Amendment No. 1 to Form 10-K
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 10-K/A

(Amendment No. 1)

 


 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2004.

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     

 

Commission File Number 1-13699

 


 

RAYTHEON COMPANY

(Exact Name of Registrant as Specified in its Charter)

 


 

DELAWARE   95-1778500
(State or Other Jurisdiction of Incorporation or Organization)   (I.R.S. Employer Identification No.)

 

870 WINTER STREET, WALTHAM, MASSACHUSETTS 02451

(Address of Principal Executive Offices) (Zip Code)

 

(781) 522-3000

Registrant’s telephone number, including area code

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class


 

Name of Each Exchange on Which Registered


Common Stock, $.01 par value  

New York Stock Exchange

Chicago Stock Exchange

Pacific Exchange

 

 

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   ¨

 

Indicate by check mark whether the registrant is an accelerated filer.    Yes   x    No   ¨

 

The aggregate market value of the voting stock held by non-affiliates of the Registrant, as of June 27, 2004, was approximately $15.5 billion.

 

Number of shares of Common Stock outstanding as of December 31, 2004: 453,096,000.

 

Documents incorporated by reference and made a part of this Form 10-K:

 

Portions of the Definitive Proxy Statement for Raytheon’s 2005 Annual Meeting are incorporated by reference in Part III of this Form 10-K.

 



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EXPLANATORY NOTE

 

Raytheon Company (the “Company” or “Raytheon”) is filing this Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2004 solely to revise Item 6 (Selected Financial Data) by deleting the selected financial data relating to 2001 and 2000 and to make a similar change to Exhibit 12 (Computation of Ratio of Earnings to Fixed Charges).

 

In April 2005, the Company submitted an offer of settlement to the staff of the Enforcement Division of the Securities and Exchange Commission, which the Enforcement Division staff has agreed to recommend to the Commission, to resolve a pending investigation of the Company’s disclosures and accounting practices, primarily related to its Raytheon Aircraft Corporation (“RAC”) commuter aircraft business during the period from 1997 to 2001. This offer of settlement was previously disclosed in a press release and in a Form 8-K dated April 15, 2005. In connection with its investigation, the staff of the Enforcement Division has alleged that, among other matters, approximately $67 million to $240 million of the total $693 million charge the Company took in the third quarter of 2001 related to losses on its commuter assets (the “commuter loss provision”) should have been taken at year-end 2000, and that the commuter loss provision taken in 2001 was thus overstated by a corresponding amount. In offering to settle the pending matter, Raytheon neither admits nor denies these allegations.

 

In connection with the settlement, the Company acknowledges certain past inadequate documentation, disclosure, and accounting practices, and further acknowledges that, in the exercise of reasonable judgment, a portion of the total $693 million charge taken in 2001 should have been recorded at year-end 2000. The Company has not, however, conducted a current detailed analysis for such periods for the purpose of attempting to allocate the commuter loss provision between the two years. The Company believes that such an undertaking now would be unreasonably difficult and burdensome.

 

RAC has not manufactured new commuter aircraft since 2002. The Company formed Raytheon Airline Aviation Services, LLC (“RAAS”) to manage the commuter portfolio, and since the fourth quarter of 2003, the Company has included the financial results of RAAS in the “Other” reporting segment. The Company believes that it would be unduly difficult and burdensome to restate the five-year statistical summary table, particularly when such a restatement would relate to a non-core line of business. RAAS accounted for 0.5%, 0.5% and 0.7%, of the Company’s net sales during 2004, 2003 and 2002, respectively, and accounted for 2% and 3% of the Company’s total assets at December 31, 2004 and December 31, 2003, respectively. Accordingly, the Company is omitting the selected financial data for 2001 and 2000 previously included in the table (and in Exhibit 12) and such financial data should no longer be relied upon.

 

As previously disclosed, the Company recorded a $12 million after-tax charge related to the offer of settlement in its 2005 first quarter.

 

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INDEX

 

          Page

PART II

         

Item 6.

   Selected Financial Data    4

PART IV

         

Item 15.

   Exhibits and Financial Statement Schedules    5

 

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PART II

 

Item 6. Selected Financial Data

 

FIVE-YEAR STATISTICAL SUMMARY

 

(In millions except share amounts and total employees)


   2004

    2003

    2002

    20011

   20001

Results of Operations

                                 

Net sales

   $ 20,245     $ 18,109     $ 16,760           

Operating income

     1,388       1,316       1,783           

Interest expense

     418       537       497           

Income from continuing operations

     439       535       756           

Loss from discontinued operations, net of tax

     (63 )     (170 )     (887 )         

Cumulative effect of change in accounting principle, net of tax

     41       —         (509 )         

Net income (loss)

     417       365       (640 )         

Net cash provided by operating activities from continuing operations

     2,114       2,567       847           

Net cash provided by (used in) operating activities

     2,071       2,034       (349 )         

Diluted earnings per share from continuing operations

   $ 0.99     $ 1.29     $ 1.85           

Diluted earnings (loss) per share

     0.94       0.88       (1.57 )         

Dividends declared per share

     0.80       0.80       0.80           

Average diluted shares outstanding (in thousands)

     442,201       415,429       408,031           
    


 


 


        

Financial Position at Year-End

                                 

Cash and cash equivalents

   $ 556     $ 661     $ 544           

Current assets

     7,124       7,125       7,922           

Property, plant, and equipment, net

     2,738       2,711       2,396           

Total assets

     24,153       24,208       24,678           

Current liabilities

     5,644       4,322       5,839           

Long-term liabilities (excluding debt)

     3,224       3,281       2,831           

Long-term debt

     4,229       6,517       6,280           

Subordinated notes payable

     408       859       858           

Total debt

     5,153       7,391       8,291           

Stockholders’ equity

     10,551       9,162       8,870           
    


 


 


        

General Statistics

                                 

Total backlog

   $ 32,543     $ 27,542     $ 25,666           

U.S. government backlog included above

     25,525       21,353       18,254           

Capital expenditures

     363       428       458           

Depreciation and amortization

     434       393       364           

Total employees from continuing operations

     79,400       77,700       76,400           
    


 


 


        

 

(1) In April 2005, the Company submitted an offer of settlement to the staff of the Enforcement Division of the Securities and Exchange Commission, which the Enforcement Division staff has agreed to recommend to the Commission, to resolve a pending investigation of the Company’s disclosures and accounting practices, primarily related to its Raytheon Aircraft Corporation (“RAC”) commuter aircraft business during the period from 1997 to 2001. This offer of settlement was previously disclosed in a press release and in a Form 8-K dated April 15, 2005. In connection with its investigation, the staff of the Enforcement Division has alleged that, among other matters, approximately $67 million to $240 million of the total $693 million charge the Company took in the third quarter of 2001 related to losses on its commuter assets (the “commuter loss provision”) should have been taken at year-end 2000, and that the commuter loss provision taken in 2001 was thus overstated by a corresponding amount. In offering to settle the pending matter, Raytheon neither admits nor denies these allegations.

 

In connection with the settlement, the Company acknowledges certain past inadequate documentation, disclosure, and accounting practices, and further acknowledges that, in the exercise of reasonable judgment, a portion of the total $693 million charge taken in 2001 should have been recorded at year-end 2000. The Company has not, however, conducted a current detailed analysis for such periods for the purpose of attempting to allocate the commuter loss provision between the two years. The Company believes that such an undertaking now would be unreasonably difficult and burdensome.

 

RAC has not manufactured new commuter aircraft since 2002. The Company formed Raytheon Airline Aviation Services, LLC (“RAAS”) to manage the commuter portfolio, and since the fourth quarter of 2003, the Company has included the financial results of RAAS in the “Other” reporting segment. The Company believes that it would be unduly difficult and burdensome to restate the five-year statistical summary table, particularly when such a restatement would relate to a non-core line of business. RAAS accounted for 0.5%, 0.5% and 0.7%, of the Company’s net sales during 2004, 2003 and 2002, respectively, and accounted for 2% and 3% of the Company’s total assets at December 31, 2004 and December 31, 2003, respectively. Accordingly, the Company is omitting the selected financial data for 2001 and 2000 previously included in the table and such financial data should no longer be relied upon.

 

Certain prior year amounts have been reclassified to conform with the current year presentation.

 

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PART IV

 

Item 15. Exhibits and Financial Statements Schedules

 

(b) Exhibits:

 

12    Statement regarding Computation of Ratio of Earnings to Combined Fixed Charges for the year ended December 31, 2004.
31.1    Certification of William H. Swanson pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of Biggs C. Porter pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

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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
By:     /s/  Biggs C. Porter          
   

Biggs C. Porter

Vice President and Corporate Controller,

Acting Chief Financial Officer

 

Dated: February 8, 2006

 

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Exhibit Index

 

12    Statement regarding Computation of Ratio of Earnings to Combined Fixed Charges for the year ended December 31, 2004.
31.1    Certification of William H. Swanson pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of Biggs C. Porter pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

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