SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): April 9, 2001
RAYTHEON COMPANY
(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 5. Other Events. On April 9, 2001, the Registrant announced that it plans
to take a first quarter charge to discontinued operations of between $275
million and $325 million to reflect the estimated cost required to complete
two Massachusetts construction projects on which it has performance
guarantees. On March 8, 2001, the prime contractor on the projects
abandoned both work sites. On March 15, 2001, the Supreme Court of New York
ordered the developer of the two projects to terminate its contract with
the prime contractor on the projects for default, triggering Registrant's
performance guarantees. In connection with this announcement, the
Registrant issued a press release, a copy of which is attached hereto as
Exhibit 99.1 and is specifically incorporated herein by reference, and the
foregoing description is qualified in its entirety by reference to such
press release.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) The following exhibit is filed as part of this report:
99.1 Press release dated April 9, 2001.
SIGNATURE
Pursuant to the requirements of Section 12 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: April 11, 2001
RAYTHEON COMPANY
By: /S/ Thomas D. Hyde
Thomas D. Hyde
Senior Vice President and
General Counsel
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EXHIBIT LIST
Exhibit No. Description
99.1 Press Release Dated April 11, 2001
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EXHIBIT 99.1
RAYTHEON Raytheon Company
Corpoprate Communications
141 Spring Street
Lexington, MA 02421
FOR IMMEDIATE RELEASE NEWS RELEASE
Contact:
David Polk
781.860.2386
Raytheon plans to take a first quarter charge to discontinued operations in line
with earlier disclosures
LEXINGTON, Mass., (April 9, 2001) - Raytheon Company (NYSE: RTNA, RTNB)
today announced that it plans to take a first quarter charge to discontinued
operations of between $275 million and $325 million to reflect the estimated
cost required to complete two Massachusetts construction projects on which it
has performance guarantees. Raytheon's outlook for earnings from continuing
operations is unaffected by this charge. Consolidated operating cash flow is
likely to be affected by the full amount of the charge over the next 4 to 6
quarters.
Raytheon has completed an initial assessment of the two projects and
believes that its net cash outflow will be between $275 million and $325
million, which is within the range of exposure projected for these projects in
Raytheon's annual report on form 10-K filed on March 5. The assessment is the
company's current best estimate of the net cash flow needed to complete the two
projects, based primarily on information provided by Washington Group
International (WGI). The company's estimate of its exposure on other guaranteed
projects referred to in its 10-K filing has not changed, and therefore the
company is not modifying the high end of its range of exposure for all
guaranteed projects.
On March 8 Washington Group International Inc., an Ohio corporation (WGI
Ohio), the prime contractor on the projects, abandoned both work sites. WGI Ohio
is a subsidiary of WGI, a Delaware corporation. On March 15 the Supreme Court of
New York ordered Sithe Energies Inc., developer of the two projects, to
terminate its contract with WGI for default, triggering Raytheon's performance
guarantees. The guarantee commitments predated the sale of Raytheon's
engineering and construction business to WGI. Under the sale agreement, WGI is
required to indemnify Raytheon for all amounts expended by Raytheon to complete
the projects, and Raytheon is entitled to full cash reimbursement for those
amounts within three days after demand for payment. In addition, Raytheon has
common law and equitable rights as a performing guarantor to seek reimbursement
from WGI Ohio as the defaulting contractor. Due to the uncertainties of the
financial position of WGI and WGI Ohio, Raytheon does not intend to recognize
for accounting purposes the value of its potential claims against WGI, although
it intends to pursue all avenues to maximize its recovery.
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The ultimate outcome will depend on a number of factors, including
resolving issues with vendors and subcontractors relating to amounts claimed by
them to be due and unpaid by WGI Ohio at the time it stopped working on the
projects, any delays in the project schedule arising prior to WGI Ohio's
termination, and any further delays arising as a result of WGI's failure to
fulfill its obligations under its contracts.
Raytheon also announced that it has hired Duke Fluor Daniel to complete
construction on the two projects. The two projects, an 800-megawatt power plant
in Weymouth, Mass., and a 1,600-megawatt power plant in Everett, Mass., are due
to be completed in the Spring of 2002.
With headquarters in Lexington, Mass., Raytheon is a global technology
leader in defense, government and commercial electronics, and business and
special mission aircraft.
Forward looking statements
This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act concerning the company's financial
results, future plans, objectives and expected performance. Specifically,
statements in this release that are not historical facts, including statements
accompanied by words such as "believe," "expect," "anticipate," "estimate,"
"intend," or "plan" are intended to identify forward-looking statements and
convey the uncertainty of future events or outcomes. The company cautions
readers that any such forward-looking statements are based on assumptions that
the company believes are reasonable, but are subject to a wide range of risks,
and actual results may differ materially. Important factors that could cause
actual results to differ include, but are not limited to: the determination by
the company of the required expenditures to complete the projects, the
confirmation of the actual physical progress completed at the time of WGI Ohio's
termination, the impacts associated with the re-mobilization of the projects and
WGI Ohio's compliance with its contractual obligations and cooperation with Duke
Fluor Daniel in its assumption of the construction activities.
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