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Raytheon Reports Strong First Quarter Results

Highlights

- Strong bookings of $6.5 billion; net sales of $6.1 billion

- Earnings per share (EPS) from continuing operations of $1.18; FAS/CAS Adjusted EPS(1) of $1.27, up 17 percent

- Solid operating cash flow from continuing operations of $257 million

- As previously announced, increased annual dividend rate by 21 percent to $1.50 per share and authorized new $2.0 billion share repurchase program

WALTHAM, Mass., April 22, 2010 /PRNewswire-FirstCall/ -- Raytheon Company (NYSE:RTN) announced first quarter 2010 income from continuing operations attributable to Raytheon of $453 million or $1.18 per diluted share, compared to $449 million or $1.11 per diluted share in the first quarter 2009. First quarter 2010 FAS/CAS Adjusted Income was $487 million or $1.27 per diluted share, compared to $442 million or $1.09 per diluted share in the first quarter 2009(1). First quarter 2010 FAS/CAS Adjusted EPS excluded ($0.09) per diluted share of FAS/CAS pension expense, compared to $0.02 per diluted share of FAS/CAS pension income in the first quarter 2009(1).

"We delivered strong results during the quarter and reaffirmed our positive outlook for the year," said William H. Swanson, Raytheon's Chairman and CEO. "We have strong competitive positions, a proven track record of performance, innovative solutions and technologies that are focused on our global customers."

Net sales in the first quarter 2010 were $6.1 billion, up 3 percent from $5.9 billion in the first quarter 2009.

The Company generated solid operating cash flow from continuing operations of $257 million in the first quarter 2010, which included federal and foreign tax payments of $59 million. Operating cash flow from continuing operations in the first quarter 2009 was $411 million, which included a net tax refund of $323 million. Excluding these tax items, operating cash flow from continuing operations in the first quarter 2010 increased by $228 million, primarily due to improved performance.

The Company ended the first quarter 2010 with $2.6 billion in cash and cash equivalents and $2.3 billion in total debt.

In the first quarter, 2010 the Company repurchased 5.5 million shares of common stock for $300 million, as part of its previously announced share repurchase program. As announced in March 2010, the Company's Board of Directors authorized the repurchase of up to an additional $2.0 billion of the Company's outstanding common stock and also increased the Company's annual dividend payout rate by 21 percent from $1.24 to $1.50 per share.

  Summary Financial Results                  1st Quarter            %
                                             -----------
  ($ in millions, except per share data)   2010           2009 Change
                                           ----           ---- ------

  Net sales                              $6,053         $5,884       3%
  Income from continuing operations
   attributable to                         $453           $449       1%
  Raytheon Company
  FAS/CAS Adjusted Income(1)               $487           $442      10%
  EPS from continuing operations          $1.18          $1.11       6%
  FAS/CAS Adjusted EPS(1)                 $1.27          $1.09      17%
  Operating cash flow from cont. ops.      $257           $411

  Workdays in fiscal reporting calendar      60             61

  (1) 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
  EPS 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


                              1st Quarter
                              -----------
    ($ in millions)        2010           2009
                           ----           ----
    Bookings             $6,526         $5,209
                         ======         ======
    Backlog                  Period Ending
                             -------------
    ($ in millions)    03/28/10       12/31/09
                       --------       --------

    Backlog             $36,984        $36,877
    Funded Backlog      $23,464        $23,479


  ----


Bookings exceeded net sales in the first quarter 2010. The Company reported total bookings in the first quarter 2010 of $6.5 billion, compared to $5.2 billion in the first quarter 2009.

The Company ended the first quarter 2010 with a backlog of $37.0 billion, compared to $36.9 billion at the end of 2009.

  Outlook


  2010 Financial Outlook
                                   2009 Actual       2010 Outlook
                                   -----------       ------------

  Net Sales ($B)                          24.9         25.9 - 26.4
  FAS/CAS Pension Inc./(Exp.)
   ($M)                                     27                (220)
  Interest Expense, Net ($M)              (109)        (95) -(110)
  Diluted Shares (M)                     395.7           377 - 382
  Effective Tax Rate                      32.5%             ~31.5%
  EPS from Continuing Operations         $4.89       $4.75 - $4.90
  FAS/CAS Adjusted EPS(1)                $4.85       $5.13 - $5.28
  Operating Cash Flow from Cont.
   Ops. ($B)                               2.7           2.0 - 2.2
  ROIC (%)(1)                             12.2         12.2 - 12.6

  (1) FAS/CAS Adjusted EPS is defined as EPS from continuing
  operations attributable to Raytheon Company common stockholders
  excluding the EPS impact of the 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 positive outlook for 2010. Charts containing additional information on the Company's 2010 financial outlook are available on the Company's website at www.raytheon.com/ir.

(1) 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 EPS impact of the FAS/CAS pension adjustment. FAS/CAS Adjusted Income and FAS/CAS Adjusted EPS 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.

  Segment Results

  Integrated Defense Systems




                           1st Quarter              %
                           -----------
    ($ in millions)     2010         2009      Change
                        ----         ----      ------

    Net Sales         $1,336       $1,262            6%
    Operating
     Income             $210         $188           12%
    Operating
     Margin             15.7%        14.9%


Integrated Defense Systems (IDS) had first quarter 2010 net sales of $1,336 million, up 6 percent compared to $1,262 million in the first quarter 2009, primarily due to growth on international Patriot programs. IDS recorded $210 million of operating income compared to $188 million in the first quarter 2009. The increase in operating income was primarily due to higher volume on international Patriot programs.

During the quarter, IDS booked $162 million to provide engineering services support for a Patriot air and missile defense program for U.S. and international customers. IDS also booked $131 million on the Zumwalt-class destroyer program for the U.S. Navy, which included initial funding for the third ship.

  Intelligence and Information Systems




                                 1st Quarter              %
                                 -----------
    ($ in millions)           2010         2009      Change
                              ----         ----      ------

    Net Sales                 $730         $784           -7%
    Operating Income           $50          $61          -18%
    Operating Margin           6.8%         7.8%


Intelligence and Information Systems (IIS) had first quarter 2010 net sales of $730 million compared to $784 million in the first quarter 2009. The change in net sales was primarily due to expected lower net sales on a classified program and an international advanced border control and security program. IIS recorded $50 million of operating income compared to $61 million in the first quarter 2009, primarily due to lower volume and increased requirements on an international program.

During the quarter, IIS booked $1,721 million, including $886 million on a contract to develop the next-generation Global Positioning System Advanced Control Segment (GPS-OCX) for the U.S. Air Force and $624 million on a number of classified contracts, including $340 million on a major classified program.

  Missile Systems




                                 1st Quarter              %
                                 -----------
    ($ in millions)           2010         2009      Change
                              ----         ----      ------

    Net Sales               $1,361       $1,368           -1%
    Operating Income          $158         $158
    Operating Margin          11.6%        11.5%


Missile Systems (MS) had first quarter 2010 net sales of $1,361 million compared to $1,368 million in the first quarter 2009. MS recorded $158 million of operating income in both the first quarter 2010 and the first quarter 2009.

During the quarter, MS booked $535 million on a classified program. MS also booked $212 million for the development of Standard Missile-3 (SM-3) and $111 million for development work on the Exoatmospheric Kill Vehicle (EKV) program for the Missile Defense Agency. In addition, MS booked $207 million for the production of Standard Missile-2 (SM-2) for an international customer and the U.S. Navy, $203 million for the production of Tomahawk missiles for the U.S. Navy, $102 million for the production of the Joint Stand-off Weapon (JSOW) for the U.S. Navy, and $95 million for the production of Tube Launched, Optically Tracked, Wireless (TOW) missiles for international customers and the U.S. Army.

  Network Centric Systems




                                 1st Quarter              %
                                 -----------
    ($ in millions)           2010         2009      Change
                              ----         ----      ------

    Net Sales               $1,176       $1,154            2%
    Operating Income          $165         $163            1%
    Operating Margin          14.0%        14.1%


Network Centric Systems (NCS) had first quarter 2010 net sales of $1,176 million compared to $1,154 million in the first quarter 2009. NCS recorded $165 million of operating income compared to $163 million in the first quarter 2009.

During the quarter, NCS booked $138 million for Long Range Advanced Scout Surveillance Systems (LRAS3) for the U.S. Army.

  Space and Airborne Systems




                                 1st Quarter              %
                                 -----------
    ($ in millions)           2010         2009      Change
                              ----         ----      ------

    Net Sales               $1,095       $1,046            5%
    Operating Income          $159         $139           14%
    Operating Margin          14.5%        13.3%



Space and Airborne Systems (SAS) had first quarter 2010 net sales of $1,095 million, up 5 percent compared to $1,046 million in the first quarter 2009, primarily due to growth on classified business. SAS recorded $159 million of operating income compared to $139 million in the first quarter 2009. The increase in operating income was primarily due to improved program performance.

During the quarter, SAS booked $90 million for the production of Advanced Countermeasures Electronic System (ACES) for an international customer.

  Technical Services




                                 1st Quarter              %
                                 -----------
    ($ in millions)           2010         2009      Change
                              ----         ----      ------

    Net Sales                 $801         $696           15%
    Operating Income           $67          $44           52%
    Operating Margin           8.4%         6.3%


Technical Services (TS) had first quarter 2010 net sales of $801 million, up 15 percent compared to $696 million in the first quarter 2009, primarily due to continued growth in domestic and foreign training programs supporting the U.S. Army's Warfighter Field Operations Customer Support (FOCUS) activities. TS recorded operating income of $67 million compared to $44 million in the first quarter 2009. The increase in operating income was primarily due to improved program performance, including higher award fees, and higher volume.

During the quarter, TS booked $155 million on domestic training programs and $25 million on foreign training programs in support of the Warfighter FOCUS activities. TS also booked $88 million on the Security Equipment Integration Services (SEIS) contract for the Transportation Security Administration (TSA) and $78 million to provide operational and logistics support to the National Science Foundation (NSF) Office of Polar Programs.

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 First Quarter 2010 Financial Results

Raytheon's financial results conference call will be held on Thursday, April 22, 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.

  Attachment A
  Raytheon Company
  Preliminary Statement of Operations Information
  First Quarter 2010

  (In millions, except per share amounts)        Three Months Ended
                                                 ------------------
                                              28-Mar-        29-Mar-
                                                 10             09
                                             --------       --------

  Net sales                                    $6,053         $5,884
                                               ------         ------
  Operating expenses
       Cost of sales                            4,784          4,697
       Administrative and selling expenses        408            364
       Research and development expenses          152            111
                                                  ---            ---

  Total operating expenses                      5,344          5,172
                                                -----          -----

  Operating income                                709            712
                                                  ---            ---

       Interest expense                            32             32
       Interest income                             (3)            (4)
       Other (income) expense                      (1)             5
                                                  ---            ---

  Non-operating (income) expense                   28             33
                                                  ---            ---

  Income from continuing operations before
   taxes                                          681            679

  Federal and foreign income taxes                220            222
                                                  ---            ---

  Income from continuing operations               461            457

  Income (loss) from discontinued
   operations, net of tax                          (8)             3
                                                  ---            ---

  Net income                                      453            460
                                                  ---            ---

    Less: Net income (loss) attributable to
     noncontrolling interests in
     subsidiaries                                   8              8
                                                  ---            ---

  Net income attributable to Raytheon
   Company                                       $445           $452
                                                 ====           ====

  Basic earnings (loss) per share attributable to
   Raytheon Company
    common stockholders:
         Income from continuing operations      $1.20          $1.12
         Income (loss) from discontinued
          operations                            (0.02)          0.01
         Net income                              1.18           1.13

  Diluted earnings (loss) per share attributable
   to Raytheon Company
    common stockholders:
         Income from continuing operations      $1.18          $1.11
         Income (loss) from discontinued
          operations                            (0.02)          0.01
         Net income                              1.16           1.12

  Amounts attributable to Raytheon Company common
   stockholders:
         Income from continuing operations       $453           $449
         Income (loss) from discontinued
          operations                               (8)             3
                                                  ---            ---
         Net income                              $445           $452
                                                 ====           ====

  Average shares outstanding
           Basic                                377.6          399.0
           Diluted                              384.4          404.0






  Attachment B

  Raytheon Company
  Preliminary Segment Information
  First Quarter 2010


                                         Net Sales
  (In millions, except
   percentages)                     Three Months Ended
                                    ------------------
                                  28-Mar-        29-Mar-
                                     10             09
                                ---------       --------

  Integrated Defense
   Systems                          $1,336        $1,262
  Intelligence and
   Information Systems                 730           784
  Missile Systems                    1,361         1,368
  Network Centric Systems            1,176         1,154
  Space and Airborne
   Systems                           1,095         1,046
  Technical Services                   801           696
  FAS/CAS Pension
   Adjustment                            -             -
  Corporate and
   Eliminations                       (446)         (426)
                                      ----          ----

  Total                             $6,053        $5,884
                                    ======        ======






                                     Operating Income
  (In millions, except
   percentages)                     Three Months Ended
                                    ------------------
                                 28-Mar-         29-Mar-
                                    10              09
                                ---------       --------

  Integrated Defense
   Systems                            $210          $188
  Intelligence and
   Information Systems                  50            61
  Missile Systems                      158           158
  Network Centric Systems              165           163
  Space and Airborne
   Systems                             159           139
  Technical Services                    67            44
  FAS/CAS Pension
   Adjustment                          (53)           11
  Corporate and
   Eliminations                        (47)          (52)
                                       ---           ---

  Total                               $709          $712
                                      ====          ====





                                    Operating Income
                                   As a Percent of Net
                                          Sales
  (In millions, except
   percentages)                    Three Months Ended
                                   ------------------
                                 28-Mar-       29-Mar-
                                    10            09
                                --------      --------

  Integrated Defense
   Systems                          15.7%         14.9%
  Intelligence and
   Information Systems               6.8%          7.8%
  Missile Systems                   11.6%         11.5%
  Network Centric Systems           14.0%         14.1%
  Space and Airborne
   Systems                          14.5%         13.3%
  Technical Services                 8.4%          6.3%
  FAS/CAS Pension
   Adjustment
  Corporate and
   Eliminations

  Total                             11.7%         12.1%






  Attachment C

  Raytheon Company
  Other Preliminary Information
  First Quarter 2010

  (In millions)                           Funded Backlog
                                          --------------
                                  28-Mar-10          31-Dec-09
                                  ---------          ---------

  Integrated Defense
   Systems                             $5,701             $5,595
  Intelligence and
   Information Systems                  1,574              1,588
  Missile Systems                       6,244              6,454
  Network Centric Systems               4,388              4,389
  Space and Airborne
   Systems                              3,549              3,402
  Technical Services                    2,008              2,051
                                        -----              -----

  Total                               $23,464            $23,479
                                      =======            =======



                                           Bookings

                                      Three Months Ended
                                      ------------------
                                  28-Mar-10          29-Mar-09
                                  ---------          ---------

  Total Bookings                       $6,526             $5,209
                                       ======             ======





  (In millions)                            Total Backlog
                                           -------------
                                  28-Mar-10          31-Dec-09
                                  ---------          ---------

  Integrated Defense
   Systems                            $10,046            $10,665
  Intelligence and
   Information Systems                  5,295              4,360
  Missile Systems                       7,868              7,657
  Network Centric Systems               5,301              5,501
  Space and Airborne
   Systems                              5,760              5,921
  Technical Services                    2,714              2,773
                                        -----              -----

  Total                               $36,984            $36,877
                                      =======            =======







  Total Bookings







  Attachment D
  Raytheon Company
  Preliminary Balance Sheet Information
  First Quarter 2010

  (In millions)
                                                     28-Mar-       31-Dec-
                                                        10            09
                                                    --------      --------
  Assets
       Cash and cash equivalents                      $2,613        $2,642
       Accounts receivable, net                          113           120
       Contracts in process                            4,742         4,373
       Inventories                                       329           344
       Deferred taxes                                    266           273
       Prepaid expenses and other current assets         116           116
                                                         ---           ---
              Total current assets                     8,179         7,868

  Property, plant and equipment, net                   1,969         2,001
  Deferred taxes                                         363           436
  Prepaid retiree benefits                               121           111
  Goodwill                                            11,925        11,922
  Other assets, net                                    1,243         1,269
                                                       -----         -----
                     Total assets                    $23,800       $23,607
                                                     =======       =======

  Liabilities and Equity
  Current liabilities
       Advance payments and billings in excess of
        costs incurred                                $2,173        $2,224
       Accounts payable                                1,310         1,397
       Accrued employee compensation                     656           868
       Other accrued expenses                          1,220         1,034
                                                       -----         -----
              Total current liabilities                5,359         5,523

  Accrued retiree benefits and other long-
   term liabilities                                    5,854         5,793
  Deferred taxes                                          23            23
  Long-term debt                                       2,328         2,329

  Equity
    Raytheon Company stockholders' equity
       Common stock                                        4             4
       Additional paid-in capital                     11,186        10,991
       Accumulated other comprehensive loss           (4,768)       (4,824)
       Treasury stock, at cost                        (5,712)       (5,446)
       Retained earnings                               9,406         9,102
                                                       -----         -----
              Total Raytheon Company stockholders'
               equity                                 10,116         9,827
       Noncontrolling interests in subsidiaries          120           112
                                                         ---           ---
           Total equity                               10,236         9,939
                                                      ------         -----
                     Total liabilities and equity    $23,800       $23,607
                                                     =======       =======








  Attachment E
  Raytheon Company
  Preliminary Cash Flow Information
  First Quarter 2010

  (In millions)                          Three Months Ended
                                         ------------------
                                      28-Mar-       29-Mar-
                                         10            09
                                     --------      ---------

  Net income (loss)                    $453           $460
  (Income) loss from discontinued
   operations, net of tax                 8             (3)
                                        ---            ---
  Income (loss) from continuing
   operations                           461            457

  Depreciation                           74             71
  Amortization                           29             26
  Working capital (excluding pension
   and taxes)*                         (677)          (938)
  Discontinued operations                 2             (6)
  Net activity in financing
   receivables                           16              9
  Other                                 354            786
                                        ---            ---
        Net operating cash flow         259            405

  Capital spending                      (45)           (33)
  Internal use software spending        (14)           (13)
  Acquisitions                          (12)             -
  Dividends                            (117)          (112)
  Repurchases of common stock          (300)          (300)
  Warrants exercised                    163              -
  Other                                  37              4
                                        ---            ---
        Total cash flow                $(29)          $(49)
                                       ====           ====

  *  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
  First Quarter 2010


  FAS/CAS Adjusted EPS Non-GAAP Reconciliation

  (In millions, except per share amounts)
                                                      First Quarter
                                                      -------------
                                                 2010                2009
                                                 ----                ----
  Diluted earnings per share from continuing
   operations
    attributable to Raytheon Company common
     stockholders                               $1.18               $1.11
  Less: Per share impact of the FAS/CAS
   Pension Adjustment*                          (0.09)               0.02
  FAS/CAS Adjusted EPS **                       $1.27               $1.09
                                                =====               =====


  *FAS/CAS Pension Adjustment                    $(53)                $11
                                                   19                  (4)
    Tax effect (at 35% federal statutory rate)    ---                 ---
                                                  (34)                  7
  After-tax FAS/CAS Pension Adjustment
                                                384.4               404.0
  Diluted Shares
                                               $(0.09)              $0.02
  Per share impact of the FAS/CAS Pension
   Adjustment                                  ======               =====





  (In millions, except per share amounts)               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)
                                                      77                 77
    Tax effect (at 35% federal statutory rate)       ---                ---
                                                    (143)              (143)
  After-tax FAS/CAS Pension Adjustment
                                                   382.0              377.0
  Diluted Shares
                                                  $(0.38)            $(0.38)
  Per share impact of the FAS/CAS Pension
   Adjustment                                     ======             ======



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


                                                       First Quarter
                                                       -------------
                                                 2010                 2009
                                                 ----                 ----
  Income from Continuing Operations
   attributable to Raytheon Company
    common stockholders                          $453                 $449
  FAS/CAS Pension Adjustment (Tax effected
   at 35% federal statutory rate)                  34                   (7)
                                                  ---                  ---
  FAS/CAS Adjusted Income from Continuing
   Operations attributable to
    Raytheon Company common stockholders**       $487                 $442
                                                 ====                 ====

  **  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 diluted 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 after-tax 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
  First Quarter 2010


  The Company defines Return on Invested Capital (ROIC) as income from
  continuing operations excluding the after-tax effect 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. The Company uses ROIC as a measure
  of efficiency and effectiveness of its use of capital and as an
  element of management compensation.

  Return on Invested Capital

  (In millions, except                        2010 Initial
   percentages)                   2009          Guidance
                                  ----       -------------
                                                        High
                                       Low end           end
                                          of             of
                                        range          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%
  **  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











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

Source: Raytheon Company

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