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Raytheon Reports Strong Fourth Quarter and Full-Year 2009 Results; Reaffirms Outlook for Continued Growth in 2010

WALTHAM, Mass., Jan. 28, 2010 /PRNewswire-FirstCall/ --

Highlights

  • Solid bookings of $7.1 billion in the quarter and $25.1 billion for the year
  • Delivered strong sales growth of 10 percent in the quarter and 7 percent for the year
  • Fourth quarter diluted earnings per share (EPS) from continuing operations of $1.30, up 29 percent; full-year 2009 EPS from continuing operations of $4.89, up 24 percent
  • Strong operating cash flow of $1.1 billion in the quarter and $2.7 billion for the year

Raytheon Company (NYSE: RTN) reported fourth quarter 2009 income from continuing operations of $517 million, up 21 percent compared to $428 million in the fourth quarter 2008. EPS from continuing operations for the fourth quarter 2009 was $1.30, up 29 percent compared to $1.01 in the fourth quarter 2008. Fourth quarter 2008 income from continuing operations included a $45 million ($69 million pretax) unfavorable adjustment due to the impact of pension investment returns on existing contracts in 2008.

"Our 2009 results reflect the increasing global demand for our capabilities, as well as the Company's strong operational performance," said William H. Swanson, Raytheon's Chairman and CEO. "Looking ahead, we expect continued growth by providing our customers with innovative solutions that address their evolving needs."

Net sales in the fourth quarter 2009 were $6.7 billion, up 10 percent from $6.1 billion in the fourth quarter 2008.

Operating cash flow from continuing operations in the fourth quarter 2009 was $1,073 million compared to $444 million in the fourth quarter 2008. In the fourth quarter 2008 the Company made $660 million in discretionary cash contributions to its pension plans. The Company made $1,115 million in total cash contributions to its pension plans in full-year 2009 compared to $1,174 million in full-year 2008.

In the fourth quarter 2009 the Company repurchased 6.0 million shares of common stock for $300 million, as part of its previously announced share repurchase program. For the full-year 2009 the Company repurchased 25.8 million shares of common stock for $1.2 billion.

Full-Year Financial Results

Full-year 2009 income from continuing operations was $2.0 billion, up 16 percent compared to $1.7 billion for the full-year 2008. EPS from continuing operations for the full-year 2009 was $4.89, up 24 percent compared to $3.93 for the full-year 2008.

Net sales in 2009 were $24.9 billion, up 7 percent from $23.2 billion in 2008, with all of Raytheon's businesses contributing to the sales growth.

The Company generated strong operating cash flow for the year. Operating cash flow from continuing operations was $2.7 billion in 2009 compared to $2.0 billion in 2008. The increase in operating cash flow in 2009 was primarily due to improved performance and lower net cash tax payments. The Company paid $627 million in cash taxes in 2009 and received $419 million in tax refunds and credits, primarily related to the discretionary cash contributions that it made to its pension plans in December 2008. The Company paid $545 million in cash taxes in 2008 and received $97 million in tax refunds and credits.

The Company ended 2009 in a net cash position of $313 million ($2.6 billion in cash and cash equivalents less total debt of $2.3 billion).

    Summary Financial Results
                                           4th Quarter                %
                                           -----------
    ($ in millions, except per
     share data)                        2009       2008(1)       Change
                                        ----       ------        ------

    Net sales                         $6,667        $6,086            10%
    Income from continuing
     operations                         $517          $428            21%
    Income from continuing
     operations attributable to
     Raytheon Company                   $504          $421            20%
    FAS/CAS Adjusted Income(2)          $500          $441            13%
    EPS from continuing operations     $1.30         $1.01            29%
    FAS/CAS Adjusted EPS(2)            $1.29         $1.06            22%
    Operating cash flow from cont.
     ops.                             $1,073          $444

    Workdays in fiscal reporting
     calendar                             61            60


                                              Full-Year                   %
                                              ---------
    ($ in millions, except per
     share data)                          2009        2008(1)        Change
                                          ----        ------         ------

    Net sales                          $24,881         $23,174             7%
    Income from continuing
     operations                         $1,977          $1,698            16%
    Income from continuing
     operations attributable to
     Raytheon Company                   $1,936          $1,674            16%
    FAS/CAS Adjusted Income(2)          $1,918          $1,754             9%
    EPS from continuing operations       $4.89           $3.93            24%
    FAS/CAS Adjusted EPS(2)              $4.85           $4.12            18%
    Operating cash flow from cont.
     ops.                               $2,745          $2,036

    Workdays in fiscal reporting
     calendar                              249             250

    (1) Fourth quarter and full-year 2008 includes a $45 million ($69
    million pretax) unfavorable adjustment due to the impact of pension
    investment returns on existing contracts in 2008.
    (2) FAS/CAS Adjusted Income is defined as income from continuing
    operations attributable to Raytheon Company common stockholders
    excluding the after-tax impact of the FAS/CAS pension adjustment.
    FAS/CAS Adjusted EPS is defined as EPS from continuing operations
    attributable to Raytheon Company common stockholders excluding the
    earnings per share impact of the FAS/CAS pension adjustment.  FAS/
    CAS Adjusted EPS and FAS/CAS Adjusted Income are non-GAAP
    financial measures.  See attachment F for a reconciliation of these
    measures and a discussion of why the Company is presenting this
    information.

Bookings and Backlog


    Bookings               4th Quarter                 Full-Year
                           -----------                 ---------
    ($ in millions)     2009              2008    2009             2008
                        ----              ----    ----             ----

    Bookings          $7,065            $8,530 $25,058          $26,820
                                               =======          =======
    Backlog               Period Ending
                          -------------
    ($ in millions) 12/31/09          12/31/08
                    --------          --------

    Backlog*         $36,877           $38,884
    Funded Backlog   $23,479           $21,986


    * Due to a change in Missile Defense Agency priorities, on June 10,
    2009 the Kinetic Energy Interceptor (KEI) program was terminated for
    convenience, resulting in a $2.4 billion reduction of the Company's
    backlog at the end of the second quarter 2009.


Bookings exceeded net sales in both the fourth quarter and full-year 2009.

The Company ended 2009 with a backlog of $36.9 billion and its highest year-end funded backlog of $23.5 billion.

Outlook


    2010 Financial Outlook                       2010 Outlook
                                                 ------------
                                                                    Prior
                                     2009A       Current       (10/22/09)
                                     -----       -------      -----------

    Net Sales ($B)                     24.9    25.9 - 26.4   25.9 - 26.4
    FAS/CAS Pension Inc./(Exp.) ($M)     27      (220)*              (228)
                                                  (95) -
    Interest Expense, Net ($M)         (109)      (110)*    (90) - (105)

    Diluted Shares (M)                395.7     377 - 382     377 - 382

    Effective Tax Rate                 32.5%         ~31.5%       ~31.5%

    EPS from Continuing Operations    $4.89   $4.75 - $4.90 $4.75 - $4.90
    FAS/CAS Adjusted EPS(1)           $4.85  $5.13 - $5.28* $5.16 - $5.31

    Operating Cash Flow from Cont.
     Ops. ($B)                          2.7     2.0 - 2.2     2.0 - 2.2
    ROIC (%)(1)                        12.2    12.2 - 12.6  Not provided

    * Denotes change from prior
     guidance.

    (1) FAS/CAS Adjusted EPS is defined as EPS from continuing
    operations attributable to Raytheon Company common stockholders
    excluding the earnings per share impact of the FAS/CAS pension
    adjustment. The statutory tax rate of 35.0% was used to calculate
    the after-tax impact of the current FAS/CAS pension adjustment.
    The effective tax rate of 31.5% was used to calculate the after-tax
    impact of the prior FAS/CAS pension adjustment. FAS/CAS Adjusted
    EPS and ROIC are non-GAAP financial measures.  See attachment F for
    a reconciliation of FAS/CAS Adjusted EPS to EPS from continuing
    operations and attachment G for a calculation of ROIC and
    discussions of why the Company is presenting this information.


The Company is reaffirming its prior guidance for 2010 and providing more detailed information. Charts containing additional information on the Company's 2010 guidance are available on the Company's website at www.raytheon.com.

Segment Results

Integrated Defense Systems



                    4th Quarter            %           Full-Year             %
                    -----------                        ---------
    ($ in
     millions)   2009           2008  Change     2009           2008  Change
                 ----           ----  ------     ----           ----  ------

    Net Sales  $1,541         $1,423        8% $5,525         $5,148        7%
    Operating
     Income      $249           $244        2%   $859           $870       -1%
    Operating
     Margin      16.2%          17.1%            15.5%          16.9%



Fourth Quarter

Integrated Defense Systems (IDS) had fourth quarter 2009 net sales of $1,541 million, up 8 percent compared to $1,423 million in the fourth quarter 2008, primarily due to growth on international Patriot programs. IDS recorded $249 million of operating income compared to $244 million in the fourth quarter 2008.

During the quarter, IDS booked $990 million for a letter contract on ground-system hardware and initial spares for the Patriot Air and Missile Defense System for Taiwan, after receiving contract awards totaling $1.1 billion. IDS also booked $160 million related to the renewal of an international Patriot technical support contract and $315 million for systems design work for the Zumwalt-class destroyer for the U.S. Navy.

Full-year

IDS had full-year 2009 net sales of $5,525 million, up 7 percent compared to $5,148 million in 2008. The increase in sales was primarily due to growth on international Patriot programs. IDS recorded $859 million of operating income in 2009 compared to $870 million in 2008.

During the year, IDS booked $1,982 million to fund new production and upgrades of the Patriot Air and Missile Defense System for Taiwan and United Arab Emirates (UAE). IDS also booked $650 million on the Zumwalt-class destroyer program, $157 million to provide Finland with Surface Launched Medium Range Air-to-Air Missile (SL-AMRAAM) systems, and $150 million for Joint Land Attack Cruise Missile Defense Elevated Netted Sensor Systems (JLENS) for the U.S. Army.

Intelligence and Information Systems



                  4th Quarter            %           Full-Year             %
                  -----------                        ---------
    ($ in
     millions) 2009           2008  Change     2009           2008  Change
               ----           ----  ------     ----           ----  ------

    Net Sales  $803           $810       -1% $3,204         $3,132        2%
    Operating
     Income     $64            $67       -4%   $259           $253        2%
    Operating
     Margin     8.0%           8.3%             8.1%           8.1%



Fourth Quarter

Intelligence and Information Systems (IIS) had fourth quarter 2009 net sales of $803 million compared to $810 million in the fourth quarter 2008. IIS recorded $64 million of operating income compared to $67 million in the fourth quarter 2008.

During the quarter, IIS booked $153 million on a contract to provide intelligence, surveillance and reconnaissance (ISR) support to the U.S. Air Force. IIS also booked $519 million on a number of classified contracts.

Full-year

IIS had full-year 2009 net sales of $3,204 million compared to $3,132 million in 2008. IIS recorded $259 million of operating income in 2009 compared to $253 million in 2008.

During the year, IIS booked $1,364 million on a number of classified contracts.

Missile Systems



                    4th Quarter            %           Full-Year             %
                    -----------                        ---------
    ($ in
     millions)   2009           2008  Change     2009           2008  Change
                 ----           ----  ------     ----           ----  ------

    Net Sales  $1,413         $1,366        3% $5,561         $5,408        3%
    Operating
     Income      $154           $142        8%   $604           $584        3%
    Operating
     Margin      10.9%          10.4%            10.9%          10.8%



Fourth Quarter

Missile Systems (MS) had fourth quarter 2009 net sales of $1,413 million compared to $1,366 million in the fourth quarter 2008, primarily due to higher volume on the Evolved Sea Sparrow Missile (ESSM), Maverick, and Phalanx programs. MS recorded $154 million of operating income compared to $142 million in the fourth quarter 2008.

During the quarter, MS booked $222 million for the production of Standard Missile-2 (SM-2) for international customers and the U.S. Navy, and $101 million for the development of Standard Missile-3 (SM-3) for the Missile Defense Agency. MS also booked $201 million for the production of ESSM for international customers and the U.S. Navy, $170 million for the production of Maverick missiles for an international customer and $111 million for the production of Tube Launched, Optically Tracked, Wireless (TOW) missiles for international customers and the U.S. Army.

Full-year

MS had full-year 2009 net sales of $5,561 million compared to $5,408 million in 2008. The increase in sales in 2009 was primarily due to higher volume on the SM-3 and Maverick programs. MS recorded $604 million of operating income in 2009 compared to $584 million in 2008. The increase in operating income in 2009 was primarily due to higher volume.

During the year, MS booked $645 million for the Advanced Medium-Range Air-to-Air Missile (AMRAAM) program for international customers and the U.S. Air Force, $514 million for TOW missiles for international customers and the U.S. Army, and $508 million for ESSM and $402 million for Phalanx Weapon Systems for international customers and the U.S. Navy. MS also booked $384 million on SM-2 for international customers and the U.S. Navy, $318 million for SM-3 for the Missile Defense Agency and $294 million for Tactical Tomahawk cruise missiles for the U.S. Navy.

Network Centric Systems



                    4th Quarter            %           Full-Year             %
                    -----------                        ---------
    ($ in
     millions)   2009           2008  Change     2009           2008  Change
                 ----           ----  ------     ----           ----  ------

    Net Sales  $1,259         $1,125       12% $4,822         $4,510        7%
    Operating
     Income      $169           $148       14%   $674           $575       17%
    Operating
     Margin      13.4%          13.2%            14.0%          12.7%




Fourth Quarter

Network Centric Systems (NCS) had fourth quarter 2009 net sales of $1,259 million, up 12 percent compared to $1,125 million in the fourth quarter 2008, due to higher volume on various programs, primarily for the U.S. Army. NCS recorded $169 million of operating income compared to $148 million in the fourth quarter 2008. The increase in operating income was primarily due to the increased volume.

During the quarter, NCS booked $446 million on an international classified program and an additional $127 million for a toll system replacement program.

Full-year

NCS had full-year 2009 net sales of $4,822 million, up 7 percent compared to $4,510 million in 2008. The increase in sales was due to higher volume on various production programs, primarily for the U.S. Army. NCS recorded $674 million of operating income compared to $575 million in 2008. The increase in operating income was primarily due to improved program performance and higher volume.

During the year, NCS booked $163 million for Improved Target Acquisition Systems (ITAS), $146 million for Horizontal Technology Insertion (HTI) forward-looking infrared kits, $117 million for Commander's Independent Viewers (CIV), $107 million for the Secure Mobile Anti-Jam Reliable Tactical Terminal (SMART-T) program and $97 million for Thermal Weapon Sights II for the U.S. Army, and $82 million for the Global Positioning Satellite-Aided Geosynchronous Augmented Navigation (GAGAN) system for the India Space Research Organization (ISRO).

Space and Airborne Systems



                    4th Quarter            %           Full-Year             %
                    -----------
    ($ in
     millions)   2009           2008  Change     2009           2008  Change
                 ----           ----  ------     ----           ----  ------

    Net Sales  $1,266         $1,166        9% $4,582         $4,280        7%
    Operating
     Income      $174           $167        4%   $647           $569       14%
    Operating
     Margin      13.7%          14.3%            14.1%          13.3%




Fourth Quarter

Space and Airborne Systems (SAS) had fourth quarter 2009 net sales of $1,266 million, up 9 percent compared to $1,166 million in the fourth quarter 2008, primarily due to growth on classified business. SAS recorded $174 million of operating income compared to $167 million in the fourth quarter 2008. The increase in operating income was primarily due to higher volume.

During the quarter, SAS booked $122 million for the B-2 Radar Modernization Program (RMP). SAS also booked $131 million on a number of classified contracts.

Full-year

SAS had full-year 2009 net sales of $4,582 million, up 7 percent compared to $4,280 million in 2008, primarily due to growth on classified business. SAS recorded $647 million of operating income in 2009 compared to $569 million in 2008. The increase in operating income was primarily due to higher volume, favorable mix and contractual settlements.

During the year, SAS booked $422 million to supply APG-63 fire control radars and support equipment for the Japan Air Self-Defense Force, $295 million for the B-2 RMP and $147 million on the Integrated Sensor Is Structure (ISIS) radar program for the Defense Advanced Research Projects Agency (DARPA). SAS also booked $1,330 million on a number of classified contracts.

Technical Services



                  4th Quarter            %           Full-Year             %
                  -----------                        ---------
    ($ in
     millions) 2009           2008  Change     2009           2008  Change
               ----           ----  ------     ----           ----  ------

    Net Sales  $888           $744       19% $3,161         $2,601       22%
    Operating
     Income     $58            $49       18%   $215           $174       24%
    Operating
     Margin     6.5%           6.6%             6.8%           6.7%





Fourth Quarter

Technical Services (TS) had fourth quarter 2009 net sales of $888 million, up 19 percent compared to $744 million in the fourth quarter 2008, primarily due to continued growth in domestic and foreign operational training programs for the U.S. Army's Warfighter Field Operations Customer Support activities. TS recorded operating income of $58 million in the fourth quarter 2009 compared to $49 million in the fourth quarter 2008, primarily due to higher volume.

During the quarter, TS booked $67 million for work on domestic operational training programs for the U.S. Army.

Full-year

TS had full-year 2009 net sales of $3,161 million, up 22 percent compared to $2,601 million in 2008. TS recorded operating income of $215 million in 2009 compared to $174 million in 2008. The increase in net sales and operating income were primarily due to continued strong growth in domestic and foreign operational training programs and the Federal Aviation Administration's (FAA) Air Traffic Control Optimum Training Solutions (ATCOTS).

During the year, TS booked $1,011 million on domestic operational training programs and $300 million on foreign operational training programs for the U.S. Army. TS also booked $160 million to upgrade Phalanx Weapon Systems for the Royal Canadian Navy and $100 million for a Defense Threat Reduction Agency (DTRA) program.

Raytheon Company (NYSE: RTN), with 2009 sales of $25 billion, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 88 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 75,000 people worldwide.

Conference Call on the Fourth Quarter and Full-Year 2009 Financial Results

Raytheon's financial results conference call will be held on Thursday, January 28, 2010 at 9 a.m. ET. Participants will include William H. Swanson, Chairman and CEO; David C. Wajsgras, senior vice president and CFO; and other Company executives.

The dial-in number for the conference call will be (866) 543-6405 in the U.S. or (617) 213-8897 outside of the U.S. The conference call will also be audiocast on the Internet at www.raytheon.com/ir. Individuals may listen to the call and download charts that will be used during the call. These charts will be available for printing prior to the call.

Interested parties are encouraged to check the website ahead of time to ensure their computers are configured for the audio stream. Instructions for obtaining the free required downloadable software are posted on the site.

Disclosure Regarding Forward-looking Statements

This release and the attachments contain forward-looking statements, including information regarding the Company's 2010 financial outlook, future plans, objectives, business prospects and anticipated financial performance. These forward-looking statements are not statements of historical facts and represent only the Company's current expectations regarding such matters. These statements inherently involve a wide range of known and unknown risks and uncertainties. The Company's actual actions and results could differ materially from what is expressed or implied by these statements. Specific factors that could cause such a difference include, but are not limited to: the Company's dependence on the U.S. Government for a significant portion of its business and the risks associated with U.S. Government sales, including changes or shifts in defense spending, uncertain funding of programs, potential termination of contracts, and difficulties in contract performance; the ability to procure new contracts; the risks of conducting business in foreign countries; the ability to comply with extensive governmental regulation, including import and export policies, the Foreign Corrupt Practices Act, the International Traffic in Arms Regulations, and procurement and other regulations; the impact of competition; the ability to develop products and technologies; the impact of changes in the financial markets and global economic conditions; the risk that actual pension returns, discount rates or other actuarial assumptions are significantly different than the Company's assumptions; the risk of cost overruns, particularly for the Company's fixed-price contracts; dependence on component availability, subcontractor performance and key suppliers; risks of a negative government audit; the use of accounting estimates in the Company's financial statements; risks associated with acquisitions, dispositions, joint ventures and other business arrangements; risks of an impairment of goodwill or other intangible assets; the outcome of contingencies and litigation matters, including government investigations; the ability to recruit and retain qualified personnel; the impact of potential security threats and other disruptions; and other factors as may be detailed from time to time in the Company's public announcements and Securities and Exchange Commission filings. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this release and the attachments or to update them to reflect events or circumstances occurring after the date of this release, including any acquisitions, dispositions or other business arrangements that may be announced or closed after such date. This release and the attachments also contain non-GAAP financial measures. A GAAP reconciliation and a discussion of the Company's use of these measures are included in this release or the attachments.


    Media Contact:                            Investor Relations Contact:
    Jon Kasle                                 Marc Kaplan
    781-522-5110                              781-522-5141



    Attachment A
    Raytheon Company
    Preliminary Statement of Operations Information
    Fourth Quarter 2009

    (In millions, except per
     share amounts)                             
                              Three Months Ended     Twelve Months Ended
                           31-Dec-09      31-Dec-08   31-Dec-09     31-Dec-08
                           ---------      ---------   ---------     ---------

    Total net sales           $6,667         $6,086     $24,881       $23,174
                              ------         ------     -------       -------
    Operating expenses
         Cost of sales        5,317           4,903      19,747        18,489
         Administrative
          and selling
          expenses              392             392       1,527         1,548
         Research and
          development
          expenses              158             138         565           517
                                ---             ---         ---           ---

    Total operating
     expenses                 5,867           5,433      21,839        20,554
                              -----           -----      ------        ------

    Operating income            800             653       3,042         2,620
                                ---             ---       -----         -----

         Interest expense        28              32         123           129
         Interest income         (3)             (8)        (14)          (64)
         Other expense, net      21              12           3            33
                                ---             ---         ---           ---

    Non-operating expense, 
     net                         46              36         112            98
                                ---             ---         ---           ---

    Income from continuing
     operations before taxes    754             617       2,930         2,522

    Federal and foreign 
     income taxes               237             189         953           824
                                ---             ---         ---           ---

    Income from continuing
     operations                 517             428       1,977         1,698

    Income (loss) from
     discontinued operations,
     net of tax                   -               -          (1)           (2)
                                ---             ---         ---           ---

    Net income                  517             428       1,976         1,696


         Less: Net income
          attributable
          to noncontrolling
          interests             13                7          41            24
                               ---              ---         ---           ---

    Net income attributable
     to Raytheon Company      $504             $421      $1,935        $1,672
                              ====             ====      ======        ======

    Basic earnings (loss) 
     per share attributable
     to Raytheon Company 
     common stockholders:
          Income from
           continuing
           operations        $1.32            $1.03       $4.96         $4.01
          Income (loss)
           from
           discontinued
           operations            -                -           -         (0.01)
          Net income          1.32             1.03        4.96          4.01

    Diluted earnings
     (loss) per share
     attributable
     to Raytheon
     Company common
     stockholders:
           Income from
            continuing
            operations       $1.30            $1.01       $4.89         $3.93
           Income (loss)
            from
            discontinued
            operations           -                -           -         (0.01)
           Net income         1.30             1.01        4.89          3.92

    Amounts attributable
     to Raytheon Company 
     common stockholders:
          Income from
           continuing
           operations         $504             $421      $1,936        $1,674
          Income (loss)
           from
           discontinued
           operations            -                -          (1)           (2)
                               ---              ---         ---           ---
          Net income          $504             $421      $1,935        $1,672
                              ====             ====      ======        ======

    Average shares 
     outstanding
          Basic              382.2            409.8       390.4         417.2
          Diluted            388.4            416.4       395.7         426.5


    Attachment B
    Raytheon Company
    Preliminary Segment Information
    Fourth Quarter 2009


                        Total Net Sales                Operating Income
    (In millions,
     except
     percentages)      Three Months Ended             Three Months Ended
                       ------------------             ------------------
                  31-Dec-09        31-Dec-08   31-Dec-09        31-Dec-08
                  ---------        ---------   ---------        ---------

    Integrated
     Defense
     Systems          $1,541           $1,423        $249             $244
    Intelligence
     and
     Information
     Systems             803              810          64               67
    Missile
     Systems           1,413            1,366         154              142
    Network
     Centric
     Systems           1,259            1,125         169              148
    Space and
     Airborne
     Systems           1,266            1,166         174              167
    Technical
     Services            888              744          58               49
    FAS/CAS
     Pension
     Adjustment            -                -           6              (30)
    Corporate and
     Eliminations       (503)            (548)        (74)            (134)
                        ----             ----         ---             ----

    Total             $6,667           $6,086        $800             $653
                      ======           ======        ====             ====



                                      Operating Income
                                   As a Percent of Sales
    (In millions, except
     percentages)                    Three Months Ended
                                     ------------------
                                31-Dec-09       31-Dec-08
                                ---------       ---------

    Integrated Defense
     Systems                          16.2%           17.1%
    Intelligence and
     Information Systems               8.0%            8.3%
    Missile Systems                   10.9%           10.4%
    Network Centric Systems           13.4%           13.2%
    Space and Airborne
     Systems                          13.7%           14.3%
    Technical Services                 6.5%            6.6%
    FAS/CAS Pension
     Adjustment
    Corporate and
     Eliminations

    Total                             12.0%           10.7%



                        Total Net Sales                Operating Income
    (In millions,
     except
     percentages)     Twelve Months Ended            Twelve Months Ended
                      -------------------            -------------------
                  31-Dec-09        31-Dec-08   31-Dec-09        31-Dec-08
                  ---------        ---------   ---------        ---------

    Integrated
     Defense
     Systems          $5,525           $5,148        $859             $870
    Intelligence
     and
     Information
     Systems           3,204            3,132         259              253
    Missile
     Systems           5,561            5,408         604              584
    Network
     Centric
     Systems           4,822            4,510         674              575
    Space and
     Airborne
     Systems           4,582            4,280         647              569
    Technical
     Services          3,161            2,601         215              174
    FAS/CAS
     Pension
     Adjustment            -                -          27             (123)
    Corporate and
     Eliminations     (1,974)          (1,905)       (243)            (282)
                      ------           ------        ----             ----

    Total            $24,881          $23,174      $3,042           $2,620
                     =======          =======      ======           ======


                                      Operating Income
                                   As a Percent of Sales
    (In millions, except
     percentages)                   Twelve Months Ended
                                    -------------------
                                31-Dec-09       31-Dec-08
                                ---------       ---------

    Integrated Defense
     Systems                          15.5%           16.9%
    Intelligence and
     Information Systems               8.1%            8.1%
    Missile Systems                   10.9%           10.8%
    Network Centric Systems           14.0%           12.7%
    Space and Airborne
     Systems                          14.1%           13.3%
    Technical Services                 6.8%            6.7%
    FAS/CAS Pension
     Adjustment
    Corporate and
     Eliminations

    Total                             12.2%           11.3%

    Attachment C
    Raytheon Company
    Other Preliminary Information
    Fourth Quarter 2009


    (In millions)             Funded Backlog              Total Backlog
                              --------------              -------------
                       31-Dec-09        31-Dec-08   31-Dec-09     31-Dec-08
                       ---------        ---------   ---------     ---------

    Integrated Defense
     Systems                $5,595           $4,802 $10,665          $9,883
    Intelligence and
     Information
     Systems                 1,588            1,890   4,360           5,137
    Missile Systems*         6,454            6,082   7,657           9,937
    Network Centric
     Systems                 4,389            4,593   5,501           5,733
    Space and Airborne
     Systems                 3,402            2,731   5,921           5,442
    Technical Services       2,051            1,888   2,773           2,752


    Total                  $23,479          $21,986 $36,877         $38,884
                           =======          ======= =======         =======



                                Bookings                      Bookings
                           Three Months Ended            Twelve Months Ended
                           ------------------            -------------------
                      31-Dec-09           31-Dec-08     31-Dec-09   31-Dec-08
                      ---------           ---------     ---------   ---------

    Bookings             $7,065              $8,530     $25,058     $26,820
                         ======              ======     =======     =======



    * Due to a change in Missile Defense Agency priorities, on June 10, 2009 
    the Kinetic Energy Interceptor (KEI) program was terminated for 
    convenience, resulting in a $2.4 billion reduction of the Company's 
    backlog at the end of the second quarter of 2009.


    Attachment D
    Raytheon Company
    Preliminary Balance Sheet Information
    Fourth Quarter 2009

    (In millions)
                                                    31-Dec-09  31-Dec-08
                                                    ---------  ---------
    Assets
         Cash and cash equivalents                     $2,642     $2,259
         Accounts receivable, net                         120        105
         Contracts in process                           4,373      3,793
         Inventories                                      344        325
         Current tax asset                                  -        441
         Deferred taxes                                   273        395
         Prepaid expenses and other current assets        116         99
                                                          ---        ---
       Total current assets                             7,868      7,417

    Property, plant and equipment, net                  2,001      2,024
    Deferred taxes                                        436        735
    Prepaid retiree benefits                              111         56
    Goodwill                                           11,922     11,662
    Other assets, net                                   1,269      1,240
                                                        -----      -----
            Total assets                              $23,607    $23,134
                                                      =======    =======

    Liabilities and Equity
    Current liabilities
         Advance payments and billings in excess of
          costs incurred                               $2,224     $1,970
         Accounts payable                               1,397      1,201
         Accrued employee compensation                    868        913
         Other accrued expenses                         1,034      1,065
                                                        -----      -----
      Total current liabilities                         5,523      5,149

    Accrued retiree benefits and other long-
     term liabilities                                   5,793      6,488
    Deferred taxes                                         23          -
    Long-term debt                                      2,329      2,309

    Equity
      Raytheon Company stockholders' equity
         Common stock                                       4          4
         Additional paid-in capital                    10,991     10,873
         Accumulated other comprehensive loss          (4,824)    (5,182)
         Treasury stock, at cost                       (5,446)    (4,254)
         Retained earnings                              9,102      7,646
                                                        -----      -----
      Total Raytheon Company stockholders' equity       9,827      9,087
         Noncontrolling interest in subsidiaries          112        101
                                                          ---        ---
        Total equity                                    9,939      9,188
                                                        -----      -----
            Total liabilities and equity              $23,607    $23,134
                                                      =======    =======



    Attachment E
    Raytheon Company
    Preliminary Cash Flow Information
    Fourth Quarter 2009


    (In millions)       Three Months Ended             Twelve Months Ended
                        ------------------             -------------------
                      31-Dec-09      31-Dec-08       31-Dec-09      31-Dec-08
                      ---------      ---------       ---------      ---------

    Net income             $517           $428          $1,976         $1,696
    Loss (income) from
     discontinued
     operations, net of
     tax                      -              -               1              2
                            ---            ---             ---            ---
    Income from
     continuing
     operations             517            428           1,977          1,698

    Depreciation             79             75             299            292
    Amortization             28             27             103             98
    Working capital
     (excluding pension
     and taxes)*            178            629             (47)           247
    Discontinued
     operations              (4)             -             (20)           (21)
    Net activity in
     financing
     receivables             18             22              46             68
    Other                   253           (737)            367           (367)
                           ----           ----            ----           ---- 
      Net operating 
       cash flow          1,069            444           2,725          2,015

    Capital spending       (142)          (137)           (280)          (304)
    Internal use
     software spending      (18)           (16)            (67)           (74)
    Acquisitions           (334)             -            (334)           (54)
    Investment activity
     and divestiture          -              -               -              9
    Dividends              (118)          (116)           (473)          (460)
    Repurchases of
     common stock          (300)          (680)         (1,200)        (1,700)
    Debt issuance           496              -             496              -
    Debt repayment         (474)             -            (474)             -
    Other                    21              3             (10)           172
                            ---            ---             ---            ---
        Total cash flow    $200          $(502)           $383          $(396)
                           ====          =====            ====           =====


    *  Working capital (excluding pension and taxes) is a summation of changes
    in: accounts receivable, net, contracts in  process and advance payments 
    and billings in excess of costs incurred, inventories, prepaid expenses 
    and other current assets, accounts payable, accrued employee compensation,
    and other accrued expenses  from the Statements of Cash Flows.   


    Attachment F
    Raytheon Company
    Non-GAAP Financial Measures - FAS/CAS Adjusted Measures
    Fourth Quarter 2009


    FAS/CAS Adjusted EPS Non-GAAP Reconciliation


                       Fourth Quarter  Full Year  2010 Guidance
                       --------------  ---------  -------------
                                 2009       2008               2009  2008
                                 ----       ----               ----  ----

    Diluted
     earnings per
     share from
     continuing
     operations
     attributable
     to Raytheon
     Company
     common
     stockholders               $1.30     $1.01*              $4.89  $3.93*
    Less: Per
     share impact
     of the FAS/
     CAS Pension
     Adjustment**                0.01      (0.05)              0.04  (0.19)
                                 ----      -----               ----  -----
    FAS/CAS
     Adjusted EPS
     ***                        $1.29      $1.06              $4.85  $4.12
                                =====      =====              =====  =====

    ** FAS/CAS
     Pension
     Adjustment                    $6       $(30)               $27  $(123)
        Tax affect (at
         35.0% federal
         statutory
         rate)                     (2)        10                 (9)   43
                                  ---        ---                ---   ---
        After-tax
         FAS/CAS
         Pension
         Adjustment                 4        (20)                18  (80)
        Diluted Shares          388.4      416.4              395.7  426.5
                                -----      -----              -----  -----
        Per share
         impact of the
         FAS/CAS
         Pension
         Adjustment             $0.01     $(0.05)             $0.04  $(0.19)
                                =====     ======              =====  ======



                                         2010 Guidance
                                         -------------
                                            Low end       High end
                                            of range      of range
                                            --------      --------

    Diluted earnings per share from
     continuing operations
     attributable to Raytheon
     Company common stockholders                 $4.75        $4.90
    Less: Per share impact of the
     FAS/CAS Pension Adjustment**                (0.38)       (0.38)
                                                 -----        -----
    FAS/CAS Adjusted EPS ***                     $5.13        $5.28
                                                 =====        =====

    ** FAS/CAS Pension Adjustment                $(220)       $(220)
        Tax affect (at 35.0% federal
         statutory rate)                            77           77
                                                   ---          ---
        After-tax FAS/CAS Pension
         Adjustment                               (143)        (143)
        Diluted Shares                           382.0        377.0
                                                 -----        -----
        Per share impact of the FAS/CAS
         Pension Adjustment                     $(0.38)      $(0.38)
                                                ======       ======


    *  Fourth quarter and full-year 2008 EPS from continuing operations
    includes the $45 million ($69 million pretax) unfavorable adjustment
    due to the impact of pension investment returns on existing
    contracts in 2008.

    FAS/CAS Adjusted Income from Continuing Operations attributable to
    Raytheon Company common stockholders Non-GAAP Reconciliation

                                Fourth Quarter            Full Year
                                --------------            ---------
                                 2009          2008   2009            2008
                                 ----          ----   ----            ----

    Income from Continuing
     Operations attributable to
     Raytheon Company common
     stockholders                $504          $421 $1,936          $1,674
    FAS/CAS Pension Adjustment
     (Tax affected at 35.0%
     federal statutory rate)       (4)           20    (18)             80
                                  ---           ---    ---             ---
    FAS/CAS Adjusted Income
     from Continuing Operations
     attributable to Raytheon
     common stockholders***
                                 $500          $441 $1,918          $1,754
                                 ====          ==== ======          ======


    ***  These amounts are not measures of financial performance under
    U.S. generally accepted accounting principles (GAAP).  They should
    be considered supplemental to and not a substitute for financial
    performance in accordance with GAAP and may not be defined and
    calculated by other companies in the same manner. FAS/CAS Adjusted
    EPS is defined as EPS from continuing operations attributable to
    Raytheon Company common stockholders excluding the earnings per
    share impact of the FAS/CAS pension adjustment.  FAS/CAS Adjusted
    Income from Continuing Operations attributable to Raytheon Company
    common stockholders is defined as Income from Continuing Operations
    attributable to Raytheon Company common stockholders excluding the
    impact of the FAS/CAS pension adjustment.  We are providing these
    measures, which exclude the impact of the FAS/CAS pension
    adjustment, because management uses them for the purposes of
    evaluating and forecasting the Company's financial performance and
    we believe it allows investors to benefit from being able to assess
    our operating performance in the context of how our principal
    customer, the U.S. Government, allows us to recover pension costs
    and to better compare our operating performance to others in the
    industry on that same basis.

    Attachment G
    Raytheon Company
    Preliminary Return on Invested Capital Non-GAAP Financial Measure
    Fourth Quarter 2009



    We define Return on Invested Capital (ROIC) as income from continuing
    operations excluding the after-tax affect of the FAS/CAS Pension
    Adjustment plus after-tax net interest expense plus one-third of
    operating lease expense after-tax (estimate of interest portion of
    operating lease expense) divided by average invested capital after
    capitalizing operating leases (operating lease expense times a
    multiplier of 8), adding financial guarantees less net investment in
    Discontinued Operations, and adding back the impact of the
    accounting standard for employers' accounting for defined benefit
    pension and other postretirement plans.  ROIC is not a measure of
    financial performance under generally accepted accounting principles
    (GAAP) and may not be defined and calculated by other companies in
    the same manner.  ROIC should be considered supplemental to and not
    a substitute for financial information prepared in accordance with
    GAAP. We use ROIC as a measure of efficiency and effectiveness of
    our use of capital and as an element of management compensation.

    Return on Invested Capital

    (In millions, except
     percentages)                 2009       2010 Initial Guidance
                                  ----       ---------------------
                                         Low end            High end
                                        of range            of range
                                        --------            --------
    Income from continuing
     operations                 $1,977
    FAS/CAS Pension
     Adjustment, after-tax *       (18)
    Net interest expense,
     after-tax *                    71   Combined            Combined
    Lease expense, after-tax *      66
                                   ---
    Return                      $2,096       $2,155              $2,200
                                ------       ------              ------

    Net debt **                  $(132)
    Equity less investment in
     discontinued operations     9,560
    Lease expense x 8, plus
     financial guarantees        2,815   Combined            Combined
    Minimum pension liability    5,007
                                 -----
    Invested capital from
     continuing operations *** $17,250      $17,700             $17,500
                               -------      -------             -------


    ROIC                          12.2%        12.2%               12.6%
                                  ----         ----                ----


    *  Federal statutory tax rate of 35.0%
    **  Net debt is defined as total debt less cash and cash equivalents
    and is calculated using a 2 point average
    ***  Calculated using a 2 point average

SOURCE: Raytheon Company

Web site: http://www.raytheon.com/

Company News On-Call: http://www.prnewswire.com/comp/149999.html

Company News On-Call: http://www.prnewswire.com/comp/742575 .html

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