Raytheon 2007 Annual Report Download - page 73

Net Sales. The increase in sales in 2007 of $603 million was primarily due to $485 million of increased volume on certain
U.S. Army programs, including an integrated ground combat surveillance program, a weapon locating radar program,
the Improved Target Acquisition System program and a communications program.
The increase in sales in 2006 was due to accelerated production on certain contracts at the customer’s request in support
of the Iraqi Freedom campaign mainly in the Combat Systems product line. The increase in sales was also due to the
continued ramp up in the Future Combat System Ground Sensor Integrator program (FCS-GSI). This growth was
partially offset by the continued ramp down on Thermal Weapon Site (TWS) and by a slowing in the secondary air traffic
radar market.
Operating Income and Margin. The increase in operating income of $127 million and margin improvement in 2007 was
primarily due to $98 million of improved program performance and volume on certain U.S. Army programs.
The increase in operating income and margin in 2006 was driven by increased volume and continued program
performance improvements.
Backlog and Bookings. The 2007 backlog and bookings remained relatively consistent with 2006. In 2007, NCS booked
$725 million on various U.S. Army programs including the Long Range Advanced Scout Surveillance Systems program,
the Firefinder locating radar program, SATCOM on the move systems to the U.S. Army for use on the Mine Resistant
Ambush Protected vehicle, and the Horizontal Technology Integration (HTI) program. NCS also booked $159 million
for development work on the U.S. Navy Multiband Terminal (NMT) contract and $121 million on the Commander’s
Independent Viewers (CIVs) program.
The $752 million increase in backlog in 2006 compared to 2005 was mainly driven by certain U.S. Army programs
booked in the fourth quarter of 2006. The $339 million increase in bookings in 2006 compared to 2005 was mainly driven
by increased bookings in 2006 including $363 million to provide HTI forward-looking infrared kits and systems to the
U.S. Army and $447 million on two contracts for our Improved Target Acquisition System (ITAS) for the U.S. Army and
Marines. In 2005, NCS booked $484 million for the FCS-GSI contract.
Space and Airborne Systems (SAS)
% Change
(In millions except percentages) 2007 2006 2005
2007
compared
to 2006
2006
compared
to 2005
Net Sales $4,288 $4,319 $4,175 -0.7% 3.4%
Operating Income 560 604 606 -7.3% -0.3%
Operating Margin 13.1% 14.0% 14.5%
Gross Bookings $3,997 $4,021 $3,996 -0.6% 0.6%
Total Backlog 5,276 5,591 5,220 -5.6% 7.1%
SAS designs and develops integrated systems and solutions for advanced missions including intelligence, surveillance and
reconnaissance, precision engagement, unmanned aerial operations, special forces operations and space. In 2007, The
Boeing Company selected SAS to supply advanced electronically scanned array (AESA) radar systems for the entire fleet
of 224 U.S. Air Force F-15E aircraft. SAS was also selected for the U.S. Army common sensor payload program for
manned and unmanned aircraft, which covers the integration, production and mission support of airborne electro-
optical/infrared (EO/IR) sensor payloads for several Army aviation platforms. In addition, SAS expanded its international
activity with the award of contracts to deliver 79 radar warning receivers to the Royal Australian Air Force.
Net Sales. The decrease in sales in 2007 of $31 million was primarily due to lower volume of $93 million on a sensor
program partially offset by higher volume on certain airborne radar and classified programs.
The increase in sales in 2006 was primarily due to increased production on a sensor program. Sales also increased due to
additional orders for Hunter Strike targeting systems and a follow-on contract for International Greek Advanced Self-
Protection Integrated Suite (ASPIS) electronic warfare products, partially offset by the restructuring of certain space programs.
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