Raytheon 2012 Annual Report Download - page 60

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52
Integrated Defense Systems
% Change
(In millions, except percentages) 2012 2011 2010
2012
compared
to 2011
2011
compared
to 2010
Total Net Sales $ 5,037 $ 4,958 $ 5,470 1.6 % (9.4)%
Total Operating Expenses
Cost of sales—labor 1,788 1,813 1,910 (1.4)% (5.1)%
Cost of sales—materials and subcontractors 1,676 1,613 2,006 3.9 % (19.6)%
Other cost of sales and other operating expenses 655 696 684 (5.9)% 1.8 %
Total Operating Expenses 4,119 4,122 4,600 (0.1)% (10.4)%
Operating Income $ 918 $ 836 $ 870 9.8 % (3.9)%
Operating Margin 18.2% 16.9% 15.9%
Change in Operating Income (in millions)
Year
Ended
2012
Versus
Year Ended
2011
Year Ended
2011 Versus
Year Ended
2010
Volume $1
$(73)
Net change in EAC adjustments —34
Mix and other performance 81 5
Total Change in Operating Income $ 82 $(34)
% Change
(In millions, except percentages) 2012 2011 2010
2012
compared
to 2011
2011
compared
to 2010
Bookings $ 4,668 $ 6,392 $ 3,269 (27.0)% 95.5%
Total Backlog 9,431 9,766 8,473 (3.4)% 15.3%
IDS is a leader in integrated air and missile defense, radar solutions, and naval combat and ship electronic systems. IDS
delivers combat-proven performance against the complete spectrum of airborne and ballistic missile threats and is a world
leader in the technology, development and production of sensors and mission systems. IDS provides solutions to the U.S.
Department of Defense (DoD), its services and agencies, and numerous international customers which represent approximately
half of IDS’ business.
Total Net Sales—Total net sales in 2012 were relatively consistent with 2011. Included in total net sales in 2012 was higher
net sales of $281 million on an international Patriot program awarded in the second quarter of 2011 as the program transitioned
into full production, $194 million on a missile defense radar program for an international customer as the program transitioned
into full production, and $155 million on various Patriot programs for an international customer, driven principally by scheduled
program production requirements. The increase was partially offset by $210 million of lower net sales from the scheduled
completion of certain design and production phases on an international Patriot program awarded in the first quarter of 2008,
$164 million from the scheduled completion of certain design and production phases on a U.S. Navy combat systems program,
and $144 million of lower net sales on various global integrated sensors programs. The remaining change in total net sales
was spread across numerous programs with no individual or common significant driver.
The decrease in total net sales of $512 million in 2011 compared to 2010 was primarily due to $316 million of lower net sales
from the scheduled completion of certain design and production phases on a U.S. Navy combat systems program and the
deferment of certain work due to the U.S. Navy's extension of the program schedule, and $175 million of lower net sales, as
planned, on an international Patriot program driven principally by lower volume due to completion of scheduled design and
certain production efforts.