UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): October 21, 2014
LOCKHEED
MARTIN CORPORATION
(Exact
name of registrant as specified in its charter)
Maryland |
1-11437 |
52-1893632 |
(State or other jurisdiction |
(Commission File Number) |
(IRS Employer |
of incorporation) |
|
Identification No.) |
|
|
|
6801 Rockledge Drive |
|
|
Bethesda, Maryland |
|
20817 |
(Address of principal executive offices) |
|
(Zip Code) |
(301) 897-6000 |
(Registrant’s
telephone number, including area code) |
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
| ¨ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item
2.02. Results of Operations and Financial Condition.
On
October 21, 2014, Lockheed Martin Corporation issued a news release reporting its financial results for the quarter ended September
28, 2014. A copy of the news release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Exhibit 99.1 shall not be
deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated
by reference in any filing under the Securities Act of 1933, as amended.
Item
9.01. Financial Statements and Exhibits.
Exhibit
No. |
|
Description |
|
|
|
99.1 |
|
Lockheed Martin Corporation News Release dated October 21, 2014
(earnings release for the quarter ended September 28, 2014). |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
|
|
Lockheed Martin
Corporation |
|
|
(Registrant) |
|
|
|
Date: October 21, 2014 |
By: |
/s/
Brian P. Colan |
|
|
Brian P. Colan |
|
|
Vice President and Controller |
EXHIBIT
INDEX
Exhibit
No. |
|
Description |
|
|
|
99.1 |
|
Lockheed Martin Corporation News Release dated October 21, 2014
(earnings release for the quarter ended September 28, 2014). |
Exhibit
99.1
News
Release
LOCKHEED
MARTIN REPORTS THIRD QUARTER 2014 RESULTS
| · | Net
sales decreased 2 percent to $11.1 billion |
| · | Net
earnings from continuing operations increased 5 percent to $888 million,
or $2.76 per
diluted share |
| · | Generated
cash from operations of $990 million |
| · | Increased
quarterly dividend rate 13 percent to $1.50 per share |
| · | Updates
2014 outlook and provides trend information for 2015 |
BETHESDA,
Md., Oct. 21, 2014 – Lockheed Martin Corporation [NYSE: LMT] today reported third quarter 2014 net sales of $11.1 billion
compared to $11.3 billion in the third quarter of 2013. Net earnings from continuing operations in the third quarter of 2014 were
$888 million, or $2.76 per diluted share, compared to $842 million, or $2.57 per diluted share, in the third quarter of 2013.
Cash from operations in the third quarter of 2014 was $990 million, compared to $900 million in the third quarter of 2013.
Third
quarter 2014 net earnings include FAS/CAS pension income of $84 million, which increased net earnings by $52 million, or
$0.16 per diluted share. FAS/CAS pension income reflects an approximate $55 million reduction in CAS pension costs due to the
enactment of The Highway and Transportation Funding Act of 2014 (HATFA), which lowered earnings by $35 million, or $0.11 per
diluted share. Third quarter 2013 net earnings include FAS/CAS pension expense of $121 million, which reduced net earnings by
$75 million, or $0.23 per diluted share.
“Although
we continue to face global economic challenges, our program and operational performance this quarter resulted in increased earnings
per share and strong cash generation,” said Chairman, President and CEO Marillyn Hewson. “As we look ahead to 2015,
we will remain focused on delivering for our customers, returning value to our shareholders, advancing our technologies and investing
in our people.”
Summary
Financial Results
The
following table presents the Corporation’s summary financial results prepared in accordance with U.S. generally accepted
accounting principles (GAAP).
|
(in millions, except per share
data) |
|
Quarters
Ended |
|
|
Nine
Months Ended |
|
|
|
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
|
Net sales |
|
$ |
11,114 |
|
|
$ |
11,347 |
|
|
$ |
33,070 |
|
|
$ |
33,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business segment operating profit |
|
$ |
1,346 |
|
|
$ |
1,455 |
|
|
$ |
4,181 |
|
|
$ |
4,331 |
|
|
|
Unallocated, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS pension income (expense)1 |
|
|
84 |
|
|
|
(121 |
) |
|
|
255 |
|
|
|
(362 |
) |
|
|
Other, net |
|
|
(38 |
) |
|
|
(80 |
) |
|
|
(186 |
) |
|
|
(298 |
) |
|
|
Total unallocated, net |
|
|
46 |
|
|
|
(201 |
) |
|
|
69 |
|
|
|
(660 |
) |
|
|
Consolidated operating profit |
|
$ |
1,392 |
|
|
$ |
1,254 |
|
|
$ |
4,250 |
|
|
$ |
3,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
888 |
|
|
$ |
842 |
|
|
$ |
2,710 |
|
|
$ |
2,462 |
|
|
|
Discontinued operations2 |
|
|
– |
|
|
|
31 |
|
|
|
– |
|
|
|
31 |
|
|
|
Net earnings |
|
$ |
888 |
|
|
$ |
873 |
|
|
$ |
2,710 |
|
|
$ |
2,493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
2.76 |
|
|
$ |
2.57 |
|
|
$ |
8.39 |
|
|
$ |
7.54 |
|
|
|
Discontinued operations2 |
|
|
– |
|
|
|
0.09 |
|
|
|
– |
|
|
|
0.09 |
|
|
|
Diluted earnings per share |
|
$ |
2.76 |
|
|
$ |
2.66 |
|
|
$ |
8.39 |
|
|
$ |
7.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from operations3 |
|
$ |
990 |
|
|
$ |
900 |
|
|
$ |
4,067 |
|
|
$ |
3,608 |
|
|
|
1
FAS/CAS pension income reflects both lower FAS pension expense and CAS pension costs for the third
quarter of 2014 compared to the same period in 2013. FAS pension expense is lower due to higher discount rates used
to calculate the Corporation’s qualified defined benefit obligations and net periodic benefit cost and the
impacts of the June 2014 plan amendments to certain of its defined benefit plans. CAS pension cost is lower due to
the effect of using a higher interest rate required by the HATFA. The HATFA was enacted on Aug. 8, 2014 and extends
the methodology in the Moving Ahead for Progress in the 21st Century Act of 2012 (MAP-21) to calculate the
interest rate assumption. The effect of adopting the HATFA reduced the Corporation’s CAS pension cost
by approximately $55 million (including about $35 million related to the first six months of 2014) in the
third quarter of 2014.
2
Discontinued operations for the third quarter and first nine months of 2013 include a benefit resulting from the
resolution of certain tax matters related to a business sold prior to 2013.
3
The Corporation made contributions to its defined benefit pension trust of $485 million and $1.0 billion during
the third quarter and first nine months of 2014, respectively, compared to $750 million and $1.5 billion during the third
quarter and first nine months of 2013, respectively. Additionally, the Corporation made net tax payments of $451 million
and $1.0 billion during the third quarter and first nine months of 2014, respectively, compared to $247 million and $387
million during the third quarter and first nine months of 2013, respectively. |
|
2014
Financial Outlook
The
following table and other sections of this news release contain forward-looking statements, which are based on the Corporation’s
current expectations. Actual results may differ materially from those projected. It is the Corporation’s practice not to
incorporate adjustments into its financial outlook for proposed acquisitions, divestitures, ventures, changes in law and restructuring
activities (including special items) until such items have been consummated or enacted. For additional factors that may impact
the Corporation’s actual results, refer to the “Forward-Looking Statements” section contained in this news release.
|
(in
millions, except per share data) |
|
Current
Update |
|
July
2014 |
|
|
|
|
|
|
|
|
|
Orders |
|
$41,500
– $43,000 |
|
$41,500
– $43,000 |
|
|
|
|
|
|
|
|
|
Net sales |
|
~$45,000 |
|
$44,000
– $45,500 |
|
|
|
|
|
|
|
|
|
Business segment operating profit |
|
~$5,500 |
|
$5,375
– $5,525 |
|
|
FAS/CAS pension
income1 |
|
~375 |
|
~445 |
|
|
Other, net |
|
~(275) |
|
~(345) |
|
|
Consolidated operating profit |
|
~$5,600 |
|
$5,475
– $5,625 |
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
~$11.15 |
|
$10.85
– $11.15 |
|
|
|
|
|
|
|
|
|
Cash from operations2 |
|
≥
$3,800 |
|
≥
$4,800 |
|
|
1
FAS/CAS pension income in the Current Update reflects lower CAS pension cost of approximately $70 million
due to the effect of using a higher interest rate required by the HATFA, of which about $55 million was recognized in
the third quarter of 2014.
2
Cash from operations in the Current Update includes the effect of $1.0 billion of incremental
pension contributions anticipated in the fourth quarter of 2014. |
|
2015
Financial Trends
The
Corporation expects 2015 net sales will decline at a low single digit rate from 2014 levels and that total business segment
operating margin will be in the 11.5 percent to 12.0 percent range. The Corporation’s preliminary outlook for 2015
assumes the U.S. Government continues to support and fund its key programs, consistent with the continuing resolution funding
measure through Dec. 11, 2014, and the U.S. Government approves budget legislation for government fiscal year (GFY) 2015
consistent with the President’s proposed budget. Changes in circumstances may require the Corporation to revise
its assumptions, which could materially change its current estimate of 2015 net sales and operating margin.
The
Corporation expects 2015 FAS/CAS pension income of approximately $650 million assuming a 4.25 percent discount rate at the end
of 2014, the same rate used for the re-measurement of its defined benefit pension obligations in June 2014, an 8.00 percent actual
return on plan assets in 2014, and incremental pension contributions of $1.0 billion anticipated in the fourth quarter of 2014,
among other assumptions. The
Corporation
does not expect to make contributions to its qualified defined benefit pension plans in 2015 through 2017. A change of
plus or minus 25 basis points to the assumed discount rate, with all other assumptions held constant, would result in
an incremental increase or decrease of approximately $120 million to the estimated 2015 FAS/CAS pension income.
The Corporation will finalize the postretirement benefit plan assumptions and determine the 2014 actual return on plan assets
on Dec. 31, 2014. The final assumptions and actual investment returns for 2014 may differ materially from those
discussed above.
Cash
Deployment Activities
The
Corporation’s cash deployment activities in the third quarters of 2014 and 2013 consisted of the following:
| · | repurchasing
2.6 million shares for $446 million during the third quarter of 2014, compared to 4.9 million shares for $607 million during the third quarter of 2013; |
| · | paying
cash dividends of $421 million during the third quarter of 2014, compared to $370 million
during the third quarter of 2013; |
| · | making
contributions to its pension trust of $485 million during the third quarter of 2014,
compared to $750 million during the third quarter of 2013; |
| · | paying
$450 million for acquisitions of businesses and investments in affiliates during the
third quarter of 2014, compared to $203 million during the third quarter of 2013; and |
| · | making
capital expenditures of $203 million during the third quarter of 2014, compared to $209 million during the third quarter of 2013. |
On
Sept. 25, 2014, the Board of Directors approved a $2.0 billion increase to the Corporation’s share repurchase program.
Inclusive of this increase, the total remaining authorization for future common share repurchases under the program was
$3.9 billion as of Sept. 28, 2014. The Corporation anticipates at least $2.0 billion of share repurchases in
2015, subject to market conditions and management’s discretion.
On
Sept. 25, 2014, the Corporation increased its quarterly dividend 13 percent, or $0.17 per share, to $1.50 per share beginning
with the payment to be made on Dec. 26, 2014 to stockholders of record as of the close of business on Dec. 1, 2014.
Segment
Results
The
Corporation operates in five business segments: Aeronautics, Information Systems & Global Solutions (IS&GS), Missiles
and Fire Control (MFC), Mission Systems and Training (MST) and Space Systems. The Corporation organizes its business segments
based on the nature of the products and services offered.
Operating
profit for the business segments includes the Corporation’s share of earnings or losses from equity method investees because
the operating activities of the equity method investees are closely aligned with the operations of the Corporation’s business
segments. United Launch Alliance (ULA), which is part of the Space Systems business segment, is the Corporation’s primary
equity method investee. Operating profit of the Corporation’s business segments excludes the FAS/CAS pension adjustment,
which represents the difference between total pension expense recorded in accordance with GAAP (FAS) and pension costs recoverable
on U.S. Government contracts as determined in accordance with U.S. Government Cost Accounting Standards (CAS); expense for stock-based
compensation; the effects of items not considered part of management’s evaluation of segment operating performance, such
as charges related to significant severance actions and goodwill impairments; gains or losses from divestitures; the effects of
certain legal settlements; corporate costs not allocated to the Corporation’s business segments; and other miscellaneous
corporate activities.
Changes
in net sales and operating profit generally are expressed in terms of volume. Changes in volume refer to increases or decreases
in sales or operating profit resulting from varying production activity levels, deliveries or service levels on individual contracts.
Volume changes in segment operating profit are typically based on the current profit booking rate for a particular contract.
In
addition, comparability of the Corporation’s segment sales, operating profit and operating margins may be impacted by
changes in profit booking rates on the Corporation’s contracts accounted for using the percentage-of-completion method
of accounting. Increases in the profit booking rates, typically referred to as risk retirements, usually relate to revisions
in the estimated total costs that reflect improved conditions on a particular contract. Conversely, conditions on a
particular contract may deteriorate resulting in an increase in the estimated total costs to complete and a reduction in the
profit booking rate. Increases or decreases in profit booking rates are recognized in the current period and reflect the
inception-to-date effect of such changes. Segment operating profit and margins may also be impacted, favorably or
unfavorably, by other items. Favorable items may include the positive resolution of contractual matters, cost recoveries on
restructuring charges and insurance recoveries. Unfavorable items may include the adverse resolution of contractual matters;
restructuring charges, except for significant severance actions which are excluded from segment operating results; reserves
for disputes; and significant asset impairments. Segment operating profit and items such as risk retirements, reductions of
profit booking rates or other matters are presented net of state income taxes.
The
following table presents summary operating results of the Corporation’s five business segments and reconciles these amounts
to the Corporation’s consolidated financial results.
|
(in millions) |
|
Quarters
Ended |
|
|
Nine
Months Ended |
|
|
|
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
|
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics |
|
$ |
3,544 |
|
|
$ |
3,632 |
|
|
$ |
10,785 |
|
|
$ |
10,225 |
|
|
|
Information Systems & Global Solutions |
|
|
1,949 |
|
|
|
2,059 |
|
|
|
5,800 |
|
|
|
6,266 |
|
|
|
Missiles and Fire Control |
|
|
1,908 |
|
|
|
2,003 |
|
|
|
5,666 |
|
|
|
6,034 |
|
|
|
Mission Systems and Training |
|
|
1,679 |
|
|
|
1,698 |
|
|
|
5,078 |
|
|
|
5,298 |
|
|
|
Space Systems |
|
|
2,034 |
|
|
|
1,955 |
|
|
|
5,741 |
|
|
|
6,002 |
|
|
|
Total net sales |
|
$ |
11,114 |
|
|
$ |
11,347 |
|
|
$ |
33,070 |
|
|
$ |
33,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics |
|
$ |
362 |
|
|
$ |
412 |
|
|
$ |
1,208 |
|
|
$ |
1,198 |
|
|
|
Information Systems & Global Solutions |
|
|
175 |
|
|
|
187 |
|
|
|
524 |
|
|
|
570 |
|
|
|
Missiles and Fire Control |
|
|
335 |
|
|
|
356 |
|
|
|
1,038 |
|
|
|
1,081 |
|
|
|
Mission Systems and Training |
|
|
193 |
|
|
|
216 |
|
|
|
628 |
|
|
|
692 |
|
|
|
Space Systems |
|
|
281 |
|
|
|
284 |
|
|
|
783 |
|
|
|
790 |
|
|
|
Total business segment operating
profit |
|
|
1,346 |
|
|
|
1,455 |
|
|
|
4,181 |
|
|
|
4,331 |
|
|
|
Unallocated, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS pension adjustment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS pension expense |
|
|
(258 |
) |
|
|
(487 |
) |
|
|
(885 |
) |
|
|
(1,461 |
) |
|
|
Less: CAS pension
cost |
|
|
342 |
|
|
|
366 |
|
|
|
1,140 |
|
|
|
1,099 |
|
|
|
FAS/CAS pension income (expense) |
|
|
84 |
|
|
|
(121 |
) |
|
|
255 |
|
|
|
(362 |
) |
|
|
Special item - Severance charges |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
(30 |
) |
|
|
Stock-based compensation |
|
|
(31 |
) |
|
|
(38 |
) |
|
|
(128 |
) |
|
|
(150 |
) |
|
|
Other, net |
|
|
(7 |
) |
|
|
(42 |
) |
|
|
(58 |
) |
|
|
(118 |
) |
|
|
Total unallocated, net |
|
|
46 |
|
|
|
(201 |
) |
|
|
69 |
|
|
|
(660 |
) |
|
|
Total consolidated operating
profit |
|
$ |
1,392 |
|
|
$ |
1,254 |
|
|
$ |
4,250 |
|
|
$ |
3,671 |
|
|
|
|
|
The
Corporation’s consolidated net adjustments not related to volume, including net profit booking rate adjustments and other
items, represented approximately 30 percent of total segment operating profit in the third quarter of 2014 compared to approximately
35 percent of total segment operating profit in the third quarter of 2013.
Aeronautics
|
(in millions) |
|
Quarters
Ended |
|
|
Nine
Months Ended |
|
|
|
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
|
Net sales |
|
$ |
3,544 |
|
|
$ |
3,632 |
|
|
$ |
10,785 |
|
|
$ |
10,225 |
|
|
|
Operating profit |
|
$ |
362 |
|
|
$ |
412 |
|
|
$ |
1,208 |
|
|
$ |
1,198 |
|
|
|
Operating margins |
|
|
10.2 |
% |
|
|
11.3 |
% |
|
|
11.2 |
% |
|
|
11.7 |
% |
|
Aeronautics’
net sales for the third quarter of 2014 decreased $88 million, or 2 percent, compared to the same period in 2013. The
decrease was primarily attributable to lower net sales of approximately $225 million for the C-130 program due to fewer
deliveries (five aircraft delivered in the third quarter of 2014 compared to eight delivered in the same period of 2013) and
lower sustainment activities; about $80 million for the F-35 development contract due to lower volume; and approximately $30
million for other sustainment activities due to lower volume. The decreases were partially offset by higher net sales of
approximately $130 million for F-35 production contracts due to increased volume, partially offset by lower risk retirements;
and approximately $115 million for various other programs due to increased volume.
Aeronautics’
operating profit for the third quarter of 2014 decreased $50 million, or 12 percent, compared to the same period in 2013.
The decrease was primarily attributable to lower operating profit of approximately $50 million for the C-130 program due to
lower risk retirements and fewer aircraft deliveries; about $40 million for other sustainment activities due to lower risk
retirements and lower volume; and approximately $30 million due to reserves recorded for contractual matters. The decreases
were partially offset by higher operating profit of about $35 million for the C-5 program due to the absence in the third
quarter of 2014 of the downward revision in the profit booking rate that occurred in the third quarter of 2013; and
approximately $40 million for various other programs and equity earnings from a joint venture. Operating profit was
comparable for the F-35 development contract. Operating profit was comparable for F-35 production contracts due to increased
volume offset by lower risk retirements. Adjustments not related to volume, including net profit booking rate adjustments and
other matters, were approximately $65 million lower for the third quarter of 2014 compared to the same period
in 2013.
Information
Systems & Global Solutions
|
(in millions) |
|
Quarters
Ended |
|
|
Nine
Months Ended |
|
|
|
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
|
Net sales |
|
$ |
1,949 |
|
|
$ |
2,059 |
|
|
$ |
5,800 |
|
|
$ |
6,266 |
|
|
|
Operating profit |
|
$ |
175 |
|
|
$ |
187 |
|
|
$ |
524 |
|
|
$ |
570 |
|
|
|
Operating margins |
|
|
9.0 |
% |
|
|
9.1 |
% |
|
|
9.0 |
% |
|
|
9.1 |
% |
|
IS&GS’
net sales for the third quarter of 2014 decreased $110 million, or 5 percent, compared to the same period in 2013. The decrease
was primarily attributable to lower net sales of approximately $150 million due to the wind-down or completion of certain programs
(primarily command and control programs); and about
$60
million due to a decline in volume for various programs, which reflects lower funding levels and programs impacted by in-theater
force reductions. The decreases were partially offset by higher net sales of about $100 million due to the start-up of new programs,
growth in recently awarded programs and integration of recently acquired companies.
IS&GS’
operating profit for the third quarter of 2014 decreased $12 million, or 6 percent, compared to the same period in 2013. The decrease
was primarily attributable to the activities mentioned above for sales. Adjustments not related to volume, including net profit
booking rate adjustments, for the third quarter of 2014 were comparable to the same period in 2013.
Missiles
and Fire Control
|
(in millions) |
|
Quarters
Ended |
|
|
Nine
Months Ended |
|
|
|
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
|
Net sales |
|
$ |
1,908 |
|
|
$ |
2,003 |
|
|
$ |
5,666 |
|
|
$ |
6,034 |
|
|
|
Operating profit |
|
$ |
335 |
|
|
$ |
356 |
|
|
$ |
1,038 |
|
|
$ |
1,081 |
|
|
|
Operating
margins |
|
|
17.6 |
% |
|
|
17.8 |
% |
|
|
18.3 |
% |
|
|
17.9 |
% |
|
MFC’s
net sales for the third quarter of 2014 decreased $95 million, or 5 percent, compared to the same period in 2013. The decrease
was primarily attributable to lower net sales of approximately $95 million for various technical services programs due to lower
volume reflecting market pressures; and about $70 million for tactical missile programs due to fewer missile and launcher deliveries
(including the Guided Multiple Launch Rocket System). The decreases were partially offset by higher net sales of about $60 million
for various programs due to increased volume. Net sales for air and missile defense programs were comparable as increased volume
for Terminal High-Altitude Area Defense was offset by fewer deliveries for the Patriot Advanced Capability-3 program.
MFC’s
operating profit for the third quarter of 2014 decreased $21 million, or 6 percent, compared to the same period in 2013. The
decrease was primarily attributable to lower operating profit of approximately $20 million for various technical services
programs due to lower volume and reserves recorded on certain programs. Adjustments not related to volume, including net
profit booking rate adjustments and other matters, were approximately $15 million lower for the third quarter of 2014
compared to the same period in 2013.
Mission
Systems and Training
|
(in millions) |
|
Quarters
Ended |
|
|
Nine
Months Ended |
|
|
|
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
|
Net sales |
|
$ |
1,679 |
|
|
$ |
1,698 |
|
|
$ |
5,078 |
|
|
$ |
5,298 |
|
|
|
Operating profit |
|
$ |
193 |
|
|
$ |
216 |
|
|
$ |
628 |
|
|
$ |
692 |
|
|
|
Operating
margins |
|
|
11.5 |
% |
|
|
12.7 |
% |
|
|
12.4 |
% |
|
|
13.1 |
% |
|
MST’s
net sales for the third quarter of 2014 decreased $19 million, or 1 percent, compared to the same period in 2013. The decrease
was primarily attributable to lower net sales of approximately $30 million for ship and aviation systems programs due to lower
volume (primarily the Merlin Capability Sustainment Program). The decrease was partially offset by higher net sales of approximately
$25 million for undersea systems programs due to higher volume.
MST’s
operating profit for the third quarter of 2014 decreased $23 million, or 11 percent, compared to the same period in 2013.
The decrease was primarily attributable to lower operating profit of approximately $35 million for integrated warfare systems
and sensor programs due to lower risk retirements (primarily radar surveillance programs). Adjustments not related to volume,
including net profit booking rate adjustments, were approximately $20 million lower for the third quarter
of 2014 compared to the same period in 2013.
Space
Systems
|
(in millions) |
|
Quarters
Ended |
|
|
Nine
Months Ended |
|
|
|
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
Sept.
28,
2014 |
|
|
Sept.
29,
2013 |
|
|
|
Net sales |
|
$ |
2,034 |
|
|
$ |
1,955 |
|
|
$ |
5,741 |
|
|
$ |
6,002 |
|
|
|
Operating profit |
|
$ |
281 |
|
|
$ |
284 |
|
|
$ |
783 |
|
|
$ |
790 |
|
|
|
Operating
margins |
|
|
13.8 |
% |
|
|
14.5 |
% |
|
|
13.6 |
% |
|
|
13.2 |
% |
|
Space
Systems’ net sales for the third quarter of 2014 increased $79 million, or 4 percent, compared to the same period in
2013. The increase was primarily attributable to higher net sales of approximately $145 million for commercial space
transportation programs due to launch-related activities; and about $70 million for the Orion program due to increased
volume. The increases were partially offset by lower net sales of approximately $140 million for government satellite
programs due to lower volume (primarily the Advanced Extremely High Frequency (AEHF) program).
Space
Systems’ operating profit for the third quarter of 2014 was comparable to the same period in 2013. Operating profit decreased
by approximately $30 million for government satellite programs due to lower volume and risk retirements (primarily AEHF). Operating
profit increased by approximately $20 million due to higher equity earnings for joint ventures. Adjustments not related to volume,
including net profit booking
rate
adjustments, were approximately $15 million lower for the third quarter of 2014 compared to the same period in 2013.
Total
equity earnings (primarily ULA) recognized by Space Systems represented approximately $90 million, or 32 percent, of this
business segment’s operating profit for the third quarter of 2014, compared to approximately $70 million, or 25
percent, for the third quarter of 2013.
Income
Taxes
The
Corporation’s effective income tax rates were 32.3 percent and 28.2 percent for the third quarter of 2014 and 2013, respectively.
The rates for both periods benefited from tax deductions for U.S. manufacturing activities and for dividends paid to the Corporation’s
defined contribution plans with an employee stock ownership plan feature. The effective tax rate for the third quarter of 2014
was higher primarily due to the benefit of research and development tax credits recognized in the third quarter of 2013. The credit
expired on Dec. 31, 2013 and, therefore, will not be recognized in 2014 unless and until legislation is enacted.
About
Lockheed Martin
Headquartered
in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company that employs approximately 113,000 people
worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of
advanced technology systems, products and services. The Corporation’s net sales for 2013 were $45.4 billion.
###
MEDIA RELATIONS CONTACT: |
Gordon Johndroe, 301-897-6357 |
INVESTOR RELATIONS CONTACT: |
Jerry Kircher, 301-897-6584 |
Website:
www.lockheedmartin.com
Conference
Call Information
Lockheed
Martin will webcast the earnings conference call (listen-only mode) at 11:00 a.m. ET on Oct. 21, 2014. A live audio
broadcast, including relevant charts, will be available on the Investor Relations page of the Corporation’s website at: www.lockheedmartin.com/investor.
Forward-Looking
Statements
This
news release contains statements that, to the extent they are not recitations of historical fact, constitute forward-looking statements
within the meaning of the federal securities laws, and are based on Lockheed Martin’s current expectations and assumptions.
The words “believe,” “estimate,” “anticipate,” “project,” “intend,”
“expect,” “plan,” “outlook,” “scheduled,” “forecast” and similar expressions
are intended to identify
forward-looking
statements. These statements are not guarantees of future performance and are subject to risks and uncertainties. Actual results
may differ materially due to factors such as:
| · | the
availability of funding for the Corporation’s products and services both domestically
and internationally due to general economic conditions, performance, cost or other factors; |
| · | the
Corporation’s dependence on U.S. Government contracts (e.g., the F-35 program); |
| · | changes
in domestic and international customer priorities and requirements (including declining
budgets resulting from general economic conditions; affordability initiatives; the potential
for deferral or termination of awards; the implementation of automatic sequestration
under the Budget Control Act of 2011 or Congressional actions intended to replace sequestration;
U.S. Government operations under a continuing resolution; or any future shutdown of U.S.
Government operations) and the success of the Corporation’s strategy to mitigate
some of these risks by focusing on expanding into adjacent markets close to the Corporation’s
core capabilities and growing international sales; |
| · | lower
demand for the Corporation’s services due to improved product field performance
requiring less service support; lower in-theater support as troop levels are drawn down;
and increased re-competition coupled with the fragmentation of large contracts into multiple
smaller contracts that are awarded primarily on the basis of price; |
| · | the
accuracy of the Corporation’s estimates and assumptions including those as to schedule,
cost, technical and performance issues under its contracts, cash flow, actual returns
(or losses) on pension plan assets, movements in interest rates and other changes that
may affect pension plan assumptions; |
| · | the
ability to implement, pace and effect capitalization changes such as share repurchase activity and accelerated pension
funding, and the effect of stock option exercises or debt levels; |
| · | difficulties
in developing and producing operationally advanced technology systems, cyber security
or other security threats, information technology failures, natural disasters, public
health crises or other disruptions; |
| · | the
timing and customer acceptance of product deliveries; |
| · | materials
availability and the performance of key suppliers, teammates, venture partners, subcontractors
and customers; |
| · | charges
from any future impairment reviews that may result in the recognition of losses and a
reduction in the book value of goodwill or other long-term assets; |
| · | the
future effect of legislation, rulemaking and changes in accounting, tax, defense procurement,
changes in policy, interpretations, or challenges to the allowability and recovery of
costs incurred under government cost accounting standards, export policy, changes in
contracting policy and contract mix; |
| · | the
future impact of acquisitions or divestitures, ventures, teaming arrangements or internal
reorganizations; |
| · | compliance
with laws and regulations, the outcome of legal proceedings and other contingencies (including
lawsuits, government investigations or audits, and the cost of completing environmental
remediation efforts), and U.S. Government identification of deficiencies in the Corporation’s
business systems; |
| · | the
competitive environment for the Corporation’s products and services, export policies,
and potential for delays in procurement due to bid protests; |
| · | the
Corporation’s efforts to increase the efficiency of its operations and improve
the affordability of its products and services including difficulties associated with
moving or consolidating operations; providing for the orderly transition of management;
attracting and retaining key personnel or the transfer of critical knowledge to the extent
the Corporation loses key personnel through wage competition, normal attrition (including
retirement) and specific actions such as workforce reductions; and supply chain management;
and |
| · | economic,
business and political conditions domestically and internationally (including potential
impacts resulting from the continuing tension between the international community and
Russia over Ukraine) and the Corporation’s increased reliance on securing international
and adjacent business. |
These
are only some of the factors that may affect the forward-looking statements contained in this news release. For a discussion identifying
additional important factors that could cause actual results to vary materially from those anticipated in the forward-looking
statements, see the Corporation’s filings with the SEC including, but not limited to, “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in the Corporation’s
Annual Report on Form 10-K for the year ended Dec. 31, 2013 and its 2014 quarterly reports on Form 10-Q. The Corporation’s
filings may be accessed through the Investor Relations page of its website, www.lockheedmartin.com/investor, or through
the website maintained by the SEC at www.sec.gov.
The
Corporation’s actual financial results likely will be different from those projected due to the inherent nature of projections.
Given these uncertainties, the forward-looking statements should not be relied on in making investment decisions. The forward-looking
statements contained in this news release speak only as of the date of its filing. Except where required by applicable law, the
Corporation expressly disclaims a duty to provide updates to forward-looking statements after the date of this news release to
reflect subsequent events, changed circumstances, changes in expectations, or the estimates and assumptions associated with them.
The forward-looking statements in this news release are intended to be subject to the safe harbor protection provided by the federal
securities laws.
Lockheed
Martin Corporation
Consolidated
Statements of Earnings1
(unaudited;
in millions, except per share data)
| |
Quarters
Ended | | |
Nine
Months Ended | |
| |
Sept.
28, 2014 | | |
Sept.
29, 2013 | | |
Sept.
28, 2014 | | |
Sept.
29, 2013 | |
| |
| | |
| | |
| | |
| |
Net sales | |
$ | 11,114 | | |
$ | 11,347 | | |
$ | 33,070 | | |
$ | 33,825 | |
Cost of sales | |
| (9,839 | ) | |
| (10,163 | ) | |
| (29,083 | ) | |
| (30,376 | ) |
Gross profit | |
| 1,275 | | |
| 1,184 | | |
| 3,987 | | |
| 3,449 | |
Other income, net | |
| 117 | | |
| 70 | | |
| 263 | | |
| 222 | |
Operating profit | |
| 1,392 | | |
| 1,254 | | |
| 4,250 | | |
| 3,671 | |
Interest expense | |
| (82 | ) | |
| (84 | ) | |
| (253 | ) | |
| (264 | ) |
Other non-operating income, net | |
| 1 | | |
| 3 | | |
| 3 | | |
| 2 | |
Earnings from continuing operations before income taxes | |
| 1,311 | | |
| 1,173 | | |
| 4,000 | | |
| 3,409 | |
Income tax expense | |
| (423 | ) | |
| (331 | ) | |
| (1,290 | ) | |
| (947 | ) |
Net earnings from continuing operations | |
| 888 | | |
| 842 | | |
| 2,710 | | |
| 2,462 | |
Net earnings from discontinued
operations2 | |
| - | | |
| 31 | | |
| - | | |
| 31 | |
Net earnings | |
$ | 888 | | |
$ | 873 | | |
$ | 2,710 | | |
$ | 2,493 | |
Effective tax rate | |
| 32.3 | % | |
| 28.2 | % | |
| 32.3 | % | |
| 27.8 | % |
| |
| | | |
| | | |
| | | |
| | |
Earnings per common share | |
| | | |
| | | |
| | | |
| | |
Basic | |
| | | |
| | | |
| | | |
| | |
Continuing operations | |
$ | 2.81 | | |
$ | 2.62 | | |
$ | 8.54 | | |
$ | 7.66 | |
Discontinued operations2 | |
| - | | |
| 0.10 | | |
| - | | |
| 0.10 | |
Basic earnings per common share | |
$ | 2.81 | | |
$ | 2.72 | | |
$ | 8.54 | | |
$ | 7.76 | |
| |
| | | |
| | | |
| | | |
| | |
Diluted | |
| | | |
| | | |
| | | |
| | |
Continuing operations | |
$ | 2.76 | | |
$ | 2.57 | | |
$ | 8.39 | | |
$ | 7.54 | |
Discontinued operations2 | |
| - | | |
| 0.09 | | |
| - | | |
| 0.09 | |
Diluted earnings per common share | |
$ | 2.76 | | |
$ | 2.66 | | |
$ | 8.39 | | |
$ | 7.63 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 316.3 | | |
| 321.3 | | |
| 317.4 | | |
| 321.3 | |
Diluted | |
| 321.8 | | |
| 327.5 | | |
| 323.0 | | |
| 326.6 | |
| |
| | | |
| | | |
| | | |
| | |
Common shares reported in stockholders' equity at end of period | |
| | | |
| | | |
| 314 | | |
| 318 | |
| 1 | The
Corporation closes its books and records on the last Sunday of the calendar quarter,
which was on Sept. 28 for the third quarter of 2014 and Sept. 29 for the third quarter
of 2013, to align its financial closing with its business processes. The consolidated
financial statements and tables of financial information included herein are labeled
based on that convention. This practice only affects interim periods, as the Corporation's
fiscal year ends on Dec. 31. |
| 2 | Discontinued
operations for the third quarter and first nine months of 2013 include a benefit resulting
from the resolution of certain tax matters related to a business sold prior to 2013. |
Lockheed
Martin Corporation
Business
Segment Summary Operating Results
(unaudited;
in millions)
| |
Quarters
Ended | | |
| | |
Nine
Months Ended | | |
| |
| |
Sept.
28, 2014 | | |
Sept.
29, 2013 | | |
%
Change | | |
Sept.
28, 2014 | | |
Sept.
29, 2013 | | |
%
Change | |
Net sales | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Aeronautics | |
$ | 3,544 | | |
$ | 3,632 | | |
(2 | )% | | |
$ | 10,785 | | |
$ | 10,225 | | |
5 | % | |
Information Systems &
Global Solutions | |
| 1,949 | | |
| 2,059 | | |
(5 | )% | | |
| 5,800 | | |
| 6,266 | | |
(7 | )% | |
Missiles and Fire Control | |
| 1,908 | | |
| 2,003 | | |
(5 | )% | | |
| 5,666 | | |
| 6,034 | | |
(6 | )% | |
Mission Systems and Training | |
| 1,679 | | |
| 1,698 | | |
(1 | )% | | |
| 5,078 | | |
| 5,298 | | |
(4 | )% | |
Space
Systems | |
| 2,034 | | |
| 1,955 | | |
4 | % | | |
| 5,741 | | |
| 6,002 | | |
(4 | )% | |
Total
net sales | |
$ | 11,114 | | |
$ | 11,347 | | |
(2 | )% | | |
$ | 33,070 | | |
$ | 33,825 | | |
(2 | )% | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Operating profit | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Aeronautics | |
$ | 362 | | |
$ | 412 | | |
(12 | )% | | |
$ | 1,208 | | |
$ | 1,198 | | |
1 | % | |
Information Systems &
Global Solutions | |
| 175 | | |
| 187 | | |
(6 | )% | | |
| 524 | | |
| 570 | | |
(8 | )% | |
Missiles and Fire Control | |
| 335 | | |
| 356 | | |
(6 | )% | | |
| 1,038 | | |
| 1,081 | | |
(4 | )% | |
Mission Systems and Training | |
| 193 | | |
| 216 | | |
(11 | )% | | |
| 628 | | |
| 692 | | |
(9 | )% | |
Space
Systems | |
| 281 | | |
| 284 | | |
(1 | )% | | |
| 783 | | |
| 790 | | |
(1 | )% | |
Total
business segment operating profit | |
| 1,346 | | |
| 1,455 | | |
(7 | )% | | |
| 4,181 | | |
| 4,331 | | |
(3 | )% | |
Unallocated, net | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
FAS/CAS pension adjustment | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
FAS pension expense | |
| (258 | ) | |
| (487 | ) | |
| | | |
| (885 | ) | |
| (1,461 | ) | |
| | |
Less:
CAS pension cost | |
| 342 | | |
| 366 | | |
| | | |
| 1,140 | | |
| 1,099 | | |
| | |
FAS/CAS pension income
(expense) | |
| 84 | | |
| (121 | ) | |
| | | |
| 255 | | |
| (362 | ) | |
| | |
Special item - severance
charges | |
| - | | |
| - | | |
| | | |
| - | | |
| (30 | ) | |
| | |
Stock-based compensation | |
| (31 | ) | |
| (38 | ) | |
| | | |
| (128 | ) | |
| (150 | ) | |
| | |
Other,
net | |
| (7 | ) | |
| (42 | ) | |
| | | |
| (58 | ) | |
| (118 | ) | |
| | |
Total
unallocated, net | |
| 46 | | |
| (201 | ) | |
N/ | M | | |
| 69 | | |
| (660 | ) | |
N/ | M | |
Total
consolidated operating profit | |
$ | 1,392 | | |
$ | 1,254 | | |
11 | % | | |
$ | 4,250 | | |
$ | 3,671 | | |
16 | % | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Operating margins | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Aeronautics | |
| 10.2 | % | |
| 11.3 | % | |
| | | |
| 11.2 | % | |
| 11.7 | % | |
| | |
Information Systems &
Global Solutions | |
| 9.0 | % | |
| 9.1 | % | |
| | | |
| 9.0 | % | |
| 9.1 | % | |
| | |
Missiles and Fire Control | |
| 17.6 | % | |
| 17.8 | % | |
| | | |
| 18.3 | % | |
| 17.9 | % | |
| | |
Mission Systems and Training | |
| 11.5 | % | |
| 12.7 | % | |
| | | |
| 12.4 | % | |
| 13.1 | % | |
| | |
Space Systems | |
| 13.8 | % | |
| 14.5 | % | |
| | | |
| 13.6 | % | |
| 13.2 | % | |
| | |
Total
business segment operating margins | |
| 12.1 | % | |
| 12.8 | % | |
| | | |
| 12.6 | % | |
| 12.8 | % | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Total
consolidated operating margins | |
| 12.5 | % | |
| 11.1 | % | |
| | | |
| 12.9 | % | |
| 10.9 | % | |
| | |
Lockheed
Martin Corporation
Consolidated
Balance Sheets
(unaudited;
in millions, except par value)
| |
Sept. 28, 2014 | | |
Dec. 31, 2013 | |
Assets | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash and cash equivalents | |
$ | 2,963 | | |
$ | 2,617 | |
Receivables, net | |
| 6,081 | | |
| 5,834 | |
Inventories, net | |
| 2,898 | | |
| 2,977 | |
Deferred income taxes | |
| 1,183 | | |
| 1,088 | |
Other current assets | |
| 559 | | |
| 813 | |
Total current assets | |
| 13,684 | | |
| 13,329 | |
| |
| | | |
| | |
Property, plant, and equipment, net | |
| 4,590 | | |
| 4,706 | |
Goodwill | |
| 10,774 | | |
| 10,348 | |
Deferred income taxes | |
| 2,954 | | |
| 2,850 | |
Other noncurrent assets | |
| 4,931 | | |
| 4,955 | |
Total assets | |
$ | 36,933 | | |
$ | 36,188 | |
| |
| | | |
| | |
Liabilities and stockholders' equity | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable | |
$ | 2,000 | | |
$ | 1,397 | |
Customer advances and amounts in excess of costs incurred | |
| 5,904 | | |
| 6,349 | |
Salaries, benefits, and payroll taxes | |
| 1,919 | | |
| 1,809 | |
Other current liabilities | |
| 2,310 | | |
| 1,565 | |
Total current liabilities | |
| 12,133 | | |
| 11,120 | |
| |
| | | |
| | |
Accrued pension liabilities | |
| 9,556 | | |
| 9,361 | |
Other postretirement benefit liabilities | |
| 901 | | |
| 902 | |
Long-term debt, net | |
| 6,165 | | |
| 6,152 | |
Other noncurrent liabilities | |
| 3,604 | | |
| 3,735 | |
Total liabilities | |
| 32,359 | | |
| 31,270 | |
| |
| | | |
| | |
Stockholders' equity | |
| | | |
| | |
Common stock, $1 par value per share | |
| 314 | | |
| 319 | |
Additional paid-in capital | |
| - | | |
| - | |
Retained earnings | |
| 14,124 | | |
| 14,200 | |
Accumulated other comprehensive loss | |
| (9,864 | ) | |
| (9,601 | ) |
Total stockholders' equity | |
| 4,574 | | |
| 4,918 | |
Total liabilities and stockholders' equity | |
$ | 36,933 | | |
$ | 36,188 | |
Lockheed
Martin Corporation
Consolidated
Statements of Cash Flows
(unaudited;
in millions)
| |
Nine Months Ended | |
| |
Sept. 28, 2014 | | |
Sept. 29, 2013 | |
| |
| | |
| |
Operating activities | |
| | | |
| | |
Net earnings | |
$ | 2,710 | | |
$ | 2,493 | |
Adjustments to reconcile net earnings to net cash provided by operating activities | |
| | | |
| | |
Depreciation and amortization | |
| 726 | | |
| 704 | |
Stock-based compensation | |
| 128 | | |
| 150 | |
Special item - severance charges | |
| - | | |
| 30 | |
Changes in assets and liabilities | |
| | | |
| | |
Receivables, net | |
| (231 | ) | |
| (310 | ) |
Inventories, net | |
| 66 | | |
| 18 | |
Accounts payable | |
| 596 | | |
| (119 | ) |
Customer advances and amounts in excess of costs incurred | |
| (458 | ) | |
| (157 | ) |
Postretirement benefit plans | |
| (96 | ) | |
| (20 | ) |
Income taxes | |
| 270 | | |
| 690 | |
Other, net | |
| 356 | | |
| 129 | |
Net cash provided by operating activities1 | |
| 4,067 | | |
| 3,608 | |
| |
| | | |
| | |
Investing activities | |
| | | |
| | |
Capital expenditures | |
| (456 | ) | |
| (491 | ) |
Acquisitions of businesses and investments in affiliates | |
| (622 | ) | |
| (266 | ) |
Other, net | |
| 14 | | |
| (27 | ) |
Net cash used for investing activities | |
| (1,064 | ) | |
| (784 | ) |
| |
| | | |
| | |
Financing activities | |
| | | |
| | |
Repurchases of common stock | |
| (1,676 | ) | |
| (1,533 | ) |
Proceeds from stock option exercises | |
| 278 | | |
| 749 | |
Dividends paid | |
| (1,286 | ) | |
| (1,112 | ) |
Repayments of long-term debt | |
| - | | |
| (150 | ) |
Other, net | |
| 27 | | |
| (15 | ) |
Net cash used for financing activities | |
| (2,657 | ) | |
| (2,061 | ) |
| |
| | | |
| | |
Net change in cash and cash equivalents | |
| 346 | | |
| 763 | |
Cash and cash equivalents at beginning of period | |
| 2,617 | | |
| 1,898 | |
Cash and cash equivalents at end of period | |
$ | 2,963 | | |
$ | 2,661 | |
| 1 | The
Corporation made contributions to its defined benefit pension trust of $1.0 billion during
the first nine months of 2014, compared to $1.5 billion during the first nine months
of 2013. Additionally, the Corporation made net tax payments of $1.0 billion during the
first nine months of 2014, compared to $387 million during the first nine months of 2013. |
Lockheed
Martin Corporation
Consolidated
Statement of Stockholders' Equity
(unaudited;
in millions)
| |
| | |
| | |
| | |
Accumulated | | |
| |
| |
| | |
Additional | | |
| | |
Other | | |
Total | |
| |
Common | | |
Paid-In | | |
Retained | | |
Comprehensive | | |
Stockholders' | |
| |
Stock | | |
Capital | | |
Earnings | | |
Loss | | |
Equity | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Balance at Dec. 31, 2013 | |
$ | 319 | | |
$ | - | | |
$ | 14,200 | | |
$ | (9,601 | ) | |
$ | 4,918 | |
Net earnings | |
| - | | |
| - | | |
| 2,710 | | |
| - | | |
| 2,710 | |
Other comprehensive loss, net of tax1 | |
| - | | |
| - | | |
| - | | |
| (263 | ) | |
| (263 | ) |
Repurchases of common stock | |
| (10 | ) | |
| (643 | ) | |
| (1,023 | ) | |
| - | | |
| (1,676 | ) |
Dividends declared2 | |
| - | | |
| - | | |
| (1,763 | ) | |
| - | | |
| (1,763 | ) |
Stock-based awards and ESOP activity | |
| 5 | | |
| 643 | | |
| - | | |
| - | | |
| 648 | |
Balance at Sept. 28, 2014 | |
$ | 314 | | |
$ | - | | |
$ | 14,124 | | |
$ | (9,864 | ) | |
$ | 4,574 | |
| 1 | The
Corporation recognized a non-cash, after-tax decrease to stockholders’ equity of
$735 million, as a result of the re-measurements of the assets and benefit obligations
related to substantially all of its defined benefit pension plans in the second quarter
of 2014. This decrease primarily was due to the incorporation of the new participant
longevity assumptions (also known as mortality), a reduction in the discount rate from
4.75% at Dec. 31, 2013 to 4.25% at the re-measurement date, partially offset by the impact
of the amendments of certain of the Corporation's qualified and nonqualified defined
benefit pension plans for non-union employees to freeze future retirement benefits. Partially
offsetting the re-measurement decrease was an increase of $520 million related to the
recognition of previously deferred amounts. |
| 2 | Represents
dividends of $1.33 per share declared during each of the first, second and third quarters
of 2014. Additionally, includes dividends of $1.50 per share declared in the third quarter
of 2014 and payable in the fourth quarter of 2014. |
Lockheed
Martin Corporation
Operating
Data
(unaudited;
in millions, except aircraft deliveries)
Backlog | |
Sept.
28, 2014 | | |
Dec.
31, 2013 | |
|
Aeronautics | |
$ | 23,300 | | |
$ | 28,000 | |
|
Information Systems & Global Solutions | |
| 8,000 | | |
| 8,300 | |
|
Missiles and Fire Control | |
| 12,800 | | |
| 15,000 | |
|
Mission Systems and Training | |
| 12,200 | | |
| 10,800 | |
|
Space Systems | |
| 20,200 | | |
| 20,500 | |
|
Total
backlog | |
$ | 76,500 | | |
$ | 82,600 | |
|
| |
Quarters
Ended | | |
Nine
Months Ended | |
Aircraft
Deliveries | |
Sept.
28, 2014 | | |
Sept.
29, 2013 | | |
Sept.
28, 2014 | | |
Sept.
29, 2013 | |
F-16 | |
| 3 | | |
| 2 | | |
| 11 | | |
| 9 | |
F-35 | |
| 8 | | |
| 10 | | |
| 22 | | |
| 22 | |
C-130J | |
| 5 | | |
| 8 | | |
| 16 | | |
| 19 | |
C-5 | |
| 2 | | |
| 1 | | |
| 6 | | |
| 2 | |
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