Lockheed Martin 2003 Annual Report Download - page 31

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The FAS/CAS pension adjustment represents the difference
between pension expense or income calculated for financial report-
ing purposes in accordance with FAS 87, and pension costs calcu-
lated and funded in accordance with U.S. Government CAS, which
are reflected in the business segment results. CAS is a major factor
in determining our pension funding requirements, and governs the
extent of allocability and recoverability of pension costs on govern-
ment contracts. The CAS expense is recovered through the pricing
of our products and services on U.S. Government contracts, and
therefore recognized in segment net sales. The results of operations
of the segments only include pension expense as determined and
funded in accordance with CAS rules.
This table shows net sales and operating profit of the business
segments and reconciles to the consolidated total.
(In millions) 2003 2002 2001
NET SALES
Aeronautics $10,202 $ 6,471 $ 5,355
Electronic Systems 8,991 8,685 8,079
Space Systems 6,021 5,287 4,801
Integrated Systems & Solutions 3,420 3,015 2,970
Information & Technology Services 3,174 3,104 2,763
Total business segments 31,808 26,562 23,968
Other 16 16 22
$31,824 $26,578 $23,990
OPERATING PROFIT
Aeronautics $ 690 $ 448 $ 329
Electronic Systems 858 875 816
Space Systems 403 279 225
Integrated Systems & Solutions 291 241 225
Information & Technology Services 226 177 114
Total business segments 2,468 2,020 1,709
Unallocated Corporate
(expense) income, net (449) (862) (602)
Impact of FAS 142 adoption ——(274)
$ 2,019 $ 1,158 $ 833
The following segment discussions also include information
relating to negotiated backlog for each segment. Total negotiated
backlog was $76.9 billion at December 31, 2003. This amount
included both funded backlog (unfilled firm orders for our products
and services for which funding has been both authorized and appro-
priated by the customer — Congress in the case of U.S.
Government agencies) and unfunded backlog (firm orders for
which funding has not yet been appropriated). Negotiated backlog
does not include unexercised options or task orders to be issued
under indefinite-delivery/indefinite-quantity (IDIQ) type contracts.
Funded backlog was $39.1 billion at December 31, 2003.
The Aeronautics segment generally includes fewer programs
that have much larger sales and operating results than programs
included in the other segments. Therefore, due to the large number
of comparatively smaller programs in the remaining segments, the
discussions of the results of operations of these business segments
generally focus on lines of business within the segments. The fol-
lowing tables of financial information and related discussions of
the results of operations of our business segments are consistent
with the presentation of segment information in Note 16 to the
financial statements.
Lockheed Martin Corporation
29