Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Raytheon Co., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Products	24,435)	22,633)	21,416)	20,166)	19,443)
Services	4,741)	4,425)	3,932)	3,903)	3,804)
Net sales	29,176)	27,058)	25,348)	24,069)	23,247)
Cost of sales, products	(17,747)	(16,108)	(15,872)	(14,767)	(14,447)
Cost of sales, services	(3,666)	(3,465)	(3,204)	(3,180)	(3,127)
Cost of sales, products and services	(21,413)	(19,573)	(19,076)	(17,947)	(17,574)
Gross margin	7,763)	7,485)	6,272)	6,122)	5,673)
General and administrative expenses	(2,989)	(2,947)	(2,954)	(2,882)	(2,660)
Operating income	4,774)	4,538)	3,318)	3,240)	3,013)
Retirement benefits non-service expense	(688)	(1,230)	—)	—)	—)
Interest expense	(180)	(184)	(205)	(232)	(233)
Interest income	42)	31)	21)	16)	11)
Other income (expense), net	38)	(8)	(21)	6)	(4)
Non-operating income (expense), net	(788)	(1,391)	(205)	(210)	(226)
Income from continuing operations before taxes	3,986)	3,147)	3,113)	3,030)	2,787)
Federal and foreign income taxes	(658)	(264)	(1,114)	(857)	(733)
Income from continuing operations	3,328)	2,883)	1,999)	2,173)	2,054)
Income (loss) from discontinued operations, net of tax	1)	(1)	2)	1)	13)
Net income	3,329)	2,882)	2,001)	2,174)	2,067)
Net loss attributable to noncontrolling interests in subsidiaries	14)	27)	23)	37)	7)
Net income attributable to Raytheon Company	3,343)	2,909)	2,024)	2,211)	2,074)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

The financial data exhibits a consistent growth trend in sales, margins, and income over the observed five-year period.

Revenue Trends: Net sales increased steadily from $23,247 million in 2015 to $29,176 million in 2019, representing a notable upward trajectory. Products revenue grew from $19,443 million to $24,435 million, while services revenue also rose from $3,804 million to $4,741 million over the same period, indicating balanced growth in both segments.
Cost of Sales: Cost of sales related to products and services increased from $17,574 million in 2015 to $21,413 million in 2019, mirroring the growth in sales but at a slightly lower rate. The increase in costs is proportionate to revenue growth but suggests an improving operational efficiency as gross margin expanded.
Profitability and Margins: Gross margin improved from $5,673 million in 2015 to $7,763 million in 2019, demonstrating enhanced profitability. The gross margin increase outpaced the growth in cost of sales, indicating more effective cost management or favorable pricing dynamics.
Operating Expenses and Income: General and administrative expenses remained relatively stable, fluctuating slightly around $2,660 million to $2,989 million over the years, reflecting consistent cost control efforts despite revenue growth. Operating income rose significantly from $3,013 million in 2015 to $4,774 million in 2019, showing strong operational leverage and improved earnings from core activities.
Non-operating Items: There was a notable non-service retirement benefit expense of $1,230 million in 2018 and $688 million in 2019, which negatively affected income from continuing operations in those years. Interest expense decreased slightly from $233 million to $180 million, and interest income increased from $11 million to $42 million, beneficial for net finance costs. Other income (expense), net showed volatility but ended with a positive $38 million in 2019. Non-operating income (expense), net displayed a sharp increase in expenses in 2018 (-$1,391 million) and partially recovered in 2019 (-$788 million), reflecting some non-recurring or unusual items that affected earnings before tax.
Income and Taxation: Income from continuing operations before taxes grew steadily from $2,787 million in 2015 to $3,986 million in 2019. Tax expenses showed variability, with a sharp decrease in 2018 to $264 million from over $1 billion in previous years, then increasing again to $658 million in 2019, indicating possible changes in tax strategy or benefits. Overall income from continuing operations increased from $2,054 million to $3,328 million.
Net Income: Net income followed a positive trend, increasing from $2,067 million in 2015 to $3,329 million in 2019. Net income attributable to the company also rose correspondingly, suggesting solid growth in shareholder value. Losses attributable to noncontrolling interests were relatively minor and declined overall, slightly enhancing attributable net income.

In summary, the data reveals that the company experienced consistent revenue and profit growth from 2015 through 2019. Operational efficiencies appear to have improved given the rising gross margin and stable administrative expenses. The presence of significant retirement benefit expenses and fluctuating non-operating items affected 2018 and 2019 reported earnings but did not fundamentally alter the underlying positive earnings trajectory. The overall financial performance indicates solid business expansion and effective management of both operating costs and capital structure.

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Raytheon Co. (NYSE:RTN)

Income Statement