Association of Raytheon Retirees, Inc.

Special Annual Meeting May 19, 2010

2

Agenda Introduction: Bob Hamilton Keynote Speaker: Philip Amaru, Elder Law Attorney

Break Financial Overview of Retiree Medical: Joe DeAmbrose Pension Review: Al Swenson Membership: Mel Weinzimer Financial Status: Dave MacLellan Communications: Bob Hamilton

Break Guest Speaker: Karen Albert, SOARS 55 Keynote Speaker: Phil Cohen, Patriot Program General Discussion Adjourn

3

Your DirectorsDirector Years at

RaytheonRaytheon Background

Bill Burditt 38 International Business Mngmt.

Joe DeAmbrose 30 Director, International Taxation

Bob Hamilton 27 Programs Manager

Dave MacLellan 37 Corporate Tax Department

Jack O’Halloran 32 Manufacturing Manager

John Rudy 41 IT/Engineering Management

Al Swenson 34 Controller, Director of Internal Audit

Mel Weinzimer 38 Director, Surveillance Programs

And of course Amy Morris, Office Manager

4

Your Directors

5

In MemoriamAaron Dermarderosian Sr. J anet WatermanAetna Tashjian J im GalluzzoAntonio Philip Terranova J im Hanson Arthur Paul Simonelli J oseph D. LorenzoBob Ross J oseph LaudaniBosonjara J ustin MargolskeeCharles E. J acobs J r. Mr. William Richard "Bill" Grace, Sr.,Claude K. Roberts Paul A. MichitsonDale Newton Paul R. MichaudDaniel Frasca Pete GalliganiDenis L. Bourassa Peter A. RichardsonDon Banks Peter A. RichardsonDonald C. Lowell Ray L'italienDonald E. Morin Ray Quick Edward G. J ohnson Richard F. Eaton         Edward R. Zilinsky Robert R. Rheaume Gerald Maurice Roger TraversGil Trabucco Ron Zanazzo George Assad Stanley J . RuzanskiHarry Savastano Stephen A. CarelliHarvey C. Schmidt Ted Langley Henry Bouchard Thomas Edward Lusk J r.Henry "Hank" Charles Howarth Tony CorsinoHenry J . Schultz J r. Thomas J HillJ ack" Scalese Vernon Francis Haverstick

6

Tally Quorum Votes

Joe DeAmbrose

7

Keynote Speaker: Philip C. Amaru

Philip C. Amaru, a prominent Elder Law Attorney of the Law office of Philip C. Amaru

Medicare and Medicaid rules and asset protection strategies

8

Break

Time to stretch for a few minutes

9

Financial Overview of Retiree NON- PENSION

Medicaland Life Insurance

Joe DeAmbrose

10

Life Insurance

Appears to be Legacy Raytheon Only

10% of Pre-Retirement CoverageFunding-Retired Lives ReserveFunding Estimate--$50M-$100M

11

Medical Financial Highlights

Legacy Raytheon, Hughes, TI, and E-SystemsPre and Post Age 65 VariationsPre-1993 Retirees—Varies Legacy

Raytheon-- 50%Post 1992 Retirees---Generally $516 Annual

CapTotal Participants---22,000Funding-VEBA Trusts and Pension AccountsFunding Estimate—About $344M

12

Medical Financial Highlights

2005 2006 2007 2008 2009

VEBA Assets $269.4 $294.1 $298.8 $202.6

Pension Assets $165.9 $189.7 $200.7 $141.6

Total Assets $453.3 $483.8 $499.5 $344.2

Total Liability $1056.4 $856.4 $760.1 $691.3

Unfunded Liability

$621.1 $372.6 $260.6 $347.1

Net Liability Per Financials

$747.0 $499.0 $375.0 $469.0 $439.0

Note: $ million

13

Medical Financial HighlightsOther Medical Data 2005 2006 2007 2008 2009

Benefits Paid $148.2 $98.5 $88.8 $73.8

Raytheon Contributions $60.3 $40.9 $32.2 $18.2

Employee Contributions $68.0 $48.0 $46.1 $38.2

Actuarial Gains $113.0 $130.1 $48.3 $35.4

Change in Actuarial Assumptions

$<28.2> $77.6 $51.6 $41.0

Raytheon Financial Expense

$38.0 $17.0 $<16.0> $<26.0> $<11.0>

Raytheon Direct Payments

$21.0 $19.4 $15.5

Administrative Expenses $3.1 $5.6 $9.9 $8.2

Participants 35,907 22,733 23,855 22,557

Note: $ million

14

Retiree Medical PremiumsSingle Coverage/Medicare Eligible

Raytheon Sponsored Plans

2005 2006 2007 2008 2009

“Plus” Plan 2,508 924 920 920 708

Estimated Avg.”D”; No Donut Hole

450 450 450 450

“Plus” with Estimated “D”

1,374 1,370 1,370 1,158

Other Available Plans

Blue Cross HMO Blue Plus (Advantage)

1,284 1,428

Blue Cross HMO Blue Premiere (Advantage)

2,076

15

Form 5500 Data: 2008$M

Employer EmployeePlan Net Assets Participants Contibution Contibution Raytheon Salaried $5,049.4 91468 $675.7 $12.8Raytheon Non-Bargaining (Hughes) $3,792.6 46204 $509.2 $19.5Raytheon Hourly $573.0 18204 $15.5 $0.3Raytheon E&C $581.6 13770 $0.0 $0.0Greenville Hourly $50.4 2516 $6.0 $0.0Garland Hourly $18.4 794 $2.0 $0.0Raytheon Subsidiaries $6.5 853 $1.0 $0.0Marine Systems $35.6 393 $7.1 $0.0Raytheon Bargaining Plan $564.2 12695 $0.6 $1.5Hourly Employees of NCS-Florida $28.6 986 $3.1 $0.0

Totals $10,700.3 187883 $1,220.2 $34.1

16

Pension Review

Al Swenson

17

Pension Fund Status Outline

Raytheon CommitmentFund balancesChanges in fund balance 2008-

2009Funding requirementsServices

Met with Raytheon Treasury 4/27/10Annual Report and Raytheon 10K

18

Raytheon Co. CommitmentDiane Avellar- Vice President, Raytheon Company

letter dated 4/26/2010

“As we have done in the past,we want to assure you that Raytheon remains fully committed to meeting all pension benefit obligations to the more than 60,000 retirees and survivors, estimated at over one billion dollars for 2010.

Additionally Raytheon remains fully committed to paying pension benefits to our future retirees and survivors, just as we have done for almost 60 years.”

19

Pension Fund Balances

Fund Balance

12/31/09 ($ In Millions)

12/31/09%

Raytheon Policy

Equities 6,538 53% 45-65 %

Fixed Income

3,600 29% 25-40%

All Other 2,336 18% 0-30%

Total 12,474 100%

20

Pension Fund Changes

Beginning Balance 1/1/09 10,581Actual Return on Plan Assets 1,965

Company Contributions 1,107

Benefits Paid <1,097>

Other <82>

Ending Balance 12/31/09 12,474

($ In Millions)

21

Pension Funding

Domestic Plans (Estimated)84% Accumulated Benefit

Obligation (ABO)76% Projected Benefit

Obligation(PBO)Funding anticipated to be

100% PBO by 2014

22

Raytheon Company2009 Financial Results

2009 Was Another Strong Year for Raytheon

2007 2008 2009

Net Sales: 21.3B 23.2B 24.9B

Operating Income:

2.4B 2.6B 3.0B

Backlog: 36.6B 38.9B 36.9B

ROIC: 10.5% 11.1% 12.2%

23

Metrics

24

Mel Weinzimer

Membership

25

Membership Status

1225 Active Members

30 New Members

26

Frank Di RestaPeter DziekanPatricia HatchBryan JohnsonKenneth KungJoseph McIsaacJerry SatkusJames SmallRonald PfeifferGary GresslerMark McGheeHarold BartonBenjamin BashanRichard SeguiFred DePorter

Welcome New MembersRobert GivenWilliam GoodallFred BenhamLeigh BlevinsRichard BrooksRichard HazelLinda KnoxKarl PfeilJohn RudyDavid SchubertDennis C. WhiteJean WrightRichard PosterJoseph CoveCarol O'Brien

27

Social Events

28

Membership Initiatives

• Met with K. Peden, Raytheon VP to request access to current and future retirees

• Placed newspaper ads to solicit new members

• Contact your friends, associates, fellow retirees and encourage them to join and/or renew membership

• Our retirees continue to stay in touch with their Raytheon friends and co-workersLet us know when your circle of Raytheon retirees is getting together

• We welcome your suggestions and ideas

29

Financial

Dave MacLellan

30

Financial Budget:2010

Item Amount

Income Dues 14,500

Expenses Newsletters & Mailings 7,000 Office Rent 4,500 Miscellaneous 2,000 NRLN Contribution 1,500 Payroll Taxes 1,200 Annual Meeting 1,000 Telephone and DSL 900 Secretary's Salary 700

Total 18,100

Net Income/(Loss) (3,600)

31

Communications

Bob Hamilton

32

Newsletter Continues With Expanded ContentHealth and pension plan articles

remain the cornerstone of our publicationBruce Nogueira continues to write his most

popular health articlesWe continue to use

Syndicated columnistsSocial and luncheon announcementsRetiree written articles of interest

Accomplishments, travel, hobbies, public service

33

Newsletter Appearance

The format has continued in booklet form

Reduced printing costs by printing at the Minuteman Regional High SchoolSometimes causes schedule issues

E-mail is still the most cost effective means of distributionMembers are encouraged to use e-mail

34

Our Website Has Expanded

Increased the content and changed the format

Specific articles of interest are highlighted and dated

More current than the newsletterWe are able to update it more

frequently than the newsletter

www.raytheonretirees.org

35

RSS Feed AddedReally Simple SyndicationContinuously searches and

provides abstracts plus links to the articles of interest

Raytheon Medicare

Health Care Estate Planning

Pension Legislation Retiree News

Social Security

36

Recent Web Site Traffic

23.00% Massachusetts 2.60% South Australia20.60% California 1.80% Oregon10.40% Texas 1.60% Colorado9.20% Florida 1.60% Indiana4.60% New Hampshire 1.40% Rhode Island4.40% Arizona 1.20% Pennsylvania3.80% Virginia 1.20% Maryland3.20% Unknown 1.00% Connecticut

37

86,366 Pages Viewed by 4,484 Returning Visitors

0

2000

4000

6000

8000

10000

12000

14000

Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010

Web

Hit

s Page Loads

Unique Visitors

First Time Visitors

Returning Visitors

38

Popular Web Pages

A random sample of approximately 500 recent hits reveals that many members are searching for their colleagues

Page 2008 2009 2010Home Page 201 232 164Members 126 125 118Benefits 39 55 120Upcoming Events 32 17 47Newsletter Archives 22 14 8Raytheon News 22 7 20J oin Us 13 14 20Goals 8 4 4

39

Memoriam Section Needs Improvement

Several members provided information in the pastWe urgently need new volunteers

to take up the challengeMany of you have written

inquiring about the memoriam feature

40

Membership Software Updated

Easier to maintain membership list

Simplifies office operations

Dues returning to January renewal

Still 12 months extension of membership

41

The Future Brings Challenges

We constantly respond to member issuesAct as an intermediary with Raytheon

Need to Expand membershipConsidering adding a forum where

retirees can communicate directly on items of interest to themNeed a forum-master volunteer

42

Break

Time to stretch for a few minutes

43

Service Opportunities after Reaching 55 (SOAR 55)

Karen Albert is a Volunteer working with individuals, groups, organizations and the media to promote volunteer opportunities.

SOAR 55 works closely with over 85 nonprofit organizations in Newton and the MetroWest area that are in need of volunteer assistance.

SOAR 55 offers maximum choice and flexibility to its volunteers as it matches personal interests, skills and individual schedules with interesting and rewarding opportunities to serve.

44

Phil Cohen, Director, Missile and Ground Programs

Phil Cohen, as part of Raytheon Integrated Defense Systems (IDS) , is responsible for Patriot missile and ground programs at all manufacturing facilities at Raytheon.

Phil will talk about the new Patriot multibillion dollar production contract and the challenges that it presents.

45

General Discussion

46

Thank You For Coming

This concludes our membership meeting

Please feel free to visit the museum or their snack bar

Hope to see or hear from you in the coming months

Stay well