1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A 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, 2001.
/ / 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 (I.R.S. Employer Identification No.)
Incorporation or Organization)
141 SPRING STREET, LEXINGTON, MASSACHUSETTS 02421
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (781) 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, $.01 par value New York Stock Exchange
Series B Junior Participating Preferred Chicago Stock Exchange
Stock purchase rights Pacific Exchange
Equity Security Units New York Stock 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. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, as of February 24, 2002, was approximately $14.9 billion.
Number of shares of Common Stock outstanding as of February 24, 2002:
396,744,000.
Documents incorporated by reference and made a part of this Form 10-K/A:
Portions of Raytheon's Annual Report Part I, Part II, Part IV to Stockholders
for the fiscal year ended December 31, 2001.
Portions of the Proxy Statement for Part III Raytheon's 2002 Annual Meeting
filed with the Commission within 120 days after the close of Raytheon's fiscal
year.
2
The sole purpose of this Form 10-K/A is to file an Annual Report for
the Registrant's savings and investment plan.
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has caused this amendment to be signed on its behalf
by the undersigned, thereunto duly authorized.
RAYTHEON COMPANY (REGISTRANT)
By: /s/ Neal E. Minahan
Neal E. Minahan
Senior Vice President and
General Counsel
Date: June 25, 2002
3
RAYTHEON SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
TO ACCOMPANY 1998 FORM 5500
ANNUAL REPORT OF EMPLOYEE BENEFIT PLAN
UNDER ERISA OF 1974
FOR THE YEAR ENDED DECEMBER 31, 2001
The supplemental schedules to the Plan's Form 5500 are not required since the
Plan's assets are held in a Master Trust. Accordingly, the Plan administrator
must file detailed financial information, including the supplemental schedules,
separately with the Department of Labor.
4
Exhibit Index
Exhibit No. Description of Documents
23 Consent of Independent Accountants
99.1 Annual Report for the Raytheon Savings and Investment Plan.
99.1a Raytheon Savings and Investment Plan, heretofore filed as an exhibit
to the Company's Form 10-K on March 22, 2000, is hereby incorporated
by reference.
99.1b Amendment to the Raytheon Savings and Investment Plan Adopting
Employers and Special Plan Provisions for Certain Adopting Employers
as of January 1, 2000
99.1c Amendment to the Raytheon Savings and Invetment Plan dated October 29,
2001.
5
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
the Raytheon Savings and Investment Plan:
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Raytheon Savings and Investment Plan (the "Plan") at
December 31, 2001 and December 31, 2000, and the changes in net assets available
for plan benefits for the year ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America. These
financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 11, 2002
6
RAYTHEON SAVINGS AND INVESTMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 2001 and 2000
2001 2000
Assets:
Master trust investments:
At contract value (Notes B, E and J)
Investment contracts $1,571,341,887 $1,420,330,559
Common collective trust - 14,515,437
At fair value (Notes B and J)
Registered investment companies 3,272,058,623 3,608,672,695
Common collective trust 687,807,761 792,970,054
Raytheon Company common stock 1,371,843,158 1,250,608,102
Common stock 142,733,881 176,450,641
Participant loans 224,819,938 235,022,632
-------------- --------------
7,270,605,248 7,498,570,120
-------------- --------------
Receivables:
Employer contributions - 4,012,685
Accrued investment income and
other receivables 9,605,889 9,966,532
Cash and cash equivalents 102,221,044 78,405,127
-------------- --------------
Total assets 7,382,432,181 7,590,954,464
-------------- --------------
Liabilities:
Accrued expenses and other payables 1,777,222 2,719,732
-------------- --------------
Total liabilities 1,777,222 2,719,732
-------------- --------------
Net assets available for plan benefits $7,380,654,959 $7,588,234,732
============== ==============
The accompanying notes are an integral part of the financial statements.
7
RAYTHEON SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
for the year ended December 31, 2001
Additions to net assets attributable to: Investment income (Notes B, E and J):
Net depreciation of investments $ (451,709,613)
Interest and Dividends 225,927,430
--------------
(225,782,183)
Contributions and deferrals:
Employee deferrals 436,285,258
Employer contributions 190,177,195
--------------
626,426,453
--------------
Total additions 400,680,270
--------------
Deductions from net assets attributable to:
Distributions to participants 549,125,186
Administrative expenses 392,812
Transfers (Note I) 58,742,045
--------------
Total deductions 608,260,043
--------------
Decrease in net assets (207,579,773)
Net assets, beginning of year 7,588,234,732
--------------
Net assets, end of year $7,380,654,959
==============
The accompanying notes are an integral part of the financial statements.
8
RAYTHEON SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
A. Description of Plan:
General
The following description of the Raytheon Savings and Investment Plan
(the "Plan"), provides only general information. Participants should refer to
the plan document for a complete description of the Plan's provisions.
The Plan is a defined contribution plan covering the majority of
employees of Raytheon Company (the "Company"). All employees are immediately
eligible to enroll in the Plan on the first day of service, including employees
from prior plans. The purpose of the Plan is to provide participants with a
tax-effective means of meeting both short and long-term investment objectives.
The Plan is intended to be a "qualified cash or deferred arrangement" under the
Internal Revenue Code (the "Code"). In addition, effective January 1, 1999, the
merger of the Raytheon Stock Ownership Plan ("prior ESOP plan") creates an
additional employee stock ownership portion (ESOP) of the Plan. The ESOP is
intended to be an employee stock ownership arrangement in compliance with all of
the related requirements for a qualified stock bonus plan as defined in the
Code. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
The Plan's investments are held in the Raytheon Company Master Trust for
Defined Contribution Plans (the "Master Trust"). The trustee of the Master Trust
maintains a separate account reflecting the Plan's equitable share in the Master
Trust.
Contributions and Deferrals
Employees are allowed to defer up to 20% of their compensation to the Plan,
except for certain employees from prior plans and certain labor unions who are
limited to 17%. Employee contributions, including rollovers are invested based
on participant elections. For 2001, the annual employee deferral for a
participant cannot exceed $10,500. The Company contributes 100% of the first 4%
of compensation that a participant contributes to the Plan. The matching Company
contribution is invested directly in the Raytheon Common Stock Fund and must be
held in that fund until the beginning of the fifth plan year following the plan
year for which the contribution was made or January 1st of the year the employee
turns age 55, if earlier. The Company also makes an ESOP contribution equal to
one-half of one percent of the participant's compensation. The ESOP portion of
the Plan provides for investment, primarily in the Raytheon Company Common Stock
Fund; however, as required by the Code, the Plan permits limited diversification
after a participant attains age 55 and completes 10 years of plan participation
(including participation in the prior ESOP plans).
Participants may invest their deferrals in increments of 1% in any
combination of thirty-five alternatives. The investment objectives range from
investments with an emphasis on preservation of capital to equity investments
with an emphasis on capital gains. The underlying investments include cash and
equivalents, investment contracts, registered investment companies, common
collective trusts, common stock and Raytheon Company stock.
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Participant Accounts
Each participant's account is credited with the participant's
contribution, the Company's contribution and an allocation of plan earnings.
Plan earnings are allocated based on account balances by investment option.
Participant accounts are charged with an allocation of plan expenses.
Vesting
With the exception of certain union groups, effective January 1, 1999, all
employee and employer contributions and earnings thereon are fully and
immediately 100% vested for each participant who performs an hour of service on
or after January 1, 1999. Forfeitures of the nonvested portions of terminated
participants' accounts are used to reduce required contributions of the Company
and pay Plan expenses. At December 31, 2001 and 2000, unallocated Plan
forfeitures were $5,334,233 and $3,522,216, respectively. During 2001, the total
amount of forfeitures from the Plan, relating to contributions made prior to
January 1, 2001, was $731,093.
Distributions to Participants
A participant may withdraw all or a portion of deferrals, employer
contributions and related earnings upon attainment of age 59 1/2. For reasons of
financial hardship, as defined in the Plan document, a participant may withdraw
all or a portion of deferrals. On termination of employment, a participant will
receive a lump-sum distribution unless the vested account is valued in excess of
$5,000, and the participant elects to defer distribution. A retiree may defer
the distribution until April 1st of the year in which the participant reaches
age 70-1/2.
Effective July 2000, participants who have investments in Raytheon Common
Stock may elect to reinvest dividends within the Plan or receive dividends in
cash. Any dividends received in cash by participants will be subject to taxes in
the year of receipt. In 2001, the Company's Board of Directors declared
dividends of $0.80 per share. Of the $8,427,927 in dividends relating to the
Plan, approximately $2,375,573 was received in cash by participants who elected
the cash payment option.
Loans to Participants
A participant may borrow against a portion of the balance in the
participant's account, subject to certain restrictions. The maximum amount of a
loan is the lesser of one-half of the participant's account balance or $50,000.
The minimum loan, which may be granted, is $500. The loans are secured by the
balance in the participant's account and bear interest equal to the prime rate
published in the Wall Street Journal on the first business day in each calendar
quarter and such rate will apply to loans which are made at any time during each
respective calendar quarter. Loans must be repaid over a period of up to five
years by means of payroll deductions. In certain cases, the repayment period may
be extended up to 15 years. Interest paid to the Plan on loans to participants
is credited to the borrower's account in the investment fund to which repayments
are made. Loans are valued at principal outstanding.
Administrative Expenses
The Plan participants pay substantially all expenses of administering the
Plan, such as legal and other administration fees.
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B. Summary of Significant Accounting Policies
The accompanying financial statements are prepared on the accrual basis
of accounting.
Plan investments are stated at fair value except the Plan's benefit
responsive investment contracts which are included in the financial statements
at their contract value, defined as net employee contributions plus interest
earned on the underlying investments at contracted rates. Investments in
registered investment companies and the common collective trust are valued at
the closing net asset value reported on the last business day of the year.
Investments in securities (common stocks) traded on a national securities
exchange are valued at the last reported sales price on the last business day of
the year. Cash equivalents are short-term money market instruments and are
valued at cost, which approximates fair value.
Security transactions are recorded on the trade date. Payables for
outstanding purchases represent trades which have occurred but have not yet
settled.
The Plan presents in the statement of changes in net assets available for
plan benefits the net appreciation (depreciation) in the fair value of its
investments, which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
Dividend income is recorded on the ex-dividend date. Income from other
investments is recorded as earned on an accrual basis. Investment income
includes both dividends and interest income.
Benefits are recorded when paid.
The preparation of financial statements in conformity with generally
accepted accounting principles, requires the Plan administrator to make
estimates and assumptions that affect the reported amounts of net assets and
liabilities and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from the estimates included in the
financial statements.
The Plan provides for various investment options in any combination of
stocks, fixed income securities, mutual funds and other investment securities.
Investment securities are exposed to various risks, such as interest rate,
market and credit risk. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in the
value of investment securities, it is at least reasonably possible that changes
in risks in the near term would materially affect participants' account balances
and the amounts reported in the statement of net assets available for plan
benefits and the statement of changes in net assets available for plan benefits.
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C. Investments
The following presents investments that represent 5 percent or more of
the Plan's net assets:
December 31,
2001 2000
Raytheon Common Stock fund** $1,371,843,158 $1,250,608,102
Fidelity Equity Income fund 915,693,447 1,049,363,041
BT Pyramid Equity Index fund 657,496,448 792,970,054
Deutsche Bank AG GIC 550,004,055 497,146,897
Fidelity Magellan fund 549,753,503 651,972,218
Fidelity Blue Chip fund 440,260,794 572,226,613
Fidelity Balanced fund 377,111,839 388,440,429
Vanguard Primecap fund 334,976,479 429,824,496
** Amount is made up of both participant and non-participant directed
amounts.
During the year ended December 31, 2001 the Plan's investments (including
gains and losses on investments bought and sold, as well as held during the
year) depreciated in value by $451,709,613 as follows:
Registered investment companies $ (380,641,554)
Common collective trusts (91,956,188)
Raytheon Company common stock 75,470,968
Common stock (54,582,839)
---------------
$ (451,709,613)
===============
D. Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed
investments is as follows:
December 31,
2001 2000
Net assets:
Raytheon Company common stock $ 628,755,464 $ 457,991,760
Cash and cash equivalents 5,260,257 4,400,304
-------------- --------------
$ 634,015,721 $ 462,392,064
============== ==============
December 31,
2001
Changes in net assets:
Contributions $ 190,177,195
Interest and dividends 14,501,280
Net appreciation of investments 29,750,853
Distribution to participants (33,568,814)
Administrative expenses (224,380)
Net transfers to other investments (29,012,477)
--------------
$ 171,623,657
==============
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E. Investment Contracts
Investments include collateralized fixed income investment portfolios
commonly referred to as Synthetic Guaranteed Investment Contracts and short-term
investments, which are managed by investment management firms. The assets
underlying the investment contracts are owned by the Plan and are maintained by
the investment management firms. The accounts are credited with earnings on the
underlying investments and charged for participant withdrawals and
administrative expenses. The contracts are included in the financial statements
at contract values as reported to the Plan by the insurance companies. Contract
value represents contributions made under the contracts, plus earnings, less
participant withdrawals and administrative expenses. The Plan utilizes a benefit
responsive wrapper contract issued by a third party that provides market and
cash flow risk protection to the Plan. The value of the wrapper is the
difference between the fair value of the underlying assets and the contract
value. At December 31, 2001, the value of the wrapper was $35,730,515.
Participants may direct the withdrawals or transfer of all or a portion of their
investment at contract value with limited restrictions related to transferring
funds out into a competing fund investment option. Due to the high
creditworthiness of the contract issuer, there is no valuation reserve to adjust
contract amount.
The crediting interest rates are adjusted quarterly to reflect the
experienced and anticipated yields to be earned on such investments, based on
their book value. The average yield and crediting interest rates were as
follows:
Crediting
Average interest
yield rate
For the year ended December 31, 2001:
Chase Manhattan Bank (429666) 6.29% 6.00%
Deutsche Bank AG (FID-RAY-1) 6.20% 5.90%
State Street Bank and Trust (99054) 6.30% 6.00%
Westdeutsche Landesbank (WLB6173) 6.14% 6.00%
For the year ended December 31, 2000:
Chase Manhattan Bank (429666) 5.79% 5.99%
Deutsche Bank AG (FID-RAY-1) 5.69% 5.89%
Fidelity IPL (633-GCDC) 5.94% 6.10%
Fidelity STIF 5.90% 6.48%
State Street Bank and Trust (99054) 5.80% 6.00%
Westdeutsche Landesbank (WLB6173) 5.79% 5.99%
F. Federal Income Tax Status
The Internal Revenue Service has determined and informed the Company by
letter dated July 1995 that the Plan and related trust are designed in
accordance with applicable sections of the Code. The Plan has been amended and
restated since receiving the determination letter. However, the Plan
administrator and the Plan's legal counsel believe that the Plan is currently
designed and being operated in compliance with applicable requirements of the
Code.
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G. Plan Termination
Although it has not expressed any intention to do so, the Company
reserves the right under the Plan at any time to discontinue its contributions
and to terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, after payment of all expenses and proportional adjustment of
accounts to reflect such expenses, fund losses or profits, and reallocations,
each participant shall be entitled to receive all amounts then credited to his
or her account.
H. Related Party Transactions
The Plan's trustee is Fidelity Management Trust Company (the "Trustee").
Certain Plan investments are shares of mutual funds managed by the Trustee and
therefore, these transactions qualify as party-in-interest.
In accordance with the provisions of the Plan, the Trustee acts as the
Plan's agent for purchases and sales of shares of Raytheon Company common stock.
These transactions are performed on a Master Trust level. For the Master Trust,
purchases amounted to $558,865,056 and sales amounted to $475,045,020 for the
year ended December 31, 2001.
I. Transfers
Transfers include transfers of participant accounts, individually and/or
in-groups, between the Plan and similar savings plans of other companies for
those participants who changed companies during the year.
In 2001, the Company sold Raytheon Aerospace to Veritas Capital retaining
a 30% interest in Aerospace. Effective August 1, 2001 all the participants in
the Plan were transferred to the Aerospace 401k plan. Transferred funds totaled
$58,742,045.
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J. Master Trust
The following is a summary of net assets available for plan benefits by Plan
under the Master Trust as of December 31, 2001:
Raytheon
Raytheon Defined
Savings and Contribution
Investment Master
Plan Trust
Assets:
Master trust investments:
At contract value:
Investment contracts $1,571,341,887 $1,571,341,887
At fair value:
Registered investment companies 3,272,058,623 3,272,058,623
Common collective trust 687,807,761 687,807,761
Raytheon Company common stock 1,371,843,158 1,371,843,158
Common stock 142,733,881 142,733,881
Participant loans 224,819,938 224,819,938
-------------- --------------
Total investments 7,270,605,248 7,270,605,248
-------------- --------------
Receivables:
Accrued investment income and
other receivables 9,605,889 9,605,889
Cash and cash equivalents 102,221,044 102,221,044
-------------- --------------
Total assets 7,382,432,181 7,382,432,181
-------------- --------------
Liabilities:
Accrued expenses and other payables 1,777,222 1,777,222
-------------- --------------
Total liabilities 1,777,222 1,777,222
-------------- --------------
Net assets available for plan benefits $7,380,654,959 $7,380,654,959
============== ==============
Percentage of total trust assets 100% 100%
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The following is a summary of net assets available for plan benefits by Plan
under the Master Trust as of December 31, 2000:
Raytheon Defined
Savings and Contribution
Investment Master
Plan Trust
Assets:
Master trust investments:
At contract value:
Investment contracts $1,420,330,559 $1,420,330,559
Common collective trust 14,515,437 14,515,437
At fair value:
Registered investment companies 3,608,672,695 3,608,672,695
Common collective trust 792,970,054 792,970,054
Raytheon Company common stock 1,250,608,102 1,250,608,102
Common stock 176,450,641 176,450,641
Participant loans 235,022,632 235,022,632
--------------- --------------
Total investments 7,498,570,120 7,498,570,120
--------------- --------------
Receivables:
Employer contributions 4,012,685 4,012,685
Accrued investment income
and other receivable 9,966,532 9,966,532
Cash and cash equivalents 78,405,127 78,405,127
--------------- --------------
Total assets 7,590,954,464 7,590,954,464
--------------- --------------
Liabilities:
Accrued expenses and other payables 2,719,732 2,719,732
--------------- --------------
Total liabilities 2,719,732 2,719,732
--------------- --------------
Net assets available for plan benefits $7,588,234,732 $7,588,234,732
=============== ==============
Percentage of total trust assets 100% 100%
16
The following is a summary of net assets available for plan benefits by
Plan under the Master Trust as of December 31, 2001:
Raytheon
Raytheon Defined
Savings and Contribution
Investment Master
Plan Trust
Investment income:
Interest and dividends $ 225,927,430 $ 225,927,430
Net appreciation/ (depreciation)
Registered investment companies (380,641,554) (380,641,554)
Common collective trust (91,956,188) (91,956,188)
Raytheon Company common stock 75,470,968 75,470,968
Common stock (54,582,839) (54,582,839)
------------- -------------
(451,709,613) (451,709,613)
------------- -------------
Total investment loss $(225,782,183) $(225,782,183)
============= =============
17
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Raytheon Employee Savings and Investment Plan has duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
By: /s/ Keith J. Peden
Keith J. Peden
Senior Vice President - Human Resources
June 27, 2002