Raytheon 2006 Annual Report Download - page 38

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which LTS provides engineering and technical services, lifecycle management and operations and maintenance
services in support of field training at more than 20 sites. LTS also works with the U.S. Defense Threat Reduction
Agency on international counter-proliferation and counter-terrorism programs.
ⳮEngineering & Production Support (EPS)—EPS provides a broad spectrum of engineering and limited-
production services, including Capability Maturity Model Integration (CMMI®) level 5 software engineering and level
3 systems engineering. EPS participates with the software support activity for the V-22 platform. Additionally, EPS
provides mission systems and avionics software for the U.S. Marine Corps’ MV-22 assault aircraft and the U.S. Air
Force’s CV-22 aircraft. EPS also designed and provides integration and field support for the Shared Reconnaissance
Pod, which provides real-time, high-resolution imaging to F/A-18E/F air crews and air operation commanders in
support of pre-mission intelligence, post-mission damage assessment and real-time target tasking and retasking.
ⳮDepot Operations (DO)—DO provides full lifecycle support for electronics and weapons, both sea and land
based. DO performs support on numerous platforms including the WSC-6 surface search radar, Seasparrow
launcher—MK 29 Guided Missile Launching System, Kidd Class Destroyer and the U.S. Navy’s Extremely High
Frequency Satellite Program, a performance-based logistics program. DO also supports the National Ignition Facility
at Lawrence Livermore National Laboratory, which develops advanced laser and fusion technologies.
ⳮOther TS business areas include Raytheon Australia and Raytheon Polar Services (Raytheon Polar). Raytheon
Australia is a Mission Support and mission systems integration provider to the Australian Government, managing the
entire operations and maintenance requirements of the Canberra Deep Space Communication Complex and
providing design, integration and lifecycle operations and maintenance services for the Royal Australian Defense
Force’s aerospace capability. Raytheon Polar specializes in providing science support, operations, information
technology and communications systems, logistics and facilities engineering and construction services and support to
the United States Antarctic Program (USAP) for the National Science Foundation.
Other—Other consists of the following businesses:
ⳮFlight Options LLC (FO)—FO offers services in the fractional and membership segment in the for hire jet
industry, including programs for ownership shares of new and used aircraft, aircraft leasing and prepaid hourly
membership programs.
ⳮRaytheon Airline Aviation Services LLC (RAAS)—RAAS manages the long-term orderly wind-down of
our commuter aircraft business, which includes aircraft in inventory, leased aircraft and notes receivable for financed
aircraft.
ⳮRaytheon Professional Services LLC (RPS)—RPS provides integrated learning solutions to commercial and
government organizations worldwide.
Sales to the U.S. Government
Our net sales to the U.S. government, principally the DoD, were $17.0 billion in 2006, $15.7 billion in 2005 and $14.6
billion in 2004, representing 84%, 83% and 82% of total sales in 2006, 2005 and 2004, respectively. Included in U.S.
government sales were foreign military sales of $1.3 billion, $1.1 billion and $1.0 billion in 2006, 2005 and 2004,
respectively.
Government Contracts and Regulation
We act as a prime contractor or major subcontractor for numerous U.S. government programs. As a result, we are subject to
extensive regulations and requirements of the U.S government agencies and entities which govern these programs, including
with respect to the award, administration and performance of contracts under such programs. We are also subject to certain
unique business risks associated with the U.S. government program funding and appropriations and government contracts
and with supplying technologically-advanced, cutting edge defense-related products and services to the U.S. government.
U.S. government contracts generally are subject to the Federal Acquisition Regulation (FAR), which sets forth policies,
procedures and requirements for the acquisition of goods and services by the U.S. government, agency-specific
regulations that implement or supplement FAR, such as the DoD’s Defense Federal Acquisition Regulation (DFAR) and
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