Breaking News

EU Targets Bortnikov, Head of Russian Secret Service, in Draft of Sanctions
Tweet TWEET

Raytheon Reports Solid First Quarter 2013 Results

              Raytheon Reports Solid First Quarter 2013 Results

- Adjusted EPS of $1.56, up 5 percent; EPS from continuing operations was
$1.49(1), up 12 percent

- Adjusted operating margin of 13.2 percent, up 10 basis points; reported
operating margin of 12.0 percent(1)

- Net sales of $5.9 billion, consistent with first quarter 2012

- Solid operating cash flow from continuing operations of $422 million

- As previously announced, increased annual dividend by 10 percent to $2.20
per share

- Updated full-year 2013 guidance

PR Newswire

WALTHAM, Mass., April 25, 2013

WALTHAM, Mass., April 25, 2013 /PRNewswire/ --Raytheon Company (NYSE: RTN)
announced first quarter 2013 Adjusted EPS^1 of $1.56 per diluted share
compared to $1.48 per diluted share in the first quarter 2012, up 5 percent.
First quarter 2013 EPS from continuing operations was $1.49 compared to $1.33
in the first quarter 2012. First quarter 2013 included $0.08 associated with
the favorable impact of the 2012 research and development (R&D) tax credit. In
addition, an unfavorable FAS/CAS Adjustment of $0.14 was included in both the
first quarter 2013 and the first quarter 2012.

"Strong program execution drove solid operating results in the first quarter,"
said William H. Swanson, Raytheon's Chairman and CEO. "Our innovation and
technology, along with our focus on productivity, agility and affordability,
continue to create value for our customers and shareholders."

Net sales for the first quarter 2013 were $5,879 million, compared to $5,938
million in the first quarter 2012.

Operating cash flow from continuing operations for the first quarter 2013 was
$422 million compared to $111 million for the first quarter 2012. The increase
in operating cash from continuing operations in the first quarter 2013 was
primarily due to working capital improvements and the timing of tax payments.

In the first quarter 2013, the Company repurchased 4.2 million shares of
common stock for $225 million as part of its previously announced share
repurchase program. In addition, as announced in March 2013, the Company's
Board of Directors voted to increase the Company's annual dividend rate by 10
percent from $2.00 to $2.20 per share, the ninth consecutive annual dividend
increase.

The Company ended the first quarter 2013 with $719 million of net debt. Net
debt is defined as total debt less cash and cash equivalents and short-term
investments.

__________________________________________________________________________

(1) Adjusted EPS is EPS from continuing operations attributable to Raytheon
Company common stockholders and Adjusted Operating Margin is total operating
margin, in each case, excluding the impact of the FAS/CAS Adjustment, and from
time to time, certain other items. Q1 2013 Adjusted EPS also excludes the
impact of the research and development (R&D) tax credit, approved by Congress
in January 2013, that relates to 2012 as discussed above. In addition, the Q1
2012 Adjusted EPS amount has been revised to include the favorable $0.02
impact for the R&D tax credit. Adjusted EPS and Adjusted Operating Margin 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.



Summary Financial
Results
                       1st Quarter                                   %
($ in millions, except 2013                     2012                 Change
per share data)
Net Sales              $     5,879              $    5,938           -1.0%
Income from Continuing
Operations
attributable to        $     490                $    450             8.9%

 Raytheon Company
Adjusted Income*       $     511                $    502             1.8%
EPS from Continuing    $     1.49               $    1.33            12.0%
Operations
Adjusted EPS*          $     1.56               $    1.48            5.4%
Operating Cash Flow
from Continuing        $     422                $    111
Operations
Workdays in Fiscal     63                       64
Reporting Calendar
* Adjusted Income is income from continuing operations attributable to
Raytheon Company common stockholders and Adjusted EPS is EPS from continuing
operations attributable to Raytheon Company common stockholders, in each case,
excluding the after-tax impact of the FAS/CAS Adjustment and, from time to
time, certain other items. In addition to the FAS/CAS Adjustment, Q1 2013
Adjusted EPS excludes the impact of the R&D tax credit, approved by Congress
in January 2013, that relates to 2012. In addition, the Q1 2012 Adjusted EPS
amount has been revised to include the favorable $0.02 impact for the R&D tax
credit. Adjusted Income and 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.



Bookings and Backlog
Bookings
($ in millions) 1st Quarter
                2013      2012
Bookings        $ 3,606   $ 5,162



Backlog
($ in millions) Period Ending
                Q1 2013    Q1 2012    2012
Backlog         $ 33,546   $ 34,303   $ 36,181
Funded Backlog  $ 22,523   $ 22,970   $ 24,047

The Company had bookings of $3.6 billion in the first quarter 2013 and ended
the first quarter 2013 with a backlog of $33.5 billion, compared to $34.3
billion at the end of the first quarter 2012.

Outlook

The Company has updated its financial outlook for 2013 to reflect first
quarter 2013 results and its current expectations of the effects of
sequestration under the Budget Control Act (BCA) of 2011. Charts containing
additional information on the Company's 2013 outlook are available on the
Company's website at www.raytheon.com/ir.



2013 Financial Outlook
                                   Current                 Prior (1/24/13)
Net Sales ($B)                     23.2 - 23.7*           23.6 - 24.1
FAS/CAS Adjustment ($M)            (286)                   (286)
Interest Expense, net ($M)         (200) - (210)           (200) - (210)
Diluted Shares (M)                 324 - 327               324 - 327
Effective Tax Rate                 ~29.5%*                 ~30%
EPS from Continuing                $5.26 - $5.41*          $5.16 - $5.31
Operations
Adjusted EPS**                     $5.75 - $5.90*          $5.65 - $5.80
Operating Cash Flow from           2.1 - 2.3*             2.0 - 2.2
Continuing Operations ($B)
* Denotes change from prior
guidance.
** Adjusted EPS is EPS from continuing operations attributable to Raytheon
Company common stockholders, excluding the after-tax impact of the FAS/CAS
Adjustment and, from time to time, certain other items. In addition to the
FAS/CAS Adjustment, 2013 EPS guidance also excludes the impact of the R&D tax
credit that relates to 2012. See attachment F for a reconciliation of this
measure and a discussion of why the Company is presenting this information.



Segment Results

As previously announced, effective April 1, 2013, in order to streamline
operations, increase productivity and achieve stronger alignment with its
customers' priorities, the Company consolidated its structure. The new
structure consists of the following four businesses: the Intelligence,
Information and Services business, resulting from the combination of the
former Intelligence and Information Systems and former Raytheon Technical
Services businesses; and the Integrated Defense Systems, Missile Systems, and
Space and Airborne Systems businesses, each of which will be expanded by the
realignment of the former Network Centric Systems business operations. These
changes are not reflected in the amounts, discussion, or presentation of the
Company's business segments as set forth in this news release. The Company
will report second quarter 2013 financial results consistent with the new
structure.

The Company's reportable segments for the first quarter ending March 31, 2013
were: Integrated Defense Systems, Intelligence and Information Systems,
Missile Systems, Network Centric Systems, Space and Airborne Systems, and
Technical Services.

Integrated Defense Systems
                 1st Quarter
($ in millions)  2013       2012       % Change
Net Sales        $ 1,263    $ 1,220    4%
Operating Income $ 244      $ 216      13%
Operating Margin   19.3  %    17.7  %

Integrated Defense Systems (IDS) had first quarter 2013 net sales of $1,263
million compared to $1,220 million in the first quarter 2012. The increase in
net sales was primarily due to higher sales on a missile defense radar program
for an international customer. IDS recorded $244 million of operating income
compared to $216 million in the first quarter 2012. The increase in operating
income was primarily driven by international programs.

During the quarter, IDS booked $208 million to provide advanced Patriot air
and missile defense capability for an international customer. IDS also booked
$160 million to provide Patriot engineering services support for U.S. and
international customers.

Intelligence and Information Systems
                  1st Quarter
($ in millions)   2013       2012     % Change
Net Sales         $  743     $ 764    -3%
Operating Income  $  59      $ 62     -5%
Operating Margin     7.9  %    8.1 %

Intelligence and Information Systems (IIS) had first quarter 2013 net sales of
$743 million compared to $764 million in the first quarter 2012. The change in
net sales was primarily due to lower net sales on classified programs. IIS
recorded $59 million of operating income compared to $62 million in the first
quarter 2012.

During the quarter, IIS booked $266 million on a number of classified
contracts.

Missile Systems
                 1st Quarter
($ in millions)  2013       2012       % Change
Net Sales        $ 1,453    $ 1,351    8%
Operating Income $ 193      $ 180      7%
Operating Margin   13.3  %    13.3  %

Missile Systems (MS) had first quarter 2013 net sales of $1,453 million, up 8
percent compared to $1,351 million in the first quarter 2012. The increase in
net sales was primarily driven by higher sales on the Standard Missile-3
(SM-3) and Rolling Airframe Missile (RAM) programs. MS recorded $193 million
of operating income compared to $180 million in the first quarter 2012. The
increase in operating income was due to higher volume on U.S. Navy programs in
the first quarter 2013.

During the quarter, MS booked $156 million for the production of RAM for the
German Navy and $85 million on Miniature Air-Launch Decoy (MALD®) for the U.S.
Air Force.

Network Centric Systems
                 1st Quarter
($ in millions)  2013     2012       % Change
Net Sales        $ 931    $ 1,000    -7%
Operating Income $ 89     $ 116      -23%
Operating Margin   9.6 %    11.6  %

Network Centric Systems (NCS) had first quarter 2013 net sales of $931 million
compared to $1,000 million in the first quarter 2012. The change in net sales
was primarily due to lower sales on sensor production programs for the U.S.
Army. NCS recorded $89 million of operating income compared to $116 million in
the first quarter 2012. The change in operating income was primarily due to a
change in contract mix and lower volume in the first quarter 2013 as well as
higher net program efficiencies in the first quarter 2012.

During the quarter, NCS booked $126 million on the Wide Area Augmentation
System (WAAS) program for the Federal Aviation Administration (FAA).

Space and Airborne Systems
                 1st Quarter
($ in millions)  2013       2012       % Change
Net Sales        $ 1,205    $ 1,257    -4%
Operating Income $ 181      $ 173      5%
Operating Margin   15.0  %    13.8  %

Space and Airborne Systems (SAS) had first quarter 2013 net sales of $1,205
million compared to $1,257 million in the first quarter 2012. The change in
net sales was primarily due to lower net sales on classified programs. SAS
recorded $181 million of operating income compared to $173 million in the
first quarter 2012. The increase in operating income was primarily due to
improved program performance and a change in contract mix.

During the quarter, SAS booked $90 million for the production of Active
Electronically Scanned Array (AESA) radars for the U.S. Air Force. SAS also
booked $184 million on a number of classified contracts.

Technical Services
                 1st Quarter
($ in millions)  2013     2012     % Change
Net Sales        $ 755    $ 802    -6%
Operating Income $ 63     $ 71     -11%
Operating Margin   8.3 %    8.9 %

Technical Services (TS) had first quarter 2013 net sales of $755 million
compared to $802 million in the first quarter 2012. The change in net sales
was due to lower net sales on a National Science Foundation (NSF) Polar
contract, which was completed in the first quarter 2012. TS recorded operating
income of $63 million compared to $71 million in the first quarter 2012.

During the quarter, TS booked $135 million on foreign training programs and
$64 million on domestic training programs in support of Warfighter FOCUS
activities.

About Raytheon

Raytheon Company, with 2012 sales of $24 billion and 68,000 employees
worldwide, is a technology and innovation leader specializing in defense,
security and civil markets throughout the world. With a history of innovation
spanning 91 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. Raytheon is headquartered in Waltham,
Mass. For more about Raytheon, visit us at www.raytheon.comand follow us on
Twitter @raytheon.

Conference Call on the First Quarter 2013 Financial Results

Raytheon's financial results conference call will be held on Thursday,
April25, 2013 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) 510-0712 in the U.S.
or (617) 597-5380 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 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 due to budgetary constraints, spending
cuts resulting from sequestration under the Budget Control Act of 2011, or
otherwise, uncertain funding of programs, potential termination of contracts,
and difficulties in contract performance; the resolution of program
terminations; 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 and cyber 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 2013
(In millions, except per share amounts)                   Three Months Ended
                                                          31-Mar-13  01-Apr-12
Net sales                                                 $  5,879   $  5,938
Operating expenses
 Cost of sales                                          4,605      4,659
 Administrative and selling expenses                    408        405
 Research and development expenses                      160        168
Total operating expenses                                  5,173      5,232
Operating income                                          706        706
Non-operating (income) expense, net
 Interest expense                                       53         50
 Interest income                                        (3)        (2)
 Other expense (income)                                 (7)        (8)
Total non-operating (income) expense, net                 43         40
Income from continuing operations before taxes            663        666
Federal and foreign income taxes                          167        212
Income from continuing operations                         496        454
Income (loss) from discontinued operations, net of tax    (2)        (2)
Net income                                                494        452
Less: Net income (loss) attributable to noncontrolling
 interests in subsidiaries                              6          4
Net income attributable to Raytheon Company               $  488     $  448
Basic earnings (loss) per share attributable to Raytheon
 Company common stockholders:
 Income from continuing operations                   $  1.50    $  1.33
 Income (loss) from discontinued operations, net of  (0.01)     —
tax
 Net income                                          1.49       1.33
Diluted earnings (loss) per share attributable to
Raytheon
 Company common stockholders:
 Income from continuing operations                   $  1.49    $  1.33
 Income (loss) from discontinued operations, net of  (0.01)     —
tax
 Net income                                          1.49       1.32
Amounts attributable to Raytheon Company common
 stockholders:
 Income from continuing operations                   $  490     $  450
 Income (loss) from discontinued operations, net of  (2)        (2)
tax
 Net income                                          $  488     $  448
Average shares outstanding
 Basic                                                  327.4      337.5
 Diluted                                                328.2      338.7



Attachment B
Raytheon
Company
Preliminary
Segment
Information
First Quarter
2013
                                                          Operating Income
              Net Sales             Operating Income      As a Percent of Net
                                                          Sales
(In millions,
except        Three Months Ended    Three Months Ended    Three Months Ended
percentages)
              31-Mar-13  01-Apr-12  31-Mar-13  01-Apr-12  31-Mar-13  01-Apr-12
Integrated
Defense       $  1,263   $  1,220   $  244     $  216     19.3   %   17.7   %
Systems
Intelligence
and           743        764        59         62         7.9    %   8.1    %
Information
Systems
Missile       1,453      1,351      193        180        13.3   %   13.3   %
Systems
Network
Centric       931        1,000      89         116        9.6    %   11.6   %
Systems
Space and
Airborne      1,205      1,257      181        173        15.0   %   13.8   %
Systems
Technical     755        802        63         71         8.3    %   8.9    %
Services
FAS/CAS       —          —          (71)       (70)
Adjustment
Corporate and (471)      (456)      (52)       (42)
Eliminations
Total         $  5,879   $  5,938   $  706     $  706     12.0   %   11.9   %



Attachment C
Raytheon Company
Other Preliminary Information
First Quarter 2013
(In millions)                       Funded Backlog        Total Backlog
                                    31-Mar-13  31-Dec-12  31-Mar-13  31-Dec-12
Integrated Defense Systems          $ 7,167    $ 7,313    $ 8,796    $ 9,431
Intelligence and Information        888        1,067      3,661      3,989
Systems
Missile Systems                     6,158      6,939      9,109      10,030
Network Centric Systems             3,226      3,583      4,081      4,364
Space and Airborne Systems          3,543      3,409      5,790      6,031
Technical Services                  1,541      1,736      2,109      2,336
Total                               $ 22,523   $ 24,047   $ 33,546   $ 36,181
                                                          Bookings
                                                          Three Months Ended
                                                          31-Mar-13  01-Apr-12
Total Bookings                                            $ 3,606    $ 5,162



Attachment D
Raytheon Company
Preliminary Balance Sheet Information
First Quarter 2013
(In millions)
                                                          31-Mar-13  31-Dec-12
Assets
 Cash and cash equivalents                              $ 3,125    $ 3,188
 Short-term investments                                 887        856
 Contracts in process, net                              4,808      4,543
 Inventories                                            442        381
 Deferred taxes                                         102        96
 Prepaid expenses and other current assets              94         182
 Total current assets                                9,458      9,246
Property, plant and equipment, net                        1,954      1,986
Deferred taxes                                            1,245      1,367
Goodwill                                                  12,757     12,756
Other assets, net                                         1,273      1,331
 Total assets                                     $ 26,687   $ 26,686
Liabilities and Equity
Current liabilities
 Advance payments and billings in excess of costs       $ 2,187    $ 2,398
incurred
 Accounts payable                                       1,221      1,348
 Accrued employee compensation                          865        1,014
 Other accrued expenses                                 1,416      1,142
 Total current liabilities                           5,689      5,902
Accrued retiree benefits and other long-term liabilities  7,797      7,854
Deferred taxes                                            10         9
Long-term debt                                            4,731      4,731
Equity
 Raytheon Company stockholders' equity
 Common stock                                         3          3
 Additional paid-in capital                           2,740      2,928
 Accumulated other comprehensive loss                 (7,646)    (7,788)
 Retained earnings                                    13,193     12,883
 Total Raytheon Company stockholders' equity        8,290      8,026
 Noncontrolling interests in subsidiaries             170        164
 Total equity                                       8,460      8,190
 Total liabilities and equity                     $ 26,687   $ 26,686



Attachment E
Raytheon Company
Preliminary Cash Flow
Information
First Quarter 2013
(In millions)                   Three Months Ended
                                31-Mar-13                  01-Apr-12
Net income                      $      494                 $      452
Loss (income) from discontinued 2                          2
operations, net of tax
Income from continuing          496                        454
operations
Depreciation                    74                         77
Amortization                    34                         35
Working capital (excluding      (793)                      (901)
pension and income taxes)*
Other long-term liabilities     (15)                       2
Pension and other               291                        254
postretirement benefits
Other, net                      335                        190
 Net operating cash     422                        111
flow from continuing operations
Supplemental Cash Flow
Information
Capital spending                (49)                       (70)
Internal use software spending  (9)                        (20)
Dividends                       (164)                      (146)
Repurchases of common stock     (225)                      (400)
* Working capital (excluding pension and income taxes) is a summation of
changes in: contracts in process, net 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 Consolidated Statements of Cash Flows.



Attachment F
(Page 1 of 2)
Raytheon
Company
Non-GAAP Financial Measures - Adjusted EPS, Adjusted Income and Adjusted Operating
Margin
First Quarter
2013
Adjusted EPS
Non-GAAP
Reconciliation
                                      2013                    2013
(In millions,
except per                            Current Guidance        Prior Guidance
share amounts)
               Three Months Ended     Low end     High end    Low end     High end
               31-Mar-13   01-Apr-12  of range    of range    of range    of range
Diluted
earnings per
share from
continuing
operations
attributable
to Raytheon
Company
common         $ 1.49      $  1.33    $ 5.26      $ 5.41      $ 5.16      $ 5.31
stockholders
Per share
impact of the  0.14        0.14       0.57        0.57        0.57        0.57
FAS/CAS
Adjustment (A)
Per share
impact of the
2012 research
and            (0.08)      0.02       (0.08)      (0.08)      (0.08)      (0.08)
development
(R&D) tax
credit (B)
Adjusted EPS   $ 1.56      $  1.48    $ 5.75      $ 5.90      $ 5.65      $ 5.80
(2), (3)
(A) FAS/CAS   $ 71        $  70      $ 286       $ 286       $ 286       $ 286
Adjustment
Tax effect (1) (25)        (24)       (100)       (100)       (100)       (100)
After-tax      46          46         186         186         186         186
impact
Diluted shares 328.2       338.7      327.0       324.0       327.0       324.0
Per share      $ 0.14      $  0.14    $ 0.57      $ 0.57      $ 0.57      $ 0.57
impact
(B) 2012 R&D  $ (25)      $  6       $ (25)      $ (25)      $ (25)      $ (25)
tax credit
Diluted shares 328.2       338.7      327.0       324.0       327.0       324.0
Per share      $ (0.08)    $  0.02    $ (0.08)    $ (0.08)    $ (0.08)    $ (0.08)
impact
Adjusted
Income
Non-GAAP
Reconciliation
(In millions)
               Three Months Ended
               31-Mar-13   01-Apr-12
Income from
continuing
operations
attributable   $ 490       $  450
to Raytheon
Company common
stockholders
FAS/CAS        46          46
Adjustment (1)
2012 R&D tax   (25)        6
credit
Adjusted
Income (2),    $ 511       $  502
(4)
Adjusted
Operating
Margin
Non-GAAP
Reconciliation
                                      2013                    2013
                                      Current Guidance        Prior Guidance
               Three Months Ended     Low end     High end    Low end     High end
               31-Mar-13   01-Apr-12  of range    of range    of range    of range
Operating      12.0     %  11.9    %  11.4     %  11.6     %  11.1     %  11.3     %
Margin
Impact of the
FAS/CAS        1.2      %  1.2     %  1.2      %  1.2      %  1.2      %  1.2      %
Adjustment
Adjusted
Operating      13.2     %  13.1    %  12.6     %  12.8     %  12.3     %  12.5     %
Margin (2),
(5)
(1) Tax effected at 35% federal statutory tax rate.
(2) 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. These amounts
exclude the FAS/CAS Adjustment and, from time to time, certain other items. We are
providing these measures because management uses them for the purposes of evaluating
and forecasting the Company's financial performance and believes that they provide
additional insights into the Company's underlying business performance. We also
believe that they allow 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 and postretirement benefit (PRB) costs and to better
compare our operating performance to others in the industry on that same basis.
Amounts may not recalculate directly due to rounding.
(3) Adjusted EPS is diluted EPS from continuing operations attributable to Raytheon
Company common stockholders excluding the EPS impact of the FAS/CAS Adjustment and,
from time to time, certain other items. Q1 2013 Adjusted EPS also excludes the
earnings per share impact of an R&D tax credit that relates to 2012. In January
2013, Congress approved legislation that included the extension of the R&D tax
credit. The legislation retroactively reinstated the R&D tax credit for 2012 and
extended it through December 31, 2013. As a result, we recorded the 2012 benefit in
the first quarter of 2013. In addition, the Q1 2012 Adjusted EPS amount has been
revised to include the favorable impact for the 2012 R&D tax credit as described on
the next page.
(4) Adjusted Income is income from continuing operations attributable to Raytheon
Company common stockholders excluding the after-tax impact of the FAS/CAS Adjustment
and, from time to time, certain other items. Q1 2013 Adjusted Income also excludes
the R&D tax credit that relates to 2012, as discussed above. Q1 2012 Adjusted
Income also includes the R&D tax credit as discussed above.
(5) Adjusted Operating Margin is defined as total operating margin excluding the
margin impact of the FAS/CAS Adjustment and, from time to time, certain other items.







Attachment F (Page 2 of 2)
Raytheon Company
Non-GAAP Financial Measures - Adjusted EPS and Adjusted Income
Quarters and Full Year 2012
The Company has revised its 2012 Adjusted EPS and Adjusted Income amounts to
include the favorable impact from the $25 million ($0.07 per diluted share)
2012 R&D tax credit that was recognized for GAAP reporting in the first
quarter of 2013 in order to provide a more meaningful comparison between
periods. The revised Adjusted EPS and Adjusted Income amounts for each of the
four quarters and full-year 2012 are below. Please note that the amounts may
not recalculate due to rounding, and the difference between the first quarter
of 2013 ($0.08 per share) and full-year 2012 ($0.07 per share) impact of the
2012 R&D tax credit is due to a higher number of diluted shares for the
full-year 2012 as compared to the first quarter of 2013.
Adjusted EPS Non-GAAP
Reconciliation
(In millions, except per                                             Twelve
share amounts)
                         Three Months Ended                          Months
                                                                     Ended
                         01-Apr-12  01-Jul-12  30-Sep-12  31-Dec-12  31-Dec-12
Diluted earnings per
share from continuing
operations attributable
to Raytheon Company
common stockholders      $  1.33    $  1.41    $  1.51    $  1.41    $  5.65
Per share impact of the  0.14       0.14       0.09       0.13       0.50
FAS/CAS Adjustment (A)
Per share impact of the
early debt retirement    —          —          —          0.06       0.06
make-whole provision (B)
Per share impact of the
2012 research and        0.02       0.02       0.02       0.02       0.07
development (R&D) tax
credit (C)
Adjusted EPS (2), (3)    $  1.48    $  1.57    $  1.62    $  1.62    $  6.28
(A) FAS/CAS Adjustment   $  70      $  71      $  47      $  67      $  255
Tax effect (1)           (24)       (25)       (16)       (23)       (89)
After-tax impact         46         46         31         44         166
Diluted shares           338.7      334.4      333.0      330.8      334.2
Per share impact         $  0.14    $  0.14    $  0.09    $  0.13    $  0.50
(B) Early debt
retirement make-whole    $  —       $  —       $  —       $  29      $  29
provision
Tax effect (1)           —          —          —          (10)       (10)
After-tax impact         —          —          —          19         19
Diluted shares           —          —          —          330.8      334.2
Per share impact         $  —       $  —       $  —       $  0.06    $  0.06
(C) 2012 R&D tax credit $  6       $  6       $  6       $  7       $  25
Diluted shares           338.7      334.4      333.0      330.8      334.2
Per share impact         $  0.02    $  0.02    $  0.02    $  0.02    $  0.07
Adjusted Income Non-GAAP
Reconciliation
(In millions)                                                        Twelve
                         Three Months Ended                          Months
                                                                     Ended
                         01-Apr-12  01-Jul-12  30-Sep-12  31-Dec-12  31-Dec-12
Income from continuing
operations attributable  $  450     $  472     $  501     $  466     $  1,889
to Raytheon Company
common stockholders
FAS/CAS Adjustment (1)   46         46         31         44         166
Early debt retirement    —          —          —          19         19
make-whole provision
2012 R&D tax credit      6          6          6          7          25
Adjusted Income (2), (4) $  502     $  524     $  538     $  536     $  2,099
(1) Tax effected at 35% federal statutory tax rate.
(2) 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. These amounts exclude the FAS/CAS Adjustment and, from time to time,
certain other items. We are providing these measures because management uses
them for the purposes of evaluating and forecasting the Company's financial
performance and believes that they provide additional insights into the
Company's underlying business performance. We also believe that they allow
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 and postretirement benefit (PRB) costs and to better compare
our operating performance to others in the industry on that same basis.
Amounts may not recalculate directly due to rounding.
(3) Adjusted EPS is diluted EPS from continuing operations attributable to
Raytheon Company common stockholders excluding the EPS impact of the FAS/CAS
Adjustment and, from time to time, certain other items. Q1 2013 Adjusted EPS
also excludes the earnings per share impact of an R&D tax credit that relates
to 2012. In January 2013, Congress approved legislation that included the
extension of the R&D tax credit. The legislation retroactively reinstated the
R&D tax credit for 2012 and extended it through December 31, 2013. As a
result, we recorded the 2012 benefit in the first quarter of 2013. In
addition, the Q1 2012 Adjusted EPS amount has been revised to include the
favorable impact for the 2012 R&D tax credit as described above.
(4) Adjusted Income is income from continuing operations attributable to
Raytheon Company common stockholders excluding the after-tax impact of the
FAS/CAS Adjustment and, from time to time, certain other items. Q1 2013
Adjusted Income also excludes the R&D tax credit that relates to 2012, as
discussed above. Q1 2012 Adjusted Income also includes the R&D tax credit as
discussed above.



Raytheon Company
Global Headquarters
Waltham, Mass.

Investor Relations Contact
Todd Ernst
781.522.5141

Media Contact
Jon Kasle
781.522.5110



SOURCE Raytheon Company

Website: http://www.raytheon.com