Transforming Tomorrow - Raytheon Company

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Transforming Tomorrow2018 Corporate Responsibility Report

TRANSFORMINGTOMORROWBreakthrough technologies have been the driving forcebehind national security, economic strength and socialcohesion. And they will continue to transform tomorrow.At Raytheon, we’re continually pushing the boundaries oftechnology, working at the forefront of quantum physics,artificial intelligence and machine learning, hypersonics,cybersecurity and much more. Together, we’re advancingdefense strategy, protecting people and infrastructurethrough proven solutions that make the world a saferplace —  faster than ever before.

RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTVisible Infrared Imaging Radiometer SuiteHIGH STANDARDS.INSPIRED PERFORMANCE.Raytheon’s corporate culture is grounded in our company values: trust, respect, collaboration, innovation and accountability.OUR ilityWe take pride inour ethical culture,are honest and dothe right thing.We are inclusive,embrace diverseperspectives andvalue the rolewe all play in ourshared vision.We fuel morepowerful ideas,deeper relationshipsand greateropportunities toachieve sharedobjectives together.We challenge thestatus quo andact with speed andagility to driveglobal growth.We honor ourcommitments,anticipate theneeds of ourcustomers, serveour communitiesand supporteach other.1

2RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTDEAR RAYTHEONSTAKEHOLDERS,Our world, customers and workforce are all changing. Raytheon is alsotransforming. We’re looking to improve the way we develop new technologies,engage stakeholders and support the next generation of engineers and scientists.Raytheon’s long-standing commitment to corporate responsibility, however,will remain unchanged. The Raytheon team embraces this responsibility at everylevel of the company, starting with our board of directors, ensuring our businessstrategies are aligned with our obligations to our stakeholders.This report highlights the many ways we live our values while fulfilling our visionof working as one global team creating trusted, innovative solutions to makethe world a safer place.

RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTTransformative PeopleRemaining a global innovation leader starts with our people.As our employee demographics shift, we are transforming theway we attract, develop and retain our world-class workforce.By better understanding how millennial and Gen-Z employeeswant to work, we’re adopting programs that allow for betterwork/life balance and ensure Raytheon is a welcoming,retaliation-free workplace.These efforts are having an impact. The number of femalevice presidents has grown by 41 percent since 2016, for example.And in 2018, I was proud to accept the Society of WomenEngineers’ Rodney D. Chipp Memorial Award, which is givento those who help support and advance women engineers.Raytheon also keeps an eye toward developing the nextgeneration of talent. In 2018, we piloted a new computerscience program in partnership with Girl Scouts of the USA,and sponsored a summer program through MIT that taught highschool students how to build drones equipped with syntheticaperture radar.Our people — more than 10,000 of whom are veterans —play an important role in how we continue to honor and supportveterans, service members and military families. They deliverthe state-of-the-art defense systems that help members of themilitary complete their missions and return home safely. Manyare also engaged in a new mentoring program we started withStudent Veterans of America, which named us its 2018 Partnerof the Year. Additionally, this past year Raytheon opened fournew STEM Centers of Innovation at Boys & Girls Clubs servingU.S. military installations.Our efforts to create a better workplace are driven from the top.Raytheon added three accomplished women to its board thisyear, and together, our five female directors were included on the2018 Most Influential Corporate Directors list by WomenInc. Sustainability and ComplianceJust as important as what we do is how we do it. Raytheoncontinues to stress achieving results the right way, mandatingemployee training in critical compliance areas, such as businessethics and export rules, and reinforcing our culture of integrity.We also are transforming the way we design, manufacture andship our products. Doing so helps us reduce our environmentalimpact and work toward our 2020 sustainability goals. In 2018,we achieved our highest waste diversion rate from landfillsWE ARE TRANSFORMING THEWAY WE ATTRACT, DEVELOPAND RETAIN OUR WORLD-CLASSWORKFORCE.and incinerators through waste reduction, reuse and recyclingefforts. We also incorporated energy-efficient designs in ourbuildings and completed numerous water reduction projectsacross the company.Providing SecurityRaytheon believes in our responsibility to use our technology toenhance safety. Our satellite-based sensors help meteorologistsunderstand storms and changing weather patterns. And ouradvanced radar solutions are ready to help improve air trafficsafety at our airports.This sense of responsibility extends to making the cybersecuritytechnology and know-how we’ve accumulated over the yearsavailable not only to government and military customers, but alsoto commercial organizations to help them defend against thegrowing cyber threat.These efforts help protect our way of life. The unprecedentedlayers of cybersecurity we’ve built into the ground system for thenext generation of GPS satellites, for example, will keep the datathat powers our financial systems and location devices accurateand secure for years to come.Anticipating What’s NextThese transformational efforts, combined with our culture ofcontinuous improvement, have Raytheon well positioned forthe challenges of tomorrow. Our team is already working at thecutting edge of technology, including areas such as quantum,artificial intelligence/machine learning, additive manufacturingand hypersonics.I am proud of all we have accomplished and will continue toachieve. As you will read in these pages, the men and womenof Raytheon are working to transform tomorrow together.Respectfully,Thomas A. KennedyChairman and Chief Executive Officer3

4RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTAPPROACHRaytheon’s “space factory” in Tucson, ArizonaWe align our many corporate responsibility initiatives with our business strategy. As a technologyleader, we have made commitments to build a future workforce with strong interest in science,technology, engineering and math (STEM); support veterans and military families; protect people,assets and infrastructure from growing cybersecurity threats; reduce our environmental impact; andgive our people and partners the opportunity, training and support they need to nurture a diverse,inclusive and safe place to work and do business.CORPORATE GOVERNANCERaytheon benefits from the leadership of a diverse board withthe critical attributes, experiences, qualifications and skills toadvance Raytheon’s long-term growth strategy.The board’s public policy and corporate responsibility committeereviews environmental stewardship and sustainability, employeehealth and safety, ethics, charitable contributions and communityrelations. The committee identifies current and emergingenvironmental, social and political trends and public policy issuesthat may affect Raytheon’s business operations, performanceor public image. In 2018, the committee reviewed and reportedto the board on a number of issues, including the public policyimplications of certain advanced technologies that are likelyto shape the future. Importantly, the committee also providesoversight on a comprehensive program that teaches employeesabout ethical decision-making.

RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTALIGNING CORPORATE RESPONSIBILITY TO BUSINESS STRATEGYOur world-class sustainability program reflects the value we place on innovation, employee engagement and stakeholder collaboration.Over the years, it has created business value by making us more competitive, enhancing our reputation and boosting employee engagement.SOCIAL COMMITMENTENVIRONMENTAL IMPACTOur evolving economy and future prosperity depend on buildinga world-class workforce. Raytheon focuses on two key socialpriorities: supporting veterans and military families, and promotingSTEM education.Our energy, water, greenhouse gas and waste reductionprograms reflect our close collaboration with stakeholders, theinnovation and engagement of our people and our commitmentto operational excellence.EFFICIENT OPERATIONSDIVERSE PERSPECTIVESAs a manufacturer and systems integrator, we incorporatesustainability into our planning, decision-making and day-to-dayoperations. We embrace the principles of Agile and DevOps toensure fast flow, fast feedback and continuous improvement.We foster an inclusive environment that honors our differences,encourages the exchange of information and new ideas andmakes it possible for everyone to thrive and succeed.SUSTAINABLE DESIGNThe trusted, innovative solutions Raytheon develops reflect ourpractice of integrating sustainability into product design andmanufacturing, and engineering innovation and excellence intoeach product’s entire life cycle.RAYTHEON TAKES A DISCIPLINED APPROACHTO CORPORATE RESPONSIBILITY THATALIGNS OUR BUSINESS STRATEGY WITHOUR MANY INITIATIVES.CONTRIBUTION FUNDING PRINCIPLESTEM/EDUCATION FUNDING30%ARYLOCAL COMMUNITIES20%NYAVM50%VETERANS AND MILITARY FAMILIESSVASVSVAVAETHICS AND ACCOUNTABILITYAcross Raytheon, transparency means holding each other, and ourselves, accountable. This commitment to ethics begins with our boardand senior leadership team and extends to every employee. We expect full adherence to our code of conduct and give employees thetraining and resources to understand compliance risks and regulations and to use our protected phone and online channels to speak upwhen they have a question or notice a problem.In support of the company’s comprehensive diversity and inclusion initiatives, the Ethics program reinforced the importance of ourRespect value and focused on workplace harassment prevention in 2018.5

6RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTCITIZENSHIPStudents compete during Engineers WeekRaytheon has established two key social priorities that align with our business imperatives ofsupporting armed service members and building a sustainable talent pipeline. We support veteransand military families by helping them succeed through education and meaningful employment in theprivate sector. And we cultivate future leaders in technology and innovation by promoting educationin science, technology, engineering and math (STEM). Our funding is allocated strategically tosupport these goals.EMPOWEREXPANDENGAGEWe empower veteransand military familiesto succeedthrough education.We expand the futureworkforce by inspiring studentsto become tomorrow’s driversof technology and innovation.We engage employees incommunity efforts that supportmilitary families and inspirestudents in STEM.

RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTEDUCATIONTraining and knowledge are critically important in today’s business environment — and for future generations preparing to enter theworkforce. Raytheon’s many investments in STEM education include initiatives to attract more women to careers in computer science andcybersecurity and international efforts to develop local work forces that can support knowledge-based economies and a global supply chain.Raytheon and Girl Scouts Open STEM Career Paths for GirlsRaytheon is sponsoring programs to help feed the talent pipelinefor future STEM jobs and encourage the next generation of femaleinnovators. The “Think Like a Programmer” Journey, piloted withfive Councils in 2018, will ultimately encourage as many as halfa million girls to pursue careers in computer sciences such ascybersecurity, robotics, data science and artificial intelligence. In2019 Raytheon will also sponsor the inaugural Cyber Challenge,the first-ever challenge event for Girl Scouts of the USA.Girl Scouts visit Raytheon’s cyber CODE CenterMATHCOUNTS Encourages Problem-SolvingFor the past decade, Raytheon has been the title sponsor ofMATHCOUNTS, a national competition program that promotes mathachievement and gives middle school students a forum to displaytheir math and problem-solving skills. In 2018, the program attractedmore than 150,000 middle school students and more than 17,000volunteers. We have renewed our commitment to MATHCOUNTSthrough 2025.2018 MATHCOUNTS National ChampionshipFIRST Robotics Teaches Vital STEM SkillsRaytheon sponsored nearly 70 teams for the 2018 FIRST (ForInspiration and Recognition of Science and Technology) RoboticsChampionship. In addition to providing mentors and volunteers,we annually award 1,000 FIRST Scholarships to 40 high schoolseniors and college students who participate in the competitionand pursue undergraduate education as STEM majors.High school students design and build their own robotsMathAlive! Reveals Math at WorkSince 2012, Raytheon has sponsored MathAlive!, our travelingmuseum exhibit that reveals math at work in the world aroundus — and its endless possibilities. In 2018 we added two newinteractive experiences — “Extreme Weather Alert” and “CyberSecurity” — and brought MathAlive! to Australia’s National Scienceand Technology Centre.MathAlive! traveling STEM exhibit7

RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTVETERANS AND MILITARY FAMILIESRaytheon empowers today’s veterans through continuing education programs that prepare them for new careers. We also inspire theirchildren to become tomorrow’s drivers of technology and innovation through programs that nurture an interest in STEM education.Building STEM Centers of InnovationOur 5 million commitment to Boys & GirlsClubs of America provides for 22 Centersof Innovation and supports after-schoolSTEM programming for children of militaryfamilies. In 2018 these Centers servedmore than 4,000 teens, in part throughthe four new Centers we opened. We alsoprovided 8,000 K–12 children in militaryfamilies with backpacks, notebooks,pencils, paper and the chance to participatein hands-on STEM activities through a backto-school initiative called Fill the Pack.2018 Boys & Girls Clubs’ Fill the Pack eventYNYAVMEmpowering Student Veterans of AmericaSince 2015, our 5 million partnership withthe world’s largest peer network of studentveterans has helped SVA scale to more than1,500 campus chapters representing nearly700,000 student veterans, an increase ofSVASVSVAVA26 percent. In 2019 Raytheon will launch apilot program focused on female veteranswhose military experience positions themfor engineering careers.AR82018 SVA National Conference

RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTVeteran Wilderness Expedition in the Grand CanyonEMPLOYEE SUPPORTEmployees donate to Raytheon’s Fund in Support of Our Troops,which disburses grants to organizations that deliver services andsupport to active-duty service members and veterans. Raytheonemployees have given more than 1.5 million through the fund.Raytheon has teamed with the nonprofit organization No BarriersWarriors on a Veteran Wilderness Expedition that boosts theirphysical confidence and psychological well-being. In 2018, a teamof disabled veterans from Alabama, Arizona, New Mexico andTexas — representing all branches of the armed forces — spent10 days on the Colorado River, hiking deep inside the GrandCanyon. John Bishop, a retired U.S. Army lieutenant colonel whohas worked at Raytheon for the last 20 years, volunteered asan alumnus coach for the 2018 Veteran Wilderness Expeditionteam. “I want to help each veteran identify at least one futuregoal that they can accomplish within the first six monthsafter the expedition,” Bishop said. “My hope is that with oneaccomplishment, it will encourage them to focus on the nextone and next one.”In Australia, Raytheon partners with Invictus Games, aninternational sporting event for wounded, injured and ill veteransand active service personnel. In addition to recognizing andhonoring the commitment, leadership skills and strength ofveterans, the partnership also enhances the recruitment, retentionand support of Raytheon’s veteran employees and their families.2018 EMPLOYEE VOLUNTEERISM BY THE NUMBERS144,7232,050402RECORDED VOLUNTEER HOURSORGANIZATIONSACROSS 31 STATESEMPLOYEES QUALIFIED FORTHE PRESIDENTIAL VOLUNTEERSERVICE AWARD9

10RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTSUSTAINABILITYA solar array at a Raytheon facility in Tucson, ArizonaRaytheon’s sustainability program aligns our employees, customers, suppliers and communitiesaround a single goal — to engineer a sustainable future by protecting the environment andconserving natural resources. Our sustainability principles extend across our company and influenceeverything we do — from operating our manufacturing plants to building our products andengineering innovative solutions.FOUR PILLARS OF RAYTHEON e integrate principles ofsustainability into the designof our products, processesand services through theirentire life cycle.We collaborate withsuppliers, customers,industry, academia andcommunities to developand deploy sustainablesolutions.We optimize environmentalperformance throughoutthe value chain by engagingin responsible resourcemanagement.We empower ouremployees and partnersto work andlive sustainably.

RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTAt Raytheon, sustainability is a shared commitment that engages every facet of our operations —from the ingenuity and focus of our people to our global operations and supply chain. Together, weare working to reduce our environmental footprint and build a sustainable future.2020 SUSTAINABILITY GOALSReduce energyconsumption by 10%Decrease wateruse by 10%Reduce greenhouse gasemissions by 12%Increase solid wastediversion rate to 82%Achieve 5%renewable energyObtain zerowaste certificationat 20 sitesReduce the environmentalimpact of supplierpackaging by 10%Obtain sustainabilitycommitmentfrom 90% of keypreferred suppliersDeploy advancedenergy management at100% of enterprisedata centersEliminate hexavalentchromium and cadmium from99% of Raytheon’s standardparts & materials listDeploy next-generationvirtual collaborationenvironment to 100% ofRaytheon locationsIncorporate sustainabilityinto 90% of targetedRaytheon enterprisesupplier assessmentsEnhance capability toobtain / quantify substancecontent of parts inproducts to 78%Increase electronictransfers of technical datapackages to 80%2020 SUSTAINABILITY GOALSRaytheon sets ambitious targets for environmental protection and resource conservation. We are working on our second set of long-termsustainability goals. In early 2016, we established 14 sustainability goals for 2020 that address many different areas, including energyand water conservation, reduction of greenhouse gas emissions, solid waste diversion, supplier packaging, renewable energy, materialsof concern and supplier commitment to sustainability. Raytheon is making steady progress toward these goals.2018 GOAL PROGRESS3.3%15%4%REDUCTION INENERGY CONSUMPTIONSINCE 2015REDUCTION INGREENHOUSE GASEMISSIONS SINCE 2015RENEWABLEENERGYIN 2018SUSTAINABILITY6.8%83%11 Zero WasteREDUCTION INWATER USESINCE 2015WASTE DIVERSIONFROM LANDFILLS /INCINERATORS IN 2018TRUE CERTIFIEDSITES AT THEEND OF 201811

12RAYTHEON 2018 CORPORATE RESPONSIBILITY REPORTSUSTAINABLE ENGINEERINGREDUCING ENERGYWe integrate sustainability into our engineering processes bydesigning and building our products with sustainable materialsand by minimizing materials of concern that pose health, safetyor environmental risks. Along with the Department of Defense,government agencies and international organizations, we’reespecially focused on reducing the use of two toxic materials —cadmium and hexavalent chromium. For the past several years,Raytheon has worked cl

MATHCOUNTS, a national competition program that promotes math achievement and gives middle school students a forum to display their math and problem-solving skills. In 2018, the program attracted more than 150,000 middle school students and more than 17,000 volunteers. We have renewed our commitment to MATHCOUNTS through 2025.

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