Raytheon 2009 Annual Report Download - page 57

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refund claim for the 1984-1990 years and certain export tax benefit claims, which reduced the effective rate by 9.9% in
2007. The effective tax rate in 2009 was lower than the U.S. statutory rate due to various permanent differences between
book and tax reporting, including manufacturing tax benefits, tax benefits related to certain refund claims, including $26
million of benefits primarily related to certain U.S. and foreign research tax incentives and Employee Stock Ownership
Plan (ESOP) dividend deductions, partially offset by various non-deductible expenses. The effective tax rate in 2008 was
lower than the U.S. statutory rate due to manufacturing tax benefits, ESOP dividend deductions and tax benefits related
to certain refund claims, including $13 million of benefits primarily related to a foreign research incentive refund claim,
partially offset by various non-deductible expenses. The effective tax rate in 2007 was lower than the U.S. statutory rate
due to the $219 million favorable impact related to the resolution of a federal research credit refund claim for the 1984-
1990 years and certain export tax benefit claims, manufacturing tax benefits, ESOP dividend deductions and the research
and development tax credit, partially offset by various non-deductible expenses.
The increase in federal and foreign income taxes of $129 million in 2009 compared to 2008 was primarily due to our
higher income from continuing operations before taxes. The increase in federal and foreign income taxes of $292 million
in 2008 compared to 2007 was primarily due to the $219 million of tax-related benefits discussed above.
Income from Continuing Operations
Income from continuing operations was $1,977 million, $1,698 million and $1,719 million in 2009, 2008 and 2007,
respectively. The increase in income from continuing operations of $279 million in 2009 compared to 2008, as discussed
in detail above, was primarily attributed to a $422 million increase in operating income, partially offset by a $129 million
increase in federal and foreign income taxes.
The decrease in income from continuing operations of $21 million in 2008 compared to 2007, as discussed in detail
above, was primarily attributed to the $292 million increase in federal and foreign income taxes, partially offset by a $266
million increase in operating income.
(Loss) Income from Discontinued Operations, net of tax
(Loss) income from discontinued operations, net of tax, described below in Discontinued Operations, was $1 million of
loss in 2009, $2 million of loss in 2008 and $885 million of income in 2007. Included in (loss) income from discontinued
operations, net of tax in 2007 was a $986 million gain on the sale of Raytheon Aircraft, which was completed in 2007.
Net Income
Net income was $1,976 million, $1,696 million and $2,604 million in 2009, 2008 and 2007, respectively. The increase in
net income of $280 million in 2009 compared to 2008 was primarily due to the increase in income from continuing
operations as discussed above. The decrease in net income of $908 million in 2008 compared to 2007 was primarily due
to the $986 million gain on the sale of Raytheon Aircraft in 2007, as discussed above.
Net Income Attributable to Raytheon Company
Net income attributable to Raytheon Company was $1,935 million, $1,672 million and $2,578 million in 2009, 2008 and
2007, respectively. The increase in net income attributable to Raytheon Company of $263 million in 2009 compared to
2008 was primarily due to the increase in income from continuing operations as discussed above. The decrease in net
income attributable to Raytheon Company of $906 million in 2008 compared to 2007 was primarily due to the $986
million gain on the sale of Raytheon Aircraft in 2007, as discussed above.
Diluted Earnings per Share from Continuing Operations Attributable to Raytheon
Company Common Stockholders
Diluted earnings per share from continuing operations attributable to Raytheon Company common stockholders was
$4.89 per diluted share on 395.7 million average shares outstanding in 2009, $3.93 per diluted share on 426.5 million
average shares outstanding in 2008 and $3.78 per diluted share on 448.4 million average shares outstanding in 2007. The
increase in diluted earnings per share from continuing operations attributable to Raytheon Company common
stockholders of $0.96 in 2009 compared to 2008 was primarily due to the increase in income from continuing operations.
The increase in diluted earnings per share from continuing operations attributable to Raytheon Company common
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