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 July 2, 2017
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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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Emerging growth 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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Jul 2, 2017
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Dec 31, 2016
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Assets
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Current assets
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Cash and cash equivalents
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$
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2,167
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$
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3,303
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Short-term investments
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410
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100
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Receivables, net
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1,560
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1,163
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Contract assets
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5,728
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5,041
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Inventories
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581
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608
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Prepaid expenses and other current assets
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491
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670
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Total current assets
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10,937
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10,885
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Property, plant and equipment, net
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2,172
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2,166
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Goodwill
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14,827
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14,788
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Other assets, net
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2,293
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2,399
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Total assets
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$
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30,229
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$
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30,238
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Liabilities, Redeemable Noncontrolling Interest and Equity
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Current liabilities
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Commercial paper
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$
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300
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$
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—
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Contract liabilities
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2,704
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2,646
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Accounts payable
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1,278
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1,520
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Accrued employee compensation
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1,179
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1,234
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Other current liabilities
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1,126
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1,139
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Total current liabilities
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6,587
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6,539
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Accrued retiree benefits and other long-term liabilities
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7,731
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7,758
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Long-term debt
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4,747
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5,335
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Commitments and contingencies (Note 10)
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Redeemable noncontrolling interest (Note 8)
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349
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449
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Equity
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Raytheon Company stockholders’ equity
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Common stock, par value, $0.01 per share, 1,450 shares authorized, 290 and 293 shares outstanding at July 2, 2017 and December 31, 2016, respectively
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3
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3
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Additional paid-in capital
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—
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—
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Accumulated other comprehensive loss
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(6,994
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)
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(7,411
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)
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Retained earnings
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17,806
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17,565
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Total Raytheon Company stockholders’ equity
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10,815
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10,157
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Noncontrolling interests in subsidiaries
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—
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—
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Total equity
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10,815
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10,157
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Total liabilities, redeemable noncontrolling interest and equity
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$
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30,229
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$
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30,238
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Three Months Ended
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Six Months Ended
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(In millions, except per share amounts)
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Jul 2, 2017
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Jul 3, 2016
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Jul 2, 2017
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Jul 3, 2016
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Net sales
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Products
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$
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5,275
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$
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5,032
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$
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10,319
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$
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9,858
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Services
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1,006
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997
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1,962
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1,973
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Total net sales
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6,281
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6,029
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12,281
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11,831
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Operating expenses
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Cost of sales—products
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3,877
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3,549
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7,633
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7,188
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Cost of sales—services
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808
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813
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1,582
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1,615
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General and administrative expenses
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747
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695
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1,476
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1,443
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Total operating expenses
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5,432
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5,057
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10,691
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10,246
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Operating income
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849
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972
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1,590
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1,585
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Non-operating (income) expense, net
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Interest expense
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51
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58
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109
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116
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Interest income
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(5
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(4
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(10
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(8
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)
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Other (income) expense, net
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35
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(1
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28
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(3
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Total non-operating (income) expense, net
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81
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53
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127
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105
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Income from continuing operations before taxes
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768
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919
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1,463
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1,480
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Federal and foreign income taxes
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221
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205
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419
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362
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Income from continuing operations
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547
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714
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1,044
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1,118
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Income (loss) from discontinued operations, net of tax
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—
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(1
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)
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3
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—
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Net income
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547
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713
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1,047
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1,118
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Less: Net income (loss) attributable to noncontrolling interests in subsidiaries
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(6
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)
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(4
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(12
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)
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(27
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)
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Net income attributable to Raytheon Company
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$
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553
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$
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717
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$
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1,059
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$
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1,145
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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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1.90
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$
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2.41
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$
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3.62
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$
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3.84
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Income (loss) from discontinued operations, net of tax
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—
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—
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0.01
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—
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Net income
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1.90
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2.41
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3.63
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3.84
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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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1.89
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$
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2.41
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$
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3.62
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$
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3.83
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Income (loss) from discontinued operations, net of tax
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—
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—
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0.01
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—
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Net income
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1.89
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2.41
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3.63
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3.84
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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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553
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$
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718
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$
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1,056
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$
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1,145
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Income (loss) from discontinued operations, net of tax
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—
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(1
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)
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3
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—
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Net income
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$
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553
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$
|
717
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$
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1,059
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|
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$
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1,145
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Dividends declared per share
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$
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0.7975
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$
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0.7325
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$
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1.5950
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$
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1.4650
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Three Months Ended
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Six Months Ended
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||||||||||||
(In millions)
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Jul 2, 2017
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Jul 3, 2016
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Jul 2, 2017
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Jul 3, 2016
|
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Net income
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$
|
547
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$
|
713
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$
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1,047
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$
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1,118
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
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|
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||||||||
Pension and other postretirement benefit plans, net:
|
|
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|
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||||||||
Amortization of prior service cost included in net periodic cost
|
1
|
|
|
1
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|
|
2
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|
|
2
|
|
||||
Amortization of net actuarial loss included in net income
|
282
|
|
|
245
|
|
|
563
|
|
|
491
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|
||||
Loss due to settlements
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—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Pension and other postretirement benefit plans, net
|
283
|
|
|
249
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|
|
565
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|
|
496
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|
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Foreign exchange translation
|
33
|
|
|
(13
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)
|
|
44
|
|
|
(46
|
)
|
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Cash flow hedges
|
10
|
|
|
4
|
|
|
8
|
|
|
8
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|
||||
Unrealized gains (losses) on investments and other, net
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Other comprehensive income (loss), before tax
|
326
|
|
|
240
|
|
|
617
|
|
|
460
|
|
||||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
(102
|
)
|
|
(89
|
)
|
|
(200
|
)
|
|
(183
|
)
|
||||
Other comprehensive income (loss), net of tax
|
224
|
|
|
151
|
|
|
417
|
|
|
277
|
|
||||
Total comprehensive income
|
771
|
|
|
864
|
|
|
1,464
|
|
|
1,395
|
|
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Less: Comprehensive income (loss) attributable to noncontrolling interests in subsidiaries
|
(6
|
)
|
|
(4
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)
|
|
(12
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)
|
|
(27
|
)
|
||||
Comprehensive income attributable to Raytheon Company
|
$
|
777
|
|
|
$
|
868
|
|
|
$
|
1,476
|
|
|
$
|
1,422
|
|
Six Months Ended July 2, 2017 and July 3, 2016 (in millions)
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Common stock
|
|
|
Additional paid-in capital
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
Retained earnings
|
|
|
Total Raytheon Company stockholders’ equity
|
|
|
Noncontrolling interests in subsidiaries
(1)
|
|
|
Total equity
|
|
|||||||
Balance at December 31, 2016
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(7,411
|
)
|
|
$
|
17,565
|
|
|
$
|
10,157
|
|
|
$
|
—
|
|
|
$
|
10,157
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
1,059
|
|
|
1,059
|
|
|
|
|
|
1,059
|
|
|||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
417
|
|
|
|
|
417
|
|
|
|
|
417
|
|
|||||||||||
Adjustment of redeemable noncontrolling interest to redemption value
|
|
|
|
|
|
|
|
134
|
|
|
134
|
|
|
|
|
134
|
|
|||||||||||
Distributions and other activity related to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|||||||||||
Dividends declared
|
|
|
|
2
|
|
|
|
|
(466
|
)
|
|
(464
|
)
|
|
|
|
(464
|
)
|
||||||||||
Common stock plans activity
|
|
|
|
91
|
|
|
|
|
|
|
91
|
|
|
|
|
91
|
|
|||||||||||
Share repurchases
|
|
|
|
(93
|
)
|
|
|
|
(486
|
)
|
|
(579
|
)
|
|
|
|
(579
|
)
|
||||||||||
Balance at July 2, 2017
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(6,994
|
)
|
|
$
|
17,806
|
|
|
$
|
10,815
|
|
|
$
|
—
|
|
|
$
|
10,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2015
|
|
$
|
3
|
|
|
$
|
398
|
|
|
$
|
(7,176
|
)
|
|
$
|
16,956
|
|
|
$
|
10,181
|
|
|
$
|
202
|
|
|
$
|
10,383
|
|
Net income (loss)
|
|
|
|
|
|
|
|
1,145
|
|
|
1,145
|
|
|
(15
|
)
|
|
1,130
|
|
||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
277
|
|
|
|
|
277
|
|
|
|
|
277
|
|
|||||||||||
Adjustment of redeemable noncontrolling interest to redemption value
|
|
|
|
|
|
|
|
10
|
|
|
10
|
|
|
|
|
10
|
|
|||||||||||
Distributions and other activity related to noncontrolling interests
|
|
|
|
|
|
|
|
(205
|
)
|
|
(205
|
)
|
|
(187
|
)
|
|
(392
|
)
|
||||||||||
Dividends declared
|
|
|
|
2
|
|
|
|
|
(437
|
)
|
|
(435
|
)
|
|
|
|
(435
|
)
|
||||||||||
Common stock plans activity
|
|
|
|
98
|
|
|
|
|
|
|
98
|
|
|
|
|
98
|
|
|||||||||||
Share repurchases
|
|
|
|
(498
|
)
|
|
|
|
(196
|
)
|
|
(694
|
)
|
|
|
|
(694
|
)
|
||||||||||
Balance at July 3, 2016
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(6,899
|
)
|
|
$
|
17,273
|
|
|
$
|
10,377
|
|
|
$
|
—
|
|
|
$
|
10,377
|
|
(1)
|
Excludes redeemable noncontrolling interest which is not considered equity. See "Note 8: Forcepoint Joint Venture" for additional information.
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Cash flows from operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
1,047
|
|
|
$
|
1,118
|
|
(Income) loss from discontinued operations, net of tax
|
|
(3
|
)
|
|
—
|
|
||
Income from continuing operations
|
|
1,044
|
|
|
1,118
|
|
||
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
|
|
263
|
|
|
247
|
|
||
Stock-based compensation
|
|
92
|
|
|
89
|
|
||
Gain on sale of equity method investment
|
|
—
|
|
|
(158
|
)
|
||
Loss on repayment of long-term debt
|
|
39
|
|
|
—
|
|
||
Deferred income taxes
|
|
(105
|
)
|
|
(53
|
)
|
||
Changes in assets and liabilities
|
|
|
|
|
||||
Receivables, net
|
|
(393
|
)
|
|
(250
|
)
|
||
Contract assets and contract liabilities
|
|
(622
|
)
|
|
(492
|
)
|
||
Inventories
|
|
27
|
|
|
(14
|
)
|
||
Prepaid expenses and other current assets
|
|
112
|
|
|
130
|
|
||
Income taxes receivable/payable
|
|
99
|
|
|
64
|
|
||
Accounts payable
|
|
(238
|
)
|
|
49
|
|
||
Accrued employee compensation
|
|
(54
|
)
|
|
(43
|
)
|
||
Other current liabilities
|
|
(25
|
)
|
|
(76
|
)
|
||
Accrued retiree benefits
|
|
564
|
|
|
445
|
|
||
Other, net
|
|
(62
|
)
|
|
15
|
|
||
Net cash provided by (used in) operating activities
|
|
741
|
|
|
1,071
|
|
||
Cash flows from investing activities
|
|
|
|
|
||||
Additions to property, plant and equipment
|
|
(181
|
)
|
|
(237
|
)
|
||
Proceeds from sales of property, plant and equipment
|
|
31
|
|
|
1
|
|
||
Additions to capitalized internal use software
|
|
(33
|
)
|
|
(26
|
)
|
||
Purchases of short-term investments
|
|
(399
|
)
|
|
(472
|
)
|
||
Maturities of short-term investments
|
|
100
|
|
|
599
|
|
||
Payments for purchases of acquired companies, net of cash received
|
|
(39
|
)
|
|
(57
|
)
|
||
Other
|
|
(1
|
)
|
|
6
|
|
||
Net cash provided by (used in) investing activities
|
|
(522
|
)
|
|
(186
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
||||
Dividends paid
|
|
(447
|
)
|
|
(419
|
)
|
||
Net borrowings (payments) on commercial paper
|
|
300
|
|
|
—
|
|
||
Repayments of long-term debt
|
|
(591
|
)
|
|
—
|
|
||
Loss on repayment of long-term debt
|
|
(38
|
)
|
|
—
|
|
||
Repurchases of common stock under share repurchase programs
|
|
(500
|
)
|
|
(602
|
)
|
||
Repurchases of common stock to satisfy tax withholding obligations
|
|
(79
|
)
|
|
(92
|
)
|
||
Acquisition of noncontrolling interest in RCCS LLC
|
|
—
|
|
|
(90
|
)
|
||
Contribution from noncontrolling interest in Forcepoint
|
|
8
|
|
|
11
|
|
||
Other
|
|
—
|
|
|
(5
|
)
|
||
Net cash provided by (used in) financing activities
|
|
(1,347
|
)
|
|
(1,197
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(1,128
|
)
|
|
(312
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of the year
|
|
3,303
|
|
|
2,328
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
2,175
|
|
|
$
|
2,016
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
(In millions, except per share amounts)
|
Dec 31, 2016
|
|
|
Oct 2, 2016
|
|
|
Jul 3, 2016
|
|
|
Apr 3, 2016
|
|
|
Dec 31, 2016
|
|
|
Dec 31, 2015
|
|
||||||
Income from continuing operations after taxes
|
$
|
12
|
|
|
$
|
18
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
40
|
|
Net income
|
12
|
|
|
18
|
|
|
9
|
|
|
—
|
|
|
39
|
|
|
40
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations after taxes
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
Net income
|
0.04
|
|
|
0.05
|
|
|
0.02
|
|
|
—
|
|
|
0.11
|
|
|
0.11
|
|
||||||
Diluted EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations after taxes
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
Net income
|
0.04
|
|
|
0.05
|
|
|
0.03
|
|
|
—
|
|
|
0.11
|
|
|
0.11
|
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Cash and cash equivalents
|
|
$
|
2,167
|
|
|
$
|
3,303
|
|
Restricted cash
|
|
8
|
|
|
—
|
|
||
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows
|
|
$
|
2,175
|
|
|
$
|
3,303
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except per share amounts)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Operating income
|
$
|
112
|
|
|
$
|
134
|
|
|
$
|
166
|
|
|
$
|
155
|
|
Income from continuing operations attributable to Raytheon Company
|
73
|
|
|
87
|
|
|
108
|
|
|
112
|
|
||||
Diluted EPS from continuing operations attributable to Raytheon Company
|
$
|
0.25
|
|
|
$
|
0.29
|
|
|
$
|
0.37
|
|
|
$
|
0.38
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Basic EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
|
|
|
||||||||
Distributed earnings
|
|
$
|
0.80
|
|
|
$
|
0.73
|
|
|
$
|
1.59
|
|
|
$
|
1.46
|
|
Undistributed earnings
|
|
1.10
|
|
|
1.68
|
|
|
2.03
|
|
|
2.38
|
|
||||
Total
|
|
$
|
1.90
|
|
|
$
|
2.41
|
|
|
$
|
3.62
|
|
|
$
|
3.84
|
|
Diluted EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
|
|
|
||||||||
Distributed earnings
|
|
$
|
0.79
|
|
|
$
|
0.73
|
|
|
$
|
1.59
|
|
|
$
|
1.46
|
|
Undistributed earnings
|
|
1.10
|
|
|
1.68
|
|
|
2.03
|
|
|
2.37
|
|
||||
Total
|
|
$
|
1.89
|
|
|
$
|
2.41
|
|
|
$
|
3.62
|
|
|
$
|
3.83
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Income from continuing operations attributable to participating securities
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
13
|
|
|
$
|
17
|
|
Income (loss) from discontinued operations, net of tax attributable to participating securities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to participating securities
|
$
|
6
|
|
|
$
|
9
|
|
|
$
|
13
|
|
|
$
|
17
|
|
(1)
|
Income (loss) from discontinued operations, net of tax attributable to participating securities was
a loss of less than $1 million in the
second quarters of 2017 and 2016
, and income of less than $1 million in the
first six months of 2017 and 2016
.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
(In millions)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Shares for basic EPS
(1)
|
291.7
|
|
|
297.3
|
|
|
292.1
|
|
|
298.2
|
|
Dilutive effect of LTPP and RSUs
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.4
|
|
Shares for diluted EPS
|
292.0
|
|
|
297.6
|
|
|
292.4
|
|
|
298.6
|
|
(1)
|
Includes
3.3 million
and
3.8 million
participating securities in the
second quarters of 2017 and 2016
, respectively, and
3.7 million
and
4.3 million
participating securities in the
first six months of 2017 and 2016
, respectively.
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Materials and purchased parts
|
|
$
|
67
|
|
|
$
|
66
|
|
Work in process
|
|
500
|
|
|
532
|
|
||
Finished goods
|
|
14
|
|
|
10
|
|
||
Total
|
|
$
|
581
|
|
|
$
|
608
|
|
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
|
$ change
|
|
% change
|
|||||||
Contract assets
|
|
$
|
5,728
|
|
|
$
|
5,041
|
|
|
$
|
687
|
|
|
14
|
%
|
Contract liabilities—current
|
|
(2,704
|
)
|
|
(2,646
|
)
|
|
(58
|
)
|
|
2
|
%
|
|||
Contract liabilities—noncurrent
|
|
(113
|
)
|
|
(128
|
)
|
|
15
|
|
|
(12
|
)%
|
|||
Net contract assets (liabilities)
|
|
$
|
2,911
|
|
|
$
|
2,267
|
|
|
$
|
644
|
|
|
28
|
%
|
(In millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
(1)
|
|
|
Total
|
|
||||||
Balance at December 31, 2016
|
|
$
|
1,702
|
|
|
$
|
2,966
|
|
|
$
|
4,154
|
|
|
$
|
4,106
|
|
|
$
|
1,860
|
|
|
$
|
14,788
|
|
Acquisitions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
35
|
|
||||||
Effect of foreign exchange rates and other
|
|
3
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||
Balance at July 2, 2017
|
|
$
|
1,705
|
|
|
$
|
2,967
|
|
|
$
|
4,154
|
|
|
$
|
4,106
|
|
|
$
|
1,895
|
|
|
$
|
14,827
|
|
(1)
|
At
July 2, 2017
, Forcepoint's fair value is estimated to exceed its net book value by approximately
$410 million
.
As discussed in "Note 8: 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.
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Beginning balance
|
|
$
|
449
|
|
|
$
|
355
|
|
Net income (loss)
|
|
(12
|
)
|
|
(13
|
)
|
||
Other comprehensive income (loss), net of tax
(1)
|
|
1
|
|
|
—
|
|
||
Contribution from noncontrolling interest
|
|
8
|
|
|
11
|
|
||
Adjustment of noncontrolling interest to redemption value
|
|
(97
|
)
|
|
(10
|
)
|
||
Ending balance
|
|
$
|
349
|
|
|
$
|
343
|
|
(1)
|
Other comprehensive income (loss), net of tax, was
a loss of less than
$1 million
in the
first six months of 2016
.
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Carrying value of long-term debt
|
|
$
|
4,747
|
|
|
$
|
5,335
|
|
Fair value of long-term debt
|
|
5,288
|
|
|
5,848
|
|
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Total remediation costs—undiscounted
|
|
$
|
210
|
|
|
$
|
219
|
|
Weighted average discount rate
|
|
5.2
|
%
|
|
5.2
|
%
|
||
Total remediation costs—discounted
|
|
$
|
146
|
|
|
$
|
147
|
|
Recoverable portion
|
|
95
|
|
|
92
|
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Guarantees
|
|
$
|
208
|
|
|
$
|
190
|
|
Letters of credit
|
|
2,560
|
|
|
2,345
|
|
||
Surety bonds
|
|
127
|
|
|
127
|
|
|
|
Six Months Ended
|
||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||
Beginning balance
|
|
292.8
|
|
|
299.0
|
|
Stock plans activity
|
|
1.1
|
|
|
1.6
|
|
Share repurchases
|
|
(3.8
|
)
|
|
(5.5
|
)
|
Ending balance
|
|
290.1
|
|
|
295.1
|
|
|
|
Six Months Ended
|
||||||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
|
|
$
|
Shares
|
|
|
$
|
Shares
|
|
||||
Shares repurchased under our share repurchase programs
|
|
$
|
500
|
|
3.3
|
|
|
$
|
602
|
|
4.8
|
|
Shares repurchased to satisfy tax withholding obligations
|
|
79
|
|
0.5
|
|
|
92
|
|
0.7
|
|
||
Total share repurchases
|
|
$
|
579
|
|
3.8
|
|
|
$
|
694
|
|
5.5
|
|
|
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, 2016
|
$
|
(7,234
|
)
|
|
$
|
(175
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(7,411
|
)
|
Before tax amount
|
565
|
|
|
44
|
|
|
8
|
|
|
—
|
|
|
617
|
|
|||||
Tax (expense) or benefit
|
(197
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(200
|
)
|
|||||
Net of tax amount
|
368
|
|
|
44
|
|
|
5
|
|
|
—
|
|
|
417
|
|
|||||
Balance at July 2, 2017
|
$
|
(6,866
|
)
|
|
$
|
(131
|
)
|
|
$
|
5
|
|
|
$
|
(2
|
)
|
|
$
|
(6,994
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2015
|
$
|
(7,088
|
)
|
|
$
|
(60
|
)
|
|
$
|
(16
|
)
|
|
$
|
(12
|
)
|
|
$
|
(7,176
|
)
|
Before tax amount
|
496
|
|
|
(46
|
)
|
|
8
|
|
|
2
|
|
|
460
|
|
|||||
Tax (expense) or benefit
|
(178
|
)
|
|
—
|
|
|
(4
|
)
|
|
(1
|
)
|
|
(183
|
)
|
|||||
Net of tax amount
|
318
|
|
|
(46
|
)
|
|
4
|
|
|
1
|
|
|
277
|
|
|||||
Balance at July 3, 2016
|
$
|
(6,770
|
)
|
|
$
|
(106
|
)
|
|
$
|
(12
|
)
|
|
$
|
(11
|
)
|
|
$
|
(6,899
|
)
|
(1)
|
Pension and PRB plans, net, is shown net of tax benefits of
$3,684 million
and
$3,881 million
at
July 2, 2017
and
December 31, 2016
, respectively.
|
(2)
|
Cash flow hedges are shown net of tax expense of
$2 million
and tax benefit of
$1 million
at
July 2, 2017
and
December 31, 2016
, respectively.
|
(3)
|
Unrealized gains (losses) on investments and other, net are shown net of tax expense of
$1 million
at both
July 2, 2017
and
December 31, 2016
.
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Marketable securities held in trust
|
|
$
|
587
|
|
|
$
|
550
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Service cost
|
|
$
|
116
|
|
|
$
|
123
|
|
|
$
|
233
|
|
|
$
|
246
|
|
Interest cost
|
|
267
|
|
|
273
|
|
|
534
|
|
|
545
|
|
||||
Expected return on plan assets
|
|
(345
|
)
|
|
(380
|
)
|
|
(690
|
)
|
|
(759
|
)
|
||||
Amounts reflected in net funded status
|
|
38
|
|
|
16
|
|
|
77
|
|
|
32
|
|
||||
Amortization of prior service cost included in net periodic pension expense
|
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Recognized net actuarial loss
|
|
280
|
|
|
245
|
|
|
559
|
|
|
490
|
|
||||
Loss due to settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Amounts reclassified during the period
|
|
281
|
|
|
246
|
|
|
561
|
|
|
495
|
|
||||
Net periodic pension expense (income)
|
|
$
|
319
|
|
|
$
|
262
|
|
|
$
|
638
|
|
|
$
|
527
|
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Long-term pension liabilities
|
|
$
|
7,061
|
|
|
$
|
7,074
|
|
Long-term PRB liabilities
|
|
357
|
|
|
358
|
|
||
Total long-term pension and PRB liabilities
|
|
$
|
7,418
|
|
|
$
|
7,432
|
|
|
Six Months Ended
|
||||||
(In millions)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Required pension contributions
|
$
|
74
|
|
|
$
|
79
|
|
PRB contributions
|
11
|
|
|
10
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Total Net Sales
(in millions)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Integrated Defense Systems
|
$
|
1,462
|
|
|
$
|
1,399
|
|
|
$
|
2,860
|
|
|
$
|
2,735
|
|
Intelligence, Information and Services
|
1,555
|
|
|
1,587
|
|
|
3,062
|
|
|
3,119
|
|
||||
Missile Systems
|
1,901
|
|
|
1,706
|
|
|
3,657
|
|
|
3,429
|
|
||||
Space and Airborne Systems
|
1,608
|
|
|
1,547
|
|
|
3,163
|
|
|
2,992
|
|
||||
Forcepoint
|
138
|
|
|
137
|
|
|
282
|
|
|
276
|
|
||||
Eliminations
|
(372
|
)
|
|
(326
|
)
|
|
(722
|
)
|
|
(673
|
)
|
||||
Total business segment sales
|
6,292
|
|
|
6,050
|
|
|
12,302
|
|
|
11,878
|
|
||||
Acquisition Accounting Adjustments
|
(11
|
)
|
|
(21
|
)
|
|
(21
|
)
|
|
(47
|
)
|
||||
Total
|
$
|
6,281
|
|
|
$
|
6,029
|
|
|
$
|
12,281
|
|
|
$
|
11,831
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Intersegment Sales
(in millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Integrated Defense Systems
|
|
$
|
17
|
|
|
$
|
16
|
|
|
$
|
32
|
|
|
$
|
33
|
|
Intelligence, Information and Services
|
|
173
|
|
|
165
|
|
|
350
|
|
|
332
|
|
||||
Missile Systems
|
|
37
|
|
|
33
|
|
|
65
|
|
|
68
|
|
||||
Space and Airborne Systems
|
|
140
|
|
|
109
|
|
|
266
|
|
|
234
|
|
||||
Forcepoint
|
|
5
|
|
|
3
|
|
|
9
|
|
|
6
|
|
||||
Total
|
|
$
|
372
|
|
|
$
|
326
|
|
|
$
|
722
|
|
|
$
|
673
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Operating Income
(in millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Integrated Defense Systems
|
|
$
|
245
|
|
|
$
|
376
|
|
|
$
|
457
|
|
|
$
|
522
|
|
Intelligence, Information and Services
|
|
115
|
|
|
120
|
|
|
226
|
|
|
224
|
|
||||
Missile Systems
|
|
236
|
|
|
233
|
|
|
452
|
|
|
425
|
|
||||
Space and Airborne Systems
|
|
218
|
|
|
205
|
|
|
408
|
|
|
372
|
|
||||
Forcepoint
|
|
2
|
|
|
10
|
|
|
18
|
|
|
28
|
|
||||
Eliminations
|
|
(37
|
)
|
|
(34
|
)
|
|
(74
|
)
|
|
(67
|
)
|
||||
Total business segment operating income
|
|
779
|
|
|
910
|
|
|
1,487
|
|
|
1,504
|
|
||||
Acquisition Accounting Adjustments
|
|
(42
|
)
|
|
(51
|
)
|
|
(84
|
)
|
|
(109
|
)
|
||||
FAS/CAS Adjustment
|
|
109
|
|
|
109
|
|
|
217
|
|
|
214
|
|
||||
Corporate
|
|
3
|
|
|
4
|
|
|
(30
|
)
|
|
(24
|
)
|
||||
Total
|
|
$
|
849
|
|
|
$
|
972
|
|
|
$
|
1,590
|
|
|
$
|
1,585
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Intersegment Operating Income
(in millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Integrated Defense Systems
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
1
|
|
Intelligence, Information and Services
|
|
17
|
|
|
16
|
|
|
34
|
|
|
32
|
|
||||
Missile Systems
|
|
3
|
|
|
3
|
|
|
6
|
|
|
6
|
|
||||
Space and Airborne Systems
|
|
13
|
|
|
10
|
|
|
26
|
|
|
22
|
|
||||
Forcepoint
|
|
3
|
|
|
4
|
|
|
6
|
|
|
6
|
|
||||
Total
|
|
$
|
37
|
|
|
$
|
34
|
|
|
$
|
74
|
|
|
$
|
67
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
FAS/CAS Adjustment Income (Expense)
(in millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
FAS/CAS Pension Adjustment
|
|
$
|
109
|
|
|
$
|
108
|
|
|
$
|
218
|
|
|
$
|
213
|
|
FAS/CAS PRB Adjustment
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
||||
FAS/CAS Adjustment
|
|
$
|
109
|
|
|
$
|
109
|
|
|
$
|
217
|
|
|
$
|
214
|
|
Total Assets
(in millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Integrated Defense Systems
(1)
|
|
$
|
4,906
|
|
|
$
|
4,573
|
|
Intelligence, Information and Services
(1)
|
|
4,300
|
|
|
4,315
|
|
||
Missile Systems
(1)
|
|
7,757
|
|
|
6,970
|
|
||
Space and Airborne Systems
(1)
|
|
6,543
|
|
|
6,564
|
|
||
Forcepoint
(1)
|
|
2,483
|
|
|
2,548
|
|
||
Corporate
|
|
4,240
|
|
|
5,268
|
|
||
Total
|
|
$
|
30,229
|
|
|
$
|
30,238
|
|
(1)
|
Total assets includes intangible assets.
Related amortization expense is included in Acquisition Accounting Adjustments.
|
|
|
Three Months Ended July 2, 2017
|
||||||||||||||||||||||||||
Disaggregation of Total Net Sales
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Other
|
|
|
Total
|
|
|||||||
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales to the U.S. government
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
$
|
216
|
|
|
$
|
256
|
|
|
$
|
657
|
|
|
$
|
512
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
1,666
|
|
Cost-type contracts
|
|
388
|
|
|
912
|
|
|
507
|
|
|
717
|
|
|
3
|
|
|
—
|
|
|
2,527
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
1
|
|
|
37
|
|
|
—
|
|
|
7
|
|
|
42
|
|
|
—
|
|
|
87
|
|
|||||||
Cost-type contracts
|
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||||
Asia/Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
41
|
|
|
45
|
|
|
116
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
226
|
|
|||||||
Cost-type contracts
|
|
38
|
|
|
13
|
|
|
16
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
142
|
|
|
47
|
|
|
78
|
|
|
64
|
|
|
15
|
|
|
—
|
|
|
346
|
|
|||||||
Cost-type contracts
|
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|||||||
Middle East and North Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
258
|
|
|
6
|
|
|
88
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
398
|
|
|||||||
Cost-type contracts
|
|
41
|
|
|
—
|
|
|
6
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
233
|
|
|
5
|
|
|
265
|
|
|
47
|
|
|
5
|
|
|
—
|
|
|
555
|
|
|||||||
Cost-type contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
All other (principally Europe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
2
|
|
|
1
|
|
|
36
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
50
|
|
|||||||
Cost-type contracts
|
|
6
|
|
|
1
|
|
|
23
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
34
|
|
|
51
|
|
|
71
|
|
|
31
|
|
|
32
|
|
|
—
|
|
|
219
|
|
|||||||
Cost-type contracts
|
|
3
|
|
|
6
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||||
Total net sales
|
|
1,445
|
|
|
1,382
|
|
|
1,864
|
|
|
1,468
|
|
|
122
|
|
|
—
|
|
|
6,281
|
|
|||||||
Intersegment sales
|
|
17
|
|
|
173
|
|
|
37
|
|
|
140
|
|
|
5
|
|
|
(372
|
)
|
|
—
|
|
|||||||
Acquisition Accounting Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
(11
|
)
|
|
—
|
|
|||||||
Reconciliation to business segment sales
|
|
$
|
1,462
|
|
|
$
|
1,555
|
|
|
$
|
1,901
|
|
|
$
|
1,608
|
|
|
$
|
138
|
|
|
$
|
(383
|
)
|
|
$
|
6,281
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
Three Months Ended July 2, 2017
|
||||||||||||||||||||||
Total Net Sales by Geographic Areas
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
United States
|
|
$
|
605
|
|
|
$
|
1,207
|
|
|
$
|
1,164
|
|
|
$
|
1,237
|
|
|
$
|
70
|
|
|
$
|
4,283
|
|
Asia/Pacific
|
|
263
|
|
|
105
|
|
|
210
|
|
|
90
|
|
|
15
|
|
|
683
|
|
||||||
Middle East and North Africa
|
|
532
|
|
|
11
|
|
|
359
|
|
|
98
|
|
|
5
|
|
|
1,005
|
|
||||||
All other (principally Europe)
|
|
45
|
|
|
59
|
|
|
131
|
|
|
43
|
|
|
32
|
|
|
310
|
|
||||||
Total net sales
|
|
$
|
1,445
|
|
|
$
|
1,382
|
|
|
$
|
1,864
|
|
|
$
|
1,468
|
|
|
$
|
122
|
|
|
$
|
6,281
|
|
|
|
Three Months Ended July 2, 2017
|
||||||||||||||||||||||
Total Net Sales by Major Customers
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
Sales to the U.S. government
(1)
|
|
$
|
604
|
|
|
$
|
1,168
|
|
|
$
|
1,164
|
|
|
$
|
1,229
|
|
|
$
|
28
|
|
|
$
|
4,193
|
|
U.S. direct commercial sales and other
|
|
1
|
|
|
39
|
|
|
—
|
|
|
8
|
|
|
42
|
|
|
90
|
|
||||||
Foreign military sales through the U.S. government
|
|
386
|
|
|
66
|
|
|
285
|
|
|
89
|
|
|
—
|
|
|
826
|
|
||||||
Foreign direct commercial sales and other
(1)
|
|
454
|
|
|
109
|
|
|
415
|
|
|
142
|
|
|
52
|
|
|
1,172
|
|
||||||
Total net sales
|
|
$
|
1,445
|
|
|
$
|
1,382
|
|
|
$
|
1,864
|
|
|
$
|
1,468
|
|
|
$
|
122
|
|
|
$
|
6,281
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
Three Months Ended July 2, 2017
|
||||||||||||||||||||||
Total Net Sales by Contract Type
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
Fixed-price contracts
|
|
$
|
927
|
|
|
$
|
448
|
|
|
$
|
1,311
|
|
|
$
|
742
|
|
|
$
|
119
|
|
|
$
|
3,547
|
|
Cost-type contracts
|
|
518
|
|
|
934
|
|
|
553
|
|
|
726
|
|
|
3
|
|
|
2,734
|
|
||||||
Total net sales
|
|
$
|
1,445
|
|
|
$
|
1,382
|
|
|
$
|
1,864
|
|
|
$
|
1,468
|
|
|
$
|
122
|
|
|
$
|
6,281
|
|
|
|
Three Months Ended July 3, 2016
|
||||||||||||||||||||||||||
Disaggregation of Total Net Sales
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Other
|
|
|
Total
|
|
|||||||
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales to the U.S. government
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
$
|
198
|
|
|
$
|
330
|
|
|
$
|
599
|
|
|
$
|
632
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
1,777
|
|
Cost-type contracts
|
|
357
|
|
|
839
|
|
|
502
|
|
|
523
|
|
|
3
|
|
|
—
|
|
|
2,224
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
—
|
|
|
37
|
|
|
—
|
|
|
7
|
|
|
47
|
|
|
—
|
|
|
91
|
|
|||||||
Cost-type contracts
|
|
3
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||||
Asia/Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
42
|
|
|
42
|
|
|
66
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
177
|
|
|||||||
Cost-type contracts
|
|
27
|
|
|
15
|
|
|
26
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
130
|
|
|
40
|
|
|
58
|
|
|
65
|
|
|
12
|
|
|
—
|
|
|
305
|
|
|||||||
Cost-type contracts
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||||
Middle East and North Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
202
|
|
|
28
|
|
|
84
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
355
|
|
|||||||
Cost-type contracts
|
|
45
|
|
|
1
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
288
|
|
|
9
|
|
|
244
|
|
|
98
|
|
|
4
|
|
|
—
|
|
|
643
|
|
|||||||
Cost-type contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
All other (principally Europe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
—
|
|
|
—
|
|
|
25
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|||||||
Cost-type contracts
|
|
5
|
|
|
—
|
|
|
26
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
39
|
|
|
55
|
|
|
34
|
|
|
38
|
|
|
29
|
|
|
—
|
|
|
195
|
|
|||||||
Cost-type contracts
|
|
1
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Total net sales
|
|
1,383
|
|
|
1,422
|
|
|
1,673
|
|
|
1,438
|
|
|
113
|
|
|
—
|
|
|
6,029
|
|
|||||||
Intersegment sales
|
|
16
|
|
|
165
|
|
|
33
|
|
|
109
|
|
|
3
|
|
|
(326
|
)
|
|
—
|
|
|||||||
Acquisition Accounting Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
(21
|
)
|
|
—
|
|
|||||||
Reconciliation to business segment sales
|
|
$
|
1,399
|
|
|
$
|
1,587
|
|
|
$
|
1,706
|
|
|
$
|
1,547
|
|
|
$
|
137
|
|
|
$
|
(347
|
)
|
|
$
|
6,029
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
Three Months Ended July 3, 2016
|
||||||||||||||||||||||
Total Net Sales by Geographic Areas
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
United States
|
|
$
|
558
|
|
|
$
|
1,224
|
|
|
$
|
1,101
|
|
|
$
|
1,162
|
|
|
$
|
68
|
|
|
$
|
4,113
|
|
Asia/Pacific
|
|
245
|
|
|
97
|
|
|
150
|
|
|
94
|
|
|
12
|
|
|
598
|
|
||||||
Middle East and North Africa
|
|
535
|
|
|
38
|
|
|
337
|
|
|
139
|
|
|
4
|
|
|
1,053
|
|
||||||
All other (principally Europe)
|
|
45
|
|
|
63
|
|
|
85
|
|
|
43
|
|
|
29
|
|
|
265
|
|
||||||
Total net sales
|
|
$
|
1,383
|
|
|
$
|
1,422
|
|
|
$
|
1,673
|
|
|
$
|
1,438
|
|
|
$
|
113
|
|
|
$
|
6,029
|
|
|
|
Three Months Ended July 3, 2016
|
||||||||||||||||||||||
Total Net Sales by Major Customers
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
Sales to the U.S. government
(1)
|
|
$
|
555
|
|
|
$
|
1,169
|
|
|
$
|
1,101
|
|
|
$
|
1,155
|
|
|
$
|
21
|
|
|
$
|
4,001
|
|
U.S. direct commercial sales and other
|
|
3
|
|
|
55
|
|
|
—
|
|
|
7
|
|
|
47
|
|
|
112
|
|
||||||
Foreign military sales through the U.S. government
|
|
321
|
|
|
86
|
|
|
236
|
|
|
75
|
|
|
—
|
|
|
718
|
|
||||||
Foreign direct commercial sales and other
(1)
|
|
504
|
|
|
112
|
|
|
336
|
|
|
201
|
|
|
45
|
|
|
1,198
|
|
||||||
Total net sales
|
|
$
|
1,383
|
|
|
$
|
1,422
|
|
|
$
|
1,673
|
|
|
$
|
1,438
|
|
|
$
|
113
|
|
|
$
|
6,029
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
Three Months Ended July 3, 2016
|
||||||||||||||||||||||
Total Net Sales by Contract Type
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
Fixed-price contracts
|
|
$
|
899
|
|
|
$
|
541
|
|
|
$
|
1,110
|
|
|
$
|
911
|
|
|
$
|
110
|
|
|
$
|
3,571
|
|
Cost-type contracts
|
|
484
|
|
|
881
|
|
|
563
|
|
|
527
|
|
|
3
|
|
|
2,458
|
|
||||||
Total net sales
|
|
$
|
1,383
|
|
|
$
|
1,422
|
|
|
$
|
1,673
|
|
|
$
|
1,438
|
|
|
$
|
113
|
|
|
$
|
6,029
|
|
|
|
Six Months Ended July 2, 2017
|
||||||||||||||||||||||||||
Disaggregation of Total Net Sales
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Other
|
|
|
Total
|
|
|||||||
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales to the U.S. government
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
$
|
401
|
|
|
$
|
519
|
|
|
$
|
1,260
|
|
|
$
|
1,043
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
3,270
|
|
Cost-type contracts
|
|
757
|
|
|
1,774
|
|
|
991
|
|
|
1,379
|
|
|
6
|
|
|
—
|
|
|
4,907
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
3
|
|
|
70
|
|
|
1
|
|
|
13
|
|
|
95
|
|
|
—
|
|
|
182
|
|
|||||||
Cost-type contracts
|
|
1
|
|
|
4
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||||
Asia/Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
85
|
|
|
88
|
|
|
187
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
402
|
|
|||||||
Cost-type contracts
|
|
72
|
|
|
29
|
|
|
33
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
138
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
301
|
|
|
85
|
|
|
125
|
|
|
138
|
|
|
26
|
|
|
—
|
|
|
675
|
|
|||||||
Cost-type contracts
|
|
81
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
81
|
|
|||||||
Middle East and North Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
528
|
|
|
10
|
|
|
193
|
|
|
94
|
|
|
—
|
|
|
—
|
|
|
825
|
|
|||||||
Cost-type contracts
|
|
78
|
|
|
2
|
|
|
12
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
97
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
456
|
|
|
12
|
|
|
497
|
|
|
91
|
|
|
11
|
|
|
—
|
|
|
1,067
|
|
|||||||
Cost-type contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
All other (principally Europe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
2
|
|
|
2
|
|
|
63
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
87
|
|
|||||||
Cost-type contracts
|
|
11
|
|
|
1
|
|
|
39
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
54
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
44
|
|
|
104
|
|
|
189
|
|
|
64
|
|
|
67
|
|
|
—
|
|
|
468
|
|
|||||||
Cost-type contracts
|
|
8
|
|
|
12
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||||
Total net sales
|
|
2,828
|
|
|
2,712
|
|
|
3,592
|
|
|
2,897
|
|
|
252
|
|
|
—
|
|
|
12,281
|
|
|||||||
Intersegment sales
|
|
32
|
|
|
350
|
|
|
65
|
|
|
266
|
|
|
9
|
|
|
(722
|
)
|
|
—
|
|
|||||||
Acquisition Accounting Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
(21
|
)
|
|
—
|
|
|||||||
Reconciliation to business segment sales
|
|
$
|
2,860
|
|
|
$
|
3,062
|
|
|
$
|
3,657
|
|
|
$
|
3,163
|
|
|
$
|
282
|
|
|
$
|
(743
|
)
|
|
$
|
12,281
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
Six Months Ended July 2, 2017
|
||||||||||||||||||||||
Total Net Sales by Geographic Areas
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
United States
|
|
$
|
1,162
|
|
|
$
|
2,367
|
|
|
$
|
2,252
|
|
|
$
|
2,436
|
|
|
$
|
148
|
|
|
$
|
8,365
|
|
Asia/Pacific
|
|
539
|
|
|
202
|
|
|
345
|
|
|
184
|
|
|
26
|
|
|
1,296
|
|
||||||
Middle East and North Africa
|
|
1,062
|
|
|
24
|
|
|
702
|
|
|
190
|
|
|
11
|
|
|
1,989
|
|
||||||
All other (principally Europe)
|
|
65
|
|
|
119
|
|
|
293
|
|
|
87
|
|
|
67
|
|
|
631
|
|
||||||
Total net sales
|
|
$
|
2,828
|
|
|
$
|
2,712
|
|
|
$
|
3,592
|
|
|
$
|
2,897
|
|
|
$
|
252
|
|
|
$
|
12,281
|
|
|
|
Six Months Ended July 2, 2017
|
||||||||||||||||||||||
Total Net Sales by Major Customers
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
Sales to the U.S. government
(1)
|
|
$
|
1,158
|
|
|
$
|
2,293
|
|
|
$
|
2,251
|
|
|
$
|
2,422
|
|
|
$
|
53
|
|
|
$
|
8,177
|
|
U.S. direct commercial sales and other
|
|
4
|
|
|
74
|
|
|
1
|
|
|
14
|
|
|
95
|
|
|
188
|
|
||||||
Foreign military sales through the U.S. government
|
|
776
|
|
|
132
|
|
|
527
|
|
|
168
|
|
|
—
|
|
|
1,603
|
|
||||||
Foreign direct commercial sales and other
(1)
|
|
890
|
|
|
213
|
|
|
813
|
|
|
293
|
|
|
104
|
|
|
2,313
|
|
||||||
Total net sales
|
|
$
|
2,828
|
|
|
$
|
2,712
|
|
|
$
|
3,592
|
|
|
$
|
2,897
|
|
|
$
|
252
|
|
|
$
|
12,281
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
Six Months Ended July 2, 2017
|
||||||||||||||||||||||
Total Net Sales by Contract Type
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
Fixed-price contracts
|
|
$
|
1,820
|
|
|
$
|
890
|
|
|
$
|
2,515
|
|
|
$
|
1,505
|
|
|
$
|
246
|
|
|
$
|
6,976
|
|
Cost-type contracts
|
|
1,008
|
|
|
1,822
|
|
|
1,077
|
|
|
1,392
|
|
|
6
|
|
|
5,305
|
|
||||||
Total net sales
|
|
$
|
2,828
|
|
|
$
|
2,712
|
|
|
$
|
3,592
|
|
|
$
|
2,897
|
|
|
$
|
252
|
|
|
$
|
12,281
|
|
|
|
Six Months Ended July 3, 2016
|
||||||||||||||||||||||||||
Disaggregation of Total Net Sales
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Other
|
|
|
Total
|
|
|||||||
United States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Sales to the U.S. government
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
$
|
377
|
|
|
$
|
598
|
|
|
$
|
1,248
|
|
|
$
|
1,161
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
3,421
|
|
Cost-type contracts
|
|
734
|
|
|
1,694
|
|
|
981
|
|
|
1,068
|
|
|
7
|
|
|
—
|
|
|
4,484
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
6
|
|
|
76
|
|
|
—
|
|
|
17
|
|
|
92
|
|
|
—
|
|
|
191
|
|
|||||||
Cost-type contracts
|
|
4
|
|
|
30
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|||||||
Asia/Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
61
|
|
|
84
|
|
|
146
|
|
|
59
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|||||||
Cost-type contracts
|
|
56
|
|
|
17
|
|
|
39
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
116
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
250
|
|
|
74
|
|
|
94
|
|
|
120
|
|
|
23
|
|
|
—
|
|
|
561
|
|
|||||||
Cost-type contracts
|
|
91
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|||||||
Middle East and North Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
392
|
|
|
36
|
|
|
184
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
695
|
|
|||||||
Cost-type contracts
|
|
94
|
|
|
1
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
534
|
|
|
53
|
|
|
421
|
|
|
154
|
|
|
7
|
|
|
—
|
|
|
1,169
|
|
|||||||
Cost-type contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
All other (principally Europe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
7
|
|
|
1
|
|
|
59
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|||||||
Cost-type contracts
|
|
12
|
|
|
—
|
|
|
47
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|||||||
Direct commercial sales and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
78
|
|
|
106
|
|
|
123
|
|
|
72
|
|
|
57
|
|
|
—
|
|
|
436
|
|
|||||||
Cost-type contracts
|
|
6
|
|
|
17
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||||
Total net sales
|
|
2,702
|
|
|
2,787
|
|
|
3,361
|
|
|
2,758
|
|
|
223
|
|
|
—
|
|
|
11,831
|
|
|||||||
Intersegment sales
|
|
33
|
|
|
332
|
|
|
68
|
|
|
234
|
|
|
6
|
|
|
(673
|
)
|
|
—
|
|
|||||||
Acquisition Accounting Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
(47
|
)
|
|
—
|
|
|||||||
Reconciliation to business segment sales
|
|
$
|
2,735
|
|
|
$
|
3,119
|
|
|
$
|
3,429
|
|
|
$
|
2,992
|
|
|
$
|
276
|
|
|
$
|
(720
|
)
|
|
$
|
11,831
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
Six Months Ended July 3, 2016
|
||||||||||||||||||||||
Total Net Sales by Geographic Areas
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
United States
|
|
$
|
1,121
|
|
|
$
|
2,398
|
|
|
$
|
2,229
|
|
|
$
|
2,247
|
|
|
$
|
136
|
|
|
$
|
8,131
|
|
Asia/Pacific
|
|
458
|
|
|
175
|
|
|
280
|
|
|
183
|
|
|
23
|
|
|
1,119
|
|
||||||
Middle East and North Africa
|
|
1,020
|
|
|
90
|
|
|
622
|
|
|
237
|
|
|
7
|
|
|
1,976
|
|
||||||
All other (principally Europe)
|
|
103
|
|
|
124
|
|
|
230
|
|
|
91
|
|
|
57
|
|
|
605
|
|
||||||
Total net sales
|
|
$
|
2,702
|
|
|
$
|
2,787
|
|
|
$
|
3,361
|
|
|
$
|
2,758
|
|
|
$
|
223
|
|
|
$
|
11,831
|
|
|
|
Six Months Ended July 3, 2016
|
||||||||||||||||||||||
Total Net Sales by Major Customers
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
Sales to the U.S. government
(1)
|
|
$
|
1,111
|
|
|
$
|
2,292
|
|
|
$
|
2,229
|
|
|
$
|
2,229
|
|
|
$
|
44
|
|
|
$
|
7,905
|
|
U.S. direct commercial sales and other
|
|
10
|
|
|
106
|
|
|
—
|
|
|
18
|
|
|
92
|
|
|
226
|
|
||||||
Foreign military sales through the U.S. government
|
|
622
|
|
|
139
|
|
|
492
|
|
|
165
|
|
|
—
|
|
|
1,418
|
|
||||||
Foreign direct commercial sales and other
(1)
|
|
959
|
|
|
250
|
|
|
640
|
|
|
346
|
|
|
87
|
|
|
2,282
|
|
||||||
Total net sales
|
|
$
|
2,702
|
|
|
$
|
2,787
|
|
|
$
|
3,361
|
|
|
$
|
2,758
|
|
|
$
|
223
|
|
|
$
|
11,831
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
Six Months Ended July 3, 2016
|
||||||||||||||||||||||
Total Net Sales by Contract Type
(in millions)
|
|
Integrated Defense Systems
|
|
|
Intelligence, Information and Services
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
|
|
|
Total
|
|
||||||
Fixed-price contracts
|
|
$
|
1,705
|
|
|
$
|
1,028
|
|
|
$
|
2,275
|
|
|
$
|
1,682
|
|
|
$
|
216
|
|
|
$
|
6,906
|
|
Cost-type contracts
|
|
997
|
|
|
1,759
|
|
|
1,086
|
|
|
1,076
|
|
|
7
|
|
|
4,925
|
|
||||||
Total net sales
|
|
$
|
2,702
|
|
|
$
|
2,787
|
|
|
$
|
3,361
|
|
|
$
|
2,758
|
|
|
$
|
223
|
|
|
$
|
11,831
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except per share amounts)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Operating income
|
$
|
112
|
|
|
$
|
134
|
|
|
$
|
166
|
|
|
$
|
155
|
|
Income from continuing operations attributable to Raytheon Company
|
73
|
|
|
87
|
|
|
108
|
|
|
112
|
|
||||
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company
|
$
|
0.25
|
|
|
$
|
0.29
|
|
|
$
|
0.37
|
|
|
$
|
0.38
|
|
(% of segment total external net sales)
|
IDS
|
|
IIS
|
|
MS
|
|
SAS
|
|
Forcepoint
|
|
Products
|
90
|
%
|
45
|
%
|
95
|
%
|
95
|
%
|
90
|
%
|
Services
|
10
|
%
|
55
|
%
|
5
|
%
|
5
|
%
|
10
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||
Net sales
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
5,275
|
|
|
$
|
5,032
|
|
|
84.0
|
%
|
|
83.5
|
%
|
Services
|
1,006
|
|
|
997
|
|
|
16.0
|
%
|
|
16.5
|
%
|
||
Total net sales
|
$
|
6,281
|
|
|
$
|
6,029
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Six Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||
Net sales
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
10,319
|
|
|
$
|
9,858
|
|
|
84.0
|
%
|
|
83.3
|
%
|
Services
|
1,962
|
|
|
1,973
|
|
|
16.0
|
%
|
|
16.7
|
%
|
||
Total net sales
|
$
|
12,281
|
|
|
$
|
11,831
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||
Sales to the U.S. government
(1)(2)
|
$
|
4,193
|
|
|
$
|
4,001
|
|
|
67
|
%
|
|
66
|
%
|
U.S. direct commercial sales and other
|
90
|
|
|
112
|
|
|
1
|
%
|
|
2
|
%
|
||
Foreign military sales through the U.S. government
|
826
|
|
|
718
|
|
|
13
|
%
|
|
12
|
%
|
||
Foreign direct commercial sales and other
(1)
|
1,172
|
|
|
1,198
|
|
|
19
|
%
|
|
20
|
%
|
||
Total net sales
|
$
|
6,281
|
|
|
$
|
6,029
|
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
(2)
|
Includes sales to the U.S. Department of Defense (DoD) of
$4,024 million
, or
64%
of total net sales, in the
second quarter of 2017
and
$3,789 million
, or
63%
of total net sales, in the
second quarter of 2016
.
|
|
Six Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||
Sales to the U.S. government
(1)(2)
|
$
|
8,177
|
|
|
$
|
7,905
|
|
|
67
|
%
|
|
67
|
%
|
U.S. direct commercial sales and other
|
188
|
|
|
226
|
|
|
1
|
%
|
|
2
|
%
|
||
Foreign military sales through the U.S. government
|
1,603
|
|
|
1,418
|
|
|
13
|
%
|
|
12
|
%
|
||
Foreign direct commercial sales and other
(1)
|
2,313
|
|
|
2,282
|
|
|
19
|
%
|
|
19
|
%
|
||
Total net sales
|
$
|
12,281
|
|
|
$
|
11,831
|
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
(2)
|
Includes sales to the U.S. DoD of
$7,806 million
, or
64%
of total net sales, in the
first six months of 2017
and
$7,504 million
, or
63%
of total net sales, in the
first six months of 2016
.
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||
Cost of sales
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
3,877
|
|
|
$
|
3,549
|
|
|
61.7
|
%
|
|
58.9
|
%
|
Services
|
808
|
|
|
813
|
|
|
12.9
|
%
|
|
13.5
|
%
|
||
Total cost of sales
|
$
|
4,685
|
|
|
$
|
4,362
|
|
|
74.6
|
%
|
|
72.4
|
%
|
|
Six Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||
Cost of sales
|
|
|
|
|
|
|
|
||||||
Products
|
$
|
7,633
|
|
|
$
|
7,188
|
|
|
62.2
|
%
|
|
60.8
|
%
|
Services
|
1,582
|
|
|
1,615
|
|
|
12.9
|
%
|
|
13.7
|
%
|
||
Total cost of sales
|
$
|
9,215
|
|
|
$
|
8,803
|
|
|
75.1
|
%
|
|
74.5
|
%
|
|
Three Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||
Administrative and selling expenses
|
$
|
547
|
|
|
$
|
514
|
|
|
8.7
|
%
|
|
8.5
|
%
|
Research and development expenses
|
200
|
|
|
181
|
|
|
3.2
|
%
|
|
3.0
|
%
|
||
Total general and administrative expenses
|
$
|
747
|
|
|
$
|
695
|
|
|
11.9
|
%
|
|
11.5
|
%
|
|
Six Months Ended
|
|
% of Total Net Sales
|
||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||
Administrative and selling expenses
|
$
|
1,105
|
|
|
$
|
1,063
|
|
|
9.0
|
%
|
|
9.0
|
%
|
Research and development expenses
|
371
|
|
|
380
|
|
|
3.0
|
%
|
|
3.2
|
%
|
||
Total general and administrative expenses
|
$
|
1,476
|
|
|
$
|
1,443
|
|
|
12.0
|
%
|
|
12.2
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Total operating expenses
|
$
|
5,432
|
|
|
$
|
5,057
|
|
|
$
|
10,691
|
|
|
$
|
10,246
|
|
% of Total Net Sales
|
86.5
|
%
|
|
83.9
|
%
|
|
87.1
|
%
|
|
86.6
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Operating income
|
$
|
849
|
|
|
$
|
972
|
|
|
$
|
1,590
|
|
|
$
|
1,585
|
|
% of Total Net Sales
|
13.5
|
%
|
|
16.1
|
%
|
|
12.9
|
%
|
|
13.4
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Non-operating (income) expense, net
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
$
|
51
|
|
|
$
|
58
|
|
|
$
|
109
|
|
|
$
|
116
|
|
Interest income
|
(5
|
)
|
|
(4
|
)
|
|
(10
|
)
|
|
(8
|
)
|
||||
Other (income) expense, net
|
35
|
|
|
(1
|
)
|
|
28
|
|
|
(3
|
)
|
||||
Total non-operating (income) expense, net
|
$
|
81
|
|
|
$
|
53
|
|
|
$
|
127
|
|
|
$
|
105
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except percentages)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Federal and foreign income taxes
|
$
|
221
|
|
|
$
|
205
|
|
|
$
|
419
|
|
|
$
|
362
|
|
Effective tax rate
|
28.8
|
%
|
|
22.3
|
%
|
|
28.6
|
%
|
|
24.5
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Income from continuing operations
|
$
|
547
|
|
|
$
|
714
|
|
|
$
|
1,044
|
|
|
$
|
1,118
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Net income
|
$
|
547
|
|
|
$
|
713
|
|
|
$
|
1,047
|
|
|
$
|
1,118
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except per share amounts)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Income from continuing operations attributable to Raytheon Company
|
|
$
|
553
|
|
|
$
|
718
|
|
|
$
|
1,056
|
|
|
$
|
1,145
|
|
Diluted weighted-average shares outstanding
|
|
292.0
|
|
|
297.6
|
|
|
292.4
|
|
|
298.6
|
|
||||
Diluted EPS from continuing operations attributable to Raytheon Company
|
|
$
|
1.89
|
|
|
$
|
2.41
|
|
|
$
|
3.62
|
|
|
$
|
3.83
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Beginning balance
|
|
291.0
|
|
|
296.9
|
|
|
292.8
|
|
|
299.0
|
|
Stock plans activity
|
|
—
|
|
|
0.2
|
|
|
1.1
|
|
|
1.6
|
|
Share repurchases
|
|
(0.9
|
)
|
|
(2.0
|
)
|
|
(3.8
|
)
|
|
(5.5
|
)
|
Ending balance
|
|
290.1
|
|
|
295.1
|
|
|
290.1
|
|
|
295.1
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions, except per share amounts)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Net income attributable to Raytheon Company
|
|
$
|
553
|
|
|
$
|
717
|
|
|
$
|
1,059
|
|
|
$
|
1,145
|
|
Diluted weighted-average shares outstanding
|
|
292.0
|
|
|
297.6
|
|
|
292.4
|
|
|
298.6
|
|
||||
Diluted EPS attributable to Raytheon Company
|
|
$
|
1.89
|
|
|
$
|
2.41
|
|
|
$
|
3.63
|
|
|
$
|
3.84
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Bookings
(in millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Integrated Defense Systems
|
|
$
|
1,231
|
|
|
$
|
1,273
|
|
|
$
|
2,862
|
|
|
$
|
2,290
|
|
Intelligence, Information and Services
|
|
1,373
|
|
|
1,599
|
|
|
3,107
|
|
|
2,852
|
|
||||
Missile Systems
|
|
2,755
|
|
|
1,891
|
|
|
3,498
|
|
|
3,523
|
|
||||
Space and Airborne Systems
|
|
1,058
|
|
|
2,217
|
|
|
2,533
|
|
|
4,419
|
|
||||
Forcepoint
|
|
115
|
|
|
123
|
|
|
220
|
|
|
220
|
|
||||
Total
|
|
$
|
6,532
|
|
|
$
|
7,103
|
|
|
$
|
12,220
|
|
|
$
|
13,304
|
|
Backlog
(in millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Integrated Defense Systems
|
|
$
|
10,055
|
|
|
$
|
10,159
|
|
Intelligence, Information and Services
|
|
5,908
|
|
|
5,662
|
|
||
Missile Systems
|
|
11,382
|
|
|
11,568
|
|
||
Space and Airborne Systems
|
|
8,398
|
|
|
8,834
|
|
||
Forcepoint
(1)
|
|
425
|
|
|
486
|
|
||
Total
|
|
$
|
36,168
|
|
|
$
|
36,709
|
|
(1)
|
Forcepoint backlog excludes the unfavorable impact of
$25 million
and
$45 million
at
July 2, 2017
and
December 31, 2016
, respectively, related to the Acquisition Accounting Adjustments to record acquired deferred revenue at fair value.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Total Net Sales
(in millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Integrated Defense Systems
|
|
$
|
1,462
|
|
|
$
|
1,399
|
|
|
$
|
2,860
|
|
|
$
|
2,735
|
|
Intelligence, Information and Services
|
|
1,555
|
|
|
1,587
|
|
|
3,062
|
|
|
3,119
|
|
||||
Missile Systems
|
|
1,901
|
|
|
1,706
|
|
|
3,657
|
|
|
3,429
|
|
||||
Space and Airborne Systems
|
|
1,608
|
|
|
1,547
|
|
|
3,163
|
|
|
2,992
|
|
||||
Forcepoint
|
|
138
|
|
|
137
|
|
|
282
|
|
|
276
|
|
||||
Eliminations
|
|
(372
|
)
|
|
(326
|
)
|
|
(722
|
)
|
|
(673
|
)
|
||||
Total business segment sales
|
|
6,292
|
|
|
6,050
|
|
|
12,302
|
|
|
11,878
|
|
||||
Acquisition Accounting Adjustments
|
|
(11
|
)
|
|
(21
|
)
|
|
(21
|
)
|
|
(47
|
)
|
||||
Total
|
|
$
|
6,281
|
|
|
$
|
6,029
|
|
|
$
|
12,281
|
|
|
$
|
11,831
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
EAC Adjustments
(in millions)
|
Jul 2, 2017
|
|
|
Jul 3, 2016
|
|
|
Jul 2, 2017
|
|
|
Jul 3, 2016
|
|
||||
Gross favorable
|
$
|
236
|
|
|
$
|
228
|
|
|
$
|
465
|
|
|
$
|
407
|
|
Gross unfavorable
|
(124
|
)
|
|
(94
|
)
|
|
(299
|
)
|
|
(252
|
)
|
||||
Total net EAC adjustments
|
$
|
112
|
|
|
$
|
134
|
|
|
$
|
166
|
|
|
$
|
155
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
Operating Income
(in millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Integrated Defense Systems
|
|
$
|
245
|
|
|
$
|
376
|
|
|
$
|
457
|
|
|
$
|
522
|
|
Intelligence, Information and Services
|
|
115
|
|
|
120
|
|
|
226
|
|
|
224
|
|
||||
Missile Systems
|
|
236
|
|
|
233
|
|
|
452
|
|
|
425
|
|
||||
Space and Airborne Systems
|
|
218
|
|
|
205
|
|
|
408
|
|
|
372
|
|
||||
Forcepoint
|
|
2
|
|
|
10
|
|
|
18
|
|
|
28
|
|
||||
Eliminations
|
|
(37
|
)
|
|
(34
|
)
|
|
(74
|
)
|
|
(67
|
)
|
||||
Total business segment operating income
|
|
779
|
|
|
910
|
|
|
1,487
|
|
|
1,504
|
|
||||
Acquisition Accounting Adjustments
|
|
(42
|
)
|
|
(51
|
)
|
|
(84
|
)
|
|
(109
|
)
|
||||
FAS/CAS Adjustment
|
|
109
|
|
|
109
|
|
|
217
|
|
|
214
|
|
||||
Corporate
|
|
3
|
|
|
4
|
|
|
(30
|
)
|
|
(24
|
)
|
||||
Total
|
|
$
|
849
|
|
|
$
|
972
|
|
|
$
|
1,590
|
|
|
$
|
1,585
|
|
Integrated Defense Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Total net sales
|
|
$
|
1,462
|
|
|
$
|
1,399
|
|
|
4.5
|
%
|
|
$
|
2,860
|
|
|
$
|
2,735
|
|
|
4.6
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of sales—labor
|
|
530
|
|
|
498
|
|
|
6.4
|
%
|
|
1,065
|
|
|
1,007
|
|
|
5.8
|
%
|
||||
Cost of sales—materials and subcontractors
|
|
465
|
|
|
482
|
|
|
(3.5
|
)%
|
|
884
|
|
|
935
|
|
|
(5.5
|
)%
|
||||
Other cost of sales and other operating expenses
|
|
222
|
|
|
43
|
|
|
416.3
|
%
|
|
454
|
|
|
271
|
|
|
67.5
|
%
|
||||
Total operating expenses
|
|
1,217
|
|
|
1,023
|
|
|
19.0
|
%
|
|
2,403
|
|
|
2,213
|
|
|
8.6
|
%
|
||||
Operating income
|
|
$
|
245
|
|
|
$
|
376
|
|
|
(34.8
|
)%
|
|
$
|
457
|
|
|
$
|
522
|
|
|
(12.5
|
)%
|
Operating margin
|
|
16.8
|
%
|
|
26.9
|
%
|
|
|
|
16.0
|
%
|
|
19.1
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Jul 2, 2017 Versus Three Months Ended Jul 3, 2016
|
|
Six Months Ended Jul 2, 2017 Versus Six Months Ended Jul 3, 2016
|
||||||||||||||||||
Volume
|
|
|
|
$
|
5
|
|
|
|
|
|
|
$
|
5
|
|
|
|
||||||
Net change in EAC adjustments
|
|
|
|
5
|
|
|
|
|
|
|
45
|
|
|
|
||||||||
Mix and other performance
|
|
|
|
(141
|
)
|
|
|
|
|
|
(115
|
)
|
|
|
||||||||
Total change in operating income
|
|
|
|
$
|
(131
|
)
|
|
|
|
|
|
$
|
(65
|
)
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Bookings
|
|
$
|
1,231
|
|
|
$
|
1,273
|
|
|
(3.3
|
)%
|
|
$
|
2,862
|
|
|
$
|
2,290
|
|
|
25.0
|
%
|
Intelligence, Information and Services
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Total net sales
|
|
$
|
1,555
|
|
|
$
|
1,587
|
|
|
(2.0
|
)%
|
|
$
|
3,062
|
|
|
$
|
3,119
|
|
|
(1.8
|
)%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales—labor
|
|
651
|
|
|
650
|
|
|
0.2
|
%
|
|
1,307
|
|
|
1,292
|
|
|
1.2
|
%
|
||||
Cost of sales—materials and subcontractors
|
|
573
|
|
|
620
|
|
|
(7.6
|
)%
|
|
1,119
|
|
|
1,216
|
|
|
(8.0
|
)%
|
||||
Other cost of sales and other operating expenses
|
|
216
|
|
|
197
|
|
|
9.6
|
%
|
|
410
|
|
|
387
|
|
|
5.9
|
%
|
||||
Total operating expenses
|
|
1,440
|
|
|
1,467
|
|
|
(1.8
|
)%
|
|
2,836
|
|
|
2,895
|
|
|
(2.0
|
)%
|
||||
Operating income
|
|
$
|
115
|
|
|
$
|
120
|
|
|
(4.2
|
)%
|
|
$
|
226
|
|
|
$
|
224
|
|
|
0.9
|
%
|
Operating margin
|
|
7.4
|
%
|
|
7.6
|
%
|
|
|
|
7.4
|
%
|
|
7.2
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Jul 2, 2017 Versus Three Months Ended Jul 3, 2016
|
|
Six Months Ended Jul 2, 2017 Versus Six Months Ended Jul 3, 2016
|
||||||||||||||||||
Volume
|
|
|
|
$
|
(3
|
)
|
|
|
|
|
|
$
|
(5
|
)
|
|
|
||||||
Net change in EAC adjustments
|
|
|
|
4
|
|
|
|
|
|
|
(4
|
)
|
|
|
||||||||
Mix and other performance
|
|
|
|
(6
|
)
|
|
|
|
|
|
11
|
|
|
|
||||||||
Total change in operating income
|
|
|
|
$
|
(5
|
)
|
|
|
|
|
|
$
|
2
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Bookings
|
|
$
|
1,373
|
|
|
$
|
1,599
|
|
|
(14.1
|
)%
|
|
$
|
3,107
|
|
|
$
|
2,852
|
|
|
8.9
|
%
|
Missile Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Total net sales
|
|
$
|
1,901
|
|
|
$
|
1,706
|
|
|
11.4
|
%
|
|
$
|
3,657
|
|
|
$
|
3,429
|
|
|
6.6
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales—labor
|
|
561
|
|
|
528
|
|
|
6.3
|
%
|
|
1,110
|
|
|
1,054
|
|
|
5.3
|
%
|
||||
Cost of sales—materials and subcontractors
|
|
845
|
|
|
706
|
|
|
19.7
|
%
|
|
1,626
|
|
|
1,353
|
|
|
20.2
|
%
|
||||
Other cost of sales and other operating expenses
|
|
259
|
|
|
239
|
|
|
8.4
|
%
|
|
469
|
|
|
597
|
|
|
(21.4
|
)%
|
||||
Total operating expenses
|
|
1,665
|
|
|
1,473
|
|
|
13.0
|
%
|
|
3,205
|
|
|
3,004
|
|
|
6.7
|
%
|
||||
Operating income
|
|
$
|
236
|
|
|
$
|
233
|
|
|
1.3
|
%
|
|
$
|
452
|
|
|
$
|
425
|
|
|
6.4
|
%
|
Operating margin
|
|
12.4
|
%
|
|
13.7
|
%
|
|
|
|
12.4
|
%
|
|
12.4
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Jul 2, 2017 Versus Three Months Ended Jul 3, 2016
|
|
Six Months Ended Jul 2, 2017 Versus Six Months Ended Jul 3, 2016
|
||||||||||||||||||
Volume
|
|
|
|
$
|
27
|
|
|
|
|
|
|
$
|
28
|
|
|
|
||||||
Net change in EAC adjustments
|
|
|
|
(8
|
)
|
|
|
|
|
|
(2
|
)
|
|
|
||||||||
Mix and other performance
|
|
|
|
(16
|
)
|
|
|
|
|
|
1
|
|
|
|
||||||||
Total change in operating income
|
|
|
|
$
|
3
|
|
|
|
|
|
|
$
|
27
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Bookings
|
|
$
|
2,755
|
|
|
$
|
1,891
|
|
|
45.7
|
%
|
|
$
|
3,498
|
|
|
$
|
3,523
|
|
|
(0.7
|
)%
|
Space and Airborne Systems
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Total net sales
|
|
$
|
1,608
|
|
|
$
|
1,547
|
|
|
3.9
|
%
|
|
$
|
3,163
|
|
|
$
|
2,992
|
|
|
5.7
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales—labor
|
|
659
|
|
|
625
|
|
|
5.4
|
%
|
|
1,325
|
|
|
1,225
|
|
|
8.2
|
%
|
||||
Cost of sales—materials and subcontractors
|
|
478
|
|
|
462
|
|
|
3.5
|
%
|
|
920
|
|
|
854
|
|
|
7.7
|
%
|
||||
Other cost of sales and other operating expenses
|
|
253
|
|
|
255
|
|
|
(0.8
|
)%
|
|
510
|
|
|
541
|
|
|
(5.7
|
)%
|
||||
Total operating expenses
|
|
1,390
|
|
|
1,342
|
|
|
3.6
|
%
|
|
2,755
|
|
|
2,620
|
|
|
5.2
|
%
|
||||
Operating income
|
|
$
|
218
|
|
|
$
|
205
|
|
|
6.3
|
%
|
|
$
|
408
|
|
|
$
|
372
|
|
|
9.7
|
%
|
Operating margin
|
|
13.6
|
%
|
|
13.3
|
%
|
|
|
|
12.9
|
%
|
|
12.4
|
%
|
|
|
Change in Operating Income
(in millions)
|
|
Three Months Ended Jul 2, 2017 Versus Three Months Ended Jul 3, 2016
|
|
Six Months Ended Jul 2, 2017 Versus Six Months Ended Jul 3, 2016
|
||||||||||||||||||
Volume
|
|
|
|
$
|
9
|
|
|
|
|
|
|
$
|
20
|
|
|
|
||||||
Net change in EAC adjustments
|
|
|
|
(23
|
)
|
|
|
|
|
|
(28
|
)
|
|
|
||||||||
Mix and other performance
|
|
|
|
27
|
|
|
|
|
|
|
44
|
|
|
|
||||||||
Total change in operating income
|
|
|
|
$
|
13
|
|
|
|
|
|
|
$
|
36
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Bookings
|
|
$
|
1,058
|
|
|
$
|
2,217
|
|
|
(52.3
|
)%
|
|
$
|
2,533
|
|
|
$
|
4,419
|
|
|
(42.7
|
)%
|
Forcepoint
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Total net sales
|
|
$
|
138
|
|
|
$
|
137
|
|
|
0.7
|
%
|
|
$
|
282
|
|
|
$
|
276
|
|
|
2.2
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
|
26
|
|
|
28
|
|
|
(7.1
|
)%
|
|
51
|
|
|
52
|
|
|
(1.9
|
)%
|
||||
Selling and marketing
|
|
58
|
|
|
48
|
|
|
20.8
|
%
|
|
112
|
|
|
94
|
|
|
19.1
|
%
|
||||
Research and development
|
|
35
|
|
|
32
|
|
|
9.4
|
%
|
|
67
|
|
|
64
|
|
|
4.7
|
%
|
||||
General and administrative
|
|
17
|
|
|
19
|
|
|
(10.5
|
)%
|
|
34
|
|
|
38
|
|
|
(10.5
|
)%
|
||||
Total operating expenses
|
|
136
|
|
|
127
|
|
|
7.1
|
%
|
|
264
|
|
|
248
|
|
|
6.5
|
%
|
||||
Operating income (loss)
|
|
$
|
2
|
|
|
$
|
10
|
|
|
(80.0
|
)%
|
|
$
|
18
|
|
|
$
|
28
|
|
|
(35.7
|
)%
|
Operating margin
|
|
1.4
|
%
|
|
7.3
|
%
|
|
|
|
6.4
|
%
|
|
10.1
|
%
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
% Change
|
||||||||||
Bookings
|
|
$
|
115
|
|
|
$
|
123
|
|
|
(6.5
|
)%
|
|
$
|
220
|
|
|
$
|
220
|
|
|
—
|
%
|
•
|
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
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Deferred revenue adjustment
|
|
$
|
(11
|
)
|
|
$
|
(21
|
)
|
|
$
|
(21
|
)
|
|
$
|
(47
|
)
|
Amortization of acquired intangibles
|
|
(31
|
)
|
|
(30
|
)
|
|
(63
|
)
|
|
(62
|
)
|
||||
Total Acquisition Accounting Adjustments
|
|
$
|
(42
|
)
|
|
$
|
(51
|
)
|
|
$
|
(84
|
)
|
|
$
|
(109
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Integrated Defense Systems
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Intelligence, Information and Services
|
|
5
|
|
|
4
|
|
|
10
|
|
|
9
|
|
||||
Missile Systems
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Space and Airborne Systems
|
|
2
|
|
|
4
|
|
|
5
|
|
|
9
|
|
||||
Forcepoint
|
|
23
|
|
|
21
|
|
|
47
|
|
|
43
|
|
||||
Total
|
|
$
|
31
|
|
|
$
|
30
|
|
|
$
|
63
|
|
|
$
|
62
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
FAS/CAS Adjustment Income (Expense)
(in millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
FAS/CAS Pension Adjustment
|
|
$
|
109
|
|
|
$
|
108
|
|
|
$
|
218
|
|
|
$
|
213
|
|
FAS/CAS PRB Adjustment
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
||||
FAS/CAS Adjustment
|
|
$
|
109
|
|
|
$
|
109
|
|
|
$
|
217
|
|
|
$
|
214
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
FAS (expense)
|
|
$
|
(319
|
)
|
|
$
|
(262
|
)
|
|
$
|
(638
|
)
|
|
$
|
(527
|
)
|
CAS expense
|
|
428
|
|
|
370
|
|
|
856
|
|
|
740
|
|
||||
FAS/CAS Pension Adjustment
|
|
$
|
109
|
|
|
$
|
108
|
|
|
$
|
218
|
|
|
$
|
213
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
Corporate
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
(30
|
)
|
|
$
|
(24
|
)
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Cash and cash equivalents
|
|
$
|
2,167
|
|
|
$
|
3,303
|
|
Short-term investments
|
|
410
|
|
|
100
|
|
||
Working capital
|
|
4,350
|
|
|
4,346
|
|
||
Amount available under credit facilities
|
|
950
|
|
|
1,250
|
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Net cash provided by (used in) operating activities
|
|
$
|
741
|
|
|
$
|
1,071
|
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Required pension contributions
|
|
$
|
74
|
|
|
$
|
79
|
|
PRB contributions
|
|
11
|
|
|
10
|
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Federal
|
|
$
|
220
|
|
|
$
|
165
|
|
Foreign
|
|
55
|
|
|
27
|
|
||
State
|
|
22
|
|
|
18
|
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
|
|||
Net cash provided by (used in) investing activities
|
|
$
|
(522
|
)
|
|
$
|
(186
|
)
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Additions to property, plant and equipment
|
|
$
|
181
|
|
|
$
|
237
|
|
Additions to capitalized internal use software
|
|
33
|
|
|
26
|
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Purchases of short-term investments
|
|
$
|
(399
|
)
|
|
$
|
(472
|
)
|
Maturities of short-term investments
|
|
100
|
|
|
599
|
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Payments for purchases of acquired companies, net of cash acquired
|
|
$
|
(39
|
)
|
|
$
|
(57
|
)
|
|
|
Six Months Ended
|
||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Net cash provided by (used in) financing activities
|
|
$
|
(1,347
|
)
|
|
$
|
(1,197
|
)
|
|
|
Six Months Ended
|
||||||||||
(In millions)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||||||
|
|
$
|
Shares
|
|
|
$
|
Shares
|
|
||||
Shares repurchased under our share repurchase programs
|
|
$
|
500
|
|
3.3
|
|
|
$
|
602
|
|
4.8
|
|
Shares repurchased to satisfy tax withholding obligations
|
|
79
|
|
0.5
|
|
|
92
|
|
0.7
|
|
||
Total share repurchases
|
|
$
|
579
|
|
3.8
|
|
|
$
|
694
|
|
5.5
|
|
|
|
Six Months Ended
|
||||||
(In millions, except per share amounts)
|
|
Jul 2, 2017
|
|
Jul 3, 2016
|
||||
Cash dividends declared per share
|
|
$
|
1.5950
|
|
|
$
|
1.4650
|
|
Total dividends paid
|
|
447
|
|
|
419
|
|
(In millions, except percentages)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Total remediation costs—undiscounted
|
|
$
|
210
|
|
|
$
|
219
|
|
Weighted average discount rate
|
|
5.2
|
%
|
|
5.2
|
%
|
||
Total remediation costs—discounted
|
|
$
|
146
|
|
|
$
|
147
|
|
Recoverable portion
|
|
95
|
|
|
92
|
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Guarantees
|
|
$
|
208
|
|
|
$
|
190
|
|
Letters of credit
|
|
2,560
|
|
|
2,345
|
|
||
Surety bonds
|
|
127
|
|
|
127
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||||||||||
(In millions, except per share amounts)
|
Dec 31, 2016
|
|
|
Oct 2, 2016
|
|
|
Jul 3, 2016
|
|
|
Apr 3, 2016
|
|
|
Dec 31, 2016
|
|
|
Dec 31, 2015
|
|
||||||
Income from continuing operations after taxes
|
$
|
12
|
|
|
$
|
18
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
40
|
|
Net income
|
12
|
|
|
18
|
|
|
9
|
|
|
—
|
|
|
39
|
|
|
40
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations after taxes
|
$
|
0.04
|
|
|
$
|
0.05
|
|
|
$
|
0.02
|
|
|
$
|
—
|
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
Net income
|
0.04
|
|
|
0.05
|
|
|
0.02
|
|
|
—
|
|
|
0.11
|
|
|
0.11
|
|
||||||
Diluted EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations after taxes
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
Net income
|
0.04
|
|
|
0.05
|
|
|
0.03
|
|
|
—
|
|
|
0.11
|
|
|
0.11
|
|
(In millions)
|
|
Jul 2, 2017
|
|
Dec 31, 2016
|
||||
Cash and cash equivalents
|
|
$
|
2,167
|
|
|
$
|
3,303
|
|
Restricted cash
|
|
8
|
|
|
—
|
|
||
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows
|
|
$
|
2,175
|
|
|
$
|
3,303
|
|
(In millions, except percentages)
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
Thereafter
|
|
|
Total
|
|
|
Fair Value
|
|
||||||||
Fixed-rate debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
—
|
|
|
$
|
3,292
|
|
|
$
|
4,792
|
|
|
$
|
5,288
|
|
Average interest rate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.550
|
%
|
|
—
|
|
|
4.229
|
%
|
|
4.017
|
%
|
|
|
(In millions, except percentages)
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
Thereafter
|
|
|
Total
|
|
|
Fair Value
|
|
||||||||
Fixed-rate debt
|
|
$
|
—
|
|
|
$
|
591
|
|
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
—
|
|
|
$
|
3,292
|
|
|
$
|
5,383
|
|
|
$
|
5,848
|
|
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)
|
|
||
April (April 3, 2017 - April 30, 2017)
|
29
|
|
|
$
|
151.23
|
|
|
—
|
|
|
$
|
1.2
|
|
May (May 1, 2017 - May 28, 2017)
|
81,894
|
|
|
159.36
|
|
|
81,528
|
|
|
1.2
|
|
||
June (May 29, 2017 - July 2, 2017)
|
760,944
|
|
|
162.23
|
|
|
537,180
|
|
|
1.1
|
|
||
Total
|
842,867
|
|
|
$
|
161.95
|
|
|
618,708
|
|
|
|
(1)
|
Includes shares purchased related to activity under our stock plans. Such activity during the
second quarter of 2017
includes the surrender by employees of
224,159
shares to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.
|
(2)
|
In November 2015, our Board of Directors authorized the repurchase of up to
$2.0 billion
of our outstanding common stock.
|
10.1
|
|
Raytheon 2017 Incentive Plan, filed as Appendix A to the Company’s definitive proxy statement filed on April 21, 2017, is hereby incorporated by reference.
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101
|
|
The following materials from Raytheon Company’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2017, formatted in eXtensible Business Reporting Language (XBRL): (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
|
(i)
|
Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”), other than those Persons in control of the Company as of the date hereof or a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities; or
|
(ii)
|
A change in the Board such that individuals who as of the date hereof constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election or nomination for election by the Company’s stockholders was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; or
|
(iii)
|
The consummation of: (a) a plan of complete liquidation of the Company; (b) an agreement for the sale or disposition of all or substantially all of the Company’s assets; (c) a merger, consolidation or reorganization of the Company with or involving any other corporation, other than a merger, consolidation or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation or reorganization.
|
(i)
|
the Participant’s involuntary dismissal or discharge by the Company (or successor thereto) or any Affiliate for reasons other than Cause; or
|
(ii)
|
the Participant’s voluntary resignation following (A) a material diminution in the Participant’s duties or responsibilities, (B) a material change in the Participant’s reporting requirements such that the Participant is required to report to a person whose duties, responsibilities and authority are materially less than those of the person to whom the Participant previously reported, (C) a material reduction in the Participant’s level of base compensation with a reduction of more than fifteen percent (15%) or more to be deemed material or (D) a material adverse change in the geographic location of the Participant’s principal place of employment with a relocation by more than fifty (50) miles or more to be deemed material, provided and only if (I) such change, reduction or relocation is effected without the Participant’s consent and (II) each of the following conditions is satisfied: (i) the Participant shall have provided the Company with written notice of the event or condition constituting the reason for Involuntary Termination within thirty (30) days after the occurrence of that event or condition; (ii) the Company shall have failed to take appropriate remedial action to cure such event or condition within thirty (30) days after receipt of such notice; and (iii) the Participant’s Involuntary Termination shall be effected upon the expiration of such thirty (30) day cure period.
|
11.
|
Other Stock-Based Awards
.
|
a)
|
immediately upon your death;
|
b)
|
in accordance with the Vesting Schedule in the event of (i) a Medical Leave of Absence of at least one year or (ii) Disability; or
|
c)
|
immediately upon your termination of employment by reason of an Involuntary Termination within two (2) years following a Change in Control, if in connection with such Change in Control this Award was assumed, continued, substituted or cancelled in exchange for cash payments subject to vesting (in which case such cash payments shall become fully vested, subject to any escrow, holdback, earn-out or similar provisions applicable to holders of Stock).
|
A.
|
No Guaranty of Future Awards.
This Award does not guarantee you the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.
|
B.
|
No Rights to Continued Employment
. This Award shall not be deemed to create a contract or other promise of continued employment with the Company or an Affiliate and shall not in any way prohibit or restrict the ability of the Company or an Affiliate to terminate your employment at any time for any reason.
|
C.
|
Taxes
. In addition to amounts in respect of taxes which the Company shall be required by law to deduct or withhold from any dividend payments on the Shares, the Company may withhold from any Shares vesting hereunder a number of Shares whose market value is sufficient in amount for the Company to satisfy any applicable United States federal, state or other tax withholding requirement under the laws of the jurisdictions in which you reside or that otherwise may be applicable to you. You shall not be entitled to any Shares or dividends on any Shares until all such tax obligations have been satisfied in full.
|
D.
|
Clawback
. If you are an elected officer, in addition to any other remedies available to the Company (but subject to applicable law), if the Board determines that it is appropriate, the Company may recover (in whole or in part) any payment made pursuant to this Award where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a restatement of Company financial statements filed with the Securities and Exchange Commission; (2) the Board determines that you engaged in knowing or intentional fraudulent or illegal conduct that caused or substantially caused the need for the restatement; and (3) a lower payment would have been made to you pursuant to the Award based upon the restated financial results. In any such instance, the Company shall, to the extent practicable, seek to recover from you the amount by which the payment pursuant to the Award for the relevant period exceeded the lower payment that would have been made based on the restated financial results. The Company’s right of recovery applies to both the vested and unvested portion of the Award.
|
E.
|
Plan
.
All terms and conditions of the Plan are incorporated herein by reference and constitute an integral part hereof. Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.
|
F.
|
Notices
. Notices required or permitted hereunder shall be in writing and shall be delivered personally or by mail, postage prepaid, and, if to the Company, addressed to Raytheon Company, 870 Winter Street, Waltham, Massachusetts 02451, Attention: Vice President, Human Resources and Global Security, and, if to you, to your name and address as shown on the Company's payroll records.
|
G.
|
Entire Agreement; Successors and Assigns
. The Plan and this Award Agreement constitute the entire agreement governing the terms of the Award to you. The Award Agreement shall inure to the benefit of the Company’s successors and assigns and may be assigned by the Company without your consent.
|
H.
|
Governing Law
. This Award Agreement shall be governed by the law of the Commonwealth of Massachusetts, without regard to its provisions governing conflicts of law.
|
a)
|
immediately upon your death;
|
b)
|
in accordance with the Vesting Schedule in the event of (i) a Medical Leave of Absence of at least one year or (ii) Disability; or
|
c)
|
immediately upon your termination of employment by reason of an Involuntary Termination within two (2) years following a Change in Control, if in connection with such Change in Control this Award was assumed, continued, substituted or cancelled in exchange for cash payments subject to vesting (in which case such cash payments shall become fully vested, subject to any escrow, holdback, earn-out or similar provisions applicable to holders of Stock).
|
A.
|
No Guaranty of Future Awards
. This Award does not guarantee you the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.
|
B.
|
No Rights as Shareholder
.
You shall not be considered a shareholder of the Company with respect to the Units until Shares are issued to you in payment of the Units. Therefore, you have no right to vote the Units or to receive dividends with respect to such Units except as provided in Section 5 above.
|
C.
|
No Rights to Continued Employment
. This Award shall not be deemed to create a contract or other promise of continued employment with the Company or an Affiliate and shall not in any way prohibit or restrict the ability of the Company or an Affiliate to terminate your employment at any time for any reason.
|
D.
|
Restrictions on Transfer of Units
. Until the vesting of, and lapse of the restrictions applicable to, any Units and the delivery of Shares in payment therefor, Units may not be sold, transferred, pledged, exchanged, hypothecated or disposed of by you and shall not be subject to execution, attachment or similar process.
|
E.
|
Taxes
. Taxes may be assessed and/or withheld as required by law at applicable United States federal, state and/or other tax rates (under the laws of the jurisdictions in which you reside or that may otherwise be applicable to you) with respect to Units, issuance of Shares and cash in lieu of dividends.
|
F.
|
Clawback
. If you are an elected officer, in addition to any other remedies available to the Company (but subject to applicable law), if the Board determines that it is appropriate, the Company may recover (in whole or in part) any payment made pursuant to this Award where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a restatement of Company financial statements filed with the Securities and Exchange Commission; (2) the Board determines that you engaged in knowing or intentional fraudulent or illegal conduct that caused or substantially caused the need for the restatement; and (3) a lower payment would have been made to you pursuant to the Award based upon the restated financial results. In any such instance, the Company will, to the extent practicable, seek to recover from you the amount by which the payment pursuant to the Award for the relevant period exceeded the lower payment that would have been made based on the restated financial results. The Company’s right of recovery applies to both the vested and unvested portion of the Award.
|
G.
|
Employer’s National Insurance Contributions – UK Recipients Only
. The Company has granted this Award on the terms that vesting is, if you are a resident of the United Kingdom, conditional upon the Recipient agreeing to pay for any Class 1 National Insurance contributions arising in respect of the Units awarded hereunder by entering this Agreement or (if the Company so determines) by completing and delivering to the Company prior to vesting a joint election in respect of the same in a form approved by HM Revenue and Customs.
|
H.
|
Plan
.
All terms and conditions of the Plan are incorporated herein by reference and constitute an integral part hereof. Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.
|
I.
|
Notices
. Notices required or permitted hereunder shall be in writing and shall be delivered personally or by mail, postage prepaid, addressed to Raytheon Company, 870 Winter Street, Waltham, Massachusetts 02451, Attention: Vice President, Human Resources and Global Security, and, if to you, to your address as shown on the Company's payroll records.
|
J.
|
Entire Agreement; Successors and Assigns
. The Plan and this Award Agreement constitute the entire agreement governing the terms of the Award to you. The Award Agreement shall inure to the benefit of the Company’s successors and assigns and may be assigned by the Company without your consent.
|
K.
|
Governing Law
. This Award Agreement shall be governed by the law of the Commonwealth of Massachusetts, without regard to its provisions governing conflicts of law.
|
A.
|
Award Assumed, Continued or Substituted
. If this Award is assumed, continued or substituted in connection with the Change in Control, then (i) if you remain an employee through the completion of the Performance Cycle, you will be paid the shares issuable under this Award (as determined pursuant to Section 4 D) or other consideration payable in connection with such assumption, continuation or substitution promptly following the end of the Performance Cycle but no later than thirty (30) days after the end of the Performance Cycles; and (ii) in the event of your Involuntary Termination within twenty-four (24) months following the Change in Control, the shares issuable under this Award (as determined pursuant to Section 4 D) or
|
B.
|
Award not Assumed, Continued or Substituted
. If this Award is not assumed, continued or substituted in connection with the Change in Control, then the shares issuable under this Award (as determined pursuant to Section 4 D) shall be issued on the effective date of the Change in Control (or as soon as administratively practicable thereafter, but no later than thirty (30) days following the effective date of the Change in Control) provided that the Award is not deemed to constitute nonqualified deferred compensation under Code Section 409A.
|
C.
|
Retirement, Death or Disability
. If the Change in Control occurs after your employment with the Company ends on account of your Retirement or because you become disabled or die, then you (or in the event of your death, your estate) will be entitled to a pro rata portion of the number of shares of Stock as determined pursuant to Section 4 D and such shares shall be issued to you on the effective date of the Change in Control or as soon as administratively practicable thereafter, but no later than thirty (30) days following the effective date of the Change in Control. If your employment with the Company ends on account of your Retirement or because you become disabled or die after the Change in Control occurs, then you (or in the event of your death, your estate) will be entitled to a pro rata portion of the number of shares of Stock as determined pursuant to Section 4 D or other consideration payable in connection with an assumption, continuation or substitution of the Award and such shares or other consideration shall be issued upon termination of your employment. In each case, the pro rata portion will be based on the number of full months in the Performance Cycle during which you were employed as compared to the total number of months in the Performance Cycle.
|
D.
|
Number of Shares of Stock
. In the event the Change in Control occurs and you remain an employee through the effective date of the Change in Control, you will be entitled to receive .
|
A.
|
Settlement of Award
. Except as otherwise provided in Sections 3 and 4 above, the actual number of shares (or amount of cash in lieu of shares) that you receive at the end of the Performance Cycle will be determined based upon the degree to which each metric is attained. You will be entitled to receive 100% of your Total Target Number of Shares of Stock if Target performance is achieved in all three metrics. If performance falls below the Threshold for a metric, no shares of Stock or cash will be awarded for that metric. When performance for a metric is at or above Threshold performance, shares of Stock or cash will be paid out based upon the performance level indicated in Section 2 above, up to a maximum of two times the Target performance level. When performance for a metric falls between two performance levels, payout will be based upon the lower Target Share Award Multiplier. Accordingly, depending upon the level of attainment of each metric, the maximum number of shares of Stock that could be issued in settlement of your Award is two times your Total Target Number of Shares of Stock. The total actual number of shares that you receive under this Award, including shares attributable to dividend equivalent amounts, will be rounded up to the nearest whole share.
|
B.
|
Timing
. Promptly following determination of the number of shares of Stock you have earned under this Award but no later than March 15 after the end of the Performance Cycle, such number, if any, will be paid to you together with a dividend equivalent amount of shares calculated in accordance with Section 5 C below.
|
C.
|
Dividend Equivalents
. For each dividend declared by the Company’s Board of Directors (the “Board”) during the period beginning on the date of grant of this Award and ending at the end of the Performance Cycle, whether in cash or stock, if any (a “LTPP Dividend”), a dividend equivalent amount will be calculated assuming that the shares of Stock to which you ultimately become entitled under this Award (including shares attributable to dividend equivalent amounts from prior LTPP Dividends, if any) were entitled to such LTPP Dividend and that the dividend equivalent amount had been reinvested in additional shares of Stock as of the payment date of such LTPP Dividend. You will not be entitled to any dividend equivalent amount on shares of Stock covered by this Award which are not ultimately earned.
|
D.
|
Form of Payment
. The Committee in its discretion may settle Awards, including any dividend equivalent amounts, in shares of Stock or cash, or a combination thereof. Cash payments, if any, shall be calculated based upon the fair market value of a share of Stock on the date on which the Committee determines the extent to which the Company has satisfied the metrics and the number of shares of Stock to be issued in settlement of the Award.
|
E.
|
Taxes
. Taxes may be assessed and/or withheld as required by law at applicable United States federal, state and/or other tax rates (under the laws of the jurisdictions in which you reside or that may otherwise be applicable to you) with respect to
|
A.
|
Future Adjustments
. In the event of any merger, acquisition, disposition or other corporate event affecting the Company or any peer company during the Performance Cycle, the Committee may make such adjustments to the peer group of companies, the total return calculations of the affected companies, and the metrics set forth in Section 2 as it may determine would most nearly carry out the original purposes and intent of this Award.
|
B.
|
No Guaranty of Future Awards
. This Award in no way guarantees you the right to or expectation that you may receive similar awards with respect to any other similar performance cycle or period which the Committee may, in its discretion, establish and as to which the Committee may elect to grant awards under the Plan.
|
C.
|
No Rights as Shareholder
.
You will not be considered a shareholder of the Company with respect to the shares of Stock covered by this Award or any dividend equivalent amount of shares unless and until shares of Stock are issued to you in settlement of this Award.
|
D.
|
No Rights to Continued Employment
. This Award shall not be deemed to create a contract or other promise of continued employment with the Company or an Affiliate and shall not in any way prohibit or restrict the ability of the Company or an Affiliate to terminate your employment at any time for any reason.
|
E.
|
Compliance with Section 409A of the Internal Revenue Code
. Notwithstanding anything in this Agreement to the contrary, to the extent that this Agreement constitutes a nonqualified deferred compensation plan to which Internal Revenue Code Section 409A applies, the administration of this Award (including time and manner of payments under it) shall comply with Code Section 409A. Any shares or other amounts payable under this Agreement on a termination of your employment may only be paid on a separation from service (as such term is defined under Code Section 409A and regulations thereunder). No shares or other amounts which become issuable or distributable under this Agreement upon your separation from service shall actually be issued or distributed to you prior to the earlier of (i) the first (1st) day of the seventh (7th) month following the date of such Separation from Service or (ii) the date of your death, if you are is deemed at the time of such Separation from Service to be a specified employee under Section 1.409A-1(i) of the Treasury Regulations issued under Code Section 409A, as determined by the Committee, and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). The deferred shares or other distributable amount shall be issued or distributed in a lump sum on the first (1st) day of the seventh (7th) month following the date of your Separation from Service or, if earlier, the first day of the month immediately following the date the Company receives proof of your death.
|
F.
|
Clawback
. If you are an elected officer, in addition to any other remedies available to the Company (but subject to applicable law), if the Board determines that it is appropriate, the Company may recover (in whole or in part) any payment made pursuant to this Award where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a restatement of Company financial statements filed with the Securities and Exchange Commission; (2) the Board determines that you engaged in knowing or intentional fraudulent or illegal conduct that caused or substantially caused the need for the restatement; and (3) a lower payment would have been made to you pursuant to the Award based upon the restated financial results.
|
G.
|
Plan
. All terms and conditions of the Plan are incorporated herein by reference and constitute an integral part hereof. Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.
|
H.
|
Notices
. Notices required or permitted hereunder shall be in writing and shall be delivered personally or by mail, postage prepaid, addressed to Raytheon Company, 870 Winter Street, Waltham, Massachusetts 02451, Attention: Vice President, Human Resources and Global Security, and to you at your address as shown on the Company’s payroll records.
|
a)
|
immediately upon your death;
|
b)
|
in accordance with the Vesting Schedule in the event of (i) a Medical Leave of Absence of at least one year or (ii) Disability; or
|
c)
|
immediately upon your termination of employment by reason of an Involuntary Termination within two (2) years following a Change in Control, if in connection with such Change in Control this Award was assumed, continued, substituted or cancelled in exchange for cash payments subject to vesting (in which case such cash payments shall become fully vested, subject to any escrow, holdback, earn-out or similar provisions applicable to holders of Stock).
|
A.
|
No Guaranty of Future Awards.
This Award does not guarantee you the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.
|
B.
|
No Rights as Shareholder
.
You shall not be considered a shareholder of the Company with respect to the Units until Shares are issued to you in payment of the Units. Therefore, you have no right to vote the Units or to receive dividends with respect to such Units except as provided in Section 6 above.
|
C.
|
No Rights to Continued Employment; Recipient Obligations
. This Award shall not be deemed to create a contract or other promise of continued employment with the Company or an Affiliate and shall not in any way prohibit or restrict the ability of the Company or an Affiliate to terminate your employment at any time for any reason. This Award Agreement provides for certain obligations on your part following the cessation of your employment with the Company or an Affiliate and shall not, by implication or otherwise, affect in any way your obligations to the Company or an Affiliate during the term of your employment by the Company or an Affiliate, whether pursuant to written agreements between the Company and you, the provisions of applicable Company policies that may be adopted from time to time or applicable law or regulation.
|
D.
|
Restrictions on Transfer of Units
. Until the vesting of, and lapse of the restrictions applicable to, any Units and the delivery of Shares in payment therefor, Units may not be sold, transferred, pledged, exchanged, hypothecated or disposed of by you and shall not be subject to execution, attachment or similar process.
|
E.
|
Taxes
. Taxes may be assessed and/or withheld as required by law at applicable United States federal, state and/or other tax rates (under the laws of the jurisdictions in which you reside or that may otherwise be applicable to you) with respect to Units, issuance of Shares and cash in lieu of dividends. The Company will accelerate the vesting and payment of Units to pay your
Federal Insurance Contributions Act (FICA) tax on Units, the income tax withholding that results from payment of your FICA tax, and your additional FICA tax and income tax withholding attributable to the pyramiding of FICA tax and income tax withholding due to the foregoing payments.
|
F.
|
Clawback
. If you are an elected officer, in addition to any other remedies available to the Company (but subject to applicable law), if the Board determines that it is appropriate, the Company may recover (in whole or in part) any payment made pursuant to this Award where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a restatement of Company financial statements filed with the Securities and Exchange Commission; (2) the Board determines that you engaged in knowing or intentional fraudulent or illegal conduct that caused or substantially caused the need for the restatement; and (3) a lower payment would have been made to you pursuant to the Award based upon the restated financial results. In any such instance, the Company will, to the extent practicable, seek to recover from you the amount by which the payment pursuant to the Award for the relevant period exceeded the lower payment that would have been made based on the restated financial results. The Company’s right of recovery applies to both the vested and unvested portion of the Award.
|
G.
|
Compliance with Section 409A of the Code
. Notwithstanding anything in this Agreement to the contrary, to the extent that this Agreement constitutes a nonqualified deferred compensation plan to which Code Section 409A applies, the administration of this Award (including time and manner of payments under it) shall comply with Section 409A.
|
H.
|
Plan
.
All terms and conditions of the Plan are incorporated herein by reference and constitute an integral part hereof. Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.
|
I.
|
Notices
. Notices required or permitted hereunder shall be in writing and shall be delivered personally or by mail, postage prepaid, addressed to Raytheon Company, 870 Winter Street, Waltham, Massachusetts 02451, Attention: Vice President, Human Resources and Global Security, and, if to you, to your address as shown on the Company's payroll records.
|
J.
|
Entire Agreement; Successors and Assigns
. The Plan and this Award Agreement constitute the entire agreement governing the terms of the Award to you. The Award Agreement shall inure to the benefit of the Company’s successors and assigns and may be assigned by the Company without your consent.
|
K.
|
Governing Law
. This Award Agreement shall be governed by the law of the Commonwealth of Massachusetts, without regard to its provisions governing conflicts of law.
|
a)
|
immediately upon your death;
|
b)
|
in accordance with the Vesting Schedule in the event of (i) a Medical Leave of Absence of at least one year or (ii) Disability; or
|
c)
|
immediately upon your termination of employment by reason of an Involuntary Termination within two (2) years following a Change in Control, if in connection with such Change in Control this Award was assumed, continued, substituted or cancelled in exchange for cash payments subject to vesting (in which case such cash payments shall become fully vested, subject to any escrow, holdback, earn-out or similar provisions applicable to holders of Stock).
|
A.
|
Employer’s National Insurance Contributions - UK Recipients Only
. The Company has granted this Award on the terms that vesting is, if you are a resident of the United Kingdom, conditional upon the Recipient agreeing to pay for any secondary Class 1 National Insurance contributions arising in respect of the Units awarded hereunder, by executing this Agreement or (if the Company so determines) by completing and delivering to the Company prior to vesting a joint election in respect of the same in a form approved by HM Revenue & Customs.
|
B.
|
No Guaranty of Future Awards
. This Award does not guarantee you the right to or expectation of future Awards under the Plan or any future plan adopted by the Company.
|
C.
|
No Rights as Shareholder
.
You shall not be considered a shareholder of the Company with respect to the Units until Shares are issued to you in payment of the Units. Therefore, you have no right to vote the Units or to receive dividends with respect to such Units except as provided in Section 6 above.
|
D.
|
No Rights to Continued Employment; Recipient Obligations
. This Award shall not be deemed to create a contract or other promise of continued employment with the Company or an Affiliate and shall not in any way prohibit or restrict the ability of the Company or an Affiliate to terminate your employment at any time for any reason. This Award Agreement provides for certain obligations on your part following the cessation of your employment with the Company or an Affiliate and shall not, by implication or otherwise, affect in any way your obligations to the Company or an Affiliate during the term of your employment by the Company or an Affiliate, whether pursuant to written agreements between the Company and you, the provisions of applicable Company policies that may be adopted from time to time or applicable law or regulation.
|
E.
|
Restrictions on Transfer of Units
. Until the vesting of, and lapse of the restrictions applicable to, any Units and the delivery of Shares in payment therefor, Units may not be sold, transferred, pledged, exchanged, hypothecated or disposed of by you and shall not be subject to execution, attachment or similar process.
|
F.
|
Taxes
. Taxes may be assessed and/or withheld as required by law at applicable United States federal, state and/or other tax rates (under the laws of the jurisdictions in which you reside or that may otherwise be applicable to you) with respect to Units, issuance of Shares and cash in lieu of dividends. The Company will accelerate the vesting and payment of Units to pay your
Federal Insurance Contributions Act (FICA) tax on Units, the income tax withholding that results from payment of your FICA tax, and your additional FICA tax and income tax withholding attributable to the pyramiding of FICA tax and income tax withholding due to the foregoing payments.
|
G.
|
Clawback
. If you are an elected officer, in addition to any other remedies available to the Company (but subject to applicable law), if the Board determines that it is appropriate, the Company may recover (in whole or in part) any payment made pursuant to this Award where: (1) the payment was predicated upon achieving certain financial results that were subsequently the subject of a restatement of Company financial statements filed with the Securities and Exchange Commission; (2) the Board determines that you engaged in knowing or intentional fraudulent or illegal conduct that caused or substantially caused the need for the restatement; and (3) a lower payment would have been made to you pursuant to the Award based upon the restated financial results. In any such instance, the Company will, to the extent practicable, seek to recover from you the amount by which the payment pursuant to the Award for the relevant period exceeded the lower payment that would have been made based on the restated financial results. The Company’s right of recovery applies to both the vested and unvested portion of the Award.
|
H.
|
Compliance with Section 409A of the Code
. Notwithstanding anything in this Agreement to the contrary, to the extent that this Agreement constitutes a nonqualified deferred compensation plan to which Code Section 409A applies, the administration of this Award (including time and manner of payments under it) shall comply with Section 409A.
|
I.
|
Plan
.
All terms and conditions of the Plan are incorporated herein by reference and constitute an integral part hereof. Any capitalized terms used but not defined herein shall have the meanings ascribed to them in the Plan.
|
J.
|
Notices
. Notices required or permitted hereunder shall be in writing and shall be delivered personally or by mail, postage prepaid, addressed to Raytheon Company, 870 Winter Street, Waltham, Massachusetts 02451, Attention: Vice President, Human Resources and Global Security, and, if to you, to your address as shown on the Company's payroll records.
|
K.
|
Entire Agreement; Successors and Assigns
. The Plan and this Award Agreement constitute the entire agreement governing the terms of the Award to you. The Award Agreement shall inure to the benefit of the Company’s successors and assigns and may be assigned by the Company without your consent.
|
L.
|
Governing Law
. This Award Agreement shall be governed by the law of the Commonwealth of Massachusetts, without regard to its provisions governing conflicts of law.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Raytheon Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Thomas A. Kennedy
|
Thomas A. Kennedy
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Raytheon Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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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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July 27, 2017
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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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July 27, 2017
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