Raytheon 2014 Annual Report Download - page 68

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59
Space and Airborne Systems
% Change
(In millions, except percentages) 2014 2013 2012
2014
compared
to 2013
2013
compared
to 2012
Total Net Sales $ 6,072 $ 6,371 $ 6,823 (4.7)% (6.6)%
Total Operating Expenses
Cost of sales—labor 2,221 2,446 2,452 (9.2)% (0.2)%
Cost of sales—materials and subcontractors 2,007 2,166 2,567 (7.3)% (15.6)%
Other cost of sales and other operating expenses 998 839 816 19.0 % 2.8 %
Total Operating Expenses 5,226 5,451 5,835 (4.1)% (6.6)%
Operating Income $ 846 $ 920 $ 988 (8.0)% (6.9)%
Operating Margin 13.9% 14.4% 14.5%
Change in Operating Income (in millions)
Year
Ended
2014
Versus
Year Ended
2013
Year Ended
2013
Versus Year
Ended 2012
Volume $(33)$(56)
Net change in EAC adjustments (1)(46)
Mix and other performance (40)34
Total Change in Operating Income $(74)$(68)
% Change
(In millions, except percentages) 2014 2013 2012
2014
compared
to 2013
2013
compared
to 2012
Bookings $ 5,410 $ 5,996 $ 6,607 (9.8)% (9.2)%
Total Backlog 6,930 7,751 7,440 (10.6)% 4.2 %
SAS is a leader in the design and development of integrated sensor and communication systems for advanced missions,
including traditional and non-traditional ISR, precision engagement, unmanned aerial operations, and space. Leveraging
advanced concepts, state-of-the-art technologies and mission systems knowledge, SAS provides EO/IR sensors, airborne
radars for surveillance and fire control applications, lasers, precision guidance systems, signals intelligence systems, processors,
electronic warfare systems, communication systems, and space-qualified systems for civil and military applications. Key
customers include the U.S. Navy, Air Force and Army, as well as classified and international customers.
Total Net Sales—The decrease in total net sales of $299 million in 2014 compared to 2013 was primarily due to lower
intersegment sales of $163 million principally driven by lower volume on contracts supporting U.S. Army ground sensor
systems, lower net sales of $144 million on classified programs, lower net sales of $101 million on certain intelligence,
surveillance and reconnaissance systems programs principally driven by reduced program requirements, and lower net sales
of $68 million on integrated communications systems programs principally driven by lower U.S. Army and U.S. Air Force
customer requirements on tactical communications systems. The decrease in total net sales was partially offset by higher net
sales of $132 million on an electronic warfare systems contract driven by cost and schedule requirements.
The decrease in total net sales of $452 million in 2013 compared to 2012 was primarily due to lower net sales of $197 million
on certain classified programs and $119 million on certain intelligence, surveillance and reconnaissance programs due to
reduced program requirements.
Total Operating Expenses—The decrease in total operating expenses of $225 million in 2014 compared to 2013 was due to
decreases in labor costs of $225 million and materials and subcontractors costs of $159 million, partially offset by an increase
in other cost of sales and other operating expenses of $159 million. The decrease in labor costs was principally driven by the