Lockheed Martin 2004 Annual Report Download - page 33

Net sales for Space Systems increased by 14% in 2003
compared to 2002. Sales increased by $570 million in Satellites
and $140 million in S&DMS compared to 2002. The growth in
Satellites was due to higher volume on government satellite
programs. The growth in S&DMS was attributable to increases
in both fleet ballistic missile and missile defense activities. In
Launch Services, increased Titan activities offset lower sales
resulting from a decline in Proton deliveries (two in 2003 and
four in 2002). There were five Atlas launches in both 2003
and 2002.
Operating profit for the segment increased 21% in 2004
as compared to 2003. Launch Services’ operating profit
increased $65 million. This increase was primarily due to U.S.
Government support of the Atlas program and the benefit
resulting from the first quarter termination of a launch vehi-
cle contract by a commercial customer, offset by a decline in
activities on the Titan launch vehicle program. Satellites’
operating profit increased $20 million due to commercial
satellite deliveries, partially offset by lower profitability on a
government satellite program. In 2003, government satellites
operating profit reflected a $30 million charge related to a
NASA satellite program.
Operating profit for the segment increased 44% in 2003 as
compared to 2002. Satellites’ operating profit increased by $70
million over the 2002 period mainly due to improved perform-
ance on commercial satellite activities and volume increases on
government satellite programs, including the impact of a $30
million charge recorded in 2003 related to a NASA satellite
program. In Launch Services, operating profit increased by $35
million. The increase was primarily due to improved perform-
ance and risk retirement activities on the maturing Titan pro-
gram, which were partially offset by the impact of a decline in
Proton launches in 2003. S&DMS’ operating profit increased
by $20 million due to the impact of the volume increases dis-
cussed above.
The increase in backlog during 2004 as compared to 2003
was mainly due to an increase in orders for government satel-
lites, launch services and missile defense activities.
Integrated Systems & Solutions
Integrated Systems & Solutions’ operating results included the
following:
(In millions) 2004 2003 2002
Net sales $3,850 $3,420 $3,015
Operating profit 334 291 241
Backlog at year-end 4,586 4,350 3,556
Net sales for IS&S increased by 13% in 2004 as compared
to 2003 and by 13% for 2003 over 2002. For both comparative
periods, the sales increases were primarily attributable to a
higher volume of intelligence, defense and information assur-
ance activities.
Operating profit for the segment increased 15% in 2004 as
compared to 2003 and by 21% for 2003 over 2002. The increases
in operating profit for both comparative periods were primarily
attributable to higher volume and performance improvements
on the activities described above.
Information & Technology Services
Information & Technology Services’ operating results included
the following:
(In millions) 2004 2003 2002
Net sales $3,801 $3,174 $3,104
Operating profit 285 226 177
Backlog at year-end 4,560 4,817 4,617
Net sales for I&TS increased by 20% in 2004 as compared
to 2003. The increase in sales was primarily attributable to
higher volume of $510 million in Information Technology.
Information Technology’s sales improved due to organic
growth, as well as the net impact of our purchase of Affiliated
Computer Services’ federal government IT business and the
concurrent sale of our commercial IT business in November
2003. The remaining increase in sales of $120 million was pri-
marily attributable to higher volume in Defense Services, which
offset a decline in NASA sales.
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Lockheed Martin Corporation