Lockheed Martin 2007 Annual Report Download - page 56

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Information Systems & Global Services
Information Systems & Global Services’ operating results included the following:
(In millions) 2007 2006 2005
Net sales $10,213 $ 8,990 $8,233
Operating profit 949 804 720
Backlog at year-end 11,800 10,500 9,200
Net sales for IS&GS increased by 14% in 2007 compared to 2006. During the year, sales increased in Global Services,
Information Systems, and Mission Solutions. Global Services sales increased $609 million due to higher volume and growth
in mission services activities including the impact of the acquisition of PAE in September 2006. Information Systems sales
increased $401 million due to growth in information technology and the acquisition of MSD in February 2007. Higher
volume in mission and combat support activities accounted for the majority of the $216 million sales increase at Mission
Solutions.
Net sales for IS&GS increased by 9% in 2006 compared to 2005. During the year, sales increases in Global Services and
Mission Solutions more than offset declines in Information Systems. Global Services sales increased $761 million primarily
due to higher volume in mission services activities and the acquisition of PAE. Information Systems sales decreased $143
million primarily due to lower volume in information technology activities. At Mission Solutions, sales increased $140
million due to higher volume in global security solutions activities that more than offset declines in mission and combat
support solutions.
Operating profit for the segment increased by 18% in 2007 compared to 2006. During the year, operating profit
increased in all three lines of business. Mission Solutions operating profit increased $90 million due to higher volume in
mission and combat support solutions and aviation solutions activities. Global Services operating profit growth of $35
million was primarily attributable to the acquisition of PAE. Information Systems increased $34 million primarily due to
improved performance of information technology activities and the acquisition of MSD.
Operating profit for the segment increased by 12% in 2006 compared to 2005. During the year, operating profit
increased in all three lines of business. Higher volume in global security solutions activities accounted for the majority of the
$41 million increase in operating profit at Mission Solutions. Information Systems operating profit increased $34 million
mainly due to improved performance in information technology and systems integration activities. Operating profit increased
$15 million in Global Services primarily due to the acquisition of PAE.
The increase in backlog during 2007 over 2006 was due to increased orders in Mission Support activities and
Information Systems programs.
Space Systems
Space Systems’ operating results included the following:
(In millions) 2007 2006 2005
Net sales $ 8,203 $ 7,923 $ 6,820
Operating profit 856 742 605
Backlog at year-end 17,400 18,800 15,900
Net sales for Space Systems increased 4% in 2007 compared to 2006. During the year, sales increases at Satellites and
Strategic & Defensive Missile Systems (S&DMS) more than offset declines at Space Transportation. In Satellites, an
increase of $354 million was mainly driven by higher volume in government satellite activities, while commercial satellites
sales remained relatively flat. There were four commercial satellite deliveries during 2007 and five in 2006. Higher volume
in strategic missile programs accounted for the majority of a $225 million increase in sales at S&DMS. Space Transportation
sales declined $290 million. This decline was expected given the divestiture of the International Launch Services business
and the formation of the ULA joint venture in the fourth quarter of 2006. The Corporation no longer records sales on Atlas
launch vehicles and related support to the U.S. Government, as ULA is accounted for under the equity method of accounting.
This sales decline was offset partially by higher volume on the Orion program.
Net sales for Space Systems increased by 16% in 2006 compared to 2005. During the year, sales growth in Satellites and
S&DMS offset declines in Space Transportation. The $1.1 billion growth in Satellites sales was mainly due to higher volume
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