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Raytheon Company Plans to Increase Dividend 10 Percent in 2005; Announces Share Repurchase Plan; and Updates Guidance for 2004 and 2005

    WALTHAM, Mass., Dec. 1  /PRNewswire-FirstCall/ -- Raytheon Company (NYSE:
RTN) announced today that its Board of Directors plans to increase the
Company's annual dividend by 10 percent, from $0.80 to $0.88, commencing with
the first quarter dividend of 2005.  Payment of quarterly dividends is subject
to Board authorization.

    The Board of Directors also authorized the repurchase of up to $700
million of the Company's outstanding common stock, which is expected to be
completed over 18 to 24 months, commencing in 2005.  Share repurchases will
take place from time to time at management's discretion depending on market

    The Company announced an increase in 2004 bookings guidance from $24.5
billion to $25.5 billion and reaffirmed previously disclosed 2004 earnings per
share from continuing operations, net sales, and free cash flow guidance.  The
Company also increased 2005 free cash flow guidance from $1.1 - $1.3 billion
to $1.2 - $1.4 billion.  Previously disclosed 2005 earnings per share from
continuing operations and net sales guidance are reaffirmed.  Additional
details for 2004 and 2005 guidance can be found on the Company's Investor
Relations website and will be discussed at today's Raytheon 2004 Investor
Conference beginning at 10:00 a.m. EST.  The webcast and slides can be found
at http://www.raytheon.com/.

    Raytheon Company (NYSE: RTN), with 2003 sales of $18.1 billion, is an
industry leader in defense and government electronics, space, information
technology, technical services, and business and special mission aircraft.
With headquarters in Waltham, Mass., Raytheon employs more than 78,000 people

    Non-GAAP Financial Measure

    The term "free cash flow" constitutes a "non-GAAP" financial measure the
Company defines as operating cash flow less capital spending and internal use
software spending.  While this non-GAAP measure may be useful in evaluating
the Company, this information should be considered supplemental to and not as
a substitute for financial information prepared in accordance with generally
accepted accounting principles.

    The Company uses free cash flow to facilitate management's internal
comparisons to the Company's historical operating results, to competitors'
operating results, and to provide greater transparency to investors of
supplemental information used by management in its financial and operational
decision-making.  The Company also uses free cash flow to evaluate its
operating performance and to determine management incentive compensation.

  Free cash flow ($ Millions)

  Operating cash flow                         $1,700-1,850
  Less: capital spending and internal
   use software spending                     $(500)- (450)
  Free cash flow                             $1,200- 1,400

  Disclosure Regarding Forward-looking Statements

    Certain statements included in this release, including any statements
relating to the Company's future plans, objectives, and projected future
financial performance, contain or are based on, forward-looking statements
within the meaning of the federal securities laws.  Specifically, statements
that are not historical facts, including statements accompanied by words such
as "believe," "expect," "estimate," "intend," or "plan," and variations of
these words and similar expressions, are intended to identify forward-looking
statements and convey the uncertainty of future events or outcomes.  The
Company cautions readers that any such forward-looking statements are based on
assumptions that the Company believes are reasonable, but are subject to a
wide range of risks, and actual results may differ materially.  The Company
expressly disclaims any current intention to provide updates to forward-
looking statements, and the estimates and assumptions associated with them,
after the date of this release.  Important factors that could cause actual
results to differ include, but are not limited to: the ability to obtain or
the timing of obtaining future government awards; the availability of
government funding; changes in government or customer priorities due to
program reviews or revisions to strategic objectives; difficulties in
developing and producing operationally advanced technology systems;
termination of government contracts; program performance, including resolution
of claims; timing of contract payments; the performance of critical
subcontractors; government import and export policies and other government
regulations; the ultimate resolution of contingencies and legal matters,
including government investigations and a securities class action lawsuit
related to the sale of our former engineering and construction business; an
agreement to settle a shareholder class action lawsuit pending in federal
court in Massachusetts has not yet received final approval by the court; the
ultimate resolution of insurance coverage for the class action litigations;
the effect of market conditions, particularly in relation to the general
aviation, commuter, and fractional aircraft markets; cost growth risks
inherent with large long-term fixed price contracts; conflicts with other
investors in joint ventures and less than wholly-owned businesses; and risks
associated with our former engineering and construction business related to
outstanding letters of credit, surety bonds, guarantees and similar agreements
and the resolution of claims and litigation.  Further information regarding
the factors that could cause actual results to differ materially from the
projected results can be found in the Company's filings with the Securities
and Exchange Commission, including the Company's Annual Report on Form 10-K
for the year ended December 31, 2003.

   Steve Brecken

  Investor Relations Contact
   Greg Smith

SOURCE: Raytheon Company

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

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