ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
95-1778500
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
Title of Each Class
|
Name of Each Exchange on Which Registered
|
Common Stock, $0.01 par value
|
New York Stock Exchange
|
–
|
Integrated Defense Systems;
|
–
|
Intelligence, Information and Services;
|
–
|
Missile Systems;
|
–
|
Space and Airborne Systems; and
|
–
|
Forcepoint.
|
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Sales to the U.S. government
(1)
|
$
|
16,860
|
|
|
$
|
16,083
|
|
|
$
|
15,788
|
|
Sales to the U.S. government as a percentage of Total Net Sales
(1)
|
67
|
%
|
|
67
|
%
|
|
68
|
%
|
|||
Foreign military sales through the U.S. government
|
$
|
3,311
|
|
|
$
|
2,899
|
|
|
$
|
2,812
|
|
Foreign military sales through the U.S. government as a percentage of Total Net Sales
|
13
|
%
|
|
12
|
%
|
|
12
|
%
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Total international sales
(1)
|
$
|
8,085
|
|
|
$
|
7,616
|
|
|
$
|
7,197
|
|
Total international sales as a Percentage of Total Net Sales
(1)
|
32
|
%
|
|
32
|
%
|
|
31
|
%
|
(1)
|
Includes foreign military sales through the U.S. government of
$3,311 million
,
$2,899 million
and
$2,812 million
in
2017
,
2016
and
2015
, respectively.
|
|
|
|
|
|
% of Total Backlog
|
||||||||
(In millions, except percentages) at December 31
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||
Total U.S. government backlog
(1)
|
$
|
22,258
|
|
|
$
|
21,144
|
|
|
58
|
%
|
|
58
|
%
|
Total non-U.S. government domestic backlog
|
740
|
|
|
602
|
|
|
2
|
%
|
|
2
|
%
|
||
Total domestic backlog
|
22,998
|
|
|
21,746
|
|
|
60
|
%
|
|
59
|
%
|
||
Total foreign military sales backlog
|
6,760
|
|
|
5,939
|
|
|
18
|
%
|
|
16
|
%
|
||
Total direct foreign government backlog
|
7,577
|
|
|
8,254
|
|
|
20
|
%
|
|
22
|
%
|
||
Total non-government foreign backlog
|
875
|
|
|
770
|
|
|
2
|
%
|
|
2
|
%
|
||
Total international backlog
|
15,212
|
|
|
14,963
|
|
|
40
|
%
|
|
41
|
%
|
||
Total backlog
|
$
|
38,210
|
|
|
$
|
36,709
|
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Excludes foreign military sales backlog through the U.S. government which is included in total international backlog.
|
–
|
Identify market needs and growth opportunities;
|
–
|
Identify emerging technological and other trends;
|
–
|
Identify additional uses for our existing technology to address customer needs;
|
–
|
Develop and maintain competitive products and services;
|
–
|
Enhance our offerings by adding innovative features that differentiate our offerings from those of our competitors;
|
–
|
Develop, manufacture and bring solutions to market quickly at cost-effective prices;
|
–
|
Enhance product designs for export and releasability to international markets; and
|
–
|
Effectively structure our businesses to reflect the competitive environment including through the use of joint ventures, collaborative agreements and other forms of alliances.
|
–
|
Integrated Defense Systems
—Huntsville, AL; Fullerton, CA; San Diego, CA; Andover, MA; Billerica, MA; Marlboro, MA; Tewksbury, MA; Woburn, MA; Maple Lawn, MD; Portsmouth, RI; Keyport, WA; and Kiel, Germany.
|
–
|
Intelligence, Information and Services
—Fullerton, CA; Aurora, CO; Colorado Springs, CO; Indialantic, FL; Orlando, FL; Indianapolis, IN; Louisville, KY; Billerica, MA; Burlington, MA; Marlboro, MA; Annapolis Junction, MD; Riverdale, MD; Troy, MI; Omaha, NE; Lawton, OK; State College, PA; El Paso, TX; Richardson, TX; Chantilly, VA; Chesapeake, VA; Dulles, VA; Herndon, VA; Springfield, VA; and Calgary, Canada.
|
–
|
Missile Systems
—Huntsville, AL; East Camden, AR; Tucson, AZ; Louisville, KY; Albuquerque, NM; Farmington, NM; Dallas, TX; Richardson, TX; Midland, Canada; Glenrothes, Scotland; and Harlow, United Kingdom.
|
–
|
Space and Airborne Systems
—El Segundo, CA; Goleta, CA; Sunnyvale, CA; Largo, FL; Fort Wayne, IN; Cambridge, MA; Marlboro, MA; Forest, MS; Dallas, TX; and McKinney, TX.
|
–
|
Forcepoint
—Los Gatos, CA; San Diego, CA; Minneapolis, MN; Austin, TX; Salt Lake City, UT; Herndon, VA; Sydney, Australia; Beijing, China; Reading, England; Helsinki, Finland; Chennai, India; Dublin, Ireland; Ra’anana, Israel; and Krakow, Poland.
|
–
|
Corporate
—Billerica, MA; Waltham, MA; Greenville, TX; Richardson, TX; Plano, TX; Arlington, VA; and Dulles, VA.
|
(In square feet)
|
Leased
|
|
|
Owned
(1)
|
|
|
Government owned
(2)
|
|
|
Total
(3)
|
|
Integrated Defense Systems
|
1,329,279
|
|
|
3,761,148
|
|
|
129,968
|
|
|
5,220,395
|
|
Intelligence, Information and Services
|
4,535,268
|
|
|
496,668
|
|
|
207,935
|
|
|
5,239,871
|
|
Missile Systems
|
2,758,986
|
|
|
2,585,915
|
|
|
1,222,146
|
|
|
6,567,047
|
|
Space and Airborne Systems
|
3,344,822
|
|
|
4,187,060
|
|
|
63
|
|
|
7,531,945
|
|
Forcepoint
|
503,598
|
|
|
—
|
|
|
—
|
|
|
503,598
|
|
Corporate
(4)
|
650,195
|
|
|
329,210
|
|
|
4,238
|
|
|
983,643
|
|
Total square feet
|
13,122,148
|
|
|
11,360,001
|
|
|
1,564,350
|
|
|
26,046,499
|
|
(1)
|
Ownership may include either fee ownership of land and improvements or a long-term ground lease with ownership of improvements.
|
(2)
|
“Government owned” means space owned by the U.S. or a foreign government utilized by us pursuant to an operating agreement with the U.S. or a foreign government.
|
(3)
|
Includes
16,301
square feet of vacant space, but excludes
205,974
square feet of space leased or subleased to unrelated third parties.
|
(4)
|
Includes business development and Raytheon International, Inc.
|
|
Annual Return Percentage
Years Ending
|
|||||||||||||
Company/Index
|
12/31/2013
|
|
|
12/31/2014
|
|
|
12/31/2015
|
|
|
12/31/2016
|
|
|
12/31/2017
|
|
Raytheon Common Stock
|
62.33
|
|
|
21.50
|
|
|
18.02
|
|
|
17.12
|
|
|
34.22
|
|
S&P 500 Index
|
32.39
|
|
|
13.69
|
|
|
1.38
|
|
|
11.96
|
|
|
21.83
|
|
S&P Aerospace & Defense Index
|
54.92
|
|
|
11.43
|
|
|
5.43
|
|
|
18.90
|
|
|
41.38
|
|
|
Indexed Returns
Years Ending
|
||||||||||||||||||||||
Company/Index
|
Base Period 12/31/2012
|
|
12/31/2013
|
|
|
12/31/2014
|
|
|
12/31/2015
|
|
|
12/31/2016
|
|
|
12/31/2017
|
|
|||||||
Raytheon Common Stock
|
$
|
100
|
|
|
$
|
162.33
|
|
|
$
|
197.22
|
|
|
$
|
232.75
|
|
|
$
|
272.59
|
|
|
$
|
365.87
|
|
S&P 500 Index
|
100
|
|
|
132.39
|
|
|
150.51
|
|
|
152.59
|
|
|
170.84
|
|
|
208.14
|
|
||||||
S&P Aerospace & Defense Index
|
100
|
|
|
154.92
|
|
|
172.63
|
|
|
182.01
|
|
|
216.42
|
|
|
305.97
|
|
Period
|
Total Number of Shares Purchased
(1)
|
|
|
Average Price Paid per Share
|
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans
|
|
|
Approximate Dollar Value (in Billions) of Shares that May Yet Be Purchased Under the Plans
(2)
|
|
||
October (October 2, 2017–October 29, 2017)
|
21
|
|
|
|
$187.65
|
|
|
—
|
|
|
$
|
0.9
|
|
November (October 30, 2017–November 26, 2017)
|
316,108
|
|
|
183.36
|
|
|
314,751
|
|
|
2.9
|
|
||
December (November 27, 2017–December 31, 2017)
|
225,323
|
|
|
187.63
|
|
|
225,323
|
|
|
2.8
|
|
||
Total
|
541,452
|
|
|
|
$185.14
|
|
|
540,074
|
|
|
|
(1)
|
Includes shares purchased related to activity under our stock plans. Such activity during the fourth quarter of
2017
includes the surrender by employees of
1,378
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. Additionally, in November 2017, our Board authorized the repurchase of up to an additional
$2.0 billion
of our outstanding common stock.
|
(In millions, except per share amounts and total employees)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||||
Results of Operations
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net sales
(1)
|
$
|
25,348
|
|
|
$
|
24,124
|
|
|
$
|
23,321
|
|
|
$
|
22,826
|
|
|
$
|
23,706
|
|
Operating income
(1)
|
3,318
|
|
|
3,295
|
|
|
3,067
|
|
|
3,179
|
|
|
2,938
|
|
|||||
Interest expense, net
|
184
|
|
|
216
|
|
|
222
|
|
|
203
|
|
|
198
|
|
|||||
Income from continuing operations
(1)
|
1,999
|
|
|
2,212
|
|
|
2,094
|
|
|
2,193
|
|
|
1,949
|
|
|||||
Income (loss) from discontinued operations, net of tax
|
2
|
|
|
1
|
|
|
13
|
|
|
65
|
|
|
64
|
|
|||||
Net income
(1)
|
2,001
|
|
|
2,213
|
|
|
2,107
|
|
|
2,258
|
|
|
2,013
|
|
|||||
Net income attributable to Raytheon Company
(1)
|
2,024
|
|
|
2,244
|
|
|
2,110
|
|
|
2,244
|
|
|
1,996
|
|
|||||
Diluted earnings per share from continuing operations attributable to Raytheon Company common stockholders
(1)
|
$
|
6.94
|
|
|
$
|
7.55
|
|
|
$
|
6.87
|
|
|
$
|
6.97
|
|
|
$
|
5.96
|
|
Diluted earnings per share attributable to Raytheon Company common stockholders
(1)
|
$
|
6.95
|
|
|
$
|
7.55
|
|
|
$
|
6.91
|
|
|
$
|
7.18
|
|
|
$
|
6.16
|
|
Average diluted shares outstanding
|
291.4
|
|
|
296.8
|
|
|
305.2
|
|
|
312.6
|
|
|
324.2
|
|
|||||
Financial Position at Year-End
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
3,103
|
|
|
$
|
3,303
|
|
|
$
|
2,328
|
|
|
$
|
3,222
|
|
|
$
|
3,296
|
|
Short-term investments
|
297
|
|
|
100
|
|
|
872
|
|
|
1,497
|
|
|
1,001
|
|
|||||
Total current assets
(1)
|
11,326
|
|
|
10,885
|
|
|
10,023
|
|
|
10,279
|
|
|
9,792
|
|
|||||
Property, plant and equipment, net
|
2,439
|
|
|
2,166
|
|
|
2,005
|
|
|
1,935
|
|
|
1,937
|
|
|||||
Total assets
(1)
|
30,860
|
|
|
30,238
|
|
|
29,477
|
|
|
27,716
|
|
|
25,964
|
|
|||||
Total current liabilities
(1)
|
7,348
|
|
|
6,539
|
|
|
6,275
|
|
|
5,752
|
|
|
5,704
|
|
|||||
Long-term liabilities (excluding debt)
(1)
|
8,287
|
|
|
7,758
|
|
|
7,134
|
|
|
6,918
|
|
|
4,329
|
|
|||||
Long-term debt
|
4,750
|
|
|
5,335
|
|
|
5,330
|
|
|
5,325
|
|
|
4,734
|
|
|||||
Redeemable noncontrolling interest
|
512
|
|
|
449
|
|
|
355
|
|
|
—
|
|
|
—
|
|
|||||
Total equity
(1)
|
9,963
|
|
|
10,157
|
|
|
10,383
|
|
|
9,721
|
|
|
11,197
|
|
|||||
Cash Flow and Other Information
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities from continuing operations
|
$
|
2,747
|
|
|
$
|
2,852
|
|
|
$
|
2,346
|
|
|
$
|
2,064
|
|
|
$
|
2,382
|
|
Net cash provided by (used in) investing activities
|
(817
|
)
|
|
53
|
|
|
(1,744
|
)
|
|
(1,322
|
)
|
|
(473
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(2,116
|
)
|
|
(1,930
|
)
|
|
(1,509
|
)
|
|
(936
|
)
|
|
(1,797
|
)
|
|||||
Bookings
(1)
|
27,718
|
|
|
27,809
|
|
|
25,145
|
|
|
24,052
|
|
|
22,132
|
|
|||||
Total backlog
(1)
|
38,210
|
|
|
36,709
|
|
|
33,839
|
|
|
33,571
|
|
|
33,685
|
|
|||||
Dividends declared per share
|
$
|
3.19
|
|
|
$
|
2.93
|
|
|
$
|
2.68
|
|
|
$
|
2.42
|
|
|
$
|
2.20
|
|
Total employees from continuing operations
|
64,000
|
|
|
63,000
|
|
|
61,000
|
|
|
61,000
|
|
|
63,000
|
|
(1)
|
Amounts prior to 2015 do not reflect the impact of the adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), in the first quarter of 2017. See “Note 1: Summary of Significant Accounting Policies” within Item 8 of this Form 10-K for additional information.
|
Topic
|
Page
|
–
|
Build upon our areas of strength within our key mission areas;
|
–
|
Focus additional resources on emerging opportunities within the DoD market;
|
–
|
Engage key countries as individual markets with multiple customers; and
|
–
|
Extend Raytheon’s advanced cyber solutions beyond the U.S. government into international and commercial markets.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
International sales
(1)
|
$
|
8,085
|
|
|
$
|
7,616
|
|
|
$
|
7,197
|
|
International bookings
|
8,479
|
|
|
8,193
|
|
|
8,512
|
|
(1)
|
Includes foreign military sales through the U.S. government.
|
–
|
Bookings
—a forward-looking metric that measures the value of firm orders awarded to us during the year;
|
–
|
Net Sales
—a growth metric that measures our revenue for the current year;
|
–
|
Operating Income
—a measure of our profit from continuing operations for the year, before non-operating expenses, net and taxes; and
|
–
|
Operating Margin
—a measure of our operating income as a percentage of total net sales.
|
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Bookings
|
$
|
27,718
|
|
|
$
|
27,809
|
|
|
$
|
25,145
|
|
Total backlog
|
38,210
|
|
|
36,709
|
|
|
33,839
|
|
|||
Total net sales
|
25,348
|
|
|
24,124
|
|
|
23,321
|
|
|||
Total operating income
(1)
|
3,318
|
|
|
3,295
|
|
|
3,067
|
|
|||
Total operating margin
|
13.1
|
%
|
|
13.7
|
%
|
|
13.2
|
%
|
|||
Operating cash flow from continuing operations
|
$
|
2,747
|
|
|
$
|
2,852
|
|
|
$
|
2,346
|
|
(1)
|
Includes FAS/CAS Adjustment, described below in Critical Accounting Estimates, of
$390 million
,
$435 million
and
$185 million
of income in
2017
,
2016
and
2015
, respectively.
|
(In millions, except per share amounts)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Operating income
|
$
|
442
|
|
|
$
|
418
|
|
|
$
|
392
|
|
Income from continuing operations attributable to Raytheon Company
|
287
|
|
|
283
|
|
|
255
|
|
|||
Diluted EPS from continuing operations attributable to Raytheon Company
|
$
|
0.98
|
|
|
$
|
0.95
|
|
|
$
|
0.84
|
|
Percentile
|
2017
|
|
|
2016
|
|
|
2015
|
|
35
th
|
5.82
|
%
|
|
6.09
|
%
|
|
6.37
|
%
|
65
th
|
7.96
|
%
|
|
8.16
|
%
|
|
8.37
|
%
|
Asset Category
|
|
|
Global equity (combined U.S. and international equity)
|
|
30%-60%
|
U.S. equities
|
|
20%-35%
|
International equities
|
|
10%-25%
|
Fixed-income securities
|
|
20%-45%
|
Cash and cash equivalents
|
|
0%-10%
|
Private equity and private real estate
|
|
10%-20%
|
Real assets
|
|
0%-4%
|
Other (including absolute return funds)
|
|
5%-15%
|
(In millions)
|
Increase
|
|
Decrease
|
||||
Impact of change in discount rate on net periodic benefit cost
|
$
|
(63
|
)
|
|
$
|
67
|
|
Impact of change in discount rate on benefit obligations
|
(783
|
)
|
|
854
|
|
(In millions)
|
Increase
|
|
Decrease
|
||||
FAS expense
|
$
|
(45
|
)
|
|
$
|
45
|
|
CAS expense
|
9
|
|
|
(9
|
)
|
(In millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Beginning balance
|
|
$
|
(11,115
|
)
|
|
$
|
(10,912
|
)
|
|
$
|
(11,437
|
)
|
Amortization of net losses included in net income
|
|
1,191
|
|
|
1,006
|
|
|
1,135
|
|
|||
Gain (loss) arising during the period
|
|
(1,842
|
)
|
|
(1,209
|
)
|
|
(610
|
)
|
|||
Ending balance
|
|
$
|
(11,766
|
)
|
|
$
|
(11,115
|
)
|
|
$
|
(10,912
|
)
|
|
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)
|
|
2017
|
|
|
2016
|
|
||
Cash and cash equivalents
|
|
$
|
3,103
|
|
|
$
|
3,303
|
|
Restricted cash
|
|
12
|
|
|
—
|
|
||
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows
|
|
$
|
3,115
|
|
|
$
|
3,303
|
|
(% of segment total external net sales)
|
IDS
|
IIS
|
MS
|
SAS
|
Forcepoint
|
Products
(1)
|
90%
|
45%
|
95%
|
100%
|
90%
|
Services
|
10%
|
55%
|
5%
|
—%
|
10%
|
(1)
|
Products net sales includes software related sales, including software subscriptions.
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Products
|
$
|
21,416
|
|
|
$
|
20,309
|
|
|
$
|
19,623
|
|
|
84.5
|
%
|
|
84.2
|
%
|
|
84.1
|
%
|
Services
|
3,932
|
|
|
3,815
|
|
|
3,698
|
|
|
15.5
|
%
|
|
15.8
|
%
|
|
15.9
|
%
|
|||
Total net sales
|
$
|
25,348
|
|
|
$
|
24,124
|
|
|
$
|
23,321
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Sales to the U.S. government
(1)(2)
|
$
|
16,860
|
|
|
$
|
16,083
|
|
|
$
|
15,788
|
|
|
67
|
%
|
|
67
|
%
|
|
68
|
%
|
U.S. direct commercial sales and other U.S. sales
|
403
|
|
|
425
|
|
|
336
|
|
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
|||
Foreign military sales through the U.S. government
|
3,311
|
|
|
2,899
|
|
|
2,812
|
|
|
13
|
%
|
|
12
|
%
|
|
12
|
%
|
|||
Foreign direct commercial sales and other foreign sales
(1)
|
4,774
|
|
|
4,717
|
|
|
4,385
|
|
|
19
|
%
|
|
20
|
%
|
|
19
|
%
|
|||
Total net sales
|
$
|
25,348
|
|
|
$
|
24,124
|
|
|
$
|
23,321
|
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
(2)
|
Includes sales to the DoD of
$16,152 million
, or
64%
of total net sales, in
2017
,
$15,340 million
, or
64%
of total net sales, in
2016
and
$14,891 million
, or
64%
of total net sales, in
2015
.
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Products
|
$
|
15,872
|
|
|
$
|
14,853
|
|
|
$
|
14,563
|
|
|
62.6
|
%
|
|
61.6
|
%
|
|
62.4
|
%
|
Services
|
3,204
|
|
|
3,112
|
|
|
3,045
|
|
|
12.6
|
%
|
|
12.9
|
%
|
|
13.1
|
%
|
|||
Total cost of sales
|
$
|
19,076
|
|
|
$
|
17,965
|
|
|
$
|
17,608
|
|
|
75.3
|
%
|
|
74.5
|
%
|
|
75.5
|
%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Administrative and selling expenses
|
$
|
2,220
|
|
|
$
|
2,109
|
|
|
$
|
1,940
|
|
|
8.8
|
%
|
|
8.7
|
%
|
|
8.3
|
%
|
Research and development expenses
|
734
|
|
|
755
|
|
|
706
|
|
|
2.9
|
%
|
|
3.1
|
%
|
|
3.0
|
%
|
|||
Total general and administrative expenses
|
$
|
2,954
|
|
|
$
|
2,864
|
|
|
$
|
2,646
|
|
|
11.7
|
%
|
|
11.9
|
%
|
|
11.3
|
%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Total operating expenses
|
$
|
22,030
|
|
|
$
|
20,829
|
|
|
$
|
20,254
|
|
|
86.9
|
%
|
|
86.3
|
%
|
|
86.8
|
%
|
|
|
|
|
|
|
|
% of Total Net Sales
|
|||||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Operating income
|
$
|
3,318
|
|
|
$
|
3,295
|
|
|
$
|
3,067
|
|
|
13.1
|
%
|
|
13.7
|
%
|
|
13.2
|
%
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Non-operating (income) expense, net
|
|
|
|
|
|
||||||
Interest expense
|
$
|
205
|
|
|
$
|
232
|
|
|
$
|
233
|
|
Interest income
|
(21
|
)
|
|
(16
|
)
|
|
(11
|
)
|
|||
Other expense (income), net
|
21
|
|
|
(6
|
)
|
|
4
|
|
|||
Total non-operating (income) expense, net
|
$
|
205
|
|
|
$
|
210
|
|
|
$
|
226
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Federal and foreign income taxes
|
$
|
1,114
|
|
|
$
|
873
|
|
|
$
|
747
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Statutory tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Research and development tax credit
|
(1.5
|
)
|
|
(1.3
|
)
|
|
(1.2
|
)
|
Tax settlements and refund claims
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
Domestic manufacturing deduction benefit
|
(2.5
|
)
|
|
(2.7
|
)
|
|
(3.1
|
)
|
Foreign income tax rate differential
|
0.2
|
|
|
—
|
|
|
(1.4
|
)
|
Equity compensation
|
(1.2
|
)
|
|
(1.6
|
)
|
|
—
|
|
TRS tax-free gain
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
Remeasurement of deferred taxes
|
3.2
|
|
|
—
|
|
|
—
|
|
One-time transition tax on previously undistributed foreign earnings
|
2.3
|
|
|
—
|
|
|
—
|
|
Other items, net
|
0.3
|
|
|
0.7
|
|
|
0.2
|
|
Effective tax rate
|
35.8
|
%
|
|
28.3
|
%
|
|
26.3
|
%
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Income from continuing operations
|
$
|
1,999
|
|
|
$
|
2,212
|
|
|
$
|
2,094
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net income
|
$
|
2,001
|
|
|
$
|
2,213
|
|
|
$
|
2,107
|
|
(In millions, except per share amounts)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Income from continuing operations attributable to Raytheon Company
|
$
|
2,022
|
|
|
$
|
2,243
|
|
|
$
|
2,097
|
|
Diluted weighted-average shares outstanding
|
291.4
|
|
|
296.8
|
|
|
305.2
|
|
|||
Diluted EPS from continuing operations attributable to Raytheon Company
|
$
|
6.94
|
|
|
$
|
7.55
|
|
|
$
|
6.87
|
|
(Shares in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
Beginning balance
|
292.8
|
|
|
299.0
|
|
|
307.3
|
|
Stock plans activity
|
1.1
|
|
|
1.5
|
|
|
1.6
|
|
Share repurchases
|
(5.5
|
)
|
|
(7.7
|
)
|
|
(9.9
|
)
|
Ending balance
|
288.4
|
|
|
292.8
|
|
|
299.0
|
|
(In millions, except per share amounts)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net income attributable to Raytheon Company
|
$
|
2,024
|
|
|
$
|
2,244
|
|
|
$
|
2,110
|
|
Diluted weighted-average shares outstanding
|
291.4
|
|
|
296.8
|
|
|
305.2
|
|
|||
Diluted EPS attributable to Raytheon Company
|
$
|
6.95
|
|
|
$
|
7.55
|
|
|
$
|
6.91
|
|
Bookings
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
4,934
|
|
|
$
|
5,377
|
|
|
$
|
6,389
|
|
Intelligence, Information and Services
|
6,615
|
|
|
5,563
|
|
|
5,319
|
|
|||
Missile Systems
|
9,672
|
|
|
7,894
|
|
|
8,149
|
|
|||
Space and Airborne Systems
|
5,907
|
|
|
8,414
|
|
|
4,936
|
|
|||
Forcepoint
|
590
|
|
|
561
|
|
|
352
|
|
|||
Total
|
$
|
27,718
|
|
|
$
|
27,809
|
|
|
$
|
25,145
|
|
Backlog
(in millions) at December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
9,186
|
|
|
$
|
10,159
|
|
|
$
|
10,460
|
|
Intelligence, Information and Services
|
6,503
|
|
|
5,662
|
|
|
5,867
|
|
|||
Missile Systems
|
13,426
|
|
|
11,568
|
|
|
10,801
|
|
|||
Space and Airborne Systems
|
8,611
|
|
|
8,834
|
|
|
6,260
|
|
|||
Forcepoint
(1)
|
484
|
|
|
486
|
|
|
451
|
|
|||
Total
(2)
|
$
|
38,210
|
|
|
$
|
36,709
|
|
|
$
|
33,839
|
|
(1)
|
Forcepoint backlog excludes the unfavorable impact of
$12 million
,
$45 million
and
$86 million
at
December 31, 2017
,
December 31, 2016
and
December 31, 2015
, respectively, related to the acquisition accounting adjustments to record acquired deferred revenue at fair value.
|
(2)
|
Included in the change in backlog at December 31,
2017
compared to December 31,
2016
and at December 31,
2016
compared to December 31,
2015
was backlog adjustments of
$0.8 billion
and
$0.7 billion
, respectively, primarily related to contract underruns and contract deobligations.
|
Total Net Sales
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
5,804
|
|
|
$
|
5,529
|
|
|
$
|
5,848
|
|
Intelligence, Information and Services
|
6,177
|
|
|
6,169
|
|
|
6,137
|
|
|||
Missile Systems
|
7,787
|
|
|
7,096
|
|
|
6,569
|
|
|||
Space and Airborne Systems
|
6,430
|
|
|
6,182
|
|
|
5,814
|
|
|||
Forcepoint
|
608
|
|
|
586
|
|
|
344
|
|
|||
Eliminations
|
(1,423
|
)
|
|
(1,361
|
)
|
|
(1,330
|
)
|
|||
Total business segment sales
|
25,383
|
|
|
24,201
|
|
|
23,382
|
|
|||
Acquisition Accounting Adjustments
(1)
|
(35
|
)
|
|
(77
|
)
|
|
(61
|
)
|
|||
Total
|
$
|
25,348
|
|
|
$
|
24,124
|
|
|
$
|
23,321
|
|
(1)
|
Acquisition accounting adjustments include the adjustments to record acquired deferred revenue at fair value as part of our purchase price allocation process and the amortization of acquired intangible assets related to historical acquisitions.
|
EAC Adjustments
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Gross favorable
|
$
|
1,116
|
|
|
$
|
900
|
|
|
$
|
835
|
|
Gross unfavorable
|
(674
|
)
|
|
(482
|
)
|
|
(443
|
)
|
|||
Total net EAC adjustments
|
$
|
442
|
|
|
$
|
418
|
|
|
$
|
392
|
|
Operating Income
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
935
|
|
|
$
|
971
|
|
|
$
|
859
|
|
Intelligence, Information and Services
|
455
|
|
|
467
|
|
|
648
|
|
|||
Missile Systems
|
1,010
|
|
|
921
|
|
|
877
|
|
|||
Space and Airborne Systems
|
862
|
|
|
808
|
|
|
851
|
|
|||
Forcepoint
|
33
|
|
|
90
|
|
|
56
|
|
|||
Eliminations
|
(148
|
)
|
|
(142
|
)
|
|
(140
|
)
|
|||
Total business segment operating income
|
3,147
|
|
|
3,115
|
|
|
3,151
|
|
|||
Acquisition Accounting Adjustments
|
(160
|
)
|
|
(198
|
)
|
|
(168
|
)
|
|||
FAS/CAS Adjustment
|
390
|
|
|
435
|
|
|
185
|
|
|||
Corporate
|
(59
|
)
|
|
(57
|
)
|
|
(101
|
)
|
|||
Total
|
$
|
3,318
|
|
|
$
|
3,295
|
|
|
$
|
3,067
|
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Total net sales
|
$
|
5,804
|
|
|
$
|
5,529
|
|
|
$
|
5,848
|
|
|
5.0
|
%
|
|
(5.5
|
)%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales—labor
|
2,138
|
|
|
1,983
|
|
|
1,896
|
|
|
7.8
|
%
|
|
4.6
|
%
|
|||
Cost of sales—materials and subcontractors
|
1,845
|
|
|
1,867
|
|
|
2,164
|
|
|
(1.2
|
)%
|
|
(13.7
|
)%
|
|||
Other cost of sales and other operating expenses
|
886
|
|
|
708
|
|
|
929
|
|
|
25.1
|
%
|
|
(23.8
|
)%
|
|||
Total operating expenses
|
4,869
|
|
|
4,558
|
|
|
4,989
|
|
|
6.8
|
%
|
|
(8.6
|
)%
|
|||
Operating income
|
$
|
935
|
|
|
$
|
971
|
|
|
$
|
859
|
|
|
(3.7
|
)%
|
|
13.0
|
%
|
Operating margin
|
16.1
|
%
|
|
17.6
|
%
|
|
14.7
|
%
|
|
|
|
|
Change in Operating Income
(in millions)
|
|
|
Year Ended 2017 Versus Year Ended 2016
|
|
|
Year Ended 2016 Versus Year Ended 2015
|
|
|
|
|
|||||||
Volume
|
|
|
$
|
23
|
|
|
$
|
(41
|
)
|
|
|
|
|||||
Net change in EAC adjustments
|
|
|
39
|
|
|
(6
|
)
|
|
|
|
|||||||
Mix and other performance
|
|
|
(98
|
)
|
|
159
|
|
|
|
|
|||||||
Total change in operating income
|
|
|
$
|
(36
|
)
|
|
$
|
112
|
|
|
|
|
|||||
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
% Change
|
|||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Bookings
|
$
|
4,934
|
|
|
$
|
5,377
|
|
|
$
|
6,389
|
|
|
(8.2
|
)%
|
|
(15.8
|
)%
|
Total Backlog
|
9,186
|
|
|
10,159
|
|
|
10,460
|
|
|
(9.6
|
)%
|
|
(2.9
|
)%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Total net sales
|
$
|
6,177
|
|
|
$
|
6,169
|
|
|
$
|
6,137
|
|
|
0.1
|
%
|
|
0.5
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales—labor
|
2,610
|
|
|
2,478
|
|
|
2,399
|
|
|
5.3
|
%
|
|
3.3
|
%
|
|||
Cost of sales—materials and subcontractors
|
2,309
|
|
|
2,400
|
|
|
2,527
|
|
|
(3.8
|
)%
|
|
(5.0
|
)%
|
|||
Other cost of sales and other operating expenses
|
803
|
|
|
824
|
|
|
563
|
|
|
(2.5
|
)%
|
|
46.4
|
%
|
|||
Total operating expenses
|
5,722
|
|
|
5,702
|
|
|
5,489
|
|
|
0.4
|
%
|
|
3.9
|
%
|
|||
Operating income
|
$
|
455
|
|
|
$
|
467
|
|
|
$
|
648
|
|
|
(2.6
|
)%
|
|
(27.9
|
)%
|
Operating margin
|
7.4
|
%
|
|
7.6
|
%
|
|
10.6
|
%
|
|
|
|
|
Change in Operating Income
(in millions)
|
|
|
Year Ended 2017 Versus Year Ended 2016
|
|
|
Year Ended 2016 Versus Year Ended 2015
|
|
|
|
|
|||||||
Volume
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
|
|
|||||
Net change in EAC adjustments
|
|
|
3
|
|
|
13
|
|
|
|
|
|||||||
Mix and other performance
|
|
|
(15
|
)
|
|
(193
|
)
|
|
|
|
|||||||
Total change in operating income
|
|
|
$
|
(12
|
)
|
|
$
|
(181
|
)
|
|
|
|
|||||
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
% Change
|
|||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Bookings
|
$
|
6,615
|
|
|
$
|
5,563
|
|
|
$
|
5,319
|
|
|
18.9
|
%
|
|
4.6
|
%
|
Total Backlog
|
6,503
|
|
|
5,662
|
|
|
5,867
|
|
|
14.9
|
%
|
|
(3.5
|
)%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Total net sales
|
$
|
7,787
|
|
|
$
|
7,096
|
|
|
$
|
6,569
|
|
|
9.7
|
%
|
|
8.0
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales—labor
|
2,303
|
|
|
2,097
|
|
|
1,980
|
|
|
9.8
|
%
|
|
5.9
|
%
|
|||
Cost of sales—materials and subcontractors
|
3,386
|
|
|
2,949
|
|
|
2,749
|
|
|
14.8
|
%
|
|
7.3
|
%
|
|||
Other cost of sales and other operating expenses
|
1,088
|
|
|
1,129
|
|
|
963
|
|
|
(3.6
|
)%
|
|
17.2
|
%
|
|||
Total operating expenses
|
6,777
|
|
|
6,175
|
|
|
5,692
|
|
|
9.7
|
%
|
|
8.5
|
%
|
|||
Operating income
|
$
|
1,010
|
|
|
$
|
921
|
|
|
$
|
877
|
|
|
9.7
|
%
|
|
5.0
|
%
|
Operating margin
|
13.0
|
%
|
|
13.0
|
%
|
|
13.4
|
%
|
|
|
|
|
Change in Operating Income
(in millions)
|
|
|
Year Ended 2017 Versus Year Ended 2016
|
|
|
Year Ended 2016 Versus Year Ended 2015
|
|
|
|
|
|||||||
Volume
|
|
|
$
|
82
|
|
|
$
|
63
|
|
|
|
|
|||||
Net change in EAC adjustments
|
|
|
10
|
|
|
(63
|
)
|
|
|
|
|||||||
Mix and other performance
|
|
|
(3
|
)
|
|
44
|
|
|
|
|
|||||||
Total change in operating income
|
|
|
$
|
89
|
|
|
$
|
44
|
|
|
|
|
|||||
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
% Change
|
|||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Bookings
|
$
|
9,672
|
|
|
$
|
7,894
|
|
|
$
|
8,149
|
|
|
22.5
|
%
|
|
(3.1
|
)%
|
Total Backlog
|
13,426
|
|
|
11,568
|
|
|
10,801
|
|
|
16.1
|
%
|
|
7.1
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Total net sales
|
$
|
6,430
|
|
|
$
|
6,182
|
|
|
$
|
5,814
|
|
|
4.0
|
%
|
|
6.3
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales—labor
|
2,673
|
|
|
2,419
|
|
|
2,483
|
|
|
10.5
|
%
|
|
(2.6
|
)%
|
|||
Cost of sales—materials and subcontractors
|
1,877
|
|
|
1,949
|
|
|
1,457
|
|
|
(3.7
|
)%
|
|
33.8
|
%
|
|||
Other cost of sales and other operating expenses
|
1,018
|
|
|
1,006
|
|
|
1,023
|
|
|
1.2
|
%
|
|
(1.7
|
)%
|
|||
Total operating expenses
|
5,568
|
|
|
5,374
|
|
|
4,963
|
|
|
3.6
|
%
|
|
8.3
|
%
|
|||
Operating income
|
$
|
862
|
|
|
$
|
808
|
|
|
$
|
851
|
|
|
6.7
|
%
|
|
(5.1
|
)%
|
Operating margin
|
13.4
|
%
|
|
13.1
|
%
|
|
14.6
|
%
|
|
|
|
|
Change in Operating Income
(in millions)
|
|
|
Year Ended 2017 Versus Year Ended 2016
|
|
|
Year Ended 2016 Versus Year Ended 2015
|
|
|
|
|
|||||||
Volume
|
|
|
$
|
26
|
|
|
$
|
58
|
|
|
|
|
|||||
Net change in EAC adjustments
|
|
|
(28
|
)
|
|
73
|
|
|
|
|
|||||||
Mix and other performance
|
|
|
56
|
|
|
(174
|
)
|
|
|
|
|||||||
Total change in operating income
|
|
|
$
|
54
|
|
|
$
|
(43
|
)
|
|
|
|
|||||
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
% Change
|
|||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Bookings
|
$
|
5,907
|
|
|
$
|
8,414
|
|
|
$
|
4,936
|
|
|
(29.8
|
)%
|
|
70.5
|
%
|
Total Backlog
|
8,611
|
|
|
8,834
|
|
|
6,260
|
|
|
(2.5
|
)%
|
|
41.1
|
%
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Total net sales
|
$
|
608
|
|
|
$
|
586
|
|
|
$
|
344
|
|
|
3.8
|
%
|
|
70.3
|
%
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
116
|
|
|
110
|
|
|
63
|
|
|
5.5
|
%
|
|
74.6
|
%
|
|||
Selling and marketing
|
246
|
|
|
187
|
|
|
98
|
|
|
31.6
|
%
|
|
90.8
|
%
|
|||
Research and development
|
143
|
|
|
128
|
|
|
87
|
|
|
11.7
|
%
|
|
47.1
|
%
|
|||
General and administrative
|
70
|
|
|
71
|
|
|
40
|
|
|
(1.4
|
)%
|
|
77.5
|
%
|
|||
Total operating expenses
|
575
|
|
|
496
|
|
|
288
|
|
|
15.9
|
%
|
|
72.2
|
%
|
|||
Operating income
|
$
|
33
|
|
|
$
|
90
|
|
|
$
|
56
|
|
|
(63.3
|
)%
|
|
60.7
|
%
|
Operating margin
|
5.4
|
%
|
|
15.4
|
%
|
|
16.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|||||||||
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017 compared to 2016
|
|
|
2016 compared to 2015
|
|
|||
Bookings
|
$
|
590
|
|
|
$
|
561
|
|
|
$
|
352
|
|
|
5.2
|
%
|
|
59.4
|
%
|
Total Backlog
|
484
|
|
|
486
|
|
|
451
|
|
|
(0.4
|
)%
|
|
7.8
|
%
|
–
|
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; and
|
–
|
General and administrative expenses—labor costs for our executive, finance and administrative personnel; third party professional service fees; and related overhead costs.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Deferred revenue adjustment
|
$
|
(35
|
)
|
|
$
|
(77
|
)
|
|
$
|
(61
|
)
|
Amortization of acquired intangibles
|
(125
|
)
|
|
(121
|
)
|
|
(107
|
)
|
|||
Total Acquisition Accounting Adjustments
|
$
|
(160
|
)
|
|
$
|
(198
|
)
|
|
$
|
(168
|
)
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Intelligence, Information and Services
|
20
|
|
|
17
|
|
|
12
|
|
|||
Missile Systems
|
1
|
|
|
1
|
|
|
1
|
|
|||
Space and Airborne Systems
|
10
|
|
|
17
|
|
|
35
|
|
|||
Forcepoint
|
94
|
|
|
85
|
|
|
58
|
|
|||
Total
|
$
|
125
|
|
|
$
|
121
|
|
|
$
|
107
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
FAS/CAS Pension Adjustment
|
$
|
397
|
|
|
$
|
435
|
|
|
$
|
182
|
|
FAS/CAS PRB Adjustment
|
(7
|
)
|
|
—
|
|
|
3
|
|
|||
FAS/CAS Adjustment
|
$
|
390
|
|
|
$
|
435
|
|
|
$
|
185
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
FAS (expense)
|
$
|
(1,367
|
)
|
|
$
|
(1,073
|
)
|
|
$
|
(1,186
|
)
|
CAS expense
|
1,764
|
|
|
1,508
|
|
|
1,368
|
|
|||
FAS/CAS Pension Adjustment
|
$
|
397
|
|
|
$
|
435
|
|
|
$
|
182
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
FAS (expense)
|
$
|
(25
|
)
|
|
$
|
(16
|
)
|
|
$
|
(12
|
)
|
CAS expense
|
18
|
|
|
16
|
|
|
15
|
|
|||
FAS/CAS PRB Adjustment
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
3
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Corporate
|
$
|
(59
|
)
|
|
$
|
(57
|
)
|
|
$
|
(101
|
)
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Cash and cash equivalents
|
$
|
3,103
|
|
|
$
|
3,303
|
|
Short-term investments
|
297
|
|
|
100
|
|
||
Working capital
|
3,978
|
|
|
4,346
|
|
||
Amount available under our credit facilities
|
950
|
|
|
1,250
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net cash provided by (used in) operating activities from continuing operations
|
$
|
2,747
|
|
|
$
|
2,852
|
|
|
$
|
2,346
|
|
Net cash provided by (used in) operating activities
|
2,745
|
|
|
2,852
|
|
|
2,359
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Required pension contributions
|
$
|
615
|
|
|
$
|
145
|
|
|
$
|
339
|
|
Discretionary pension contributions
|
1,000
|
|
|
500
|
|
|
200
|
|
|||
PRB contributions
|
27
|
|
|
25
|
|
|
22
|
|
|||
Total
|
$
|
1,642
|
|
|
$
|
670
|
|
|
$
|
561
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Federal
|
$
|
765
|
|
|
$
|
710
|
|
|
$
|
1,008
|
|
Foreign
|
77
|
|
|
47
|
|
|
43
|
|
|||
State
|
36
|
|
|
22
|
|
|
30
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net cash provided by (used in) investing activities
|
$
|
(817
|
)
|
|
$
|
53
|
|
|
$
|
(1,744
|
)
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Additions to property, plant and equipment
|
$
|
543
|
|
|
$
|
561
|
|
|
$
|
406
|
|
Additions to capitalized internal use software
|
68
|
|
|
64
|
|
|
51
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Purchases of short-term investments
|
$
|
(696
|
)
|
|
$
|
(472
|
)
|
|
$
|
(1,392
|
)
|
Sales of short-term investments
|
—
|
|
|
—
|
|
|
209
|
|
|||
Maturities of short-term investments
|
517
|
|
|
1,184
|
|
|
1,793
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Payments for purchases of acquired companies, net of cash received
|
$
|
93
|
|
|
$
|
57
|
|
|
$
|
1,954
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net cash provided by (used in) financing activities
|
$
|
(2,116
|
)
|
|
$
|
(1,930
|
)
|
|
$
|
(1,509
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
(In millions)
|
$
|
Shares
|
|
|
$
|
Shares
|
|
|
$
|
Shares
|
|
||||||
Shares repurchased under our share repurchase programs
|
$
|
800
|
|
4.9
|
|
|
$
|
900
|
|
6.9
|
|
|
$
|
1,000
|
|
9.0
|
|
Shares repurchased to satisfy tax withholding obligations
|
85
|
|
0.6
|
|
|
96
|
|
0.8
|
|
|
99
|
|
0.9
|
|
|||
Total share repurchases
|
$
|
885
|
|
5.5
|
|
|
$
|
996
|
|
7.7
|
|
|
$
|
1,099
|
|
9.9
|
|
(In millions, except per share amounts)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cash dividends per share
|
$
|
3.19
|
|
|
$
|
2.93
|
|
|
$
|
2.68
|
|
Dividends paid
|
910
|
|
|
850
|
|
|
797
|
|
|
Payment due by period
|
||||||||||||||||||
(In millions)
|
Total
|
|
|
Less than 1 year (2018)
|
|
|
1–3 years (2019–2020)
|
|
|
3–5 years (2021–2022)
|
|
|
After 5 years (2023 and thereafter)
|
|
|||||
Debt
(1)
|
$
|
4,792
|
|
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
1,100
|
|
|
$
|
2,192
|
|
Interest payments
|
2,262
|
|
|
193
|
|
|
374
|
|
|
278
|
|
|
1,417
|
|
|||||
Operating leases
|
1,041
|
|
|
229
|
|
|
338
|
|
|
212
|
|
|
262
|
|
|||||
Purchase obligations
|
9,708
|
|
|
7,957
|
|
|
1,578
|
|
|
167
|
|
|
6
|
|
|||||
Total
|
$
|
17,803
|
|
|
$
|
8,379
|
|
|
$
|
3,790
|
|
|
$
|
1,757
|
|
|
$
|
3,877
|
|
(1)
|
Debt includes scheduled principal payments only.
|
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
||
Total remediation costs—undiscounted
|
$
|
206
|
|
|
$
|
219
|
|
Weighted-average discount rate
|
5.2
|
%
|
|
5.2
|
%
|
||
Total remediation costs—discounted
|
$
|
142
|
|
|
$
|
147
|
|
Recoverable portion
|
92
|
|
|
92
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Guarantees
|
$
|
216
|
|
|
$
|
190
|
|
Letters of credit
|
2,416
|
|
|
2,345
|
|
||
Surety bonds
|
166
|
|
|
127
|
|
(In millions, except percentages)
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
Thereafter
|
|
|
Total
|
|
|
Fair Value
|
|
||||||||
Fixed-rate debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
—
|
|
|
$
|
1,100
|
|
|
$
|
2,192
|
|
|
$
|
4,792
|
|
|
$
|
5,293
|
|
Average interest rate
|
—
|
|
|
—
|
|
|
3.550
|
%
|
|
—
|
|
|
2.500
|
%
|
|
5.097
|
%
|
|
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
|
%
|
|
|
Topic
|
Page
|
/s/ Thomas A. Kennedy
|
|
/s/ Anthony F. O’Brien
|
Thomas A. Kennedy
|
|
Anthony F. O’Brien
|
Chairman and Chief Executive Officer
|
|
Vice President and Chief Financial Officer
|
(In millions, except per share amount) December 31:
|
2017
|
|
|
2016
|
|
||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,103
|
|
|
$
|
3,303
|
|
Short-term investments
|
297
|
|
|
100
|
|
||
Receivables, net
|
1,324
|
|
|
1,163
|
|
||
Contract assets
|
5,247
|
|
|
5,041
|
|
||
Inventories
|
594
|
|
|
608
|
|
||
Prepaid expenses and other current assets
|
761
|
|
|
670
|
|
||
Total current assets
|
11,326
|
|
|
10,885
|
|
||
Property, plant and equipment, net
|
2,439
|
|
|
2,166
|
|
||
Goodwill
|
14,871
|
|
|
14,788
|
|
||
Other assets, net
|
2,224
|
|
|
2,399
|
|
||
Total assets
|
$
|
30,860
|
|
|
$
|
30,238
|
|
|
|
|
|
||||
Liabilities, Redeemable Noncontrolling Interest and Equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Commercial paper
|
$
|
300
|
|
|
$
|
—
|
|
Contract liabilities
|
2,927
|
|
|
2,646
|
|
||
Accounts payable
|
1,519
|
|
|
1,520
|
|
||
Accrued employee compensation
|
1,342
|
|
|
1,234
|
|
||
Other current liabilities
|
1,260
|
|
|
1,139
|
|
||
Total current liabilities
|
7,348
|
|
|
6,539
|
|
||
Accrued retiree benefits and other long-term liabilities
|
8,287
|
|
|
7,758
|
|
||
Long-term debt
|
4,750
|
|
|
5,335
|
|
||
Commitments and contingencies (Note 11)
|
|
|
|
|
|||
|
|
|
|
||||
Redeemable noncontrolling interest (Note 12)
|
512
|
|
|
449
|
|
||
|
|
|
|
||||
Equity
|
|
|
|
||||
Raytheon Company stockholders’ equity
|
|
|
|
||||
Common stock, par value, $0.01 per share, 1,450 shares authorized, 288 and 293 shares outstanding at December 31, 2017 and 2016, respectively.
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
—
|
|
|
—
|
|
||
Accumulated other comprehensive loss
|
(7,935
|
)
|
|
(7,411
|
)
|
||
Retained earnings
|
17,895
|
|
|
17,565
|
|
||
Total Raytheon Company stockholders’ equity
|
9,963
|
|
|
10,157
|
|
||
Noncontrolling interests in subsidiaries
|
—
|
|
|
—
|
|
||
Total equity
|
9,963
|
|
|
10,157
|
|
||
Total liabilities, redeemable noncontrolling interest and equity
|
$
|
30,860
|
|
|
$
|
30,238
|
|
(In millions, except per share amounts) Years Ended December 31:
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net sales
|
|
|
|
|
|
||||||
Products
|
$
|
21,416
|
|
|
$
|
20,309
|
|
|
$
|
19,623
|
|
Services
|
3,932
|
|
|
3,815
|
|
|
3,698
|
|
|||
Total net sales
|
25,348
|
|
|
24,124
|
|
|
23,321
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Cost of sales—products
|
15,872
|
|
|
14,853
|
|
|
14,563
|
|
|||
Cost of sales—services
|
3,204
|
|
|
3,112
|
|
|
3,045
|
|
|||
General and administrative expenses
|
2,954
|
|
|
2,864
|
|
|
2,646
|
|
|||
Total operating expenses
|
22,030
|
|
|
20,829
|
|
|
20,254
|
|
|||
Operating income
|
3,318
|
|
|
3,295
|
|
|
3,067
|
|
|||
Non-operating (income) expense, net
|
|
|
|
|
|
||||||
Interest expense
|
205
|
|
|
232
|
|
|
233
|
|
|||
Interest income
|
(21
|
)
|
|
(16
|
)
|
|
(11
|
)
|
|||
Other (income) expense, net
|
21
|
|
|
(6
|
)
|
|
4
|
|
|||
Total non-operating (income) expense, net
|
205
|
|
|
210
|
|
|
226
|
|
|||
Income from continuing operations before taxes
|
3,113
|
|
|
3,085
|
|
|
2,841
|
|
|||
Federal and foreign income taxes
|
1,114
|
|
|
873
|
|
|
747
|
|
|||
Income from continuing operations
|
1,999
|
|
|
2,212
|
|
|
2,094
|
|
|||
Income (loss) from discontinued operations, net of tax
|
2
|
|
|
1
|
|
|
13
|
|
|||
Net income
|
2,001
|
|
|
2,213
|
|
|
2,107
|
|
|||
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries
|
(23
|
)
|
|
(31
|
)
|
|
(3
|
)
|
|||
Net income attributable to Raytheon Company
|
$
|
2,024
|
|
|
$
|
2,244
|
|
|
$
|
2,110
|
|
|
|
|
|
|
|
||||||
Basic earnings per share attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
6.95
|
|
|
$
|
7.55
|
|
|
$
|
6.88
|
|
Income (loss) from discontinued operations, net of tax
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|||
Net income
|
6.96
|
|
|
7.56
|
|
|
6.92
|
|
|||
Diluted earnings per share attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
6.94
|
|
|
$
|
7.55
|
|
|
$
|
6.87
|
|
Income (loss) from discontinued operations, net of tax
|
0.01
|
|
|
—
|
|
|
0.04
|
|
|||
Net income
|
6.95
|
|
|
7.55
|
|
|
6.91
|
|
|||
Amounts attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
2,022
|
|
|
$
|
2,243
|
|
|
$
|
2,097
|
|
Income (loss) from discontinued operations, net of tax
|
2
|
|
|
1
|
|
|
13
|
|
|||
Net income
|
$
|
2,024
|
|
|
$
|
2,244
|
|
|
$
|
2,110
|
|
|
|
|
|
|
|
||||||
Dividends declared per share
|
$
|
3.19
|
|
|
$
|
2.93
|
|
|
$
|
2.68
|
|
(In millions) Years Ended December 31:
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net income
|
$
|
2,001
|
|
|
$
|
2,213
|
|
|
$
|
2,107
|
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Pension and other postretirement benefit plans, net:
|
|
|
|
|
|
||||||
Prior service (cost) credit arising during period
|
(15
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Amortization of prior service cost (credit) included in net income
|
4
|
|
|
4
|
|
|
6
|
|
|||
Actuarial gain (loss) arising during period
|
(1,816
|
)
|
|
(1,238
|
)
|
|
(622
|
)
|
|||
Amortization of net actuarial loss included in net income
|
1,187
|
|
|
1,002
|
|
|
1,129
|
|
|||
Loss due to curtailments/settlements
|
3
|
|
|
5
|
|
|
4
|
|
|||
Effect of exchange rates
|
(14
|
)
|
|
25
|
|
|
10
|
|
|||
Pension and other postretirement benefit plans, net
|
(651
|
)
|
|
(203
|
)
|
|
525
|
|
|||
Foreign exchange translation
|
80
|
|
|
(115
|
)
|
|
(57
|
)
|
|||
Cash flow hedges
|
10
|
|
|
25
|
|
|
(4
|
)
|
|||
Unrealized gains (losses) on investments and other, net
|
(1
|
)
|
|
15
|
|
|
(5
|
)
|
|||
Other comprehensive income (loss), before tax
|
(562
|
)
|
|
(278
|
)
|
|
459
|
|
|||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
38
|
|
|
43
|
|
|
(177
|
)
|
|||
Other comprehensive income (loss), net of tax
|
(524
|
)
|
|
(235
|
)
|
|
282
|
|
|||
Total comprehensive income (loss)
|
1,477
|
|
|
1,978
|
|
|
2,389
|
|
|||
Less: Comprehensive income (loss) attributable to noncontrolling interests in subsidiaries
|
(23
|
)
|
|
(31
|
)
|
|
(3
|
)
|
|||
Comprehensive income (loss) attributable to Raytheon Company
|
$
|
1,500
|
|
|
$
|
2,009
|
|
|
$
|
2,392
|
|
Years Ended December 31, 2017, 2016 and 2015 (in millions):
|
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, 2014
|
$
|
3
|
|
|
$
|
1,309
|
|
|
$
|
(7,458
|
)
|
|
$
|
15,684
|
|
|
$
|
9,538
|
|
|
$
|
196
|
|
|
$
|
9,734
|
|
Net income (loss)
|
|
|
|
|
|
|
2,110
|
|
|
2,110
|
|
|
10
|
|
|
2,120
|
|
||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
282
|
|
|
|
|
282
|
|
|
|
|
282
|
|
|||||||||||
Adjustment of redeemable noncontrolling interest to redemption value
|
|
|
|
|
|
|
|
(25
|
)
|
|
(25
|
)
|
|
|
|
|
(25
|
)
|
|||||||||
Distributions and other activity related to noncontrolling interests
|
|
|
(2
|
)
|
|
|
|
|
|
(2
|
)
|
|
(4
|
)
|
|
(6
|
)
|
||||||||||
Dividends declared
|
|
|
|
|
|
|
|
(813
|
)
|
|
(813
|
)
|
|
|
|
(813
|
)
|
||||||||||
Common stock plans activity
|
|
|
190
|
|
|
|
|
|
|
190
|
|
|
|
|
190
|
|
|||||||||||
Share repurchases
|
|
|
(1,099
|
)
|
|
|
|
|
|
(1,099
|
)
|
|
|
|
(1,099
|
)
|
|||||||||||
Balance at December 31, 2015
|
3
|
|
|
398
|
|
|
(7,176
|
)
|
|
16,956
|
|
|
10,181
|
|
|
202
|
|
|
10,383
|
|
|||||||
Net income (loss)
|
|
|
|
|
|
|
2,244
|
|
|
2,244
|
|
|
(15
|
)
|
|
2,229
|
|
||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
(235
|
)
|
|
|
|
(235
|
)
|
|
|
|
(235
|
)
|
|||||||||||
Adjustment of redeemable noncontrolling interest to redemption value
|
|
|
|
|
|
|
(138
|
)
|
|
(138
|
)
|
|
|
|
(138
|
)
|
|||||||||||
Distributions and other activity related to noncontrolling interests
|
|
|
|
|
|
|
(195
|
)
|
|
(195
|
)
|
|
(187
|
)
|
|
(382
|
)
|
||||||||||
Dividends declared
|
|
|
3
|
|
|
|
|
(867
|
)
|
|
(864
|
)
|
|
|
|
(864
|
)
|
||||||||||
Common stock plans activity
|
|
|
160
|
|
|
|
|
|
|
160
|
|
|
|
|
160
|
|
|||||||||||
Share repurchases
|
|
|
(561
|
)
|
|
|
|
(435
|
)
|
|
(996
|
)
|
|
|
|
(996
|
)
|
||||||||||
Balance at December 31, 2016
|
3
|
|
|
—
|
|
|
(7,411
|
)
|
|
17,565
|
|
|
10,157
|
|
|
—
|
|
|
10,157
|
|
|||||||
Net income (loss)
|
|
|
|
|
|
|
2,024
|
|
|
2,024
|
|
|
|
|
2,024
|
|
|||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
(524
|
)
|
|
|
|
(524
|
)
|
|
|
|
(524
|
)
|
|||||||||||
Adjustment of redeemable noncontrolling interest to redemption value
|
|
|
|
|
|
|
(41
|
)
|
|
(41
|
)
|
|
|
|
(41
|
)
|
|||||||||||
Distributions and other activity related to noncontrolling interests
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||||
Dividends declared
|
|
|
2
|
|
|
|
|
(929
|
)
|
|
(927
|
)
|
|
|
|
(927
|
)
|
||||||||||
Common stock plans activity
|
|
|
159
|
|
|
|
|
|
|
159
|
|
|
|
|
159
|
|
|||||||||||
Share repurchases
|
|
|
(161
|
)
|
|
|
|
(724
|
)
|
|
(885
|
)
|
|
|
|
(885
|
)
|
||||||||||
Balance at December 31, 2017
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
(7,935
|
)
|
|
$
|
17,895
|
|
|
$
|
9,963
|
|
|
$
|
—
|
|
|
$
|
9,963
|
|
(1)
|
Excludes redeemable noncontrolling interest which is not considered equity. See “Note 12: Forcepoint Joint Venture” for additional information.
|
(In millions) Years Ended December 31:
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
2,001
|
|
|
$
|
2,213
|
|
|
$
|
2,107
|
|
(Income) loss from discontinued operations, net of tax
|
(2
|
)
|
|
(1
|
)
|
|
(13
|
)
|
|||
Income from continuing operations
|
1,999
|
|
|
2,212
|
|
|
2,094
|
|
|||
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
|
550
|
|
|
515
|
|
|
489
|
|
|||
Stock-based compensation
|
173
|
|
|
151
|
|
|
140
|
|
|||
Gain on sale of equity method investment
|
—
|
|
|
(158
|
)
|
|
—
|
|
|||
Loss on repayment of long-term debt
|
39
|
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
252
|
|
|
133
|
|
|
(42
|
)
|
|||
Tax benefit from stock-based awards
|
—
|
|
|
—
|
|
|
(47
|
)
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
||||||
Receivables, net
|
(157
|
)
|
|
18
|
|
|
12
|
|
|||
Contract assets and contract liabilities
|
88
|
|
|
(645
|
)
|
|
(656
|
)
|
|||
Inventories
|
14
|
|
|
(10
|
)
|
|
(187
|
)
|
|||
Prepaid expenses and other current assets
|
204
|
|
|
205
|
|
|
(61
|
)
|
|||
Income taxes receivable/payable
|
(193
|
)
|
|
(185
|
)
|
|
(181
|
)
|
|||
Accounts payable
|
(94
|
)
|
|
152
|
|
|
107
|
|
|||
Accrued employee compensation
|
111
|
|
|
77
|
|
|
72
|
|
|||
Other current liabilities
|
106
|
|
|
(41
|
)
|
|
17
|
|
|||
Accrued retiree benefits
|
(250
|
)
|
|
419
|
|
|
637
|
|
|||
Other, net
|
(95
|
)
|
|
9
|
|
|
(48
|
)
|
|||
Net cash provided by (used in) operating activities from continuing operations
|
2,747
|
|
|
2,852
|
|
|
2,346
|
|
|||
Net cash provided by (used in) operating activities from discontinued operations
|
(2
|
)
|
|
—
|
|
|
13
|
|
|||
Net cash provided by (used in) operating activities
|
2,745
|
|
|
2,852
|
|
|
2,359
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(543
|
)
|
|
(561
|
)
|
|
(406
|
)
|
|||
Proceeds from sales of property, plant and equipment
|
46
|
|
|
34
|
|
|
59
|
|
|||
Additions to capitalized internal use software
|
(68
|
)
|
|
(64
|
)
|
|
(51
|
)
|
|||
Purchases of short-term investments
|
(696
|
)
|
|
(472
|
)
|
|
(1,392
|
)
|
|||
Sales of short-term investments
|
—
|
|
|
—
|
|
|
209
|
|
|||
Maturities of short-term investments
|
517
|
|
|
1,184
|
|
|
1,793
|
|
|||
Payments for purchases of acquired companies, net of cash received
|
(93
|
)
|
|
(57
|
)
|
|
(1,954
|
)
|
|||
Other
|
20
|
|
|
(11
|
)
|
|
(2
|
)
|
|||
Net cash provided by (used in) investing activities
|
(817
|
)
|
|
53
|
|
|
(1,744
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Dividends paid
|
(910
|
)
|
|
(850
|
)
|
|
(797
|
)
|
|||
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
|
(800
|
)
|
|
(900
|
)
|
|
(1,000
|
)
|
|||
Repurchases of common stock to satisfy tax withholding obligations
|
(85
|
)
|
|
(96
|
)
|
|
(99
|
)
|
|||
Acquisition of noncontrolling interest in RCCS LLC
|
—
|
|
|
(90
|
)
|
|
—
|
|
|||
Contribution from noncontrolling interest in Forcepoint
|
8
|
|
|
11
|
|
|
—
|
|
|||
Tax benefit from stock-based awards
|
—
|
|
|
—
|
|
|
47
|
|
|||
Sale of noncontrolling interest in Forcepoint
|
—
|
|
|
—
|
|
|
343
|
|
|||
Other
|
—
|
|
|
(5
|
)
|
|
(3
|
)
|
|||
Net cash provided by (used in) financing activities
|
(2,116
|
)
|
|
(1,930
|
)
|
|
(1,509
|
)
|
|||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(188
|
)
|
|
975
|
|
|
(894
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
3,303
|
|
|
2,328
|
|
|
3,222
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
$
|
3,115
|
|
|
$
|
3,303
|
|
|
$
|
2,328
|
|
(In millions, except per share amounts)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Operating income
|
$
|
442
|
|
|
$
|
418
|
|
|
$
|
392
|
|
Income from continuing operations attributable to Raytheon Company
|
287
|
|
|
283
|
|
|
255
|
|
|||
Diluted EPS from continuing operations attributable to Raytheon Company
|
$
|
0.98
|
|
|
$
|
0.95
|
|
|
$
|
0.84
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Materials and purchased parts
|
$
|
69
|
|
|
$
|
66
|
|
Work in process
|
504
|
|
|
532
|
|
||
Finished goods
|
21
|
|
|
10
|
|
||
Total
|
$
|
594
|
|
|
$
|
608
|
|
|
Years
|
Machinery and equipment
|
3–10
|
Buildings
|
20–45
|
|
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, 2014
|
$
|
(7,432
|
)
|
|
$
|
(3
|
)
|
|
$
|
(14
|
)
|
|
$
|
(9
|
)
|
|
$
|
(7,458
|
)
|
Before tax amount
|
525
|
|
|
(57
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|
459
|
|
|||||
Tax (expense) benefit
|
(181
|
)
|
|
—
|
|
|
2
|
|
|
2
|
|
|
(177
|
)
|
|||||
Net of tax amount
|
344
|
|
|
(57
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
282
|
|
|||||
Balance at December 31, 2015
|
(7,088
|
)
|
|
(60
|
)
|
|
(16
|
)
|
|
(12
|
)
|
|
(7,176
|
)
|
|||||
Before tax amount
|
(203
|
)
|
|
(115
|
)
|
|
25
|
|
|
15
|
|
|
(278
|
)
|
|||||
Tax (expense) benefit
|
57
|
|
|
—
|
|
|
(9
|
)
|
|
(5
|
)
|
|
43
|
|
|||||
Net of tax amount
|
(146
|
)
|
|
(115
|
)
|
|
16
|
|
|
10
|
|
|
(235
|
)
|
|||||
Balance at December 31, 2016
|
(7,234
|
)
|
|
(175
|
)
|
|
—
|
|
|
(2
|
)
|
|
(7,411
|
)
|
|||||
Before tax amount
|
(651
|
)
|
|
80
|
|
|
10
|
|
|
(1
|
)
|
|
(562
|
)
|
|||||
Tax (expense) benefit
|
42
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
38
|
|
|||||
Net of tax amount
|
(609
|
)
|
|
80
|
|
|
6
|
|
|
(1
|
)
|
|
(524
|
)
|
|||||
Balance at December 31, 2017
|
$
|
(7,843
|
)
|
|
$
|
(95
|
)
|
|
$
|
6
|
|
|
$
|
(3
|
)
|
|
$
|
(7,935
|
)
|
(1)
|
The pension and PRB plans, net, is shown net of tax benefits of
$3,923 million
and
$3,881 million
at
December 31, 2017
and
December 31, 2016
, respectively.
|
(2)
|
The cash flow hedges are shown net of tax expense of
$3 million
and tax benefit of
$1 million
at
December 31, 2017
and
December 31, 2016
, respectively.
|
(3)
|
The unrealized gains (losses) on investments and other, net, are shown net of tax expense of
$1 million
at both
December 31, 2017
and
December 31, 2016
.
|
Level 1:
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2:
|
Observable inputs, other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or that we corroborate with observable market data for substantially the full term of the related assets or liabilities.
|
Level 3:
|
Unobservable inputs supported by little or no market activity that are significant to the fair value of the assets or liabilities.
|
|
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)
|
|
2017
|
|
|
2016
|
|
||
Cash and cash equivalents
|
|
$
|
3,103
|
|
|
$
|
3,303
|
|
Restricted cash
|
|
12
|
|
|
—
|
|
||
Cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows
|
|
$
|
3,115
|
|
|
$
|
3,303
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Basic EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
||||||
Distributed earnings
|
$
|
3.18
|
|
|
$
|
2.92
|
|
|
$
|
2.67
|
|
Undistributed earnings
|
3.77
|
|
|
4.63
|
|
|
4.21
|
|
|||
Total
|
$
|
6.95
|
|
|
$
|
7.55
|
|
|
$
|
6.88
|
|
Diluted EPS attributable to Raytheon Company common stockholders:
|
|
|
|
|
|
||||||
Distributed earnings
|
$
|
3.18
|
|
|
$
|
2.92
|
|
|
$
|
2.67
|
|
Undistributed earnings
|
3.76
|
|
|
4.63
|
|
|
4.20
|
|
|||
Total
|
$
|
6.94
|
|
|
$
|
7.55
|
|
|
$
|
6.87
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Income from continuing operations attributable to participating securities
|
$
|
24
|
|
|
$
|
30
|
|
|
$
|
32
|
|
Income from discontinued operations, net of tax attributable to participating securities
(1)
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to participating securities
|
$
|
24
|
|
|
$
|
30
|
|
|
$
|
32
|
|
(1)
|
Income from discontinued operations, net of tax attributable to participating securities, was income of less than
$1 million
for
2017
,
2016
and
2015
.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
Shares for basic EPS
(1)
|
291.1
|
|
|
296.5
|
|
|
304.8
|
|
Effect of dilutive securities
|
0.3
|
|
|
0.3
|
|
|
0.4
|
|
Shares for diluted EPS
|
291.4
|
|
|
296.8
|
|
|
305.2
|
|
(1)
|
Includes participating securities of
3.5 million
,
4.0 million
and
4.7 million
for
2017
,
2016
and
2015
, respectively.
|
(In millions)
|
Purchase price allocation
|
|
|
Accounts receivable (at contractually stated amounts)
|
$
|
38
|
|
Other current assets
|
21
|
|
|
Property, plant and equipment
|
19
|
|
|
Goodwill
|
1,624
|
|
|
Intangible assets
|
501
|
|
|
Other noncurrent assets
|
16
|
|
|
Deferred revenue
|
(225
|
)
|
|
Current liabilities
|
(51
|
)
|
|
Long-term liabilities
|
(52
|
)
|
|
Fair value of net assets acquired
|
$
|
1,891
|
|
(In millions, except years)
|
Gross carrying amount
|
|
|
Weighted-average useful life (in years)
|
|
Completed technology
|
$
|
439
|
|
|
7
|
Customer relationships
|
43
|
|
|
13
|
|
Trademarks and other
|
19
|
|
|
10
|
|
Fair value of intangible assets acquired
|
$
|
501
|
|
|
|
(In millions)
|
Integrated Defense Systems
(1)
|
|
|
Intelligence, Information and Services
(1)
|
|
|
Missile Systems
|
|
|
Space and Airborne Systems
|
|
|
Forcepoint
(3)
|
|
|
Total
|
|
||||||
Balance at December 31, 2015
|
$
|
1,704
|
|
|
$
|
2,958
|
|
|
$
|
4,154
|
|
|
$
|
4,106
|
|
|
$
|
1,809
|
|
|
$
|
14,731
|
|
Acquisitions
(2)
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
59
|
|
||||||
Effect of foreign exchange rates and other
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Balance at December 31, 2016
|
1,702
|
|
|
2,966
|
|
|
4,154
|
|
|
4,106
|
|
|
1,860
|
|
|
14,788
|
|
||||||
Acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
77
|
|
||||||
Effect of foreign exchange rates and other
|
4
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
6
|
|
||||||
Balance at December 31, 2017
|
$
|
1,706
|
|
|
$
|
2,967
|
|
|
$
|
4,154
|
|
|
$
|
4,106
|
|
|
$
|
1,938
|
|
|
$
|
14,871
|
|
(1)
|
In connection with the January 1, 2016 reorganization of Integrated Defense Systems (IDS) and IIS, goodwill of
$90 million
was allocated to the IIS segment on a relative fair value basis and is reflected in the revised balances at December 31, 2015.
|
(2)
|
In addition to the acquisition of the Stonesoft NGFW business during the first quarter of 2016, we finalized the purchase price allocation for Foreground Security at IIS, which resulted in an adjustment to goodwill of
$8 million
.
|
(3)
|
At
December 31, 2017
, Forcepoint’s fair value is estimated to exceed its net book value by approximately
$1.3 billion
. As discussed in “Note 12: 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.
|
(In millions)
|
2017
|
|
|
2016
|
|
||
U.S. government contracts (including foreign military sales)
|
$
|
881
|
|
|
$
|
570
|
|
Other customers
|
451
|
|
|
601
|
|
||
Allowance for doubtful accounts
|
(8
|
)
|
|
(8
|
)
|
||
Total receivables, net
|
$
|
1,324
|
|
|
$
|
1,163
|
|
(In millions)
|
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
Contract assets
|
|
$
|
5,247
|
|
|
$
|
5,041
|
|
|
$
|
206
|
|
|
4
|
%
|
Contract liabilities—current
|
|
(2,927
|
)
|
|
(2,646
|
)
|
|
(281
|
)
|
|
11
|
%
|
|||
Contract liabilities—noncurrent
|
|
(127
|
)
|
|
(128
|
)
|
|
1
|
|
|
(1
|
)%
|
|||
Net contract assets (liabilities)
|
|
$
|
2,193
|
|
|
$
|
2,267
|
|
|
$
|
(74
|
)
|
|
(3
|
)%
|
(In millions)
|
2017
|
|
|
2016
|
|
||
U.S. government contracts (including foreign military sales):
|
|
|
|
||||
Unbilled
|
$
|
10,748
|
|
|
$
|
9,356
|
|
Progress payments
|
(6,637
|
)
|
|
(5,651
|
)
|
||
|
4,111
|
|
|
3,705
|
|
||
Other customers:
|
|
|
|
||||
Unbilled
|
1,368
|
|
|
1,742
|
|
||
Progress payments
|
(232
|
)
|
|
(406
|
)
|
||
|
1,136
|
|
|
1,336
|
|
||
Total contract assets
|
$
|
5,247
|
|
|
$
|
5,041
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Land
|
$
|
85
|
|
|
$
|
88
|
|
Buildings and improvements
|
2,567
|
|
|
2,508
|
|
||
Machinery and equipment
|
4,621
|
|
|
4,198
|
|
||
Property, plant and equipment, gross
|
7,273
|
|
|
6,794
|
|
||
Accumulated depreciation and amortization
|
(4,834
|
)
|
|
(4,628
|
)
|
||
Total
|
$
|
2,439
|
|
|
$
|
2,166
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Marketable securities held in trust
(1)
|
$
|
633
|
|
|
$
|
550
|
|
Computer software, net of accumulated amortization of $1,150 and $1,113 at December 31, 2017 and 2016, respectively
|
288
|
|
|
291
|
|
||
Other intangible assets, net of accumulated amortization of $652 and $520 at December 31, 2017 and 2016, respectively
|
481
|
|
|
598
|
|
||
Other noncurrent assets, net
|
285
|
|
|
242
|
|
||
Deferred tax asset
(2)
|
537
|
|
|
718
|
|
||
Total
|
$
|
2,224
|
|
|
$
|
2,399
|
|
(1)
|
For further details, refer to “Note 15: Pension and Other Employee Benefits.”
|
(2)
|
For further details, refer to “Note 16: Income Taxes.”
|
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
||
$251 notes due 2018, 6.75%
|
$
|
—
|
|
|
$
|
251
|
|
$340 notes due 2018, 6.40%
|
—
|
|
|
339
|
|
||
$500 notes due 2020, 4.40%
|
499
|
|
|
498
|
|
||
$1,000 notes due 2020, 3.125%
|
996
|
|
|
995
|
|
||
$1,100 notes due 2022, 2.50%
|
1,095
|
|
|
1,094
|
|
||
$300 notes due 2024, 3.15%
|
297
|
|
|
297
|
|
||
$382 notes due 2027, 7.20%
|
372
|
|
|
372
|
|
||
$185 notes due 2028, 7.00%
|
185
|
|
|
184
|
|
||
$600 notes due 2040, 4.875%
|
592
|
|
|
591
|
|
||
$425 notes due 2041, 4.70%
|
419
|
|
|
419
|
|
||
$300 notes due 2044, 4.20%
|
295
|
|
|
295
|
|
||
Total debt issued and outstanding
|
$
|
4,750
|
|
|
$
|
5,335
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Fair value of long-term debt
|
$
|
5,293
|
|
|
$
|
5,848
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Principal
|
$
|
4,792
|
|
|
$
|
5,383
|
|
Unamortized issue discounts
|
(34
|
)
|
|
(39
|
)
|
||
Unamortized interest rate lock costs
|
(8
|
)
|
|
(9
|
)
|
||
Total
|
$
|
4,750
|
|
|
$
|
5,335
|
|
(In millions)
|
|
|
|
2018
|
$
|
229
|
|
2019
|
188
|
|
|
2020
|
150
|
|
|
2021
|
119
|
|
|
2022
|
93
|
|
|
Thereafter
|
262
|
|
(In millions, except percentages)
|
2017
|
|
|
2016
|
|
||
Total remediation costs—undiscounted
|
$
|
206
|
|
|
$
|
219
|
|
Weighted-average discount rate
|
5.2
|
%
|
|
5.2
|
%
|
||
Total remediation costs—discounted
|
$
|
142
|
|
|
$
|
147
|
|
Recoverable portion
|
92
|
|
|
92
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Guarantees
|
$
|
216
|
|
|
$
|
190
|
|
Letters of credit
|
2,416
|
|
|
2,345
|
|
||
Surety bonds
|
166
|
|
|
127
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Beginning balance
|
$
|
449
|
|
|
$
|
355
|
|
Net income (loss)
|
(23
|
)
|
|
(16
|
)
|
||
Other comprehensive income (loss), net of tax
(1)
|
—
|
|
|
(1
|
)
|
||
Contribution from noncontrolling interest
|
8
|
|
|
11
|
|
||
Adjustment of noncontrolling interest to redemption value
|
78
|
|
|
100
|
|
||
Ending balance
|
$
|
512
|
|
|
$
|
449
|
|
(1)
|
Other comprehensive income (loss), net of tax, was income of less than
$1 million
in
2017
.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
Beginning balance
|
292.8
|
|
|
299.0
|
|
|
307.3
|
|
Stock plans activity
|
1.1
|
|
|
1.5
|
|
|
1.6
|
|
Share repurchases
|
(5.5
|
)
|
|
(7.7
|
)
|
|
(9.9
|
)
|
Ending balance
|
288.4
|
|
|
292.8
|
|
|
299.0
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
(In millions)
|
$
|
Shares
|
|
|
$
|
Shares
|
|
|
$
|
Shares
|
|
||||||
Shares repurchased under our share repurchase programs
|
$
|
800
|
|
4.9
|
|
|
$
|
900
|
|
6.9
|
|
|
$
|
1,000
|
|
9.0
|
|
Shares repurchased to satisfy tax withholding obligations
|
85
|
|
0.6
|
|
|
96
|
|
0.8
|
|
|
99
|
|
0.9
|
|
|||
Total share repurchases
|
$
|
885
|
|
5.5
|
|
|
$
|
996
|
|
7.7
|
|
|
$
|
1,099
|
|
9.9
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Stock-based compensation expense
|
|
|
|
|
|
||||||
Restricted stock expense
|
$
|
94
|
|
|
$
|
96
|
|
|
$
|
92
|
|
RSU expense
|
28
|
|
|
26
|
|
|
26
|
|
|||
LTPP expense
|
38
|
|
|
29
|
|
|
22
|
|
|||
Total stock-based compensation expense
|
$
|
160
|
|
|
$
|
151
|
|
|
$
|
140
|
|
Stock-based tax benefit recognized
|
30
|
|
|
46
|
|
|
44
|
|
|
Shares/units
(in thousands)
|
|
|
Weighted-average
grant date
fair value
|
|
|
Outstanding at December 31, 2014
|
4,518
|
|
|
$
|
69.76
|
|
Granted
|
1,242
|
|
|
110.28
|
|
|
Vested
|
(1,597
|
)
|
|
57.65
|
|
|
Forfeited
|
(423
|
)
|
|
77.02
|
|
|
Outstanding at December 31, 2015
|
3,740
|
|
|
87.57
|
|
|
Granted
|
1,128
|
|
|
124.08
|
|
|
Vested
|
(1,407
|
)
|
|
71.09
|
|
|
Forfeited
|
(167
|
)
|
|
98.61
|
|
|
Outstanding at December 31, 2016
|
3,294
|
|
|
106.56
|
|
|
Granted
|
1,025
|
|
|
152.93
|
|
|
Vested
|
(1,194
|
)
|
|
91.77
|
|
|
Forfeited
|
(229
|
)
|
|
120.33
|
|
|
Outstanding at December 31, 2017
|
2,896
|
|
|
$
|
127.98
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Fair value of restricted stock and RSUs vested
|
$
|
193
|
|
|
$
|
183
|
|
|
$
|
167
|
|
Tax benefit realized related to vested restricted stock/RSUs
(1)
|
63
|
|
|
64
|
|
|
58
|
|
(1)
|
Amounts in 2017 and 2016 include excess tax benefits realized of
$29 million
and
$32 million
, respectively.
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Expected stock price volatility
|
18.74
|
%
|
|
18.60
|
%
|
|
16.90
|
%
|
Peer group stock price volatility
|
20.01
|
%
|
|
20.06
|
%
|
|
19.37
|
%
|
Correlations of returns
|
56.55
|
%
|
|
58.05
|
%
|
|
59.51
|
%
|
Risk free interest rate
|
1.53
|
%
|
|
1.08
|
%
|
|
0.89
|
%
|
|
Units
(in thousands)
|
|
|
Weighted-average
grant date
fair value
|
|
|
Outstanding at December 31, 2014
|
1,408
|
|
|
$
|
60.53
|
|
Granted
|
189
|
|
|
112.14
|
|
|
Increase due to expected performance
|
148
|
|
|
73.70
|
|
|
Vested
|
(797
|
)
|
|
50.83
|
|
|
Forfeited
|
(33
|
)
|
|
85.16
|
|
|
Outstanding at December 31, 2015
|
915
|
|
|
80.83
|
|
|
Granted
|
167
|
|
|
123.31
|
|
|
Increase due to expected performance
|
205
|
|
|
89.62
|
|
|
Vested
|
(590
|
)
|
|
61.38
|
|
|
Forfeited
|
(32
|
)
|
|
105.52
|
|
|
Outstanding at December 31, 2016
|
665
|
|
|
110.32
|
|
|
Granted
|
142
|
|
|
152.29
|
|
|
Increase due to expected performance
|
193
|
|
|
125.14
|
|
|
Vested
|
(273
|
)
|
|
97.59
|
|
|
Forfeited
|
(4
|
)
|
|
137.57
|
|
|
Outstanding at December 31, 2017
|
723
|
|
|
$
|
127.16
|
|
(1)
|
This table excludes dividend equivalent units outstanding of
28 thousand
at
December 31, 2017
,
28 thousand
at
December 31, 2016
, and
50 thousand
at
December 31, 2015
, based on expected performance on each reporting date.
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Fair value of LTPP awards vested
|
$
|
44
|
|
|
$
|
77
|
|
|
$
|
93
|
|
Tax benefit realized related to vested LTPP awards
(1)
|
15
|
|
|
27
|
|
|
33
|
|
(1)
|
Amounts in 2017 and 2016 include excess tax benefits realized
of
$7 million
and
$15 million
, respectively.
|
Unit Price
|
$
|
1,101.31
|
|
Expected life (in years)
|
2.29
|
|
|
Expected unit price volatility
|
49.51
|
%
|
|
Risk free interest rate
|
1.46
|
%
|
|
Dividend yield
|
—
|
%
|
|
Grant date fair value
|
$
|
339.72
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Domestic Pension Benefits plan
|
$
|
20,075
|
|
|
$
|
17,808
|
|
Foreign Pension Benefits plan
|
927
|
|
|
797
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Marketable securities held in trust
|
$
|
633
|
|
|
$
|
550
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Required pension contributions
|
$
|
615
|
|
|
$
|
145
|
|
|
$
|
339
|
|
Discretionary pension contributions
|
1,000
|
|
|
500
|
|
|
200
|
|
|||
PRB contributions
|
27
|
|
|
25
|
|
|
22
|
|
|||
Total
|
$
|
1,642
|
|
|
$
|
670
|
|
|
$
|
561
|
|
(In millions)
|
Pension
Benefits
|
|
|
PRB
|
|
||
2018
|
$
|
2,223
|
|
|
$
|
63
|
|
2019
|
1,876
|
|
|
61
|
|
||
2020
|
1,890
|
|
|
59
|
|
||
2021
|
1,845
|
|
|
57
|
|
||
2022
|
1,805
|
|
|
55
|
|
||
Thereafter (next 5 years)
|
8,093
|
|
|
245
|
|
|
Pension Benefits
|
||||||||||
Components of Net Periodic Pension Expense (Income)
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Service cost
|
$
|
473
|
|
|
$
|
482
|
|
|
$
|
537
|
|
Interest cost
|
1,088
|
|
|
1,089
|
|
|
1,047
|
|
|||
Expected return on plan assets
|
(1,377
|
)
|
|
(1,505
|
)
|
|
(1,533
|
)
|
|||
Amounts reflected in net funded status
|
184
|
|
|
66
|
|
|
51
|
|
|||
Amortization of prior service cost included in net periodic pension expense
|
5
|
|
|
5
|
|
|
7
|
|
|||
Recognized net actuarial loss
|
1,177
|
|
|
999
|
|
|
1,127
|
|
|||
Loss recognized due to settlements
|
1
|
|
|
3
|
|
|
1
|
|
|||
Amounts reclassified during the year
|
1,183
|
|
|
1,007
|
|
|
1,135
|
|
|||
Net periodic pension expense (income)
|
$
|
1,367
|
|
|
$
|
1,073
|
|
|
$
|
1,186
|
|
|
PRB
|
||||||||||
Components of Net Periodic PRB Expense (Income)
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Service cost
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
7
|
|
Interest cost
|
30
|
|
|
31
|
|
|
30
|
|
|||
Expected return on plan assets
|
(21
|
)
|
|
(25
|
)
|
|
(28
|
)
|
|||
Amounts reflected in net funded status
|
15
|
|
|
12
|
|
|
9
|
|
|||
Amortization of prior service cost included in net periodic PRB expense
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Recognized net actuarial loss
|
10
|
|
|
3
|
|
|
2
|
|
|||
Loss recognized due to settlements
|
1
|
|
|
2
|
|
|
2
|
|
|||
Amounts reclassified during the year
|
10
|
|
|
4
|
|
|
3
|
|
|||
Net periodic PRB expense (income)
|
$
|
25
|
|
|
$
|
16
|
|
|
$
|
12
|
|
|
Pension Benefits
|
|
PRB
|
||||||||||||
Funded Status – Amounts Recognized on our Balance Sheets
(in millions) December 31:
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Noncurrent assets
|
$
|
112
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Current liabilities
|
(164
|
)
|
|
(127
|
)
|
|
(19
|
)
|
|
(19
|
)
|
||||
Noncurrent liabilities
|
(7,515
|
)
|
|
(7,074
|
)
|
|
(368
|
)
|
|
(358
|
)
|
||||
Net amount recognized on our balance sheets
|
$
|
(7,567
|
)
|
|
$
|
(7,182
|
)
|
|
$
|
(387
|
)
|
|
$
|
(377
|
)
|
|
Pension Benefits
|
|
PRB
|
||||||||||||
Reconciliation of Amounts Recognized on our Balance Sheets
(in millions) December 31:
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Prior service (cost) credit
|
$
|
(22
|
)
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
Net loss
|
(11,607
|
)
|
|
(10,975
|
)
|
|
(137
|
)
|
|
(128
|
)
|
||||
Accumulated other comprehensive loss
|
(11,629
|
)
|
|
(10,988
|
)
|
|
(137
|
)
|
|
(127
|
)
|
||||
Accumulated contributions in excess (below) net periodic benefit or cost
|
4,062
|
|
|
3,806
|
|
|
(250
|
)
|
|
(250
|
)
|
||||
Net amount recognized on our balance sheets
|
$
|
(7,567
|
)
|
|
$
|
(7,182
|
)
|
|
$
|
(387
|
)
|
|
$
|
(377
|
)
|
|
Pension Benefits
|
|
PRB
|
||||||||||||
Sources of Change in Accumulated Other Comprehensive Loss
(in millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Prior service (cost) credit arising during period
|
$
|
(15
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Amortization of prior service cost (credit) included in net income
|
5
|
|
|
5
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net change in prior service (cost) credit not recognized in net income during the period
|
(10
|
)
|
|
4
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Actuarial gain (loss) arising during period
|
(1,796
|
)
|
|
(1,212
|
)
|
|
(20
|
)
|
|
(26
|
)
|
||||
Amortization of net actuarial (gain) loss included in net income
|
1,177
|
|
|
999
|
|
|
10
|
|
|
3
|
|
||||
Loss due to curtailments/settlements
|
2
|
|
|
3
|
|
|
1
|
|
|
2
|
|
||||
Net change in actuarial gain (loss) not included in net income during the period
|
(617
|
)
|
|
(210
|
)
|
|
(9
|
)
|
|
(21
|
)
|
||||
Effect of exchange rates
|
(14
|
)
|
|
25
|
|
|
—
|
|
|
—
|
|
||||
Total change in accumulated other comprehensive loss during period
|
$
|
(641
|
)
|
|
$
|
(181
|
)
|
|
$
|
(10
|
)
|
|
$
|
(22
|
)
|
(In millions)
|
Pension Benefits
|
|
|
PRB
|
|
||
Amortization of net gain (loss)
|
$
|
(1,377
|
)
|
|
$
|
(9
|
)
|
Amortization of prior service (cost) credit
|
(5
|
)
|
|
—
|
|
||
Total
|
$
|
(1,382
|
)
|
|
$
|
(9
|
)
|
(In millions)
|
2017
|
|
|
2016
|
|
||
PBO for domestic qualified pension plans
|
$
|
26,150
|
|
|
$
|
23,818
|
|
ABO for domestic qualified pension plans
|
24,122
|
|
|
22,089
|
|
||
Asset values for domestic qualified pension plans
|
20,075
|
|
|
17,808
|
|
|
Pension Benefits
|
|
PRB
|
||||||||||||
Change in Projected Benefit Obligation
(in millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
PBO at beginning of year
|
$
|
25,787
|
|
|
$
|
25,445
|
|
|
$
|
737
|
|
|
$
|
745
|
|
Service cost
|
473
|
|
|
482
|
|
|
6
|
|
|
6
|
|
||||
Interest cost
|
1,088
|
|
|
1,089
|
|
|
30
|
|
|
31
|
|
||||
Plan participants’ contributions
|
8
|
|
|
9
|
|
|
35
|
|
|
46
|
|
||||
Amendments
|
15
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Plan curtailments/settlements
|
(5
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|
(10
|
)
|
||||
Actuarial loss (gain)
|
3,085
|
|
|
831
|
|
|
41
|
|
|
21
|
|
||||
Foreign exchange loss (gain)
|
78
|
|
|
(140
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(1,960
|
)
|
|
(1,923
|
)
|
|
(95
|
)
|
|
(102
|
)
|
||||
PBO at end of year
|
$
|
28,569
|
|
|
$
|
25,787
|
|
|
$
|
745
|
|
|
$
|
737
|
|
|
Pension Benefits
|
|
PRB
|
||||||||||||
Change in Plan Assets
(in millions)
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
||||
Fair value of plan assets at beginning of year
|
$
|
18,605
|
|
|
$
|
18,900
|
|
|
$
|
360
|
|
|
$
|
380
|
|
Actual return (loss) on plan assets
|
2,666
|
|
|
1,124
|
|
|
40
|
|
|
21
|
|
||||
Company contributions
|
1,615
|
|
|
645
|
|
|
27
|
|
|
25
|
|
||||
Plan participants’ contributions
|
8
|
|
|
9
|
|
|
35
|
|
|
46
|
|
||||
Plan settlements
|
(4
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|
(10
|
)
|
||||
Foreign exchange gain (loss)
|
72
|
|
|
(143
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(1,960
|
)
|
|
(1,923
|
)
|
|
(95
|
)
|
|
(102
|
)
|
||||
Fair value of plan assets at end of year
|
$
|
21,002
|
|
|
$
|
18,605
|
|
|
$
|
358
|
|
|
$
|
360
|
|
|
Pension Benefits
|
|||||||
Weighted-Average Net Periodic Benefit Cost Assumptions
|
2017
|
|
|
2016
|
|
|
2015
|
|
Discount rate
|
4.31
|
%
|
|
4.45
|
%
|
|
4.06
|
%
|
Expected long-term rate of return on plan assets
|
7.39
|
%
|
|
7.91
|
%
|
|
7.91
|
%
|
Rate of compensation increase
|
|
|
|
|
|
|||
Range
|
2%–7%
|
|
|
2%–7%
|
|
|
2%–7%
|
|
Average
|
4.43
|
%
|
|
4.42
|
%
|
|
4.41
|
%
|
|
PRB
|
|||||||
Weighted-Average Net Periodic Benefit Cost Assumptions
|
2017
|
|
|
2016
|
|
|
2015
|
|
Discount rate
|
4.28
|
%
|
|
4.42
|
%
|
|
4.05
|
%
|
Expected long-term rate of return on plan assets
|
6.25
|
%
|
|
6.99
|
%
|
|
7.01
|
%
|
Rate of compensation increase
|
|
|
|
|
|
|||
Range
|
2%–7%
|
|
|
2%–7%
|
|
|
2%–7%
|
|
Average
|
4.50
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
Health care trend rate
*
|
4.00
|
%
|
|
4.00
|
%
|
|
4.00
|
%
|
|
Pension Benefits
|
|
PRB
|
||||||||
Weighted-Average Year-End Benefit Obligation Assumptions
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Discount rate
|
3.68
|
%
|
|
4.31
|
%
|
|
3.72
|
%
|
|
4.28
|
%
|
Rate of compensation increase
|
|
|
|
|
|
|
|
||||
Range
|
2%–7%
|
|
|
2%–7%
|
|
|
2%–7%
|
|
|
2%–7%
|
|
Average
|
4.40
|
%
|
|
4.40
|
%
|
|
4.50
|
%
|
|
4.50
|
%
|
Health care trend rate
*
|
|
|
|
|
4.00
|
%
|
|
4.00
|
%
|
Percentile
|
2017
|
|
|
2016
|
|
|
2015
|
|
35
th
|
5.82
|
%
|
|
6.09
|
%
|
|
6.37
|
%
|
65
th
|
7.96
|
%
|
|
8.16
|
%
|
|
8.37
|
%
|
December 31, 2017:
(In millions)
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Not subject to leveling
(7)
|
|
|||||
U.S. equities
(1)
|
$
|
5,217
|
|
|
$
|
2,631
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,586
|
|
International equities
(1)
|
3,784
|
|
|
2,613
|
|
|
1
|
|
|
—
|
|
|
1,170
|
|
|||||
Real assets
(2)
|
100
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
Fixed-income securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agency securities
|
1,919
|
|
|
1,814
|
|
|
105
|
|
|
—
|
|
|
—
|
|
|||||
Corporate debt securities/instruments
(3)
|
2,850
|
|
|
278
|
|
|
2,097
|
|
|
—
|
|
|
475
|
|
|||||
Core fixed-income
(4)
|
102
|
|
|
102
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Global multi-sector fixed-income
(5)
|
472
|
|
|
472
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Securitized and structured credit
(6)
|
571
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
571
|
|
|||||
Cash and cash equivalents
(7)
|
655
|
|
|
42
|
|
|
1
|
|
|
—
|
|
|
612
|
|
|||||
Absolute return funds
|
1,680
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,680
|
|
|||||
Private equity funds
|
1,416
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,416
|
|
|||||
Private real estate funds
|
1,203
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,203
|
|
|||||
Insurance contracts
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|||||
Total investments
|
19,999
|
|
|
8,031
|
|
|
2,204
|
|
|
30
|
|
|
9,734
|
|
|||||
Net receivables and payables
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76
|
|
|||||
Total assets
|
$
|
20,075
|
|
|
$
|
8,031
|
|
|
$
|
2,204
|
|
|
$
|
30
|
|
|
$
|
9,810
|
|
December 31, 2016: (In millions)
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Not subject to leveling
(7)
|
|
|||||
U.S. equities
(1)
|
$
|
4,527
|
|
|
$
|
2,433
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,094
|
|
International equities
(1)
|
3,099
|
|
|
2,120
|
|
|
1
|
|
|
—
|
|
|
978
|
|
|||||
Real assets
(2)
|
103
|
|
|
103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Fixed-income securities
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agency securities
|
1,031
|
|
|
917
|
|
|
114
|
|
|
—
|
|
|
—
|
|
|||||
Corporate debt securities/instruments
(3)
|
3,092
|
|
|
277
|
|
|
2,527
|
|
|
—
|
|
|
288
|
|
|||||
Core fixed-income
(4)
|
345
|
|
|
345
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Global multi-sector fixed-income
(5)
|
343
|
|
|
343
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Securitized and structured credit
(6)
|
611
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
611
|
|
|||||
Cash and cash equivalents
(7)
|
571
|
|
|
26
|
|
|
8
|
|
|
—
|
|
|
537
|
|
|||||
Absolute return funds
|
1,412
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,412
|
|
|||||
Private equity funds
|
1,251
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,251
|
|
|||||
Private real estate funds
|
1,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,167
|
|
|||||
Insurance contracts
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|||||
Total investments
|
17,581
|
|
|
6,564
|
|
|
2,650
|
|
|
29
|
|
|
8,338
|
|
|||||
Net receivables and payables
|
227
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
227
|
|
|||||
Total assets
|
$
|
17,808
|
|
|
$
|
6,564
|
|
|
$
|
2,650
|
|
|
$
|
29
|
|
|
$
|
8,565
|
|
(1)
|
U.S. and International equities primarily include investments across the spectrum of large, medium and small market capitalization stocks.
|
(2)
|
Real asset investments include strategies and funds that invest in physical and permanent assets, including infrastructure.
|
(3)
|
Corporate debt securities/instruments include investment grade and non-investment grade securities.
|
(4)
|
Core fixed-income securities are funds that invest primarily in intermediate-term high quality domestic securities issued by various governmental or private sector entities.
|
(5)
|
Global multi-sector fixed-income investments are funds that invest globally among several sectors including governments, investment grade corporate bonds, high yield corporate bonds and emerging market securities.
|
(6)
|
Securitized and structured credit include fixed-income funds and securities that pool together various cash flow producing financial assets that are structured in a way that can achieve desired targeted credit, maturity or other characteristics and are typically collateralized by residential mortgages, commercial mortgages and other assets, and other fixed income related securities.
|
(7)
|
Cash and cash equivalents are invested in highly liquid money market funds and bank sponsored collective funds. Included in cash and cash equivalents is excess cash in investment manager accounts. This cash is available for immediate use and is used to fund daily operations and execute the investment policy. This amount is not considered to be part of the cash target allocation set forth in the investment policy.
|
(8)
|
Receivables, payables and certain investments that are valued using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amount presented for the total domestic pension benefits plan assets.
|
|
% of Plan Assets at Dec 31:
|
||||
Asset category
|
2017
|
|
|
2016
|
|
Fixed-income securities
|
44
|
%
|
|
45
|
%
|
U.S. equities
|
40
|
%
|
|
40
|
%
|
International equities
|
10
|
%
|
|
10
|
%
|
Cash and cash equivalents
|
6
|
%
|
|
5
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Current income tax expense (benefit)
|
|
|
|
|
|
||||||
Federal
|
$
|
822
|
|
|
$
|
713
|
|
|
$
|
757
|
|
Foreign
|
40
|
|
|
38
|
|
|
36
|
|
|||
State
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
|||
Deferred income tax expense (benefit)
|
|
|
|
|
|
||||||
Federal
|
235
|
|
|
118
|
|
|
(89
|
)
|
|||
Foreign
|
18
|
|
|
6
|
|
|
45
|
|
|||
State
|
(1
|
)
|
|
1
|
|
|
2
|
|
|||
Total
|
$
|
1,114
|
|
|
$
|
873
|
|
|
$
|
747
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
Statutory tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Research and development tax credit
|
(1.5
|
)
|
|
(1.3
|
)
|
|
(1.2
|
)
|
Tax settlements and refund claims
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
Domestic manufacturing deduction benefit
|
(2.5
|
)
|
|
(2.7
|
)
|
|
(3.1
|
)
|
Foreign income tax rate differential
|
0.2
|
|
|
—
|
|
|
(1.4
|
)
|
Equity compensation
|
(1.2
|
)
|
|
(1.6
|
)
|
|
—
|
|
TRS tax-free gain
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
Remeasurement of deferred taxes
|
3.2
|
|
|
—
|
|
|
—
|
|
One-time transition tax on previously undistributed foreign earnings
|
2.3
|
|
|
—
|
|
|
—
|
|
Other, net
|
0.3
|
|
|
0.7
|
|
|
0.2
|
|
Effective tax rate
|
35.8
|
%
|
|
28.3
|
%
|
|
26.3
|
%
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Domestic income from continuing operations before taxes
|
$
|
3,027
|
|
|
$
|
2,964
|
|
|
$
|
2,523
|
|
Foreign income from continuing operations before taxes
|
86
|
|
|
121
|
|
|
318
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Federal
|
$
|
765
|
|
|
$
|
710
|
|
|
$
|
1,008
|
|
Foreign
|
77
|
|
|
47
|
|
|
43
|
|
|||
State
|
36
|
|
|
22
|
|
|
30
|
|
(In millions)
|
2017
|
|
|
2016
|
|
||
Noncurrent deferred tax assets (liabilities)
|
|
|
|
||||
Accrued employee compensation and benefits
|
$
|
202
|
|
|
$
|
293
|
|
Other accrued expenses and reserves
|
86
|
|
|
126
|
|
||
Contract balances and inventories
|
(537
|
)
|
|
(887
|
)
|
||
Pension benefits
|
1,505
|
|
|
2,368
|
|
||
Other retiree benefits
|
67
|
|
|
109
|
|
||
Net operating loss and tax credit carryforwards
|
99
|
|
|
121
|
|
||
Depreciation and amortization
|
(858
|
)
|
|
(1,343
|
)
|
||
Partnership outside basis difference
|
(36
|
)
|
|
(90
|
)
|
||
Other
|
21
|
|
|
52
|
|
||
Valuation allowance
|
(17
|
)
|
|
(38
|
)
|
||
Deferred income taxes—noncurrent
|
$
|
532
|
|
|
$
|
711
|
|
Total Net Sales
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
5,804
|
|
|
$
|
5,529
|
|
|
$
|
5,848
|
|
Intelligence, Information and Services
|
6,177
|
|
|
6,169
|
|
|
6,137
|
|
|||
Missile Systems
|
7,787
|
|
|
7,096
|
|
|
6,569
|
|
|||
Space and Airborne Systems
|
6,430
|
|
|
6,182
|
|
|
5,814
|
|
|||
Forcepoint
|
608
|
|
|
586
|
|
|
344
|
|
|||
Eliminations
|
(1,423
|
)
|
|
(1,361
|
)
|
|
(1,330
|
)
|
|||
Total business segment sales
|
25,383
|
|
|
24,201
|
|
|
23,382
|
|
|||
Acquisition Accounting Adjustments
|
(35
|
)
|
|
(77
|
)
|
|
(61
|
)
|
|||
Total
|
$
|
25,348
|
|
|
$
|
24,124
|
|
|
$
|
23,321
|
|
Intersegment Sales
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
64
|
|
|
$
|
69
|
|
|
$
|
64
|
|
Intelligence, Information and Services
|
666
|
|
|
657
|
|
|
624
|
|
|||
Missile Systems
|
132
|
|
|
122
|
|
|
143
|
|
|||
Space and Airborne Systems
|
540
|
|
|
493
|
|
|
484
|
|
|||
Forcepoint
|
21
|
|
|
20
|
|
|
15
|
|
|||
Total
|
$
|
1,423
|
|
|
$
|
1,361
|
|
|
$
|
1,330
|
|
Operating Income
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
935
|
|
|
$
|
971
|
|
|
$
|
859
|
|
Intelligence, Information and Services
|
455
|
|
|
467
|
|
|
648
|
|
|||
Missile Systems
|
1,010
|
|
|
921
|
|
|
877
|
|
|||
Space and Airborne Systems
|
862
|
|
|
808
|
|
|
851
|
|
|||
Forcepoint
|
33
|
|
|
90
|
|
|
56
|
|
|||
Eliminations
|
(148
|
)
|
|
(142
|
)
|
|
(140
|
)
|
|||
Total business segment operating income
|
3,147
|
|
|
3,115
|
|
|
3,151
|
|
|||
Acquisition Accounting Adjustments
|
(160
|
)
|
|
(198
|
)
|
|
(168
|
)
|
|||
FAS/CAS Adjustment
|
390
|
|
|
435
|
|
|
185
|
|
|||
Corporate
|
(59
|
)
|
|
(57
|
)
|
|
(101
|
)
|
|||
Total
|
$
|
3,318
|
|
|
$
|
3,295
|
|
|
$
|
3,067
|
|
Intersegment Operating Income
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
2
|
|
Intelligence, Information and Services
|
64
|
|
|
65
|
|
|
68
|
|
|||
Missile Systems
|
13
|
|
|
12
|
|
|
15
|
|
|||
Space and Airborne Systems
|
51
|
|
|
46
|
|
|
47
|
|
|||
Forcepoint
|
15
|
|
|
15
|
|
|
8
|
|
|||
Total
|
$
|
148
|
|
|
$
|
142
|
|
|
$
|
140
|
|
(In millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
FAS/CAS Pension Adjustment
|
$
|
397
|
|
|
$
|
435
|
|
|
$
|
182
|
|
FAS/CAS PRB Adjustment
|
(7
|
)
|
|
—
|
|
|
3
|
|
|||
FAS/CAS Adjustment
|
$
|
390
|
|
|
$
|
435
|
|
|
$
|
185
|
|
Capital Expenditures
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
200
|
|
|
$
|
135
|
|
|
$
|
124
|
|
Intelligence, Information and Services
|
22
|
|
|
59
|
|
|
87
|
|
|||
Missile Systems
|
221
|
|
|
135
|
|
|
62
|
|
|||
Space and Airborne Systems
|
158
|
|
|
149
|
|
|
131
|
|
|||
Forcepoint
|
14
|
|
|
19
|
|
|
10
|
|
|||
Corporate
|
19
|
|
|
29
|
|
|
11
|
|
|||
Total
(1)
|
$
|
634
|
|
|
$
|
526
|
|
|
$
|
425
|
|
(1)
|
Total capital expenditures may not agree to our consolidated statements of cash flows due to non-cash transactions.
|
Depreciation and Amortization
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Integrated Defense Systems
|
$
|
98
|
|
|
$
|
88
|
|
|
$
|
86
|
|
Intelligence, Information and Services
|
50
|
|
|
65
|
|
|
48
|
|
|||
Missile Systems
|
84
|
|
|
69
|
|
|
74
|
|
|||
Space and Airborne Systems
|
132
|
|
|
122
|
|
|
131
|
|
|||
Forcepoint
|
17
|
|
|
15
|
|
|
8
|
|
|||
Acquisition Accounting Adjustments
|
125
|
|
|
121
|
|
|
107
|
|
|||
Corporate
|
44
|
|
|
35
|
|
|
35
|
|
|||
Total
|
$
|
550
|
|
|
$
|
515
|
|
|
$
|
489
|
|
Total Assets
(in millions)
|
2017
|
|
|
2016
|
|
||
Integrated Defense Systems
(1)
|
$
|
4,679
|
|
|
$
|
4,573
|
|
Intelligence, Information and Services
(1)
|
4,230
|
|
|
4,315
|
|
||
Missile Systems
(1)
|
7,338
|
|
|
6,970
|
|
||
Space and Airborne Systems
(1)
|
6,696
|
|
|
6,564
|
|
||
Forcepoint
(1)
|
2,543
|
|
|
2,548
|
|
||
Corporate
|
5,374
|
|
|
5,268
|
|
||
Total
|
$
|
30,860
|
|
|
$
|
30,238
|
|
(1)
|
Total assets includes intangible assets.
Related amortization expense is included in Acquisition Accounting Adjustments.
|
Property, Plant and Equipment, Net, by Geographic Area
(in millions)
|
2017
|
|
|
2016
|
|
||
United States
|
$
|
2,362
|
|
|
$
|
2,085
|
|
All other (principally Europe)
|
77
|
|
|
81
|
|
||
Total
|
$
|
2,439
|
|
|
$
|
2,166
|
|
|
|
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
|
|
$
|
812
|
|
|
$
|
1,090
|
|
|
$
|
2,914
|
|
|
$
|
2,233
|
|
|
$
|
111
|
|
|
$
|
—
|
|
|
$
|
7,160
|
|
Cost-type contracts
|
|
1,507
|
|
|
3,576
|
|
|
1,991
|
|
|
2,614
|
|
|
12
|
|
|
—
|
|
|
9,700
|
|
|||||||
Direct commercial sales and other U.S. sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
6
|
|
|
130
|
|
|
1
|
|
|
51
|
|
|
202
|
|
|
—
|
|
|
390
|
|
|||||||
Cost-type contracts
|
|
1
|
|
|
9
|
|
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
13
|
|
|||||||
Asia/Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
167
|
|
|
181
|
|
|
410
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
871
|
|
|||||||
Cost-type contracts
|
|
138
|
|
|
51
|
|
|
64
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
262
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
596
|
|
|
193
|
|
|
309
|
|
|
284
|
|
|
59
|
|
|
—
|
|
|
1,441
|
|
|||||||
Cost-type contracts
|
|
145
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|||||||
Middle East and North Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
1,066
|
|
|
18
|
|
|
371
|
|
|
191
|
|
|
—
|
|
|
—
|
|
|
1,646
|
|
|||||||
Cost-type contracts
|
|
154
|
|
|
1
|
|
|
22
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
207
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
979
|
|
|
18
|
|
|
1,013
|
|
|
175
|
|
|
25
|
|
|
—
|
|
|
2,210
|
|
|||||||
Cost-type contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
All other (principally Europe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
7
|
|
|
3
|
|
|
157
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
218
|
|
|||||||
Cost-type contracts
|
|
22
|
|
|
2
|
|
|
78
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
128
|
|
|
209
|
|
|
320
|
|
|
131
|
|
|
142
|
|
|
—
|
|
|
930
|
|
|||||||
Cost-type contracts
|
|
12
|
|
|
30
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
|||||||
Total net sales
|
|
5,740
|
|
|
5,511
|
|
|
7,655
|
|
|
5,890
|
|
|
552
|
|
|
—
|
|
|
25,348
|
|
|||||||
Intersegment sales
|
|
64
|
|
|
666
|
|
|
132
|
|
|
540
|
|
|
21
|
|
|
(1,423
|
)
|
|
—
|
|
|||||||
Acquisition Accounting Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
(35
|
)
|
|
—
|
|
|||||||
Reconciliation to business segment sales
|
|
$
|
5,804
|
|
|
$
|
6,177
|
|
|
$
|
7,787
|
|
|
$
|
6,430
|
|
|
$
|
608
|
|
|
$
|
(1,458
|
)
|
|
$
|
25,348
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
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
|
|
$
|
2,326
|
|
|
$
|
4,805
|
|
|
$
|
4,906
|
|
|
$
|
4,900
|
|
|
$
|
326
|
|
|
$
|
17,263
|
|
Asia/Pacific
|
|
1,046
|
|
|
425
|
|
|
784
|
|
|
407
|
|
|
59
|
|
|
2,721
|
|
||||||
Middle East and North Africa
|
|
2,199
|
|
|
37
|
|
|
1,406
|
|
|
396
|
|
|
25
|
|
|
4,063
|
|
||||||
All other (principally Europe)
|
|
169
|
|
|
244
|
|
|
559
|
|
|
187
|
|
|
142
|
|
|
1,301
|
|
||||||
Total net sales
|
|
$
|
5,740
|
|
|
$
|
5,511
|
|
|
$
|
7,655
|
|
|
$
|
5,890
|
|
|
$
|
552
|
|
|
$
|
25,348
|
|
|
|
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)
|
|
$
|
2,319
|
|
|
$
|
4,666
|
|
|
$
|
4,905
|
|
|
$
|
4,847
|
|
|
$
|
123
|
|
|
$
|
16,860
|
|
U.S. direct commercial sales and other U.S. sales
|
|
7
|
|
|
139
|
|
|
1
|
|
|
53
|
|
|
203
|
|
|
403
|
|
||||||
Foreign military sales through the U.S. government
|
|
1,554
|
|
|
256
|
|
|
1,102
|
|
|
399
|
|
|
—
|
|
|
3,311
|
|
||||||
Foreign direct commercial sales and other foreign sales
(1)
|
|
1,860
|
|
|
450
|
|
|
1,647
|
|
|
591
|
|
|
226
|
|
|
4,774
|
|
||||||
Total net sales
|
|
$
|
5,740
|
|
|
$
|
5,511
|
|
|
$
|
7,655
|
|
|
$
|
5,890
|
|
|
$
|
552
|
|
|
$
|
25,348
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
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
|
|
$
|
3,761
|
|
|
$
|
1,842
|
|
|
$
|
5,495
|
|
|
$
|
3,229
|
|
|
$
|
539
|
|
|
$
|
14,866
|
|
Cost-type contracts
|
|
1,979
|
|
|
3,669
|
|
|
2,160
|
|
|
2,661
|
|
|
13
|
|
|
10,482
|
|
||||||
Total net sales
|
|
$
|
5,740
|
|
|
$
|
5,511
|
|
|
$
|
7,655
|
|
|
$
|
5,890
|
|
|
$
|
552
|
|
|
$
|
25,348
|
|
|
|
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
|
|
$
|
766
|
|
|
$
|
1,170
|
|
|
$
|
2,647
|
|
|
$
|
2,321
|
|
|
$
|
86
|
|
|
$
|
—
|
|
|
$
|
6,990
|
|
Cost-type contracts
|
|
1,473
|
|
|
3,357
|
|
|
1,902
|
|
|
2,345
|
|
|
16
|
|
|
—
|
|
|
9,093
|
|
|||||||
Direct commercial sales and other U.S. sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
13
|
|
|
167
|
|
|
2
|
|
|
20
|
|
|
193
|
|
|
—
|
|
|
395
|
|
|||||||
Cost-type contracts
|
|
5
|
|
|
22
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|||||||
Asia/Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
136
|
|
|
180
|
|
|
328
|
|
|
107
|
|
|
—
|
|
|
—
|
|
|
751
|
|
|||||||
Cost-type contracts
|
|
119
|
|
|
77
|
|
|
70
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
272
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
502
|
|
|
166
|
|
|
249
|
|
|
288
|
|
|
49
|
|
|
—
|
|
|
1,254
|
|
|||||||
Cost-type contracts
|
|
175
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|||||||
Middle East and North Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
816
|
|
|
60
|
|
|
387
|
|
|
148
|
|
|
—
|
|
|
—
|
|
|
1,411
|
|
|||||||
Cost-type contracts
|
|
153
|
|
|
3
|
|
|
25
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
182
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
1,086
|
|
|
72
|
|
|
829
|
|
|
272
|
|
|
18
|
|
|
—
|
|
|
2,277
|
|
|||||||
Cost-type contracts
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
All other (principally Europe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
18
|
|
|
2
|
|
|
108
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|||||||
Cost-type contracts
|
|
23
|
|
|
—
|
|
|
90
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
121
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
162
|
|
|
206
|
|
|
333
|
|
|
136
|
|
|
127
|
|
|
—
|
|
|
964
|
|
|||||||
Cost-type contracts
|
|
12
|
|
|
30
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||||
Total net sales
|
|
5,460
|
|
|
5,512
|
|
|
6,974
|
|
|
5,689
|
|
|
489
|
|
|
—
|
|
|
24,124
|
|
|||||||
Intersegment sales
|
|
69
|
|
|
657
|
|
|
122
|
|
|
493
|
|
|
20
|
|
|
(1,361
|
)
|
|
—
|
|
|||||||
Acquisition Accounting Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
(77
|
)
|
|
—
|
|
|||||||
Reconciliation to business segment sales
|
|
$
|
5,529
|
|
|
$
|
6,169
|
|
|
$
|
7,096
|
|
|
$
|
6,182
|
|
|
$
|
586
|
|
|
$
|
(1,438
|
)
|
|
$
|
24,124
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
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
|
|
$
|
2,257
|
|
|
$
|
4,716
|
|
|
$
|
4,551
|
|
|
$
|
4,689
|
|
|
$
|
295
|
|
|
$
|
16,508
|
|
Asia/Pacific
|
|
932
|
|
|
423
|
|
|
648
|
|
|
401
|
|
|
49
|
|
|
2,453
|
|
||||||
Middle East and North Africa
|
|
2,056
|
|
|
135
|
|
|
1,241
|
|
|
421
|
|
|
18
|
|
|
3,871
|
|
||||||
All other (principally Europe)
|
|
215
|
|
|
238
|
|
|
534
|
|
|
178
|
|
|
127
|
|
|
1,292
|
|
||||||
Total net sales
|
|
$
|
5,460
|
|
|
$
|
5,512
|
|
|
$
|
6,974
|
|
|
$
|
5,689
|
|
|
$
|
489
|
|
|
$
|
24,124
|
|
|
|
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)
|
|
$
|
2,239
|
|
|
$
|
4,527
|
|
|
$
|
4,549
|
|
|
$
|
4,666
|
|
|
$
|
102
|
|
|
$
|
16,083
|
|
U.S. direct commercial sales and other U.S. sales
|
|
18
|
|
|
189
|
|
|
2
|
|
|
23
|
|
|
193
|
|
|
425
|
|
||||||
Foreign military sales through the U.S. government
|
|
1,265
|
|
|
322
|
|
|
1,008
|
|
|
304
|
|
|
—
|
|
|
2,899
|
|
||||||
Foreign direct commercial sales and other foreign sales
(1)
|
|
1,938
|
|
|
474
|
|
|
1,415
|
|
|
696
|
|
|
194
|
|
|
4,717
|
|
||||||
Total net sales
|
|
$
|
5,460
|
|
|
$
|
5,512
|
|
|
$
|
6,974
|
|
|
$
|
5,689
|
|
|
$
|
489
|
|
|
$
|
24,124
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
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
|
|
$
|
3,499
|
|
|
$
|
2,023
|
|
|
$
|
4,883
|
|
|
$
|
3,326
|
|
|
$
|
473
|
|
|
$
|
14,204
|
|
Cost-type contracts
|
|
1,961
|
|
|
3,489
|
|
|
2,091
|
|
|
2,363
|
|
|
16
|
|
|
9,920
|
|
||||||
Total net sales
|
|
$
|
5,460
|
|
|
$
|
5,512
|
|
|
$
|
6,974
|
|
|
$
|
5,689
|
|
|
$
|
489
|
|
|
$
|
24,124
|
|
|
|
2015
|
||||||||||||||||||||||||||
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
|
|
$
|
876
|
|
|
$
|
1,065
|
|
|
$
|
2,261
|
|
|
$
|
2,330
|
|
|
$
|
74
|
|
|
$
|
—
|
|
|
$
|
6,606
|
|
Cost-type contracts
|
|
1,526
|
|
|
3,553
|
|
|
2,077
|
|
|
2,015
|
|
|
11
|
|
|
—
|
|
|
9,182
|
|
|||||||
Direct commercial sales and other U.S. sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
27
|
|
|
140
|
|
|
1
|
|
|
27
|
|
|
92
|
|
|
—
|
|
|
287
|
|
|||||||
Cost-type contracts
|
|
5
|
|
|
36
|
|
|
—
|
|
|
7
|
|
|
1
|
|
|
—
|
|
|
49
|
|
|||||||
Asia/Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
150
|
|
|
185
|
|
|
259
|
|
|
140
|
|
|
—
|
|
|
—
|
|
|
734
|
|
|||||||
Cost-type contracts
|
|
119
|
|
|
4
|
|
|
48
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
509
|
|
|
173
|
|
|
259
|
|
|
326
|
|
|
25
|
|
|
—
|
|
|
1,292
|
|
|||||||
Cost-type contracts
|
|
245
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
247
|
|
|||||||
Middle East and North Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
720
|
|
|
27
|
|
|
433
|
|
|
264
|
|
|
—
|
|
|
—
|
|
|
1,444
|
|
|||||||
Cost-type contracts
|
|
135
|
|
|
1
|
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
182
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
1,246
|
|
|
128
|
|
|
474
|
|
|
6
|
|
|
7
|
|
|
—
|
|
|
1,861
|
|
|||||||
Cost-type contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
All other (principally Europe)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Foreign military sales through the U.S. government
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
29
|
|
|
1
|
|
|
122
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
190
|
|
|||||||
Cost-type contracts
|
|
24
|
|
|
—
|
|
|
58
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|||||||
Direct commercial sales and other foreign sales
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed-price contracts
|
|
166
|
|
|
167
|
|
|
386
|
|
|
167
|
|
|
58
|
|
|
—
|
|
|
944
|
|
|||||||
Cost-type contracts
|
|
7
|
|
|
33
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|||||||
Total net sales
|
|
5,784
|
|
|
5,513
|
|
|
6,426
|
|
|
5,330
|
|
|
268
|
|
|
—
|
|
|
23,321
|
|
|||||||
Intersegment sales
|
|
64
|
|
|
624
|
|
|
143
|
|
|
484
|
|
|
15
|
|
|
(1,330
|
)
|
|
—
|
|
|||||||
Acquisition Accounting Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
(61
|
)
|
|
—
|
|
|||||||
Reconciliation to business segment sales
|
|
$
|
5,848
|
|
|
$
|
6,137
|
|
|
$
|
6,569
|
|
|
$
|
5,814
|
|
|
$
|
344
|
|
|
$
|
(1,391
|
)
|
|
$
|
23,321
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
2015
|
||||||||||||||||||||||
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
|
|
$
|
2,434
|
|
|
$
|
4,794
|
|
|
$
|
4,339
|
|
|
$
|
4,379
|
|
|
$
|
178
|
|
|
$
|
16,124
|
|
Asia/Pacific
|
|
1,023
|
|
|
362
|
|
|
567
|
|
|
472
|
|
|
25
|
|
|
2,449
|
|
||||||
Middle East and North Africa
|
|
2,101
|
|
|
156
|
|
|
953
|
|
|
270
|
|
|
7
|
|
|
3,487
|
|
||||||
All other (principally Europe)
|
|
226
|
|
|
201
|
|
|
567
|
|
|
209
|
|
|
58
|
|
|
1,261
|
|
||||||
Total net sales
|
|
$
|
5,784
|
|
|
$
|
5,513
|
|
|
$
|
6,426
|
|
|
$
|
5,330
|
|
|
$
|
268
|
|
|
$
|
23,321
|
|
|
|
2015
|
||||||||||||||||||||||
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)
|
|
$
|
2,402
|
|
|
$
|
4,618
|
|
|
$
|
4,338
|
|
|
$
|
4,345
|
|
|
$
|
85
|
|
|
$
|
15,788
|
|
U.S. direct commercial sales and other U.S. sales
|
|
32
|
|
|
176
|
|
|
1
|
|
|
34
|
|
|
93
|
|
|
336
|
|
||||||
Foreign military sales through the U.S. government
|
|
1,177
|
|
|
218
|
|
|
966
|
|
|
451
|
|
|
—
|
|
|
2,812
|
|
||||||
Foreign direct commercial sales and other foreign sales
(1)
|
|
2,173
|
|
|
501
|
|
|
1,121
|
|
|
500
|
|
|
90
|
|
|
4,385
|
|
||||||
Total net sales
|
|
$
|
5,784
|
|
|
$
|
5,513
|
|
|
$
|
6,426
|
|
|
$
|
5,330
|
|
|
$
|
268
|
|
|
$
|
23,321
|
|
(1)
|
Excludes foreign military sales through the U.S. government.
|
|
|
2015
|
||||||||||||||||||||||
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
|
|
$
|
3,723
|
|
|
$
|
1,886
|
|
|
$
|
4,195
|
|
|
$
|
3,298
|
|
|
$
|
256
|
|
|
$
|
13,358
|
|
Cost-type contracts
|
|
2,061
|
|
|
3,627
|
|
|
2,231
|
|
|
2,032
|
|
|
12
|
|
|
9,963
|
|
||||||
Total net sales
|
|
$
|
5,784
|
|
|
$
|
5,513
|
|
|
$
|
6,426
|
|
|
$
|
5,330
|
|
|
$
|
268
|
|
|
$
|
23,321
|
|
2017
(in millions, except per share amounts, stock prices and workdays)
|
First
|
|
Second
|
|
|
Third
|
|
|
Fourth
(3)
|
|
|||||
Total net sales
|
$
|
6,000
|
|
|
$
|
6,281
|
|
|
$
|
6,284
|
|
|
$
|
6,783
|
|
Gross margin
|
1,470
|
|
|
1,596
|
|
|
1,594
|
|
|
1,612
|
|
||||
Income from continuing operations
|
497
|
|
|
547
|
|
|
568
|
|
|
387
|
|
||||
Net income attributable to Raytheon Company
|
506
|
|
|
553
|
|
|
572
|
|
|
393
|
|
||||
EPS from continuing operations attributable to Raytheon Company common stockholders
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.73
|
|
|
$
|
1.90
|
|
|
$
|
1.97
|
|
|
$
|
1.35
|
|
Diluted
|
1.73
|
|
|
1.89
|
|
|
1.97
|
|
|
1.35
|
|
||||
EPS attributable to Raytheon Company common stockholders
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
1.74
|
|
|
1.90
|
|
|
1.97
|
|
|
1.35
|
|
||||
Diluted
|
1.74
|
|
|
1.89
|
|
|
1.97
|
|
|
1.35
|
|
||||
Cash dividends per share
|
|
|
|
|
|
|
|
||||||||
Declared
|
0.7975
|
|
|
0.7975
|
|
|
0.7975
|
|
|
0.7975
|
|
||||
Paid
|
0.7325
|
|
|
0.7975
|
|
|
0.7975
|
|
|
0.7975
|
|
||||
Common stock prices
|
|
|
|
|
|
|
|
||||||||
High
|
156.97
|
|
|
164.26
|
|
|
186.58
|
|
|
191.38
|
|
||||
Low
|
142.90
|
|
|
149.95
|
|
|
162.57
|
|
|
179.58
|
|
||||
Workdays
(2)
|
64
|
|
|
64
|
|
|
62
|
|
|
58
|
|
2016 (in millions, except per share amounts, stock prices and workdays)
|
First
|
|
|
Second
(4)
|
|
|
Third
|
|
|
Fourth
|
|
||||
Total net sales
|
$
|
5,802
|
|
|
$
|
6,029
|
|
|
$
|
6,014
|
|
|
$
|
6,279
|
|
Gross margin
|
1,361
|
|
|
1,667
|
|
|
1,540
|
|
|
1,591
|
|
||||
Income from continuing operations
|
404
|
|
|
714
|
|
|
541
|
|
|
553
|
|
||||
Net income attributable to Raytheon Company
|
428
|
|
|
717
|
|
|
544
|
|
|
555
|
|
||||
EPS from continuing operations attributable to Raytheon Company common stockholders
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.43
|
|
|
$
|
2.41
|
|
|
$
|
1.84
|
|
|
$
|
1.88
|
|
Diluted
|
1.43
|
|
|
2.41
|
|
|
1.84
|
|
|
1.87
|
|
||||
EPS attributable to Raytheon Company common stockholders
(1)
|
|
|
|
|
|
|
|
||||||||
Basic
|
1.43
|
|
|
2.41
|
|
|
1.84
|
|
|
1.88
|
|
||||
Diluted
|
1.43
|
|
|
2.41
|
|
|
1.84
|
|
|
1.88
|
|
||||
Cash dividends per share
|
|
|
|
|
|
|
|
||||||||
Declared
|
0.7325
|
|
|
0.7325
|
|
|
0.7325
|
|
|
0.7325
|
|
||||
Paid
|
0.6700
|
|
|
0.7325
|
|
|
0.7325
|
|
|
0.7325
|
|
||||
Common stock prices
|
|
|
|
|
|
|
|
||||||||
High
|
128.24
|
|
|
136.66
|
|
|
142.65
|
|
|
150.54
|
|
||||
Low
|
117.62
|
|
|
124.22
|
|
|
134.90
|
|
|
132.97
|
|
||||
Workdays
(2)
|
65
|
|
|
64
|
|
|
63
|
|
|
57
|
|
(1)
|
EPS is computed independently for each of the quarters presented; therefore, the sum of the quarterly earnings per share may not equal the total computed for each year.
|
(2)
|
Number of workdays per our fiscal calendar, which excludes holidays and weekends.
|
(3)
|
In the fourth quarter of 2017, we recorded a provisional tax-related expense of approximately
$171 million
due to the enactment of the 2017 Act.
|
(4)
|
In the second quarter of 2016, we recorded the sale of our equity method investment in TRS SAS at fair value, which resulted in a tax-free gain of
$158 million
, at IDS, that was recorded in operating income through a reduction in cost of sales.
|
(1)
|
This amount includes
962,961
shares, which is the aggregate of the actual number of shares that will be issued pursuant to the
2015
Long-term Performance Plan (LTPP) awards and the maximum number of shares that may be issued upon settlement of outstanding
2016
and
2017
LTPP awards, including estimated dividend equivalent amounts. The shares to be issued pursuant to the
2015
,
2016
and
2017
LTPP awards will be issued under the Raytheon 2010 Stock Plan. The material terms of the
2015
,
2016
and
2017
LTPP awards are described in more detail in “Note 14: Stock-based Compensation Plans” within Item 8 of this Form 10-K. These awards are granted as restricted stock units (RSUs) and though generally settled in stock, may be settled in cash, stock or a combination of both cash and stock at the discretion of the Management Development and Compensation Committee (MDCC).
|
(2)
|
Since RSU awards do not have an exercise price, and there are no other options, warrants or rights outstanding at December 31,
2017
, the weighted-average exercise price is zero.
|
(a)
|
Financial Statements and Schedules
|
(1)
|
The following financial statements of Raytheon Company, supplemental information and report of independent registered public accounting firm are included in this Form 10-K:
|
(2)
|
List of financial statement schedules:
|
(b)
|
Exhibits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
The following materials from Raytheon Company’s Annual Report on Form 10-K for the year ended December 31, 2017, formatted in eXtensible Business Reporting Language (XBRL): (i) the 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.*
|
R
AYTHEON
C
OMPANY
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Wood
|
|
|
|
|
Michael J. Wood
Vice President, Controller and Chief
Accounting Officer
|
|
|
|
|
SIGNATURES
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/ Thomas A. Kennedy
|
|
Chairman and Chief Executive Officer (Principal Executive Officer)
|
|
February 14, 2018
|
Thomas A. Kennedy
|
|
|
|
|
|
|
|
|
|
/s/ Anthony F. O’Brien
|
|
Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
February 14, 2018
|
Anthony F. O’Brien
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Wood
|
|
Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)
|
|
February 14, 2018
|
Michael J. Wood
|
|
|
|
|
|
|
|
|
|
/s/ Tracy A. Atkinson
|
|
Director
|
|
February 14, 2018
|
Tracy A. Atkinson
|
|
|
|
|
|
|
|
|
|
/s/ Robert E. Beauchamp
|
|
Director
|
|
February 14, 2018
|
Robert E. Beauchamp
|
|
|
|
|
|
|
|
|
|
/s/ Vernon E. Clark
|
|
Director
|
|
February 14, 2018
|
Vernon E. Clark
|
|
|
|
|
|
|
|
|
|
/s/ Stephen J. Hadley
|
|
Director
|
|
February 14, 2018
|
Stephen J. Hadley
|
|
|
|
|
|
|
|
|
|
/s/ Letitia A. Long
|
|
Director
|
|
February 14, 2018
|
Letitia A. Long
|
|
|
|
|
|
|
|
|
|
/s/ George R. Oliver
|
|
Director
|
|
February 14, 2018
|
George R. Oliver
|
|
|
|
|
|
|
|
|
|
/s/ Dinesh C. Paliwal
|
|
Director
|
|
February 14, 2018
|
Dinesh C. Paliwal
|
|
|
|
|
|
|
|
|
|
/s/ William R. Spivey
|
|
Director
|
|
February 14, 2018
|
William R. Spivey
|
|
|
|
|
|
|
|
|
|
/s/ James A. Winnefeld, Jr.
|
|
Director
|
|
February 14, 2018
|
James A. Winnefeld, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Robert O. Work
|
|
Director
|
|
February 14, 2018
|
Robert O. Work
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(In millions, except ratio)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
2013
|
|||||||
Pretax income from continuing
operations attributable to Raytheon
Company common stockholders
(1)(2)
|
|
$
|
3,141
|
|
|
$
|
3,113
|
|
|
$
|
2,839
|
|
|
$
|
2,952
|
|
|
$
|
2,740
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
|
290
|
|
|
318
|
|
|
317
|
|
|
291
|
|
|
296
|
|
|||||
Amortization of capitalized interest
|
|
5
|
|
|
4
|
|
|
3
|
|
|
4
|
|
|
4
|
|
|||||
Less:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capitalized interest
|
|
9
|
|
|
6
|
|
|
5
|
|
|
3
|
|
|
3
|
|
|||||
Income as adjusted
|
|
$
|
3,427
|
|
|
$
|
3,429
|
|
|
$
|
3,154
|
|
|
$
|
3,244
|
|
|
$
|
3,037
|
|
Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Portion of rents representative of
interest factor
|
|
$
|
76
|
|
|
$
|
80
|
|
|
$
|
79
|
|
|
$
|
75
|
|
|
$
|
83
|
|
Interest on indebtedness
|
|
205
|
|
|
232
|
|
|
233
|
|
|
213
|
|
|
210
|
|
|||||
Capitalized interest
|
|
9
|
|
|
6
|
|
|
5
|
|
|
3
|
|
|
3
|
|
|||||
Fixed charges
|
|
$
|
290
|
|
|
$
|
318
|
|
|
$
|
317
|
|
|
$
|
291
|
|
|
$
|
296
|
|
Ratio of earnings to fixed charges
|
|
11.8
|
|
|
10.8
|
|
|
9.9
|
|
|
11.1
|
|
|
10.3
|
|
(1)
|
Net of adjustment for earnings from affiliates.
|
(2)
|
Amounts prior to 2015 do not reflect the impact of the adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), in the first quarter of 2017.
|
Name of Subsidiary
|
|
Jurisdiction
|
Forcepoint LLC
|
|
Delaware
|
|
|
/s/ PricewaterhouseCoopers LLP
|
PricewaterhouseCoopers LLP
|
Boston, Massachusetts
|
February 14, 2018
|
1.
|
I have reviewed this annual report on Form 10-K of Raytheon Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Thomas A. Kennedy
|
Thomas A. Kennedy
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Raytheon Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Anthony F. O'Brien
|
Anthony F. O'Brien
Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Thomas A. Kennedy
|
Thomas A. Kennedy
Chairman and Chief Executive Officer
|
February 14, 2018
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Anthony F. O'Brien
|
Anthony F. O'Brien
Vice President and Chief Financial Officer
|
February 14, 2018
|