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Raytheon Reports Strong Third Quarter 2009 Results; Increases Full-Year Guidance

Highlights

WALTHAM, Mass., Oct. 22, 2009 /PRNewswire-FirstCall/ -- Raytheon Company (NYSE: RTN) reported third quarter 2009 income from continuing operations of $499 million, up 14 percent compared to $437 million in the third quarter 2008. EPS from continuing operations for the third quarter 2009 was $1.25, up 24 percent compared to $1.01 in the third quarter 2008.

"Our continued solid performance and outlook for future growth demonstrate the strength of our Company," said William H. Swanson, Raytheon's Chairman and CEO. "Our technology and innovative solutions are well aligned with our U.S. and international customers' evolving priorities."

Net sales for the third quarter 2009 were $6.2 billion, up 6 percent from $5.9 billion in the third quarter 2008.

Operating cash flow from continuing operations in the third quarter 2009 was $749 million compared to $758 million in the third quarter 2008. In the third quarter 2009 the Company made $547 million in cash contributions to its pension plans compared to $137 million in the third quarter 2008. This substantially completed the Company's planned cash contributions to its pension plans of approximately $1.1 billion in 2009, consistent with the total cash contributions made in full-year 2008. The higher cash contributions in the third quarter 2009 were largely offset by a $397 million improvement in working capital.

In the third quarter 2009 the Company repurchased 6.4 million shares of common stock for $300 million, as part of the Company's previously announced share repurchase program. Year-to-date 2009, the Company repurchased 19.8 million shares of common stock for $900 million.

The Company ended the third quarter 2009 in a net cash position of $149 million ($2.4 billion in cash and cash equivalents less total debt of $2.3 billion).

    Summary Financial
    Results                3rd Quarter                 Nine Months
                           -----------                 -----------
    ($in millions,
     except per                            %                            %
     share data)        2009       2008  Change     2009        2008  Change
                        ----       ----  ------     ----        ----  ------

    Net sales         $6,205     $5,864    6%    $18,214     $17,088    7%
    Total operating
     expenses          5,440      5,174           15,972      15,121
                       -----      -----           ------      ------
    Operating income     765        690   11%      2,242       1,967   14%
    Non-operating
     expenses, net        18         31               66          62
                       -----      -----            -----       -----
    Income from cont.
     ops. before taxes  $747       $659   13%     $2,176      $1,905   14%
    Income from
     continuing
     operations         $499       $437   14%     $1,460      $1,270   15%
    Income from
     continuing
     operations
     attributable to
     Raytheon Company   $491       $427   15%     $1,432      $1,253   14%
    Net income
     attributable to
     Raytheon Company   $490       $427   15%     $1,431      $1,251   14%

    Diluted EPS from
     cont. ops.        $1.25      $1.01   24%      $3.60       $2.92   23%

    Operating cash
     flow from cont.
     ops.               $749       $758           $1,672      $1,592

    FAS/CAS pension
     adj. Inc./(Exp.)    $(1)      $(26)             $21        $(93)

    Workdays in fiscal
     reporting calendar   63         63              188         190

Bookings and Backlog

    Bookings                  3rd Quarter                     Nine Months
                              -----------                     -----------
    ($in millions)       2009            2008            2009           2008
                         ----            ----            ----           ----

    Total Bookings     $5,137          $5,766         $17,993        $18,290
                      =======         =======         =======        =======
    Backlog                        Period Ending
                                   -------------
    ($in millions)    09/27/09        12/31/08        09/28/08
                    ----------      ----------      ----------

    Backlog*          $36,212         $38,884         $36,985
    Funded Backlog    $23,751         $21,986         $21,145

    * 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.

The Company reported total bookings for the third quarter 2009 of $5.1 billion compared to $5.8 billion in the third quarter 2008. The Company ended the third quarter 2009 with a backlog of $36.2 billion compared to $38.9 billion at the end of 2008 and $37.0 billion at the end of the third quarter 2008.

Outlook

     2009 Financial Outlook                Current          Prior (7/23/09)
                                           -------           -------------

    Net Sales ($B)                       24.7 - 25.0*         24.5 - 25.0
    FAS/CAS Pension Income ($M)              29*                  47
    Interest Inc./(Exp.), net ($M)      (105) - (115)        (105) - (115)
    Diluted Shares (M)                    397 - 400*           398 - 401
    Effective Tax Rate                 approximately 33%   approximately 33%
    EPS from Continuing Operations      $4.70 - $4.80*       $4.60 - $4.75
    FAS/CAS Adjusted EPS(1)             $4.65 - $4.75*       $4.52 - $4.67
    Operating Cash Flow from Cont.
     Ops. ($B)                            2.2 - 2.4            2.2 - 2.4
    ROIC (%)(1)                          11.5 - 11.8*         11.2 - 11.7

     *  Denotes change from prior guidance.

    (1) FAS/CAS Adjusted EPS is defined as EPS from continuing
        operations excluding the earnings per share 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 has increased full-year 2009 guidance for earnings per share from continuing operations and return on invested capital (ROIC), narrowed the range for net sales, and updated FAS/CAS pension income.

    2009 Financial Outlook
      Comparison                     2008A       2009E        Change
                                     -----       -----        ------

    Net Sales ($B)                   23.2     24.7 - 25.0     6% - 8%
    EPS from Continuing Operations  $4.04(1) $4.70 - $4.80   16% - 19%
    FAS/CAS Adjusted EPS(2)         $4.23(1) $4.65 - $4.75   10% - 12%
    Operating Cash Flow from Cont.
     Ops. ($B)                       2.0       2.2 - 2.4     10% - 20%
    ROIC (%)(2)                     10.9(1)   11.5 - 11.8     60 - 90 bps.

    (1) 2008 EPS from Continuing Operations and ROIC have been adjusted
        to exclude the $45 million ($69 million pretax) or $0.11 per diluted
        share unfavorable adjustment due to the impact of pension investment
        returns on existing contracts (CAS pension adjustment).

    (2) FAS/CAS Adjusted EPS is defined as EPS from continuing operations
        excluding the earnings per share 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 expects full-year 2009 sales growth of 6 percent to 8 percent and full-year 2009 FAS / CAS Adjusted EPS growth of 10 percent to 12 percent, compared to full-year 2008.

The Company has also provided its initial financial guidance for 2010.

    2010 Initial Financial Outlook
                                            2009E              2010E
                                            -----              -----
    Net Sales ($B)                       24.7 - 25.0        25.9 - 26.4
    FAS/CAS Pension Inc./(Exp.) ($M)         29               (228)
    Interest Inc./(Exp.), net ($M)      (105) - (115)       (90) - (105)
    Diluted Shares (M)                    397 - 400          377 - 382
    Effective Tax Rate                approximately 33% approximately 31.5%
    EPS from Continuing Operations      $4.70 - $4.80      $4.75 - $4.90
    FAS/CAS Adjusted EPS(1)             $4.65 - $4.75      $5.16 - $5.31
    Operating Cash Flow from Cont.
     Ops. ($B)                            2.2 - 2.4          2.0 - 2.2

    (1) FAS/CAS Adjusted EPS is defined as EPS from continuing operations
        excluding the earnings per share impact of the FAS/CAS pension
        adjustment.  FAS/CAS Adjusted EPS is a non-GAAP financial
        measure.  See attachment F for a reconciliation of FAS/CAS
        Adjusted EPS to EPS from continuing operations and a discussion
        of why the Company is presenting this information.

Based on the mid-point of its financial outlook for 2009, the Company expects full-year 2010 sales growth of 4 percent to 6 percent and full-year 2010 FAS / CAS Adjusted EPS growth of 10 percent to 13 percent. Charts containing additional information on the Company's 2009 and 2010 financial guidance are available on the Company's website at www.raytheon.com. Additional information regarding the Company's 2010 guidance will be provided on the fourth quarter earnings conference call scheduled for January 28, 2010.

Segment Results

Integrated Defense Systems

                       3rd Quarter         %     Nine Months     %
                       -----------               -----------
     ($in millions)   2009     2008    Change   2009    2008   Change
                     ----     ----    ------   ----    ----   ------

    Net Sales      $1,387   $1,276      9%   $3,984  $3,725      7%
    Operating
     Income          $217     $206      5%     $610    $626     -3%
    Operating
     Margin          15.6%    16.1%           15.3%   16.8%

Integrated Defense Systems (IDS) had third quarter 2009 net sales of $1,387 million, up 9 percent compared to $1,276 million in the third quarter 2008, primarily due to growth on international Patriot programs. IDS recorded $217 million of operating income compared to $206 million in the third quarter 2008.

During the quarter, IDS booked a $75 million option related to two Volume Search Radars (VSR) for the U.S. Navy, one for the Zumwalt-class destroyer program and one for the CVN 78 aircraft carrier, bringing the year-to-date bookings on the program to $217 million. IDS also booked $81 million for the production of Airborne Low Frequency Sonar systems for the U.S. Navy.

Intelligence and Information Systems

                       3rd Quarter        %      Nine Months     %
                       -----------               -----------
    ($in millions)    2009     2008    Change   2009    2008   Change
                      ----     ----    ------   ----    ----   ------
    Net Sales         $805     $801       -   $2,401  $2,322     3%
    Operating
     Income            $68      $67       1%    $195    $186     5%
    Operating
     Margin           8.4%     8.4%             8.1%    8.0%

Intelligence and Information Systems (IIS) had third quarter 2009 net sales of $805 million compared to $801 million in the third quarter 2008. IIS recorded $68 million of operating income compared to $67 million in the third quarter 2008.

During the quarter, IIS booked $267 million on a number of classified contracts and shortly after the quarter close IIS booked $151 million on a U.S. Air Force contract to provide operation and maintenance support.

Missile Systems

                       3rd Quarter         %     Nine Months     %
                       -----------               -----------
     ($in millions)   2009     2008    Change   2009    2008   Change
                      ----     ----    ------   ----    ----   ------
    Net Sales       $1,396   $1,360      3%   $4,148  $4,042     3%
    Operating
     Income           $145     $145      -      $450    $442     2%
    Operating
     Margin          10.4%    10.7%            10.8%   10.9%

Missile Systems (MS) had third quarter 2009 net sales of $1,396 million compared to $1,360 million in the third quarter 2008. MS recorded $145 million of operating income in both the third quarter 2009 and the third quarter 2008.

During the quarter, MS booked $357 million for the production of Tube Launched, Optically Tracked, Wireless (TOW) missiles for the U.S. Army and the U.S. Marine Corps. MS also booked $140 million for the production of Evolved Sea Sparrow Missiles (ESSM) for the U.S. Navy and international customers.

Network Centric Systems

                       3rd Quarter         %     Nine Months     %
                       -----------               -----------
     ($in millions)   2009     2008    Change   2009    2008   Change
                      ----     ----    ------   ----    ----   ------
    Net Sales       $1,212   $1,145      6%   $3,563  $3,385     5%
    Operating
     Income           $172     $152     13%     $505    $427    18%
    Operating
     Margin          14.2%    13.3%            14.2%   12.6%

Network Centric Systems (NCS) had third quarter 2009 net sales of $1,212 million, up 6 percent compared to $1,145 million in the third quarter 2008, primarily due to higher volume on certain U.S. Army programs. NCS recorded $172 million of operating income compared to $152 million in the third quarter 2008. The increase in operating income was primarily due to improved program performance.

During the quarter, NCS booked $51 million on the Long-Range Advance Scout Surveillance System (LRAS3) program and shortly after the quarter close NCS booked an additional $127 million for a toll system replacement program.

Space and Airborne Systems

                       3rd Quarter         %     Nine Months     %
                       -----------               -----------
     ($in millions)   2009     2008    Change   2009    2008   Change
                      ----     ----    ------   ----    ----   ------
    Net Sales       $1,134   $1,065       6%  $3,316  $3,114     6%
    Operating
     Income           $159     $144      10%    $473    $402    18%
    Operating
     Margin          14.0%    13.5%            14.3%   12.9%

Space and Airborne Systems (SAS) had third quarter 2009 net sales of $1,134 million, up 6 percent compared to $1,065 million in the third quarter 2008, primarily due to growth on classified business. SAS recorded $159 million of operating income compared to $144 million in the third quarter 2008. The increase in operating income was primarily due to higher international volume.

During the quarter, SAS booked $201 million on a number of classified contracts.

Technical Services

                       3rd Quarter         %     Nine Months     %
                       -----------               -----------
     ($in millions)   2009     2008    Change   2009    2008   Change
                      ----     ----    ------   ----    ----   ------
    Net Sales         $797     $689      16%  $2,273  $1,857     22%
    Operating
     Income            $60      $45      33%    $157    $125     26%
    Operating
     Margin           7.5%     6.5%             6.9%    6.7%

Technical Services (TS) had third quarter 2009 net sales of $797 million, up 16 percent compared to $689 million in the third quarter 2008, due to strong growth in training programs, primarily Warfighter Field Operations Customer Support (FOCUS) and Air Traffic Control Optimum Training Solution (ATCOTS). TS recorded $60 million of operating income compared to $45 million in the third quarter 2008. The increase in operating income was primarily due to higher volume, timing of an award fee and a contract scope modification.

During the quarter, TS booked $511 million for work on the Warfighter FOCUS contract for the U.S. Army.

Raytheon Company (NYSE: RTN), with 2008 sales of $23.2 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 87 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 73,000 people worldwide.

Conference Call on the Third Quarter 2009 Financial Results

Raytheon's financial results conference call will be held on Thursday, October 22, 2009 at 9:00 a.m. EDT. 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. 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 2009 and 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
    Third Quarter 2009

    (In millions, except
     per share amounts)            Three Months Ended     Nine Months Ended
                                   ------------------     -----------------
                                  27-Sep-09  28-Sep-08  27-Sep-09  28-Sep-08
                                  ---------  ---------  ---------  ---------

    Net sales                        $6,205     $5,864    $18,214    $17,088
                                     ------     ------    -------    -------
    Operating expenses
      Cost of sales                   4,894      4,664     14,430     13,586
      Administrative and
       selling expenses                 401        380      1,135      1,156
      Research and development
       expenses                         145        130        407        379
                                        ---        ---        ---        ---

    Total operating expenses          5,440      5,174     15,972     15,121
                                      -----      -----     ------     ------

    Operating income                    765        690      2,242      1,967
                                        ---        ---      -----      -----

      Interest expense                   32         29         95         97
      Interest income                    (4)       (16)       (11)       (56)
      Other (income) expense, net       (10)        18        (18)        21
                                        ---         --        ---         --

    Non-operating expense, net           18         31         66         62
                                         --         --         --         --

    Income from continuing
     operations before taxes            747        659      2,176      1,905

    Federal and foreign income
     taxes                              248        222        716        635
                                        ---        ---        ---        ---

    Income from continuing
     operations                         499        437      1,460      1,270

    (Loss) income from discontinued
     operations, net of tax              (1)         -         (1)        (2)
                                         --          -         --         --

    Net income                          498        437      1,459      1,268
                                        ---        ---      -----      -----

      Less: Net income attributable
       to noncontrolling interests        8         10         28         17
                                          -         --         --         --

    Net income attributable to
     Raytheon Company                  $490       $427     $1,431     $1,251
                                       ====       ====     ======     ======

    Basic earnings (loss) per
     share attributable to Raytheon
     Company common stockholders:

      Income from continuing
       operations                     $1.27      $1.03      $3.64      $2.99
      Income (loss) from
       discontinued operations            -          -          -      (0.01)
      Net income                       1.26       1.03       3.64       2.98

    Diluted earnings (loss) per
     share attributable to Raytheon
     Company common stockholders:

      Income from continuing
       operations                     $1.25      $1.01      $3.60      $2.92
      Income (loss) from
       discontinued operations            -          -          -      (0.01)
      Net income                       1.25       1.00       3.59       2.91

    Amounts attributable to
     Raytheon Company
     common stockholders:
      Income from continuing
       operations                      $491       $427     $1,432     $1,253
      (Loss) income from
       discontinued operations           (1)         -         (1)        (2)
                                         --          -         --         --
      Net income                       $490       $427     $1,431     $1,251
                                       ====       ====     ======     ======

    Average shares outstanding
        Basic                         388.1      415.6      393.2      419.6
        Diluted                       393.4      424.9      398.2      429.8



    Attachment B
    Raytheon Company
    Preliminary Segment Information
    Third Quarter 2009

                                                                  Operating
                                                                    Income
                                                                 As a Percent
    (In millions,      Net Sales         Operating Income          of Sales
     except          Three Months          Three Months          Three Months
     percentages)        Ended                 Ended                 Ended
                      ------------          ------------          ------------
             27-Sep-09  28-Sep-08  27-Sep-09  28-Sep-08  27-Sep-09  28-Sep-08
             ---------  ---------  ---------  ---------  ---------  ---------

    Integrated
     Defense
     Systems    $1,387     $1,276       $217       $206       15.6%      16.1%
    Intelligence
     and
     Information
     Systems       805        801         68         67        8.4%       8.4%
    Missile
     Systems     1,396      1,360        145        145       10.4%      10.7%
    Network
     Centric
     Systems     1,212      1,145        172        152       14.2%      13.3%
    Space and
     Airborne
     Systems     1,134      1,065        159        144       14.0%      13.5%
    Technical
     Services      797        689         60         45        7.5%       6.5%
    FAS/CAS
     Pension
     Adjustment      -          -         (1)       (26)
    Corporate and
     Elimi-
     nations      (526)      (472)       (55)       (43)
                  ----       ----        ---        ---

    Total       $6,205     $5,864       $765       $690       12.3%      11.8%
                ======     ======       ====       ====


                                                                  Operating
                                                                    Income
                                                                 As a Percent
    (In millions,      Net Sales         Operating Income          of Sales
     except           Nine Months           Nine Months           Nine Months
     percentages)        Ended                 Ended                 Ended
                      ------------          ------------          ------------
             27-Sep-09  28-Sep-08  27-Sep-09  28-Sep-08  27-Sep-09  28-Sep-08
             ---------  ---------  ---------  ---------  ---------  ---------

    Integrated
     Defense
     Systems    $3,984     $3,725       $610       $626       15.3%      16.8%
    Intelligence
     and
     Information
     Systems     2,401      2,322        195        186        8.1%       8.0%
    Missile
     Systems     4,148      4,042        450        442       10.8%      10.9%
    Network
     Centric
     Systems     3,563      3,385        505        427       14.2%      12.6%
    Space and
     Airborne
     Systems     3,316      3,114        473        402       14.3%      12.9%
    Technical
     Services    2,273      1,857        157        125        6.9%       6.7%
    FAS/CAS
     Pension
     Adjustment      -          -         21        (93)
    Corporate and
     Elimi-
     nations    (1,471)    (1,357)      (169)      (148)
                ------     ------       ----       ----

    Total      $18,214    $17,088     $2,242     $1,967       12.3%      11.5%
               =======    =======     ======     ======



    Attachment C
    Raytheon Company
    Other Preliminary Information
    Third Quarter 2009

    (In millions)                    Funded Backlog      Total Backlog
                                     --------------      -------------
                                  27-Sep-09 31-Dec-08 27-Sep-09 31-Dec-08
                                  --------- --------- --------- ---------

    Integrated Defense Systems       $5,523    $4,802    $9,823    $9,883
    Intelligence and
     Information Systems              1,692     1,890     4,349     5,137
    Missile Systems*                  6,281     6,082     7,688     9,937
    Network Centric Systems           4,068     4,593     5,123     5,733
    Space and Airborne Systems        3,718     2,731     6,078     5,442
    Technical Services                2,469     1,888     3,151     2,752
                                      -----     -----     -----     -----

    Total                           $23,751   $21,986   $36,212   $38,884
                                    =======   =======   =======   =======


                                        Bookings
                                   Three Months Ended
                                   ------------------
                                  27-Sep-09 28-Sep-08
                                  --------- ---------

    Total Bookings                   $5,137    $5,766
                                     ======    ======


    *  In the second quarter of 2009, Kinetic Energy Interceptor (KEI), a
       developmental program with the Missile Defense Agency (MDA), was
       terminated for convenience, which resulted in a backlog adjustment of
       approximately $2.4 billion at Missile Systems.  The program was
       cancelled by the MDA due to a change in missile defense priorities.
       We expect that the change in focus to "early intercept" will lead to
       additional opportunities for a number of our products and
       technologies, including Standard Missile-3.  Total backlog for
       Missile Systems and the total Company at December 31, 2008 above are
       presented unadjusted. For comparability, total backlog for Missile
       Systems and the total Company without KEI would have been $7,572
       million and $36,519 million, respectively, at December 31, 2008.



    Attachment D
    Raytheon Company
    Preliminary Balance Sheet Information
    Third Quarter 2009

    (In millions)
                                                      27-Sep-09  31-Dec-08
                                                      ---------  ---------
    Assets
      Cash and cash equivalents                          $2,442     $2,259
      Accounts receivable, net                              105        105
      Contracts in process                                4,207      3,793
      Inventories                                           317        325
      Current tax asset                                       -        441
      Deferred taxes                                        382        395
      Prepaid expenses and other current assets              96         99
                                                             --         --
          Total current assets                            7,549      7,417

    Property, plant and equipment, net                    1,945      2,024
    Deferred taxes                                          445        735
    Prepaid retiree benefits                                 66         56
    Goodwill                                             11,668     11,662
    Other assets, net                                     1,207      1,240
                                                          -----      -----
          Total assets                                  $22,880    $23,134
                                                        =======    =======

    Liabilities and Equity
    Current liabilities
      Advance payments and billings in excess
       of costs incurred                                 $2,002     $1,970
      Accounts payable                                    1,266      1,201
      Accrued employee compensation                         914        913
      Other accrued expenses                                988      1,065
                                                            ---      -----
          Total current liabilities                       5,170      5,149

    Accrued retiree benefits and other long-term
     liabilities                                          5,778      6,488
    Long-term debt                                        2,293      2,309

    Equity
      Raytheon Company stockholders' equity
        Common stock                                          4          4
        Additional paid-in capital                       10,929     10,873
        Accumulated other comprehensive loss             (4,967)    (5,182)
        Treasury stock, at cost                          (5,145)    (4,254)
        Retained earnings                                 8,714      7,646
                                                          -----      -----
          Total Raytheon Company stockholders' equity     9,535      9,087
        Noncontrolling interest in subsidiaries             104        101
                                                            ---        ---
          Total equity                                    9,639      9,188
                                                          -----      -----
          Total liabilities and equity                  $22,880    $23,134
                                                        =======    =======



    Attachment E
    Raytheon Company
    Preliminary Cash Flow Information
    Third Quarter 2009

    (In millions)                  Three Months Ended     Nine Months Ended
                                  --------------------   -------------------
                                  27-Sep-09  28-Sep-08  27-Sep-09  28-Sep-08
                                  ---------  ---------  ---------  ---------

    Net income                         $498       $437     $1,459     $1,268
    Loss (income) from discontinued
     operations, net of tax               1          -          1          2
                                          -          -          -          -
    Income from continuing
     operations                         499        437      1,460      1,270

    Depreciation                         76         75        220        217
    Amortization                         25         24         75         71
    Working capital (excluding
     pension and taxes)*                400          3       (225)      (382)
    Discontinued operations              (7)        (5)       (16)       (21)
    Net activity in financing
     receivables                         13         21         28         46
    Other                              (264)       198        114        370
                                       ----        ---        ---        ---
      Net operating cash flow           742        753      1,656      1,571

    Capital spending                    (57)       (68)      (138)      (167)
    Internal use software spending      (15)       (28)       (49)       (58)
    Acquisitions                          -        (20)         -        (54)
    Investment activity
     and divestiture                      -          -          -          9
    Dividends                          (121)      (117)      (355)      (344)
    Repurchases of common stock        (300)      (340)      (900)    (1,020)
    Other                                (6)        27        (31)       169
                                         --         --        ---        ---
      Total cash flow                  $243       $207       $183       $106
                                       ====       ====       ====       ====


    *  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
    Forecasted Non-GAAP Financial Measure - FAS/CAS Adjusted EPS
    Third Quarter 2009

    Forecasted FAS/CAS Adjusted EPS Non-GAAP Reconciliation - 2009

                                                       2009 Current Guidance
                                                       ---------------------
                                                         Low end  High end
                                                        of range  of range
                                                        --------  --------
    Diluted earnings per share from continuing
     operations attributable to Raytheon Company
     common stockholders                                   $4.70     $4.80
    Less: Per share impact of the FAS/CAS Pension
     Adjustment *                                           0.05      0.05
                                                            ----      ----
    FAS/CAS Adjusted EPS **                                $4.65     $4.75
                                                           =====     =====


    *   FAS/CAS Pension Adjustment                           $29       $29
          Tax effect (at effective rate)                     (10)      (10)
                                                             ---       ---
        After-tax FAS/CAS Pension Adjustment                  19        19
        Diluted Shares                                       400       397
                                                             ---       ---
        Per share impact of the FAS/CAS Pension
         Adjustment                                        $0.05     $0.05
                                                           =====     =====

    **  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.  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.  Management uses FAS/CAS
        Adjusted EPS for the purposes of evaluating and forecasting the
        Company's financial performance.


    Forecasted FAS/CAS Adjusted EPS Non-GAAP Reconciliation - 2010

                                                       2010 Initial 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 *                                  (0.41)    (0.41)
                                                           -----     -----
    FAS/CAS Adjusted EPS **                                $5.16     $5.31
                                                           =====     =====


    *   FAS/CAS Pension Adjustment                         $(228)    $(228)
          Tax effect (at effective rate)                      72        72
                                                              --        --
        After-tax FAS/CAS Pension Adjustment                (156)     (156)
        Diluted Shares                                       382       377
                                                             ---       ---
        Per share impact of the FAS/CAS Pension
         Adjustment                                       $(0.41)   $(0.41)
                                                          ======    ======

    **  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.  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.  Management uses FAS/CAS
        Adjusted EPS for the purposes of evaluating and forecasting the
        Company's financial performance.



    Attachment G
    Raytheon Company
    2008 Adjusted and 2009 Preliminary Return on Invested Capital Non-GAAP
    Financial Measure
    Third Quarter 2009


    We define Return on Invested Capital (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
    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 new
    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 Current Guidance
                                                 ---------------------
                                           Adjusted     Low end     High end
                                          ROIC 2008 *   of range    of range
                                          -----------   --------    --------
    Income from continuing operations          $1,743
    Net interest expense, after-tax **             44   Combined    Combined
    Lease expense, after-tax **                    68
                                                   --      ------      ------
    Return                                     $1,855      $2,030      $2,070
                                               ------      ------      ------

    Net debt ***                                $(169)
    Equity less investment in
     discontinued operations                   10,920
    Lease expense x 8, plus financial
     guarantees                                 2,728   Combined    Combined
    Minimum pension liability                   3,550

                                              -------     -------     -------
    Invested capital from continuing
     operations ****                          $17,029     $17,700     $17,500
                                              -------     -------     -------

                                                 ----        ----        ----
    ROIC                                        10.9%       11.5%       11.8%
                                                 ----        ----        ----


    *    2008 Adjusted ROIC is ROIC excluding the $45 million ($69 million
         pretax) or $0.11 per diluted share unfavorable adjustment due to
         the impact of pension investment returns on existing contracts.
         2008 Adjusted ROIC is a non-GAAP financial measure.  The Company uses
         2008 Adjusted ROIC to facilitate management's internal comparisons to
         the Company's historical ROIC results, and to provide greater
         transparency to investors of supplemental information used by
         management in its financial and operational decision making,
         including to evaluate the Company's operating performance.
    **   Effective tax rates:  Adjusted 2008 - Approximately 33%
                               2009 - Approximately 33% (2009 guidance)
    ***  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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