 MISSILE SYSTEMS (MS), which reported sales of
$3.5 billion in 2003, continued its leading position as a developer
and supplier of innovative weapon systems and built on its core
strengths to grow its business to support the evolving needs of its
customers.
 Performance was highlighted by the successful use
of those weapon systems in combat by U.S. and allied forces in
Operation Iraqi Freedom. Raytheon’s precision-guided weapons
gave war fighters pinpoint accuracy and reduced collateral damage.
Paveway laser-guided bombs and Tomahawk cruise missiles were
key systems used during the conflict.
To meet customer needs,
the company tripled production of Paveway II from 2002 to 2003,
and earned a $174 million production contract. Raytheon also accelerated
efforts to recertify and remanufacture Tomahawks to incorporate
system upgrades. Missile Systems continued to mature key
programs in development to meet evolving battlefield requirements.
The new Tactical Tomahawk proved its capabilities in a number of
significant flight tests during 2003 and earned a $224 million initial
production contract. The weapon is expected to become operational
in 2004. Tactical Tomahawk incorporates innovative technologies
and provides growth and advanced capabilities to the Navy, and the
opportunity for stable business for Raytheon.
The Evolved Sea
Sparrow Missile, an advanced ship self-defense missile developed
for the U.S. and NATO allies, was successfully fired from ships of the
navies of the U.S., Australia and the Netherlands and completed
Navy testing and evaluation, paving the way for full-rate production
in 2004. AIM-9X, the next generation Sidewinder air-to-air missile,
is now operationally fielded after a highly successful flight test.
As part of the company’s overall strategy to meet the needs of its
international customers, Missile Systems earned contract awards in
two key programs in 2003. The United Kingdom and New Zealand
selected the Javelin anti-tank weapon system to meet their medium-range
anti-armor needs. Missile Systems also provided technical
support to Raytheon Systems Limited, which was selected to provide
an upgraded Paveway designated as Paveway IV, to meet the
Royal Air Force’s precision-guided bomb needs, opening up new
markets internationally and in the U.S.
In the growing area of missile
defense, Raytheon was part of a team awarded the Kinetic
Energy Interceptor (KEI), a $4 billion contract to the team, from the
Missile Defense Agency. KEI will provide the U.S. with the ability to
destroy hostile missiles during the vulnerable boost phase of flight.
Earlier in the year, the company secured an $881 million contract
for engineering and manufacturing to continue development and
begin deployment of the STANDARD Missile-3 as part of the Missile
Defense Agency’s sea-based Aegis Ballistic Missile Defense
System. In addition, Raytheon delivered the first deployment version
of the Exoatmospheric Kill Vehicle (EKV), which will be tested as part
of the Ground-based Missile Defense system in 2004, and won a
$177 million contract to build 15 additional EKVs.
Based on the
previous year’s investments, Missile Systems secured nearly
$190 million of leading-edge technology programs to deliver important
new capabilities, one of which is the U.S. Air Force’s Miniature
Air Launched Decoy.
The breadth of the Missile Systems portfolio
continues to position the company to respond to the evolving needs
of its customers with innovative, cost effective solutions.
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