Table Of ContentD L A M I S S I O N
To provide best value logistics support to
America’s Armed Forces, in peace and war . . .
around the clock, around the world.
D L A V I S I O N
Right Item, Right Time, Right Place, Right Price.
Every Time . . . Best Value Solutions
For America’s Warfighters.
D E F E N S E L O G I S T I C S A G E N C Y
W O R K I N G C A P I TA L F U N D
Annual Financial Statements
Fiscal Year 2003
(Unaudited)
DEFENSE LOGISTICS AGENCY WORKING CAPITAL FUND I
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ANNUAL FINANCIAL STATEMENTS
FISCAL YEAR 2003
Table of Contents
Message from the Director . . . . . . . . . . . . . . . . . . . . . .v
I. Consolidated
a. Management’s Discussion and Analysis . . . . . . . . . . . . .1
b. Consolidated and Combined Financial Statements . . . .13
c. Notes to the Consolidated and Combined
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . .19
d. Required Supplementary Stewardship Information . . . .45
e. Required Supplementary Information . . . . . . . . . . . . . .47
II. Supply Management
a. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
b. Comparative Financial Statements . . . . . . . . . . . . . . . .61
III. Distribution
a. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
b. Comparative Financial Statements . . . . . . . . . . . . . . . .73
IV. Reutilization and Marketing
a. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
b. Comparative Financial Statements . . . . . . . . . . . . . . . .83
V. Document Automation and Production Services
a. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
b. Comparative Financial Statements . . . . . . . . . . . . . . . .93
DEFENSE LOGISTICS AGENCY WORKING CAPITAL FUND III
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ANNUAL FINANCIAL STATEMENTS
FISCAL YEAR 2003
Message from the
Director
I’m pleased to present our Fiscal Year 2003 Financial Statements.
During the course of the year, we met the challenges of support-
ing our soldiers, sailors, marines, and airmen in both OPERA-
TION ENDURING FREEDOM and OPERATION IRAQI
FREEDOM and positioned ourselves to support the Department
of Defense transformation initiative. Collectively, these events
led us to the threshold of initiating monumental cultural and
structural changes within the Agency — changes that will
achieve efficiencies and operational effectiveness to lessen the
logistics footprint, but not the capability, safety, or health of our
fighting forces. accordingly, I am committed to executing a
comprehensive plan that leads to the best structure, business
processes, and workforce we can devise to support the warfight-
er at the least cost.
Because the environments — threat, risk, and theater — are so
fluid, we will no longer anticipate an “end state.” Our strategic
management system plans, consisting of the DLA Strategic Plan,
Balanced Score Card, and Enterprise Business Plan, will retain
both flexibility and agility as we manage the challenges of an
uncertain and ambiguous future. The successful deployment of
our enterprise resource planning system in the Non-Energy
supply segments of our mission and the underlying cultural
and organizational changes are critical events in executing our
overall strategy.
KEITH W. LIPPERT
Vice Admiral, SC, USN
Director
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D E F E N S E L O G I S T I C S A G E N C Y
W O R K I N G C A P I TA L F U N D
Consolidated Management’s
Discussion & Analysis
For the Fiscal Year Ended
September 30, 2003
DEFENSE LOGISTICS AGENCY WORKING CAPITAL FUND 1
CONSOLIDATED MANAGEMENT’S DISCUSSION & ANALYSIS
Description of the Defense Agency Strategic Goals and Strategies
Logistics Agency
We are actively engaged in the revolution of DoD business
affairs, including the significant advances made in the techno-
The Defense Logistics Agency (DLA) is the logistics combat logical sophistication, speed, and mobility of our armed forces.
support agency of the Department of Defense (DoD) and We are constantly adapting to the changing global logistics
receives its oversight and staff direction from the Deputy Under requirements, including the need to support smaller U.S. Forces
Secretary of Defense for Logistics and Materiel Readiness. Our as they respond to crises around the world, often in remote
primary mission is to provide best value logistics solutions to regions where roads, airfields, and seaports are primitive, if they
meet the needs of America’s Armed Forces around the clock and exist at all.
around the world in times of peace, national emergency, and war.
DLA has institutionalized a four-level approach to planning to
Execution of the U.S. national defense strategy is dependent on
formalize, align, and integrate a planning and performance meas-
the logistics support provided by DLA — where our reach
urement process. DLA’s Strategic Plan is the top level with its
extends from the home front to the frontlines and from dining
focus on long-term outcomes. The DLA Enterprise Balanced
facilities to foxholes. We support DoD objectives and missions
Scorecard (BSC) — our performance plan — is the second level,
through our involvement in the full range of military operations,
with an emphasis on identifying the strategies necessary to trans-
from our participation with multi-national forces engaged in
form the Agency in the mid-term. The Enterprise Business Plan
large-scale combat operation, peacekeeping, and humanitarian
(EBP) is the third level, highlighting the investments and actions
assistance to the global war on terrorism.
necessary to execute our strategies and realize our objectives and
DLA manages more than 4.6 million items and disseminates logis- the benefits of specific actions in the near term. The fourth level
tics cataloging information for approximately 6.7 million items is performance measurement, analysis, and reporting. This level
that support the DoD, other Federal Agencies, and U.S. interna- includes review and analysis of the Agency’s performance
tional partners. Among the materiel we manage are fuel and against the Strategic Plan, BSC, and EBP.
repair parts for weapon systems as well as food, clothing, and med-
Our Strategic Management System maps and tracks our trans-
ical supplies needed to deploy and sustain U.S. Forces. Through
formation strategies. During 2003, we revised our BSC and our
our network of supply depots, we receive, issue, and distribute
Strategic Plan to meet current customer transformational needs
most of these items and through our reutilization and marketing
and aligned both our BSC and Strategic Plan (imbedded with
services, we manage DoD programs to reutilize, transfer, donate,
our objectives and strategies) with the DoD Risk
or sell surplus and excess materiel, and dispose of hazardous
Framework/Scorecard. The color-coded alignment wheel, pro-
materiel. In addition to these logistics missions, we also adminis-
vided below, and an alignment matrix communicates —
ter the DoD document automation and production services.
throughout the Defense community — how DLA’s strategies
Our missions have evolved and grown over the past four decades and objectives are cross-mapped to the relevant DoD Scorecard
to an extent that if our forces fight with it, wear it, eat it, or burn elements.
it as fuel, we probably buy it; warehouse and distribute it; or
arrange for its reuse, sale, or disposal after the owner no longer
needs it.
Our Vision:
Right Item, Right Time, Right Place, Right Price, Every Time…
Best Value Solutions For America’s Warfighters.
2 DEFENSE LOGISTICS AGENCY WORKING CAPITAL FUND
Description:large-scale combat operation, peacekeeping, and humanitarian assistance to the . port offices located in Columbus, OH, and New Cumberland,.
