<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 28, 1997
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ............ to ...............
Commission File Number 1-2833
RAYTHEON COMPANY
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation or Organization)
04-1760395
(I.R.S. Employer Identification No.)
141 SPRING STREET, LEXINGTON, MASSACHUSETTS 02173
(Address of Principal Executive Offices) (Zip Code)
(781) 862-6600
(Registrant's telephone number, including area code)
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
NUMBER OF COMMON SHARES OUTSTANDING AT SEPTEMBER 28, 1997: 236,330,807
<PAGE> 2
RAYTHEON COMPANY AND SUBSIDIARIES CONSOLIDATED
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS (Unaudited)
Sept. 28, 1997 Dec. 31, 1996
-------------- -------------
(In thousands)
ASSETS
Cash and marketable securities $ 267,684 $ 138,821
Accounts receivable 953,652 808,715
Federal and foreign income taxes,
including deferred 227,554 246,120
Contracts in process, less progress payments 3,148,259 2,592,006
Inventories 1,652,815 1,590,967
Prepaid expenses 304,005 227,266
------------- ----------
Total current assets 6,553,969 5,603,895
Property, plant and equipment, net 2,046,958 1,802,012
Other assets 6,655,225 3,720,169
------------- -----------
$15,256,152 $11,126,076
============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable and current portion
of long-term debt $ 2,174,785 $ 2,226,935
Accounts payable 1,265,300 1,125,881
Advance payments, less contracts in process 389,327 341,326
Accrued expenses 1,515,709 997,691
------------ -----------
Total current liabilities 5,345,121 4,691,833
Accrued retiree benefits 423,793 249,992
Federal and foreign income taxes,
including deferred 85,765 85,765
Long-term debt 4,386,377 1,500,476
Stockholders' equity 5,015,096 4,598,010
------------ -----------
$15,256,152 $11,126,076
============ ===========
The accompanying notes are an integral part of the financial statements.
<PAGE> 3
<TABLE>
<CAPTION>
RAYTHEON COMPANY AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF INCOME (Unaudited)
Three Months Ended Nine Months Ended
Sept. 28, 1997 Sept. 29, 1996 Sept. 28, 1997 Sept. 29, 1996
-------------- ------------- -------------- --------------
(In thousands except per share data)
<S> <C> <C> <C> <C>
Net sales $3,445,310 $3,032,360 $9,669,204 $8,946,745
---------- ---------- ---------- ----------
Cost of sales 2,635,702 2,428,087 7,426,576 7,004,735
Administrative and selling expenses 269,501 254,358 811,871 781,655
Research and development expenses 120,510 76,862 290,057 254,326
Special charge - 34,000 - 34,000
---------- ---------- ---------- ----------
Total operating expenses 3,025,713 2,793,307 8,528,504 8,074,716
---------- ---------- ---------- ----------
Operating income 419,597 239,053 1,140,700 872,029
---------- ---------- ---------- -----------
Interest expense 119,810 70,827 262,593 185,684
Interest and dividend income (9,291) (60,314) (24,341) (92,884)
Other (income) expense, net (13,189) 2,623 (12,050) (42,613)
---------- ---------- ---------- ----------
Non-operating expense, net 97,330 13,136 226,202 50,187
---------- ---------- ---------- ----------
Income before taxes 322,267 225,917 914,498 821,842
Federal and foreign income taxes 111,047 38,027 310,366 238,069
---------- ---------- ---------- ----------
Net income $ 211,220 $ 187,890 $ 604,132 $ 583,773
========== ========== ========== ==========
Earnings per common share $0.89 $0.80 $2.56 $2.45
Average number of common shares
outstanding during period 236,411 235,932 236,327 237,833
Dividends declared per common share $0.20 $0.20 $0.60 0.60
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE> 4
RAYTHEON COMPANY AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended
Sept. 28, Sept. 29,
1997 1996
--------- ----------
(In thousands)
Cash flows from operating activities:
Net income $ 604,132 $ 583,773
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 325,326 271,321
Special charge - 34,000
Sale of receivables 1,080,500 524,500
Gain on sale of operating unit (13,000) -
Other adjustments, net (1,702,995) (1,934,741)
---------- ----------
Net cash provided by (used in) operating activities 293,963 (521,147)
---------- ----------
Cash flows from investing activities:
Additions to property, plant and equipment (305,381) (287,597)
Payment for purchase of acquired companies,
net of cash received (3,018,277) (584,390)
Proceeds from sale of operating unit, net 522,200 66,551
Additions to intangible assets (8,684) (36,207)
All other, net (86,059) (5,481)
----------- ----------
Net cash used in investing activities (2,896,201) (847,124)
----------- ----------
Cash flows from financing activities:
Change in short-term debt (52,150) 1,721,396
Change in long-term debt 2,885,901 (3,122)
Dividends (141,808) (142,317)
Purchase of treasury shares (65,256) (305,842)
Proceeds under common stock plans 48,722 45,047
All other, net 60,069 4,992
----------- ----------
Net cash provided by financing activities 2,735,478 1,320,154
----------- ----------
Effect of foreign exchange rates on cash (3,986) (663)
----------- ----------
Net increase (decrease) in cash and cash equivalents 129,254 (48,780)
Cash and cash equivalents at beginning of year 137,379 208,614
----------- ----------
Cash and cash equivalents at end of third quarter $ 266,633 $ 159,834
============ ==========
The accompanying notes are an integral part of the financial statements.
<PAGE> 5
RAYTHEON COMPANY AND SUBSIDIARIES CONSOLIDATED
NOTES TO FINANCIAL STATEMENTS
(1) Details of certain balance sheet accounts are as follows:
Sept. 28, 1997 Dec. 31, 1996
-------------- -------------
(In thousands)
Cash and marketable securities
Cash and cash equivalents $ 266,633 $ 137,379
Marketable securities 1,051 1,442
---------- ----------
Total cash and marketable securities $ 267,684 $ 138,821
========== ==========
Inventories
Finished goods $ 371,977 $ 616,660
Work in process 934,847 650,132
Material and purchased parts 503,968 482,152
Excess of current cost over LIFO values (157,977) (157,977)
----------- ----------
Total inventories $1,652,815 $1,590,967
========== ==========
Property, plant and equipment
At cost $4,928,196 $4,490,359
Accumulated depreciation and amortization (2,881,238) (2,688,347)
---------- ----------
Net property, plant and equipment $2,046,958 $1,802,012
========== ==========
Stockholders' equity
Preferred stock, no outstanding shares $ - $ -
Common stock, outstanding shares 236,331 236,250
Additional paid-in capital 353,174 307,451
Equity adjustments (40,670) (11,966)
Retained earnings 4,466,261 4,066,275
---------- ----------
Total stockholders' equity $5,015,096 $4,598,010
========== ==========
(2) In connection with the sale of receivables as noted in the Statement of
Cash Flows, the following special purpose entities were established in
accordance with Statement of Financial Accounting Standards No. 125, Accounting
for Transfers and Servicing of Financial Assets and Extinquishments of
Liabilities: Raytheon Aircraft Receivables Corporation, Raytheon Commercial
Appliances Finance Corporation, Raytheon Appliances/Amana Receivables
Corporation, Raytheon Commercial Appliances Receivables Corporation and Raytheon
Engineers & Constructors Receivables Corporation.
<PAGE> 6
(3) The company will adopt Statement of Financial Accounting Standards No. 128,
Earnings per Share, in the fourth quarter of 1997. The adoption is not expected
to have a material effect on the company's financial position, results of
operations, or earnings per share.
(4) The company will adopt Statement of Financial Accounting Standards No.
130, Reporting Comprehensive Income, in 1998, by making the appropriate
disclosures.
(5) The company will adopt Statement of Financial Accounting Standards No. 131,
Disclosure about Segments of an Enterprise and Related Information, in 1998, by
making the appropriate disclosures.
(6) Certain amounts in the 1996 financial statements have been reclassified to
conform with the 1997 presention.
(7) The information furnished has been prepared from the accounts without audit.
In the opinion of management, the information reflects all adjustments, which
are of a normal recurring nature, necessary for a fair presentation of the
financial statements for the interim periods.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Third Quarter 1997 versus 1996
Raytheon Company reported third quarter earnings of $211.2 million,
or $.89 per share, on record third quarter sales of $3.445 billion.
The third quarter 1997 earnings of $211.2 million, or $.89 per share,
were achieved despite higher non-operating expense of $84 million. This higher
non-operating expense included $49 million of increased interest expense, $51
million of lower interest income primarily associated with non-recurring R&D tax
credits recorded in the third quarter of last year, and $16 million of higher
other income including a $13 million gain on the sale of several operations
within the Major Appliances segment. The sale of these appliance operations
contributed 3 cents per share to the 1997 third quarter earnings.
The third quarter earnings of $211.2 million were up slightly from the
$210.0 million recorded in the third quarter of 1996. The 1996 earnings exclude
a $22.1 million after-tax special charge. Earnings per share of $.89 were flat
with 1996, and 1997 sales of $3.445 billion, including the acquisition of
Raytheon TI Systems, were up 14 percent from the $3.032 billion recorded in
1996. Including the special after-tax charge, reported earnings for the third
quarter of 1996 were $187.9 million or $.80 per share compared to $.89 per share
in the third quarter of 1997.
The 1997 third quarter effective tax rate of 34.5 percent compares to a
19.2 percent effective tax rate, excluding the special charge, during the
comparable period last year reflecting $38 million in nonrecurring R&D tax
credits recorded in 1996.
During the quarter, Raytheon completed the acquisition of Texas
Instruments' (TI) defense business. The bond offering to finance the TI defense
acquisition was successfully completed with substantial over-subscription. The
sale of several operations of the Appliance Group was also completed.
<PAGE> 7
Shortly after the close of the quarter, the Department of Justice gave
approval to the merger of Hughes Electronics' defense operations and Raytheon.
The Hughes defense-Raytheon merger, once completed, will create a combined
company of more than 120,000 employees, with approximately $20 billion in sales,
on a 1996 pro forma basis, of which over $13 billion is attributable to defense
and government electronics. The merger is subject to approval by stockholders of
Raytheon and General Motors, including GM Class H common stockholders.
The Aircraft segment reported record third quarter sales and operating
income of $594 million and $61 million, respectively. The 19 percent increase in
sales and 85 percent increase in operating income over the third quarter of 1996
reflected substantially increased shipments of general aviation aircraft.
The Electronics segment led Raytheon's increase with record third
quarter sales and operating income, as segment sales grew 33 percent and segment
operating income increased 65 percent, compared with the third quarter of 1996.
These increases include partial results for Raytheon TI Systems. Both sales and
operating income were up for Raytheon Electronic Systems, Raytheon E-Systems and
Commercial Electronics compared to the same period a year ago, with record sales
and operating income for the quarter for Raytheon E-Systems, and strong sales
and operating income for Raytheon Electronic Systems and Commercial Electronics.
Raytheon Electronic Systems recorded its third successive quarter of increased
sales and operating income.
The Engineering & Construction segment reported quarterly operating
income of $39 million on revenues of $752 million. Sales were down from the
third quarter of 1996 due to delays in funding of new international orders and a
slower than anticipated pace of several turnkey projects. Operating income was
flat with the third quarter of 1996.
Raytheon Engineers & Constructors has experienced delays in the award
and funding of international projects that have adversely affected its financial
performance during 1997. While the company is trying to address this trend, such
delays are continuing currently.
The Major Appliances segment reported third quarter sales of $297
million and operating income of $6 million. On September 10, Raytheon completed
the sale of the home appliance, heating and air conditioning and commercial
cooking operations of its Appliance Group to Goodman Manufacturing Company, L.
P., of Houston, Texas. Raytheon has retained the commercial laundry and
electronic controls operations of the Appliance Group. Raytheon is a market
leader in commercial laundry. In 1996, these two operations combined accounted
for approximately 20 percent of revenues and 50 percent of profits for the
Appliance Group. Raytheon is continuing its strategic evaluation of these two
businesses.
<PAGE> 8
Segment Data
Three Months Ended Nine Months Ended
Sales Sept. 28, Sept. 29, Sept. 28, Sept. 29,
- ----- 1997 1996 1997 1996
------------------- -------------------
(In millions)
Electronics $1,802 $1,358 $4,791 $3,992
Engineering & Construction 752 792 2,198 2,305
Aircraft 594 498 1,649 1,494
Major Appliances 297 384 1,031 1,156
------ ------ ------ ------
Total sales $3,445 $3,032 $9,669 $8,947
Segment Income
Electronics $ 314 $ 190 $ 803 $ 590
Engineering & Construction 39 39 144 156
Aircraft 61 33 150 105
Major Appliances 6 11 44 55
------ ------ ------ ------
Total segment income $ 420 $ 273 $1,141 $ 906
Segment Income as a
Percent of Sales
Electronics 17.4% 14.0% 16.8% 14.8%
Engineering & Construction 5.2 4.9 6.6 6.8
Aircraft 10.3 6.6 9.1 7.0
Major Appliances 2.0 2.9 4.3 4.8
---- ---- ---- ----
Total segment income 12.2% 9.0% 11.8% 10.1%
as a percent of sales
Certain reclassifications of prior period information were made to conform
to the current year presentation.
Sales to the U. S. government, including Foreign Military Sales, were
$1.621 billion, an increase of $345 million or 27.0 percent from the comparable
quarter of 1996 due principally to the acquisition of Raytheon TI Systems. U. S.
government sales were 47.1 percent of consolidated net sales in 1997, and were
42.1 percent of sales in 1996.
Administration and selling expenses were $269.5 million or 7.8 percent of
sales in 1997 versus $254.4 million or 8.4 percent of sales in 1996. The percent
decline was primarily from record sales in the Aircraft and Electronics
segments.
Research and development expenses were $120.5 million or 3.5 percent of
sales in 1997 versus $76.9 million or 2.5 percent of sales in 1996. Research and
development expenses increased due to the acquisition of Raytheon TI Systems and
increased spending in the Aircraft segment.
Operating income was $419.6 million or 12.2 percent of sales versus $273.1
million or 9.0 percent of sales, excluding the special charge, in 1996.
Operating income in 1997 was 53.7 percent above 1996.
<PAGE> 9
Interest expense increased to $119.8 million in 1997 from $70.8 million
in 1996. The increase was due to higher debt levels from the acquisition of
Raytheon TI Systems and higher short-term interest rates.
Interest and dividend income declined to $9.3 million in 1997 from
$60.3 million in 1996. The 1996 results included accrued interest on a
retroactive federal income tax refund claim.
Other (income) expense, net for 1997 was income of $13.2 million versus
expense of $2.6 million in 1996. The 1997 results included $13.0 million income
before tax from the sale of several operations within the Major Appliances
segment.
The 1997 effective tax rate of 34.5 percent reflects the statutory rate
of 35 percent reduced by Foreign Sales Corporation tax credits and incremental
research and development tax credits applicable to certain government contracts,
partially offset by non-deductible amortization of goodwill.
For reasons discussed above, net income for 1997 was $211.2 million
versus $210.0 million, excluding the special charge, in 1996. The 1996 earnings
including the special charge were $187.9 million.
Earnings per common share for the third quarter of 1997 were $.89
versus $.80, including the special charge, in 1996. The average number of shares
outstanding during the third quarter of 1997 was 236.4 million versus 235.9
million in 1996.
Nine Months 1997 versus 1996
Consolidated net sales during the first nine months of 1997 increased
by 8.1 percent to $9.669 billion from $8.947 billion in 1996. Sales increased in
the Electronics and Aircraft segments, partially offset by lower sales in the
Engineering & Construction and Major Appliances segments.
Sales to the U. S. government were $4.310 billion in the first nine months
of 1997 versus $3.708 billion in 1996 and were 44.6 percent of consolidated net
sales in 1997 versus 41.4 percent in 1996.
Operating income was $1.141 billion or 11.8 percent of sales in 1997
versus $906.0 million or 10.1 percent of sales, excluding the special charge, in
1996. Operating income for the first nine months of 1997 was 25.9 percent above
1996.
Non-operating expense was $226.2 million in 1997 versus $50.2 million
in 1996. Interest expense increased to $262.6 million from $185.7 million in
1996 due principally to the acquisition of Raytheon TI Systems in July 1997, the
acquisitions of Chrysler Technologies and Rust Engineering in the second quarter
of 1996 and higher short-term interest rates. Interest and dividend income
decreased to $24.3 million in 1997 from $92.9 million in 1996. The 1996 results
included accrued interest on a retroactive federal income tax refund claim.
Other income was $12.1 million in 1997 versus $42.6 million in 1996. The 1996
results included $40.0 million income before tax from the release of a
contingency reserve associated with the sale of a business.
The effective tax rate of 33.9 percent in 1997 reflects the statutory
rate of 35 percent reduced principally by Foreign Sales Corporation tax credits
and incremental research and development tax credits applicable to certain
government contracts, partially offset by non-deductible amortization of
goodwill.
<PAGE> 10
For reasons discussed above, net income for 1997 was $604.1 million
versus $605.9 million, excluding the special charge, in 1996. Including the
special charge, net income increased from $583.8 million in 1996 to $604.1
million for the first nine months of 1997.
Earnings per share were $2.56 for the first nine months of 1997 and
$2.45 for the comparable period of 1996, including the special charge. Earnings
per share in 1996 were $2.55 excluding the special charge. The average number of
common shares outstanding was 236.3 million for the first nine months of 1997
versus 237.8 million for 1996. During the first nine months of 1997, outstanding
shares were increased by 1.3 million principally due to the exercise of employee
stock options. These were mostly offset by the repurchase of 1.2 million shares
on the open market at a cost of $65.3 million.
On February 22, 1995, the Board of Directors authorized the repurchase
of up to 12 million shares of the company's common stock. There have been 9.5
million shares purchased under this authorization.
The book value of common stock outstanding at the end of the period was
$21.22 as compared with $19.46 at December 31, 1996 and $18.85 at September 29,
1996.
All share and per share data have been restated for the two-for-one
stock split on October 23, 1995.
Backlog consisted of the following at:
Sept. 28, Dec. 31, Sept. 29,
1997 1996 1996
--------- -------- ---------
(In millions)
Electronics $ 8,757 $ 7,303 $ 6,824
Engineering & Construction 3,167 3,565 3,101
Aircraft 1,543 1,163 1,284
Major Appliances 44 35 45
------- ------- --------
Total backlog $13,511 $12,066 $11,254
U. S. government backlog
included above $ 6,706 $ 5,637 $ 4,918
During the first nine months of 1997 there was a positive cash flow
from operations of $294.0 million versus a negative cash flow of $521.1 million
for the comparable period in 1996. Net income plus depreciation and amortization
provided a positive cash flow of $929.5 million. Working capital requirements,
principally receivables, contracts in process and inventories were $1.703
billion in the period. The company sold $1.081 billion of receivables, including
appliance, general and commuter aviation eligible long-term receivables and
eligible engineering and construction and appliance short-term receivables, to a
bank syndicate and other financial institutions. During the period, the company
used $2.496 billion for net acquisitions and divestitures, $305.4 million for
additions to property, plant and equipment and $141.8 million for payment of
dividends. Principally as a result of the above, total debt increased by $2.834
billion. Short-term debt decreased by $52.2 million. Long-term debt increased by
$2.886 billion due to the acquisition of Raytheon TI Systems which also
increased excess of cost over net assets of acquired companies by $2.921
billion. On August 12, 1997, Raytheon completed a public offering of $3.0
billion aggregate principal amount of Raytheon notes offered with final
maturities of three, five, 10 and 30 years.
<PAGE> 11
Debt, net of cash and marketable securities, was $6.293 billion at
September 28, 1997, as compared with $3.589 billion at December 31, 1996 and
$4.273 billion at September 29, 1996. Net debt as a percentage of total
capitalization was 55.7 percent at September 28, 1997, as compared with 43.8
percent at December 31, 1996 and 49.0 percent at September 29, 1996.
Capital expenditures were $305.4 million for the first nine months of
1997 versus $287.6 million for the first nine months of 1996. Capital
expenditures in 1997 are expected to be moderately above the 1996 level,
excluding the effect of acquisitions.
Dividends declared to stockholders in the first nine months of 1997
were $141.8 million versus $142.3 million in 1996. The dividend rate was $.20
per quarter for the first three quarters of 1997 and for all quarters of 1996.
Total employment was 80,700 at September 28, 1997 versus 75,300 at
December 31, 1996, and 76,400 at September 29, 1996. The increase from September
29, 1996 is due principally to the acquisition of Raytheon TI Systems, partially
offset by the sale of several operations within the Major Appliances segment and
employee reductions in the Aircraft and Engineering & Construction segments.
Credit ratings for the company, based on the acquisition of Raytheon TI
Systems and the company's proposed merger with the defense business of Hughes
Electronics Corporation, have been established by Moody's at P-2 for short-term
borrowing and Baa1 for senior debt, by Standard and Poor's at A-3 for short-term
borrowing and BBB for senior debt. Duff & Phelps has provided ratings of D-2 for
short-term borrowing and BBB+ for senior debt. The company expects that its cash
flow from operations and asset reductions will be sufficient to maintain
investment grade credit ratings and available debt financing will be sufficient
to meet any additional funding requirements in 1997.
The company announced in the third quarter of 1996 that it would exit
the manual-clean range market and dispose of the assets related to that
operation, including its facility located in Delaware, Ohio, and recorded a
$34.0 million pre-tax charge for this closing. The after-tax effect was $22.1
million or $.09 per share.
The company enters into interest rate swaps and foreign
currency forward agreements with commercial and investment banks to reduce the
impact of changes in interest rates and foreign exchange rates on long-term debt
and on purchases, sales and financing arrangements with lenders, vendors,
customers and foreign subsidiaries. The company meets its working capital
requirements mainly with variable rate short-term financing. The company also
enters into foreign exchange forward contracts to minimize fluctuations in the
value of payments due to international vendors and the value of foreign currency
denominated receipts. The hedges used by the company are directly related to a
particular asset, liability, or transaction for which a firm commitment is in
place. The impact on the financial position, liquidity, and results of
operations from likely changes in foreign exchange and interest rates is
immaterial due to the minimizing of risk through the hedging of transactions
related to specific assets, liabilities, or commitments.
Recurring costs associated with the company's environmental compliance
program are not material and are expensed as incurred. Capital expenditures in
connection with the environmental compliance are immaterial. 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
<PAGE> 12
company's responsibility, it is difficult to determine the ultimate outcome
of these matters. However, in the opinion of management, any additional
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.
The company will adopt Statement of Financial Accounting Standards No.
128, Earnings per Share, in the fourth quarter of 1997. The adoption is not
expected to have a material effect on the company's financial position, results
of operations, or earnings per share.
The company will adopt Statement of Financial Accounting Standards No.
130, Reporting Comprehensive Income, in 1998, by making the appropriate
disclosures.
The company will adopt Statement of Financial Accounting Standards No.
131, Disclosures about Segments of an Enterprise and Related Information, in
1998, by making the appropriate disclosures.
Forward Looking Statements
Statements which are not historical facts contained in this report are
forward-looking statements that involve risks and uncertainties. These risks
include, in addition to the specific uncertainties referenced in this report,
the ability to realize anticipated cost efficiencies from the recently completed
acquisition of the defense systems and electronics business of Texas Instruments
and the pending merger of the company with the defense business of Hughes
Electronics Corporation, the effect of worldwide political and market
conditions, the impact of competitive products and pricing and the timing of
awards and contracts, particularly international contracts. Further information
regarding the factors that could cause actual results to differ materially from
projected results can be found in Raytheon's reports filed with the Securities
and Exchange Commission, including our Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 and our Current Reports on Form 8-K dated January
16, 1997 and May 23, 1997.
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - Exhibit 27 Financial Data Schedule (filed only
electronically with the Securities and Exchange Commission).
(b) Reports on Form 8-K:
Raytheon Company Current Reports on Form 8-K dated July 1,
1997, July 14, 1997, October 6, 1997 and October 13, 1997.
SIGNATURE
Pursuant to the requirements 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 (Registrant)
By: /s/ Peter R. D'Angelo
Peter R. D'Angelo
Executive Vice President and
November 11, 1997 Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEPT-28-1997
<CASH> 266,633
<SECURITIES> 1,051
<RECEIVABLES> 953,652
<ALLOWANCES> 0
<INVENTORY> 1,652,815
<CURRENT-ASSETS> 6,553,969
<PP&E> 4,928,196
<DEPRECIATION> 2,881,238
<TOTAL-ASSETS> 15,256,152
<CURRENT-LIABILITIES> 5,345,121
<BONDS> 3,985,199
<COMMON> 236,331
0
0
<OTHER-SE> 4,778,765
<TOTAL-LIABILITY-AND-EQUITY> 15,256,152
<SALES> 9,669,204
<TOTAL-REVENUES> 9,669,204
<CGS> 7,426,576
<TOTAL-COSTS> 7,426,576
<OTHER-EXPENSES> 290,057
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 262,593
<INCOME-PRETAX> 914,498
<INCOME-TAX> 310,366
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