1. Raytheon Company
First Quarter Earnings
April 29, 2004
Dial In Number
800-901-5218 Domestic
617-786-4511 International
Replay Number
888-286-8010 Domestic
617-801-6888 International
Reservation Number: 36633390
Available through May 7, 2004

2. Forward Looking Statements
Certain statements included in this presentation, 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 quot;believe,quot; quot;expect,quot; quot;estimate,quot; quot;intend,quot; or quot;plan,quot; 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 presentation. Important factors that could cause actual
results to differ include, but are not limited to: the ability to obtain or the timing of obtaining future government awards;
the availability of government funding; changes in government or customer priorities due to program reviews or
revisions to strategic objectives; difficulties in developing and producing operationally advanced technology systems;
termination of government contracts; program performance, including resolution of claims; timing of contract
payments; the performance of critical subcontractors; government import and export policies and other government
regulations; the ultimate resolution of contingencies and legal matters, including investigations; the effect of market
conditions, particularly in relation to the general aviation, commuter and fractional aircraft markets; cost growth risks
inherent with large long-term fixed price contracts; conflicts with other investors in joint ventures and less than wholly-
owned businesses; and risks associated with outstanding letters of credit, surety bonds, guarantees and other support
agreements related to a number of contracts and leases of our former engineering and construction business unit.
Further information regarding the factors that could cause actual results to differ materially from the projected results
can be found in the Company’s filings with the Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the year ended December 31, 2003. This presentation includes certain non-GAAP financial
measures as defined under SEC rules. As required by SEC rules, the Company has provided a quantitative
reconciliation of each of those measures to the most directly comparable GAAP measure. This reconciliation, along
with definitions of non-GAAP terms used by the Company, is included in this presentation.

3. Q1 HIGHLIGHTS
● Strong Bookings drive Backlog to record $31.2B
● 11% year over year Revenue growth,
(8% excluding Flight Options)
● Continuing operations EPS of $0.24; $0.04 higher than
guidance
● Consolidated diluted EPS of $0.30 including discontinued
operations (-$0.03) and change in pension accounting
measurement date ($0.10)
● Free Cash Flow exceeds guidance by approximately $650M
● Net Debt at the end of Q1 at $7.1B vs. forecast of $7.8B
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4. Q1 - Consolidated Results
($ Millions)
Net Sales Operating Income
$251
As Reported
2004 $4,676 2004 Excludes FAS/CAS Profit Adj. $372
$313
As Reported
2003 $4,201 2003
$341
Excludes FAS/CAS Profit Adj.
● Driven by double digit growth from ● 9% increase in op income excluding
IDS, MS, & SAS FAS/CAS pension adjustment
● G&D margins as expected
Free Cash Flow Bookings
$8,505
($286)
2004 2004
2003 ($819) 2003 $5,380
● Every business better than target ● Current quarter includes KEI
● Successful financial system implementation booking of $2.1B
● Large international collection earlier than ● Q1 classified bookings over $1.7 B
expected
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5. PENSION IMPACT
($ Millions except EPS)
PRIOR GUIDANCE CURRENT GUIDANCE
EXPENSE 2004E 2005E 2004E 2005E
FAS ($714) ($732) ($741) ($754)
CAS ($256) ($339) ($264) ($350)
INCOME ADJUSTMENT ($458) ($393) ($477) ($404)
DILUTED EPS EFFECT ($0.72) ($0.60) ($0.75) ($0.62)
CASH
FUNDING REQUIRED ($318) ($316) ($400) ($355)
CAS RECOVERY $256 $339 $264 $350
NET CASH IMPACT ($62) $23 ($136) ($5)
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6. 2004 FINANCIAL OUTLOOK
Prior Current
Bookings $22 B $23.0 B
Sales $19.5 - $20.0 B $20.0 B+
GAAP EPS from Cont. Ops $1.25 - $1.35 $1.30 - $1.40
EPS Excluding FAS/CAS Adj $1.97 - $2.07 $2.05 - $2.15
Continuing Ops Free Cash Flow Approx $1 B $1 B+
Total Free Cash Flow Approx $1 B $1 B+
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7. BUSINESS UNIT DETAILED
Q1 RESULTS
BACKUP
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8. Q1 - INTEGRATED DEFENSE SYSTEMS (IDS)
($ Millions)
Net Sales Operating Income
$94
2004 2004
$839
2003 $654 2003 $74
● Up 28% primarily due to DD(x) and ● Increase driven by volume, margin on target
Strong Missile Defense Sales
Free Cash Flow Bookings
2004 ($129) 2004 $786
($13) $904
2003 2003
● Significantly better than expected ● Current quarter includes SLAMRAAM
● Financial system implementation in Q1 2004; booking $122M, Patriot engineering
negative impact of $210M, services $148M
● Large international collection earlier than
expected
Note: Net sales include intercompany sales
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9. Q1 - INTELLIGENCE & INFORMATION SYSTEMS (IIS)
($ Millions)
Net Sales Operating Income
2004 $494 2004 $45
2003 $462 2003 $41
● Up 7% driven by classified programs, ● Driven by volume; margin on target
NPOESS and DCGS
Free Cash Flow Bookings
2004 ($45) 2004 $553
2003 ($87) 2003 $678
● Improved collection cycles ● Current Qtr includes classified bookings
nearly $400M
Note: Net sales include intercompany sales
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10. Q1 - MISSILE SYSTEMS (MS)
($ Millions)
Net Sales Operating Income
2004 $965 2004 $107
2003 $857 2003 $101
● Up 13% driven by the Phalanx and Standard Missile-3 ● Up 6% driven by increased sales volume,
programs partially offset with wind-down on cost recovery
for prior year restructuring costs
● Margin on target
Free Cash Flow Bookings
2004 ($41) $3,742
2004
2003 ($219) 2003 $1,610
● 2003 included financial system implementation ● Current quarter includes KEI booking of $2.1B,
NLOS-LS for $525M, Tactical Tomahawk LRIP
Missiles for $170M and a contract for
Paveway II Laser Guided Bomb Kits
Note: Net sales include intercompany sales
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11. Q1 - NETWORK CENTRIC SYSTEMS (NCS)
($ Millions)
Net Sales Operating Income
2004 $720 $55
2004
2003 $771 2003 $62
● Q1 sales on target ● Q1 margin on target
● Down 7% from prior year due to the projected ● Decrease in income driven by volume and
decrease in Air Traffic Management and run-out of low margin programs
Communications product lines
Free Cash Flow Bookings
($129)
2004 2004 $827
2003 ($173) $800
2003
● Financial system implementation in Q1 2004; ● Current quarter includes $101M of changes
negative impact of $62M to existing HTI contract due to Block 1 A-Kits
● Higher milestone collections than prior year and B-Kits ECP
Note: Net sales include intercompany sales
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12. Q1 - SPACE AND AIRBORNE SYSTEMS (SAS)
($ Millions)
Net Sales Operating Income
2004 $1,013 2004 $129
2003 $894 2003 $104
● Up 13% driven by International and Classified ● Q1 income increase driven by volume
programs
Free Cash Flow Bookings
$1,682
2004 ($115) 2004
2003 ($50) 2003 $792
● Outflow vs. prior year driven by ● Current quarter includes over $1B in classified
liquidation of international payments bookings
Note: Net sales include intercompany sales
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13. Q1 - TECHNICAL SERVICES (TS)
($ Millions)
Net Sales Operating Income
$474 $31
2004 2004
2003 $491 2003 $36
● Q1 sales on target ● Q1 margin on target
● Year over year decline primarily due to the
completion in 2003 of a major Base &
Range Services contract
Bookings
Free Cash Flow
$331
2004
2004 $16
2003 $260
$6
2003
● Continued focus on cash ● Q1 includes $65M International booking
Note: Net sales include intercompany sales
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14. Q1 - RAYTHEON AIRCRAFT COMPANY (RAC)
($ Millions)
Net Sales Operating Income
$374
2004 2004 ($28)
2003 $361 2003 ($35)
● Lower new aircraft unit sales offset by higher ● Operating income slightly better than expected
used aircraft sales
Bookings
Free Cash Flow
$425
2004
($20)
2004
$306
2003
2003 $4
● Q1 free cash flow on target ● Current quarter includes $95M on JPATS
program
Note: Net sales exclude sales to Flight Options
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15. Q1 - OTHER
($ Millions)
Net Sales Operating Income
$175 ($15)
2004 2004
2003 $40 2003 ($3)
● Consolidation of Flight Options' results in the ● Consolidation of Flight Options' results in the
current quarter accounts for $133M of the current quarter accounts for $9M of the
increased sales. increased loss.
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16. Reconciliation of Non-GAAP Financial Measures
2003 2004
Q1 Q1
A. Free Cash Flow
Operating cash flow ($740) ($201)
Less: Capital spending ($58) ($60)
Internal use software spending ($21) ($25)
Free cash flow ($819) ($286)
Less: Discontinued operations ($305) $9
Free cash flow from continuing operations ($514) ($295)
B. Net Debt
Total debt $9,081 $7,410
Less cash $387 $340
Net Debt $8,694 $7,070
C. Operating income before FAS/CAS adjustment
Operating income $313 $251
FAS/CAS pension adjustment $28 $121
Operating income before FAS/CAS adjustment $341 $372
D. EPS excluding FAS/CAS adjustment
EPS from continuing operations $0.27 $0.24
FAS/CAS pension adjustment $0.05 $0.20
EPS excluding FAS/CAS adjustment $0.32 $0.44
Definitions:
Free cash flow is defined as operating cash flow less capital spending and internal use software spending.
Net debt is defined as total debt less cash and cash equivalents.
Operating income before FAS/CAS adjustment is defined as operating income adjusted for non cash
FAS/CAS pension amount
EPS excluding FAS/CAS adjustment is defined as EPS from continuing operations adjusted for the non cash
FAS/CAS pension amount.
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