Raytheon Cuts Cash Flow Outlook by $2 Billion Due to R&D Mandate

The research and experimentation requirements for companies that went into effect earlier this year are beginning to have an impact, with aerospace and defense company Raytheon Technologies announcing a $2 billion decrease in expected free cash flow.

“It’s rooted in the fact that Congress hasn’t acted on the research and experimentation amortization provision that was in the Tax Cuts and Jobs Act,” Andrew Silverman, a Bloomberg Intelligence tax policy analyst, said Wednesday.

Companies must deduct U.S.-based expenses over five years and charge it to a capital account, a requirement as of 2022. They previously could deduct all research and ...