Raytheon 2012 Annual Report Download - page 65

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offset by lower refurbishment costs due to scheduled lower production rates on the Phalanx program.
The decrease in total 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.
Operating Income and Margin—The increase in operating income of $26 million in 2012 compared to 2011 was primarily
due to the $43 million change in mix and other performance principally driven by a $15 million negative adjustment in 2011
related to a contract settlement, and prior period EAC adjustments on certain classified and close-in weapons systems programs,
which had an impact of $20 million, partially offset by the net decrease in EAC adjustments of $27 million, which included
a $21 million favorable contract resolution in 2011.
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.
Backlog and Bookings—Backlog was $10,030 million, $8,570 million and $8,212 million at December 31, 2012, 2011 and
2010, respectively. The increase in backlog of $1,460 million or 17% at December 31, 2012 compared to December 31, 2011
was primarily due to the higher 2012 bookings described below. Backlog at December 31, 2011 was relatively consistent with
December 31, 2010.
Bookings increased by $1,187 million in 2012 compared to 2011. In 2012, MS booked $1,421 million for the production and
development of SM-3 and $855 million for the production of Exoatmospheric Kill Vehicle (EKV) contract for the MDA, $710
million for Tomahawk for the U.S. Navy and international customers, $689 million for the production of Paveway™ for the
U.S. Air Force and international customers, $553 million for the production of Advanced Medium-Range Air-to-Air Missile
(AMRAAM) for the U.S. Air Force and international customers, $364 million for the production of Rolling Airframe Missile
(RAM) for the U.S. Navy and international customers, $356 million for the production of tube-launched, optically-tracked,
wireless-guided (TOW) missiles for the U.S. Army, $301 million for production of ESSM for the U.S. Navy and international
customers, $281 million for the production of Standard Missile-6 (SM-6) for the U.S. Navy, $216 million for AIM-9X
Sidewinder short range Air-To-Air Missiles for the U.S. Navy and international customers, $190 million for Phalanx weapon
systems for the U.S. Navy and international customers, and $105 million for production of Miniature Air-Launch Decoy
(MALD®) for the U.S. Air Force.
Bookings decreased by $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 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 MALD® for the U.S. Air Force.
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 EKV program for the MDA, $209 million for the production of AIM-9X
Sidewinder short range Air-to-Air missiles for the U.S. Navy and international customers, $198 million for the Javelin program
for the U.S. Army and international customers, $168 million on the MALD® for the U.S. Air Force, Army, and Navy, $147