10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from               to

Commission File Number 1-13699

________________________________________________________________________________

RAYTHEON COMPANY

(Exact name of Registrant as Specified in its Charter)

________________________________________________________________________________ 

Delaware	95-1778500
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

870 Winter Street, Waltham, Massachusetts 02451

(Address of Principal Executive Offices) (Zip Code)

(781) 522-3000

(Registrant’s telephone number, including area code)

________________________________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ý   No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ý   No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer	ý	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨   No ý

Number of shares of common stock outstanding as of April 22, 2019 was 279,871,000.

RAYTHEON COMPANY

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets (Unaudited) at March 31, 2019 and December 31, 2018	4
	Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2019 and April 1, 2018	5
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three Months Ended March 31, 2019 and April 1, 2018	6
	Consolidated Statements of Equity (Unaudited) for the Three Months Ended March 31, 2019 and April 1, 2018	7
	Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2019 and April 1, 2018	8
	Notes to Consolidated Financial Statements (Unaudited)	9
	Report of Independent Registered Public Accounting Firm	27
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	49
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 6.	Exhibits	50
Signatures		51

2

Cautionary Note Regarding Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of federal securities laws, including information regarding our financial outlook, future plans, objectives, business prospects, products and services, trends and anticipated financial performance, including with respect to: our revenue; our liquidity and capital resources; our capital expenditures; our bookings and backlog; our international sales, including our ability to do business in the Kingdom of Saudi Arabia (KSA) and delays in the Congressional Notification process for direct commercial sales contracts for precision guided munitions to certain Middle Eastern customers; our expected tax payments; our pension, nonqualified defined benefit and defined contribution plans funding; the impact of new accounting pronouncements and tax regulations; our unrecognized tax benefits; our recognition of revenue on certain performance obligations; our reclassifications of gains or losses on cash flow hedges; the impact and outcome of audits, legal and administrative proceedings, claims, investigations and commitments and contingencies; the impact of certain regional developments; and the impact of changes in foreign currency rates. You can identify these statements by the fact that they include words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” “intend,” “plan,” or variations of these words, or similar expressions. These forward-looking statements are not statements of historical facts and represent only our current expectations regarding such matters. These statements inherently involve a wide range of known and unknown uncertainties. Our actual actions and results could differ materially from what is expressed or implied by these statements. Specific factors that could cause such a difference include, but are not limited to, those set forth under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018 and other important factors disclosed previously and from time to time in our other filings with the Securities and Exchange Commission (SEC). Given these factors, as well as other variables that may affect our operating results, you should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, or use historical trends to anticipate results or trends in future periods. We expressly disclaim any obligation or intention to provide updates to the forward-looking statements and the estimates and assumptions associated with them, except as required by law.

3

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

RAYTHEON COMPANY

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In millions, except per share amounts)	Mar 31, 2019			Dec 31, 2018
Assets
Current assets
Cash and cash equivalents	$	2,093		$	3,608
Receivables, net	1,424			1,648
Contract assets	5,971			5,594
Inventories	882			758
Prepaid expenses and other current assets	586			529
Total current assets	10,956			12,137
Property, plant and equipment, net	2,899			2,840
Operating lease right-of-use assets	816			805
Goodwill	14,882			14,864
Other assets, net	2,023			2,024
Total assets	$	31,576		$	32,670
Liabilities, Redeemable Noncontrolling Interests and Equity
Current liabilities
Commercial paper and current portion of long-term debt	$	800		$	300
Contract liabilities	2,930			3,309
Accounts payable	1,361			1,964
Accrued employee compensation	995			1,509
Other current liabilities	1,594			1,381
Total current liabilities	7,680			8,463
Accrued retiree benefits and other long-term liabilities	6,848			6,922
Long-term debt	4,256			4,755
Operating lease liabilities	652			647
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests	432			411
Equity
Raytheon Company stockholders’ equity
Common stock, par value, $0.01 per share, 1,450 shares authorized, 280 and 282 shares outstanding at March 31, 2019 and December 31, 2018, respectively	3			3
Additional paid-in capital	—			—
Accumulated other comprehensive loss	(8,399		)	(8,618		)
Retained earnings	20,104			20,087
Total Raytheon Company stockholders’ equity	11,708			11,472
Noncontrolling interests in subsidiaries	—			—
Total equity	11,708			11,472
Total liabilities, redeemable noncontrolling interests and equity	$	31,576		$	32,670

The accompanying notes are an integral part of the unaudited consolidated financial statements.

4

RAYTHEON COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended
(In millions, except per share amounts)	Mar 31, 2019			Apr 1, 2018
Net sales
Products	$	5,562		$	5,254
Services	1,167			1,013
Total net sales	6,729			6,267
Operating expenses
Cost of sales—products	4,002			3,737
Cost of sales—services	875			795
General and administrative expenses	739			694
Total operating expenses	5,616			5,226
Operating income	1,113			1,041
Non-operating (income) expense, net
Retirement benefits non-service expense	181			239
Interest expense	44			47
Interest income	(13		)	(7		)
Other (income) expense, net	(20		)	5
Total non-operating (income) expense, net	192			284
Income from continuing operations before taxes	921			757
Federal and foreign income taxes	146			133
Income from continuing operations	775			624
Income (loss) from discontinued operations, net of tax	—			(1		)
Net income	775			623
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries	(6		)	(10		)
Net income attributable to Raytheon Company	$	781		$	633
Basic earnings per share attributable to Raytheon Company common stockholders:
Income from continuing operations	$	2.77		$	2.20
Income (loss) from discontinued operations, net of tax	—			—
Net income	2.77			2.20
Diluted earnings per share attributable to Raytheon Company common stockholders:
Income from continuing operations	$	2.77		$	2.20
Income (loss) from discontinued operations, net of tax	—			—
Net income	2.77			2.19
Amounts attributable to Raytheon Company common stockholders:
Income from continuing operations	$	781		$	634
Income (loss) from discontinued operations, net of tax	—			(1		)
Net income	$	781		$	633

The accompanying notes are an integral part of the unaudited consolidated financial statements.

5

RAYTHEON COMPANY 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Net income	$	775		$	623
Other comprehensive income (loss), before tax:
Pension and other postretirement benefit plans, net:
Amortization of prior service cost	1			1
Amortization of net actuarial loss	276			347
Pension and other postretirement benefit plans, net	277			348
Foreign exchange translation	8			24
Cash flow hedges	(10		)	(10		)
Unrealized gains (losses) on investments and other, net	—			—
Other comprehensive income (loss), before tax	275			362
Income tax benefit (expense) related to items of other comprehensive income (loss)	(56		)	(71		)
Other comprehensive income (loss), net of tax	219			291
Reclassification of stranded tax effects	—			(1,451		)
Total comprehensive income (loss)	994			(537		)
Less: Comprehensive income (loss) attributable to noncontrolling interests in subsidiaries	(6		)	(10		)
Comprehensive income (loss) attributable to Raytheon Company	$	1,000		$	(527	)

The accompanying notes are an integral part of the unaudited consolidated financial statements.

6

RAYTHEON COMPANY

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

(In millions)	Common stock		Additional paid-in capital			Accumulated other comprehensive income (loss)			Retained earnings			Total Raytheon Company stockholders’ equity			Noncontrolling interests in subsidiaries(1)		Total equity
Balance at December 31, 2018	$	3	$	—		$	(8,618	)	$	20,087		$	11,472		$	—	$	11,472
Net income (loss)									781			781			—		781
Other comprehensive income (loss), net of tax						219						219					219
Adjustment of redeemable noncontrolling interests to redemption value									5			5					5
Dividends declared			1						(265		)	(264		)			(264		)
Common stock plans activity			61									61					61
Share repurchases			(62		)				(504		)	(566		)			(566		)
Balance at March 31, 2019	$	3	$	—		$	(8,399	)	$	20,104		$	11,708		$	—	$	11,708
Balance at December 31, 2017	$	3	$	—		$	(7,935	)	$	17,895		$	9,963		$	—	$	9,963
Net income (loss)									633			633			—		633
Other comprehensive income (loss), net of tax						291						291					291
Reclassification of stranded tax effects						(1,451		)	1,451			—					—
Adjustment of redeemable noncontrolling interests to redemption value									11			11					11
Dividends declared			1						(252		)	(251		)			(251		)
Common stock plans activity			62									62					62
Share repurchases			(63		)				(409		)	(472		)			(472		)
Balance at April 1, 2018	$	3	$	—		$	(9,095	)	$	19,329		$	10,237		$	—	$	10,237

(1) Excludes redeemable noncontrolling interests which are not considered equity. See “Note 13: Redeemable Noncontrolling Interests” for additional information.

The accompanying notes are an integral part of the unaudited consolidated financial statements.

7

RAYTHEON COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Cash flows from operating activities
Net income	$	775		$	623
(Income) loss from discontinued operations, net of tax	—			1
Income from continuing operations	775			624
Adjustments to reconcile to net cash provided by (used in) operating activities from continuing operations, net of the effect of acquisitions and divestitures
Depreciation and amortization	140			135
Stock-based compensation	59			63
Deferred income taxes	(44		)	(77		)
Changes in assets and liabilities
Receivables, net	236			(314		)
Contract assets and contract liabilities	(731		)	(174		)
Inventories	(124		)	(46		)
Prepaid expenses and other current assets	(59		)	138
Income taxes receivable/payable	181			290
Accounts payable	(484		)	(167		)
Accrued employee compensation	(523		)	(420		)
Other current liabilities	3			(60		)
Accrued retiree benefits	219			306
Other, net	(59		)	(15		)
Net cash provided by (used in) operating activities from continuing operations	(411		)	283
Net cash provided by (used in) operating activities from discontinued operations	—			1
Net cash provided by (used in) operating activities	(411		)	284
Cash flows from investing activities
Additions to property, plant and equipment	(274		)	(219		)
Additions to capitalized internal use software	(10		)	(12		)
Maturities of short-term investments	—			309
Payments for purchases of acquired companies, net of cash received	(8		)	—
Other	—			(1		)
Net cash provided by (used in) investing activities	(292		)	77
Cash flows from financing activities
Dividends paid	(245		)	(230		)
Net borrowings (payments) on commercial paper	—			—
Repurchases of common stock under share repurchase programs	(500		)	(400		)
Repurchases of common stock to satisfy tax withholding obligations	(66		)	(72		)
Other	(5		)	(5		)
Net cash provided by (used in) financing activities	(816		)	(707		)
Net increase (decrease) in cash, cash equivalents and restricted cash	(1,519		)	(346		)
Cash, cash equivalents and restricted cash at beginning of the year	3,624			3,115
Cash, cash equivalents and restricted cash at end of period	$	2,105		$	2,769

The accompanying notes are an integral part of the unaudited consolidated financial statements.

8

RAYTHEON COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1: Basis of Presentation

We prepared the accompanying unaudited consolidated financial statements of Raytheon Company and all wholly-owned, majority-owned or otherwise controlled subsidiaries on the same basis as our annual audited financial statements. We condensed or omitted certain information and footnote disclosures normally included in our annual audited financial statements, which we prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Our quarterly financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018. As used in this report, the terms “we,” “us,” “our,” “Raytheon” and the “Company” mean Raytheon Company and its subsidiaries, unless the context indicates another meaning.

In the opinion of management, our financial statements reflect all adjustments, which are of a normal recurring nature, necessary for presentation of financial statements for interim periods in accordance with U.S. GAAP and with the instructions to Form 10-Q in Article 10 of Securities and Exchange Commission (SEC) Regulation S-X. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates, and any such differences may be material to our financial statements.

Effective January 1, 2019, we adopted the requirements of Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) using the modified retrospective approach as discussed below in “Note 2: Accounting Standards.” We reclassified certain balance sheet amounts to conform to our current period presentation. All amounts disclosed in this Form 10-Q reflect these changes.

Note 2: Accounting Standards

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability for most lease arrangements. Effective January 1, 2019, we adopted the requirements of the new lease standard using the modified retrospective approach, applying the new lease requirements at the beginning of the earliest period presented. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows us to carry forward the historical lease classification. We did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use assets. The standard resulted in the recognition of operating lease right-of-use assets of $805 million and operating lease liabilities of $841 million, of which $194 million was classified as current and is included in other current liabilities in our consolidated balance sheet as of December 31, 2018, with immaterial changes to other balance sheet accounts. The standard had no impact on our results of operations or cash flows. In addition, new disclosures are provided to enable users to assess the amount, timing and uncertainty of cash flows arising from leases.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820), which eliminates the disclosure requirement of the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and modifies certain disclosure requirements related to Level 3 recurring and nonrecurring fair value measurements. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. Effective January 1, 2019, we elected to early adopt the requirements of the new standard on a prospective basis. The standard did not have an impact on our financial position, results of operations or liquidity.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-24): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. Effective January 1, 2019, we elected to early adopt the requirements of the new standard on a prospective basis. The standard did not have a material impact on our financial position, results of operations or liquidity.

Other new pronouncements adopted and issued but not effective until after March 31, 2019 did not and are not expected to have a material impact on our financial position, results of operations or liquidity.

9

Note 3: Significant Accounting Policies Update

Our significant accounting policies are detailed in “Note 1: Summary of Significant Accounting Policies” within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2018. Significant changes to our accounting policies as a result of adopting Topic 842 are discussed below:

Leases—We determine if an arrangement is a lease or contains an embedded lease at inception. For lease agreements with both lease and nonlease components (e.g., common-area maintenance costs), we account for the nonlease components separately. Consideration is allocated to the lease and nonlease components based on the estimated standalone prices.

All of our leases are operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. The current portion of operating lease liabilities is included in other current liabilities in our consolidated balance sheets. For the majority of our leases, the discount rate used to determine the present value of the lease payments is our incremental borrowing rate as of the lease commencement date, as the implicit rate is not readily determinable. The operating lease right-of-use assets also includes any initial direct costs and any lease payments made at or before the commencement date, and is reduced for any unrestricted incentives received at or before the commencement date.

Some of our leases include options to extend or terminate the lease. We include these options in the recognition of our right-of-use assets and lease liabilities when it is reasonably certain that we will exercise the option. Very few of our leases include variable lease-related payments, such as escalation clauses based on consumer price index (CPI) rates, or residual guarantees. Variable payments that are based on an index or a rate are included in the recognition of our right-of-use assets and lease liabilities using the index or rate at lease commencement; however, changes to these lease payments due to rate or index updates are recorded as rent expense in the period incurred. Amounts probable of payment under residual guarantees are also included in the recognition of our right-of-use assets and lease liabilities.

Note 4: Changes in Estimates under Percentage of Completion Contract Accounting

We have a companywide standard and disciplined quarterly Estimate at Completion (EAC) process in which management reviews the progress and execution of our performance obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly-developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by our subcontractors, the availability and timing of funding from our customer, and overhead cost rates, among other variables. These estimates also include the estimated cost of satisfying our industrial cooperation agreements, sometimes in the form of either offset obligations or in-country industrial participation (ICIP) agreements, required under certain contracts. These obligations may or may not be distinct depending on their nature.

Based on this analysis, any quarterly adjustments to net sales, cost of sales and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive program performance, and may result in an increase in operating income during the performance of individual performance obligations, if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities. Likewise, these adjustments may result in a decrease in operating income if we determine we will not be successful in mitigating these risks or realizing related opportunities. Changes in estimates of net sales, cost of sales and the related impact to operating income are recognized quarterly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation’s percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. When estimates of total costs to be incurred exceed total estimates of revenue to be earned on a performance obligation related to complex aerospace or defense equipment or related services, or product maintenance or separately priced extended warranty, a provision for the entire loss on the performance obligation is recognized in the period the loss is identified.

10

Net EAC adjustments had the following impact on our operating results:

	Three Months Ended
(In millions, except per share amounts)	Mar 31, 2019		Apr 1, 2018
Operating income	$	123	$	115
Income from continuing operations attributable to Raytheon Company	97		91
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company	$	0.34	$	0.32

In addition, net revenue recognized from our performance obligations satisfied in previous periods was $158 million and $138 million in the first quarters of 2019 and 2018, respectively. This primarily relates to EAC adjustments that impacted revenue.

Note 5: Earnings Per Share (EPS)

We compute basic and diluted EPS using actual income from continuing operations attributable to Raytheon Company common stockholders, income (loss) from discontinued operations attributable to Raytheon Company common stockholders and net income attributable to Raytheon Company, and our actual weighted-average shares outstanding rather than the numbers presented within our unaudited consolidated financial statements, which are rounded to the nearest million. As a result, it may not be possible to recalculate EPS as presented in our unaudited consolidated financial statements. Furthermore, it may not be possible to recalculate EPS attributable to Raytheon Company common stockholders by adjusting EPS from continuing operations by EPS from discontinued operations.

We include all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in our basic EPS calculation as they are considered participating securities. As a result, we have included all of our outstanding unvested awards of restricted stock, as well as restricted stock units (RSUs) and Long-term Performance Plan (LTPP) awards that meet the retirement eligible criteria in our calculation of basic EPS. We disclose EPS for common stock and unvested stock-based payment awards, and separately disclose distributed and undistributed earnings. Distributed earnings represent common stock dividends and dividends earned on unvested awards of restricted stock and stock-based payment awards of retirement eligible employees. Undistributed earnings represent earnings that were available for distribution but were not distributed. Common stock and unvested stock-based payment awards earn dividends equally.

As described in “Note 13: Redeemable Noncontrolling Interests,” we record redeemable noncontrolling interest related to Vista Equity Partners’ interest in Forcepoint. We reflect the redemption value adjustments related to this redeemable noncontrolling interest in both the basic and diluted EPS calculation for the portion of redemption value that is in excess of the fair value of noncontrolling interest. There was no impact to basic or diluted EPS in the first quarters of 2019 or 2018.

EPS from continuing operations attributable to Raytheon Company common stockholders and unvested stock-based payment awards was as follows: 

	Three Months Ended
	Mar 31, 2019		Apr 1, 2018
Basic EPS attributable to Raytheon Company common stockholders:
Distributed earnings	$	0.94	$	0.87
Undistributed earnings	1.83		1.33
Total	$	2.77	$	2.20
Diluted EPS attributable to Raytheon Company common stockholders:
Distributed earnings	$	0.94	$	0.87
Undistributed earnings	1.83		1.33
Total	$	2.77	$	2.20

11

Income attributable to participating securities was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Income from continuing operations attributable to participating securities	$	8	$	7
Income (loss) from discontinued operations, net of tax attributable to participating securities	—		—
Net income attributable to participating securities	$	8	$	7

The weighted-average shares outstanding for basic and diluted EPS were as follows: 

	Three Months Ended
(In millions)	Mar 31, 2019	Apr 1, 2018
Shares for basic EPS(1)	281.9	288.5
Effect of dilutive securities	0.3	0.3
Shares for diluted EPS	282.2	288.8

(1) Includes 2.8 million and 3.2 million participating securities for the first quarters of 2019 and 2018, respectively.

Note 6: Inventories

Inventories consisted of the following: 

(In millions)	Mar 31, 2019		Dec 31, 2018
Materials and purchased parts	$	74	$	75
Work in process	785		662
Finished goods	23		21
Total	$	882	$	758

Precontract costs are costs incurred to fulfill a contract prior to contract award. Precontract costs, including general and administrative expenses that are specifically chargeable to the customer, are deferred in inventories if we determine that the costs are probable of recovery under a specific anticipated contract. All other precontract costs, including start-up costs, are expensed as incurred. Costs that are deferred are recognized as contract costs upon the receipt of the anticipated contract. We included deferred precontract costs of $238 million and $163 million in inventories as work in process at March 31, 2019 and December 31, 2018, respectively.

Note 7: Contract Assets and Contract Liabilities

Our contract assets consist of unbilled amounts typically resulting from sales under long-term contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Our contract liabilities consist of advance payments and billings in excess of costs incurred and deferred revenue. The noncurrent portion of deferred revenue is included in accrued retiree benefits and other long-term liabilities in our consolidated balance sheets.

Net contract assets (liabilities) consisted of the following:

(In millions, except percentages)	Mar 31, 2019			Dec 31, 2018			$ Change		% Change
Contract assets	$	5,971		$	5,594		$	377	6.7	%
Contract liabilities—current	(2,930		)	(3,309		)	379		(11.5	)%
Contract liabilities—noncurrent	(141		)	(150		)	9		(6.0	)%
Net contract assets (liabilities)	$	2,900		$	2,135		$	765	35.8	%

The $765 million increase in our net contract assets (liabilities) from December 31, 2018 to March 31, 2019 was primarily due to a $379 million decrease in our current contract liabilities, primarily driven by revenue recognized on certain international programs with milestone payments or advances, and a $377 million increase in our contract assets, principally due to contractual billing terms on U.S. government and foreign military sales contracts and the timing of pending approvals on direct commercial sales contracts for precision guided munitions to certain Middle Eastern customers. For direct commercial sales contracts for which we are required to obtain regulatory approvals, we recognize revenue based on the likelihood of obtaining such approvals. At March 31, 2019, we had approximately $2.4 billion of total contract value, recognized approximately $1.1 billion of sales for work performed to date and received approximately $850 million in advances on contracts for precision guided munitions to certain

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Middle Eastern customers for which U.S. government approval is pending. On a contract by contract basis, and excluding advances billed but not received, we had $600 million and $350 million of net contract assets and net contract liabilities, respectively, related to these contracts.

In the first quarters of 2019 and 2018, we recognized revenue of $894 million and $652 million related to our contract liabilities at January 1, 2019 and January 1, 2018, respectively.

Impairment losses recognized on our receivables and contract assets were de minimis in the first quarters of 2019 and 2018.

Note 8: Deferred Commissions

Our incremental direct costs of obtaining a contract, which consist of sales commissions primarily for our security software sales at Forcepoint, are deferred and amortized over the period of contract performance or a longer period, generally the estimated life of the customer relationship, if renewals are expected and the renewal commission is not commensurate with the initial commission. We classify deferred commissions as current or noncurrent based on the timing of when we expect to recognize the expense. The current and noncurrent portions of deferred commissions are included in prepaid expenses and other current assets, and other assets, net, respectively, in our consolidated balance sheets. At March 31, 2019 and December 31, 2018, we had deferred commissions of $51 million and $55 million, respectively. Amortization expense related to deferred commissions was $4 million and $8 million in the first quarters of 2019 and 2018, respectively.

Note 9: Acquisitions, Divestitures and Goodwill

In pursuing our business strategies, we acquire and make investments in certain businesses that meet strategic and financial criteria, and divest of certain non-core businesses, investments and assets when appropriate. We did not have any divestitures in the first quarter of 2019.

In 2013, we formed the Range Generation Next LLC (RGNext) joint venture with General Dynamics Information Technology (GDIT) through our Intelligence, Information and Services (IIS) segment, in which we held a 50% equity ownership that was accounted for using the equity method. On February 8, 2019, we amended and restated the RGNext joint venture agreement and acquired an additional 10% equity ownership in the joint venture, increasing our equity ownership to 60% and giving us control of the operations of RGNext. Effective as of February 8, 2019, we consolidate the results of RGNext in our consolidated financial statements and report its results in our IIS segment. We also remeasured our equity method investment in RGNext to fair value, which resulted in a non-cash gain of $21 million that was recorded in operating income through a reduction to cost of sales at our IIS segment; recognized redeemable noncontrolling interest for GDIT’s interest in RGNext at a fair value of $32 million; and recognized $90 million of net assets, including cash acquired, at fair value. As part of our purchase price allocation, we recorded $19 million of goodwill, primarily related to the value of the existing workforce, and $34 million of intangible assets, primarily related to customer relationships with a weighted-average life of 7 years.

Pro forma financial information and revenue from the date of acquisition has not been provided as it is not material.

A rollforward of goodwill by segment was as follows: 

(In millions)	Integrated Defense Systems			Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint(1)		Total
Balance at December 31, 2018	$	1,704		$	2,965	$	4,154	$	4,103	$	1,938	$	14,864
Acquisitions	—			19		—		—		—		19
Effect of foreign exchange rates and other	(1		)	—		—		—		—		(1		)
Balance at March 31, 2019	$	1,703		$	2,984	$	4,154	$	4,103	$	1,938	$	14,882

(1) At March 31, 2019, Forcepoint’s fair value was estimated to exceed its net book value by approximately $900 million. As discussed in “Note 13: Redeemable Noncontrolling Interests,” we are required to determine Forcepoint’s fair value on a quarterly basis due to the accounting related to the redeemable noncontrolling interest.

Note 10: Derivatives and Other Financial Instruments

Derivatives—Our primary market exposures are to foreign exchange rates and interest rates, and we use certain derivative financial instruments to help manage these exposures. We execute these instruments with financial institutions that we judge to be credit-worthy. The majority of our foreign currency forward contracts are denominated in currencies of major industrial countries. We do not hold or issue derivative financial instruments for trading or speculative purposes.

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We use foreign currency forward contracts to fix the functional currency value of specific commitments, payments and receipts denominated in foreign currencies. The aggregate notional amount of our outstanding foreign currency forward contracts was $1,843 million and $1,772 million at March 31, 2019 and December 31, 2018, respectively. The net notional exposure of these contracts was $777 million and $840 million at March 31, 2019 and December 31, 2018, respectively.

The fair value of asset derivatives included in other assets, net and liability derivatives included in other current liabilities in our consolidated balance sheets related to foreign currency forward contracts were as follows:

(In millions)	Mar 31, 2019		Dec 31, 2018
Asset derivatives	$	14	$	26
Liability derivatives	23		34

The fair value of these derivatives is Level 2 in the fair value hierarchy because they are determined based on a market approach utilizing externally quoted forward rates for similar contracts.

Our foreign currency forward contracts contain offset or netting provisions to mitigate credit risk in the event of counterparty default, including payment default and cross default. We measure and record the impact of counterparty credit risk into our valuation and at March 31, 2019 and December 31, 2018, the fair value of our counterparty default exposure was less than $1 million and was spread across numerous highly rated counterparties.

There were no interest rate swaps outstanding at March 31, 2019 or December 31, 2018.

Other Financial Instruments—We hold financial instruments, including cash and cash equivalents, commercial paper and long-term debt. The carrying amounts for cash and cash equivalents and commercial paper approximated their fair values. The carrying value of long-term debt was recorded at amortized cost. The estimated fair value of long-term debt was determined based on quoted prices in inactive markets, which falls within Level 2 of the fair value hierarchy. The carrying value and estimated fair value of long-term debt were as follows:

(In millions)	Mar 31, 2019		Dec 31, 2018
Carrying value of long-term debt(1)	$	4,756	$	4,755
Fair value of long-term debt(2)	5,202		5,063

(1)     Carrying value of long-term debt at March 31, 2019 includes current portion of long-term debt carrying value of $500 million.

(2) Fair value of long-term debt at March 31, 2019 includes current portion of long-term debt fair value of $508 million.

At March 31, 2019, short-term commercial paper borrowings outstanding were $300 million, which had a weighted-average interest rate and original maturity period of 2.551% and 6 days, respectively. At December 31, 2018, short-term commercial paper borrowings outstanding were $300 million, which had a weighted-average interest rate and original maturity period of 2.954% and 16 days, respectively. The commercial paper notes outstanding have original maturities of not more than 90 days from the date of issuance.

Supplemental Cash Flow Information—Cash and cash equivalents reported within our consolidated balance sheets excludes restricted cash of $12 million and $16 million at March 31, 2019 and December 31, 2018, respectively, which for purposes of our consolidated statements of cash flows, is included in cash, cash equivalents and restricted cash.

Note 11: Leases

We enter into operating leases primarily for: real estate, including for manufacturing, engineering, research, administration, sales and warehousing facilities; information technology (IT) equipment; and other equipment. At March 31, 2019 and December 31, 2018, we did not have any finance leases. Approximately 90% of our future lease commitments, and related lease liability, relate to our real estate leases. Some of our leases also include options to extend the lease or terminate the lease. A small portion of our leases include variable escalation clauses, which are typically based on CPI rates, or other variable lease-related payments.

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The components of lease expense were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Operating lease cost	$	53	$	58
Variable lease cost(1)	—		—
Sublease income(1)	—		—
Total lease cost	$	53	$	58

(1) Variable lease cost was expense of less than $1 million and sublease income was income of less than $1 million, in both the first quarters of 2019 and 2018.

Gains and losses on sale and leaseback transactions were de minimis in both the first quarters of 2019 and 2018.

At March 31, 2019, our future lease payments under non-cancellable leases were as follows:

(In millions)
2019 (excluding the three months ended March 31, 2019)	$	167
2020	189
2021	164
2022	127
2023	90
Thereafter	238
Total future lease payments(1)	975
Imputed interest	(122		)
Total lease liabilities	$	853

(1) Total future lease payments excluded $27 million of future lease payments related to leases that were signed but had not yet commenced as of March 31, 2019.

Our lease liabilities recognized in our consolidated balance sheet at March 31, 2019 were as follows:

(In millions)
Operating lease liabilities—current	$	201
Operating lease liabilities—noncurrent	652
Total lease liabilities	$	853

The weighted-average remaining lease term related to our operating leases was 8 years and 7 years as of March 31, 2019 and December 31, 2018, respectively. The weighted-average discount rate related to our operating leases was 3.1% as of March 31, 2019 and December 31, 2018.

Other information related to leases was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Cash paid for amounts included in the measurement of operating lease liabilities	$	61	$	62
Right-of-use assets obtained in exchange for new operating lease obligations	56		38

There were no material restrictions or covenants imposed by our leases at March 31, 2019 or December 31, 2018. In addition, we do not have any related party leases and our sublease transactions are de minimis.

Note 12: Commitments and Contingencies

Environmental Matters—We are involved in various stages of investigation and cleanup related to remediation of various environmental sites. Our estimate of the liability of total environmental remediation costs includes the use of a discount rate and takes into account that a portion of these costs is eligible for future recovery through the pricing of our products and services to the U.S. government. We regularly assess the probability of recovery of these costs, which requires us to make assumptions about the extent of cost recovery under our contracts and the amount of future contract activity. We consider such recovery probable based on government contracting regulations and our long history of receiving reimbursement for such costs, and accordingly

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have recorded the estimated future recovery of these costs from the U.S. government within prepaid expenses and other current assets in our consolidated balance sheets. Our estimates regarding remediation costs to be incurred were as follows:

(In millions, except percentages)	Mar 31, 2019			Dec 31, 2018
Total remediation costs—undiscounted	$	197		$	193
Weighted-average discount rate	5.1		%	5.1		%
Total remediation costs—discounted	$	136		$	128
Recoverable portion	88			82

We also lease certain government-owned properties and generally are not liable for remediation of preexisting environmental contamination at these sites. As a result, we generally do not provide for these costs in our consolidated financial statements.

Due to the complexity of environmental laws and regulations, the varying costs and effectiveness of alternative cleanup methods and technologies, the uncertainty of insurance coverage, and the unresolved extent of our responsibility, it is difficult to determine the ultimate outcome of environmental matters. However, we do not expect any additional liability to have a material adverse effect on our financial position, results of operations or liquidity.

Financing Arrangements and Other—We issue guarantees, and banks and surety companies issue, on our behalf, letters of credit and surety bonds, to meet various bid, performance, warranty, retention and advance payment obligations for us or our affiliates. These instruments expire on various dates through 2028. Additional guarantees of project performance for which there is no stated value also remain outstanding. The stated values outstanding consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Guarantees	$	211	$	201
Letters of credit	2,296		2,503
Surety bonds	80		166

All guarantees at March 31, 2019 and December 31, 2018 related to our joint venture in Thales-Raytheon Systems Air and Missile Defense Command and Control S.A.S. (TRS AMDC2). We provide these guarantees, as well as letters of credit, to TRS AMDC2 and other affiliates to assist these entities in obtaining financing on more favorable terms, making bids on contracts and performing their contractual obligations. While we expect these entities to satisfy their loans and meet their project performance and other contractual obligations, their failure to do so may result in a future obligation to us. We periodically evaluate the risk of these entities failing to meet their obligations described above. At March 31, 2019, we believe the risk that these entities will not be able to meet their obligations is minimal for the foreseeable future based on their current financial condition. All obligations were current at March 31, 2019. We had an estimated liability of $3 million at both March 31, 2019 and December 31, 2018 related to these guarantees.

As discussed in “Note 13: Redeemable Noncontrolling Interests,” under the joint venture agreement between Raytheon Company and Vista Equity Partners, Raytheon may be required to purchase Vista Equity Partners’ interest in Forcepoint.

We have entered into industrial cooperation agreements, sometimes in the form of either offset agreements or in-country industrial participation (ICIP) agreements, as a condition to obtaining orders for our products and services from certain customers in foreign countries. At March 31, 2019, the aggregate amount of our offset agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $9.3 billion. These agreements are designed to return economic value to the foreign country by requiring us to engage in activities supporting local defense or commercial industries, promoting a balance of trade, developing in-country technology capabilities or addressing other local development priorities. Offset agreements may be satisfied through activities that do not require a direct cash payment, including transferring technology, providing manufacturing, training and other consulting support to in-country projects, and the purchase by third parties (e.g., our vendors) of supplies from in-country vendors. These agreements may also be satisfied through our use of cash for activities such as subcontracting with local partners, purchasing supplies from in-country vendors, providing financial support for in-country projects and making investments in local ventures. Such activities may also vary by country depending upon requirements as dictated by their governments. We typically do not commit to offset agreements until orders for our products or services are definitive. The amounts ultimately applied against our offset agreements are based on negotiations with the customers and typically require cash outlays that represent only a fraction of the notional value in the offset agreements. Offset programs usually extend over several or more years and may provide for penalties in the event we fail to perform in accordance with offset requirements. Historically, we have not been required to pay any penalties of significance.

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As a U.S. government contractor, we are subject to many levels of audit and investigation by the U.S. government relating to our contract performance and compliance with applicable rules and regulations. Agencies that oversee contract performance include: the Defense Contract Audit Agency (DCAA); the Defense Contract Management Agency (DCMA); the Inspectors General of the U.S. Department of Defense (DoD) and other departments and agencies; the Government Accountability Office (GAO); the Department of Justice (DOJ); and Congressional Committees. Other areas of our business operations may also be subject to audit and investigation by these and/or other agencies. From time to time, agencies investigate or conduct audits to determine whether our operations are being conducted in accordance with applicable requirements. Such investigations and audits may be initiated due to a number of reasons, including as a result of a whistleblower complaint. Such investigations and audits could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, the suspension of government export licenses or the suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and many result in no adverse action against us. Our final allowable incurred costs for each year are also subject to audit and have, from time to time, resulted in disputes between us and the U.S. government, with litigation resulting at the Court of Federal Claims (COFC) or the Armed Services Board of Contract Appeals (ASBCA) or their related courts of appeals. In addition, the DOJ has, from time to time, convened grand juries to investigate possible irregularities by us. We also provide products and services to customers outside of the U.S., and those sales are subject to local government laws, regulations and procurement policies and practices. Our compliance with such local government regulations or any applicable U.S. government regulations (e.g., the Foreign Corrupt Practices Act (FCPA) and International Traffic in Arms Regulations (ITAR)) may also be investigated or audited. Other than as specifically disclosed herein, we do not expect these audits, investigations or disputes to have a material effect on our financial position, results of operations or liquidity, either individually or in the aggregate.

In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened against, or initiated by, us. We do not expect any of these proceedings to result in any additional liability or gains that would materially affect our financial position, results of operations or liquidity. In connection with certain of our legal matters, we may be entitled to insurance recovery for qualified legal costs or other incurred costs. We do not expect any insurance recovery to have a material impact on the financial exposure that could result from these matters.

Note 13: Redeemable Noncontrolling Interests

Forcepoint is a cybersecurity joint venture company with Vista Equity Partners. The joint venture agreement between Raytheon and Vista Equity Partners provides Vista Equity Partners with certain rights to require Forcepoint to pursue an initial public offering at any time after four years and three months following the closing date of May 29, 2015, or pursue a sale of the company at any time after five years following the closing date. In either of these events, Raytheon has the option to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint for cash at a price equal to fair value as determined under the joint venture agreement. Additionally, Vista Equity Partners has the ability to liquidate its ownership through a put option. The put option allows Vista Equity Partners to require Raytheon to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint for cash at a price equal to fair value as determined under the joint venture agreement. Lastly, Raytheon has the option to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint at a price equal to fair value as determined under the joint venture agreement. The joint venture agreement provides for the process under which the parties would determine the fair value of the interest and could result in a payment by Raytheon shortly after the exercise of Vista Equity Partners’ put option or Raytheon’s purchase option; however, the ultimate timing will depend on the actions of the parties and other factors. The estimate of fair value for purposes of presenting the redeemable noncontrolling interest in our consolidated balance sheets could differ from the parties’ determination of fair value for the interest under the joint venture agreement.

Vista Equity Partners’ adjusted equity interest in the Forcepoint joint venture was 19.5% at March 31, 2019. Vista Equity Partners’ interest in Forcepoint is presented as redeemable noncontrolling interest, outside of stockholders’ equity, in our consolidated balance sheets. The redeemable noncontrolling interest is recognized at the greater of the estimated redemption value as of the balance sheet date, which was $399 million at March 31, 2019, or the carrying value, defined as the initial value adjusted for Vista Equity Partners’ share of the cumulative impact of net income (loss), other changes in accumulated other comprehensive income (loss) and additional contributions, which was $274 million at March 31, 2019. Adjustments to the redemption value over the period from the date of acquisition to the redemption date are immediately recorded to retained earnings.

As discussed in “Note 9: Acquisitions, Divestitures and Goodwill,” in February 2019, we amended and restated the RGNext joint venture agreement and acquired an additional 10% equity ownership in the joint venture, increasing our equity ownership to 60% and giving us control of the operations, with GDIT obtaining only protective rights. As a result, we now consolidate the results of RGNext in our consolidated financial statements. The amendment to the RGNext joint venture agreement provides GDIT with the ability to liquidate its ownership and receive an amount equal to its contributed capital (the redemption value). As such, GDIT’s interest in RGNext is presented as redeemable noncontrolling interest, outside of stockholders’ equity, in our consolidated balance sheets, and is recorded at the greater of its carrying value or the redemption value.

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A rollforward of redeemable noncontrolling interests was as follows:

(In millions)	Forcepoint			RGNext		Total
Balance at December 31, 2018	$	411		$	—	$	411
RGNext initial recognition	—			32		32
Net income (loss)	(7		)	1		(6		)
Other comprehensive income (loss), net of tax(1)	—			—		—
Adjustment of noncontrolling interests to redemption value	(5		)	—		(5		)
Balance at March 31, 2019	$	399		$	33	$	432
Balance at December 31, 2017	$	512		$	—	$	512
Net income (loss)	(10		)	—		(10		)
Other comprehensive income (loss), net of tax	1			—		1
Adjustment of noncontrolling interests to redemption value	(11		)	—		(11		)
Balance at April 1, 2018	$	492		$	—	$	492

(1) Other comprehensive income (loss), net of tax, related to Forcepoint was income of less than $1 million for the first quarter of 2019.

Note 14: Stockholders’ Equity

The changes in shares of our common stock outstanding were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Beginning balance	282.1		288.4
Stock plans activity	1.1		1.0
Share repurchases	(3.1	)	(2.2	)
Ending balance	280.1		287.2

From time to time, our Board of Directors authorizes the repurchase of shares of our common stock. In November 2015, our Board authorized the repurchase of up to $2.0 billion of our outstanding common stock. In November 2017, our Board also authorized the repurchase of up to an additional $2.0 billion of our outstanding common stock. At March 31, 2019, we had approximately $1.0 billion available under the 2017 repurchase program. Share repurchases will take place from time to time at management’s discretion depending on market conditions.

Share repurchases also include shares surrendered by employees to satisfy tax withholding obligations in connection with restricted stock, RSUs and LTPP awards issued to employees.

Our share repurchases were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
	$		Shares	$		Shares
Shares repurchased under our share repurchase programs	$	500	2.8	$	400	1.9
Shares repurchased to satisfy tax withholding obligations	66		0.3	72		0.3
Total share repurchases	$	566	3.1	$	472	2.2

In March 2019, our Board of Directors authorized an 8.6% increase to our annual dividend payout rate from $3.47 to $3.77 per share. Our Board of Directors also declared dividends of $0.9425 per share during the first quarter of 2019, compared to dividends of $0.8675 per share during the first quarter of 2018. Dividends are subject to quarterly approval by our Board of Directors.

Stock-based Compensation Plans

Restricted Stock and RSUs—During the first quarter of 2019, we granted 0.9 million combined shares of restricted stock and RSUs with a weighted-average grant-date fair value of $179.93 per share, calculated under the intrinsic value method. These awards generally vest in equal installments on each of the second, third and fourth anniversary dates of the award’s grant date.

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LTPP—During the first quarter of 2019, we granted RSUs subject to the 2019–2021 LTPP plan with an aggregate target award of 0.1 million units and a weighted-average grant-date fair value of $175.93 per share. The performance goals for the 2019–2021 LTPP award are independent of each other and based on three metrics, as defined in the LTPP award agreements: return on invested capital (ROIC), weighted at 50%; total shareholder return (TSR) relative to a peer group, weighted at 25%; and cumulative free cash flow from continuing operations (CFCF), weighted at 25%. The ultimate award, which is determined at the end of the three-year cycle, can range from zero to 200% of the target award and includes dividend equivalents, which are not included in the aggregate target award numbers. The grant-date fair value is based upon the value determined under the intrinsic value method for the CFCF and ROIC portions of the award and the Monte Carlo simulation method for the TSR portion of the award.

Forcepoint Plans—Forcepoint unit appreciation rights and profits interests vest over a specified period of time and settlement is subject to a liquidity event defined as either a change in control or an initial public offering of the joint venture. In certain limited circumstances other vesting conditions may apply. The impact attributable to these other vesting conditions was income of $2 million for the first quarter of 2019 and expense of $1 million for the first quarter of 2018. At March 31, 2019, there were 174 thousand combined units and/or profits interests authorized for award under these plans.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes gains and losses associated with pension and other postretirement benefit (PRB) plans, foreign exchange translation adjustments, gains and losses on derivative instruments qualified as cash flow hedges included in the assessment of effectiveness, and unrealized gains (losses) on available-for-sale investments. The computation of other comprehensive income (loss) and its components are presented in the consolidated statements of comprehensive income.

A rollforward of accumulated other comprehensive income (loss) was as follows:

	Pension and PRB plans, net(1)			Foreign exchange translation			Cash flow hedges(2)			Unrealized gains (losses) on investments and other, net(3)			Total
(In millions)
Balance at December 31, 2018	$	(8,483	)	$	(131	)	$	(2	)	$	(2	)	$	(8,618	)
Before tax amount	277			8			(10		)	—			275
Tax (expense) or benefit	(58		)	—			2			—			(56		)
Net of tax amount	219			8			(8		)	—			219
Balance at March 31, 2019	$	(8,264	)	$	(123	)	$	(10	)	$	(2	)	$	(8,399	)
Balance at December 31, 2017	$	(7,843	)	$	(95	)	$	6		$	(3	)	$	(7,935	)
Before tax amount	348			24			(10		)	—			362
Tax (expense) or benefit	(73		)	—			2			—			(71		)
Net of tax amount	275			24			(8		)	—			291
Reclassification of stranded tax effects	(1,452		)	—			1			—			(1,451		)
Balance at April 1, 2018	$	(9,020	)	$	(71	)	$	(1	)	$	(3	)	$	(9,095	)

(1) Pension and PRB plans, net is shown net of cumulative tax benefits of $2,197 million and $2,255 million at March 31, 2019 and December 31, 2018, respectively.

(2) Cash flow hedges are shown net of cumulative tax benefits of $3 million and $1 million at March 31, 2019 and December 31, 2018, respectively.

(3) Unrealized gains (losses) on investments and other, net are shown net of cumulative tax expense of $1 million at both March 31, 2019 and December 31, 2018.

In the first quarter of 2018, we reclassified the stranded tax effects related to the enactment of the Tax Cuts and Jobs Act of 2017 (2017 Act) from accumulated other comprehensive loss (AOCL) to retained earnings in accordance with ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. These stranded tax effects related to the deferred tax amounts at December 31, 2017 recorded through other comprehensive income prior to the enactment date using the prior 35% statutory tax rate that remained in other comprehensive income despite the fact that the related deferred tax assets and liabilities were remeasured to reflect the newly enacted tax rate of 21%.

Other material amounts reclassified out of AOCL related to the amortization of net actuarial loss associated with our pension plans were $273 million and $344 million before tax in the first quarters of 2019 and 2018, respectively. This component of AOCL is included in the calculation of net periodic pension expense (income). See “Note 15: Pension and Other Employee Benefits” for additional details.

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We expect $2 million net of tax of net unrealized losses on our cash flow hedges at March 31, 2019 to be reclassified into earnings at then-current values over the next 12 months as the underlying hedged transactions occur.

Note 15: Pension and Other Employee Benefits

We have pension plans covering the majority of our employees hired prior to January 1, 2007, including certain employees in foreign countries (Pension Benefits). Our primary pension obligations relate to our domestic Internal Revenue Service (IRS) qualified pension plans. In addition, we provide certain health care and life insurance benefits to retired employees and to eligible employees upon retirement through PRB plans.

We also sponsor nonqualified defined benefit and defined contribution plans to provide benefits in excess of qualified plan limits. We have set aside certain assets in a separate trust, which we expect to be used to pay for trust obligations. The fair value of marketable securities held in trust, which are considered Level 1 assets under the fair value hierarchy, consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Marketable securities held in trust	$	677	$	642

Included in marketable securities held in trust in the table above was $431 million and $420 million at March 31, 2019 and December 31, 2018, respectively, related to the nonqualified defined contribution plans. The liabilities related to the nonqualified defined contribution plans were $440 million and $431 million at March 31, 2019 and December 31, 2018, respectively.

The components of net periodic pension expense (income) were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Operating expense
Service cost	$	105		$	127
Non-operating expense
Interest cost	261			253
Expected return on plan assets	(359		)	(363		)
Amortization of prior service cost	1			1
Amortization of net actuarial loss	273			344
Total pension non-service expense	176			235
Net periodic pension expense (income)	$	281		$	362

Net periodic pension expense (income) includes income of $1 million and $2 million from foreign Pension Benefits plans in the first quarters of 2019 and 2018, respectively.

Net periodic PRB expense was $6 million and $5 million in the first quarters of 2019 and 2018, respectively.

Long-term pension and PRB liabilities consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Long-term pension liabilities	$	6,042	$	6,111
Long-term PRB liabilities	356		354
Total long-term pension and PRB liabilities	$	6,398	$	6,465

We made the following contributions to our pension and PRB plans:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Required pension contributions	$	64	$	58
PRB contributions	4		3
Total	$	68	$	61

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We periodically evaluate whether to make discretionary contributions. We did not make any discretionary contributions to our pension plans during the first quarters of 2019 or 2018.

Note 16: Income Taxes

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. With the exception of one matter related to the 2015 tax year, all IRS examinations related to originally filed returns are closed through the 2016 tax year. No amount related to the 2015 matter is reflected in unrecognized tax benefits as of March 31, 2019. In 2018 we amended tax returns for tax years 2014-2016 to reflect refund claims related to increased Research and Development tax credits (R&D tax credits), which will be subject to audit. We are also under audit by multiple state and foreign tax authorities.

The balance of our unrecognized tax benefits, exclusive of interest, was $96 million and $92 million at March 31, 2019 and December 31, 2018, respectively, the majority of which would affect our earnings if recognized. There were no significant changes in the balance during the first quarter of 2019.

We accrue interest and penalties related to unrecognized tax benefits in tax expense. Interest and penalties recognized during the first quarters of 2019 and 2018 and accrued as of March 31, 2019 and December 31, 2018 were de minimis.

Note 17: Business Segment Reporting

Our reportable segments, organized based on capabilities and technologies, are: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint. Segment total net sales and operating income include intersegment sales and profit generally recorded at cost-plus a specified fee, which may differ from what the selling entity would be able to obtain on sales to external customers. Eliminations include intersegment sales and profit eliminations. Corporate operating income includes expenses that represent unallocated costs and certain other corporate costs not considered part of management’s evaluation of reportable segment operating performance. Acquisition Accounting Adjustments include the adjustments to record acquired deferred revenue at fair value as part of our purchase price allocation process and the amortization of acquired intangible assets related to historical acquisitions.

Segment financial results were as follows: 

	Three Months Ended
Total Net Sales (in millions)	Mar 31, 2019			Apr 1, 2018
Integrated Defense Systems	$	1,550		$	1,489
Intelligence, Information and Services	1,777			1,582
Missile Systems	2,006			1,848
Space and Airborne Systems	1,653			1,568
Forcepoint	158			141
Eliminations	(414		)	(357		)
Total business segment sales	6,730			6,271
Acquisition Accounting Adjustments	(1		)	(4		)
Total	$	6,729		$	6,267

	Three Months Ended
Intersegment Sales (in millions)	Mar 31, 2019		Apr 1, 2018
Integrated Defense Systems	$	21	$	15
Intelligence, Information and Services	168		162
Missile Systems	43		35
Space and Airborne Systems	173		139
Forcepoint	9		6
Total	$	414	$	357

21

	Three Months Ended
Operating Income (in millions)	Mar 31, 2019			Apr 1, 2018
Integrated Defense Systems	$	258		$	273
Intelligence, Information and Services	187			117
Missile Systems	190			212
Space and Airborne Systems	212			193
Forcepoint	(9		)	(7		)
Eliminations	(47		)	(40		)
Total business segment operating income	791			748
Acquisition Accounting Adjustments	(28		)	(33		)
FAS/CAS Operating Adjustment	366			354
Corporate	(16		)	(28		)
Total	$	1,113		$	1,041

	Three Months Ended
Intersegment Operating Income (in millions)	Mar 31, 2019		Apr 1, 2018
Integrated Defense Systems	$	2	$	2
Intelligence, Information and Services	17		17
Missile Systems	4		3
Space and Airborne Systems	17		14
Forcepoint	7		4
Total	$	47	$	40

The FAS/CAS Operating Adjustment, which is reported as a separate line in our segment results above, represents the difference between the service cost component of our pension and PRB expense or income under Financial Accounting Standards (FAS) in accordance with U.S. GAAP and our pension and PRB expense under U.S. government Cost Accounting Standards (CAS). The results of each segment only include pension and PRB expense under CAS that we generally recover through the pricing of our products and services to the U.S. government.

The pension and PRB components of the FAS/CAS Operating Adjustment were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
FAS/CAS Pension Operating Adjustment	$	362	$	351
FAS/CAS PRB Operating Adjustment	4		3
FAS/CAS Operating Adjustment	$	366	$	354

Total assets for each of our business segments were as follows:

Total Assets (in millions)	Mar 31, 2019		Dec 31, 2018(2)
Integrated Defense Systems(1)	$	4,783	$	4,826
Intelligence, Information and Services(1)	4,368		4,238
Missile Systems(1)	8,490		8,229
Space and Airborne Systems(1)	6,856		6,740
Forcepoint(1)	2,455		2,529
Corporate	4,624		6,108
Total	$	31,576	$	32,670

(1)     Total assets includes intangible assets. Related amortization expense is included in Acquisition Accounting Adjustments.

(2) Amounts have been recast to reflect the adoption of ASU 2016-02, Leases (Topic 842). Operating lease right-of-use assets are all recorded at Corporate.

22

We disaggregate our revenue from contracts with customers by geographic location, customer-type and contract-type for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below.

	Three Months Ended March 31, 2019
Disaggregation of Total Net Sales  (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government(1)
Fixed-price contracts	$	221	$	224	$	708	$	548	$	37	$	—		$	1,738
Cost-type contracts	424		1,152		699		659		4		—			2,938
Direct commercial sales and other U.S. sales
Fixed-price contracts	1		33		9		26		44		—			113
Cost-type contracts	—		4		—		1		—		—			5
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	40		73		124		30		—		—			267
Cost-type contracts	18		11		16		9		—		—			54
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	168		41		32		48		16		—			305
Cost-type contracts	17		—		—		—		—		—			17
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	269		3		115		74		—		—			461
Cost-type contracts	48		5		5		19		—		—			77
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	195		7		145		18		8		—			373
Cost-type contracts	—		—		19		—		—		—			19
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	81		1		34		17		—		—			133
Cost-type contracts	10		—		15		2		—		—			27
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	34		49		42		29		39		—			193
Cost-type contracts	3		6		—		—		—		—			9
Total net sales	1,529		1,609		1,963		1,480		148		—			6,729
Intersegment sales	21		168		43		173		9		(414		)	—
Acquisition Accounting Adjustments	—		—		—		—		1		(1		)	—
Reconciliation to business segment sales	$	1,550	$	1,777	$	2,006	$	1,653	$	158	$	(415	)	$	6,729

(1) Excludes foreign military sales through the U.S. government.

23

	Three Months Ended March 31, 2019
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	646	$	1,413	$	1,416	$	1,234	$	85	$	4,794
Asia/Pacific	243		125		172		87		16		643
Middle East and North Africa	512		15		284		111		8		930
All other (principally Europe)	128		56		91		48		39		362
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

	Three Months Ended March 31, 2019
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government(1)	$	645	$	1,376	$	1,407	$	1,207	$	41	$	4,676
U.S. direct commercial sales and other U.S. sales	1		37		9		27		44		118
Foreign military sales through the U.S. government	466		93		309		151		—		1,019
Foreign direct commercial sales and other foreign sales(1)	417		103		238		95		63		916
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended March 31, 2019
Total Net Sales by Contract Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	1,009	$	431	$	1,209	$	790	$	144	$	3,583
Cost-type contracts	520		1,178		754		690		4		3,146
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

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	Three Months Ended April 1, 2018
Disaggregation of Total Net Sales  (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government(1)
Fixed-price contracts	$	226	$	252	$	584	$	544	$	21	$	—		$	1,627
Cost-type contracts	402		956		630		642		3		—			2,633
Direct commercial sales and other U.S. sales
Fixed-price contracts	2		28		11		26		49		—			116
Cost-type contracts	—		4		—		—		—		—			4
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	29		51		96		30		—		—			206
Cost-type contracts	25		14		17		2		—		—			58
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	146		44		43		50		16		—			299
Cost-type contracts	27		—		—		2		—		—			29
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	195		3		81		54		—		—			333
Cost-type contracts	32		1		6		15		—		—			54
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	347		5		231		21		6		—			610
Cost-type contracts	—		—		—		—		—		—			—
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	—		—		25		9		—		—			34
Cost-type contracts	8		—		24		1		—		—			33
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	33		51		65		33		36		—			218
Cost-type contracts	2		11		—		—		—		—			13
Total net sales	1,474		1,420		1,813		1,429		131		—			6,267
Intersegment sales	15		162		35		139		6		(357		)	—
Acquisition Accounting Adjustments	—		—		—		—		4		(4		)	—
Reconciliation to business segment sales	$	1,489	$	1,582	$	1,848	$	1,568	$	141	$	(361	)	$	6,267

(1) Excludes foreign military sales through the U.S. government.

25

	Three Months Ended April 1, 2018
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	630	$	1,240	$	1,225	$	1,212	$	73	$	4,380
Asia/Pacific	227		109		156		84		16		592
Middle East and North Africa	574		9		318		90		6		997
All other (principally Europe)	43		62		114		43		36		298
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

	Three Months Ended April 1, 2018
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government(1)	$	628	$	1,208	$	1,214	$	1,186	$	24	$	4,260
U.S. direct commercial sales and other U.S. sales	2		32		11		26		49		120
Foreign military sales through the U.S. government	289		69		249		111		—		718
Foreign direct commercial sales and other foreign sales(1)	555		111		339		106		58		1,169
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended April 1, 2018
Total Net Sales by Contract Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	978	$	434	$	1,136	$	767	$	128	$	3,443
Cost-type contracts	496		986		677		662		3		2,824
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

Note 18: Remaining Performance Obligations

Remaining performance obligations represents the transaction price of firm orders for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity (IDIQ)). As of March 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $41,073 million. We expect to recognize revenue on approximately half and three-quarters of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter.

Recent events have caused increased attention on U.S. defense sales to the Kingdom of Saudi Arabia (KSA). KSA represents less than 5% of our sales and $2.1 billion of our remaining performance obligations at March 31, 2019. Although we currently do not expect to be prevented from doing business in KSA, if government action impairs our ability to fulfill our contractual obligations or otherwise to continue to do business in KSA, it would have a material adverse effect on our financial results.

26

With respect to the unaudited consolidated financial information of Raytheon Company for the three months ended March 31, 2019 and April 1, 2018, PricewaterhouseCoopers LLP (PricewaterhouseCoopers) reported that it has applied limited procedures in accordance with professional standards for a review of such information. Its report dated April 25, 2019, appearing below, states that the firm did not audit and does not express an opinion on that unaudited consolidated financial information. Accordingly, the degree of reliance on its report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers is not subject to the liability provisions of Section 11 of the Securities Act of 1933, as amended (Securities Act) for its report on the unaudited consolidated financial information because that report is not a “report” or a “part” of a registration statement prepared or certified by PricewaterhouseCoopers within the meaning of Sections 7 and 11 of the Securities Act.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Raytheon Company

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of Raytheon Company and its subsidiaries (the “Company”) as of March 31, 2019, and the related consolidated statements of operations, of comprehensive income (loss), of equity and of cash flows for the three-month periods ended March 31, 2019 and April 1, 2018, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2018, and the related consolidated statements of operations, of comprehensive income, of equity and of cash flows for the year then ended (not presented herein), and in our report dated February 13, 2019, which included a paragraph describing a change in the manner in which it accounts for certain stranded tax effects impacting accumulated other comprehensive income and the manner in which it presents and discloses certain net periodic pension and postretirement benefit costs in the Company’s statements of operations, we expressed an unqualified opinion on those consolidated financial statements. As discussed in Note 2 to the accompanying consolidated interim financial statements, the Company changed its method of accounting for leases. The accompanying December 31, 2018 consolidated balance sheet reflects this change.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts

April 25, 2019

27

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

We develop technologically advanced and integrated products, services and solutions in our core markets: integrated air and missile defense; electronic warfare; command, control, communications, computers, cyber, intelligence, surveillance and reconnaissance; space systems; effects; and cyber. We serve both domestic and international customers primarily as a prime contractor or subcontractor on a broad portfolio of defense and related programs for government customers.

We operate in five segments: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint. For a more detailed description of our segments, see “Business Segments” within Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2018.

Effective January 1, 2019, we adopted the requirements of Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) using the modified retrospective approach as discussed in “Note 2: Accounting Standards” within Item 1 of this Form 10-Q. We reclassified certain balance sheet amounts to conform to our current period presentation. All amounts disclosed in this Form 10-Q reflect these changes.

The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018 and our unaudited consolidated financial statements included in this Form 10-Q.

CONSOLIDATED RESULTS OF OPERATIONS

As described in our “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q, our interim period results of operations and period-to-period comparisons of such results, particularly at a segment level, may not be indicative of our future operating results. Additionally, we use a fiscal calendar, which may result in differences in the number of work days in the current and comparable prior interim period and could affect period-to-period comparisons. The following discussions of comparative results among periods, including the discussion of segment results, should be viewed in this context.

Total Net Sales

The composition of external net sales by products and services for each segment for the first quarter of 2019 was approximately the following:

(% of segment total external net sales)	IDS		IIS		MS		SAS		Forcepoint
Products	90	%	45	%	95	%	100	%	90	%
Services	10	%	55	%	5	%	—	%	10	%

	Three Months Ended				% of Total Net Sales
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018		Mar 31, 2019		Apr 1, 2018
Net sales
Products	$	5,562	$	5,254	82.7	%	83.8	%
Services	1,167		1,013		17.3	%	16.2	%
Total net sales	$	6,729	$	6,267	100.0	%	100.0	%

Total Net Sales - First Quarter of 2019 vs. First Quarter of 2018—The increase in total net sales of $462 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher external net sales of $189 million at IIS and $150 million at MS. The increase in external net sales at IIS was primarily due to higher net sales on classified programs in both cyber and space and higher net sales from the consolidation of Range Generation Next LLC (RGNext) in the first quarter of 2019, partially offset by lower net sales on programs in support of the U.S. Army’s Warfighter Field Operations Customer Support (Warfighter FOCUS) activities, which continue to transition to a number of competitively-awarded replacement programs. In the first quarter of 2019, we amended and restated the RGNext joint venture agreement and acquired an additional 10% equity ownership in the joint venture, increasing our equity ownership to 60% and giving us control of the operations of RGNext with the partner having only protective rights. The results of RGNext are included in IIS’s segment results effective as of the February 8, 2019 consolidation date. See “Note 9: Acquisitions, Divestitures and Goodwill” within Item 1 of this Form 10-Q for additional detail. The increase in external net sales at MS was spread across numerous programs with no individual or common significant driver and included lower net sales on the Paveway™ program due to planned decreases in production and higher net sales on classified programs.

28

Products and Services Net Sales - First Quarter of 2019 vs. First Quarter of 2018—The increase in products net sales of $308 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher external products net sales of $147 million at MS, $65 million at SAS and $58 million at IIS. The increase in products net sales at MS was spread across numerous programs with no individual or common significant driver. The increase in products net sales at SAS was primarily driven by higher products net sales on certain classified programs. The increase in products net sales at IIS was primarily driven by higher products net sales on certain classified programs. The increase in services net sales of $154 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher external services net sales of $131 million at IIS primarily due to higher services net sales on certain classified programs and higher services net sales from the consolidation of RGNext described above in Total Net Sales, partially offset by lower services net sales on the programs in support of the U.S. Army’s Warfighter FOCUS activities described above in Total Net Sales.

Sales to Major Customers - First Quarter of 2019 vs. First Quarter of 2018

	Three Months Ended				% of Total Net Sales
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018		Mar 31, 2019		Apr 1, 2018
Sales to the U.S. government(1)(2)	$	4,676	$	4,260	69	%	68	%
U.S. direct commercial sales and other U.S. sales	118		120		2	%	2	%
Foreign military sales through the U.S. government	1,019		718		15	%	11	%
Foreign direct commercial sales and other foreign sales(1)	916		1,169		14	%	19	%
Total net sales	$	6,729	$	6,267	100	%	100	%

(1) Excludes foreign military sales through the U.S. government.

(2) Includes sales to the U.S. Department of Defense (DoD) of $4,451 million, or 66% of total net sales, in the first quarter of 2019 and $4,080 million, or 65% of total net sales, in the first quarter of 2018.

Total Cost of Sales

Cost of sales, for both products and services, consists of labor, materials and subcontractors costs, as well as related allocated costs. For each of our contracts, we manage the nature and amount of direct costs at the contract level, and manage indirect costs through cost pools as required by government accounting regulations. The estimate of the actual amount of direct and indirect costs forms the basis for estimating our total costs at completion of the contract.

	Three Months Ended				% of Total Net Sales
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018		Mar 31, 2019		Apr 1, 2018
Cost of sales
Products	$	4,002	$	3,737	59.5	%	59.6	%
Services	875		795		13.0	%	12.7	%
Total cost of sales	$	4,877	$	4,532	72.5	%	72.3	%

Total Cost of Sales - First Quarter of 2019 vs. First Quarter of 2018—The increase in total cost of sales of $345 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher external cost of sales at MS and IIS. The increase in total costs of sales at MS was spread across numerous programs with no individual or common significant driver. The increase in total costs of sales at IIS was primarily due to the programs described above in Total Net Sales.

Products and Services Cost of Sales - First Quarter of 2019 vs. First Quarter of 2018—The increase in products cost of sales of $265 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher external products cost of sales at MS which was spread across numerous programs with no individual or common significant driver. The increase in services cost of sales of $80 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher external services cost of sales at IIS principally driven by the programs described above in Total Net Sales.

General and Administrative Expenses

	Three Months Ended				% of Total Net Sales
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018		Mar 31, 2019		Apr 1, 2018
Administrative and selling expenses	$	544	$	528	8.1	%	8.4	%
Research and development expenses	195		166		2.9	%	2.6	%
Total general and administrative expenses	$	739	$	694	11.0	%	11.1	%

29

The increase in administrative and selling expenses of $16 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher selling and marketing expenses of $9 million at Forcepoint principally driven by higher costs for the sales organization due to increased staffing and training.

Included in administrative and selling expenses is the provision for state income taxes, which generally can be recovered through the pricing of products and services to the U.S. government. Net state income taxes allocated to our contracts were $10 million in the first quarters of 2019 and 2018.

The increase in research and development expenses of $29 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher independent research and development expense of $21 million at IDS related to next-generation radars.

Total Operating Expenses

	Three Months Ended
(In millions, except percentages)	Mar 31, 2019			Apr 1, 2018
Total operating expenses	$	5,616		$	5,226
% of Total Net Sales	83.5		%	83.4		%

The increase in total operating expenses of $390 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to the increase in total cost of sales of $345 million, the primary drivers of which are described above in Total Cost of Sales.

Operating Income

	Three Months Ended
(In millions, except percentages)	Mar 31, 2019			Apr 1, 2018
Operating income	$	1,113		$	1,041
% of Total Net Sales	16.5		%	16.6		%

The increase in operating income of $72 million in the first quarter of 2019 compared to the first quarter of 2018 was due to the increase in total net sales of $462 million, the primary drivers of which are described above in Total Net Sales, partially offset by the increase in total operating expenses of $390 million, the primary drivers of which are described above in Total Operating Expenses.

Total Non-Operating (Income) Expense, Net

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Non-operating (income) expense, net
Retirement benefits non-service expense	$	181		$	239
Interest expense	44			47
Interest income	(13		)	(7		)
Other (income) expense, net	(20		)	5
Total non-operating (income) expense, net	$	192		$	284

The decrease in total non-operating (income) expense, net of $92 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to a decrease in retirement benefits non-service expense of $58 million and a change in other (income) expense, net of $25 million. The decrease in retirement benefits non-service expense was principally due to a decrease in the amortization of net actuarial loss in the first quarter of 2019 compared to the first quarter of 2018 due to a decrease in the unamortized loss at December 31, 2018 compared to December 31, 2017, and the higher discount rate at December 31, 2018 compared to the discount rate at December 31, 2017, partially offset by unfavorable asset performance during 2018. The decrease in other (income) expense, net was principally driven by a $24 million change in the mark-to-market of marketable securities held in trust associated with certain of our non-qualified deferred compensation and employee benefit plans, due to net gains of $20 million in the first quarter of 2019 compared to net losses of $4 million in the first quarter of 2018.

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Federal and Foreign Income Taxes

	Three Months Ended
(In millions, except percentages)	Mar 31, 2019			Apr 1, 2018
Federal and foreign income taxes	$	146		$	133
Effective tax rate	15.9		%	17.6		%

On March 4, 2019, the Treasury Department and the Internal Revenue Service (IRS) issued proposed regulations providing guidance for the determination of the amount of foreign-derived intangible income (FDII) and global intangible low-taxed income. Although these rules would affect amounts recorded or amounts expected to be recorded and could increase our income tax expense, we do not expect any material changes to our financial statements if the regulations are finalized as currently drafted.

Our effective tax rate in the first quarter of 2019 was 15.9% compared to 17.6% in the first quarter of 2018. The decrease of 1.7% was primarily due to the one-time transition tax on undistributed foreign earnings, which increased the first quarter 2018 rate by 1.7%, the foreign rate differential, which decreased the rate by 1.4% and FDII, which decreased the rate by 0.5%, partially offset by the tax benefit recognized upon settlement of stock-based awards, which increased the rate by 2.2%. The remaining decrease of 0.3% is composed of various unrelated items which individually and collectively are not significant.

Our effective tax rate in the first quarter of 2019 was 5.1% lower than the statutory federal rate primarily due to FDII, which decreased the rate by 3.5%, the Research and Development tax credit (R&D tax credit), which decreased the rate by 1.6% and the tax benefit recognized upon settlement of stock-based awards, which decreased the rate by 1.2%. The offsetting increase of 1.2% is composed of various unrelated items which individually and collectively are not significant.

Our effective tax rate in the first quarter of 2018 was 3.4% lower than the statutory federal rate primarily due to the tax benefit recognized upon settlement of stock-based awards, which decreased the rate by 3.4%, FDII, which decreased the rate by 3.0% and the R&D tax credit, which decreased the rate by 1.8%. Items which increased the effective tax rate were the foreign rate differential, which increased the rate by 1.9% and the one-time transition tax on undistributed foreign earnings, which increased the rate by 1.7%. The remaining increase of 1.2% is composed of various unrelated items which individually and collectively are not significant.

Income from Continuing Operations

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Income from continuing operations	$	775	$	624

The increase in income from continuing operations of $151 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to a decrease of $92 million in total non-operating (income) expense, net, the primary drivers of which are described above in Total Non-Operating (Income) Expense, Net and an increase of $72 million in operating income, the primary drivers of which are described above in Operating Income.

Net Income

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Net income	$	775	$	623

The increase in net income of $152 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to the $151 million increase in income from continuing operations, the primary drivers of which are described above in Income from Continuing Operations.

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Diluted Earnings Per Share (EPS) from Continuing Operations Attributable to Raytheon Company Common Stockholders

	Three Months Ended
(In millions, except per share amounts)	Mar 31, 2019		Apr 1, 2018
Income from continuing operations attributable to Raytheon Company	$	781	$	634
Diluted weighted-average shares outstanding	282.2		288.8
Diluted EPS from continuing operations attributable to Raytheon Company	$	2.77	$	2.20

The increase in diluted EPS from continuing operations attributable to Raytheon Company common stockholders of $0.57 in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to the increase in income from continuing operations described above in Income from Continuing Operations and a decrease in weighted-average shares outstanding, which was affected by the common stock share activity shown in the table below.

Our common stock share activity was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Beginning balance	282.1		288.4
Stock plans activity	1.1		1.0
Share repurchases	(3.1	)	(2.2	)
Ending balance	280.1		287.2

SEGMENT RESULTS

We report our results in the following segments: IDS; IIS; MS; SAS; and Forcepoint.

The following provides some context for viewing our segment performance through the eyes of management.

Given the nature of our business, bookings, total net sales and operating income (and the related operating margin percentage), which we disclose and discuss at the segment level, are most relevant to an understanding of management’s view of our segment performance, and often these measures have significant interrelated effects, as described below. In addition, we disclose and discuss backlog, which represents future sales that we expect to recognize over the remaining contract period, which is generally several years. We also disclose total operating expenses and the components of total operating expenses within our segment disclosures.

Bookings—We disclose the amount of bookings and notable contract awards for each segment. Bookings generally represent the dollar value of new external contracts awarded to us during the reporting period and include firm orders for which funding has not been appropriated. We believe bookings are an important measure of future performance and are an indicator of potential future changes in total net sales, because we cannot record revenues under a new contract without first having a booking in the current or a preceding period.

Bookings are impacted by the timing and amounts of awards in a given period, which are subject to numerous factors, including: (1) the desired capability by the customer and urgency of customer needs; (2) customer budgets and other fiscal constraints; (3) political and economic and other environmental factors; (4) the timing of customer negotiations; (5) the timing of governmental approvals and notifications; and (6) the timing of option exercises or increases in scope. In addition, due to these factors, quarterly bookings tend to fluctuate from period to period, particularly on a segment basis. As a result, we believe comparing bookings on a quarterly basis or for periods less than one year is less meaningful than for longer periods and that shorter term changes in bookings may not necessarily indicate a material trend.

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	Three Months Ended
Bookings (in millions)	Mar 31, 2019		Apr 1, 2018
Integrated Defense Systems	$	1,374	$	2,475
Intelligence, Information and Services	1,634		1,074
Missile Systems	706		1,390
Space and Airborne Systems	1,530		1,272
Forcepoint	124		100
Total	$	5,368	$	6,311

Included in bookings were international bookings of $663 million and $2,848 million in the first quarters of 2019 and 2018, respectively, which included foreign military bookings through the U.S. government. International bookings amounted to 12% and 45% of total bookings in the first quarters of 2019 and 2018, respectively.

We record bookings for not-to-exceed contract awards (e.g., undefinitized contract awards, binding letter agreements) based on reasonable estimates of the expected contract definitization. We subsequently adjust bookings to reflect the actual amounts definitized, or prior to definitization when facts and circumstances indicate that our previously estimated amounts are no longer reasonable. The timing of awards that may cover multiple fiscal years influences the size of bookings in each year. Bookings exclude unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity (IDIQ) type contracts), and are reduced for contract cancellations and terminations of bookings recognized in the current year. We reflect contract cancellations and terminations from prior year bookings, as well as the impact of changes in foreign exchange rates, directly as an adjustment to backlog in the period in which the cancellation or termination occurs and the impact is determinable. Contract cancellations and terminations include contract underruns on cost-type programs.

Backlog—We disclose period-end backlog for each segment. Backlog, which is equivalent to our remaining performance obligations, represents the dollar value of firm orders for which work has not been performed. Backlog generally increases with bookings and generally converts into sales as we incur costs under the related contractual commitments. Therefore, we discuss changes in backlog, including any individually significant cancellations, for each of our segments, as we believe such discussion provides an understanding of the awarded but not executed portions of our contracts. Backlog excludes unexercised contract options and potential orders under ordering-type contracts (e.g., IDIQ). Backlog is affected by changes in foreign exchange rates.  

Backlog (in millions)	Mar 31, 2019		Dec 31, 2018
Integrated Defense Systems	$	11,380	$	11,557
Intelligence, Information and Services	6,377		6,233
Missile Systems	12,664		13,976
Space and Airborne Systems	10,157		10,126
Forcepoint(1)	495		528
Total	$	41,073	$	42,420

(1) Forcepoint backlog excludes the unfavorable impact of $1 million and $2 million at March 31, 2019 and December 31, 2018, respectively, related to the Acquisition Accounting Adjustments to record acquired deferred revenue at fair value.

Total Net Sales—We generally express changes in total net sales in terms of volume. Volume generally refers to increases or decreases in revenues related to varying amounts of total operating expenses incurred on individual contracts (i.e., from performance against contractual commitments on our bookings related to engineering, production or service activity). Therefore, we discuss volume changes attributable principally to individual programs or product lines unless there is a discrete event (e.g., a major contract termination, natural disaster or major labor strike), or some other unusual item that has a material effect on changes in a segment’s volume for a reported period. Due to the nature of our contracts, the amount of costs incurred and related revenues will naturally fluctuate over the lives of our contracts. As a result, in any reporting period, the changes in volume on numerous contracts are likely to be due to normal fluctuations in our engineering, production or service activities, depending on the phase of the contracts’ lifecycle.

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Total net sales by segment were as follows:

	Three Months Ended
Total Net Sales (in millions)	Mar 31, 2019			Apr 1, 2018
Integrated Defense Systems	$	1,550		$	1,489
Intelligence, Information and Services	1,777			1,582
Missile Systems	2,006			1,848
Space and Airborne Systems	1,653			1,568
Forcepoint	158			141
Eliminations	(414		)	(357		)
Total business segment sales	6,730			6,271
Acquisition Accounting Adjustments	(1		)	(4		)
Total	$	6,729		$	6,267

Total Operating Expenses—We generally disclose operating expenses for each segment in terms of the following: (1) cost of sales—labor; (2) cost of sales—materials and subcontractors; and (3) other costs of sales and other operating expenses. Included in cost of sales—labor is the incurred direct labor costs associated with the performance of contracts in the current period and any applicable overhead and fringe costs. Included in cost of sales—materials and subcontractors is the incurred direct materials costs, subcontractor costs (which could include effort performed by other Raytheon segments or locations) and applicable overhead allocations in the current period. Included in other costs of sales and other operating expenses is other direct costs not captured in labor or materials and subcontractors costs, such as previously deferred precontract costs recognized in the period, applicable overhead allocations, general and administrative expenses, which include administrative and selling expenses (including bid and proposal costs) and research and development expenses, other direct costs (such as ancillary services and travel expenses) and adjustments for loss contracts.

Operating Income (and the related operating margin percentage)—We generally express changes in segment operating income in terms of volume, net changes in Estimate at Completion (EAC) adjustments or changes in contract mix and other program performance.

The impact of changes in volume on operating income excludes the impact of net EAC adjustments and the impact of changes in contract mix and other program performance and is calculated based on changes in costs on individual programs at an overall margin for the segment. As such, changes in volume do not impact operating margins.

Changes in net EAC adjustments relate to changes in operating income and margin due to revisions to total estimated revenues and costs at completion. These changes reflect improved or deteriorated operating performance or award fee rates. For a full description of our EAC process, refer to “Note 4: Changes in Estimates under Percentage of Completion Contract Accounting” within Item 1 of this Form 10-Q. Given that we have thousands of individual contracts and the types and complexity of the assumptions and estimates we must make on an on-going basis, we have both favorable and unfavorable EAC adjustments. We had the following aggregate EAC adjustments for the periods presented:

	Three Months Ended
EAC Adjustments (in millions)	Mar 31, 2019			Apr 1, 2018
Gross favorable	$	242		$	206
Gross unfavorable	(119		)	(91		)
Total net EAC adjustments	$	123		$	115

Significant EAC adjustments in the first quarters of 2019 and 2018 are discussed in the Operating Income and Margin section of each business segment’s discussion below. The increase in net EAC adjustments of $8 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to the increase in net EAC adjustments at IDS and IIS, partially offset by the decrease in net EAC adjustments at MS.

Changes in contract mix and other program performance refer to changes in operating income and margin due to a change in the relative volume of contracts with higher or lower fee rates such that the overall average margin rate for the segment changes, and other drivers of program performance including margin rate increases or decreases due to EAC adjustments in prior periods. A higher or lower expected fee rate at the initial award of a contract typically correlates to the contract’s risk profile, which is often specifically driven by the type of customer and related procurement regulations, the type of contract (e.g., fixed-price vs. cost-

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plus), the maturity of the product or service and the scope of work. Changes in contract mix and other performance also include all other items which are not related to volume or EAC adjustments (e.g., real estate transactions).

Operating income by segment was as follows:

	Three Months Ended
Operating Income (in millions)	Mar 31, 2019			Apr 1, 2018
Integrated Defense Systems	$	258		$	273
Intelligence, Information and Services	187			117
Missile Systems	190			212
Space and Airborne Systems	212			193
Forcepoint	(9		)	(7		)
Eliminations	(47		)	(40		)
Total business segment operating income	791			748
Acquisition Accounting Adjustments	(28		)	(33		)
FAS/CAS Operating Adjustment	366			354
Corporate	(16		)	(28		)
Total	$	1,113		$	1,041

Integrated Defense Systems
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019			Apr 1, 2018			% Change
Total net sales	$	1,550		$	1,489		4.1	%
Total operating expenses
Cost of sales—labor	543			553			(1.8	)%
Cost of sales—materials and subcontractors	503			466			7.9	%
Other cost of sales and other operating expenses	246			197			24.9	%
Total operating expenses	1,292			1,216			6.3	%
Operating income	$	258		$	273		(5.5	)%
Operating margin	16.6		%	18.3		%

Change in Operating Income (in millions)	Three Months Ended Mar 31, 2019 Versus Three Months Ended Apr 1, 2018
Volume			$	15
Net change in EAC adjustments			16
Mix and other performance			(46		)
Total change in operating income			$	(15	)
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018			% Change
Bookings	$	1,374	$	2,475		(44.5	)%

Total Net Sales—The increase in total net sales of $61 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher net sales of $110 million on various Patriot® programs for a Middle East and North Africa (MENA) customer from the completion of a transaction to satisfy all of our existing offset obligations on the programs, higher net sales of $87 million on certain European Patriot programs awarded in 2018, higher net sales of $30 million on a naval radar program driven by awards in the first quarter of 2019, and higher net sales of $27 million on an international air and missile defense system program driven by planned increases in production, partially offset by lower net sales of $158 million on an international Patriot program awarded in the first quarter of 2018 driven primarily by an estimated $90 million of net sales recognized in the first quarter of 2018 from previously inventoried costs, and lower net sales of $36 million on certain international Patriot programs due to the scheduled completion of certain production phases of the programs.

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Total Operating Expenses—The increase in total operating expenses of $76 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to an increase in other cost of sales and other operating expenses of $49 million and an increase in materials and subcontractors costs of $37 million. The increase in other cost of sales and other operating expenses was primarily due to higher general and administrative expenses driven by higher independent research and development costs principally related to next-generation radars. The increase in materials and subcontractors costs was driven by the completion of the offset transaction on various Patriot programs for a MENA customer described above in Total Net Sales, and higher activity on the certain European Patriot programs and on the international air and missile defense system program described above in Total Net Sales, partially offset by lower activity on the international Patriot program awarded in the first quarter of 2018 and the certain international Patriot programs described above in Total Net Sales. The remaining change was spread across numerous programs with no individual or common significant driver.

Operating Income and Margin—The decrease in operating income of $15 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to a change in mix and other performance of $46 million, partially offset by a net change in EAC adjustments of $16 million and an increase in volume of $15 million. The change in mix and other performance was principally driven by lower sales on the international Patriot program awarded in the first quarter of 2018 described above in Total Net Sales. Included in the change in mix and other performance was a $6 million gain on a real estate transaction in the first quarter of 2019. The net change in EAC adjustments was primarily due to $30 million of favorable profit adjustments in the first quarter of 2019 related to the offset transaction discussed above in Total Net Sales due to a reduction of expected costs to fulfill our offset obligations on several contracts, with the remaining change spread across numerous programs with no individual or common significant driver. The increase in volume was primarily due to the activity on the programs described above in Total Net Sales and included $14 million related to the offset transaction described above. In total, the offset transaction resulted in $44 million of operating income in the first quarter of 2019. The decrease in operating margin in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to the change in mix and other performance, partially offset by the net change in EAC adjustments.

Backlog and Bookings—Backlog was $11,380 million at March 31, 2019 compared to $11,557 million at December 31, 2018. The decrease in backlog of $177 million at March 31, 2019 compared to December 31, 2018 was primarily due to sales in excess of bookings at our Integrated Air and Missile Defense (IAMD) and Mission Systems and Sensors (MSS) product lines, partially offset by bookings in excess of sales at our Seapower Capability Systems (SCS) product line. Bookings decreased by $1,101 million in the first quarter of 2019 compared to the first quarter of 2018. In the first quarter of 2019, IDS booked $418 million on the Air and Missile Defense Radar (AMDR) program for the U.S. Navy, $310 million to provide Patriot engineering services support for the U.S. Army and international customers and $103 million to provide advanced Patriot air and missile defense capability for the U.S. Army and international customers. In the first quarter of 2018, IDS booked $1.6 billion to provide advanced Patriot air and missile defense capability to an international customer, $226 million to provide Patriot engineering services support for U.S. and international customers, $150 million to provide Patriot depot support for an international customer and $139 million to provide Patriot spares for an international customer.

Intelligence, Information and Services
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019			Apr 1, 2018			% Change
Total net sales	$	1,777		$	1,582		12.3	%
Total operating expenses
Cost of sales—labor	725			693			4.6	%
Cost of sales—materials and subcontractors	698			578			20.8	%
Other cost of sales and other operating expenses	167			194			(13.9	)%
Total operating expenses	1,590			1,465			8.5	%
Operating income	$	187		$	117		59.8	%
Operating margin	10.5		%	7.4		%

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Change in Operating Income (in millions)	Three Months Ended Mar 31, 2019 Versus Three Months Ended Apr 1, 2018
Volume			$	14
Net change in EAC adjustments			12
Mix and other performance			44
Total change in operating income			$	70
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018		% Change
Bookings	$	1,634	$	1,074	52.1	%

Total Net Sales—The increase in total net sales of $195 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher net sales of $150 million on classified programs in both cyber and space and higher net sales of $38 million from the consolidation of RGNext in the first quarter of 2019, partially offset by lower net sales of $53 million on programs in support of the U.S. Army’s Warfighter FOCUS activities, which continue to transition to a number of competitively-awarded replacement programs. In the first quarter of 2019, we amended and restated the RGNext joint venture agreement and acquired an additional 10% equity ownership in the joint venture, increasing our equity ownership to 60% and giving us control of the operations of RGNext with the partner having only protective rights. The results of RGNext are included in IIS’s segment results effective as of the February 8, 2019 consolidation date. See “Note 9: Acquisitions, Divestitures and Goodwill” within Item 1 of this Form 10-Q for additional detail.

Total Operating Expenses—The increase in total operating expenses of $125 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to an increase in materials and subcontractors costs of $120 million, partially offset by a decrease in other cost of sales and other operating expenses of $27 million. The increase in materials and subcontractors costs was primarily driven by higher activity on the classified programs described above in Total Net Sales, partially offset by lower activity on the programs in support of the U.S. Army’s Warfighter FOCUS activities described above in Total Net Sales. The decrease in other cost of sales and other operating expenses was driven principally by a non-cash gain of $21 million from the remeasurement of our equity method investment in RGNext to fair value in the first quarter of 2019, which was recorded as a reduction to cost of sales. As discussed above in Total Net Sales, in the first quarter of 2019, we acquired additional equity ownership in the RGNext joint venture.

Operating Income and Margin—The increase in operating income of $70 million and the related increase in operating margin in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to a change in mix and other performance of $44 million primarily due to the non-cash gain of $21 million from the remeasurement of our equity method investment in RGNext described above in Total Operating Expenses, and a $13 million gain in the first quarter of 2019 on the sale of residual materials and supplies previously used to support the Warfighter FOCUS programs.

Backlog and Bookings—Backlog was $6,377 million at March 31, 2019 compared to $6,233 million at December 31, 2018. The increase in backlog of $144 million at March 31, 2019 compared to December 31, 2018 was primarily due to the consolidation of RGNext, as described above in Total Net Sales. Bookings increased by $560 million in the first quarter of 2019 compared to the first quarter of 2018. In the first quarter of 2019, IIS booked $148 million on domestic and foreign training programs in support of Warfighter FOCUS activities and $82 million to provide support for the North Warning System for the Canadian government. IIS also booked $744 million on a number of classified contracts. In the first quarter of 2018, IIS booked $80 million on domestic and foreign training programs in support of Warfighter FOCUS activities. IIS also booked $514 million on a number of classified contracts.

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Missile Systems
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019			Apr 1, 2018			% Change
Total net sales	$	2,006		$	1,848		8.5	%
Total operating expenses
Cost of sales—labor	685			622			10.1	%
Cost of sales—materials and subcontractors	883			826			6.9	%
Other cost of sales and other operating expenses	248			188			31.9	%
Total operating expenses	1,816			1,636			11.0	%
Operating income	$	190		$	212		(10.4	)%
Operating margin	9.5		%	11.5		%

Change in Operating Income (in millions)	Three Months Ended Mar 31, 2019 Versus Three Months Ended Apr 1, 2018
Volume			$	23
Net change in EAC adjustments			(24		)
Mix and other performance			(21		)
Total change in operating income			$	(22	)
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018			% Change
Bookings	$	706	$	1,390		(49.2	)%

Total Net Sales—The increase in total net sales of $158 million in the first quarter of 2019 compared to the first quarter of 2018 was spread across numerous programs with no individual or common significant driver. Included in the change in total net sales were lower net sales of $67 million on the Paveway program due to planned decreases in production and higher net sales of $52 million on classified programs.

Total Operating Expenses—The increase in total operating expenses of $180 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to an increase in labor costs of $63 million, an increase in other cost of sales and other operating expenses of $60 million and an increase in materials and subcontractors costs of $57 million. Almost half of the increase in labor costs was driven by the classified programs described above in Total Net Sales, with the remaining change spread across numerous programs with no individual or common significant driver. The increase in other cost of sales and other operating expenses was spread across numerous programs with no individual or common significant driver. The increase in materials and subcontractors costs was spread across numerous programs with no individual or common significant driver and included decreased activity on the Paveway program described above in Total Net Sales and increased activity on the classified programs described above in Total Net Sales.

Operating Income and Margin— The decrease in operating income of $22 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to a net change in EAC adjustments of $24 million and a change in mix and other performance of $21 million, partially offset by an increase in volume of $23 million. The net change in EAC adjustments was primarily driven by a $15 million unfavorable adjustment in the first quarter of 2019 on a program to upgrade an international test range due to an increase in estimated costs and schedule delays. The change in mix and other performance was principally driven by activity on international Paveway programs, which had an impact of $23 million. The increase in volume was spread across numerous programs with no individual or common significant driver. The decrease in operating margin in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to the net change in EAC adjustments and the change in mix and other performance.

Backlog and Bookings—Backlog was $12,664 million at March 31, 2019 compared to $13,976 million at December 31, 2018. The decrease in backlog of $1,312 million at March 31, 2019 compared to December 31, 2018 was primarily due to sales in excess of bookings within our Air Warfare Systems (AWS) and Strategic and Naval Systems (SNS) product lines. Bookings decreased by $684 million in the first quarter of 2019 compared to the first quarter of 2018. In the first quarter of 2019, MS booked $102 million for Evolved Seasparrow Missile (ESSM®) for the U.S. Navy and an international customer and $93 million for Rolling Airframe Missile (RAM™) for the U.S. Navy and international customers. MS also booked $154 million on a number of classified contracts. In the first quarter of 2018, MS booked $552 million for Advanced Medium-Range Air-to-Air Missile (AMRAAM®) for the U.S. Air Force, U.S. Navy and international customers, $186 million for StormBreaker™ for the U.S. Air Force and $114

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million for Commander’s Independent Thermal Viewers (CITV) for the U.S. Army and an international customer. MS also booked $130 million on a number of classified contracts.

Space and Airborne Systems
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019			Apr 1, 2018			% Change
Total net sales	$	1,653		$	1,568		5.4	%
Total operating expenses
Cost of sales—labor	753			688			9.4	%
Cost of sales—materials and subcontractors	424			391			8.4	%
Other cost of sales and other operating expenses	264			296			(10.8	)%
Total operating expenses	1,441			1,375			4.8	%
Operating income	$	212		$	193		9.8	%
Operating margin	12.8		%	12.3		%

Change in Operating Income (in millions)	Three Months Ended Mar 31, 2019 Versus Three Months Ended Apr 1, 2018
Volume			$	7
Net change in EAC adjustments			4
Mix and other performance			8
Total change in operating income			$	19
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018		% Change
Bookings	$	1,530	$	1,272	20.3	%

Total Net Sales—The increase in total net sales of $85 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to higher net sales of $53 million on classified programs principally driven by 2018 awards.

Total Operating Expenses—The increase in total operating expenses of $66 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to an increase in labor costs of $65 million and an increase in materials and subcontractors costs of $33 million, partially offset by a decrease in other cost of sales and other operating expenses of $32 million. The increase in labor costs was primarily due to activity on the classified programs described above in Total Net Sales and on an international tactical radar systems production program due to scheduled increases in production. The increase in materials and subcontractors costs was primarily due to activity on the classified programs described above in Total Net Sales and on a surveillance and targeting systems production program for the U.S. Air Force awarded in the third quarter of 2018. The decrease in other cost of sales and other operating expenses was principally due to a $24 million change in the amount of previously deferred precontract costs recognized based on contract awards.

Operating Income and Margin—The increase in operating income of $19 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to a change in mix and other performance of $8 million and an increase in volume of $7 million, both of which were driven by activity on the classified programs described above in Total Net Sales. The increase in operating margin in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to the change in mix and other performance.

Backlog and Bookings—Backlog was $10,157 million at March 31, 2019 compared to $10,126 million at December 31, 2018. Bookings increased by $258 million in the first quarter of 2019 compared to the first quarter of 2018. In the first quarter of 2019, SAS booked $288 million on the Advanced Synthetic Aperture Radar System (ASARS) program for the U.S. Air Force and $90 million for the Next Generation Overhead Persistent Infrared (Next Gen OPIR) program for the U.S. Air Force. SAS also booked $451 million on a number of classified contracts. In the first quarter of 2018, SAS booked $87 million for the next-generation Multi-Spectral Targeting System (MTS) for the U.S. Air Force and $85 million for radar components for the U.S. Navy. SAS also booked $356 million on a number of classified contracts.

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Forcepoint
	Three Months Ended
(In millions, except percentages)	Mar 31, 2019			Apr 1, 2018			% Change
Total net sales	$	158		$	141		12.1	%
Total operating expenses
Cost of sales	40			27			48.1	%
Selling and marketing	73			64			14.1	%
Research and development	30			37			(18.9	)%
General and administrative	24			20			20.0	%
Total operating expenses	167			148			12.8	%
Operating income (loss)	$	(9	)	$	(7	)	28.6	%
Operating margin	(5.7		)%	(5.0		)%

	Three Months Ended
(In millions, except percentages)	Mar 31, 2019		Apr 1, 2018		% Change
Bookings	$	124	$	100	24.0	%

Total Net Sales—The increase in total net sales of $17 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily driven by $11 million of higher Global Government and Critical Infrastructure sales from a higher volume of product bookings and the correction of a de minimis error in the current period for royalty revenue related to original equipment manufacturing (OEM) agreements, which increased sales and operating income by $7 million, the majority of which should have been recognized in prior periods after adoption of the new revenue recognition standard (Topic 606). Total net sales excluded the unfavorable impact related to the deferred revenue acquisition accounting adjustments described below in Acquisition Accounting Adjustments.

Total Operating Expenses—We disclose our operating expenses for the segment, which excludes amortization of acquired intangible assets and certain other acquisition and acquisition related expenses, in terms of the following:

– Cost of sales—labor and overhead costs associated with analytic and technical support services; infrastructure costs associated with maintaining our databases; and labor, materials and overhead costs associated with providing our product offerings;

– Selling and marketing—labor costs related to personnel engaged in selling and marketing and customer support functions; costs related to public relations, advertising, promotions and travel; and related overhead costs;

– Research and development—labor costs for the development and management of new and existing products; and related overhead costs; and

– General and administrative—labor costs for our executive, finance and administrative personnel; third party professional service fees; and related overhead costs.

Total operating expenses in the first quarter of 2019 increased $19 million compared to the first quarter of 2018 primarily due to an increase in cost of sales of $13 million, an increase in selling and marketing expenses of $9 million and an increase in general and administrative expenses of $4 million, partially offset by a decrease in research and development expenses of $7 million. The increase in cost of sales was principally due to increased hardware sales and staffing to support fulfillment of higher services sales. The increase in selling and marketing expenses was principally due to higher costs for the sales organization due to increased staffing and training. The increase in general and administrative expenses was primarily due to increased professional services fees to increase support capabilities to align with future growth. The decrease in research and development was due to a decrease in labor costs primarily due to headcount reductions as a result of a reorganization of the research and development workforce to gain efficiencies. Total operating expenses excluded amortization of acquired intangible assets as described below in Acquisition Accounting Adjustments and certain unallocated costs which are included in Corporate.

Operating Income (Loss) and Margin—The change in operating income (loss) of $2 million and related change in operating margin in the first quarter of 2019 compared to the first quarter of 2018 was primarily driven by the increase in total operating expenses described above in Total Operating Expenses, partially offset by the increase in total net sales described above in Total Net Sales which included $7 million related to the change in accounting for OEM agreements described above in Total Net Sales.

Backlog and Bookings—Backlog was $495 million at March 31, 2019, $528 million at December 31, 2018 and $449 million at April 1, 2018. The decrease in backlog of $33 million at March 31, 2019 compared to December 31, 2018 was primarily due to the seasonality of Enterprise Security products experiencing higher bookings in the fourth quarter of each year. Bookings increased

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by $24 million in the first quarter of 2019 compared to the first quarter of 2018 primarily due to the volume of Global Government and Critical Infrastructure awards.

Acquisition Accounting Adjustments

Acquisition Accounting Adjustments include the adjustments to record acquired deferred revenue at fair value as part of our purchase price allocation process, referred to as the deferred revenue adjustment, and the amortization of acquired intangible assets related to historical acquisitions. These adjustments are not considered part of management’s evaluation of segment results.

The components of Acquisition Accounting Adjustments were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Deferred revenue adjustment	$	(1	)	$	(4	)
Amortization of acquired intangibles	(27		)	(29		)
Total Acquisition Accounting Adjustments	$	(28	)	$	(33	)

The deferred revenue adjustment related to acquisitions in the Forcepoint segment.

Amortization of acquired intangibles related to acquisitions in the segments was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Integrated Defense Systems	$	—	$	—
Intelligence, Information and Services	6		5
Missile Systems	—		—
Space and Airborne Systems	2		2
Forcepoint	19		22
Total	$	27	$	29

Acquisition Accounting Adjustments in the first quarter of 2019 were relatively consistent with the first quarter of 2018.

FAS/CAS Operating Adjustment

The FAS/CAS Operating Adjustment represents the difference between the service cost component of our pension and other postretirement benefit (PRB) expense or income under Financial Accounting Standards (FAS) requirements under U.S. Generally Accepted Accounting Principles (GAAP) and our pension and PRB expense under U.S. government Cost Accounting Standards (CAS). The results of each segment only include pension and PRB expense under CAS that we generally recover through the pricing of our products and services to the U.S. government.

The pension and PRB components of the FAS/CAS Operating Adjustment were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
FAS/CAS Pension Operating Adjustment	$	362	$	351
FAS/CAS PRB Operating Adjustment	4		3
FAS/CAS Operating Adjustment	$	366	$	354

The components of the FAS/CAS Operating Adjustment were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
FAS service cost (expense)	$	(106	)	$	(128	)
CAS expense	472			482
FAS/CAS Operating Adjustment	$	366		$	354

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The change in our FAS/CAS Operating Adjustment of $12 million in the first quarter of 2019 compared to the first quarter of 2018 was driven by a $22 million decrease in our FAS service cost, partially offset by a $10 million decrease in our CAS expense. The decrease in our FAS service cost was principally driven by the higher discount rate at December 31, 2018 compared to the discount rate at December 31, 2017. The decrease in our CAS expense was primarily due to unfavorable asset performance during 2018.

Corporate

Corporate operating income consists of unallocated costs and certain other corporate costs not considered part of management’s evaluation of reportable segment operating performance.

Operating income related to Corporate was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Corporate	$	(16	)	$	(28	)

Operating income related to Corporate in the first quarter of 2019 included miscellaneous favorable items not allocated to segments results and was relatively consistent with the first quarter of 2018.

FINANCIAL CONDITION AND LIQUIDITY

Overview

We pursue a capital deployment strategy that balances funding for growing our business, including: (1) capital expenditures, acquisitions and research and development; (2) prudently managing our balance sheet, including debt repayments and pension contributions; and (3) returning cash to our shareholders, including dividend payments and share repurchases, as outlined below. Our need for, cost of and access to funds are dependent on future operating results, as well as other external conditions. We currently expect that cash and cash equivalents, cash flow from operations and other available financing resources will be sufficient to meet anticipated operating, capital expenditure, investment, debt service and other financing requirements during the next 12 months and for the foreseeable future.

In addition, the following table highlights selected measures of our liquidity and capital resources:

(In millions)	Mar 31, 2019		Dec 31, 2018
Cash and cash equivalents	$	2,093	$	3,608
Working capital(1)	3,276		3,674
Amount available under credit facilities	950		950

(1)     Amounts have been recast to reflect the adoption of ASU 2016-02, Leases (Topic 842).

Operating Activities

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Net cash provided by (used in) operating activities from continuing operations	$	(411	)	$	283
Net cash provided by (used in) operating activities	(411		)	284

The decrease in net cash provided by operating activities of $695 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to the timing of vendor payments and higher net tax payments as discussed below in Tax Payments and Refunds.

Pension Plan Contributions—We made the following contributions to our pension and PRB plans: 

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Required pension contributions	$	64	$	58
PRB contributions	4		3
Total	$	68	$	61

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Tax Payments and Refunds—We made (received) the following net tax payments (refunds):

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Federal	$	—	$	(260	)
Foreign	10		17
State	15		2

We expect full-year net federal, foreign and state tax payments to be approximately $926 million in 2019.

Interest Payments—We made interest payments on our outstanding debt of $25 million in the first quarters of 2019 and 2018.

Investing Activities

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Net cash provided by (used in) investing activities	$	(292	)	$	77

The change in net cash provided by (used in) investing activities of $369 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due to our short-term investments activity as described below in Short-term Investments Activity.

Additions to Property, Plant and Equipment and Capitalized Internal Use Software—Additions to property, plant and equipment and capitalized internal use software were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Additions to property, plant and equipment	$	274	$	219
Additions to capitalized internal use software	10		12

The increase in additions to property, plant and equipment of $55 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily driven by program related requirements due to recent and anticipated growth and investment in productivity initiatives, including high-technology production facilities and continuing factory automation upgrades.

We expect our property, plant and equipment and capitalized internal use software expenditures to be between approximately $1,050–$1,125 million and $70–$95 million, respectively, in 2019, consistent with the anticipated needs of our business and for specific investments including capital assets and facility improvements.

Short-term Investments Activity—We may invest in marketable securities in accordance with our short-term investment policy and cash management strategy. Marketable securities are classified as available-for-sale and are recorded at fair value as short-term investments in our consolidated balance sheets. There was no activity on short-term investments in the first quarter of 2019. In the first quarter of 2018, maturities of short-term investments were $309 million.

Acquisitions and Divestitures—In pursuing our business strategies, we acquire and make investments in certain businesses that meet strategic and financial criteria. In the first quarter of 2019, we amended and restated the RGNext joint venture agreement and acquired an additional 10% equity ownership in the joint venture increasing our equity ownership to 60%. See “Note 9: Acquisitions, Divestitures and Goodwill” within Item 1 of this Form 10-Q for additional detail. There were no acquisitions in the first quarter of 2018.

Financing Activities

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Net cash provided by (used in) financing activities	$	(816	)	$	(707	)

We generally use cash provided by operating activities and proceeds from the issuance of new debt as our primary source for the repayment of debt, payment of dividends, pension contributions and the repurchase of our common stock. The change in net cash

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used in financing activities of $109 million in the first quarter of 2019 compared to the first quarter of 2018 was primarily due activity on our share repurchases as discussed below.

Share Repurchases—From time to time, our Board of Directors authorizes the repurchase of shares of our common stock. In November 2015, our Board authorized the repurchase of up to $2.0 billion of our outstanding common stock. In November 2017, our Board also authorized the repurchase of up to an additional $2.0 billion of our outstanding common stock. At March 31, 2019, we had approximately $1.0 billion available under the 2017 repurchase program. Share repurchases will take place from time to time at management’s discretion depending on market conditions.

Share repurchases also include shares surrendered by employees to satisfy tax withholding obligations in connection with restricted stock, restricted stock units (RSUs) and Long-term Performance Plan (LTPP) awards issued to employees.

Our share repurchases were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
	$		Shares	$		Shares
Shares repurchased under our share repurchase programs	$	500	2.8	$	400	1.9
Shares repurchased to satisfy tax withholding obligations	66		0.3	72		0.3
Total share repurchases	$	566	3.1	$	472	2.2

Cash Dividends—Our Board of Directors authorized the following cash dividends:

	Three Months Ended
(In millions, except per share amounts)	Mar 31, 2019		Apr 1, 2018
Cash dividends declared per share	$	0.9425	$	0.8675
Total dividends paid	245		230

In March 2019, our Board of Directors authorized an 8.6% increase to our annual dividend payout rate from $3.47 to $3.77 per share. Dividends are subject to quarterly approval by our Board of Directors.

CAPITAL RESOURCES

Long-term Debt—Total long-term debt, including the current portion of long-term debt, was $4.8 billion at both March 31, 2019 and December 31, 2018. Our outstanding debt bears contractual interest at fixed interest rates ranging from 2.5% to 7.2% and matures at various dates from 2020 through 2044.

Cash and Cash Equivalents—Cash and cash equivalents were $2.1 billion and $3.6 billion at March 31, 2019 and December 31, 2018, respectively. We may invest in: U.S. Treasuries; AAA/Aaa rated money market funds; certificates of deposit, time deposits and commercial paper of banks with a minimum long-term debt rating of A or A2 and minimum short-term debt rating of A-1 and P-1; and commercial paper of corporations with a minimum long-term debt rating of A- or A3 and minimum short-term debt rating of A-2 and P-2. Cash and cash equivalents balances held at our foreign subsidiaries were approximately $293 million and $326 million at March 31, 2019 and December 31, 2018, respectively. Our undistributed earnings of our foreign subsidiaries are not permanently reinvested. We continuously evaluate our liquidity needs and ability to meet global cash requirements as a part of our overall capital deployment strategy. Factors that affect our global capital deployment strategy include anticipated cash flows, the ability to repatriate cash in a tax efficient manner, funding requirements for operations and investment activities, acquisitions and divestitures, and capital market conditions.

Commercial Paper—The Company may issue up to $1.25 billion of unsecured commercial paper notes, as the commercial paper is backed by our credit facility. At March 31, 2019, short-term commercial paper borrowings outstanding were $300 million, which had a weighted-average interest rate and original maturity period of 2.551% and 6 days, respectively. The maximum amount of short-term commercial paper borrowings outstanding during the first quarter of 2019 was $300 million. At December 31, 2018, short-term commercial paper borrowings outstanding were $300 million, which had a weighted-average interest rate and original maturity period of 2.954% and 16 days, respectively.

Credit Facilities—In November 2015, we entered into a $1.25 billion revolving credit facility maturing in November 2020. Under the $1.25 billion credit facility, we can borrow, issue letters of credit and backstop commercial paper. Borrowings under this facility bear interest at various rate options, including LIBOR plus a margin based on our credit ratings. Based on our credit ratings at

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March 31, 2019, borrowings would generally bear interest at LIBOR plus 80.5 basis points. The credit facility is composed of commitments from approximately 20 separate highly rated lenders, each committing no more than 10% of the facility. As of March 31, 2019 and December 31, 2018 there were no borrowings or letters of credit outstanding under this credit facility. The $300 million of commercial paper outstanding at March 31, 2019 reduced the amount available under our credit facility to $950 million.

Under the $1.25 billion credit facility we must comply with certain covenants, including a ratio of total debt to total capitalization of no more than 60%. We were in compliance with the credit facility covenants as of March 31, 2019. Our ratio of total debt to total capitalization, as those terms are defined in the credit facility, was 30.2% at March 31, 2019. We are providing this ratio as this metric is used by our lenders to monitor our leverage and is also a threshold that could limit our ability to utilize this facility.

Shelf Registrations—We have an effective shelf registration statement with the Securities and Exchange Commission (SEC), filed in March 2019, which covers the registration of debt securities, common stock, preferred stock and warrants.

COMMITMENTS AND CONTINGENCIES

Environmental Matters—We are involved in various stages of investigation and cleanup related to remediation of various environmental sites. Our estimate of the liability of total environmental remediation costs includes the use of a discount rate and takes into account that a portion of these costs is eligible for future recovery through the pricing of our products and services to the U.S. government. We regularly assess the probability of recovery of these costs, which requires us to make assumptions about the extent of cost recovery under our contracts and the amount of future contract activity. We consider such recovery probable based on government contracting regulations and our long history of receiving reimbursement for such costs, and accordingly have recorded the estimated future recovery of these costs from the U.S. government within prepaid expenses and other current assets in our consolidated balance sheets. Our estimates regarding remediation costs to be incurred were as follows:  

(In millions, except percentages)	Mar 31, 2019			Dec 31, 2018
Total remediation costs—undiscounted	$	197		$	193
Weighted-average discount rate	5.1		%	5.1		%
Total remediation costs—discounted	$	136		$	128
Recoverable portion	88			82

We also lease certain government-owned properties and generally are not liable for remediation of preexisting environmental contamination at these sites. As a result, we generally do not provide for these costs in our consolidated financial statements.

Due to the complexity of environmental laws and regulations, the varying costs and effectiveness of alternative cleanup methods and technologies, the uncertainty of insurance coverage, and the unresolved extent of our responsibility, it is difficult to determine the ultimate outcome of environmental matters. However, we do not expect any additional liability to have a material adverse effect on our financial position, results of operations or liquidity.

Financing Arrangements and Other—We issue guarantees, and banks and surety companies issue, on our behalf, letters of credit and surety bonds, to meet various bid, performance, warranty, retention and advance payment obligations for us or our affiliates. These instruments expire on various dates through 2028. Additional guarantees of project performance for which there is no stated value also remain outstanding. The stated values outstanding consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Guarantees	$	211	$	201
Letters of credit	2,296		2,503
Surety bonds	80		166

All guarantees at March 31, 2019 and December 31, 2018 related to our joint venture in Thales-Raytheon Systems Air and Missile Defense Command and Control S.A.S. (TRS AMDC2). We provide these guarantees, as well as letters of credit, to TRS AMDC2 and other affiliates to assist these entities in obtaining financing on more favorable terms, making bids on contracts and performing their contractual obligations. While we expect these entities to satisfy their loans and meet their project performance and other contractual obligations, their failure to do so may result in a future obligation to us. We periodically evaluate the risk of these entities failing to meet their obligations described above. At March 31, 2019, we believe the risk that these entities will not be able to meet their obligations is minimal for the foreseeable future based on their current financial condition. All obligations were current at March 31, 2019. We had an estimated liability of $3 million at both March 31, 2019 and December 31, 2018 related to these guarantees.

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The joint venture agreement between Raytheon and Vista Equity Partners relating to Forcepoint provides Vista Equity Partners with certain rights to require Forcepoint to pursue an initial public offering at any time after four years and three months following the closing date of May 29, 2015, or pursue a sale of the company at any time after five years following the closing date. In either of these events, Raytheon has the option to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint for cash at a price equal to fair value as determined under the joint venture agreement. Additionally, Vista Equity Partners has the ability to liquidate its ownership through a put option. The put option allows Vista Equity Partners to require Raytheon to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint for cash at a price equal to fair value as determined under the joint venture agreement. Lastly, Raytheon has the option, to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint at a price equal to fair value as determined under the joint venture agreement. The joint venture agreement provides for the process under which the parties would determine the fair value of the interest and could result in a payment by Raytheon shortly after the exercise of Vista Equity Partners’ put option or Raytheon’s purchase option; however, the ultimate timing will depend on the actions of the parties and other factors. At March 31, 2019, the fair value of the noncontrolling interest was estimated at $399 million and is subject to change based upon market conditions and business performance. The estimate of fair value for purposes of presenting the redeemable noncontrolling interest, outside of stockholders’ equity, in our consolidated balance sheets could differ from the parties’ determination of fair value for the interest under the joint venture agreement.

We have entered into industrial cooperation agreements, sometimes in the form of either offset agreements or in-country industrial participation (ICIP) agreements, as a condition to obtaining orders for our products and services from certain customers in foreign countries. At March 31, 2019, the aggregate amount of our offset agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $9.3 billion. These agreements are designed to return economic value to the foreign country by requiring us to engage in activities supporting local defense or commercial industries, promoting a balance of trade, developing in-country technology capabilities or addressing other local development priorities. Offset agreements may be satisfied through activities that do not require a direct cash payment, including transferring technology, providing manufacturing, training and other consulting support to in-country projects, and the purchase by third parties (e.g., our vendors) of supplies from in-country vendors. These agreements may also be satisfied through our use of cash for activities such as subcontracting with local partners, purchasing supplies from in-country vendors, providing financial support for in-country projects and making investments in local ventures. Such activities may also vary by country depending upon requirements as dictated by their governments. We typically do not commit to offset agreements until orders for our products or services are definitive. The amounts ultimately applied against our offset agreements are based on negotiations with the customers and typically require cash outlays that represent only a fraction of the notional value in the offset agreements. Offset programs usually extend over several or more years and may provide for penalties in the event we fail to perform in accordance with offset requirements. Historically, we have not been required to pay any penalties of significance.

As a U.S. government contractor, we are subject to many levels of audit and investigation by the U.S. government relating to our contract performance and compliance with applicable rules and regulations. Agencies that oversee contract performance include: the Defense Contract Audit Agency (DCAA); the Defense Contract Management Agency (DCMA); the Inspectors General of the U.S. Department of Defense (DoD) and other departments and agencies; the Government Accountability Office (GAO); the Department of Justice (DOJ); and Congressional Committees. Other areas of our business operations may also be subject to audit and investigation by these and/or other agencies. From time to time, agencies investigate or conduct audits to determine whether our operations are being conducted in accordance with applicable requirements. Such investigations and audits may be initiated due to a number of reasons, including as a result of a whistleblower complaint. Such investigations and audits could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, the suspension of government export licenses or the suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and many result in no adverse action against us. Our final allowable incurred costs for each year are also subject to audit and have, from time to time, resulted in disputes between us and the U.S. government, with litigation resulting at the Court of Federal Claims (COFC) or the Armed Services Board of Contract Appeals (ASBCA) or their related courts of appeals. In addition, the DOJ has, from time to time, convened grand juries to investigate possible irregularities by us. We also provide products and services to customers outside of the U.S., and those sales are subject to local government laws, regulations and procurement policies and practices. Our compliance with such local government regulations or any applicable U.S. government regulations (e.g., the Foreign Corrupt Practices Act (FCPA) and International Traffic in Arms Regulations (ITAR)) may also be investigated or audited. Other than as specifically disclosed herein, we do not expect these audits, investigations or disputes to have a material effect on our financial position, results of operations or liquidity, either individually or in the aggregate.

We do not expect any material impact on our financial results from regional developments regarding Qatar. Almost all of our contracts in Qatar are foreign military sales contracts through the U.S. government and represent less than 5% of our backlog at March 31, 2019.

Recent events have caused increased attention on U.S. defense sales to the Kingdom of Saudi Arabia (KSA). KSA represents less than 5% of our sales and $2.1 billion of our backlog at March 31, 2019. This includes the majority of the precision guided munitions

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described below, integrated air and missile defense systems, as well as other products and services. Although we currently do not expect to be prevented from doing business in KSA, if government action impairs our ability to fulfill our contractual obligations or otherwise to continue to do business in KSA, it would have a material adverse effect on our financial results.

We have several direct commercial sales contracts for precision guided munitions with certain Middle Eastern customers for which U.S. government approvals from the State Department and Congress through the Congressional Notification process have been delayed and which we expect will continue to be delayed in the near future. These contracts contain clauses that permit the customer to terminate the contract, and require refund of any advances received, if those approvals are not received by a stated date or that date is not otherwise changed. While uncertainty exists over the timing of these pending approvals, and from time to time members of Congress have expressed concerns over these sales, we have taken contractual actions, such as changing or removing the government approval deadlines, or invoking the force majeure clauses for government delays. As a result, we believe further delays of these pending approvals will not have a material impact on our financial results. However, if we ultimately do not receive the approvals, it would have a material adverse effect on our financial results. For these precision guided munitions contracts with certain Middle Eastern customers, we had approximately $2.4 billion of total contract value, recognized approximately $1.1 billion of sales for work performed to date and received approximately $850 million in advances. On a contract by contract basis, and excluding advances billed but not received, we had $600 million and $350 million of net contract assets and net contract liabilities, respectively, related to these contracts.

On June 23, 2016, the U.K. held a referendum in which British citizens approved an exit from the European Union (EU), commonly referred to as “Brexit.” As a result of the referendum, there has been volatility in exchange rates versus the U.S. dollar. The British pound is the functional currency for approximately 2% of our sales. In addition, for any contracts that are not denominated in the same currency as the functional currency (for example, contracts denominated in British pounds where the functional currency is the U.S. dollar), we enter into foreign currency forward contracts to hedge our risk related to foreign currency exchange rate fluctuations. As a result, we currently do not expect the U.K.’s exit from the EU to have a material impact on our financial position, results of operations or liquidity.

In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened against, or initiated by, us. We do not expect any of these proceedings to result in any additional liability or gains that would materially affect our financial position, results of operations or liquidity. In connection with certain of our legal matters, we may be entitled to insurance recovery for qualified legal costs or other incurred costs. We do not expect any insurance recovery to have a material impact on the financial exposure that could result from these matters.

Accounting Standards

For a discussion of recent accounting pronouncements, see “Note 2: Accounting Standards” within Item 1 of this Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market exposures are to interest rates and foreign exchange rates.

We generally supplement our working capital requirements with a combination of variable-rate short-term and fixed-rate long-term financing. We may enter into interest rate swap agreements with commercial and investment banks to manage interest rates associated with our financing arrangements. We enter into foreign currency forward contracts with commercial banks to fix the foreign currency exchange rates on specific commitments, payments to vendors and customer receipts denominated in foreign currencies. The market-risk sensitive instruments we use for hedging are directly related to a particular asset, liability or transaction for which a firm commitment is in place. We do not hold or issue derivative financial instruments for trading or speculative purposes.

The following tables provide information as of March 31, 2019 and December 31, 2018 about our market risk exposure associated with changing interest rates. For long-term debt obligations, the table presents principal cash flows by maturity date and average interest rates related to outstanding obligations. There were no interest rate swaps outstanding at March 31, 2019 or December 31, 2018.

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Principal payments and interest rate detail for long-term debt by contractual maturity date as of March 31, 2019 and December 31, 2018, respectively, were as follows: 

March 31, 2019 (in millions, except percentages)	2019		2020			2021		2022			2023		Thereafter			Total			Fair Value
Fixed-rate debt	$	—	$	1,500		$	—	$	1,100		$	—	$	2,192		$	4,792		$	5,202
Average interest rate	—		3.550		%	—		2.500		%	—		5.097		%	4.017		%

December 31, 2018 (in millions, except percentages)	2019		2020			2021		2022			2023		Thereafter			Total			Fair Value
Fixed-rate debt	$	—	$	1,500		$	—	$	1,100		$	—	$	2,192		$	4,792		$	5,063
Average interest rate	—		3.550		%	—		2.500		%	—		5.097		%	4.017		%

In addition, the aggregate notional amount of our outstanding foreign currency forward contracts was $1,843 million and $1,772 million at March 31, 2019 and December 31, 2018, respectively. The net notional exposure of these contracts was $777 million and $840 million at March 31, 2019 and December 31, 2018, respectively.

The fair value of asset derivatives included in other assets, net and liability derivatives included in other current liabilities in our consolidated balance sheets related to foreign currency forward contracts were as follows:

(In millions)	Mar 31, 2019		Dec 31, 2018
Asset derivatives	$	14	$	26
Liability derivatives	23		34

For foreign currency forward contracts designated and qualifying for hedge accounting, we record the gain or loss on the derivative in accumulated other comprehensive loss (AOCL), net of tax, and reclassify it into earnings in the same period or periods during which the hedged revenue or cost of sales transaction affects earnings. We present the gain or loss in the same income statement line items as the earnings effect of the hedged item, which offsets the foreign exchange gains and losses on the underlying transactions being hedged. We believe our exposure due to changes in foreign currency rates is not material due to our hedging policy.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management has conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a–15(e) and 15d–15(e) of the Securities Exchange Act of 1934) as of March 31, 2019.

Conclusion of Evaluation—Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of March 31, 2019 were effective.

Inherent Limitations on Effectiveness of Controls—In designing and evaluating our disclosure controls and procedures, management recognizes that any control, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

Changes in Internal Control Over Financial Reporting—There were no changes in our internal control over financial reporting during the first quarter of 2019 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We primarily engage in providing products and services under contracts with the U.S. government and, to a lesser degree, under direct foreign sales contracts, some of which the U.S. government funds. As a U.S. government contractor, we are subject to many levels of audit and investigation by the U.S. government relating to our contract performance and compliance with applicable rules and regulations. Agencies that oversee contract performance include: the Defense Contract Audit Agency (DCAA); the

48

Defense Contract Management Agency (DCMA); the Inspectors General of the U.S. Department of Defense (DoD) and other departments and agencies; the Government Accountability Office (GAO); the Department of Justice (DOJ); and Congressional Committees. Other areas of our business operations may also be subject to audit and investigation by these and/or other agencies. From time to time, agencies investigate or conduct audits to determine whether our operations are being conducted in accordance with applicable requirements. Such investigations and audits may be initiated due to a number of reasons, including as a result of a whistleblower complaint. Such investigations and audits could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, the suspension of government export licenses or the suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and many result in no adverse action against us. Our final allowable incurred costs for each year are also subject to audit and have, from time to time, resulted in disputes between us and the U.S. government, with litigation resulting at the Court of Federal Claims (COFC) or the Armed Services Board of Contract Appeals (ASBCA) or their related courts of appeals. In addition, the DOJ has, from time to time, convened grand juries to investigate possible irregularities by us. We also provide products and services to customers outside of the U.S., and those sales are subject to local government laws, regulations and procurement policies and practices. Our compliance with such local government regulations or any applicable U.S. government regulations (e.g., the Foreign Corrupt Practices Act (FCPA) and International Traffic in Arms Regulations (ITAR)) may also be investigated or audited. Other than as specifically disclosed in this Form 10-Q, we do not expect these audits, investigations or disputes to have a material effect on our financial position, results of operations or liquidity, either individually or in the aggregate.

In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened against us. We do not expect these proceedings to result in any additional liability that would materially affect our financial position, results of operations or liquidity.

ITEM 1A. RISK FACTORS

You should carefully review and consider the information regarding certain factors which could materially affect our business, financial condition or future results set forth under Item 1A. in our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no material changes from the factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018, although we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the Securities and Exchange Commission (SEC).

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities 

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Approximate Dollar Value (in billions) of Shares that May Yet Be Purchased Under the Plan (2)
January (January 1, 2019 - January 27, 2019)	508	$	168.14	—	$	1.5
February (January 28, 2019 - February 24, 2019)	2,219,430	180.23		2,219,430	1.1
March (February 25, 2019 - March 31, 2019)	768,502	180.98		552,573	1.0
Total	2,988,440	$	180.42	2,772,003

(1) Includes shares purchased related to activity under our stock plans. Such activity during the first quarter of 2019 includes the surrender by employees of 216,437 shares to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.

(2) In November 2017, our Board authorized the repurchase of up to $2.0 billion of our outstanding common stock.

49

ITEM 6. EXHIBITS

The following list of exhibits includes exhibits submitted with this Form 10-Q as filed with the Securities and Exchange Commission and those incorporated by reference to other filings.

3.1	Raytheon Company Amended and Restated By-Laws, as amended as of March 20, 2019, filed as an exhibit to the Company’s Current Report on Form 8-K filed March 22, 2019, is hereby incorporated by reference.
10.1	Letter Agreement dated July 23, 2015 by and between the Company and Wesley D. Kremer.*
10.2	Amendment to Letter Agreement dated March 21, 2019 by and between the Company and Wesley D. Kremer.*
15	PricewaterhouseCoopers LLP Awareness Letter.*
31.1	Certification of Thomas A. Kennedy pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certification of Anthony F. O’Brien pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Thomas A. Kennedy pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of Anthony F. O’Brien pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	eXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*

*	filed electronically herewith
**	furnished electronically herewith, and not filed

50

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

RAYTHEON COMPANY
By:	/s/ Michael J. Wood
	Michael J. Wood
	Vice President, Controller and Chief Accounting Officer
	Principal Accounting Officer

April 25, 2019

51

EX-10.1

Exhibit 10.1

	Thomas A. Kennedy	Raytheon Company
	Chairman & Chief Executive Officer	870 Winter Street
	781.522.6400 business	Waltham, Massachusetts
	781.522.6401 fax	02451 USA
	tkennedy1@raytheon.com

July 23, 2015

Wesley D. Kremer

11305 N Shadow Vista Place

Oro Valley, AZ 85742

Dear Wes:

It is my sincere pleasure to offer you the position as President of the Integrated Defense Systems (IDS) business effective July 30, 2015, reporting to me. I look forward to you joining our Leadership team. Your position will be an officer and vice president of the corporation. The position resides in Tewksbury, MA.

The offer details are as follows:

• Your base salary will be $600,000 annually, paid at a bi-weekly rate of $23,077.60. Your next eligibility for a base salary increase will be March, 2016.

• Your Results Based Incentive (RBI) Program target for 2015 will be increased to 100% of your annualized base salary, subject to individual and company performance.

• You will be eligible to participate in the Company’s Long Term Participant Plan (LTPP). As a first time participant, your award value for the 2015 program is $950,000, based on performance achieved at the end of a three-year cycle (2015-2017). Your payout, if earned, may be higher or lower than the initial award value. Participation in this plan is subject to annual review.

• You remain eligible to participate in the annual restricted share award program subject to the terms of the award and the provisions of the Raytheon Stock Plan. Your 2016 restricted stock award is targeted at $975,000, subject to your individual performance and approval by the Board of Directors in 2016.

• You will be required by the end of your fifth (5^th) year in an elected officer capacity to own a minimum of three (3x) times base salary in the form of Raytheon equity. In addition, there is a requirement that each elected officer holds shares of Company "stock owned outright" with a value of at least 1x base salary. Company stock owned outright includes the following Company securities: outright share purchases, shares from restricted stock/unit vestings or acquired upon option exercises; and vested shares or share equivalents in any Company retirement plan (e.g., 401(k), Deferred Compensation Plan).

July 23, 2015

Wes Kremer

Page 2

• If you are involuntarily separated from employment with the Company without cause, as defined in the Raytheon Severance Pay Plan, you will be entitled to a separation payment of one (1) times your annual base salary and target bonus, as well as one (1) years benefits (excluding executive perquisites) as of the date of separation in exchange for a General Release.

• You will be entitled to a Change in Control Severance Agreement which would provide you with severance benefits equal to two (2) times your annual base salary and target bonus as of the date of the change in control in the event of a change in control of the company. Please note that the Change in Control Severance Agreement is structured to require both a change in corporate ownership and a loss of employment as those terms are defined in the draft agreement.

• You will be eligible to participate in the Raytheon Supplemental Executive Retirement Plan. This non-qualified plan provides a pension of 35% of final average compensation after ten (10) years of Raytheon service and attainment of age 55, increasing by 3% of final average compensation for every additional year of service up to a maximum of 50% of final average compensation after fifteen (15) years of service and attainment of age 60. Amounts payable under this plan will be offset by amounts payable under any other pension plan of the Company or any prior employer and by Social Security.

• You will continue to be eligible to participate in Raytheon’s Deferred Compensation Plan, subject to the terms and conditions of the program.

• Your annual automobile allowance will be $18,000.00, paid at a bi-weekly rate of $692.31.

• You will be eligible to receive Company paid senior executive life insurance which equals four (4) times your annual base salary bracket to a maximum of $3 million. You are also eligible to receive enhanced life insurance equal to one (1) times your annual base salary. If you choose not to elect this benefit, your enhanced life insurance will be capped at $50,000.00.

• Your financial planning assistance will be $15,000.00 for your first year, and $12,000.00 annually thereafter.

• Your Excess liability coverage will be increased to $5 million.

• You will continue to be eligible for the Executive Health Program, which includes an annual comprehensive medical assessment. This benefit has an annual allowance of $2,000.00 for your participation in the program. You will be enrolled in the Executive Registry. It is a health care program designed for traveling executives and their families. The Registry operates as a domestic and international network of leading academic medical centers and affiliations.

• You will be eligible for first class airfare for all business travel.

July 23, 2015

Wes Kremer

Page 3

This letter sets forth the entire offer and understanding between you and the Company related to your employment with Raytheon. Acceptance of this offer will be considered an acceptance to all the terms and conditions contained within the offer and the attachments.

Wes, I look forward to you leading our IDS business. Please sign below to indicate your acceptance and return to Randa Newsome. Please contact Randa at 781.522.5097 if you have additional questions.

Sincerely,

/s/ Thomas A. Kennedy

Thomas A. Kennedy

Chairman and CEO

I have read and accept this offer for President of Raytheon’s IDS business, effective July 30, 2015.

Accepted:	/s/Wesley Kremer
	Wesley Kremer
Date:	July 23, 2015

Attached: (1) Change in Control Agreement

EX-10.2

Exhibit 10.2

	Thomas A. Kennedy	Raytheon Company
	Chairman & Chief Executive Officer	870 Winter Street
	781.522.6400 tel	Waltham, Massachusetts
	781.522.6401 fax	02451 USA
	tkennedy1@raytheon.com

March 21, 2019

Wesley D. Kremer

1 Franklin Street, Unit 2403

Boston, MA 02110

Dear Wes:

It is my pleasure to offer you the position of President of Raytheon Missile Systems (RMS) effective March 30, 2019. You also will continue to be an elected officer and vice president of Raytheon Company.

This letter amends your July 23, 2015 offer letter. Those terms and conditions shall continue except for the changes listed in this offer letter. All of your other current compensation, benefits, and perquisites will remain the same.

Base Salary:

Effective March 30, 2019, your bi-weekly rate of pay will be $31,058.40 which, when annualized, is $807,518.40. You will be eligible for a base salary increase in March 2020.

Relocation Benefits:

You shall receive temporary relocation benefits coordinated by our relocation vendor, CARTUS.

Temporary Housing Expenses:

Raytheon will reimburse you up to $5,000 per month for your eligible temporary housing expenses in Tucson. You will also be reimbursed up to $1,000 per month for your eligible Tucson miscellaneous utilities and maintenance expenses. This housing reimbursement will also be coordinated by CARTUS.

Company Paid Personal Travel:

Raytheon will pay for personal travel between Arizona and Massachusetts when approved by the CEO.

Please note, this is not a contract of employment or a promise of employment for any specific period. Nothing in this letter is intended to alter the “at-will” nature of your employment. Because you are an “at-will” employee, both you and the Company may end the employment relationship at any time and for any reason, with or without cause or notice.

Wes, I look forward to you leading the RMS business unit. Please sign below to indicate your acceptance and return to Randa Newsome. Please contact Randa at 781-522-5097 if you have any questions.

Congratulations and best wishes for your success in this important role for our Company.

Sincerely,

/s/ Thomas A. Kennedy

Thomas A. Kennedy

Chairman and CEO

I have read and accept this offer for President of the Raytheon Missile Systems (RMS) business, effective March 30, 2019.

Accepted:

/s/Wesley D. Kremer	March 21, 2019
Wesley D. Kremer	Date

EX-15

Exhibit 15

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Commissioners:

We are aware that our report dated April 25, 2019 on our review of interim financial information of Raytheon Company, which appears in this Quarterly Report on Form 10-Q, is incorporated by reference in the Registration Statements on Form S-3 (File Nos. 333-230497; 333-211878; 333-71974; 333-58474; 333-82529 and 333-44321) and Form S-8 (File Nos. 333-168415; 333-124690; 333-64168; 333-52536; 333-56117 and 333-45629) of Raytheon Company.

Very truly yours,

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, Massachusetts

April 25, 2019

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas A. Kennedy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Raytheon Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 25, 2019

/s/ Thomas A. Kennedy

Thomas A. Kennedy

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Anthony F. O'Brien, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Raytheon Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 25, 2019

/s/ Anthony F. O'Brien

Anthony F. O'Brien

Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Raytheon Company (the “Company”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas A. Kennedy, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Thomas A. Kennedy

Thomas A. Kennedy

Chairman and Chief Executive Officer

April 25, 2019

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Raytheon Company (the “Company”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony F. O'Brien, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Anthony F. O'Brien

Anthony F. O'Brien

Vice President and Chief Financial Officer

April 25, 2019

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 22, 2019
Document and Entity Information
Entity Registrant Name	RAYTHEON CO/
Entity Central Index Key	0001047122
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	RTN
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		279,871,000

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 2,093,000,000	$ 3,608,000,000
Receivables, net	1,424,000,000	1,648,000,000
Contract assets	5,971,000,000	5,594,000,000
Inventories	882,000,000	758,000,000
Prepaid expenses and other current assets	586,000,000	529,000,000
Total current assets	10,956,000,000	12,137,000,000
Property, plant and equipment, net	2,899,000,000	2,840,000,000
Operating lease right-of-use assets	816,000,000	805,000,000
Goodwill	14,882,000,000	14,864,000,000
Other assets, net	2,023,000,000	2,024,000,000
Total assets	31,576,000,000	32,670,000,000
Current liabilities
Commercial paper and current portion of long-term debt	800,000,000	300,000,000
Contract liabilities	2,930,000,000	3,309,000,000
Accounts payable	1,361,000,000	1,964,000,000
Accrued employee compensation	995,000,000	1,509,000,000
Other current liabilities	1,594,000,000	1,381,000,000
Total current liabilities	7,680,000,000	8,463,000,000
Accrued retiree benefits and other long-term liabilities	6,848,000,000	6,922,000,000
Long-term debt	4,256,000,000	4,755,000,000
Operating lease liabilities	652,000,000	647,000,000
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests	432,000,000	411,000,000
Raytheon Company stockholders’ equity
Common stock, par value, $0.01 per share, 1,450 shares authorized, 280 and 282 shares outstanding at March 31, 2019 and December 31, 2018, respectively	3,000,000	3,000,000
Additional paid-in capital	0	0
Accumulated other comprehensive loss	(8,399,000,000)	(8,618,000,000)
Retained earnings	20,104,000,000	20,087,000,000
Total Raytheon Company stockholders’ equity	11,708,000,000	11,472,000,000
Noncontrolling interests in subsidiaries	0	0
Total equity	11,708,000,000	11,472,000,000
Total liabilities, redeemable noncontrolling interests and equity	$ 31,576,000,000	$ 32,670,000,000

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Millions	Mar. 31, 2019	Dec. 31, 2018
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,450.0	1,450.0
Common stock, shares outstanding	280.1	282.1

XML

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Net sales
Net sales	$ 6,729	$ 6,267
Operating expenses
General and administrative expenses	739	694
Total operating expenses	5,616	5,226
Operating income	1,113	1,041
Non-operating (income) expense, net
Retirement benefits non-service expense	181	239
Interest expense	44	47
Interest income	(13)	(7)
Other (income) expense, net	(20)	5
Total non-operating (income) expense, net	192	284
Income from continuing operations before taxes	921	757
Federal and foreign income taxes	146	133
Income from continuing operations	775	624
Income (loss) from discontinued operations, net of tax	0	(1)
Net income	775	623
Less: Net income (loss) attributable to noncontrolling interests in subsidiaries	(6)	(10)
Net income attributable to Raytheon Company	$ 781	$ 633
Basic earnings per share attributable to Raytheon Company common stockholders:
Income from continuing operations	$ 2.77	$ 2.20
Income (loss) from discontinued operations, net of tax	0	0
Net income	2.77	2.20
Diluted earnings per share attributable to Raytheon Company common stockholders:
Income from continuing operations	2.77	2.20
Income (loss) from discontinued operations, net of tax	0	0
Net income	$ 2.77	$ 2.19
Amounts attributable to Raytheon Company common stockholders:
Income from continuing operations	$ 781	$ 634
Income (loss) from discontinued operations, net of tax	0	(1)
Net income	781	633
Products [Member]
Net sales
Net sales	5,562	5,254
Operating expenses
Cost of sales	4,002	3,737
Services [Member]
Net sales
Net sales	1,167	1,013
Operating expenses
Cost of sales	$ 875	$ 795

XML

Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Net income	$ 775,000,000	$ 623,000,000
Pension and other postretirement benefit plans, net:
Amortization of prior service cost	1,000,000	1,000,000
Amortization of net actuarial loss	276,000,000	347,000,000
Pension and other postretirement benefit plans, net	277,000,000	348,000,000
Foreign exchange translation	8,000,000	24,000,000
Cash flow hedges	(10,000,000)	(10,000,000)
Unrealized gains (losses) on investments and other, net	0	0
Other comprehensive income (loss), before tax	275,000,000	362,000,000
Income tax benefit (expense) related to items of other comprehensive income (loss)	(56,000,000)	(71,000,000)
Other comprehensive income (loss), net of tax	219,000,000	291,000,000
Reclassification of stranded tax effects	0	(1,451,000,000)
Total comprehensive income (loss)	994,000,000	(537,000,000)
Less: Comprehensive income (loss) attributable to noncontrolling interests in subsidiaries	(6,000,000)	(10,000,000)
Comprehensive income (loss) attributable to Raytheon Company	$ 1,000,000,000	$ (527,000,000)

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Consolidated Statements of Equity (Unaudited) - USD ($)	Total	Common stock [Member]	Additional paid-in capital [Member]	Accumulated other comprehensive income (loss) [Member]	Retained earnings [Member]	Total Raytheon Company stockholders' equity [Member]	Noncontrolling interest in subsidiaries (1) [Member]	[1]
Beginning Balance at Dec. 31, 2017	$ 9,963,000,000	$ 3,000,000	$ 0	$ (7,935,000,000)	$ 17,895,000,000	$ 9,963,000,000	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to Raytheon Company	633,000,000				633,000,000	633,000,000
Net Income (loss) excluding redeemable noncontrolling interest	633,000,000						0
Other comprehensive income (loss), net of tax	291,000,000			291,000,000		291,000,000
Reclassification of stranded tax effects	0			(1,451,000,000)	1,451,000,000	0
Adjustment of redeemable noncontrolling interests to redemption value	11,000,000				11,000,000	11,000,000
Dividends declared	(251,000,000)		1,000,000		(252,000,000)	(251,000,000)
Common stock plans activity	62,000,000		62,000,000			62,000,000
Share repurchases	(472,000,000)		(63,000,000)		(409,000,000)	(472,000,000)
Ending Balance at Apr. 01, 2018	10,237,000,000	3,000,000	0	(9,095,000,000)	19,329,000,000	10,237,000,000	0
Beginning Balance at Dec. 31, 2018	11,472,000,000	3,000,000	0	(8,618,000,000)	20,087,000,000	11,472,000,000	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to Raytheon Company	781,000,000				781,000,000	781,000,000
Net Income (loss) excluding redeemable noncontrolling interest	781,000,000						0
Other comprehensive income (loss), net of tax	219,000,000			219,000,000		219,000,000
Adjustment of redeemable noncontrolling interests to redemption value	5,000,000				5,000,000	5,000,000
Dividends declared	(264,000,000)		1,000,000		(265,000,000)	(264,000,000)
Common stock plans activity	61,000,000		61,000,000			61,000,000
Share repurchases	(566,000,000)		(62,000,000)		(504,000,000)	(566,000,000)
Ending Balance at Mar. 31, 2019	$ 11,708,000,000	$ 3,000,000	$ 0	$ (8,399,000,000)	$ 20,104,000,000	$ 11,708,000,000	$ 0

[1] Excludes redeemable noncontrolling interests which are not considered equity. See “Note 13: Redeemable Noncontrolling Interests” for additional information.

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Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Cash flows from operating activities
Net income	$ 775,000,000	$ 623,000,000
(Income) loss from discontinued operations, net of tax	0	1,000,000
Income from continuing operations	775,000,000	624,000,000
Adjustments to reconcile to net cash provided by (used in) operating activities from continuing operations, net of the effect of acquisitions and divestitures
Depreciation and amortization	140,000,000	135,000,000
Stock-based compensation	59,000,000	63,000,000
Deferred income taxes	(44,000,000)	(77,000,000)
Changes in assets and liabilities
Receivables, net	236,000,000	(314,000,000)
Contract assets and contract liabilities	(731,000,000)	(174,000,000)
Inventories	(124,000,000)	(46,000,000)
Prepaid expenses and other current assets	(59,000,000)	138,000,000
Income taxes receivable/payable	181,000,000	290,000,000
Accounts payable	(484,000,000)	(167,000,000)
Accrued employee compensation	(523,000,000)	(420,000,000)
Other current liabilities	3,000,000	(60,000,000)
Accrued retiree benefits	219,000,000	306,000,000
Other, net	(59,000,000)	(15,000,000)
Net cash provided by (used in) operating activities from continuing operations	(411,000,000)	283,000,000
Net cash provided by (used in) operating activities from discontinued operations	0	1,000,000
Net cash provided by (used in) operating activities	(411,000,000)	284,000,000
Cash flows from investing activities
Additions to property, plant and equipment	(274,000,000)	(219,000,000)
Additions to capitalized internal use software	(10,000,000)	(12,000,000)
Maturities of short-term investments	0	309,000,000
Payments for purchases of acquired companies, net of cash received	(8,000,000)	0
Other	0	(1,000,000)
Net cash provided by (used in) investing activities	(292,000,000)	77,000,000
Cash flows from financing activities
Dividends paid	(245,000,000)	(230,000,000)
Net borrowings (payments) on commercial paper	0	0
Other	(5,000,000)	(5,000,000)
Net cash provided by (used in) financing activities	(816,000,000)	(707,000,000)
Net increase (decrease) in cash, cash equivalents and restricted cash	(1,519,000,000)	(346,000,000)
Cash, cash equivalents and restricted cash at beginning of the year	3,624,000,000	3,115,000,000
Cash, cash equivalents and restricted cash at end of period	2,105,000,000	2,769,000,000
Share Repurchase Program [Member]
Cash flows from financing activities
Repurchases of common stock	(500,000,000)	(400,000,000)
Satisfy tax withholding [Member]
Cash flows from financing activities
Repurchases of common stock	$ (66,000,000)	$ (72,000,000)

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Basis of Presentation

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

We prepared the accompanying unaudited consolidated financial statements of Raytheon Company and all wholly-owned, majority-owned or otherwise controlled subsidiaries on the same basis as our annual audited financial statements. We condensed or omitted certain information and footnote disclosures normally included in our annual audited financial statements, which we prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Our quarterly financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018. As used in this report, the terms “we,” “us,” “our,” “Raytheon” and the “Company” mean Raytheon Company and its subsidiaries, unless the context indicates another meaning.

In the opinion of management, our financial statements reflect all adjustments, which are of a normal recurring nature, necessary for presentation of financial statements for interim periods in accordance with U.S. GAAP and with the instructions to Form 10-Q in Article 10 of Securities and Exchange Commission (SEC) Regulation S-X. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates, and any such differences may be material to our financial statements.

Effective January 1, 2019, we adopted the requirements of Accounting Standards Update (ASU) 2016-02, Leases (Topic 842) using the modified retrospective approach as discussed below in “Note 2: Accounting Standards.” We reclassified certain balance sheet amounts to conform to our current period presentation. All amounts disclosed in this Form 10-Q reflect these changes.

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Accounting Standards

3 Months Ended

Mar. 31, 2019

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Accounting Standards

Accounting Standards

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability for most lease arrangements. Effective January 1, 2019, we adopted the requirements of the new lease standard using the modified retrospective approach, applying the new lease requirements at the beginning of the earliest period presented. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allows us to carry forward the historical lease classification. We did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of right-of-use assets. The standard resulted in the recognition of operating lease right-of-use assets of $805 million and operating lease liabilities of $841 million, of which $194 million was classified as current and is included in other current liabilities in our consolidated balance sheet as of December 31, 2018, with immaterial changes to other balance sheet accounts. The standard had no impact on our results of operations or cash flows. In addition, new disclosures are provided to enable users to assess the amount, timing and uncertainty of cash flows arising from leases.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement: Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820), which eliminates the disclosure requirement of the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and modifies certain disclosure requirements related to Level 3 recurring and nonrecurring fair value measurements. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. Effective January 1, 2019, we elected to early adopt the requirements of the new standard on a prospective basis. The standard did not have an impact on our financial position, results of operations or liquidity.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-24): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. Effective January 1, 2019, we elected to early adopt the requirements of the new standard on a prospective basis. The standard did not have a material impact on our financial position, results of operations or liquidity.

Other new pronouncements adopted and issued but not effective until after March 31, 2019 did not and are not expected to have a material impact on our financial position, results of operations or liquidity.

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Significant Accounting Policies Update

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Significant Accounting Policies Update

Significant Accounting Policies Update

Our significant accounting policies are detailed in “Note 1: Summary of Significant Accounting Policies” within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2018. Significant changes to our accounting policies as a result of adopting Topic 842 are discussed below:

Leases—We determine if an arrangement is a lease or contains an embedded lease at inception. For lease agreements with both lease and nonlease components (e.g., common-area maintenance costs), we account for the nonlease components separately. Consideration is allocated to the lease and nonlease components based on the estimated standalone prices.

All of our leases are operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. The current portion of operating lease liabilities is included in other current liabilities in our consolidated balance sheets. For the majority of our leases, the discount rate used to determine the present value of the lease payments is our incremental borrowing rate as of the lease commencement date, as the implicit rate is not readily determinable. The operating lease right-of-use assets also includes any initial direct costs and any lease payments made at or before the commencement date, and is reduced for any unrestricted incentives received at or before the commencement date.

Some of our leases include options to extend or terminate the lease. We include these options in the recognition of our right-of-use assets and lease liabilities when it is reasonably certain that we will exercise the option. Very few of our leases include variable lease-related payments, such as escalation clauses based on consumer price index (CPI) rates, or residual guarantees. Variable payments that are based on an index or a rate are included in the recognition of our right-of-use assets and lease liabilities using the index or rate at lease commencement; however, changes to these lease payments due to rate or index updates are recorded as rent expense in the period incurred. Amounts probable of payment under residual guarantees are also included in the recognition of our right-of-use assets and lease liabilities.Changes in Estimates under Percentage of Completion Contract Accounting

We have a companywide standard and disciplined quarterly Estimate at Completion (EAC) process in which management reviews the progress and execution of our performance obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly-developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by our subcontractors, the availability and timing of funding from our customer, and overhead cost rates, among other variables. These estimates also include the estimated cost of satisfying our industrial cooperation agreements, sometimes in the form of either offset obligations or in-country industrial participation (ICIP) agreements, required under certain contracts. These obligations may or may not be distinct depending on their nature.

Based on this analysis, any quarterly adjustments to net sales, cost of sales and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive program performance, and may result in an increase in operating income during the performance of individual performance obligations, if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities. Likewise, these adjustments may result in a decrease in operating income if we determine we will not be successful in mitigating these risks or realizing related opportunities. Changes in estimates of net sales, cost of sales and the related impact to operating income are recognized quarterly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation’s percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. When estimates of total costs to be incurred exceed total estimates of revenue to be earned on a performance obligation related to complex aerospace or defense equipment or related services, or product maintenance or separately priced extended warranty, a provision for the entire loss on the performance obligation is recognized in the period the loss is identified.

Net EAC adjustments had the following impact on our operating results:

	Three Months Ended
(In millions, except per share amounts)	Mar 31, 2019		Apr 1, 2018
Operating income	$	123	$	115
Income from continuing operations attributable to Raytheon Company	97		91
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company	$	0.34	$	0.32

In addition, net revenue recognized from our performance obligations satisfied in previous periods was $158 million and $138 million in the first quarters of 2019 and 2018, respectively. This primarily relates to EAC adjustments that impacted revenue.

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Changes in Estimates under Percentage of Completion Contract Accounting

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Changes in Estimates under Percentage of Completion Contract Accounting

Significant Accounting Policies Update

Our significant accounting policies are detailed in “Note 1: Summary of Significant Accounting Policies” within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2018. Significant changes to our accounting policies as a result of adopting Topic 842 are discussed below:

Leases—We determine if an arrangement is a lease or contains an embedded lease at inception. For lease agreements with both lease and nonlease components (e.g., common-area maintenance costs), we account for the nonlease components separately. Consideration is allocated to the lease and nonlease components based on the estimated standalone prices.

All of our leases are operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. The current portion of operating lease liabilities is included in other current liabilities in our consolidated balance sheets. For the majority of our leases, the discount rate used to determine the present value of the lease payments is our incremental borrowing rate as of the lease commencement date, as the implicit rate is not readily determinable. The operating lease right-of-use assets also includes any initial direct costs and any lease payments made at or before the commencement date, and is reduced for any unrestricted incentives received at or before the commencement date.

Some of our leases include options to extend or terminate the lease. We include these options in the recognition of our right-of-use assets and lease liabilities when it is reasonably certain that we will exercise the option. Very few of our leases include variable lease-related payments, such as escalation clauses based on consumer price index (CPI) rates, or residual guarantees. Variable payments that are based on an index or a rate are included in the recognition of our right-of-use assets and lease liabilities using the index or rate at lease commencement; however, changes to these lease payments due to rate or index updates are recorded as rent expense in the period incurred. Amounts probable of payment under residual guarantees are also included in the recognition of our right-of-use assets and lease liabilities.Changes in Estimates under Percentage of Completion Contract Accounting

We have a companywide standard and disciplined quarterly Estimate at Completion (EAC) process in which management reviews the progress and execution of our performance obligations. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly-developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by our subcontractors, the availability and timing of funding from our customer, and overhead cost rates, among other variables. These estimates also include the estimated cost of satisfying our industrial cooperation agreements, sometimes in the form of either offset obligations or in-country industrial participation (ICIP) agreements, required under certain contracts. These obligations may or may not be distinct depending on their nature.

Based on this analysis, any quarterly adjustments to net sales, cost of sales and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive program performance, and may result in an increase in operating income during the performance of individual performance obligations, if we determine we will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities. Likewise, these adjustments may result in a decrease in operating income if we determine we will not be successful in mitigating these risks or realizing related opportunities. Changes in estimates of net sales, cost of sales and the related impact to operating income are recognized quarterly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods based on a performance obligation’s percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of our performance obligations. When estimates of total costs to be incurred exceed total estimates of revenue to be earned on a performance obligation related to complex aerospace or defense equipment or related services, or product maintenance or separately priced extended warranty, a provision for the entire loss on the performance obligation is recognized in the period the loss is identified.

Net EAC adjustments had the following impact on our operating results:

	Three Months Ended
(In millions, except per share amounts)	Mar 31, 2019		Apr 1, 2018
Operating income	$	123	$	115
Income from continuing operations attributable to Raytheon Company	97		91
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company	$	0.34	$	0.32

In addition, net revenue recognized from our performance obligations satisfied in previous periods was $158 million and $138 million in the first quarters of 2019 and 2018, respectively. This primarily relates to EAC adjustments that impacted revenue.

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Earnings Per Share (EPS)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings per Share (EPS)

Earnings Per Share (EPS)

We compute basic and diluted EPS using actual income from continuing operations attributable to Raytheon Company common stockholders, income (loss) from discontinued operations attributable to Raytheon Company common stockholders and net income attributable to Raytheon Company, and our actual weighted-average shares outstanding rather than the numbers presented within our unaudited consolidated financial statements, which are rounded to the nearest million. As a result, it may not be possible to recalculate EPS as presented in our unaudited consolidated financial statements. Furthermore, it may not be possible to recalculate EPS attributable to Raytheon Company common stockholders by adjusting EPS from continuing operations by EPS from discontinued operations.

We include all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in our basic EPS calculation as they are considered participating securities. As a result, we have included all of our outstanding unvested awards of restricted stock, as well as restricted stock units (RSUs) and Long-term Performance Plan (LTPP) awards that meet the retirement eligible criteria in our calculation of basic EPS. We disclose EPS for common stock and unvested stock-based payment awards, and separately disclose distributed and undistributed earnings. Distributed earnings represent common stock dividends and dividends earned on unvested awards of restricted stock and stock-based payment awards of retirement eligible employees. Undistributed earnings represent earnings that were available for distribution but were not distributed. Common stock and unvested stock-based payment awards earn dividends equally.

As described in “Note 13: Redeemable Noncontrolling Interests,” we record redeemable noncontrolling interest related to Vista Equity Partners’ interest in Forcepoint. We reflect the redemption value adjustments related to this redeemable noncontrolling interest in both the basic and diluted EPS calculation for the portion of redemption value that is in excess of the fair value of noncontrolling interest. There was no impact to basic or diluted EPS in the first quarters of 2019 or 2018.

EPS from continuing operations attributable to Raytheon Company common stockholders and unvested stock-based payment awards was as follows: 

	Three Months Ended
	Mar 31, 2019		Apr 1, 2018
Basic EPS attributable to Raytheon Company common stockholders:
Distributed earnings	$	0.94	$	0.87
Undistributed earnings	1.83		1.33
Total	$	2.77	$	2.20
Diluted EPS attributable to Raytheon Company common stockholders:
Distributed earnings	$	0.94	$	0.87
Undistributed earnings	1.83		1.33
Total	$	2.77	$	2.20

Income attributable to participating securities was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Income from continuing operations attributable to participating securities	$	8	$	7
Income (loss) from discontinued operations, net of tax attributable to participating securities	—		—
Net income attributable to participating securities	$	8	$	7

The weighted-average shares outstanding for basic and diluted EPS were as follows: 

	Three Months Ended
(In millions)	Mar 31, 2019	Apr 1, 2018
Shares for basic EPS(1)	281.9	288.5
Effect of dilutive securities	0.3	0.3
Shares for diluted EPS	282.2	288.8

(1)

Includes 2.8 million and 3.2 million participating securities for the first quarters of 2019 and 2018, respectively.

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Inventories

3 Months Ended

Mar. 31, 2019

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following: 

(In millions)	Mar 31, 2019		Dec 31, 2018
Materials and purchased parts	$	74	$	75
Work in process	785		662
Finished goods	23		21
Total	$	882	$	758

Precontract costs are costs incurred to fulfill a contract prior to contract award. Precontract costs, including general and administrative expenses that are specifically chargeable to the customer, are deferred in inventories if we determine that the costs are probable of recovery under a specific anticipated contract. All other precontract costs, including start-up costs, are expensed as incurred. Costs that are deferred are recognized as contract costs upon the receipt of the anticipated contract. We included deferred precontract costs of $238 million and $163 million in inventories as work in process at March 31, 2019 and December 31, 2018, respectively.

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Contract Assets and Contract Liabilities

3 Months Ended

Mar. 31, 2019

Contract with Customer, Asset and Liability [Abstract]

Contract Assets and Contract Liabilities

Contract Assets and Contract Liabilities

Our contract assets consist of unbilled amounts typically resulting from sales under long-term contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Our contract liabilities consist of advance payments and billings in excess of costs incurred and deferred revenue. The noncurrent portion of deferred revenue is included in accrued retiree benefits and other long-term liabilities in our consolidated balance sheets.

Net contract assets (liabilities) consisted of the following:

(In millions, except percentages)	Mar 31, 2019			Dec 31, 2018			$ Change		% Change
Contract assets	$	5,971		$	5,594		$	377	6.7	%
Contract liabilities—current	(2,930		)	(3,309		)	379		(11.5	)%
Contract liabilities—noncurrent	(141		)	(150		)	9		(6.0	)%
Net contract assets (liabilities)	$	2,900		$	2,135		$	765	35.8	%

The $765 million increase in our net contract assets (liabilities) from December 31, 2018 to March 31, 2019 was primarily due to a $379 million decrease in our current contract liabilities, primarily driven by revenue recognized on certain international programs with milestone payments or advances, and a $377 million increase in our contract assets, principally due to contractual billing terms on U.S. government and foreign military sales contracts and the timing of pending approvals on direct commercial sales contracts for precision guided munitions to certain Middle Eastern customers. For direct commercial sales contracts for which we are required to obtain regulatory approvals, we recognize revenue based on the likelihood of obtaining such approvals. At March 31, 2019, we had approximately $2.4 billion of total contract value, recognized approximately $1.1 billion of sales for work performed to date and received approximately $850 million in advances on contracts for precision guided munitions to certain

Middle Eastern customers for which U.S. government approval is pending. On a contract by contract basis, and excluding advances billed but not received, we had $600 million and $350 million of net contract assets and net contract liabilities, respectively, related to these contracts.

In the first quarters of 2019 and 2018, we recognized revenue of $894 million and $652 million related to our contract liabilities at January 1, 2019 and January 1, 2018, respectively.

Impairment losses recognized on our receivables and contract assets were de minimis in the first quarters of 2019 and 2018.

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Deferred Commissions	3 Months Ended
	Mar. 31, 2019
Deferred Costs [Abstract]
Deferred Commissions	Deferred CommissionsOur incremental direct costs of obtaining a contract, which consist of sales commissions primarily for our security software sales at Forcepoint, are deferred and amortized over the period of contract performance or a longer period, generally the estimated life of the customer relationship, if renewals are expected and the renewal commission is not commensurate with the initial commission. We classify deferred commissions as current or noncurrent based on the timing of when we expect to recognize the expense. The current and noncurrent portions of deferred commissions are included in prepaid expenses and other current assets, and other assets, net, respectively, in our consolidated balance sheets. At March 31, 2019 and December 31, 2018, we had deferred commissions of $51 million and $55 million, respectively. Amortization expense related to deferred commissions was $4 million and $8 million in the first quarters of 2019 and 2018, respectively.

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Acquisitions, Divestitures and Goodwill

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Acquisitions, Divestitures and Goodwill

Acquisitions, Divestitures and Goodwill

In pursuing our business strategies, we acquire and make investments in certain businesses that meet strategic and financial criteria, and divest of certain non-core businesses, investments and assets when appropriate. We did not have any divestitures in the first quarter of 2019.

In 2013, we formed the Range Generation Next LLC (RGNext) joint venture with General Dynamics Information Technology (GDIT) through our Intelligence, Information and Services (IIS) segment, in which we held a 50% equity ownership that was accounted for using the equity method. On February 8, 2019, we amended and restated the RGNext joint venture agreement and acquired an additional 10% equity ownership in the joint venture, increasing our equity ownership to 60% and giving us control of the operations of RGNext. Effective as of February 8, 2019, we consolidate the results of RGNext in our consolidated financial statements and report its results in our IIS segment. We also remeasured our equity method investment in RGNext to fair value, which resulted in a non-cash gain of $21 million that was recorded in operating income through a reduction to cost of sales at our IIS segment; recognized redeemable noncontrolling interest for GDIT’s interest in RGNext at a fair value of $32 million; and recognized $90 million of net assets, including cash acquired, at fair value. As part of our purchase price allocation, we recorded $19 million of goodwill, primarily related to the value of the existing workforce, and $34 million of intangible assets, primarily related to customer relationships with a weighted-average life of 7 years.

Pro forma financial information and revenue from the date of acquisition has not been provided as it is not material.

A rollforward of goodwill by segment was as follows: 

(In millions)	Integrated Defense Systems			Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint(1)		Total
Balance at December 31, 2018	$	1,704		$	2,965	$	4,154	$	4,103	$	1,938	$	14,864
Acquisitions	—			19		—		—		—		19
Effect of foreign exchange rates and other	(1		)	—		—		—		—		(1		)
Balance at March 31, 2019	$	1,703		$	2,984	$	4,154	$	4,103	$	1,938	$	14,882

(1)

At March 31, 2019, Forcepoint’s fair value was estimated to exceed its net book value by approximately $900 million. As discussed in “Note 13: Redeemable Noncontrolling Interests,” we are required to determine Forcepoint’s fair value on a quarterly basis due to the accounting related to the redeemable noncontrolling interest.

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Derivatives and Other Financial Instruments

3 Months Ended

Mar. 31, 2019

Summary of Derivative Instruments [Abstract]

Derivative and Other Financial Instruments

Derivatives and Other Financial Instruments

Derivatives—Our primary market exposures are to foreign exchange rates and interest rates, and we use certain derivative financial instruments to help manage these exposures. We execute these instruments with financial institutions that we judge to be credit-worthy. The majority of our foreign currency forward contracts are denominated in currencies of major industrial countries. We do not hold or issue derivative financial instruments for trading or speculative purposes.

We use foreign currency forward contracts to fix the functional currency value of specific commitments, payments and receipts denominated in foreign currencies. The aggregate notional amount of our outstanding foreign currency forward contracts was $1,843 million and $1,772 million at March 31, 2019 and December 31, 2018, respectively. The net notional exposure of these contracts was $777 million and $840 million at March 31, 2019 and December 31, 2018, respectively.

The fair value of asset derivatives included in other assets, net and liability derivatives included in other current liabilities in our consolidated balance sheets related to foreign currency forward contracts were as follows:

(In millions)	Mar 31, 2019		Dec 31, 2018
Asset derivatives	$	14	$	26
Liability derivatives	23		34

The fair value of these derivatives is Level 2 in the fair value hierarchy because they are determined based on a market approach utilizing externally quoted forward rates for similar contracts.

Our foreign currency forward contracts contain offset or netting provisions to mitigate credit risk in the event of counterparty default, including payment default and cross default. We measure and record the impact of counterparty credit risk into our valuation and at March 31, 2019 and December 31, 2018, the fair value of our counterparty default exposure was less than $1 million and was spread across numerous highly rated counterparties.

There were no interest rate swaps outstanding at March 31, 2019 or December 31, 2018.

Other Financial Instruments—We hold financial instruments, including cash and cash equivalents, commercial paper and long-term debt. The carrying amounts for cash and cash equivalents and commercial paper approximated their fair values. The carrying value of long-term debt was recorded at amortized cost. The estimated fair value of long-term debt was determined based on quoted prices in inactive markets, which falls within Level 2 of the fair value hierarchy. The carrying value and estimated fair value of long-term debt were as follows:

(In millions)	Mar 31, 2019		Dec 31, 2018
Carrying value of long-term debt(1)	$	4,756	$	4,755
Fair value of long-term debt(2)	5,202		5,063

(1)     Carrying value of long-term debt at March 31, 2019 includes current portion of long-term debt carrying value of $500 million.

(2) Fair value of long-term debt at March 31, 2019 includes current portion of long-term debt fair value of $508 million.

At March 31, 2019, short-term commercial paper borrowings outstanding were $300 million, which had a weighted-average interest rate and original maturity period of 2.551% and 6 days, respectively. At December 31, 2018, short-term commercial paper borrowings outstanding were $300 million, which had a weighted-average interest rate and original maturity period of 2.954% and 16 days, respectively. The commercial paper notes outstanding have original maturities of not more than 90 days from the date of issuance.

Supplemental Cash Flow Information—Cash and cash equivalents reported within our consolidated balance sheets excludes restricted cash of $12 million and $16 million at March 31, 2019 and December 31, 2018, respectively, which for purposes of our consolidated statements of cash flows, is included in cash, cash equivalents and restricted cash.

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

Leases

We enter into operating leases primarily for: real estate, including for manufacturing, engineering, research, administration, sales and warehousing facilities; information technology (IT) equipment; and other equipment. At March 31, 2019 and December 31, 2018, we did not have any finance leases. Approximately 90% of our future lease commitments, and related lease liability, relate to our real estate leases. Some of our leases also include options to extend the lease or terminate the lease. A small portion of our leases include variable escalation clauses, which are typically based on CPI rates, or other variable lease-related payments.

The components of lease expense were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Operating lease cost	$	53	$	58
Variable lease cost(1)	—		—
Sublease income(1)	—		—
Total lease cost	$	53	$	58

(1) Variable lease cost was expense of less than $1 million and sublease income was income of less than $1 million, in both the first quarters of 2019 and 2018.

Gains and losses on sale and leaseback transactions were de minimis in both the first quarters of 2019 and 2018.

At March 31, 2019, our future lease payments under non-cancellable leases were as follows:

(In millions)
2019 (excluding the three months ended March 31, 2019)	$	167
2020	189
2021	164
2022	127
2023	90
Thereafter	238
Total future lease payments(1)	975
Imputed interest	(122		)
Total lease liabilities	$	853

(1) Total future lease payments excluded $27 million of future lease payments related to leases that were signed but had not yet commenced as of March 31, 2019.

Our lease liabilities recognized in our consolidated balance sheet at March 31, 2019 were as follows:

(In millions)
Operating lease liabilities—current	$	201
Operating lease liabilities—noncurrent	652
Total lease liabilities	$	853

The weighted-average remaining lease term related to our operating leases was 8 years and 7 years as of March 31, 2019 and December 31, 2018, respectively. The weighted-average discount rate related to our operating leases was 3.1% as of March 31, 2019 and December 31, 2018.

Other information related to leases was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Cash paid for amounts included in the measurement of operating lease liabilities	$	61	$	62
Right-of-use assets obtained in exchange for new operating lease obligations	56		38

There were no material restrictions or covenants imposed by our leases at March 31, 2019 or December 31, 2018. In addition, we do not have any related party leases and our sublease transactions are de minimis.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Environmental Matters—We are involved in various stages of investigation and cleanup related to remediation of various environmental sites. Our estimate of the liability of total environmental remediation costs includes the use of a discount rate and takes into account that a portion of these costs is eligible for future recovery through the pricing of our products and services to the U.S. government. We regularly assess the probability of recovery of these costs, which requires us to make assumptions about the extent of cost recovery under our contracts and the amount of future contract activity. We consider such recovery probable based on government contracting regulations and our long history of receiving reimbursement for such costs, and accordingly

have recorded the estimated future recovery of these costs from the U.S. government within prepaid expenses and other current assets in our consolidated balance sheets. Our estimates regarding remediation costs to be incurred were as follows:

(In millions, except percentages)	Mar 31, 2019			Dec 31, 2018
Total remediation costs—undiscounted	$	197		$	193
Weighted-average discount rate	5.1		%	5.1		%
Total remediation costs—discounted	$	136		$	128
Recoverable portion	88			82

We also lease certain government-owned properties and generally are not liable for remediation of preexisting environmental contamination at these sites. As a result, we generally do not provide for these costs in our consolidated financial statements.

Due to the complexity of environmental laws and regulations, the varying costs and effectiveness of alternative cleanup methods and technologies, the uncertainty of insurance coverage, and the unresolved extent of our responsibility, it is difficult to determine the ultimate outcome of environmental matters. However, we do not expect any additional liability to have a material adverse effect on our financial position, results of operations or liquidity.

Financing Arrangements and Other—We issue guarantees, and banks and surety companies issue, on our behalf, letters of credit and surety bonds, to meet various bid, performance, warranty, retention and advance payment obligations for us or our affiliates. These instruments expire on various dates through 2028. Additional guarantees of project performance for which there is no stated value also remain outstanding. The stated values outstanding consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Guarantees	$	211	$	201
Letters of credit	2,296		2,503
Surety bonds	80		166

All guarantees at March 31, 2019 and December 31, 2018 related to our joint venture in Thales-Raytheon Systems Air and Missile Defense Command and Control S.A.S. (TRS AMDC2). We provide these guarantees, as well as letters of credit, to TRS AMDC2 and other affiliates to assist these entities in obtaining financing on more favorable terms, making bids on contracts and performing their contractual obligations. While we expect these entities to satisfy their loans and meet their project performance and other contractual obligations, their failure to do so may result in a future obligation to us. We periodically evaluate the risk of these entities failing to meet their obligations described above. At March 31, 2019, we believe the risk that these entities will not be able to meet their obligations is minimal for the foreseeable future based on their current financial condition. All obligations were current at March 31, 2019. We had an estimated liability of $3 million at both March 31, 2019 and December 31, 2018 related to these guarantees.

As discussed in “Note 13: Redeemable Noncontrolling Interests,” under the joint venture agreement between Raytheon Company and Vista Equity Partners, Raytheon may be required to purchase Vista Equity Partners’ interest in Forcepoint.

We have entered into industrial cooperation agreements, sometimes in the form of either offset agreements or in-country industrial participation (ICIP) agreements, as a condition to obtaining orders for our products and services from certain customers in foreign countries. At March 31, 2019, the aggregate amount of our offset agreements, both agreed to and anticipated to be agreed to, had an outstanding notional value of approximately $9.3 billion. These agreements are designed to return economic value to the foreign country by requiring us to engage in activities supporting local defense or commercial industries, promoting a balance of trade, developing in-country technology capabilities or addressing other local development priorities. Offset agreements may be satisfied through activities that do not require a direct cash payment, including transferring technology, providing manufacturing, training and other consulting support to in-country projects, and the purchase by third parties (e.g., our vendors) of supplies from in-country vendors. These agreements may also be satisfied through our use of cash for activities such as subcontracting with local partners, purchasing supplies from in-country vendors, providing financial support for in-country projects and making investments in local ventures. Such activities may also vary by country depending upon requirements as dictated by their governments. We typically do not commit to offset agreements until orders for our products or services are definitive. The amounts ultimately applied against our offset agreements are based on negotiations with the customers and typically require cash outlays that represent only a fraction of the notional value in the offset agreements. Offset programs usually extend over several or more years and may provide for penalties in the event we fail to perform in accordance with offset requirements. Historically, we have not been required to pay any penalties of significance.

As a U.S. government contractor, we are subject to many levels of audit and investigation by the U.S. government relating to our contract performance and compliance with applicable rules and regulations. Agencies that oversee contract performance include: the Defense Contract Audit Agency (DCAA); the Defense Contract Management Agency (DCMA); the Inspectors General of the U.S. Department of Defense (DoD) and other departments and agencies; the Government Accountability Office (GAO); the Department of Justice (DOJ); and Congressional Committees. Other areas of our business operations may also be subject to audit and investigation by these and/or other agencies. From time to time, agencies investigate or conduct audits to determine whether our operations are being conducted in accordance with applicable requirements. Such investigations and audits may be initiated due to a number of reasons, including as a result of a whistleblower complaint. Such investigations and audits could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed upon us, the suspension of government export licenses or the suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and many result in no adverse action against us. Our final allowable incurred costs for each year are also subject to audit and have, from time to time, resulted in disputes between us and the U.S. government, with litigation resulting at the Court of Federal Claims (COFC) or the Armed Services Board of Contract Appeals (ASBCA) or their related courts of appeals. In addition, the DOJ has, from time to time, convened grand juries to investigate possible irregularities by us. We also provide products and services to customers outside of the U.S., and those sales are subject to local government laws, regulations and procurement policies and practices. Our compliance with such local government regulations or any applicable U.S. government regulations (e.g., the Foreign Corrupt Practices Act (FCPA) and International Traffic in Arms Regulations (ITAR)) may also be investigated or audited. Other than as specifically disclosed herein, we do not expect these audits, investigations or disputes to have a material effect on our financial position, results of operations or liquidity, either individually or in the aggregate.

In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened against, or initiated by, us. We do not expect any of these proceedings to result in any additional liability or gains that would materially affect our financial position, results of operations or liquidity. In connection with certain of our legal matters, we may be entitled to insurance recovery for qualified legal costs or other incurred costs. We do not expect any insurance recovery to have a material impact on the financial exposure that could result from these matters.

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Redeemable Noncontrolling Interests

3 Months Ended

Mar. 31, 2019

Redeemable Noncontrolling Interests [Abstract]

Redeemable Noncontrolling Interests

Redeemable Noncontrolling Interests

Forcepoint is a cybersecurity joint venture company with Vista Equity Partners. The joint venture agreement between Raytheon and Vista Equity Partners provides Vista Equity Partners with certain rights to require Forcepoint to pursue an initial public offering at any time after four years and three months following the closing date of May 29, 2015, or pursue a sale of the company at any time after five years following the closing date. In either of these events, Raytheon has the option to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint for cash at a price equal to fair value as determined under the joint venture agreement. Additionally, Vista Equity Partners has the ability to liquidate its ownership through a put option. The put option allows Vista Equity Partners to require Raytheon to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint for cash at a price equal to fair value as determined under the joint venture agreement. Lastly, Raytheon has the option to purchase all, but not less than all, of Vista Equity Partners’ interest in Forcepoint at a price equal to fair value as determined under the joint venture agreement. The joint venture agreement provides for the process under which the parties would determine the fair value of the interest and could result in a payment by Raytheon shortly after the exercise of Vista Equity Partners’ put option or Raytheon’s purchase option; however, the ultimate timing will depend on the actions of the parties and other factors. The estimate of fair value for purposes of presenting the redeemable noncontrolling interest in our consolidated balance sheets could differ from the parties’ determination of fair value for the interest under the joint venture agreement.

Vista Equity Partners’ adjusted equity interest in the Forcepoint joint venture was 19.5% at March 31, 2019. Vista Equity Partners’ interest in Forcepoint is presented as redeemable noncontrolling interest, outside of stockholders’ equity, in our consolidated balance sheets. The redeemable noncontrolling interest is recognized at the greater of the estimated redemption value as of the balance sheet date, which was $399 million at March 31, 2019, or the carrying value, defined as the initial value adjusted for Vista Equity Partners’ share of the cumulative impact of net income (loss), other changes in accumulated other comprehensive income (loss) and additional contributions, which was $274 million at March 31, 2019. Adjustments to the redemption value over the period from the date of acquisition to the redemption date are immediately recorded to retained earnings.

As discussed in “Note 9: Acquisitions, Divestitures and Goodwill,” in February 2019, we amended and restated the RGNext joint venture agreement and acquired an additional 10% equity ownership in the joint venture, increasing our equity ownership to 60% and giving us control of the operations, with GDIT obtaining only protective rights. As a result, we now consolidate the results of RGNext in our consolidated financial statements. The amendment to the RGNext joint venture agreement provides GDIT with the ability to liquidate its ownership and receive an amount equal to its contributed capital (the redemption value). As such, GDIT’s interest in RGNext is presented as redeemable noncontrolling interest, outside of stockholders’ equity, in our consolidated balance sheets, and is recorded at the greater of its carrying value or the redemption value.

A rollforward of redeemable noncontrolling interests was as follows:

(In millions)	Forcepoint			RGNext		Total
Balance at December 31, 2018	$	411		$	—	$	411
RGNext initial recognition	—			32		32
Net income (loss)	(7		)	1		(6		)
Other comprehensive income (loss), net of tax(1)	—			—		—
Adjustment of noncontrolling interests to redemption value	(5		)	—		(5		)
Balance at March 31, 2019	$	399		$	33	$	432
Balance at December 31, 2017	$	512		$	—	$	512
Net income (loss)	(10		)	—		(10		)
Other comprehensive income (loss), net of tax	1			—		1
Adjustment of noncontrolling interests to redemption value	(11		)	—		(11		)
Balance at April 1, 2018	$	492		$	—	$	492

(1)

Other comprehensive income (loss), net of tax, related to Forcepoint was income of less than $1 million for the first quarter of 2019.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

The changes in shares of our common stock outstanding were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Beginning balance	282.1		288.4
Stock plans activity	1.1		1.0
Share repurchases	(3.1	)	(2.2	)
Ending balance	280.1		287.2

From time to time, our Board of Directors authorizes the repurchase of shares of our common stock. In November 2015, our Board authorized the repurchase of up to $2.0 billion of our outstanding common stock. In November 2017, our Board also authorized the repurchase of up to an additional $2.0 billion of our outstanding common stock. At March 31, 2019, we had approximately $1.0 billion available under the 2017 repurchase program. Share repurchases will take place from time to time at management’s discretion depending on market conditions.

Share repurchases also include shares surrendered by employees to satisfy tax withholding obligations in connection with restricted stock, RSUs and LTPP awards issued to employees.

Our share repurchases were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
	$		Shares	$		Shares
Shares repurchased under our share repurchase programs	$	500	2.8	$	400	1.9
Shares repurchased to satisfy tax withholding obligations	66		0.3	72		0.3
Total share repurchases	$	566	3.1	$	472	2.2

In March 2019, our Board of Directors authorized an 8.6% increase to our annual dividend payout rate from $3.47 to $3.77 per share. Our Board of Directors also declared dividends of $0.9425 per share during the first quarter of 2019, compared to dividends of $0.8675 per share during the first quarter of 2018. Dividends are subject to quarterly approval by our Board of Directors.

Stock-based Compensation Plans

Restricted Stock and RSUs—During the first quarter of 2019, we granted 0.9 million combined shares of restricted stock and RSUs with a weighted-average grant-date fair value of $179.93 per share, calculated under the intrinsic value method. These awards generally vest in equal installments on each of the second, third and fourth anniversary dates of the award’s grant date.

LTPP—During the first quarter of 2019, we granted RSUs subject to the 2019–2021 LTPP plan with an aggregate target award of 0.1 million units and a weighted-average grant-date fair value of $175.93 per share. The performance goals for the 2019–2021 LTPP award are independent of each other and based on three metrics, as defined in the LTPP award agreements: return on invested capital (ROIC), weighted at 50%; total shareholder return (TSR) relative to a peer group, weighted at 25%; and cumulative free cash flow from continuing operations (CFCF), weighted at 25%. The ultimate award, which is determined at the end of the three-year cycle, can range from zero to 200% of the target award and includes dividend equivalents, which are not included in the aggregate target award numbers. The grant-date fair value is based upon the value determined under the intrinsic value method for the CFCF and ROIC portions of the award and the Monte Carlo simulation method for the TSR portion of the award.

Forcepoint Plans—Forcepoint unit appreciation rights and profits interests vest over a specified period of time and settlement is subject to a liquidity event defined as either a change in control or an initial public offering of the joint venture. In certain limited circumstances other vesting conditions may apply. The impact attributable to these other vesting conditions was income of $2 million for the first quarter of 2019 and expense of $1 million for the first quarter of 2018. At March 31, 2019, there were 174 thousand combined units and/or profits interests authorized for award under these plans.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) includes gains and losses associated with pension and other postretirement benefit (PRB) plans, foreign exchange translation adjustments, gains and losses on derivative instruments qualified as cash flow hedges included in the assessment of effectiveness, and unrealized gains (losses) on available-for-sale investments. The computation of other comprehensive income (loss) and its components are presented in the consolidated statements of comprehensive income.

A rollforward of accumulated other comprehensive income (loss) was as follows:

	Pension and PRB plans, net(1)			Foreign exchange translation			Cash flow hedges(2)			Unrealized gains (losses) on investments and other, net(3)			Total
(In millions)
Balance at December 31, 2018	$	(8,483	)	$	(131	)	$	(2	)	$	(2	)	$	(8,618	)
Before tax amount	277			8			(10		)	—			275
Tax (expense) or benefit	(58		)	—			2			—			(56		)
Net of tax amount	219			8			(8		)	—			219
Balance at March 31, 2019	$	(8,264	)	$	(123	)	$	(10	)	$	(2	)	$	(8,399	)
Balance at December 31, 2017	$	(7,843	)	$	(95	)	$	6		$	(3	)	$	(7,935	)
Before tax amount	348			24			(10		)	—			362
Tax (expense) or benefit	(73		)	—			2			—			(71		)
Net of tax amount	275			24			(8		)	—			291
Reclassification of stranded tax effects	(1,452		)	—			1			—			(1,451		)
Balance at April 1, 2018	$	(9,020	)	$	(71	)	$	(1	)	$	(3	)	$	(9,095	)

(1) Pension and PRB plans, net is shown net of cumulative tax benefits of $2,197 million and $2,255 million at March 31, 2019 and December 31, 2018, respectively.

(2) Cash flow hedges are shown net of cumulative tax benefits of $3 million and $1 million at March 31, 2019 and December 31, 2018, respectively.

(3) Unrealized gains (losses) on investments and other, net are shown net of cumulative tax expense of $1 million at both March 31, 2019 and December 31, 2018.

In the first quarter of 2018, we reclassified the stranded tax effects related to the enactment of the Tax Cuts and Jobs Act of 2017 (2017 Act) from accumulated other comprehensive loss (AOCL) to retained earnings in accordance with ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. These stranded tax effects related to the deferred tax amounts at December 31, 2017 recorded through other comprehensive income prior to the enactment date using the prior 35% statutory tax rate that remained in other comprehensive income despite the fact that the related deferred tax assets and liabilities were remeasured to reflect the newly enacted tax rate of 21%.

Other material amounts reclassified out of AOCL related to the amortization of net actuarial loss associated with our pension plans were $273 million and $344 million before tax in the first quarters of 2019 and 2018, respectively. This component of AOCL is included in the calculation of net periodic pension expense (income). See “Note 15: Pension and Other Employee Benefits” for additional details.

We expect $2 million net of tax of net unrealized losses on our cash flow hedges at March 31, 2019 to be reclassified into earnings at then-current values over the next 12 months as the underlying hedged transactions occur.

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Pension and Other Employee Benefits

3 Months Ended

Mar. 31, 2019

Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]

Pension and Other Employee Benefits

Pension and Other Employee Benefits

We have pension plans covering the majority of our employees hired prior to January 1, 2007, including certain employees in foreign countries (Pension Benefits). Our primary pension obligations relate to our domestic Internal Revenue Service (IRS) qualified pension plans. In addition, we provide certain health care and life insurance benefits to retired employees and to eligible employees upon retirement through PRB plans.

We also sponsor nonqualified defined benefit and defined contribution plans to provide benefits in excess of qualified plan limits. We have set aside certain assets in a separate trust, which we expect to be used to pay for trust obligations. The fair value of marketable securities held in trust, which are considered Level 1 assets under the fair value hierarchy, consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Marketable securities held in trust	$	677	$	642

Included in marketable securities held in trust in the table above was $431 million and $420 million at March 31, 2019 and December 31, 2018, respectively, related to the nonqualified defined contribution plans. The liabilities related to the nonqualified defined contribution plans were $440 million and $431 million at March 31, 2019 and December 31, 2018, respectively.

The components of net periodic pension expense (income) were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Operating expense
Service cost	$	105		$	127
Non-operating expense
Interest cost	261			253
Expected return on plan assets	(359		)	(363		)
Amortization of prior service cost	1			1
Amortization of net actuarial loss	273			344
Total pension non-service expense	176			235
Net periodic pension expense (income)	$	281		$	362

Net periodic pension expense (income) includes income of $1 million and $2 million from foreign Pension Benefits plans in the first quarters of 2019 and 2018, respectively.

Net periodic PRB expense was $6 million and $5 million in the first quarters of 2019 and 2018, respectively.

Long-term pension and PRB liabilities consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Long-term pension liabilities	$	6,042	$	6,111
Long-term PRB liabilities	356		354
Total long-term pension and PRB liabilities	$	6,398	$	6,465

We made the following contributions to our pension and PRB plans:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Required pension contributions	$	64	$	58
PRB contributions	4		3
Total	$	68	$	61

We periodically evaluate whether to make discretionary contributions. We did not make any discretionary contributions to our pension plans during the first quarters of 2019 or 2018.

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Taxes Paid, Net [Abstract]

Income Taxes

Income Taxes

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. With the exception of one matter related to the 2015 tax year, all IRS examinations related to originally filed returns are closed through the 2016 tax year. No amount related to the 2015 matter is reflected in unrecognized tax benefits as of March 31, 2019. In 2018 we amended tax returns for tax years 2014-2016 to reflect refund claims related to increased Research and Development tax credits (R&D tax credits), which will be subject to audit. We are also under audit by multiple state and foreign tax authorities.

The balance of our unrecognized tax benefits, exclusive of interest, was $96 million and $92 million at March 31, 2019 and December 31, 2018, respectively, the majority of which would affect our earnings if recognized. There were no significant changes in the balance during the first quarter of 2019.

We accrue interest and penalties related to unrecognized tax benefits in tax expense. Interest and penalties recognized during the first quarters of 2019 and 2018 and accrued as of March 31, 2019 and December 31, 2018 were de minimis.

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Business Segment Reporting

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Business Segment Reporting

Business Segment Reporting

Our reportable segments, organized based on capabilities and technologies, are: Integrated Defense Systems (IDS); Intelligence, Information and Services (IIS); Missile Systems (MS); Space and Airborne Systems (SAS); and Forcepoint. Segment total net sales and operating income include intersegment sales and profit generally recorded at cost-plus a specified fee, which may differ from what the selling entity would be able to obtain on sales to external customers. Eliminations include intersegment sales and profit eliminations. Corporate operating income includes expenses that represent unallocated costs and certain other corporate costs not considered part of management’s evaluation of reportable segment operating performance. Acquisition Accounting Adjustments include the adjustments to record acquired deferred revenue at fair value as part of our purchase price allocation process and the amortization of acquired intangible assets related to historical acquisitions.

Segment financial results were as follows: 

	Three Months Ended
Total Net Sales (in millions)	Mar 31, 2019			Apr 1, 2018
Integrated Defense Systems	$	1,550		$	1,489
Intelligence, Information and Services	1,777			1,582
Missile Systems	2,006			1,848
Space and Airborne Systems	1,653			1,568
Forcepoint	158			141
Eliminations	(414		)	(357		)
Total business segment sales	6,730			6,271
Acquisition Accounting Adjustments	(1		)	(4		)
Total	$	6,729		$	6,267

	Three Months Ended
Intersegment Sales (in millions)	Mar 31, 2019		Apr 1, 2018
Integrated Defense Systems	$	21	$	15
Intelligence, Information and Services	168		162
Missile Systems	43		35
Space and Airborne Systems	173		139
Forcepoint	9		6
Total	$	414	$	357

	Three Months Ended
Operating Income (in millions)	Mar 31, 2019			Apr 1, 2018
Integrated Defense Systems	$	258		$	273
Intelligence, Information and Services	187			117
Missile Systems	190			212
Space and Airborne Systems	212			193
Forcepoint	(9		)	(7		)
Eliminations	(47		)	(40		)
Total business segment operating income	791			748
Acquisition Accounting Adjustments	(28		)	(33		)
FAS/CAS Operating Adjustment	366			354
Corporate	(16		)	(28		)
Total	$	1,113		$	1,041

	Three Months Ended
Intersegment Operating Income (in millions)	Mar 31, 2019		Apr 1, 2018
Integrated Defense Systems	$	2	$	2
Intelligence, Information and Services	17		17
Missile Systems	4		3
Space and Airborne Systems	17		14
Forcepoint	7		4
Total	$	47	$	40

The FAS/CAS Operating Adjustment, which is reported as a separate line in our segment results above, represents the difference between the service cost component of our pension and PRB expense or income under Financial Accounting Standards (FAS) in accordance with U.S. GAAP and our pension and PRB expense under U.S. government Cost Accounting Standards (CAS). The results of each segment only include pension and PRB expense under CAS that we generally recover through the pricing of our products and services to the U.S. government.

The pension and PRB components of the FAS/CAS Operating Adjustment were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
FAS/CAS Pension Operating Adjustment	$	362	$	351
FAS/CAS PRB Operating Adjustment	4		3
FAS/CAS Operating Adjustment	$	366	$	354

Total assets for each of our business segments were as follows:

Total Assets (in millions)	Mar 31, 2019		Dec 31, 2018(2)
Integrated Defense Systems(1)	$	4,783	$	4,826
Intelligence, Information and Services(1)	4,368		4,238
Missile Systems(1)	8,490		8,229
Space and Airborne Systems(1)	6,856		6,740
Forcepoint(1)	2,455		2,529
Corporate	4,624		6,108
Total	$	31,576	$	32,670

(1)     Total assets includes intangible assets. Related amortization expense is included in Acquisition Accounting Adjustments.

(2) Amounts have been recast to reflect the adoption of ASU 2016-02, Leases (Topic 842). Operating lease right-of-use assets are all recorded at Corporate.

We disaggregate our revenue from contracts with customers by geographic location, customer-type and contract-type for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below.

	Three Months Ended March 31, 2019
Disaggregation of Total Net Sales  (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government(1)
Fixed-price contracts	$	221	$	224	$	708	$	548	$	37	$	—		$	1,738
Cost-type contracts	424		1,152		699		659		4		—			2,938
Direct commercial sales and other U.S. sales
Fixed-price contracts	1		33		9		26		44		—			113
Cost-type contracts	—		4		—		1		—		—			5
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	40		73		124		30		—		—			267
Cost-type contracts	18		11		16		9		—		—			54
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	168		41		32		48		16		—			305
Cost-type contracts	17		—		—		—		—		—			17
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	269		3		115		74		—		—			461
Cost-type contracts	48		5		5		19		—		—			77
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	195		7		145		18		8		—			373
Cost-type contracts	—		—		19		—		—		—			19
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	81		1		34		17		—		—			133
Cost-type contracts	10		—		15		2		—		—			27
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	34		49		42		29		39		—			193
Cost-type contracts	3		6		—		—		—		—			9
Total net sales	1,529		1,609		1,963		1,480		148		—			6,729
Intersegment sales	21		168		43		173		9		(414		)	—
Acquisition Accounting Adjustments	—		—		—		—		1		(1		)	—
Reconciliation to business segment sales	$	1,550	$	1,777	$	2,006	$	1,653	$	158	$	(415	)	$	6,729

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended March 31, 2019
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	646	$	1,413	$	1,416	$	1,234	$	85	$	4,794
Asia/Pacific	243		125		172		87		16		643
Middle East and North Africa	512		15		284		111		8		930
All other (principally Europe)	128		56		91		48		39		362
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

	Three Months Ended March 31, 2019
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government(1)	$	645	$	1,376	$	1,407	$	1,207	$	41	$	4,676
U.S. direct commercial sales and other U.S. sales	1		37		9		27		44		118
Foreign military sales through the U.S. government	466		93		309		151		—		1,019
Foreign direct commercial sales and other foreign sales(1)	417		103		238		95		63		916
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended March 31, 2019
Total Net Sales by Contract Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	1,009	$	431	$	1,209	$	790	$	144	$	3,583
Cost-type contracts	520		1,178		754		690		4		3,146
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

	Three Months Ended April 1, 2018
Disaggregation of Total Net Sales  (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government(1)
Fixed-price contracts	$	226	$	252	$	584	$	544	$	21	$	—		$	1,627
Cost-type contracts	402		956		630		642		3		—			2,633
Direct commercial sales and other U.S. sales
Fixed-price contracts	2		28		11		26		49		—			116
Cost-type contracts	—		4		—		—		—		—			4
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	29		51		96		30		—		—			206
Cost-type contracts	25		14		17		2		—		—			58
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	146		44		43		50		16		—			299
Cost-type contracts	27		—		—		2		—		—			29
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	195		3		81		54		—		—			333
Cost-type contracts	32		1		6		15		—		—			54
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	347		5		231		21		6		—			610
Cost-type contracts	—		—		—		—		—		—			—
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	—		—		25		9		—		—			34
Cost-type contracts	8		—		24		1		—		—			33
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	33		51		65		33		36		—			218
Cost-type contracts	2		11		—		—		—		—			13
Total net sales	1,474		1,420		1,813		1,429		131		—			6,267
Intersegment sales	15		162		35		139		6		(357		)	—
Acquisition Accounting Adjustments	—		—		—		—		4		(4		)	—
Reconciliation to business segment sales	$	1,489	$	1,582	$	1,848	$	1,568	$	141	$	(361	)	$	6,267

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended April 1, 2018
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	630	$	1,240	$	1,225	$	1,212	$	73	$	4,380
Asia/Pacific	227		109		156		84		16		592
Middle East and North Africa	574		9		318		90		6		997
All other (principally Europe)	43		62		114		43		36		298
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

	Three Months Ended April 1, 2018
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government(1)	$	628	$	1,208	$	1,214	$	1,186	$	24	$	4,260
U.S. direct commercial sales and other U.S. sales	2		32		11		26		49		120
Foreign military sales through the U.S. government	289		69		249		111		—		718
Foreign direct commercial sales and other foreign sales(1)	555		111		339		106		58		1,169
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended April 1, 2018
Total Net Sales by Contract Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	978	$	434	$	1,136	$	767	$	128	$	3,443
Cost-type contracts	496		986		677		662		3		2,824
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

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Remaining Performance Obligations

3 Months Ended

Mar. 31, 2019

Revenue, Performance Obligation [Abstract]

Remaining Performance Obligations

Remaining Performance Obligations

Remaining performance obligations represents the transaction price of firm orders for which work has not been performed and excludes unexercised contract options and potential orders under ordering-type contracts (e.g., indefinite-delivery, indefinite-quantity (IDIQ)). As of March 31, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $41,073 million. We expect to recognize revenue on approximately half and three-quarters of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter.

Recent events have caused increased attention on U.S. defense sales to the Kingdom of Saudi Arabia (KSA). KSA represents less than 5% of our sales and $2.1 billion of our remaining performance obligations at March 31, 2019. Although we currently do not expect to be prevented from doing business in KSA, if government action impairs our ability to fulfill our contractual obligations or otherwise to continue to do business in KSA, it would have a material adverse effect on our financial results.

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Significant Accounting Policies Update (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Leases [Policy Text Block]

Leases—We determine if an arrangement is a lease or contains an embedded lease at inception. For lease agreements with both lease and nonlease components (e.g., common-area maintenance costs), we account for the nonlease components separately. Consideration is allocated to the lease and nonlease components based on the estimated standalone prices.

All of our leases are operating leases. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. The current portion of operating lease liabilities is included in other current liabilities in our consolidated balance sheets. For the majority of our leases, the discount rate used to determine the present value of the lease payments is our incremental borrowing rate as of the lease commencement date, as the implicit rate is not readily determinable. The operating lease right-of-use assets also includes any initial direct costs and any lease payments made at or before the commencement date, and is reduced for any unrestricted incentives received at or before the commencement date.

Some of our leases include options to extend or terminate the lease. We include these options in the recognition of our right-of-use assets and lease liabilities when it is reasonably certain that we will exercise the option. Very few of our leases include variable lease-related payments, such as escalation clauses based on consumer price index (CPI) rates, or residual guarantees. Variable payments that are based on an index or a rate are included in the recognition of our right-of-use assets and lease liabilities using the index or rate at lease commencement; however, changes to these lease payments due to rate or index updates are recorded as rent expense in the period incurred. Amounts probable of payment under residual guarantees are also included in the recognition of our right-of-use assets and lease liabilities.

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Changes in Estimates under Percentage of Completion Contract Accounting (Tables)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Net EAC adjustments

Net EAC adjustments had the following impact on our operating results:

	Three Months Ended
(In millions, except per share amounts)	Mar 31, 2019		Apr 1, 2018
Operating income	$	123	$	115
Income from continuing operations attributable to Raytheon Company	97		91
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company	$	0.34	$	0.32

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Earnings Per Share (EPS) (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

EPS from continuing operations attributable to Raytheon Company common stockholders and unvested stock-based payment awards was as follows: 

	Three Months Ended
	Mar 31, 2019		Apr 1, 2018
Basic EPS attributable to Raytheon Company common stockholders:
Distributed earnings	$	0.94	$	0.87
Undistributed earnings	1.83		1.33
Total	$	2.77	$	2.20
Diluted EPS attributable to Raytheon Company common stockholders:
Distributed earnings	$	0.94	$	0.87
Undistributed earnings	1.83		1.33
Total	$	2.77	$	2.20

Income Attributable to Participating Securities

Income attributable to participating securities was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Income from continuing operations attributable to participating securities	$	8	$	7
Income (loss) from discontinued operations, net of tax attributable to participating securities	—		—
Net income attributable to participating securities	$	8	$	7

Weighted-Average Shares Outstanding for Basic and Diluted EPS

The weighted-average shares outstanding for basic and diluted EPS were as follows: 

	Three Months Ended
(In millions)	Mar 31, 2019	Apr 1, 2018
Shares for basic EPS(1)	281.9	288.5
Effect of dilutive securities	0.3	0.3
Shares for diluted EPS	282.2	288.8

(1)

Includes 2.8 million and 3.2 million participating securities for the first quarters of 2019 and 2018, respectively.

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Inventories (Tables)

3 Months Ended

Mar. 31, 2019

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following: 

(In millions)	Mar 31, 2019		Dec 31, 2018
Materials and purchased parts	$	74	$	75
Work in process	785		662
Finished goods	23		21
Total	$	882	$	758

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Contract Assets and Contract Liabilities (Tables)

3 Months Ended

Mar. 31, 2019

Contract with Customer, Asset and Liability [Abstract]

Net Contract Assets (Liabilities)

Net contract assets (liabilities) consisted of the following:

(In millions, except percentages)	Mar 31, 2019			Dec 31, 2018			$ Change		% Change
Contract assets	$	5,971		$	5,594		$	377	6.7	%
Contract liabilities—current	(2,930		)	(3,309		)	379		(11.5	)%
Contract liabilities—noncurrent	(141		)	(150		)	9		(6.0	)%
Net contract assets (liabilities)	$	2,900		$	2,135		$	765	35.8	%

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Acquisitions, Divestitures and Goodwill (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Rollforward of Goodwill by Segment

A rollforward of goodwill by segment was as follows: 

(In millions)	Integrated Defense Systems			Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint(1)		Total
Balance at December 31, 2018	$	1,704		$	2,965	$	4,154	$	4,103	$	1,938	$	14,864
Acquisitions	—			19		—		—		—		19
Effect of foreign exchange rates and other	(1		)	—		—		—		—		(1		)
Balance at March 31, 2019	$	1,703		$	2,984	$	4,154	$	4,103	$	1,938	$	14,882

(1)

At March 31, 2019, Forcepoint’s fair value was estimated to exceed its net book value by approximately $900 million. As discussed in “Note 13: Redeemable Noncontrolling Interests,” we are required to determine Forcepoint’s fair value on a quarterly basis due to the accounting related to the redeemable noncontrolling interest.

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Derivatives and Other Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Summary of Derivative Instruments [Abstract]

Schedule of Derivative Assets and Liabilities

The fair value of asset derivatives included in other assets, net and liability derivatives included in other current liabilities in our consolidated balance sheets related to foreign currency forward contracts were as follows:

(In millions)	Mar 31, 2019		Dec 31, 2018
Asset derivatives	$	14	$	26
Liability derivatives	23		34

Schedule of Long-term Debt Details

The carrying value and estimated fair value of long-term debt were as follows:

(In millions)	Mar 31, 2019		Dec 31, 2018
Carrying value of long-term debt(1)	$	4,756	$	4,755
Fair value of long-term debt(2)	5,202		5,063

(1)     Carrying value of long-term debt at March 31, 2019 includes current portion of long-term debt carrying value of $500 million.

(2)

Fair value of long-term debt at March 31, 2019 includes current portion of long-term debt fair value of $508 million.

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Components of lease expense

The components of lease expense were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Operating lease cost	$	53	$	58
Variable lease cost(1)	—		—
Sublease income(1)	—		—
Total lease cost	$	53	$	58

(1)

Variable lease cost was expense of less than $1 million and sublease income was income of less than $1 million, in both the first quarters of 2019 and 2018.

Future lease payments

At March 31, 2019, our future lease payments under non-cancellable leases were as follows:

(In millions)
2019 (excluding the three months ended March 31, 2019)	$	167
2020	189
2021	164
2022	127
2023	90
Thereafter	238
Total future lease payments(1)	975
Imputed interest	(122		)
Total lease liabilities	$	853

(1)

Total future lease payments excluded $27 million of future lease payments related to leases that were signed but had not yet commenced as of March 31, 2019.

Operating lease liabilities recognized in statement of financial position

Our lease liabilities recognized in our consolidated balance sheet at March 31, 2019 were as follows:

(In millions)
Operating lease liabilities—current	$	201
Operating lease liabilities—noncurrent	652
Total lease liabilities	$	853

Other information related to operating leases

Other information related to leases was as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Cash paid for amounts included in the measurement of operating lease liabilities	$	61	$	62
Right-of-use assets obtained in exchange for new operating lease obligations	56		38

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Estimates of Total Remediation Costs

Our estimates regarding remediation costs to be incurred were as follows:

(In millions, except percentages)	Mar 31, 2019			Dec 31, 2018
Total remediation costs—undiscounted	$	197		$	193
Weighted-average discount rate	5.1		%	5.1		%
Total remediation costs—discounted	$	136		$	128
Recoverable portion	88			82

Stated Values Outstanding

The stated values outstanding consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Guarantees	$	211	$	201
Letters of credit	2,296		2,503
Surety bonds	80		166

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Redeemable Noncontrolling Interests (Tables)

3 Months Ended

Mar. 31, 2019

Noncontrolling Interest [Line Items]

Redeemable Noncontrolling Interests Rollforward

A rollforward of redeemable noncontrolling interests was as follows:

(In millions)	Forcepoint			RGNext		Total
Balance at December 31, 2018	$	411		$	—	$	411
RGNext initial recognition	—			32		32
Net income (loss)	(7		)	1		(6		)
Other comprehensive income (loss), net of tax(1)	—			—		—
Adjustment of noncontrolling interests to redemption value	(5		)	—		(5		)
Balance at March 31, 2019	$	399		$	33	$	432
Balance at December 31, 2017	$	512		$	—	$	512
Net income (loss)	(10		)	—		(10		)
Other comprehensive income (loss), net of tax	1			—		1
Adjustment of noncontrolling interests to redemption value	(11		)	—		(11		)
Balance at April 1, 2018	$	492		$	—	$	492

(1)

Other comprehensive income (loss), net of tax, related to Forcepoint was income of less than $1 million for the first quarter of 2019.

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Schedule of Changes in Shares of Common Stock Outstanding

The changes in shares of our common stock outstanding were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Beginning balance	282.1		288.4
Stock plans activity	1.1		1.0
Share repurchases	(3.1	)	(2.2	)
Ending balance	280.1		287.2

Repurchases of Common Stock

Our share repurchases were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
	$		Shares	$		Shares
Shares repurchased under our share repurchase programs	$	500	2.8	$	400	1.9
Shares repurchased to satisfy tax withholding obligations	66		0.3	72		0.3
Total share repurchases	$	566	3.1	$	472	2.2

Schedule of Accumulated Other Comprehensive Income (Loss)

A rollforward of accumulated other comprehensive income (loss) was as follows:

	Pension and PRB plans, net(1)			Foreign exchange translation			Cash flow hedges(2)			Unrealized gains (losses) on investments and other, net(3)			Total
(In millions)
Balance at December 31, 2018	$	(8,483	)	$	(131	)	$	(2	)	$	(2	)	$	(8,618	)
Before tax amount	277			8			(10		)	—			275
Tax (expense) or benefit	(58		)	—			2			—			(56		)
Net of tax amount	219			8			(8		)	—			219
Balance at March 31, 2019	$	(8,264	)	$	(123	)	$	(10	)	$	(2	)	$	(8,399	)
Balance at December 31, 2017	$	(7,843	)	$	(95	)	$	6		$	(3	)	$	(7,935	)
Before tax amount	348			24			(10		)	—			362
Tax (expense) or benefit	(73		)	—			2			—			(71		)
Net of tax amount	275			24			(8		)	—			291
Reclassification of stranded tax effects	(1,452		)	—			1			—			(1,451		)
Balance at April 1, 2018	$	(9,020	)	$	(71	)	$	(1	)	$	(3	)	$	(9,095	)

(1) Pension and PRB plans, net is shown net of cumulative tax benefits of $2,197 million and $2,255 million at March 31, 2019 and December 31, 2018, respectively.

(2) Cash flow hedges are shown net of cumulative tax benefits of $3 million and $1 million at March 31, 2019 and December 31, 2018, respectively.

(3)

Unrealized gains (losses) on investments and other, net are shown net of cumulative tax expense of $1 million at both March 31, 2019 and December 31, 2018.

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Pension and Other Employee Benefits (Tables)

3 Months Ended

Mar. 31, 2019

Defined Benefit Plans and Other Postretirement Benefit Plans Table [Line Items]

Marketable Securities

The fair value of marketable securities held in trust, which are considered Level 1 assets under the fair value hierarchy, consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Marketable securities held in trust	$	677	$	642

Schedule of Pension and PRB Liabilities

Long-term pension and PRB liabilities consisted of the following:

(In millions)	Mar 31, 2019		Dec 31, 2018
Long-term pension liabilities	$	6,042	$	6,111
Long-term PRB liabilities	356		354
Total long-term pension and PRB liabilities	$	6,398	$	6,465

Schedule of Pension and PRB Contributions

We made the following contributions to our pension and PRB plans:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
Required pension contributions	$	64	$	58
PRB contributions	4		3
Total	$	68	$	61

Pension Plan [Member]

Defined Benefit Plans and Other Postretirement Benefit Plans Table [Line Items]

Components of Net Periodic Pension Expense

The components of net periodic pension expense (income) were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019			Apr 1, 2018
Operating expense
Service cost	$	105		$	127
Non-operating expense
Interest cost	261			253
Expected return on plan assets	(359		)	(363		)
Amortization of prior service cost	1			1
Amortization of net actuarial loss	273			344
Total pension non-service expense	176			235
Net periodic pension expense (income)	$	281		$	362

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Business Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Schedule of Operating Performance

Segment financial results were as follows: 

	Three Months Ended
Total Net Sales (in millions)	Mar 31, 2019			Apr 1, 2018
Integrated Defense Systems	$	1,550		$	1,489
Intelligence, Information and Services	1,777			1,582
Missile Systems	2,006			1,848
Space and Airborne Systems	1,653			1,568
Forcepoint	158			141
Eliminations	(414		)	(357		)
Total business segment sales	6,730			6,271
Acquisition Accounting Adjustments	(1		)	(4		)
Total	$	6,729		$	6,267

	Three Months Ended
Intersegment Sales (in millions)	Mar 31, 2019		Apr 1, 2018
Integrated Defense Systems	$	21	$	15
Intelligence, Information and Services	168		162
Missile Systems	43		35
Space and Airborne Systems	173		139
Forcepoint	9		6
Total	$	414	$	357

	Three Months Ended
Operating Income (in millions)	Mar 31, 2019			Apr 1, 2018
Integrated Defense Systems	$	258		$	273
Intelligence, Information and Services	187			117
Missile Systems	190			212
Space and Airborne Systems	212			193
Forcepoint	(9		)	(7		)
Eliminations	(47		)	(40		)
Total business segment operating income	791			748
Acquisition Accounting Adjustments	(28		)	(33		)
FAS/CAS Operating Adjustment	366			354
Corporate	(16		)	(28		)
Total	$	1,113		$	1,041

	Three Months Ended
Intersegment Operating Income (in millions)	Mar 31, 2019		Apr 1, 2018
Integrated Defense Systems	$	2	$	2
Intelligence, Information and Services	17		17
Missile Systems	4		3
Space and Airborne Systems	17		14
Forcepoint	7		4
Total	$	47	$	40

Components of FAS/CAS Operating Adjustment

The pension and PRB components of the FAS/CAS Operating Adjustment were as follows:

	Three Months Ended
(In millions)	Mar 31, 2019		Apr 1, 2018
FAS/CAS Pension Operating Adjustment	$	362	$	351
FAS/CAS PRB Operating Adjustment	4		3
FAS/CAS Operating Adjustment	$	366	$	354

Total Assets

Total assets for each of our business segments were as follows:

Total Assets (in millions)	Mar 31, 2019		Dec 31, 2018(2)
Integrated Defense Systems(1)	$	4,783	$	4,826
Intelligence, Information and Services(1)	4,368		4,238
Missile Systems(1)	8,490		8,229
Space and Airborne Systems(1)	6,856		6,740
Forcepoint(1)	2,455		2,529
Corporate	4,624		6,108
Total	$	31,576	$	32,670

(1)     Total assets includes intangible assets. Related amortization expense is included in Acquisition Accounting Adjustments.

(2) Amounts have been recast to reflect the adoption of ASU 2016-02, Leases (Topic 842). Operating lease right-of-use assets are all recorded at Corporate.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic location, customer-type and contract-type for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below.

	Three Months Ended March 31, 2019
Disaggregation of Total Net Sales  (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government(1)
Fixed-price contracts	$	221	$	224	$	708	$	548	$	37	$	—		$	1,738
Cost-type contracts	424		1,152		699		659		4		—			2,938
Direct commercial sales and other U.S. sales
Fixed-price contracts	1		33		9		26		44		—			113
Cost-type contracts	—		4		—		1		—		—			5
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	40		73		124		30		—		—			267
Cost-type contracts	18		11		16		9		—		—			54
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	168		41		32		48		16		—			305
Cost-type contracts	17		—		—		—		—		—			17
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	269		3		115		74		—		—			461
Cost-type contracts	48		5		5		19		—		—			77
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	195		7		145		18		8		—			373
Cost-type contracts	—		—		19		—		—		—			19
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	81		1		34		17		—		—			133
Cost-type contracts	10		—		15		2		—		—			27
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	34		49		42		29		39		—			193
Cost-type contracts	3		6		—		—		—		—			9
Total net sales	1,529		1,609		1,963		1,480		148		—			6,729
Intersegment sales	21		168		43		173		9		(414		)	—
Acquisition Accounting Adjustments	—		—		—		—		1		(1		)	—
Reconciliation to business segment sales	$	1,550	$	1,777	$	2,006	$	1,653	$	158	$	(415	)	$	6,729

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended March 31, 2019
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	646	$	1,413	$	1,416	$	1,234	$	85	$	4,794
Asia/Pacific	243		125		172		87		16		643
Middle East and North Africa	512		15		284		111		8		930
All other (principally Europe)	128		56		91		48		39		362
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

	Three Months Ended March 31, 2019
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government(1)	$	645	$	1,376	$	1,407	$	1,207	$	41	$	4,676
U.S. direct commercial sales and other U.S. sales	1		37		9		27		44		118
Foreign military sales through the U.S. government	466		93		309		151		—		1,019
Foreign direct commercial sales and other foreign sales(1)	417		103		238		95		63		916
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended March 31, 2019
Total Net Sales by Contract Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	1,009	$	431	$	1,209	$	790	$	144	$	3,583
Cost-type contracts	520		1,178		754		690		4		3,146
Total net sales	$	1,529	$	1,609	$	1,963	$	1,480	$	148	$	6,729

	Three Months Ended April 1, 2018
Disaggregation of Total Net Sales  (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government(1)
Fixed-price contracts	$	226	$	252	$	584	$	544	$	21	$	—		$	1,627
Cost-type contracts	402		956		630		642		3		—			2,633
Direct commercial sales and other U.S. sales
Fixed-price contracts	2		28		11		26		49		—			116
Cost-type contracts	—		4		—		—		—		—			4
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	29		51		96		30		—		—			206
Cost-type contracts	25		14		17		2		—		—			58
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	146		44		43		50		16		—			299
Cost-type contracts	27		—		—		2		—		—			29
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	195		3		81		54		—		—			333
Cost-type contracts	32		1		6		15		—		—			54
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	347		5		231		21		6		—			610
Cost-type contracts	—		—		—		—		—		—			—
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	—		—		25		9		—		—			34
Cost-type contracts	8		—		24		1		—		—			33
Direct commercial sales and other foreign sales(1)
Fixed-price contracts	33		51		65		33		36		—			218
Cost-type contracts	2		11		—		—		—		—			13
Total net sales	1,474		1,420		1,813		1,429		131		—			6,267
Intersegment sales	15		162		35		139		6		(357		)	—
Acquisition Accounting Adjustments	—		—		—		—		4		(4		)	—
Reconciliation to business segment sales	$	1,489	$	1,582	$	1,848	$	1,568	$	141	$	(361	)	$	6,267

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended April 1, 2018
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	630	$	1,240	$	1,225	$	1,212	$	73	$	4,380
Asia/Pacific	227		109		156		84		16		592
Middle East and North Africa	574		9		318		90		6		997
All other (principally Europe)	43		62		114		43		36		298
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

	Three Months Ended April 1, 2018
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government(1)	$	628	$	1,208	$	1,214	$	1,186	$	24	$	4,260
U.S. direct commercial sales and other U.S. sales	2		32		11		26		49		120
Foreign military sales through the U.S. government	289		69		249		111		—		718
Foreign direct commercial sales and other foreign sales(1)	555		111		339		106		58		1,169
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

(1) Excludes foreign military sales through the U.S. government.

	Three Months Ended April 1, 2018
Total Net Sales by Contract Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	978	$	434	$	1,136	$	767	$	128	$	3,443
Cost-type contracts	496		986		677		662		3		2,824
Total net sales	$	1,474	$	1,420	$	1,813	$	1,429	$	131	$	6,267

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Accounting Standards (Narrative) (Details) - Accounting Standards Update 2016-02 [Member] $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)
Assets, Total [Member]
New Accounting Pronouncements [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification	$ 805
Liabilities, Total [Member]
New Accounting Pronouncements [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification	(841)
Other Current Liabilities [Member]
New Accounting Pronouncements [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification	$ (194)

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Changes in Estimates under Percentage of Completion Contract Accounting (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Accounting Policies [Abstract]
Performance Obligation Satisfied in Previous Period	$ 158	$ 138

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Changes in Estimates under Percentage of Completion Contract Accounting (Net EAC adjustments) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Change in Accounting Estimate [Line Items]
Operating income	$ 1,113	$ 1,041
Income from continuing operations attributable to Raytheon Company	$ 781	$ 634
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company	$ 2.77	$ 2.20
Contracts Accounted for under Percentage of Completion [Member]
Change in Accounting Estimate [Line Items]
Operating income	$ 123	$ 115
Income from continuing operations attributable to Raytheon Company	$ 97	$ 91
Diluted earnings per share (EPS) from continuing operations attributable to Raytheon Company	$ 0.34	$ 0.32

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Earnings Per Share (EPS) (Narrative) (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Earnings Per Share
Favorable (unfavorable) impact to EPS, Diluted	$ 2.77	$ 2.19
Favorable (unfavorable) impact to EPS, Basic	2.77	2.20
Redemption Value Adjustment in Excess of Fair Value [Member]
Earnings Per Share
Favorable (unfavorable) impact to EPS, Diluted	0	0.00
Favorable (unfavorable) impact to EPS, Basic	$ 0.00	$ 0.00

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Earnings Per Share (EPS) (EPS from Continuing Operations) (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Basic EPS attributable to Raytheon Company common stockholders:
Distributed earnings	$ 0.94	$ 0.87
Undistributed earnings	1.83	1.33
Total	2.77	2.20
Diluted EPS attributable to Raytheon Company common stockholders:
Distributed earnings	0.94	0.87
Undistributed earnings	1.83	1.33
Total	$ 2.77	$ 2.20

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Earnings Per Share (EPS) (Income from participating securities) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Earnings Per Share
Net income attributable to participating securities	$ 8	$ 7
Continuing Operations [Member]
Earnings Per Share
Net income attributable to participating securities	8	7
Discontinued Operations [Member]
Earnings Per Share
Net income attributable to participating securities	$ 0	$ 0

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Earnings Per Share (EPS) (Weighted-Average Shares) (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Earnings Per Share [Abstract]
Shares for basic EPS(1)	281.9	288.5
Effect of dilutive securities	0.3	0.3
Shares for diluted EPS	282.2	288.8
Shares for basic EPS, Participating Securities	2.8	3.2

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Inventories (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Inventories [Line Items]
Deferred precontract costs, work in process inventories	$ 238	$ 163

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Inventories (Schedule of Inventories) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Inventories [Line Items]
Materials and purchased parts	$ 74	$ 75
Work in process	785	662
Finished goods	23	21
Total	$ 882	$ 758

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Contract Assets and Contract Liabilities (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Contract with Customer, Asset and Liability [Abstract]
Change in Net Contract Assets (Liabilities)	$ 765
Change in Current Contract Liabilities	379
Change in Contract Assets	377
Total contract value related to precision guided munitions to certain Middle Eastern customers pending U.S. government approval	2,400
Sales recognized for work performed to date related to precision guided munitions to certain Middle Eastern customers pending U.S. government approval	1,100
Advances received to date on contracts related to precision guided munitions to certain Middle Eastern customers pending U.S. government approval	850
Net contract assets related to precision guided munitions to certain Middle Eastern customers pending U.S. government approval	600
Net contract liabilities related to precision guided munitions to certain Middle Eastern customers pending U.S. government approval	350
Revenue Recognized on Contract Liabilities	$ 894	$ 652

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Contract Assets and Contract Liabilities (Net Contract Assets Liabilities) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Contract with Customer, Asset and Liability [Abstract]
Contract assets	$ 5,971	$ 5,594
Change in Contract Assets	$ 377
Percent Change in Contract Asset	6.70%
Contract liabilities—current	$ (2,930)	(3,309)
Change in Contract Liabilities, Current	$ 379
Percent Change in Contract Liability, Current	(11.50%)
Contract liabilities—noncurrent	$ (141)	(150)
Change in Contract Liabilities, Noncurrent	$ 9
Percent Change in Contract Liability, Noncurrent	(6.00%)
Net contract assets (liabilities)	$ 2,900	$ 2,135
Change in Net Contract Assets (Liabilities)	$ 765
Percent Change in Net Contract Assets (Liabilities)	35.80%

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Deferred Commissions (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018	Dec. 31, 2018
Deferred Costs [Abstract]
Deferred Commissions	$ 51		$ 55
Amortization of Deferred Commissions	$ 4	$ 8

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Acquisitions, Divestitures and Goodwill (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)	Dec. 31, 2013
Business Acquisition [Line Items]
Number of Business Divestitures	0
Goodwill, Acquired During Period	$ 19
RGNext [Member]
Business Acquisition [Line Items]
Noncontrolling Interest, Raytheon Ownership Percentage	60.00%	50.00%
Noncontrolling Interest, Ownership Percentage Acquired by Raytheon	10.00%
Remeasurement Gain	$ 21
Redeemable Noncontrolling Interest, Equity, Fair Value	32
Recognized Identifiable Assets Acquired and Liabilities Assumed, Net	90
Goodwill, Acquired During Period	19
Finite-lived Intangible Assets Acquired	$ 34
Finite-lived Intangible Assets Acquired, Weighted Average Useful Life	7 years

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Acquisitions, Divestitures and Goodwill (Rollforward of Goodwill by Segments) (Details)	3 Months Ended
	Mar. 31, 2019 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 14,864,000,000
Acquisitions	19,000,000
Effect of foreign exchange rates and other	(1,000,000)
Ending balance	14,882,000,000
Integrated Defense Systems
Goodwill [Roll Forward]
Beginning balance	1,704,000,000
Acquisitions	0
Effect of foreign exchange rates and other	(1,000,000)
Ending balance	1,703,000,000
Intelligence, Information and Services
Goodwill [Roll Forward]
Beginning balance	2,965,000,000
Acquisitions	19,000,000
Effect of foreign exchange rates and other	0
Ending balance	2,984,000,000
Missile Systems
Goodwill [Roll Forward]
Beginning balance	4,154,000,000
Acquisitions	0
Effect of foreign exchange rates and other	0
Ending balance	4,154,000,000
Space and Airborne Systems
Goodwill [Roll Forward]
Beginning balance	4,103,000,000
Acquisitions	0
Effect of foreign exchange rates and other	0
Ending balance	4,103,000,000
Forcepoint
Goodwill [Roll Forward]
Beginning balance	1,938,000,000
Acquisitions	0
Effect of foreign exchange rates and other	0
Ending balance	1,938,000,000
Estimated fair value in excess of book value	$ 900,000,000

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Derivatives and Other Financial Instruments (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) Swap	Apr. 01, 2018	Dec. 31, 2018 USD ($) Swap
Derivative and Other Financial Instruments
Commercial paper	$ 300		$ 300
Commercial Paper, Weighted Average Interest Rate	2.551%		2.954%
Commercial Paper, Weighted Average Original Maturity Period	6 days	16 days
Commercial paper, maximum original maturity period	90 days
Restricted Cash and Cash Equivalents	$ 12		$ 16
Maximum [Member]
Derivative and Other Financial Instruments
Foreign currency forward contracts, off-set or netting provisions, fair value of counterparty default exposure	1		1
Foreign Exchange Forward [Member]
Derivative and Other Financial Instruments
Notional Amount on foreign currency forward contracts	1,843		1,772
Foreign Currency Forward Contracts Net Exposure	$ 777		$ 840
Interest Rate Swap [Member]
Derivative and Other Financial Instruments
Interest rate swaps outstanding | Swap	0		0

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Derivatives and Other Financial Instruments (Schedule of Derivative Assets and Liabilities) (Details) - Fair Value, Inputs, Level 2 [Member] - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Derivative and Other Financial Instruments
Asset derivatives	$ 14	$ 26
Liability derivatives	$ 23	$ 34

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Derivative and Other Financial Instruments (Schedule of Long-term Debt Details) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Carrying value of long-term debt(1)	$ 4,756	$ 4,755
Fair value of long-term debt(2)	5,202	$ 5,063
Carrying value of current portion of long-term debt	500
Commercial Paper and Current Maturities of Long-term Debt [Member]
Debt Instrument [Line Items]
Fair value of long-term debt(2)	$ 508

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Leases (Narrative) (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Finance Lease, Liability	$ 0	$ 0
Percent of future lease commitments related to real estate leases	90.00%
Operating Lease, Weighted Average Remaining Lease Term	8 years	7 years
Operating Lease, Weighted Average Discount Rate, Percent	3.10%	3.10%

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Leases (Components of lease expense) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Lessee, Lease, Description [Line Items]
Operating lease cost	$ 53	$ 58
Variable lease cost(1)	0	0
Sublease income(1)	0	0
Total lease cost	53	58
Maximum [Member]
Lessee, Lease, Description [Line Items]
Variable lease cost(1)	1	1
Sublease income(1)	$ (1)	$ (1)

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Leases (Future lease payments) (Details) $ in Millions	Mar. 31, 2019 USD ($)
Leases [Abstract]
2019 (excluding the three months ended March 31, 2019)	$ 167
2020	189
2021	164
2022	127
2023	90
Thereafter	238
Total future lease payments(1)	975
Imputed interest	(122)
Total lease liabilities	853
Lessee, Operating Lease, Lease Not Yet Commenced, Amount	$ 27

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Leases (Operating lease liabilities recognized on balance sheet) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Leases [Abstract]
Operating lease liabilities—current	$ 201
Operating lease liabilities—noncurrent	652	$ 647
Total lease liabilities	$ 853

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Leases (Other information related to operating leases) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Leases [Abstract]
Cash paid for amounts included in the measurement of operating lease liabilities	$ 61	$ 62
Right-of-use assets obtained in exchange for new operating lease obligations	$ 56	$ 38

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Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Commitments and Contingencies [Line Items]
Notional value of offset agreements with certain customers in foreign countries	$ 9,300
Thales- Raytheon Systems Air and Missile Defense Command and Control S.A.S. (TRS AMDC2) [Member]
Commitments and Contingencies [Line Items]
Estimated liability related to guarantees	$ 3	$ 3

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Commitments and Contingencies (Estimates of Total Remediation Costs) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Environmental Remediation Obligations [Abstract]
Total remediation costs—undiscounted	$ 197	$ 193
Weighted-average discount rate	5.10%	5.10%
Total remediation costs—discounted	$ 136	$ 128
Recoverable portion	$ 88	$ 82

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Commitments and Contingencies (Stated Values Outstanding) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Guarantees	$ 211	$ 201
Letters of credit	2,296	2,503
Surety bonds	$ 80	$ 166

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Redeemable Noncontrolling Interests (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Apr. 01, 2018	Dec. 31, 2017	Dec. 31, 2013
Noncontrolling Interest [Line Items]
Estimated Redemption Value	$ 432,000,000	$ 411,000,000	$ 492,000,000	$ 512,000,000
Forcepoint
Noncontrolling Interest [Line Items]
Vista Equity Partners' Adjusted Equity Interest	19.50%
Estimated Redemption Value	$ 399,000,000	411,000,000	492,000,000	512,000,000
Redeemable Noncontrolling Interest, Carrying Value	274,000,000
RGNext [Member]
Noncontrolling Interest [Line Items]
Estimated Redemption Value	$ 33,000,000	$ 0	$ 0	$ 0
Noncontrolling Interest, Ownership Percentage Acquired by Raytheon	10.00%
Noncontrolling Interest, Raytheon Ownership Percentage	60.00%				50.00%

XML

Redeemable Noncontrolling Interests (Redeemable Noncontrolling Interests Rollforward) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Noncontrolling Interest [Line Items]
Beginning Balance	$ 411,000,000	$ 512,000,000
RGNext initial recognition	32,000,000
Net income (loss)	(6,000,000)	(10,000,000)
Other comprehensive income (loss), net of tax(1)	0	1,000,000
Adjustment of noncontrolling interests to redemption value	(5,000,000)	(11,000,000)
Ending Balance	432,000,000	492,000,000
RGNext [Member]
Noncontrolling Interest [Line Items]
Beginning Balance	0	0
RGNext initial recognition	32,000,000
Net income (loss)	1,000,000	0
Other comprehensive income (loss), net of tax(1)	0	0
Adjustment of noncontrolling interests to redemption value	0	0
Ending Balance	33,000,000	0
Forcepoint
Noncontrolling Interest [Line Items]
Beginning Balance	411,000,000	512,000,000
RGNext initial recognition	0
Net income (loss)	(7,000,000)	(10,000,000)
Other comprehensive income (loss), net of tax(1)	0	1,000,000
Adjustment of noncontrolling interests to redemption value	(5,000,000)	(11,000,000)
Ending Balance	399,000,000	$ 492,000,000
Forcepoint | Maximum [Member]
Noncontrolling Interest [Line Items]
Other comprehensive income (loss), net of tax(1)	$ 1,000,000

XML

Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	1 Months Ended	3 Months Ended		12 Months Ended		36 Months Ended
	Mar. 31, 2019	Mar. 31, 2019	Apr. 01, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2021	Nov. 30, 2017	Nov. 30, 2015
Stockholders' Equity
Stock repurchase program, outstanding common stock available	$ 1,000	$ 1,000
Increase in annual dividend payout rate	8.60%
Dividends declared per share		$ 0.9425	$ 0.8675		$ 3.47
Amortization of net actuarial loss reclassified out of AOCL		$ (276)	$ (347)
Cash Flow Hedge Loss to be Reclassified into earnings within Twelve Months	$ 2	2
Forcepoint
Stockholders' Equity
Expense (income) attributable to vesting conditions		$ (2)	1
Shares authorized under stock plans	174	174
Restricted Stock [Member]
Stockholders' Equity
Units granted in period		900
Weighted Average Grant Date Fair Value		$ 179.93
Long-Term Performance Plan [Member]
Stockholders' Equity
Units granted in period		100
Weighted Average Grant Date Fair Value		$ 175.93
Scenario, Forecast [Member]
Stockholders' Equity
Dividends declared per share				$ 3.77
Scenario, Forecast [Member] | Long-Term Performance Plan [Member]
Stockholders' Equity
Performance goals, return on invested capital, weighted						50.00%
Performance goals, total shareholder return, weighted						25.00%
Performance goals, cumulative free cash flow, weighted						25.00%
Scenario, Forecast [Member] | Long-Term Performance Plan [Member] | Upper Limit
Stockholders' Equity
Target award						200.00%
Scenario, Forecast [Member] | Long-Term Performance Plan [Member] | Lower Limit
Stockholders' Equity
Target award						0.00%
November Two Thousand Fifteen Board of Directors Authorization [Member]
Stockholders' Equity
Stock repurchase program, authorized amount								$ 2,000
November Two Thousand Seventeen Board of Directors Authorization [Member]
Stockholders' Equity
Stock repurchase program, authorized amount							$ 2,000
Pension Plan [Member]
Stockholders' Equity
Amortization of net actuarial loss reclassified out of AOCL		$ 273	$ 344

XML

Stockholders' Equity (Changes in Shares of Common Stock Outstanding) (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Common Stock Outstanding [Roll Forward]
Beginning balance	282.1	288.4
Stock plans activity	1.1	1.0
Share repurchases	(3.1)	(2.2)
Ending balance	280.1	287.2

XML

Stockholders' Equity (Repurchases of Common Stock) (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Stockholders' Equity
Total shares repurchased	$ 566	$ 472
Total shares repurchased	3.1	2.2
Share Repurchase Program [Member]
Stockholders' Equity
Total shares repurchased	$ 500	$ 400
Total shares repurchased	2.8	1.9
Satisfy tax withholding [Member]
Stockholders' Equity
Total shares repurchased	$ 66	$ 72
Total shares repurchased	0.3	0.3

XML

Stockholders' Equity (Schedule of Accumulated Other Comprehensive Income) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018	Dec. 31, 2018
Stockholders' Equity
Accumulated Other Comprehensive Income (Loss), Pension and PRB plans, net, beginning balance	$ (8,483,000,000)	$ (7,843,000,000)
Pension and PRB plans, net, Before tax amount	277,000,000	348,000,000
Pension and PRB plans, net, Tax (expense) or benefit	(58,000,000)	(73,000,000)
Pension and PRB plans, net, Net of tax amount	219,000,000	275,000,000
Pension and PRB plans, net, Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings		(1,452,000,000)
Accumulated Other Comprehensive Income (Loss), Pension and PRB plans, net, ending balance	(8,264,000,000)	(9,020,000,000)
Accumulated Other Comprehensive Income (Loss), Foreign exchange translation, beginning balance	(131,000,000)	(95,000,000)
Foreign exchange translation, Before tax amount	8,000,000	24,000,000
Foreign exchange translation, Tax (expense) or benefit	0	0
Foreign exchange translation, Net of tax amount	8,000,000	24,000,000
Foreign exchange translation, Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings		0
Accumulated Other Comprehensive Income (Loss), Foreign exchange translation, ending balance	(123,000,000)	(71,000,000)
Accumulated Other Comprehensive Income (Loss), Cash flow hedges, beginning balance	(2,000,000)	6,000,000
Cash flow hedges, Before tax amount	(10,000,000)	(10,000,000)
Cash flow hedges, Tax (expense) or benefit	2,000,000	2,000,000
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax	(8,000,000)	(8,000,000)
Cash flow hedges, Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings		1,000,000
Accumulated Other Comprehensive Income (Loss), Cash flow hedges, ending balance	(10,000,000)	(1,000,000)
Accumulated Other Comprehensive Income (Loss), Unrealized gains (losses) on investments and other, net, beginning balance	(2,000,000)	(3,000,000)
Unrealized gains (losses) on investments and other, net, Before tax amount	0	0
Unrealized gains (losses) on investments and other, net, Tax (expense) or benefit	0	0
Unrealized gains (losses) on investments and other, net, Net of tax amount	0	0
Unrealized Holding Gains (Losses) on Investments and Other, net, Tax Cuts and Jobs Act of 2017, Reclassification from AOCI to Retained Earnings		0
Accumulated Other Comprehensive Income (Loss), Unrealized gains (losses) on investments and other, net, ending balance	(2,000,000)	(3,000,000)
Accumulated Other Comprehensive Income (Loss), Net of Tax, beginning balance	(8,618,000,000)	(7,935,000,000)
Other comprehensive income (loss), Before tax amount	275,000,000	362,000,000
Other comprehensive income (Loss), Tax (expense) or benefit	(56,000,000)	(71,000,000)
Other comprehensive income (loss), net of tax	219,000,000	291,000,000
Reclassification of stranded tax effects	0	(1,451,000,000)
Accumulated Other Comprehensive Income (Loss), Net of Tax, ending balance	(8,399,000,000)	$ (9,095,000,000)
Pension and PRB plans cumulative tax benefit (expense)	2,197,000,000		$ 2,255,000,000
Cash flow hedges cumulative tax benefit (expense)	3,000,000		1,000,000
Unrealized gains (losses) on investments and other, net cumulative tax benefit (expense)	$ (1,000,000)		$ (1,000,000)

XML

Pension and Other Employee Benefits (Narrative) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018	Dec. 31, 2018
Pension and Other Postretirement Benefit [Line Items]
Discretionary Pension Contributions	$ 0	$ 0
PRB Plan [Member]
Pension and Other Postretirement Benefit [Line Items]
Net periodic pension expense (income)	6,000,000	5,000,000
Foreign Plan [Member]
Pension and Other Postretirement Benefit [Line Items]
Net periodic pension expense (income)	(1,000,000)	$ (2,000,000)
Fair Value, Inputs, Level 1 [Member]
Pension and Other Postretirement Benefit [Line Items]
Marketable securities held in trust	677,000,000		$ 642,000,000
Nonqualified Plan [Member]
Pension and Other Postretirement Benefit [Line Items]
Liabilities related to nonqualified contribution plan	440,000,000		431,000,000
Nonqualified Plan [Member] | Fair Value, Inputs, Level 1 [Member]
Pension and Other Postretirement Benefit [Line Items]
Marketable securities held in trust	$ 431,000,000		$ 420,000,000

XML

Pension and Other Employee Benefits (Schedule of Marketable Securities) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Inputs, Level 1 [Member]
Marketable Securities [Line Items]
Marketable securities held in trust	$ 677	$ 642

XML

Pension and Other Employee Benefits (Schedule of Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Non-operating expense
Total pension non-service expense	$ 181	$ 239
Pension Plan [Member]
Operating expense
Service cost	105	127
Non-operating expense
Interest cost	261	253
Expected return on plan assets	(359)	(363)
Amortization of prior service cost	1	1
Amortization of net actuarial loss	273	344
Total pension non-service expense	176	235
Net periodic pension expense (income)	$ 281	$ 362

XML

Pension and Other Employee Benefits (Schedule of Pension and PRB Liabilities) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Defined Benefit Plans and Other Postretirement Benefit Plans Table [Line Items]
Defined Benefit Plan, Long-term Liabilities	$ 6,398	$ 6,465
Pension Plan [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table [Line Items]
Defined Benefit Plan, Long-term Liabilities	6,042	6,111
PRB Plan [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table [Line Items]
Defined Benefit Plan, Long-term Liabilities	$ 356	$ 354

XML

Pension and Other Employee Benefits (Schedule of Pension and PRB Contributions) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Pension and Other Postretirement Benefit Expense [Line Items]
Required pension contributions	$ 64	$ 58
PRB contributions	4	3
Total pension and PRB contributions	$ 68	$ 61

XML

Income Taxes (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Unrecognized Tax Benefits	$ 96	$ 92

XML

Business Segment Reporting (Segment Results) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Segment Reporting Information [Line Items]
Net sales	$ 6,729,000,000	$ 6,267,000,000
Operating income	1,113,000,000	1,041,000,000
Operating Segments [Member]
Segment Reporting Information [Line Items]
Net sales	6,730,000,000	6,271,000,000
Operating income	791,000,000	748,000,000
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	(414,000,000)	(357,000,000)
Operating income	(47,000,000)	(40,000,000)
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net sales	(415,000,000)	(361,000,000)
Corporate [Member]
Segment Reporting Information [Line Items]
Net sales	0	0
Operating income	(16,000,000)	(28,000,000)
Integrated Defense Systems
Segment Reporting Information [Line Items]
Net sales	1,529,000,000	1,474,000,000
Integrated Defense Systems | Operating Segments [Member]
Segment Reporting Information [Line Items]
Net sales	1,550,000,000	1,489,000,000
Operating income	258,000,000	273,000,000
Integrated Defense Systems | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	(21,000,000)	(15,000,000)
Operating income	(2,000,000)	(2,000,000)
Integrated Defense Systems | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net sales	0	0
Intelligence, Information and Services
Segment Reporting Information [Line Items]
Net sales	1,609,000,000	1,420,000,000
Intelligence, Information and Services | Operating Segments [Member]
Segment Reporting Information [Line Items]
Net sales	1,777,000,000	1,582,000,000
Operating income	187,000,000	117,000,000
Intelligence, Information and Services | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	(168,000,000)	(162,000,000)
Operating income	(17,000,000)	(17,000,000)
Intelligence, Information and Services | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net sales	0	0
Missile Systems
Segment Reporting Information [Line Items]
Net sales	1,963,000,000	1,813,000,000
Missile Systems | Operating Segments [Member]
Segment Reporting Information [Line Items]
Net sales	2,006,000,000	1,848,000,000
Operating income	190,000,000	212,000,000
Missile Systems | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	(43,000,000)	(35,000,000)
Operating income	(4,000,000)	(3,000,000)
Missile Systems | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net sales	0	0
Space and Airborne Systems
Segment Reporting Information [Line Items]
Net sales	1,480,000,000	1,429,000,000
Space and Airborne Systems | Operating Segments [Member]
Segment Reporting Information [Line Items]
Net sales	1,653,000,000	1,568,000,000
Operating income	212,000,000	193,000,000
Space and Airborne Systems | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	(173,000,000)	(139,000,000)
Operating income	(17,000,000)	(14,000,000)
Space and Airborne Systems | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net sales	0	0
Forcepoint
Segment Reporting Information [Line Items]
Net sales	148,000,000	131,000,000
Forcepoint | Operating Segments [Member]
Segment Reporting Information [Line Items]
Net sales	158,000,000	141,000,000
Operating income	(9,000,000)	(7,000,000)
Forcepoint | Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Net sales	(9,000,000)	(6,000,000)
Operating income	(7,000,000)	(4,000,000)
Forcepoint | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net sales	(1,000,000)	(4,000,000)
Acquisition Accounting Adjustments
Segment Reporting Information [Line Items]
Net sales	0	0
Acquisition Accounting Adjustments | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Net sales	(1,000,000)	(4,000,000)
Operating income	(28,000,000)	(33,000,000)
FAS CAS Operating Adjustment [Member] | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Operating income	$ 366,000,000	$ 354,000,000

XML

Business Segment Reporting (Components of FAS/CAS Operating Adjustment) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Segment Reporting Information [Line Items]
Operating income	$ 1,113	$ 1,041
FAS CAS Operating Adjustment [Member] | Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Operating income	366	354
FAS/CAS Pension Operating Adjustment [Member]
Segment Reporting Information [Line Items]
Operating income	362	351
FAS/CAS PRB Operating Adjustment [Member]
Segment Reporting Information [Line Items]
Operating income	$ 4	$ 3

XML

Business Segment Reporting (Total Assets) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Total assets	$ 31,576	$ 32,670
Corporate [Member]
Segment Reporting Information [Line Items]
Total assets	4,624	6,108
Integrated Defense Systems | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets	4,783	4,826
Intelligence, Information and Services | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets	4,368	4,238
Missile Systems | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets	8,490	8,229
Space and Airborne Systems | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets	6,856	6,740
Forcepoint | Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets	$ 2,455	$ 2,529

XML

Business Segment Reporting (Disaggregation of Revenue) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Apr. 01, 2018
Disaggregation of Revenue [Line Items]
Net sales	$ 6,729,000,000	$ 6,267,000,000
Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	3,583,000,000	3,443,000,000
Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	3,146,000,000	2,824,000,000
U.S. Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	4,676,000,000	4,260,000,000
Domestic Direct Commercial Sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	118,000,000	120,000,000
Foreign Military Sales through US Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,019,000,000	718,000,000
Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member]
Disaggregation of Revenue [Line Items]
Net sales	916,000,000	1,169,000,000
United States [Member]
Disaggregation of Revenue [Line Items]
Net sales	4,794,000,000	4,380,000,000
United States [Member] | U.S. Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,738,000,000	1,627,000,000
United States [Member] | U.S. Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	2,938,000,000	2,633,000,000
United States [Member] | Domestic Direct Commercial Sales [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	113,000,000	116,000,000
United States [Member] | Domestic Direct Commercial Sales [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	5,000,000	4,000,000
Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Net sales	643,000,000	592,000,000
Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	267,000,000	206,000,000
Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	54,000,000	58,000,000
Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	305,000,000	299,000,000
Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	17,000,000	29,000,000
Middle East And North Africa [Member]
Disaggregation of Revenue [Line Items]
Net sales	930,000,000	997,000,000
Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	461,000,000	333,000,000
Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	77,000,000	54,000,000
Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	373,000,000	610,000,000
Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	19,000,000	0
All Other Principally Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	362,000,000	298,000,000
All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	133,000,000	34,000,000
All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	27,000,000	33,000,000
All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	193,000,000	218,000,000
All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	9,000,000	13,000,000
Corporate [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Net sales	(414,000,000)	(357,000,000)
Segment Reconciling Items [Member]
Disaggregation of Revenue [Line Items]
Net sales	(415,000,000)	(361,000,000)
Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Net sales	6,730,000,000	6,271,000,000
Integrated Defense Systems
Disaggregation of Revenue [Line Items]
Net sales	1,529,000,000	1,474,000,000
Integrated Defense Systems | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,009,000,000	978,000,000
Integrated Defense Systems | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	520,000,000	496,000,000
Integrated Defense Systems | U.S. Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	645,000,000	628,000,000
Integrated Defense Systems | Domestic Direct Commercial Sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,000,000	2,000,000
Integrated Defense Systems | Foreign Military Sales through US Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	466,000,000	289,000,000
Integrated Defense Systems | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member]
Disaggregation of Revenue [Line Items]
Net sales	417,000,000	555,000,000
Integrated Defense Systems | United States [Member]
Disaggregation of Revenue [Line Items]
Net sales	646,000,000	630,000,000
Integrated Defense Systems | United States [Member] | U.S. Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	221,000,000	226,000,000
Integrated Defense Systems | United States [Member] | U.S. Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	424,000,000	402,000,000
Integrated Defense Systems | United States [Member] | Domestic Direct Commercial Sales [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,000,000	2,000,000
Integrated Defense Systems | United States [Member] | Domestic Direct Commercial Sales [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Integrated Defense Systems | Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Net sales	243,000,000	227,000,000
Integrated Defense Systems | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	40,000,000	29,000,000
Integrated Defense Systems | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	18,000,000	25,000,000
Integrated Defense Systems | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	168,000,000	146,000,000
Integrated Defense Systems | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	17,000,000	27,000,000
Integrated Defense Systems | Middle East And North Africa [Member]
Disaggregation of Revenue [Line Items]
Net sales	512,000,000	574,000,000
Integrated Defense Systems | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	269,000,000	195,000,000
Integrated Defense Systems | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	48,000,000	32,000,000
Integrated Defense Systems | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	195,000,000	347,000,000
Integrated Defense Systems | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Integrated Defense Systems | All Other Principally Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	128,000,000	43,000,000
Integrated Defense Systems | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	81,000,000	0
Integrated Defense Systems | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	10,000,000	8,000,000
Integrated Defense Systems | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	34,000,000	33,000,000
Integrated Defense Systems | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	3,000,000	2,000,000
Integrated Defense Systems | Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Net sales	(21,000,000)	(15,000,000)
Integrated Defense Systems | Segment Reconciling Items [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Integrated Defense Systems | Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,550,000,000	1,489,000,000
Intelligence, Information and Services
Disaggregation of Revenue [Line Items]
Net sales	1,609,000,000	1,420,000,000
Intelligence, Information and Services | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	431,000,000	434,000,000
Intelligence, Information and Services | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,178,000,000	986,000,000
Intelligence, Information and Services | U.S. Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,376,000,000	1,208,000,000
Intelligence, Information and Services | Domestic Direct Commercial Sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	37,000,000	32,000,000
Intelligence, Information and Services | Foreign Military Sales through US Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	93,000,000	69,000,000
Intelligence, Information and Services | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member]
Disaggregation of Revenue [Line Items]
Net sales	103,000,000	111,000,000
Intelligence, Information and Services | United States [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,413,000,000	1,240,000,000
Intelligence, Information and Services | United States [Member] | U.S. Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	224,000,000	252,000,000
Intelligence, Information and Services | United States [Member] | U.S. Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,152,000,000	956,000,000
Intelligence, Information and Services | United States [Member] | Domestic Direct Commercial Sales [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	33,000,000	28,000,000
Intelligence, Information and Services | United States [Member] | Domestic Direct Commercial Sales [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	4,000,000	4,000,000
Intelligence, Information and Services | Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Net sales	125,000,000	109,000,000
Intelligence, Information and Services | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	73,000,000	51,000,000
Intelligence, Information and Services | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	11,000,000	14,000,000
Intelligence, Information and Services | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	41,000,000	44,000,000
Intelligence, Information and Services | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Intelligence, Information and Services | Middle East And North Africa [Member]
Disaggregation of Revenue [Line Items]
Net sales	15,000,000	9,000,000
Intelligence, Information and Services | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	3,000,000	3,000,000
Intelligence, Information and Services | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	5,000,000	1,000,000
Intelligence, Information and Services | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	7,000,000	5,000,000
Intelligence, Information and Services | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Intelligence, Information and Services | All Other Principally Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	56,000,000	62,000,000
Intelligence, Information and Services | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,000,000	0
Intelligence, Information and Services | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Intelligence, Information and Services | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	49,000,000	51,000,000
Intelligence, Information and Services | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	6,000,000	11,000,000
Intelligence, Information and Services | Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Net sales	(168,000,000)	(162,000,000)
Intelligence, Information and Services | Segment Reconciling Items [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Intelligence, Information and Services | Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,777,000,000	1,582,000,000
Missile Systems
Disaggregation of Revenue [Line Items]
Net sales	1,963,000,000	1,813,000,000
Missile Systems | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,209,000,000	1,136,000,000
Missile Systems | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	754,000,000	677,000,000
Missile Systems | U.S. Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,407,000,000	1,214,000,000
Missile Systems | Domestic Direct Commercial Sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	9,000,000	11,000,000
Missile Systems | Foreign Military Sales through US Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	309,000,000	249,000,000
Missile Systems | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member]
Disaggregation of Revenue [Line Items]
Net sales	238,000,000	339,000,000
Missile Systems | United States [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,416,000,000	1,225,000,000
Missile Systems | United States [Member] | U.S. Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	708,000,000	584,000,000
Missile Systems | United States [Member] | U.S. Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	699,000,000	630,000,000
Missile Systems | United States [Member] | Domestic Direct Commercial Sales [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	9,000,000	11,000,000
Missile Systems | United States [Member] | Domestic Direct Commercial Sales [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Missile Systems | Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Net sales	172,000,000	156,000,000
Missile Systems | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	124,000,000	96,000,000
Missile Systems | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	16,000,000	17,000,000
Missile Systems | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	32,000,000	43,000,000
Missile Systems | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Missile Systems | Middle East And North Africa [Member]
Disaggregation of Revenue [Line Items]
Net sales	284,000,000	318,000,000
Missile Systems | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	115,000,000	81,000,000
Missile Systems | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	5,000,000	6,000,000
Missile Systems | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	145,000,000	231,000,000
Missile Systems | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	19,000,000	0
Missile Systems | All Other Principally Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	91,000,000	114,000,000
Missile Systems | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	34,000,000	25,000,000
Missile Systems | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	15,000,000	24,000,000
Missile Systems | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	42,000,000	65,000,000
Missile Systems | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Missile Systems | Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Net sales	(43,000,000)	(35,000,000)
Missile Systems | Segment Reconciling Items [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Missile Systems | Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Net sales	2,006,000,000	1,848,000,000
Space and Airborne Systems
Disaggregation of Revenue [Line Items]
Net sales	1,480,000,000	1,429,000,000
Space and Airborne Systems | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	790,000,000	767,000,000
Space and Airborne Systems | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	690,000,000	662,000,000
Space and Airborne Systems | U.S. Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,207,000,000	1,186,000,000
Space and Airborne Systems | Domestic Direct Commercial Sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	27,000,000	26,000,000
Space and Airborne Systems | Foreign Military Sales through US Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	151,000,000	111,000,000
Space and Airborne Systems | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member]
Disaggregation of Revenue [Line Items]
Net sales	95,000,000	106,000,000
Space and Airborne Systems | United States [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,234,000,000	1,212,000,000
Space and Airborne Systems | United States [Member] | U.S. Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	548,000,000	544,000,000
Space and Airborne Systems | United States [Member] | U.S. Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	659,000,000	642,000,000
Space and Airborne Systems | United States [Member] | Domestic Direct Commercial Sales [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	26,000,000	26,000,000
Space and Airborne Systems | United States [Member] | Domestic Direct Commercial Sales [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,000,000	0
Space and Airborne Systems | Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Net sales	87,000,000	84,000,000
Space and Airborne Systems | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	30,000,000	30,000,000
Space and Airborne Systems | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	9,000,000	2,000,000
Space and Airborne Systems | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	48,000,000	50,000,000
Space and Airborne Systems | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	2,000,000
Space and Airborne Systems | Middle East And North Africa [Member]
Disaggregation of Revenue [Line Items]
Net sales	111,000,000	90,000,000
Space and Airborne Systems | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	74,000,000	54,000,000
Space and Airborne Systems | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	19,000,000	15,000,000
Space and Airborne Systems | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	18,000,000	21,000,000
Space and Airborne Systems | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Space and Airborne Systems | All Other Principally Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	48,000,000	43,000,000
Space and Airborne Systems | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	17,000,000	9,000,000
Space and Airborne Systems | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	2,000,000	1,000,000
Space and Airborne Systems | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	29,000,000	33,000,000
Space and Airborne Systems | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Space and Airborne Systems | Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Net sales	(173,000,000)	(139,000,000)
Space and Airborne Systems | Segment Reconciling Items [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Space and Airborne Systems | Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Net sales	1,653,000,000	1,568,000,000
Forcepoint
Disaggregation of Revenue [Line Items]
Net sales	148,000,000	131,000,000
Forcepoint | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	144,000,000	128,000,000
Forcepoint | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	4,000,000	3,000,000
Forcepoint | U.S. Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	41,000,000	24,000,000
Forcepoint | Domestic Direct Commercial Sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	44,000,000	49,000,000
Forcepoint | Foreign Military Sales through US Government [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member]
Disaggregation of Revenue [Line Items]
Net sales	63,000,000	58,000,000
Forcepoint | United States [Member]
Disaggregation of Revenue [Line Items]
Net sales	85,000,000	73,000,000
Forcepoint | United States [Member] | U.S. Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	37,000,000	21,000,000
Forcepoint | United States [Member] | U.S. Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	4,000,000	3,000,000
Forcepoint | United States [Member] | Domestic Direct Commercial Sales [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	44,000,000	49,000,000
Forcepoint | United States [Member] | Domestic Direct Commercial Sales [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Net sales	16,000,000	16,000,000
Forcepoint | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	16,000,000	16,000,000
Forcepoint | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | Middle East And North Africa [Member]
Disaggregation of Revenue [Line Items]
Net sales	8,000,000	6,000,000
Forcepoint | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	8,000,000	6,000,000
Forcepoint | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | All Other Principally Europe [Member]
Disaggregation of Revenue [Line Items]
Net sales	39,000,000	36,000,000
Forcepoint | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	39,000,000	36,000,000
Forcepoint | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Forcepoint | Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Net sales	(9,000,000)	(6,000,000)
Forcepoint | Segment Reconciling Items [Member]
Disaggregation of Revenue [Line Items]
Net sales	(1,000,000)	(4,000,000)
Forcepoint | Operating Segments [Member]
Disaggregation of Revenue [Line Items]
Net sales	158,000,000	141,000,000
Corporate [Member] | United States [Member] | U.S. Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | United States [Member] | U.S. Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | United States [Member] | Domestic Direct Commercial Sales [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | United States [Member] | Domestic Direct Commercial Sales [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | Asia Pacific [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | Asia Pacific [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | Middle East And North Africa [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | Middle East And North Africa [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | All Other Principally Europe [Member] | Foreign Military Sales through US Government [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Fixed-price Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Corporate [Member] | All Other Principally Europe [Member] | Foreign direct commercial sales, excluding Foreign Military Sales through U.S. Gov [Member] | Cost-type Contract [Member]
Disaggregation of Revenue [Line Items]
Net sales	0	0
Acquisition Accounting Adjustments
Disaggregation of Revenue [Line Items]
Net sales	0	0
Acquisition Accounting Adjustments | Segment Reconciling Items [Member]
Disaggregation of Revenue [Line Items]
Net sales	(1,000,000)	(4,000,000)
Operating Segments [Member] | Intersegment Eliminations [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 0	$ 0

XML

Remaining Performance Obligations (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining Performance Obligation	$ 41,073
Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation	We expect to recognize revenue on approximately half and three-quarters of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter.
SAUDI ARABIA
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining Performance Obligation	$ 2,100
SAUDI ARABIA | Maximum [Member]
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Kingdom of Saudi Arabia net sales, as a percent of total net sales	5.00%