<PAGE>
Filed pursuant to Rule 424(b)(2)
Registration No. 333-44321
PROSPECTUS SUPPLEMENT (To Prospectus Dated February 13, 1998)
$1,400,000,000
$400,000,000 5.70% Notes Due 2003
$750,000,000 6.15% Notes Due 2008
$250,000,000 7% Debentures Due 2028
----------------
INTEREST PAYABLE ON MAY 1 AND NOVEMBER 1
----------------
The 5.70% Notes Due 2003 will mature on November 1, 2003. The Company may not
redeem any of these notes prior to maturity.
The 6.15% Notes Due 2008 will mature on November 1, 2008. The Company may
redeem all or a portion of the Notes Due 2008 at any time.
The 7% Debentures Due 2028 will mature on November 1, 2028. The
Company may redeem all or a portion of the
Debentures Due 2028 at any time.
The redemption prices for the Notes Due 2008 and the Debentures Due 2028
are described in the "Description of the Offered Securities"
section of this Prospectus Supplement.
----------------
<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND RAYTHEON
PUBLIC COMMISSIONS COMPANY
------------ ------------- ------------
<S> <C> <C> <C>
Per Note Due 2003....................... 99.881% .600% 99.281%
Total................................. $399,524,000 $2,400,000 $397,124,000
Per Note Due 2008....................... 99.736% .650% 99.086%
Total................................. $748,020,000 $4,875,000 $743,145,000
Per Debenture Due 2028.................. 99.951% .875% 99.076%
Total................................. $249,877,500 $2,187,500 $247,690,000
</TABLE>
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this Prospectus
Supplement or the accompanying Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Credit Suisse First Boston Corporation and Morgan Stanley & Co. Incorporated
expect to deliver the securities to purchasers on November 5, 1998.
----------------
CREDIT SUISSE FIRST BOSTON MORGAN STANLEY DEAN WITTER
----------------
CHASE SECURITIES INC. J.P. MORGAN & CO.
NATIONSBANC MONTGOMERY SECURITIES LLC SALOMON SMITH BARNEY
----------------
ABN AMRO INCORPORATED BT ALEX. BROWN
CIBC OPPENHEIMER COMMERZBANK CAPITAL MARKETS CORPORATION
FIRST CHICAGO CAPITAL MARKETS, INC. SCOTIA CAPITAL MARKETS
WARBURG DILLON READ
The date of this Prospectus Supplement is November 2, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
Disclosure Regarding Forward-Looking Statements.......................... S-3
Incorporation of Certain Documents By Reference.......................... S-3
The Company.............................................................. S-4
Recent Developments...................................................... S-5
Recent Financial Results................................................. S-6
Use of Proceeds.......................................................... S-6
Capitalization........................................................... S-7
Ratio of Net Debt to Total Capitalization................................ S-7
Ratio of Earnings to Fixed Charges....................................... S-7
Selected Summary Financial Data.......................................... S-8
Description of the Offered Securities.................................... S-9
Certain United States Federal Income Tax Consequences.................... S-11
Underwriting............................................................. S-13
Notice to Canadian Residents............................................. S-14
Validity of Offered Securities........................................... S-15
Experts.................................................................. S-15
PROSPECTUS
Available Information.................................................... 2
Incorporation of Certain Documents by Reference.......................... 3
The Company.............................................................. 4
Recent Developments...................................................... 4
Use of Proceeds.......................................................... 5
Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends............................................................... 5
Description of Debt Securities........................................... 5
Description of Preferred Stock........................................... 16
Description of Common Stock.............................................. 18
Description of Securities Warrants....................................... 23
Plan of Distribution..................................................... 24
Validity of Offered Securities........................................... 25
Experts.................................................................. 25
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. WE ARE OFFERING TO SELL THE
SECURITIES, AND SEEKING OFFERS TO BUY THE SECURITIES, ONLY IN JURISDICTIONS
WHERE OFFERS AND SALES ARE PERMITTED. THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS ACCURATE ONLY AS OF
THE DATE OF THIS PROSPECTUS SUPPLEMENT OR THE DATE OF THE ACCOMPANYING
PROSPECTUS, RESPECTIVELY, REGARDLESS OF THE TIME OF DELIVERY OF THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS OR ANY SALE OF THE
SECURITIES. IN THIS PROSPECTUS SUPPLEMENT, THE "COMPANY," "RAYTHEON," "WE,"
"US" AND "OUR" REFER TO RAYTHEON COMPANY.
S-2
<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus Supplement and the Prospectus include "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical facts included in
this Prospectus Supplement and the Prospectus that the Company expects or
anticipates will or may occur in the future, including, without limitation,
certain statements under "The Company," "Recent Developments" and located
elsewhere herein regarding the Company's financial position, business strategy
and measures to implement that strategy, including changes to operations,
competitive strengths, goals, expansion and growth of the Company's and its
subsidiaries' business and operations, plans, references to future success and
other such matters are forward-looking statements. These statements are based
on certain assumptions and analyses made by the Company in light of its
experience and its perception of historical trends, current conditions and
expected future developments as well as other factors it believes are
appropriate in the circumstances. However, whether actual results and
developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, including without limitation:
(1) the significant considerations discussed in this Prospectus Supplement and
the Prospectus, (2) competition from others, (3) the ability of the Company to
successfully integrate TI Defense (as defined) and Hughes Defense (as defined)
and to consolidate activities and operations into Raytheon in a manner that
avoids business disruptions and achieves anticipated cost and revenue
synergies, (4) the ability of the Company to successfully implement its
consolidation plans for Raytheon Engineers & Constructors, (5) the magnitude
and timing of new business awards, (6) declines in the procurement portion of
the U.S. defense budget, (7) changes in general economic and business
conditions, (8) other factors which might be described from time to time in
the Company's filings with the Commission and (9) other factors which are
beyond the control of the Company and its subsidiaries. Consequently, all of
the forward-looking statements made in this Prospectus Supplement and the
Prospectus are qualified by these cautionary statements, and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequences to or effects on the Company and its subsidiaries or
their businesses or operations. Additionally, important factors that could
cause actual results to differ materially from the Company's expectations
("cautionary statements") are disclosed in the documents incorporated by
reference herein, including statements under "Item 1--Business" of Raytheon
Company's Annual Report on Form 10-K for the year ended December 31, 1997. All
subsequent forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by the
cautionary statements. The Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-
looking statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Securities and
Exchange Commission after the date of the accompanying Prospectus, are
incorporated herein by reference:
(a) The Company's Quarterly Reports on Form 10-Q for the periods ended March
29, 1998, June 28, 1998 and September 27, 1998; and
(b) The Company's Proxy Statement, dated April 15, 1998, for its 1998 Annual
Meeting of Stockholders.
S-3
<PAGE>
THE COMPANY
Raytheon Company ("Raytheon" or the "Company") is a global technology
leader, with worldwide 1997 pro forma sales of more than $20 billion. The
Company provides products and services in the areas of defense and commercial
electronics, business and special mission aircraft, and engineering and
construction. Raytheon has operations throughout the United States and serves
customers in more than 80 countries around the world. In the past 18 months,
Raytheon has acquired the defense systems and electronics business of Texas
Instruments ("TI Defense") and merged with the defense business of Hughes
Electronics Corporation ("Hughes Defense").
ELECTRONICS
Defense Electronics. Raytheon's defense electronics businesses are engaged
in the design, manufacture and service of advanced electronic devices,
equipment and systems for both government and commercial customers. In
addition to defense electronics systems, Raytheon has been successful in the
conversion of certain defense electronics technologies to commercial and non-
defense applications such as air traffic control, environmental monitoring and
communications.
Simultaneously with the consummation of the merger with Hughes Defense on
December 17, 1997, Raytheon announced the creation of Raytheon Systems Company
("RSC") to integrate Raytheon's defense electronics businesses. RSC includes
the business units of Raytheon formerly known as Raytheon Electronic Systems,
Raytheon E-Systems and Raytheon TI Systems, along with Hughes Defense. RSC
currently consists of the following five business units:
. Defense Systems--anti-tactical ballistic missile systems; air defense;
air-to-air, surface-to-air, and air-to-ground missiles; naval and
maritime systems; ship self-defense systems; torpedoes; strike,
interdiction and cruise missiles; and advanced munitions.
. Sensors and Electronic Systems--ground, shipboard and airborne fire
control and surveillance systems; primary and secondary air traffic
control radars; ground- and space-based electro-optic sensors; electronic
warfare; and GPS systems.
. Command, Control, Communication and Information Systems--command, control
and communications systems; air traffic control systems; tactical radios;
satellite communication ground control terminals; wide area surveillance
systems; advanced transportation systems; simulators and simulation
systems; ground-based information processing systems; large scale
information retrieval, processing and distribution systems; and global
broadcast systems.
. Aircraft Integration Systems--integration of airborne surveillance and
intelligence systems; aircraft modifications; and head-of-state aircraft
systems.
. Training and Services--training services and integrated training
programs; technical services; and logistics and support. In connection
with the creation of RSC, a majority of the operations of Raytheon
Service Company were transferred to the Training and Services unit.
Commercial Electronics. Raytheon's commercial electronics businesses
produce, among other things, marine radars and other marine electronics,
transmit/receive modules for satellite communications projects, and other
electronic components for a wide range of applications.
S-4
<PAGE>
AIRCRAFT
Raytheon Aircraft offers one of the broadest product lines in the general
aviation market. Raytheon Aircraft manufactures, markets and supports piston-
powered aircraft, jet props and light and medium jets for the world's
commercial, regional airline and military aircraft markets. Raytheon Aircraft
is the prime contractor for the U.S. Air Force/U.S. Navy Joint Primary
Aircraft Training System (JPATS).
ENGINEERING AND CONSTRUCTION
Raytheon Engineers & Constructors ("RE&C") is one of the largest engineering
and construction firms in the United States, serving markets throughout the
world. RE&C is engaged in the design, construction and maintenance of
facilities and plants operated by a range of customers, including independent
power producers, utilities, petroleum companies, pulp and paper companies,
industrial concerns and governments.
RECENT DEVELOPMENTS
On January 23, 1998, shortly after completion of the merger with Hughes
Defense, the Company announced plans to reduce the workforce at RSC by 8,700
employees and reduce facility space by approximately eight million square
feet. On October 7, 1998 the Company announced plans to accelerate and expand
these actions, reducing employment by a total of 12% by the end of 1998 and
another 4% in 1999, for a total reduction of 16%, or approximately 14,000
positions by the end of 1999. RSC also plans to close an additional
approximately two million square feet of facilities by the end of 1999.
Raytheon also announced on October 7, 1998 the reorganization of certain
business segments within RSC. Specifically, the Information, Intelligence and
Aircraft Integration Systems segment, with the exception of its Aircraft
Systems division, is merging with the Command, Control and Communication
Systems segment to form the new Command, Control, Communication and
Information Systems segment. The former Aircraft Systems division will operate
as a separate segment--the Aircraft Integration Systems segment--within RSC.
RSC will incur significant cash costs as a result of the ongoing
consolidation efforts. Raytheon management believes that the anticipated
benefits of the cost reduction efforts should be progressively realized over
the next few years. The associated costs of these efforts will be incurred
partially in advance of achieving the anticipated benefits. Raytheon currently
estimates that the cash costs to implement the additional cost reduction
actions announced in October 1998 of approximately $300 million, combined with
the costs associated with the consolidation efforts announced in January 1998,
will total approximately $1.1 billion.
In addition, Raytheon may encounter unforeseen difficulties in completing
its integration of TI Defense, Hughes Defense and Raytheon or may not realize
the full benefits expected from such integration. The challenges posed by
these consolidations include the integration of numerous geographically
separated manufacturing facilities and research and development centers. The
success of this transition to an integrated entity will be significantly
influenced by Raytheon's ability to integrate different management structures
and will require significant management time and resources. Any material
delays, disruptions or unexpected costs incurred in connection with such
integration could have a material adverse effect on Raytheon's business,
operating results or financial condition.
S-5
<PAGE>
RECENT FINANCIAL RESULTS
On October 20, 1998, Raytheon announced its financial results for the
quarter ended September 27, 1998. Net income for the quarter was $11 million,
or $0.03 per diluted share, on sales of $4.4 billion. Included in third
quarter net income were special items totaling $284 million after tax, or
$0.83 per diluted share. Excluding the special items, third quarter net income
was $295 million, or $0.86 per diluted share, on sales of $4.7 billion,
representing a 40% increase in net income and a 38% increase in sales over the
same period in 1997. The increases were due principally to the merger with
Hughes Defense.
The special items of $284 million after tax included $50 million for
downsizing at RE&C, $180 million for a change in estimate on certain contracts
and contract claims at RE&C and $54 million to exit a Commercial Electronics
business which includes a Korean joint venture. The contract claims adjustment
at RE&C also resulted in a $310 million reduction in net sales.
Net income for the first nine months of 1998 was $495 million, or $1.45 per
diluted share, including special items of $277 million after tax, on sales of
$14.1 billion. Excluding special items, net income was $772 million, or $2.25
per diluted share, on sales of $14.4 billion, representing a 28% increase in
net income and a 49% increase in sales over the same period in 1997. The
increases were due principally to the merger with Hughes Defense and the
acquisition of TI Defense. The special items included third quarter special
items of $284 million after tax, as described above, and second quarter
charges totaling $54 million after tax and a second quarter gain totaling $61
million after tax.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the 5.70% Notes
Due 2003, 6.15% Notes Due 2008 and 7% Debentures Due 2028 (collectively, the
"Offered Securities") (the "Offering") primarily to repay commercial paper
borrowings and, consequently, the Company intends to reduce its bank-related
commercial paper back-up lines.
S-6
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of Raytheon as of
September 27, 1998 and as adjusted to give effect to the Offering and the
application of the proceeds thereof (without deduction for expenses) as
described under "Use of Proceeds" as if they had occurred on such date. This
table should be read in conjunction with the Selected Summary Financial Data
included elsewhere in this Prospectus Supplement and the financial statements,
including the notes thereto, which are incorporated by reference in the
accompanying Prospectus.
<TABLE>
<CAPTION>
AS OF SEPTEMBER 27, 1998
(UNAUDITED)
--------------------------
ACTUAL AS ADJUSTED
------------ -------------
(IN MILLIONS)
<S> <C> <C>
Notes payable and current portion of long-term
debt......................................... $ 4,053 $ 2,653
Long-term debt
Offered Securities.......................... 1,400
Other long-term debt........................ 5,980 5,980
------------ ------------
Total long-term debt...................... 5,980 7,380
Stockholders' equity.......................... 10,579 10,579
------------ ------------
Total capitalization.................... $ 20,612 $ 20,612
============ ============
</TABLE>
RATIO OF NET DEBT TO TOTAL CAPITALIZATION
The following table sets forth the Company's consolidated ratio of net debt
to total capitalization at September 27, 1998 and at the end of fiscal years
1997, 1996, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
DECEMBER 31,
SEPTEMBER 27, --------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
48.4% 48.4% 43.8% 36.8% 17.9% 14.1%
</TABLE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratio of earnings
to fixed charges for the nine months ended September 27, 1998 and the fiscal
years 1997, 1996, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED FISCAL YEAR ENDED DECEMBER 31,
SEPTEMBER 27, -----------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
------------- ---- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C>
2.4x 2.7x 4.6x 6.0x 12.0x 18.1x
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of net earnings, taxes on income and fixed charges (less capitalized
interest) and fixed charges consist of interest expense, amortization of debt
discount and issuance expense, the portion of rents representative of an
interest factor and capitalized interest.
S-7
<PAGE>
SELECTED SUMMARY FINANCIAL DATA
The following tables present selected financial data for Raytheon. In the
opinion of management, the unaudited consolidated interim financial data for
the nine months ended September 27, 1998 reflect all adjustments (consisting
of only normal recurring items) that are necessary for a fair presentation of
the financial position and results of operations for such period. The fiscal
year-end financial data have been derived from the audited financial
statements of Raytheon incorporated by reference in the accompanying
Prospectus and should be read in conjunction with such financial statements
and notes thereto. The selected financial data of Raytheon for the 1998 fiscal
year and for the nine months ended September 27, 1998 include the results of
TI Defense from July 11, 1997, and the results of Hughes Defense from December
17, 1997.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED FISCAL YEAR ENDED
SEPTEMBER 27, DECEMBER 31,
1998 -------------------------
(UNAUDITED) 1997 1996 1995
------------- ------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
OPERATING DATA:
Net sales........................... $14,088 $13,673 $12,331 $11,804
Operating income.................... 1,275 1,084 1,198 1,118
Interest expense.................... 552 397 256 197
Net income.......................... 495 527 761 792
OTHER DATA:
EBITDA (a).......................... $ 1,972 $ 1,606 $ 1,606 $ 1,733
Depreciation and amortization....... 588 457 369 371
Capital expenditures................ 374 459 406 329
NET CASH PROVIDED BY (USED IN):
Operating activities................ $ (319) $ 963 $ 291 $ 1,175
Investing activities................ 479 (2,856) (938) (2,323)
Financing activities................ (345) 2,053 575 1,155
<CAPTION>
AS OF
SEPTEMBER 27, AS OF DECEMBER 31,
1998 -------------------------
(UNAUDITED) 1997 1996 1995
------------- ------- ------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Net working capital................. $ (605) $(2,653) $ 836 $ 1,497
Total assets........................ 28,712 28,598 11,198 9,907
Notes payable and current portion of
long-term debt..................... 4,053 5,656 2,227 1,216
Long-term debt and capitalized
leases............................. 5,980 4,406 1,500 1,488
Stockholders' equity................ 10,579 10,425 4,598 4,292
</TABLE>
- - --------
(a) EBITDA represents income before interest, income taxes, depreciation
(including certain amounts allocated to corporate overhead that are
included in general and administrative expenses) and amortization. EBITDA
is not intended to represent cash flow or any other measure of performance
reported in accordance with generally accepted accounting principles. The
Company has included EBITDA as it understands that EBITDA is used by
certain investors as one measure of a company's ability to service debt.
S-8
<PAGE>
DESCRIPTION OF THE OFFERED SECURITIES
GENERAL
The Offered Securities will be limited to $1,400,000,000 aggregate principal
amount, consisting of $400,000,000 principal amount of Notes Due 2003,
$750,000,000 principal amount of Notes Due 2008 and $250,000,000 principal
amount of Debentures Due 2028. The Offered Securities are Senior Debt
Securities as described in the accompanying Prospectus. Each of the Offered
Securities will be senior unsecured obligations of the Company and will rank
pari passu with all senior unsecured debt of the Company and will be senior to
all existing and future subordinated debt of the Company, if any. The Offered
Securities will be issued pursuant to the Senior Indenture (as defined in the
accompanying Prospectus). Interest on the Offered Securities will be payable
in United States dollars at the office or agency of the Company in the Borough
of Manhattan, the City of New York, New York or, at the Company's option, by
check mailed to the address of the registered holder. Interest will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
See "Description of Debt Securities" in the accompanying Prospectus for
additional information concerning the Offered Securities and the Senior
Indenture.
The Notes Due 2003. Each Note Due 2003 will bear interest from November 5,
1998, at 5.70% per annum, payable semiannually on May 1 and November 1 of each
year, commencing May 1, 1999, to the person in whose name the Note Due 2003
is registered, subject to certain exceptions as provided in the Senior
Indenture, at the close of business on April 15 or October 15 (each a "Record
Date"), as the case may be, immediately preceding such May 1 or November 1.
The Notes Due 2003 will mature on November 1, 2003. The Notes Due 2003 are not
redeemable prior to maturity and are not subject to any sinking fund
provision.
The Notes Due 2008. Each Note Due 2008 will bear interest from November 5,
1998, at 6.15% per annum, payable semiannually on May 1 and November 1 of each
year, commencing May 1, 1999, to the person in whose name the Note Due 2008 is
registered, subject to certain exceptions as provided in the Senior Indenture,
at the close of business on the Record Date immediately preceding such May 1
or November 1. The Notes Due 2008 will mature on November 1, 2008 and are not
subject to any sinking fund provision.
The Debentures Due 2028. Each Debenture Due 2028 will bear interest from
November 5, 1998, at 7% per annum, payable semiannually on May 1 and November
1 of each year, commencing May 1, 1999, to the person in whose name the
Debenture Due 2028 is registered, subject to certain exceptions as provided in
the Senior Indenture, at the close of business on the Record Date immediately
preceding such May 1 or November 1. The Debentures Due 2028 will mature on
November 1, 2028 and are not subject to any sinking fund provision.
OPTIONAL REDEMPTION
The Notes Due 2008 and the Debentures Due 2028 will be redeemable as a whole
at any time or in part from time to time, at the option of the Company, at a
redemption price equal to the greater of (i) 100% of the principal amount of
such notes or debentures, as the case may be, and (ii) the sum of the present
values of the remaining scheduled payments of principal and interest thereon
from the redemption date to the applicable maturity date discounted, in each
case, to the redemption date on a
S-9
<PAGE>
semiannual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Treasury Rate plus 20 basis points for the Notes Due 2008 and at the
Treasury Rate plus 25 basis points for the Debentures Due 2028, plus, in any
case, any interest accrued but not paid to the date of redemption.
"Treasury Rate" means, with respect to any redemption date for the Notes Due
2008 or the Debentures Due 2028, as the case may be, (i) the yield, under the
heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Board of Governors of the Federal Reserve System and which establishes yields
on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities," for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the maturity date for the Notes Due 2008 or the
Debentures Due 2028, as the case may be, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall
be determined and the Treasury Rate shall be interpolated or extrapolated from
such yields on a straight line basis, rounding to the nearest month) or (ii)
if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. The Treasury Rate shall be calculated
on the third Business Day preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Notes Due 2008 or the Debentures Due 2028, as the
case may be, to be redeemed that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of such
notes or debentures, as the case may be. "Independent Investment Banker" means
one of the Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means with respect to any redemption date for
the Notes Due 2008 or the Debentures Due 2028, as the case may be, (i) the
average of four Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Morgan Stanley & Co. Incorporated and two other primary U.S.
Government securities dealers in New York City (each, a "Primary Treasury
Dealer") appointed by the Trustee in consultation with the Company; provided,
however, that if any of the foregoing shall cease to be a Primary Treasury
Dealer, the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
S-10
<PAGE>
Notice of any redemption will be mailed at least 30 days but no more than 60
days before the redemption date to each holder of Offered Securities to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the redemption date interest will cease to accrue on the Offered Securities or
portions thereof called for redemption.
DEFEASANCE
Under certain circumstances, Raytheon will be deemed to have discharged the
entire indebtedness on all the outstanding Offered Securities by defeasance,
or to be discharged from certain covenants otherwise applicable to the Offered
Securities and described in the accompanying Prospectus under the heading
"Description of Debt Securities--Certain Covenants of the Corporation." See
"Description of Debt Securities--Defeasance and Covenant Defeasance" in the
accompanying Prospectus for a description of the terms of any such defeasance.
Raytheon has made these defeasance provisions applicable to the Offered
Securities.
GLOBAL SECURITIES
The Offered Securities will each initially be represented by Global
Securities (as defined in the accompanying Prospectus) deposited with DTC and
registered in the name of a nominee of DTC, except in certain circumstances.
See "Description of Debt Securities--Global Securities" in the accompanying
Prospectus for a description of the terms of such Global Securities and the
availability of certified Debt Securities.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
NON-U.S. HOLDERS
The following summary describes certain United States federal income tax
consequences under current law that may be relevant to a beneficial owner of
the Offered Securities that is not (i) a citizen or resident of the United
States, (ii) a corporation created or organized under the laws of the United
States or any State thereof or the District of Columbia or (iii) a person
otherwise subject to United States federal income taxation on its worldwide
income (any of the foregoing, a "Non-U.S. Holder"). This summary addresses
only issues concerning Non-U.S. Holders that are initial holders of the
Offered Securities and that will hold the Offered Securities as capital
assets. It does not address the tax considerations applicable to Non-U.S.
Holders if income or gain in respect of the Offered Securities is effectively
connected with the conduct of a trade or business in the United States.
Generally, payments of interest made with respect to the Offered Securities
to a Non-U.S. Holder will not be subject to United States federal income or
withholding tax, provided that (i) the Non-U.S. Holder does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Company entitled to vote, (ii) the Non-U.S. Holder is
not a controlled foreign corporation for United States tax purposes that is
directly or indirectly related to the Company through stock ownership and
(iii) the Non-U.S. Holder complies with applicable certification requirements.
Any capital gain realized on the sale, exchange, retirement or other
disposition of an Offered Security by a Non-U.S. Holder will not be subject to
United States federal income or withholding taxes unless such Non-U.S. Holder
is an individual who is present in the United States for a period or
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periods aggregating 183 days or more in the taxable year of such sale,
exchange, retirement or other disposition and either has a "tax home" (as
defined for United States federal income tax purposes) in the United States or
an office or other fixed place of business in the United States to which the
sale or disposition is attributable.
The Offered Securities will not be includible in the estate of a Non-U.S.
Holder provided the Non-U.S. Holder does not actually or constructively own
10% or more of the total combined voting power of all classes of stock of the
Company entitled to vote.
PURCHASERS OF OFFERED SECURITIES SHOULD CONSULT THEIR OWN TAX ADVISERS WITH
RESPECT TO THE POSSIBLE APPLICABILITY OF UNITED STATES FEDERAL INCOME,
WITHHOLDING AND OTHER TAXES UPON INCOME AND GAIN REALIZED IN RESPECT OF THE
OFFERED SECURITIES.
INFORMATION REPORTING AND BACKUP WITHHOLDING
A holder of the Offered Securities may be subject to information reporting
and backup withholding at a rate of 31% on certain amounts paid to the holder
unless such holder provides proof of an applicable exemption (including a
general exemption for Non-U.S. Holders and for corporations) or correct
taxpayer identification number, and otherwise complies with applicable
requirements of the information reporting and backup withholding rules. Any
amount withheld under the backup withholding rules may be allowed as a refund
or a credit against such holder's United States federal income tax liability,
provided that the required information is furnished to the Internal Revenue
Service.
1997 REGULATIONS
On October 6, 1997, the United States Department of the Treasury issued new
regulations relating to withholding, backup withholding and information
reporting, which apply to payments made after December 31, 1999, subject to
certain transition rules (the "1997 Regulations"). Among other things, the
1997 Regulations unify certain forms and procedures for certification, and
clarify certain reliance standards. Prospective investors should consult their
own tax advisors regarding the effect of the 1997 Regulations.
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<PAGE>
UNDERWRITING
Under the terms and subject to the conditions in an Underwriting Agreement
dated the date hereof (the "Underwriting Agreement"), the Underwriters named
below (the "Underwriters") for whom Credit Suisse First Boston Corporation and
Morgan Stanley & Co. Incorporated are acting as representatives (the
"Representatives") have severally agreed to purchase, and the Company has
agreed to sell to them, severally, the respective principal amounts of Offered
Securities set forth opposite their names:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITER OF NOTES DUE 2003 OF NOTES DUE 2008 OF DEBENTURES DUE 2028
- - ----------- ----------------- ----------------- ----------------------
<S> <C> <C> <C>
Credit Suisse First Bos-
ton Corporation........ $104,500,000 $195,937,500 $ 65,312,500
Morgan Stanley & Co. In-
corporated............. 104,500,000 195,937,500 65,312,500
Chase Securities Inc. .. 32,000,000 60,000,000 20,000,000
J.P. Morgan Securities
Inc. .................. 32,000,000 60,000,000 20,000,000
NationsBanc Montgomery
Securities LLC......... 32,000,000 60,000,000 20,000,000
Salomon Inc. ........... 32,000,000 60,000,000 20,000,000
ABN AMRO Incorporated... 9,000,000 16,875,000 5,625,000
BT Alex. Brown Incorpo-
rated.................. 9,000,000 16,875,000 5,625,000
CIBC Oppenheimer
Corp. ................. 9,000,000 16,875,000 5,625,000
Commerzbank Capital Mar-
kets Corporation....... 9,000,000 16,875,000 5,625,000
First Chicago Capital
Markets, Inc. ......... 9,000,000 16,875,000 5,625,000
Scotia Capital Markets
(USA) Inc. ............ 9,000,000 16,875,000 5,625,000
Warburg Dillon Read
LLC.................... 9,000,000 16,875,000 5,625,000
------------ ------------ ------------
Total................. $400,000,000 $750,000,000 $250,000,000
============ ============ ============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters are
obligated to take and pay for all the Offered Securities if any are taken. The
Underwriting Agreement provides that, in the event of a default by an
Underwriter, the purchase commitments of non-defaulting Underwriters may be
increased in certain circumstances or the Underwriting Agreement may be
terminated.
Raytheon estimates that its expenses associated with the offer and sale of
the Offered Securities will not be in excess of $100,000.
The Underwriters initially propose to offer a portion of the Offered
Securities directly to the public at the public offering price set forth on
the cover page of this Prospectus Supplement and a portion to certain dealers
at a price that represents a concession not in excess of .375% of the
principal amount in the case of the Notes Due 2003, .400% of the principal
amount in the case of the Notes Due 2008 and .500% of the principal amount in
the case of the Debentures Due 2028. Any Underwriter may allow, and such
dealers may reallow, a concession to certain other dealers not in excess of
.250% of the principal amount in the case of the Notes Due 2003, .250% of the
principal amount in the case of the Notes Due 2008 and .250% of the principal
amount in the case of the Debentures Due 2028. After the initial offering of
the Offered Securities, the offering price and other selling terms may from
time to time be varied by the Representatives.
The Company does not intend to apply for listing of the Offered Securities
on any national securities exchange, but has been advised by the
Representatives that one or more of the Underwriters
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intend to make a market in the Offered Securities, as permitted by applicable
laws and regulations. The Underwriters are not obligated, however, to make a
market in the Offered Securities and any such market-making may be
discontinued at any time at the sole discretion of the Underwriters.
Accordingly, no assurance can be given as to the liquidity of, or the
existence of trading markets for, the Offered Securities.
The Company and the Underwriters have agreed to indemnify each other against
certain liabilities, including civil liabilities under the Securities Act of
1933, as amended, or contribute to payments they may be required to make in
respect thereof.
From time to time, certain of the Underwriters and certain of their
affiliates have engaged in transactions with and performed services, including
investment and/or commercial banking services, for Raytheon and certain of its
subsidiaries in the ordinary course of business and may continue to engage in
such transactions with or perform such services for Raytheon and certain of
its subsidiaries.
The Representatives, on behalf of the Underwriters, may engage in over-
allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Securities Exchange Act
of 1934, as amended. Over-allotment involves syndicate sales in excess of the
offering size, which creates a syndicate short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Offered Securities in the open market
after the distribution has been completed in order to cover syndicate short
positions. Penalty bids permit the Representatives to reclaim a selling
concession from a syndicate member when the Offered Securities originally sold
by such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Offered
Securities to be higher than it would otherwise be in the absence of such
transactions. These transactions, if commenced, may be discontinued at any
time.
NOTICE TO CANADIAN RESIDENTS
Resale Restrictions. The distribution of the Offered Securities in Canada is
being made only on a private placement basis exempt from the requirement that
Raytheon prepare and file a prospectus with the securities regulatory
authorities in each province where trades of Offered Securities are effected.
Accordingly, any resale of the Offered Securities in Canada must be made in
accordance with applicable securities laws which will vary depending on the
relevant jurisdiction, and which may require resales to be made in accordance
with available statutory exemptions or pursuant to a discretionary exemption
granted by the applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the Offered
Securities.
Representations of Purchasers. Each purchaser of Offered Securities in
Canada who receives a purchase confirmation will be deemed to represent to
Raytheon and the dealer from whom such purchase confirmation is received that
(i) such purchaser is entitled under applicable provincial securities laws to
purchase such Offered Securities without the benefit of a prospectus qualified
under such securities laws; (ii) where required by law, such purchaser is
purchasing as principal and not as agent; and (iii) such purchaser has
reviewed the text above under "Resale Restrictions."
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<PAGE>
Rights of Action (Ontario Purchasers). The Offered Securities are those of a
foreign issuer and Ontario purchasers will not receive the contractual right
of action prescribed by section 32 of the Regulation under the Securities Act
(Ontario). As a result, Ontario purchasers must rely on other remedies that
may be available, including common law rights of action for damages or
rescission or rights of action under the civil liability provisions of the
U.S. federal securities laws.
Enforcement of Legal Rights. All of Raytheon's directors and officers as
well as the experts named herein may be located outside of Canada and, as a
result, it may not be possible for Canadian purchasers to effect service of
process within Canada upon Raytheon or such persons. All or a substantial
portion of the assets of Raytheon and such persons may be located outside of
Canada and, as a result, it may not be possible to satisfy a judgment against
Raytheon or such persons in Canada or to enforce a judgment obtained in
Canadian courts against Raytheon or such persons outside of Canada.
Notice to British Columbia Residents. A purchaser of Offered Securities to
whom the Securities Act (British Columbia) applies is advised that such
purchaser is required to file with the British Columbia Securities Commission
a report within ten days of the sale of any Offered Securities acquired by
such purchaser pursuant to this offering. Such report must be in the form
attached to British Columbia Securities Commission Blanket Order BOR #95/17, a
copy of which may be obtained from Raytheon. Only one such report must be
filed in respect of Offered Securities acquired on the same date and under the
same prospectus exemption.
Taxation and Eligibility For Investment. Canadian purchasers of Offered
Securities should consult their own legal and tax advisors with respect to the
tax consequences of an investment in the Offered Securities in their
particular circumstances and with respect to the eligibility of the Offered
Securities for investment by the purchaser under relevant Canadian
legislation.
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities will be passed upon for the Company
by Thomas D. Hyde, Senior Vice President, General Counsel and Secretary of the
Company, and for the Underwriters by Cravath, Swaine & Moore of New York City.
As of the date of this Prospectus Supplement, Thomas D. Hyde, Esq. holds
18,101 shares of Class B Common Stock and options to acquire 160,018 shares of
Class B Common Stock of the Company.
EXPERTS
The consolidated balance sheets of Raytheon Company as of December 31, 1997
and 1996 and the related statements of income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1997 and
the related financial statement schedule, incorporated by reference in this
Prospectus, have been incorporated herein in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
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