Raytheon Company (RTN)

Research and Development

We conduct extensive research and development activities to continually enhance our existing products and services and develop new products and services to meet our customers’ changing needs and requirements and address new market opportunities. During 2008, we expended $517 million on research and development efforts compared with $502 million in 2007 and $464 million in 2006. These expenditures principally have been for product development for the U.S. Government, including bid and proposal efforts related to U.S. Government programs. We also conduct funded research and development activities under U.S. Government contracts which are included in net sales. For additional information related to our research and development activities, see “Note 1: Accounting Policies” within Item 8 of this Form 10-K.

Research and Development

We conduct extensive research and development activities to continually enhance our existing products and services and develop new products and services to meet our customers’ changing needs and requirements and address new market opportunities. During 2007, we expended $502 million on research and development efforts compared with $464 million in 2006 and $430 million in 2005. These expenditures principally have been for product development for the U.S. government, including bid and proposal efforts related to U.S. government programs. We also conduct funded research and development activities under U.S. government contracts which are included in net sales. For additional information related to our research and development activities, see “Note 1: Accounting Policies” within Item 8 of this Form 10-K.

Research and Development

We conduct extensive research and development activities to continually enhance our existing products and services and develop new products and services to meet our customers’ changing needs and requirements and to address new market opportunities. During 2006, we expended $464 million on research and development efforts compared with $430 million in 2005 and $413 million in 2004. These expenditures principally have been for product development for the U.S. government, including bid and proposal efforts related to government programs. We also conduct funded research and development activities under government contracts which are included in net sales. For additional information related to our research and development activities, see “Note 1: Accounting Policies” within Item 8 of this Form 10-K.

Research and Development

Raytheon conducts extensive research and development activities to continually enhance its existing products and services and develop new products and services to meet its customer’s changing needs and requirements. During 2005, Raytheon expended $503 million on research and development efforts compared with $491 million in 2004 and $487 million in 2003. These expenditures principally have been for product development for the U.S. government and for aircraft products, including bid and proposal efforts related to government programs. Raytheon also conducts funded research and development activities under government contracts which are included in net sales. For additional information related to research and development activities, see “Note A—Accounting Policies” within Item 8 of this Form 10-K.

RESEARCH AND DEVELOPMENT

During 2004, Raytheon expended $491 million on research and development efforts compared with $487 million in 2003 and $449 million in 2002. These expenditures principally have been for product development for the Government and for aircraft products. In addition, Raytheon conducts funded research and development activities under Government contracts which is included in net sales. For additional information related to research and development efforts, see “Note A – Accounting Policies” within Item 8 of this Form 10-K.