Raytheon had another good year in 2005, reflecting our commitment to our customers, shareholders and employees. We are proud that by year-end, we had reduced our net debt position to its lowest level in 10 years and that in 2005 we achieved continued predictability in our results.

Highlights from our 2005 results included total company sales of $21.9 billion, up 8 percent compared with 2004; Government and Defense sales, up 6 percent; and Raytheon Aircraft Company sales, up 18 percent. Total Raytheon fourth quarter 2005 sales were the highest ever, and our diluted earnings per share from continuing operations rose significantly for the year.

In 2005, our operating cash flow from continuing operations was $2.5 billion compared with $2.1 billion in 2004. Our net debt (total debt less cash and cash equivalents) was $3.3 billion at the end of 2005, a reduction of $1.3 billion from the end of 2004. Total backlog at the end of 2005 was $34.4 billion, up $1.9 billion from the end of the prior year.

During 2005, the company returned cash to shareholders through a previously authorized 10 percent increase in the dividend — and through the repurchase of 11.2 million shares of common stock for $436 million, part of a total $700 million stock repurchase program authorized by the Board.

At Raytheon, we believe that there is a link between this financial success and our ongoing emphasis on customer focus, growth and shareholder value. We plan to continue to run the company with a focus on our customers, concentrating on continuous improvement in our performance, relationships and solutions. To this end, we have increased our emphasis on speed and agility in the organization to help us deploy our capabilities and programs ever more efficiently in our changing world.