BETHESDA, Md., April 21, 2015 /PRNewswire/ -- Lockheed
Martin Corporation (NYSE: LMT) today reported first quarter 2015
net sales of $10.1 billion, compared
to $10.7 billion in the first quarter
of 2014. Net earnings in the first quarter of 2015 were
$878 million, or $2.74 per share, compared to $933 million, or $2.87 per share, in the first quarter of 2014.
Cash from operations in the first quarter of 2015 was $957 million, compared to cash from operations of
$2.1 billion in the first quarter of
2014.
"Our team continues to deliver solid performance for our
customers and strong results for our shareholders," said
Marillyn Hewson, Lockheed Martin
Chairman, President and CEO. "We remain focused on successfully
competing in the global marketplace and delivering industry-leading
affordable products and technologies to our customers."
Summary Financial Results
The following table presents the Corporation's summary financial
results.
|
(in millions, except
per share data)
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
29,
|
|
|
March
30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
$
|
10,111
|
|
|
$
|
10,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit
|
|
|
|
|
|
|
|
|
|
$
|
1,306
|
|
|
$
|
1,429
|
|
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS pension
adjustment
|
|
|
|
|
|
|
|
|
|
|
119
|
|
|
|
86
|
|
|
|
Other, net
|
|
|
|
|
|
|
|
|
|
|
(69)
|
|
|
|
(83)
|
|
|
|
Total unallocated
items
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
|
3
|
|
|
|
Consolidated
operating profit
|
|
|
|
|
|
|
|
|
|
$
|
1,356
|
|
|
$
|
1,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
|
|
|
|
|
|
|
$
|
878
|
|
|
$
|
933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
|
|
|
|
|
|
|
|
|
$
|
2.74
|
|
|
$
|
2.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from
operations
|
|
|
|
|
|
|
|
|
|
$
|
957
|
|
|
$
|
2,100
|
|
|
|
|
|
2015 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 in this news release.
|
(in millions, except
per share data)
|
|
Current
Update
|
|
January
2015
|
|
|
|
|
|
|
|
|
|
Orders
|
|
No
Change
|
|
$43,500
– $45,000
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
No
Change
|
|
$43,500 –
$45,000
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit
|
|
$5,150 –
$5,300
|
|
$5,100 –
$5,250
|
|
|
FAS/CAS
pension adjustment
|
|
No
Change
|
|
~475
|
|
|
Other,
net
|
|
No
Change
|
|
~(275)
|
|
|
Consolidated
operating profit
|
|
$5,350 –
$5,500
|
|
$5,300 –
$5,450
|
|
|
|
|
|
|
|
|
|
Diluted earnings
per share
|
|
$10.85 –
$11.15
|
|
$10.80 –
$11.10
|
|
|
|
|
|
|
|
|
|
Cash from
operations
|
|
No
Change
|
|
>/= $5,000
|
|
|
|
|
Cash Activities
The Corporation's cash deployment activities in the first
quarter of 2015 consisted of the following:
- repurchasing 3.0 million shares for $604
million, compared to 7.0 million shares for $1.1 billion in the first quarter of 2014;
- paying cash dividends of $498
million, compared to $444
million in the first quarter of 2014; and
- making capital expenditures of $118
million, compared to $103
million in the first quarter of 2014.
On Feb. 20, 2015, the Corporation
issued $2.25 billion of notes in a
registered public offering consisting of $750 million maturing in 2025 with a fixed
interest rate of 2.90%, $500 million
maturing in 2035 with a fixed interest rate of 3.60% and
$1.0 billion maturing in 2045 with a
fixed interest rate of 3.80%.
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 of the business segments includes the
Corporation's share of earnings or losses from equity method
investees as 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. Changes in volume also include the effect of
fluctuations in contract profit booking rates that have occurred in
reporting periods other than those presented in the comparative
segment results. 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 favorably or
unfavorably 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, 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; asset impairments; and
losses on sales of assets. 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
|
|
|
|
|
|
|
|
|
|
|
|
March
29,
|
|
|
March
30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
|
|
|
|
|
|
|
|
$
|
3,134
|
|
|
$
|
3,386
|
|
|
|
Information Systems
& Global Solutions
|
|
|
|
|
|
|
|
|
|
|
1,869
|
|
|
|
1,910
|
|
|
|
Missiles and Fire
Control
|
|
|
|
|
|
|
|
|
|
|
1,503
|
|
|
|
1,867
|
|
|
|
Mission Systems and
Training
|
|
|
|
|
|
|
|
|
|
|
1,651
|
|
|
|
1,628
|
|
|
|
Space
Systems
|
|
|
|
|
|
|
|
|
|
|
1,954
|
|
|
|
1,859
|
|
|
|
Total net
sales
|
|
|
|
|
|
|
|
|
|
$
|
10,111
|
|
|
$
|
10,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
|
|
|
|
|
|
|
|
$
|
371
|
|
|
$
|
393
|
|
|
|
Information Systems
& Global Solutions
|
|
|
|
|
|
|
|
|
|
|
136
|
|
|
|
174
|
|
|
|
Missiles and Fire
Control
|
|
|
|
|
|
|
|
|
|
|
292
|
|
|
|
358
|
|
|
|
Mission Systems and
Training
|
|
|
|
|
|
|
|
|
|
|
219
|
|
|
|
250
|
|
|
|
Space
Systems
|
|
|
|
|
|
|
|
|
|
|
288
|
|
|
|
254
|
|
|
|
Total business segment
operating profit
|
|
|
|
|
|
|
|
|
|
|
1,306
|
|
|
|
1,429
|
|
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS pension
adjustment
|
|
|
|
|
|
|
|
|
|
|
119
|
|
|
|
86
|
|
|
|
Other, net
|
|
|
|
|
|
|
|
|
|
|
(69)
|
|
|
|
(83)
|
|
|
|
Total unallocated
items
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
|
3
|
|
|
|
Total consolidated
operating profit
|
|
|
|
|
|
|
|
|
|
$
|
1,356
|
|
|
$
|
1,432
|
|
|
|
|
|
The Corporation's consolidated net adjustments not related to
volume, including net profit booking rate adjustments and other
matters, represented approximately 38 percent of total segment
operating profit for the first quarter of 2015, compared to
approximately 37 percent in the first quarter of 2014.
Aeronautics
|
(in
millions)
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
29,
|
|
|
March
30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
$
|
3,134
|
|
|
$
|
3,386
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
$
|
371
|
|
|
$
|
393
|
|
|
|
Operating
margins
|
|
|
|
|
|
|
|
|
|
|
11.8
|
%
|
|
|
11.6
|
%
|
|
Aeronautics' net sales for the first quarter of 2015 decreased
$252 million, or 7 percent, compared
to the same period in 2014. The decrease was attributable to lower
net sales of approximately $135
million for the C-130 program due to fewer aircraft
deliveries (four aircraft delivered in the first quarter of 2015,
compared to five delivered in the same period in 2014) and lower
sustainment activities; about $95
million for the C-5 program due to fewer aircraft deliveries
(one aircraft delivered in the first quarter of 2015, compared to
two delivered in the same period in 2014); approximately
$70 million for the F-16 program due
to decreased sustainment activities and fewer aircraft deliveries
(three aircraft delivered in the first quarter of 2015, compared to
four delivered in the same period in 2014); about $50 million for the F-22 program due to decreased
sustainment activities; and approximately $50 million due to lower volume on various other
sustainment activities. The decreases were partially offset by
higher net sales of approximately $175
million for F-35 production contracts due to increased
volume and sustainment activities. Net sales for F-35 development
contracts were comparable.
Aeronautics' operating profit for the first quarter of 2015
decreased $22 million, or 6 percent,
compared to the same period in 2014. The decrease was primarily
attributable to lower operating profit of approximately
$30 million for the C-130 program due
to fewer aircraft deliveries and lower risk retirements; and about
$20 million for the F-16 program due
to decreased sustainment activities, lower risk retirements, and
fewer aircraft deliveries. The decreases were partially offset by
higher operating profit of approximately $25
million for F-35 production contracts due to increased
volume and risk retirements. Operating profit for F-35 development
contracts was comparable. Adjustments not related to volume,
including net profit booking rate adjustments, for the first
quarter of 2015 were comparable to the same period in 2014.
Information Systems & Global Solutions
|
(in
millions)
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
29,
|
|
|
March
30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
$
|
1,869
|
|
|
$
|
1,910
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
$
|
136
|
|
|
$
|
174
|
|
|
|
Operating
margins
|
|
|
|
|
|
|
|
|
|
|
7.3
|
%
|
|
|
9.1
|
%
|
|
IS&GS' net sales decreased $41
million, or 2 percent, for the first quarter of 2015
compared to the same period in 2014. The decrease was attributable
to lower net sales of approximately $160
million due to decreased volume as a result of the wind-down
or completion of certain programs (including Persistent Threat
Detection System program) affected by in-theater force reductions,
lower customer funding levels (primarily command and control
programs), and the impacts of increased re-competition of existing
contracts coupled with the fragmentation of large contracts into
multiple smaller contracts that are awarded primarily on the basis
of price (CMS-CITIC). The decreases were partially offset by higher
net sales of approximately $80
million for businesses acquired in 2014; and about
$40 million due to increased volume
on recently awarded programs.
IS&GS' operating profit for the first quarter of 2015
decreased $38 million, or 22 percent,
compared to the same period in 2014. The decrease was primarily
attributable to lower operating profit of approximately
$70 million for performance matters
on an international program during the first quarter of 2015 and
about $10 million for the
amortization of intangible assets associated with recently acquired
businesses. The decreases were partially offset by higher operating
profit of approximately $35 million
due to risk retirements on various programs and increased volume on
recently awarded programs. Adjustments not related to volume,
including net profit booking rate adjustments, were $25 million lower for the first quarter of 2015
compared to the same period in 2014.
Missiles and Fire Control
|
(in
millions)
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
29,
|
|
|
March
30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
$
|
1,503
|
|
|
$
|
1,867
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
$
|
292
|
|
|
$
|
358
|
|
|
|
Operating
margins
|
|
|
|
|
|
|
|
|
|
|
19.4
|
%
|
|
|
19.2
|
%
|
|
MFC's net sales for the first quarter of 2015 decreased
$364 million, or 19 percent, compared
to the same period in 2014. The decrease was attributable to lower
net sales of approximately $160
million for tactical missile programs due to fewer
deliveries (primarily Hellfire, Joint Air-to-Surface Standoff
Missile and Guided Multiple Launch Rocket System); about
$115 million for air and missile
defense programs due to decreased deliveries (primarily Patriot
Advanced Capability-3); and approximately $85 million for fire control programs due to
decreased deliveries (primarily LANTIRN® and Sniper®).
MFC's operating profit for the first quarter of 2015 decreased
$66 million, or 18 percent, compared
to the same period in 2014. The decrease was attributable to lower
operating profit of approximately $50
million for tactical missile programs due to fewer
deliveries and lower risk retirements (primarily Hellfire); and
about $25 million for fire control
programs due to lower risk retirements and fewer deliveries
(primarily LANTIRN® and Sniper®). Adjustments not related to
volume, including net profit booking rate adjustments, were
approximately $25 million lower for
the first quarter of 2015 compared to the same period in 2014.
Mission Systems and Training
|
(in
millions)
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
29,
|
|
|
March
30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
$
|
1,651
|
|
|
$
|
1,628
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
$
|
219
|
|
|
$
|
250
|
|
|
|
Operating
margins
|
|
|
|
|
|
|
|
|
|
|
13.3
|
%
|
|
|
15.4
|
%
|
|
MST's net sales for the first quarter of 2015 increased
$23 million, or 1 percent, compared
to the same period in 2014. Net sales increased by approximately
$110 million for integrated warfare
systems and sensors programs due to the start of new programs
(primarily Space Fence) and volume (including Aegis and radar
surveillance programs); and $35
million for undersea systems due to an increase in volume on
various programs. The increases were mostly offset by lower
net sales of approximately $120
million for ship and aviation systems programs due to fewer
deliveries (including MH-60) and lower volume (including Merlin
Capability Sustainment Program).
MST's operating profit for the first quarter of 2015 decreased
$31 million, or 12 percent, compared
to the same period in 2014. The decrease was primarily attributable
to lower operating profit of approximately $25 million for ship and aviation systems due to
decreased risk retirements (primarily naval launchers programs) and
lower volume. Adjustments not related to volume, including net
profit booking rate adjustments and other matters, were
approximately $40 million lower for
the first quarter of 2015 compared to the same period in 2014.
Space Systems
|
(in
millions)
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
|
|
|
|
|
|
March
29,
|
|
|
March
30,
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
$
|
1,954
|
|
|
$
|
1,859
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
$
|
288
|
|
|
$
|
254
|
|
|
|
Operating
margins
|
|
|
|
|
|
|
|
|
|
|
14.7
|
%
|
|
|
13.7
|
%
|
|
Space Systems' net sales for the first quarter of 2015 increased
$95 million, or 5 percent, compared
to the same period in 2014. The increase was attributable to
higher net sales of approximately $105
million for the Orion program due to increased volume; and
about $90 million for businesses
acquired in 2014. These increases were partially offset by lower
net sales of approximately $75
million for government satellite programs due to decreased
volume.
Space Systems' operating profit for the first quarter of 2015
increased $34 million, or 13 percent,
compared to the same period in 2014. The increase was attributable
to higher operating profit of about $20
million for government satellite programs due to increased
risk retirements; and approximately $15
million for the Orion program due to increased risk
retirements and volume. Adjustments not related to volume,
including net profit booking rate adjustments and other matters,
were approximately $50 million higher
for the first quarter of 2015 compared to the same period in
2014.
Total equity earnings recognized by Space Systems (primarily
ULA) represented approximately $75
million, or 26 percent, of this business segment's operating
profit for the first quarter of 2015, compared to approximately
$70 million, or 28 percent, in the
first quarter of 2014.
Income Taxes
The Corporation's effective income tax rate was 30.6 percent for
the first quarter of 2015, compared to 30.8 percent for the first
quarter of 2014. 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 rates included no benefit from
the research and development tax credit because the credit was not
part of the law and had not been reenacted during either
period.
About Lockheed Martin
Headquartered in Bethesda,
Maryland, Lockheed Martin is a global security and aerospace
company that employs approximately 112,000 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
2014 were $45.6 billion.
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 April 21, 2015. 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 Corporation's reliance on contracts with the U.S.
Government, all of which are conditioned upon the availability of
funding;
- declining budgets; affordability initiatives; the
implementation of automatic sequestration under the Budget Control
Act of 2011; U.S. Government operations under a continuing
resolution or the failure to adopt a budget which may cause
contracts to be delayed, canceled or funded at lower levels or
which may cause the Corporation to put its funds at risk;
- risks related to the development, performance, schedule, cost
and requirements of complex and technologically advanced programs
including the Corporation's largest, the F-35 program;
- economic, industry, business and political conditions (domestic
and international) including their effects on governmental
policy;
- the Corporation's success in growing international sales and
expanding into adjacent markets and risks associated with doing
business in new markets and internationally;
- the competitive environment for the Corporation's products and
services, including increased market pressures in the Corporation's
services businesses, competition from outside the aerospace and
defense industry, and increased bid protests;
- planned production rates for significant programs and
compliance with stringent performance and reliability
standards;
- the performance of key suppliers, teammates, venture partners,
subcontractors and customers;
- the timing and customer acceptance of product deliveries;
- the Corporation's ability 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 the Corporation's businesses;
- the Corporation's ability to implement, pace and effect
capitalization changes such as share repurchase activity and
pension funding or debt levels;
- the Corporation's ability to recover certain costs under U.S.
Government contracts and changes in contract mix;
- the accuracy of the Corporation's estimates and
projections;
- risk of a future impairment of goodwill or other long-term
assets;
- movements in interest rates and other changes that may affect
pension plan assumptions and actual returns on pension plan
assets;
- realizing the anticipated benefits of acquisitions or
divestitures, ventures, teaming arrangements or internal
reorganizations, and the Corporation's efforts to increase the
efficiency of its operations and improve the affordability of its
products and services;
- the adequacy of the Corporation's insurance and
indemnities;
- materials availability;
- the effect of changes in (or the interpretation of):
legislation, regulation or policy, including those applicable to
procurement, cost allowability or recovery, accounting, taxation,
or export; and
- the outcome of legal proceedings, bid protests, environmental
remediation efforts, government allegations that we have failed to
comply with law, other contingencies and U.S. Government
identification of deficiencies in the Corporation's 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 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, 2014. 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
|
|
|
|
|
|
|
|
|
|
March 29,
2015
|
|
March 30,
2014
|
|
|
|
|
|
|
|
Net
sales
|
|
$
10,111
|
|
$
10,650
|
|
|
|
|
|
|
|
Cost of
sales
|
|
(8,848)
|
|
(9,279)
|
|
|
|
|
|
|
|
Gross
profit
|
|
1,263
|
|
1,371
|
|
|
|
|
|
|
|
Other income,
net
|
|
93
|
|
61
|
|
|
|
|
|
|
|
Operating
profit
|
|
1,356
|
|
1,432
|
|
|
|
|
|
|
|
Interest
expense
|
|
(93)
|
|
(86)
|
|
|
|
|
|
|
|
Other non-operating
income, net
|
|
3
|
|
2
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
1,266
|
|
1,348
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(388)
|
|
(415)
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
878
|
|
$
933
|
|
|
|
|
|
|
|
Effective tax rate
|
|
30.6
|
%
|
30.8
|
%
|
|
|
|
|
|
|
Earnings per
common share
|
|
|
|
|
|
Basic
|
|
$
2.78
|
|
$
2.92
|
|
Diluted
|
|
$
2.74
|
|
$
2.87
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
Basic
|
|
315.4
|
|
319.1
|
|
Diluted
|
|
320.2
|
|
325.1
|
|
|
|
|
|
|
|
Common shares
reported in stockholders' equity at end of period
|
|
313
|
|
315
|
|
|
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 March
29 for the first quarter of 2015 and March 30 for the first
quarter
of 2014. 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.
|
Lockheed Martin
Corporation
|
|
|
|
|
|
|
|
|
Business Segment
Summary Operating Results
|
|
|
|
|
|
|
|
(unaudited; in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
|
March 29,
2015
|
|
March 30,
2014
|
|
|
%
Change
|
Net
sales
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$ 3,134
|
|
$ 3,386
|
|
|
(7)
|
%
|
Information
Systems & Global Solutions
|
|
1,869
|
|
1,910
|
|
|
(2)
|
%
|
Missiles and
Fire Control
|
|
1,503
|
|
1,867
|
|
|
(19)
|
%
|
Mission
Systems and Training
|
|
1,651
|
|
1,628
|
|
|
1
|
%
|
Space
Systems
|
|
1,954
|
|
1,859
|
|
|
5
|
%
|
Total net
sales
|
|
$ 10,111
|
|
$ 10,650
|
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
371
|
|
$ 393
|
|
|
(6)
|
%
|
Information
Systems & Global Solutions
|
|
136
|
|
174
|
|
|
(22)
|
%
|
Missiles and
Fire Control
|
|
292
|
|
358
|
|
|
(18)
|
%
|
Mission
Systems and Training
|
|
219
|
|
250
|
|
|
(12)
|
%
|
Space
Systems
|
|
288
|
|
254
|
|
|
13
|
%
|
Total business segment
operating profit
|
1,306
|
|
1,429
|
|
|
(9)
|
%
|
Unallocated
items
|
|
|
|
|
|
|
|
|
FAS/CAS
pension adjustment
|
|
119
|
|
86
|
|
|
|
|
Other,
net
|
|
(69)
|
|
(83)
|
|
|
|
|
Total unallocated
items
|
|
50
|
|
3
|
|
|
N/M
|
|
Total consolidated
operating profit
|
|
$ 1,356
|
|
$ 1,432
|
|
|
(5)
|
%
|
|
|
|
|
|
|
|
|
|
Operating
margins
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
11.8
|
%
|
11.6
|
%
|
|
|
|
Information
Systems & Global Solutions
|
|
7.3
|
%
|
9.1
|
%
|
|
|
|
Missiles and
Fire Control
|
|
19.4
|
%
|
19.2
|
%
|
|
|
|
Mission
Systems and Training
|
|
13.3
|
%
|
15.4
|
%
|
|
|
|
Space
Systems
|
|
14.7
|
%
|
13.7
|
%
|
|
|
|
Total business segment
operating margins
|
12.9
|
%
|
13.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
operating margins
|
|
13.4
|
%
|
13.4
|
%
|
|
|
|
Lockheed Martin
Corporation
|
|
|
|
|
Consolidated
Balance Sheets
|
|
|
|
|
(unaudited; in
millions, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 29,
2015
|
|
Dec. 31,
2014
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
3,486
|
|
$
1,446
|
Receivables,
net
|
|
6,545
|
|
5,884
|
Inventories,
net
|
|
3,087
|
|
2,882
|
Deferred
income taxes
|
|
1,468
|
|
1,451
|
Other current
assets
|
|
632
|
|
666
|
Total current assets
|
|
15,218
|
|
12,329
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
4,654
|
|
4,755
|
Goodwill
|
|
10,841
|
|
10,862
|
Deferred income
taxes
|
|
4,024
|
|
4,013
|
Other noncurrent
assets
|
|
5,015
|
|
5,114
|
Total
assets
|
|
$
39,752
|
|
$ 37,073
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
1,945
|
|
$
1,570
|
Customer
advances and amounts in excess of costs incurred
|
5,548
|
|
5,790
|
Salaries,
benefits and payroll taxes
|
|
1,722
|
|
1,826
|
Other current
liabilities
|
|
2,352
|
|
1,926
|
Total current
liabilities
|
|
11,567
|
|
11,112
|
|
|
|
|
|
Accrued pension
liabilities
|
|
11,400
|
|
11,413
|
Other postretirement
benefit liabilities
|
|
1,098
|
|
1,102
|
Long-term debt,
net
|
|
8,404
|
|
6,169
|
Other noncurrent
liabilities
|
|
3,763
|
|
3,877
|
Total
liabilities
|
|
36,232
|
|
33,673
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common stock,
$1 par value per share
|
|
313
|
|
314
|
Additional
paid-in capital
|
|
-
|
|
-
|
Retained
earnings
|
|
14,922
|
|
14,956
|
Accumulated
other comprehensive loss
|
|
(11,715)
|
|
(11,870)
|
Total stockholders'
equity
|
|
3,520
|
|
3,400
|
Total liabilities and
stockholders' equity
|
|
$
39,752
|
|
$ 37,073
|
Lockheed Martin
Corporation
|
|
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
(unaudited; in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
March 29,
2015
|
|
March 30,
2014
|
|
|
|
|
Operating
activities
|
|
|
|
Net
earnings
|
$
878
|
|
$
933
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
Depreciation
and amortization
|
244
|
|
237
|
Stock-based
compensation
|
40
|
|
48
|
Changes in
assets and liabilities
|
|
|
|
Receivables,
net
|
(661)
|
|
(423)
|
Inventories,
net
|
(205)
|
|
29
|
Accounts
payable
|
375
|
|
545
|
Customer advances and
amounts in excess of costs incurred
|
(242)
|
|
(152)
|
Postretirement benefit
plans
|
292
|
|
320
|
Income
taxes
|
395
|
|
584
|
Other,
net
|
(159)
|
|
(21)
|
Net cash provided
by operating activities
|
957
|
|
2,100
|
|
|
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(118)
|
|
(103)
|
Other, net
|
26
|
|
(23)
|
Net cash used for
investing activities
|
(92)
|
|
(126)
|
|
|
|
|
Financing
activities
|
|
|
|
Issuance of long-term
debt, net of related costs
|
2,213
|
|
-
|
Repurchases of common
stock
|
(604)
|
|
(1,106)
|
Proceeds from stock
option exercises
|
65
|
|
197
|
Dividends
paid
|
(498)
|
|
(444)
|
Other, net
|
(1)
|
|
26
|
Net cash provided
by (used for) financing activities
|
1,175
|
|
(1,327)
|
|
|
|
|
Net change in cash
and cash equivalents
|
2,040
|
|
647
|
Cash and cash
equivalents at beginning of period
|
1,446
|
|
2,617
|
Cash and cash
equivalents at end of period
|
$
3,486
|
|
$
3,264
|
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, 2014
|
$
314
|
|
$
-
|
|
$
14,956
|
|
$
(11,870)
|
|
$
3,400
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
-
|
|
-
|
|
878
|
|
-
|
|
878
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of tax1
|
-
|
|
-
|
|
-
|
|
155
|
|
155
|
|
|
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
(3)
|
|
(166)
|
|
(435)
|
|
-
|
|
(604)
|
|
|
|
|
|
|
|
|
|
|
Dividends
declared2
|
-
|
|
-
|
|
(477)
|
|
-
|
|
(477)
|
|
|
|
|
|
|
|
|
|
|
Stock-based awards
and ESOP activity
|
2
|
|
166
|
|
-
|
|
-
|
|
168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March
29, 2015
|
$
313
|
|
$
-
|
|
$
14,922
|
|
$
(11,715)
|
|
$
3,520
|
|
|
|
|
|
|
|
|
|
|
1
Primarily represents the reclassification adjustment for
recognition of prior period amounts related to postretirement
benefit plans.
|
|
2
Represents dividends of $1.50 per share declared during the first
quarter of 2015.
|
Lockheed Martin
Corporation
|
|
|
|
Operating
Data
|
|
|
|
|
(unaudited; in
millions, except aircraft deliveries)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Backlog
|
|
March 29,
2015
|
|
Dec. 31,
2014
|
Aeronautics
|
|
$
25,300
|
|
$ 27,600
|
Information Systems
& Global Solutions
|
8,100
|
|
8,700
|
Missiles and Fire
Control
|
|
12,800
|
|
13,600
|
Mission Systems and
Training
|
12,300
|
|
11,700
|
Space
Systems
|
|
18,400
|
|
18,900
|
Total
backlog
|
|
$
76,900
|
|
$ 80,500
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
|
|
March 29,
2015
|
|
March 30,
2014
|
Orders
|
|
$
6,500
|
|
$
7,700
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
Aircraft
Deliveries
|
|
March 29,
2015
|
|
March 30,
2014
|
F-16
|
|
3
|
|
4
|
F-35
|
|
8
|
|
8
|
C-130J
|
|
4
|
|
5
|
C-5
|
|
1
|
|
2
|
Logo -
http://photos.prnewswire.com/prnh/20140402/PH96591LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/lockheed-martin-reports-first-quarter-2015-results-300068874.html
SOURCE Lockheed Martin Corporation