BAE Systems 35 Annual Report 2017 Segmental review We report our performance through five principal reporting segments.1 06 Alternative performance measure definitions Electronic Cyber & Platforms & Platforms & Platforms & Systems Intelligence Services Services Services (US) (UK) (International) 36 40 44 48 52 Employees2 Employees2 Employees2 Employees 2 Employees 2 1 4,400 1 0,900 1 1,400 30,100 1 3,800 Financial performance measures As defined by the Group Defined in IFRS3 KPI KPI KPI KPI Net cash Operating flow from Underlying Return business Order Order Operating Return operating Sales EBITA on sales cash flow intake2 backlog2 Revenue profit/(loss) on revenue activities Year ended 31 December 2017 £m £m % £m £m £bn £m £m % £m Electronic Systems 3,635 562 15.5 450 4,175 5.4 3,635 542 14.9 569 Cyber & Intelligence 1,820 52 2.9 116 1,859 2.1 1,820 (367) (20.2) 127 Platforms & Services (US) 2,928 242 8.3 222 3,542 4.6 2,825 218 7.7 286 Platforms & Services (UK) 7,682 794 10.3 427 6,817 16.8 7,624 774 10.2 607 Platforms & Services (International) 4,138 472 11.4 671 4,365 13.3 3,136 427 13.6 669 HQ4 287 (88) (134) 288 – – (114) (134) Deduct Intra-group (864) (789) (1.0) (718) Deduct Taxation5 (227) Total 19,626 2,034 10.4 1,752 20,257 41.2 18,322 1,480 8.1 1,897 We use financial performance measures as defined by the Group to monitor the underlying financial performance of the Group’s reporting segments. Reconciliations from these measures to the financial performance measures defined in IFRS are provided in the Group financial3 review on pages 28 to 34. Reconciliations by reporting segment for revenue and operating profit are included in note 1 to the Group accounts (see page 148) and for net cash flow from operating activities in note 24 to the Group accounts (see page 187). 1. Effective 1 January 2018, BAE Systems revised its reporting segments to reflect the organisational changes described on page 17. See page 56 for more information. 2. Including share of equity accounted investments. 3. International Financial Reporting Standards. 4. HQ comprises the Group’s head office activities, together with a 49% interest in Air Astana. 5. Taxation is managed on a Group-wide basis.