Raytheon 2012 Annual Report Download - page 66

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58
million for ESSM for the U.S. Navy and international customers, $122 million for the production of TOW missiles for U.S.
Army and international customers, and $114 million for the production of the JSOW for the U.S. Navy and international
customers.
Network Centric Systems
% Change
(In millions, except percentages) 2012 2011 2010
2012
compared
to 2011
2011
compared
to 2010
Total Net Sales $ 4,058 $ 4,497 $ 4,918 (9.8)% (8.6)%
Total Operating Expenses
Cost of sales—labor 1,405 1,482 1,531 (5.2)% (3.2)%
Cost of sales—materials and subcontractors 1,507 1,699 2,055 (11.3)% (17.3)%
Other cost of sales and other operating expenses 651 649 640 0.3 % 1.4 %
Total Operating Expenses 3,563 3,830 4,226 (7.0)% (9.4)%
Operating Income $ 495 $ 667 $ 692 (25.8)% (3.6)%
Operating Margin 12.2% 14.8% 14.1%
Change in Operating Income (in millions)
Year
Ended
2012
Versus
Year Ended
2011
Year Ended
2011 Versus
Year Ended
2010
Volume $(40)$(59)
Net change in EAC adjustments (1)(22)
Mix and other performance (131)56
Total Change in Operating Income $(172)$(25)
% Change
(In millions, except percentages) 2012 2011 2010
2012
compared
to 2011
2011
compared
to 2010
Bookings $ 4,089 $ 3,632 $ 4,034 12.6% (10.0)%
Total Backlog 4,364 4,160 4,912 4.9% (15.3)%
NCS leverages the capabilities of the network through communications, sensors, and command and control systems, to develop
and produce customer solutions for land combat modernization, international and domestic Air Traffic Management (ATM)
and other transportation systems, military and civil communications, and homeland security. NCS key customers include the
DoD, the U.S. Federal Aviation Administration (FAA) and other U.S. Government customers, as well as numerous international
customers.
Total Net Sales—The decrease in total net sales of $439 million in 2012 compared to 2011 was primarily due to $188 million
of lower net sales on U.S. Army sensor programs driven principally by planned declines in production, $105 million of lower
net sales on certain radio and communications programs driven principally by reduced customer program requirements, $85
million of lower net sales of acoustic sensor systems due to higher 2011 deliveries based on customer demand, $74 million
of lower net sales on various air traffic control programs due to planned declines in production and $61 million of lower net
sales on an international command, control, communications, computers and intelligence (C4I) program driven principally
by program schedule requirements. The lower net sales were partially offset by higher net sales of $109 million on a close
combat tactical radar program and higher net sales of $62 million on an air traffic control program due to planned increases
in production. The remaining change in net sales was spread across numerous programs with no individual or common
significant driver.