Lockheed Martin 2004 Annual Report Download - page 31

This table shows net sales and operating profit of the busi-
ness segments and reconciles to the consolidated total.
(In millions) 2004 2003 2002
NET SALES
Aeronautics $11,781 $10,202 $ 6,471
Electronic Systems 9,724 8,991 8,685
Space Systems 6,357 6,021 5,287
Integrated Systems & Solutions 3,850 3,420 3,015
Information & Technology
Services 3,801 3,174 3,104
Total business segments 35,513 31,808 26,562
Other 13 16 16
$35,526 $31,824 $26,578
OPERATING PROFIT
Aeronautics $ 899 $ 690 $ 448
Electronic Systems 969 858 875
Space Systems 489 403 279
Integrated Systems & Solutions 334 291 241
Information & Technology
Services 285 226 177
Total business segments 2,976 2,468 2,020
Net unallocated Corporate expense (887) (449) (862)
$ 2,089 $ 2,019 $ 1,158
The following segment discussions also include informa-
tion relating to negotiated backlog for each segment. Total
negotiated backlog was $74 billion at December 31, 2004. This
amount included both funded backlog (unfilled firm orders for
which funding has been both authorized and appropriated by
the customer - Congress in the case of U.S. Government agen-
cies) and unfunded backlog (firm orders for which funding has
not yet been appropriated). Negotiated backlog does not include
unexercised options or task orders to be issued under indefinite-
delivery/indefinite-quantity (IDIQ) type contracts. Funded
backlog was approximately $40.2 billion at December 31, 2004.
The Aeronautics segment generally includes fewer programs
that have much larger sales and operating results than programs
included in the other segments. Therefore, due to the large num-
ber of comparatively smaller programs in the remaining segments,
the discussions of the results of operations of these business seg-
ments generally focus on lines of business within the segments
rather than on specific programs. The following tables of financial
information and related discussions of the results of operations of
our business segments are consistent with the presentation of seg-
ment information in Note 15 to the financial statements.
Aeronautics
Aeronautics’ operating results included the following:
(In millions) 2004 2003 2002
Net sales $11,781 $10,202 $ 6,471
Operating profit 899 690 448
Backlog at year-end 30,489 37,580 35,477
Net sales for Aeronautics increased by 15% in 2004 compared
to 2003. The majority of the increase in sales, $1.5 billion, was due
to higher volume on the F-35 Joint Strike Fighter, F-16 and F/A-22
Combat Aircraft programs. In 2004, 83 F-16s were delivered, 21
more than in 2003. The remaining increase in sales was mainly due
to higher C-5 activities in Air Mobility. There were 13 C-130J
deliveries in 2004 compared to 15 deliveries in 2003.
Net sales for Aeronautics increased by 58% in 2003 com-
pared to 2002 due to growth in Combat Aircraft and Air
Mobility. Approximately half the growth in Combat Aircraft was
due to higher volume on the F-35 program with a majority of the
remaining growth attributable to F-16 programs as a result of
increased deliveries. In 2003, 62 F-16s were delivered, 41 more
than in 2002. Increased C-130J deliveries contributed $470 mil-
lion to the year-over-year growth in sales. There were 15 C-130J
deliveries in 2003 compared to eight deliveries in 2002.
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Lockheed Martin Corporation
0
500
1,000
1,500
2,000
2,500
$3,000
2004 2003 2002
I&TS
IS&S
Space Systems
Electronic Systems
Aeronautics
Segment Operating Profit
(In millions)