1995 Annual Report - Lockheed Martin

Management's Discussion and Analysis of Financial Condition and Results of Operations Continuedcommencement of activities under the Idaho National Engineering Laboratories Managementand Operations and Pit 9 contracts in the fourth quarter of 1994 and the January 1995 Materialsacquisition of the construction aggregates business of Dravo Corporation. The primary reasonfor the increase in 1994 net sales was the increase in sales of construction aggregates, reflectingimprovements in construction markets and increased production volume from acquisitionsand new activities.Operating profit for this segment increased by 39 percent in 1995 compared to 1994 and by15 percent in 1994 compared to 1993. The increase in 1995 was the result of the inclusion of a fullyear of activities under the Idaho National Engineering Laboratories Management and Operationscontract and earnings growth due to increased production volume at Materials. The increase in1994 was principally due to production volume growth in the Materials business.Negotiated BacklogBacklogTotal negotiated backlog of $41.1 billion at December 31, 1995 included both unfilled firm ordersfor the Corporation's products for which funding has been both authorized and appropriated by thecustomer (Congress, in the case of U.S. Government customers) and firm orders for which fundinghas not been appropriated. The following table shows total backlog by segment at the end of eachof the last three years:(In millions)199519941993BacklogSpace & Strategic MissilesAeronauticsInformation & Technology ServicesElectronicsEnergy, Materials and Other$16,26114,7754,6695,4128$15,92016,1464,8555,23873$14,05219,8225,5266,08723$41,125$42,232$45,510Total Space & Strategic Missiles backlog increased by two percent in 1995 as compared to 1994and by 13 percent in 1994 as compared to 1993. The increase in 1995 occurred principally becauseof growth in new orders for classified programs. The primary factor in the 1994 increase was theacquisition of backlog related to the former GD Space Systems.In the Aeronautics segment, total backlog decreased by eight percent in 1995 compared to 1994,having decreased by 19 percent in 1994 compared to 1993. For both years, the fighter aircraft backlogdecreased significantly, primarily reflecting deliveries of aircraft to the U.S. Government withoutthe addition of new orders. In 1995, this decrease was partially offset by the receipt of orders from theUnited Kingdom and Australia to provide 37 C-130J aircraft, with options for 58 additional aircraftfor those two nations and New Zealand.52