WALTHAM, Mass., Nov. 30, 2007 /PRNewswire-FirstCall/ -- Raytheon Company has completed the sale of its wholly owned subsidiary, Flight Options LLC, to H.I.G. Capital, a Miami, Florida-based global investment firm. Terms of the transaction were not disclosed.
As previously announced and disclosed on October 25, 2007, the Company expects to record in the fourth quarter 2007 an after-tax charge of approximately $45 million, subject to purchase price adjustments, to write down the net assets of Flight Options consistent with the final net sales price. The Company will report Flight Options as a discontinued operation in the fourth quarter 2007 and for all previous periods presented. Attached to the press release are the results of Raytheon Company through the third quarter 2007 reflecting Flight Options as a discontinued operation and the realignment of the "Other" category to include Raytheon Professional Services as part of Technical Services and the commuter portfolio as part of corporate.
Raytheon Company is a technology leader, specializing in defense, homeland security, and other government markets throughout the world. With a history of innovation spanning 85 years, Raytheon provides state of the art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 73,000 people worldwide.
Attachment A Raytheon Company Pro Forma Statement of Operations Information* Quarters and Year-to-Date 2007 (In millions except per share amounts) Three Nine Months Ended Months Ended 25-Mar- 24-Jun- 23-Sep- 23-Sep- 07 07 07 07 Net sales $4,804 $5,278 $5,219 $15,301 Cost of sales 3,856 4,194 4,150 12,200 Administrative and selling expenses 330 357 355 1,042 Research and development expenses 97 138 142 377 Total operating expenses 4,283 4,689 4,647 13,619 Operating income 521 589 572 1,682 Interest expense 60 54 41 155 Interest income (28) (57) (42) (127) Other expense, net 3 56 9 68 Non-operating expense, net 35 53 8 96 Income from continuing operations before taxes 486 536 564 1,586 Federal and foreign income taxes 162 181 184 527 Income from continuing operations 324 355 380 1,059 Income (loss) from discontinued operations, net of tax 22 (6) (81) (65) Gain on sale, net of tax - 986 - 986 (Loss) income from discontinued operations 22 980 (81) 921 Net income $346 $1,335 $299 $1,980 Earnings per share from continuing operations Basic $0.73 $0.81 $0.88 $2.43 Diluted $0.71 $0.79 $0.86 $2.36 Earnings (loss) per share from discontinued operations Basic $0.05 $2.24 $(0.19) $2.11 Diluted $0.05 $2.18 $(0.18) $2.06 Earnings per share Basic $0.78 $3.06 $0.69 $4.54 Diluted $0.76 $2.97 $0.68 $4.42 Average shares outstanding Basic 441.0 436.7 431.2 436.3 Diluted 453.5 448.8 443.0 448.2 * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment A Raytheon Company Pro Forma Statement of Operations Information* Quarters and Year-to-Date 2006 (In millions except per share amounts) Three Twelve Months Ended Months Ended 26-Mar- 25-Jun- 24-Sep- 31-Dec- 31-Dec- 06 06 06 06 06 Net sales $4,520 $4,827 $4,799 $5,561 $19,707 Cost of sales 3,660 3,882 3,910 4,525 15,977 Administrative and selling expenses 310 336 315 361 1,322 Research and development expenses 101 135 106 122 464 Total operating expenses 4,071 4,353 4,331 5,008 17,763 Operating income 449 474 468 553 1,944 Interest expense 69 68 65 70 272 Interest income (21) (12) (14) (28) (75) Other income, net (26) (14) (2) (2) (44) Non-operating expense, net 22 42 49 40 153 Income from continuing operations before taxes 427 432 419 513 1,791 Federal and foreign income taxes 143 147 145 169 604 Income from continuing operations 284 285 274 344 1,187 Loss from discontinued operations, net of tax 3 25 47 21 96 Net income $287 $310 $321 $365 $1,283 Earnings per share from continuing operations Basic $0.64 $0.64 $0.62 $0.78 $2.69 Diluted $0.63 $0.63 $0.61 $0.76 $2.63 Loss per share from discontinued operations Basic $0.01 $0.06 $0.11 $0.05 $0.22 Diluted $0.01 $0.06 $0.10 $0.05 $0.21 Earnings per share Basic $0.65 $0.70 $0.73 $0.83 $2.90 Diluted $0.64 $0.69 $0.71 $0.81 $2.85 Average shares outstanding Basic 442.3 442.7 441.9 440.1 441.8 Diluted 448.8 450.9 451.6 452.3 450.9 * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment B Raytheon Company Pro Forma Segment Information* Quarters and Year-to-Date 2007 Net Sales Three Nine Months Ended Months Ended 25-Mar- 24-Jun- 23-Sep- 23-Sep- (In millions) 07 07 07 07 Integrated Defense Systems $1,092 $1,166 $1,147 $3,405 Intelligence and Information Systems 588 666 680 1,934 Missile Systems 1,140 1,244 1,247 3,631 Network Centric Systems 929 1,052 1,036 3,017 Space and Airborne Systems 964 1,065 1,016 3,045 Technical Services 463 514 554 1,531 Corporate and Eliminations (372) (429) (461) (1,262) Total $4,804 $5,278 $5,219 $15,301 Operating Income Three Nine Months Ended Months Ended 25-Mar- 24-Jun- 23-Sep- 23-Sep- 07 07 07 07 Integrated Defense Systems $199 $212 $206 $617 Intelligence and Information Systems 55 63 64 182 Missile Systems 120 134 139 393 Network Centric Systems 117 139 123 379 Space and Airborne Systems 129 133 121 383 Technical Services 23 32 37 92 FAS/CAS Pension Adjustment (62) (63) (67) (192) Corporate and Eliminations (60) (61) (51) (172) Total $521 $589 $572 $1,682 Operating Income As a Percent of Sales Three Nine Months Ended Months Ended 25-Mar- 24-Jun- 23-Sep- 23-Sep- 07 07 07 07 Integrated Defense Systems 18.2% 18.2% 18.0% 18.1% Intelligence and Information Systems 9.4% 9.5% 9.4% 9.4% Missile Systems 10.5% 10.8% 11.1% 10.8% Network Centric Systems 12.6% 13.2% 11.9% 12.6% Space and Airborne Systems 13.4% 12.5% 11.9% 12.6% Technical Services 5.0% 6.2% 6.7% 6.0% FAS/CAS Pension Adjustment Corporate and Eliminations Total 10.8% 11.2% 11.0% 11.0% * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment B Raytheon Company Pro Forma Segment Information* Quarters and Year-to-Date 2006 Net Sales Three Twelve Months Ended Months Ended 26-Mar- 25-Jun- 24-Sep- 31-Dec- 31-Dec- (In millions) 06 06 06 06 06 Integrated Defense Systems $963 $1,038 $1,030 $1,189 $4,220 Intelligence and Information Systems 611 633 626 690 2,560 Missile Systems 989 1,117 1,081 1,316 4,503 Network Centric Systems 791 880 879 1,011 3,561 Space and Airborne Systems 1,018 1,057 1,069 1,175 4,319 Technical Services 481 499 534 639 2,153 Corporate and Eliminations (333) (397) (420) (459) (1,609) Total $4,520 $4,827 $4,799 $5,561 $19,707 Operating Income Three Twelve Months Ended Months Ended 26-Mar- 25-Jun- 24-Sep- 31-Dec- 31-Dec- 06 06 06 06 06 Integrated Defense Systems $158 $177 $167 $189 $691 Intelligence and Information Systems 55 58 58 63 234 Missile Systems 110 122 109 138 479 Network Centric Systems 84 91 87 117 379 Space and Airborne Systems 145 152 148 159 604 Technical Services 34 32 37 50 153 FAS/CAS Pension Adjustment (85) (96) (90) (91) (362) Corporate and Eliminations (52) (62) (48) (72) (234) Total $449 $474 $468 $553 $1,944 Operating Income As a Percent of Sales Three Twelve Months Ended Months Ended 26-Mar- 25-Jun- 24-Sep- 31-Dec- 31-Dec- 06 06 06 06 06 Integrated Defense Systems 16.4% 17.1% 16.2% 15.9% 16.4% Intelligence and Information Systems 9.0% 9.2% 9.3% 9.1% 9.1% Missile Systems 11.1% 10.9% 10.1% 10.5% 10.6% Network Centric Systems 10.6% 10.3% 9.9% 11.6% 10.6% Space and Airborne Systems 14.2% 14.4% 13.8% 13.5% 14.0% Technical Services 7.1% 6.4% 6.9% 7.8% 7.1% FAS/CAS Pension Adjustment Corporate and Eliminations Total 9.9% 9.8% 9.8% 9.9% 9.9% * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment C Raytheon Company Other Pro Forma Information* Quarters and Year-to-Date 2007 Backlog (In millions) 25-Mar-07 24-Jun-07 23-Sep-07 Integrated Defense Systems $8,089 $7,958 $8,458 Intelligence and Information Systems 3,747 3,615 4,142 Missile Systems 9,638 9,356 9,078 Network Centric Systems 5,146 5,328 5,407 Space and Airborne Systems 5,210 5,115 4,900 Technical Services 2,063 1,925 1,892 Corporate 16 21 12 Total $33,909 $33,318 $33,889 Funded Backlog (In millions) 25-Mar-07 24-Jun-07 23-Sep-07 Integrated Defense Systems $4,156 $3,879 $3,399 Intelligence and Information Systems 909 877 925 Missile Systems 5,386 5,071 4,866 Network Centric Systems 4,041 4,031 4,094 Space and Airborne Systems 2,784 2,968 2,907 Technical Services 1,300 1,220 1,250 Corporate 16 21 12 Total $18,592 $18,067 $17,453 Bookings Three Nine Months Ended Months Ended 25-Mar-07 24-Jun-07 23-Sep-07 23-Sep-07 Total Bookings $5,158 $4,832 $6,327 $16,317 * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment C Raytheon Company Other Pro Forma Information* Quarters and Year-to-Date 2006 Backlog (In millions) 26-Mar- 25-Jun- 24-Sep- 31-Dec- 06 06 06 06 Integrated Defense Systems $7,911 $7,698 $7,411 $7,934 Intelligence and Information Systems 3,728 3,869 4,009 3,935 Missile Systems 8,250 8,261 8,913 9,504 Network Centric Systems 4,484 4,327 4,532 5,059 Space and Airborne Systems 5,637 5,464 5,257 5,591 Technical Services 1,780 1,929 1,809 1,815 Total $31,790 $31,548 $31,931 $33,838 Funded Backlog (In millions) 26-Mar- 25-Jun- 24-Sep- 31-Dec- 06 06 06 06 Integrated Defense Systems $3,143 $3,501 $3,277 $4,088 Intelligence and Information Systems 780 725 748 893 Missile Systems 5,032 4,756 4,805 5,135 Network Centric Systems 3,207 3,087 3,374 4,037 Space and Airborne Systems 3,236 3,108 2,724 2,770 Technical Services 1,201 1,291 1,276 1,263 Total $16,599 $16,468 $16,204 $18,186 Bookings Three Nine Months Ended Months Ended 26-Mar-06 25-Jun-06 24-Sep-06 31-Dec-06 31-Dec-06 Total Bookings $4,827 $4,691 $5,266 $7,633 $22,417 * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment D Raytheon Company Pro Forma Balance Sheet Information* Quarters 2007 (In millions) 25-Mar-07 24-Jun-07 23-Sep-07 Assets Cash and cash equivalents $1,660 $3,045 $2,609 Accounts receivable, less allowance for doubtful accounts 131 118 120 Contracts in process 3,895 3,945 3,894 Inventories 378 384 424 Deferred taxes 240 227 215 Prepaid expenses and other current assets 120 125 247 Assets held for sale 2,675 306 298 Total current assets 9,099 8,150 7,807 Property, plant and equipment, net 1,994 1,997 1,986 Deferred taxes 206 211 30 Goodwill 11,461 11,463 11,464 Other assets, net 1,927 2,094 1,957 Assets held for sale 396 375 247 Total assets $25,083 $24,290 $23,491 Liabilities and Stockholders' Equity Notes payable and current portion of long-term debt $686 $686 $119 Advance payments and billings in excess of costs incurred 1,864 1,819 1,708 Accounts payable 824 878 971 Accrued employee compensation 747 748 939 Other accrued expenses 1,067 1,246 971 Liabilities held for sale 1,249 230 267 Total current liabilities 6,437 5,607 4,975 Accrued retiree benefits and other long-term liabilities 3,778 3,888 3,950 Long-term debt 3,283 2,233 2,249 Liabilities held for sale 195 187 133 Minority interest 179 195 211 Stockholders' equity 11,211 12,180 11,973 Total liabilities and stockholders' equity $25,083 $24,290 $23,491 * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment D Raytheon Company Pro Forma Balance Sheet Information* Quarters 2006 (In millions) 26-Mar- 25-Jun- 24-Sep- 31-Dec- 06 06 06 06 Assets Cash and cash equivalents $944 $925 $1,162 $2,460 Accounts receivable, less allowance for doubtful accounts 146 152 144 141 Contracts in process 3,657 3,739 3,781 3,600 Inventories 460 440 501 376 Deferred taxes 326 289 256 257 Prepaid expenses and other current assets 109 102 114 108 Assets held for sale 2,729 2,783 2,845 2,575 Total current assets 8,371 8,430 8,803 9,517 Property, plant and equipment, net 1,962 1,966 1,959 2,025 Deferred taxes - - - 170 Goodwill 11,453 11,457 11,484 11,461 Other assets, net 2,322 2,181 2,128 1,944 Assets held for sale 472 438 429 374 Total assets $24,580 $24,472 $24,803 $25,491 Liabilities and Stockholders' Equity Notes payable and current portion of long-term debt $47 $90 $581 $687 Subordinated notes payable 408 - - - Advance payments and billings in excess of costs incurred 1,453 1,499 1,524 1,885 Accounts payable 792 748 810 910 Accrued employee compensation 763 759 926 937 Other accrued expenses 1,113 870 1,023 1,043 Liabilities held for sale 1,454 1,409 1,355 1,253 Total current liabilities 6,030 5,375 6,219 6,715 Accrued retiree benefits and other long-term liabilities 3,259 3,277 3,315 4,053 Deferred taxes 156 147 136 - Long-term debt 3,961 3,945 3,401 3,278 Liabilities held for sale 164 162 187 179 Minority interest 132 147 165 165 Stockholders' equity 10,878 11,419 11,380 11,101 Total liabilities and stockholders' equity $24,580 $24,472 $24,803 $25,491 * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment E Raytheon Company Pro Forma Cash Flow Information* Quarters and Year-to-Date 2007 Three Nine Months Ended Months Ended 25-Mar- 24-Jun- 23-Sep- 23-Sep- (In millions) 07 07 07 07 Income from continuing operations $324 $355 $379 $1,058 Depreciation 67 73 74 214 Amortization 19 21 21 61 Working capital (653) (39) 163 (529) Discontinued operations (63) (20) 41 (42) Net activity in financing receivables 21 35 15 71 Other (131) (475) 38 (568) Net operating cash flow (416) (50) 731 265 Capital spending (38) (57) (65) (160) Internal use software spending (15) (19) (17) (51) Acquisitions - - - - Investment activity and divestitures - 3,117 - 3,117 Dividends (107) (113) (111) (331) Repurchase of common stock (275) (526) (500) (1,301) Debt repayments 3 (1,041) (568) (1,606) Discontinued operations (28) - (1) (29) Other 76 74 95 245 Total cash flow $(800) $1,385 $(436) $149 * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Attachment E Raytheon Company Pro Forma Cash Flow Information* Quarters and Year-to-Date 2006 Three Twelve Months Ended Months Ended 26-Mar- 25-Jun- 24-Sep- 31-Dec- 31-Dec- (In millions) 06 06 06 06 06 Income from continuing operations $284 $285 $274 $344 $1,187 Depreciation 67 72 70 76 285 Amortization 18 21 17 20 76 Working capital (522) (50) 125 824 377 Discontinued operations 23 (1) (14) 258 266 Net activity in financing receivables 45 29 22 72 168 Other 65 104 258 (43) 384 Net operating cash flow (20) 460 752 1,551 2,743 Capital spending (35) (52) (58) (149) (294) Internal use software spending (4) (21) (25) (27) (77) Acquisitions (47) - (40) - (87) Investment activity and divestitures 22 28 - 3 53 Dividends (98) (107) (108) (107) (420) Repurchase of common stock (102) - (250) - (352) Debt repayments (8) (339) (74) (16) (437) Discontinued operations (32) (11) (9) (21) (73) Other 66 23 49 64 202 Total cash flow $(258) $(19) $237 $1,298 $1,258 * On November 30, 2007, we completed the sale of Flight Options (FO). These pro forma financial statements reflect FO as a discontinued operation for all periods presented. Additionally, effective on the date of the sale, the remaining components of the Other category, Raytheon Professional Services and our commuter aircraft portfolio, have been reclassified for all periods presented to Technical Services and Corporate, respectively. Media Contact: Investor Relations Contact: Jon Kasle Greg Smith 781-522-5110 781-522-5141
