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Raytheon Co RTN
Q4 2012 Earnings Call Transcript

Transcript Call Date 01/24/2013

Operator: Good day, ladies and gentlemen, and welcome to the Raytheon Fourth Quarter 2012 Earnings Conference Call. My name is Shenel, and I'll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to, Mr. Todd Ernst, Vice President of Investor Relations. Please proceed.

Todd Ernst - VP, IR: Thank you, Shenel. Good morning everyone. Thank you for joining us today for our fourth quarter conference call. The results we announced this morning, the audio feed of this call, and the slides we'll reference are available on our website at raytheon.com. Following this morning's call, an archive of both the audio replay and a printable version of the slides will be available in the Investor Relations section of our website.

With me today are Bill Swanson, our Chairman and Chief Executive Officer; and Dave Wajsgras, our Chief Financial Officer. We'll start with some brief remarks by Bill and Dave, and then move on to questions.

Before I turn the call over to Bill, I'd like to caution you regarding our forward-looking statements. Any matters discussed today that are not historical facts, particularly comments regarding this Company's future plans, objectives, and expected performance constitute forward-looking statements. These statements are based on a wide range of assumptions that the Company believes are reasonable, but are subject to a range of uncertainties and risks that are summarized at the end of our earnings release and are discussed in detail in our SEC filings.

With that, I'll turn the call over to Bill. Bill?

William H. Swanson - Chairman and CEO: Thank you, Todd. Good morning, everyone. Raytheon delivered solid operating results in 2012. Our focus on lowering costs and program execution drove higher than expected earnings and cash flow for the year. Demand for our broad portfolio of cutting-edge technologies and innovative solutions resulting in bookings well in excess of expectation and we ended 2012 with a record funded backlog.

Fourth quarter bookings were strong at $7.9 billion resulting in a book to bill of 1.23. International comprised a robust 40% of fourth quarter bookings. When looking at the full year our book to bill was 1.09 and was driven by strong domestic orders for missiles, radars, training, communication and classified programs as well as international orders for command-and-control systems, precision munitions and sensors among a multitude of other awards. We also exceeded our initial bookings expectation by about 6% ending the year with $26.5 billion of total bookings with domestic demand a little higher and international also strong. In the fourth quarter, international revenue increased 8% over last year and represents 27% of the quarter's total revenue.

For all of 2012, international revenue was 26% of our total revenue, setting the standard for our industry and continuing to validate our international strategy. As a technology and innovation leader, we continued our investment strategy to strengthen our capabilities, grow our market position and better meet customer needs.

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