PAGE 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
/X/ Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required] for the fiscal year ended
December 31, 1994.
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required] for the
transition period from............... to ..............
Commission File Number 1-2833
RAYTHEON COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 04-1760395
(State or Other Jurisdiction of
Incorporation or Organization) (I.R.S. Employer Identification No.)
141 SPRING STREET, LEXINGTON, MASSACHUSETTS 02173
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code (617) 862-6600
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, $1.00 par value New York Stock Exchange
Preferred Stock, No par value Chicago Stock Exchange
Pacific Stock Exchange
<PAGE>
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. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the Registrant, as of February 27, 1994, was approximately
$8,587,069,313. 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 28, 1995
<PAGE>
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123,126,188
Documents incorporated by reference and made a part of this Form 10-K:
Portions of Raytheon's Annual Report to Stockholders Part I, Part II,
for the fiscal year ended December 31, 1994 Part IV
Portions of the Proxy Statement for Raytheon's Part III
1995 Annual Meeting which will be filed with the
Commission within 120 days of the close of
Raytheon's fiscal year
<PAGE>
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PART I
ITEM 1. BUSINESS
GENERAL
Raytheon is an international, high technology company which operates in
four businesses: commercial and defense electronics, engineering and
construction, aircraft and major appliances. Its principal business is
the design, manufacture and servicing of advanced electronic devices,
equipment and systems for government and commercial use. Through a
diversification program begun in 1964, Raytheon has expanded into aircraft
products, engineering and construction services, major appliances and
textbook publishing. In recent years, the Company has strengthened its
businesses through consolidation, operational improvement and acquisitions
and diversified core defense technologies into commercial markets while
remaining a strong defense company.
Sales to the United States Government (the "Government"), principally to
the Department of Defense ("DOD"), were $3.930 billion in 1994 and $4.501
billion in 1993 representing 39.3% of total sales in 1994 and 48.9% in
1993. Of these sales, $694 million in 1994 and $779 million in 1993
represented purchases made by the Government on behalf of foreign
governments.
ELECTRONICS SEGMENT
The business and operations of the Electronics segment is conducted by
Raytheon Electronic Systems Division and Raytheon Electronics. In January
1995, the Company combined its Missile Systems, Equipment, Electromagnetic
Systems and Research divisions with Amber Engineering, Inc., Seiscor
Technologies, Inc. and Xyplex, Inc. to form the Raytheon Electronic
Systems Division, which designs, manufactures and services advanced
electronic systems for both governmental and commercial customers.
The principal contributor to electronic systems sales and earnings in
recent years has been and continues to be sales to the United States and
foreign governments of air defense missile systems, subsystems and
components. The Patriot Air Defense System, the Company's largest
program, had sales of $1.089 billion, $1.248 billion and $1.209 billion in
1994, 1993 and 1992, respectively. Other products and services sold
directly or indirectly to the Government include: ship and land based
radar systems for surveillance, target identification, tracking, fire
control, navigation, air traffic control and weather observation; sonar
systems; communications systems; electronic countermeasures systems and
electronic components (see Backlog Discussion, p. 6). Some of the
Government's procurement is for non-military use such as air traffic
<PAGE>
control and weather observation.
Raytheon acts as a prime contractor or major subcontractor for
many different Government programs including those that involve the
development and production of new or improved weapons or other types of
electronics systems or major components of such systems. Over its
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lifetime, a program may be implemented by the award of many different
individual contracts and subcontracts.
The funding of Government programs is usually subject to congressional
appropriations. Although multi-year contracts may be authorized in
connection with major procurements, Congress generally appropriates funds
on a fiscal year basis even though a program may continue for many years.
Consequently, programs are often only partially funded initially, and
additional funds are committed only as Congress makes further
appropriations. The Government is required to adjust equitably a contract
price for additions or reductions in scope or other changes ordered by it.
Generally, Government contracts have provisions for audit, price
redetermination and other profit and cost controls and limitations and may
be terminated, in whole or in part, without prior notice at the
Government's convenience upon the payment of compensation only for work
done and commitments made at the time of termination. In the event of
termination, the contractor may also receive some allowance for profit on
the work performed. The right to terminate for convenience has not had any
significant effect upon Raytheon's business in light of its total
Government business.
Raytheon's Government business is performed under both cost
reimbursement and fixed price prime contracts and subcontracts. Cost
reimbursement contracts provide for the reimbursement of allowable costs
plus the payment of a fee. These contracts fall into three basic types:
(i) cost plus fixed fee contracts which provide for the payment of a fixed
fee irrespective of the final cost of performance, (ii) cost plus
incentive fee contracts which provide for increases or decreases in the
fee, within specified limits, based upon actual results as compared to
contractual targets relating to such factors as cost, performance and
delivery schedule, and (iii) cost plus award fee contracts which provide
for the payment of an award fee determined in the discretion of the
customer based upon the performance of the contractor against pre-
established criteria. Under cost reimbursement type contracts, Raytheon
is reimbursed periodically for allowable costs and is paid a portion of
the fee based on contract progress. Some costs incident to performing
contracts have been made partially or wholly unallowable by statute or
regulation. Examples are charitable contributions, travel costs in excess
of government rates and certain litigation defense costs.
Raytheon's fixed price contracts are either firm fixed price contracts
or fixed price incentive contracts. Under firm fixed price contracts,
Raytheon agrees to perform the contract for a fixed price and as a result
benefits from cost savings and carries the burden of cost overruns. Under
fixed price incentive contracts, Raytheon shares with the Government
<PAGE>
savings accrued from contracts performed for less than target costs and
costs incurred in excess of targets up to a negotiated ceiling price
(which is higher than the target cost) and carries the entire burden of
costs exceeding the negotiated ceiling price. Under such incentive
contracts, Raytheon's profit may also be adjusted up or down depending
upon whether specified performance objectives are met. Under firm fixed
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price and fixed price incentive type contracts, Raytheon usually receives
progress payments monthly from the Government generally in amounts
equalling 85% of costs incurred under the contract. For contracts and
modifications issued after November 11, 1993, progress payments may not
exceed 75% of incurred costs. This rate may be adjusted from time to time
on the basis of the Short Term Commercial Borrowing Rate published by the
Federal Reserve. The remaining amount, including profits or incentive
fees, is billed upon delivery and final acceptance of end items under the
contract.
Raytheon's Government business is subject to specific procurement
regulations and a variety of socio-economic and other requirements.
Failure to comply with such regulations and requirements could lead to
suspension or debarment, for cause, from Government contracting or
subcontracting for a period of time. Among the causes for debarment are
violations of various statutes, including those related to employment
practices, the protection of the environment, the accuracy of records and
the recording of costs. Raytheon has not, at any time, been debarred or
suspended.
Under many Government contracts, Raytheon is required to maintain
facility and personnel security clearances complying with DOD
requirements.
Companies such as Raytheon, which are engaged in supplying defense-
related equipment to the Government, are subject to certain business risks
peculiar to that industry. Among these are: the cost of obtaining trained
and skilled employees; the uncertainty and instability of prices for raw
materials and supplies; the problems associated with advanced designs,
which may result in unforeseen technological difficulties and cost
overruns; and the intense competition and the constant necessity for
improvement in facilities and personnel training. Sales to the Government
may be affected by changes in procurement policies, budget considerations,
changing concepts of national defense, political developments abroad and
other factors.
As a result of the 1985 Balanced Budget and Emergency Deficit Reduction
Control Act, the federal deficit and changing world order conditions, DOD
budgets have been subject to increasing pressure resulting in an
uncertainty as to the future effects of DOD budget cuts. Raytheon has,
nonetheless, maintained a solid foundation of tactical defense systems
which meet the needs of the United States and its allies, as well as
serving a broad government program base and wide range of commercial
electronics businesses. These factors lead management to believe that
there is high probability of continuation of Raytheon's current major
tactical defense programs.
<PAGE>
During the first quarter of 1994 the Company's Board of Directors
approved a company-wide restructuring plan designed to help maintain the
Company's competitive position in a shrinking defense market and improve
productivity in its commercial businesses. The plan is being implemented
over a two-year period and resulted in a one-time, pre-tax charge of $250
million ($162 million after tax). The major elements of the plan include
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the costs of employee separations and relocations, facility consolidations
and facility and equipment disposals.
Raytheon Electronic Systems has successfully expanded its defense
technology and skills into commercial markets such as environmental
monitoring, communications, air traffic control, vessel traffic and
transportation systems. A leader in the field of wide-area environmental
surveillance, Raytheon Electronic Systems is heading a team that will
develop and produce the System for the Surveillance of the Amazon (SIVAM),
an environmental monitoring system that will help Brazil protect natural
resources, sustain economic growth and support proper land use,
conservation and development in the Amazon region. The system is based on
an integrated network of telecommunications, remote satellite sensing and
imagery and ground-based and airborne sensors controlled by regional and
national coordination centers. The parties are in the process of
negotiating the definitive contract.
Raytheon Electronics consists of the Semiconductor Division,
Switchcraft, Inc., Raytheon Marine Company, Raytheon Anschutz GmbH and the
Advanced Device Center. In addition, D.C. Heath and Company, an
educational publisher, is part of the group.
Raytheon Electronics is a strong niche player in semiconductor and audio
components and marine electronics. Electronic products sold to commercial
customers include: marine collision avoidance systems; marine
radiotelephones, radars, autopilots and "Fathometer " depth sounders; and
components such as semiconductor devices, transistors, diodes, integrated
circuits, electronic controls for automobiles and appliances, switches,
jacks and plugs. Some electronic products are manufactured and assembled
for Raytheon outside of the United States.
Raytheon's D.C. Heath and Company division publishes school and college
textbooks and educational software.
AIRCRAFT SEGMENT
During 1994 Raytheon combined the operations of its Beech Aircraft and
Raytheon Corporate Jets subsidiaries to form Raytheon Aircraft Company,
which offers the broadest product line in business aviation. Raytheon
Aircraft manufactures, markets and supports piston-powered aircraft,
jetprops and medium and light jets for the world's commercial, regional
airline and military markets.
Raytheon Aircraft produces"Hawker " medium-sized business jets, which
are sold in domestic and international markets. More than 874 Hawker
aircraft of various models have been sold throughout the world since the
<PAGE>
product line was introduced in 1960 as the de Havilland 125. The single
engine piston-powered Beechcraft Bonanza introduced in 1947 enjoys the
distinction of the longest continuous production of any aircraft in
history. Raytheon Aircraft also produces the twin-engine piston-powered
Baron, several models of turbine-powered aircraft in the Starship and King
Air jetprop product lines, and the Beechjet light business jet and its
military counterpart, the T-1A Jayhawk Trainer sold to the United States
<PAGE>
PAGE 7
Air Force. The Beech 1900D is a stand-up cabin 19-passenger aircraft sold
to commuter airlines and corporate customers. Raytheon Aircraft also
produces two missile target drones for the United States and its allied
forces. Raytheon Aircraft operates fixed base operations at airports
throughout the United States and supports military aircraft throughout the
world.
ENGINEERING AND CONSTRUCTION SEGMENT*
* Formerly the "energy and Environmental" segment, renamed to describe
more accurately the business conducted by the segment. There has been no
change in the segment's business or operations.
The Engineering and Construction segment is comprised of operating
subsidiaries of Raytheon Engineers & Constructors International, Inc.,
including Raytheon Engineers & Constructors, Inc., Raytheon Service
Company and Cedarapids, Inc.
Raytheon Engineers & Constructors is engaged in the design, construction
and maintenance of electricity generating fossil fuel and nuclear plants,
petroleum refining, lube oil, petrochemical, fertilizer, chemical,
plastics, synthetic fuels and environmental treatment plants; metals
manufacturing and processing plants and other types of heavy industrial
plants. In addition, Raytheon Engineers & Constructors provides
engineering services relating to facility and site planning, environmental
assessment and design studies. It also designs and constructs specialty
process, pharmaceutical and biotechnology plants. Customers include
independent power producers, major utility companies, industrial concerns
and the Government.
Raytheon Engineers & Constructors undertakes some engineering and
construction projects on a firm fixed price basis ("lump sum turnkey"),
and as a result benefits from cost savings and carries the burden of cost
overruns.
Raytheon Service Company offers worldwide engineering, construction,
installation, operation, maintenance, environmental and training services,
and supports and maintains other complex military and industrial systems.
Cedarapids, Inc. designs and manufactures a wide range of stationary and
portable aggregate producing equipment, asphalt paving equipment, mixing
plants and soil remediation systems.
MAJOR APPLIANCES SEGMENT
The Major Appliances segment, which consists of Amana Refrigeration,
<PAGE>
Inc. and Speed Queen Company, manufactures and sells household and
commercial appliances under the Amana, Speed Queen, Caloric, Modern Maid,
Glenwood, Huebsch, Menumaster and UniMac brand names. Products include
refrigerators, gas and electric ranges, cooktops, wall ovens and microwave
ovens, as well as home washers and dryers and commercial laundry equipment
for use in coin laundries and institutional settings. The line also
includes freezers, dishwashers, room air conditioners, furnaces, central
<PAGE>
PAGE 8
air conditioning systems and heat pumps. These products are sold to
dealers, distributors and home builders for resale to the customer or for
incorporation into new homes and apartments.
Financial information about Operations by Business Segments and
Operations by Geographic Areas is contained on page 49 of Raytheon's
1994 Annual Report to Stockholders and is incorporated herein by
reference.
BACKLOG
Raytheon's backlog of orders at December 31, 1994 was $8.070 billion
compared with $7.756 billion at the end of 1993. The 1994 amount includes
funded backlog of $3.641 billion from the Government compared with $4.519
billion at the end of 1993. Normally, the Government funds its major
programs only to the dollar level appropriated annually by Congress, even
though the total estimated program values are considerably greater.
Accordingly, Raytheon's Government funded backlog represents only that
amount which has been appropriated and against which Raytheon can be
reimbursed for work performed.
Approximately $2.415 billion of the overall backlog figure represents
the unperformed portion of multi-year direct orders from foreign
governments, of which $1.341 billion is for air defense systems or
components thereof and related services and $1.074 billion is for the
SIVAM environmental monitoring system. Approximately $823 million of the
overall backlog represents non-government foreign backlog.
Aircraft segment backlog was $1.203 billion at the end of 1994 versus
$1.082 billion at the end of 1993.
Backlog in the Engineering and Construction segment was $1.522 billion
at the end of 1994 compared with $1.824 billion at the end of 1993. The
decrease was due to the progress made on turnkey projects combined with
the timing of several key international and domestic turnkey projects.
Design and construction contracts in this segment typically take from
eighteen months to several years to perform.
Approximately $2.509 billion of the $8.070 billion 1994 year-end backlog
is not expected to be filled during the following twelve months.
RESEARCH AND DEVELOPMENT
During 1994, Raytheon derived net sales of $450 million ($686.2 million
in 1993 and $672.6 million in 1992) pursuant to Government contracts for
research and development. In addition, during 1994 Raytheon expended
<PAGE>
$269.6 million on research and development efforts compared with $279.4
million in 1993 and $289.9 million in 1992. These expenditures
principally have been for product development for the Government and for
aircraft products. Approximately 10,000 employees (10,100 for 1993), of
whom 4,300 (4,600 for 1993) hold engineering or scientific degrees, were
actively engaged in research and development at the end of 1994.
<PAGE>
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SUPPLIERS
Delivery of raw materials and supplies to Raytheon is generally
satisfactory. Raytheon is sometimes dependent, for a variety of reasons,
upon sole-source suppliers for procurement requirements. However,
Raytheon has experienced no significant difficulties in meeting production
and delivery obligations because of delays in delivery or reliance on such
suppliers.
COMPETITION
The military and commercial industries in which Raytheon operates are
highly competitive in both military and commercial areas. Raytheon's
competitors range from highly resourceful small concerns, which engineer
and produce specialized items, to large, diversified firms. Products are
subject to an unpredictable and often high degree of obsolescence. The
Electronics segment is a direct participant in most major areas of
development in the defense, space, information gathering, data reduction
and automation fields. Technical superiority and reputation, price,
delivery schedules, financing and reliability are principal competitive
factors considered by electronics customers. About half of the 30 largest
defense contractors in the United States are competitors in the
Electronics segment. Several of the competitors of Raytheon Electronic
Systems Division have relocated production facilities to states where the
cost of doing business is less than in Massachusetts where most of
Raytheon's defense electronics facilities are located.
Competition in the Aircraft segment comes from a number of domestic and
foreign jet, turboprop and piston aircraft manufacturers. Principal
elements of competition in the industry are price, operating costs,
reliability, cabin size and comfort, product quality, speed and service
support.
In the Engineering and Construction segment it is estimated that about
15 firms compete for major business opportunities worldwide. Competition
is based primarily upon technical superiority, project experience and
price. The ability to arrange or otherwise provide financing to customers
is sometimes significant in attracting or retaining clients.
In the Major Appliances segment, quality, warranty, price, advertising
and marketing are all competitive factors. Approximately 24 firms compete
with Raytheon in the appliance field. Of these, Raytheon considers four
firms to be significant competitors.
PATENTS AND LICENSES
<PAGE>
In most of the businesses in which Raytheon is engaged, patents are
prevalent. Raytheon and its subsidiaries own a large number of United
States and foreign patents and patent applications. In addition, rights
under the patents and inventions of others have been acquired through
licenses.
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Raytheon's patent position is deemed adequate for the conduct of its
businesses. Should additional rights be desirable, Raytheon believes that
in most instances they can be acquired on reasonable terms. It is
Raytheon's policy to enforce its own patent rights and to respect the
rights of others. Typically there are a number of infringement claims
pending or threatened both by and against Raytheon. In the opinion of
management, these claims will be disposed of in a satisfactory manner.
<PAGE>
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EMPLOYMENT
At December 31, 1994 Raytheon had 60,200 employees compared with 63,800
employees at the end of 1993. During 1994 the employment level declined
by 4,600 people and 1,000 people were added as a result of acquisitions.
Subsidiaries of Raytheon Engineers & Constructors International, Inc. and
certain other subsidiaries have craft employees engaged for individual
projects not included in Raytheon's employee count. Raytheon considers
its employee relations to be generally satisfactory. Raytheon has, for
the most part, successfully negotiated labor agreements without
significant work stoppages. Over the past ten years, Raytheon has
experienced only one work stoppage: a two-week stoppage at its Amana, Iowa
facility. Negotiations with the primary union representing Raytheon
Electronic Systems Division employees in Massachusetts, whose labor
contract expires in September 1995, will occur in the spring and summer of
1995. As a result of the dramatic decline in defense procurement and the
Company's need to achieve a competition position in this increasingly cost
sensitive market, the Company will seek significant changes to the terms
and conditions of the contract, including wage and benefit concessions.
FOREIGN SALES
Of total sales, Raytheon's sales to customers outside the United States
were 19.6%, 18.4% and 18.7% in 1994, 1993 and 1992, respectively. These
sales were principally in the fields of air defense systems, air traffic
control systems, sonar systems, aircraft products, petrochemical power and
industrial plant design and construction, electronic equipment, computer
software and systems, personnel training, equipment maintenance, and
microwave communication. Financing, to the extent needed for foreign
manufacturing and sales, is generally sought in the countries concerned.
Sales and income from international operations are subject to changes in
currency values, domestic and foreign government policies (including
requirements to expend a portion of program funds in-country) and
regulations, embargoes and international hostilities. Exchange
restrictions imposed by various countries could restrict the transfer of
funds between countries and between Raytheon and its subsidiaries.
Raytheon generally has been able to protect itself against most undue
risks through insurance, foreign exchange contracts, contract provisions,
government guarantees or progress payments.
On occasion Raytheon utilizes the services of sales representatives and
distributors in connection with foreign sales. Such representatives and
distributors normally are paid either commissions or granted resale
discounts in return for services rendered in connection with obtaining
orders.
<PAGE>
Licenses are required from Government agencies under the Export
Administration Act, the Trading with the Enemy Act of 1917 and the Arms
Export Control Act of 1976 (formerly the Foreign Military Sales Act) for
export from the United States of many of Raytheon's products. In the case
of certain sales of defense equipment and services to foreign governments,
the Government's Executive Branch must notify Congress at least 30 days
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prior to authorizing such sales. During that time, Congress may take
action to block the proposed sale.
ITEM 2. PROPERTIES
Raytheon and its subsidiaries operate in a number of plants,
laboratories and office facilities in the United States and abroad.
Raytheon's manufacturing, engineering, research, administrative, sales
and storage floor space aggregated approximately 29 million square feet at
December 31, 1994, more than 97% of which was located in the United
States. Of such total, 56% was owned, 22% was held pursuant to long-term
leases, 16% was held pursuant to short-term leases and 6% was Government-
owned. Raytheon's facilities are suitable and adequate for its current
level of business. In connection with the restructuring plan announced in
March 1994, certain facilities will be disposed of following
consolidation.
Raytheon maintains a wide-spread energy conservation effort in
cooperation with Federal and state agencies. While Raytheon's businesses
generally utilize clean manufacturing processes, such processes at times
utilize chemicals, solvents, gases and other materials which could be
hazardous. Several states have adopted "right-to-know" legislation
entitling employees and, to a lesser extent, the public to information
concerning such materials. Discharge of effluents and smoke particles are
regulated by Federal and state agencies and frequently require permits.
Discharge in excess of permit limitations may result in fines.
Enforcement proceedings may be brought by citizen groups as well as
government agencies. In the opinion of management, Raytheon complies with
these regulations in all material respects.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various stages of investigation and cleanup
relative to remediation of various sites. All appropriate costs incurred
in connection therewith have been expensed. Due to the complexity of
environmental laws and regulations, the varying costs and effectiveness of
alternative cleanup methods and technologies, the uncertainty of insurance
coverage and the unresolved extent of the Company's responsibility, it is
difficult to determine the ultimate outcome of these matters. However, in
the opinion of management, any liability will not have a material effect
on the Company's financial position, liquidity or results of operations
after giving effect to provisions already recorded.
Accidents involving personal injuries and property damage occur in
general aviation travel. When permitted by appropriate government
<PAGE>
agencies, Raytheon Aircraft investigates accidents related to its products
involving fatalities or serious injuries. Through a relationship with
FlightSafety International, Raytheon Aircraft provides initial and
recurrent pilot and maintenance training services to reduce the frequency
of accidents involving its products.
Raytheon Aircraft is a defendant in a number of product liability
<PAGE>
PAGE 13
lawsuits which allege personal injury and property damage and seek
substantial recoveries including, in some cases, punitive and exemplary
damages. Raytheon Aircraft maintains partial insurance coverage against
such claims and maintains a level of uninsured risk determined by
management to be prudent. (See Note J to Raytheon's Financial Statements
for the years ended December 31, 1994, 1993 and 1992.)
The insurance policies for product liability coverage held by Raytheon
Aircraft do not exclude punitive damages, and it is the position of
Raytheon Aircraft and its counsel that punitive damage claims are
therefore covered. Historically, the defense of punitive damage claims
has been undertaken and paid by insurance carriers. Under the law of some
states, however, insurers are not required to respond to judgments for
punitive damages. Nevertheless, to date no judgments for punitive damages
have been sustained.
Defense contractors are subject to many levels of audit and
investigation. Among agencies which oversee contract performance are:
the Defense Contract Audit Agency, the Inspector General, the Defense
Criminal Investigative Service, the General Accounting Office, and the
Department of Justice and Congressional Committees. The Department of
Justice from time to time has convened grand juries to investigate
possible irregularities by Raytheon in governmental contracting.
Various claims and legal proceedings generally incidental to the normal
course of business are pending or threatened against the Company. While
the Company cannot predict the outcome of any of these matters, in the
opinion of management, any liability arising from them will not have a
material effect on the Company's financial position, liquidity or results
of operations after giving effect to provisions already recorded.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
SUBSTITUTE ITEM 4. EXECUTIVE OFFICERS OF REGISTRANT AS OF
MARCH 1, 1995
Gail P. Anderson. Vice President - Human Resources since December 1994.
Prior to assuming his present position Mr. Anderson served as Vice
President - Human Resources, Phillips Petroleum Company from 1986. Age:
52
Shay D. Assad. Vice President - Contracts since July 1994. Prior to
assuming his present position Mr. Assad served as Manager-Contracts,
Missile Systems Division from 1985. Age: 45
<PAGE>
Max E. Bleck. Director since November 1990 and President since March
1991. Prior to assuming his present position, Mr. Bleck served as
President and Chief Executive Officer - Beech Aircraft Corporation from
1987. Age: 67
Philip W. Cheney. Vice President and Group Executive - Commercial
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PAGE 14
Electronics since July 1994. Prior to assuming his present position, Dr.
Cheney served as Vice President - Engineering from February 1990. Age: 59
Peter R. D'Angelo. Vice President, Chief Financial Officer and Controller
since January 1995. Prior to assuming his present position, Mr. D'Angelo
served as Vice President and Corporate Controller from 1992 and as
Controller - Missile Systems Division from 1984. Age: 56
Herbert Deitcher. Senior Vice President - Treasurer since November 1989.
Age: 61
David S. Dwelley. Vice President - Strategic Business Development since
April 1991. Prior to assuming his present position, Mr. Dwelley served as
Vice President - President, Raytheon Europe Limited from 1989. Age: 55
Christoph L. Hoffmann. Senior Vice President - Law, Human Resources and
Corporate Administration, and Secretary since February 1994. Prior to
assuming his present position, Mr. Hoffmann served as Vice President,
Secretary and General Counsel from July 1991 and as Senior Vice President,
General Counsel and Secretary of Pneumo Abex Corporation from 1986. Age:
50
Thomas D. Hyde. Vice President and General Counsel since February 1994.
Prior to assuming his present position, Mr. Hyde served as Assistant
General Counsel from August 1992, as Senior Vice President, General
Counsel and Chief Financial Officer of MNC Financial Inc. Special Assets
Bank from 1991, and as Vice President, Finance Manville Sales Corporation
from 1988. Age: 46
Frank Kendall. Vice President - Engineering since December 1994. Prior
to assuming his present position Mr.Kendall was a civilian employee with
the Department of Defense from 1990. Age: 46
Charles Q. Miller. Senior Vice President and Group Executive and Chairman
and Chief Executive Officer of Raytheon Engineers & Constructors
International, Inc. since March 1993. Prior to assuming his present
position, Mr. Miller served as President, United Engineers & Constructors,
Inc. from 1990. Age: 49
Dennis J. Picard. Director since 1989 and Chairman and Chief Executive
Officer since March 1991. Prior to assuming his present position, Mr.
Picard served as President from 1989. Age: 62
Robert A. Skelly. Vice President - Assistant to the Executive Office.
Prior to assuming his present position, Mr. Skelly served as Vice
President-Administration, Environmental Quality and Procurement since
<PAGE>
September 1992, as Vice President-Public and Financial Relations from
January 1991 and as Assistant to the President from August 1989. Age: 52
Robert L. Swam. Senior Vice President and Group Executive - Appliance
Group since January 1992. Prior to assuming his present position, Mr.
Swam was an independent consultant from 1989. Age 54
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PAGE 15
William H. Swanson. Senior Vice President and General Manager -
Electronic Systems Division since January 1995. Prior to assuming his
present position, Mr. Swanson served as Senior Vice President and General
Manager, Missile Systems Division from 1990. Age: 46
Arthur E. Wegner. Senior Vice President - Chairman and Chief Executive
Officer of Raytheon Aircraft since July 1993. Prior to assuming his
present position, Mr. Wegner served as Executive Vice President and
President of the Aerospace/Defense Sector of United Technologies
Corporation from 1989. Age: 57
Edmund B. Woollen. Vice President - Government Marketing since December
1992. Prior to assuming his present position, Mr. Woollen served as Vice
President-Corporate Marketing from October 1990 and as Director of
Marketing, Government Group from 1986. Age: 50
Each executive officer was elected by the Board of Directors to serve
for a term of one year and until his successor is elected and qualified or
until his earlier removal, resignation or death.
PART II
Item 5. Market For Registrant's Common Equity and Related Stockholder
Matters
This information is contained in the Annual Report to Stockholders for
the year ended December 31, 1994 on page 1, on page 48 under the caption
"Quarterly Financial Data" and on the back cover and is incorporated
herein by reference.
Item 6. Selected Financial Data
This information is included in the "Ten Year Statistical Summary"
contained in the Annual Report to Stockholders for the year ended December
31, 1994 on pages 50 and 51 and is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This information is contained in the Annual Report to Stockholders for
the year ended December 31, 1994 on pages 43 through 48 and is
incorporated herein by reference.
Item 8. Financial Statements and Supplemental Data
Financial statements and supplementary data of the Registrant are
<PAGE>
contained in the Annual Report to Stockholders for the year ended December
31, 1994 on pages 52 through 67 and are incorporated herein by reference.
Schedules required under Regulation S-X are filed as "Financial Statement
Schedules" pursuant to Item 14 hereof.
Item 9. Changes in and Disagreements with Accountants and Financial
<PAGE>
PAGE 16
Disclosure
None.
Item 10. Directors and Executive Officers of the Registrant
Information regarding the directors of the Registrant is contained in
the definitive proxy statement of the Registrant for the annual meeting of
stockholders to be held May 24, 1995 on pages 2 and 3 under the caption
"Election of Directors" and is incorporated herein by reference. See Part
I, Substitute Item 4 of this Form 10-K for information regarding the
executive officers of the Registrant.
Item 11. Executive Compensation
This information is contained in the definitive proxy statement of the
Registrant for the annual meeting of stockholders to be held May 24, 1995
beginning with the caption "Executive Compensation of Directors" on pages
6 through 10 and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
This information is contained in the definitive proxy statement of the
Registrant for the annual meeting of stockholders to be held May 24, 1995
under the caption "Security Ownership" on pages 4 and 5 and is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
This information is contained in the definitive proxy statement of the
Registrant for the annual meeting of stockholders to be held May 24, 1995
under the caption "Other Information" on page 17 and is incorporated
herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K
(a) Financial Statements and Schedules
(1) The following financial statements of Raytheon Company and
Subsidiaries Consolidated, as contained in Raytheon's 1994 Annual
Report to Stockholders, are hereby incorporated by reference:
<PAGE>
Balance Sheets at December 31, 1994 and 1993
Statements of Income for the Years Ended
December 31, 1994, 1993 and 1992
Statements of Stockholders' Equity for the Years Ended
<PAGE>
PAGE 17
December 31, 1994, 1993 and 1992
Statements of Cash Flows for the Years Ended
December 31, 1994, 1993 and 1992
(2) The following financial statement schedule is included herein:
Schedule II, Reserves for the Three Years Ended
December 31, 1994
Schedules I, III and IV are omitted because they are not required,
not applicable or the information is otherwise included.
(b) Reports on Form 8-K
None.
(c) Exhibits
(3.1) Raytheon Company Certificate of Incorporation, as amended through
July 1, 1987, heretofore filed as an Exhibit to Registration
Statement No. 33-15396, is hereby incorporated by reference.
(3.2) Raytheon Company By-Laws, as amended through August 22, 1990,
heretofore filed as an Exhibit to Raytheon's Form 10-K for the
year ended December 31, 1990, are hereby incorporated by
reference.
(4) On July 3, 1986 the Company filed a registration statement on Form
8-A, which form was amended on June 28, 1988, describing certain
rights that may accrue to stockholders in the event that a person
or group acquires beneficial ownership of 20% or more of the
Company's outstanding capital stock or commences a tender or
exchange offer that would result in such person or group owning
25% or more of such outstanding capital stock. Said Registration
Statement is hereby incorporated by reference.
(10.1) Raytheon's 1976 Stock Option Plan, filed as an exhibit to
Raytheon's Registration Statement No. 33-23449 on Form S-8, is
hereby incorporated by reference.
(10.2) Raytheon's 1991 Stock Plan, filed as an exhibit to Raytheon's 1991
Form 10-K, is hereby incorporated by reference.
(13) Raytheon's 1994 Annual Report to Stockholders (furnished for the
information of the Commission and not to be deemed "filed" as part
<PAGE>
of this Report except to the extent that portions thereof are
expressly incorporated by reference).
(22) Subsidiaries of Raytheon Company
(24.1) Consent of Independent Accountants
<PAGE>
PAGE 18
(24.2) Report of Independent Accountants
(28.1) Annual Report on Form 11-K for the (To be filed at a
Raytheon Savings and Investment Plan later date under
Form 10-K/A)
(28.2) Annual Report on Form 11-K for the (To be filed at a
Raytheon Savings and Investment Plan later date under
for Specified Hourly Payroll Employees Form 10-K/A)
(28.3) Annual Report on Form 11-K for the (To be filed at a
Raytheon Subsidiary Savings and later date under
Investment Plan Form 10-K/A)
(28.4) Annual Report on Form 11-K for the (To be filed at a
Raytheon Employee Savings and later date under
Investment Plan Form 10-K/A)
<PAGE>
PAGE 19
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
RAYTHEON COMPANY
/s/ Christoph L. Hoffmann
Christoph L. Hoffmann
Senior Vice President and Secretary
for the Registrant
Dated: March 22, 1995
<PAGE>
PAGE 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE
DATE
Dennis J. Picard Chairman of the Board March 22, 1995
(Dennis J. Picard) and Director (Principal
Executive Officer)
Max E. Bleck President and Director March 22, 1995
(Max E. Bleck)
Charles F. Adams Director March 22, 1995
(Charles F. Adams)
Francis H. Burr Director March 22, 1995
(Francis H. Burr)
Ferdinand Colloredo-Mansfeld Director March 22, 1995
(Ferdinand Colloredo-Mansfeld)
Theodore L. Eliot, Jr. Director March 22, 1995
(Theodore L. Eliot, Jr.)
Barbara B. Hauptfuhrer Director March 22, 1995
(Barbara B. Hauptfuhrer)
Richard D. Hill Director March 22, 1995
(Richard D. Hill)
James N. Land, Jr. Director March 22, 1995
(James N. Land, Jr.)
Thomas L. Phillips Director March 22, 1995
(Thomas L. Phillips)
Warren B. Rudman Director March 22, 1995
(Warren B. Rudman)
Joseph J. Sisco Director March 22, 1995
(Joseph J. Sisco)
<PAGE>
Alfred M. Zeien Director March 22, 1995
(Alfred M. Zeien)
Peter R. D'Angelo Vice President - Chief March 22, 1995
(Peter R. D'Angelo) Financial Officer,
Controller
(Chief Accounting Officer)
<PAGE>
PAGE 21
<TABLE>
RAYTHEON COMPANY AND SUBSIDIARIES CONSOLIDATED
----------------------------------------------
SCHEDULE II - RESERVES
FOR THE THREE YEARS ENDED DECEMBER 31, 1994
-------------------------------------------
(In thousands)
COLUMN A COLUMN B COLUMN C COLUMN D
COLUMN E
Additions
Balance at
Balance at
beginning Charged to costs Charged to other Deductions
end of
Description of period and expenses accounts Note (1)
period
------------------------------------------------------------------------------------------------------------
-------
Year ended December 31, 1994:
<S> <C> <C> <C> <C>
<C>
Allowance for doubtful $25,891 $ 2,473 - $ 7,074
$21,290
accounts receivable
Year ended December 31, 1993:
<S> <C> <C> <C> <C>
<C>
Allowance for doubtful $20,023 $ 4,586 - $(1,282)
$25,891
accounts receivable
<PAGE>
Year ended December 31, 1992:
<S> <C> <C> <C> <C>
<C>
Allowance for doubtful $19,229 $10,336 - $ 9,542
$20,023
accounts receivable
Note (1) - Uncollectible accounts and adjustments, less recoveries
</TABLE>
<PAGE>
PAGE 1
INDEX TO EXHIBITS
(3A) Certificate of Incorporation Incorporated by
Reference
(3B) Bylaws Incorporated by
Reference
(4) Instruments Defining the Rights of
Security Holders Incorporated by
Reference
(10.1) 1976 Stock Option Plan Incorporated by
Reference
(10.2) 1991 Stock Option Plan Incorporated by
Reference
(13) Annual Report to Security Holders (Filed On Form SE dated
March 27, 1995)
(22) Subsidiaries of the Registrant
(24.1) Consent of Independent Accountants
(24.2) Report of Independent Accountants
(28.1) Annual Report on Form 11-K for the (To be filed at a later
Raytheon Savings and Investment Plan date under Form 10-K/A)
<PAGE>
(28.2) Annual Report on Form 11-K for the (To be filed at a later
Raytheon Savings and Investment Plan date under Form 10-K/A)
for Specified Hourly Payroll Employees
(28.3) Annual Report on Form 11-K for the (To be filed at a later
Raytheon Subsidiary Savings and date under Form 10-K/A)
Investment Plan
(28.4) Annual Report on Form 11-K for the (To be filed at a later
Raytheon Employee Savings and date under Form 10-K/A)
Investment Plan
<PAGE>
PAGE 1
EXHIBIT 22
SUBSIDIARIES OF THE REGISTRANT
Subsidiary Where Organized Percentage Owned
---------- --------------- ----------------
Amana Refrigeration, Inc. Delaware 100%
Beech Aircraft Corporation Kansas 100%
(d/b/a Raytheon Aircraft Company)
Cedarapids, Inc. Iowa 100%
Raytheon Engineers &
Constructors, Inc. Delaware 100%
Raytheon Service Company Delaware 100%
<PAGE>
PAGE 1
EXHIBIT 24.1
CONSENT OF
INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statements of Raytheon Company and Subsidiaries Consolidated on Form S-8
(File Nos. 2-55841, 2-87308, 2-93903, 2-93871, 33-3720, 33-3723, 33-5650,
33-10811, 33-14165, 33-15242, 33-15396, 33-15397, 33-15398, 33-21454, 33-
21741, 33-22211, 33-23449, 33-23751, 33-24695, 33-49041 and 33-49033) and
on Form S-3 (File Nos. 33-49045 and 33-49269) of our reports dated January
19, 1995, except as to information presented in Note R for which the date
is February 22, 1995, on our audits of the consolidated financial
statements and financial statement schedules of Raytheon Company and
Subsidiaries Consolidated as of December 31, 1994 and 1993, and for each
of the three years in the period ended December 31, 1994 which reports are
incorporated by reference or included in this Annual Report on Form 10-K.
Coopers & Lybrand L.L.P.
/s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts
March 22, 1995
<PAGE>
PAGE 1
EXHIBIT 24.2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders
Raytheon Company:
Our report on the consolidated financial statements of Raytheon
Company and Subsidiaries Consolidated has been incorporated by reference
in this Form 10-K from page 59 of the 1994 Annual Report to Shareholders
of Raytheon Company. In connection with our audits of such financial
statements, we have also audited the related financial statement schedules
listed in Item 14(a) of this Form 10-K.
In our opinion, the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a
whole, presents fairly, in all material respects, the information
required to be included therein.
Coopers & Lybrand L.L.P.
/s/ Coopers & Lybrand L.L.P.
Boston, Massachusetts
January 19, 1995, except for the
information presented in Note R for
which the date is February 22, 1995.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 200,938
<SECURITIES> 1,243
<RECEIVABLES> 997,568
<ALLOWANCES> (21,290)
<INVENTORY> 1,499,458
<CURRENT-ASSETS> 4,985,491
<PP&E> 3,691,001
<DEPRECIATION> (2,330,221)
<TOTAL-ASSETS> 7,395,394
<CURRENT-LIABILITIES> 3,283,065
<BONDS> 0
<COMMON> 123,322
0
0
<OTHER-SE> 3,804,846
<TOTAL-LIABILITY-AND-EQUITY> 7,395,394
<SALES> 10,012,855
<TOTAL-REVENUES> 10,012,855
<CGS> 7,752,567
<TOTAL-COSTS> 7,752,567
<OTHER-EXPENSES> 519,364
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48,504
<INCOME-PRETAX> 899,939
<INCOME-TAX> 303,063
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 596,876
<EPS-PRIMARY> 4.51
<EPS-DILUTED> 4.48
</TABLE>
