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Income statement for the year ended 31 December
2022 £m 2021 Re-presented1 £m 2020 £m 2019 £m 2018 £m
Continuing operations
Sales2
Electronic Systems 5,057 4,491 4,557 4,439 3,965
Platforms & Services 3,688 3,395 3,503 3,337 3,005
Air 7,698 7,449 7,910 7,457 6,712
Maritime 4,598 4,169 3,257 3,116 2,975
Cyber & Intelligence 2,205 1,923 1,812 1,732 1,678
HQ 420 281 190 387 350
Intra-group sales (410) (398) (367) (359) (278)
23,256 21,310 20,862 20,109 18,407
Underlying EBIT3
Electronic Systems 838 766 674 n/a n/a
Platforms & Services 326 259 190 n/a n/a
Air 849 772 909 n/a n/a
Maritime 356 351 279 n/a n/a
Cyber & Intelligence 232 179 135 n/a n/a
HQ (122) (122) (150) n/a n/a
2,479 2,205 2,037 - -
Underlying EBITA4
Electronic Systems n/a n/a n/a 687 606
Platforms & Services n/a n/a n/a 267 210
Air n/a n/a n/a 887 859
Maritime n/a n/a n/a 268 209
Cyber & Intelligence n/a n/a n/a 91 111
HQ n/a n/a n/a (83) (67)
- - 2,117 1,928
Adjusting Items5
Profit/(loss) on business transactions 94 158 (5) 9 (40)
Profit on sale of investment property - 182 - - -
Settlement gain on transfer of US pension liabilities - - 64 - -
Impairment - inventory write down re business exited in 2018 - - (13) - -
Derecognition of intangible assets - - - (36) -
Guaranteed Minimum Pension equalisation charge - - (7) - (114)
Gain related to past services on the pension schemes 13 - - - -
Acquisition-related income/(costs) (16) 10 (20) - -
EBIT3 2,570 2,555 2,056 n/a n/a
EBITA4 n/a n/a n/a 2,090 1,774
Amortisation of programme, customer-related and other intangible assets, and impairment of intangibles2 (111) (101) (46) n/a n/a
Amortisation and impairment of intangible assets3 n/a n/a n/a (115) (118)
Financial and taxation expense of equity accounted investments (75) (65) (80) (76) (51)
Operating profit 2,384 2,389 1,930 1,899 1,605
Net finance costs (395) (279) (334) (273) (381)
Profit before taxation 1,989 2,110 1,596 1,626 1,224
Taxation expense (315) (198) (225) (94) (191)
Profit for the year 1,674 1,912 1,371 1,532 1,033
Balance sheet as at 31 December7
2022
£m		 2021
£m		 2020
£m		 20196
£m		 2018
£m
Intangible assets 12,644 11,716 11,745 10,371 10,658
Property, plant and equipment, right-of-use assets and investment property7 4,723 4,010 3,836 3,712 2,456
Equity accounted investments and other investments 886 630 409 441 442
Working capital7,8 (4,119) (3,740) (3,699) (3,378) (3,630)
Lease liabilities (1,582) (1,252) (1203) (1,291) -
Net other financial assets and liabilities (138) (1) 36 34 70
Group's share of the post-employment benefits surplus /(deficit) 646 (2,124) (4,485) (4,455) (4,029)
Net tax assets and liabilities 363 589 906 690 449
Net debt (2,023) (2,160) (2,718) (743) (904)
Net assets held for sale - - 94 130 106
Net Assets 11,400 7,668 4,921 5,511 5,618
Non-controlling interests (185) (232) (278) (104) (72)
Total equity attributable to equity holders of BAE Systems plc 11,215 7,436 4,643 5,407 5,546
Movement in net debt for the year ended 31 December
2022
£m		 2021
£m		 2020
£m		 2019
£m		 2018
£m
Net cash flow from operating activities 2,839 2,447 1,166 1,597 1,200
Deduct: Net capital expenditure9 (519) (209) (392) (454) (464)
Deduct: Principal element of lease payment and receipts (227) (207) (226) (230) -
Add back: Dividends received from equity accounted investments 94 57 27 142 57
Add back: Taxation 365 234 251 252 200
Operating business cash flow 2,552 2,322 826 1,307 993
Deduct: Taxation paid (365) (234) (251) (252) (200)
Deduct: Net interest paid (237) (224) (208) (205) (178)
Free Cash Flow10 1,950 1,864 367 850 615
Acquisitions and disposals (38) 213 (1,674) 74 41
Dividends paid (968) (979) (765) (780) (731)
Net (purchase)/sale of own shares (788) (368) - - 1
Other movements (including foreign exchange)11 (19) (172) 97 17 (78)
Net increase/(decrease) in net debt 137 558 (1,975) 161 (152)
Opening net debt (2,160) (2,718) (743) (904) (752)

Closing net debt

 

 (2,023) (2,160) (2,718) (743) (904)
Other information
           

2022
 2021
 2020
 2019
 2018
Continuing operations
Basic earnings per share - total (pence) 51.1 55.2 40.7 46.4 31.3
Basic earnings per share - underlying12 (pence) excluding tax benefit (derived from EBIT) 55.5 47.8 44.3 n/a n/a
Basic earnings per share - underlying13(pence) excluding one-off tax benefit (derived from EBITA) n/a n/a n/a 45.8 42.9
Basic earnings per share - underlying12 (pence) including tax benefit (derived from EBIT) 55.5 50.7 44.3 n/a n/a
Basic earnings per share - underlying13(pence) including one-off tax benefit (derived from EBITA) n/a n/a n/a 50.8 42.9
Order backlog14 including the Group's share of equity accounted investments (£bn) 58.9 44.0 45.2 45.4 48.4
Dividend per ordinary share (pence)15 27.0 25.1 23.7 23.2 22.2
Number of employees, excluding share of employees of equity accounted investments, at year end 84,000 82,000 81,000 79,000 78,000
Capital expenditure including leased assets16(£m) 780 697 715 715 498
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  1. With effect from 2022, the Group established a new Digital Intelligence business, bringing together our non-US digital and data capabilities to further strengthen how we deliver these services and capabilities for our customers. The new Digital Intelligence business is reported within the Cyber & Intelligence segment. In addition, our BAE Systems Australia business transitioned from the Air segment to the Maritime segment. Comparative segmental financial information for 2021 has been re-presented to reflect the new business structure. The information presented for 2018 to 2020 reflects the structure prior to the re-organisation.
  2. Revenue plus the Group's share of revenue of equity accounted investments, excluding subsidiaries' revenue from equity accounted investments.
  3. Operating profit excluding amortisation of programme, customer-related and other intangible assets, impairment of intangible assets, finance costs and taxation expense of equity accounted investments (EBIT) and adjusting items.
    Underlying EBIT has been used as a profitability measure from 2020.
  4. Operating profit excluding amortisation and impairment of intangible assets, finance costs and taxation expense of equity accounted investments (EBITA) and adjusting items.
    Underlying EBITA has been used as a profitability measure for 2018 - 2019 numbers.
  5. Adjusting items are items of financial performance which have been determined by management as being material by their size or incidence and not relevant to an understanding of the Group's underlying business performance. Adjusting items were referred to as non-recurring items in prior years. No change has been made to the definition of these items, but the name has been changed to reflect that some items could be considered recurring in nature. The Group's definition of adjusting items includes profit or loss on business transactions, the impact of substantively enacted tax rate changes, and costs incurred which are one-off in nature, for example non-routine costs or income relating to post-retirement benefit schemes, and other items which management has determined as not being relevant to an understanding of the Group's underlying business performance.
  6. With effect from 1 January 2019, the Group adopted IFRS 16 Leases. This results in almost all leases being recognised on the balance sheet by lessees. The Group has applied the modified retrospective transition approach and therefore has not restated comparative amounts for the year ended 31 December 2018.
  7. Funding received from the UK government for property, plant and equipment at Barrow-in-Furness, UK, was previously reported against the associated assets in property, plant and equipment, right-of-use assets and investment property. From 2022, costs reimbursed from the UK government for these works has been presented as working capital. The prior years have been re-presented to reflect this change.
  8. Inventories, plus trade, other & contract receivables and contract liabilities, trade & other payables, and provisions. 2018-2021 comparatives have been re-presented together as working capital to reflect the presentation in the 2022 Annual Report.
  9. Includes net expenditure on property, plant and equipment (net of proceeds from funding of assets), investment property, intangible assets, and other investments, and equity accounted investment funding.
  10. Free cash flow provides a measure of cash generated by the Group's operations after servicing debt and tax obligations, available for use in line with the Group's capital allocation policy.
  11. Includes cash flows from matured derivative financial instruments, foreign exchange, cash collateral and other non-cash movements.
  12. Basic earnings per share excluding amortisation of programme, customer-related and other intangible assets, impairment of intangible assets, non-cash finance movements on pensions and financial derivatives, and adjusting items (EBIT).
    13. Balance sheet as at 31 December
  13. Basic earnings per share excluding amortisation and impairment of intangible assets, non-cash finance movements on pensions and financial derivatives, and adjusting items (EBITA).
    Underlying EBITA has been used as a profitability measure for 2018 - 2019 numbers.
  14. Funded and unfunded unexecuted customer orders including the Group's share of order backlog of equity accounted investments. Unfunded orders include the elements of US multi-year contracts for which funding has not been authorised by the customer.
  15. An interim dividend of 13.8p per share was paid in 2020, in respect of the year ended 31 December 2019, having been proposed as a 2019 final dividend but deferred in light of the pandemic.
  16. Cash expenditure on the purchase of; property, plant and equipment, investment property, other investments, intangible assets, and equity accounted investment funding plus the principal element of finance lease payments net of funding received from the UK government relating to property, plant and equipment in Barrow-in-Furness, UK.

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