1
EXHIBIT 99.3
RAYTHEON EMPLOYEE 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 Employee 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 Employee 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 EMPLOYEE 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) $ 21,118,702 $ 20,126,493
At fair value (Notes B, F and I) 57,350,890 41,496,932
------------ ------------
78,469,592 61,623,425
------------ ------------
Receivables:
Accrued investment income
and other receivables 75,163 79,759
Transfer receivables (Note H) 210,313,280 -
Cash and cash equivalents 2,117,237 422,687
------------ ------------
Total assets 290,975,272 62,125,871
------------ ------------
Liabilities:
Payable for outstanding purchases 21,566 72,220
Accrued expenses and other payables 32,586 34,682
------------ ------------
Total liabilities 54,152 106,902
------------ ------------
Net assets available for plan benefits $290,921,120 $ 62,018,969
============ ============
The accompanying notes are an integral part of the financial statements.
4
RAYTHEON EMPLOYEE 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 $ 7,179,846
Interest & Dividends 3,401,424
------------
10,581,270
Contributions and deferrals:
Employee deferrals 10,671,948
Employer contributions 5,466,458
Transfers (Note G and H) 211,989,472
------------
228,127,878
Total additions 238,709,148
------------
Deductions from net assets attributable to:
Distributions to participants 9,761,895
Administrative expenses 5,356
Transfers (Note G) 39,746
------------
Total deductions 9,806,997
Increase in net assets 228,902,151
Net assets, beginning of year 62,018,969
------------
Net assets, end of year $290,921,120
============
The accompanying notes are an integral part of the financial statements.
5
RAYTHEON EMPLOYEE SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
A. Description of Plan:
General
The following description of the Raytheon Employee 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 and covers the employees of the Raytheon
Support Services Company and the Range Systems Engineer Support Company,
respectively, wholly-owned subsidiaries 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, certain union employees of Raytheon Systems Company, Cedarapids, Inc. and
Raytheon Aircraft Company who participated in Prior Plans were merged into the
Plan and all eligible employees, including those from Prior Plans, may join the
Plan immediately. In addition, the Raytheon Stock Ownership Plan for Specified
Hourly Payroll Employees (referred to as the "Prior ESOP Plan") was merged into
the Plan and created an additional employee stock ownership portion (ESOP) of
the Plan.
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 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 combined with the investments of other similar
defined contribution plans of Raytheon Company and subsidiaries 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 Master 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.
In 1995, the Company began to make qualified non-elective contributions (QNECs)
to certain accounts based on specific employee agreements. 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, eligible employees at certain divisions of Raytheon
Systems Company have different deferral limitations ranging from 10% to 20%,
depending upon division. In addition, for certain union employees at Raytheon
Systems Company, Cedarapids, Inc. and Raytheon Aircraft Company, the Company
will match amounts at 100%, 50% of the first 6% or 50% of the first 3% of
elective deferrals. The maximum match varies by division and is 4%, 3% or 1.5%
of compensation. The Company match is participant directed at certain divisions.
At divisions where the Company match is not participant directed, the 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. For certain divisions, the Company will also make QNECs,
employer contributions based on hours of service or percent of pay and/or ESOP
contributions. When applicable, ESOP contributions are 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 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) 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. Dividends and distributions from 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.
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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.
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, any
applicable employer contributions (QNECs, matching contributions, employer or
ESOP) 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 and employer
contributions plus actual earnings thereon.
Certain union employees at Raytheon Systems Company, Cedarapids, Inc. and
Raytheon Aircraft Company, whose accounts merged into the Plan effective January
1, 1999, will retain the vesting schedule from their Prior Plans. Vesting
requirements for employer contributions plus earnings thereon may vary depending
upon when an employee became eligible to participate in the Prior Plans. 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.
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.
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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 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 ecurities 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 dividend and interest income.
Benefits are recorded when paid.
Certain items in the 1997 financial statements have been reclassified to conform
to the 1998 presentation.
9
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 June 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.
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:
10
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 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.
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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 provisions of the Plan govern. The
transfer receivable by Prior Plan is as follows:
Raytheon Savings and Investment Plan
for Specified Hourly Payroll Employees $109,994,457
Raytheon Tucson Bargaining Unit Employees
Savings and Investment Plan 46,783,076
Raytheon Savings and Investment Plan (10014) 18,676,997
Serv-Air, Inc. Savings and Retirement Plan 18,053,874
Raytheon Stock Ownership Plan for Specified
Hourly Payroll Employees 16,804,876
------------
Total $210,313,280
============
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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 $ 7,434,772
Prudential Life Insurance
Company of America 3,723,037
Metropolitan Life
Insurance Company 9,344,894
Fidelity 405,365
Connecticut General 102,718
Monumental Life
Insurance Company 107,916
At fair value:
Fidelity Equity
Income Fund $10,975,776
Raytheon Company
Common Stock Fund $8,925,215
BT Pyramid Equity
Index Fund $10,496,295
Fidelity Balanced
Fund $4,014,520
Fidelity Magellan
Fund $7,549,319
Fidelity Blue
Chip Fund $9,160,057
Fund
Loans receivable
from participants
------------ ----------- ----------- ----------- ---------- ----------- -----------
Total investments 21,118,702 10,975,776 8,925,215 10,496,295 4,014,520 7,549,319 9,160,057
------------ ----------- ----------- ----------- ---------- ----------- -----------
Receivables:
Accrued investment income
and other receivables 53,010 22,153
Cash and cash equivalents 1,947,524 122,833 46,880
----------- ----------- ----------- ----------- ---------- ---------- ----------
Total assets 23,066,226 10,975,776 9,101,058 10,565,328 4,014,520 7,549,319 9,160,057
------------ ----------- ----------- ----------- ---------- ---------- ----------
Liabilities:
Payable for outstanding
purchases 21,566
Accrued expenses and other
payables 20,691 11,895
------------ ----------- ----------- ----------- ---------- ---------- ----------
Total liabilities - - 42,257 11,895 - - -
------------ ----------- ----------- ----------- ---------- ---------- ----------
Net assets available for
plan benefits $ 23,066,226 $10,975,776 $9,058,801 $10,553,433 $4,014,520 $7,549,319 $9,160,057
============ =========== ========== =========== ========== ========== ==========
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Loan
Fund Other(1) Total
Assets:
Master trust investments:
At contract value:
Bankers Trust $ 7,434,772
Prudential Insurance
Company of America 3,723,037
Metropolitan Life
Insurance Company 9,344,894
Fidelity 405,365
Connecticut General 102,718
Monumental Life
Insurance Company 107,916
At fair value:
Fidelity Equity
Income Fund 10,975,776
Raytheon Company
Common Stock Fund 8,925,215
BT Pyramid Equity
Index Fund 10,496,295
Fidelity Balanced
Fund 4,014,520
Fidelity Magellan
Fund 7,549,319
Fidelity Blue
Chip Fund 9,160,057
Loans receivable
from participants $ 6,229,708 6,229,708
----------- ------------ ------------
Total investments 6,229,708 - 78,469,592
----------- ------------ ------------
Receivables:
Accrued investment income
and other receivables 75,163
Transfer Receivables $210,313,280 210,313,280
Cash and cash equivalents 2,117,237
----------- ------------ ------------
Total assets 6,229,708 210,313,280 290,975,272
----------- ------------ ------------
Liabilities:
Payable for outstanding
purchases 21,566
Accrued expenses and
other payables 32,586
----------- ------------ ------------
Total liabilities - - 54,152
----------- ------------ ------------
Net assets available for
plan benefits $ 6,229,708 $210,313,280 $290,921,120
=========== ============ ============
(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* $ 7,516,950
Prudential Insurance
Company of America* 4,662,435
Metropolitan Life
Insurance Company* 7,947,108
At fair value:
Fidelity Equity Income Fund* $ 9,742,698
Raytheon Company Common Stock* $ 8,495,820
BT Pyramid Equity Index Fund* $ 7,213,874
Fidelity Balanced Fund $2,923,744
Fidelity Magellan Fund* $3,910,859
Fidelity Blue Chip Fund*
Loans receivable from participants*
------------ ----------- ----------- ----------- ---------- ----------
Total investments 20,126,493 9,742,698 8,495,820 7,213,874 2,923,744 3,910,859
------------ ----------- ----------- ----------- ---------- ----------
Receivables:
Accrued investment income
and other receivables 62,529 17,230
Cash and cash equivalents 198,284 153,750 70,653
------------ ----------- ----------- ----------- ---------- ----------
Total assets 20,324,777 9,742,698 8,712,099 7,301,757 2,923,744 3,910,859
------------ ----------- ----------- ----------- ---------- ----------
Liabilities:
Payable for outstanding
purchases 72,220
Accrued expenses and other
payables 16,868 17,814
------------ ----------- ----------- ---------- ----------- ----------
Total liabilities - - 89,088 17,814 - -
------------ ----------- ----------- ---------- ----------- ----------
Net assets available for plan
benefits $ 20,324,777 $ 9,742,698 $ 8,623,011 $ 7,283,943 $2,923,744 $3,910,859
============ =========== =========== =========== ========== ==========
*Represents more than 5% of net assets available for plan benefits
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Blue Chip Loan
Fund Fund Total
Assets:
Master trust investments:
At contract value:
Bankers Trust* $ 7,516,950
Prudential Insurance
Company of America* 4,662,435
Metropolitan Life
Insurance Company* 7,947,108
At fair value:
Fidelity Equity Income Fund* 9,742,698
Raytheon Company Common Stock* 8,495,820
BT Pyramid Equity Index Fund* 7,213,874
Fidelity Balanced Fund 2,923,744
Fidelity Magellan Fund* 3,910,859
Fidelity Blue Chip Fund* $4,599,412 4,599,412
Loans receivable from participants* $ 4,610,525 4,610,525
---------- ----------- -----------
Total investments 4,599,412 4,610,525 61,623,425
---------- ----------- ------------
Receivables:
Accrued investment income
and other receivables 79,759
Cash and cash equivalents 422,687
---------- ----------- ------------
Total assets 4,599,412 4,610,525 62,125,871
---------- ----------- ------------
Liabilities:
Payable for outstanding
purchases 72,220
Accrued expenses and other
payables 34,682
---------- ----------- ------------
Total liabilities - - 106,902
---------- ----------- ------------
Net assets available for plan
benefits $4,599,412 $ 4,610,525 $ 62,018,969
========== =========== ============
*Represents more than 5% of net assets available for plan benefits
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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 $ 783 $ 549,040 $ 995,655 $ 2,336,298 $ 267,944 $ 1,350,108 $ 1,680,018
Interest & Dividends 1,380,765 623,016 376,854 321,620 339,826
----------- ------------ ----------- ----------- ----------- ------------ ------------
1,381,548 1,172,056 995,655 2,336,298 644,798 1,671,728 2,019,844
----------- ------------ ----------- ----------- ----------- ------------ ------------
Contributions and deferrals:
Employee deferrals 1,717,217 1,720,660 1,619,094 1,708,027 627,263 1,570,913 1,708,774
Employer contributions 3,341,633 380,809 500,677 376,096 138,312 347,345 381,586
Transfers 329,389 23,545 203,917 173,239 986 25,517 47,976
------------ ------------ ----------- ----------- ----------- ------------ ------------
5,388,239 2,125,014 2,323,688 2,257,362 766,561 1,943,775 2,138,336
------------ ------------ ----------- ----------- ----------- ------------ ------------
Total additions 6,769,787 3,297,070 3,319,343 4,593,660 1,411,359 3,615,503 4,158,180
------------ ------------ ----------- ----------- ----------- ------------ ------------
Deductions from net assets
attributable to:
Distributions to
participants 4,202,881 1,133,189 838,121 991,231 388,044 583,103 780,586
Administrative expenses 1,796 884 811 708 278 401 478
Transfers 6,061 21,342 12,343
------------ ------------ ----------- ----------- ----------- ------------ ------------
Total deductions 4,204,677 1,140,134 838,932 991,939 409,664 595,847 781,064
------------ ------------ ----------- ----------- ----------- ------------ ------------
Interfund transfers 176,339 (923,858) (2,044,621) (332,231) 89,081 618,804 1,183,529
------------ ------------ ----------- ----------- ----------- ----------- ------------
Increase in net assets 2,741,449 1,233,078 435,790 3,269,490 1,090,776 3,638,460 4,560,645
------------ ------------ ----------- ----------- ------------ ------------ ------------
Net assets, beginning
of year 20,324,777 9,742,698 8,623,011 7,283,943 2,923,744 3,910,859 4,599,412
------------ ------------ ----------- ----------- ------------ ------------ ------------
Net assets, end of year $ 23,066,226 $ 10,975,776 $ 9,058,801 $10,553,433 $ 4,014,520 $ 7,549,319 $ 9,160,057
============ ============ =========== =========== ============ ============ ============
17
Loan
Fund Other Total
Additions to net assets
attributable to:
Investment income:
Net appreciation of
investments $ 7,179,846
Interest & Dividends $ 359,343 3,401,424
----------- ------------- -------------
359,343 - 10,581,270
------------ ------------- -------------
Contributions and deferrals:
Employee deferrals 10,671,948
Employer contributions 5,466,458
Transfers 871,623 $210,313,280 211,989,472
------------ ------------- -------------
871,623 210,313,280 228,127,878
------------ ------------- -------------
Total additions 1,230,966 210,313,280 238,709,148
------------ ------------- -------------
Deductions from net assets
attributable to:
Distributions to
participants 844,740 9,761,895
Administrative expenses 5,356
Transfers 39,746
------------ -------------- -------------
Total deductions 844,740 - 9,806,997
------------ -------------- -------------
Interfund transfers 1,232,957
----------- -------------- -------------
Increase in net assets 1,619,183 210,313,280 228,902,151
----------- -------------- -------------
Net assets, beginning
of year 4,610,525 - 62,018,969
----------- -------------- -------------
Net assets, end of year $ 6,229,708 $ 210,313,280 $ 290,921,120
=========== ============== =============
18
J. Master Trust:
All plan investments are included under the Master Trust. At December 31,
1998, assets of the Plan represented 4.08% of the total assets under the Master
Trust. This has decreased from 1.8% 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
============== ============== ============== ============== ============== ==============
19
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
============== ============== ============== ============== ============== ==============
20
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 - 4.08%
*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.
21
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
============ ============ ============ ============ ============ ===========
22
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 - 1.76%
*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.
23
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
=========== ============ =========== ============ =========== ===========
24
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
=========== =========== ======== ========== ========== ==========
25
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
=========== ========== =========== =========== ============