1 EXHIBIT 99.6 RAYTHEON TI SYSTEMS SAVINGS PLAN FINANCIAL STATEMENTS TO ACCOMPANY 1998 FORM 5500 ANNUAL REPORT OF EMPLOYEE BENEFIT PLAN UNDER ERISA OF 1974 FOR THE YEAR ENDED DECEMBER 31, 1998 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. 2 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the Raytheon TI Systems Savings 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 benefits of the Raytheon TI Systems Savings Plan (the "Plan") at December 31, 1998 and 1997, and the changes in net assets available for benefits for the year ended December 31, 1998 in conformity with generally accepted accounting principles. 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 generally accepted auditing standards 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 the opinion expressed above. As discussed in Notes A and H to the financial statements, the Board of Directors of Raytheon Company voted on December 16, 1998, to merge the Plan into the Raytheon Savings and Investment Plan. PricewaterhouseCoopers LLP Boston, Massachusetts June 4, 1999 3 RAYTHEON TI SYSTEMS SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS as of December 31, 1998 and 1997 1998 1997 Assets: Master trust investments: At contract value (Notes B, E and I) $ 36,008,015 $ 27,129,250 At fair value (Notes B, F and I) 215,389,507 151,647,372 ------------ ------------ 251,397,522 178,776,622 ------------ ------------ Receivables: Accrued investment income and other receivables 422,047 528,072 Cash and cash equivalents 4,278,946 1,673,631 ------------ ------------ Total assets 256,098,515 180,978,325 ------------ ------------ Liabilities: Payable for outstanding purchases 132,047 533,996 Accrued expenses and other payables 179,030 192,678 Transfer payables (Note H) 255,787,438 ------------ ------------ Total liabilities 256,098,515 726,674 ------------ ------------ Net assets available for plan benefits $ - $180,251,651 ============ ============ The accompanying notes are an integral part of the financial statements. 4 RAYTHEON TI SYSTEMS SAVINGS PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS for the year ended December 31, 1998 Additions to net assets attributable to: Investment income (Notes B, E and I): Net appreciation of investments $ 25,229,092 Interest & Dividends 8,294,811 ------------ 33,523,903 Contributions and deferrals: Employee deferrals 43,369,679 Employer contributions 8,443,415 Transfers (Note G) 32,797 ------------ 51,845,891 Total additions 85,369,794 ------------ Deductions from net assets attributable to: Distributions to participants 9,757,925 Administrative expenses 16,103 Transfers (Note G and H) 255,847,417 ------------ Total deductions 265,621,445 ------------ Decrease in net assets (180,251,651) Net assets, beginning of year 180,251,651 ------------ Net assets, end of year $ - ============ The accompanying notes are an integral part of the financial statements. 5 RAYTHEON TI SYSTEMS SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS A. Description of Plan: General As more fully described in Note H, the Raytheon TI Systems Savings Plan (the "Plan") ceased to exist as of December 31, 1998 and effective January 1, 1999, was merged into the Raytheon Savings and Investment Plan (RAYSIP). The following description of the Plan provides only general information that is applicable through December 31, 1998. Participants should refer to the plan document for a complete description of the Plan's provisions. The Plan was established on July 11, 1997 for former employees of Texas Instruments. The Plan is a defined contribution plan covering certain employees of Raytheon Company (the "Company"). An employee becomes eligible to participate in the Plan on the date he or she becomes an employee and may enter the Plan any day thereafter during his or her employment. 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"). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan's investments are combined with the investments of other similar defined contribution plans of the Company into the Raytheon Company Master Trust for Defined Contribution Plans ("Master Trust"). 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 2% of the participant's salary. For 1998, the annual employee deferral for a participant cannot exceed $10,000. Rollover contributions from other qualified plans are accepted by the Plan. Participants may invest their deferrals in any combination of nine 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) the Fidelity Equity Income Fund which invests in shares of a mutual fund consisting primarily of income-producing equity securities, (c) a Raytheon Common Stock Fund which invests in shares of Raytheon Company 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) the Fidelity Balanced Fund which invests 6 in shares of a mutual fund consisting primarily of equity securities, bonds and money market instruments, (f) the Fidelity Magellan Fund, a growth fund which invests primarily in equities of companies of all types and sizes, (g) the Fidelity Blue Chip Fund, a growth fund which invests primarily in equities of well known and established companies, (h) the Templeton Foreign I Fund, a long-term capital growth fund which invests in stocks and debt obligations of companies and governments of any nation and (i) the Fidelity Investment Grade Bond Fund which invests primarily in U.S. government and corporate bonds including, without limitation, index funds and mutual funds. The Fidelity Investment Grade Bond Fund was eliminated as an option during 1998 and balances were transferred into the Fixed Income Fund. Dividends and distributions from investments of the Fidelity Equity Income Fund, the Raytheon Common Stock Fund, the Stock Index Fund, the Fidelity Balanced Fund, the Fidelity Magellan Fund, the Fidelity Blue Chip Fund, the Templeton Foreign I Fund and the Fidelity Investment Grade Bond Fund are reinvested in their respective funds; stock dividends, stock splits and similar changes are also reflected in the funds. 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 fully and immediately vested in their entire account balance including voluntary deferrals, employer contributions and all investment earnings thereon. 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 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. 7 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. 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. Contract value approximates 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. Participant loans are valued at cost, which approximates fair value. Security transactions are recorded on the 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. Investment income includes both dividends and interest income. Benefits are recorded when paid. 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. 8 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. C. Federal Income Tax Status: The Internal Revenue Service has determined and informed the Company by letter dated March 1999 that the Plan, as adopted on July 11, 1997, and related trust are designed in accordance with applicable sections of the Code. The Plan has been amended since applying for 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 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, plan assets shall be distributed among all participants in proportion to their interest and employee contributions shall be distributed in accordance with the provisions contained in the Code. E. Investment Contracts: The Plan invests in collateralized fixed income investment portfolios which are managed by insurance companies and investment management firms. 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: 9 Annualized Credited Average Yield Interest Rate For the year ended December 31, 1998: Banker's Trust (WBS 92-485) 6.85% 6.85% Metropolitan Life Insurance Company (GIC GA-12908) 6.58% 6.58% Metropolitan Life Insurance Company (GIC GA-13659) 6.10% 6.10% Prudential Asset Management Company (GIC 917163-001) 6.75% 6.75% Connecticut General (GIC 0025174) 5.58% 5.58% Fidelity IPL (633-GCDC) 5.62% 5.62% Monumental Life Insurance Company (GIC BDA00463FR-00) 7.84% 7.84% For the year ended December 31, 1997: Banker's 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% 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. F. Related Party Transactions: The Plan's trustee is Fidelity Management Trust Company (the "Trustee"). The Trustee holds the funds for the Plan and is responsible for managing the Plan's investment assets, executing all investment transactions, recording approved transactions, 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 $288,116,995 and sales amounted to $257,878,566 for the year ended December 31, 1998. G. Transfers: Transfers include transfers of participant accounts, individually and/or in-groups, between the Plan 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 Plan and similar savings plans of other companies for those participants who changed companies during the year. H. Transfer Payables: As part of an overall effort to minimize plan design differences and increase administrative efficiencies, the Board of Directors of Raytheon Company voted on December 16, 1998 to merge the participants and their account balances into the RAYSIP. The Plan ceased to exist on December 31, 1998 and effective January 1, 1999, the plan provisions of the RAYSIP govern. The transfer payable amount represents a complete transfer of assets to the RAYSIP. 10 I. Fund Data: The following is a summary of net assets available for plan benefits by fund as of December 31, 1998: Fixed Raytheon Stock Income Equity Common Index Balanced Magellan Blue Chip Fund Fund Stock Fund Fund Fund Fund Fund Assets: Master trust investments: At contract value: Bankers Trust $ 12,676,508 Prudential Life Insurance Company of America 6,347,889 Metropolitan Life Insurance Company 15,933,322 Fidelity 691,160 Connecticut General 175,137 Monumental Life Insurance Company 183,999 At fair value: Fidelity Equity Income Fund $ 17,276,885 Raytheon Company Common Stock Fund $54,644,741 BT Pyramid Equity Index Fund $46,192,796 Fidelity Balanced Fund $13,627,478 Fidelity Magellan Fund $19,552,160 Fidelity Blue Chip Fund $41,109,867 Templeton Foreign I Fund Loans receivable from participants ------------ ----------- ----------- ----------- ----------- ----------- ----------- Total investments 36,008,015 17,276,885 54,644,741 46,192,796 13,627,478 19,552,160 41,109,867 ------------ ----------- ----------- ----------- ----------- ----------- ----------- Receivables: Accrued investment income and other receivables 324,556 97,491 Cash and cash equivalents 3,320,586 752,045 206,315 ------------ ----------- ----------- ----------- ----------- ----------- ----------- Total assets 39,328,601 17,276,885 55,721,342 46,496,602 13,627,478 19,552,160 41,109,867 ------------ ----------- ----------- ----------- ----------- ----------- ----------- Liabilities: Payable for outstanding purchases 132,047 Accrued expenses and other payables 126,681 52,349 Transfer payables 39,328,601 17,276,885 55,462,614 46,444,253 13,627,478 19,552,160 41,109,867 ------------ ----------- ----------- ----------- ----------- ----------- ----------- Total liabilities 39,328,601 17,276,885 55,721,342 46,496,602 13,627,478 19,552,160 41,109,867 ------------ ----------- ----------- ----------- ----------- ----------- ----------- Net assets available for plan benefits $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 ============ =========== =========== ========== =========== =========== =========== 11 Templeton Foreign I Loan Account Fund Total Assets: Master trust investments: At contract value: Bankers Trust $ 12,676,508 Prudential Insurance Company of America 6,347,889 Metropolitan Life Insurance Company 15,933,322 Fidelity 691,160 Connecticut General 175,137 Monumental Life Insurance Company 183,999 At fair value: Fidelity Equity Income Fund 17,276,885 Raytheon Company Common Stock Fund 54,644,741 BT Pyramid Equity Index Fund 46,192,796 Fidelity Balanced Fund 13,627,478 Fidelity Magellan Fund 19,552,160 Fidelity Blue Chip Fund 41,109,867 Templeton Foreign I Fund $ 6,966,650 6,966,650 Loans receivable from participants $16,018,930 16,018,930 ----------- ----------- ------------ Total investments 6,966,650 16,018,930 251,397,522 ----------- ----------- ------------ Receivables: Accrued investment income and other receivables 422,047 Cash and cash equivalents 4,278,946 ----------- ----------- ------------ Total assets 6,966,650 16,018,930 256,098,515 ----------- ----------- ------------ Liabilities: Payable for outstanding purchases 132,047 Accrued expenses and other payables 179,030 Transfer payables 6,966,650 16,018,930 255,787,438 ----------- ----------- ------------ Total liabilities 6,966,650 16,018,930 256,098,515 ----------- ----------- ------------ Net assets available for plan benefits $ 0 $ 0 $ 0 =========== =========== ============ 12 I. Fund Data, Continued: The following is a summary of net assets available for plan benefits by fund as of December 31, 1997: Raytheon Fixed Equity Common Stock Balanced Magellan Income Fund Fund Stock Fund Index Fund Fund Fund Assets: Master trust investments: At contract value: Bankers Trust* $ 10,132,377 Prudential Insurance Company of America 6,284,670 Metropolitan Life Insurance Company* 10,712,203 At fair value: Fidelity Equity Income Fund $ 8,254,100 Raytheon Company Common Stock* $62,818,459 BT Pyramid Equity Index Fund* $27,442,258 Fidelity Balanced Fund $7,638,642 Fidelity Magellan Fund $6,635,153 Fidelity Blue Chip Fund* Templeton Foreign I Fund Fidelity Investment Grade Bond Fund Loans receivable from participants* ------------ ----------- ----------- ----------- ---------- ---------- Total investments 27,129,250 8,254,100 62,818,459 27,442,258 7,638,642 6,635,153 ------------ ----------- ----------- ----------- ---------- ---------- Receivables: Accrued investment income and other receivables 462,345 65,727 Cash and cash equivalents 267,275 1,136,836 269,520 ------------ ----------- ----------- ----------- ---------- ---------- Total assets 27,396,525 8,254,100 64,417,640 27,777,505 7,638,642 6,635,153 ------------ ----------- ----------- ----------- ---------- ---------- Liabilities: Payable for outstanding purchases 533,996 Accrued expenses and other payables 124,723 67,955 ------------ ----------- ----------- ---------- ----------- ---------- Total liabilities - - 658,719 67,955 - - ------------ ----------- ----------- ---------- ----------- ---------- Net assets available for plan benefits $ 27,396,525 $ 8,254,100 $63,758,921 $27,709,550 $7,638,642 $6,635,153 ============ =========== =========== =========== ========== ========== *Represents more than 5% of net assets available for plan benefits 13 Templeton Investment Blue Chip Foreign I Grade Loan Fund Fund Bond Fund Fund Total Assets: Investments: At contract value: Bankers Trust* $ 10,132,377 Prudential Life Insurance Company of America 6,284,670 Metropolitan Life Insurance Company* 10,712,203 At fair value: Fidelity Equity Income Fund 8,254,100 Raytheon Company Common Stock Fund* 62,818,459 BT Pyramid Equity Index Fund* 27,442,258 Fidelity Balanced Fund 7,638,642 Fidelity Magellan Fund 6,635,153 Fidelity Blue Chip Fund* $ 18,760,639 18,760,639 Templeton Foreign I Fund $5,471,176 5,471,176 Fidelity Investment Grade Bond Fund $1,548,125 1,548,125 Loans receivable from participants* $ 13,078,820 13,078,820 ------------ ---------- ---------- ------------ ------------ Total investments 18,760,639 5,471,176 1,548,125 13,078,820 178,776,622 ------------ ---------- ---------- ------------ ------------ Receivables: Accrued investment income and other receivables 528,072 Cash and cash equivalents 1,673,631 ------------ ---------- ---------- ------------ ------------ Total assets 18,760,639 5,471,176 1,548,125 13,078,820 180,978,325 ------------ ---------- ---------- ------------ ------------ Liabilities: Payable for outstanding purchases 533,996 Accrued expenses and other payables 192,678 ------------ ---------- ---------- ------------ ------------ Total liabilities - - - - 726,674 ------------ ---------- ---------- ------------ ------------ Net assets available for plan benefits $ 18,760,639 $5,471,176 $1,548,125 $ 13,078,820 $180,251,651 ============ ========== ========== ============ ============ *Represent more than 5% of net assets available for plan benefits 14 I. 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, 1998: Fixed Raytheon Stock Income Equity Common Index Balanced Magellan Blue Chip Fund Fund Stock Fund Fund Fund Fund Fund Additions to net assets attributable to: Investment income: Net appreciation (depreciation) of investments $ 3,295 $ 584,690 $ 5,158,554 $ 9,280,287 $ 829,007 $ 3,117,037 $ 7,334,555 Interest & Dividends 1,993,246 874,982 1,116,139 717,602 1,421,709 ----------- ------------ ----------- ----------- ----------- ------------ ------------ 1,996,541 1,459,672 5,158,554 9,280,287 1,945,146 3,834,639 8,756,264 ----------- ------------ ----------- ----------- ----------- ------------ ------------ Contributions and deferrals: Employee deferrals 6,104,144 5,975,544 3,061,022 7,954,043 2,632,497 5,181,263 8,707,144 Employer contributions 1,130,391 1,217,093 659,688 1,608,662 479,166 944,884 1,701,689 Transfers 14,206 42,771 3,898 (12,411) (1,814) (1,765) ------------ ------------ ----------- ----------- ----------- ------------ ------------ 7,248,741 7,235,408 3,724,608 9,550,294 3,111,663 6,124,333 10,407,068 ------------ ------------ ----------- ----------- ----------- ------------ ------------ Total additions 9,245,282 8,695,080 8,883,162 18,830,581 5,056,809 9,958,972 19,163,332 ------------ ------------ ----------- ----------- ----------- ------------ ------------ Deductions from net assets attributable to: Distributions to participants 1,860,825 745,470 1,703,163 1,536,525 675,276 535,393 1,528,144 Administrative expenses 2,492 940 5,698 2,756 767 764 1,998 Transfers (13,295) 27,074 62,761 Transfers plan mergers 39,328,602 17,276,885 55,462,614 46,444,253 13,627,478 19,552,160 41,109,867 ------------ ------------ ----------- ------------ ----------- ------------ ------------ Total deductions 41,191,919 18,010,000 57,198,549 48,046,295 14,303,521 20,088,317 42,640,009 ------------ ------------ ----------- ------------ ----------- ------------ ------------ Interfund transfers 4,550,112 1,060,820 (15,443,534) 1,506,164 1,608,070 3,494,192 4,716,038 ------------ ------------ ----------- ------------ ----------- ------------ ------------ Decrease in net assets (27,396,525) (8,254,100) (63,758,921) (27,709,550) (7,638,642) (6,635,153) (18,760,639) Net assets, beginning of year 27,396,525 8,254,100 63,758,921 27,709,550 7,638,642 6,635,153 18,760,639 ------------ ------------ ----------- ----------- ------------ ------------ ------------ Net assets, end of year $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 ============ ============ =========== =========== ============ ============ ============ 15 Templeton Investment Foreign I Grade Bond Loan Fund Fund Fund Total Additions to net assets attributable to: Investment income: Net appreciation (depreciation) of investments $(1,095,967) $ 17,634 $ 25,229,092 Interest & Dividends 752,610 162,858 $ 1,255,665 8,294,811 ----------- ------------ ------------ ------------- (343,357) 180,492 1,255,665 33,523,903 ----------- ------------ ------------- ------------- Contributions and deferrals: Employee deferrals 2,897,062 856,960 43,369,679 Employer contributions 598,350 103,492 8,443,415 Transfers (12,088) 32,797 ---------- ------------ ------------- ------------- 3,495,412 960,452 (12,088) 51,845,891 ----------- ------------ ------------- ------------- Total additions 3,152,055 1,140,944 1,243,577 85,369,794 ----------- ------------ ------------- ------------- Deductions from net assets attributable to: Distributions to participants 274,069 123,832 775,228 9,757,925 Administrative expenses 514 174 16,103 Transfers (16,562) 59,978 Transfers plan mergers 6,966,650 16,018,930 255,787,439 ----------- ------------ -------------- ------------- Total deductions 7,241,233 124,006 16,777,596 265,621,445 ----------- ------------ -------------- ------------- Interfund transfers (1,381,998) (2,565,063) 2,455,199 ----------- ----------- -------------- ------------- Decrease in net assets (5,471,176) (1,548,125) (13,078,820) (180,251,651) ----------- ----------- -------------- ------------- Net assets, beginning of year 5,471,176 1,548,125 13,078,820 180,251,651 ------------ ----------- -------------- ------------- Net assets, end of year $ 0 $ 0 $ 0 $ 0 ============ =========== ============= ============= 16 J. Master Trust: All plan investments are included under the Master Trust. At December 31, 1998, assets of the Plan represented 0% of the total assets under the Master Trust. This has decreased from 5.1% at December 31, 1997. The following is a summary of net assets available for plan benefits by fund under the Master Trust as of December 31, 1998: Fixed Raytheon Stock Income Equity Common Index Balanced Magellan Fund Fund Stock Fund Fund Fund Fund Assets: Investments: At contract value: Bankers Trust* $ 473,258,791 Prudential Life Insurance Company of America 236,989,116 Metropolitan Life Insurance Company* 594,847,154 Fidelity 25,803,449 Connecticut General 6,538,482 Monumental Life Insurance Company 6,869,338 At fair value: Fidelity Equity Income Fund* $1,464,615,296 Raytheon Company Common Stock Fund* $ 799,542,751 BT Pyramid Equity Index Fund* $ 745,602,791 Fidelity Balanced Fund* $ 442,796,289 Fidelity Magellan Fund* $ 379,680,454 Fidelity Blue Chip Fund* Templeton Foreign I Fund Fidelity Investment Grade Bond Fund Fidelity Retirement Money Market Vanguard Winsor Vanguard Wellesley TRP Small Cap Stock Raytheon Class A Wasting Stock Fund Raytheon GMH Wasting Stock Fund Loans receivable from participants -------------- -------------- -------------- -------------- -------------- -------------- Total investments 1,344,306,330 1,464,615,296 799,542,751 745,602,791 442,796,289 379,680,454 -------------- -------------- -------------- -------------- -------------- -------------- Receivables: Employer contribution Accrued investment income and other receivables 4,748,948 1,573,604 Transfer receivables 580,261,670 762,142,416 440,085,027 216,741,687 312,377,329 236,688,803 Cash and cash equivalents 123,969,201 11,004,025 3,330,147 -------------- -------------- -------------- -------------- -------------- -------------- Total assets 2,048,537,201 2,226,757,712 1,255,380,751 967,248,229 755,173,618 616,369,257 -------------- -------------- -------------- -------------- -------------- -------------- Liabilities: Payable for outstanding purchases 1,932,125 Accrued expenses and other payables 1,853,618 844,977 Transfer payables 580,261,670 762,142,416 440,085,027 216,741,687 312,377,329 236,688,803 -------------- -------------- -------------- -------------- -------------- -------------- Total liabilities 580,261,670 762,142,416 443,870,770 217,586,664 312,377,329 236,688,803 -------------- -------------- -------------- -------------- -------------- -------------- Net assets available for plan benefits $1,468,275,531 $1,464,615,296 $ 811,509,981 $ 749,661,565 $ 442,796,289 $ 379,680,454 ============== ============== ============== ============== ============== ============== 17 Templeton Investment Retirement Vanguard Vanguard Blue Chip Foreign I Grade Money Winsor Wellesley Fund Fund Bond Fund Market Fund Fund Fund Assets: Investments: At contract value: Bankers Trust* Prudential Life Insurance Company of America Metropolitan Life Insurance Company* Fidelity Connecticut General Monumental Life Insurance Company At fair value: Fidelity Equity Income Fund* Raytheon Company Common Stock Fund* BT Pyramid Equity Index Fund* Fidelity Balanced Fund* Fidelity Magellan Fund* Fidelity Blue Chip Fund* $ 391,787,509 Templeton Foreign I Fund $ 6,966,704 Fidelity Investment Grade Bond Fund $ - Fidelity Retirement Money Market $ 13,202,524 Vanguard Winsor $ 41 Vanguard Wellesley $ 18 TRP Small Cap Stock Raytheon Class A Wasting Stock Fund Raytheon GMH Wasting Stock Fund Loans receivable from participants -------------- -------------- -------------- ------------- ------------- -------------- Total investments 391,787,509 6,966,704 - 13,202,524 41 18 -------------- -------------- -------------- ------------- ------------- -------------- Receivables: Employer contribution 3,595,261 Accrued investment income and other receivables Transfer receivables 191,269,141 6,966,652 16,715,590 Cash and cash equivalents -------------- -------------- -------------- ------------- ------------- -------------- Total assets 583,056,650 13,933,356 - 33,513,375 41 18 -------------- -------------- -------------- ------------- ------------- -------------- Liabilities: Payable for outstanding purchases Accrued expenses and other payables Transfer payables 191,269,141 6,966,652 16,715,590 -------------- -------------- -------------- ------------- ------------- -------------- Total liabilities 191,269,141 6,966,652 - 16,715,590 - - -------------- -------------- -------------- ------------- ------------- -------------- Net assets available for plan benefits $ 391,787,509 $ 6,966,704 $ - $ 16,797,785 $ 41 $ 18 ============== ============== ============== ============== ============== ============== 18 TRP Small RTN.A GMH Cap Stock Wasting Wasting Loan Fund Fund Fund Fund Other(1) Total Assets: Investments: At contract value: Bankers Trust* $ 473,258,791 Prudential Life Insurance Company of America 236,989,116 Metropolitan Life Insurance Company* 594,847,154 Fidelity 25,803,449 Connecticut General 6,538,482 Monumental Life Insurance Company 6,869,338 At fair value: Fidelity Equity Income Fund* 1,464,615,296 Raytheon Company Common Stock Fund* 799,542,751 BT Pyramid Equity Index Fund* 745,602,791 Fidelity Balanced Fund* 442,796,289 Fidelity Magellan Fund* 379,680,454 Fidelity Blue Chip Fund* 391,787,509 Templeton Foreign I Fund 6,966,704 Fidelity Investment Grade Bond Fund - Fidelity Retirement Money Market 13,202,524 Vanguard Winsor 41 Vanguard Wellesley 18 TRP Small Cap Stock $ 348 348 Raytheon Class A Wasting Stock Fund $ 116,129,149 116,129,149 Raytheon GMH Wasting Stock Fund $ 172,859,819 172,859,819 Loans receivable from participants $ 250,687,865 250,687,865 -------------- -------------- -------------- -------------- ------------- -------------- Total investments 348 116,129,149 172,859,819 250,687,865 - 6,128,177,888 -------------- -------------- -------------- -------------- ------------- -------------- Receivables: Employer contribution 3,595,261 Accrued investment income and other receivables 1,193,397 23,640 7,539,589 Transfer receivables 120,761,325 178,295,618 117,046,618 $ 855,826,675 4,035,178,551 Cash and cash equivalents 3,480,490 5,474,220 147,258,083 -------------- -------------- -------------- ------------- -------------- -------------- Total assets 348 241,564,361 356,653,297 367,734,483 855,826,675 10,321,749,372 -------------- -------------- -------------- ------------- -------------- -------------- Liabilities: Payable for outstanding purchases 1,932,125 Accrued expenses and other payables 41,711 62,061 2,802,367 Transfer payables 120,761,325 178,295,618 117,046,618 3,179,351,876 -------------- -------------- -------------- ------------- -------------- -------------- Total liabilities - 120,803,036 178,357,679 117,046,618 - 3,184,086,368 -------------- -------------- -------------- ------------- -------------- -------------- Net assets available for plan benefits $ 348 $120,761,325 $ 178,295,618 $ 250,687,865 $ 855,826,675 $7,137,663,004 ============== ============== ============== ============== ============== ============== Percentage of Master Trust that are Plan assets - 0.00% *Represent more than 5% of net assets available for plan benefits (1) Other represents Raytheon plans merging in from outside the Master Trust. Note: Not all funds within the Master Trust are available options to participants in the Plan. 19 J. 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, 1997: Fixed Raytheon Stock Income Equity Common Index Balanced Magellan Fund Fund Stock Fund Fund Fund Fund Assets: Investments: At contract value: Bankers Trust* $351,035,073 Prudential Life 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 Fund* $745,980,294 BT Pyramid Equity Index Fund* $484,781,406 Fidelity Balanced Fund $117,556,481 Fidelity Magellan Fund $91,863,155 Fidelity Blue Chip Fund 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 ------------ ------------ ------------ ------------ ------------ ----------- 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 ------------ ------------ ------------ ------------ ------------ ----------- Liabilities: Payable 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 ============ ============ ============ ============ ============ =========== 20 Templeton Investment Retirement Blue Chip Foreign I Grade Money Loan Fund Fund Bond Fund Market Fund Fund Total Assets: Investments: At contract value: Bankers Trust* $351,035,073 Prudential Life 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 Fund* 745,980,294 BT Pyramid Equity Index Fund* 484,781,406 Fidelity Balanced Fund 117,556,481 Fidelity Magellan Fund 91,863,155 Fidelity Blue Chip Fund $136,586,123 136,586,123 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 136,586,123 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 136,586,123 5,471,176 1,548,125 16,201,185 166,395,767 3,523,214,698 Liabilities: Payable 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 $136,586,123 $5,471,176 $1,548,125 $16,201,185 $166,395,767 $3,514,193,034 ============ ========== ========== =========== ============ ============== Percentage of Master Trust that are Plan assets - 5.1% *Represent more than 5% of net assets available for plan benefits Note: Not all funds within the Master Trust are available options to participants in the Plan. 21 J. Master Trust, Continued: The following is a summary of investment income by fund under the Master Trust for the year ended December 31, 1998: Fixed Raytheon Stock Income Equity Common Index Balanced Magellan Fund Fund Stock Fund Fund Fund Fund Investment income: Net appreciation (depreciation) of assets $ 30,695 $ 49,019,748 $74,202,083 $149,571,006 $16,091,158 $62,195,801 Interest & Dividends 81,886,632 86,279,682 1,792 42,537,357 13,255,763 ----------- ------------ ----------- ------------ ----------- ----------- Total investment income/(loss) $81,917,327 $135,299,430 $74,203,875 $149,571,006 $58,628,515 $75,451,564 =========== ============ =========== ============ =========== =========== 22 Templeton Investment Retirement Vanguard Vanguard Blue Chip Foreign I Grade Money Winsor Wellesley Fund Fund Bond Fund Market Fund Fund Fund Investment income: Net appreciation (depreciation) of assets $60,264,181 $(1,095,980) $ 17,635 $2,864,378 $1,379,950 Interest & Dividends 13,550,491 752,610 162,858 $ 349,740 ----------- ----------- -------- ---------- ---------- ---------- Total investment income/(loss) $73,814,672 $ (343,370) $180,493 $ 349,740 $2,864,378 $1,379,950 =========== =========== ======== ========== ========== ========== 23 TRP Small RTN.A GMH Cap Stock Wasting Wasting Loan Fund Fund Fund Fund Total Investment income: Net appreciation (depreciation) of assets $ 15 $ (35,268) $44,604,025 $459,109,427 Interest & Dividends $15,334,403 254,111,328 ----------- ---------- ----------- ----------- ------------ Total investment income/(loss) $ 15 $ (35,268) $44,604,025 $15,334,403 $713,220,755 =========== ========== =========== =========== ============