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Raytheon Reports Strong First Quarter 2005 Performance and Increases Full-year Guidance for EPS and Bookings
* EPS from continuing operations of $0.43, up 79 percent * Sales of $4.9 billion, up 6 percent * Better than expected free cash outflow from continuing operations of $338 million * Strong bookings of $5.3 billion

WALTHAM, Mass., Apr. 28, 2005, 2005 /PRNewswire-FirstCall via COMTEX/ -- Raytheon Company (NYSE: RTN) reported first quarter 2005 income from continuing operations of $196 million or $0.43 per diluted share compared to $101 million or $0.24 per diluted share in the first quarter 2004. First quarter 2005 income from continuing operations included a $12 million charge or $0.03 per diluted share for a previously announced offer of settlement submitted to the staff of the Securities and Exchange Commission to resolve an investigation primarily related to Raytheon Aircraft Company's (RAC) commuter aircraft business during the period from 1997 to 2001. First quarter 2005 income from continuing operations was higher due to better operating results in the Government and Defense businesses and at RAC combined with lower interest expense. Non-cash pension expense (FAS/CAS Pension Adjustment) was $116 million in the first quarter 2005 compared with $121 million in the comparable period last year.

"The Company is off to a great start for the year," said William H. Swanson, Raytheon's Chairman and CEO. "Our bookings and operating performance demonstrate that the Company is continuing to execute well, with the Government and Defense businesses as well as Raytheon Aircraft delivering strong results. Our plan to put risk and uncertainty behind us and our strategy to focus on customer success are showing positive results."

First quarter 2005 net income was $166 million or $0.36 per diluted share compared to $128 million or $0.30 per diluted share in 2004. Net income for the first quarter of 2005 included a $30 million after-tax loss in discontinued operations or $0.07 per diluted share, versus $14 million or $0.03 per diluted share in 2004. The $30 million after-tax loss in discontinued operations in the first quarter of 2005 included a $25 million after-tax charge for the previously announced settlement of a class action shareholder lawsuit related to the July 2000 sale of the Company's engineering and construction businesses. Net income for the first quarter of 2004 included a $41 million or $0.10 per diluted share benefit from a cumulative effect of change in accounting principle due to the change in the Company's pension and other post-retirement benefit plans measurement date from Oct. 31 to Dec. 31.

Net sales for the first quarter 2005 were $4.9 billion, up 6 percent from $4.7 billion in the comparable period in 2004. Government and Defense sales for the quarter (after the elimination of intercompany sales) increased 4 percent to $4.3 billion from $4.1 billion in the comparable quarter. RAC sales for the quarter increased 18 percent to $442 million from $374 million in the 2004 comparable period.

Free cash from continuing operations for the first quarter was an outflow of $338 million versus an outflow of $200 million for the comparable period in 2004. During the quarter the Company made a $200 million discretionary cash contribution to its pension plans. Free cash flow from continuing operations was significantly better than prior guidance, driven primarily by the earlier receipt of collections and as a result of a very successful financial system implementation. Free cash flow is defined by the Company as operating cash flow less capital spending and internal use software spending.

During the first quarter of 2005, the Company repurchased 1.4 million shares of common stock for $53 million as part of the Company's previously announced share repurchase program.

Net debt was $5.1 billion at the end of the first quarter compared with $4.6 billion at the end of 2004. Net debt increased in the current quarter primarily due to seasonal trends and the $200 million discretionary cash contribution made to the Company's pension plans.

As was previously announced, during the quarter the Company increased the quarterly dividend 10 percent to 22 cents per outstanding share of common stock from 20 cents per outstanding share of common stock. This was the first dividend increase since 1996.

Quarter Results                               1st Quarter             %
    (in millions, except per share data)       2005         2004       Change

    Net sales                                 $4,944       $4,676         6%
    Total operating expenses                   4,567        4,425
    Operating income                             377          251        50%
    Non-operating expenses                        81          105
    Income from cont. ops. before taxes         $296         $146       103%
    Income from continuing operations           $196         $101        94%
    Net income                                  $166         $128        30%

    Diluted EPS from continuing
     operations                                $0.43        $0.24        79%
    Diluted EPS                                $0.36        $0.30        20%

    Free cash flow from continuing
     operations                                $(338)       $(200)

    Backlog and Bookings

The Company ended the quarter with a backlog of $32.8 billion compared to $31.2 billion in the 2004 comparable quarter. The Government and Defense businesses ended the quarter with a backlog of $29.8 billion compared to $28.9 billion in the 2004 comparable quarter. The Government and Defense businesses recorded first quarter bookings of $4.6 billion compared to bookings of $7.9 billion in the first quarter of 2004. First quarter 2004 bookings included $2.1 billion for the Kinetic Energy Inceptor system contract.

Raytheon Aircraft Company's first quarter bookings were $472 million compared to $425 million in the 2004 comparable quarter.

Bookings                           1st Quarter
    (in millions)                    2005       2004

    Bookings
     Government and Defense        $4,612      $7,921
     Commercial                       663         584
    Total Bookings                 $5,275      $8,505

    Backlog                             Period ending
                                 03/27/05 12/31/04 03/28/04
    Backlog                       $32,758  $32,543  $31,245
    Funded Backlog                $19,107  $18,403  $18,047

    Outlook

The Company now expects 2005 earnings per share from continuing operations to be $1.85 - $1.95 versus its previous guidance of $1.80 - $1.90. The Company now expects net interest expense to be $300 - $315 million versus its previous guidance of $315 - $325 million. The Company raised its full year guidance for bookings to $23.2 - $24.2 billion from $22.5 - $23.5 billion. Charts containing the Company's guidance are available on the Company's website at http://www.raytheon.com.

2005 Financial Outlook                   Prior               Current

    Bookings                            $22.5B - $23.5B      $23.2B - $24.2B
    Net Sales                           $21.5B - $22.0B      $21.5B - $22.0B
    FAS/CAS Pension Expense                  $463M                $463M
    Interest Expense, net                $315M - $325M        $300M - $315M
    Diluted Shares                            455M                 455M
    EPS from Cont. Ops.                  $1.80 - $1.90        $1.85 - $1.95

    Cont. Ops./Total Free Cash Flow
     as previously defined               $1.2B - $1.4B        $1.2B - $1.4B
    Cont. Ops./Total Free Cash Flow
     as currently defined *              $1.3B - $1.5B        $1.3B - $1.5B

* Cash flow from operations now includes financing and collection of aircraft receivables

Segment Results

    Integrated Defense Systems



                                           1st Quarter    %
    (in millions, except margin percent)   2005   2004  Change

    Net Sales                              $906   $839    8%
    Operating Income                       $121    $94   29%
    Operating Margin                      13.4%  11.2%

Integrated Defense Systems (IDS) had first quarter 2005 net sales of $906 million, up 8 percent compared to $839 million in the first quarter 2004, primarily due to growth in international Patriot programs and the Cobra Judy program partially offset by expected lower sales on the Sea-Based Radar program. IDS recorded $121 million of first quarter 2005 operating income compared to $94 million in the comparable quarter a year ago. Operating income was higher primarily due to increased sales on international programs.

During the quarter, IDS booked $151 million to provide engineering services support to the Patriot air and missile defense program for the U.S. Army. IDS also booked $112 million for a contract modification to provide three ship sets for the Aegis Weapon System to the U.S. Navy.

Intelligence and Information Systems



                                        1st Quarter    %
    (in millions, except margin percent) 2005  2004  Change

    Net Sales                            $542  $524    3%
    Operating Income                      $50   $45   11%
    Operating Margin                     9.2%  8.6%

Intelligence and Information Systems (IIS) had first quarter 2005 net sales of $542 million, up 3 percent compared to $524 million in the first quarter 2004, primarily due to continued growth in classified programs. IIS recorded $50 million of operating income compared to $45 million in the comparable quarter a year ago. Operating income was higher primarily due to program performance improvements.



During the quarter, IIS booked $353 million on a number of classified contracts.

    Missile Systems



                                           1st Quarter    %
    (in millions, except margin percent)   2005   2004  Change

    Net Sales                              $990   $965    3%
    Operating Income                       $105   $107   -2%
    Operating Margin                      10.6%  11.1%

Missile Systems (MS) had first quarter 2005 net sales of $990 million, up 3 percent compared to $965 million in the first quarter 2004. MS recorded $105 million of operating income compared to $107 million in the comparable quarter a year ago. Last year's first quarter operating income included cost recovery for prior year restructuring actions.

During the quarter, MS booked $260 million for the production of Standard Missile-2 (SM-2), $208 million for the production of 298 Tactical Tomahawk missiles, and $127 million for PHALANX FY'05 production for the U.S. Navy and the U.S. Army.

Network Centric Systems



                                             1st Quarter   %
    (in millions, except margin percent)     2005  2004 Change

    Net Sales                                $762  $704    8%
    Operating Income                          $79   $54   46%
    Operating Margin                        10.4%  7.7%

Network Centric Systems (NCS) had first quarter 2005 net sales of $762 million, up 8 percent compared to $704 million in the first quarter 2004 primarily due to increased effort on development programs and communication programs. NCS recorded operating income of $79 million compared to $54 million in the comparable quarter a year ago. Operating income was higher due to the continued program performance improvements.

During the quarter, NCS booked $143 million to provide urgent spare parts to support the Firefinder locating radars for the U.S. Army.

Space and Airborne Systems



                                            1st Quarter    %
    (in millions, except margin percent)   2005    2004  Change

    Net Sales                              $957  $1,013   -6%
    Operating Income                       $155    $129   20%
    Operating Margin                      16.2%   12.7%

Space and Airborne Systems (SAS) had first quarter 2005 net sales of $957 million, down 6 percent compared to $1,013 million in the first quarter 2004, primarily due to expected lower sales on the ASTOR program. SAS recorded $155 million of operating income compared to $129 million in the comparable quarter a year ago. Operating income was higher due to profit adjustments on contracts nearing completion and the favorable resolution of certain unbilled costs.

During the quarter, SAS booked $275 million for the procurement of 80 Advanced Targeting Forward Looking Infrared (ATFLIR) full rate production units for the U.S. Navy and U.S. Navy Reserve. SAS also booked $248 million on a number of classified contracts.

Technical Services


                                         1st Quarter    %
    (in millions, except margin percent) 2005   2004 Change

    Net Sales                             $467   $450   4%
    Operating Income                       $31    $31   0%
    Operating Margin                      6.6%   6.9%

Technical Services (TS) had first quarter 2005 net sales of $467 million, up 4 percent compared to $450 million in the first quarter 2004. TS recorded operating income of $31 million in the first quarter of 2005 and in the comparable quarter a year ago.

During the quarter, TS was downselected for a contract from the Defense Threat Reduction Agency to provide improved security at Russian nuclear weapons storage facilities under the Cooperative Threat Reduction Program. This contract is expected to be booked in the second quarter.

Aircraft



                                            1st Quarter    %
    (in millions, except margin percent)     2005  2004  Change

    Net Sales                               $442   $374   18%
    Operating Income (Loss)                   $2   $(28) N.M.
    Operating Margin                        0.5%  -7.5%

    Commercial Deliveries                     33     25   32%

Raytheon Aircraft Company (RAC) had first quarter 2005 net sales of $442 million, up 18 percent from $374 million in the first quarter 2004. RAC recorded operating income of $2 million in the quarter compared to an operating loss of $28 million in the comparable quarter in 2004. Operating income was higher primarily due to higher volume on new and used aircraft sales combined with continued productivity and cost savings improvements.

RAC delivered 33 commercial aircraft in the first quarter of 2005, compared to 25 in the same quarter last year.

As previously announced, during the quarter NetJets Inc. reached a tentative agreement with RAC to purchase up to 50 Hawker Horizon aircraft. This order is expected to be booked in the second quarter.

Other

Net sales for this segment in the first quarter 2005 were $192 million compared to $175 million in the first quarter 2004. The segment recorded an operating loss of $21 million in the first quarter 2005 compared to an operating loss of $15 million in the comparable quarter in 2004.

Discontinued Operations

During the quarter, the Company recorded an after-tax loss from discontinued operations of $30 million or $0.07 per diluted share related to its former engineering and construction and Aircraft Integration Systems businesses. The after-tax loss in the first quarter of 2005 included a $25 million after-tax charge for the previously announced settlement of a class action shareholder lawsuit related to the July 2000 sale of the Company's engineering and construction businesses. As previously announced, the settlement is subject to court approval.

Raytheon Company (NYSE: RTN), with 2004 sales of $20.2 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

Certain statements included in this release, including any statements relating to the Company's future plans, objectives, and projected future financial performance, contain or are based on, forward-looking statements within the meaning of the federal securities laws. Specifically, statements that are not historical facts, including statements accompanied by words such as "believe," "expect," "estimate," "intend," or "plan," and variations of these words and similar expressions, are intended to identify forward-looking statements and convey the uncertainty of future events or outcomes. The Company cautions readers that any such forward-looking statements are based on assumptions that the Company believes are reasonable, but are subject to a wide range of risks, and actual results may differ materially. The Company expressly disclaims any current intention to provide updates to forward- looking statements, and the estimates and assumptions associated with them, after the date of this release. Important factors that could cause actual results to differ include, but are not limited to: the ability to obtain or the timing of obtaining future government awards; the availability of government funding; changes in government or customer priorities due to program reviews or revisions to strategic objectives; difficulties in developing and producing operationally advanced products and technology systems; termination of government contracts; program performance, including resolution of claims; timing of contract payments; the performance of critical subcontractors; government import and export policies and other government regulations; the ultimate resolution of contingencies and legal matters, including government investigations and a securities class action lawsuit related to the sale of our former engineering and construction business; the ultimate resolution of insurance coverage for class action shareholder and derivative lawsuits against the Company; the effect of regulatory actions and market conditions, particularly in relation to the general aviation, commuter, and fractional aircraft businesses; cost growth risks inherent with large long-term fixed price contracts; conflicts with other investors and business risks in joint ventures and less than wholly-owned businesses; and risks associated with our former engineering and construction business related to outstanding letters of credit, surety bonds, guarantees and similar agreements and the resolution of claims and litigation. Further information regarding the factors that could cause actual results to differ materially from the projected results can be found in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2004 and quarterly reports on Form 10-Q, copies of which may be obtained at the Company's website at http://www.raytheon.com.

Conference Call on the First Quarter 2005 Financial Results

Raytheon's financial results conference call will be Thursday, April 28, 2005 at 9 a.m. EDT. Participants will be William H. Swanson, Chairman and CEO, Biggs Porter, vice president and corporate controller, and acting CFO, and other Company executives.

The dial-in number for the conference call will be (800) 265 - 0241. 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.



     Attachment A

     Raytheon Company
     Financial Information
     First Quarter 2005

    (In millions except per share amounts)              Three Months Ended
                                                      27-Mar-05   28-Mar-04

    Net sales                                          $4,944       $4,676

    Cost of sales                                       4,118        3,996
    Administrative and selling expenses                   349          314
    Research and development expenses                     100          115

    Total operating expenses                            4,567        4,425

    Operating income                                      377          251

    Interest expense                                       76          117
    Interest income                                       (12)         (12)
    Other expense, net                                     17            -

    Non-operating expense, net                             81          105

    Income from continuing operations
     before taxes                                         296          146

    Federal and foreign income taxes                      100           45

    Income from continuing operations                     196          101

    Loss from discontinued operations,
     net of tax                                           (30)         (14)

    Income before accounting change                       166           87

    Cumulative effect of change in
     accounting principle, net of tax                       -           41

    Net income                                           $166         $128

    Earnings per share from continuing operations
        Basic                                           $0.43        $0.24
        Diluted                                         $0.43        $0.24

    Loss per share from discontinued operations
        Basic                                          $(0.07)      $(0.03)
        Diluted                                        $(0.07)      $(0.03)

    Earnings per share from cumulative effect of
     change in accounting principle
        Basic                                              $-        $0.10
        Diluted                                            $-        $0.10

    Earnings per share
        Basic                                           $0.37        $0.31
        Diluted                                         $0.36        $0.30

    Average shares outstanding
        Basic                                           450.6        418.6
        Diluted                                         456.6        421.3



     Attachment B

     Raytheon Company
     Segment Information
     First Quarter 2005

    (In millions)



                                                              Operating Income
                                                                 As a Percent
                                               Operating Income    of Sales
                                  Net Sales      Three Months    Three Months
                             Three Months Ended     Ended           Ended
                             27-Mar-  28-Mar- 27-Mar- 28-Mar- 27-Mar- 28-Mar-
                              05        04        05      04     05       04

    Integrated Defense
     Systems                   $906     $839     $121    $94    13.4%    11.2%
    Intelligence and
     Information Systems        542      524       50     45     9.2%     8.6%
    Missile Systems             990      965      105    107    10.6%    11.1%
    Network Centric Systems     762      704       79     54    10.4%     7.7%
    Space and Airborne
     Systems                    957    1,013      155    129    16.2%    12.7%
    Technical Services          467      450       31     31     6.6%     6.9%
    Aircraft                    442      374        2    (28)    0.5%    -7.5%
    Other                       192      175     (21)    (15)  -10.9%    -8.6%
    FAS/CAS Pension Adjustment    -        -    (116)   (121)
    Corporate and Eliminations (314)    (368)    (29)    (45)

    Total                    $4,944   $4,676     $377   $251     7.6%     5.4%



     Attachment C

     Raytheon Company
     Other Information
     First Quarter 2005

                                                                  Funded
                                             Backlog              Backlog
                                          (In millions)        (In millions)
                                      27-Mar-05  31-Dec-04 27-Mar-05 31-Dec-04

    Integrated Defense Systems          $6,549     $6,628   $3,748     $3,454
    Intelligence and Information
     Systems                             4,013      4,066      794        811
    Missile Systems                      8,410      8,341    4,790      4,517
    Network Centric Systems              3,761      3,587    2,718      2,623
    Space and Airborne Systems           5,439      5,216    3,229      3,127
    Technical Services                   1,667      1,773      909        939
    Aircraft                             2,634      2,638    2,634      2,638
    Other                                  285        294      285        294

                                       $32,758    $32,543  $19,107    $18,403

    Government and Defense businesses  $29,839    $29,611  $16,188    $15,471

    U.S. government backlog included
     above                             $26,087    $25,525


                                                        Bookings
                                                     (In millions)
                                                   Three months ended
                                             27-Mar-05           28-Mar-04

    Government and Defense businesses         $4,612                $7,921
    Commercial businesses                        663                   584

                                              $5,275                $8,505


                                              New Aircraft Deliveries (Units)
                                                    Three Months Ended
                                                27-Mar-05         28-Mar-04

    Horizon                                         -                   -
    Hawker 800XP                                    6                   6
    Premier I                                       3                   3
    Hawker 400XP                                    4                   4
    King Air                                       14                   5
    1900D Commuter                                  -                   1
    Pistons                                        13                   8
    T-6A                                           15                  13
       Total                                       55                  40


                                               New Aircraft Bookings (Units)
                                                     Three Months Ended
                                                27-Mar-05         28-Mar-04

    Horizon                                         1                   -
    Hawker 800XP                                    7                   7
    Premier I                                       2                   2
    Hawker 400XP                                    2                   2
    King Air                                       22                  17
    1900D Commuter                                  -                   1
    Pistons                                        31                  32
    T-6A                                            6                   7
       Total                                       71                  68



     Attachment D

     Raytheon Company
     Preliminary Financial Information
     First Quarter 2005

    (In millions)

    Balance sheets
                                               27-Mar-05           31-Dec-04
    Assets
    Cash and cash equivalents                    $457                 $556
    Accounts receivable                           387                  478
    Contracts in process                        3,952                3,514
    Inventories                                 1,858                1,745
    Deferred federal and foreign income
     taxes                                        452                  469
    Prepaid expenses and other current
     assets                                       317                  343
    Assets from discontinued operations            19                   19
      Total current assets                      7,442                7,124

    Property, plant and equipment, net          2,684                2,738
    Deferred federal and foreign income
     taxes                                          8                   71
    Goodwill                                   11,514               11,516
    Other assets, net                           2,693                2,704
        Total assets                          $24,341              $24,153

    Liabilities and Stockholders' Equity
    Notes payable and current portion of
     long-term debt                              $941                 $516
    Advance payments and billings in
     excess of costs incurred                   1,961                1,900
    Accounts payable                              820                  867
    Accrued salaries and wages                    769                  934
    Other accrued expenses                      1,329                1,403
    Liabilities from discontinued
     operations                                    66                   24
      Total current liabilities                 5,886                5,644

    Accrued retiree benefits and other
     long-term liabilities                      3,179                3,224
    Long-term debt                              4,206                4,229
    Subordinated notes payable                    408                  408
    Minority interest                             106                   97
    Stockholders' equity                       10,556               10,551
        Total liabilities and
         stockholders' equity                 $24,341              $24,153



     Attachment E

     Raytheon Company
     Preliminary Cash Flow Information
     First Quarter 2005

    (In millions)

    Cash flow information
                                                    Three Months Ended
                                              27-Mar-05           28-Mar-04

    Income from continuing operations            $196                 $101
    Depreciation                                   88                   85
    Amortization                                   20                   16
    Working capital                              (634)                (611)
    Discontinued operations                        (3)                   9
    Capital spending                              (48)                 (60)
    Internal use software spending                (16)                 (25)
    Net activity in financing receivables          45                   95
    Other                                          11                  199
          Subtotal - free cash flow (a)          (341)                (191)

    Acquisitions                                  (60)                 (70)
    Investment activity and divestitures            7                    4
    Dividends                                     (90)                 (83)
    Issuance of common stock                        -                    4
    Repurchase of common stock                    (53)                   -
    Debt borrowings (repayments)                  422                   (3)
    Other                                          16                   18
             Total cash flow                     $(99)               $(321)


    Segment free cash flow information
                                                    Three Months Ended
                                               27-Mar-05           28-Mar-04

    Integrated Defense Systems                    $90                $(129)
    Intelligence and Information Systems          (43)                 (43)
    Missile Systems                                51                  (41)
    Network Centric Systems                      (140)                (129)
    Space and Airborne Systems                   (247)                (115)
    Technical Services                            (18)                  15
    Aircraft                                       52                   56
    Other                                           9                   18
    Discontinued operations                        (3)                   9
    Corporate                                     (92)                 168
                                                $(341)               $(191)


    (a) See Attachment F for a description of free cash flow.



     Attachment F

     Raytheon Company
     Non-GAAP Financial Measures
     First Quarter 2005


    Free cash flow is a "non-GAAP" financial measure under SEC regulations.
    The Company defines free cash flow as operating cash flow less capital
    spending and internal use software spending.  Our definition may differ
    from similarly titled measures used by others.  The Company uses free
    cash flow to facilitate management's internal comparisons to the
    Company's historical operating results and to competitors' operating
    results and as an element of management incentive compensation.  The
    Company believes disclosure of free cash flow performance provides
    investors greater transparency with respect to information used by
    management in its financial and operational decision making.  While this
    information may be useful in evaluating the Company, it should be
    considered supplemental to and not as a substitute for financial
    information prepared in accordance with generally accepted accounting
    principles.


    Free cash flow
                                                    Three Months Ended
                                              27-Mar-05          28-Mar-04
    Operating cash flow                        $(277)               $(106)
    Less: Capital spending                       (48)                 (60)
          Internal use software spending         (16)                 (25)
            Free cash flow                      (341)                (191)
    Plus: Discontinued operations                  3                   (9)
              Free cash flow from
               continuing operations           $(338)               $(200)


    Free cash flow guidance as currently defined*

    2005                                  Prior Guidance    Current Guidance
                                       Low end    High end  Low end   High end
    Full year                          of range   of range  of range  of range
    Operating cash flow                 $1,770    $1,930    $1,750    $1,910
    Less: Capital and internal software
           spending                       (500)     (450)     (500)     (450)
            Free cash flow               1,270     1,480     1,250     1,460
    Plus: Discontinued operations           25        20        65        60
             Free cash flow from
              continuing operations     $1,295    $1,500    $1,315    $1,520


    Free cash flow guidance as previously defined

    2005                                Prior Guidance       Current Guidance
                                       Low end   High end   Low end   High end
    Full year                          of range  of range   of range  of range
    Operating cash flow                 $1,695    $1,855    $1,675    $1,835
    Less: Capital and internal software
           spending                       (500)     (450)     (500)     (450)
            Free cash flow               1,195     1,405     1,175     1,385
    Plus: Discontinued operations           25        20        65        60
             Free cash flow from
              continuing operations     $1,220    $1,425    $1,240    $1,445

    * Cash flow from operations now includes financing of aircraft
    receivables.

SOURCE Raytheon Company

Media: James Fetig, +1-781-522-5111, or Investor Relations: Greg Smith, +1-781-522-5141, both of Raytheon Company