LEXINGTON, Mass., Oct. 17 /PRNewswire/ -- Raytheon Company (NYSE: RTN) and
Hughes Electronics Corporation announced that they have agreed to a purchase
price adjustment related to Raytheon's 1997 merger with Hughes Defense. Under
terms of the agreement, Hughes Electronics will reimburse Raytheon $635.5
million of its $9.5 billion purchase price, with $500 million received on
Oct. 16 and the balance to be paid within six months. Raytheon expects to use
the proceeds to pay down debt.
The settlement between Raytheon and Hughes Electronics does not affect
Raytheon's ongoing dispute with Towers, Perrin, Forster & Crosby (Towers
Perrin). Raytheon filed suit against Towers Perrin in November 1999 claiming
that Towers Perrin made false representations regarding pension plans that
Raytheon acquired as part of the Hughes merger.
Raytheon today also announced that it expects to record a third quarter
charge of $693 million in connection with its commuter aircraft business and
$52 million related to used general aviation aircraft. The after-tax effect
of the charges is $484 million, or $1.36 per diluted share. Consequently, the
company expects to report a loss for the 2001 third quarter and for the year.
The cash portion of the charge is expected to be approximately $350 million
spread over a four-year period.
While Raytheon has been reducing its build rates on commuter aircraft over
the last 18 months, current market conditions and the tragic events of
September 11 have had a significant adverse effect on both the airline
industry and aircraft manufacturers, including Raytheon Aircraft Company.
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. Risks that could cause actual results to
differ include, but are not limited to the continued deterioration in the
aircraft market.
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,
+1-781-860-2386
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