Raytheon 2012 Annual Report Download - page 70
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62
Technical Services
% Change
(In millions, except percentages) 2012 2011 2010
2012
compared
to 2011
2011
compared
to 2010
Total Net Sales $ 3,239 $ 3,353 $ 3,472 (3.4)% (3.4)%
Total Operating Expenses
Cost of sales—labor 1,076 1,100 998 (2.2)% 10.2 %
Cost of sales—materials and subcontractors 1,589 1,664 1,903 (4.5)% (12.6)%
Other cost of sales and other operating expenses 292 277 274 5.4 % 1.1 %
Total Operating Expenses 2,957 3,041 3,175 (2.8)% (4.2)%
Operating Income $ 282 $ 312 $ 297 (9.6)% 5.1 %
Operating Margin 8.7% 9.3% 8.6%
Change in Operating Income (in millions)
Year
Ended
2012
Versus
Year Ended
2011
Year Ended
2011 Versus
Year Ended
2010
Volume $(6)$(9)
Net change in EAC adjustments (33)11
Mix and other performance 913
Total Change in Operating Income $(30)$ 15
% Change
(In millions, except percentages) 2012 2011 2010
2012
compared
to 2011
2011
compared
to 2010
Bookings $ 2,551 $ 2,774 $ 2,631 (8.0)% 5.4 %
Total Backlog 2,336 2,586 2,654 (9.7)% (2.6)%
TS provides a full spectrum of technical and professional services to defense, federal, international and commercial customers
worldwide. It specializes in training, logistics, engineering services and solutions, product and operational support services
for the mission support, homeland security, space, civil aviation, counter proliferation and counterterrorism markets. Key
customers include all branches of the U.S. Armed Forces, as well as the Department of Homeland Security (DHS), NASA,
FAA, Department of State (DOS), Department of Energy (DOE), Defense Threat Reduction Agency (DTRA), international
governments and commercial entities.
Total Net Sales—The decrease in total net sales of $114 million in 2012 compared to 2011 was due to lower net sales of $121
million on the NSF Polar contract, which was completed in the first quarter of 2012.
The decrease in total net sales of $119 million in 2011 compared to 2010 was primarily due to $76 million of lower net sales
on a DTRA program which completed significant efforts at the end of 2010 and $60 million of lower net sales on training
programs, principally domestic training programs supporting the U.S. Army's Warfighter FOCUS activities due to a decrease
in customer determined activity levels, partially offset by $45 million of higher net sales on various depot services operations
programs, driven primarily by new contract awards.
Total Operating Expenses—The decrease in total operating expenses of $84 million in 2012 compared to 2011 was primarily
due to the activity on the programs and for the reasons described above in Total Net Sales. The $15 million increase in other
cost of sales and other operating expenses was due primarily to an increase in administrative and selling, and bid and proposal,
expenses.