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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): January 30, 2003
RAYTHEON COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 1-13699 95-1778500
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification Number)
141 Spring Street
Lexington, Massachusetts 02421
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 862-6600
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Item 9. Regulation FD Disclosure
We are filing this Form 8-K to disclose changes in the way we will report our
segment results beginning in the first quarter of 2003. On August 30, 2002, we
announced that we would realign our government and defense businesses into six
segments. In addition, on December 19, 2002, we announced that our Commercial
Electronics businesses would be reassigned to the new government and defense
businesses. Raytheon Aircraft Company will continue to be reported separately.
Accordingly, beginning in the first quarter of 2003, we will report our
financial results in the following segments:
o Integrated Defense Systems (IDS)
o Intelligence and Information Systems (IIS)
o Missile Systems (MS)
o Network Centric Systems (NCS)
o Space and Airborne Systems (SAS)
o Technical Services (TS)
o Aircraft (RAC)
Also beginning in the first quarter of 2003, we will change the way we report
pension expense or income in our segment results. Statement of Financial
Accounting Standards (SFAS) No. 87, Employers' Accounting for Pensions, outlines
the methodology used to determine pension expense or income for financial
reporting purposes, which is not necessarily indicative of the funding
requirements of pension plans, which are determined by other factors. A major
factor for determining pension funding requirements are Cost Accounting
Standards (CAS) that proscribe the allocation to and recovery of pension costs
on U.S. government contracts. We will report the difference between our SFAS
No. 87 (FAS) pension expense or income and our CAS pension expense as a
separate line item in our segment results called FAS/CAS Income Adjustment. Our
individual segment results will now only include pension expense as determined
under CAS, which can generally be recovered through the pricing of products and
services to the U.S. government. Previously, our individual segment results
included FAS pension expense or income, which consisted of CAS pension expense
and an adjustment to reconcile CAS pension expense to FAS pension expense or
income.
The following information reflects our segment results during 2001 and 2002 as
though we had operated our business in the realigned structure consisting of
IDS, IIS, MS, NCS, SAS, TS and RAC during those periods. In addition, the
individual segment results below include pension expense as determined under
CAS. Also included below is information relating to 2001 operating income in
the realigned segment structure excluding goodwill amortization, which was
discontinued January 1, 2002, in accordance with SFAS No. 142, Goodwill and
Other Intangible Assets.
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2002 Segment Results
Net Sales
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 591 598 542 635 2,366
Intelligence and Information
Systems 417 457 485 528 1,887
Missile Systems 727 729 792 790 3,038
Network Centric Systems 748 760 759 824 3,091
Space and Airborne Systems 707 798 803 935 3,243
Technical Services 528 505 556 544 2,133
Aircraft 494 526 451 687 2,158
Corporate and Eliminations (301) (278) (296) (281) (1,156)
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Total 3,911 4095 4,092 4,662 16,760
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Operating Income
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 71 72 69 77 289
Intelligence and Information
Systems 37 42 45 56 180
Missile Systems 94 92 96 92 374
Network Centric Systems 73 58 63 84 278
Space and Airborne Systems 85 108 109 126 428
Technical Services 35 6 36 39 116
Aircraft (53) 11 (11) 2 (51)
FAS/CAS Income Adjustment 52 52 53 53 210
Corporate and Eliminations (41) 13 (5) (37) (70)
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Total 353 454 455 492 1,754
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Operating Cash Flow
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems (123) 58 56 203 194
Intelligence and Information
Systems (47) 11 46 111 121
Missile Systems (101) 2 37 238 176
Network Centric Systems (128) 44 49 123 88
Space and Airborne Systems (77) 125 111 (6) 153
Technical Services 22 82 27 43 174
Aircraft 34 (70) (81) 68 (49)
Corporate 214 175 156 218 763
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Total (206) 427 401 998 1,620
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Capital Expenditures
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 19 15 15 26 75
Intelligence and Information
Systems 7 6 5 12 30
Missile Systems 8 9 13 16 46
Network Centric Systems 12 26 11 30 79
Space and Airborne Systems 22 31 18 51 122
Technical Services 1 4 6 10 21
Aircraft 16 14 28 27 85
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Total 85 105 96 172 458
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Depreciation and Amortization
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 10 11 10 13 44
Intelligence and Information
Systems 6 7 8 7 28
Missile Systems 11 12 12 11 46
Network Centric Systems 15 13 15 17 60
Space and Airborne Systems 14 16 18 21 69
Technical Services 3 3 3 3 12
Aircraft 29 25 26 25 105
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Total 88 87 92 97 364
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Identifiable Assets
===================================================================
(In millions) Q1 Q2 Q3 Q4
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Integrated Defense Systems 1,821 1,813 1,792 1,612
Intelligence and Information
Systems 1,942 1,977 1,999 1,926
Missile Systems 4,570 4,634 4,640 4,429
Network Centric Systems 3,986 3,931 3,921 3,914
Space and Airborne Systems 3,889 3,871 3,814 3,875
Technical Services 1,472 1,405 1,392 1,372
Aircraft 3,183 2,987 2,967 3,891
Corporate 4,780 5,072 4,004 2,333
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Total 25,643 25,690 24,529 23,352
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2001 Segment Results
==============================================================================
(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 568 584 539 574 2,265
Intelligence and Information 391 421 430 494 1,736
Systems
Missile Systems 704 718 741 738 2,901
Network Centric Systems 671 723 696 775 2,865
Space and Airborne Systems 568 686 672 812 2,738
Technical Services 483 499 524 549 2,055
Aircraft 638 768 449 717 2,572
Corporate and Eliminations (251) (302) (296) (266) (1,115)
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Total 3,772 4,097 3,755 4,393 16,017
==============================================================================
Operating Income
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 46 56 59 77 238
Intelligence and Information 25 33 31 50 139
Systems
Missile Systems 57 65 63 72 257
Network Centric Systems 58 62 47 79 246
Space and Airborne Systems 66 73 98 102 339
Technical Services 27 31 30 35 123
Aircraft (14) 12 (774) (46) (822)
FAS/CAS Income Adjustment 97 99 94 96 386
Corporate and Eliminations (48) (36) (12) (44) (140)
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Total 314 395 (364) 421 766
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Operating Cash Flow
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 19 14 22 72 127
Intelligence and Information (86) 22 31 76 43
Systems
Missile Systems 37 (21) (4) 281 293
Network Centric Systems (57) 16 13 87 59
Space and Airborne Systems 2 60 82 71 215
Technical Services (29) 2 13 (43) (57)
Aircraft (242) (74) (260) 118 (458)
Corporate (70) 67 (10) (71) (84)
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Total (426) 86 (113) 591 138
============================================================================
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Capital Expenditures
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 20 19 21 29 89
Intelligence and Information 10 13 10 16 49
Systems
Missile Systems 4 3 7 23 37
Network Centric Systems 20 19 8 26 73
Space and Airborne Systems 14 17 26 50 107
Technical Services 1 0 1 1 3
Aircraft 26 21 32 24 103
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Total 95 92 105 169 461
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Depreciation and Amortization
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(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 18 15 19 10 62
Intelligence and Information 15 16 17 16 64
Systems
Missile Systems 36 36 36 35 143
Network Centric Systems 29 30 31 32 122
Space and Airborne Systems 26 30 27 39 122
Technical Services 8 8 8 7 31
Aircraft 32 34 32 35 133
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Total 164 169 170 174 677
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Identifiable Assets
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(In millions) Q1 Q2 Q3 Q4
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Integrated Defense Systems 1,786 1,765 1,714 1,706
Intelligence and Information 2,001 2,017 1,976 1,916
Systems
Missile Systems 4,755 4,842 4,728 4,412
Network Centric Systems 4,041 4,155 3,939 3,904
Space and Airborne Systems 4,128 4,037 3,861 3,848
Technical Services 1,487 1,473 1,401 1,503
Aircraft 3,377 3,404 3,181 3,126
Corporate 3,350 3,526 4,411 4,727
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Total 24,925 25,219 25,211 25,142
=================================================================
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2001 Segment Results
Operating Income excluding
Goodwill Amortization
======================================================================
(In millions) Q1 Q2 Q3 Q4 Total
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Integrated Defense Systems 51 60 64 81 256
Intelligence and Information 35 43 41 59 178
Systems
Missile Systems 81 90 88 97 356
Network Centric Systems 75 79 64 95 313
Space and Airborne Systems 86 92 117 121 416
Technical Services 34 37 36 41 148
Aircraft (12) 14 (772)(1) (44) (814)(1)
FAS/CAS Income Adjustment 97 100 94 96 387
Corporate and Eliminations (48) (36) (11) (45) (140)
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Total 399 479 (279) 501 1,100
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: January 30, 2003
RAYTHEON COMPANY
By: /s/ John W. Kapples
John W. Kapples
Vice President and Secretary