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): October 19, 2001
RAYTHEON COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-13699 95-1778500
(State of Incorporation) (Commission File Number) (IRS Employer
Identification Number)
141 Spring Street
Lexington, Massachusetts 02421
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code: (781) 862-6600
Item 5. Other Events.
On October 17, 2001, the Registrant announced financial results for its
fiscal quarter ended September 30, 2001. 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.
On October 17, 2001, the Registrant announced that it had agreed to a
purchase price adjustment related to its 1997 merger with Hughes
Defense. The Registrant also announced that it plans to record a third
quarter charge of $693 million in connection with its commuter aircraft
business and $52 million related to used general aviation aircraft. In
connection with these announcements, the Registrant issued a press
release, a copy of which is attached hereto as Exhibit 99.2 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 October 17, 2001.
99.2 Press release dated October 17, 2001.
99.3 Certificate of Amendment of Restated Certificate of
Incorporation of Raytheon Company to effect a reverse stock
split of the Registrant's Class A and Class B common stock.
99.4 Certificate of Amendment of Restated Certificate of
Incorporation of Raytheon Company to effect a forward stock
split of the Registrant's Class A and Class B common stock.
99.5 Certificate of Amendment of Restated Certificate of
Incorporation of Raytheon Company to reclassify the
Registrant's Class A and Class B common stock into a single
new class of common stock.
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: October 19, 2001
RAYTHEON COMPANY
By: /s/ John W. Kapples
John W. Kapples
Vice President and
Secretary
EXHIBIT INDEX
Exhibit
Number Description
99.1 Press release dated October 17, 2001.
99.2 Press release dated October 17, 2001.
99.3 Certificate of Amendment of Restated Certificate of Incorporation of
Raytheon Company to effect a reverse stock split of the Registrant's
Class A and Class B common stock.
99.4 Certificate of Amendment of Restated Certificate of Incorporation of
Raytheon Company to effect a forward stock split of the Registrant's
Class A and Class B common stock.
99.5 Certificate of Amendment of Restated Certificate of Incorporation of
Raytheon Company to reclassify the Registrant's Class A and Class B
common stock into a single new class of common stock.
Raytheon Raytheon Company
Corporate Communications
141 Spring Street
Lexington, MA 02421
http://www.raytheon.com
News release
FOR IMMEDIATE RELEASE
Contacts:
David Polk (News Media)
781.860.2386
Timothy Oliver (Investor Relations)
781.860.2167
Raytheon reports third quarter results;
Defense posts strong results, commercial businesses remain weak
LEXINGTON, Mass., (Oct. 17, 2001) - Raytheon Company (NYSE: RTN) today
reported sales of $4.0 billion for the third quarter of 2001, down from $4.2
billion in the third quarter a year ago. The year-over-year decline in sales is
due to divestitures and lower deliveries at Raytheon Aircraft Company (RAC).
Sales for the defense businesses, adjusting for divestitures, were up 6 percent
year-over-year. As a result of the charge announced earlier related to RAC, the
company reported a loss from continuing operations of $262 million, or $0.73 per
diluted share. Excluding the charge, income from continuing operations was $127
million, or $0.35 per diluted share, compared with $133 million, or $0.39 per
diluted share, in the third quarter of 2000. The company's backlog at the end of
the quarter was $25.1 billion.
Consolidated operating cash outflow was $357 million, compared with
positive operating cash flow of $212 million a year ago. Cash outflow was driven
by discontinued operations, which consumed $254 million, and RAC, which consumed
$260 million. The defense businesses generated $162 million. Net debt at the end
of the quarter was $8.8 billion, compared with $9.9 billion at the end of the
third quarter of 2000. Following the end of the quarter, Raytheon received a
$500 million payment as part of a $635.5 million reimbursement from Hughes
Electronics Corporation, as previously announced.
The company expects continued strength in its defense businesses this
year, however, it will not be sufficient to offset the deterioration in the
commercial businesses. Therefore, the company is revising its outlook for 2001
EPS from continuing operations, excluding third quarter charges related to RAC,
to $1.35 to $1.40, due entirely to the decline in profit contribution from RAC.
The company also said 2002 EPS from continuing operations is expected to be
$1.35 to
$1.40, reflecting an expected $0.35 per share reduction in pension
income. The reduction in pension income primarily reflects the year-to-date
performance of the equity markets. In the aggregate, the company's pension plans
are adequately funded and the estimated reduction will not have an impact on
cash flow in 2002.
Economic EPS for 2002 (excluding the effects of pension and amortization
of goodwill) is expected to be in the range of $2.40 to $2.45, versus $2.10 to
$2.15 for 2001. The company's estimate does not reflect any additional increases
in defense spending due to recent world events.
Including the impact of discontinued operations, the company posted a net
loss in the third quarter of $285 million, or $0.79 per diluted share, compared
with net income of $105 million, or $0.31 per diluted share, in the third
quarter of 2000.
"Our defense businesses are performing well and are ahead of plan in
sales, margin and cash for the year-to-date," said Raytheon Chairman and Chief
Executive Officer Daniel P. Burnham. "Our commercial businesses continue to be
hurt by the softening economy, but we remain optimistic about our future
prospects because we are well-positioned for growth in defense."
Electronic Systems
Electronic Systems (ES) reported third quarter sales of $2.0 billion, up
from $1.9 billion in the third quarter of 2000. Operating income was $281
million, compared with $296 million in the third quarter of 2000. Performance at
ES is better than both the plan and prior year through the first nine months.
Year-to-date, excluding divestitures, sales are up 7 percent over the prior
year. Margins increased from 12.3 percent in 2000 to 13.3 percent in 2001. ES
had backlog of $11.2 billion at the end of the quarter.
During the quarter, Raytheon received a $212 million award from NATO for
low rate initial production of the Evolved SeaSparrow Missile (ESSM). ESSM is
designed to protect Navy ships by destroying currently fielded and near-term
projected anti-ship missiles. Also during the quarter, Raytheon's Tomahawk
cruise missile system completed another successful test launch from a Royal Navy
attack submarine. The test marked the first use of a joint U.S./UK version of
the Advanced Tomahawk Weapon Control System software, which promotes commonality
and interoperability between the Royal Navy and U.S. Navy.
Command, Control, Communication and Information Systems
Command, Control, Communication and Information Systems (C3I) recorded
third quarter sales of $945 million, up 12 percent from $843 million last year.
The increase is due primarily to
higher volume in classified programs and secure network programs. Operating
income in the quarter was $94 million, up from $87 million in the third quarter
of 2000. Year-to-date, C3I income is higher than both plan and prior year. Sales
through nine months, excluding divestitures, are up 9 percent over the prior
year. Margins have improved from 9.8 percent to 10.0 percent. C3I had backlog of
$5.7 billion at the end of the quarter.
During the quarter, Raytheon's leadership in network centric command and
control continued. The U.S. Navy's Cooperative Engagement Capability (CEC) -
developed by Raytheon and Johns Hopkins University's Applied Physics Laboratory
- passed its Operational Evaluation Test (OPEVAL), clearing the way for a
Department of Defense full-scale production decision. CEC is a unique sensor
networking system that integrates radar measurements in real time, which enables
a fleet of warships to defend against advanced threats - such as cruise missiles
- at ranges not previously possible. In addition, a $110 million contract was
awarded for the Army Airborne Command and Control System that provides a
Corps/Division/Brigade command post on UH60 helicopters for on-the-move
situational awareness to maneuver commanders and battle staff.
Under the aegis of Raytheon's Intelligence, Surveillance, Reconnaissance
initiative (ISR.Net), the company won several awards, including a $203 million
contract from National Imagery and Mapping Agency for the Information
Dissemination Services - Direct Delivery (IDS-D) program. IDS-D receives,
processes and directs large volumes of data and imagery intelligence to the
armed services and intelligence community.
Also during the quarter, Raytheon and the U.S. Air Force accomplished the
first precision approach and landing by a civilian aircraft using a military
global positioning station (GPS). Raytheon designed and developed the
differential GPS ground station under an Air Force contract for the Joint
Precision Approach and Landings System program.
Technical Services
Technical Services (TS) reported sales of $522 million for the third
quarter, up 13 percent from $461 million a year ago. Operating income was $38
million, an increase of 6 percent from a year ago. Margin for the quarter is
down slightly, due to the mix of contracts. Sales and margin at TS are higher
than plan and prior year on a year-to-date basis. Sales are up, excluding
divestitures, 13 percent through the first nine months, compared to the prior
year. Margins are up slightly, from 7.5 percent in 2000, to 7.8 percent in 2001.
The business had backlog of $1.8 billion at the end of the quarter.
During the third quarter, TS received five contract awards from the
Defense Threat Reduction Agency to continue its work supporting the U.S.
government's Cooperative Threat Reduction (CTR) and Strategic Arms Reduction
Treaty (START) monitoring efforts in the former Soviet Union.
Aircraft Integration Systems
Aircraft Integration Systems (AIS) reported sales of $259 million for the
third quarter, compared with $277 million in the same quarter of 2000. On a
year-to-date basis, sales are down 12 percent, as expected, due to several Navy,
Air Force and commercial programs nearing completion, partially offset by
increased volume on the Airborne Standoff Radar (ASTOR) program. AIS recorded
operating income of $24 million, compared with operating income of $11 million
in the third quarter of 2000. The prior period included a contract write-down on
the Boeing Business Jet program. Through the first nine months of the year,
margin is down from 6.5 percent in 2000 to 0.3 percent in 2001. This decrease is
driven by contract adjustments made in the second quarter of 2001, including a
write-down on the Boeing Business Jet program. The business shipped three Boeing
Business Jets in the third quarter and expects to ship the last four in the
fourth quarter of 2001. AIS had backlog of $1.9 billion at the end of the
quarter.
During the quarter, the first aerodynamic validation flight for the UK
Ministry of Defence's new ASTOR (Airborne Standoff Radar) system took place in
Wichita, Kansas. The Raytheon-developed airborne radar surveillance system,
carried aboard a specially configured Global Express aircraft, provides
day/night and all-weather imagery of the ground over a large area. The imagery
can be analyzed on board the aircraft and passed in near real-time to ground
stations and other military systems. The first production aircraft is scheduled
for delivery to Raytheon's AIS facility in Greenville, Texas, in 2002.
Subsequent aircraft will be modified and equipped by Raytheon Systems Limited in
the UK.
Commercial Electronics
Commercial Electronics (CE) reported third quarter sales of $101 million,
compared with $156 million in the third quarter of 2000. The lower sales were
due to the divestiture of Recreational Marine and reduced industry-wide demand
for cellular handset components. These factors also contributed to a shortfall
to plan and prior year, through the first nine months of 2001. Sales are down 13
percent through the first nine months versus the prior year, after adjusting for
the divestiture. CE posted an operating loss of $22 million for the quarter,
compared with an operating loss of $15 million a year ago. The increase in the
loss is driven primarily by pricing pressures tied to current market conditions.
Raytheon Aircraft Company
Raytheon Aircraft Company (RAC) reported sales of $449 million, compared
with $749 million for the third quarter of 2000. The sales decline was due to
the divestiture of Raytheon Aerospace Company and lower aircraft shipments. RAC
shipped 73 aircraft in the quarter, compared with 114 in the third quarter of
2000. As previously announced, RAC reported third quarter charges of $693
million in connection with its commuter aircraft business and $52 million
related to used general aviation aircraft. Including the effect of the charges,
RAC recorded an operating loss of $758 million, compared with operating income
of $40 million a year ago. Performance at RAC is significantly below both plan
and prior year through the first nine months of 2001. Adjusting for the
divestiture, sales are down 20 percent over prior year on a year-to-date basis.
Margins have decreased from 4.4 percent, to 0.5 percent, excluding the charge
taken during the quarter. Cash flow at RAC worsened due to lower demand for used
aircraft and a resulting rise in used aircraft inventory.
RAC announced it was implementing further workforce reductions, cutting
additional costs, and reducing factory and fleet inventory expenses to bring
costs in line with a slowing economy. For the entire year, RAC will lay off a
total of approximately 1,700 people. The business also continues to review
production rates.
On August 11, RAC's largest airplane, the new super mid-size Hawker
Horizon, made its first flight. The Horizon is one-third larger than the
company's mid-size Hawker 800XP, and has trans-Atlantic flight capability.
Discontinued Operations
The company recorded a third quarter loss from discontinued operations of
$23 million after-tax, or $0.06 per diluted share. The company's performance
against cost to complete estimates for two Massachusetts power plants and other
guaranteed projects remains in line with its previous disclosures.
With headquarters in Lexington, Mass., Raytheon Company is a global
technology leader in defense, government and commercial electronics, and
business and special mission aircraft.
Conference Call on third quarter 2001 Financial Results
There will be a conference call beginning at 9 a.m. ET on Oct. 18 to review the
company's third quarter results. To listen to the call, dial 877.604.2081 (in
the U.S.) or 706.679.7694 (international callers). There will also be an audio
cast of the call on www.raytheon.com. Slides will also be available on the
website.
A replay of the conference will be run from Noon ET Oct. 18 through Noon ET
October 22. The replay number is 800-642-1687 for U.S. callers and 706-645-9291
for international callers. The reservation number for the replay is 1979868.
Forward-Looking Statements
Certain statements made in this release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995
regarding the company's future plans, objectives, and expected performance.
Specifically, statements that are not historical facts, including statements
accompanied by words such as "believe," "expect," "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: differences in anticipated and actual
program results; risks inherent with large long-term fixed price contracts,
particularly the ability to contain cost growth; the ultimate resolution of
contingencies and legal matters; the ability to realize anticipated cost
efficiencies; timely development and certification of new aircraft; the effect
of market conditions, particularly in relation to the general aviation and
commuter aircraft markets; the impact of changes in the collateral values of
financed aircraft, particularly commuter aircraft; the ability to finance
ongoing operations at attractive rates; government customers' budgetary
constraints; government import and export policies; termination of government
contracts; financial and governmental risks related to international
transactions; delays and uncertainties regarding the timing of the award of
international programs; the integration of acquisitions; the impact of
competitive products and pricing; and risks associated with the continuing
project obligations and retained assets and liabilities of Raytheon Engineers &
Constructors (RE&C), the ultimate outcome of disputes with Washington Group
International relating to the sale of RE&C, and timely completion of two
Massachusetts construction projects, among other things. Further information
regarding the factors that could cause actual results to differ materially from
projected results can be found in the company's filings with the Securities and
Exchange Commission, including "Item 1-Business" in the company's Annual Report
on Form 10-K for the year ended December 31, 2000.
###
Attachment A
Raytheon Company
Financial Information
Third Quarter 2001
(In millions, except per share amounts) Three Months Ended Nine Months Ended
-------------------------- --------------------------
30-Sep-01 01-Oct-00 30-Sep-01 01-Oct-00
------------ ------------ ------------ ------------
Net sales $ 3,961 $ 4,160 $ 12,236 $ 12,515
-------- -------- -------- --------
Cost of sales 3,883 3,317 10,614 10,087
Administrative and selling expenses 312 288 929 916
Research and development expenses 110 122 364 395
-------- -------- -------- --------
Total operating expenses 4,305 3,727 11,907 11,398
-------- -------- -------- --------
Operating income (loss) (344) 433 329 1,117
-------- -------- -------- --------
Interest expense, net 165 193 516 558
Other expense (income), net 18 4 (36) 13
-------- -------- -------- --------
Non-operating expense, net 183 197 480 571
-------- -------- -------- --------
Income (loss) from continuing operations before taxes (527) 236 (151) 546
Federal and foreign income taxes (265) 103 (103) 238
-------- -------- -------- --------
Income (loss) from continuing operations (262) 133 (48) 308
-------- -------- -------- --------
Discontinued operations
Loss from discontinued operations, net of tax -- -- -- (70)
Loss on disposal of discontinued operations, net of tax (23) (28) (549) (265)
-------- -------- -------- --------
(23) (28) (549) (335)
-------- -------- -------- --------
Net income (loss) $ (285) $ 105 $ (597) $ (27)
======== ======== ======== ========
Earnings (loss) per share from continuing operations
Basic $ (0.73) $ 0.39 $ (0.14) $ 0.91
Diluted $ (0.73) $ 0.39 $ (0.14) $ 0.91
Loss per share from discontinued operations
Basic $ (0.06) $ (0.08) $ (1.57) $ (0.99)
Diluted $ (0.06) $ (0.08) $ (1.57) $ (0.99)
Earnings (loss) per share
Basic $ (0.79) $ 0.31 $ (1.71) $ (0.08)
Diluted $ (0.79) $ 0.31 $ (1.71) $ (0.08)
Average shares outstanding
Basic 359.4 338.3 349.8 338.2
Diluted 359.4 1 341.6 349.8 1 339.9
1 Diluted average shares outstanding for the three and nine months ended
September 30, 2001 do not include the effect of stock plans since their
inclusion would have an antidilutive effect on earnings per share.
Attachment B
Raytheon Company
Segment Information
Third Quarter 2001
Operating Income
Net Sales Operating Income As a Percent of Sales
(In millions) Three Months Ended Three Months Ended Three Months Ended
----------------------- ------------------------ -------------------------
30-Sep-01 01-Oct-00 30-Sep-01 01-Oct-00 30-Sep-01 01-Oct-00
---------- ----------- ----------- ----------- ----------- -----------
Electronic Systems $ 1,985 $ 1,938 $ 281 $ 296 14.2% 15.3%
Command, Control, Communication
and Information Systems 945 843 94 87 9.9% 10.3%
Technical Services 522 461 38 36 7.3% 7.8%
Aircraft Integration Systems 259 277 24 11 9.3% 4.0%
Commercial Electronics 101 156 (22) (15) -21.8% -9.6%
Aircraft 449 749 (758) 40 -168.8% 5.3%
Corporate and Eliminations (300) (264) (1) (22)
-------- -------- --------- --------
Total $ 3,961 $ 4,160 $ (344) $ 433 -8.7% 10.4%
======== ======== ======== ========
Operating Income
Net Sales Operating Income As a Percent of Sales
Nine Months Ended Nine Months Ended Nine Months Ended
----------------------- ------------------------ -------------------------
30-Sep-01 01-Oct-00 30-Sep-01 01-Oct-00 30-Sep-01 01-Oct-00
---------- ----------- ----------- ----------- ----------- -----------
Electronic Systems $ 5,872 $ 5,597 $ 779 $ 688 13.3% 12.3%
Command, Control, Communication
and Information Systems 2,731 2,535 273 249 10.0% 9.8%
Technical Services 1,499 1,348 117 101 7.8% 7.5%
Aircraft Integration Systems 774 878 2 57 0.3% 6.5%
Commercial Electronics 339 485 (43) (4) -12.7% -0.8%
Aircraft 1,854 2,374 (735) 105 -39.6% 4.4%
Corporate and Eliminations (833) (702) (64) (79)
-------- -------- -------- --------
Total $ 12,236 $ 12,515 $ 329 $ 1,117 2.7% 8.9%
======== ======== ======== ========
Note: Corporate and Eliminations includes certain company-wide activities that have not been attributed to a particular
segment and intercompany eliminations.
Attachment C
Raytheon Company
Other Information
Third Quarter 2001
(In millions, except total employees and aircraft shipments)
Backlog
------------------------
30-Sep-01 01-Oct-00
--------- ---------
Electronic Systems $ 11,199 $ 11,613
Command, Control, Communication
and Information Systems 5,673 4,789
Technical Services 1,774 1,614
Aircraft Integration Systems 1,919 2,105
Commercial Electronics 488 688
Aircraft 4,031 4,309
--------- ---------
$ 25,084 $ 25,118
========= =========
U.S. government backlog included above $ 16,452 $ 16,118
========= =========
Total Employees
------------------------
30-Sep-01 01-Oct-00
--------- ---------
Total employees 87,700 94,500
Aircraft Shipments (Units)
Three Months Ended
--------------------------
30-Sep-01 01-Oct-00
--------- ---------
Hawker 8 14
Premier I 2 --
Beechjet (Commercial) 4 10
King Air 16 34
1900D Commuter -- 12
Pistons 30 29
T-6A 13 15
-------- --------
Total aircraft shipments 73 114
======== ========
Attachment D
Raytheon Company
Preliminary Financial Information
Third Quarter 2001
(In millions)
Balance sheets
30-Sep-01 31-Dec-00 01-Oct-00
--------- --------- ---------
Assets
Cash and cash equivalents $ 604 $ 871 $ 171
Accounts receivable 515 505 688
Contracts in process 3,919 4,061 4,426
Inventories 2,347 1,908 1,934
Deferred federal and foreign income taxes 699 476 471
Prepaid expenses and other current assets 798 178 151
Net assets from discontinued operations -- 14 50
------- ------- -------
Total current assets 8,882 8,013 7,891
Property, plant and equipment, net 2,279 2,491 2,452
Goodwill, net 12,385 13,281 13,378
Other assets, net 3,237 2,992 2,889
------- ------- -------
Total assets $26,783 $26,777 $26,610
======= ======= =======
Liabilities and Stockholders' Equity
Notes payable and current portion of long-term debt $ 1,748 $ 877 $ 972
Advance payments, less contracts in process 887 1,135 966
Accounts payable 903 1,099 988
Accrued salaries and wages 656 549 644
Other accrued expenses 1,468 1,205 1,368
Net liabilities from discontinued operations 386 -- --
------- ------- -------
Total current liabilities 6,048 4,865 4,938
Accrued retiree benefits and other long-term liabilities 1,082 1,262 1,316
Deferred federal and foreign income taxes 607 773 591
Long-term debt 7,623 9,054 9,049
Trust preferred securities 856 -- --
Stockholders' equity 10,567 10,823 10,716
------- ------- -------
Total liabilities and stockholders' equity $26,783 $26,777 $26,610
======= ======= =======
Debt-to-capital ratio
30-Sep-01 31-Dec-00 01-Oct-00
--------- --------- ---------
Debt $ 9,371 $ 9,931 $10,021
Capital 20,794 20,754 20,737
------- ------- -------
Debt-to-capital ratio 45.1% 47.9% 48.3%
======= ======= =======
Attachment E
Raytheon Company
Preliminary Cash Flow Information
Third Quarter 2001
(In millions)
Cash flow information
Three Months Ended
---------------------------
30-Sep-01 01-Oct-00
------------- ------------
Income from continuing operations $ (262) $ 133
Depreciation 77 78
Amortization 107 105
Working capital 147 96
Capital spending (108) (96)
Internal use software spending (30) (26)
Discontinued operations (254) (85)
Other (34) 7
------------- ------------
Subtotal - operating cash flow (357) 212
Net activity in financing receivables (11) 2
Divestitures - 1
Dividends (72) (68)
Other (36) 89
------------- ------------
Change in net debt $ (476) $ 236
============= ============
Restructuring amounts included in ------------- ------------
operating cash flow above $ 11 $ 42
============= ============
Segment operating cash flow information
Three Months Ended
---------------------------
30-Sep-01 01-Oct-00
------------- ------------
Electronic Systems $ 131 $ 110
Command, Control, Communication
and Information Systems 1 167
Technical Services 13 55
Aircraft Integration Systems 17 (17)
Commercial Electronics (9) (4)
Aircraft (260) (26)
Discontinued operations (254) (85)
Other 4 12
------------- ------------
$ (357) $ 212
============= ============
Raytheon Raytheon Company
Corporate Communications
141 Spring Street
Lexington, MA 02421
http://www.raytheon.com
News release
FOR IMMEDIATE RELEASE
Contact:
David Polk
781.860.2386
Hughes to reimburse Raytheon $635.5 million to settle 1997 merger dispute;
Company also announces third quarter write-down on commuter aircraft
LEXINGTON, Mass., (Oct. 17, 2001) - Raytheon Company (NYSE: RTN) and
Hughes Electronics Corporation announced that they have agreed to a purchase
price adjustment related to Raytheon's 1997 merger with Hughes Defense. Under
terms of the agreement, Hughes Electronics will reimburse Raytheon $635.5
million of its $9.5 billion purchase price, with $500 million received on Oct.
16 and the balance to be paid within six months. Raytheon expects to use the
proceeds to pay down debt.
The settlement between Raytheon and Hughes Electronics does not affect
Raytheon's ongoing dispute with Towers, Perrin, Forster & Crosby (Towers
Perrin). Raytheon filed suit against Towers Perrin in November 1999 claiming
that Towers Perrin made false representations regarding pension plans that
Raytheon acquired as part of the Hughes merger.
Raytheon today also announced that it expects to record a third quarter
charge of $693 million in connection with its commuter aircraft business and $52
million related to used general aviation aircraft. The after-tax effect of the
charges is $484 million, or $1.36 per diluted share. Consequently, the company
expects to report a loss for the 2001 third quarter and for the year. The cash
portion of the charge is expected to be approximately $350 million spread over a
four-year period.
While Raytheon has been reducing its build rates on commuter aircraft
over the last 18 months, current market conditions and the tragic events of
September 11 have had a significant adverse effect on both the airline industry
and aircraft manufacturers, including Raytheon Aircraft Company.
1
With headquarters in Lexington, Mass., Raytheon Company is a global
technology leader in defense, government and commercial electronics, and
business and special mission aircraft.
Forward-looking statements
Certain statements made in this release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995
regarding the company's future plans, objectives, and expected performance.
Specifically, statements that are not historical facts, including statements
accompanied by words such as "believe," "expect," "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. Risks that could cause actual results to differ
include, but are not limited to the continued deterioration in the aircraft
market.
###
2
CERTIFICATE OF AMENDMENT
OF RESTATED CERTIFICATE OF INCORPORATION OF
RAYTHEON COMPANY
Raytheon Company, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That at a regular meeting of the members of the board of
directors of the Corporation, resolutions were duly adopted setting forth
proposed amendments to the Restated Certificate of Incorporation of the
Corporation and declaring said amendments to be advisable. The resolutions
setting forth the proposed amendments are as follows:
RESOLVED, that, accordingly, upon approval by the requisite
vote of the holders of each of the Class A and Class B Common Stock and
the filing of the requisite certificate of amendment to the Restated
Certificate of Incorporation with the Secretary of State of the State
of Delaware, Section 1 of Article IV of the Corporation's Restated
Certificate of Incorporation be amended to read in its entirety as
follows:
Without regard to any other provision of this
Restated Certificate of Incorporation (including, without
limitation, all of the provisions of Article IV, and
including, without limitation, those in Section 2(b)(iii) of
Article IV relating to the treatment of the shares of Class A
Common Stock and Class B Common Stock in the case of any
split, subdivision, combination or reclassification, and those
in Section 2(b)(vi) of Article IV relating to the identical
rights of the holders of Class A Common Stock and the rights
of the holders of Class B Common Stock, all of which are
hereby amended as and to the extent necessary to allow the
matters and transactions contemplated and effected hereby),
each one (1) share of Class A Common Stock (as defined below),
either issued and outstanding or held by the Corporation as
treasury stock, immediately prior to the time this amendment
becomes effective shall be and are hereby automatically
reclassified and changed (without any further act) into
one-twentieth (1/20th) of a fully-paid and nonassessable share
of Class A Common Stock, without increasing or decreasing the
amount of stated capital or paid-in surplus of the
Corporation, provided that no fractional shares shall be
issued to any holder of fewer than 20 shares of Class A Common
Stock immediately prior to the time this amendment becomes
effective, and that instead of issuing such fractional shares,
the Corporation shall, as may be determined by the Chief
Financial Officer of the Corporation, either (1) arrange for
the disposition of fractional interests by those entitled
thereto, by the mechanism of having (x) the transfer agent of
the Corporation aggregate such fractional interests and (y)
the shares resulting from the aggregation sold and (z) the net
proceeds received from the sale be allocated and distributed
among the holders of the fractional interests as their
respective interests appear, or (2) pay in
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cash the fair value of such fractions of a share as of the
time when this amendment becomes effective.
Without regard to any other provision of this
Restated Certificate of Incorporation (including, without
limitation, all of the provisions of Article IV, and
including, without limitation, those in Section 2(b)(iii) of
Article IV relating to the treatment of the shares of Class A
Common Stock and Class B Common Stock in the case of any
split, subdivision, combination or reclassification, and those
in Section 2(b)(vi) of Article IV relating to the identical
rights of the holders of Class A Common Stock and the rights
of the holders of Class B Common Stock, all of which are
hereby amended as and to the extent necessary to allow the
matters and transactions contemplated and effected hereby),
each one (1) share of Class B Common Stock (as defined below),
either issued and outstanding or held by the Corporation as
treasury stock, immediately prior to the time this amendment
becomes effective shall be and are hereby automatically
reclassified and changed (without any further act) into
one-twentieth (1/20th) of a fully-paid and nonassessable share
of Class B Common Stock, without increasing or decreasing the
amount of stated capital or paid-in surplus of the
Corporation, provided that no fractional shares shall be
issued to any holder of fewer than 20 shares of Class B Common
Stock immediately prior to the time this amendment becomes
effective, and that instead of issuing such fractional shares,
the Corporation shall, as may be determined by the Chief
Financial Officer of the Corporation, either (1) arrange for
the disposition of fractional interests by those entitled
thereto, by the mechanism of having (x) the transfer agent of
the Corporation aggregate such fractional interests and (y)
the shares resulting from the aggregation sold and (z) the net
proceeds received from the sale be allocated and distributed
among the holders of the fractional interests as their
respective interests appear, or (2) pay in cash the fair value
of such fractions of a share as of the time when this
amendment becomes effective.
The Corporation is authorized to issue 272,500,000
shares of capital stock of which (a) 72,500,000 shares shall
be shares of Common Stock $.01 par value per share ("Common
Stock"), and which shares of Common Stock shall be divided
into two classes, 22,500,000 shares of Common Stock shall be
shares of Class A Common Stock ("Class A Common Stock") and
50,00,000 shares of Common Stock shall be shares of Class B
Common Stock ("Class B Common Stock"), and (b) 200,000,000
shares shall be shares of Preferred Stock $.01 par value per
share ("Preferred Stock").
SECOND: That at the annual meeting of stockholders, said amendments
were duly adopted in accordance with the applicable provisions of Sections 242
of the General Corporation Law of the State of Delaware.
THIRD: That the certificate shall become effective at 6:00 p.m. New
York City time on Monday, May 14, 2001, in accordance with the applicable
provisions of Section 103 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Raytheon Company has caused this certificate to be
signed by its Vice President and Secretary this 14th day of May, 2001.
By: /s/ John W. Kapples
Name: John W. Kapples
Title: Vice President and Secretary
CERTIFICATE OF AMENDMENT
OF RESTATED CERTIFICATE OF INCORPORATION OF
RAYTHEON COMPANY
Raytheon Company, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That at a regular meeting of the members of the board
of directors of the Corporation, resolutions were duly adopted setting forth
proposed amendments to the Restated Certificate of Incorporation of the
Corporation and declaring said amendments to be advisable. The resolutions
setting forth the proposed amendments are as follows:
RESOLVED, that, accordingly, upon approval by the requisite
vote of the holders of each of the Class A and Class B Common
Stock and the filing of the requisite certificate of amendment
to the Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware, immediately
following completion of the Reverse Stock Split, Section 1 of
Article IV of the Corporation's Restated Certificate of
Incorporation be amended to read in its entirety as follows:
Without regard to any other provision of this
Restated Certificate of Incorporation (including,
without limitation, all of the provisions of Article
IV, and including, without limitation, those in
Section 2(b)(iii) of Article IV relating to the
treatment of the shares of Class A Common Stock and
Class B Common Stock in the case of any split,
subdivision, combination or reclassification, and
those in Section 2(b)(vi) of Article IV relating to
the identical rights of the holders of Class A Common
Stock and the rights of the holders of Class B Common
Stock, all of which are hereby amended as and to the
extent necessary to allow the matters and
transactions contemplated and effected hereby), each
one (1) share of Class A Common Stock (as defined
below), either issued and outstanding or held by the
Corporation as treasury stock (and including each
fractional share held by any stockholder and each
fractional interest held by the Corporation or its
agent pending disposition on behalf of those entitled
thereto), immediately prior to the time this
amendment becomes effective shall be and hereby is
automatically reclassified and changed (without any
further act) into twenty (20) fully-paid and
nonassessable shares of Class A Common Stock (or,
with respect to such fractional shares and interests,
such lesser number of shares and fractional shares or
interests as may be applicable based upon such 1 to
20 ratio), without increasing or decreasing the
amount of stated capital or paid-in surplus of the
Corporation, provided that no fractional shares shall
be issued.
Without regard to any other provision of these
Restated Certificate of Incorporation (including,
without limitation, all of the provisions of Article
IV, and including, without limitation, those in
Section 2(b)(iii) of Article IV relating to the
treatment of the shares of Class A Common Stock and
Class B Common Stock in the case of any split,
subdivision, combination or reclassification, and
those in Section 2(b)(vi) of Article IV relating to
the identical rights of the holders of Class A Common
Stock and the rights of the holders of Class B Common
Stock, all of which are hereby amended as and to the
extent necessary to allow the matters and
transactions contemplated and effected hereby), each
one (1) share of Class B Common Stock (as defined
below), either issued and outstanding or held by the
Corporation as treasury stock (and including each
fractional share held by any stockholder and each
fractional interest held by the Corporation or its
agent pending disposition on behalf of those entitled
thereto), immediately prior to the time this
amendment becomes effective shall be and hereby is
automatically reclassified and changed (without any
further act) into twenty (20) fully-paid and
nonassessable shares of Class B Common Stock (or,
with respect to such fractional shares and interests,
such lesser number of shares and fractional shares or
interests as may be applicable based upon such 1 to
20 ratio), without increasing or decreasing the
amount of stated capital or paid-in surplus of the
Corporation, provided that no fractional shares shall
be issued. The Corporation is authorized to issue
1,650,000,000 shares of capital stock of which (a)
1,450,000,000 shares shall be shares of Common Stock
$.01 par value per share ("Common Stock"), and which
shares of Common Stock shall be divided into two
classes, 450,000,000 shares of Common Stock shall be
shares of Class A Common Stock ("Class A Common
Stock") and 1,000,000,000 shares of Common Stock
shall be shares of Class B Common Stock ("Class B
Common Stock"), and (b) 200,000,000 shares shall be
shares of Preferred Stock $.01 par value per share
("Preferred Stock").
SECOND: That at the annual meeting of stockholders, said
amendments were duly adopted in accordance with the applicable provisions of
Sections 242 of the General Corporation Law of the State of Delaware.
THIRD: That the certificate shall become effective at 6:01
p.m. New York City time on Monday, May 14, 2001, in accordance with the
applicable provisions of Section 103 of the General Corporation Law of the State
of Delaware.
IN WITNESS WHEREOF, Raytheon Company has caused this certificate to be
signed by its Vice President and Secretary this 14th day of May, 2001.
By: /s/ John W. Kapples
Name: John W. Kapples
Title: Vice President and Secretary
CERTIFICATE OF AMENDMENT
OF RESTATED CERTIFICATE OF INCORPORATION OF
RAYTHEON COMPANY
Raytheon Company, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That at a regular meeting of the members of the Board of
Directors of the Corporation, resolutions were duly adopted setting forth
proposed amendments to the Restated Certificate of Incorporation of the
Corporation and declaring said amendments to be advisable. The resolutions
setting forth the proposed amendments are as follows:
RESOLVED, that, upon approval of the stockholders of the
Corporation, the following changes (the "Charter Amendments") be made
to the Corporation's Restated Certificate of Incorporation:
Section 1 of Article IV shall be amended to read in its
entirety as follows:
Each share of Class A Common Stock, par
value $.01, of the Corporation, either issued and
outstanding or held by the Corporation as treasury
stock, immediately prior to the time this amendment
becomes effective shall be and is automatically
reclassified and changed (without any further act)
into 1 fully paid and nonassessable share of Common
Stock (as defined below) without increasing or
decreasing the amount of stated capital or paid-in
surplus of the Corporation, provided that no
fractional shares shall be issued.
Each share of Class B Common Stock, par
value $.01, of the Corporation, either issued and
outstanding or held by the Corporation as treasury
stock, immediately prior to the time this amendment
becomes effective shall be and is automatically
reclassified and changed (without any further act)
into 1 fully paid and nonassessable share of Common
Stock without increasing or decreasing the amount of
stated capital or paid-in surplus of the Corporation,
provided that no fractional shares shall be issued.
The Corporation is authorized to issue
1,650,000,000 shares of capital stock of which (a)
1,450,000,000 shares shall be shares of Common Stock
$.01 par value per share ("Common Stock") and (b)
200,000,000 shares shall be shares of Preferred Stock
$.01 par value per share ("Preferred Stock").
Section 2 of Article IV be amended to read in its entirety as
follows:
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Common Stock. Except as provided herein, as otherwise
provided by law or by the resolution or resolutions
adopted by the Board designating the rights, powers
and preferences of any series of Preferred Stock, the
Common Stock shall have the exclusive right to vote
for the election of directors and for all other
purposes, in each case acting by such vote as
required under applicable law (or by such greater
vote than would be required under applicable law as
may be set forth herein or in the By-laws of the
Corporation). Each share of Common Stock shall have
one vote, and the Common Stock shall vote together as
a single class on all matters to be voted on by the
Corporation's stockholders.
Subject to the rights of the holders of any class or
series of outstanding Preferred Stock and subject to
any other provisions hereof and applicable law,
holders of Common Stock will be entitled to dividends
and such other distributions in cash, securities or
property of the Corporation as may be declared
thereon by the Corporation's Board of Directors, out
of funds legally available therefor, whether payable
in cash, property or securities of the Corporation
Section 3 of Article VI be amended to read in its entirety as follows:
Vacancies and newly created directorships. Except as
otherwise provided for or fixed by or pursuant to the
provisions of Article IV relating to the rights of
the holders of any class or series of stock having a
preference over the Common Stock as to dividends or
upon liquidation to elect directors under specified
circumstances, (i) vacancies on the Board resulting
from death, resignation, disqualification, removal or
other cause shall be filled by the affirmative vote
of a majority of the remaining directors then in
office, even though less than a quorum of the Board,
and not by the stockholders and (ii) newly created
directorships resulting from any increase in the
number of directors after the adoption of a
resolution by a majority of the Whole Board in
accordance with Section 1 of this Article VI shall be
filled by the affirmative vote of the holders of
Common Stock, voting in accordance with the
provisions of Section 2 of Article IV.
Any director appointed in accordance with
clause (i) of the preceding sentence shall hold
office until the next annual or special meeting of
stockholders and until such director's successor
shall have been duly elected and qualified. Any
director elected in accordance with clause (ii) of
the preceding sentence shall hold office for the
remainder of the full term of the class of director
in which the new directorship was created and until
such director's successor shall have been duly
elected and qualified. No decrease in the number of
directors constituting the Board shall shorten the
term of any incumbent director.
Section 4 of Article VI be amended to read in its entirety as follows:
Removal. Subject to the rights of any class or series
of stock having a preference over the Common Stock as
to dividends or upon liquidation to elect directors
under specified circumstances, any director may be
removed from office only for cause by the affirmative
vote of the holders of the shares of Common Stock,
voting in accordance with the provisions of Section 2
of Article IV.
Article VII be amended to read in its entirety as follows:
By-laws. The By-Laws may be altered or repealed and
new By-Laws may be adopted (1) at any annual or
special meeting of stockholders, by the affirmative
vote of the holders of the shares of Common Stock
voting in accordance with the provisions of Section 2
of Article IV; provided, however, that in the case of
any such stockholder action at a special meeting of
stockholders, notice of the proposed alteration,
repeal or adoption of the new By-Law or By-Laws must
be contained in the notice of such special meeting,
or (2) by the affirmative vote of a majority of the
Whole Board.
SECOND: That at the annual meeting of stockholders, said amendments
were duly adopted in accordance with the applicable provisions of Sections 242
of the General Corporation Law of the State of Delaware.
THIRD: That the certificate shall become effective at 6:02 p.m. New
York City time on Monday, May 14, 2001, in accordance with the applicable
provisions of Section 103 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Raytheon Company has caused this certificate to be
signed by its Vice President and Secretary this 14th day of May, 2001.
By: /s/ John W. Kapples
Name: John W. Kapples
Title: Vice President and Secretary