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52
Change in Operating Income (in millions)
Year Ended
2015
Versus Year
Ended 2014
Year Ended
2014
Versus Year
Ended 2013
Volume $ 60 $(47)
Net change in EAC adjustments (16)(55)
Mix and other performance (101)(39)
Total change in operating income $(57)$(141)
% Change
(In millions, except percentages) 2015 2014 2013
2015
compared
to 2014
2014
compared
to 2013
Bookings $ 7,044 $ 6,953 $ 5,869 1.3% 18.5%
Total Backlog 11,842 11,495 10,916 3.0% 5.3%
IDS is a leader in integrated air and missile defense; large land- and sea-based radar solutions; command, control,
communications, computers, cyber and intelligence (C5I™) solutions; and naval combat and ship electronic systems. IDS
delivers combat-proven performance against the complete spectrum of airborne and ballistic missile threats and is a world
leader in the technology, development, and production of sensors and mission systems. IDS provides solutions to the U.S.
Department of Defense (DoD) and the U.S. Intelligence Community, as well as more than 50 international customers which
represent approximately half of IDS’s business.
Total Net Sales—The increase in total net sales of $290 million in 2015 compared to 2014 was primarily due to higher net
sales of $385 million from an international Patriot program awarded in the second quarter of 2015 driven by program activity
and the recognition of previously deferred precontract costs, $320 million of higher net sales from an international Patriot
program awarded in the fourth quarter of 2014, $161 million of higher net sales on the Air Warfare Destroyer (AWD) program
driven by additional scope awarded in the fourth quarter of 2014 and higher net change in EAC adjustments as discussed
below, and $144 million of higher net sales from an international air and missile defense system program awarded in the fourth
quarter of 2013 due to scheduled production phases. The higher net sales were partially offset by lower net sales of $510
million from the scheduled completion of certain production phases on various Patriot programs for international customers
and $227 million from the scheduled completion of certain production phases on our missile defense radar programs.
The decrease in net sales of $404 million in 2014 compared to 2013 was primarily due to lower net sales of $441 million from
the scheduled completion of certain production phases on various Patriot programs for international customers, $134 million
on a close combat tactical radar program due to planned decreases in production, and $134 million on a missile defense radar
program for an international customer also due to planned decreases in production. The decrease was partially offset by $203
million of higher net sales from an international air defense system program awarded in the fourth quarter of 2013, $154
million of higher net sales from an international Patriot program awarded in the first quarter of 2014 and $135 million of
higher net sales from an international Patriot program awarded in the fourth quarter of 2014 driven primarily by previously
deferred precontract costs. The remaining decrease was spread across numerous programs with no individual or common
significant driver.
Total Operating Expenses—The increase in total operating expenses of $347 million in 2015 compared to 2014 was primarily
due to an increase in materials and subcontractors costs of $328 million, driven principally by the activity on the international
Patriot program awarded in the fourth quarter of 2014 and the international air and missile defense system program awarded
in the fourth quarter of 2013 described above in Total Net Sales.
The decrease in total operating expenses of $263 million in 2014 compared to 2013 was primarily due to a decrease in labor
costs of $233 million, principally driven by the activity on the various Patriot programs for international customers and the
missile defense radar program for an international customer described above in Total Net Sales, partially offset by increased
labor costs on a naval radar program awarded in the fourth quarter of 2013.
Operating Income and Margin—The decrease in operating income of $57 million in 2015 compared to 2014 was primarily
due to a change in mix and other performance of $101 million, partially offset by an increase in volume of $60 million. The