Analysis of Reportable Segments
Raytheon Co. operates in 5 segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Analysis of Revenues
- Analysis of Debt
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Segment Profit Margin
Raytheon Co., profit margin by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint |
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).
- Integrated Defense Systems (IDS)
- The profit margin for IDS exhibited an overall upward trend from 14.38% in 2015 to a peak of 17.35% in 2016, followed by a slight decrease and stabilization around 16% through 2019. This indicates consistent profitability with minor fluctuations but a generally strong margin maintained over the period.
- Intelligence, Information and Services (IIS)
- Profit margins showed a declining trend from 10.45% in 2015 to 7.37% in 2017, before beginning a recovery to 9.2% in 2019. This pattern suggests initial challenges in profitability which gradually improved towards the end of the period but did not completely return to the 2015 level.
- Missile Systems (MS)
- The margin for MS consistently decreased from 13.22% in 2015 to 10.99% in 2019. The decline, though gradual, indicates diminishing profitability in this segment over the five-year timeframe.
- Space and Airborne Systems (SAS)
- Space and Airborne Systems maintained relatively stable profit margins throughout the period, with slight fluctuations between 13.1% and 13.7%. This suggests steady performance without significant volatility.
- Forcepoint
- The margin for Forcepoint demonstrated a marked downward trend from 9.15% in 2015 to a low of 0.79% in 2018, followed by a minor recovery to 1.22% in 2019. This sharp decline and minimal recovery imply substantial challenges affecting profitability in this segment.
Segment Profit Margin: Integrated Defense Systems (IDS)
Raytheon Co.; Integrated Defense Systems (IDS); segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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).
1 2019 Calculation
Segment profit margin = 100 × Operating income ÷ Net sales
= 100 × ÷ =
- Operating Income
- Operating income demonstrated a general upward trend over the analyzed period. Starting at 917 million USD in 2015, it increased steadily to 950 million USD in 2016, slightly declined to 935 million USD in 2017, and then continued its growth to reach 1,023 million USD in 2018 and 1,111 million USD in 2019. The overall increase indicates strengthening profitability at the operating level.
- Net Sales
- Net sales exhibited some fluctuation but maintained a positive growth trajectory over the five years. Beginning at 6,375 million USD in 2015, sales dropped noticeably to 5,476 million USD in 2016. This was followed by a recovery and increase to 5,804 million USD in 2017, continuing upward to 6,180 million USD in 2018 and culminating at 6,927 million USD in 2019. Despite the initial decline, the latter years show a consistent rise in sales, exceeding the initial 2015 figure by the end of the period.
- Segment Profit Margin
- The segment profit margin experienced variability but remained relatively stable within a narrow range. It started at 14.38% in 2015 and increased significantly to 17.35% in 2016. Afterward, it declined slightly to 16.11% in 2017, followed by a modest increase to 16.55% in 2018, then a minor decrease to 16.04% in 2019. Overall, the margin stayed above 14%, suggesting a generally consistent level of profitability relative to sales over the years.
- Summary
- The financial metrics for the segment indicate a robust performance characterized by an upward trend in both operating income and net sales after an initial setback in sales during 2016. The increase in operating income alongside rising sales points to effective cost management and operational efficiency. Meanwhile, the stable profit margin percentage reflects consistent profitability relative to sales, albeit with slight fluctuations. These patterns suggest strengthening financial health and operational stability in the segment over the five-year period.
Segment Profit Margin: Intelligence, Information and Services (IIS)
Raytheon Co.; Intelligence, Information and Services (IIS); segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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).
1 2019 Calculation
Segment profit margin = 100 × Operating income ÷ Net sales
= 100 × ÷ =
The segment data for Intelligence, Information and Services (IIS) over the five-year period reveals several key trends in operating income, net sales, and segment profit margin. These trends provide an overview of the segment’s financial performance and operational efficiency.
- Operating Income
- Operating income experienced a decline from 599 million US dollars in 2015 to 467 million in 2016, followed by a marginal further decrease to 455 million in 2017. Thereafter, the segment saw a recovery and growth, with operating income increasing to 538 million in 2018 and further rising to 658 million in 2019. This indicates a dip in profitability in the initial years, followed by a strong rebound towards the end of the period.
- Net Sales
- Net sales have shown a consistent upward trajectory throughout the period. Starting at 5733 million US dollars in 2015, net sales increased each year, peaking at 7151 million in 2019. The growth in sales suggests expanding business activity or higher demand within the segment, with a particularly noticeable jump from 6177 million in 2017 to 6722 million in 2018, and continuing upward.
- Segment Profit Margin
- The segment profit margin percentage declined from 10.45% in 2015 to a low of 7.37% in 2017, reflecting the earlier trends in operating income. Following 2017, the margin improved moderately to 8% in 2018 and further to 9.2% in 2019. While the margin did not return to the 2015 level, the upward trend in more recent years suggests improved operational efficiency or cost management.
In summary, the financial data for this segment between 2015 and 2019 shows a dip in operating income and segment margin during 2016 and 2017, despite steadily increasing net sales. The subsequent recovery in both operating income and profit margin from 2018 onward indicates a positive adjustment in profitability dynamics, possibly due to enhanced cost control or higher-margin sales strategies. Continued growth in net sales throughout the period underscores expanding market presence or product demand.
Segment Profit Margin: Missile Systems (MS)
Raytheon Co.; Missile Systems (MS); segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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).
1 2019 Calculation
Segment profit margin = 100 × Operating income ÷ Net sales
= 100 × ÷ =
The reportable segment demonstrates a steady increase in net sales over the observed period. Starting from approximately 6.556 billion US dollars in 2015, net sales grew consistently each year, reaching around 8.726 billion US dollars by the end of 2019. This indicates a positive trend in revenue generation within the segment.
Operating income also shows an upward trajectory initially, increasing from 867 million US dollars in 2015 to a peak of 1.010 billion US dollars in 2017. However, after this peak, operating income experiences a decline, dropping to 973 million US dollars in 2018 and further to 959 million US dollars in 2019. Despite the decrease in operating income in the latter years, it remains above the 2015 level.
The segment profit margin reflects a declining trend throughout the period. Starting at 13.22% in 2015, the margin slightly decreases to about 12.95% in 2016 and remains relatively stable in 2017 at 12.97%. From 2018 onwards, the profit margin declines more noticeably, falling to 11.73% in 2018 and further down to 10.99% in 2019. This decline suggests increasing cost pressures or other factors eroding profitability despite growing sales.
- Net Sales
- Consistently increased from 6.556 billion US dollars to 8.726 billion US dollars over the five-year period, showing strong revenue growth.
- Operating Income
- Rose steadily to a peak in 2017 at 1.010 billion US dollars, followed by a decrease in the following two years, ending slightly below the 2018 figure but above the 2015 baseline.
- Segment Profit Margin
- Experienced a gradual but persistent decline, indicating that profitability per dollar of sales has contracted over time despite revenue increases.
In summary, while overall sales within the segment have expanded annually, operating income and profit margins have not maintained the same growth trajectory. This divergence points to potential challenges in cost management or competitive pressures impacting earnings quality within the segment in the later years of the period analyzed.
Segment Profit Margin: Space and Airborne Systems (SAS)
Raytheon Co.; Space and Airborne Systems (SAS); segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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).
1 2019 Calculation
Segment profit margin = 100 × Operating income ÷ Net sales
= 100 × ÷ =
- Net Sales
- Net sales exhibited a consistent upward trend over the five-year period, increasing from $5,796 million in 2015 to $7,427 million in 2019. This represents a compound growth, indicating expanding revenue generation within the segment.
- Operating Income
- Operating income also showed a positive trajectory, rising steadily from $794 million in 2015 to $991 million in 2019. This progression reflects improved operational performance and enhanced profitability in absolute terms.
- Segment Profit Margin
- The segment profit margin, expressed as a percentage, remained relatively stable throughout the period, fluctuating marginally between 13.1% and 13.7%. Notably, the margin decreased slightly from 13.7% in 2015 to a low of 13.1% in 2018 before recovering marginally to 13.34% in 2019. This stability suggests consistent efficiency and cost control relative to net sales.
- Overall Analysis
- The data reveal sustained growth in sales accompanied by increasing operating income, indicating effective scaling of the segment's business operations. Despite fluctuations in profit margin percentages, the segment maintained a stable margin, demonstrating resilience in maintaining profitability amid rising sales volumes. The combination of growing revenues and stable profit margins points to a robust and well-managed financial performance within the segment across the analyzed years.
Segment Profit Margin: Forcepoint
Raytheon Co.; Forcepoint; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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).
1 2019 Calculation
Segment profit margin = 100 × Operating income ÷ Net sales
= 100 × ÷ =
- Net Sales Trends
- Net sales exhibited a consistent upward trend throughout the analyzed period, rising from 328 million USD in 2015 to 658 million USD by the end of 2019. This represents a doubling of revenue over five years, indicating significant growth in the segment’s top-line performance.
- Operating Income Trends
- Operating income showed considerable volatility despite growing net sales. After increasing from 30 million USD in 2015 to a peak of 51 million USD in 2016, operating income declined sharply to 33 million USD in 2017, plummeted further to 5 million USD in 2018, and slightly recovered to 8 million USD in 2019. This pattern suggests emerging challenges in managing operating costs or other operational inefficiencies over time.
- Segment Profit Margin Analysis
- The segment profit margin closely mirrors operating income trends relative to net sales. Beginning at a relatively strong margin of 9.15% in 2015, it decreased marginally to 9.01% in 2016. Thereafter, the margin dropped significantly to 5.43% in 2017, nearing break-even levels at 0.79% in 2018, before a minor recovery to 1.22% in 2019. This decline indicates decreasing profitability despite increasing sales, highlighting pressures on cost structure or pricing.
- Overall Insights
- The data reflects a scenario where increased revenue has not translated into proportional profit gains, with operating income and profit margins both experiencing substantial deterioration after 2016. This suggests potential issues in cost management, increased expense base, or competitive factors affecting profitability within the segment. Continued focus on operational efficiency and cost control would be advisable to improve profit margins in future periods.
Segment Return on Assets (Segment ROA)
Raytheon Co., ROA by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint |
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).
- Integrated Defense Systems (IDS)
- The ROA for this segment demonstrated a generally stable performance with a slight upward trend over the observed period. Starting at 21.05% in 2015, the value experienced minor fluctuations, dipping to 19.98% in 2017 but recovering thereafter, reaching its highest level of 21.77% in 2019. This indicates consistent asset utilization efficiency in this segment.
- Intelligence, Information and Services (IIS)
- The segment displayed a notable decline from 14.42% in 2015 to 10.9% in 2016, and it remained relatively stagnant through 2017 at 10.76%. However, a recovery phase was evident in 2018 and 2019, with percentages rising to 12.68% and then 15.33%, respectively. This trend suggests initial operational challenges followed by improvements in asset efficiency within this segment.
- Missile Systems (MS)
- This segment saw a modest increase from 13.21% in 2015 to 13.76% in 2017, indicating improved asset returns early on. Subsequently, there was a decline to 11.82% in 2018, followed by a slight decrease to 11.41% in 2019. The latter part of the period reflects some erosion in the efficiency of asset utilization.
- Space and Airborne Systems (SAS)
- This segment reported a consistent upward trajectory throughout the period. Starting at 12.38% in 2015, ROA values progressively increased each year, culminating in 14.2% in 2019. This steady growth indicates improving asset productivity and possibly enhanced operational performance.
- Forcepoint
- The ROA figures for this segment remained low and exhibited considerable volatility. Beginning at 1.21% in 2015, it increased to 2.03% in 2016 but then declined sharply to 1.3% in 2017 and further dropped to 0.2% in 2018. A slight recovery to 0.33% occurred in 2019, though the overall ROA remained minimal, suggesting low asset efficiency and unstable performance.
- Summary
- Overall, the Integrated Defense Systems segment maintained the highest and most stable ROA levels. The Intelligence, Information and Services segment showed recovery after a mid-period decline. Missile Systems experienced peak performance in the middle years but declined towards the end. Space and Airborne Systems demonstrated consistent improvement, whereas Forcepoint remained underperforming with significant volatility across the period.
Segment ROA: Integrated Defense Systems (IDS)
Raytheon Co.; Integrated Defense Systems (IDS); segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Total assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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).
1 2019 Calculation
Segment ROA = 100 × Operating income ÷ Total assets
= 100 × ÷ =
- Operating Income
- The operating income shows a generally increasing trend over the five-year period. Starting at 917 million US dollars in 2015, it increased steadily to 950 million in 2016, slightly dipped to 935 million in 2017, and then rose significantly to 1023 million in 2018 and further to 1111 million by 2019. This indicates an overall positive performance in earnings from operations within the segment.
- Total Assets
- Total assets also display consistent growth throughout the five years. Beginning at 4357 million US dollars in 2015, assets increased year-over-year reaching 4551 million in 2016, 4679 million in 2017, 4829 million in 2018, and culminating at 5103 million in 2019. This growth suggests ongoing investment or accumulation of resources within the segment.
- Segment Return on Assets (ROA)
- The segment ROA exhibits some fluctuations but remains relatively stable overall. It started at 21.05% in 2015, slightly declined to 20.87% in 2016 and further to 19.98% in 2017 before rebounding to 21.18% in 2018 and increasing further to 21.77% in 2019. This pattern implies that despite some minor variation, the segment maintained a strong ability to generate profit relative to its asset base, with improved efficiency or profitability noted in the latter two years.
Segment ROA: Intelligence, Information and Services (IIS)
Raytheon Co.; Intelligence, Information and Services (IIS); segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Total assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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).
1 2019 Calculation
Segment ROA = 100 × Operating income ÷ Total assets
= 100 × ÷ =
The segment's operating income exhibited a fluctuating trend over the observed period. It began at a high point in 2015, decreased notably in 2016 and 2017, and then recovered in 2018 and 2019, ultimately surpassing the initial 2015 figure by the end of the period. This pattern suggests periods of operational challenges followed by a phase of improved profitability.
Total assets associated with the segment remained relatively stable throughout the years. The asset base saw a slight increase from 2015 to 2016, followed by a minor decline in 2017 and minimal fluctuations thereafter, signaling consistent investment or asset management without significant expansion or contraction.
Return on assets (ROA) for the segment presented an overall downward trend from 2015 to 2017, indicating reduced efficiency or profitability relative to its asset base during this interval. However, from 2017 onward, ROA improved steadily, culminating in the highest recorded value in 2019. This improvement in ROA corresponds with the recovery and growth in operating income, despite the stable asset base, suggesting enhanced asset utilization or increased operational efficiency in the latter years.
In summary, while the segment faced a decline in operating income and ROA in the mid-period, both metrics rebounded effectively by 2019, complemented by a stable asset base. This indicates an overall positive trajectory in financial performance and operational efficiency in recent years.
Segment ROA: Missile Systems (MS)
Raytheon Co.; Missile Systems (MS); segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Total assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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).
1 2019 Calculation
Segment ROA = 100 × Operating income ÷ Total assets
= 100 × ÷ =
- Operating Income
- Operating income exhibited a general upward trend from 2015 to 2017, increasing from 867 million US dollars to 1,010 million US dollars. However, this was followed by a decline in the subsequent two years, with values falling to 973 million US dollars in 2018 and further to 959 million US dollars in 2019.
- Total Assets
- Total assets consistently increased throughout the period, starting at 6,561 million US dollars in 2015 and rising steadily each year to reach 8,408 million US dollars by the end of 2019. This represents a growth of approximately 28% over the five-year span.
- Segment Return on Assets (ROA)
- Segment ROA showed a slight improvement from 13.21% in 2015 to a peak of 13.76% in 2017. Following this peak, there was a noticeable decline, with ROA decreasing to 11.82% in 2018 and further to 11.41% in 2019. This drop in ROA coincides with the reductions observed in operating income during the same period, despite the increasing asset base.
Segment ROA: Space and Airborne Systems (SAS)
Raytheon Co.; Space and Airborne Systems (SAS); segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Total assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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).
1 2019 Calculation
Segment ROA = 100 × Operating income ÷ Total assets
= 100 × ÷ =
The data displays a consistent upward trajectory across all key financial metrics from 2015 through 2019.
- Operating income
- Operating income exhibits a steady increase each year, starting at 794 million USD in 2015 and reaching 991 million USD by 2019. This marks an overall growth of approximately 24.7% over the five-year period, indicating improving profitability within the segment.
- Total assets
- Total assets show gradual growth, increasing from 6,416 million USD in 2015 to 6,979 million USD in 2019. The increase, while less pronounced than the rise in operating income, suggests ongoing investment in or retention of assets to support operations, with a compound annual growth rate of about 2.7%.
- Segment ROA (Return on Assets)
- The Segment ROA demonstrates a positive trend, rising from 12.38% in 2015 to 14.2% in 2019. This improvement reflects enhanced efficiency in utilizing assets to generate operating income. The steady year-on-year increase indicates consistent operational improvements or better asset management over the period.
Overall, the segment evidences continuous growth in income and asset base, coupled with improving asset efficiency, pointing to a strengthening financial position and effective management practices within this business segment during the analyzed timeframe.
Segment ROA: Forcepoint
Raytheon Co.; Forcepoint; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Operating income | |||||
| Total assets | |||||
| Segment Profitability Ratio | |||||
| Segment ROA1 | |||||
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).
1 2019 Calculation
Segment ROA = 100 × Operating income ÷ Total assets
= 100 × ÷ =
- Operating Income
- Operating income demonstrated fluctuation over the five-year period. Starting at 30 million US dollars in 2015, it peaked at 51 million in 2016, indicating a significant improvement. However, this was followed by a decline to 33 million in 2017, with a steep drop to 5 million in 2018. A slight recovery to 8 million occurred in 2019, but overall operating income showed considerable volatility and a downward trend after 2016.
- Total Assets
- Total assets experienced minor variation throughout the period. Beginning at 2,486 million in 2015, assets increased slightly to 2,514 million by the end of 2016 and continued a gradual rise to 2,543 million in 2017. From 2018 onwards, assets slightly decreased, reaching 2,424 million in 2019. The changes reflect relative stability in asset base with a marginal decline in the final years.
- Segment Return on Assets (ROA)
- The segment ROA followed a pattern consistent with operating income trends. Starting at 1.21% in 2015, it increased to 2.03% in 2016, supporting the improved profitability seen in operating income. Subsequently, ROA declined to 1.3% in 2017, and more sharply to 0.2% in 2018, mirroring the fall in operating income. A slight improvement to 0.33% in 2019 suggests marginal recovery but remains significantly below the earlier peak.
- Overall Analysis
- The data reveals that the segment experienced performance peaks around 2016 with operating income and ROA both reaching their highs. After this period, both profitability metrics declined substantially, indicating challenges in maintaining earnings efficiency despite relatively stable asset levels. The slight asset reduction in later years may reflect adjustments in resource allocation or disposals, but does not balance the marked decrease in profitability indicators.
Segment Asset Turnover
Raytheon Co., asset turnover by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint |
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).
- Integrated Defense Systems (IDS)
- The asset turnover ratio for this segment exhibited a general decline from 1.46 in 2015 to 1.20 in 2016, followed by a gradual recovery in subsequent years, reaching 1.36 by 2019. This pattern suggests an initial reduction in efficiency or asset utilization, with a steady improvement thereafter, though it has not fully returned to the 2015 level.
- Intelligence, Information and Services (IIS)
- This segment showed a consistent upward trend in asset turnover, starting at 1.38 in 2015 and increasing each year to 1.67 in 2019. The steady improvement over the five-year period indicates enhanced efficiency or increased revenue generation relative to assets employed.
- Missile Systems (MS)
- The asset turnover ratio demonstrated a slight increase from 1.00 in 2015 to a peak of 1.06 in 2017. This was followed by a minor decline and stabilization around 1.01 to 1.04 through to 2019, indicating relatively stable but modest improvements in asset utilization for this segment.
- Space and Airborne Systems (SAS)
- An upward trajectory is visible in this segment, with the ratio growing steadily from 0.90 in 2015 to 1.06 in 2019. This consistent increase suggests improving efficiency and better asset turnover over the period.
- Forcepoint
- The ratio for this segment started at a low base of 0.13 in 2015 and showed gradual improvement each year, reaching 0.27 in 2019. Despite the low absolute values, the doubling of the ratio over five years indicates meaningful growth in asset turnover and enhanced operational performance.
- Overall Insights
- Across all segments, there is a general pattern of improvement or stabilization in asset turnover ratios from 2015 to 2019. The Intelligence, Information and Services segment demonstrated the strongest upward trend, while Integrated Defense Systems showed a recovery after an initial decline. The lower ratios in Forcepoint reveal it as a developing area with positive growth. These trends collectively suggest ongoing efforts to enhance asset efficiency in diversified business areas.
Segment Asset Turnover: Integrated Defense Systems (IDS)
Raytheon Co.; Integrated Defense Systems (IDS); segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | |||||
| Total assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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).
1 2019 Calculation
Segment asset turnover = Net sales ÷ Total assets
= ÷ =
- Net Sales
- Net sales exhibited a fluctuating upward trend over the five-year period. Starting at 6375 million US dollars in 2015, sales declined to 5476 million in 2016 before gradually recovering to 6927 million by 2019. The initial dip in 2016 was followed by consistent annual growth, signaling a positive recovery and expansion in revenue generation.
- Total Assets
- Total assets showed a continuous increase from 4357 million US dollars in 2015 to 5103 million in 2019. This steady growth suggests ongoing investment or accumulation of assets within the segment, which may support the gradual rise in net sales observed in the later years.
- Segment Asset Turnover
- The segment asset turnover ratio started at 1.46 in 2015, indicating relatively high efficiency in using assets to generate sales at that time. It then declined sharply to 1.2 in 2016 and showed a slight recovery to 1.36 by 2019. Though the turnover ratio improved over the last three years, it did not return to the initial 2015 level, suggesting that asset utilization efficiency weakened overall despite growth in sales and assets.
- Summary
- Overall, the segment experienced a decrease in sales and asset turnover efficiency in 2016, followed by a steady recovery through 2019. The increase in total assets over the analyzed period indicates ongoing capital investment, while the partial rebound in asset turnover suggests moderate improvements in operational efficiency. However, the segment has not yet fully restored its asset turnover to the initial higher levels, reflecting room for enhancing the efficiency of asset use in generating revenues.
Segment Asset Turnover: Intelligence, Information and Services (IIS)
Raytheon Co.; Intelligence, Information and Services (IIS); segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | |||||
| Total assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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).
1 2019 Calculation
Segment asset turnover = Net sales ÷ Total assets
= ÷ =
The analysis of the annual data for the Intelligence, Information and Services segment reveals several noteworthy trends over the five-year period ending in 2019.
- Net Sales
- There is a consistent upward trend in net sales, rising from $5,733 million in 2015 to $7,151 million in 2019. This represents an approximate increase of 24.8% over the period, reflecting steady growth year-over-year with the largest incremental increase occurring between 2018 and 2019.
- Total Assets
- Total assets remained relatively stable, fluctuating modestly from $4,155 million in 2015 to $4,291 million in 2019. The asset base showed minor variations without any significant upward or downward trend, indicating consistent investment or retention of asset levels.
- Segment Asset Turnover
- The segment asset turnover ratio demonstrates a clear improving trend, increasing from 1.38 in 2015 to 1.67 in 2019. This metric indicates enhanced efficiency in utilizing assets to generate sales. The gradual incremental rises suggest progressive improvements in operational efficiency over the period analyzed.
Overall, the segment shows sustained revenue growth alongside stable asset levels, contributing to increasing asset turnover efficiency. Such trends suggest effective management of resources and a strengthening capacity to convert assets into revenue within this segment.
Segment Asset Turnover: Missile Systems (MS)
Raytheon Co.; Missile Systems (MS); segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | |||||
| Total assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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).
1 2019 Calculation
Segment asset turnover = Net sales ÷ Total assets
= ÷ =
The analysis of the annual data for the Missile Systems segment over the five-year period reveals a consistent upward trend in net sales, total assets, and segment asset turnover, each indicating growth and operational efficiency.
- Net Sales
- Net sales demonstrate a steady increase each year, rising from 6,556 million US dollars in 2015 to 8,726 million US dollars in 2019. This represents an approximate compound annual growth rate, showing sustained top-line growth over the period. The increase suggests expanding market demand or successful sales strategies within this segment.
- Total Assets
- Total assets also increased consistently from 6,561 million US dollars in 2015 to 8,408 million US dollars in 2019. The asset base expanded by approximately 28% over the period, reflecting investment in resources, possibly including technology, facilities, or inventory, in support of the segment's growth initiatives.
- Segment Asset Turnover
- The segment asset turnover ratio fluctuated slightly but generally remained stable, moving from 1.00 in 2015 to a peak of 1.06 in 2017 before settling at 1.04 in 2019. This ratio indicates the efficiency with which assets are used to generate sales. The levels above 1 consistently suggest effective use of assets to drive revenue, with minor variations indicating small changes in operational efficiency over the years.
Overall, the Missile Systems segment showcases steady growth in revenue and asset base, coupled with consistent asset utilization effectiveness. This combination typically points to a healthy operational environment, supporting both expansion and efficiency objectives within the segment.
Segment Asset Turnover: Space and Airborne Systems (SAS)
Raytheon Co.; Space and Airborne Systems (SAS); segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | |||||
| Total assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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).
1 2019 Calculation
Segment asset turnover = Net sales ÷ Total assets
= ÷ =
Over the five-year period ending on December 31, 2019, the financial data for the Space and Airborne Systems segment demonstrate a consistent upward trend across key performance indicators.
- Net Sales
- Net sales increased steadily from $5,796 million in 2015 to $7,427 million in 2019. This represents an approximate total growth of 28% over the period, indicating a positive trajectory in revenue generation within the segment.
- Total Assets
- Total assets showed a gradual increase from $6,416 million in 2015 to $6,979 million in 2019. The growth in assets was moderate, at around 8.8%, suggesting a relatively conservative expansion of asset base alongside growing sales.
- Segment Asset Turnover
- The asset turnover ratio, which measures sales efficiency relative to assets, improved from 0.9 in 2015 to 1.06 in 2019. This rising ratio reflects enhanced utilization of the asset base to generate revenue, with the segment increasing its sales output proportionally faster than asset growth.
Overall, the data reveal stronger revenue growth compared to asset growth, accompanied by improving asset turnover. This may indicate enhanced operational efficiency and effective asset management within the segment over the analyzed timeframe.
Segment Asset Turnover: Forcepoint
Raytheon Co.; Forcepoint; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Net sales | |||||
| Total assets | |||||
| Segment Activity Ratio | |||||
| Segment asset turnover1 | |||||
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).
1 2019 Calculation
Segment asset turnover = Net sales ÷ Total assets
= ÷ =
- Net Sales
- Net sales demonstrated a consistent upward trend over the five-year period, increasing each year from 328 million US dollars in 2015 to 658 million US dollars in 2019. The growth rate showed a notable acceleration between 2015 and 2016, followed by more moderate but steady increases in subsequent years.
- Total Assets
- Total assets remained relatively stable with slight fluctuations during the period. The values increased marginally from 2,486 million US dollars in 2015 to 2,514 million in 2016 and then plateaued around the mid-2,500 million range before declining slightly to 2,424 million by 2019. This indicates limited expansion in asset base despite the growth in net sales.
- Segment Asset Turnover
- Segment asset turnover improved steadily from 0.13 in 2015 to 0.27 in 2019, effectively doubling over the analyzed timeframe. This ratio's increase suggests enhanced efficiency in utilizing assets to generate sales, reflecting either improved operational performance or better asset management within the segment.
Segment Capital Expenditures to Depreciation
Raytheon Co., capital expenditures to depreciation by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint |
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 analysis of the annual reportable segment capital expenditures to depreciation ratios reveals varied trends across different business units over the five-year period from 2015 to 2019.
- Integrated Defense Systems (IDS)
- The ratio for IDS shows a consistent upward trend throughout the period. Starting at 1.4 in 2015, it rises to 1.53 in 2016 and continues to increase significantly to 2.04 in 2017. This growth trend maintains momentum in 2018 with a ratio of 2.47 and peaks at 2.62 in 2019. The steady increase suggests sustained or growing capital expenditures relative to depreciation, indicating ongoing investment or expansion within this segment.
- Intelligence, Information and Services (IIS)
- The IIS segment exhibits a declining trend in the early years, with the ratio dropping sharply from 1.49 in 2015 to 0.91 in 2016 and reaching a low of 0.44 in 2017. This decline implies that capital expenditures were relatively low compared to depreciation during this period. However, the ratio recovers slightly to 0.9 in 2018 and modestly improves to 1.02 in 2019, indicating a partial resurgence in investment activities relative to asset depreciation.
- Missile Systems (MS)
- The MS segment shows notable volatility with a substantial increase in the ratio from 0.83 in 2015 to 1.96 in 2016, and further to 2.63 in 2017, reflecting a significant rise in capital expenditures relative to depreciation. This upward trend continues, peaking at 3.44 in 2018, the highest among all segments for that year. However, the ratio declines in 2019 to 1.8, suggesting a decrease in capital expenditures or an increase in depreciation.
- Space and Airborne Systems (SAS)
- The SAS segment demonstrates fluctuation over the period. Beginning at 0.79 in 2015, the ratio increases to 1.22 in 2016 and remains relatively stable at 1.2 in 2017. A decline to 0.97 follows in 2018, but there is a marked rise to 2.3 in 2019. This pattern indicates variability in capital spending relative to depreciation, ending with a strong increase in the final year.
- Forcepoint
- The Forcepoint segment experiences minor fluctuations with a starting ratio of 1.25 in 2015, maintaining a similar level of 1.27 in 2016. The ratio drops to 0.82 in 2017 and further decreases slightly to 0.76 in 2018, pointing to reduced capital expenditures or elevated depreciation during this timeframe. In 2019, the ratio rebounds to 1.21, indicating a recovery in capital investment relative to asset depreciation.
Segment Capital Expenditures to Depreciation: Integrated Defense Systems (IDS)
Raytheon Co.; Integrated Defense Systems (IDS); segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital Expenditures
- Capital expenditures have shown a consistent upward trend over the five-year period. Starting at $126 million in 2015, the amount increased each year, reaching $309 million in 2019. This represents a marked increase, more than doubling over the period, indicating a substantial reinvestment in assets within the segment.
- Depreciation and Amortization
- Depreciation and amortization expenses remained relatively stable from 2015 to 2018, fluctuating modestly around the $90 million to $98 million range. In 2019, there was a noticeable increase to $118 million, suggesting either increased capital asset base or changes in asset life assumptions.
- Segment Capital Expenditures to Depreciation Ratio
- This ratio has steadily increased throughout the period, from 1.4 in 2015 to 2.62 in 2019. The rising ratio indicates that capital expenditures have been growing at a faster pace than depreciation expenses. This trend suggests ongoing expansion or modernization of the asset base, with investments outpacing the rate at which assets are being depreciated.
Segment Capital Expenditures to Depreciation: Intelligence, Information and Services (IIS)
Raytheon Co.; Intelligence, Information and Services (IIS); segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital Expenditures
- Capital expenditures showed a declining trend from 2015 to 2017, decreasing significantly from 85 million US dollars in 2015 to a low of 22 million US dollars in 2017. Following this, there was a recovery phase with capital expenditures rising to 46 million in 2018 and slightly increasing further to 50 million in 2019.
- Depreciation and Amortization
- Depreciation and amortization values fluctuated over the years. Starting at 57 million US dollars in 2015, the figure increased to 65 million in 2016, then decreased to 50 million in 2017. The amount stabilized somewhat in the subsequent years, with 51 million in 2018 and a slight decline to 49 million in 2019.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation exhibited a downward trend from 1.49 in 2015 to a low of 0.44 in 2017, indicating that capital expenditures became significantly lower relative to depreciation and amortization during this period. Subsequently, the ratio improved, rising to 0.9 in 2018 and surpassing parity to reach 1.02 in 2019, which suggests a return to capital expenditures levels comparable to or marginally higher than depreciation expenses.
Segment Capital Expenditures to Depreciation: Missile Systems (MS)
Raytheon Co.; Missile Systems (MS); segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital Expenditures
- There is a clear upward trend in capital expenditures from 2015 to 2018, increasing from US$62 million in 2015 to a peak of US$337 million in 2018. However, this is followed by a notable decline in 2019, with capital expenditures decreasing to US$232 million.
- Depreciation and Amortization
- Depreciation and amortization values show a fluctuating but generally increasing pattern over the five-year period. After a slight decrease from US$75 million in 2015 to US$69 million in 2016, there is a rise to US$84 million in 2017, continuing up to US$129 million by 2019.
- Segment Capital Expenditures to Depreciation Ratio
- The capital expenditures to depreciation ratio exhibits significant variability. It rises markedly from 0.83 in 2015 to a peak of 3.44 in 2018, indicating capital spending was more than triple the depreciation expense that year. This ratio then declines sharply to 1.8 in 2019, reflecting a reduction in relative capital investment versus depreciation.
Segment Capital Expenditures to Depreciation: Space and Airborne Systems (SAS)
Raytheon Co.; Space and Airborne Systems (SAS); segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
The data reveals several notable trends in the financial activities related to capital expenditures and depreciation for the Space and Airborne Systems segment over the five-year period ending in 2019.
- Capital Expenditures
- Capital expenditures demonstrate a fluctuating but generally upward trend, starting at $131 million in 2015 and nearly doubling to $304 million in 2019. After a moderate increase from 2015 to 2017, there is a dip in 2018, followed by a substantial jump in 2019, marking the highest investment level within the observed period.
- Depreciation and Amortization
- Depreciation and amortization expenses show a peak at $166 million in 2015, followed by a notable decline to $122 million in 2016. From 2016 through 2019, the values remain relatively stable, fluctuating narrowly around $130 million, suggesting consistent asset usage or amortization schedules during those years.
- Segment Capital Expenditures to Depreciation Ratio
- This ratio, which compares capital expenditures to depreciation and amortization expenses, increases from 0.79 in 2015 to a peak of 2.3 in 2019. The initial increase from 2015 through 2017 indicates rising investment relative to asset consumption. Although there is a slight decrease in 2018 to 0.97, the sharp rise in 2019 highlights intensified asset acquisition or reinvestment efforts, more than doubling the capital expenditures relative to depreciation.
Overall, the trends suggest a strategic increase in investment activity in 2019, following a period of relative steadiness in asset use and depreciation costs. The spike in capital expenditures in 2019, coupled with stable depreciation, may indicate expansion, modernization, or replacement of assets within the segment.
Segment Capital Expenditures to Depreciation: Forcepoint
Raytheon Co.; Forcepoint; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures | |||||
| Depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation and amortization
= ÷ =
- Capital expenditures
- The capital expenditures exhibit variability over the observed period, beginning at $10 million in 2015, increasing to a peak of $19 million in 2016, followed by a decline to $13-14 million range during 2017 and 2018. A moderate increase is noted again in 2019, reaching $17 million. This pattern indicates a fluctuating investment in fixed assets, with the highest capital outlay in 2016 and a partial recovery towards the end of the period.
- Depreciation and amortization
- The expense for depreciation and amortization shows a generally increasing trend from $8 million in 2015 to a high of $17 million in both 2017 and 2018, before declining to $14 million in 2019. The growth in these non-cash expenses through the middle years suggests either increased asset base or accelerated amortization, with a notable decrease in the final year.
- Segment capital expenditures to depreciation ratio
- The ratio of capital expenditures to depreciation reflects the relationship between new investments and the consumption of existing assets. Starting at 1.25 in 2015 and slightly increasing to 1.27 in 2016, the ratio declines significantly in 2017 and 2018 to 0.82 and 0.76, respectively, indicating capital spending was less than depreciation expense in these years. In 2019, the ratio rebounds to 1.21, showing an increased level of capital investment relative to asset depreciation.
- Overall analysis
- Over the five-year period, the financial data reveal an investment cycle characterized by elevated capital expenditures in 2016 followed by a period of relative restraint in 2017 and 2018, concurrent with higher depreciation levels. The return to higher capital expenditures in 2019, along with the rebound in the capital expenditures to depreciation ratio, suggests a renewed focus on asset acquisition or upgrade after a period of asset consumption outpacing new investment. The fluctuation in depreciation and amortization expenses mirrors these changes in the asset investment cycle.
Net sales
Raytheon Co., net sales by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint | |||||
| Eliminations | |||||
| Total |
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 net sales data exhibits noteworthy trends across the five reportable segments over the five-year period from 2015 to 2019. Overall, total net sales increased steadily from $23.3 billion in 2015 to $29.2 billion in 2019, indicating consistent growth.
- Integrated Defense Systems (IDS)
- Sales in this segment declined from $6.375 billion in 2015 to a low of $5.476 billion in 2016. After this drop, sales gradually recovered, rising to $6.927 billion by 2019. Despite the initial dip, the segment demonstrated resilience with a moderate recovery, ending the period higher than the starting point.
- Intelligence, Information and Services (IIS)
- This segment exhibited a generally positive trend with sales increasing from $5.733 billion in 2015 to $7.151 billion in 2019. Minor fluctuations were observed, particularly a slight decrease between 2016 and 2017, but the overall trajectory was upward, reflecting growth in demand or expansion in this area.
- Missile Systems (MS)
- Missile Systems showed the most consistent growth, with net sales rising steadily every year from $6.556 billion in 2015 to $8.726 billion in 2019. This segment had the highest sales figures among all segments in each year, underscoring its critical role and robust performance.
- Space and Airborne Systems (SAS)
- Net sales in this segment also displayed steady increases, climbing from $5.796 billion in 2015 to $7.427 billion in 2019. Growth was consistent year-over-year, suggesting stable demand and successful market engagement.
- Forcepoint
- This segment, likely representing a smaller or newer business unit, grew from $328 million in 2015 to $658 million in 2019. The trend is clearly upward, almost doubling over the period, indicating rapid expansion or increasing market penetration.
- Eliminations
- Eliminations, reflecting internal adjustments to avoid double counting in consolidated figures, became more negative over time, increasing from -$1.48 billion in 2015 to -$1.712 billion in 2019. The growing magnitude of eliminations may indicate increased intersegment transactions accompanying overall growth.
In summary, the data reveals a broad-based increase in net sales across most segments, with Missile Systems leading the growth and Integrated Defense Systems recovering after an initial decline. The steady rise in Forcepoint sales highlights emerging business opportunities, while mounting eliminations point to increasing complexity in intersegment dealings. The overall upward trajectory of total net sales reflects successful growth strategies and market expansion throughout the company’s operations during this period.
Operating income
Raytheon Co., operating income by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint | |||||
| Eliminations | |||||
| Total |
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).
- Integrated Defense Systems (IDS)
- The operating income for the Integrated Defense Systems segment exhibited a consistent upward trend over the five-year period. Starting at 917 million USD in 2015, it increased steadily each year to reach 1111 million USD in 2019, reflecting overall growth and an expanding contribution to the company's earnings.
- Intelligence, Information and Services (IIS)
- This segment experienced fluctuations in operating income. It registered a decline from 599 million USD in 2015 to 455 million USD in 2017. However, thereafter it showed recovery, increasing to 538 million USD in 2018 and further to 658 million USD in 2019, suggesting a rebound and strengthening performance in recent years.
- Missile Systems (MS)
- Missile Systems displayed growth early in the period, rising from 867 million USD in 2015 to a peak of 1010 million USD in 2017. Subsequently, there was a slight decline, with operating income falling to 973 million USD in 2018 and 959 million USD in 2019. Despite the recent decreases, the segment maintains a strong operating income near historically high levels.
- Space and Airborne Systems (SAS)
- The Space and Airborne Systems segment demonstrated consistent growth throughout the timeframe. Operating income increased from 794 million USD in 2015 to 991 million USD in 2019. This indicates steady expansion and an increasing contribution to overall profitability.
- Forcepoint
- Forcepoint's operating income showed considerable volatility as well as a relatively low base compared to other segments. After increasing from 30 million USD in 2015 to 51 million USD in 2016, it dropped sharply to 33 million USD in 2017 and then further declined to 5 million USD in 2018, recovering modestly to 8 million USD in 2019. This suggests challenges within the segment, with minimal impact on total operating income.
- Eliminations
- Eliminations consistently reduced total operating income throughout the period, increasing negatively from -159 million USD in 2015 to -184 million USD in 2019. The growing negative amount indicates increasing internal offsets or adjustments within segment reporting.
- Total Operating Income
- The total operating income showed a generally positive trajectory, increasing from 3048 million USD in 2015 to 3543 million USD in 2019. Despite some fluctuations in individual segments, this upward movement reflects overall growth in the company's profitability over the five-year period.
Capital expenditures
Raytheon Co., capital expenditures by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint | |||||
| Corporate | |||||
| Total |
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 analysis of capital expenditures over the five-year period reveals diverse trends across the various segments. Overall, total capital expenditures demonstrated a consistent increase, rising from US$425 million in 2015 to US$940 million in 2019, more than doubling in value.
- Integrated Defense Systems (IDS)
- Capital expenditures in this segment showed steady growth throughout the period, increasing from US$126 million in 2015 to US$309 million in 2019. Notable incremental rises are observed year-over-year, with a particularly significant increase between 2018 and 2019.
- Intelligence, Information and Services (IIS)
- This segment experienced a noticeable decline in capital expenditures from US$85 million in 2015 down to a low of US$22 million in 2017. Following this dip, expenditures partially recovered, reaching US$50 million in 2019, though still below the 2015 level.
- Missile Systems (MS)
- Capital expenditures exhibited substantial growth from US$62 million in 2015 to a peak of US$337 million in 2018. However, this was followed by a decrease to US$232 million in 2019, indicating some volatility in this segment's investment.
- Space and Airborne Systems (SAS)
- Expenditures in SAS grew moderately from US$131 million in 2015 to US$158 million in 2017, but then fell to US$136 million in 2018. A sharp increase occurred in 2019, with expenditures more than doubling to US$304 million compared to the previous year.
- Forcepoint
- Capital expenditures for Forcepoint remained relatively low and somewhat stable, fluctuating between US$10 million and US$19 million over the period and showing no clear upward or downward trend.
- Corporate
- Corporate capital expenditures trended upwards overall, increasing from US$11 million in 2015 to US$28 million in 2019. The growth was gradual with minor fluctuations in intervening years.
Depreciation and amortization
Raytheon Co., depreciation and amortization by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint | |||||
| Acquisition Accounting Adjustments | |||||
| Corporate | |||||
| Total |
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).
- Integrated Defense Systems (IDS)
- The depreciation and amortization expense for IDS remained relatively stable from 2015 to 2018, fluctuating modestly between 88 and 98 million USD. In 2019, there was a notable increase to 118 million USD, indicating a possible rise in asset base or amortization intensity in the final year analyzed.
- Intelligence, Information and Services (IIS)
- This segment showed a less consistent trend, peaking at 65 million USD in 2016 before declining to 50 million USD in 2017. The values for 2018 and 2019 remained slightly above 49-51 million USD, suggesting some stabilization after the initial drop.
- Missile Systems (MS)
- The amortization and depreciation values for MS exhibited a clear upward trend, starting at 75 million USD in 2015, dipping briefly in 2016 to 69 million USD, but then increasing steadily to 84 million USD in 2017, 98 million USD in 2018, and reaching 129 million USD in 2019. This consistent growth may reflect capital investments or increased depreciation schedules.
- Space and Airborne Systems (SAS)
- Depreciation and amortization in this segment decreased significantly from 166 million USD in 2015 to 122 million USD in 2016. Thereafter, it showed moderate increases to 132 million USD in 2017 and 140 million USD in 2018, before a slight decrease to 132 million USD in 2019. This indicates a fluctuating but overall downward adjustment from the initial year’s high base.
- Forcepoint
- The expense for Forcepoint increased from 8 million USD in 2015 to 17 million USD by 2017, holding steady through 2018, before a slight decrease to 14 million USD in 2019. This pattern suggests initial growth followed by mild stabilization and a minor decline in the last year.
- Acquisition Accounting Adjustments
- There was a sharp increase in this category from 58 million USD in 2015 to 121 million USD in 2016, with further slight increases to 125 million USD in 2017. Subsequent years saw a gradual decline to 116 million USD in 2018 and 111 million USD in 2019. This pattern may reflect significant acquisition-related depreciation and amortization recorded during the earlier period with steady decreases afterward.
- Corporate
- Corporate depreciation and amortization expenses increased steadily each year, starting at 35 million USD in both 2015 and 2016, rising to 44 million USD in 2017, then 48 million USD in 2018, and reaching 52 million USD in 2019. This steady increase suggests ongoing investment in corporate-level assets or expansions.
- Total
- The total depreciation and amortization expense displayed consistent growth across the five-year period, rising from 489 million USD in 2015 to 605 million USD in 2019. This reflects an overall expansion in depreciable assets or an increase in amortization charges across segments and corporate activities over time.
Total assets
Raytheon Co., total assets by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Integrated Defense Systems (IDS) | |||||
| Intelligence, Information and Services (IIS) | |||||
| Missile Systems (MS) | |||||
| Space and Airborne Systems (SAS) | |||||
| Forcepoint | |||||
| Corporate | |||||
| Total |
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).
Over the period from December 31, 2015, to December 31, 2019, the total assets of the different reportable segments demonstrate distinct growth patterns with some variability across segments.
- Integrated Defense Systems (IDS)
- The IDS segment shows a steady and consistent increase in total assets over the five-year period. Starting at $4,357 million in 2015, assets rose to $5,103 million by 2019, reflecting a growth trend averaging approximately 4% annually. This indicates ongoing investment or asset accumulation in this segment.
- Intelligence, Information and Services (IIS)
- The IIS segment maintains relatively stable asset levels with marginal fluctuations. Assets increased slightly from $4,155 million in 2015 to $4,291 million in 2019, showing minimal growth. The slight dip in 2017 was corrected the following years, suggesting a mature segment with modest asset variation.
- Missile Systems (MS)
- This segment demonstrates the most substantial growth among the reported segments. Beginning at $6,561 million in 2015, assets increased steadily each year, reaching $8,408 million in 2019. The growth rate here is the highest, implying significant expansion or capital allocation.
- Space and Airborne Systems (SAS)
- The SAS segment also exhibits consistent asset growth from $6,416 million in 2015 to $6,979 million in 2019. The growth rate is moderate in comparison to MS but steady, suggesting gradual scaling of assets.
- Forcepoint
- Forcepoint displays a slight decline in total assets over the period. Starting at $2,486 million in 2015, the asset value marginally increased through to 2017 but then declined to $2,424 million by 2019. This indicates a possible reduction in asset base or divestment in this segment.
- Corporate
- The Corporate segment assets remain relatively stable from 2015 to 2018, fluctuating around $5,300 million. However, there is a marked increase to $7,361 million in 2019, suggesting a significant adjustment or reclassification of corporate assets during the last year of the period.
- Total Assets
- The cumulative total assets across all segments increased steadily from $29,281 million in 2015 to $34,566 million in 2019. This overall growth is consistent with the patterns observed in the individual segments, particularly driven by substantial increases in Missile Systems and Integrated Defense Systems, along with the late increase in Corporate assets, despite the slight decline in Forcepoint.