1
EXHIBIT 99.1
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, 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 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
benefits of the Raytheon Savings and Investment 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.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 4, 1999
3
RAYTHEON SAVINGS AND INVESTMENT 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) $ 791,829,132 $ 772,455,041
At fair value (Notes B, F and I) 2,147,582,028 1,887,852,039
-------------- --------------
2,939,411,160 2,660,307,080
-------------- --------------
Receivables:
Accrued investment income and
other receivables 3,214,568 3,765,409
Transfer receivables (Note H) 3,824,865,272 -
Cash and cash equivalents 80,249,335 18,482,006
-------------- --------------
Total assets 6,847,740,335 2,682,554,495
-------------- --------------
Liabilities:
Payable for outstanding purchases 861,953 3,213,981
Accrued expenses and other payables 1,415,440 1,766,653
-------------- --------------
Total liabilities 2,277,393 4,980,634
-------------- --------------
Net assets available for plan benefits $6,845,462,942 $2,677,573,861
============== ==============
The accompanying notes are an integral part of the financial statements.
4
RAYTHEON SAVINGS AND INVESTMENT 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 $ 274,186,504
Interest & Dividends 125,514,753
--------------
399,701,257
Contributions and deferrals:
Employee deferrals 139,261,693
Employer contributions 40,567,458
Transfers (Note G and H) 3,844,113,615
--------------
4,023,942,766
Total additions 4,423,644,023
--------------
Deductions from net assets attributable to:
Distributions to participants 226,235,565
Administrative expenses 228,714
Transfers (Note G) 29,290,663
Total deductions 255,754,942
--------------
Increase in net assets 4,167,889,081
Net assets, beginning of year 2,677,573,861
--------------
Net assets, end of year $6,845,462,942
==============
The accompanying notes are an integral part of the financial statements.
5
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. As more fully
described in Note H, effective January 1, 1999, the participants and related
account balances of several defined contribution plans (collectively referred to
as "Prior Plans") were merged into the Plan.
The Plan is a defined contribution plan covering certain employees of Raytheon
Company (the "Company"). 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. Effective January 1, 1999, eligible employees may join the Plan
immediately, 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 and
the Raytheon Stock Ownership Plan for Specified Hourly Payroll Employees
(collectively referred to as "prior ESOP plans") 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 ("Master Trust") with the assets of other defined
contribution plans of the Company. 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 plan 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 salary. The employee and Company contributions are
invested based on participant elections. For 1998, the annual employee deferral
for a participant cannot exceed $10,000. Rollover contributions from other
qualified plans are accepted by the Plan.
6
Effective January 1, 1999, employees are allowed to defer up to 20% of their
compensation to the Plan, except for certain employees from Prior Plans who are
limited to 17%. Employee contributions, including rollovers, are invested based
on participant elections. The Company will match contribution amounts equal to
100% of each participant's deferral, up to a maximum of 4% of compensation. The
Company match shall be made to 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. The Company will also make 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 Raytheon
Company Class B common stock; however, as required by the Code, the Plan permits
limited diversification after a participant attains age 55 or 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 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) 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 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, and (g) the Fidelity Blue Chip Fund, a growth
fund which invests primarily in equities of well known and established
companies. In addition, certain employees who transferred into the Plan were
allowed to maintain small balances in other fund options that become available
to all participants in 1999. Dividends and distributions from investments of all
fund options are reinvested in their respective funds; stock dividends, stock
splits and similar changes are also reflected in the funds.
Effective January 1, 1999, the Plan will offer several additional fund options
that were available in Prior Plans. These options include:
Templeton Foreign I Fund - a long-term capital growth fund which invests in
stocks and debt obligations of companies and governments of any nation.
Vanguard Morgan Growth Fund - investments consist primarily of common stocks of
corporations with either established growth patterns, emerging growth potential,
or cyclical growth patterns.
Vanguard Windsor Fund - investments consist of a portfolio of common stocks, the
objective of which is primarily long-term growth and secondarily, current income
through dividends.
7
Vanguard Wellesley Income Fund - investments consist of about 60% fixed-income
securities and 40% common stocks. The Fund objective is primarily current income
through dividends, and secondarily, moderate capital growth.
T. Rowe Price Small Cap Stock Fund - invests in equity securities of small, high
growth potential companies.
RTN-A Wasting Fund and GMH Wasting Fund - hold shares of Raytheon Company Class
A common stock or General Motors Class H common stock, respectively, that were
transferred into the Plan from Prior Plans. These options will not be open for
additional contributions and will only be available through December 31, 2002.
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 completion of five years of service
or upon three years of Plan participation or upon retirement, death, disability,
or attainment of normal retirement age. Forfeitures of the non-vested portions
of terminated participants' accounts are used to reduce required contributions
of the Company.
Effective January 1, 1999, all employee and employer contributions and earnings
thereon are fully and immediately 100% vested.
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,
($5,000 effective January 1, 1999) 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.
8
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 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.
Administrative Expenses
The Plan participants pay substantially all expenses of administering the Plan.
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
employee contributions plus interest earned on the underlying investments at
contracted rates. Contract values approximate fair value. Investments in mutual
funds and the commingled pool are valued a 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. 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.
9
Certain items in the 1997 financial statements have been reclassified to conform
to the 1998 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.
C. 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 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. 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.
10
E. Investment Contracts:
The Plan invests in collateralized fixed income investment portfolios (with no
expiration date), 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:
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.
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G. Transfers:
Transfers include transfers of participant accounts, individually and/or
in-groups, between the Plan and all 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 Receivables:
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 from
several Prior Plans into the Plan. The Prior Plans ceased to exist on December
31, 1998 and effective January 1, 1999 the plan provisions of the Plan govern.
The transfer receivable by Prior Plan is as follows:
Raytheon Salaried Savings and
Investment Plan $2,188,796,696
E-Systems, Inc. Employee Savings Plan 744,493,356
Raytheon TI Systems Savings Plan 255,787,439
Raytheon Savings and Investment Plan
for Specified Hourly Payroll Employees 233,308,197
Raytheon Stock Ownership Plan 219,416,215
Raytheon STX Corporation 401(k)
Retirement Plan 89,317,908
Raytheon California Hourly Savings
and Investment Plan 59,818,911
Raytheon Stock Ownership Plan for
Specified Hourly Payroll Employees 29,965,013
Standard Missile 401(k) Plan 3,961,537
--------------
Total $3,824,865,272
==============
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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 $278,760,941
Prudential Insurance
Company of America 139,592,355
Metropolitan Life
Insurance Company* 350,379,445
Fidelity 15,198,859
Connecticut General 3,851,325
Monumental Life
Insurance Company 4,046,207
At fair value:
Fidelity Equity
Income Fund* $691,209,765
Raytheon Company
Common Stock Fund* $356,701,412
BT Pyramid Equity
Index Fund* $519,296,605
Fidelity Balanced
Fund $126,343,413
Fidelity Magellan
Fund $135,325,150
Fidelity Blue
Chip Fund $191,248,790
Fidelity Retirement
Money Market
Vanguard Winsor
Vanguard Wellesley
TRP Small Cap Stock
Loans receivable
from participants
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total investments 791,829,132 691,209,765 356,701,412 519,296,605 126,343,413 135,325,150 191,248,790
------------ ------------ ------------ ------------ ------------ ------------ ------------
Receivables:
Accrued investment income
and other receivables 2,118,587 1,095,981
Transfer receivables
Cash and cash equivalents 73,020,876 4,909,081 2,319,378
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total assets 864,850,008 691,209,765 363,729,080 522,711,964 126,343,413 135,325,150 191,248,790
------------ ------------ ------------ ------------ ------------ ------------ ------------
Liabilities:
Payable for outstanding
purchases 861,953
Accrued expenses and other
payables 826,930 588,510
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total liabilities - - 1,688,883 588,510 - - -
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net assets available for
plan benefits $864,850,008 $691,209,765 $362,040,197 $522,123,454 $126,343,413 $135,325,150 $191,248,790
============ ============ ============ ============ ============ ============ ============
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Templeton Retirement Vanguard Vanguard TRP
Foreign I Money Winsor Wellesley Cap Stock
Fund Market Fund 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
Templeton Foreign I Fund $ 52
Fidelity Retirement
Money Market $ 82,195
Vanguard Winsor $ 41
Vanguard Wellesley $ 18
TRP Small Cap Stock $ 348
Loans receivable from
participants
-------- ----------- -------- -------- --------
Total investments 52 82,195 41 18 348
-------- ----------- -------- -------- --------
Receivables:
Accrued investment income
and other receivables
Transfer receivables
Cash and cash equivalents
-------- ----------- -------- -------- --------
Total assets 52 82,195 41 18 348
-------- ----------- -------- -------- --------
Liabilities:
Payables for outstanding
purchases
Accrued expenses and
other payables
-------- ----------- -------- -------- --------
Total liabilities - - - - -
-------- ----------- -------- -------- --------
Net assets available for
plan benefits $ 52 $ 82,195 $ 41 $ 18 $ 348
======== =========== ======== ======== ========
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Loan
Fund Other(1) Total
Assets:
Investments:
At contract value:
Bankers Trust $ 278,760,941
Prudential Life Insurance
Company of America 139,592,355
Metropolitan Life
Insurance Company* 350,379,445
Fidelity 15,198,859
Connecticut General 3,851,325
Monumental Life Insurance
Company 4,046,207
At fair value:
Fidelity Equity Income
Fund* 691,209,765
Raytheon Company Common
Stock Fund* 356,701,412
BT Pyramid Equity
Index Fund* 519,296,605
Fidelity Balanced Fund 126,343,413
Fidelity Magellan Fund 135,325,150
Fidelity Blue Chip Fund 191,248,790
Templeton Foreign I Fund 52
Fidelity Retirement
Money Market 82,195
Vanguard Winsor 41
Vanguard Wellesley 18
TRP Small Cap Stock 348
Loans receivable from
participants $127,374,239 127,374,239
------------ -------------- --------------
Total investments 127,374,239 - 2,939,411,160
------------ -------------- --------------
Receivables:
Accrued investment income
and other receivables 3,214,568
Transfer receivables $3,824,865,272 3,824,865,272
Cash and cash equivalents 80,249,335
------------ -------------- --------------
Total assets 127,374,239 3,824,865,272 6,847,740,335
------------ -------------- --------------
Liabilities:
Payables for outstanding
purchases 861,953
Accrued expenses and
other payables 1,415,440
------------ -------------- --------------
Total liabilities - - 2,277,393
------------ -------------- --------------
Net assets available for
plan benefits $127,374,239 $3,824,865,272 $6,845,462,942
============ ============== ==============
(1) See Note H.
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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* $288,500,627
Prudential Insurance
Company of America* 178,944,318
Metropolitan Life
Insurance Company* 305,010,096
At fair value:
Fidelity Equity Income Fund* $702,811,931
Raytheon Company Common Stock* $378,088,027
BT Pyramid Equity Index Fund* $410,284,635
Fidelity Balanced Fund $99,624,204
Fidelity Magellan Fund $73,972,306
Fidelity Blue Chip Fund*
Loans receivable from participants
------------ ------------ ------------ ------------ ----------- -----------
Total investments 772,455,041 702,811,931 378,088,027 410,284,635 99,624,204 73,972,306
------------ ------------ ------------ ------------ ----------- -----------
Receivables:
Accrued investment income
and other receivables 2,782,739 982,670
Cash and cash equivalents 7,610,141 6,842,320 4,029,545
------------ ------------ ------------ ------------ ----------- -----------
Total assets 780,065,182 702,811,931 387,713,086 415,296,850 99,624,204 73,972,306
------------ ------------ ------------ ------------ ---------- -----------
Liabilities:
Payable for outstanding
purchases 3,213,981
Accrued expenses and other
payables 750,673 1,015,980
------------ ----------- ------------ ------------ ----------- -----------
Total liabilities - - 3,964,654 1,015,980 - -
------------ ----------- ------------ ------------ ----------- -----------
Net assets available for plan
benefits $780,065,182 $702,811,931 $383,748,432 $414,280,870 $99,624,204 $73,972,306
============ ============ ============ ============ =========== ===========
*Represents more than 5% of net assets available for plan benefits
16
Blue Chip Loan
Fund Fund Total
Assets:
Master trust investments:
At contract value:
Bankers Trust* $ 288,500,627
Prudential Insurance
Company of America* 178,944,318
Metropolitan Life
Insurance Company* 305,010,096
At fair value:
Fidelity Equity Income Fund* 702,811,931
Raytheon Company Common Stock* 378,088,027
BT Pyramid Equity Index Fund* 410,284,635
Fidelity Balanced Fund 99,624,204
Fidelity Magellan Fund 73,972,306
Fidelity Blue Chip Fund* $104,583,449 104,583,449
Loans receivable from participant $118,487,487 118,487,487
------------ ------------ --------------
Total investments 104,583,449 118,487,487 2,660,307,080
------------ ------------ --------------
Receivables:
Accrued investment income
and other receivables 3,765,409
Cash and cash equivalents 18,482,006
------------ ------------ --------------
Total assets 104,583,449 118,487,487 2,682,554,495
------------ ------------ --------------
Liabilities:
Payable for outstanding
purchases 3,213,981
Accrued expenses and other
payables 1,766,653
------------ ------------ --------------
Total liabilities - - 4,980,634
------------ ------------ --------------
Net assets available for plan
benefits $104,583,449 $118,487,487 $2,677,573,861
============ ============ ==============
*Represents more than 5% of net assets available for plan benefits
17
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 of
investments $ 7,968 $ 39,869,117 $ 46,093,769 $116,015,605 $ 8,737,847 $ 23,704,822 $ 35,513,033
Interest & Dividends 52,236,404 40,677,644 487 11,799,209 5,735,292 7,005,152
----------- ------------ ------------ ------------ ------------ ------------ ------------
52,244,372 80,546,761 46,094,256 116,015,605 20,537,056 29,440,114 42,518,185
----------- ------------ ------------ ------------ ------------ ------------ ------------
Contributions and deferrals:
Employee deferrals 34,393,979 30,611,637 19,742,509 24,215,193 7,352,853 10,245,680 12,699,583
Employer contributions 9,772,937 9,247,861 6,058,288 7,160,853 2,130,456 2,735,723 3,461,156
Transfers 688,904 433,952 390,442 81,659 292,867
------------ ------------ ------------ ----------- ------------ ------------ ------------
44,855,820 40,293,450 25,800,797 31,766,488 9,564,968 13,274,270 16,160,739
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total additions 97,100,192 120,840,211 71,895,053 147,782,093 30,102,024 42,714,384 58,678,924
------------ ------------ ------------ ------------ ------------ ------------ ------------
Deductions from net assets
attributable to:
Distributions to
participants 92,915,405 47,496,188 20,966,864 29,985,617 7,923,978 6,806,225 8,887,855
Administrative expenses 68,305 61,171 34,400 37,925 9,103 7,397 10,413
Transfers 9,832,382 6,519,835 3,644,315 4,904,260 1,139,553 1,464,607 1,785,711
------------ ------------ ----------- ------------- ------------ ------------ ------------
Total deductions 102,816,092 54,077,194 24,645,579 34,927,802 9,072,634 8,278,229 10,683,979
------------ ------------ ----------- ------------- ------------ ------------ ------------
Interfund transfers 90,500,726 (78,365,183) (68,957,709) (5,011,707) 5,689,819 26,916,689 38,670,396
------------ ------------ ----------- ------------- ------------ ------------ ------------
Increase(decrease) in
net assets 84,784,826 (11,602,166) (21,708,235) 107,842,584 26,719,209 61,352,844 86,665,341
Net assets, beginning
of year 780,065,182 702,811,931 383,748,432 414,280,870 99,624,204 73,972,306 104,583,449
------------ ------------ ----------- ------------ ------------ ------------ ------------
Net assets, end of year $864,850,008 $691,209,765 $362,040,197 $522,123,454 $126,343,413 $135,325,150 $191,248,790
============ ============ ============ ============ ============ ============ ============
18
Templeton Retirement Vanguard Vanguard TRP
Foreign I Money Winsor Wellesley Cap Stock
Fund Market Fund Fund Fund Fund
Assets:
Additions to net assets
attributable to:
Investment income:
Net appreciation of
investments $ $ 2,864,378 $ 1,379,950 $ 15
Interest & Dividends - $ 1,231
---------- ------------ ----------- ----------- ---------
- 1,231 2,864,378 1,379,950 15
---------- ------------ ----------- ----------- ---------
Contributions and deferrals:
Employee deferrals 32 18 18 191
Employer contributions 20 22 142
Transfers 10,958 (2,864,377) (1,379,950)
------------ ------------ ----------- ----------- ---------
52 10,958 (2,864,337) (1,379,932) 333
------------ ------------ ----------- ----------- ---------
Total additions 52 12,189 41 18 348
------------ ------------ ----------- ----------- ---------
Deductions from net assets
attributable to:
Distributions to
participants (84)
Administrative expenses
Transfers
------------ ------------ ----------- ----------- ---------
Total deductions - (84) - - -
------------ ------------ ----------- ----------- ---------
Interfund transfers 69,922
------------ ------------ ----------- ----------- ---------
Increase/(Decrease) in
net assets 52 82,195 41 18 348
Net assets, beginning
of year
------------ ------------ ----------- ------------- ---------
Net assets, end of year $ 52 $ 82,195 $ 41 $ 18 $ 348
============ ============ =========== ============= =========
19
Loan
Fund Other(1) Total
Additions to net assets
attributable to:
Investment income:
Net appreciation of
investments $ 274,186,504
Interest & Dividends $ 8,059,334 125,514,753
------------ ------------- --------------
8,059,334 399,701,257
------------ ------------- --------------
Contributions and deferrals:
Employee deferrals 139,261,693
Employer contributions 40,567,458
Transfers 21,593,888 $3,824,865,272 3,844,113,615
----------- -------------- --------------
21,593,888 3,824,865,272 4,023,942,766
----------- ------------- --------------
Total additions 29,653,222 3,824,865,272 4,423,644,023
----------- -------------- --------------
Deductions from net assets
attributable to:
Distributions to
participants 11,253,517 226,235,565
Administrative expenses 228,714
Transfers 29,290,663
------------ -------------- --------------
Total deductions 11,253,517 - 255,754,942
------------ -------------- --------------
Interfund transfers (9,512,953)
------------ -------------- --------------
Increase/(Decrease) in net assets 8,886,752 3,824,865,272 4,167,889,081
Net assets, beginning
of year 118,487,487 2,677,573,861
------------ -------------- --------------
Net assets, end of year $127,374,239 $3,824,865,272 $6,845,462,942
============ ============== =============
(1) See Note H
20
J. Master Trust:
All plan investments are included under the Master Trust. At December 31, 1998,
assets of the Plan represented 95.9% of the total assets under the Master Trust.
This has decreased from 76.2% 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
============== ============== ============== ============== ============== ==============
21
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
============== ============== ============== ============== ============== ==============
22
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 - 95.9%
*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.
23
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
============ ============ ============ ============ ============ ===========
24
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 - 76.2%
*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.
25
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
=========== ============ =========== ============ =========== ===========
26
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
=========== =========== ======== ========== ========== ==========
27
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
=========== ========== =========== =========== ============