RAYTHEON CO/, 424B2, 2000-08-09

RAYTHEON CO/
424B2, 2000-08-09
SEARCH, DETECTION, NAVAGATION, GUIDANCE, AERONAUTICAL SYS

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<PAGE>

PROSPECTUS SUPPLEMENT
(To Prospectus dated March 13, 2000)
Filed pursuant to Rule 424(b)(2)
Registration No. 333-82529

$350,000,000
[LOGO OF RAYTHEON]

FLOATING RATE NOTES DUE AUGUST 10, 2001

----------------

Each floating rate note will bear interest at a rate per annum equal to LIBOR
plus 0.33%, payable quarterly in arrears on November 10, 2000, February 10,
2001, May 10, 2001 and August, 10, 2001, as more fully described in this
prospectus supplement under the heading "Description of the Notes" beginning on
page S-8. The rate of interest on the floating rate notes will be reset
quarterly.

The floating rate notes will mature on August 10, 2001. The Company may not
redeem any of the floating rate notes prior to maturity.

Investing in our floating rate notes involves risks. See "Risk Factors"
beginning on page 3 of the accompanying prospectus to read about risks you
should consider before buying our floating rate notes.

----------------

The underwriter has proposed to offer the floating rate notes from time to
time for sale in negotiated transactions, or otherwise, at varying prices to be
determined at the time of each sale. The underwriter has agreed to purchase the
floating rate notes from us at 100% of their principal amount plus accrued
interest, if any, from August 10, 2000.

----------------

The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this Prospectus
Supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

----------------

The floating rate notes will be delivered to you in global form through the
book-entry delivery system of The Depository Trust Company on August 10, 2000.

----------------

MORGAN STANLEY DEAN WITTER

August 7, 2000
<PAGE>

TABLE OF CONTENTS

Prospectus Supplement Prospectus

<TABLE>
<CAPTION>
Page Page
---- ----
<S> <C> <C> <C>
Disclosure Regarding Forward-Looking Raytheon Company................................. 1
Statements......................... S-3 Risk Factors..................................... 3
Raytheon Company.................... S-3 About This Prospectus............................ 10
Recent Developments................. S-4 Where You Can Find More Information.............. 11
Use of Proceeds..................... S-5 Disclosure Regarding Forward-Looking Statements.. 12
Capitalization...................... S-5 Ratio of Earnings to Combined Fixed Charges and
Ratio of Debt to Capitalization..... S-5 Preferred Stock Dividends...................... 12
Ratio of Earnings to Combined Fixed Use of Proceeds.................................. 13
Charges............................ S-6 Description of Our Securities.................... 13
Selected Summary Financial Data..... S-7 Description of Our Debt Securities............... 13
Description of the Notes............ S-8 Description of Our Preferred Stock............... 21
Certain United States Federal Income Description of Our Class B Common Stock.......... 22
Tax Consequences................... S-10 Description of Our Securities Warrants........... 26
Underwriting........................ S-13 Plan of Distribution............................. 27
Validity of Notes................... S-13 Legal Matters.................................... 28
Experts............................. S-13 Experts.......................................... 28
</TABLE>

This supplemental prospectus is part of a registration statement and
prospectus that we filed with the Securities and Exchange Commission using a
"shelf" registration process that became effective in March 2000. Under this
shelf process, we may sell any combination of the securities described in the
original prospectus in one or more offerings up to a total dollar amount of
$3.0 billion or the equivalent denominated in foreign currencies. The original
prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement,
like this one, that will contain specific information about the terms of that
offering. This supplemental prospectus does not contain all of the information
included in the registration statement or original prospectus. For a more
complete understanding of the of the offering of the securities, you should
refer to the registration statement, including its exhibits, and the
accompanying original prospectus. You should note, however, that this
prospectus supplement may add, update or change information contained in the
original prospectus.

You should rely only on the information contained in this supplemental
prospectus and the accompanying original prospectus. We have not authorized
anyone to provide you with information different from that contained in this
supplemental prospectus and the prospectus or incorporated by reference in this
supplemental prospectus and the prospectus. We are not making offers to sell
the notes or soliciting offers to buy the notes in any jurisdiction in which
that offer or solicitation is not authorized or in which the person making that
offer or solicitation is not qualified to do so or to anyone to whom it is
unlawful to make that offer or solicitation.

The information in this supplemental prospectus is accurate as of the date on
the front cover. You should not assume that the information contained in this
supplemental prospectus is accurate as of any other date. In this prospectus
supplement, the "Company," "Raytheon," "we," "us" and "our" refer to Raytheon
Company.

S-2
<PAGE>

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This supplemental prospectus, the prospectus and the information we are
incorporating by reference into them contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical facts included in this
supplemental prospectus and the information incorporated by reference into this
supplemental prospectus that we expect or anticipate will or may occur in the
future, including, without limitation, certain statements included in this
supplemental prospectus under "Raytheon Company" and located elsewhere in this
supplemental prospectus regarding our financial position, business strategy and
measures to implement that strategy, including changes to operations,
competitive strengths, goals, expansion and growth of our business and
operations, plans, references to future success and other similar matters are
forward-looking statements. These statements are based on assumptions and
analyses made by us in light of our experience and our perception of historical
trends, current conditions and expected future developments as well as other
factors we believe are appropriate in the circumstances. However, whether
actual results and developments will conform with our expectations and
predictions is subject to a number of risks and uncertainties, including
without limitation the factors which might be described from time to time in
our filings with the SEC and additional factors which are beyond our control.

Consequently, all of the forward-looking statements we make in this
supplemental prospectus and the information we are incorporating by reference
into this supplemental prospectus are qualified by these cautionary statements,
and there can be no assurance that the actual results or developments
anticipated by us will be realized or, even if substantially realized, that
they will have the expected consequences to or effects on us and our
subsidiaries or our businesses or operations. Additionally, important factors
that could cause actual results to differ materially from our expectations are
disclosed in the documents we are incorporating by reference, including
statements under "Item 1-Business" of our Annual Report on Form 10-K for the
year ended December 31, 1999. All subsequent forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by any of those factors described above and in the documents
containing those forward-looking statements. We expressly disclaim any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statement.

RAYTHEON COMPANY

Raytheon Company is a global technology leader, with worldwide 1999 sales of
$19.8 billion. We provide products and services in the areas of defense and
commercial electronics and business and special mission aircraft. We have
operations throughout the United States and serve customers in more than 70
countries around the world.

Electronics

We design, manufacture and service advanced electronic devices, equipment and
systems for both government and commercial customers. In addition to defense
electronic systems, we have been successful in the conversion of defense
electronic technologies to commercial applications such as air traffic control,
environmental monitoring and communications.

Our defense electronics businesses consist of the following four business
units, which are focused on the following programs:

Electronic Systems:
.missile systems
.air and missile defense systems
.air combat and strike systems
.surveillance and reconnaissance systems
.naval and maritime integrated systems
.tactical systems

S-3
<PAGE>

Command, Control, Communication and Information Systems:
.imagery and geospatial systems
.communications systems
.strategic systems
.air traffic control
.command and control
.military c/2/ and simulation
.system for the vigilance of the Amazon (SIVAM)

Aircraft Integration Systems:
.tactical reconnaissance systems
.maritime patrol aircraft
.aircraft integration and modification
.joint operations group

Technical Services:
.depot services
.installation support services
.integrated logistics

Raytheon Commercial Electronics

Our commercial electronics businesses consist of:

.Raytheon Marine
.RF components
.Crosspan network access technologies
.Raytheon commercial infrared
.ELCAN optical technologies
.commercial training

Aircraft

Raytheon Aircraft, a subsidiary of Raytheon Company, offers one of the
broadest product lines in the general aviation market. Raytheon Aircraft
manufactures, markets and supports piston-powered aircraft, jet props and light
and medium jets for the world's commercial, regional airline and military
aircraft markets. Raytheon Aircraft is the prime contractor for the U.S. Air
Force/U.S. Navy Joint Primary Aircraft Training System (JPATS). In addition, in
1997 Raytheon Aircraft launched its own fractional or shared aircraft ownership
business called Raytheon Travel Air. This program currently has over 500
customers.

Our principal executive offices are located at 141 Spring Street, Lexington,
Massachusetts 02421. Our telephone number is (781) 862-6600.

RECENT DEVELOPMENTS

On July 7, 2000, we announced that we had completed the sale of our Raytheon
Engineers & Constructors business to Morrison Knudsen Corporation. As part of
the sale, we agreed to retain responsibility for cost and performance of four
large, fixed-price international turnkey projects, to partially indemnify
Morrison Knudsen on the completion of one other existing project and to retain
other significant assets and liabilities.

On July 20, 2000, we announced our financial results for the quarter ended
July 2, 2000. Income from continuing operations for the quarter was $95
million, or $0.28 per diluted share, on sales of $4.1 billion. This compares to
income from continuing operations of $277 million, or $0.81 per diluted share,
on sales of $4.6 billion for the quarter ended July 4, 1999. The impact of
Raytheon Engineers & Constructors in the quarter was a $46 million loss on
disposal of discontinued operations. Net income for the quarter was $49
million, or $0.14 per diluted share, versus $290 million, or $0.84 per diluted
share, the previous year.

S-4
<PAGE>

USE OF PROCEEDS

We intend to use the net proceeds from the sale of the notes to partially
refinance previously issued public bonds maturing in August 2000.

CAPITALIZATION

The following table sets forth our capitalization at April 2, 2000, and as
adjusted to give effect to the offering and the application of the proceeds of
the offering (without deduction for expenses) as described under "Use of
Proceeds", as if they occurred on that date. This table should be read in
conjunction with the Selected Summary Financial Data included elsewhere in this
supplemental prospectus and the financial statements, including the notes to
the financial statements, which are incorporated into this supplemental
prospectus and the prospectus by reference.

<TABLE>
<CAPTION>
April 2, 2000
----------------
As
Actual Adjusted
------- --------
(in millions)
<S> <C> <C>
Notes payable and current portion of long-term debt............ $ 1,109 $ 759
Floating Rate Notes Due 2001................................... 350
-------
Total notes payable and current portion of long-term debt.... 1,109
Long-term debt................................................. 9,042 9,042
Stockholders' equity........................................... 10,732 10,732
------- -------
Total capitalization....................................... $20,883 $20,883
======= =======
</TABLE>

RATIO OF DEBT TO CAPITALIZATION

The following table sets forth our consolidated ratio of debt to
capitalization at April 2, 2000 and at the end of fiscal years 1999, 1998,
1997, 1996 and 1995:

<TABLE>
<CAPTION>
December 31,
---------------------------------------------------------------------
April 2, 2000 1999 1998 1997 1996 1995
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
48.6% 47.1% 45.4% 49.2% 44.9% 38.8%
</TABLE>

S-5
<PAGE>

RATIO OF EARNINGS TO COMBINED FIXED CHARGES

The following table sets forth our consolidated ratio of earnings to combined
fixed charges for the quarter ended April 2, 2000, and for the fiscal years
1999, 1998, 1997, 1996 and 1995:

<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
Three Months Ended ---------------------------------------------------------------------
April 2, 2000 1999 1998 1997 1996 1995
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
1.6x 1.9x 2.7x 2.7x 4.5x 6.0x
</TABLE>

For purposes of computing the ratio of earnings to combined fixed charges:

. earnings consist of net earnings, taxes on income and fixed charges, less
capitalized interest;

. fixed charges consist of interest expense, amortization of debt discount
and issuance expense, the portion of rents representative of an interest
factor and capitalized interest; and

. the ratio for the three months ended April 2, 2000 reflects Raytheon
Engineers & Constructors as a discontinued operation.

The ratio of earnings to combined fixed charges has declined due to higher
interest expense resulting from increased borrowings to finance our merger with
the defense business of Hughes Electronics and our acquisition of the defense
assets of Texas Instruments Incorporated.

S-6
<PAGE>

SELECTED SUMMARY FINANCIAL DATA

The following tables present our selected summary financial data. The
financial data for the three months ended April 2, 2000 and at April 2, 2000
reflects Raytheon Engineers & Constructors as a discontinued operation and
should be read in conjunction with the Company's first quarter 2000 Form 10-Q.
The fiscal year-end financial data have been derived from our audited financial
statements incorporated by reference herein and should be read in conjunction
with those financial statements and notes thereto.

<TABLE>
<CAPTION>
Three
Months
Ended, Fiscal Year Ended
April 2, -------------------------
2000 1999 1998 1997
-------- ------- ------- -------
(in millions)
<S> <C> <C> <C> <C>
Operating Data (a):
Net sales................................ $ 4,231 $19,841 $19,419 $13,593
Operating income......................... 316 1,527 2,006 1,060
Interest expense, net.................... 180 713 711 359
Income from continuing operations/net
income (b).............................. 80 404 844 511
Other Data (a):
EBITDA (c)............................... $ 492 $ 2,183 $ 2,909 $ 1,582
Depreciation and amortization............ 171 724 761 457
Capital expenditures..................... 140 532 509 459
Net cash provided by (used in) (a):
Operating activities (d)................. $ (535) $ (317) $ 994 $ 1,044
Investing activities (d)................. (13) (400) 617 (2,937)
Financing activities..................... 314 526 (1,486) 2,053
<CAPTION>
December 31,
April 2, -------------------------
2000 1999 1998 1997
-------- ------- ------- -------
(in millions)
<S> <C> <C> <C> <C>
Balance Sheet Data (a):
Net working capital...................... $ 2,814 $ 1,045 $ 1,933 $(2,021)
Total assets............................. 27,002 28,110 28,232 28,520
Notes payable and current portion of
long-term debt.......................... 1,109 2,472 827 5,656
Long-term debt and capitalized leases.... 9,042 7,298 8,163 4,406
Stockholders' equity..................... 10,732 10,959 10,797 10,386
</TABLE>
--------
(a) The information presented for the three months ended April 2, 2000 and at
April 2, 2000 reflects Raytheon Engineers & Constructors as a discontinued
operation.
(b) The information presented for the three months ended April 2, 2000 reflects
income from continuing operations. The information presented for the fiscal
years ended December 31, 1999, 1998 and 1997 reflect net income.
(c) EBITDA represents income before interest, income taxes, depreciation and
amortization. EBITDA is not intended to represent cash flow or any other
measure of performance reported in accordance with generally accepted
accounting principles. We have included EBITDA as we understand that EBITDA
is used by certain investors as one measure of a company's ability to
service debt.
(d) The information presented for the three months ended April 2, 2000 reflects
cash flows from continuing operations. The information presented for the
fiscal years ended December 31, 1999, 1998 and 1997 reflect total cash
flows.

S-7
<PAGE>

DESCRIPTION OF THE NOTES

The Floating Rate Notes Due 2001 will be issued as a separate series under a
Senior Indenture (as defined in the accompanying prospectus), dated as of July
3, 1995, as supplemented and amended (collectively referred to in this
supplemental prospectus as the "indenture"), between us and The Bank of New
York, as trustee. See "Description of Our Debt Securities" in the accompanying
prospectus for additional information concerning the notes and the indenture.

General

We will issue the floating rate notes initially with a maximum aggregate
principal amount of $350,000,000. We will issue the floating rate notes in
denominations of $1,000 and any integral multiple of $1,000. We are permitted
to issue more floating rate notes under the Indenture in an unlimited principal
amount. Any additional notes that are actually issued will be treated as issued
and outstanding floating rate notes, and as the same class and bearing the same
CUSIP number as the initial floating rate notes, for all purposes of the
Indenture and this "Description of the Notes" unless the content indicates
otherwise.

The notes are senior unsecured obligations of ours and rank pari passu with
all of our senior unsecured debt and will be senior to all of our existing and
future subordinated debt, if any. Interest on the notes is payable in U.S.
dollars at our office or agency in the Borough of Manhattan, the City of New
York, New York or, at our option, by check mailed to the address of the
registered holder. Interest is calculated on the basis of a 360-day year
consisting of twelve 30-day months.

Each note bears interest form August 10, 2000, at the rate per annum equal to
LIBOR plus 0.33%, payable quarterly in arrears on November 10, 2000, February
10, 2001, May 10, 2001 and August 10, 2001, to the person in whose name the
note is registered on October 25, 2000, January 25, 2001, April 25, 2001 and
July 25, 2001, subject to certain exceptions as provided in the indenture.
These notes will mature on August 10, 2001, and are not redeemable before
maturity or subject to any sinking fund provision.

The rate of interest on the notes will be reset quarterly (the "floating
interest reset period," and the first day of each floating interest reset
period will be a "floating interest reset date"). The floating interest reset
dates will be November 10, 2000, February 10, 2001 and May 10, 2001; provided,
however, that the interest rate in effect from the date of issue to the first
floating interest reset date with respect to the notes will be 7.02%. If any
floating interest reset date would otherwise be a day that is not a business
day, the floating interest reset date shall be postponed to the next succeeding
business day, except that if that business day is in the next succeeding
calendar month, that floating reset date will be the next preceding business
day.

Interest payments for notes will be the amount of interest accrued from the
date of issue or from the last date to which interest has been paid to, but
excluding, the interest payment date or maturity date, as the case may be.

Accrued interest on any note will be calculated by multiplying the principal
amount of the note by an accrued interest factor. This accrued interest factor
will be computed by adding the interest factors calculated for each date in the
period for which interest is being paid. The interest factor for each date is
computed by dividing the interest rate applicable to that day by 360. All
percentages used in or resulting from any calculation of the rate of interest
on a note will be rounded, if necessary, to the nearest one-hundredth-
thousandth of a percentage point (.0000001), with five one-millionths of a
percentage point rounded upward, and all dollar amounts used in or resulting
from that calculation will be rounded to the nearest cent, with one-half cent
rounded upward. The interest rate in effect on any floating interest reset date
will be the applicable rate as reset on that date. The interest rate applicable
to any other day is the interest rate from the immediately preceding floating
interest reset date, or, if none, the initial floating interest rate.

S-8
<PAGE>

The calculation agent is The Bank of New York, whom we refer to as the
"calculation agent," with respect to the notes. Upon the request of the holder
of any notes, the calculation agent will provide the interest rate then in
effect and, if determined, the interest rate that will become effective on the
next floating interest reset date with respect to that note.

The "floating interest determination date" pertaining to a floating interest
reset date will be the second London banking day preceding that floating
interest reset date. "London banking day" means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market. "LIBOR"
for each floating interest reset date will be determined by the calculation
agent as follows:

(i) as of the floating interest determination date, the calculation agent
will determine LIBOR as the rate for deposits in U.S. dollars for a period
of three months, commencing on that floating interest determination date,
that appears on Page 3750 on Bridge Telerate Inc., or any successor page,
at approximately 11:00 a.m., London time, on that floating interest
determination date. If no rate appears, LIBOR in respect of that floating
interest determination date will be determined as described in (ii) below.

(ii) With respect to a floating interest determination date on which no
rate appears, the calculation agent will request the principal London
offices of each of four major reference banks in the London interbank
market, as selected by the calculation agent after consultation with us, to
provide the calculation agent with its offered quotation for deposits in
U.S. dollars for the period of three months, commencing on the second
London banking day immediately following the floating interest
determination date, to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on that floating interest
determination date and in a principal amount that is representative of a
single transaction in U.S. dollars in that market at that time. If at least
two quotations are provided, LIBOR for the floating interest determination
date will be the arithmetic mean of those quotations. If fewer than two
quotations are provided, LIBOR will be determined for the applicable
floating interest reset date as the arithmetic mean of the rates quoted at
approximately 11:00 a.m., New York time, on that floating interest reset
date, by three major banks in New York City, as selected by the calculation
agent after consultation with us, for loans in U.S. dollars to leading
European banks, for a period of three months, commencing on that floating
interest reset date, and in a principal amount that is representative of a
single transaction in U.S. dollars in that market at that time. If the
banks so selected by the calculation agent are not quoting as mentioned
above, LIBOR in effect for the applicable period will be the same as LIBOR
for the immediately preceding floating interest reset period, or, if there
was no floating interest reset period, the rate of interest payable will be
the initial floating interest rate.

Defeasance

Under certain circumstances, we will be deemed to have discharged the entire
indebtedness on all of the outstanding notes by defeasance, or to be discharged
from certain covenants otherwise applicable to the notes and described in the
accompanying prospectus under the heading "Description of Our Debt Securities--
Covenants." See "Description of Our Debt Securities--Defeasance and Covenant
Defeasance" in the accompanying prospectus for a description of the terms of
such a defeasance. Raytheon has made these defeasance provisions applicable to
the notes.

Global Securities

The notes will each initially be represented by Global Securities (as defined
in the accompanying prospectus) deposited with DTC and registered in the name
of a nominee of DTC, except in certain circumstances. See "Description of Our
Debt Securities--Global Securities" in the accompanying prospectus for a
description of the terms of these Global Securities and the availability of
certificated Debt Securities.

S-9
<PAGE>

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

The following discussion of certain of the anticipated federal income tax
consequences of the purchase, ownership, and disposition of the notes is based
upon the provisions of the Internal Revenue Code of l986, as amended, the
final, temporary, and proposed regulations promulgated under the Code, and
administrative rulings and judicial decisions now in effect, all of which are
subject to change, possibly with retroactive effect, or different
interpretations. This summary does not purport to deal with all aspects of
federal income taxation that may be relevant to you individually, nor any tax
consequences arising under the laws of any state, locality, or foreign
jurisdiction, and it is not intended to be applicable to all categories of
investors, some of which, such as dealers in securities, banks, insurance
companies, tax-exempt organizations, foreign persons, persons that hold the
notes as part of a straddle or conversion transactions, persons that purchase
the notes from other holders at a discount or a premium or holders subject to
the alternative minimum tax, may be subject to special rules. In addition, the
summary is limited to persons that will hold the notes as "capital assets"
(generally, property held for investment) within the meaning of Section 1221 of
the Code.

You are strongly advised to consult your own tax advisors regarding the
Federal, state, local, and foreign tax consequences of the ownership and
disposition of notes.

General

This section summarizes the material U.S. tax consequences to holders of
notes. The discussion is limited in the following ways:

. As noted above, the discussion only covers you if you hold your notes as
a capital asset (that is, for investment purposes), and if you do not
have a special tax status.

. The discussion does not cover tax consequences that depend upon your
particular tax situation in addition to your ownership of your note. We
suggest that you consult your tax advisor about the consequences of
holding note in your particular situation.

. As noted above, the discussion is based on current law. Changes in the
law may change the tax treatment of the notes, possibly with a
retroactive effect.

. The discussion does not apply to purchasers of notes other than on their
original issuance.

. As noted above, the discussion does not cover state, local or foreign
law.

. This discussion does not apply to you if you are a non-U.S. holder of
notes and if you (a) own 10% or more of our voting stock, (b) are a
"controlled" foreign corporation with respect to us, or (c) are a bank
making a loan in the ordinary course of its business.

. We have not requested a ruling from the IRS on the tax consequences of
owning the notes. As a result, the IRS could disagree with portions of
this discussion.

Tax Consequences to U.S. Holders

This section applies to you if you are a "U.S. Holder". A "U.S. Holder" is:

. an individual U.S. citizen or resident alien;

. a corporation, or entity taxable as a corporation, that was created under
U.S. law (federal or state); or

. an estate or trust whose world-wide income is subject to U.S. federal
income tax.

If a partnership holds notes, the tax treatment of a partner will generally
depend upon the status of the partner and upon the activities of the
partnership. If you are a partner of a partnership holding notes, we suggest
that you consult your tax advisor.

S-10
<PAGE>

Interest

. If you are a cash method taxpayer (including most individual holders),
you must report interest on the notes in your income when you receive it.

. If you are an accrual method taxpayer, you must report interest on the
notes in your income as it accrues.

Additional Interest

If you receive additional interest on your notes, we believe it should be
treated in the same manner as regular interest on the notes. However, it is
possible that you would be required to report additional interest as income
when it accrues or becomes fixed, even if you are a cash method taxpayer.

Sale or Retirement of Notes

On your sale or retirement of your note:

. You will have taxable gain or loss equal to the difference between the
amount received by you and your tax basis in the note. Your tax basis in
the note is your cost, subject to certain adjustments.

. Your gain or loss will generally be capital gain or loss, and will be
long term capital gain or loss if you held the note for more than one
year.

. If you sell the note between interest payment dates, a portion of the
amount you receive reflects interest that has accrued on the note but has
not yet been paid by the sale date. That amount is treated as ordinary
interest income and not as sale proceeds.

Information Reporting and Backup Withholding

Under the tax rules concerning information reporting to the IRS:

. Assuming you hold your notes through a broker or other securities
intermediary, the intermediary is required to provide information to the
IRS concerning interest and retirement proceeds on your notes, unless an
exemption applies.

. Similarly, unless an exemption applies, you must provide the intermediary
with your Taxpayer Identification Number for its use in reporting
information to the IRS. If you are an individual, this is your social
security number. You are also required to comply with other IRS
requirements concerning information reporting.

. If you are subject to these requirements but do not comply, the
intermediary is required to withhold 31% of all amounts payable to you on
the notes (including principal payments). If the intermediary withholds
payments, you may use the withheld amount as a credit against your
federal income tax liability.

. All U.S. Holders that are individuals are subject to these requirements.
Some U.S. Holders, including all corporations, tax-exempt organizations
and individual retirement accounts, are exempt from these requirements.

Tax Consequences to Non-U.S. holders

This section applies to you if you are a "Non-U.S. Holder." A "Non-U.S.
Holder" is:

. an individual that is a nonresident alien;

. a corporation organized or created under non-U.S. law; or

. an estate or trust that is not taxable in the U.S. on its worldwide
income.

Withholding Taxes

Generally, payments of principal and interest on the notes will not be
subject to U.S. withholding taxes.

S-11
<PAGE>

However, for the exemption from withholding taxes to apply to you, you must
meet one of the following requirements:

. You provide your name, address, and a signed statement that you are the
beneficial owner of the note and are not a U.S. Holder. This statement is
generally made on Form W-8 or Form W-8BEN.

. You or your agent claim an exemption from withholding tax under an
applicable tax treaty. This claim is generally made on Form 1001 or Form
W-8BEN.

. You or your agent claim an exemption from withholding tax on the ground
that the income is effectively connected with the conduct of a trade or
business in the U.S. This claim is generally made on Form 4224 or Form W-
8ECI.

You should consult your tax advisor about the specific methods for satisfying
these requirements. These procedures will change on January 1, 2001. In
addition, a claim for exemption will not be valid if the person receiving the
applicable form has actual knowledge that the statements on the form are false.

Sale or Retirement of Notes

If you sell an note or it is redeemed, you will not be subject to federal
income tax on any gain unless one of the following applies:

. The gain is connected with a trade or business that you conduct in the
U.S.

. You are an individual, you are present in the U.S. for at least 183 days
during the year in which you dispose of the note, and certain other
conditions are satisfied.

. The gain represents accrued interest, in which case the rules for
interest would apply.

U.S. Trade or Business

If you hold your note in connection with a trade or business that you are
conducting in the U.S.:

. Any interest on the note, and any gain from disposing of the note,
generally will be subject to income tax as if you were a U.S. Holder.

. If you are a corporation, you may be subject to the "branch profits tax"
on your earnings that are connected with your U.S. trade or business,
including earnings from the note. This tax is 30%, but may be reduced or
eliminated by an applicable income tax treaty.

Estate Taxes

If you are an individual, your notes will not be subject to U.S. estate tax
when you die. However, this rule only applies if, at the time of your death,
payments on the notes were not connected to a trade or business that you were
conducting in the U.S.

Information Reporting and Backup Withholding

U.S. rules concerning information reporting and backup withholding are
described above. These rules apply to Non-U.S. Holders as follows:

. Principal and interest payments received by you will be automatically
exempt from the usual rules if you provide the tax certifications needed
to avoid withholding tax on interest, as described above. The exemption
does not apply if the recipient of the applicable form knows that the
form is false. In addition, interest payments made to you will be
reported to the IRS on Form 1042-S.

. Sale proceeds you receive on a sale of your notes through a broker may be
subject to information reporting and/or backup withholding if you are not
eligible for an exemption. In particular, information reporting and
backup reporting may apply if you use the U.S. office of a broker, and
information reporting (but not backup withholding) may apply if you use
the foreign office of a broker that has certain connections to the U.S.
You should consult your tax advisor concerning information reporting and
backup withholding on a sale.

S-12
<PAGE>

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting Agreement
dated August 7, 2000 between Raytheon Company and Morgan Stanley & Co.
Incorporated as underwriter, Morgan Stanley & Co. Incorporated has agreed to
purchase $350,000,000 principal amount of floating rate notes at par.

In the Underwriting Agreement, the underwriter has agreed, subject to the
terms and conditions set forth in that agreement, to purchase all the floating
rate notes if any floating rate notes are purchased. The underwriter proposes
to offer the notes from time to time for sale in negotiated transactions, or
otherwise, at varying prices to be determined at the time of each sale.

The Underwriting Agreement provides that we will indemnify the underwriter
against certain liabilities, including liabilities under the Securities Act of
1933, or contribute to any payments the underwriter may be required to make in
respect of those liabilities.

In connection with this offering and in compliance with applicable law, the
underwriter may overallot (i.e., sell more than the principal amount of
floating rate notes shown in the first paragraph above) and may effect
transactions which stabilize, maintain or otherwise affect the market price of
the floating rate notes at levels above those which might otherwise prevail in
the open market. Those transactions may include placing bids for the floating
rate notes or effecting purchases of the floating rate notes for the purpose of
pegging, fixing or maintaining the price of the floating rate notes or for the
purpose of reducing a short position created in connection with the offering.
The underwriter is not required to engage in any of these activities, and any
of these activities, if commenced, may be discontinued at any time.

The underwriter and its associates and affiliates may be customers of, engage
in transactions with, and perform investment banking and other financial
services (including commercial lending) for, us and our subsidiaries in the
ordinary course of business.

The floating rate notes are new securities with no established trading market
and there can be no assurance as to the liquidity of any markets that may
develop for the floating rate notes, the ability of the holders of the floating
rate notes to sell their floating rate notes or at what price holders of the
floating rate notes will be able to sell their floating rate notes. Future
trading prices of the floating rate notes will depend on many factors,
including, among other things, prevailing interest rates, our operating
results, and the market for similar securities. We have been advised by Morgan
Stanley & Co. Incorporated that it initially intends to make a market in the
floating rate notes, but Morgan Stanley & Co. Incorporated is not obligated to
do so and may discontinue any market making at any time without notice.

VALIDITY OF NOTES

The validity of the notes will be passed upon for us by Thomas D. Hyde, Esq.,
our Senior Vice President and General Counsel. The underwriter has been
represented by Cravath, Swaine & Moore of New York City.

EXPERTS

The financial statements incorporated in this prospectus supplement and the
accompanying prospectus by reference to the Annual Report on Form 10-K for the
year ended December 31, 1999 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.

S-13
<PAGE>

Prospectus

[LOGO OF RAYTHEON]

DEBT SECURITIES
PREFERRED STOCK
CLASS B COMMON STOCK
WARRANTS

----------------

By this prospectus, we may offer, from time to time, the following securities:

. our unsecured senior debt securities
. our unsecured subordinated debt securities
. warrants to purchase our debt securities
. shares of our preferred stock
. warrants to purchase shares of our preferred stock
. shares of our Class B common stock
. warrants to purchase shares of our Class B common stock
. units consisting of some or all of these securities

Investing in our securities involves risks. See "Risk Factors" beginning on
page 3.

----------------

We may offer the offered securities in different series from time to time in
amounts, at prices and on terms determined at the time of the offering. We will
provide you with specific terms of the applicable offered securities in
supplements to this prospectus. The aggregate initial offering price of the
securities that we may issue under this prospectus will not exceed $3.0
billion.

Our Class B common stock is listed for trading on the New York Stock Exchange,
the Chicago Stock Exchange and the Pacific Exchange under the symbol RTNb. On
March 10, 2000, the last reported sale price of our Class B common stock on the
New York Stock Exchange was $17.750.

You should read this prospectus and any prospectus supplement carefully before
you decide to invest. This prospectus may not be used to make sales of the
offered securities unless it is accompanied by a prospectus supplement
describing the method and terms of the offering of those offered securities. We
may sell the securities, or we may distribute them through underwriters or
dealers. In addition, the underwriters may overallot a portion of the
securities.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

The date of this Prospectus is March 13, 2000
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
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<S> <C>
Raytheon Company......................................................... 1
Electronics............................................................ 1
Aircraft............................................................... 2
Engineering and Construction........................................... 2
Recent Developments.................................................... 2

Risk Factors............................................................. 3

About this Prospectus.................................................... 10

Where You Can Find More Information...................................... 11

Disclosure Regarding Forward-Looking Statements.......................... 12

Ratio of Earnings to Combined Fixed Charges and Preferred Stock
Dividends............................................................... 12

Use of Proceeds.......................................................... 13

Description of Our Securities............................................ 13

Description of Our Debt Securities....................................... 13
Subordination of Subordinated Debt Securities.......................... 15
Events of Default...................................................... 15
Defeasance and Covenant Defeasance..................................... 17
Modification and Waiver................................................ 17
</TABLE>
<TABLE>
<CAPTION>
Page
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<S> <C>
Covenants............................................................... 18
Consolidation, Merger and Sale of Assets................................ 18
Conversion or Exchange Rights........................................... 18
Global Securities....................................................... 18
Our Debt Trustee........................................................ 21

Description of Our Preferred Stock........................................ 21
Hughes Separation Agreement............................................. 22

Description of Our Class B Common Stock................................... 22
Provisions of our Restated Certificate of Incorporation and Amended and
Restated By-Laws....................................................... 23
Stockholder Rights Plan................................................. 24
Section 203 of the Delaware General Corporation Law..................... 25
Stock Exchange Listing.................................................. 26
Transfer Agent.......................................................... 26

Description of Our Securities Warrants.................................... 26

Plan of Distribution...................................................... 27

Legal Matters............................................................. 28

Experts................................................................... 28
</TABLE>
<PAGE>

RAYTHEON COMPANY

Raytheon Company is a global technology leader, with worldwide 1999 sales of
$19.8 billion. We provide products and services in the areas of defense and
commercial electronics, business and special mission aircraft, and engineering
and construction. We have operations throughout the United States and serve
customers in more than 80 countries around the world. Our principal executive
offices are located at 141 Spring Street, Lexington, Massachusetts 02421. Our
telephone number is (781) 862-6600.

Electronics

Defense Electronics. Our defense electronics businesses represent the
combination and consolidation of four legacy defense organizations--Raytheon
Electronic Systems, Raytheon E-Systems, Raytheon TI Systems and the defense
electronics business of Hughes Electronics Corporation.

Defense Systems:
. anti-ballistic missile systems
. air defense
. air-to-air, surface-to-air, and air-to-surface missiles
. naval and maritime systems
. ship self-defense systems
. torpedoes; strike, interdiction and cruise missiles
. advanced munitions

Sensors and Electronic Systems:
. airborne and surface radars
. electronic warfare
. surveillance and reconnaissance systems
. precision guidance systems
. tactical systems

Command, Control, Communication and Information Systems:
. command, control and communications systems
. air traffic control systems
. tactical radios
. satellite communication ground control terminals
. wide area surveillance systems
. ground-based information processing systems
. large scale information retrieval, processing and distribution
systems
. global broadcast systems

Aircraft Integration Systems:
. integration of airborne surveillance and intelligence systems
. aircraft modifications
. head-of-state aircraft systems

Training and Services:
. training services and integrated training programs
. technical services
. logistics and support

1
<PAGE>

Commercial Electronics. Our commercial electronics businesses produce,
among other things:
. marine radars and other marine electronics
. transmit/receive modules for satellite communications projects
. other electronic components for a wide range of applications

See "Recent Developments" regarding our announcements to further reorganize
our electronics businesses.

Aircraft

Engineering and Construction

Raytheon Engineers & Constructors, a subsidiary of Raytheon Company, is one
of the largest engineering and construction firms in the United States, serving
markets throughout the world. Raytheon Engineers & Constructors designs,
constructs and maintains facilities and plants operated by a range of
customers, including:

. independent power producers
. utilities
. petroleum companies
. pulp and paper companies
. industrial concerns
. governments

Recent Developments

Financial Results. On January 25, 2000, we announced our financial results
for the year and fourth quarter ended December 31, 1999. For the 1999 fiscal
year, our earnings were $404 million, or $1.19 per diluted share. We also
reported revenue for the 1999 fiscal year of $19.8 billion. These financial
results were consistent with the public estimate provided by us on January
18th, and represented a decline from 1998 net income of $844 million and 1998
diluted earnings per share of $2.47. Revenue for the 1999 fiscal year was up
slightly over revenue for the 1998 fiscal year due to increased sales in
missile defense systems and some improvement in the power business of Raytheon
Engineers & Constructors. The overall decline in earnings was due to contract
related adjustments, pricing pressures, and the cumulative effect of two
internal accounting changes consistent with SOP 98-5 and SAB 101 (discussed
below). Results for 1998 also included gains from divestitures.

For the fourth quarter of 1999, our revenue was $4.8 billion, our earnings
were $72 million and our diluted earnings per share in the quarter were $0.21,
compared with revenue of $5.3 billion, earnings of $341 million and diluted
earnings per share of $1.00, for the same period of 1998. The revenue decline
during the fourth quarter was due primarily to lower missile shipments, certain
nonrecurring events from the 1998 fourth quarter in the electronics businesses,
aircraft shipments and accounting adjustments at Raytheon Aircraft Company and
the divestiture of Cedarapids, Inc. These factors, along with contract
adjustments in the electronics businesses and cost performance at both Raytheon
Aircraft Company and Raytheon Engineers & Constructors, contributed to lower
earnings for the fourth quarter of 1999.

On December 6, 1999, the SEC issued Staff Accounting Bulletin 101, which
clarified the conditions for recognizing revenue on bill and hold transactions.
As previously announced, we recently completed a review of

2
<PAGE>

revenue recognition practices at Raytheon Aircraft Company. Based on this
evaluation, we have now restated our financial results consistent with SAB 101.
This restatement resulted in a negative effect of $0.11 per share on 1999
fourth quarter earnings.

In keeping with our ongoing consolidation efforts and to further simplify our
organizational structure, in November 1999, we announced a reorganization of
our electronics businesses. Under the new structure, Raytheon Systems Company
has been eliminated, and the Defense Systems and Sensors and Electronics
Systems segments are being combined.

Legal Developments. As described in our quarterly report on Form 10-Q for the
fiscal quarter ended October 3, 1999, we and two of our officers were named as
defendants in class action lawsuits alleging that the defendants violated
federal securities laws by making false and misleading statements and by
failing to disclose material information concerning our financial performance,
thereby causing the value of the our stock to be artificially inflated. We are
contesting these lawsuits vigorously. In addition, following the restatement of
our financial results consistent with SAB 101 (as discussed above), we received
an informal inquiry from the SEC Division of Enforcement regarding the
restatement. We are in the process of responding to this inquiry.

RISK FACTORS

An investment in our securities involves a high degree of risk. In addition
to the other information included in this prospectus, you should carefully
consider the following risk factors in determining whether or not to purchase
the securities offered under this prospectus.

If the cost-cutting efforts currently being undertaken at two of our core
business units are not successful, our financial results may not improve, which
may result in more volatility in the price of our stock in the future.

During 1998, we announced plans to reduce the workforce and close facilities
in conjunction with the consolidation and reorganization of two of our business
units, Raytheon Systems Company, our major defense electronics operation, and
Raytheon Engineers & Constructors, our engineering and construction unit.
Significant progress has been made to date in completing these actions. As part
of this effort, we have closed several facilities in the United States while
transferring the operations previously conducted at those facilities to other
company sites. In addition, several of Raytheon Systems Company's operations
were consolidated. Both units' workforces have also been significantly reduced.
In September 1999, we announced plans to further reduce costs at Raytheon
Systems Company and Raytheon Engineers & Constructors. In October 1999, we
announced pretax charges totaling $599 million, including $147 million for
restructuring charges for additional employment and facility space reductions
primarily at Raytheon Systems Company and Raytheon Engineers & Constructors.

These cost-cutting actions have been taken in an effort to improve these
units' competitive position in their markets and ultimately, our results of
operations. There can be no assurance that these actions will ultimately be
successful in improving our results of operations. The results of operations of
these two units are affected by a wide variety of factors, including factors
that affect their industries generally. A failure to improve these important
business units' results of operations, which constitute a vital part of our
results of operations, could result in more volatility in the price of our
stock.

The restructuring charges resulting from these cost-cutting efforts have had
a negative impact on our earnings in 1999. There can be no assurance that
additional reductions and associated restructuring charges will not be required
in the future to improve one or both of these units' operations. Any additional
reductions and associated restructuring charges could negatively impact future
financial results.

3
<PAGE>

Because we have recently sold a number of our business units, our business is
less diversified, which could reduce our earnings and might make us more
susceptible to negative conditions in our remaining businesses.

Consistent with our strategy of focusing on and streamlining our core
businesses and paying down our debt, during 1998 and 1999 we divested several
non-core business units. These include three business units that we agreed to
divest when we acquired the defense operations of Hughes Electronics
Corporation and the defense assets of Texas Instruments Incorporated in 1997.
As a result of these divestitures, we no longer receive revenues from these
operations and, without offsetting increases in revenues in our other
businesses, our overall revenues would decrease, which would have a negative
affect on our financial condition.

In addition, as a result of these divestitures, our business is now less
diversified and thus more dependent on our remaining businesses. As a result,
we are now more sensitive to conditions and trends in the remaining industries
in which we operate. Negative conditions and trends in these remaining
industries could cause our financial condition and results of operations to
suffer more heavily than would occur when our business lines were more
diversified. Our inability to overcome these negative conditions and trends
could have a negative impact on our financial condition.

We heavily depend on our government contracts, which are only partially funded,
subject to immediate termination and heavily regulated and audited, and the
termination or failure to fund one or more of these contracts could have a
negative impact on our operations.

We act as prime contractor or major subcontractor for many different
government programs. Over its lifetime, a program may be implemented by the
award of many different individual contracts and subcontracts. The funding of
government programs is subject to congressional appropriations. Although multi-
year contracts may be authorized in connection with major procurements,
Congress generally appropriates funds on a fiscal year basis even though a
program may continue for several years. Consequently, programs are often only
partially funded initially and additional funds are committed only as Congress
makes further appropriations. The termination of funding for a government
program would result in a loss of anticipated future revenues attributable to
that program. That could have a negative impact on our operations. In addition,
the termination of a program or failure to commit additional funds to a program
already started could increase our overall costs of doing business.

Generally, government contracts are subject to oversight audits by government
representatives and contain provisions permitting termination, in whole or in
part, without prior notice at the government's convenience upon the payment of
compensation only for work done and commitments made at the time of
termination. We can give no assurance that one or more of our government
contracts will not be terminated under these circumstances. Also, we can give
no assurance that we would be able to procure new government contracts to
offset the revenues lost as a result of any termination of our contracts. As
our revenues are dependent on our procurement, performance and payment under
our contracts, the loss of one or more critical contracts would have a negative
impact on our financial condition.

Our government business is also subject to specific procurement regulations
and a variety of socio-economic and other requirements. These requirements,
although customary in government contracts, increase our performance and
compliance costs. These costs might increase in the future, reducing our
margins, which could have a negative effect on our financial condition. Failure
to comply with these regulations and requirements could lead to suspension or
debarment, for cause, from government contracting or subcontracting for a
period of time. Among the causes for debarment are violations of various
statutes, including those related to:

. procurement integrity
. export control
. government security regulations
. employment practices

4
<PAGE>

. protection of the environment
. accuracy of records and the recording of costs

The termination of a government contract or relationship as a result of any
of these acts would have a negative impact on our operations and could have a
negative effect on our reputation and ability to procure other government
contracts in the future.

In addition, sales to the government may be affected by:

. changes in procurement policies
. budget considerations
. changing concepts of national defense
. political developments abroad

The influence of any of these factors, which are largely beyond our control,
could also negatively impact our financial condition. We also may experience
problems associated with advanced designs required by the government which may
result in unforeseen technological difficulties and cost overruns. Failure to
overcome these technological difficulties and the occurrence of cost overruns
would have a negative impact on our results.

We depend on the U.S. Government for a significant portion of our sales, and
the loss of this relationship or a shift in government funding could have
severe consequences on the financial condition of raytheon.

Approximately 66% of our net sales in 1998 were to the U.S. government.
Therefore, any significant disruption or deterioration of our relationship with
the U.S. government would significantly reduce our revenues. Our U.S.
government programs must compete with programs managed by other defense
contractors for a limited number of programs and for uncertain levels of
funding. Our competitors continuously engage in efforts to expand their
business relationships with the U.S. government at our expense, and are likely
to continue these efforts in the future. The U.S. government may choose to use
other defense contractors for its limited number of defense programs. In
addition, the funding of defense programs also competes with non-defense
spending of the U.S. government. Budget decisions made by the U.S. government
are outside of our control and have long-term consequences for the size and
structure of Raytheon. A shift in government defense spending to other programs
in which we are not involved or a reduction in U.S. government defense spending
generally could have severe consequences for our results of operations.

We derive a significant portion of our revenues from international sales and
are subject to the risks of doing business in foreign countries.

In 1998, sales to international customers accounted for approximately 26% of
our net sales. We expect that international sales will continue to account for
a substantial portion of our net sales for the foreseeable future, and may
increase as a percentage of our net sales. As a result, we are subject to risks
of doing business internationally, including:

. changes in regulatory requirements
. domestic and foreign government policies, including requirements to
expend a portion of program funds locally and governmental industrial
cooperation requirements
. fluctuations in foreign currency exchange rates
. delays in placing orders
. the complexity and necessity of using foreign representatives and
consultants
. the uncertainty of adequate and available transportation
. the uncertainty of the ability of foreign customers to finance purchases
. uncertainties and restrictions concerning the availability of funding
credit or guarantees
. imposition of tariffs or embargoes, export controls and other trade
restrictions
. the difficulty of management and operation of an enterprise spread over
various countries

5
<PAGE>

. compliance with a variety of foreign laws as well as U.S. laws affecting
the activities of U.S. companies abroad and
. general economic and geopolitical conditions, including international
hostilities, inflation, trade relationships and military and political
alliances

While these factors or the impact of these factors are difficult to predict,
any one or more of these factors could adversely affect our operations in the
future.

Licenses are required from government agencies under the Export
Administration Act, the Trading with the Enemy Act of 1917 and the Arms Export
Control Act of 1976 for export of many of our products. We can give no
assurance that we will be successful in obtaining these necessary licenses in
order to conduct business abroad. In the case of certain sales of defense
equipment and services to foreign governments, the U.S. government's Executive
Branch must notify Congress at least 15 to 30 days, depending on the location
of the sale, prior to authorizing these sales. During that time, Congress may
take action to block the proposed sale.

We may suffer problems relating to year 2000 date conversion.

The Year 2000 problem concerns the inability of information systems to
properly recognize and process date-sensitive information beyond January 1,
2000. In January 1998, we initiated a formal comprehensive enterprise-wide
program to identify and to resolve Year 2000 related issues. The scope of the
program included the investigation of all Raytheon functions and products and
all internally used hardware and software systems, including embedded systems
in what are not traditionally considered information technology systems. We
followed an eight-step risk management process grouped into two major phases:
detection, including planning and awareness, inventory, triage, and detailed
assessment; and correction, including resolution, test planning, test
execution, and deployment.

Through the first six weeks of calendar year 2000, we completed the
transition from calendar year 1999 to 2000 with no reported significant impact
to our operations. We will continue to evaluate Year 2000 related exposures at
our suppliers and customers over the next several months. We will also continue
to monitor our systems, facilities and products to ensure that latent defects
do not manifest themselves over the next few months. Although our Year 2000
conversion efforts were successful, there are some remaining Year 2000-related
risks. These risks include potential product supply issues and other non-
operational issues.

Since January 1998, we have spent approximately $120 million to resolve Year
2000 related issues. These costs included costs related to employees, inside
and outside consultants and services, system replacements and other equipment
requirements.

Competition within our markets may reduce our procurement of future contracts
and our sales.

The military and commercial industries in which we operate are highly
competitive. Our competitors range from highly resourceful small concerns,
which engineer and produce specialized items, to large, diversified firms.
Several established and emerging companies offer a variety of products for
applications similar to those of our products. Our competitors may have more
extensive or more specialized engineering, manufacturing and marketing
capabilities than we do in some areas. There can be no assurance that we can
continue to compete with these firms. In addition, some of our largest
customers could develop the capability to manufacture products similar to
products that we manufacture. This would result in these customers supplying
their own products and competing directly with us for sales of these products,
all of which could significantly reduce our revenues and seriously harm our
business.

Furthermore, we are facing increased international competition and cross-
border consolidation of competition. There can be no assurance that we will be
able to compete successfully against our current or future competitors or that
the competitive pressures we face will not result in reduced revenues and
market share or seriously harm our business.

6
<PAGE>

Our future success will depend on our ability to develop new technologies that
achieve market acceptance.

Both our commercial and defense markets are characterized by rapidly changing
technologies and evolving industry standards. Accordingly, our future
performance depends on a number of factors, including our ability to:

. identify emerging technological trends in our target markets
. develop and maintain competitive products
. enhance our products by adding innovative features that differentiate our
products from those of our competitors and
. manufacture and bring products to market quickly at cost-effective prices

We believe that, in order to remain competitive in the future, we will need
to continue to develop new products, which will require the investment of
significant financial resources in new product development. The need to make
these expenditures could divert our attention and resources from other projects
and we cannot be sure that these expenditures will ultimately lead to the
timely development of new technology. Due to the design complexity of our
products, we may in the future experience delays in completing development and
introduction of new products. Any delays could result in increased costs of
development or deflect resources from other projects. In addition, there can be
no assurance that the market for our products will develop or continue to
expand as we currently anticipate. The failure of our technology to gain market
acceptance could significantly reduce our revenues and harm our business.
Furthermore, we cannot be sure that our competitors will not develop competing
technology which gains market acceptance in advance of our products. The
possibility that our competitors might develop new technology or products might
cause our existing technology and products to become obsolete. If we fail in
our new product development efforts or our products fail to achieve market
acceptance more rapidly than our competitors, our revenues will decline and our
business, financial condition and results of operations will be negatively
affected.

Our financial performance is significantly dependent on the timely and
successful conversion of our defense products into commercial markets.

In order to leverage technology that we develop for defense applications, we
frequently strive to adapt existing defense technology for commercial markets.
We may not be successful, however, in converting our defense systems and
devices into commercially viable products, and the market for such products may
be limited. Any of these results could have a negative impact on our future
revenues.

We enter into fixed-price contracts which could subject us to losses in the
event that we have cost overruns.

Sometimes we enter into contracts on a firm, fixed price basis. This allows
us to benefit from cost savings, but carries the burden of cost overruns. If
our initial estimates are incorrect, we can lose money on these contracts. In
addition, some of our contracts have provisions relating to cost controls and
audit rights and if we fail to meet the terms specified in those contracts then
we may not realize their full benefits. Our financial condition is dependent on
our ability to maximize our earnings from our contracts. Lower earnings caused
by cost overruns and cost controls would have a negative impact on our
financial results.

In 1998 and 1999, we experienced significant cost overruns, as well as
project delays and cancellations, at our subsidiaries Raytheon Engineers &
Constructors and Raytheon Aircraft Company. There may be further cost overruns
and losses as we move to close out older contracts at Raytheon Engineers &
Constructors, particularly four large international turnkey contracts. Any
additional cost overruns or losses would have an adverse effect on our
financial results.

7
<PAGE>

We depend on the recruitment and retention of qualified personnel, and our
failure to attract and retain personnel could seriously harm our business.

Due to the specialized nature of our businesses, our future performance is
highly dependent upon the continued services of our key engineering personnel
and executive officers. Our prospects depend upon our ability to attract and
retain qualified engineering, manufacturing, marketing, sales and management
personnel for our operations. Competition for personnel is intense and we may
not be successful in attracting or retaining qualified personnel. Our failure
to compete for these personnel could seriously harm our business, results of
operations and financial condition.

A significant portion of our labor force is unionized, and our failure to
maintain stable relationships with our unions could seriously harm our
business.

Approximately 16,000 of our employees are unionized, which represented
approximately 16% of our employees at June 30, 1999. As a result, we may
experience work stoppages from time to time, and we are vulnerable to the
demands imposed by our collective bargaining relationships. We cannot predict
how stable these relationships, currently with 13 different labor
organizations, will be or whether we will be able to meet the requirements of
these unions without impacting the financial condition of Raytheon. In
addition, the presence of unions may limit our flexibility in dealing with our
workforce. Work stoppages and instability in our union relationships could
negatively impact our ability to manufacture our products on a timely basis,
resulting in strain on our relationships with our customers as well as a loss
of revenues. That would adversely affect our results of operations.

We may be unable to adequately protect our intellectual property rights, which
could affect our ability to compete.

Protecting our intellectual property rights is critical to our ability to
compete and succeed as a company. We own a large number of United States and
foreign patents and patent applications as well as trademark, copyright and
semiconductor chip mask work registrations which are necessary and contribute
significantly to the preservation of our competitive position in the market.
There can be no assurance that any of these patents and other intellectual
property will not be challenged, invalidated or circumvented by third parties.
In some instances, we have augmented our technology base by licensing the
proprietary intellectual property of others. In the future, we may not be able
to obtain necessary licenses on commercially reasonable terms. We enter into
confidentiality and invention assignment agreements with our employees, and
enter into non-disclosure agreements with our suppliers and appropriate
customers so as to limit access to and disclosure of our proprietary
information. These measures may not suffice to deter misappropriation or
independent third party development of similar technologies. Moreover, the
protection provided to our intellectual property by the laws and courts of
foreign nations may not be as advantageous to us as the remedies available
under United States law.

We may incur costs in complying with environmental laws which could negatively
impact our financial condition.

We are generators of both hazardous and non-hazardous wastes. The treatment,
storage, transportation and disposal of these hazardous and non-hazardous
wastes are governed by various environmental laws and regulations. Compliance
with these laws is complicated and time-consuming. If we do not handle
hazardous wastes properly, we could be subject to significant liabilities. In
addition, the treatment, storage, transportation and disposal of hazardous
waste generated by our business is expensive and the costs of this activity
could increase in the future which could have a negative effect on our results
of operations.

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<PAGE>

Provisions in our charter documents and rights agreement could make it more
difficult to acquire raytheon and may reduce the market price of our stock.

Our certificate of incorporation and by-laws contain certain provisions, such
as a classified board of directors, a provision prohibiting stockholder action
by written consent, a provision prohibiting stockholders from calling special
meetings and a provision authorizing our Board of Directors to consider factors
other than stockholders' short-term interests in evaluating an offer involving
a change in control. Also, we have a rights plan, which limits the ability of
anyone to acquire more than 15% of our Class A or Class B Common Stock. These
provisions could have the effect of delaying or preventing a change in control
of Raytheon or the removal of Raytheon management, of deterring potential
acquirers from making an offer to our stockholders and of limiting any
opportunity to realize premiums over prevailing market prices for Raytheon
common stock. Provisions of the Rights Agreement described under "Description
of Our Class B Common Stock--Stockholder Rights Plan," and the Hughes
Separation Agreement, described under "Description of Our Preferred Stock--
Hughes Separation Agreement" could also have the effect of deterring changes of
control of Raytheon.

We have agreed to restrictive covenants that could limit our ability to
participate in future defense industry consolidation.

We are subject to covenants under the Hughes Separation Agreement that
prohibit us from entering into specific transactions and activities if these
activities would jeopardize the tax-free status of the merger of Raytheon and
defense business of Hughes Electronics or the transactions effected by General
Motors and Hughes Electronics immediately prior to the merger pursuant to which
Hughes' defense business became an independent, wholly-owned subsidiary of
General Motors and Class A Common Stock was distributed by General Motors to
its common stockholders. These covenants could prohibit us, in some cases, from
participating in defense industry consolidations and could also have the effect
of deterring us from capitalizing on opportunities that arise while the
covenants are in effect, including strategically advantageous mergers and
acquisitions. Our inability to pursue these activities could prevent us from
taking actions which might improve our results of operations.

We depend on component availability, subcontractor performance and our key
suppliers to manufacture and deliver our products.

Our manufacturing operations are highly dependent upon the delivery of
materials by outside suppliers in a timely manner. In addition, we depend in
part upon subcontractors to assemble major components and subsystems used in
our products in a timely and satisfactory manner. While we enter into long-term
or volume purchase agreements with a few of our suppliers, we cannot be sure
that materials, components, and subsystems will be available in the quantities
we require, if at all. We are dependent for some purposes on sole-source
suppliers. If any of them fails to meet our needs, we may not have readily
available alternatives. Our inability to fill our supply needs would jeopardize
our ability to satisfactorily and timely complete our obligations under
government and other contracts. This might result in reduced sales, termination
of one or more of these contracts and damage to our reputation and
relationships with our customers. All of these events could have a negative
effect on our financial condition.

Our dual class capital structure may depress the value of your Class B Common
Stock.

We have two distinct classes of common stock--Class A Common Stock and Class
B Common Stock. With respect to all actions other than the election or removal
of directors, holders of Class A Common Stock and Class B Common Stock have
equal voting rights. With respect to the election or removal of directors only,
holders of Class A Common Stock have 80.1% of the total voting power. Holders
of Class B Common Stock have the remaining 19.9% of the voting power. If you
hold Class B Common Stock, or any securities convertible into or exercisable
for Class B Common Stock, the value of your securities may be depressed by the
disparity in voting power. Furthermore, while shares of Class B Common Stock
currently trade on the New

9
<PAGE>

York Stock Exchange, the Chicago Stock Exchange and the Pacific Exchange, the
listing policies of each of these exchanges with respect to corporations with
dual-class capitalizations may change in the future, and in the future such
policies may not allow for the continued listing of our Class B Common Stock.

The unpredictability of our results may harm the trading price of our
securities, or contribute to volatility.

Our operating results may vary significantly over time for a variety of
reasons, many of which are outside of our control, and any of which may harm
our business. The value of our securities may fluctuate as a result of
considerations that are difficult to forecast, such as:

. volume and timing of product orders received and delivered
. levels of product demand
. consumer and government spending patterns
. the timing of contract receipt and funding
. our ability and the ability of our key suppliers to respond to changes in
customer orders
. timing of our new product introductions and the new product introductions
of our competitors
. changes in the mix of our products
. cost and availability of components and subsystems
. price erosion
. adoption of new technologies and industry standards
. competitive factors, including pricing, availability and demand for
competing products
. fluctuations in foreign currency exchange rates
. conditions in the capital markets and the availability of project
financing
. regulatory developments and
. general economic conditions

During the period between September 1, 1999 and March 10, 2000, the market
price of our Class B Common Stock as quoted on the New York Stock Exchange, the
Chicago Stock Exchange and the Pacific Exchange has ranged from a low of
$17.750 per share to a high of $68.875 per share. The market prices for our
other securities, including those that are exercisable for or convertible into
our Class B Common Stock, may also be volatile.

Because we have not specified a use of the proceeds of this offering, we have
complete discretion over how those proceeds will be spent and we may not
ultimately spend the money wisely.

We may use the proceeds of this offering for investments, acquisitions,
efforts to increase market share, working capital, general corporate purposes
and other capital expenditures. The specific uses of the proceeds will be at
our complete discretion and the proceeds may be allocated from time to time
based on a variety of circumstances. There is no assurance we will spend the
money wisely or in a way that will improve the financial condition of Raytheon.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, we may sell any combination of the securities described in
this prospectus in one or more offerings up to a total dollar amount of $3.0
billion or the equivalent denominated in foreign currencies. This prospectus
provides you with a general description of the securities we may offer. Each
time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. This prospectus
does not contain all of the information included in the registration statement.
For a more complete understanding of the of the offering of the securities, you
should refer to the registration statement, including its exhibits. The
prospectus supplement may

10
<PAGE>

also add, update or change information contained in this prospectus. You should
read both this prospectus and any prospectus supplement together with
additional information under the heading "Where You Can Find Information."

You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus or incorporated by reference in this prospectus.
We are not making offers to sell the securities in any jurisdiction in which
such an offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to anyone to whom it is
unlawful to make such offer or solicitation.

The information in this prospectus is accurate as of the date on the front
cover. You should not assume that the information contained in this prospectus
is accurate as of any other date.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy the registration statement and
any other document we file at the SEC's public reference section, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, at the worldwide web site
(http://www.sec.gov) maintained by the SEC and at the SEC's regional offices
located at Seven World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the operation of the public reference section can be
obtained by calling 1-800-SEC-0330. Our Class B common stock, $0.01 par value
per share, and Class A common stock, $0.01 par value per share, are listed on
the New York Stock Exchange, the Chicago Stock Exchange and the Pacific
Exchange, where reports, proxy statements and other information concerning
Raytheon Company can also be inspected. The offices of the NYSE are located at
20 Broad Street, New York, New York 10005.

The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. These incorporated documents contain
important business and financial information about us that is not included in
or delivered with this prospectus. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information.

We incorporate by reference into this prospectus:

. our Quarterly Reports on Form 10-Q for the fiscal quarters ended April 4,
1999, as amended by Form 10-Q/A filed with the SEC on January 21, 2000,
July 4, 1999, as amended by Form 10-Q/A filed with the SEC on January 21,
2000, and October 3, 1999, as amended by Form 10-Q/A filed with the SEC
on January 21, 2000;

. our Annual Report on Form 10-K for the fiscal year ended December 31,
1998, as amended by Form 10-K/A filed with the SEC on July 1, 1999, as
further amended by Form 10-K/A filed with the SEC on January 21, 2000;

. our registration statement on Form 8-A dated December 11, 1997 and Form
8-A/A dated December 17, 1997; and

. any future filings made by us with the SEC under Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until we sell all of the
securities.

We will provide without charge to each person, including any beneficial
owner, to whom a prospectus is delivered, on written or oral request of that
person, a copy of any or all of the documents we are incorporating

11
<PAGE>

by reference into this prospectus, other than exhibits to those documents
unless such exhibits are specifically incorporated by reference into those
documents. Such written requests should be addressed to:

Secretary, Raytheon Company
141 Spring Street
Lexington, Massachusetts 02421

You may direct telephone requests to the Secretary of Raytheon Company at
(781) 862-6600.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus and the information we are incorporating by reference into it
contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements other than statements
of historical facts included in this prospectus and the information
incorporated by reference into this prospectus that we expect or anticipate
will or may occur in the future, including, without limitation, statements
included in this prospectus under "Raytheon Company" and located elsewhere in
this prospectus regarding our financial position, business strategy and
measures to implement that strategy, including changes to operations,
competitive strengths, goals, expansion and growth of our business and
operations, plans, references to future success and other such matters are
forward-looking statements. These statements are based on assumptions and
analyses made by us in light of our experience and our perception of historical
trends, current conditions and expected future developments as well as other
factors we believe are appropriate in the circumstances. However, whether
actual results and developments will conform with our expectations and
predictions is subject to a number of risks and uncertainties, including
without limitation the information discussed under the caption "Risk Factors"
in this prospectus as well as other factors which might be described from time
to time in our filings with the Securities and Exchange Commission and
additional factors which are beyond our control including the preparedness of
our critical suppliers to avoid Year 2000 related service and delivery
interruptions.

Consequently, all of the forward-looking statements we make in this
prospectus and the information we are incorporating by reference into this
prospectus are qualified by these cautionary statements, and there can be no
assurance that the actual results or developments anticipated by us will be
realized or, even if substantially realized, that they will have the expected
consequences to or effects on us and our subsidiaries or our businesses or
operations. All subsequent forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by any
of those factors described above and in the documents containing such forward-
looking statements. We do not assume any obligation to release publicly any
updates or revisions to any forward-looking statement.

RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS

The following table sets forth Raytheon Company's consolidated ratio of
earnings to combined fixed charges and preferred stock dividends for the end of
the fiscal years 1999, 1998, 1997, 1996 and 1995:

<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
-------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
2.0x 2.7x 2.7x 4.5x 5.8x
</TABLE>

For purposes of computing the ratio of earnings to combined fixed charges and
preferred stock dividends:

. earnings consist of net earnings, taxes on income and fixed charges, less
capitalized interest; and

. fixed charges consist of interest expense, amortization of debt discount
and issuance expense, the portion of rents representative of an interest
factor and capitalized interest.

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<PAGE>

USE OF PROCEEDS

Unless the applicable prospectus supplement states otherwise, we will use the
net proceeds from the sale of the securities for working capital, capital
expenditures, acquisitions and other general corporate purposes. Until we use
the net proceeds in that manner, we may temporarily use them to make short-term
investments or reduce short-term borrowings.

DESCRIPTION OF OUR SECURITIES

We may offer under this prospectus one or more of the following categories of
our securities:

. unsecured senior debt securities

. unsecured subordinated debt securities

. warrants to purchase senior or subordinated debt securities

. shares of preferred stock, in one or more series

. warrants to purchase shares of preferred stock

. shares of Class B common stock

. warrants to purchase shares of Class B common stock

The terms of any specific offering of our securities, including the terms of
any units of a combination of our securities, will be described in a prospectus
supplement relating to that offering.

DESCRIPTION OF OUR DEBT SECURITIES

This section describes the general terms and provisions of the debt
securities that we may offer. The applicable prospectus supplement will
describe the specific terms of the debt securities offered through that
prospectus supplement as well as any general terms described in this section
that will not apply to those debt securities.

Our unsecured senior debt securities will be issued under an indenture, dated
as of July 3, 1995, between Raytheon Company and The Bank of New York, as
trustee, or another indenture or indentures to be entered into by Raytheon
Company and that trustee or another trustee. The unsecured subordinated debt
securities will be issued under a second Indenture, dated as of July 3, 1995,
also between Raytheon Company and The Bank of New York, as trustee or another
indenture to be entered into by Raytheon Company and that trustee or another
trustee.

Copies of each of the July 3, 1995 indentures have been filed with the SEC as
exhibits to the registration statement of which this prospectus are a part, and
are incorporated by reference into this prospectus. If we elect to issue
securities under another indenture, we will file a copy of that indenture with
the SEC. You should refer to the applicable indenture for more specific
information. In addition, you should consult the applicable prospectus
supplement for particular terms of our debt securities.

Our existing indentures do not limit the amount of debt securities that we
may issue, and permit us to issue securities from time to time in one or more
series. The debt securities will be unsecured obligations of Raytheon Company.

13
<PAGE>

Generally, we will pay the principal of, premium, if any, and interest on our
debt securities either at an office or agency that we maintain for that purpose
or, if we elect, we may pay interest by mailing a check to your address as it
appears on our register. We will issue our debt securities only in fully
registered form without coupons, generally in denominations of $1,000 or
integral multiples of $1,000. We will not apply a service charge for a transfer
or exchange of our debt securities, but we may require that you pay the amount
of any applicable tax or other governmental charge.

The applicable prospectus supplement will describe the following terms of any
series of debt securities that we may offer:

. the title of the debt securities;

. whether they are senior debt securities or subordinated debt securities;

. any limit on the aggregate principal amount of the debt securities
offered through that prospectus supplement;

. the identity of the person to whom we will pay interest if it is anybody
other than the noteholder;

. when the principal of the debt securities will mature;

. the interest rate, which may be fixed or variable, or its method of
calculation;

. when interest will be payable, as well as the record date for determining
who we will pay interest to;

. where the principal of, premium, if any, and interest on the debt
securities will be paid;

. any mandatory or optional sinking funds or similar arrangements;

. when the debt securities may be redeemed if they are redeemable, as well
as the redemption prices, and a description of the terms of redemption;

. whether we have any obligation to redeem or repurchase the debt
securities at your option;

. the denominations of the debt securities, if other than $1,000 or an
integral multiple of $1,000;

. the amount that we will pay you if the maturity of the debt securities is
accelerated if other than their principal amount;

. the currency in which we will make payments to you and, if a foreign
currency, the manner of conversion from United States dollars;

. any index we may use to determine the amount of payment of principal of,
premium, if any, and interest on the debt securities;

. if the debt securities will be issued only in the form of a global note,
the name of the depositary or its nominee and the circumstances under
which the global note may be transferred or exchanged to someone other
than the depositary or its nominee;

. the applicability of the defeasance and covenant defeasance provisions in
the applicable indenture;

. whether the debt securities are convertible into any other securities and
the terms and conditions of convertibility;

. any additions or changes to events of default and, in the case of
subordinated debt securities, any additional events of default that would
result in acceleration of their maturity; and

. any other terms of the debt securities.

We may issue our debt securities at an original issue discount, bearing no
interest or bearing interest at a rate that, at the time of issuance, is below
market rate, to be sold at a substantial discount below their stated principal
amount. Generally speaking, if our debt securities are issued at an original
issue discount and there is

14
<PAGE>

an event of default or acceleration of their maturity, holders will receive an
amount less than their principal amount. Tax and other special considerations
applicable to original issue discount debt will be described in the prospectus
supplement in which we offer those debt securities.

Subordination of Subordinated Debt Securities

Generally, the payment of principal of, premium, if any, and interest on our
unsecured subordinated debt securities will be subordinated in right of payment
to the prior payment in full of our senior indebtedness. If we distribute our
assets to creditors upon liquidation, dissolution, reorganization, insolvency,
bankruptcy or under similar circumstances, holders of our senior debt will be
entitled to be paid in full before any payments will be made on our
subordinated debt securities. In addition, if the maturity of our subordinated
debt securities is accelerated, holders of our senior debt will be entitled to
be paid in full before any payments will be made on our subordinated debt
securities. Moreover, while there is an event of default with respect to our
senior debt that would permit our senior debt to be accelerated, and while we
are in default in our payment obligations to holders of senior debt, we cannot
make payments to our subordinated debt holders.

If we were to become insolvent, you may not be paid with respect to our
subordinated securities until our senior debt and third party creditors are
paid in full.

The indenture for our unsecured subordinated debt securities will not place
any limits on the amount of other indebtedness, including senior debt, that we
may issue.

The indenture for our unsecured subordinated debt securities defines "senior
indebtedness" to include the principal of, premium, if any, and interest on:

(1) all of our indebtedness for money borrowed, other than our
subordinated debt securities, and any other indebtedness represented by a
note, bond, debenture or other similar evidence of indebtedness, including
indebtedness of others that we guarantee, in each case whether outstanding
on the date of execution of the subordinated securities indenture or
thereafter created, incurred or assumed; and

(2) any amendments, renewals, extensions, modifications and refundings of
any such indebtedness, unless in any case in the instrument creating or
evidencing any such indebtedness or pursuant to which it is outstanding it
is provided that such indebtedness is not superior in right of payment to
our subordinated debt securities.

In addition, for purposes of the definition of "senior indebtedness",
"indebtedness for money borrowed" includes:

(1) any obligation of, or any obligation guaranteed by, Raytheon Company
for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments,

(2) any deferred payment obligation of, or any such obligation guaranteed
by, Raytheon Company for the payment of the purchase price of property or
assets evidenced by a note or similar instrument, and

(3) any obligation of, or any such obligation guaranteed by, Raytheon
Company for the payment of rent or other amounts under a lease of property
or assets if such obligation is required to be classified and accounted for
as a capitalized lease on our balance sheet under generally accepted
accounting principles.

Events of Default

Generally speaking, any of the following events will constitute an event of
default under the indentures:

. failure to pay interest on our debt securities for thirty days past the
applicable due date, even if we are prohibited from paying interest on
our debt securities because they are subordinated;

. failure to pay principal of, or premium, if any, on our debt securities
when due, even if we are prohibited from making such payments on our debt
securities because they are subordinated;

15
<PAGE>

. failure to make any sinking fund payment when due, even if we are
prohibited from making such payments with respect to subordinated
securities;

. failure to perform any other covenant or agreement in the applicable
indenture, other than a covenant included in the indenture solely for the
benefit of a different type of our debt securities, which continues for
60 days after written notice as provided in the indenture;

. bankruptcy, insolvency or reorganization; and

. any other event of default provided with respect to debt securities of
that series.

You will be notified of an event of default with respect to a series of our
debt securities by the trustee.

If there is an event of default with respect to a series of our senior debt
securities, which continues for the requisite amount of time, either the
trustee or holders of at least 25% of the aggregate principal amount of that
series may declare the principal amount of all of the senior debt securities of
that series to be due and payable immediately. If the securities were issued at
an original issue discount, less than the stated principal amount may become
payable.

Payment of the principal of our subordinated debt securities may be
accelerated only in the case of our bankruptcy, insolvency or reorganization.
Neither you nor the trustee will be able to accelerate the payment of interest
or principal with respect to our subordinated debt securities for any other
reason.

In some cases, after a declaration of acceleration has been made, but before
a judgment or decree has been obtained, holders of a majority in aggregate
principal amount of the series that is in default may rescind the acceleration.

The trustee will be required to act with a high standard of care. However,
the trustee will not be obligated to exercise any of its rights or powers under
the indentures at your request unless you provide the trustee reasonable
security or indemnity. Generally, but with exceptions, holders of a majority in
aggregate principal amount of any series of our outstanding debt securities
will have the right to choose the time, method and place of any proceeding for
any remedy available to the trustee or any exercise of power by the trustee
with respect to debt securities of that series.

You may institute a suit against us for enforcement of your rights to receive
payment of the principal of, premium, if any, on or interest on our debt
securities after the due dates. However, you will not be able to institute any
other proceedings under the applicable indenture, including for any remedy,
unless the following conditions are satisfied:

(1) You give the trustee written notice of a continuing event of default
with respect to a series of our debt securities that you hold;

(2) holders of at least 25% of the aggregate principal amount of that
series make a request, in writing, and offer reasonable indemnity, to the
trustee for the trustee to institute the requested proceeding;

(3) the trustee does not receive direction contrary to your request
within 60 days following your written notice from holders of a majority in
aggregate principal amount of that series; and

(4) the trustee does not institute the proceeding you request within 60
days following your written notice.

Every year we are required to deliver to the trustee a statement as to
performance of our obligations under the indentures and as to any defaults.

A default in the payment of any of our debt securities, where the aggregate
principal amount of that series of debt securities exceeds $50 million, or a
default with respect to our debt securities that causes them to be accelerated,
will give rise to a cross-default under our senior credit facilities. In some
circumstances, payment

16
<PAGE>

defaults on our debt securities may also give rise to cross-defaults of our
guarantees of the indebtedness of our subsidiaries.

Defeasance and Covenant Defeasance

Any series of our debt securities may be subject to the defeasance and
discharge provisions of the applicable indenture. If those provisions are
applicable, we may elect either:

. defeasance--which will permit us to defease and be discharged from,
subject to limitations, all of our obligations with respect to those debt
securities; or

. covenant defeasance--which will permit us to be released from our
obligations to comply with covenants relating to those debt securities as
described in the applicable prospectus supplement, which may include
obligations concerning subordination of our subordinated debt securities.

To invoke defeasance or covenant defeasance with respect to any series of our
debt securities, we must irrevocably deposit with the trustee, in trust, an
amount in funds or U.S. government obligations which, through the payment of
principal and interest in accordance with their terms, will provide money in an
amount sufficient to pay, when due, the principal of, premium, if any, on and
interest on those debt securities and any mandatory sinking fund or similar
payments on those debt securities.

We cannot defease our obligations to register the transfer or exchange of our
debt securities, to replace our debt securities that have been stolen, lost or
mutilated, to maintain paying agencies, or to hold funds for payment in trust.
We may not defease our obligations if there is a continuing event of default on
securities issued under the applicable indenture, or if depositing amounts into
trust would cause the trustee to have conflicting interests with respect to
other of our securities. In addition, we would be required to deliver a legal
opinion to the trustee to the effect that you will not recognize additional
income, gain or loss for federal income tax purposes as a result of the
defeasance or covenant defeasance.

If we effect covenant defeasance with respect to any of our debt securities
and then those debt securities are declared due and payable because of an event
of default, other than an event of default relating to any covenant from which
we have been released through covenant defeasance, the amount of money or U.S.
government obligations on deposit with the trustee may not be sufficient to pay
all amounts due on the debt securities at the time of acceleration. However, we
would remain liable with respect to any shortfall.

Modification and Waiver

Modifications and amendments of our current indentures may be made only with
the consent of holders of at least a majority in aggregate principal amount of
all of our outstanding debt securities affected, voting as a single class.
Generally, the consent of all of the holders of our debt securities that are
affected is required for any of the following:

. to change the stated maturity of the principal, or any installment of
interest or premium, if any;

. to reduce the principal amount, the premium, if any, or the interest, or
the amount payable upon acceleration or maturity in the case of debt
securities issued at an original issue discount;

. to change the place of payment, or the currency in which payments are
made;

. to impair your right to institute suit to enforce any payment at or
following stated maturity or following a redemption date;

. to modify the subordination provisions of our subordinated debt
securities in a manner adverse to holders; or

. to reduce the percentage of the principal amount of our outstanding debt
securities required for modification to or amendment of the either
indenture, or for waiver of our compliance with indenture provisions or
defaults.

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<PAGE>

Holders of a majority in aggregate principal amount of either our senior debt
securities or our subordinated debt securities may waive any past default under
the applicable indenture, except for a default in the payment of principal,
premium, if any, on, or interest on our debt securities and except for our
compliance with specified covenants.

Covenants

Our current indentures contain covenants regarding, among other things:

. a limitation on liens other than specified types of liens;

. a limitation on sale and leaseback transactions, unless the lien on any
property subject to the sale and leaseback transaction is permitted under
the indentures or the proceeds of the sale and leaseback transaction are
used to retire specified types of debt; and

. restrictions on our ability to engage in consolidations, mergers or
transfers of substantially all of our assets unless the surviving or
acquiring corporation assumes the outstanding debt of Raytheon Company
issued under such indentures.

You should be aware that we are not prohibited from engaging in highly
leveraged transactions, other than as may conflict with those covenants.
Moreover, any series of our debt securities may provide that these covenants
may be removed with respect to that series.

Consolidation, Merger and Sale of Assets

Our current indentures prohibit us from consolidating with or merging into
another business, or transferring or leasing substantially all of our assets,
unless the business is a domestic company and it expressly assumes our
obligations with respect to our debt securities by executing a supplemental
indenture.

Conversion or Exchange Rights

If any series of debt securities are convertible or exchangeable, the
applicable prospectus supplement will specify:

. the type of securities into which it may be converted or exchanged;

. the conversion price or exchange ratio, or its method of calculation;

. whether conversion or exchange is mandatory or at your election; and

. how the conversion price or exchange ratio may be adjusted if our debt
securities are redeemed.

Global Securities

Our debt securities may be issued in the form of one or more global
securities that will be deposited with a depositary or its nominee identified
in the applicable prospectus supplement. If so, each global security will be
issued in the denomination of the aggregate principal amount of securities that
it represents. Unless and until it is exchanged in whole or in part for debt
securities that are in definitive registered form, a global security may not be
transferred or exchanged except as a whole by the depositary to its nominee.
The applicable prospectus supplement will describe this concept more fully.

The specific material terms of the depositary arrangement with respect to any
portion of a series of our debt securities that will be represented by a global
security will be described in the applicable prospectus supplement. We
anticipate that the following provisions will apply to all depositary
arrangements.

Upon the issuance of any global security, and its deposit with or on behalf
of the depositary, the depositary will credit, on its book-entry registration
and transfer system, the principal amounts of our debt securities

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represented by the global security to the accounts of participating
institutions that have accounts with the depositary or its nominee. The
underwriters or agents engaging in the distribution of our debt securities, or
Raytheon Company if we are offering and selling our debt securities directly,
will designate the accounts to be credited. Ownership of beneficial interests
in a global security will be limited to participating institutions or their
clients. The depositary or its nominee will keep records of the ownership and
transfer of beneficial interests in a global security by participating
institutions. Participating institutions will keep records of the ownership and
transfer of beneficial interests by their clients. The laws of some
jurisdictions may require that purchasers of our securities receive physical
certificates, which may impair your ability to transfer your beneficial
interests in global securities.

While the depositary or its nominee is the registered owner of a global
security, the depositary or its nominee will be considered the sole owner of
all of our debt securities represented by the global security for all purposes
under the indentures. Generally, if you own beneficial interests in a global
security, you will not be entitled to have our debt securities registered in
your own name, and you will not be entitled to receive a certificate
representing your ownership. Accordingly, if you own a beneficial interest in a
global security, you must rely on the depositary and, if applicable, the
participating institution of which you are a client to exercise the rights of a
holder under the applicable indenture.

The depositary may grant proxies and otherwise authorize participating
institutions to take any action that a holder is entitled to take under the
indentures. We understand that, according to existing industry practices, if we
request any action of holders, or any owner of a beneficial interest in a
global security wishes to give any notice or take any action, the depositary
would authorize the participating institutions to give the notice or take the
action, and the participating institutions would in turn authorize their
clients to give the notice or take the action.

Generally, we will make payments on our debt securities represented by a
global security directly to the depositary. It is our understanding that the
depositary will then credit the accounts of participating institutions, which
will then distribute funds to their clients. We also expect that payments by
participating institutions to their clients will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of clients registered in "street names," and will be the
responsibility of the participating institutions. Neither we nor the trustee,
nor our respective agents, will have any responsibility, or bear any liability,
for any aspects of the records relating to or payments made on account of
beneficial interests in a global security, or for maintaining, supervising or
reviewing records relating to beneficial interests.

Generally, a global security may be exchanged for certificated debt
securities only in the following instances:

(1) the depositary notifies us that it is unwilling or unable to continue
as depositary, or it ceases to be a registered clearing agency, if required
to be registered by law, and a successor is not appointed within 90 days;

(2) we determine in our sole discretion that we will permit global
securities to be exchanged for certificated debt securities; or

(3) there is a continuing event of default under the indenture governing
the debt securities held in global form.

The following is based on information furnished to us:

Unless otherwise specified in the applicable prospectus supplement, the
Depositary Trust Company will act as depositary for securities issued in the
form of global securities. Global securities will be issued only as fully-
registered securities registered in the name of Cede & Co., which is DTC's
nominee. One or more fully-registered global securities will be issued for
these securities representing in the aggregate the total number of these
securities, and will be deposited with or on behalf of DTC.

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DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants deposit with it. DTC
also facilitates the settlement among its participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates. Direct
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and other organizations. DTC is owned by a number of its
direct participants and by the New York Stock Exchange, the American Stock
Exchange and the National Association of Securities Dealers. Access to the DTC
system is also available to others, known as indirect participants, such as
securities brokers and dealers, banks and trust companies that clear through or
maintain custodial relationships with direct participants, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the Securities and Exchange Commission.

Purchases of securities within the DTC system must be made by or through
direct participants, which will receive a credit for the securities on DTC's
records. The ownership interest of each actual purchaser of each security,
commonly referred to as the beneficial owner, is in turn to be recorded on the
direct and indirect participants' records. Beneficial owners will not receive
written confirmation from DTC of their purchases, but beneficial owners are
expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owners purchased
securities. Transfers of ownership interests in securities issued in the form
of global securities are accomplished by entries made on the books of
participants acting on behalf of beneficial owners. Beneficial owners will not
receive certificates representing their ownership interests in these
securities, except if use of the book-entry system for such securities is
discontinued.

DTC has no knowledge of the actual beneficial owners of the securities issued
in the form of global securities. DTC's records reflect only the identity of
the direct participants to whose accounts such securities are credited, which
may or may not be the beneficial owners. The participants will remain
responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to direct participants,
by direct participants to indirect participants, and by direct participants and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.

Any redemption notices need to be sent to DTC. If less than all of the
securities of a series or class are being redeemed, DTC's practice is to
determine by lot the amount to be redeemed from each participant.

Although voting with respect to securities issued in the form of global
securities is limited to the holders of record, when a vote is required,
neither DTC nor Cede & Co. will itself consent or vote with respect to such
securities. Under its usual procedures, DTC would mail an omnibus proxy to the
issuer of the securities as soon as possible after the record date. The omnibus
proxy assigns Cede & Co.'s consenting or voting rights to those direct
participants to whose accounts such securities are credited on the record date,
identified in a listing attached to the omnibus proxy.

Payments in respect of securities issued in the form of global securities
will be made by the issuer of such securities to DTC. DTC's practice is to
credit direct participants' accounts on the relevant payment date in accordance
with their respective holdings shown on DTC's records unless DTC has reason to
believe that it will not receive payments on such payment date. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices and will be the responsibility of such participant and not
of DTC or Raytheon Company, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payments to DTC are the responsibility
of the issuer of the applicable securities, disbursement of

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such payments to direct participants is the responsibility of DTC, and
disbursements of such payments to the beneficial owners is the responsibility
of direct and indirect participants.

DTC may discontinue providing its services as depositary with respect to any
securities at any time by giving reasonable notice to the issuer of such
securities. If a successor depositary is not obtained, individual security
certificates representing such securities are required to be printed and
delivered. We, at our option, may decide to discontinue use of the system of
book-entry transfers through DTC or a successor depositary.

The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be accurate, but we assume no
responsibility for its accuracy. We have no responsibility for the performance
by DTC or its participants of their obligations as described in this prospectus
or under the rules and procedures governing their operations.

Our Debt Trustee

The current trustee for our debt securities is The Bank of New York, which
performs services for us in the ordinary course of business. We may engage
additional or substitute trustees with respect to particular series of our debt
securities.

DESCRIPTION OF OUR PREFERRED STOCK

This section describes the general terms and provisions of our preferred
stock. The applicable prospectus supplement will describe the specific terms of
the shares of preferred stock offered through that prospectus supplement as
well as any general terms described in this section that will not apply to
those shares of preferred stock. We will file a copy of the certificate of
designation that contains the terms of each new series of preferred stock with
the SEC each time we issue a new series of preferred stock, and these
certificates of designation will be incorporated by reference into the
registration statement of which this prospectus is a part. Each certificate of
designation will establish the number of shares included in a designated
series, and fix the designation, powers, privileges, preferences and rights of
the shares of each series as well as any applicable qualifications, limitations
or restrictions. You should refer to the applicable certificate of designation
as well as our restated certificate of incorporation before deciding to buy
shares of our preferred stock as described in the applicable prospectus
supplement.

Our authorized capital stock consists of 1,650,000,000 shares of stock,
including:

. 1,450,000,000 shares of common stock, $0.01 par value per share,
comprised of:

. 450,000,000 shares of Class A common stock, and

. 1,000,000,000 shares of Class B common stock.

. 200,000,000 shares of preferred stock, $0.01 par value per share,
including:

. 4,000,000 shares of Series A Junior Participating preferred stock,
$0.01 par value per share.

Our Board has been authorized, subject to limitations provided in our charter,
to provide for the issuance of shares of our preferred stock in multiple
series. No shares of our preferred stock are currently outstanding.

With respect to each series of our preferred stock, our Board of Directors
has the authority to fix the following terms:

. the designation of the series;

. the number of shares within the series;

. whether dividends are cumulative and, if cumulative, the dates from which
dividends are cumulative;

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. the rate of any dividends, any conditions upon which dividends are
payable, and the dates of payment of dividends;

. whether the shares are redeemable, the redemption price and the terms of
redemption;

. the amount payable to you for each share you own if Raytheon Company is
dissolved or liquidated;

. whether the shares are convertible or exchangeable, the price or rate of
exchange, and the applicable terms and conditions;

. any restrictions on issuance of shares in the same series or any other
series; and

. your voting rights for the shares you own.

You will have no preemptive rights with respect to your shares. In addition,
your rights with respect to your shares of preferred stock will be subordinate
to the rights of our general creditors. If we receive the appropriate payment,
shares of our preferred stock that we issue will be fully paid and
nonassessable.

We currently plan to retain State Street Bank and Trust Company of Boston,
Massachusetts as the registrar and transfer agent of any series of our
preferred stock.

Hughes Separation Agreement

On December 17, 1997, Raytheon Company acquired, through a merger, the
defense electronics business of Hughes Electronics Corporation. As part of the
merger, we agreed under the Hughes Spin-Off Separation Agreement not to take
specified actions unless General Motors Corporation determines in good faith
that such actions would not jeopardize the tax-free status of the spin-off of
the defense electronics business of Hughes Electronics Corporation and its
merger with Raytheon Company.

Many of the covenants restricting our actions expired on December 18, 1999
and are no longer in effect. However, we remain subject to covenants that
prohibit us from:

. making amendments to our restated certificate of incorporation or amended
and restated by-laws that would affect the composition or size of our
board of directors, the manner in which the board is elected, and the
duties and responsibilities of the board. This covenant expires on
December 18, 2000.

. proposing a plan of recapitalization or amendment to our restated
certificate of incorporation that would (1) convert shares of our Class A
common stock into shares of Class B common stock or vice versa, or (2)
change the absolute or relative voting rights of any class of our common
stock from the rights in existence on December 17, 1997. The covenant
does not have an expiration date.

A copy of the Hughes Spin-Off Separation Agreement has been filed with the
SEC as an exhibit to the registration statement of which this prospectus is a
part.

DESCRIPTION OF OUR CLASS B COMMON STOCK

We are authorized to issue up to 1,450,000,000 shares of common stock,
consisting of 450,000,000 shares of our Class A common stock, $0.01 par value
per share, and 1,000,000,000 shares of our Class B common stock, $0.01 par
value per share.

This section describes the general terms of our Class B common stock. For
more detailed information, you should refer to our restated certificate of
incorporation and our amended and restated by-laws, copies of which have been
filed with the SEC. These documents are also incorporated by reference into
this prospectus.

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In addition, we entered into an agreement with General Motors Corporation
that limits our ability to take actions that affect our common stock. Please
refer the description of the Hughes Spin-Off Separation Agreement in the
section of this prospectus captioned "Description of Our Preferred Stock".

Generally, holders of our Class A common stock and Class B common stock are
entitled to one vote per share and the approval of corporate actions requires
the approval of both classes, voting separately, as well as approval of the
holders of any series of our preferred stock that may be entitled to vote for
the action. The election or removal of our directors is subject to separate
rules.

For the election or removal of our directors, our common stockholders vote as
a single class, and are entitled to vote as follows:

CLASS B:
Holders of our Class B common stock will be entitled to one vote per
share, and the voting power of the entire class will be equal to
19.9% of the total voting power of all classes of our common stock.

CLASS A:
Holders of our Class A common stock will be entitled to the number
of votes per share as will cause the Class A common stock to have
80.1% of the total voting power of all classes of our common stock.

Our common stock will be the only type of our capital stock entitled to vote
in the election and removal of directors and other matters presented to our
stockholders from time to time, unless we issue voting preferred stock or our
charter or the law require otherwise.

Our common stockholders will be entitled to receive dividends and
distributions declared by our Board of Directors, to the extent permitted by
outstanding shares of preferred stock and by our charter. If a dividend is
declared, it will be distributed pro rata to our Class A and Class B
stockholders, unless it is a dividend in kind. We are permitted to distribute
Class A common stock to Class A stockholders and Class B common stock to Class
B stockholders but only if the ratio of shares outstanding of the two classes
remains unchanged. In addition, in the case of any stock split, subdivision,
combination or reclassification of either class, the other class will be
adjusted accordingly so that the ratio of shares outstanding of the two classes
remains unchanged.

If Raytheon Company is liquidated or dissolved, our common stockholders will
be entitled to receive our assets and funds available for distribution to
common stockholders in proportion to the number of shares of either class they
hold. Our common stockholders may not receive any assets or funds until our
creditors have been paid in full and the preferential or participating rights
of our preferred stockholders have been satisfied. If we participate in a
corporate merger, consolidation, purchase or acquisition of property or stock,
or other reorganization, any payments or shares of stock allocated to our
common stockholders will be distributed pro rata to holders of our Class A and
Class B common stock on a per share basis. If we redeem, repurchase or
otherwise acquire for payment any shares of our common stock, we will treat
each share of Class A common stock and Class B common stock identically.

You will not have any preemptive, subscription or conversion rights with
respect to shares of our common stock that you own. We may issue additional
shares of our common stock, if authorized by our Board of Directors, without
your approval--unless required by a stock exchange on which our securities are
traded. If we receive the appropriate payment, shares of our common stock that
we issue will be fully paid and nonassessable.

Other than as described above, the rights of our Class A common stockholders
and Class B common stockholders are the same, and we will not discriminate with
respect to one class over the other.

Provisions of Our Restated Certificate of Incorporation and Amended and
Restated By-Laws

Advance Notice of Nominations. Our by-laws contain provisions requiring that
you deliver advance notice of any business that you intend to raise at an
annual meeting of stockholders, and providing for

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procedures to be followed if you wish to nominate a person to be elected as a
director. To be timely, you must give written notice to our Secretary within
the thirty day period beginning on the 120th day prior to the first anniversary
of the preceding year's annual meeting. If the date of the next annual meeting
is more than 30 days before, or more than 60 days after, the first anniversary
of the preceding year's annual meeting, you must deliver notice to our
Secretary within the period beginning on the 120th day prior to the meeting and
ending thirty days later, or, if later, the 10th day after our public
announcement of the meeting date. In addition, if we plan to increase the size
of our Board of Directors, and we do not announce all of the nominees for
election or the fact that the size of our Board will be increased at least 100
days before the first anniversary of the preceding year's annual meeting, you
will have ten days following the date of our public announcement to give notice
of your nomination to our Secretary.

The notice must provide information about you and the business to be brought
before the meeting. You should review our by-laws for more information. For our
2000 annual stockholders meeting, the first anniversary of the previous year's
meeting will be April 28, 2000.

Classification of Directors. Our charter provides that, except as required by
any series of preferred stock or specific provisions of the charter, the number
of our directors, which must be at least equal to three, may be fixed from time
to time by a resolution adopted by a majority of our Board. Our Board is
classified into three classes, as nearly equal in size as possible. Each class
holds office until the third succeeding anniversary of the annual stockholders'
meeting electing that class, except that the terms of the initial three classes
were set to expire in 1998, 1999 and 2000, respectively. A director may be
removed only for cause by the vote of our common stockholders, voting together
as a single class in accordance with their respective percentages of total
voting power, and subject to the rights of any series of preferred stock
outstanding.

No Action by Written Consent; Special Meeting. Our charter provides that
stockholders may not act by written consent in lieu of a special meeting.
Special meetings of the stockholders may only be called by our Chairman of the
Board or by our Board of Directors pursuant to a resolution that indicates the
purpose of the meeting, which is approved by a majority of our directors,
assuming, for this purpose, that there were no vacancies. No business other
than that stated in the notice may be transacted at any special meeting of
stockholders.

According to our by-laws, if we call a special meeting to elect directors to
the Board of Directors, you may nominate individuals for election if you
deliver notice to our Secretary during the period beginning on the 120th day
before the special meeting and ending thirty days later, or, if later, the 10th
day after our public announcement of the meeting.

Limitation on Directors' Liability. Our charter provides, as authorized by
law, that our directors will not be personally liable to Raytheon Company or
our stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent limited by the Delaware General Corporate Law.
The effect of this charter provision may be to reduce the likelihood of
derivative litigation against directors for breach of their duty of care, even
though the action, if successful, might otherwise have benefited Raytheon
Company and our stockholders.

Stockholder Rights Plan

When Raytheon Company merged with the defense electronics business of Hughes
Electronics Corporation in 1997, the Board of Directors adopted a stockholder
rights plan. Each share of Class B common stock issued hereunder will be issued
together with one right under the stockholder rights plan. You should refer to
the Rights Agreement, dated as of December 15, 1997, by and between Raytheon
and State Street Bank and Trust Company, as rights agent, for a more detailed
description of the stockholder rights plan. A copy of the Rights Agreement is
filed as an exhibit to the registration statement of which this prospectus is a
part.

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The rights trade automatically with shares of our common stock and become
exercisable only under circumstances described below. The rights are designed
to protect our interests and the interests of our stockholders against coercive
takeover tactics. The purpose of the rights is to encourage potential acquirers
to negotiate with our Board of Directors before attempting a takeover and to
provide the Board of Directors with leverage in negotiating the terms of any
proposed takeover on behalf of all stockholders. The rights may have anti-
takeover effects. Subject to the terms of the Hughes Spin-Off Separation
Agreement, the rights should not, however, interfere with any merger or other
business combination that the Board of Directors approves.

The rights do not become exercisable until triggering events occur. They
expire on December 15, 2007, but we may extend this date or redeem the rights
earlier. Before a right is exercised, the right does not confer any right to
vote or receive dividends. Before a triggering event occurs, each right will
entitle you to purchase from us one one-hundredth of a share of our Series A
Junior Participating preferred stock for $250, subject to adjustment. The
rights are triggered by either of the following occurrences:

. 10 days after the public announcement that an individual or group--the
"acquirer"- has acquired 15% or more of our Class A common stock, Class B
common stock, or the total voting power in the election of our directors;
or

. 10 business days, or later if the Board of Directors elects, after the
commencement or announcement by an individual or group--the "acquirer"-
of an intention to make a tender offer or exchange offer that would
result in the acquisition of 15% or more of our Class A common stock,
Class B common stock, or the total voting power in the election of our
directors.

If the rights are triggered, each holder of a right other than the acquirer,
whose rights will automatically become void, will thereafter have the right to
purchase shares of Class B common stock at a 50% discount to market price. If
Raytheon Company is thereafter acquired in a merger or other business
combination, or 50% or more of our assets or earning power are sold, each
holder of a right will have the right to purchase shares of common stock of the
acquiring company at a 50% discount to market price. However the Board of
Directors will have the option, before the acquirer obtains 50% or more of our
outstanding shares of common stock, to exchange rights of holders, other than
the acquirer, for shares of our Series A Junior Participating preferred stock,
at a rate of 100 rights per share, subject to adjustment.

Subject to the terms of the Hughes Spin-Off Separation Agreement, we may
redeem the rights at any time before they are triggered at a price of $0.01 per
right. Our Board of Directors may also designate the effective time of the
redemption as well as the applicable conditions. If we redeem your rights, you
will be entitled to receive $0.01 for each right you hold, but you will not
have any further entitlements with respect to these rights.

Section 203 of the Delaware General Corporation Law

Section 203 of the Delaware General Corporation Law prohibits a defined set
of transactions between a Delaware corporation, such as Raytheon Company, and
an "interested stockholder." An interested stockholder is defined as a person
who, together with any affiliates or associates of such person, beneficially
owns, directly or indirectly, 15% or more of the outstanding voting shares of a
Delaware corporation. This provision may prohibit business combinations between
an interested stockholder and a corporation for a period of three years after
the date the interested stockholder becomes an interested stockholder. The term
"business combination" is broadly defined to include mergers, consolidations,
sales or other dispositions of assets having a total value in excess of 10% of
the consolidated assets of the corporation, and some other transactions that
would increase the interested stockholder's proportionate share ownership in
the corporation.

This prohibition is effective unless:

. The business combination is approved by the corporation's board of
directors prior to the time the interested stockholder becomes an
interested stockholder;

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. The interested stockholder acquired at least 85% of the voting stock of
the corporation, other than stock held by directors who are also officers
or by qualified employee stock plans, in the transaction in which it
becomes an interested stockholder; or

. The business combination is approved by a majority of the board of
directors and by the affirmative vote of 66 2/3% of the outstanding
voting stock that is not owned by the interested stockholder.

In general, the prohibitions do not apply to business combinations with
persons who were stockholders prior to the corporation becoming subject to
Section 203.

Stock Exchange Listing

Both our Class A common stock and Class B common stock are listed on the New
York Stock Exchange, the Chicago Stock Exchange and the Pacific Exchange. The
trading symbols for our Class A common stock and Class B common stock on these
exchanges are "RTNa" and "RTNb", respectively.

Transfer Agent

State Street Bank and Trust Company is the Transfer Agent for our common
stock and the Rights Agent for the rights.

DESCRIPTION OF OUR SECURITIES WARRANTS

This section describes the general terms and provisions of our securities
warrants. The applicable prospectus supplement will describe the specific terms
of the securities warrants offered through that prospectus supplement as well
as any general terms described in this section that will not apply to those
securities warrants.

We may issue securities warrants for the purchase of our debt securities,
preferred stock, or Class B common stock. We may issue warrants independently
or together with other securities, and they may be attached to or separate from
the other securities. Each series of securities warrants will be issued under a
separate warrant agreement that we will enter into with State Street Bank and
Trust Company, or another bank or trust company, as warrant agent, as detailed
in the applicable prospectus supplement. The warrant agent will act solely as
an agent of Raytheon Company in connection with the securities warrants and
will not assume any obligation, or agency or trust relationship, with you. The
forms of securities warrant agreements, including the forms of warrant
certificates, are filed as exhibits to the registration statement of which this
prospectus is a part. You should refer to the provisions of the securities
warrant agreements for more specific information.

The prospectus supplement relating to a particular issue of securities
warrants will describe the terms of those securities warrants, including, where
applicable:

. the exercise price for our debt securities, the amount of debt securities
you will receive upon exercise, and a description of that series of debt
securities;

. the exercise price for shares of our preferred stock, the number of
shares of preferred stock you will receive upon exercise, and a
description of that series of our preferred stock;

. the exercise price for shares of our Class B common stock and the number
of shares of Class B common stock you will receive upon exercise;

. the expiration date;

. U.S. federal income tax consequences; and

. any other terms of the securities warrants.

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After your warrants expire they will become void. The prospectus supplement
will describe how you may exercise your securities warrants. You must exercise
warrants for our preferred stock or Class B common stock through payment in
U.S. dollars. All securities warrants will be issued in registered form. The
prospectus supplement may provide for the adjustment of the exercise price of
the securities warrants.

Until you exercise your warrants to purchase our debt securities, preferred
stock, or Class B common stock, you will not have any rights as a holder of our
debt securities, preferred stock, or Class B common stock by virtue of your
ownership of warrants.

PLAN OF DISTRIBUTION

We may sell our securities domestically or abroad, through underwriters,
dealers or agents, or directly, or through any combination of those methods.
The applicable prospectus supplement will describe the terms of the offering
that it applies to, including the names of any underwriters, dealers or agents,
the purchase price for our securities, and the proceeds we expect to receive.
It will also include any delayed delivery arrangements, any underwriting
discounts and other items constituting underwriters' compensation, the initial
public offering price, any discounts or concessions allowed or re-allowed or
paid to dealers, and a list of any securities exchanges on which the securities
offered may be listed.

If we use underwriters in any sale, our securities will be purchased by the
underwriters or dealers for their own account and may be resold from time to
time in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. Our
securities may be offered to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by one or more
firms acting as underwriters. The underwriters with respect to a particular
underwritten offering will be named in the applicable prospectus supplement
relating to that offering. If an underwriting syndicate is used, the managing
underwriter or underwriters will be disclosed on the cover of the applicable
prospectus supplement. Generally, the obligations of the underwriters or agents
to purchase the securities that we offer will be subject to conditions
precedent, and the underwriters will have to purchase all of the offered
securities if any are purchased. The initial public offering price and any
discounts or concessions allowed or re-allowed or paid to dealers may be
changed from time to time.

If we use dealers to sell our securities, we will sell our securities to the
dealers as principals. The dealers may then resell our securities to the public
at varying prices that they determine at the time of resale. We will disclose
the names of the dealers and the terms of the transaction in the applicable
prospectus supplement.

We may sell the securities through agents that we designate from time to time
at fixed prices that may be changed, or at varying prices determined at the
time of sale. We will name any agent involved in the offer or sale of our
securities and specify any commissions that we will pay them. Unless otherwise
specified in the applicable prospectus supplement, any agent will be acting on
a best efforts basis for the period of its appointment.

Underwriters or agents may be paid by us or by purchasers of our securities
for whom they act as agents in the form of discounts, concessions or
commissions. Underwriters, agents and dealers participating in the distribution
of our securities may all be deemed to be underwriters, and any discounts or
commissions that they receive, as well as profit they receive on the resale of
our securities, may be deemed to be underwriting discounts or commissions under
the Securities Act of 1933.

A prospectus supplement may indicate that we will authorize agents,
underwriters or dealers to solicit from specified types of institutions offers
to purchase our securities at the public offering price set forth in the
prospectus supplement pursuant to delayed delivery contracts permitting payment
and delivery on a specified future date. The prospectus supplement will
describe conditions of any delayed delivery contracts, as well as the
commission we will pay for solicitation of these contracts.

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Some or all of the securities that we offer though this prospectus may be new
issues of securities with no established trading market. Any underwriters to
whom we sell our securities for public offering and sale may make a market in
those securities, but they will not be obligated to and they may discontinue
any market making at any time without notice. Accordingly, we cannot assure you
of the liquidity of, or continued trading markets for, any securities that we
offer.

In order to facilitate the offering of our securities, any underwriters or
agents involved in the offering may engage in transactions that stabilize,
maintain or otherwise affect the price of our securities, or other securities
that affect payments on our securities. Specifically, the underwriters or
agents may overallot in connection with the offering, creating a short position
for their own account. In addition, to cover overallotments or to stabilize the
price of our securities, or other securities that affect payments on our
securities, the underwriters or agents may bid for and purchase the securities
in the open market. In any offering of our securities through a syndicate of
underwriters, the underwriting syndicate may reclaim selling concessions
allowed to an underwriter or dealer for distributing our securities if the
syndicate repurchases previously distributed securities in transactions to
cover syndicate short positions, in stabilizing transactions or otherwise. Any
of these activities may stabilize or maintain the market price of our
securities above independent market levels. The underwriters or agents are not
required to engage in these activities, and may end any of these activities at
any time.

Agents, dealers and underwriters may be entitled to be indemnified by us
against specified civil liabilities, including liabilities under the Securities
Act of 1933, or to contribution with respect to payments that they may be
required to make.

Any underwriters, dealers or agents that we use, as well as their affiliates,
may be customers of Raytheon Company, or may engage in transactions with us or
perform services for us in the ordinary course of business.

LEGAL MATTERS

Thomas D. Hyde, Esq., the Senior Vice President, General Counsel and
Secretary of Raytheon Company will pass upon the validity of our securities. As
of the date of this prospectus, Thomas D. Hyde, Esq. holds 14,714 shares of
Class B Common Stock and options to acquire an additional 205,018 shares of
Class B Common Stock.

EXPERTS

Our consolidated balance sheets as of December 31, 1998 and 1997 and the
related statements of income, stockholders' equity and cash flows for each of
the three years in the period ended December 31, 1998 and the related financial
statement schedule, incorporated by reference in the registration statement of
which this prospectus is a part, have been incorporated into such registration
statement in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.

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