1
EXHIBIT 99.2
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES
FINANCIAL STATEMENTS
TO ACCOMPANY 1997 FORM 5500
ANNUAL REPORT OF EMPLOYEE BENEFIT PLAN
UNDER ERISA OF 1974
FOR THE YEAR ENDED DECEMBER 31, 1997
The supplemental schedules required to accompany the Plan's Form 5500
are not required since the Plan's assets are held in a Master Trust.
Accordingly, detailed financial information, including the supplemental
schedules, must be filed separately with the Department of Labor by the plan
administrator.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Raytheon Company:
We have audited the accompanying statements of net assets available
for plan benefits of the Raytheon Savings and Investment Plan for Specified
Hourly Payroll Employees (the "Plan") as of December 31, 1997 and 1996, and the
related statement of changes in net assets available for plan benefits for the
year ended December 31, 1997. 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 in accordance with generally accepted auditing
standards. Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits of
the Plan as of December 31, 1997 and 1996, and the changes in net assets
available for plan benefits for the year ended December 31, 1997 in conformity
with generally accepted accounting principles.
Coopers & Lybrand LLP
Boston, Massachusetts
May 29, 1998
2
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
as of December 31, 1997 and 1996
1997 1996
Assets:
Master trust investments:
At contract value (Notes B, E and H) $118,688,832 $114,483,156
At fair value (Notes B, F and H) 210,894,210 167,294,559
------------ ------------
329,583,042 281,777,715
------------ ------------
Receivables:
Accrued investment income
and other receivables 536,061 120,280
Cash and cash equivalents 2,639,423 3,030,913
------------ ------------
Total assets 332,758,526 284,928,908
------------ ------------
Liabilities:
Payable for outstanding purchases 512,188 233,567
Accrued expenses and other payables 215,365 120,450
------------ ------------
Total liabilities 727,553 354,017
------------ ------------
Net assets available for plan benefits $332,030,973 $284,574,891
============ ============
The accompanying notes are an integral part of the financial statements.
3
RAYTHEON SAVINGS AND INVESTMENT PLAN
FOR SPECIFIED HOURLY PAYROLL EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
for the year ended December 31, 1997
Additions to net assets attributable to:
Investment income (Notes B, E and H):
Net appreciation of investments $24,128,490
Interest 9,928,559
Dividends 5,734,138
------------
39,791,187
------------
Contributions and deferrals:
Employee deferrals 22,972,877
Employer contributions 7,537,344
Transfers (Note G) 316,293
------------
30,826,514
------------
Total additions 70,617,701
------------
Deductions from net assets attributable to:
Distributions to participants 22,400,103
Administrative expenses 77,846
Transfers (Note G) 683,670
------------
Total deductions 23,161,619
------------
Increase in net assets 47,456,082
Net assets available for
plan benefits, beginning of year 284,574,891
------------
Net assets available for
plan benefits, end of year $332,030,973
============
The accompanying notes are an integral part of the financial statements.
4
A. Description of Plan:
General
The following description of the Raytheon Savings and Investment Plan
for Specified Hourly Payroll Employees (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 certain hourly payroll employees of Raytheon Company (the "Company")
who are employed in units represented by specified labor unions. To participate
in the Plan, eligible employees must have three months of service and may enter
the Plan only on the first day of each month. 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 Sections 401(a) and 401(k) of the Internal Revenue
Code (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 "Master Trust" with the assets of other defined
contribution plans of Raytheon Company and subsidiaries. The trustee of the
Master Trust maintains a separate account reflecting the equitable share in the
Trust of each plan.
Investment income and administrative expenses relating to the Master
Trust are allocated to the individual plans based upon average monthly balances
invested by each plan.
Contributions and Deferrals
Eligible employees are allowed to defer to the Plan up to 17% of their
salaries. The Company contributes amounts equal to 50% of each participant's
deferral, up to a maximum of 3% of the participant's salary. As of December 31,
1997, the annual employee deferral for a participant cannot exceed $9,500.
Rollover contributions from other qualified plans are accepted by the Plan.
Participants may invest their deferrals in increments of 1% in any combination
of seven funds: (a) a Fixed Income Fund under which assets are invested
primarily in contracts providing for fixed rates of interest for specified
periods of time, (b) an Equity Fund which invests in shares of a mutual fund
which consists primarily of income-producing equity securities, (c) a Raytheon
Common Stock Fund which invests in shares of Raytheon Company Class B common
stock, (d) a Stock Index Fund which invests in a commingled pool consisting
primarily of equity securities and is designed to track the S&P 500 Index, (e) a
Balanced Fund which invests in shares of a mutual fund which consists primarily
of equity securities, bonds and money market instruments, (f) the Magellan Fund,
a growth fund which invests primarily in equities of companies of all types and
sizes, and (g) the Blue Chip Fund, a growth fund which invests primarily in
equities of well known and established companies. Dividends and distributions
from investments of the Equity Fund, the Raytheon Common Stock Fund, the Stock
Index Fund, the Balanced Fund, the Magellan Fund and the Blue Chip Fund are
reinvested in their respective funds; stock dividends, stock splits and similar
changes are also reflected in the funds.
5
Participant Accounts
Each participant's account is credited with the participant's
deferral, the Company's contribution and an allocation of plan earnings. Plan
earnings are allocated based on account balances by fund.
Vesting
Participants are immediately vested in their voluntary deferrals plus
actual earnings thereon. Vesting requirements for employer contributions plus
earnings thereon may vary depending upon when an employee became eligible to
participate in the Plan. Vesting generally occurs upon the earliest of the
completion of five years of service or upon three years of participation or upon
retirement, death, disability, or attainment of normal retirement age.
Forfeitures of the nonvested portions of terminated participants' accounts are
used to reduce required contributions of the Company.
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
$3,500 and the participant elects to defer distribution. A retiree or a
beneficiary of a deceased participant may defer the distribution until January
of the year following attainment of age 65.
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 vested account balance or
$50,000. The minimum loan which may be granted is $500. The interest rate
applied is equal to the prime rate published in the Wall Street Journal on the
first business day in June and December of each year. Loans must be repaid over
a period of up to 5 years by means 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.
Administrative Expenses
Substantially all expenses of administering the Plan are paid by the
plan participants.
B. Summary of Significant Accounting Policies:
The accompanying financial statements are prepared on the accrual
basis of accounting.
6
The Plan's investment contracts are fully benefit-responsive and are
therefore included in the financial statements at their contract value, defined
as net contributions and deferrals plus interest earned on the underlying
investments at contracted rates. Because the investment contracts are fully
benefit-responsive, contract values approximate fair value. Investments in
mutual funds and the commingled pool 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 trade date. Except for its
investment contracts (Note E), the Plan's investments are held by
bank-administered trust funds. Payables for outstanding security transactions
represent trades which have occurred but have not yet settled.
The Plan presents in the statement of changes in net assets 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.
Benefits are recorded when paid.
Certain items in the 1996 financial statements have been reclassified
to conform to the 1997 presentation.
The preparation of the financial statements in conformity with
generally accepted accounting principles requires the Plan administrator to make
significant estimates and assumptions that affect the reported amounts of net
assets and liabilities available for benefits at the date of the financial
statements and the changes in net assets available for benefits during the
reporting period and, when applicable, disclosures of contingent assets and
liabilities at the date of the financial statements. Actual results could differ
from the estimates included in the financial statements.
The Plan provides for various investment options in any combination of
stocks, bonds, 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.
7
C. Federal Income Tax Status:
The Plan obtained its latest determination letter in June 1995, in
which the Internal Revenue Service stated that the Plan, as submitted, was in
compliance with the applicable requirements of the Internal Revenue Code. The
Plan has been amended 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 the applicable
requirements of the Internal Revenue Code. Therefore, no provision for income
taxes has been included in the Plan's financial statements.
D. Plan Termination:
Although it has not expressed any intention to do so, the Company
reserves the right under the Plan at any time or times 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 any amounts then
credited to his or her account.
E. Investment Contracts:
The Plan invests in collateralized fixed income investment portfolios
(with no expiration date), three of which are managed by insurance companies and
one of which is managed by an investment management firm. The credited interest
rates are adjusted semiannually to reflect the experienced and anticipated
yields to be earned on such investments, based on their book value. The
annualized average yield and credited interest rates were as follows:
Annualized
Average Credited
Yield Interest Rate
For the year ended December 31, 1997:
Bankers Trust (WBS 92-485) 6.95% 6.95%
Metropolitan Life Insurance Company (GIC GA-12908) 6.86% 6.86%
Metropolitan Life Insurance Company (GIC GA-13659) 6.43% 6.43%
Prudential Asset Management Company (GIC 917163-001) 6.99% 6.99%
For the year ended December 31, 1996:
Bankers Trust (WBS 92-485) 6.87% 6.95%
Metropolitan Life Insurance Company (GIC GA-12908) 6.77% 6.86%
Metropolitan Life Insurance Company (GIC GA-13659) 6.36% 6.43%
Prudential Asset Management Company (GIC 917163-001) 6.89% 6.99%
The contract values are subject to limitations in certain situations
including large workforce reductions and plan termination.
In the financial statements, the two Metropolitan Life Insurance
Company contracts are recorded as one investment option.
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F. Related Party Transactions:
In accordance with the provisions of the Plan, Fidelity Management
Trust Company (the "Trustee") acts as the Plan's agent for purchases and sales
of shares of Raytheon Company Class B common stock. These transactions are
performed on the Master Trust level. For the Master Trust, purchases amounted to
$200,689,057 and $158,515,882 and sales amounted to $102,165,608 and $38,523,792
for the years ended December 31, 1997 and 1996 respectively.
G. Transfers:
Transfers include transfers of participant accounts, individually
and/or in groups, between the Raytheon Savings and Investment Plan for Specified
Hourly Payroll Employees and other plans included in the Raytheon Company Master
Trust for those participants and/or groups of participants who changed plans
during the year. Transfers also include transfers of participant accounts,
individually and/or in groups, between the Raytheon Savings and Investment Plan
for Specified Hourly Payroll Employees and similar savings plans of other
companies for those participants who changed companies during the year.
9
H. Fund Data:
The following is a summary of net assets available for plan benefits
by fund as of December 31, 1997:
Fixed Raytheon Stock
Income Equity Common Index Balanced Magellan
Fund Fund Stock Fund Fund Fund Fund
Assets:
Master trust investments:
At contract value:
Bankers Trust* $ 44,328,538
Prudential Insurance
Company of America* 27,495,053
Metropolitan Life
Insurance Company* 46,865,241
At fair value:
Fidelity Equity
Income Fund* $60,433,311
Raytheon Company
Common Stock* $60,253,020
BT Pyramid Equity
Index Fund* $38,661,267
Fidelity Balanced Fund $6,955,322
Fidelity Magellan Fund $6,462,497
Fidelity Blue Chip Fund
Loans receivable from
participants*
------------ ----------- ----------- ----------- ---------- ----------
Total investments 118,688,832 60,433,311 60,253,020 38,661,267 6,955,322 6,462,497
------------ ----------- ----------- ----------- ---------- ----------
Receivables:
Accrued investment income
and other receivables 443,463 92,598
Cash and cash equivalents 1,169,309 1,090,409 379,705
------------ ----------- ----------- ----------- ---------- ----------
Total assets 119,858,141 60,433,311 61,786,892 39,133,570 6,955,322 6,462,497
------------ ----------- ----------- ----------- ---------- ----------
Liabilities:
Payable for security purchases 512,188
Accrued expenses and other
payables 119,629 95,736
------------ ----------- ----------- ----------- ---------- ----------
Total liabilities 631,817 95,736
------------ ----------- ----------- ----------- ---------- ----------
Net assets available for
plan benefits $119,858,141 $60,433,311 $61,155,075 $39,037,834 $6,955,322 $6,462,497
============ =========== =========== =========== ========== ==========
*Represents more than 5% of net assets available for plan benefits
10
Blue Chip Loan
Fund Fund Total
Assets:
Master trust investments:
At contract value:
Bankers Trust* $ 44,328,538
Prudential Insurance
Company of America* 27,495,053
Metropolitan Life
Insurance Company* 46,865,241
At fair value:
Fidelity Equity
Income Fund* 60,433,311
Raytheon Company
Common Stock* 60,253,020
BT Pyramid Equity
Index Fund* 38,661,267
Fidelity Balanced Fund 6,955,322
Fidelity Magellan Fund 6,462,497
Fidelity Blue Chip Fund $7,967,742 7,967,742
Loans receivable from
participants* $30,161,051 30,161,051
---------- ----------- ------------
Total investments 7,967,742 30,161,051 329,583,042
---------- ----------- ------------
Receivables:
Accrued investment income
and other receivables 536,061
Cash and cash equivalents 2,639,423
---------- ----------- ------------
Total assets 7,967,742 30,161,051 332,758,526
---------- ----------- ------------
Liabilities:
Payable for security purchases 512,188
Accrued expenses and other
payables 215,365
---------- ----------- ------------
Total liabilities 727,553
---------- ----------- ------------
Net assets available for
plan benefits $7,967,742 $30,161,051 $332,030,973
========== =========== ============
*Represents more than 5% of net assets available for plan benefits
11
H. Fund Data, continued:
The following is a summary of net assets available for plan benefits
by fund as of December 31, 1996:
Fixed Raytheon Stock
Income Equity Common Index Balanced Magellan
Fund Fund Stock Fund Fund Fund Fund
Assets:
Master trust investments:
At contract value:
Bankers Trust* $ 43,177,931
Prudential Insurance
Company of America* 26,771,195
Metropolitan Life
Insurance Company* 44,534,030
At fair value:
Fidelity Equity
Income Fund* $ 43,658,303
Raytheon Company
Common Stock* $58,428,943
BT Pyramid Equity
Index Fund* $24,961,318
Fidelity Balanced Fund $4,954,118
Fidelity Magellan Fund $3,449,226
Fidelity Blue Chip Fund
Loans receivable from
participants*
------------ ----------- ----------- ----------- ---------- ----------
Total investments 114,483,156 43,658,303 58,428,943 24,961,318 4,954,118 3,449,226
------------ ----------- ----------- ----------- ---------- ----------
Receivables:
Accrued investment income
and other receivables 86,055 34,225
Cash and cash equivalents 1,860,197 883,292 287,424
------------ ----------- ----------- ----------- ---------- ----------
Total assets 116,343,353 43,658,303 59,398,290 25,282,967 4,954,118 3,449,226
------------ ----------- ----------- ----------- ---------- ----------
Liabilities:
Payable for security purchases 233,567
Accrued expenses and other
payables 81,625 38,825
------------ ----------- ----------- ----------- ---------- ----------
Total liabilities 315,192 38,825
------------ ----------- ----------- ----------- ---------- ----------
Net assets available for plan
benefits $116,343,353 $43,658,303 $59,083,098 $25,244,142 $4,954,118 $3,449,226
============ =========== =========== =========== ========== ==========
*Represents more than 5% of net assets available for plan benefits
12
Blue Chip Loan
Fund Fund Total
Assets:
Master trust investments:
At contract value:
Bankers Trust* $ 43,177,931
Prudential Insurance
Company of America* 26,771,195
Metropolitan Life
Insurance Company* 44,534,030
At fair value:
Fidelity Equity
Income Fund* 43,658,303
Raytheon Company
Common Stock* 58,428,943
BT Pyramid Equity
Index Fund* 24,961,318
Fidelity Balanced Fund 4,954,118
Fidelity Magellan Fund 3,449,226
Fidelity Blue Chip Fund $3,856,512 3,856,512
Loans receivable from
participants* $27,986,139 27,986,139
---------- ----------- ------------
Total investments 3,856,512 27,986,139 281,777,715
---------- ----------- ------------
Receivables:
Accrued investment income
and other receivables 120,280
Cash and cash equivalents 3,030,913
---------- ----------- ------------
Total assets 3,856,512 27,986,139 284,928,908
---------- ----------- ------------
Liabilities:
Payable for security purchases 233,567
Accrued expenses and other
payables 120,450
---------- ----------- ------------
Total liabilities 354,017
---------- ----------- ------------
Net assets available for plan
benefits $3,856,512 $27,986,139 $284,574,891
========== =========== ============
*Represents more than 5% of net assets available for plan benefits
13
H. Fund Data, continued:
The following is a summary of changes in net assets available for plan
benefits by fund for the year ended December 31, 1997:
Fixed Raytheon Stock
Income Equity Common Index Balanced Magellan
Fund Fund Stock Fund Fund Fund Fund
Additions to net assets
attributable to:
Investment income:
Net appreciation of investments $10,239,734 $ 2,967,135 $ 9,026,757 $ 403,216 $ 594,940
Interest $ 7,851,164 54,192 24,903
Dividends 3,278,728 898,130 810,267 369,647
------------ ----------- ----------- ----------- ---------- ----------
7,851,164 13,518,462 3,919,457 9,051,660 1,213,483 964,587
------------ ----------- ----------- ----------- ---------- ----------
Contributions and deferrals:
Employee deferrals 9,368,379 3,598,647 5,088,392 2,747,610 605,549 700,927
Employer contributions 3,326,160 1,109,758 1,624,848 830,490 185,207 209,348
Transfers 46,161 82,365
------------ ----------- ----------- ----------- ---------- ----------
12,694,539 4,708,405 6,713,240 3,578,100 836,917 992,640
------------ ----------- ----------- ----------- ---------- ----------
Total additions 20,545,703 18,226,867 10,632,697 12,629,760 2,050,400 1,957,227
------------ ----------- ----------- ----------- ---------- ----------
Deductions from net assets
attributable to:
Distributions to participants 11,616,989 2,869,930 3,322,970 2,081,750 363,234 193,308
Administrative expenses 32,938 14,292 15,351 11,261 1,586 1,108
Transfers 400,342 95,582 31,320 156,426
------------ ----------- ----------- ----------- ---------- ----------
Total deductions 12,050,269 2,979,804 3,369,641 2,249,437 364,820 194,416
------------ ----------- ----------- ----------- ---------- ----------
Interfund transfers (4,980,646) 1,527,945 (5,191,079) 3,413,369 315,624 1,250,460
------------ ----------- ----------- ----------- ---------- ----------
Increase in net assets 3,514,788 16,775,008 2,071,977 13,793,692 2,001,204 3,013,271
Net assets available for plan
benefits, beginning of year 116,343,353 43,658,303 59,083,098 25,244,142 4,954,118 3,449,226
------------ ----------- ----------- ----------- ---------- ----------
Net assets available for plan
benefits, end of year $119,858,141 $60,433,311 $61,155,075 $39,037,834 $6,955,322 $6,462,497
============ =========== =========== =========== ========== ==========
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Blue Chip Loan
Fund Fund Total
attributable to:
Investment income:
Net appreciation of investments $ 896,708 $ 24,128,490
Interest $1,998,300 9,928,559
Dividends 377,366 5,734,138
---------- ----------- ------------
1,274,074 1,998,300 39,791,187
---------- ----------- ------------
Contributions and deferrals:
Employee deferrals 863,373 22,972,877
Employer contributions 251,533 7,537,344
Transfers 42,247 145,520 316,293
---------- ----------- ------------
1,157,153 145,520 30,826,514
---------- ----------- ------------
Total additions 2,431,227 2,143,820 70,617,701
---------- ----------- ------------
Deductions from net assets
attributable to:
Distributions to participants 236,246 1,715,676 22,400,103
Administrative expenses 1,310 77,846
Transfers 683,670
---------- ----------- ------------
Total deductions 237,556 1,715,676 23,161,619
---------- ----------- ------------
Interfund transfers 1,917,559 1,746,768 --
---------- ----------- ------------
Increase in net assets 4,111,230 2,174,912 47,456,082
Net assets available for plan
benefits, beginning of year 3,856,512 27,986,139 284,574,891
---------- ----------- ------------
Net assets available for plan
benefits, end of year $7,967,742 $30,161,051 $332,030,973
========== =========== ============
15
I. Master Trust:
All plan investments are included under the Master Trust. At December
31, 1997, assets of the Plan represented 9.4% of the total assets under the
Master Trust. This has decreased from 10.1% at December 31, 1996. The following
is a summary of net assets available for plan benefits by fund under the Master
Trust as of December 31, 1997:
Fixed Raytheon Stock
Income Equity Common Index Balanced Magellan Blue Chip
Fund Fund Stock Fund Fund Fund Fund Fund
Assets:
Investments:
At contract value:
Bankers Trust* $351,035,073
Prudential Insurance
Company of America* 217,731,699
Metropolitan Life
Insurance Company* 371,123,080
At fair value:
Fidelity Equity
Income Fund* $782,799,011
Raytheon Company
Common Stock* $745,980,294
BT Pyramid Equity
Index Fund* $484,781,406
Fidelity Balance Fund $117,556,481
Fidelity Magellan Fund $91,863,155
Fidelity Blue Chip Fund $136,586,123
Templeton Foreign I Fund
Fidelity Investment
Grade Bond Fund
Fidelity Retirement
Money Market Fund
Loans receivable from
participants
------------ ------------ ------------ ------------ ------------ ----------- ------------
Total investments 939,889,852 782,799,011 745,980,294 484,781,406 117,556,481 91,863,155 136,586,123
------------ ------------ ------------ ------------ ------------ ----------- ------------
Receivables:
Employer contribution
Accrued investment income
and other receivables 5,489,592 1,161,112
Cash and cash equivalents 9,232,100 13,498,051 4,761,268
------------ ------------ ------------ ------------ ------------ ----------- -----------
Total assets 949,121,952 782,799,011 764,967,937 490,703,786 117,556,481 91,863,155 136,586,123
------------ ------------ ------------ ------------ ------------ ----------- ------------
Liabilities:
Payables for outstanding
purchases 6,340,318
Accrued expenses and
other payables 1,480,875 1,200,471
------------ ------------ ------------ ------------ ------------ ----------- ------------
Total liabilities 7,821,193 1,200,471
------------ ------------ ------------ ------------ ------------ ----------- ------------
Net assets available for
plan benefits $949,121,952 $782,799,011 $757,146,744 $489,503,315 $117,556,481 $91,863,155 $136,586,123
============ ============ ============ ============ ============ =========== ============
Percentage of Master Trust that 12.6% 7.7% 8.1% 8.0% 5.9% 7.0% 5.8%
are plan assets of the Raytheon
Savings and Investment Plan for
Specified Hourly Payroll Employees.
*Represents more than 5% of net assets available for plan benefits.
N/A: The Templeton Foreign I Fund, Investment Grade Bond Fund, and
Retirement Money Market Fund are not available for the Raytheon
Savings and Investment Plan for Specified Hourly Payroll Employees.
16
Templeton Investment Retirement
Foreign I Grade Money Loan
Fund Bond Fund Market Fund Fund Total
Assets:
Investments:
At contract value:
Bankers Trust* $ 351,035,073
Prudential Insurance
Company of America* 217,731,699
Metropolitan Life
Insurance Company* 371,123,080
At fair value:
Fidelity Equity
Income Fund* 782,799,011
Raytheon Company
Common Stock* 745,980,294
BT Pyramid Equity
Index Fund* 484,781,406
Fidelity Balance Fund 117,556,481
Fidelity Magellan Fund 91,863,155
Fidelity Blue Chip Fund 136,586,123
Templeton Foreign I Fund $5,471,176 5,471,176
Fidelity Investment
Grade Bond Fund $1,548,125 1,548,125
Fidelity Retirement
Money Market Fund $12,186,085 12,186,085
Loans receivable from
participants $166,395,767 166,395,767
---------- ---------- ----------- ------------ --------------
Total investments 5,471,176 1,548,125 12,186,085 166,395,767 3,485,057,475
---------- ---------- ----------- ------------ --------------
Receivables:
Employer contribution 4,015,100 4,015,100
Accrued investment income
and other receivables 6,650,704
Cash and cash equivalents 27,491,419
---------- ---------- ----------- ------------ --------------
Total assets 5,471,176 1,548,125 16,201,185 166,395,767 3,523,214,698
---------- ---------- ----------- ------------ --------------
Liabilities:
Payables for outstanding
purchases 6,340,318
Accrued expenses and
other payables 2,681,346
---------- ---------- ----------- ------------ --------------
Total liabilities 9,021,664
---------- ---------- ----------- ------------ --------------
Net assets available for
plan benefits $5,471,176 $1,548,125 $16,201,185 $166,395,767 $3,514,193,034
========== ========== =========== ============ ==============
Percentage of Master Trust that are N/A N/A N/A 18.1% 9.4%
plan assets of the Raytheon Savings
and Investment Plan for Specified
Hourly Payroll Employees
*Represents more than 5% of net assets available for plan benefits
N/A: The Templeton Foreign I Fund, Investment Grade Bond Fund, and
Retirement Money Market Fund are not available for the Raytheon
Savings and Investment Plan for Specified Hourly Payroll Employees.
17
I. Master Trust, continued:
The following is a summary of net assets available for plan benefits
by fund under the Master Trust as of December 31, 1996:
Fixed Raytheon Stock
Income Equity Common Index Balanced Magellan
Fund Fund Stock Fund Fund Fund Fund
Assets:
Investments:
At contract value:
Bankers Trust* $339,670,440
Prudential Insurance
Company of America* 210,594,065
Metropolitan Life
Insurance Company* 350,310,646
At fair value:
Fidelity Equity
Income Fund * $578,166,630
Raytheon Company
Common Stock* $671,136,043
BT Pyramid Equity
Index Fund* $307,555,916
Fidelity Balance Fund $83,265,065
Fidelity Magellan Fund $50,454,961
Fidelity Blue Chip Fund
Loans receivable from
participants*
------------ ------------ ------------ ------------ ----------- -----------
Total investments 900,575,151 578,166,630 671,136,043 307,555,916 83,265,065 50,454,961
------------ ------------ ------------ ------------ ----------- -----------
Receivables:
Accrued investment income 39,737 13,686
Cash and cash equivalents 14,633,134 10,145,818 3,541,437
------------ ------------ ------------ ------------ ----------- -----------
Total assets 915,208,285 578,166,630 681,321,598 311,111,039 83,265,065 50,454,961
------------ ------------ ------------ ------------ ----------- -----------
Liabilities:
Payables for outstanding
purchases 2,682,835
------------ ------------ ------------ ------------ ----------- -----------
Total liabilities 2,682,835
------------ ------------ ------------ ------------ ----------- -----------
Net assets available for
plan benefits $915,208,285 $578,166,630 $678,638,763 $311,111,039 $83,265,065 $50,454,961
============ ============ ============ ============ =========== ===========
Percentage of Master Trust that are 12.7% 7.6% 8.7% 8.1% 6.0% 6.8%
plan assets of the Raytheon Saving
and Investment Plan for Specified
Hourly Payroll Employees
*Represents more than 5% of net assets available for plan benefits
18
Blue Chip Loan
Fund Fund Total
Assets:
Investments:
At contract value:
Bankers Trust* $339,670,440
Prudential Insurance
Company of America* 210,594,065
Metropolitan Life
Insurance Company* 350,310,646
At fair value:
Fidelity Equity
Income Fund * 578,166,630
Raytheon Company
Common Stock* 671,136,043
BT Pyramid Equity
Index Fund* 307,555,416
Fidelity Balance Fund 83,265,065
Fidelity Magellan Fund 50,454,961
Fidelity Blue Chip Fund $67,866,240 67,866,240
Loans receivable from
participants* $144,824,714 144,824,714
----------- ------------ --------------
Total investments 67,866,240 144,824,714 2,803,844,720
----------- ------------ --------------
Receivables:
Accrued investment income 53,423
Cash and cash equivalents 28,320,389
----------- ------------ --------------
Total assets 67,866,240 144,824,714 2,832,218,532
----------- ------------ --------------
Liabilities:
Payables for outstanding
purchases 2,682,835
----------- ------------ --------------
Total liabilities 2,682,835
----------- ------------ --------------
Net assets available for
plan benefits $67,866,240 $144,824,714 $2,829,535,697
=========== ============ ==============
Percentage of Master Trust that are 5.7% 19.3% 10.1%
plan assets of the Raytheon Savings
and Investment Plan for Specified
Hourly Payroll Employees.
*Represents more than 5% of net assets available for plan benefits.
19
I. Master Trust, continued:
The following is a summary of investment income by fund under the
Master Trust for the year ended December 31, 1997:
Fixed Raytheon
Income Common Stock Balanced Magellan Blue Chip
Fund Equity Fund Stock Fund Index Fund Fund Fund Fund
Investment income:
Net appreciation (depreciation)
of assets $ (191,924) $132,974,182 $30,715,963 $109,162,707 $ 6,388,316 $ 9,026,047 $15,474,118
Interest 62,319,073 673,934 312,511
Dividends 42,443,971 11,118,152 13,680,351 5,217,835 6,302,875
----------- ------------ ----------- ------------ ----------- ----------- -----------
Total investment income/(loss) $62,127,149 $175,418,153 $42,508,049 $109,475,218 $20,068,667 $14,243,882 $21,776,993
=========== ============ =========== ============ =========== =========== ===========
19
Templeton Investment Retirement
Foreign I Grade Money Loan
Fund Bond Fund Market Fund Fund Total
Investment income:
Net appreciation (depreciation)
of assets $(826,396) $22,581 $302,745,594
Interest $10,848,204 74,153,722
Dividends 549,717 36,337 $266,835 79,616,073
--------- ------- ------- ----------- ------------
Total investment income/(loss) $(276,679) $58,918 $266,835 $10,848,204 $456,515,389
========= ======= ======== =========== ============