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Raytheon Reports Strong Third Quarter 2006 Results and Increases 2006 Full-year Guidance

Highlights

WALTHAM, Mass., Oct. 26, 2006 /PRNewswire-FirstCall/ -- Raytheon Company (NYSE: RTN) reported third quarter 2006 income from continuing operations of $323 million or $0.72 per diluted share compared to $231 million or $0.51 per diluted share in the third quarter 2005. Third quarter 2006 net income was $321 million or $0.71 per diluted share compared to $228 million or $0.50 per diluted share in the third quarter 2005. Third quarter 2006 net income was higher primarily due to improved operating results at Integrated Defense Systems (IDS) and Raytheon Aircraft Company (RAC), combined with a reduction in pension expense.

"Raytheon had another very strong quarter," said William H. Swanson, Raytheon's Chairman and CEO. "Our operating results demonstrate the Company's continued focus on execution, and as a result, the Company is able to increase its full-year EPS, bookings, cash flow, and ROIC guidance."

Net sales for the third quarter 2006 were $5.7 billion, up 7 percent from $5.3 billion in the third quarter 2005. Government and Defense sales for the quarter (after the elimination of intercompany sales) increased 5 percent to $4.7 billion from $4.5 billion in the third quarter 2005. RAC sales for the quarter increased 18 percent to $758 million from $642 million in the third quarter 2005.

Operating cash flow from continuing operations for the third quarter 2006 was $750 million versus $798 million for the third quarter 2005. Year-to-date operating cash flow from continuing operations was $1,194 million versus $1,344 million for the comparable period in 2005. The decrease in both the third quarter and year-to-date 2006 versus the comparable periods in 2005 is primarily due to higher cash tax payments in 2006.

During the third quarter 2006, the Company repurchased 5.5 million shares of common stock for $250 million as part of the Company's previously announced share repurchase programs. The Company has repurchased 7.9 million shares of common stock year-to-date for $352 million.

Net debt was $2.8 billion at the end of the third quarter 2006 compared with $3.3 billion at year-end 2005 and $4.2 billion at the end of the third quarter 2005. Net debt is defined as total debt less cash and cash equivalents.

  Summary Financial Results
  (in millions, except per share data)

                         3rd Quarter      %          Nine Months      %
                      2006      2005  Change     2006      2005  Change

  Net Sales         $5,693    $5,331      7%  $16,556   $15,684      6%
  Total Operating
   Expenses          5,156     4,917           15,053    14,466
  Operating Income     537       414     30%    1,503     1,218     23%
  Non-operating
   Expenses             44        61              101       212
  Income from Cont.
   Ops. before Taxes  $493      $353     40%   $1,402    $1,006     39%
  Income from Continuing
   Operations         $323      $231     40%     $923      $660     40%
  Net Income          $321      $228     41%     $918      $595     54%

  Diluted EPS from
   Continuing
   Operations        $0.72     $0.51     41%    $2.05     $1.45     41%
  Diluted EPS        $0.71     $0.50     42%    $2.04     $1.31     56%

  Cash Flow from
   Continuing
   Operations         $750      $798           $1,194    $1,344




  Bookings and Backlog



  Bookings
  (in millions)                3rd Quarter               Nine Months
                            2006         2005         2006         2005

  Bookings
  Government and Defense  $5,237       $3,422      $14,655      $15,317
  Commercial                 883          737        2,386        2,187
  Total Bookings          $6,120       $4,159      $17,041      $17,504

  Backlog                    Period ending
  (in millions)         09/24/06     12/31/05

  Backlog                $34,587      $34,419
  Funded Backlog         $18,860      $17,580

The Government and Defense businesses reported third quarter 2006 bookings of $5.2 billion compared to $3.4 billion in the third quarter 2005, an increase driven by several programs in Missile Systems (MS) and Network Centric Systems (NCS). RAC reported third quarter 2006 bookings of $717 million compared to $572 million in the third quarter 2005.

The Government and Defense businesses ended the third quarter 2006 with a backlog of $31.7 billion compared to $31.2 billion at the end of 2005. The Company ended the quarter with a backlog of $34.6 billion compared to $34.4 billion at the end of 2005.

  Outlook


  2006 Financial Outlook
                                                   Current        Prior *

  Bookings ($B)                                23.0 - 24.0    22.0 - 23.0
  Net Sales ($B)                               23.1 - 23.6    23.1 - 23.6
  FAS/CAS Pension Expense ($M)                     378            378
  Interest Expense, net ($M)                    200 - 210      220 - 230
  Diluted Shares                                449 - 451      449 - 451
  EPS from Cont. Ops. ($)                      2.70 - 2.80    2.60 - 2.70

  Net Debt ($B)                                 2.0 - 2.2      2.3 - 2.5
  Operating Cash Flow ($B)                      2.3 - 2.5      2.0 - 2.2
  ROIC (%)                                      8.4 - 8.8      8.2 - 8.6
  * As of July 27, 2006

The Company has increased full-year 2006 guidance for earnings per share from continuing operations, bookings, operating cash flow, and return on invested capital (ROIC). In addition, the Company's full-year 2006 guidance reflects a reduction in both net interest expense and net debt.

  2007 Financial Outlook

  Bookings ($B)
                                               24.5 - 25.5
  Net Sales ($B)
    Government and Defense                     22.2 - 22.7
    Eliminations of Intercompany Sales            (1.7)
    Government and Defense after Elims         20.5 - 21.0

    Raytheon Aircraft                              3.3
    Other                                          0.8
    Total Company                              24.6 - 25.1

  EPS from Cont. Ops. ($)                      2.95 - 3.05

  Operating Cash Flow ($B)                      1.7 - 1.9

  ROIC (%)                                      9.0 - 9.4

Charts containing additional information on the Company's 2006 and 2007 guidance are available on the Company's website at http://www.raytheon.com/. See attachment F for the Company's calculation and use of ROIC, a non-GAAP financial measure.

  Segment Results
  Integrated Defense Systems



  (in millions, except margin percent)
                        3rd Quarter       %        Nine Months       %
                      2006      2005  Change     2006      2005  Change

  Net Sales         $1,030      $919     12%   $3,031    $2,765     10%
  Operating Income    $167      $134     25%     $502      $394     27%
  Operating Margin   16.2%     14.6%            16.6%     14.2%

Integrated Defense Systems (IDS) had third quarter 2006 net sales of $1,030 million, up 12 percent compared to $919 million in the third quarter 2005, primarily due to growth in DDG 1000 and international programs. IDS recorded $167 million of operating income compared to $134 million in the third quarter 2005. The increase in operating income was primarily due to higher volume and program performance improvements on domestic and international programs.

During the quarter, IDS booked $92 million to provide torpedoes, spares and support for the U.S. Navy.

  Intelligence and Information Systems



  (in millions, except margin percent)
                        3rd Quarter       %        Nine Months       %
                      2006      2005  Change     2006      2005  Change

  Net Sales           $626      $649     -4%   $1,870    $1,821      3%
  Operating Income     $58       $57      2%     $171      $166      3%
  Operating Margin    9.3%      8.8%             9.1%      9.1%

Intelligence and Information Systems (IIS) had third quarter 2006 net sales of $626 million compared to $649 million in the third quarter 2005, a decrease primarily due to the timing of funding on certain classified programs. IIS recorded $58 million of operating income compared to $57 million in the third quarter 2005.

During the quarter, IIS booked $294 million on a number of classified contracts, including $111 million on a major classified contract.

  Missile Systems

  (in millions, except margin percent)

                        3rd Quarter       %        Nine Months       %
                      2006      2005  Change     2006      2005  Change

  Net Sales         $1,081    $1,005      8%   $3,187    $3,002      6%
  Operating Income    $109      $104      5%     $341      $313      9%
  Operating Margin   10.1%     10.3%            10.7%     10.4%

Missile Systems (MS) had third quarter 2006 net sales of $1,081 million, up 8 percent compared to $1,005 million in the third quarter 2005, primarily due to a ramp up on Standard Missile and several development programs. MS recorded $109 million of operating income compared to $104 million in the third quarter 2005.

During the quarter, MS booked $369 million for the production of Phalanx Weapons Systems for the U.S. Navy. MS also booked $311 million for additional development work on the Exoatmospheric Kill Vehicle (EKV) program, $267 million for the production of Standard Missile-3 (SM-3) for the Missile Defense Agency, and $163 million for the production of Tube-launched Optically guided Wire controlled (TOW) missiles for the U.S. Army.

  Network Centric Systems


  (in millions, except margin percent)
                        3rd Quarter       %        Nine Months       %
                      2006      2005  Change     2006      2005  Change

  Net Sales           $879      $833      6%   $2,550    $2,399      6%
  Operating Income     $87       $87      NM     $262      $244      7%
  Operating Margin    9.9%     10.4%            10.3%     10.2%

Network Centric Systems (NCS) had third quarter 2006 net sales of $879 million, up 6 percent compared to $833 million in the third quarter 2005, primarily due to growth in the Combat Systems business. NCS recorded operating income of $87 million in the third quarter 2006 and in the third quarter 2005.

During the quarter, NCS booked $285 million for the production of Improved Target Acquisition System (ITAS) for the U.S. Army and the U.S. Marine Corps. NCS also booked $97 million to provide Horizontal Technology Integration (HTI) forward-looking infrared kits to the U.S. Army.

  Space and Airborne Systems


  (in millions, except margin percent)
                        3rd Quarter       %        Nine Months       %
                      2006      2005  Change     2006      2005  Change

  Net Sales         $1,069    $1,013      6%   $3,144    $3,030      4%
  Operating Income    $148      $143      3%     $445      $444      NM
  Operating Margin   13.8%     14.1%            14.2%     14.7%

Space and Airborne Systems (SAS) had third quarter 2006 net sales of $1,069 million, up 6 percent compared to $1,013 million in the third quarter 2005, primarily due to growth in the Advanced Targeting Forward Looking Infrared (ATFLIR) and Airborne Radar Production programs. SAS recorded $148 million of operating income compared to $143 million in the third quarter 2005.

During the quarter, SAS booked $96 million to supply the Hellenic Air Force with Advanced Self-Protection Integrated Suite (ASPIS) equipment for its F-16 aircraft fleet. SAS also booked $192 million on a number of classified contracts.

  Technical Services

  (in millions, except margin percent)
                        3rd Quarter       %        Nine Months       %
                      2006      2005  Change     2006      2005  Change

  Net Sales           $509      $479      6%   $1,445    $1,455     -1%
  Operating Income     $36       $38     -5%     $100      $107     -7%
  Operating Margin    7.1%      7.9%             6.9%      7.4%

Technical Services (TS) had third quarter 2006 net sales of $509 million, up 6 percent compared to $479 million in the third quarter 2005, primarily due to growth in the Logistics and Training Systems business. TS recorded operating income of $36 million in the third quarter of 2006 compared to $38 million in the third quarter 2005. Operating income was lower primarily due to favorable program profit adjustments recorded in the prior year.

During the quarter, TS booked $145 million on a number of Logistics and Training Systems business contracts.

  Aircraft

  (in millions, except margin percent)
                        3rd Quarter       %        Nine Months       %
                      2006      2005  Change     2006      2005  Change

  Net Sales           $758      $642     18%   $1,996    $1,771     13%
  Operating Income     $70       $34    106%     $127       $69     84%
  Operating Margin    9.2%      5.3%             6.4%      3.9%

Raytheon Aircraft Company (RAC) had third quarter 2006 net sales of $758 million, up 18 percent compared to $642 million in the third quarter 2005, primarily due to increased new aircraft deliveries. RAC recorded operating income of $70 million compared to $34 million in the third quarter 2005. Operating income was higher due to continued improved operating performance, favorable aircraft volume and mix, and a favorable adjustment related to warranty expense.

After the quarter, RAC received an order from NetJets® Inc. for the purchase of 48 additional Hawker® aircraft, 30 Hawker 750s and 18 Hawker 900XPs. These aircraft are expected to be delivered in the 2007 - 2009 timeframe and have a value totaling more than $500 million.

Other

Net sales for the Other segment in the third quarter 2006 were $190 million compared to $185 million in the third quarter 2005. The segment recorded an operating loss of $11 million in the third quarter 2006 compared to an operating loss of $25 million in the third quarter 2005.

Raytheon Company (NYSE: RTN), with 2005 sales of $21.9 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 80,000 people worldwide.

Disclosure Regarding Forward-looking Statements

This release and the attachments contain forward-looking statements, including information regarding the Company's 2006 and 2007 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: risks associated with the Company's 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 and procurement, aircraft manufacturing and other regulations; the impact of competition; the ability to develop products and technologies; 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; the potential impairment of the Company's goodwill; risks associated with the general aviation, commuter and fractional ownership aircraft markets; accidents involving the Company's aircraft; the outcome of contingencies and litigation matters, including government investigations; the ability to recruit and retain qualified personnel; risks associated with acquisitions, joint ventures and other business arrangements; the impact of changes in the Company's credit ratings; risks associated with exploring strategic alternatives for RAC, including the uncertainty of whether a transaction will be consummated and the potential disruption to RAC's business during such transaction; and other factors as may be detailed from time to time in the Company's public announcements and Securities and Exchange Commission filings. In addition, these statements do not give effect to the potential impact of any acquisitions, divestitures or business combinations, including any potential RAC transaction, that may be announced or closed after the date hereof. 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.

Conference Call on the Third Quarter 2006 Financial Results

Raytheon's financial results conference call will be Thursday, October 26, 2006 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) 800 - 8651. The conference call will also be audiocast on the Internet at http://www.raytheon.com/. 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 urged 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.

  Media Contact:                      Investor Relations Contact:
  Mac Jeffery                         Greg Smith
  781-522-5111                        781-522-5141


  Attachment A

  Raytheon Company
  Preliminary Statement of Operations Information
  Third Quarter 2006

  (In millions except per share amounts)
                                     Three Months Ended   Nine Months Ended
                                   24-Sep-06  25-Sep-05 24-Sep-06  25-Sep-05

  Net sales                           $5,693  $5,331    $16,556     $15,684

  Cost of sales                        4,656   4,445     13,529      13,053
  Administrative and selling
   expenses                              373     348      1,124       1,053
  Research and development expenses      127     124        400         360

  Total operating expenses             5,156   4,917     15,053      14,466

  Operating income                       537     414      1,503       1,218

  Interest expense                        64      79        201         237
  Interest income                        (17)    (14)       (58)        (38)
  Other (income) expense, net             (3)     (4)       (42)         13

  Non-operating expense, net              44      61        101         212

  Income from continuing operations
   before taxes                          493     353      1,402       1,006

  Federal and foreign income taxes       170     122        479         346

  Income from continuing operations      323     231        923         660

  Loss from discontinued
   operations, net of tax                 (2)     (3)        (5)        (65)

  Net income                            $321    $228       $918        $595

  Earnings per share from
   continuing operations
      Basic                            $0.73   $0.52      $2.09       $1.47
      Diluted                          $0.72   $0.51      $2.05       $1.45

  Loss per share from discontinued
   operations
      Basic                             $-    $(0.01)    $(0.01)     $(0.14)
      Diluted                           $-    $(0.01)    $(0.01)     $(0.14)

  Earnings per share
      Basic                            $0.73   $0.51      $2.08       $1.33
      Diluted                          $0.71   $0.50      $2.04       $1.31

  Average shares outstanding
      Basic                            441.9   445.6      442.3       448.4
      Diluted                          451.6   452.1      450.5       454.4



  Attachment B

  Raytheon Company
  Preliminary Segment Information
  Third Quarter 2006

  (In millions)


                                                         Operating Income
                       Net Sales     Operating Income  As a Percent of Sales
                   Three Months Ended Three Months Ended Three Months Ended
                 24-Sep-06 25-Sep-05 24-Sep-06 25-Sep-05 24-Sep-06 25-Sep-05

  Integrated Defense
   Systems          $1,030      $919      $167      $134     16.2%     14.6%
  Intelligence and
   Information Systems 626       649        58        57      9.3%      8.8%
  Missile Systems    1,081     1,005       109       104     10.1%     10.3%

  Network Centric
   Systems             879       833        87        87      9.9%     10.4%

  Space and Airborne
   Systems           1,069     1,013       148       143     13.8%     14.1%
  Technical Services   509       479        36        38      7.1%      7.9%

  Aircraft             758       642        70        34      9.2%      5.3%

  Other                190       185      (11)      (25)     -5.8%    -13.5%

  FAS/CAS Pension
   Adjustment          -         -        (93)     (117)

  Corporate and
   Eliminations      (449)     (394)      (34)      (41)

  Total             $5,693    $5,331      $537      $414      9.4%      7.8%





                                                         Operating Income
                       Net Sales     Operating Income  As a Percent of Sales
                   Nine Months Ended Nine Months Ended Nine Months Ended
                 24-Sep-06 25-Sep-05 24-Sep-06 25-Sep-05 24-Sep-06 25-Sep-05

  Integrated Defense
   Systems          $3,031    $2,765      $502      $394     16.6%     14.2%
  Intelligence and
   Information
   Systems           1,870     1,821       171       166      9.1%      9.1%
  Missile Systems    3,187     3,002       341       313     10.7%     10.4%

  Network Centric
   Systems           2,550     2,399       262       244     10.3%     10.2%

  Space and Airborne
   Systems           3,144     3,030       445       444     14.2%     14.7%
  Technical Services 1,445     1,455       100       107      6.9%      7.4%

  Aircraft           1,996     1,771       127        69      6.4%      3.9%

  Other                582       566      (34)      (66)     -5.8%    -11.7%

  FAS/CAS Pension
   Adjustment        -         -         (283)     (349)

  Corporate and
   Eliminations    (1,249)   (1,125)     (128)     (104)

  Total           $16,556   $15,684    $1,503    $1,218       9.1%      7.8%




  Attachment C

  Raytheon Company
  Other Preliminary Information
  Third Quarter 2006

                                                               Funded
                                          Backlog             Backlog
                                       (In millions)       (In millions)
                                   24-Sep-06  31-Dec-05 24-Sep-06  31-Dec-05

  Integrated Defense Systems          $7,411     $8,010   $3,277     $3,009
  Intelligence and Information
   Systems                             4,009      4,077      748        642
  Missile Systems                      8,913      8,040    4,805      4,443
  Network Centric Systems              4,532      4,307    3,374      2,839
  Space and Airborne Systems           5,257      5,220    2,724      2,851
  Technical Services                   1,546      1,594    1,013        916
  Aircraft                             2,656      2,891    2,656      2,600
  Other                                  263        280      263        280

                                     $34,587    $34,419  $18,860    $17,580

  Government and Defense businesses  $31,668    $31,248  $15,941    $14,700



                                                         Bookings
                                                       (In millions)
                                                     Three Months Ended
                                               24-Sep-06           25-Sep-05

  Government and Defense businesses              $5,237              $3,422
  Commercial businesses                             883                 737

                                                 $6,120              $4,159


                                             New Aircraft Deliveries (Units)
                                                     Three Months Ended
                                                24-Sep-06          25-Sep-05

  Hawker 800XP                                       18                  13
  Premier                                             9                   2
  Hawker 400XP                                       12                  14
  King Air                                           36                  27
  Pistons                                            20                   8
  T-6A                                               18                  16
     Total                                          113                  80




                                               New Aircraft Bookings (Units)
                                                     Three Months Ended
                                                24-Sep-06          25-Sep-05

  Hawker 4000                                           2                 -
  Hawker 800XP                                         18                11
  Premier                                              10                 9
  Hawker 400XP                                         13                11
  King Air                                             39                38
  Pistons                                              20                13
  T-6A                                                  2                 -
     Total                                            104                82




  Attachment D

  Raytheon Company
  Preliminary Balance Sheet Information
  Third Quarter 2006

  (In millions)

  Balance sheets
                                               24-Sep-06          31-Dec-05
  Assets
  Cash and cash equivalents                       $1,162             $1,202
  Accounts receivable, less allowance
   for doubtful accounts                             367                425
  Contracts in process                             3,799              3,469
  Inventories                                      2,139              1,722
  Deferred federal and foreign income
   taxes                                             341                435
  Prepaid expenses and other current
   assets                                            273                314
    Total current assets                           8,081              7,567

  Property, plant and equipment, net               2,588              2,675
  Goodwill                                        11,617             11,554
  Other assets, net                                2,501              2,585
      Total assets                               $24,787            $24,381

  Liabilities and Stockholders' Equity
  Notes payable and current portion of
   long-term debt                                   $582                $79
  Subordinated notes payable                           -                408
  Advance payments and billings in
   excess of costs incurred                        1,965              2,012
  Accounts payable                                 1,084                962
  Accrued salaries and wages                         971                987
  Other accrued expenses                           1,285              1,403
  Liabilities from discontinued
   operations                                         50                 49
    Total current liabilities                      5,937              5,900

  Accrued retiree benefits and other
   long-term liabilities                           3,695              3,559
  Deferred federal and foreign income
   taxes                                             209                125
  Long-term debt                                   3,401              3,969
  Minority interest                                  165                119
  Stockholders' equity                            11,380             10,709
      Total liabilities and
       stockholders' equity                      $24,787            $24,381




  Attachment E

  Raytheon Company
  Preliminary Cash Flow Information
  Third Quarter 2006

  (In millions)

  Cash flow information
                                    Three Months Ended   Nine Months Ended
                                   24-Sep-06 25-Sep-05 24-Sep-06  25-Sep-05

  Net income                            $321      $228      $918       $595
  Depreciation                            90        86       271        262
  Amortization                            23        23        70         65
  Working capital                         37       245      (621)      (106)
  Discontinued operations                  2        (4)       (2)       (56)
  Net activity in financing
   receivables                            35       (12)      141         79
  Other                                  244       228       415        449
      Net operating cash flow            752       794     1,192      1,288

  Capital spending                       (68)      (71)     (173)      (183)
  Internal use software spending         (25)      (25)      (51)       (61)
  Acquisitions                           (40)      (39)      (87)       (99)
  Investment activity and
   divestitures                            -         -        50          7
  Dividends                             (108)      (99)     (313)      (289)
  Repurchase of common stock            (250)     (198)     (352)      (390)
  Debt repayments                        (74)      (31)     (445)       (93)
  Other                                   50        35       139         84
        Total cash flow                 $237      $366      $(40)      $264




  Attachment F

  Raytheon Company
  Non-GAAP Financial Measures
  Third Quarter 2006

Return on Invested Capital (ROIC) is a "non-GAAP" financial measure under SEC regulations. The Company defines ROIC as income from continuing operations plus after-tax net interest expense plus one-third of operating lease expense after-tax (estimate of interest portion of the operating lease expense), divided by average invested capital after capitalizing operating leases (operating lease expense times a multiplier of 8) and adding financial guarantees. 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 to make the most efficient and effective use of capital and as an element of management incentive compensation.

  Return on Invested Capital

  (In millions)                                Current 2006 Guidance
                                         Low end of range High end of range
  Income from Continuing Operations
  Net Interest Expense, after-tax*           Combined          Combined
  Lease Expense, after-tax*
  Return                                           $1,415            $1,460
  Net Debt**
  Equity**                                   Combined          Combined
  Lease Expense x 8 plus Financial
   Guarantees**
  Invested Capital                                $16,775           $16,575
  ROIC                                               8.4%              8.8%


                                                   2007 Guidance
                                         Low end of range High end of range
  Income from Continuing Operations
  Net Interest Expense, after-tax*           Combined          Combined
  Lease Expense, after-tax*
  Return                                           $1,510            $1,555
  Net Debt**
  Equity**                                   Combined          Combined
  Lease Expense x 8 plus Financial
   Guarantees**
  Invested Capital                                $16,700           $16,500
  ROIC                                               9.0%              9.4%

  *   effective tax rate of 33.9% (2006 Guidance) and 34.0% (2007 Guidance)
  **  two-point average

SOURCE: Raytheon Company

CONTACT: Media: Mac Jeffery, +1-781-522-5111, or Investor Relations:
Greg Smith, +1-781-522-5141, both of Raytheon Company

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

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