Raytheon 2006 Annual Report Download - page 69

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Funded Backlog(1) Total Backlog
Backlog at December 31 (In millions) 2006 2005 2004 2006 2005 2004
Integrated Defense Systems $ 4,088 $ 3,009 $ 3,454 $ 7,934 $ 8,010 $ 6,628
Intelligence and Information Systems 893 642 811 3,935 4,077 4,066
Missile Systems 5,135 4,443 4,517 9,504 8,040 8,341
Network Centric Systems 4,037 2,839 2,623 5,059 4,307 3,587
Space and Airborne Systems 2,770 2,851 3,127 5,591 5,220 5,216
Technical Services 1,020 916 939 1,572 1,594 1,773
Other 243 280 294 243 280 294
Total $18,186 $14,980 $15,765 $33,838 $31,528 $29,905
(1) Funded backlog excludes U.S. and foreign government contracts for which funding has not been appropriated.
Gross Bookings(1) (In millions) 2006 2005 2004
Integrated Defense Systems $ 4,118 $ 5,265 $ 3,494
Intelligence and Information Systems 2,701 2,537 2,272
Missile Systems 6,021 3,808 7,179
Network Centric Systems 4,037 3,698 3,219
Space and Airborne Systems 4,021 3,996 3,901
Technical Services 1,334 1,242 1,802
Other 769 787 752
Total $23,001 $21,333 $22,619
(1) The gross bookings in each year are influenced by timing of awards that may cover multiple fiscal years and exclude contract cancellations and
terminations.
Integrated Defense Systems (IDS)
% Change
(In millions except percentages) 2006 2005 2004
2006
versus
2005
2005
versus
2004
Net Sales $4,220 $3,807 $3,456 10.8% 10.2%
Operating Income 691 548 417 26.1% 31.4%
Operating Margin 16.4% 14.4% 12.1%
Gross Bookings 4,118 5,265 3,494 -21.8% 50.7%
Total Backlog 7,934 8,010 6,628 -0.9% 20.9%
IDS provides integrated solutions for ballistic missile defense, air defense, naval and maritime systems and homeland
security applications, which enable situational awareness and joint integrated fires. During 2006, IDS, as the prime
mission systems equipment integrator for all electronic and combat systems of the DDG 1000 Zumwalt Class Destroyer
program (DDG 1000), continued to make significant progress on the program. IDS also expanded its international
business and continued to evolve its products and technologies for use in other markets, such as homeland security.
Net Sales. The increase in sales in 2006 was primarily attributable to growth on the DDG 1000 program. The program
growth was due to the ramp up of the detail design and integration phase of the program during which we transitioned
into the prime contractor role. In addition, sales increased due to growth on certain international missile defense
programs primarily the Taiwan Early Warning Surveillance Radar System program. The increases were offset in part by
the completion of certain U.S. Navy programs. The increase in sales in 2005 was due to growth on the Cobra Judy
Replacement Mission Equipment program and increased volume on several international programs.
Operating Income and Margin. The increase in operating margin in 2006 was primarily due to performance
improvements from lean manufacturing initiatives on several domestic programs and performance improvements and
higher sales volume on certain international programs. The increase in operating margin in 2005 was due to higher sales
and program performance improvements on certain international programs. The 2007 margin is expected to be slightly
lower than 2006 primarily due to a higher mix of cost type development work which generally has lower margins.
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