--Issuer Default Rating (IDR) at 'A-';

--Senior unsecured debt at 'A-';

--Bank facilities at 'A-';

--Short-term IDR at 'F2';

--Commercial paper programs at 'F2'.

The Rating Outlook is Stable. Approximately $2.3 billion of debt is covered by these ratings.

RTN's ratings reflect the company's competitive position in the defense industry, high levels of U.S. defense spending, international revenue growth, and large backlog. The company's strong credit metrics, conservative financial policies, financial flexibility, and liquidity also support the ratings. Concerns center on uncertainty about core U.S. defense spending beyond FY2010, the outlook for defense spending related to operations in Iraq and Afghanistan, large share repurchases, the pension deficit, the expiration of the company's credit facility in less than one year, and some pending legal issues, including an internal investigation into international operations.

Given the strength of RTN's credit metrics for the current ratings, there is a significant amount of cushion to withstand negative developments. For a negative rating action to be considered there would likely need to be a dramatic change in U.S. defense spending policies, poor execution on a number of key contracts, and/or a major change in the company's financial strategy. A positive rating action could be considered if the company maintains its current liquidity position and decides to pay down some or all of the maturing debt in 2011-2013, although Fitch believes that RTN is more likely to refinance this debt.

At June 28, 2009, RTN had a liquidity position of $4.4 billion, consisting of $2.2 billion of cash and $2.2 billion of credit facility availability. RTN's 5-year $2.2 billion revolving credit facility expires in March 2010. Fitch expects that RTN will successfully replace this facility, but the term and amount will likely be reduced as a result of continued stress in the bank market. RTN had a net debt position of only $96 million at the end of June, and the company has no debt maturities until January 2011, when $453 million matures.

Free cash flow (cash from operations less capital expenditures and dividends) for the latest twelve months (LTM) ending June 28, 2009 was $1.3 billion. Free cash flow should rise in 2009 due to continued strong performance and the benefit of a tax refund.