Raytheon 2012 Annual Report Download - page 62

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54
million to provide Patriot Guidance Enhanced Missile-Tactical (GEM-T) missiles for Kuwait, and $112 million on the Air &
Missile Defense Radar (AMDR) program for the U.S. Navy.
Intelligence and Information Systems
% Change
(In millions, except percentages) 2012 2011 2010
2012
compared
to 2011
2011
compared
to 2010
Total Net Sales $ 3,012 $ 3,015 $ 2,757 (0.1)% 9.4 %
Total Operating Expenses
Cost of sales—labor 1,264 1,214 1,232 4.1 % (1.5)%
Cost of sales—materials and subcontractors 1,078 1,138 1,169 (5.3)% (2.7)%
Other cost of sales and other operating expenses 423 504 513 (16.1)% (1.8)%
Total Operating Expenses 2,765 2,856 2,914 (3.2)% (2.0)%
Operating Income $ 247 $ 159 $ (157) 55.3 % 201.3 %
Operating Margin 8.2% 5.3% (5.7)%
Change in Operating Income (in millions)
Year
Ended
2012
Versus
Year Ended
2011
Year Ended
2011 Versus
Year Ended
2010
Volume $5
$(12)
Net change in EAC adjustments 75 297
Mix and other performance 831
Total Change in Operating Income $ 88 $ 316
% Change
(In millions, except percentages) 2012 2011 2010
2012
compared
to 2011
2011
compared
to 2010
Bookings $ 2,756 $ 3,217 $ 3,709 (14.3)% (13.3)%
Total Backlog 3,989 4,366 4,319 (8.6)% 1.1 %
IIS is a leader in global intelligence, surveillance and reconnaissance (ISR), advanced cyber solutions, and DoD space, weather
and environmental solutions. Approximately half of its business is for classified customers. Key customers include the U.S.
Intelligence Community, DoD agencies, the National Oceanic and Atmospheric Administration (NOAA), Department of
Homeland Security (DHS), and the National Aeronautics and Space Administration (NASA).
Total Net Sales— Total net sales in 2012 were relatively consistent with 2011. Included in total net sales in 2012 was $54
million of lower net sales on the UKBA Program as a result of the program termination. Also included in total net sales in
2012 was $75 million of higher net sales of cybersecurity solutions driven by recent acquisitions and increased customer
orders and $72 million of higher net sales on the Joint Polar Satellite System (JPSS) program primarily due to scheduled
design and production efforts. The remaining change in total net sales was primarily spread across numerous domestic programs
with no individual or common significant driver.
The increase in total net sales of $258 million in 2011 compared to 2010 was primarily due to the difference in net sales from
the UKBA Program. Net sales from the UKBA Program in 2010 were lower than 2011 by $240 million, primarily due to the
UKBA Program Adjustment, as described in Commitments and Contingencies beginning on page 72, which negatively
impacted 2010 net sales by $316 million. Also included in the increase in net sales was $85 million of higher net sales on a
GPS command, control, and mission capabilities program awarded in the first quarter of 2010, primarily as a result of scheduled
design and build efforts. The remaining change in total net sales was primarily spread across numerous domestic programs.