Lockheed Martin 2002 Annual Report Download - page 35

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FORTY-TWO
Lockheed Martin Corporation
MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
December 31, 2002
The Technology Services segment has a business unit
which provides services to the government of Argentina. At
December 31, 2002, we had investments in and advances to
the business unit totaling about $30 million. While we expect
that these amounts will be recoverable, there is always the
potential that further devaluation of the Argentine peso, deteri-
oration in the Argentine economy or other factors could
adversely affect our ability to recover those amounts.
Unallocated Corporate Income (Expense), Net
The following table shows the components of unallocated
Corporate income (expense), net:
(In millions) 2002 2001 2000
UNALLOCATED CORPORATE
INCOME (EXPENSE), NET
Unusual items $(1,112) $(973) $(685)
FAS/CAS adjustment 243 360 309
Other 711 66
$(862) $(602) $(310)
For information about unusual items, see the table under
the previous discussion of continuing operations.
The difference between pension costs calculated and
funded in accordance with CAS and pension expense or income
determined in accordance with FAS 87 is not included in seg-
ment operating results and therefore is a reconciling item
between operating profit from the business segments and consol-
idated operating profit (FAS/CAS adjustment). The CAS fund-
ing amount is allocated among the business segments and is
included as an expense item in the segments’ cost of goods
sold. This cost is also passed along to our customers through
contract pricing, and is consequently included in the segments’
sales. The following table shows the CAS funding that is
included as expense in the segments’ operating results, the
related FAS income, and the FAS/CAS adjustment:
(In millions) 2002 2001 2000
FAS 87 income $156 $354 $302
CAS funding and expense (87) (6) (7)
FAS/CAS adjustment—income $243 $360 $309
BACKLOG
Total negotiated backlog was $70.4 billion at December 31,
2002. This amount includes both funded backlog (unfilled
firm orders for our products for which funding has been both
authorized and appropriated by the customer—Congress in the
case of U.S. Government agencies) and unfunded backlog
(firm orders for which funding has not been appropriated).
Funded backlog was $36.1 billion at December 31, 2002.
The following table shows total backlog by segment at the
end of each of the last three years:
(In millions) 2002 2001 2000
BACKLOG
Systems Integration $17,671 $17,027 $16,706
Space Systems 12,620 12,977 15,505
Aeronautics 35,477 36,149 17,570
Technology Services 4,617 5,116 5,295
$70,385 $71,269 $55,076
Negotiated Backlog
(In billions)
2001
0
20
40
60
$80
20002002
Technology Services
Aeronautics
Space Systems
Systems Integration