1
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 7, 1998
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
2
Item 5. Other Events
On October 7, 1998, the Registrant announced that the outlook for 1998
third quarter earnings per share before non-recurring charges would be slightly
below analysts' current earnings consensus of $.90 per share and that it would
be taking non-recurring charges totaling $284 million after tax, or $.83 per
share, during the quarter related to Raytheon Engineers & Constructors ("RE&C")
and its Commercial Electronics operation. The Registrant also announced certain
details regarding accelerated and expanded cost reduction efforts at Raytheon
Systems Company, its major defense electronics operation. In connection with
these announcements, the Registrant issued a press release, a copy of which is
attached hereto as Exhibit 99.1 and is specifically incorporated herein by
reference, and the foregoing description is qualified in its entirety by
reference to such press release.
On October 20, 1998, the Registrant announced financial results for
its fiscal quarter ended September 27, 1998. The results included a
restructuring charge for additional downsizing of facilities at RE&C, a charge
for a change in estimate on certain contracts and contract claims at RE&C and a
special charge to exit a business which includes a Korean joint venture. 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 Statements and Exhibits
(c) The following exhibits are filed as part of this report:
99.1 Press release dated October 7, 1998.
99.2 Press release dated October 20, 1998.
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.
RAYTHEON COMPANY
By:/s/ Thomas D. Hyde
Thomas D. Hyde
Senior Vice President and
General Counsel
Dated: October 22, 1998
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EXHIBIT INDEX
Exhibit
Number Description
99.1 Press release, dated October 7, 1998
99.2 Press release, dated October 20, 1998
1
EXHIBIT 99.1
RAYTHEON
Raytheon Targets Growth and Productivity Initiatives to Boost Stockholder Value
FOR IMMEDIATE RELEASE
Contact: Toni Simonetti
781.860.2539
http://www.raytheon.com
RAYTHEON TARGETS GROWTH AND PRODUCTIVITY INITIATIVES TO BOOST STOCKHOLDER
VALUE
Raytheon Systems Company expands and accelerates cost reduction
efforts to meet goals; Engineers & Constructors and Commercial Electronics take
non-recurring charges
LEXINGTON, Mass., (October 7, 1998) -- Raytheon Company (NYSE: RTNA,
RTNB) announced today its intent to grow its existing businesses and capitalize
on new emerging business opportunities through an acceleration and expansion of
cost reduction efforts and the implementation of new productivity improvement
efforts.
"Raytheon has many strengths - including an impressive depth and
breadth of technology and the best margins in the defense electronics business,"
said Daniel P. Burnham, Raytheon president and chief operating officer. "Our
strategy is to concentrate those strengths on our many growth opportunities and
on becoming the most productive competitor in each of our segments. I believe
this, in turn, will inspire the company to achieve even more."
Burnham, who is scheduled to meet with investors and security analysts
tomorrow, said Raytheon has a plan of impressive growth in sales, earnings and
cash generation.
Burnham noted the company is moving aggressively to implement key
initiatives that support operating priorities.
"We will be absolutely single-minded in our efforts to meet our
performance commitments, to break down any barriers remaining in the way of
becoming one company, and to increase shareholder value," said Burnham. "Staying
focused on these priorities, combined with our employees' passion for excellence
and achievement, will lead to a bright future."
Raytheon will accelerate and expand cost reduction actions at its
major defense electronics operation, Raytheon Systems Company (RSC), to meet its
performance objectives and address changing customer needs. RSC intends to
consolidate business operations further, reduce employment levels, and reduce
excess facility space and manufacturing capacity.
"These cost reduction actions are difficult and painful, but are
absolutely necessary to ensure a productive and viable future for this
enterprise," said Burnham. "We are committed to treating our employees with
dignity and respect during this process. For those affected by employment
reductions, we will provide a benefit package as well as career transition
assistance, as we have done in the past."
2
Third Quarter Earnings Advisory
Raytheon also said today that, predominantly because of slowing
business levels in its engineering and construction segment, the outlook for
1998 third quarter earnings per share before non-recurring charges would be
slightly below analysts' current earnings consensus of $0.90 per share. Raytheon
expects to achieve 1998 fourth quarter earnings consensus of $1.08.
The company will report third quarter results on October 20. RSC is
expected to turn in strong results, as is Raytheon Aircraft Company (RAC), whose
performance in 1998 continues to be outstanding. However, Raytheon will be
taking non-recurring charges totaling $284 million after tax, or $0.83 per
share, during the quarter related to the Raytheon Engineers & Constructors and
Commercial Electronics operations, as follows:
A restructuring charge of $50 million after tax, or $0.15 per share,
related to additional downsizing of facilities at Raytheon Engineers &
Constructors (RE&C);
A change in the estimate of the financial impact attributable to the
downturn in the engineering and construction business environment and
unfavorable developments in certain contracts and contract claims at RE&C of
$180 million after tax, or $0.52 per share;
A special charge of $54 million after tax, or $0.16 per share, to exit
a business at Raytheon Commercial Electronics, which includes a Korean joint
venture.
"Raytheon Engineers & Constructors is well on its way to correcting
its problems," Burnham said. "The engineering and construction markets are
weaker than most expected in the face of difficult worldwide economic turmoil.
We've evaluated these problems and have identified solutions, which include
improving cash management, lowering the overhead structure, strengthening the
management team to improve project execution, and sharing risk through
partnerships."
In the Commercial Electronics Group, both our Raytheon Marine and
Cedarapids business units are well ahead of their 1997 performance.
Launch of Six Sigma
"In each of our business segments, we must become the most productive
competitor," said Burnham. "There are tools and techniques to help organizations
change quickly and drive productivity. Six Sigma is the most powerful, and we
will be launching a major endeavor beginning in 1999."
Six Sigma is a technique to identify and eliminate defects
systematically through rigorous analysis and execution. The company already has
strong Six Sigma capabilities, particularly at the Malcolm
Baldrige-award-winning former Texas Instruments Defense Systems & Electronics
operation that is now part of Raytheon Systems Company. In addition, the
Raytheon Learning Institute has a substantial number of trainers able to support
the company's Six Sigma implementation efforts.
3
Burnham said, "Based on these capabilities, the future additional cost
savings that can be achieved from the full implementation of Six Sigma are very
significant."
Raytheon Systems Company
Raytheon Systems Company, which already has an aggressive cost-
reduction program, is taking additional actions to reduce further its employment
levels, facility space and manufacturing capacity. The company now plans to
reduce employment by a total of 12 percent by the end of 1998 and another 4
percent in 1999, for a total reduction of 16 percent, or about 14,000 positions,
over a two-year period. This compares to the earlier target of a 10 percent
reduction, or 8,700 positions, over two years. RSC will also close or downsize
additional facilities in 1998 and 1999, beyond what was announced earlier this
year.
"We are well down the path to meet the restructuring and consolidation
goals we announced last January," said William H. Swanson, a Raytheon Company
executive vice president, and RSC chairman and chief executive officer. "We will
now accelerate our activities."
Specific facility actions over the next two years include:
The Lewisville, Texas, facility will close by the end of 1999. The
Strike Systems Business Unit will relocate to Tucson, Ariz., and the Circuit
Card Assembly (CCA) work will be consolidated with the CCA work in Andover,
Mass.
The Naval and Maritime facility at Mukilteo, Wash. will close by the
end of 1999, and the work will be consolidated at RSC's Portsmouth, R.I.
facility.
The Orangeburg, S.C. plant will close by the end of 1999, and the work
will be relocated to Andover, Mass. and the plant in Forest, Miss.
The Waltham (Mass.) West facility will be closed by the end of 1999,
and the work will be transferred to Andover and Tewksbury, Mass.
The Farmers Branch and Irving, Texas, facilities will be consolidated
into the Arlington, Texas, facility. The Information, Intelligence and Aircraft
Integration Systems (I2AIS) headquarters building in Garland, Texas, will be
closed and the workforce consolidated in another building in Garland.
The San Jose, Calif. facility housing the C3 business unit will close
and the work transferred to State College, Penn. in 1999.
"The past nine months have shown us that we have been able to move
products and programs successfully with resulting significant cost reductions,"
Swanson said. "The successful move of our missile programs is the model we
intend to follow."
Among the reasons cited by Swanson for the actions announced today are:
To take advantage of additional opportunities for cost reduction and
productivity; To increase utilization of company resources, including maximizing
use of facilities; To focus more clearly on core competencies and businesses; To
meet the financial objectives established when the company was created in
January 1998.
"These actions are right for the company, right for the customer and
right for our remaining employees," Swanson said. "It is to everyone's benefit
that we complete the transition as quickly as possible." The actions being taken
at Raytheon Systems Company will not affect Raytheon's third quarter earnings.
4
In addition, RSC is reorganizing certain business segments to better
align the operations with customer needs and to eliminate management redundancy.
Information, Intelligence and Aircraft Integration Systems segment, with the
exception of its Aircraft Systems Division, will merge with Command, Control and
Communication Systems to create Command, Control, Communication and Information
Systems, headquartered in Marlborough, Mass. The Aircraft Systems Division, with
operating locations in Greenville and Waco, Texas, will be established as a
separate operating unit called Aircraft Integration Systems Segment, based in
Waco.
# # #
This news release contains forward-looking statements concerning the
company's consolidation and cost reduction efforts, productivity and performance
initiatives, and EPS objectives and should be read in conjunction with
cautionary statements contained in "Item 1 - Business" in the Raytheon's most
recent Form 10-K.
C-2462
1
EXHIBIT 99.2
Raytheon Reports Record Third Quarter Revenue
FOR IMMEDIATE RELEASE
Contact:
Toni Simonetti
781.860.2539
http://www.raytheon.com
RAYTHEON REPORTS RECORD THIRD QUARTER REVENUE
Greece selects Raytheon for up to $1.5 billion in missile defense,
trainer aircraft
LEXINGTON, Mass. (October 20, 1998) -- Raytheon Company (NYSE: RTNA,
RTNB) today reported third quarter 1998 earnings of $295 million excluding
non-recurring charges, on record sales of $4.7 billion, or $0.86 per diluted
share based on 341.5 million shares outstanding. For the third quarter of 1997,
net income was $211 million, or $0.88 per diluted share, based on 240.3 million
shares of stock outstanding.
Sales and operating income for the third quarter of 1998, excluding
non-recurring items, increased 38 percent and 57 percent, respectively, compared
to last year, reflecting the merger with Hughes defense in late 1997.
Raytheon had previously indicated it would take non-recurring charges
in the third quarter. These charges are:
A restructuring charge of $50 million after tax for additional downsizing
of facilities at Raytheon Engineers & Constructors (RE&C);
A charge of $180 million after tax for a change in estimate on certain
contracts and contract claims at RE&C. In accordance with the company's
accounting practices, the charge resulted in a $310 million reduction in
net sales; and
A special charge of $54 million after tax at Commercial Electronics to exit
a business, which includes a Korean joint venture.
These charges total $284 million on an after-tax basis, or $0.83 per
diluted share.
"We are reporting strong bottom-line results at both Raytheon Systems
Company and Raytheon Aircraft," said Dennis J. Picard, Raytheon chairman and
chief executive officer. He said that both the Raytheon Marine and Cedarapids
business units, which are part of the Commercial Electronics group, are well
ahead of their 1997 performance.
"At Raytheon Engineers & Constructors, we have identified certain
problems and are well on our way to correcting them," he added.
Including the non-recurring special charges, third quarter 1998 net
income was $11 million, or $0.03 per diluted share, on sales of $4.4 billion.
"Raytheon has many strengths - including an impressive depth and
breadth of technology and the best margins in the defense electronics business,"
said Daniel P. Burnham, Raytheon president and chief operating officer. "We
intend to use those strengths to seek out growth opportunities and become the
most productive competitor in each of our segments." Burnham will succeed Picard
as chief executive officer on December 1. Picard will continue as chairman of
the board.
2
Picard noted that Raytheon was selected earlier this month to provide
nearly $1.5 billion in missile systems and military trainer aircraft to Greece;
potentially more than $1.1 billion for Patriot Air Defense Systems; $145 million
for an upgrade to Hawk Air Defense Systems; and more than $200 million for T6-A
trainer aircraft.
"The awards from the Hellenic Ministry of Defense and Hellenic Air
Force are great news for Raytheon, and are solid evidence that we are continuing
to grow our business on the international front," he said. "The combination of
higher performance and lower operating costs than competitive systems make
Patriot far and away the best value air defense system available in the world
today."
Raytheon has deployed Patriot Missile Systems around the globe. The
world's owners and operators of Patriot now include Germany, Israel, Japan,
Kuwait, the Netherlands, Saudi Arabia, Taiwan, and the United States.
Raytheon recently announced its intent to grow its existing businesses
and capitalize on new emerging business opportunities through acceleration and
expansion of cost reduction initiatives and the implementation of new
productivity improvement efforts.
The company's electronics businesses reported third quarter sales of
$3.6 billion, an increase of 58 percent compared with the same period a year
ago, and operating income of $573 million, a 73 percent increase compared with
the same period a year ago. The increase was attributable primarily to the
December 1997 merger with Hughes defense.
Raytheon Systems Company (RSC), which already has an aggressive
cost-reduction program underway, is accelerating and expanding these actions to
further reduce employment levels, facility space and manufacturing capacity in
order to remain competitive and address changing customer needs.
RSC now plans to reduce employment by a total of 12 percent by the end
of 1998 and another 4 percent in 1999, for a total reduction of 16 percent, or
about 14,000 positions over a two-year period. This compares to the earlier
target of a 10 percent reduction, or 8,700 positions, over two years. RSC will
also close or downsize an additional eight major facilities in 1998 and 1999
beyond what was announced in January of this year.
3
"The past nine months have shown us that we have been able to move
products and programs successfully with resulting significant cost reductions,"
said William H. Swanson, Raytheon Company executive vice president and CEO of
RSC. "The successful move of our missile programs is the model we intend to
follow."
Among the reasons cited by Swanson for the additional employment and
facility reductions are:
To take advantage of additional opportunities for cost reduction and
productivity;
To increase utilization of company resources, including maximizing the use
of facilities;
To focus more clearly on core competencies and businesses;
To meet the financial objectives established when RSC was created in
January 1998.
Also during the third quarter, RSC received a subcontract from Ingalls
Shipbuilding division of Litton Industries for work on the next-generation DD 21
Destroyer Program for the U.S. Navy. Raytheon is teamed with Ingalls to develop
one of two competing concept designs over a 14-month period for the opportunity
to participate in producing 32 ships in the program.
Raytheon Engineers & Constructors reported third quarter sales of $556
million, excluding non-recurring charges, compared with $554 million a year ago.
Operating income, excluding the non- recurring charges, was $16 million, a 41
percent decrease compared with the same period a year ago. The engineering and
construction markets have weakened significantly in the face of worldwide
economic turmoil.
"At RE&C, our plan to reduce costs, strengthen project execution, and
become more selective on turnkey projects will result in improved cash
generation and ultimately stronger bottom- line performance," said Picard.
Raytheon Aircraft (RAC) reported third quarter sales of $572 million,
compared with $594 million a year ago, and operating income of $68 million, an
11 percent increase compared with the same period a year ago. RAC continues to
experience improved profit margins in all of its turbine aircraft product lines.
Raytheon Aircraft's Travel Air fractional ownership program also contributed to
the improvement in operating income. While RAC third quarter revenue is down
slightly compared to last year, its year-to-date sales are ahead of last year,
and a strong fourth quarter and year-end total is expected.
During the quarter, Raytheon Travel Air sold its 100th aircraft share,
after only just 12 months into the new program. Designed to offer business
aviation to a broader range of customers, Raytheon Travel Air now has a fleet of
29 aircraft: nine Hawker 800XPs, 13 Beechjet 400As and seven King Air B200s.
Earlier this month, RAC was selected by the Hellenic Ministry of
Defense and Hellenic Air Force to provide primary trainer aircraft, the T-6A.
While final terms for the program still need to be negotiated, the T-6A program
is expected to be worth more than $200 million.
4
"The breadth of RAC's product line of aircraft and services is a
competitive advantage in managing growth," said Burnham. "The company is well
positioned for future growth with the introductions of three new aircraft. At
the same time, RAC is capitalizing on the expanding aviation services markets."
The company's total backlog at the end of the third quarter of 1998
was $22.1 billion, up from $13.5 billion a year ago, principally due to the
merger with Hughes defense. The third quarter 1998 backlog includes U.S.
government backlog of $14.1 billion, and does not include the recently announced
awards from the Hellenic Ministry of Defense and Air Force.
Debt, net of cash and marketable securities, was $9.9 billion at the
end of the third quarter of 1998 compared with $10.1 billion at the end of the
second quarter of 1998, and $9.8 billion at the end of 1997. Net debt as a
percent of capital was 48.4 percent at September 27, 1998. Raytheon is on track
for significant additional debt reduction in the fourth quarter.
Earnings for the first nine months of 1998 were $772 million, or $2.25
per diluted share, excluding non-recurring items, based on 342.5 million average
shares outstanding. Net income for the first nine months of 1997 was $604
million on sales of $9.7 billion, or $2.53 per diluted share, based on 239.0
million average shares outstanding. Including non-recurring items totaling $277
million, net income for the first nine months of 1998 was $495 million, or $1.45
per diluted share, on sales of $14.1 billion.
This news release contains forward-looking statements concerning the
company's financial results and new business awards and should be read in
conjunction with cautionary statements contained in "Item 1 - Business" in
Raytheon's most recent Form 10-K.
###
5
Raytheon Company
Selected Financial Information
Third Quarter 1998
Three Months Ended Nine Months Ended
(In millions, except per
share amounts) 27-Sep-98 28-Sep-97 27-Sep-98 28-Sep-97
Net sales $4,436* $3,445 $14,088* $9,669
====== ====== ======= ======
Cost of sales 3,593 2,636 11,090 7,427
Administrative and
selling expenses 321 269 1,039 812
Research and
development expenses 134 121 432 290
Restructuring and
special charges 168 - 252 -
====== ====== ======= ======
Total operating expenses 4,216 3,026 12,813 8,529
====== ====== ======= ======
Operating income 220* 419 1,275* 1,140
====== ====== ======= ======
Interest expense 186 119 552 262
Interest and dividend income (6) (9) (19) (24)
Other income, net (7) (13) (109) (12)
====== ====== ======= ======
Non-operating expense, net 173 97 424 226
====== ====== ======= ======
Income before taxes 47 322 851 914
Federal and foreign
income taxes 36 111 356 310
====== ====== ======= ======
Net income $11* $211 $495* $604
====== ====== ======= ======
Earnings per common share,
excluding non-recurring items:
Basic $0.87 $0.90 $2.28 $2.56
Diluted $0.86 $0.88 $2.25 $2.53
Earnings per common share:
Basic $0.03 $0.90 $1.46 $2.56
Diluted $0.03 $0.88 $1.45 $2.53
Average common shares outstanding:
Basic 337.8** 235.9 338.2** 235.8
Diluted 341.5** 240.3 342.5** 239.0
* See supplemental schedule for presentation of amounts excluding non-recurring
items.
** Earnings per share calculations for 1998 include 102.6 million shares of
Class A common stock issued in December 1997 in connection with the merger with
Hughes defense.
6
Raytheon Company
Supplemental Financial Information
Third Quarter 1998
Three Months Ended Nine Months Ended
(In millions, except per
share amounts) 27-Sep-98 28-Sep-97 Change 27-Sep-98 28-Sep-97 Change
Net sales, as reported $4,436 $3,445 $14,088 $9,669
Non-recurring Item:
RE&C contracts and
contract claims 310 - 310 -
====== ====== ======= ======
Net sales, excluding
non-recurring item $4,746 $3,445 38% $14,398 $9,669 49%
====== ====== ======= ======
Operating income,
as reported $220 $419 $1,275 $1,140
Non-recurring Items:
RE&C:
Contracts and contract
claims (net of $33 million
state tax benefit) 277 - 277 -
Restructuring (net of $8
million state tax benefit) 77 - 77 -
Commercial Electronics:
Exit of a business 83 - 83 -
Impairment of assets - - 42 -
Write-down of certain
assets - - 42 -
====== ====== ======= ======
Operating income, excluding
non-recurring items $657 $419 57% $1,796 $1,140 58%
====== ====== ======= ======
Net income, as reported $11 $211 $495 $604
Non-recurring Items:
RE&C
Contracts and contract
claims 180 - 180 -
Restructuring 50 - 50 -
Commercial Electronics:
Exit of a business 54 - 54 -
Impairment of assets - - 27 -
Write-down of certain
assets - - 27 -
Gain on divestitures - - (61) -
====== ====== ======= ======
Net income, excluding
non-recurring items $295 $211 40% $772 $604 28%
====== ====== ======= ======
Diluted earnings per share,
excluding non-recurring
items $0.86 $0.88 $2.25 $2.53
Diluted shares outstanding 341.5 240.3 342.5 239.0
7
Raytheon Company
Segment Financial Information
Third Quarter 1998
Segment Income
Sales Segment Income As a Percent of Sales
(In millions) Three Months Ended Three Months Ended Three Months Ended
27-Sep-98 28-Sep-97 27-Sep-98 28-Sep-97 27-Sep-98 28-Sep-97
Defense Systems $1,185 $250 21.1%
Sensors and Electronic Systems 808 125 15.5%
Intelligence, Information and
Aircraft Integration Systems 651 79 12.1%
Command, Control and Communication
Systems, Training, Services,
Commercial Electronics and Other 974 119 12.2%
====== ====
Total Electronics 3,618 $2,297 573 $331 15.8% 14.4%
Engineering and Construction 246(1) 554 (261)(1) 27 -106.1%(1) 4.9%
Aircraft 572 594 68 61 11.9% 10.3%
====== ====== ==== ====
Total $4,436 $3,445 $380(2) $419 8.6%(2) 12.2%
====== ====== ==== ====
8
Segment Income
Sales Segment Income As a Percent of Sales
(In millions) Nine Months Ended Nine Months Ended Nine Months Ended
27-Sep-98 28-Sep-97 27-Sep-98 28-Sep-97 27-Sep-98 28-Sep-97
Defense Systems $3,616 $625 17.3%
Sensors and Electronic Systems 2,195 347 15.8%
Intelligence, Information and
Aircraft Integration Systems 2,021 241 11.9%
Command, Control and Communication
Systems, Training, Services,
Commercial Electronics and Other 3,178 328 10.3%
======= ======
Total Electronics 11,010 $6,402 1,541 $874 14.0% 13.7%
Engineering and Construction 1,408(1) 1,618 (198)(1) 116 -14.1%(1) 7.2%
Aircraft 1,670 1,649 176 150 10.5% 9.1%
======= ====== ====== ======
Total $14,088 $9,669 $1,519(3) $1,140 10.8%(3) 11.8%
======= ====== ====== ======
9
(1) Includes a non-recurring charge of $310 million related to Engineering
and Construction. Excluding this charge, sales, segment income and
segment income as a percent of sales would have been $556 million, $16
million and 2.9%, respectively for the three months ended September
27, 1998 and $1,718 million, $79 million and 4.6%, respectively for
the nine months ended September 27, 1998.
(2) Excludes restructuring charge of $85 million (not including $8 million
state tax benefit) related to Engineering and Construction and special
charge of $83 million related to Commercial Electronics. Segment
income and segment income as a percent of sales, including these
non-recurring charges, was $220 million and 5.0% , respectively for
the three months ended September 27, 1998.
(3) Excludes Q3 restructuring charge of $85 million (not including $8
million state tax benefit) related to Engineering and Construction, Q3
special charge of $83 million related to Commercial Electronics and Q2
special charge of $84 million related to Intelligence, Information and
Aircraft Integration Systems ($8 million) and Commercial Electronics
($76 million). Segment income and segment income as a percent of
sales, including these non-recurring charges, was $1,275 million and
9.1% , respectively for the nine months ended September 27, 1998.
Note: Certain prior year amounts have been reclassified to conform to the
current year presentation, including the reclassification of
Cedarapids Inc. from Engineering and Construction to Commercial
Electronics.
10
Raytheon Company
Other Information
Third Quarter 1998
(In millions, except total employees)
Backlog(1)
27-Sep-98 28-Sep-97
Total Electronics $15,996(2) $9,107
Engineering and Construction 3,712 2,861
Aircraft 2,358(2) 1,543
======= =======
Total $22,066 $13,511
======= =======
U.S. government-funded backlog,
included above $14,135 $6,706
======= =======
Total employees 114,800 80,700
(1) During the third quarter of 1998, Raytheon changed its method of
reporting backlog at certain locations in order to provide
consistency. The company includes the full value of contract awards
when received, excluding multi-year awards and options. The one-time
impact of this change was a $1.1 billion increase to Electronics and a
$0.9 billion increase to Engineering and Construction.
(2) Does not include contract awards from the Hellenic Ministry of Defense
and Hellenic Air Force.
