1995 Annual Report - Lockheed Martin

Lockheed Martin Corporationof the 1994 sales variances described above, improved performance in C-130 programs and higherprofit margins in special tactical aircraft systems programs.Information & Technology ServicesNet sales of the Information & Technology Services segment increased by six percent in 1995compared to 1994, and by 15 percent for 1994 compared with 1993. The increase in this segmentin 1995 was caused primarily by increases in sales for commercial product manufacturing anddistribution activities. In addition, the segment recorded increased revenues in informationmanagement and space activities. The increase for 1994 compared to 1993 reflects increased salesof command control systems and information processing services as well as commercial productmanufacturing activities.Operating profit for the segment increased by 29 percent in 1995 compared to 1994 and by57 percent in 1994 compared to 1993. The variance in 1995 reflects increased award fee recognition,sales volume increases and continued improvements in margin performance throughout thesegment. The 1994 operating profit increase was principally the result of improved performancein commercial product manufacturing operations and improved margin performance throughoutthe segment.ElectronicsNet sales of the Electronics segment decreased by almost 19 percent in 1995 compared to 1994 afterremaining relatively flat in 1994 compared to 1993. The decrease in 1995 was primarily the result ofvolume decreases in various programs, particularly in AEGIS surface ship combat system programsand the AN/BSY-2 submarine combat system program. In addition, the 1995 sales performancerepresents an expected transition from mature production programs into new development programs.In 1994, sales gains from AEGIS programs were offset by sales decreases related to theLANTIRN targeting and navigation system, other fire control systems programs and certain radarand undersea surveillance systems.Operating profit for the segment decreased by 22 percent in 1995 compared with 1994,reflecting the sales volume decreases described above, the negative earnings implications ofcontract charges related to the LANTIRN program close-out and from investments in newbusinesses, and substantial completion of subcontract activities on the Patriot and other matureproduction programs. The 38 percent increase in operating profit for 1994 compared to 1993reflected the performance on the AEGIS program, fire control systems programs and armamentsystems programs, and improved margin expansion across the segment.Energy, Materials and OtherNet sales of this segment increased by 16 percent in 1995 compared with 1994 and by ten percentin 1994 compared with 1993. Sales for both Energy and Materials grew in 1995, reflecting the