Raytheon 2012 Annual Report Download - page 69

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Total Operating Expenses—Total operating expenses in 2012 were relatively consistent with 2011. The increase in other cost
of sales and other operating expenses of $62 million was primarily due to the timing and amount of adjustments for loss
contracts.
The increase in total operating expenses of $384 million in 2011 compared to 2010 was primarily due to the activity described
above. The increase in materials and subcontractor costs of $188 million was driven primarily by the timing of program
requirements, principally on the ISR systems production programs and on the international airborne tactical radar program
for the reasons described above in Total Net Sales. The increases in labor of $109 million and in other cost of sales and other
operating expenses of $87 million compared to 2010 were primarily related to RAST.
Operating Income and Margin—The increase in operating income of $67 million in 2012 compared to 2011 was primarily
due to a net change in EAC adjustments of $51 million principally as a result of material and support efficiencies and contract
modifications on international tactical airborne radar programs and certain classified programs. Included in mix and other
performance in 2012 and 2011 was $22 million and $41 million, respectively, of acquisition-related costs for RAST.
The increase in operating income of $41 million in 2011 compared to 2010 was primarily due to higher volume of $43 million,
principally driven by the activity on the programs described above in Total Net Sales, and net change in EAC adjustments of
$16 million, driven primarily by the amount of EAC adjustments on an international airborne tactical radar program and on
an advanced targeting program, partially offset by a change in contract mix and other performance of $18 million. Included
in contract mix and other performance was $41 million of acquisition-related costs for RAST, partially offset by the 2011
impact of the mix of contracts completing and new contract awards. Operating margin in 2011 remained relatively consistent
with 2010.
Backlog and Bookings—Backlog remained relatively consistent and was $6,031 million, $5,864 million and $5,981 million
at December 31, 2012, 2011 and 2010, respectively.
Bookings increased by $713 million in 2012 compared to 2011. In 2012, SAS booked $617 million on radar contracts for
international customers, $205 million to provide Multi-Spectral Targeting Systems (MTS) for unmanned aerial vehicles to
the U.S. Air Force, $77 million for the production of radar warning receivers for the U.S. Navy, and $76 million for the
production of the Multi-Platform Radar Technology Insertion Program (MP-RTIP) surveillance system for NATO. In addition
to the bookings noted above, SAS booked $1,858 million on a number of classified contracts.
Bookings increased by $271 million in 2011 compared to 2010. In 2011, SAS booked $782 million on an international Active
Electronically Scanned Array (AESA) program for F-15's to the Kingdom of Saudi Arabia, $291 million for the production
of AESA radars for the U.S. Air Force, U.S. Navy and the Air National Guard, and $78 million on radar contracts for an
international customer. SAS also booked $954 million on a number of classified contracts.
In 2010, SAS booked $1,106 million on a number of classified contracts, including $332 million on a major classified space
program. In 2010, SAS also booked $618 million for the production of AESA radars for the U.S. Air Force, U.S. Navy, Air
National Guard and international customers and $90 million for the production of Advanced Countermeasures Electronic
System (ACES) for Egypt.