LEXINGTON, Mass., May 14 /PRNewswire/ -- Raytheon Company
(NYSE: RTNA, RTNB) said that today's bankruptcy filing by Washington Group
International (WGI) will not affect the company's cash flow outlook for 2001.
In its most recent 10-K and 10-Q filings, the company disclosed four
categories of exposure with respect to the sale of its engineering and
construction business to WGI. The company's cash and earnings exposure is
consistent with those prior disclosures.
"Washington Group's bankruptcy shouldn't come as a surprise," said
Raytheon Senior Vice President and General Counsel Thomas D. Hyde. "What is
most important for us is successfully managing to completion the projects they
abandon and that we have guaranteed. It doesn't matter whether they abandon
the projects before filing bankruptcy or after."
After WGI announced in March that it had severe liquidity problems,
Raytheon disclosed a potential liability of up to $450 million for 50
construction projects for which it has performance guarantees. The company
recorded a charge of $325 million in the first quarter for two of those
projects; the estimated cash exposure for the remaining projects is $125
million.
Raytheon's estimated range of cash exposure with respect to the guaranteed
projects, which is based on the company's best judgment and analysis of
information provided by WGI, assumes that WGI abandons all 50 of the projects.
To date, WGI has abandoned only two: a 1,600-megawatt power plant in Everett,
Mass., and an 800-megawatt power plant in Weymouth, Mass. Raytheon has hired
Duke Fluor Daniel to complete those projects, which are being developed by
Sithe Energies. As previously disclosed, detailed estimated costs to complete
the two projects are being prepared by Duke Fluor Daniel.
With headquarters in Lexington, Mass., Raytheon Company is a global
technology leader in defense, government and commercial electronics, and
business and special mission aircraft.
Forward-looking statements
Certain statements made in this release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995
regarding the company's future plans, objectives, and expected performance.
Specifically, statements that are not historical facts, including statements
accompanied by words such as "believe," "expect," "estimate," "intend," or
"plan" are intended to identify forward-looking statements and convey the
uncertainty of future events or outcomes. The company cautions readers that
any such forward-looking statements are based on assumptions that the company
believes are reasonable, but are subject to a wide range of risks, and actual
results may differ materially. Important factors that could cause actual
results to differ include, but are not limited to: risks associated with the
retained assets and liabilities of Raytheon Engineers & Constructors; the
final determination by the company of the required expenditures to complete
the two Massachusetts construction projects and any other Raytheon guaranteed
projects that WGI may abandon; the confirmation of the actual physical
progress completed at the time of WGI's abandonment of the projects; the
impacts associated with the re-mobilization of the projects and WGI's
compliance with its contractual obligations and cooperation with the
contractors hired by Raytheon to complete the projects; the ability of the
company to recover any reimbursement for costs incurred on the guaranteed
projects may be significantly limited under bankruptcy law; differences in
anticipated and actual program results; risks inherent with large long-term
fixed price contracts, particularly the ability to contain cost growth; the
ultimate resolution of contingencies and legal matters, among other things.
Further information regarding the factors that could cause actual results to
differ materially from projected results can be found in the company's recent
reports filed with the Securities and Exchange Commission, including in the
company's Annual Report on Form 10-K for the year ended December 31, 2000, and
Form 10-Q for the quarter ended April 1, 2001.
Contact:
David Polk
781.860.2386
SOURCE Raytheon Company
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Related links:
http://www.raytheon.com
CONTACT:
David Polk of Raytheon Company, 781-860-2386
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