Raytheon 2004 Annual Report Download - page 62

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was $2,114 million in 2004 versus $2,567 million in 2003 and $847 million in 2002. Included in 2004 was a $210
million payment made in connection with the settlement of the class action lawsuit described below in
Commitments and Contingencies. As the Company continues to convert portions of existing financial systems to a
new integrated financial package, certain planned delays in billings to customers may occur during 2005, however,
the Company does not expect these delays to negatively impact full year cash flow results.
Savings and investment plan activity includes certain items related to the Company’s 401(k) plan that were
funded through the issuance of the Company’s common stock and are non-cash operating activities included on
the statement of cash flows. In 2004, the Company began funding its 401(k) plan match with cash. Total
contributions (required and discretionary) related to the Company’s pension plans are expected to be
approximately $515 million in 2005.
The Company provides long-term financing to its aircraft customers. Origination of financing receivables was
$325 million in 2004, $402 million in 2003, and $431 million in 2002. The Company received proceeds of $59
million in 2004 and $279 million in 2003 related to the sale of certain general aviation finance receivables, described
below in Off Balance Sheet Financing Arrangements. The Company also maintained a program under which it sold
general aviation and commuter aircraft long-term receivables under a receivables purchase facility through the end
of 2002. In connection with this program in 2002, the sale of financing receivables was $263 million and the
repurchase of financing receivables was $347 million. The Company bought out the receivables that remained in
the facility in 2002 for $1,029 million, brought the related assets onto the Company’s books, and eliminated the
associated $1.4 billion receivables purchase facility.
Net cash used in investing activities was $532 million in 2004 versus $708 million in 2003. Net cash provided by
investing activities was $669 million in 2002. Capital expenditures were $363 million in 2004, $428 million in 2003,
and $458 million in 2002. Capital expenditures in 2005 are expected to approximate $385 million. In 1998, the
Company entered into a $490 million property sale and five-year operating lease (synthetic lease) facility under
which property, plant, and equipment was sold and leased back to the Company. In 2003, the lease facility expired
and the Company bought back the assets remaining in the lease facility for $125 million. Capitalized expenditures
for internal use software were $103 million in 2004, $98 million in 2003, and $138 million in 2002. Capitalized
expenditures for internal use software in 2005 are expected to approximate $115 million.
Proceeds from the sale of operating units and investments were $47 million in 2004 versus $111 million in 2003
and $1,166 million in 2002. In 2004, the Company sold its commercial infrared business for $43 million. In 2003,
the Company sold the remaining interest in its former aviation support business for $97 million. In 2002, the
Company sold its AIS business for $1,123 million, described above in Discontinued Operations.
In 2004, the Company paid the second installment of $70 million related to the 2003 acquisition of Solipsys
Corporation. The final installment of $60 million is due in the first quarter of 2005. Also in 2004, the Company
paid $42 million for the acquisition of Photon Research Associates, Inc.
In 2003, the Company paid $130 million related to the Space Imaging credit facility guarantee, described below
in Major Affiliated Entities. In October 2001, the Company and Hughes Electronics agreed to a settlement
regarding the purchase price adjustment related to the Company’s merger with the defense business of Hughes
Electronics Corporation. Under the terms of the agreement, Hughes Electronics agreed to reimburse the Company
approximately $635 million of its purchase price over time, with the final payment received in 2002.
Net cash used in financing activities was $1,644 million in 2004 versus $1,209 million in 2003 and $990 million
in 2002. Dividends paid to stockholders were $349 million in 2004, $331 million in 2003, and $321 million in 2002.
The quarterly dividend rate was $0.20 per share for each of the four quarters of 2004, 2003, and 2002. Beginning in
2005, the Company plans to increase the quarterly dividend rate to $0.22 per share. Although the Company does
not have a formal dividend policy, management believes that a reasonable dividend payout ratio based on the
current industry environment and market conditions is approximately one third of the Company’s economic