Raytheon 2006 Annual Report Download - page 31

PART I
ITEM 1. BUSINESS
General
Raytheon Company and its subsidiaries are an industry leader in defense and government electronics, space, information
technology and technical services. We design, develop, manufacture, integrate, support and provide a wide range of
technologically advanced products, services and solutions for governmental and commercial customers in the United
States and abroad. We act as a prime contractor or major subcontractor on numerous defense and related programs for
the U.S. government, which accounted for 84% of our sales in 2006.
We were founded in 1922 and are currently incorporated in the state of Delaware. We are the surviving company of the
1997 merger of HE Holdings, Inc. and Raytheon Company. Our principal executive offices are located at 870 Winter
Street, Waltham, Massachusetts 02451.
In December 2006, we entered into a definitive agreement to sell our wholly-owned subsidiary, Raytheon Aircraft
Company, which constitutes substantially all of our Aircraft business segment with the exception of certain retained
items. As a result, Raytheon Aircraft is presented as discontinued operations in this Form 10-K and, unless otherwise
indicated, is not included in the discussion below, which pertains to our continuing operations. For further information
regarding Raytheon Aircraft and our discontinued operations, see “Note 2: Discontinued Operations” within Item 8 of
this Form 10-K.
Business Segments
We currently operate in six principal business segments:
ⳮIntegrated Defense Systems (IDS)
ⳮIntelligence and Information Systems (IIS)
ⳮMissile Systems (MS)
ⳮNetwork Centric Systems (NCS)
ⳮSpace and Airborne Systems (SAS)
ⳮTechnical Services (TS)
We also have three other businesses which we combine and disclose as Other. Revenue and other financial information
regarding our business segments is set forth on pages 40-46 of this Form 10-K.
Integrated Defense Systems (IDS)—IDS, headquartered in Tewksbury, Massachusetts, is a leading provider of
integrated joint battlespace (e.g. space, air, surface and subsurface) and homeland security solutions. IDS leverages its
core domain knowledge and key capabilities in sensors, command and control, and effects, to deliver mission assured
solutions for ballistic missile defense, air defense, naval and maritime, and homeland security applications, which enable
situational awareness and joint integrated fires.
During 2006, IDS, as the prime mission systems equipment integrator for all electronic and combat systems of the DDG
1000 Zumwalt Class Destroyer program (DDG 1000), continued to make significant progress on the program, providing
key deliverables and completing a number of major reviews and assessments. IDS also expanded its international
business, particularly through sales of its Patriot Air & Missile Defense System, and continued to evolve its products and
technologies for use in other markets, such as homeland security. For example, IDS is using its technology to provide
advanced spectroscopic portal nuclear detectors to a homeland security customer. IDS is also leveraging its radio
frequency capabilities to develop, with a partner, an economical and environmentally friendly method of extracting oil
from oil shale reserves.
IDS’ key customers include the U.S. Navy, Army, Air Force and Marine Corps, the U.S. Missile Defense Agency and
Department of Homeland Security. Key international customers include Japan, Saudi Arabia, Taiwan, Australia,
Germany and the United Kingdom.
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