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34
Network & Space Systems
Operating Results
(Dollars in millions)
Years ended December 31, 2013 2012 2011
Revenues $8,512 $7,911 $8,964
% of total company revenues 10% 10% 13%
Earnings from operations $719 $562 $759
Operating margins 8.4% 7.1% 8.5%
Contractual backlog $9,832 $10,078 $9,429
Unobligated backlog $6,076 $6,937 $6,437
Revenues
N&SS revenues in 2013 increased by $601 million compared with 2012 primarily due to higher revenue
of $364 million on the Space Launch System program awarded in the fourth quarter of 2012 and higher
revenues of $329 million in our commercial satellite programs. This increase was partially offset by lower
revenues of $196 million on our electronic and information solutions programs.
N&SS revenues in 2012 decreased by $1,053 million or 12% compared with 2011 primarily due to $835
million of lower revenues on the Brigade Combat Team Modernization (BCTM) program, which was
terminated for convenience during 2011. In addition, customer funding constraints on the GMD program
and conclusion of the Space Shuttle program in 2011 reduced revenues by a total of $251 million. These
decreases were partially offset by higher Space & Intelligence Systems revenues of $178 million due to
larger volume of deliveries in 2012.
Delta launch and new-build satellite deliveries were as follows:
Years ended December 31, 2013 2012 2011
Commercial and civil satellites 331
Military satellites 473
Earnings From Operations
N&SS earnings from operations in 2013 increased by $157 million or 28% compared with 2012 primarily
due to higher revenues and mix in our civil and commercial satellite programs and the Space Launch
Systems program. These increases were partially offset by lower earnings from our United Space Alliance
(USA) joint venture reflecting a gain of $39 million recorded in the third quarter of 2012 related to the
termination and settlement of USA's defined benefit pension plans. The impact of net favorable cumulative
contract catch-up adjustments was not significant in 2013.
N&SS earnings from operations in 2012 decreased by $197 million or 26% compared with 2011 primarily
due to lower revenues on the BCTM program and a $42 million charge related to a contract restructure of
an electronic and mission system program. Net favorable cumulative contract catch-up adjustments were
$56 million lower in 2012 than in 2011 primarily reflecting the $42 million charge described above.
N&SS earnings from operations include equity earnings of $171 million, $180 million and $194 million from
the USA joint venture and the United Launch Alliance (ULA) joint venture in 2013, 2012 and 2011,
respectively.