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REVIEW OF BUSINESS GROUPS
Year Ended December 31 2015 2014 2013
Revenue Operating Earnings Revenue Operating Earnings Revenue Operating Earnings
Aerospace $ 8,851 $ 1,706 $ 8,649 $ 1,611 $ 8,118 $ 1,416
Combat Systems 5,640 882 5,732 862 5,832 908
Information Systems and Technology 8,965 903 9,159 785 10,268 795
Marine Systems 8,013 728 7,312 703 6,712 666
Corporate – (41) – (72) – (96)
Total $ 31,469 $ 4,178 $ 30,852 $ 3,889 $ 30,930 $ 3,689
Following is a discussion of operating results and outlook for each of
our business groups. For the Aerospace group, results are analyzed for
specific types of products and services, consistent with how the group
is managed. For the defense groups, the discussion is based on the
lines of products and services each group offers with a supplemental
discussion of specific contracts and programs when significant to the
group’s results. Additional information regarding our business groups
can be found in Note Q to the Consolidated Financial Statements in
Item 8.
AEROSPACE
Review of 2015 vs. 2014
Year Ended December 31 2015 2014 Variance
Revenue $ 8,851 $ 8,649 $ 202 2.3%
Operating earnings 1,706 1,611 95 5.9%
Operating margin 19.3% 18.6%
Gulfstream aircraft deliveries
(in units):
Green 147 144 3 2.1%
Outfitted 154 150 4 2.7%
The increase in the Aerospace group’s revenue in 2015 consisted of
the following:
Aircraft manufacturing, outfitting and completions $173
Pre-owned aircraft 44
Aircraft services (15)
Total increase $202
Aircraft manufacturing, outfitting and completions revenue increased
in 2015 due primarily to additional deliveries of the G650 aircraft.
Mid-cabin aircraft deliveries were also up slightly. We had seven pre-
owned aircraft sales in 2015 compared with three sales in 2014.
The increase in the group’s operating earnings in 2015 consisted of
the following:
Aircraft manufacturing, outfitting and completions $ 100
Aircraft services 9
Pre-owned aircraft (7)
G&A/other expenses (7)
Total increase $ 95
Aircraft manufacturing, outfitting and completions earnings grew in
2015 due to an increase in higher-priced G650 aircraft deliveries.
Operating earnings in 2015 were also favorably affected by a first-
quarter 2015 supplier settlement associated with aircraft component
design and delivery delays. The group’s services performance reflected
a favorable mix of work. Partially offsetting these increases, the
group’s performance was impacted by slightly higher net R&D
expenses (included in G&A/other expenses above) associated with
ongoing product-development efforts. Overall, the Aerospace group’s
operating margin increased 70 basis points to 19.3 percent in 2015.
Review of 2014 vs. 2013
Year Ended December 31 2014 2013 Variance
Revenue $ 8,649 $ 8,118 $ 531 6.5%
Operating earnings 1,611 1,416 195 13.8%
Operating margin 18.6% 17.4%
Gulfstream aircraft deliveries
(in units):
Green 144 139 5 3.6%
Outfitted 150 144 6 4.2%
General Dynamics Annual Report 2015 21