2 0 1 5
`A N N U A L R E P O R T
`
`Raytheon2006-0001
`
`Sony Corp. v. Raytheon Co.
`IPR2016-00209
`
`

`
`RAYTHEON 2015 FINANCIAL HIGHLIGHTS
`
`In billions, except per share amounts
`
`$23.2
`
`$3.0
`
` 11 12
`
` 13 14 15
`NET SALES
`
` 13 14 15
` 11 12
`OPERATING INCOME
`
`$6.75
`
`$2.68
`
` 13 14 15
` 11 12
`EPS FROM CONTINUING OPERATIONS
`
` 13 14 15
` 11 12
`DIVIDENDS PER SHARE
`
`YEARS ENDED DECEMBER 31
`In millions, except per share amounts
`Backlog
`
`Net Sales
`
`Operating Income
`
`EPS from Continuing Operations
`
`Operating Cash Flow from Continuing Operations
`
`Dividends Declared per Share
`
`2013
`
`$33,685
`
`23,706
`
`2,938
`
`5.96
`
`2,382
`
`2.20
`
`2014
`
`$33,571
`
`22,826
`
`3,179
`
`6.97
`
`2,064
`
`2.42
`
`2015
`
`$34,669
`
`23,247
`
`3,013
`
`6.75
`
`2,346
`
`2.68
`
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`Raytheon2006-0002
`
`

`
`Dear Fellow Shareholders,
`Two years ago, we made the strategic decision to focus our company on top-line growth, with the
`expectation that aligning our financial resources and world-class people would lay the foundation
`for a return to growth after years of reduced U.S. government defense budgets. Our most optimistic
`projections were that growth would return in 2016. Today, I am very pleased to report that we
`exceeded those goals and that your company returned to growth in 2015 — a full year ahead of plan.
`
`This success did not happen by accident. It required the dedication and hard work of all of our 61,000
`employees — each contributing his or her expertise to the company’s strategy, goals and objectives.
`Their successful execution of our growth strategy and increased demand from our global customers
`generated solid operating performance in 2015.
`
`Our overall results for 2015 bookings, sales, earnings
`per share and cash flow all met or exceeded our
`expectations. Our 2015 net sales of $23.2 billion were up 2
`percent compared to 2014. For the full-year 2015, our EPS
`from continuing operations was $6.75, operating income
`was $3.0 billion, and operating cash flow from continuing
`operations was $2.3 billion, after a $200 million pretax
`discretionary pension plan contribution.
`
`Strong customer demand was reflected in our 2015 bookings
`of $25.2 billion, a 5 percent increase over 2014, which
`positions us well going into 2016. Furthermore, total backlog
`at the end of 2015 was $34.7 billion, an increase of $1.1
`billion over 2014.
`
`Additionally, our international strategy continued to be
`a key driver of our results. In 2015, 31 percent of our net
`sales were international, marking a new company record.
`International business comprised 34 percent of our total
`2015 bookings and 43 percent of our total backlog at the
`end of 2015.
`
`“Your company returned to
`growth in 2015 — a full year
`ahead of plan.”
`
`Balanced Capital Deployment
`Strategy
`This strong fundamental performance provided a
`foundation for continuing our balanced capital deployment
`strategy. Our overall objective is always to create
`shareholder value, and for the full-year 2015, the company
`repurchased 9 million shares of common stock for $1.0
`billion. We also raised our dividend by 10.7 percent in
`2015, marking the 11th consecutive annual increase.
`These moves and our performance contributed to
`Raytheon’s stock price reaching several all-time highs
`in 2015, and our stock outperformed the S&P 500 index
`for the fifth consecutive year.
`
`A strong financial position also provided us with the
`flexibility to support future growth and meet customer
`needs through strategic acquisitions. We made three
`acquisitions during the year to strengthen our capabilities
`in cyber markets. Most notably, we acquired from Vista
`Equity Partners its premier commercial cybersecurity
`business, Websense, and entered into a joint venture with
`Vista Equity Partners, combining Websense with Raytheon
`Cyber Products to form our new ForcepointTM business.
`
`1
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`Raytheon2006-0003
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`

`
`Global Demand from Across
`Our Portfolio
`As I travel around the world, I am hearing from many
`customers about their need to invest in a strong defense
`to deter evolving threats. The capabilities they are seeking,
`and that we are partnering with them to deliver, are well
`aligned with our core strengths. So more than ever before,
`demand from our global customers is broad-based
`and diversified.
`
`MISSILE DEFENSE: Raytheon continued to demonstrate
`our industry leadership across all elements of missile
`defense. The Patriot Air and Missile Defense System
`repeatedly proved its effectiveness in 2015 by intercepting
`more than 10 ballistic missiles during combat operations.
`Demand for Patriot’s capabilities continued to grow as
`evidenced by bookings of $2.0 billion for the Kingdom of
`Saudi Arabia and $769 million for the Republic of Korea.
`In a landmark test, Standard Missile-6 demonstrated
`multimission capabilities as it intercepted a ballistic
`missile target, and the program transitioned to full-rate
`production. Our land-based Standard Missile-3 supported
`by the AN/TPY-2 radar achieved its first intercept in space,
`and we began flight testing the SM-3® Block IIA in a year
`when SM-3 contract awards totaled more than $1 billion.
`
`“Our performance contributed to
`Raytheon’s stock price reaching
`several all-time highs in 2015,
`and our stock outperformed the
`S&P 500 index for the fifth
`consecutive year.”
`
`C5I™ CAPABILITIES: We are leveraging our deep experience
`in command, control, communications, computers, cyber and
`intelligence systems to combine sensors and advanced
`networks that create entirely new ways of perceiving the
`world. During the year, we grew our leadership position in
`Advanced Extremely High Frequency satellite communications,
`with an award for low-rate initial production of terminals for
`the U.S. Air Force’s Family of Advanced Beyond Line of Sight
`
`2
`
`Our international
`sales achieved
`A NEW COMPANY
`RECORD in 2015
`
`(FAB-T) program, which positions us to deploy this critical
`capability on multiple airborne platforms. The Air Force
`also awarded us an indefinite-delivery, indefinite-quantity
`contract with a $393 million ceiling value to continue
`mission support for its Distributed Common Ground
`System, the service’s primary intelligence, surveillance and
`reconnaissance analysis tool. We continued our strong
`performance as the prime mission-systems equipment
`integrator for the DDG 1000 Zumwalt-class destroyer
`program, especially during DDG 1000’s Alpha Trials, a
`week-long, at-sea exercise that demonstrated key ship
`capabilities. Internationally, we booked $163 million to
`continue development on the Air Defense Operations
`Center for Qatar.
`
`CYBERSECURITY: We made significant progress
`in 2015 on our strategy to bring advanced cybersecurity
`capabilities to commercial and government customers
`around the world. We increased our presence in the
`commercial cyber market with the formation of Forcepoint,
`establishing a strong competitive position via the breadth
`and depth of Forcepoint’s product offerings. In the
`government realm, our strong international cyber business
`grew with the securing of two new countries as customers
`for our cybersecurity solutions to protect their networks
`against advanced cyber threats.
`
`ELECTRONIC WARFARE: Raytheon has long been a
`leader in electronic warfare, and in 2015 we extended
`our leadership by focusing on the convergence of EW,
`cyber and signals intelligence. We are building a next-
`generation EW business with highly successful flight
`tests of the Next Generation Jammer program and a
`series of airborne cyber capability flight demonstrations.
`Our EW Planning and Management Tool successfully
`completed U.S. Army Interoperability Certification and
`Operational Testing, which will lead to initial unit fielding.
`We also successfully completed operational tests with the
`Air Force for the Miniature Air Launched Decoy-Jammer
`(MALD®-J), satisfying all requirements to attain Initial
`Operational Capability.
`
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`Raytheon2006-0004
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`

`
`PRECISION WEAPONS: Raytheon is enabling customer
`missions with an unprecedented level of accuracy by
`employing evolved seekers, laser guidance and advanced
`digital signal processing. We continued modernizing
`Tomahawk as evidenced by the U.S. Navy demonstrating
`the ability of Tomahawk to strike a moving target at sea.
`The U.S. Air Force completed operational testing of the
`Advanced Medium-Range Air-to-Air Missile’s latest variant,
`and we booked $637 million to produce the AMRAAM®
`missile for domestic and international customers. The
`U.S. Navy approved full-rate production for the AIM-9X®
`Block II Sidewinder™ air-to-air missile, and the Paveway™
`missile continued its role as a preferred air-to-ground
`weapon with new bookings exceeding $1 billion.
`
`TRAINING AND MISSION SUPPORT: With decades of
`experience and cutting-edge technologies, we are delivering
`training and full lifecycle mission support solutions
`worldwide. In 2015, we secured a competitive win with a
`$700 million ceiling value to support the mission-critical
`command and control systems at the North American
`Aerospace Defense Command’s Cheyenne Mountain
`Complex. NASA awarded us a contract extension with a
`potential value of $102 million for work at its Johnson
`Space Center to support facilities that are critical to human
`spaceflight, such as operations and engineering services at
`the Neutral Buoyancy Lab and Space Vehicle Mockup
`Facility. We also booked $963 million on the Warfighter
`FOCUS contract that provides high-consequence training
`services and support to the U.S. Army, other military
`branches, and allied and coalition forces around the world.
`
`Investing in Next-Generation
`Capabilities
`We clearly have the right solutions for today. To ensure
`that we have the right solutions for tomorrow, we
`have increased our investments in Raytheon’s business,
`technologies and capabilities. Our internal research and
`development reached 3 percent of the company’s sales
`in 2015. We used this funding to invest in next-generation
`technologies and capabilities to increase our
`competitiveness and drive Raytheon’s long-term growth.
`
`Our customers are looking to us for next-generation
`capabilities to counter increasingly sophisticated threats
`that are developing on the horizon. We have heard them
`
`“We are continuously focused on
`lowering our costs, enhancing our
`competitiveness and improving
`affordability for our customers.”
`
`and are innovating to create game-changing technologies
`of the future — ranging from hypersonics and cybersecurity
`to high-energy lasers. For example, the Defense Advanced
`Research Projects Agency awarded Raytheon a $20 million
`contract to continue development work in the area of
`hypersonics. Our extensive experience in developing
`advanced guided systems uniquely positions us to solve the
`many technical challenges associated with hypersonic flight.
`We also continue to establish ourselves as a technology
`leader in high-energy lasers with an award on the Missile
`Defense Laser Development program, which is a precursor
`to a demonstration program.
`
`Improving Affordability and
`Competitiveness
`In this environment, we are also continuously focused on
`lowering our costs, enhancing our competitiveness and
`improving affordability for our customers. A few examples
`of our many efforts and initiatives include executing our
`strategic sourcing strategy to reduce costs in our supply
`chain; leveraging our centralized Global Business Services
`organization to more efficiently provide back-office support
`to Raytheon’s businesses; and reducing our footprint, taking
`out a gross total of 1.9 million square feet in 2015. In
`addition, we continue to look at all areas of our company
`to reduce complexity and further improve productivity.
`
`In 2015, we raised
`our dividend for the
`11TH YEAR in a row
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`Raytheon2006-0005
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`

`
`Guided by Our Vision, Strategy
`and Values
`Another way we strengthen our competitiveness is by
`uniting our 61,000 employees worldwide as one team,
`aligned around our Raytheon vision, strategy and values.
`
`Our values build on each other. They begin with trust,
`which is fundamental and is reinforced by our ethical
`culture of integrity and a top score from Transparency
`International-UK in 2015. Trust leads to respect and is
`demonstrated when we embrace diversity and inclusion;
`as a result, Raytheon was named a “Best Place to
`Work” by the Human Rights Campaign® for the 11th
`year in a row. Respect enables collaboration, and we
`are benefiting from this dynamic after transforming our
`employee resource groups to better align with business
`priorities and harness the power of diverse ideas and
`experiences. Collaboration inspires innovation,
`where we challenge the status quo in all areas, not just
`in our technologies. At the end of the day, we need to
`have accountability, honoring commitments to our
`customers, our communities and each other.
`
`Taken together, we are one global team creating trusted,
`innovative solutions to make the world a safer place.
`This vision has been widely embraced by the Raytheon
`team since we introduced it in March 2015. It captures
`the essence of what we do and why we do it. And when
`I share it with the customers I meet, it resonates
`strongly with them too.
`
`Confident in Our Future
`Today, we turn our attention to the future of the company:
`setting new goals and objectives to maximize shareholder
`value while ensuring customer success. We do this from a
`solid position. Our company is performing very well, our
`growth strategy is working, and we are confident in our
`future. Internationally, the global environment continues to
`drive demand for our solutions, and domestically, increased
`budgets are paving the way for growth from our U.S.
`defense customers for the first time since 2009.
`
`Now that we have returned to growth, our focus will be
`on accelerating that growth and expanding our margins.
`
`I want to thank each and every member of the Raytheon
`team for a great year and for our enviable position. Their
`outstanding efforts, commitment and alignment yielded
`great results. They are driven by purpose, rising
`to the challenge of solving our customers’ toughest
`problems and helping shape a better future. Thank you
`for all that you do for our company, our customers and
`our shareholders.
`
`Respectfully,
`
`Thomas A. Kennedy
`Chairman and
`Chief Executive Officer
`March 2016
`
`“Our values build on each other. They begin with trust,
`which is fundamental and is reinforced by our ethical
`culture of integrity.”
`
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`Raytheon2006-0006
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`

`
`2015 FORM 10-K
`2 0 1 5 F O R M 1 0 - K
`
`Raythe0n2006-0007
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`Raytheon2006-0007
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`

`
`Raythe0n2006-0008
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`Raytheon2006-0008
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`

`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`WASHINGTON, D.C. 20549
` __________________________________________________________
`FORM 10-K
`ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
`For the fiscal year ended December 31, 2015 or
`TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
`EXCHANGE ACT OF 1934
`For the transition period from to
` Commission File Number 1-13699
`__________________________________________________________
`
`RAYTHEON COMPANY
`
`(Exact Name of Registrant as Specified in its Charter)
`__________________________________________________________
`
`Delaware
`(State or Other Jurisdiction of Incorporation or Organization)
`
`95-1778500
`(I.R.S. Employer Identification No.)
`
`870 Winter Street, Waltham, Massachusetts 02451
`(Address of Principal Executive Offices) (Zip Code)
` (781) 522-3000
`(Registrant’s telephone number, including area code)
`Securities registered pursuant to Section 12(b) of the Act:
`
`Title of Each Class
`Common Stock, $.01 par value
`
`Name of Each Exchange on Which Registered
`New York Stock Exchange
`
`
`
`Securities registered pursuant to Section 12(g) of the Act:
`None
` __________________________________________________________
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
`Yes
` No
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
`Yes
` No
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
`Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required
`to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
` No
`Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any,
`every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
`chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such
`files). Yes
` No
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter)
`is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information
`statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
`Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or
`a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting
`company” in Rule 12b-2 of the Exchange Act.
` Smaller reporting company
` Non-accelerated filer
`Large accelerated filer
` Accelerated filer
`Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
`Act). Yes
` No
`The aggregate market value of the voting stock held by non-affiliates of the Registrant as of June 26, 2015, was
`approximately $29.6 billion.
`The number of shares of Common Stock outstanding as of February 8, 2016 was 298,998,000.
`Documents incorporated by reference and made a part of this Form 10-K:
`Portions of the Registrant’s Definitive Proxy Statement for its 2016 Annual Meeting of Stockholders are incorporated by
`reference in Part III of this Form 10-K.
`
`Raytheon2006-0009
`
`

`
`1 1
`
`3
`22
`22
`23
`24
`24
`
`26
`28
`29
`72
`74
`123
`123
`123
`
`123
`124
`124
`124
`124
`
`INDEX
`
`
`PART I
`Item 1.
`Business......................................................................................................................................................
`Item 1A. Risk Factors................................................................................................................................................
`Item 1B. Unresolved Staff Comments ......................................................................................................................
`Item 2.
`Properties....................................................................................................................................................
`Item 3.
`Legal Proceedings ......................................................................................................................................
`Item 4.
`Mine Safety Disclosures.............................................................................................................................
`
`Executive Officers of the Registrant ..........................................................................................................
`
`PART II
`Item 5.
`
`Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
`Purchases of Equity Securities ...................................................................................................................
`Item 6.
`Selected Financial Data..............................................................................................................................
`Item 7.
`Management’s Discussion and Analysis of Financial Condition and Results of Operations.....................
`Item 7A. Quantitative and Qualitative Disclosures About Market Risk ...................................................................
`Item 8.
`Financial Statements and Supplementary Data..........................................................................................
`Item 9.
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ....................
`Item 9A. Controls and Procedures.............................................................................................................................
`Item 9B. Other Information.......................................................................................................................................
`
`Directors, Executive Officers and Corporate Governance.........................................................................
`Executive Compensation............................................................................................................................
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters..
`Certain Relationships and Related Transactions, and Director Independence...........................................
`Principal Accountant Fees and Services.....................................................................................................
`
`PART III
`Item 10.
`Item 11.
`Item 12.
`Item 13.
`Item 14.
`
`PART IV
`Item 15.
`
`Exhibits and Financial Statement Schedules..............................................................................................
`
`124
`
`SIGNATURES .............................................................................................................................................................
`
`129
`
`Raytheon2006-0010
`
`

`
`PART I
`
`ITEM 1. BUSINESS
`
`General
`Raytheon Company, together with its subsidiaries, is a technology and innovation leader specializing in defense and other
`government markets throughout the world. The terms “we”, “us”, “our”, “Raytheon” and the “Company” mean Raytheon
`Company and its subsidiaries, unless the context indicates another meaning. We develop technologically advanced and
`integrated products, services and solutions in our core markets: sensing; effects; command, control, communications,
`computers, cyber and intelligence (C5I™); mission support; and cybersecurity. We serve both domestic and international
`customers, primarily as a prime contractor or subcontractor on a broad portfolio of defense and related programs for government
`customers.
`
`We were founded in 1922 and have grown internally and through a number of acquisitions. We are incorporated in the state
`of Delaware. Our principal executive offices are located at 870 Winter Street, Waltham, Massachusetts 02451.
`
`In May 2015, we created Raytheon|Websense, a new cybersecurity joint venture company (with Vista Equity Partners), through
`a series of transactions by which we acquired Websense, Inc. (Websense) from Vista Equity Partners and combined it with
`Raytheon Cyber Products (RCP), formerly part of our Intelligence, Information and Services (IIS) segment, and then sold a
`minority interest in the combined company to Vista Equity Partners. Raytheon|Websense was later renamed ForcepointTM. In
`connection with these transactions, we reorganized our operating and reporting structure with Forcepoint as our fifth reporting
`segment.
`
`In this section, we describe our business, including our business segments, product lines, customers, operations and other
`considerations.
`
`Business Segments
`We operate in five business segments:
`–
`Integrated Defense Systems;
`–
`Intelligence, Information and Services;
`– Missile Systems;
`– Space and Airborne Systems; and
`– Forcepoint.
`
`The following is a description of each of our business segments. As part of the description, we include a discussion of some
`of the segment’s notable initiatives and achievements in 2015, such as certain key contract awards, new product introductions
`and acquisitions. For a discussion of the financial performance of our business segments and other financial information, see
`pages 48–65 of this Form 10-K.
`
`Integrated Defense Systems (IDS)—IDS, headquartered in Tewksbury, Massachusetts, is a leader in integrated air and missile
`defense; large land- and sea-based radar solutions; command, control, communications, computers, cyber and intelligence
`(C5I™) solutions; and naval combat and ship electronic systems. IDS delivers combat-proven performance against the
`complete spectrum of airborne and ballistic missile threats and is a world leader in the technology, development, and production
`of sensors and mission systems. IDS provides solutions to the U.S. Department of Defense (DoD) and the U.S. Intelligence
`Community, as well as more than 50 international customers which represent approximately half of IDS’s business.
`
`In 2015, IDS booked more than $2.0 billion for a contract to provide advanced Patriot air and missile defense capability for
`the Kingdom of Saudi Arabia and a contract for $769 million from the Republic of Korea to upgrade its Patriot Air and Missile
`Defense (A&MD) systems to the latest configuration. IDS also received contract awards for Patriot A&MD systems for the
`U.S. Army and for undersea sensor systems for the U.S. Navy.
`
`Effective January 1, 2016, IDS has the following principal product lines: Mission Systems and Sensors (MSS); Integrated Air
`and Missile Defense; and Seapower Capability Systems. This structure reflects the reorganization of IDS's former Command,
`Control, Communications, Computers and Intelligence (C4I) product line on January 1, 2016 to more efficiently leverage its
`capabilities within Raytheon. The reorganization integrated the C5I™ and Thales-Raytheon Systems LLC (TRS LLC) product
`
`1
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`Raytheon2006-0011
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`
`areas from IDS's former C4I product line into the new IDS MSS product line and moved certain air traffic systems, border
`and critical infrastructure protection and highway tolling programs from IDS's former C4I product line into Raytheon's IIS
`business segment. See "Intelligence, Information and Services" below for more information on Raytheon's IIS business
`segment.
`
`Mission Systems and Sensors (MSS)—MSS provides integrated whole-life air and missile defense systems. MSS produces
`systems and solutions, including Upgraded Early Warning Radars (UEWR), the Army Navy/Transportable Radar Surveillance-
`Model 2 (AN/TPY-2) and other land-based surveillance and search radars, which provide threat detection, precision tracking,
`discrimination, and classification of ballistic missile threats. In addition, MSS provides C5I™ solutions through the
`development, delivery and support of complex integrated, networked, actionable combat command and control solutions for
`air and land combatant commanders. MSS also includes TRS LLC, the U.S. operating subsidiary of Thales-Raytheon Systems
`LTD (a joint venture that focuses on battlefield radars and air command and control, including NATO’s Air Command and
`Control System program). Key MSS customers include the U.S. Army and Air Force, the Missile Defense Agency (MDA)
`and international customers.
`
`Integrated Air and Missile Defense (IAMD)—IAMD provides combat-proven air and missile defense systems, such as the
`Patriot A&MD system which is the cornerstone of the air and missile defense architecture for thirteen nations around the
`globe, including the U.S. and five NATO nations. The National Advanced Surface-to-Air Missile System (NASAMS), also
`offered by IAMD, is a highly adaptable mid-range solution for any operational air defense requirement. It is deployed in the
`U.S. and five other countries. Key IAMD customers include the U.S. Army and international customers. Total sales from this
`business area were approximately 10% of our consolidated revenues for 2015, 2014 and 2013.
`
`Seapower Capability Systems (SCS)—SCS is a provider and integrator of maritime air and missile defense radar systems,
`naval combat management, and airborne anti-submarine and mine warfare systems, as well as sensors, maritime naval
`navigation systems, and torpedoes for U.S. and international navies. As a naval radar provider, SCS produces the SPY-3, the
`U.S. Navy's first shipboard active phased array multifunction radar, and radar transmitters for the sea- and land-based Aegis
`weapon system radars, and is designing and will manufacture the low-rate initial production of the U.S. Navy’s newest radar,
`Air and Missile Defense Radar (AMDR), which is designated as AN/SPY-6. As a ship integrator for the U.S. Navy, SCS
`provides mission systems equipment and serves as the combat and mission systems integrator for the DDG-1000, the total
`ship electronics systems integrator for the LPD-17, the U.S. Navy’s latest amphibious warfare ship, and the warfare systems
`integrator for the CVN-78, the U.S. Navy’s next generation of aircraft carrier. Key SCS customers include the U.S. Navy and
`allied navies.
`
`IDS also includes the Advanced Technology Programs (ATP) product line, which executes contract research and development
`programs primarily with the Office of Naval Research (ONR) and the Defense Advanced Research Projects Agency (DARPA)
`in advanced materials, semiconductors such as Gallium Nitride (GaN) and next-generation radar systems such as Flexible
`Digital Array Radar (FlexDAR), to support Raytheon product lines. ATP also pursues attractive adjacent growth markets such
`as undersea warfare and directed energy.
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`Intelligence, Information and Services (IIS)—IIS, headquartered in Dulles, Virginia, provides a full range of technical and
`professional services to intelligence, defense, federal and commercial customers worldwide. IIS specializes in global
`Intelligence, Surveillance and Reconnaissance (ISR); navigation; U.S. Department of Defense (DoD) space and weather
`solutions; cybersecurity; analytics; training; logistics; mission support; engineering; automation and sustainment solutions;
`and international and domestic Air Traffic Management (ATM) systems. Key customers include the U.S. Intelligence
`Community, the U.S. Armed Forces, the Federal Aviation Administration (FAA), the National Oceanic and Atmospheric
`Administration (NOAA), the Department of Homeland Security (DHS), the National Aeronautics and Space Administration
`(NASA) and an increasing number of international customers.
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`During 2015, IIS won a variety of notable unclassified contracts. IIS will provide systems modifications to increase the
`capability and capacity of the command center of the North American Aerospace Defense Command (NORAD); extend new
`phases of border security solutions in the Philippines and Jordan; provide cybersecurity capabilities for more than 100 federal
`civilian government agencies under a DHS award, which was protested; and provide lifecycle management for aircrew,
`maintenance and systems-specific training systems for the DoD. IIS also received a contract award to provide field support
`for the U.S. Air Force’s distributed common ground system mission. IIS’s Range Generation Next (RGNext) joint venture
`received a contract award to operate, maintain and sustain the U.S. Air Force’s space launch and test range system. IIS continued
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`to grow its classified business, receiving a number of significant contracts. We acquired Foreground Security, a leading provider
`of virtual security operations centers (SOCs), managed security service solutions and cybersecurity professional services in
`the federal and commercial markets. Additionally, RCP, formerly part of IIS, was integrated into our Forcepoint business
`segment in connection with the series of transactions related to our Forcepoint joint venture.
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`Effective January 1, 2016, IIS has the following principal product lines: Cybersecurity and Special Missions (CSM); Global
`Training Solutions (GTS); Navigation and Environmental Solutions (NES); Global Intelligence Solutions (GIS); Mission
`Support and Modernization (MSM); and Transportatio