BETHESDA, Md., Oct. 22, 2019 /PRNewswire/ -- Lockheed Martin
Corporation (NYSE: LMT) today reported third quarter 2019 net sales
of $15.2 billion, compared to
$14.3 billion in the third quarter of
2018. Net earnings in the third quarter of 2019 were $1.6 billion, or $5.66 per share, compared to $1.5 billion, or $5.14 per share, in the third quarter of 2018.
Cash from operations in the third quarter of 2019 was $2.5 billion, compared to cash from operations of
$361 million after pension
contributions of $1.5 billion in the
third quarter of 2018.
"The corporation achieved another quarter of strong growth and
outstanding operational performance," said Lockheed Martin
Chairman, President and CEO Marillyn
Hewson. "As we look ahead to 2020, we remain focused on
providing innovative solutions for our customers, investing for
long-term growth, and generating value for our shareholders."
Summary Financial Results
The following table presents the corporation's summary financial
results.
|
(in millions, except
per share data)
|
|
Quarters
Ended2
|
|
Nine Months
Ended2
|
|
|
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
|
Net
sales
|
|
$
|
15,171
|
|
|
$
|
14,318
|
|
|
$
|
43,934
|
|
|
$
|
39,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit1
|
|
$
|
1,665
|
|
|
$
|
1,586
|
|
|
$
|
4,934
|
|
|
$
|
4,362
|
|
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
513
|
|
|
451
|
|
|
1,537
|
|
|
1,353
|
|
|
|
Severance and
restructuring charges3
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96)
|
|
|
|
Other,
net4
|
|
(73)
|
|
|
(74)
|
|
|
(75)
|
|
|
(136)
|
|
|
|
Total unallocated
items
|
|
440
|
|
|
377
|
|
|
1,462
|
|
|
1,121
|
|
|
|
Consolidated
operating profit
|
|
$
|
2,105
|
|
|
$
|
1,963
|
|
|
$
|
6,396
|
|
|
$
|
5,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings5
|
|
$
|
1,608
|
|
|
$
|
1,473
|
|
|
$
|
4,732
|
|
|
$
|
3,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
|
$
|
5.66
|
|
|
$
|
5.14
|
|
|
$
|
16.66
|
|
|
$
|
13.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated
from operations6
|
|
$
|
2,490
|
|
|
$
|
361
|
|
|
$
|
5,821
|
|
|
$
|
921
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Business segment
operating profit is a non-GAAP measure. See the "Non-GAAP Financial
Measures" section of this news release for
more information.
|
|
2
|
For the quarter ended
Sept. 29, 2019, the corporation's accounting period included 13
weeks compared to 14 weeks for the quarter ended
Sept. 30, 2018. For the first nine months of 2019 and 2018, the
corporation's accounting period included 39 weeks.
|
|
3
|
In the first nine
months of 2018, the corporation recognized severance and
restructuring charges totaling $96 million ($76 million, or
$0.26
per share, after tax) associated with planned workforce reductions
and the consolidation of certain operations at the corporation's
Rotary
and Mission Systems business segment.
|
|
4
|
In the first nine
months of 2019, the corporation recognized a previously deferred
non-cash gain of $51 million ($38 million, or $0.13 per
share, after tax) related to properties sold in 2015 as a result of
completing its remaining obligations.
|
|
5
|
Net earnings for the
quarter and the first nine months of 2019 include benefits of $62
million ($0.22 per share) and $127 million ($0.45 per
share), respectively, for additional tax deductions for the prior
year, primarily attributable to foreign derived intangible income
treatment
based on proposed tax regulations released on March 4, 2019 and our
change in tax accounting method. Net earnings for the quarter
and
the first nine months of 2018 include benefits of $148 million
($0.52 per share) and $152 million ($0.53 per share), respectively,
for additional
tax deductions for the prior year, primarily attributable to
true-ups to the net one-time charges related to the Tax Cuts and
Jobs Act enacted
on Dec. 22, 2017 and our change in tax accounting method. See the
"Income Taxes" section for further discussion.
|
|
6
|
Cash from operations
in the third quarter of 2018 is after pension contributions of $1.5
billion. Cash from operations in the first nine months
of 2018 is after pension contributions $5.0 billion and includes
$870 million of tax refunds. The corporation made no pension
contributions
in 2019.
|
|
|
|
|
2019 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 typical
practice not to incorporate adjustments into its financial outlook
for proposed acquisitions, divestitures, ventures, changes in law,
or new accounting standards until such items have been consummated,
enacted or adopted. For additional factors that may impact the
corporation's actual results, refer to the "Forward-Looking
Statements" section in this news release.
|
(in millions, except
per share data)
|
|
Current
Update3
|
|
July
Outlook
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
~$59,100
|
|
$58,250 -
$59,750
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit
|
|
~$6,425
|
|
$6,325 -
$6,475
|
|
|
|
|
|
|
|
|
|
Net FAS/CAS pension
adjustment1
|
|
~$1,475
|
|
~$1,475
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share2
|
|
~$21.55
|
|
$20.85 -
$21.15
|
|
|
|
|
|
|
|
|
|
Cash from
operations
|
|
≥$7,600
|
|
≥$7,600
|
|
|
|
|
|
|
|
|
1
|
The net FAS/CAS
pension adjustment above is presented as a single amount and
includes expected 2019 U.S. Government cost
accounting standards
(CAS) pension cost of approximately $2,565 million and expected
financial accounting standards (FAS) pension
expense of
approximately $1,090 million. CAS pension cost and the service cost
component of FAS pension expense is included in
operating profit as
part of cost of sales. The non-service cost components of FAS
pension expense are included in other non-operating
expense, net in the
corporation's consolidated statements of earnings. For additional
detail on the corporation's FAS/CAS pension
adjustment see the
supplemental table included at the end of this news
release.
|
|
2
|
Although the
corporation typically does not update its outlook for proposed
changes in law, the above includes the effect of proposed
tax
regulations
confirming that foreign military sales (FMS) qualify for tax
deductions for foreign derived intangible income. The
corporation
believes
incorporating the effect of the proposed regulations yields more
accurate disclosure of the company's expectations because
the
proposed regulations
describe the tax treatment of FMS sales in accordance with the
corporation's analysis of the Internal Revenue Code.
|
|
3
|
The corporation's
financial outlook for 2019 does not include potential impacts to
the corporation's programs, including the F-35 program,
resulting from U.S.
Government actions related to Turkey or potential financial impacts
related to the U.S. Government operating under a
continuing resolution
funding measure. During periods covered by continuing resolutions
or until the regular appropriations bills are
passed, the
corporation may experience delays in procurement of products and
services due to lack of funding, and those delays may
affect its results of
operations. The corporation currently does not expect either of
these events to have an impact on its 2019
financial
results.
|
|
2020 Financial Trends
The corporation expects its 2020 net sales to increase to
approximately $62.0 billion. Total
business segment operating margin in 2020 is expected to be in the
10.5 percent to 10.8 percent range and cash from operations is
expected to be greater than or equal to $7.2
billion, net of $500 million
of pension contributions. The preliminary outlook for 2020 assumes
there is no impact from U.S. Government actions related to
Turkey and the U.S. Government
continues to support and fund the corporation's key programs.
Changes in circumstances may require the corporation to revise its
assumptions, which could materially change the corporation's
current estimate of 2020 net sales, operating margin and cash
flows.
The corporation currently expects a total net FAS/CAS pension
benefit of approximately $2.1 billion
in 2020. This estimate assumes a 3.25 percent discount rate (a 100
basis point decrease from the end of 2018), a 15.00 percent return
on plan assets in 2019, and a 7.00 percent expected long-term rate
of return on plan assets in future years, among other assumptions.
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 $15 million to the estimated net 2020 FAS/CAS
pension benefit. The impact of changes in the discount rate is
significantly less than in prior years (i.e., $15 million for 2020 compared to $120 million for 2019) due to the expected
completion of the planned freeze of the corporation's salaried
pension plans that was previously announced on July 1, 2014, which is discussed in further
detail below. A change of 100 basis points to the return on plan
assets in 2019, with all other assumptions held constant, would
impact the net 2020 FAS/CAS pension benefit by approximately
$15 million. As noted above, the
corporation expects to make contributions of approximately
$500 million to its qualified defined
benefit pension plans in 2020 and anticipates recovering
approximately $2.2 billion of CAS
pension cost. The corporation will complete the annual
remeasurement of its postretirement benefit plans and update its
estimated 2020 FAS/CAS pension adjustment on Dec. 31, 2019. The final assumptions and actual
investment return for 2019 may differ materially from those
discussed above.
As previously announced on July 1,
2014, the corporation will complete the final step of the
planned freeze of its qualified and nonqualified defined benefit
pension plans for salaried employees effective Jan. 1, 2020. The service-based component of the
formula used to determine retirement benefits will be frozen such
that participants will no longer earn further credited service for
any period after Dec. 31, 2019. As a
result of these changes, the plans will be fully frozen effective
Jan. 1, 2020. Retirees already
collecting benefits and former employees with a vested benefit will
not be affected by the change. Current employees also will retain
all benefits already earned in their pension plan to date.
Cash Activities
The corporation's cash activities in the third quarter of 2019
included the following:
- paying cash dividends of $621
million, compared to $569
million in the third quarter of 2018;
- repurchasing 0.6 million shares for $210
million, compared to 0.6 million shares for $216 million in the third quarter of 2018;
- making capital expenditures of $308
million, compared to $339
million in the third quarter of 2018;
- no net proceeds from or repayments of commercial paper,
compared to net proceeds of $490
million in the third quarter of 2018; and
- making no pension contributions, compared to pension
contributions of $1.5 billion in the
third quarter of 2018.
As previously reported on Sept. 26,
2019, the corporation increased its quarterly dividend by
$0.20 per share, to $2.40 per share, beginning with the dividend
payment in the fourth quarter of 2019. The corporation also
increased its share repurchase authority by $1.0 billion with $3.3
billion in total remaining authorization for future
repurchases of common stock under the program as of Sept. 29, 2019.
Segment Results
The corporation operates in four business segments organized
based on the nature of products and services offered: Aeronautics,
Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS)
and Space. The following table presents summary operating results
of the corporation's business segments and reconciles these amounts
to the corporation's consolidated financial results.
|
(in
millions)
|
|
Quarters
Ended
|
|
Nine Months
Ended
|
|
|
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
|
6,178
|
|
|
$
|
5,642
|
|
|
$
|
17,312
|
|
|
$
|
15,361
|
|
|
|
Missiles and Fire
Control
|
|
2,601
|
|
|
2,273
|
|
|
7,362
|
|
|
6,035
|
|
|
|
Rotary and Mission
Systems
|
|
3,709
|
|
|
3,848
|
|
|
11,239
|
|
|
10,637
|
|
|
|
Space
|
|
2,683
|
|
|
2,555
|
|
|
8,021
|
|
|
7,318
|
|
|
|
Total net
sales
|
|
$
|
15,171
|
|
|
$
|
14,318
|
|
|
$
|
43,934
|
|
|
$
|
39,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
|
665
|
|
|
$
|
600
|
|
|
$
|
1,842
|
|
|
$
|
1,646
|
|
|
|
Missiles and Fire
Control
|
|
349
|
|
|
332
|
|
|
1,093
|
|
|
872
|
|
|
|
Rotary and Mission
Systems
|
|
342
|
|
|
361
|
|
|
1,068
|
|
|
1,013
|
|
|
|
Space
|
|
309
|
|
|
293
|
|
|
931
|
|
|
831
|
|
|
|
Total business
segment operating profit
|
|
1,665
|
|
|
1,586
|
|
|
4,934
|
|
|
4,362
|
|
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
513
|
|
|
451
|
|
|
1,537
|
|
|
1,353
|
|
|
|
Severance and
restructuring charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96)
|
|
|
|
Other, net
|
|
(73)
|
|
|
(74)
|
|
|
(75)
|
|
|
(136)
|
|
|
|
Total unallocated
items
|
|
440
|
|
|
377
|
|
|
1,462
|
|
|
1,121
|
|
|
|
Total consolidated
operating profit
|
|
$
|
2,105
|
|
|
$
|
1,963
|
|
|
$
|
6,396
|
|
|
$
|
5,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales and operating profit of the corporation's business
segments exclude intersegment sales, cost of sales, and profit as
these activities are eliminated in consolidation. Operating profit
of the corporation's business segments includes the corporation's
share of earnings or losses from equity method investees as the
operating activities of the investees are closely aligned with the
operations of its business segments.
Operating profit of the corporation's business segments also
excludes the FAS/CAS operating adjustment described below, a
portion of corporate costs not considered allowable or allocable to
contracts with the U.S. Government under the applicable U.S.
government cost accounting standards (CAS) or federal acquisition
regulations (FAR), and other items not considered part of
management's evaluation of segment operating performance such as a
portion of management and administration costs, legal fees and
settlements, environmental costs, stock-based compensation expense,
retiree benefits, significant severance actions, significant asset
impairments, gains or losses from significant divestitures, and
other miscellaneous corporate activities.
The corporation recovers CAS pension cost through the pricing of
its products and services on U.S. Government contracts and,
therefore, recognizes CAS pension cost in each of its business
segment's net sales and cost of sales. The corporation's
consolidated financial statements must present pension and other
postretirement benefit plan expense calculated in accordance with
U.S. generally accepted accounting principles (referred to as FAS
pension expense). The operating portion of the net FAS/CAS pension
adjustment represents the difference between the service cost
component of FAS pension expense and CAS pension cost. The
non-service FAS pension cost component is included in other
non‑operating expense, net on the corporation's consolidated
statements of earnings. The net FAS/CAS pension adjustment
increases or decreases CAS pension cost to equal total FAS pension
expense (both service and non-service).
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 margin
may be impacted favorably or unfavorably by changes in profit
booking rates on the corporation's contracts for which it
recognizes revenue over time using the percentage-of-completion
cost-to-cost method to measure progress towards completion.
Increases in profit booking rates, typically referred to as risk
retirements, usually relate to revisions in the estimated total
costs to fulfill the performance obligations 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 fulfill the performance obligations
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 margin may also be impacted
favorably or unfavorably by other items, which may or may not
impact sales. Favorable items may include the positive resolution
of contractual matters, cost recoveries on severance and
restructuring charges, insurance recoveries and gains on sales of
assets. 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; certain asset impairments; and
losses on sales of certain assets.
The corporation's consolidated net adjustments not related to
volume, including net profit booking rate adjustments, represented
approximately 29 percent of total segment operating profit in the
third quarter of 2019 as compared to 34 percent in the third
quarter of 2018.
Aeronautics
|
(in
millions)
|
|
Quarters
Ended
|
|
Nine Months
Ended
|
|
|
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
|
Net
sales
|
|
$
|
6,178
|
|
|
$
|
5,642
|
|
|
$
|
17,312
|
|
|
$
|
15,361
|
|
|
|
Operating
profit
|
|
$
|
665
|
|
|
$
|
600
|
|
|
$
|
1,842
|
|
|
$
|
1,646
|
|
|
|
Operating
margin
|
|
10.8
|
%
|
|
10.6
|
%
|
|
10.6
|
%
|
|
10.7
|
%
|
|
Aeronautics' net sales in the third quarter of 2019 increased
$536 million, or 10 percent, compared
to the same period in 2018. The increase was primarily attributable
to higher net sales of approximately $480
million for the F-35 program due to increased volume on
production, development and sustainment contracts and about
$80 million for classified
development programs due to higher volume.
Aeronautics' operating profit in the third quarter of 2019
increased $65 million, or 11 percent,
compared to the same period in 2018. Operating profit increased
approximately $35 million for the
F-16 program due to higher risk retirements on sustainment
contracts, and about $20 million for
the F-35 program due to increased volume on production,
development, and sustainment contracts, partially offset by lower
risk retirements. Adjustments not related to volume, including net
profit booking rate adjustments and other matters, were comparable
during the third quarter of 2019 compared to the same period in
2018.
Missiles and Fire Control
|
(in
millions)
|
|
Quarters
Ended
|
|
Nine Months
Ended
|
|
|
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
|
Net
sales
|
|
$
|
2,601
|
|
|
$
|
2,273
|
|
|
$
|
7,362
|
|
|
$
|
6,035
|
|
|
|
Operating
profit
|
|
$
|
349
|
|
|
$
|
332
|
|
|
$
|
1,093
|
|
|
$
|
872
|
|
|
|
Operating
margin
|
|
13.4
|
%
|
|
14.6
|
%
|
|
14.8
|
%
|
|
14.4
|
%
|
|
MFC's net sales in the third quarter of 2019 increased
$328 million, or 14 percent, compared
to the same period in 2018. The increase was primarily attributable
to higher net sales of approximately $200
million for tactical and strike missile programs due to
increased volume (primarily precision fires and new hypersonic
development programs); and about $120
million for integrated air and missile defense programs due
to increased volume (primarily Patriot Advanced Capability-3
(PAC-3) and Terminal High Altitude Area Defense (THAAD)).
MFC's operating profit in the third quarter of 2019 increased
$17 million, or 5 percent, compared
to the same period in 2018. Operating profit increased
approximately $45 million due to
higher risk retirements on energy programs and about $15 million for integrated air and missile
defense programs due to higher risk retirements and higher volume
(primarily THAAD and PAC-3), partially offset by charges for
performance matters on an air and missile defense development
program. These increases were partially offset by a decrease of
approximately $40 million for sensors
and global sustainment programs due to lower risk retirements
(primarily Low Altitude Navigation and Targeting Infrared for Night
(LANTIRN®) and Sniper Advanced Targeting Pod
(SNIPER®)). Adjustments not related to volume, including
net profit booking rate adjustments and other matters, were
$30 million lower in the third
quarter of 2019 compared to the same period in 2018.
Rotary and Mission Systems
|
(in
millions)
|
|
Quarters
Ended
|
|
Nine Months
Ended
|
|
|
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
|
Net
sales
|
|
$
|
3,709
|
|
|
$
|
3,848
|
|
|
$
|
11,239
|
|
|
$
|
10,637
|
|
|
|
Operating
profit
|
|
$
|
342
|
|
|
$
|
361
|
|
|
$
|
1,068
|
|
|
$
|
1,013
|
|
|
|
Operating
margin
|
|
9.2
|
%
|
|
9.4
|
%
|
|
9.5
|
%
|
|
9.5
|
%
|
|
RMS' net sales in the third quarter of 2019 decreased
$139 million, or 4 percent, compared
to the same period in 2018. The decrease was primarily attributable
to lower net sales of approximately $160
million for Sikorsky helicopter programs due to lower volume
(primarily Black Hawk production and mission systems programs).
This decrease was partially offset by an increase of approximately
$40 million for various C6ISR
(command, control, communications, computers, cyber, combat
systems, intelligence, surveillance, and reconnaissance) programs
due to higher volume.
RMS' operating profit in the third quarter of 2019 decreased
$19 million, or 5 percent, compared
to the same period in 2018. Operating profit decreased
approximately $50 million for
integrated warfare systems and sensors (IWSS) programs due to lower
risk retirements (primarily Radar Surveillance Systems programs).
This decrease was partially offset by an increase of about
$20 million for Sikorsky helicopter
programs due to risk retirements on commercial after-market
programs and better cost performance across the portfolio; and
about $10 million for training and
logistics solutions (TLS) programs due to lower program charges.
Adjustments not related to volume, including net profit booking
rate adjustments and other matters, were about $35 million lower in the third quarter of 2019
compared to the same period in 2018.
Space
|
(in
millions)
|
|
Quarters
Ended
|
|
Nine Months
Ended
|
|
|
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
|
Net
sales
|
|
$
|
2,683
|
|
|
$
|
2,555
|
|
|
$
|
8,021
|
|
|
$
|
7,318
|
|
|
|
Operating
profit
|
|
$
|
309
|
|
|
$
|
293
|
|
|
$
|
931
|
|
|
$
|
831
|
|
|
|
Operating
margin
|
|
11.5
|
%
|
|
11.5
|
%
|
|
11.6
|
%
|
|
11.4
|
%
|
|
Space's net sales in the third quarter of 2019 increased
$128 million, or 5 percent, compared
to the same period in 2018. The increase was primarily attributable
to higher net sales of approximately $100
million for government satellite programs due to higher
volume (primarily Next Generation Overhead Persistent Infrared
(Next Gen OPIR) and Global Positioning System (GPS) III) and about
$95 million for strategic and missile
defense programs due to higher volume (primarily new hypersonic
development programs). These increases were partially offset by a
decrease of $35 million due to lower
volume on the Orion program and a decrease of $25 million due to lower volume on commercial
satellite programs.
Space's operating profit in the third quarter of 2019 increased
$16 million, or 5 percent, compared
to the same period in 2018. Operating profit increased
approximately $10 million due to
higher equity earnings for ULA and $10
million for commercial satellite programs, which reflect a
lower amount of charges recorded for performance matters. These
increases were partially offset by a decrease of approximately
$10 million for government satellite
programs due to lower risk retirements. Adjustments not related to
volume, including net profit booking rate adjustments and other
matters, were comparable in the third quarter of 2019, to the same
period in 2018.
Total equity earnings recognized by Space (primarily ULA)
represented approximately $55
million, or 18 percent of Space's operating profit in the
third quarter of 2019, compared to approximately $45 million, or 15 percent in the third quarter
of 2018.
Income Taxes
The corporation's effective income tax rate was 9.7 percent in
the third quarter of 2019, compared to 6.5 percent in the third
quarter of 2018. The rate for the third quarter of 2019 benefited
from $62 million, or $0.22 per share, of additional tax deductions for
the prior year, primarily attributable to foreign derived
intangible income treatment based on proposed tax regulations
released on March 4, 2019 and our
change in tax accounting method, reflecting a 2012 Court of Federal
Claims decision, which held that the tax basis in certain assets
should be increased and realized upon the assets' disposition. The
rate for the third quarter of 2018 benefited from $148 million, or $0.52 per share, of additional tax deductions for
the prior year, primarily attributable to true-ups to the net
one-time charges related to the Tax Cuts and Jobs Act enacted on
December 22, 2017 and additional tax
deductions from the corporation's change in tax accounting method
reflecting the 2012 Court of Federal Claims decision. The rates for
both periods benefited from tax deductions for dividends paid to
the corporation's defined contribution plans with an employee stock
ownership plan feature, tax deductions for foreign derived
intangible income, tax deductions for employee equity awards, and
the research and development tax credit.
Use of Non-GAAP Financial Measures
This news release contains the following non-generally accepted
accounting principles (non-GAAP) financial measures (as defined by
U.S. Securities and Exchange Commission (SEC) Regulation G). While
the corporation believes that these non-GAAP financial measures may
be useful in evaluating the financial performance of Lockheed
Martin Corporation, this information should be considered
supplemental and is not a substitute for financial information
prepared in accordance with GAAP. In addition, the corporation's
definitions for non-GAAP financial measures may differ from
similarly titled measures used by other companies or analysts.
Business segment operating profit represents the total earnings
from the corporation's business segments before unallocated income
and expense. This measure is used by the corporation's senior
management in evaluating the performance of its business segments
and is a performance goal in the corporation's annual incentive
plan. Business segment operating margin is calculated by dividing
business segment operating profit by sales. The table below
reconciles the non-GAAP measure business segment operating profit
with the most directly comparable GAAP financial measure,
consolidated operating profit included in the corporation's 2019
financial outlook.
|
(in
millions)
|
|
2019 Financial
Outlook
|
|
|
|
|
Current
Update
|
|
July
Outlook
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit (non-GAAP)
|
|
~$6,425
|
|
$6,325 -
$6,475
|
|
|
FAS/CAS operating
adjustment1
|
|
~2,050
|
|
~2,050
|
|
|
Other, net
|
|
~(125)
|
|
~(115)
|
|
|
Consolidated
operating profit (GAAP)
|
|
~$8,350
|
|
$8,260 -
$8,410
|
|
|
|
|
|
|
|
|
1
|
Refer to the
supplemental table "Other Financial and Operating Information"
included in this news release for a detail of the
FAS/CAS
operating adjustment,
which excludes $575 million of expected non-service FAS cost that
will be recorded in other non-operating expense,
net.
|
|
Conference Call Information
Lockheed Martin Corporation will webcast live its third quarter
2019 earnings results conference call (listen-only mode) on
Tuesday, Oct. 22, 2019, at
11:00 a.m. ET. The live webcast and
relevant financial charts will be available for download on the
Lockheed Martin Investor Relations website at
www.lockheedmartin.com/investor.
For additional information, visit our website:
www.lockheedmartin.com.
About Lockheed Martin
Headquartered in Bethesda,
Maryland, Lockheed Martin Corporation is a global security
and aerospace company that employs approximately 105,000 people
worldwide and is principally engaged in the research, design,
development, manufacture, integration and sustainment of advanced
technology systems, products and services.
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:
- our reliance on contracts with the U.S. Government, which are
conditioned upon the availability of funding and can be terminated
by the U.S. Government for convenience, and our ability to
negotiate favorable contract terms;
- budget uncertainty; affordability initiatives; the impact of
continuing resolution funding mechanisms and the potential for a
government shutdown (including the potential that we work on
unfunded contracts to preserve their cost and/or schedule);
- risks related to the development, production, sustainment,
performance, schedule, cost and requirements of complex and
technologically advanced programs including our largest, the F‑35
program;
- planned production rates for significant programs; compliance
with stringent performance and reliability standards; materials
availability;
- the performance and financial viability of key suppliers,
teammates, ventures, venture partners, subcontractors and
customers;
- economic, industry, business and political conditions including
their effects on governmental policy and government actions that
disrupt our supply chain or prevent the sale or delivery of our
products (such as delays in obtaining Congressional approvals for
exports requiring Congressional notification);
- trade policies or sanctions (including the impact of U.S.
Government sanctions on Turkey and
Turkey's removal from the F-35
program and potential sanctions on the Kingdom of Saudi Arabia);
- our success expanding into and doing business in adjacent
markets and internationally and the differing risks posed by
international sales;
- changes in foreign national priorities and foreign government
budgets;
- the competitive environment for our products and services,
including increased pricing pressures, aggressive pricing in the
absence of cost realism evaluation criteria, competition from
outside the aerospace and defense industry, and increased bid
protests;
- the timing and customer acceptance of product deliveries;
- our ability to continue to innovate and develop new products
and to attract and retain key personnel and transfer knowledge to
new personnel; the impact of work stoppages or other labor
disruptions;
- the impact of cyber or other security threats or other
disruptions to our businesses;
- our ability to implement and continue, and the timing and
impact of, capitalization changes such as share repurchases and
dividend payments;
- our ability to recover costs under U.S. Government contracts
and changes in contract mix;
- the accuracy of our estimates and projections;
- timing and estimates regarding pension funding and movements in
interest rates and other changes that may affect pension plan
assumptions, stockholders' equity, the level of the FAS/CAS
adjustment and actual returns on pension plan assets;
- the successful operation of ventures that we do not control and
our ability to recover our investments;
- realizing the anticipated benefits of acquisitions or
divestitures, ventures, teaming arrangements or internal
reorganizations;
- our efforts to increase the efficiency of our operations and
improve the affordability of our products and services;
- risk of an impairment of our assets, including the potential
impairment of goodwill, intangible assets and inventory recorded as
a result of the acquisition of the Sikorsky business and the
potential further impairment of our equity investment in Advanced
Military Maintenance, Repair and Overhaul Center LLC (AMMROC);
- the availability and adequacy of our insurance and
indemnities;
- the effect of changes in (or in the interpretation of)
procurement and other regulations and policies affecting our
industry, including export of our products, cost allowability or
recovery, aggressive government positions on the use and ownership
of intellectual property and potential changes to the DoD's
acquisition regulations relating to progress payments and
performance-based payments and a preference for fixed-price
contracts;
- the effect of changes in accounting, taxation, or export laws,
regulations, and policies; and
- the outcome of legal proceedings, bid protests, environmental
remediation efforts, government investigations or government
allegations that we have failed to comply with law, other
contingencies and U.S. Government identification of deficiencies in
our business systems.
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 differ materially from those anticipated in
the forward-looking statements, see the corporation's filings with
the U.S. Securities and Exchange Commission 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, 2018 and subsequent
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, 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. 29,
2019
|
|
Sept. 30,
2018
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
Net
sales
|
|
$
|
15,171
|
|
|
$
|
14,318
|
|
|
$
|
43,934
|
|
|
$
|
39,351
|
|
|
Cost of
sales2
|
|
(13,108)
|
|
|
(12,397)
|
|
|
(37,690)
|
|
|
(34,019)
|
|
|
Gross
profit
|
|
2,063
|
|
|
1,921
|
|
|
6,244
|
|
|
5,332
|
|
|
Other income,
net3
|
|
42
|
|
|
42
|
|
|
152
|
|
|
151
|
|
|
Operating
profit
|
|
2,105
|
|
|
1,963
|
|
|
6,396
|
|
|
5,483
|
|
|
Interest
expense
|
|
(162)
|
|
|
(177)
|
|
|
(496)
|
|
|
(497)
|
|
|
Other non-operating
expense, net
|
|
(162)
|
|
|
(211)
|
|
|
(491)
|
|
|
(631)
|
|
|
Earnings before
income taxes
|
|
1,781
|
|
|
1,575
|
|
|
5,409
|
|
|
4,355
|
|
|
Income tax
expense4
|
|
(173)
|
|
|
(102)
|
|
|
(677)
|
|
|
(562)
|
|
|
Net
earnings
|
|
$
|
1,608
|
|
|
$
|
1,473
|
|
|
$
|
4,732
|
|
|
$
|
3,793
|
|
|
Effective tax
rate
|
|
9.7
|
%
|
|
6.5
|
%
|
|
12.5
|
%
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
5.70
|
|
|
$
|
5.18
|
|
|
$
|
16.77
|
|
|
$
|
13.31
|
|
|
Diluted
|
|
$
|
5.66
|
|
|
$
|
5.14
|
|
|
$
|
16.66
|
|
|
$
|
13.21
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
282.0
|
|
|
284.3
|
|
|
282.2
|
|
|
284.9
|
|
|
Diluted
|
|
283.9
|
|
|
286.7
|
|
|
284.0
|
|
|
287.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
reported in stockholders' equity at
end of period
|
|
|
|
|
|
281
|
|
|
283
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The corporation
closes its books and records on the last Sunday of the calendar
quarter to align its financial closing with its business
processes,
which was on Sept. 29
for the third quarter of 2019 and Sept. 30 for the third quarter of
2018. 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
|
In the first nine
months of 2018, the corporation recognized severance and
restructuring charges totaling $96 million ($76 million, or $0.26
per
share, after tax)
associated with planned workforce reductions and the consolidation
of certain operations at the corporation's Rotary and
Mission Systems
business segment.
|
3
|
In the first nine
months of 2019, the corporation recognized a previously deferred
non-cash gain of $51 million ($38 million, or $0.13 per
share,
after tax) related to
properties sold in 2015 as a result of completing its remaining
obligations.
|
4
|
Net earnings for the
quarter and the first nine months of 2019 include benefits of $62
million ($0.22 per share) and $127 million ($0.45 per
share), respectively,
for additional tax deductions for the prior year, primarily
attributable to foreign derived intangible income treatment
based
on proposed tax
regulations released on March 4, 2019 and our change in tax
accounting method. Net earnings for the quarter and the first
nine
months of 2018
include benefits of $148 million ($0.52 per share) and $152 million
($0.53 per share), respectively, for additional tax deductions
for
the prior year,
primarily attributable to true-ups to the net one-time charges
related to the Tax Cuts and Jobs Act enacted on Dec. 22, 2017
and
our change in tax
accounting method.
|
Lockheed Martin
Corporation
|
Business Segment
Summary Operating Results
|
(unaudited; in
millions)
|
|
|
|
|
Quarters
Ended
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
%
Change
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
%
Change
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
|
6,178
|
|
|
$
|
5,642
|
|
|
10
|
%
|
|
$
|
17,312
|
|
|
$
|
15,361
|
|
|
13
|
%
|
|
Missiles and Fire
Control
|
|
2,601
|
|
|
2,273
|
|
|
14
|
%
|
|
7,362
|
|
|
6,035
|
|
|
22
|
%
|
|
Rotary and Mission
Systems
|
|
3,709
|
|
|
3,848
|
|
|
(4)
|
%
|
|
11,239
|
|
|
10,637
|
|
|
6
|
%
|
|
Space
|
|
2,683
|
|
|
2,555
|
|
|
5
|
%
|
|
8,021
|
|
|
7,318
|
|
|
10
|
%
|
|
Total net
sales
|
|
$
|
15,171
|
|
|
$
|
14,318
|
|
|
6
|
%
|
|
$
|
43,934
|
|
|
$
|
39,351
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
|
665
|
|
|
$
|
600
|
|
|
11
|
%
|
|
$
|
1,842
|
|
|
$
|
1,646
|
|
|
12
|
%
|
|
Missiles and Fire
Control
|
|
349
|
|
|
332
|
|
|
5
|
%
|
|
1,093
|
|
|
872
|
|
|
25
|
%
|
|
Rotary and Mission
Systems
|
|
342
|
|
|
361
|
|
|
(5)
|
%
|
|
1,068
|
|
|
1,013
|
|
|
5
|
%
|
|
Space
|
|
309
|
|
|
293
|
|
|
5
|
%
|
|
931
|
|
|
831
|
|
|
12
|
%
|
|
Total business
segment operating
profit
|
|
1,665
|
|
|
1,586
|
|
|
5
|
%
|
|
4,934
|
|
|
4,362
|
|
|
13
|
%
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
513
|
|
|
451
|
|
|
|
|
1,537
|
|
|
1,353
|
|
|
|
|
Severance and
restructuring charges1
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
(96)
|
|
|
|
|
Other,
net2
|
|
(73)
|
|
|
(74)
|
|
|
|
|
(75)
|
|
|
(136)
|
|
|
|
|
Total unallocated
items
|
|
440
|
|
|
377
|
|
|
17
|
%
|
|
1,462
|
|
|
1,121
|
|
|
30
|
%
|
|
Total consolidated
operating profit
|
|
$
|
2,105
|
|
|
$
|
1,963
|
|
|
7
|
%
|
|
$
|
6,396
|
|
|
$
|
5,483
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
10.8
|
%
|
|
10.6
|
%
|
|
|
|
10.6
|
%
|
|
10.7
|
%
|
|
|
|
Missiles and Fire
Control
|
|
13.4
|
%
|
|
14.6
|
%
|
|
|
|
14.8
|
%
|
|
14.4
|
%
|
|
|
|
Rotary and Mission
Systems
|
|
9.2
|
%
|
|
9.4
|
%
|
|
|
|
9.5
|
%
|
|
9.5
|
%
|
|
|
|
Space
|
|
11.5
|
%
|
|
11.5
|
%
|
|
|
|
11.6
|
%
|
|
11.4
|
%
|
|
|
|
Total business
segment operating
margin
|
|
11.0
|
%
|
|
11.1
|
%
|
|
|
|
11.2
|
%
|
|
11.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
operating
margin
|
|
13.9
|
%
|
|
13.7
|
%
|
|
|
|
14.6
|
%
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
In the first nine
months of 2018, the corporation recognized severance and
restructuring charges totaling $96 million ($76 million, or $0.26
per share,
after tax) associated
with planned workforce reductions and the consolidation of certain
operations at the corporation's Rotary and Mission
Systems
business
segment.
|
2
|
In the first nine
months of 2019, the corporation recognized a previously deferred
non-cash gain of $51 million ($38 million, or $0.13 per share,
after
tax) related to
properties sold in 2015 as a result of completing its remaining
obligations.
|
Lockheed Martin
Corporation
|
Consolidated
Balance Sheets
|
(in millions,
except par value)
|
|
|
|
|
Sept. 29,
2019
|
|
Dec. 31,
2018
|
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,539
|
|
|
$
|
772
|
|
|
Receivables,
net
|
|
2,384
|
|
|
2,444
|
|
|
Contract
assets
|
|
11,004
|
|
|
9,472
|
|
|
Inventories
|
|
3,474
|
|
|
2,997
|
|
|
Other current
assets
|
|
402
|
|
|
418
|
|
|
Total current
assets
|
|
19,803
|
|
|
16,103
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
6,240
|
|
|
6,124
|
|
|
Goodwill
|
|
10,762
|
|
|
10,769
|
|
|
Intangible assets,
net
|
|
3,278
|
|
|
3,494
|
|
|
Deferred income
taxes
|
|
2,912
|
|
|
3,208
|
|
|
Other noncurrent
assets1
|
|
6,280
|
|
|
5,178
|
|
|
Total
assets
|
|
$
|
49,275
|
|
|
$
|
44,876
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
|
2,904
|
|
|
$
|
2,402
|
|
|
Contract
liabilities
|
|
6,777
|
|
|
6,491
|
|
|
Salaries, benefits
and payroll taxes
|
|
2,308
|
|
|
2,122
|
|
|
Current maturities of
long-term debt and commercial paper
|
|
900
|
|
|
1,500
|
|
|
Other current
liabilities1
|
|
2,626
|
|
|
1,883
|
|
|
Total current
liabilities
|
|
15,515
|
|
|
14,398
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
12,652
|
|
|
12,604
|
|
|
Accrued pension
liabilities
|
|
11,436
|
|
|
11,410
|
|
|
Other postretirement
benefit liabilities
|
|
677
|
|
|
704
|
|
|
Other noncurrent
liabilities1
|
|
5,058
|
|
|
4,311
|
|
|
Total
liabilities
|
|
45,338
|
|
|
43,427
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Common stock, $1 par
value per share
|
|
281
|
|
|
281
|
|
|
Additional paid-in
capital
|
|
—
|
|
|
—
|
|
|
Retained
earnings
|
|
17,265
|
|
|
15,434
|
|
|
Accumulated other
comprehensive loss
|
|
(13,653)
|
|
|
(14,321)
|
|
|
Total stockholders'
equity
|
|
3,893
|
|
|
1,394
|
|
|
Noncontrolling
interests in subsidiary
|
|
44
|
|
|
55
|
|
|
Total
equity
|
|
3,937
|
|
|
1,449
|
|
|
Total liabilities and
equity
|
|
$
|
49,275
|
|
|
$
|
44,876
|
|
|
|
|
|
|
|
1
|
Effective Jan. 1,
2019, the corporation adopted Accounting Standards Update (ASU)
2016-02, Leases (Topic 842). As of Sept. 29, 2019,
right-
of-use operating
lease assets were $984 million and operating lease liabilities were
$1.1 billion. Approximately $818 million of operating
lease
liabilities were
classified as noncurrent. There was no impact to the corporation's
consolidated statements of earnings or cash flows as a
result
of adopting this
standard. The 2018 periods were not restated for the adoption of
ASU 2016-02.
|
Lockheed Martin
Corporation
|
Consolidated
Statements of Cash Flows
|
(unaudited; in
millions)
|
|
|
|
Nine Months
Ended
|
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
Operating
activities
|
|
|
|
|
Net
earnings
|
|
$
|
4,732
|
|
|
$
|
3,793
|
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
|
Depreciation and
amortization
|
|
867
|
|
|
857
|
|
Stock-based
compensation
|
|
158
|
|
|
148
|
|
Severance and
restructuring charges
|
|
—
|
|
|
96
|
|
Gain on property
sale
|
|
(51)
|
|
|
—
|
|
Changes in assets and
liabilities
|
|
|
|
|
Receivables,
net
|
|
60
|
|
|
(151)
|
|
Contract
assets
|
|
(1,532)
|
|
|
(1,777)
|
|
Inventories
|
|
(477)
|
|
|
(172)
|
|
Accounts
payable
|
|
524
|
|
|
1,237
|
|
Contract
liabilities
|
|
286
|
|
|
(539)
|
|
Postretirement
benefit plans
|
|
828
|
|
|
(3,935)
|
|
Income
taxes
|
|
(117)
|
|
|
729
|
|
Other, net
|
|
543
|
|
|
635
|
|
Net cash provided
by operating activities
|
|
5,821
|
|
|
921
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
|
(841)
|
|
|
(819)
|
|
Other, net
|
|
38
|
|
|
146
|
|
Net cash used for
investing activities
|
|
(803)
|
|
|
(673)
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Dividends
paid
|
|
(1,881)
|
|
|
(1,725)
|
|
Repurchases of common
stock
|
|
(710)
|
|
|
(826)
|
|
(Repayments of)
proceeds from commercial paper, net
|
|
(600)
|
|
|
490
|
|
Other, net
|
|
(60)
|
|
|
(151)
|
|
Net cash used for
financing activities
|
|
(3,251)
|
|
|
(2,212)
|
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
1,767
|
|
|
(1,964)
|
|
Cash and cash
equivalents at beginning of period
|
|
772
|
|
|
2,861
|
|
Cash and cash
equivalents at end of period
|
|
$
|
2,539
|
|
|
$
|
897
|
|
Lockheed Martin
Corporation
|
Consolidated
Statement of Equity
|
(unaudited; in
millions)
|
|
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders' Equity
|
|
Noncontrolling Interests in Subsidiary
|
|
Total Equity
|
|
Balance at
December 31, 2018
|
|
$
|
281
|
|
|
$
|
—
|
|
|
$
|
15,434
|
|
|
$
|
(14,321)
|
|
|
$
|
1,394
|
|
|
$
|
55
|
|
|
$
|
1,449
|
|
|
Net
earnings
|
|
—
|
|
|
—
|
|
|
4,732
|
|
|
—
|
|
|
4,732
|
|
|
—
|
|
|
4,732
|
|
|
Other comprehensive
income, net of tax1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
668
|
|
|
668
|
|
|
—
|
|
|
668
|
|
|
Repurchases of common
stock
|
|
(2)
|
|
|
(366)
|
|
|
(350)
|
|
|
—
|
|
|
(718)
|
|
|
—
|
|
|
(718)
|
|
|
Dividends
declared2
|
|
—
|
|
|
—
|
|
|
(2,551)
|
|
|
—
|
|
|
(2,551)
|
|
|
—
|
|
|
(2,551)
|
|
|
Stock-based awards,
ESOP activity and
other
|
|
2
|
|
|
366
|
|
|
—
|
|
|
—
|
|
|
368
|
|
|
—
|
|
|
368
|
|
|
Net decrease in
noncontrolling interests in
subsidiary
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11)
|
|
|
(11)
|
|
|
Balance at Sept.
29, 2019
|
|
$
|
281
|
|
|
$
|
—
|
|
|
$
|
17,265
|
|
|
$
|
(13,653)
|
|
|
$
|
3,893
|
|
|
$
|
44
|
|
|
$
|
3,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Primarily represents
the reclassification adjustment for the recognition of prior period
amounts related to pension and other postretirement
benefit
plans.
|
2
|
Represents dividends
of $2.20 per share declared for each of the first, second and third
quarters of 2019 and dividends of $2.40 per share declared
for
the fourth quarter of
2019.
|
Lockheed Martin
Corporation
|
Other Financial
and Operating Information
|
(unaudited; in
millions, except aircraft deliveries and weeks)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
Outlook
|
|
2018
Actual
|
|
Total FAS expense
and CAS costs
|
|
|
|
|
|
|
|
|
|
FAS pension
expense
|
|
|
|
|
|
$
|
(1,090)
|
|
$
|
(1,431)
|
|
Less: CAS pension
cost
|
|
|
|
|
|
2,565
|
|
2,433
|
|
Net FAS/CAS pension
adjustment
|
|
|
|
|
|
$
|
1,475
|
|
$
|
1,002
|
|
|
|
|
|
|
|
|
|
|
|
Service and
non-service cost reconciliation
|
|
|
|
|
|
|
|
|
FAS pension service
cost
|
|
|
|
|
|
$
|
(515)
|
|
$
|
(630)
|
|
Less: CAS pension
cost
|
|
|
|
|
|
2,565
|
|
2,433
|
|
FAS/CAS operating
adjustment
|
|
|
|
|
|
2,050
|
|
1,803
|
|
Non-operating FAS
pension cost 1
|
|
|
|
|
|
(575)
|
|
(801)
|
|
Net FAS/CAS pension
adjustment
|
|
|
|
|
|
$
|
1,475
|
|
$
|
1,002
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The corporation
records the non-service cost components of FAS pension expense as
part of other non-operating expense, net in the
consolidated
statements of earnings. The non-service cost components in the
table above relate only to the corporation's qualified
defined
benefit pension
plans. The corporation expects total non-service costs for its
qualified defined benefit pension plans in the table above,
along
with non-service
costs for its other postretirement benefit plans of $115 million,
to total $690 million for 2019. The corporation recorded
non-
service costs for its
other postretirement benefit plans of $67 million in 2018, in
addition to its total non-service costs for its qualified
defined
benefit pension plans
in the table above, for a total of $868 million in 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog
|
|
|
|
|
|
Sept. 29,
2019
|
|
Dec. 31,
2018
|
|
Aeronautics
|
|
|
|
|
|
$
|
49,426
|
|
$
|
55,601
|
|
Missiles and Fire
Control
|
|
|
|
|
|
26,973
|
|
21,363
|
|
Rotary and Mission
Systems
|
|
|
|
|
|
31,867
|
|
31,320
|
|
Space
|
|
|
|
|
|
29,089
|
|
22,184
|
|
Total
backlog
|
|
|
|
|
|
$
|
137,355
|
|
$
|
130,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Nine Months
Ended
|
|
Aircraft
Deliveries
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
Sept. 29,
2019
|
|
Sept. 30,
2018
|
|
F-35
|
|
28
|
|
20
|
|
83
|
|
59
|
|
C-130J
|
|
6
|
|
7
|
|
19
|
|
18
|
|
C-5
|
|
-
|
|
1
|
|
-
|
|
4
|
|
Government helicopter
programs
|
|
20
|
|
28
|
|
61
|
|
75
|
|
Commercial helicopter
programs
|
|
-
|
|
1
|
|
-
|
|
2
|
|
International
military helicopter programs
|
2
|
|
4
|
|
5
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
Number of Weeks in
Reporting Period
|
|
|
|
|
2019
|
|
2018
|
|
First
quarter
|
|
|
|
|
|
13
|
|
12
|
|
Second
quarter
|
|
|
|
|
|
13
|
|
13
|
|
Third
quarter
|
|
|
|
|
|
13
|
|
14
|
|
Fourth
quarter
|
|
|
|
|
|
13
|
|
13
|
View original
content:http://www.prnewswire.com/news-releases/lockheed-martin-reports-third-quarter-2019-results-300942338.html
SOURCE Lockheed Martin