1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A- No.1
/X/ Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended December 31, 1999.
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from............... to
..............
Commission File Number 1-13699
RAYTHEON COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 95-1778500
(State or Other Jurisdiction of
Incorporation or Organization) (I.R.S. Employer Identification No.)
141 SPRING STREET, LEXINGTON, MASSACHUSETTS 02421
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (781) 862-6600
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange
on Which Registered
Class A Common Stock, $.01 par value New York Stock Exchange
Class B Common Stock, $.01 par value Chicago Stock Exchange
Series A Junior Participating Preferred Pacific Exchange
Stock purchase rights
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes .X. No ...
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
2
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, as of February 27, 2000, was approximately $6,621,599,169. For
purposes of this disclosure, non-affiliates are deemed to be all persons other
than members of the Board of Directors of the Registrant.
Number of shares of Common Stock outstanding as of February 27, 2000:
337,647,682, consisting of 100,778,310 shares of Class A Common Stock and
236,869,372 shares of Class B Common Stock.
Documents incorporated by reference and made a part of this Form 10-K:
Portions of Raytheon's Annual Report Part I, Part II, Part IV
to Stockholders for the fiscal year
ended December 31, 1999.
Portions of the Proxy Statement for Part III
Raytheon's 2000 Annual Meeting
filed with the Commission within
120 days after the close of
Raytheon's fiscal year.
The sole purpose of this Form 10-K/A is to file Annual Reports for the
Registrant's various savings and investment plans.
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has caused this amendment to be signed on its behalf
by the undersigned, thereunto duly authorized.
RAYTHEON COMPANY (REGISTRANT)
By: /s/ Thomas D. Hyde
Thomas D. Hyde
Senior Vice President and
General Counsel
Date: June 26, 2000
Exhibit Index
Exhibit No. Description of Documents
99.1 Annual Report for the Raytheon Savings and Investment Plan.
99.1a Consent of Independent Accountants
99.1b Raytheon Savings and Investment Plan, heretofore filed as an
exhibit to the Company's Form 10-K on March 22, 2000, is hereby
incorporated by reference.
99.2 Annual Report for the Raytheon Employee Savings and Investment Plan.
99.2a Consent of Independent Accountants
99.2b Raytheon Employee Savings and Investment Plan, heretofore filed as an
exhibit to the Company's Form 10-K on March 22, 2000, is hereby
incorporated by reference.
99.3 Annual Report for the Raytheon Savings and Investment Plan for
Puerto Rico Based Employees.
99.3a Consent of Independent Accountants
99.3b Raytheon Savings and Investment Plan for Puerto Rico Based Employees,
heretofore filed as an exhibit to the Company's S-8 Registration
Statement No. 333-56117 on June 5, 1998, is hereby incorporated by
reference.
1
EXHIBIT 99.1
Raytheon Savings and Investment Plan
Financial Statements
to Accompany 1999 Form 5500
Annual Report of Employee Benefit Plan
Under ERISA of 1974
For the Year Ended December 31, 1999
The supplemental schedules to the Plan's Form 5500 are not required since the
Plan's assets are held in a Master Trust. Accordingly, the Plan administrator
must file detailed financial information, including the supplemental schedules,
separately with the Department of Labor.
2
Report of Independent Accountants
To the Participants and Administrator of
The Raytheon Savings and Investment Plan:
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Raytheon Savings and Investment Plan (the "Plan") at
December 31, 1999 and December 31, 1998, and the changes in net assets available
for plan benefits for the year ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Notes A and J to the financial statements, the Plan was amended
to merge and consolidate the Plan into the Raytheon Savings and Investment Plan.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 16, 2000
3
Statements of Net Assets Available for Plan Benefits
As of December 31, 1999 and 1998
1999 1998
Assets:
Master trust investments:
At contract value (Notes B, E and L)
Investment contracts $1,365,686,304 $ 776,630,273
Common collective trust 24,541,396 15,198,859
At fair value (Notes B and L)
Registered investment companies 3,418,046,502 1,144,209,772
Common collective trust 897,408,197 519,296,605
Raytheon Company common stock 767,489,840 356,701,412
Common stock 279,907,944 -
Participant loans 224,811,843 127,374,239
-------------- --------------
6,977,892,026 2,939,411,160
-------------- --------------
Receivables:
Employer contributions 456,290 -
Accrued investment income and
other receivables 9,328,981 3,214,568
Transfer receivable (Note J) 558,535,238 3,824,865,272
Cash and cash equivalents 108,497,715 80,249,335
-------------- --------------
Total assets $7,654,710,250 $6,847,740,335
-------------- --------------
Liabilities:
Payable for outstanding purchases $ 3,078,603 $ 861,953
Accrued expenses and other payables 1,903,254 1,415,440
-------------- --------------
Total liabilities 4,981,857 2,277,393
-------------- --------------
Net assets available for plan benefits $7,649,728,393 $6,845,462,942
============== ==============
The accompanying notes are an integral part of these financial statements.
4
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1999
Additions to net assets attributable to:
Investment income (Notes B, E and L):
Net depreciation of investments $ (9,180,290)
Interest & dividends 422,485,598
--------------
413,305,308
Contributions and deferrals:
Employee deferrals 482,571,192
Employee contributions 198,879,528
Transfers and Plan Merger (Notes I and J) 551,555,179
--------------
1,233,005,899
Total additions 1,646,311,207
--------------
Deductions from net assets attributable to:
Distributions to participants 567,128,708
Administrative expenses 311,073
Transfers (Note J) 274,605,975
--------------
Total deductions 842,045,756
--------------
Increase in net assets 804,265,451
Net assets, beginning of year 6,845,462,942
--------------
Net assets, end of year $7,649,728,393
==============
The accompanying notes are an integral part of these financial statements.
5
Notes to Financial Statements
A. Description of Plan
General
The following description of the Raytheon Savings and Investment Plan (the
"Plan"), provides only general information. Participants should refer to the
plan document for a complete description of the Plan's provisions. As more fully
described in Note J, effective January 1, 2000 the participants and related
account balances of the Raytheon Employee Savings and Investment Plan (RESIP)
were merged into the Plan. Also as more fully described in Note J, effective
January 1, 1999, the participants and related account balances of several
defined contribution plans (collectively referred to as "Prior Plans") were
merged into the Plan.
The Plan is a defined contribution plan covering the majority of employees of
Raytheon Company (the "Company"). To participate in the Plan, eligible employees
must have three months of service and may enter the Plan only on the first day
of each month. Effective January 1, 1999, eligible employees may join the Plan
immediately, including employees from prior plans. The purpose of the Plan is to
provide participants with a tax-effective means of meeting both short and
long-term investment objectives. The Plan is intended to be a "qualified cash or
deferred arrangement" under the Internal Revenue Code (the "Code"). In addition,
effective January 1, 1999, the merger of the Raytheon Stock Ownership Plan
("prior ESOP plan") creates an additional employee stock ownership portion
(ESOP) of the Plan. The ESOP is intended to be an employee stock ownership
arrangement in compliance with all of the related requirements for a qualified
stock bonus plan as defined in the Code. The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan's investments are held in the Raytheon Company Master Trust for Defined
Contribution Plans (the "Master Trust") with the assets of other defined
contribution plans of the Company. The trustee of the Master Trust maintains a
separate account reflecting the equitable share in the Master Trust of each
plan.
Investment income and administrative expenses relating to the Master Trust are
allocated to the individual plan based upon average monthly balances invested by
each plan.
Contributions and Deferrals
Effective January 1, 1999, employees are allowed to defer up to 20% of
their compensation to the Plan, except for certain employees from Prior Plans
who are limited to 17%. Employee contributions, including rollovers, and company
contributions are invested based on participant elections. For 1999, the annual
employee deferral for a participant cannot exceed $10,000. The Company will
match contribution amounts equal to 100% of each participant's deferral, up to a
maximum of 4% of compensation. The Company match shall be made to the Raytheon
Common Stock Fund and must be held in that fund until the beginning of the fifth
plan year following the plan year for which the contribution was made. The
Company will also make an ESOP contribution equal to one-half of one percent of
the participant's compensation. The ESOP portion of the Plan provides for
investment, primarily in Raytheon Company Class B common stock; however, as
required by the Code, the Plan permits limited diversification after a
participant attains age 55 or completes 10 years of plan participation
(including participation in the prior ESOP plans).
6
Effective January 1, 2000 the Plan is amended to include the former RESIP
provisions for union groups formerly covered by that plan. Certain union groups
have different deferral limitations ranging from 10% to 20%, depending upon
division. In addition, for certain union employees at Raytheon Company and
Raytheon Aircraft Company, the Company will match up to 4% of compensation. The
Company match is participant directed at certain divisions. At divisions where
the Company match is not participant directed, the match shall be made to the
Raytheon Common Stock Fund and must be held in that fund until the beginning of
the fifth plan year following the plan year for which the contribution was made.
For certain divisions, the Company will also make qualified non-elective
contributions (QNECs), employer contributions based on hours of service or
percent of pay and/or ESOP contributions. Where applicable, ESOP contributions
are as described in the previous paragraph.
Participants may invest their deferrals in increments of 1% in any combination
of fourteen funds. The investment objectives of the funds range from
conservative investments with an emphasis on preservation of capital to equity
investments with an emphasis on capital gains. The underlying assets that make
up the funds include cash and equivalents, investment contracts, registered
investment companies, common collective trusts, common stock and Raytheon
Company stock.
Participant Accounts
Each participant's account is credited with the participant's deferral, the
Company's contribution and an allocation of plan earnings. Plan earnings are
allocated based on account balances by fund. Participant's accounts are debited
with an allocation of Plan expenses.
Vesting
Effective January 1, 1999, all employee and employer contributions and earnings
thereon are fully and immediately 100% vested for each participant who performs
an hour of service on or after January 1, 1999.
Prior to 1999, participants were immediately vested in their voluntary deferrals
plus actual earnings thereon. Vesting requirements for employer contributions
plus earnings thereon varied depending upon when an employee became eligible to
participate in the Plan. Vesting generally occurred upon completion of five
years of service or upon three years of Plan participation or upon retirement,
death, disability, or attainment of normal retirement age. Forfeitures of the
non-vested portions of terminated participants' accounts are used to reduce
required contributions of the Company. During 1999, the total amount of
forfeitures from the Plan was $1,083,814.
Distributions to Participants
A participant may withdraw all or a portion of deferrals, employer contributions
and related earnings upon attainment of age 59 1/2. For reasons of financial
hardship, as defined in the Plan document, a participant may withdraw all or a
portion of deferrals. On termination of employment, a participant will receive a
lump-sum distribution unless the vested account is valued in excess of $5,000,
and the participant elects to defer distribution. A retiree or a beneficiary of
a deceased participant may defer the distribution until January of the year
following attainment of age 65.
7
Loans to Participants
A participant may borrow against a portion of the balance in the participant's
account, subject to certain restrictions. The maximum amount of a loan is the
lesser of one-half of the participant's account balance or $50,000. The minimum
loan, which may be granted, is $500. The interest rate applied is equal to the
prime rate published in the Wall Street Journal on the first business day in
June and December of each year. Loans must be repaid over a period of up to five
years by means of payroll deductions. In certain cases, the repayment period may
be extended up to 15 years. Interest paid to the Plan on loans to participants
is credited to the borrower's account in the investment fund to which repayments
are made.
Administrative Expenses
The Plan participants pay substantially all expenses of administering the Plan.
B. Summary of Significant Accounting Policies
The accompanying financial statements are prepared on the accrual basis of
accounting. The provisions of AICPA Statement of Position 99-3 were adopted in
1999 and prior period financial statements and disclosures have been
reclassified where appropriate.
The Plan's investment contracts are fully benefit-responsive and are therefore
included in the financial statements at their contract value, defined as net
employee contributions plus interest earned on the underlying investments at
contracted rates. Because the investment contracts are fully benefit-responsive,
contract values approximate fair value. Investments in registered investment
companies and the common collective trust are valued at the closing net asset
value reported on the last business day of the year. Investments in securities
(common stocks) traded on a national securities exchange are valued at the last
reported sales price on the last business day of the year. Cash equivalents are
short-term money market instruments and are valued at cost, which approximates
fair value.
Security transactions are recorded on the trade date. Except for its investment
contracts (Note E), the Plan's investments are held by bank-administered trust
funds. Payable for outstanding security transactions represents trades, which
have occurred but have not yet settled.
The Plan presents in the statement of changes in net assets the net appreciation
(depreciation) in the fair value of its investments, which consists of the
realized gains or losses and the unrealized appreciation (depreciation) on those
investments.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis. Investment income
includes both dividends and interest income.
Benefits are recorded when paid.
8
The preparation of the financial statements, in conformity with generally
accepted accounting principles, requires the Plan administrator to make
significant estimates and assumptions that affect the reported amounts of net
assets and liabilities available for benefits at the date of the financial
statements and the changes in net assets available for benefits during the
reporting period and, when applicable, disclosures of contingent assets and
liabilities at the date of the financial statements. Actual results could differ
from the estimates included in the financial statements.
The Plan provides for various investment options in any combination of stocks,
bonds, fixed income securities, mutual funds and other investment securities.
Investment securities are exposed to various risks, such as interest rate,
market and credit risk. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect participants' account balances
and the amounts reported in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits.
C. Investments
The following presents investments that represent 5 percent or more of the
Plan's net assets:
December 31,
1999 1998
Fidelity Equity Income fund $1,130,114,968 $691,209,765
Raytheon Common Stock fund** 767,489,840 356,701,412
BT Pyramid Equity Index fund 897,408,197 519,296,605
Fidelity Magellan fund 681,632,410 *
Fidelity Blue Chip fund 575,996,214 *
Fidelity Balanced fund 417,684,330 *
Deutsche Bank AG 477,990,216 N/A
Metropolitan Life Insurance Company N/A 350,379,445
(GA-12908)
* Investments were less than 5 percent of the Plan's net assets
** Amount is made up of both participant and non-participant directed monies.
During the year ended December 31, 1999 the Plan's investments
experienced a net depreciation as follows:
Registered investment companies $133,664,027
Common collective trusts 166,058,412
Raytheon Company common stock (498,666,117)
Common stock 189,763,388
------------
$ (9,180,290)
============
9
D. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as follows:
December 31,
1999 1998
Net assets:
Raytheon Company common stock $177,372,404 $195,766,072
Cash and cash equivalents 8,724,595 2,694,219
------------ ------------
$186,096,999 $198,460,291
============ ============
December 31,
1999
Changes in net assets:
Contributions $ 185,452,568
Interest and dividends 179,559
Net depreciation of investments (167,924,345)
Distributions to participants (18,433,541)
Administrative expenses (107,248)
Net fund transfers (11,530,285)
--------------
$ (12,363,292)
--------------
E. Investment Contracts
The Plan invests in collateralized fixed income investment portfolios,
which are managed by insurance companies and investment management firms. The
credited interest rates are adjusted semiannually to reflect the experienced and
anticipated yields to be earned on such investments, based on their book value.
The annualized average yield and credited interest rates were as follows:
Annualized
average interest
yield rate
For the year ended December 31, 1999:
Chase Manhattan Bank (429666) 5.69% 5.69%
Deutsche Bank AG (FID-RAY-1) 5.59% 5.59%
Fidelity IPL (633-GCDC) 5.75% 5.76%
Fidelity STIF 5.22% 5.74%
State Street Bank and Trust (99054) 5.70% 5.70%
Westdeutsche Landesbank (WLB6173) 5.69% 5.69%
For the year ended December 31, 1998:
Banker's Trust (WBS 92-485) 6.85% 6.85%
Metropolitan Life Insurance Company (GIC GA-12908) 6.58% 6.58%
Metropolitan Life Insurance Company (GIC GA-13269) 6.10% 6.10%
Prudential Asset Management Company (GIC 917163-001) 6.75% 6.75%
Connecticut General (GIC 0025174) 5.58% 5.58%
Fidelity IPL (633-GCDC) 5.62% 5.62%
Monumental Life Insurance Company (GIC BDA00463FR-00) 7.84% 7.84%
The contract values are subject to limitations in certain situations including
large workforce reductions and plan termination.
10
F. Federal Income Tax Status
The Internal Revenue Service has determined and informed the Company by letter
dated July 1995 that the Plan and related trust are designed in accordance with
applicable sections of the Code. The Plan has been amended since receiving the
determination letter. However, the Plan administrator and the Plan's legal
counsel believe that the Plan is currently designed and being operated in
compliance with applicable requirements of the Code.
G. Plan Termination
Although it has not expressed any intention to do so, the Company reserves the
right under the Plan at any time or times to discontinue its contributions and
to terminate the Plan subject to the provisions of ERISA. In the event of plan
termination, after payment of all expenses and proportional adjustment of
accounts to reflect such expenses, fund losses or profits, and reallocations,
each participant shall be entitled to receive any amounts then credited to his
or her account.
H. Related Party Transactions
The Plan's trustee is Fidelity Management Trust Company (the "Trustee"). The
Trustee holds the funds for the Plan and is responsible for managing the Plan's
investment assets, executing all investment transactions, recording approved
transactions, and, therefore these transactions qualify as party-in-interest.
In accordance with the provisions of the Plan, the Trustee acts as the Plan's
agent for purchases and sales of shares of Raytheon Company common stock. These
transactions are performed on a Master Trust level. For the Master Trust,
purchases amounted to $721,986,347 and sales amounted to $204,780,412 for the
year ended December 31, 1999.
I. Transfers
Transfers include transfers of participant accounts, individually and/or
in-groups, between the Plan and all other plans included in the Master Trust for
those participants and/or groups of participants who changed plans during the
year. Transfers also include transfers of participant accounts, individually
and/or in-groups, between the Plan and similar savings plans of other companies
for those participants who changed companies during the year.
J. Transfer Receivables
In a continuing effort to improve administrative efficiencies, the Plan was
amended and effective January 1, 2000 the RESIP was merged into and consolidated
with the Plan. The RESIP ceased to exist as a separate plan after December 31,
1999 and effective January 1, 2000 the provisions of the Plan were modified to
incorporate the RESIP provisions related to prior RESIP eligible and certain
union employees. As of December 31, 1999 the transfer receivable from the RESIP
merger to the Plan is $558,535,238.
11
As part of an overall effort to minimize plan design differences and increase
administrative efficiencies, the Board of Directors of Raytheon Company voted on
December 16, 1998 to merge the participants and their account balances from
several Prior Plans into the Plan. The Prior Plans ceased to exist on December
31, 1998 and effective January 1, 1999 the plan provisions of the Plan govern.
The transfer receivable by Prior Plans as of December 31, 1998 consisted of:
Raytheon Salaried Savings and Investment Plan (10011) $2,188,796,696
E-Systems, Inc. Employee Savings Plan 744,493,356
Raytheon TI Systems Savings Plan 255,787,439
Raytheon Savings and Investment Plan
for Specified Hourly Payroll Employees 233,308,197
Raytheon Stock Ownership Plan 219,416,215
Raytheon STX Corporation 401(k) Retirement Plan 89,317,908
Raytheon California Hourly Savings and Investment Plan 59,818,911
(10012)
Raytheon Stock Ownership Plan
for Specified Hourly Payroll Employees 29,965,013
Standard Missile 401(k) Plan 3,961,537
--------------
Total $3,824,865,272
==============
Subsequent to December 31, 1998, the Plan and RESIP were further amended with
respect to the transfer amounts related to certain Prior Plans covering hourly
payroll employees. The amounts shown above for the Raytheon Savings and
Investment Plan for Specified Hourly Payroll Employees and the Raytheon Stock
Ownership Plan for Specified Hourly Payroll Employees were decreased to reflect
a complete transfer of those specific plans into RESIP. Additionally, certain
unions from the E-Systems, Inc. Employee Savings Plan were also merged into
RESIP. These changes resulted in a reduction in the net transfer to the Plan as
of December 31, 1998 of $274,605,975. This amount is reflected in the 1999
transfer activity.
K. Subsequent Event
On April 14, 2000, the Company signed a definitive agreement with
Morrison Knudsen to sell all of the stock of Raytheon Engineers & Constructors,
Inc. and several subsidiaries. Employees of Raytheon Engineers & Constructors,
Inc. enrolled in the Plan will consequently be treated as vested terminated
employees effective on the closing date of the transaction.
12
L. Master Trust
The following is a summary of net assets available for plan benefits by Plan
under the Master Trust as of December 31, 1999:
Raytheon Raytheon Raytheon
Raytheon Employee Savings and Defined
Savings and Savings and Investment Plan Contribution
Investment Investment for Puerto Rico Master
Plan Plan Based Employees Trust
Assets:
Master trust investments:
At contract value:
Investment contracts $1,365,686,304 $152,581,183 $ 200,776 $1,518,468,263
Common collective trust 24,541,396 2,741,885 3,608 27,286,889
At fair value:
Registered investment 3,418,046,502 189,241,065 744,624 3,608,032,191
companies
Common collective trust 897,408,197 62,574,915 233,408 960,216,520
Raytheon Company 767,489,840 85,131,829 302,334 852,924,003
common stock
Common stock 279,907,944 7,967,256 - 287,875,200
Participant loans 224,811,843 44,414,163 126,313 269,352,319
-------------- ------------ ---------- --------------
Total investments 6,977,892,026 544,652,296 1,611,063 7,524,155,385
-------------- ------------ ---------- --------------
Cash and cash equivalents 108,497,715 9,876,650 28,117 118,402,482
Receivables:
Employer contributions 456,290 3,556,816 - 4,013,106
Accrued investment income
& other receivables 9,328,981 947,795 3,349 10,280,125
Transfer receivable* 558,535,238 - - 558,535,238
-------------- ------------- ---------- --------------
Total assets $7,654,710,250 $ 559,033,557 $1,642,529 $8,215,386,336
-------------- ------------- ---------- --------------
Liabilities:
Payable for outstanding $ 3,078,603 $ 356,829 $ 1,287 $ 3,436,719
purchases
Accrued expenses and 1,903,254 141,490 513 2,045,257
other payables
Transfer payable* - 558,535,238 - 558,535,238
-------------- ------------- ---------- --------------
Total liabilities $ 4,981,857 $ 559,033,557 $ 1,800 $ 564,017,214
-------------- ------------- ---------- --------------
Net assets available for $7,649,728,393 $ - $1,640,729 $7,651,369,122
plan benefits ============== ============= ========== ==============
Percentage of total trust 99.98% 0.00% 0.02% 100.00%
assets
* See Note J
13
The following is a summary of net assets available for plan benefits by Plan
under the Master Trust as of December 31, 1998:
Raytheon Raytheon Raytheon
Raytheon Employee Savings and Defined
Savings and Savings and Investment Plan Other Prior Contribution
Investment Investment for Puerto Rico Plans Merged Master
Plan Plan Based Employees 12/31/98 Trust
Assets:
Master trust investments:
At contract value:
Investment contracts $ 776,630,273 $ 20,713,337 $ 87,670 $ 521,071,601 $ 1,318,502,881
Common collective trust 15,198,859 405,365 1,716 10,197,509 25,803,449
At fair value:
Registered investment
companies 1,144,209,772 31,699,672 575,071 1,522,564,673 2,699,049,188
Common collective trust 519,296,605 10,496,295 241,676 215,568,215 745,602,791
Raytheon Company
common stock 356,701,412 8,925,215 321,152 549,724,121 915,671,900
Common stock - - - 172,859,819 172,859,819
Participant loans 127,374,239 6,229,708 37,300 117,046,618 250,687,865
-------------- ------------- ---------- -------------- ---------------
Total investments 2,939,411,160 78,469,592 1,264,585 3,109,032,556 6,128,177,893
-------------- ------------- ---------- -------------- ---------------
Cash and cash equivalents 80,249,335 2,117,237 13,742 64,877,770 147,258,084
Receivables:
Employer contributions - - - 3,595,261 3,595,261
Accrued investment income 3,214,568 75,163 2,417 4,247,441 7,539,589
and other receivables
Transfer receivable* 3,824,865,272 210,313,280 - - 4,035,178,552
-------------- ------------- ---------- -------------- ---------------
Total assets $6,847,740,335 $ 290,975,272 $1,280,744 $3,181,753,028 $10,321,749,379
-------------- ------------- ---------- -------------- ---------------
Liabilities:
Payable for $ 861,953 $ 21,566 $ 776 $ 1,047,830 $ 1,932,125
outstanding purchases
Accrued expenses and
other payables 1,415,440 32,586 1,019 1,353,322 2,802,367
Transfer payable* - - - 3,179,351,876 3,179,351,876
-------------- ------------ ---------- -------------- ---------------
Total liabilities $ 2,277,393 $ 54,152 $ 1,795 $3,181,753,028 $ 3,184,086,368
-------------- ------------ ---------- -------------- ---------------
Net assets available for $6,845,462,942 $290,921,120 $1,278,949 $ - $ 7,137,663,011
plan benefits ============== ============ ========== ============== ===============
Percentage of total trust assets 95.91% 4.07% 0.02% 0.00% 100.00%
* See Note J
14
The following is a summary of investment income by Plan under the
Master Trust for the year ended December 31, 1999.
Raytheon
Savings and
Raytheon Investment Raytheon
Raytheon Employee Plan for Defined
Savings and Savings and Puerto Rico Contribution
Investment Investment Based Master
Plan Plan Employees Trust
Investment income:
Interest and dividends $ 422,485,598 $ 30,193,248 $ 96,208 $ 452,775,054
Net appreciation/(depreciation):
Registered investment companies 133,664,027 7,294,448 43,969 141,002,444
Common collective trusts 166,058,412 11,577,692 46,175 177,682,279
Raytheon Company common stock (498,666,117) (63,984,845) (240,144) (562,891,106)
Common stock 189,763,388 6,009,679 - 195,773,067
------------- ------------ --------- -------------
(9,180,290) (39,103,026) (150,000) (48,433,316)
------------- ------------ --------- -------------
Total investment income/(loss) $ 413,305,308 $ (8,909,778) $ (53,792) $ 404,341,738
============= ============ ========= =============
1
EXHIBIT 99.1a
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement of Raytheon Company on Form S-3 (File No. 333-82529), Form S-4 (File
No. 333-78219), and Form S-8 (File Nos. 333-56117 and 333-45629) relating to the
financial statements of Raytheon Savings and Investment Plan, which appears in
this Form 10-K/A.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 27, 2000
1
Exhibit 99.2
Raytheon Employee Savings and Investment Plan
Financial Statements
to Accompany 1999 Form 5500
Annual Report of Employee Benefit Plan
Under ERISA of 1974
For the Year Ended December 31, 1999
The supplemental schedules to the Plan's Form 5500 are not required since the
Plan's assets are held in a Master Trust. Accordingly, the Plan administrator
must file detailed financial information, including the supplemental schedules,
separately with the Department of Labor.
2
Report of Independent Accountants
To the Participants and Administrator of
The Raytheon Employee Savings and Investment Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Raytheon Employee Savings and Investment Plan (the "Plan")
at December 31, 1999 and December 31, 1998, and the changes in net assets
available for plan benefits for the year ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
As discussed in Notes A and K to the financial statements, the Plan was amended
to merge and consolidate the Plan into the Raytheon Savings and Investment Plan.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 16,2000
3
Statements of Net Assets Available for Plan Benefits
As of December 31, 1999 and 1998
1999 1998
Assets
Master trust investments:
At contract value (Notes B, E and M):
Investment contracts $152,581,183 $ 20,713,337
Common collective trust 2,741,885 405,365
At fair value (Notes B and M):
Registered investment companies 189,241,065 31,699,672
Common collective trust 62,574,915 10,496,295
Raytheon Company common stock 85,131,829 8,925,215
Common stock 7,967,256 -
Participant loans 44,414,163 6,229,708
------------ ------------
544,652,296 78,469,592
------------ ------------
Receivables:
Employer contributions 3,556,816 -
Accrued investment income and
other receivables 947,795 75,163
Transfer receivable (Note J) - 210,313,280
Cash and cash equivalents 9,876,650 2,117,237
------------ ------------
Total assets $559,033,557 $290,975,272
------------ ------------
Liabilities
Payable for outstanding purchases $ 356,829 $ 21,566
Accrued expenses and other payables 141,490 32,586
Transfer payable (Note K) 558,535,238 -
------------ ------------
Total liabilities $559,033,557 $ 54,152
------------ ------------
Net assets available for plan benefits $ - $290,921,120
============ ============
The accompanying notes are an integral part of these financial statements.
4
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1999
Additions to net assets attributable to:
Investment income (Notes B, E and M):
Net depreciation of investments $(39,103,026)
Interest and dividends 30,193,248
------------
(8,909,778)
Contributions and deferrals:
Employee deferrals 44,477,008
Employer contributions 23,990,930
Transfers (Note J) 274,605,975
------------
343,073,913
Total additions 334,164,135
------------
Deductions from net assets attributable to:
Distributions to participants 50,443,869
Administrative expenses 72,190
Transfers and Plan merger (Note I and K) 574,569,196
------------
Total deductions 625,085,255
------------
Decrease in net assets (290,921,120)
Net assets, beginning of year 290,921,120
------------
Net assets, end of year $ -
============
5
Notes to Financial Statements
A. Description of Plan
General
The following description of the Raytheon Employee Savings and
Investment Plan (the "Plan") provides only general information. Participants
should refer to the plan document for a complete description of the Plan's
provisions. As more fully described in Note K, effective January 1, 2000 the
participants and related account balances of the Plan were merged into the
Raytheon Savings and Investment Plan (RAYSIP). The Plan's provisions were
adopted by the RAYSIP and effective December 31, 1999 the Plan ceased to exist
as a separate entity. As more fully described in Note J, effective January 1,
1999, the participants and related account balances of several defined
contribution plans (collectively referred to as "Prior Plans") were merged into
the Plan.
The Plan is a defined contribution plan and covers the employees of the
Raytheon Support Services Company and the Range Systems Engineer Support
Company, respectively, wholly-owned subsidiaries of Raytheon Company (the
"Company"). To participate in the Plan, eligible employees must have three
months of service and may enter the Plan only on the first day of each month.
Effective January 1, 1999, certain union employees of the former Raytheon
Systems Company, Cedar Rapids, Inc. and Raytheon Aircraft Company who
participated in Prior Plans were merged into the Plan and all eligible
employees, including those from Prior Plans, may join the Plan immediately. In
addition, the Raytheon Stock Ownership Plan for Specified Hourly Payroll
Employees (referred to as the "Prior ESOP Plan") was merged into the Plan and
created an additional employee stock ownership portion (ESOP) of the Plan.
The purpose of the Plan is to provide participants with a tax-effective
means of meeting both short and long-term investment objectives. The Plan is
intended to be a "qualified cash or deferred arrangement" under the Internal
Revenue Code (the "Code"). The ESOP is intended to be an employee stock
ownership arrangement in compliance with all of the related requirements for a
qualified stock bonus plan as defined in the Code. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
The Plan's investments are combined with the investments of other
similar defined contribution plans of the Company into the Raytheon Company
Master Trust for Defined Contribution Plans (the "Master Trust"). The trustee of
the Master Trust maintains a separate account reflecting the equitable share in
the Master Trust of each plan.
Investment income and administrative expenses relating to the Master
Trust are allocated to the individual plan based upon average monthly balances
invested by each plan.
6
Contributions and Deferrals
Effective January 1, 1999, eligible employees at certain divisions of
the former Raytheon Systems Company may defer up to 20%, depending upon
division. For 1999, the annual employee deferral for a participant would not
exceed $10,000. Rollover contributions from other qualified plans are accepted
by the Plan. In addition, for certain union employees at the former Raytheon
Systems Company, Cedar Rapids, Inc. and Raytheon Aircraft Company, the Company
will match amounts ranging from 1.5% to 4% of compensation. The Company match is
participant directed at certain divisions. At divisions where the Company match
is not participant directed, the match shall be made to the Raytheon Common
Stock Fund and must be held in that fund until the beginning of the fifth plan
year following the plan year for which the contribution was made. For certain
divisions, the Company will also make qualified non-elective contributions
(QNECs), employer contributions based on hours of service or percent of pay
and/or ESOP contributions. When applicable, ESOP contributions are equal to
one-half of one percent of the participant's compensation. The ESOP portion of
the Plan provides for investment, primarily in Raytheon Company Class B common
stock; however, as required by the Code, the Plan permits limited
diversification after a participant attains age 55 or completes 10 years of plan
participation (including participation in the Prior ESOP Plan).
Participants may invest their deferrals in increments of 1% in any
combination of fourteen funds. The investment objectives of the funds range from
conservative investments with an emphasis on preservation of capital to equity
investments with an emphasis on capital gains. The underlying assets that make
up the funds include cash and equivalents, investment contracts, registered
investment companies.
Participant Accounts
Each participant's account is credited with the participant's deferral,
any applicable employer contributions (QNECs, matching contributions, employer
or ESOP) and an allocation of Plan earnings. Plan earnings are allocated based
on account balances by fund. Participant's accounts are debited with an
allocation of Plan expenses.
Vesting
Participants are immediately vested in their voluntary deferrals and
employer contributions plus actual earnings thereon for each participant who
performs an hour of service or after January 1, 1999.
Certain union employees at the former Raytheon Systems Company, Cedar
Rapids, Inc. and Raytheon Aircraft Company, whose accounts merged into the Plan
effective January 1, 1999, will retain the vesting schedule from their Prior
Plan. Vesting requirements for employer contributions plus earnings thereon may
vary depending upon when an employee became eligible to participate in the Prior
Plan. Vesting generally occurs upon completion of five years of service or upon
three years of Plan participation or upon retirement, death, disability, or
attainment of normal retirement age. Forfeitures of the non-vested portions of
terminated participants' accounts are used to reduce required contributions of
the Company. During 1999, the total amount of forfeitures from the plan was
$76,773.
Distributions to Participants
A participant may withdraw all or a portion of deferrals, employer
contributions and related earnings upon attainment of age 59 1/2. For reasons of
financial hardship, as defined in the plan document, a participant may withdraw
all or a portion of deferrals. On termination of employment, a participant will
receive a lump-sum distribution unless the vested account is valued in excess of
$5,000, and the participant elects to defer distribution. A retiree or a
beneficiary of a deceased participant may defer the distribution until January
of the year following attainment of age 65.
7
Loans to Participants
A participant may borrow against a portion of the balance in the
participant's account, subject to certain restrictions. The maximum amount of a
loan is the lesser of one-half of the participant's account balance or $50,000.
The minimum loan which may be granted is $500. The interest rate applied is
equal to the prime rate published in the Wall Street Journal on the first
business day in June and December of each year. Loans must be repaid over a
period of up to five years by means of payroll deductions. In certain cases, the
repayment period may be extended up to 15 years. Interest paid to the Plan on
loans to participants is credited to the borrower's account in the investment
fund to which repayments are made.
Administrative Expenses
The Plan participants pay substantially all expenses of administering
the Plan.
B. Summary of Significant Accounting Policies
The accompanying financial statements are prepared on the accrual basis
of accounting. The provisions of AICPA Statement of Position 99-3 were adopted
in 1999 and prior period financial statements and disclosures have been
reclassified where appropriate.
The Plan's investment contracts and common collective trust are fully
benefit-responsive and are therefore included in the financial statements at
their contract value, defined as net employee contributions plus interest earned
on the underlying investments at contracted rates. Contract value approximates
fair value. Investments in mutual funds and the common collective trust are
valued at the closing net asset value reported on the last business day of the
year. Investments in securities (common stocks) traded on a national securities
exchange are valued at the last reported sales price on the last business day of
the year. Cash equivalents are short-term money market instruments and are
valued at cost, which approximates fair value. Participant loans are valued at
cost, which approximates fair value.
Security transactions are recorded on the trade date. Except for its
investment contracts (Note E), the Plan's investments are held in a trust.
Payable for outstanding security transactions represent trades which have
occurred but have not yet settled.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments, which consists
of the realized gains or losses and the unrealized appreciation (depreciation)
on those investments.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis. Investment income
includes both dividend and interest income.
8
Benefits are recorded when paid.
The preparation of the financial statements in conformity with
generally accepted accounting principles requires the Plan administrator to make
significant estimates and assumptions that affect the reported amounts of net
assets and liabilities available for benefits at the date of the financial
statements and the changes in net assets available for benefits during the
reporting period and, when applicable, disclosures of contingent assets and
liabilities at the date of the financial statements. Actual results could differ
from the estimates included in the financial statements.
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds and other investment
securities. Investment securities are exposed to various risks, such as interest
rate, market and credit risk. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect participants' account balances
and the amounts reported in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits.
C. Investments
There were no investment that represented 5% or more of the Plan's net
assets at December 31, 1998 due to transfer receivable for $210,313,280 (Note J)
which made all investments equal to less than 5% of the Plan's net assets. There
were no investments that represented 5% or more of the Plan's net assets at
December 31, 1999 as there were no net assets due to the Plan merger and
consolidation into RAYSIP (Note K).
During the year ended December 31, 1999 the Plan's investments
experienced a net depreciation as follows:
Registered investment companies $ 7,294,448
Common collective trusts 11,577,692
Raytheon Company common stock (63,984,845)
Common stock 6,009,679
------------
$(39,103,026)
============
9
D. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments is as
follows:
December 31,
1999 1998
Net assets:
Raytheon Company common stock $23,824,206 $43,673,432
Cash and cash equivalents 1,171,865 601,053
----------- -----------
Total $24,996,071 $44,274,485
=========== ===========
For the year ended
December 31,1999
Changes in net assets:
Contributions $ 8,353,812
Interest and dividends 8,179
Net depreciation of investments (23,893,377)
Distributions to participants (2,782,479)
Administative expenses (12,350)
Net fund transfers (952,198)
------------
$(19,278,413)
============
E. Investment Contracts
The Plan invests in collateralized fixed income investment portfolios
which are managed by insurance companies and investment management firms. The
credited interest rates are adjusted semiannually to reflect the experienced and
anticipated yields to be earned on such investments, based on their book value.
The annualized average yield and credited interest rates were as follows:
Annualized Credited
average interest
yield rate
For the year ended December 31, 1999:
Chase Manhanttan Bank (429666) 5.69% 5.69%
Deutsche Bank AG (FID-RAY-1) 5.59% 5.59%
Fidelity IPL (633-GCDC) 5.75% 5.76%
Fidelity STIF 5.22% 5.74%
State Street Bank and Trust (99054) 5.70% 5.70%
Westdeutsche Landesbank (WLB 6173) 5.69% 5.69%
For the year ended December 31, 1998:
Banker's Trust (WBS 92-485) 6.85% 6.85%
Metropolitan Life Insurance Company (GIC GA-12908) 6.58% 6.58%
Metropolitan Life Insurance Company (GIC GA-13659) 6.10% 6.10%
Prudential Asset Management Company (GIC 917163-001) 6.75% 6.75%
Connecticut General (GIC 0025174) 5.58% 5.58%
Fidelity IPL (633-GCDC) 5.62% 5.62%
Monumental Life Insurance Company
(GIC BDA00463FR-00) 7.84% 7.84%
10
The contract values are subject to limitations in certain situations
including large workforce reductions and plan termination.
F. Federal Income Tax Status
The Internal Revenue Service has determined and informed the Company by
letter dated June 1995 that the Plan and related trust are designed in
accordance with applicable sections of the Code. The Plan has been amended since
receiving the determination letter. However, the Plan administrator and the
Plan's legal counsel believe that the Plan is currently designed and being
operated in compliance with applicable requirements of the Code.
G. Plan Termination
Although it has not expressed any intention to do so, the Company
reserves the right under the Plan at any time or times to discontinue its
contributions and to terminate the Plan subject to the provisions of ERISA. In
the event of plan termination, after payment of all expenses and proportional
adjustment of accounts to reflect such expenses, fund losses or profits, and
reallocations, each participant shall be entitled to receive any amounts then
credited to his or her account.
H. Related Party Transactions
The Plan's trustee is Fidelity Management Trust Company (the
"Trustee"). The Trustee holds the funds for the Plan and is responsible for
managing the Plan's investment assets, executing all investment transactions,
recording approved transactions, and, therefore these transactions qualify as
party-in-interest.
In accordance with the provisions of the Plan, the Trustee acts as the
Plan's agent for purchases and sales of shares of Raytheon Company common stock.
These transactions are performed on a Master Trust level. For the Master Trust,
purchases amounted to $721,986,347 and sales amounted to $204,780,412 for the
year ended December 31, 1999.
I. Transfers
Transfers include transfers of participant accounts, individually
and/or in groups, between the Plan and all other plans included in the Master
Trust for those participants and/or groups of participants who changed plans
during the year. Transfers also include transfers of participant accounts,
individually and/or in-groups, between the Plan and similar savings plans of
other companies for those participants who changed companies during the year.
J. Transfer Receivable
As part of an overall effort to minimize plan design differences and
increase administrative efficiencies, the Board of Directors of Raytheon Company
voted on December 16, 1998 to merge the participants and their account balances
from several Prior Plans into the Plan. The Prior Plans ceased to exist on
December 31, 1998 and effective January 1, 1999, the plan provisions of the Plan
govern.
11
The transfer receivable by Prior Plan at December 31, 1998 is as
follows:
Raytheon Savings and Investment Plan for Specified
Hourly Payroll Employees $109,994,457
Raytheon Tucson Bargaining Unit Employees Savings
and Investment Plan 46,783,076
Raytheon Savings and Retirement Plan (10014) 18,676,997
Serv-Air, Inc. Savings and Retirement Plan 18,053,874
Raytheon Stock Ownership Plan for Specified Hourly
Payroll Employees 16,804,876
------------
Total $210,313,280
------------
Subsequent to December 31, 1998, the Plan and RAYSIP were further
amended with respect to the transfer amounts related to certain Prior Plans
covering hourly payroll employees. The amounts shown above for the Raytheon
Savings and Investment Plan for Specified Hourly Payroll Employees and the
Raytheon Stock Ownership Plan for Specified Hourly Payroll Employees were
increased to reflect a complete transfer of those specific plans into the Plan.
Additionally, certain unions from the E-Systems, Inc. Employee Savings Plan
were also merged into RESIP. These changes resulted in a net increase in the
actual transfer receivable to the Plan as of December 31, 1998 of $274,605,975.
This amount is reflected in the 1999 transfer activity.
K. Transfer Payable
In a continuing effort to improve administrative efficiencies, the Plan
was amended and effective January 1, 2000 was merged into and consolidated with
RAYSIP. The Plan ceased to exist as a separate plan after December 31, 1999 and
effective January 1, 2000 the provisions of the RAYSIP were modified to
incorporate the Plan provisions related to Plan eligible and certain union
employees. As of December 31, 1999 the transfer payable to the RAYSIP is
$558,535,238. This represents a complete transfer of all assets and obligations
related to the Plan.
L. Subsequent Event
On April 14, 2000, the Company signed a definitive agreement with
Morrison Knudsen to sell all of the stock of Raytheon Engineers & Constructors,
Inc. and several subsidiaries. Employees of Raytheon Engineers & Constructors
enrolled in the Plan will consequently be treated as vested terminated employees
effective on the closing date of the transaction.
12
M. Master Trust
The following is a summary of net assets available for plan benefits by
Plan under the Master Trust of December 31, 1999:
Raytheon
Raytheon Savings and
Raytheon Employee Investment Raytheon
Savings and Savings and Plan for Defined
Investment Investment Puerto Rico Contribution
Plan Plan Based Master
Employees Trust
Assets
Master trust investments:
At contract value:
Investment contracts $1,365,686,304 $152,581,183 $ 200,776 $1,518,468,263
Common collective trust 24,541,396 2,741,885 3,608 27,286,889
At fair value:
Registered investment companies 3,418,046,502 189,241,065 744,624 3,608,032,191
Common collective trust 897,408,197 62,574,915 233,408 960,216,520
Raytheon Company common stock 767,489,840 85,131,829 302,334 852,924,003
Common stock 279,907,944 7,967,256 - 287,875,200
Participant loans 224,811,843 44,414,163 126,313 269,352,319
-------------- ------------ ---------- --------------
Total investments 6,977,892,026 544,652,296 1,611,063 7,524,155,385
-------------- ------------ ---------- --------------
Cash and cash equivalents 108,497,715 9,876,650 28,117 118,402,482
Receivables:
Employer contributions 456,290 3,556,816 - 4,013,106
Accrued investment income and other
receivables 9,328,981 947,795 3,349 10,280,125
Transfer receivable* 558,535,238 - - 558,535,238
-------------- ------------ ---------- --------------
Total assets $7,654,710,250 $559,033,557 $1,642,529 $8,215,386,336
-------------- ------------ ---------- --------------
Liabilities
Payable for outstanding purchases $ 3,078,603 $ 356,829 $ 1,287 $ 3,436,719
Accrued expenses and other payables 1,903,254 141,490 513 2,045,257
Transfer payable* - 558,535,238 - 558,535,238
-------------- ------------ ---------- --------------
Total liabilities $ 4,981,857 $559,033,557 $ 1,800 $ 564,017,214
-------------- ------------ ---------- --------------
Net assets available for plan benefit $7,649,728,393 $ - $1,640,729 $7,651,369,122
============== ============ ========== ==============
Percentage of total trust assets 99.98% 0.00% 0.02% 100.00%
* See Note K
13
The following is a summary of net assets available for plan benefits by
Plan under the Master Trust as of December 31, 1998:
Raytheon
Savings and
Raytheon Investment
Raytheon Employee Plan for Other prior Raytheon
Savings and Savings and Puerto Rico plans merged Defined
Investment Investment Based December 31, Contributions
Plan Plan Employees 1998 Master Trust
Assets
Master trust investments:
At contract value:
Investment contracts $ 776,630,273 $ 20,713,337 $ 87,670 $ 521,071,601 $ 1,318,502,881
Common collective trusts 15,198,859 405,365 1,716 10,197,509 25,803,449
At fair value:
Registered investment 1,144,209,772 31,699,672 575,071 1,522,564,673 2,699,049,188
companies
Common collective trust 519,296,605 10,496,295 241,676 215,568,215 745,602,791
Raytheon Company common 356,701,412 8,925,215 321,152 549,724,121 915,671,900
stock
Common stock - - - 172,859,819 172,859,819
Participant loans 127,374,239 6,229,708 37,300 117,046,618 250,687,865
-------------- ------------ ---------- -------------- ---------------
Total investments 2,939,411,160 78,469,592 $1,264,585 $3,109,032,556 6,128,177,893
-------------- ------------ ---------- -------------- ---------------
Cash and cash equivalents 80,249,335 2,117,237 13,742 64,877,770 147,258,084
Receivables:
Employer contributions - - - 3,595,261 3,595,261
Accrued investment income and
other receivables 3,214,568 75,163 2,417 4,247,441 7,539,589
Transfer receivable* 3,824,865,272 210,313,280 - - 4,035,178,552
-------------- ------------ ---------- -------------- ---------------
Total assets $6,847,740,335 $290,975,272 $1,280,744 $3,181,753,028 $10,321,749,379
-------------- ------------ ---------- -------------- ---------------
Liabilities
Payable for outstanding $ 861,953 $ 21,566 $ 776 $ 1,047,830 $ 1,932,125
purchases
Accrued expenses and other 1,415,440 32,586 1,019 1,353,322 2,802,367
payables
Transfer payable* - - - 3,179,351,876 3,179,351,876
-------------- ------------ ---------- -------------- ---------------
Total liabilities $ 2,277,393 $ 54,152 $ 1,795 $3,181,753,028 $ 3,184,086,368
-------------- ------------ ---------- -------------- ---------------
Net assets available for plan $6,845,462,942 $290,921,120 $1,278,949 $ - $ 7,137,663,011
benefits ============== ============ ========== ============== ===============
Percentage of total trust assets 95.91% 4.07% 0.02% 0.00% 100.00%
* See Note J
14
The following is a summary of investment income by Plan under the
Master Trust for the year ended December 31, 1999:
Raytheon
Savings and
Raytheon Investment Raytheon
Raytheon Employee Plan for Defined
Savings and Savings and Puerto Rico Contribution
Investment Investment Based Master
Plan Plan Employees Trust
Investment income:
Interest and dividends $ 422,485,598 $ 30,193,248 $ 96,208 $ 452,775,054
Net appreciation/(depreciation):
Registered investment companies 133,664,027 7,294,448 43,969 141,002,444
Common collective trusts 166,058,412 11,577,692 46,175 177,682,279
Raytheon Company common stock (498,666,117) (63,984,845) (240,144) (562,891,106)
Common stock 189,763,388 6,009,679 - 195,773,067
------------- ------------ --------- -------------
(9,180,290) (39,103,026) (150,000) (48,433,316)
------------- ------------ --------- -------------
Total investment income/(loss) $ 413,305,308 $ (8,909,778) $ (53,792) $ 404,341,738
============= ============ ========= =============
1
EXHIBIT 99.2 CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement of Raytheon Company on Form S-3 (File No. 333-82529), Form S-4 (File
No. 333-78219), and Form S-8 (File Nos. 333-56117 and 333-45629) relating to the
financial statements of Raytheon Employee Savings and Investment Plan, which
appears in this Form 10-K/A.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 27, 2000
1
EXHIBIT 99.3
Raytheon Savings and Investment Plan for
Puerto Rico Based Employees
Financial Statements
To Accompany 1999 Form 5500
Annual Report of Employee Benefit Plan
Under ERISA of 1974
For the Year Ended December 31, 1999
The supplemental schedules to the Plan's Form 5500 are not required since the
Plan's assets are held in a Master Trust. Accordingly, the Plan administrator
must file detailed financial information, including the supplemental schedules,
separately with the Department of Labor.
2
Report of Independent Accountants
To the Participants and Administrator of the
Raytheon Savings and Investment Plan for Puerto Rico Based Employees
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Raytheon Savings and Investment Plan for Puerto Rico Based
Employees (the "Plan") at December 31, 1999 and December 31, 1998, and the
changes in net assets available for plan benefits for the year ended December
31, 1999 in conformity with accounting principles generally accepted in the
United States. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note J to the financial statements, the Plan will be transferred
from Raytheon Catalytic, Inc. to Morrison Knudsen upon the expected closing of
the stock sale.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 16, 2000
3
Statements of Net Assets Available for Plan Benefits
As of December 31, 1999 and 1998
1999 1998
Assets
Master trust investments:
At contract value (Notes B, E and K):
Investment contracts $ 200,776 $ 87,670
Common collective trust 3,608 1,716
At fair value (Notes B and K):
Registered investment companies 744,624 575,071
Common collective trust 233,408 241,676
Raytheon Company common stock 302,334 321,152
Participant loans 126,313 37,300
---------- ----------
1,611,063 1,264,585
---------- ----------
Receivables:
Accrued investment income and other receivables 3,349 2,417
Cash and cash equivalents 28,117 13,742
---------- ----------
Total assets $1,642,529 $1,280,744
---------- ----------
Liabilities
Payable for outstanding purchases $ 1,287 $ 776
Accrued expenses and other payables 513 1,019
---------- ----------
Total liabilities $ 1,800 $ 1,795
---------- ----------
Net assets available for plan benefits $1,640,729 $1,278,949
========== ==========
The accompanying notes are an integral part of these financial statements.
4
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1999
Additions to net assets attributable to:
Investment income (Notes B, E and K):
Net depreciation of investments $ (150,000)
Interest and dividends 96,208
----------
(53,792)
Contributions and deferrals:
Employee deferrals 320,305
Employer contributions 170,663
Transfers (Note I) 91,610
----------
582,578
Total additions 528,786
----------
Deductions from net assets attributable to:
Distributions to participants 166,501
Administrative expenses 505
----------
Total deductions 167,006
----------
Increase in net assets 361,780
Net assets, beginning of year 1,278,949
----------
Net assets, end of year $1,640,729
==========
The accompanying notes are an integral part of these financial statements.
5
Notes to Financial Statements
A. Description of Plan
General
The following description of the Raytheon Savings and Investment Plan
for Puerto Rico Based Employees (the "Plan") provides only general information.
Participants should refer to the plan document for a complete description of the
Plan's provisions. The Plan is a defined contribution plan covering certain
Puerto Rico based employees of Raytheon Catalytic, Inc., a wholly owned
subsidiary of Raytheon Company (the "Company"). To participate in the Plan,
eligible employees must have three months of service and may enter the Plan only
on the first pay date of each month. The purpose of the Plan is to provide
participants with a tax-effective means of meeting both short and long-term
investment objectives. The Plan, effective as of January 1, 1995, is intended to
comply with all the requirements for a "qualified profit sharing plan" under the
Revenue Code of Puerto Rico (the "Code"). The Plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
All of the Plan's investments are combined with the investments of
other similar defined contribution plans of Raytheon Company into the Raytheon
Company Master Trust for Defined Contribution Plans ("Master Trust"). The
trustee of the Master Trust maintains a separate account reflecting the
equitable share in the Master Trust of each plan.
Investment income and administrative expenses relating to the Master
Trust are allocated to the individual plans based upon average monthly balances
invested by each plan.
Contributions and Deferrals
Effective January 1, 1999, employees are allowed to defer up to 20% of
their annual compensation up to a maximum of $8,000 to the Plan. Employee
contributions, including rollovers, are invested based on participant elections.
The Company will match contribution amounts equal to 100% of each participant's
deferral, up to a maximum of 4% of compensation. The Company match shall be made
to the Raytheon Common Stock Fund and must be held in that fund until the
beginning of the fifth plan year following the plan year for which the
contribution was made. The Company will also make an Employee Stock Ownership
Portion ("ESOP") contribution equal to one-half of one percent of the
participant's compensation. The ESOP portion of the Plan provides for
investment, primarily in Raytheon Company Class B common stock; however, as
required by the Code, the Plan permits limited diversification after a
participant attains age 55 or completes 10 years of plan participation
(including participation in the prior ESOP plans).
Participants may invest their deferrals in increments of 1% in any
combination of thirteen funds. The investment objectives of the funds range from
conservative investments with an emphasis on preservation of capital to equity
investments with an emphasis on capital gains. The underlying assets that make
up the funds include cash and equivalents, investment contracts, registered
investment companies, common collective trusts, common stock and Raytheon
Company stock.
Dividends and distributions from investments of all fund options are
reinvested in their respective funds; stock dividends, stock splits and similar
changes are also reflected in the funds.
6
Participant Accounts
Each participant's account is credited with the participant's deferral,
the Company's contributions and an allocation of Plan earnings. Plan earnings
are allocated based on account balances by fund. Participant's accounts are
debited with an allocation of Plan expenses.
Vesting
Effective January 1, 1999, all employee and employer contributions and
earnings thereon are fully and immediately 100% vested for each participant who
performs an hour of service on or after January 1, 1999.
Prior to 1999, vesting requirements for employer contributions plus
earnings thereon varied depending upon when an employee became eligible to
participate in the Plan. Vesting generally occurred upon completion of five
years of service or after 3 years of participation or upon retirement, death,
disability, or attainment of retirement age. Forfeitures of the nonvested
portions of terminated participants' accounts are used to reduce required
contributions of the Company. Participants were always immediately vested in
their voluntary deferrals plus actual earnings thereon.
Distributions to Participants
A participant may withdraw all or a portion of deferrals, employer
contributions and related earnings upon attainment of age 59 1/2. For reasons of
financial hardship, as defined in the plan document, a participant may withdraw
all or part of deferrals. On termination of employment, a participant will
receive a lump-sum distribution. If the vested account is valued in excess of
$3,500, the participant has the option to defer distribution. A retiree or a
beneficiary of a deceased participant may defer the distribution until January
of the year following attainment of age 65.
Loans to Participants
A participant may borrow against a portion of the balance in the
participant's account, subject to certain restrictions. The maximum amount of a
loan is one-half of the participant's account balance up to $50,000. The minimum
loan which may be granted is $500. The interest rate applied is equal to the
prime rate published in the Wall Street Journal on the first business day in
each calendar quarter. Loans must be repaid over a period of up to five years by
means of payroll deductions. In certain cases, the repayment period may be
extended up to 15 years. Interest paid to the Plan on loans to participants is
credited to the borrower's account in the investment fund to which repayments
are made.
Administrative Expenses
Certain expenses of administering the Plan are paid by the plan
participants.
7
B. Summary of Significant Accounting Policies
The accompanying financial statements are prepared on the accrual basis
of accounting. The provisions of AICPA Statement of Position 99-3 were adopted
in 1999 and prior period financial statements and disclosures have been
reclassified where appropriate.
The Plan's investment contracts and common collective trust are fully
benefit-responsive and are therefore included in the financial statements at
their contract value, defined as net contributions and deferrals plus interest
earned on the underlying investments at contracted rates. Contract value
approximates fair value. Investments in mutual funds and the common collective
trust are valued at the closing net asset value reported on the last business
day of the year. Investments in securities (common stocks) traded on a national
securities exchange are valued at the last reported sales price on the last
business day of the year. Cash equivalents are short-term money market
instruments and are valued at cost, which approximates fair value. Participant
loans are valued at cost, which approximates fair value.
Security transactions are recorded on the trade date. Except for its
investment contracts (Note E), the Plan's investments are held in a trust.
Payable for outstanding security transactions represents trades which have
occurred but have not yet settled.
The Plan presents in the statement of changes in net assets the net
appreciation (depreciation) in the fair value of its investments, which consists
of the realized gains or losses and the unrealized appreciation (depreciation)
on those investments.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis. Investment income
includes both dividend and interest income.
Benefits are recorded when paid.
The preparation of the financial statements in conformity with
generally accepted accounting principles requires the Plan administrator to make
significant estimates and assumptions that affect the reported amounts of net
assets and liabilities available for benefits at the date of the financial
statements and the changes in net assets available for benefits during the
reporting period and, when applicable, disclosures of contingent assets and
liabilities at the date of the financial statements. Actual results could differ
from the estimates included in the financial statements.
The Plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds and other investment
securities. Investment securities are exposed to various risks, such as interest
rate, market and credit risk. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect participants' account balances
and the amounts reported in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits.
8
C. Investments
The following presents investments that represent 5 percent or more of
the Plan's net assets:
December 31,
1999 1998
Fidelity Equity Income Fund $ 274,126 $ 287,340
Raytheon Company common stock** 302,334 321,152
BT Pyramid Equity Index Fund 233,408 241,676
Fidelity Magellan Fund 153,327 117,182
Fidelity Blue Chip Fund 143,838 109,521
Vanguard PrimeCap Fund 90,575 *
Participant loans 126,313 *
* Investments were less than 5 percent of the Plan's net assets.
** Amount is made up of both participant and non-participant directed funds.
During the year ended December 31, 1999 the Plan's investments
experienced a net depreciation as follows:
Registered investment companies $ 43,969
Common collective trusts 46,175
Raytheon Company common stock (240,144)
---------
$(150,000)
---------
D. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments is as
follows:
December 31,
1999 1998
Net assets:
Raytheon Company common stock $113,962 $77,794
Cash and cash equivalents 5,606 1,071
-------- -------
Total $119,568 $78,865
======== =======
For the Year Ended
December 31, 1999
Changes in net assets:
Contributions $ 169,781
Interest and dividends 232
Net depreciation of investments (108,446)
Distributions to participants (17,263)
Administrative expenses (364)
Net fund transfers (3,237)
---------
$ 40,703
=========
9
E. Investment Contracts
The Plan invests in collateralized fixed income investment portfolios
which are managed by insurance companies and investment management firms. The
credited interest rates are adjusted semiannually to reflect the experienced and
anticipated yields to be earned on such investments, based on their book value.
The annualized average yield and credited interest rates were as follows:
Annualized Credited
average interest
yield rate
For the year ended December 31, 1999:
Chase Manhattan Bank (429666) 5.69% 5.69%
Deutsche Bank AG (FID-RAY-1) 5.59% 5.59%
Fidelity IPL (633-GCDC) 5.75% 5.76%
Fidelity STIF 5.22% 5.74%
State Street Bank and Trust (99054) 5.70% 5.70%
Westdeutsche Landesbank (WLB6173) 5.69% 5.69%
For the year ended December 31, 1998:
Banker's Trust (WBS 92-485) 6.85% 6.85%
Metropolitan Life Insurance Company (GIC GA-12908) 6.58% 6.58%
Metropolitan Life Insurance Company (GIC GA-13659) 6.10% 6.10%
Prudential Asset Management Company (GIC 917163-001) 6.75% 6.75%
Connecticut General (GIC 0025174) 5.58% 5.58%
Fidelity IPL (633-GCDC) 5.62% 5.62%
Monumental Life Insurance Company (GIC BDA00463FR-00) 7.84% 7.84%
The contract values are subject to limitations in certain situations
including large workforce reductions and plan termination.
F. Related Party Transactions
The Plan's trustee is Fidelity Management Trust Company (the
"Trustee"). The Trustee holds the funds for the Plan and is responsible for
managing the Plan's investment assets, executing all investment transactions,
recording approved transactions, and, therefore these transactions qualify as
party-in-interest.
In accordance with the provisions of the Plan, the Trustee acts as the
Plan's agent for purchases and sales of shares of Raytheon Company common stock.
These transactions are performed on a Master Trust level. For the Master Trust,
purchases amounted to $721,986,347 and sales amounted to $204,780,412 for the
year ended December 31, 1999.
10
G. Tax Status
The Plan obtained its latest determination letter in August 1996, in
which the Treasury department of the Commonwealth of Puerto Rico stated that the
Plan, as submitted, was in compliance with the applicable requirements of the
Puerto Rico Income Tax Act of 1954, as amended. Since receiving the
determination letter, the Plan has been amended. The Plan administrator and the
Plan's legal counsel believe that the Plan is designed and being operated in
compliance with the applicable requirements of the aforementioned Act.
H. Plan Termination
Although it has not expressed any intention to do so, the Company
reserves the right under the Plan at any time or times to discontinue its
contributions and to terminate the Plan subject to the provisions of ERISA. In
the event of plan termination, after payment of all expenses and proportional
adjustment of accounts to reflect such expenses, fund losses or profits, and
reallocations, each participant shall be entitled to receive any amounts then
credited to his or her account.
I. Transfers
Transfers include transfers of participant accounts, individually
and/or in-groups, between the Plan and all other plans included in the Master
Trust for those participants and/or groups of participants who changed plans
during the year. Transfers also include transfers of participant accounts,
individually and/or in-groups, between the Plan and similar savings plans of
other companies for those participants who changed companies during the year.
J. Subsequent Event
On April 14, 2000, the Company signed a definitive agreement with Morrison
Knudsen to sell all of the stock of Raytheon Engineers & Constructors, Inc. and
several subsidiaries, including Raytheon Catalytic, Inc., the sponsor of the
Plan. Consequently, as of the closing date of the stock sale, the Plan will be
transferred from the Raytheon controlled group of corporations to the Morrison
Knudsen controlled group of corporations.
11
K. Master Trust
The following is a summary of net assets available for plan benefits by
Plan under the Master Trust as of December 31, 1999:
Raytheon
Raytheon Savings and
Raytheon Employee Investment Plan Raytheon
Savings and Savings and for Puerto Rico Defined
Investment Investment Based Contribution
Plan Plan Employees Master Trust
Assets:
Master trust investments:
At contract value:
Investment contracts $1,365,686,304 $152,581,183 $ 200,776 $1,518,468,263
Common collective trust 24,541,396 2,741,885 3,608 27,286,889
At fair value:
Registered investment
companies 3,418,046,502 189,241,065 744,624 3,608,032,191
Common collective trust 897,408,197 62,574,915 233,408 960,216,520
Raytheon Company
common stock 767,489,840 85,131,829 302,334 852,924,003
Common stock 279,907,944 7,967,256 - 287,875,200
Participant loans 224,811,843 44,414,163 126,313 269,352,319
-------------- ------------ ---------- --------------
Total investments 6,977,892,026 544,652,296 1,611,063 7,524,155,385
-------------- ------------ ---------- --------------
Cash and cash equivalents 108,497,715 9,876,650 28,117 118,402,482
Receivables:
Employer contributions 456,290 3,556,816 - 4,013,106
Accrued investment income
and other receivables 9,328,981 947,795 3,349 10,280,125
Transfer receivable* 558,535,238 - - 558,535,238
-------------- ------------ ---------- --------------
Total assets $7,654,710,250 $559,033,557 $1,642,529 $8,215,386,336
-------------- ------------ ---------- --------------
Liabilities
Payable for outstanding
purchases $ 3,078,603 $ 356,829 $ 1,287 $ 3,436,719
Accrued expenses and other
payables 1,903,254 141,490 513 2,045,257
Transfer payable* - 558,535,238 - 558,535,238
-------------- ------------ ---------- --------------
Total liabilities $ 4,981,857 $559,033,557 $ 1,800 $ 564,017,214
-------------- ------------ ---------- --------------
Net assets available for plan
benefits $7,649,728,393 $ - $1,640,729 $7,651,369,122
============== ============ ========== ==============
Percentage of total trust 99.98% 0.00% 0.02% 100.00%
assets
* The transfer receivable/payable represents the merger of the Raytheon
Employee Savings and Investment Plan into the Raytheon Savings and Investment Plan.
12
The following is a summary of net assets available for plan benefits by
Plan under the Master Trust as of December 31, 1998:
Raytheon
Savings and
Raytheon Investment Raytheon
Raytheon Employee Plan for Defined
Savings and Savings and Puerto Rico Other prior Contribution
Investment Investment Based plans merged Master
Plan Plan Employees 12/31/98 Trust
Assets:
Master trust investments:
At contract value:
Investment contracts $ 776,630,273 $ 20,713,337 $ 87,670 $ 521,071,601 $1,318,502,881
Common collective trust 15,198,859 405,365 1,716 10,197,509 25,803,449
At fair value:
Registered investment
companies 1,144,209,772 31,699,672 575,071 1,522,564,673 2,699,049,188
Common collective trust 519,296,605 10,496,295 241,676 215,568,215 745,602,791
Raytheon Company
common stock 356,701,412 8,925,215 321,152 549,724,121 915,671,900
Common stock - - - 172,859,819 172,859,819
Participant loans 127,374,239 6,229,708 37,300 117,046,618 250,687,865
-------------- ------------ ---------- -------------- ---------------
Total investments 2,939,411,160 78,469,592 1,264,585 3,109,032,556 6,128,177,893
-------------- ------------ ---------- -------------- ---------------
Cash and cash equivalents 80,249,335 2,117,237 13,742 64,877,770 147,258,084
Receivables:
Employer contributions - - - 3,595,261 3,595,261
Accrued investment income
and other receivables 3,214,568 75,163 2,417 4,247,441 7,539,589
Transfer receivable* 3,824,865,272 210,313,280 - - 4,035,178,552
-------------- ------------ ---------- -------------- ---------------
Total assets $6,847,740,335 $290,975,272 $1,280,744 $3,181,753,028 $10,321,749,379
-------------- ------------ ---------- -------------- ---------------
Liabilities
Payable for outstanding
purchases $ 861,953 $ 21,566 $ 776 $ 1,047,830 $ 1,932,125
Accrued expenses and other
payables 1,415,440 32,586 1,019 1,353,322 2,802,367
Transfer payable* - - - 3,179,351,876 3,179,351,876
-------------- ------------ ---------- -------------- ---------------
Total liabilities $ 2,277,393 $ 54,152 $ 1,795 $3,181,753,028 $ 3,184,086,368
-------------- ------------ ---------- -------------- ---------------
Net assets available for
plan benefits $6,845,462,942 $290,921,120 $1,278,949 $ - $ 7,137,663,011
============== ============ ========== ============== ===============
Percentage of total trust 95.91% 4.07% 0.02% 0.00% 100.00%
assets
* Represents the merger of the other prior plans into the Raytheon Savings and Investment Plan and the
Raytheon Employee Savings and Investment Plan.
13
The following is a summary of investment income by Plan under the
Master Trust for the year ended December 31, 1999:
Raytheon
Raytheon Savings and
Raytheon Employee Investment Plan Raytheon
Savings and Savings and for Puerto Rico Defined
Investment Investment Based Contribution
Plan Plan Employees Master Trust
Investment income:
Interest and dividends $ 422,485,598 $ 30,193,248 $ 96,208 $ 452,775,054
Net appreciation/(depreciation)
Registered investment companies 133,664,027 7,294,448 43,969 141,002,444
Common collective trusts 166,058,412 11,577,692 46,175 177,682,279
Raytheon Company common stock (498,666,117) (63,984,845) (240,144) (562,891,106)
Common stock 189,763,388 6,009,679 - 195,773,067
------------- ------------ --------- -------------
(9,180,290) (39,103,026) (150,000) (48,433,316)
------------- ------------ --------- -------------
Total investment income/(loss) $ 413,305,308 $ (8,909,778) $ (53,792) $ 404,341,738
============= ============ ========= =============
1
EXHIBIT 99.3a
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement of Raytheon Company on Form S-3 (File No. 333-82529), Form S-4 (File
No. 333-78219), and Form S-8 (File Nos. 333-56117 and 333-45629) relating to the
financial statements of Raytheon Savings and Investment Plan For Puerto Rico
Based Employees, which appears in this Form 10-K/A.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 27, 2000
