Lexington, Mass.-based Raytheon Co., the third-largest defense contractor, may write off as much as $900 million in the value of acquisitions this year to comply with a new accounting rule.
The new rule changes the way companies account for goodwill, which is the premium, or amount above book value, that a company paid for an acquisition. Goodwill is an asset. Though Raytheon said it’s still reviewing the impact of the rule, it estimated write-offs of $300 million to $900 million, the company said in a regulatory filing. The company has been cutting debt accrued in several acquisitions in the 1990s, including the $9.5 billion purchase of the Hughes defense business in 1997.
Raytheon expects to complete its goodwill review in the second half of the year, said David Polk, a company spokesman. The company wrote down $360 million in the first quarter related to last month’s sale of a business to L-3 Communications Holdings Inc. It had $11.36 billion in goodwill at the end of the first quarter, according to the filing.
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Raytheon also said it had $1.34 billion in off-balance sheet debt held in a special purpose entity related to its business-jet unit, Raytheon Aircraft Receivables Corp., the filing said.
WHX unit will exit some precious-metals businesses
WHX Corp., a holding company whose Wheeling-Pittsburgh steel-making unit filed for Chapter 11 bankruptcy protection in 2000, said its Handy & Harman unit will exit some precious-metal businesses, affecting its East Providence location.
The company also has a plant in Fairfield, Connecticut. The company didn’t say whether the facilities will be shut or how many jobs will be cut, Bloomberg News reported.
WHX officials didn’t return a phone call seeking comment. New York-based WHX said it would have a second-quarter charge of $14.5 million to $16.5 million.
The company’s shares have fallen 37 percent this year.
Bell Helicopter names Hess president and COO
Textron Inc.’s Bell Helicopter unit last week announced that Glenn E. Hess has been named president and chief operating officer.
Hess, who joins the company after a 23-year career with McDonnell Douglas/Boeing, will manage Bell’s engineering, manufacturing, procurement and material management operations, filling a critical post that has been vacant since John Murphey was promoted to chairman and CEO last September.
Bell Helicopter, a Textron Company, is a $1.4 billion leading producer of commercial and military helicopters, and the pioneer of the TiltRotor aircraft. Bell’s global work force of over 6,000 employees serves customers flying Bell aircraft in over l20 countries.
Textron Inc. is a Providence-based multi-industry company with more than 51,000 employees in 40 countries. Its brands include Bell Helicopter, Cessna Aircraft, Kautex, Lycoming, E-Z-GO and Greenlee, among others.
J.P. Morgan, FleetBoston may be charged in IPO Probe
J.P. Morgan Chase & Co. and FleetBoston Financial Corp. received notices from regulators indicating the banks may be charged for allotting initial public offering shares to favored investors in exchange for extra commissions, according to a person familiar with the situation.
According to Bloomberg News, the action means the National Association of Securities Dealers plans to pursue an enforcement case against the companies, the person said. Credit Suisse First Boston agreed in January to pay $100 million to settle a similar case with the Securities and Exchange Commission and NASD.
Securities regulators have been investigating for two years whether Wall Street firms demanded promises to buy more stock or higher fees to let investors in on IPOs during the Internet stock boom that ended in mid-2000.
Tyco scraps breakup; Kozlowski calls plan a ‘mistake’
Tyco International Ltd. Chief Executive Dennis Kozlowski canceled the breakup of the conglomerate, saying his idea was a mistake after shareholders lost $41 billion after the plan was announced, Bloomberg News reported.
The company will eliminate 7,100 jobs and close 24 facilities, and said fiscal second-quarter costs to cover those actions and to write down the value of its undersea telecommunications network totaled $3.3 billion. Full-year profit forecasts were slashed, and the stock fell as much as 21 percent.
"They said the sum of the pieces would be worth about 50 percent more than the whole," said James Bitter, an analyst with Wilmington Trust Corp. "The market believed that for about five hours." Wilmington Trust manages about $25 billion in assets, including 1.92 million Tyco shares as of December.
The company reportedly has approximately 360 employees in Rhode Island and 7,000 in Massachusetts. Tyco owns the Fire & Security Group in Cranston, among other operations in the Ocean State.
(Compiled from news reports and releases, print and electronic.)
