Raytheon 2011 Annual Report Download - page 62

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The increase in net sales of $171 million in 2010 compared to 2009 was primarily due to $108 million of higher net sales on
the SM-3 program, principally from higher volume driven by scheduled development efforts, $100 million of higher net sales
on the Advanced Medium-Range Air-to-Air Missiles (AMRAAM) program, principally from higher volume driven by
scheduled higher production build rates, $92 million of higher net sales on the tube-launched, optically-tracked, wireless-
guided (TOW) missile program, principally from higher volume driven by scheduled higher production build rates and $84
million of higher net sales on the Paveway™ program, principally from higher volume driven by scheduled production efforts
on an international award. The increase in net sales was partially offset by $96 million of lower net sales on a non line-of-
sight missile program, principally from lower volume, as the program received a stop work-order in the second quarter of
2010 and $82 million of lower net sales on the KEI program, which was terminated for convenience in the second quarter of
2009 as described above.
Total Operating Expenses—The decrease in operating expenses of $185 million in 2011 compared to 2010 was primarily due
to the activity on the SM-2, ESSM and SM-3 programs for the reasons described above in Total Net Sales, partially offset by
the activity in the SDB-II and Paveway™ programs for the reasons described above in Total Net Sales.
The increase in operating expenses of $120 million in 2010 compared to 2009 was primarily due to the activity on the SM-3,
AMRAAM, TOW missile and Paveway™ programs for the reasons described above in Total Net Sales, partially offset by the
activity on the non line-of-sight missile program and the KEI program for the reasons described above in Total Net Sales.
The increase in other cost of sales and other operating expenses of $45 million was primarily due to increased independent
research and development costs.
Operating Income and Margin—The increase in operating income of $43 million in 2011 compared to 2010 was primarily
due to a net change in EAC adjustments of $54 million, principally driven by the amount of EAC adjustments on our air
warfare systems programs, partially offset by lower volume of $26 million, driven principally by the programs described
above in Total Net Sales. Included in EAC adjustments in 2011 was a $21 million favorable contract resolution. Included in
contract mix and other performance in 2011 was a $15 million negative adjustment related to a contract settlement. The
increase in operating margin in 2011 compared to 2010 was primarily due to the net change in EAC adjustments described
above.
The increase in operating income of $51 million in 2010 compared to 2009 was primarily due to a change in contract mix and
other performance of $56 million, primarily in our air warfare systems product line due to the mix of contracts completing
and new contract awards. The increase in operating margin in 2010 compared to 2009 was primarily due to the change in
contract mix and other performance described above.
Backlog and Bookings—Backlog remained relatively consistent and was $8,570 million, $8,212 million and $7,657 million
at December 31, 2011, 2010 and 2009, respectively.
Bookings decreased $537 million in 2011 compared to 2010. In 2011, MS booked $1,402 million for the development of
SM-3 for the MDA, $696 million for the production of AMRAAM for the U.S. Air Force and international customers, $393
million for production of ESSM for the U.S. Navy and international customers, $374 million for Phalanx weapon systems for
the U.S. Navy and international customers, $311 million for the production of Excalibur for the U.S. Army, U.S. Marines,
and an international customer, $270 million for the production of Paveway™ for the U.S. Air Force and international customers,
$237 million for the production of SM-2 for the U.S. Navy and international customers, $225 million for a major classified
program, $210 million for production of Standard Missile-6 (SM-6) for the U.S. Navy, $191 million for the production of the
Joint Stand-off Weapon (JSOW) for the U.S. Navy and international customers, $152 million for the production of TOW
missiles for the U.S. Army, and $113 million for production of Miniature Air-Launch Decoy (MALD®) for the U.S. Air Force.
Bookings increased $937 million in 2010 compared to 2009. In 2010, MS booked $743 million for SM-3 for the MDA and
an international customer, $698 million for the production of AMRAAM for the U.S. Air Force and international customers,
$675 million on a classified program, $668 million for the production of Paveway™ for the Kingdom of Saudi Arabia and
other international customers, $501 million for the production of Tomahawk missiles for the U.S. Navy and an international
customer, $451 million for engineering and manufacturing development of SDB II for the joint U.S. Air Force and U.S Navy
program, $425 million for the production of SM-2 for the U.S. Navy and international customers, $274 million for the production
of Rolling Airframe Missile (RAM) for the U.S. Navy and international customers, $271 million for the Phalanx Weapons
System for the U.S. Navy, Army and international customers, $262 million for development work on the Exoatmospheric Kill
Vehicle program for the MDA, $209 million for the production of AIM-9X Sidewinder short range air-to-air missiles for the