Raytheon Co. (RTN)

Statement of Cash Flows

Difficulty: Beginner

The cash flow statement provides information about a company’s cash receipts and cash payments during an accounting period, showing how these cash flaws link the ending cash balance to the beginning balance shown on the company’s statement of financial position.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Raytheon Co., Consolidated Statement of Cash Flows

USD $ in millions

12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Net income	2,882	2,001	2,174	2,067	2,258
(Income) loss from discontinued operations, net of tax	1	(2)	(1)	(13)	(65)
Income from continuing operations	2,883	1,999	2,173	2,054	2,193
Depreciation and amortization	568	550	515	489	439
Stock-based compensation	165	173	151	140	148
Gain on sale of equity method investment	—	—	(158)	—	—
Loss on repayment of long-term debt	—	39	—	—	—
Deferred income taxes	(24)	252	109	(56)	(60)
Tax benefit from stock-based awards	—	—	—	(47)	(47)
Receivables, net	(327)	(157)	—	—	—
Contract assets and contract liabilities	28	88	(593)	(637)	(162)
Inventories	(166)	14	(23)	(223)	(50)
Prepaid expenses and other current assets	73	204	181	(28)	50
Income taxes receivable/payable	174	(193)	(185)	(181)	(33)
Accounts payable	406	(94)	152	107	54
Accrued employee compensation	165	111	77	72	(20)
Other current liabilities	(108)	106	(6)	58	(33)
Accrued retiree benefits	(421)	(250)	419	637	(367)
Changes in assets and liabilities	(176)	(171)	22	(195)	(561)
Other, net	12	(95)	40	(39)	(48)
Adjustments to reconcile to net cash provided by operating activities, net of the effect of acquisitions and divestitures	545	748	679	292	(129)
Net cash provided by operating activities	3,428	2,747	2,852	2,346	2,064
Additions to property, plant and equipment	(763)	(543)	(561)	(406)	(326)
Proceeds from sales of property, plant and equipment	2	46	34	59	9
Additions to capitalized internal use software	(58)	(68)	(64)	(51)	(54)
Purchases of short-term investments	—	(696)	(472)	(1,392)	(2,914)
Sales of short-term investments	—	—	—	209	882
Maturities of short-term investments	309	517	1,184	1,793	1,523
Payments for purchases of acquired companies, net of cash received	—	(93)	(57)	(1,954)	(427)
Proceeds from sale of business, net of transaction costs	11	—	—	—	—
Other	(22)	20	(11)	(2)	(15)
Net cash (used in) provided by investing activities	(521)	(817)	53	(1,744)	(1,322)
Dividends paid	(975)	(910)	(850)	(797)	(735)
Net borrowings (payments) on commercial paper	—	300	—	—	—
Issuance of long-term debt, net of offering costs	—	—	—	—	592
Repayments of long-term debt	—	(591)	—	—	—
Loss on repayment of long-term debt	—	(38)	—	—	—
Repurchases of common stock under share repurchase programs	(1,325)	(800)	(900)	(1,000)	(750)
Repurchases of common stock to satisfy tax withholding obligations	(93)	(85)	(96)	(99)	(90)
Proceeds from exercise of stock options	—	—	—	—	2
Acquisition of noncontrolling interest in RCCS LLC	—	—	(90)	—	—
Contribution from noncontrolling interest in Forcepoint	—	8	11	—	—
Tax benefit from stock-based awards	—	—	—	47	47
Sale of noncontrolling interest in Forcepoint	—	—	—	343	—
Other	(5)	—	(5)	(3)	(2)
Net cash used in financing activities	(2,398)	(2,116)	(1,930)	(1,509)	(936)
Net cash provided by (used in) operating activities from discontinued operations	—	(2)	—	13	120
Net increase (decrease) in cash, cash equivalents and restricted cash	509	(188)	975	(894)	(74)
Cash, cash equivalents and restricted cash at beginning of year	3,115	3,303	2,328	3,222	3,296
Cash, cash equivalents and restricted cash at end of year	3,624	3,115	3,303	2,328	3,222

Based on: 10-K (filing date: 2019-02-13), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-15), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-11).

Item	Description	The company
Net cash provided by operating activities	Amount of cash inflow (outflow) from operating activities, excluding discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities.	Raytheon Co.’s net cash provided by operating activities declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.
Net cash (used in) provided by investing activities	Amount of cash inflow (outflow) of investing activities, excluding discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets.	Raytheon Co.’s net cash (used in) provided by investing activities declined from 2016 to 2017 but then slightly increased from 2017 to 2018.
Net cash used in financing activities	Amount of cash inflow (outflow) of financing activities, excluding discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit.	Raytheon Co.’s net cash used in financing activities declined from 2016 to 2017 and from 2017 to 2018.