Lockheed Martin 2007 Annual Report Download - page 55

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Air Mobility sales declined by $535 million primarily due to C-130J deliveries (12 in 2006 compared to 15 in 2005) and
lower volume on the C-5 program. Combat Aircraft sales increased by $292 million mainly due to higher F-35 and F-22
volume, partially offset by reduced volume on F-16 programs. Other Aeronautics programs sales increased by $83 million
primarily due to higher volume in sustainment services activities.
Operating profit for the segment increased 21% in 2007 compared to 2006. Operating profit increases in Combat
Aircraft more than offset decreases in Other Aeronautics programs and Air Mobility. Combat Aircraft operating profit
increased $326 million mainly due to improved performance on F-22 and F-16 programs. Air Mobility and Other
Aeronautics programs declined $77 million due to lower operating profit in support and sustainment activities.
Operating profit for the segment increased 20% in 2006 compared to 2005. Operating profit increased in both Combat
Aircraft and Air Mobility. Combat Aircraft increased $114 million, mainly due to higher volume on the F-35 and F-22
programs, and improved performance on F-16 programs. The improvement for the year was also attributable in part to the
fact that in 2005, operating profit included a reduction in earnings on the F-35 program. Air Mobility operating profit
increased $84 million, mainly due to improved performance on C-130J sustainment activities in 2006.
Backlog decreased in 2007 as compared to 2006 primarily as a result of sales volume on the F-35 program. This
decrease was offset partially by increased orders on the F-22 and C-130J programs.
Electronic Systems
Electronic Systems’ operating results included the following:
(In millions) 2007 2006 2005
Net sales $11,143 $10,519 $ 9,811
Operating profit 1,410 1,264 1,078
Backlog at year-end 21,200 19,700 18,600
Net sales for Electronic Systems increased by 6% in 2007 compared to 2006. Sales increased in Missiles & Fire Control
(M&FC), Maritime Systems & Sensors (MS2), and Platform, Training & Energy (PT&E). M&FC sales increased $258
million mainly due to higher volume in fire control systems and air defense programs, which more than offset declines in
tactical missile programs. MS2 sales grew $254 million due to volume increases in undersea and radar systems activities that
were offset partially by decreases in surface systems activities. PT&E sales increased $113 million, primarily due to higher
volume in platform integration activities, which more than offset declines in distribution technology activities.
Net sales for Electronic Systems increased by 7% in 2006 compared to 2005. Higher volume in platform integration
activities led to increased sales of $329 million at PT&E. MS2 sales increased $267 million primarily due to surface systems
activities. Air defense programs contributed to increased sales of $118 million at M&FC.
Operating profit for the segment increased by 12% in 2007 compared to 2006, representing an increase in all three lines
of business during the year. Operating profit increased $70 million at PT&E primarily due to higher volume and improved
performance on platform integration activities. MS2 operating profit increased $32 million due to higher volume on undersea
and tactical systems activities that more than offset lower volume on surface systems activities. At M&FC, operating profit
increased $32 million due to higher volume in fire control systems and improved performance in tactical missile programs,
which partially were offset by performance on certain international air defense programs in 2006.
Operating profit for the segment increased by 17% in 2006 compared to 2005. Operating profit increased by $74 million
at MS2 mainly due to higher volume on surface systems and undersea programs. PT&E operating profit increased $61
million mainly due to improved performance on distribution technology activities. Higher volume on air defense programs
contributed to a $52 million increase in operating profit at M&FC.
The increase in backlog during 2007 over 2006 resulted primarily from increased orders for certain tactical missile
programs and fire control systems at M&FC and platform integration programs at PT&E.
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