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8-K - LOCKHEED MARTIN CORP | v208911_8-k.htm |
News Release
For
Immediate Release
LOCKHEED MARTIN ANNOUNCES
FOURTH QUARTER 2010 RESULTS
·
|
Fourth
quarter net sales of $12.8
billion
|
·
|
Fourth
quarter earnings from continuing operations of $829 million and earnings
per share from continuing operations of
$2.30
|
·
|
Fourth
quarter cash from operations of $160 million after discretionary
contributions of $840 million to its pension
trust
|
·
|
Year-end
backlog of $78.2 billion, including $20.5 billion in fourth quarter
orders
|
·
|
Provides
2011 outlook
|
BETHESDA, Md., Jan.
27, 2011 – Lockheed Martin Corporation (NYSE: LMT) today reported fourth quarter
2010 net sales of $12.8 billion, compared to $12.2 billion in 2009. Earnings
from continuing operations for the fourth quarter of 2010 were $829 million, or
$2.30 per diluted share, compared to $836 million, or $2.19 per diluted share,
in 2009. During the fourth quarter of 2010, the Corporation incurred an unusual
charge of $42 million ($27 million after-tax, or $0.08 per share) related to a
previously announced facilities consolidation within Mission Systems &
Sensors (MS2), a line of business in Electronic Systems. The fourth quarter of
2010 also included a reduction of income tax expense related to the extension of
the Research and Development (R&D) tax credit and additional benefits from
U.S. manufacturing deductions. The fourth quarter of 2009 included an unusual
tax benefit from the resolution of an IRS examination, which increased earnings
from continuing operations by $11 million, or $0.03 per share.
Cash from
operations in the fourth quarter of 2010 was $160 million, after making $840
million in discretionary contributions to the Corporation’s pension trust. Cash
from operations in the fourth quarter of 2009 was ($605) million, after making
$1.5 billion in discretionary contributions to the Corporation’s pension
trust.
“We had a solid
fourth quarter, marked by robust bookings and excellent cash generation,” said
Bob Stevens, Chairman and CEO. “For the year, sales and backlog
grew. Combined with strong cash flow, I believe it was very solid
performance in a very demanding year. Looking ahead, our employees are
focused on providing increasingly affordable solutions to our customers and
continuing strong financial results for our shareholders.”
Divestitures
Update
On
Nov. 23, 2010, the Corporation announced that it had completed the divestiture
of its Enterprise Integration Group (EIG) business. Earnings from discontinued
operations for the fourth quarter of 2010 include a $184 million ($0.51 per
share) gain from the sale of EIG. Operating results for EIG are included in
discontinued operations for all periods presented. The Corporation received $815
million in gross proceeds and paid $260 million in tax payments related to the
transaction in the quarter.
As
previously announced on June 2, 2010, the Corporation plans to divest most of
Pacific Architects and Engineers, Inc. (PAE), a business within Information
Systems & Global Solutions (IS&GS). As a result, operating results for
PAE are included in discontinued operations for all periods presented and its
assets and liabilities are classified as held for sale on the balance sheet as
of Dec. 31, 2010. The plan to divest PAE is a result of customers seeking a
different mix of services that do not fit with the Corporation’s long-term
strategy. The Corporation expects to announce a transaction to sell PAE in the
first quarter of 2011.
2
Summary Reported
Results
The following table
presents the Corporation’s results for the periods referenced in accordance with
generally accepted accounting principles (GAAP):
REPORTED
RESULTS
|
4th
Quarter
|
Year-to-Date
|
||||||||||||||
(In millions,
except per share data)
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Net
sales
|
$ | 12,794 | $ | 12,203 | $ | 45,803 | $ | 43,995 | ||||||||
Operating
profit
|
||||||||||||||||
Segment
operating profit
|
$ | 1,395 | $ | 1,416 | $ | 5,076 | $ | 5,104 | ||||||||
Unallocated
corporate expense, net:
|
||||||||||||||||
FAS/CAS
pension adjustment
|
(123 | ) | (114 | ) | (454 | ) | (456 | ) | ||||||||
Unusual
items1
|
(42 | ) | — | (220 | ) | — | ||||||||||
Other,
net
|
(102 | ) | (58 | ) | (305 | ) | (233 | ) | ||||||||
Operating
profit
|
$ | 1,128 | $ | 1,244 | $ | 4,097 | $ | 4,415 | ||||||||
Net
earnings (loss) from:
|
||||||||||||||||
Continuing
operations
|
$ | 829 | $ | 836 | $ | 2,645 | $ | 2,999 | ||||||||
Discontinued
operations2
|
154 | (9 | ) | 281 | 25 | |||||||||||
Net earnings2
|
$ | 983 | $ | 827 | $ | 2,926 | $ | 3,024 | ||||||||
Diluted
earnings (loss) per share:
|
||||||||||||||||
Continuing
operations
|
$ | 2.30 | $ | 2.19 | $ | 7.18 | $ | 7.71 | ||||||||
Discontinued
operations2
|
.43 | (.02 | ) | .76 | .07 | |||||||||||
Diluted earnings
per share2
|
$ | 2.73 | $ | 2.17 | $ | 7.94 | $ | 7.78 | ||||||||
Cash from operations3
|
$ | 160 | $ | (605 | ) | $ | 3,547 | $ | 3,173 |
1
|
Includes $42 million related to the previously announced facilities
consolidation within the MS2 line of business ($27 million after-tax, or
$0.08 per share). The year-to-date amount includes $178 million ($116
million after tax, or $0.31 per share) for the Voluntary Executive
Separation Program.
|
2 |
The amounts
and per share data reported for discontinued operations may change between
the earnings release date and filing of the Corporation’s 2010 Form 10-K
due to the on-going sale process for
PAE.
|
3 | The Corporation made discretionary contributions to its pension trust of $840 million in the fourth quarter of 2010 and $2.24 billion year-to-date Dec. 31, 2010. The fourth quarter and year-to-date Dec. 31, 2009 amounts include discretionary contributions to the pension trust of $1.48 billion. |
3
2011 Financial
Outlook
The following table
and other sections of this press 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 to its outlook for
proposed acquisitions, divestitures, joint ventures, or unusual items until such
transactions have been consummated. See the “Forward-Looking Statements”
discussion contained in this press release.
2011
FINANCIAL OUTLOOK 1
|
|
(In millions,
except per share data)
|
|
Net
sales
|
$45,750 - $47,250
|
Operating
profit:
|
|
Segment
operating profit
|
$4,950
- $5,100
|
Unallocated
corporate expense, net:
|
|
FAS/CAS
pension adjustment2
|
~
(925)
|
Other,
net
|
~
(325)
|
Operating
profit
|
3,700
– 3,850
|
Diluted
earnings per share from continuing operations
|
$6.70
- $7.00
|
Cash
from operations3
|
>
$4,000
|
All amounts
approximate
|
1
|
Starting in
2011, the Corporation will account for U.S Government service contracts
under the percentage-of-completion revenue recognition method in lieu of
the current service accounting method. The effect of this change is
expected to be less than one percent of net sales and segment operating
profit in 2011 and has been incorporated into the 2011 financial outlook.
The percentage-of-completion revenue recognition method better reflects
the underlying economics of these contracts and aligns the Corporation
with others in the industry.
|
2 |
The FAS/CAS
pension adjustment was calculated using a 5.5 percent discount rate and an
actual rate of return on plan assets for 2010 of approximately 13.0
percent.
|
3 |
The
Corporation’s outlook for 2011 cash from operations includes an
anticipated $1.3 billion in contributions to its pension trust. The
Corporation anticipates recovering approximately $0.9 billion as CAS costs
in 2011, with the remainder being recoverable in future
years.
|
4
Cash Deployment
Strategy
The Corporation
continued to execute its cash deployment strategy in 2010 by:
·
|
repurchasing
13.2 million shares at a cost of $916 million in the quarter and 33.0
million shares at a cost of $2.5 billion for the year-to-date
period;
|
·
|
making
discretionary contributions of $840 million to its pension trust in the
quarter and $2.24 billion for the year-to-date
period;
|
·
|
paying cash
dividends totaling $269 million in the quarter and $969 million for the
year-to-date period; and
|
·
|
expending
capital of $426 million during the quarter and $820 million during the
year-to-date period.
|
Segment
Results
The Corporation
operates in four principal business segments: Aeronautics; Electronic Systems;
IS&GS; and Space Systems.
The segment results
and discussions that follow reflect the previously discussed exclusion of PAE
and EIG from IS&GS’ results as they are both reported as discontinued
operations.
Operating profit
for the business segments includes equity earnings (losses) from their
investments, because the operating activities of the investees are closely
aligned with the operations of those segments. The Corporation’s
largest equity investments are United Launch Alliance (ULA) and United Space
Alliance (USA), both of which are part of Space
Systems.
5
The following table
presents the operating results of the four business segments and reconciles
these amounts to the Corporation’s consolidated financial
results.
(In
millions)
|
4th
Quarter
|
Year-to-Date
|
||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
||||||||||||||||
Aeronautics
|
$ | 3,856 | $ | 3,250 | $ | 13,235 | $ | 12,201 | ||||||||
Electronic Systems
|
3,976 | 3,714 | 14,363 | 13,532 | ||||||||||||
Information
Systems & Global Solutions
|
2,682 | 2,632 | 9,959 | 9,608 | ||||||||||||
Space
Systems
|
2,280 | 2,607 | 8,246 | 8,654 | ||||||||||||
Total
net sales
|
$ | 12,794 | $ | 12,203 | $ | 45,803 | $ | 43,995 | ||||||||
Operating
profit
|
||||||||||||||||
Aeronautics
|
$ | 410 | $ | 426 | $ | 1,502 | $ | 1,577 | ||||||||
Electronic Systems | 451 | 431 | 1,712 | 1,660 | ||||||||||||
Information
Systems & Global Solutions
|
255 | 259 | 890 | 895 | ||||||||||||
Space
Systems
|
279 | 300 | 972 | 972 | ||||||||||||
Segment operating
profit
|
1,395 | 1,416 | 5,076 | 5,104 | ||||||||||||
Unallocated
corporate expense, net
|
(267 | ) | (172 | ) | (979 | ) | (689 | ) | ||||||||
Total
operating profit
|
$ | 1,128 | $ | 1,244 | $ | 4,097 | $ | 4,415 |
In
the discussion of comparative results, changes in net sales and operating profit
generally are expressed in terms of volume and performance.
Volume refers to
increases or decreases in sales resulting from varying production activity
levels, deliveries, or service levels on individual contracts. Volume
changes typically include a corresponding change in operating profit based on
the estimated profit rate at completion of a particular contract for design,
development and production activities.
Performance
generally refers to changes in contract profit booking rates. These
changes to contracts for products usually relate to profit recognition
associated with revisions to total estimated costs at completion of the
contracts that reflect improved (or deteriorated) operating or award fee
performance on a particular contract. Changes in contract profit
booking rates on contracts for products are recognized by recording adjustments
in the current period for the inception-to-date effect of the changes on current
and prior periods. Recognition of the inception-to-date adjustment in
the current or prior periods may affect the comparison of segment operating
results.
6
Aeronautics
($
millions)
|
4th
Quarter
|
Year-to-Date
|
||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
$ | 3,856 | $ | 3,250 | $ | 13,235 | $ | 12,201 | ||||||||
Operating
profit
|
$ | 410 | $ | 426 | $ | 1,502 | $ | 1,577 | ||||||||
Operating
margin
|
10.6 | % | 13.1 | % | 11.3 | % | 12.9 | % |
Net sales for
Aeronautics increased by 19 percent for the fourth quarter of 2010 from the
comparable 2009 period. Sales increased in all three lines of
business during the quarter. The $354 million increase in Air Mobility primarily
was attributable to higher volume on C-130 programs, including deliveries and
support activities, as well as higher volume on the C-5 Reliability Enhancement
and Re-Engineering Program (RERP). There were nine C-130J deliveries in the
fourth quarter of 2010 compared to six in the fourth quarter of 2009. The $202
million increase in Combat Aircraft principally was due to higher volume on F-35
production contracts and F-16 support activities. These increases
partially were offset by a decrease in volume on F-16 and F-22 production
programs, the F-35 System Development and Demonstration (SDD) contract and other
combat aircraft programs. There were three F-16 deliveries in the fourth quarter
of 2010 compared to seven in the fourth quarter of 2009. The $50 million
increase in Other Aeronautics Programs mainly was due to higher volume on P-3
and advanced development programs.
Operating profit
for Aeronautics decreased by 4 percent for the fourth quarter of 2010 from the
comparable 2009 period. A decline in operating profit in Combat Aircraft
partially was offset by an increase in Air Mobility while operating profit in
Other Aeronautics Programs essentially was unchanged. The $50 million
decrease in Combat Aircraft’s operating profit primarily was due to lower volume
and a decrease in the level of favorable performance adjustments on F-22, F-16
and other combat aircraft programs in 2010. These declines partially were offset
by higher volume on F-35 production contracts. The $10 million increase in Air
Mobility operating profit primarily was due to higher volume on C-130J support
activities, which partially was offset by a lower level of favorable performance
adjustments on C-130J deliveries in 2010. The remaining change in operating
profit is attributable to an increase in other income, net between the
comparable periods.
7
Net sales for
Aeronautics increased by 8 percent for the year ended Dec. 31, 2010 from the
comparable 2009 period. Sales increased in all three lines of
business during the year. The $800 million increase in Air Mobility primarily
was attributable to higher volume on C-130J programs, including deliveries and
support activities, as well as higher volume on the C-5 RERP. There were 25
C-130J deliveries in 2010 compared to 16 in 2009. The $179 million increase in
Combat Aircraft principally was due to higher volume on F-35 production
contracts, which partially was offset by lower volume on the F-35 SDD contract
and a decline in volume on F-16, F-22 and other combat aircraft programs. There
were 20 F-16 deliveries in 2010 compared to 31 in 2009. The $55 million increase
in Other Aeronautics Programs mainly was due to higher volume on P-3 and
advanced development programs, which partially were offset by a decline in
volume on sustainment activities.
Operating profit
for Aeronautics decreased by 5 percent for the year ended Dec. 31, 2010 from the
comparable 2009 period. A decline in operating profit in Combat
Aircraft partially was offset by increases in Other Aeronautics Programs and Air
Mobility. The $149 million decrease in Combat Aircraft’s operating profit
primarily was due to lower volume and a decrease in the level of favorable
performance adjustments on the F-22 program, the F-35 SDD contract and F-16 and
other combat aircraft programs in 2010. These decreases more than offset
increased operating profit resulting from higher volume and improved performance
on F-35 production contracts in 2010. The $35 million increase in Other
Aeronautics Programs mainly was attributable to higher volume and improved
performance on P-3 and advanced development programs as well as an increase in
the level of favorable performance adjustments on sustainment activities in
2010. The $19 million increase in Air Mobility operating profit primarily was
due to higher volume and improved performance in 2010 on C-130J support
activities, which more than offset a decrease in operating profit due to a lower
level of favorable performance adjustments on C-130J deliveries in 2010. The
remaining change in operating profit is attributable to an increase in other
income, net between the comparable periods.
The Aeronautics
2010 operating margins have decreased when compared to 2009. The operating
margin decrease reflects the life cycles of our significant programs.
Specifically, Aeronautics is performing more development and initial production
work on the F-35 program and is performing less work on more mature programs
such as the F-22 and F-16. Development and initial production contracts yield
lower profits than mature full rate programs. Accordingly, while net
sales increased in 2010 relative to 2009, operating profit decreased and
consequently operating margins have declined.
8
Electronic
Systems
($
millions)
|
4th
Quarter
|
Year-to-Date
|
||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
$ | 3,976 | $ | 3,714 | $ | 14,363 | $ | 13,532 | ||||||||
Operating
profit
|
$ | 451 | $ | 431 | $ | 1,712 | $ | 1,660 | ||||||||
Operating
margin
|
11.3 | % | 11.6 | % | 11.9 | % | 12.3 | % |
Net sales for
Electronic Systems increased by 7 percent for the quarter ended Dec. 31, 2010
from the comparable 2009 period. Sales increases at Missiles & Fire Control
(M&FC) and Global Training & Logistics (GT&L) more than offset a
decline in MS2. The $169 million increase at M&FC primarily was due to
higher volume on tactical missile programs, which partially was offset by lower
volume on fire control systems and air defense programs. The $113 million
increase at GT&L primarily was due to growth on readiness and stability
operations, which partially was offset by lower volume on simulation &
training and other logistics programs. The $20 million decrease at MS2 mainly
was due to lower volume on ship & aviation systems and undersea warfare
programs, which partially were offset by higher volume on surface naval warfare
programs.
Operating profit
for Electronic Systems increased by 5 percent for the quarter ended Dec. 31,
2010 from the comparable 2009 period. During the quarter, operating profit
increases at M&FC and GT&L more than offset a decline at MS2. The $50
million increase at M&FC primarily was due to higher volume and improved
performance in 2010 on certain tactical missile programs. The $10 million
increase at GT&L primarily was attributable to higher volume on readiness
and stability operations and improved performance on simulation & training
programs, which partially were offset by lower volume and performance on other
logistics programs. The $42 million decrease at MS2 primarily was attributable
to lower volume and performance on undersea warfare and performance on surface
naval warfare programs in 2010. These decreases partially were offset by
improved performance in 2010 on ship & aviation system
programs.
Net sales for
Electronic Systems increased by 6 percent for the year ended Dec. 31, 2010 from
the comparable 2009 period. Sales increased in all three lines of business
during the year. The $421 million increase at GT&L primarily was due to
growth on readiness and stability operations, which partially was offset by
lower volume on simulation & training programs. The $316 million increase at
M&FC primarily was due to higher volume on tactical missile and air defense
programs, which partially was offset by a decline in volume on fire control
systems. The $94 million increase at MS2 mainly was due to higher volume on
surface naval warfare, ship & aviation systems, and radar systems programs,
which partially was offset by lower volume on undersea warfare
programs.
9
Operating profit
for Electronic Systems increased by 3 percent for the year ended Dec. 31, 2010
from the comparable 2009 period. Operating profit increases at M&FC and
GT&L more than offset a decline at MS2. The $73 million increase at M&FC
mainly was due to higher volume and improved performance on certain tactical
missile programs and higher volume on air defense programs. The $23 million
increase at GT&L primarily was attributable to higher volume on readiness
and stability operations and improved performance on simulation and training
programs. These increases more than offset declines due to lower volume and
performance on other logistics programs and the absence in 2010 of a benefit
recognized in the first quarter of 2009 from favorably resolving a contract
matter at simulation & training programs. The $44 million decrease in
operating profit at MS2 mainly was due to lower volume and performance on
undersea warfare programs and a decrease in the level of favorable performance
adjustments on surface naval warfare programs in 2010. These declines partially
were offset by higher volume and improved performance on ship & aviation
systems and radar systems programs in 2010.
Information Systems &
Global Solutions
($
millions)
|
4th
Quarter
|
Year-to-Date
|
||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
$ | 2,682 | $ | 2,632 | $ | 9,959 | $ | 9,608 | ||||||||
Operating
profit
|
$ | 255 | $ | 259 | $ | 890 | $ | 895 | ||||||||
Operating
margin
|
9.5 | % | 9.8 | % | 8.9 | % | 9.3 | % |
Net sales for
IS&GS increased by 2 percent for the quarter ended Dec. 31, 2010 from the
comparable 2009 period. Sales increased in Defense and Civil but declined in
Intelligence during the quarter. Defense sales increased $74 million primarily
due to higher volume on mission and combat systems activities. Civil sales
increased $11 million principally due to higher volume on enterprise civilian
services. Sales in Intelligence programs declined $35 million mainly due to
lower volume on security solutions.
10
Operating profit
for IS&GS decreased by 2 percent for the quarter ended Dec. 31, 2010 from
the comparable 2009 period. During the quarter, operating profit
declined in Defense and essentially was unchanged in Intelligence and Civil. The
$9 million decrease in operating profit at Defense primarily was attributable to
a decrease in the level of favorable performance adjustments in 2010 on mission
and combat systems activities.
Net sales for
IS&GS increased by 4 percent for the year ended Dec. 31, 2010 from the
comparable 2009 period. Sales increased in Civil and Defense but declined in
Intelligence during the year. Civil increased $437 million principally due to
higher volume on enterprise civilian services. Defense sales increased $20
million primarily due to higher volume on mission and combat systems activities.
The $106 million decline in Intelligence programs mainly was due to lower volume
on security solutions.
Operating profit
for IS&GS decreased by 1 percent for the year ended Dec. 31, 2010 from the
comparable 2009 period. For the year, operating profit declines in
Defense more than offset an increase in Civil, while operating profit at
Intelligence essentially was unchanged. The $27 million decrease in operating
profit at Defense primarily was attributable to a decrease in the level of
favorable performance adjustments on mission and combat systems activities in
2010. The $19 million increase in Civil principally was due to higher
volume on enterprise civilian services.
Space
Systems
($
millions)
|
4th
Quarter
|
Year-to-Date
|
||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
$ | 2,280 | $ | 2,607 | $ | 8,246 | $ | 8,654 | ||||||||
Operating
profit
|
$ | 279 | $ | 300 | $ | 972 | $ | 972 | ||||||||
Operating
margin
|
12.2 | % | 11.5 | % | 11.8 | % | 11.2 | % |
Net sales for Space
Systems decreased by 13 percent for the quarter ended Dec. 31, 2010 from the
comparable 2009 period. Sales declined in all three lines of business
during the quarter. The $233 million decrease in Space Transportation
principally was due to lower volume on commercial launch vehicle activities, the
Orion program and the space shuttle external tank program. There were
no commercial launches in the fourth quarter of 2010 compared to one commercial
launch in the fourth quarter of 2009. The $82 million decline in Satellites
primarily was attributable to lower volume in government satellite activities,
which partially was offset by higher volume on commercial satellites. There was
one commercial satellite delivery in the fourth quarter of 2010 compared to no
deliveries in the fourth quarter of 2009. Lower volume on defensive missile
programs drove a $12 million decrease in Strategic & Defensive Missile
Systems (S&DMS) sales.
11
Operating profit
for Space Systems decreased by 7 percent for the quarter ended Dec. 31, 2010
from the comparable 2009 period. During the quarter, operating profit
declined in Satellites and essentially was unchanged in Space Transportation and
S&DMS. Satellites’ operating profit decreased $17 million primarily due to
lower volume and a decline in the level of favorable performance adjustments on
government satellite programs in 2010, which partially was offset by higher
volume on commercial satellite programs. Equity earnings represented
23 percent of operating profit at Space Systems in the fourth quarter of 2010
compared to 15 percent in the fourth quarter of 2009.
Net sales for Space
Systems decreased by 5 percent for the year ended Dec. 31, 2010 from the
comparable 2009 period. Sales declined in all three lines of business
during the year. The $253 million decrease in Space Transportation principally
was due to lower volume on the space shuttle external tank, commercial launch
vehicle activity and other human space flight programs, which partially were
offset by higher volume on the Orion program. There were no commercial launches
in 2010 compared to one commercial launch in 2009. S&DMS sales declined $147
million principally due to lower volume on defensive missile
programs. The $8 million sales decline in Satellites primarily was
attributable to lower volume on commercial satellites, which partially were
offset by higher volume on government satellite activities. There was one
commercial satellite delivery in 2010 and one commercial satellite delivery in
2009.
Operating profit
for Space Systems was unchanged for the year ended Dec. 31, 2010 from the
comparable 2009 period. Growth in Space Transportation’s operating
profit was more than offset by a decline in Satellites’ operating profit.
S&DMS operating profit was relatively unchanged between periods. The $21
million increase in Space Transportation mainly was attributable to higher
equity earnings on the ULA and USA joint ventures and higher volume on the Orion
program, which partially were offset by lower volume on the space shuttle’s
external tank program. Satellites’ operating profit decreased $23 million
primarily due to lower volume and performance on commercial satellite programs,
which partially was offset by higher volume and improved performance on
government satellite programs in 2010. Equity earnings represented 27 percent of
operating profit at Space Systems in 2010, compared to 22 percent in
2009.
12
Unallocated Corporate
Expense, Net
($
millions)
|
4th
Quarter
|
Year-to-Date
|
||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
FAS/CAS
pension adjustment
|
$ | (123 | ) | $ | (114 | ) | $ | (454 | ) | $ | (456 | ) | ||||
Unusual
items
|
(42 | ) | — | (220 | ) | — | ||||||||||
Other,
net
|
(102 | ) | (58 | ) | (305 | ) | (233 | ) | ||||||||
Unallocated
corporate expense, net
|
$ | (267 | ) | $ | (172 | ) | $ | (979 | ) | $ | (689 | ) |
Consistent with the manner in which the Corporation’s business segment
operating performance is evaluated by senior management, certain items are
excluded from the business segment results and included in “Unallocated
corporate expense, net.” See the Corporation’s 2009 Form 10-K for a
description of “Unallocated corporate expense, net” including the FAS/CAS
pension adjustment.
For purposes of segment reporting, unusual items are included in
“Unallocated corporate expense, net”:
2010 –
·
|
In the fourth
quarter of 2010, the Corporation incurred an unusual charge, net of state
income tax benefits, of $42 million related to a previously announced
facilities consolidation within the MS2 line of business in Electronic
Systems. The charge reduced net earnings by $27 million ($0.08
per share during the fourth quarter of 2010; $0.07 per share for the year
ended Dec. 31, 2010).
|
·
|
In the third
quarter of 2010, the Corporation incurred an unusual charge, net of state
income tax benefits, of $178 million related to the Voluntary Executive
Separation Program. The charge reduced net earnings by $116
million ($0.32 per share during the third quarter of 2010; $0.31 per share
for the year ended Dec. 31, 2010).
|
2009 –
·
|
There were no
unusual items affecting operating profit during the
year.
|
13
Income
Taxes
The Corporation’s
effective income tax rates from continuing operations were 22.5 percent and 30.9
percent for the quarter and year ended Dec. 31, 2010, and 29.4 percent and 29.1
percent for the quarter and year ended Dec. 31, 2009. These rates were lower
than the statutory rate of 35 percent for all periods due to tax deductions for
U.S. manufacturing activities and dividends related to our employee stock
ownership plan. The effective rates for the comparable periods were also
impacted by the following items:
2010 –
·
|
In the fourth
quarter, tax legislation retroactively extended the R&D tax credit for
two years, from Jan. 1, 2010 to Dec. 31, 2011. As a result, the
Corporation reduced its income tax expense by $43 million in the fourth
quarter of 2010. R&D tax credits of a comparable amount were
recognized as a reduction of income tax expense throughout 2009. In the
fourth quarter, the Corporation also recognized additional benefits from
U.S. manufacturing deductions.
|
·
|
As was
previously reported, health care legislation eliminated the tax deduction
for company-paid retiree prescription drug expenses to the extent they are
reimbursed under Medicare Part D, beginning in 2013. As a result, the
Corporation recorded additional income tax expense of $96 million in the
first quarter.
|
2009 –
·
|
Resolution of
the IRS examination of the 2008 tax return in the fourth quarter reduced
income tax expense by $11 million. The year also included the
third quarter resolution of the IRS examination of the 2005-2007 tax
returns, which reduced income tax expense by $58
million.
|
14
Discontinued
Operations
Discontinued
operations includes the operating results for PAE and EIG for all periods
presented. The fourth quarter and year-to-date 2010 amounts also include a $184
million after-tax gain on the sale of EIG.
15
Headquartered in
Bethesda, Md., Lockheed Martin is a global security company that employs about
132,000 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 2010 sales from continuing
operations were $45.8 billion.
###
NEWS MEDIA
CONTACT:
|
Jeff Adams,
301/897-6308
|
INVESTOR RELATIONS
CONTACT:
|
Jerry Kircher,
301/897-6584
|
Web site:
www.lockheedmartin.com
Conference
call: Lockheed Martin will webcast the earnings conference
call (listen-only mode) at 3:00 p.m. E.T. on Jan. 27, 2011. A live
audio broadcast, including relevant charts, will be available on the Investor
Relations page of the company’s web site at: http://www.lockheedmartin.com/investor.
FORWARD-LOOKING
STATEMENTS
Statements in this
release that are "forward-looking statements" are based on Lockheed Martin’s
current expectations and assumptions. Forward-looking statements in this
release include estimates of future sales, earnings and cash flow. These
statements are not guarantees of future performance and are subject to risks and
uncertainties. Actual results could differ materially due to factors such
as:
·
|
the
availability of government funding for the Corporation’s products and
services both domestically and internationally due to performance, cost
growth, or other factors;
|
·
|
changes in
government and customer priorities and requirements (including the
potential deferral of awards, terminations or reduction of expenditures,
changes to respond to the priorities of Congress and the Administration,
budgetary constraints, operations under a continuing resolution, and
cost-cutting initiatives);
|
·
|
additional
costs or schedule revisions to the F-35 program that may result from the
detailed re-planning of the restructured program that is ongoing following
completion of the technical baseline
review;
|
·
|
actual
returns (or losses) on pension plan assets, movements in interest and
discount rates and other changes that may affect pension plan
assumptions;
|
·
|
the effect of
capitalization changes (such as share repurchase activity, advance pension
funding, option exercises, or debt levels) on earnings per
share;
|
·
|
difficulties
in developing and producing operationally advanced technology
systems;
|
·
|
the timing
and customer acceptance of product
deliveries;
|
·
|
materials
availability and performance by key suppliers, 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;
|
16
·
|
the future
effect of legislation, rulemaking, and changes in accounting, tax, defense
procurement, changes in policy, interpretations or challenges to the
allowability of costs incurred under government cost accounting standards
or export policies;
|
·
|
the future
impact of acquisitions or divestitures, joint ventures or teaming
arrangements;
|
·
|
the outcome
of legal proceedings and other contingencies (including lawsuits,
government investigations or audits, and the cost of completing
environmental remediation efforts);
|
·
|
the
competitive environment for the Corporation’s products and services and
potential for delays in procurement due to bid
protests;
|
·
|
the ability
to attract and retain key personnel;
and
|
·
|
economic,
business and political conditions domestically and
internationally.
|
These are only some
of the factors that may affect the forward-looking statements contained in this
press release. For further information regarding risks and uncertainties
associated with Lockheed Martin’s business, please refer to the Corporation’s
SEC filings, including the “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” “Risk Factors,” and “Legal Proceedings”
sections of the Corporation’s 2009 annual report on Form 10-K and its 2010
quarterly reports on Form 10-Q, which may be obtained at the Corporation’s
website: http://www.lockheedmartin.com.
It
is the Corporation’s policy to only update or reconfirm its financial
projections by issuing a press release. The Corporation generally plans to
provide a forward-looking outlook as part of its quarterly earnings release but
reserves the right to provide an outlook at different intervals or to revise its
practice in future periods. All information in this release is as of Jan.
26, 2011. Lockheed Martin undertakes no duty to update any forward-looking
statement to reflect subsequent events, actual results or changes in the
Corporation’s expectations. The Corporation also disclaims any duty to
comment upon or correct information that may be contained in reports published
by investment analysts or others.
RETURN
ON INVESTED CAPITAL (ROIC)
The Corporation
believes that reporting ROIC provides investors with greater visibility into how
effectively Lockheed Martin uses the capital invested in its
operations. The Corporation uses ROIC to evaluate multi-year
investment decisions and as a long-term performance measure, and also uses ROIC
as a factor in evaluating management performance for incentive compensation
purposes.
17
The
Corporation calculates ROIC as follows:
Net earnings plus
after-tax interest expense divided by average invested capital (stockholders’
equity plus debt), after adjusting stockholders’ equity by adding back
adjustments related to postretirement benefit plans.
(In millions,
except percentages)
|
|
|||||
2010
|
2009
|
|||||
NET
EARNINGS INTEREST
EXPENSE (MULTIPLIED BY 65%) 1 |
|
$
2,926
224
|
$
3,024
198
|
|||
RETURN
|
$
3,150
|
$ 3,222
|
||||
|
||||||
AVERAGE DEBT
2,5
AVERAGE EQUITY
3,5
AVERAGE BENEFIT
PLAN
ADJUSTMENTS
4,5
|
|
$ 5,032
3,904
8,650
|
$ 4,054
3,155
8,960
|
|
||
AVERAGE
INVESTED CAPITAL
|
$
17,586
|
$ 16,169
|
||||
|
||||||
RETURN
ON INVESTED CAPITAL
|
17.9%
|
19.9%
|
1
|
Represents
after-tax interest expense utilizing the federal statutory rate of
35 percent. Interest expense is added back to net earnings
as it represents the return to debt holders. Debt is included
as a component of average invested
capital.
|
2
|
Debt consists
of long-term debt, including current maturities, and short-term borrowings
(if any).
|
3
|
Equity
includes non-cash adjustments, primarily to recognize the funded /
unfunded status of the Corporation’s benefit
plans.
|
4 |
Average
Benefit Plan Adjustments reflect the cumulative value of entries
identified in the Corporation’s Statements of Stockholders’ Equity
discussed in Note 3 above.
|
5 | Yearly averages are calculated using balances at the start of the year and at the end of each quarter. |
18
LOCKHEED
MARTIN CORPORATION
|
Condensed
Consolidated Statements of Earnings
|
Unaudited
|
(In
millions, except per share data and
percentages)
|
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
December
31, 2010
|
December 31,
2009
|
December
31, 2010
|
December 31,
2009
|
|||||||||||||
Net
sales
|
$ | 12,794 | $ | 12,203 | $ | 45,803 | $ | 43,995 | ||||||||
Cost
of sales
|
11,717 | 10,987 | 41,967 | 39,803 | ||||||||||||
Gross
profit
|
1,077 | 1,216 | 3,836 | 4,192 | ||||||||||||
Other
income, net
|
51 | 28 | 261 | 223 | ||||||||||||
Operating
profit
|
1,128 | 1,244 | 4,097 | 4,415 | ||||||||||||
Interest
expense
|
87 | 86 | 345 | 308 | ||||||||||||
Other
non-operating income, net
|
28 | 26 | 74 | 123 | ||||||||||||
Earnings
from continuing operations before income taxes
|
1,069 | 1,184 | 3,826 | 4,230 | ||||||||||||
Income
tax expense
|
240 | 348 | 1,181 | 1,231 | ||||||||||||
Earnings
from continuing operations
|
829 | 836 | 2,645 | 2,999 | ||||||||||||
Earnings
(loss) from discontinued operations (a)
|
154 | (9 | ) | 281 | 25 | |||||||||||
Net
earnings
|
$ | 983 | $ | 827 | $ | 2,926 | $ | 3,024 | ||||||||
Effective
tax rate
|
22.5 | % | 29.4 | % | 30.9 | % | 29.1 | % | ||||||||
Earnings
per common share
|
||||||||||||||||
Basic
|
||||||||||||||||
Continuing
operations
|
$ | 2.33 | $ | 2.20 | $ | 7.26 | $ | 7.79 | ||||||||
Discontinued
operations
|
0.43 | (0.01 | ) | 0.77 | 0.07 | |||||||||||
Basic
earnings per common share
|
$ | 2.76 | $ | 2.19 | $ | 8.03 | $ | 7.86 | ||||||||
Diluted
|
||||||||||||||||
Continuing
operations
|
$ | 2.30 | $ | 2.19 | $ | 7.18 | $ | 7.71 | ||||||||
Discontinued
operations
|
0.43 | (0.02 | ) | 0.76 | 0.07 | |||||||||||
Diluted
earnings per common share
|
$ | 2.73 | $ | 2.17 | $ | 7.94 | $ | 7.78 | ||||||||
Average
number of shares outstanding
|
||||||||||||||||
Basic
|
355.8 | 377.7 | 364.2 | 384.8 | ||||||||||||
Diluted
|
359.7 | 381.9 | 368.3 | 388.9 | ||||||||||||
Common
shares reported in stockholders' equity at year end:
|
345.9 | 372.9 |
(a) |
In
June 2010, the Corporation announced plans to divest most of Enterprise
Integration Group (EIG) and Pacific Architects and Engineers, Inc. (PAE).
The Corporation completed the divestiture of the EIG business in the
fourth quarter of 2010 and recognized a gain of $184 million ($0.51 per
share for the quarter; $0.50 per share for the
year).
|
19
LOCKHEED
MARTIN CORPORATION
|
Net
Sales, Operating Profit and Margins (a)
|
Unaudited
|
(In
millions, except
percentages)
|
QUARTER
ENDED
|
YEAR
ENDED
|
||||||||||||||||||||
December
31, 2010
|
December 31,
2009
|
% Change
|
December
31, 2010
|
December 31,
2009
|
% Change
|
||||||||||||||||
Net
sales
|
|||||||||||||||||||||
Aeronautics
|
$ | 3,856 | $ | 3,250 |
19%
|
$ | 13,235 | $ | 12,201 |
8%
|
|||||||||||
Electronic
Systems
|
3,976 | 3,714 |
7
|
14,363 | 13,532 |
6
|
|||||||||||||||
Information
Systems & Global Solutions
|
2,682 | 2,632 |
2
|
9,959 | 9,608 |
4
|
|||||||||||||||
Space
Systems
|
2,280 | 2,607 |
(13)
|
8,246 | 8,654 |
(5)
|
|||||||||||||||
Total
net sales
|
$ | 12,794 | $ | 12,203 |
5%
|
$ | 45,803 | $ | 43,995 |
4%
|
|||||||||||
Operating
profit
|
|||||||||||||||||||||
Aeronautics
|
$ | 410 | $ | 426 |
(4)%
|
$ | 1,502 | $ | 1,577 |
(5)%
|
|||||||||||
Electronic
Systems
|
451 | 431 |
5
|
1,712 | 1,660 |
3
|
|||||||||||||||
Information
Systems & Global Solutions
|
255 | 259 |
(2)
|
890 | 895 |
(1)
|
|||||||||||||||
Space
Systems
|
279 | 300 |
(7)
|
972 | 972 |
—
|
|||||||||||||||
Segment operating profit
|
1,395 | 1,416 |
(1)
|
5,076 | 5,104 |
(1)
|
|||||||||||||||
Unallocated
corporate expense, net
|
(267 | ) | (172 | ) | (979 | ) | (689 | ) | |||||||||||||
Total
operating profit
|
$ | 1,128 | $ | 1,244 |
(9)%
|
$ | 4,097 | $ | 4,415 |
(7)%
|
|||||||||||
Margins
|
|||||||||||||||||||||
Aeronautics
|
10.6 | % | 13.1 | % | 11.3 | % | 12.9 | % | |||||||||||||
Electronic
Systems
|
11.3 | 11.6 | 11.9 | 12.3 | |||||||||||||||||
Information
Systems & Global Solutions
|
9.5 | 9.8 | 8.9 | 9.3 | |||||||||||||||||
Space
Systems
|
12.2 | 11.5 | 11.8 | 11.2 | |||||||||||||||||
Total
operating segments
|
10.9 | 11.6 | 11.1 | 11.6 | |||||||||||||||||
Total
consolidated
|
8.8 | % | 10.2 | % | 8.9 | % | 10.0 | % |
(a) |
In
June 2010, the Corporation announced the realignment of two
IS&GS businesses, Readiness & Stability Operations (RSO) and Savi
Technology, Inc., with its Simulation, Training and Support business
to form the Global Training & Logistics line of business within
Electronic Systems and plans to divest PAE and EIG. All of the
business segment information presented in the attachments has been
reclassified to reflect this realignment and to exclude the PAE and EIG
businesses from the IS&GS business segment information for all prior
periods presented. PAE and EIG were classified as discontinued
operations in the second and third quarters of 2010,
respectively.
|
20
LOCKHEED
MARTIN CORPORATION
|
Selected
Financial Data
|
Unaudited
|
(In
millions, except per share
data)
|
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
December
31, 2010
|
December 31,
2009
|
December
31, 2010
|
December 31,
2009
|
|||||||||||||
Unallocated corporate
expense, net
|
||||||||||||||||
FAS/CAS
pension adjustment
|
$ | (123 | ) | $ | (114 | ) | $ | (454 | ) | $ | (456 | ) | ||||
Stock
compensation expense
|
(46 | ) | (42 | ) | (168 | ) | (154 | ) | ||||||||
Unusual
items
|
(42 | ) | — | (220 | ) | — | ||||||||||
Other,
net
|
(56 | ) | (16 | ) | (137 | ) | (79 | ) | ||||||||
Unallocated
corporate expense, net
|
$ | (267 | ) | $ | (172 | ) | $ | (979 | ) | $ | (689 | ) | ||||
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
December
31, 2010
|
December 31,
2009
|
December
31, 2010
|
December 31,
2009
|
|||||||||||||
FAS/CAS pension
adjustment
|
||||||||||||||||
FAS
pension expense
|
$ | (370 | ) | $ | (259 | ) | $ | (1,442 | ) | $ | (1,036 | ) | ||||
Less:
CAS costs
|
(247 | ) | (145 | ) | (988 | ) | (580 | ) | ||||||||
FAS/CAS
pension adjustment
|
$ | (123 | ) | $ | (114 | ) | $ | (454 | ) | $ | (456 | ) |
QUARTER
ENDED DECEMBER 31, 2010
|
YEAR
ENDED DECEMBER 31, 2010
|
|||||||||||||||||||||||
Operating
profit
|
Net
earnings
|
Earnings
per
share
|
Operating
profit
|
Net
earnings
|
Earnings
per
share
|
|||||||||||||||||||
Unusual Items -
2010
|
||||||||||||||||||||||||
MS2 facility
consolidation
|
$ | (42 | ) | $ | (27 | ) | $ | (0.08 | ) | $ | (42 | ) | $ | (27 | ) | $ | (0.07 | ) | ||||||
Voluntary
Executive Separation Charge
|
— | — | — | (178 | ) | (116 | ) | (0.31 | ) | |||||||||||||||
Elimination
of Medicare Part D deferred tax assets
|
— | — | — | — | (96 | ) | (0.26 | ) | ||||||||||||||||
$ | (42 | ) | $ | (27 | ) | $ | (0.08 | ) | $ | (220 | ) | $ | (239 | ) | $ | (0.64 | ) | |||||||
QUARTER
ENDED DECEMBER 31, 2009
|
YEAR
ENDED DECEMBER 31, 2009
|
|||||||||||||||||||||||
Operating
profit
|
Net
earnings
|
Earnings
per
share
|
Operating
profit
|
Net
earnings
|
Earnings
per
share
|
|||||||||||||||||||
Unusual Items -
2009
|
||||||||||||||||||||||||
Resolution of
IRS examinations:
|
||||||||||||||||||||||||
Ÿ 2005 -
2007
|
$ | — | $ | — | $ | — | $ | — | $ | 58 | $ | 0.15 | ||||||||||||
Ÿ
2008
|
— | 11 | 0.03 | — | 11 | 0.03 | ||||||||||||||||||
$ | — | $ | 11 | $ | 0.03 | $ | — | $ | 69 | $ | 0.18 |
21
LOCKHEED
MARTIN CORPORATION
|
Selected
Financial Data
|
Unaudited
|
(In
millions)
|
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
December
31, 2010
|
December 31,
2009
|
December
31, 2010
|
December 31,
2009
|
|||||||||||||
Depreciation and
amortization of plant and equipment
|
||||||||||||||||
Aeronautics
|
$ | 60 | $ | 55 | $ | 205 | $ | 198 | ||||||||
Electronic
Systems
|
67 | 66 | 237 | 245 | ||||||||||||
Information
Systems & Global Solutions
|
18 | 18 | 63 | 66 | ||||||||||||
Space
Systems
|
53 | 51 | 186 | 182 | ||||||||||||
Segments
|
198 | 190 | 691 | 691 | ||||||||||||
Unallocated
corporate expense, net
|
12 | 16 | 58 | 59 | ||||||||||||
Total
depreciation and amortization of plant and
equipment
|
$ | 210 | $ | 206 | $ | 749 | $ | 750 |
22
LOCKHEED
MARTIN CORPORATION
|
Condensed
Consolidated Balance Sheets
|
(In
millions, except
percentages)
|
(Unaudited)
|
||||||||
DECEMBER
31,
|
DECEMBER
31,
|
|||||||
2010
|
2009
|
|||||||
Assets
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 2,261 | $ | 2,391 | ||||
Short-term
investments
|
516 | 346 | ||||||
Accounts
receivable, net
|
5,757 | 6,061 | ||||||
Inventories
|
2,378 | 2,183 | ||||||
Deferred
income taxes
|
1,038 | 815 | ||||||
Other
current assets
|
901 | 681 | ||||||
Total current assets
|
12,851 | 12,477 | ||||||
Property,
plant and equipment, net
|
4,554 | 4,520 | ||||||
Goodwill
|
9,605 | 9,948 | ||||||
Purchased
intangibles, net
|
127 | 311 | ||||||
Prepaid
pension asset
|
179 | 160 | ||||||
Deferred
income taxes
|
3,482 | 3,779 | ||||||
Other
assets
|
4,269 | 3,916 | ||||||
Total
assets
|
$ | 35,067 | $ | 35,111 | ||||
Liabilities and
Stockholders' Equity
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
$ | 1,630 | $ | 2,030 | ||||
Customer
advances and amounts in excess of costs incurred
|
5,719 | 5,049 | ||||||
Salaries,
benefits and payroll taxes
|
1,870 | 1,648 | ||||||
Other
current liabilities
|
1,941 | 1,976 | ||||||
Total
current liabilities
|
11,160 | 10,703 | ||||||
Long-term
debt, net
|
5,019 | 5,052 | ||||||
Accrued
pension liabilities
|
10,607 | 10,823 | ||||||
Other
postretirement benefit liabilities
|
1,213 | 1,308 | ||||||
Other
liabilities
|
3,360 | 3,096 | ||||||
Total
liabilities
|
31,359 | 30,982 | ||||||
Stockholders'
equity
|
||||||||
Common
stock, $1 par value per share
|
346 | 373 | ||||||
Additional
paid-in capital
|
— | — | ||||||
Retained
earnings
|
12,372 | 12,351 | ||||||
Accumulated
other comprehensive loss
|
(9,010 | ) | (8,595 | ) | ||||
Stockholders'
equity
|
3,708 | 4,129 | ||||||
Total
liabilities and stockholders' equity
|
$ | 35,067 | $ | 35,111 | ||||
Total
debt-to-capitalization ratio:
|
58 | % | 55 | % |
23
LOCKHEED
MARTIN CORPORATION
|
Condensed
Consolidated Statements of Cash Flows
|
Unaudited
|
(In
millions)
|
YEAR
ENDED
|
||||||||
December
31, 2010
|
December 31,
2009
|
|||||||
Operating
Activities
|
||||||||
Net
earnings
|
$ | 2,926 | $ | 3,024 | ||||
Adjustments
to reconcile net earnings to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization of plant and equipment
|
749 | 750 | ||||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable, net
|
(15 | ) | (719 | ) | ||||
Inventories
|
(227 | ) | (233 | ) | ||||
Accounts
payable
|
(362 | ) | (21 | ) | ||||
Customer
advances and amounts in excess of costs incurred
|
685 | 482 | ||||||
Other
|
(209 | ) | (110 | ) | ||||
Net
cash provided by operating activities
|
3,547 | 3,173 | ||||||
Investing
Activities
|
||||||||
Expenditures
for property, plant and equipment
|
(820 | ) | (852 | ) | ||||
Net cash used
for short-term investment transactions
|
(171 | ) | (279 | ) | ||||
Acquisition
of businesses / investments in affiliates
|
(148 | ) | (435 | ) | ||||
Divestiture
of EIG, net of transaction costs
|
798 | — | ||||||
Other
|
22 | 48 | ||||||
Net
cash used for investing activities
|
(319 | ) | (1,518 | ) | ||||
Financing
Activities
|
||||||||
Repurchases
of common stock
|
(2,420 | ) | (1,851 | ) | ||||
Issuances of
common stock and related amounts
|
73 | 61 | ||||||
Common stock
dividends
|
(969 | ) | (908 | ) | ||||
Issuance of
long-term debt, net of related costs
|
— | 1,464 | ||||||
Repayment of
long-term debt
|
— | (242 | ) | |||||
Cash premium
and transaction costs for debt exchange
|
(47 | ) | —- | |||||
Net
cash used for financing activities
|
(3,363 | ) | (1,476 | ) | ||||
Effect
of exchange rate changes on cash and cash equivalents
|
5 | 44 | ||||||
Net
increase (decrease) in cash and cash equivalents
|
(130 | ) | 223 | |||||
Cash
and cash equivalents at beginning of period
|
2,391 | 2,168 | ||||||
Cash
and cash equivalents at end of period
|
$ | 2,261 | $ | 2,391 |
24
LOCKHEED
MARTIN CORPORATION
|
Condensed
Consolidated Statement of Stockholders' Equity
|
Unaudited
|
(In
millions, except per share
data)
|
Accumulated
|
||||||||||||||||||||
Additional
|
Other
|
Total
|
||||||||||||||||||
Common
|
Paid-In
|
Retained
|
Comprehensive
|
Stockholders'
|
||||||||||||||||
Stock
|
Capital
|
Earnings
|
Loss
|
Equity
|
||||||||||||||||
Balance
at December 31, 2009
|
$ | 373 | $ | — | $ | 12,351 | $ | (8,595 | ) | $ | 4,129 | |||||||||
Net
earnings
|
— | — | 2,926 | — | 2,926 | |||||||||||||||
Common
stock dividends (a)
|
— | — | (969 | ) | — | (969 | ) | |||||||||||||
Stock-based
awards and other
|
6 | 514 | — | — | 520 | |||||||||||||||
Common
stock repurchases (b)
|
(33 | ) | (514 | ) | (1,936 | ) | — | (2,483 | ) | |||||||||||
Other
comprehensive loss (c)
|
— | — | — | (415 | ) | (415 | ) | |||||||||||||
Balance
at December 31, 2010
|
$ | 346 | $ | — | $ | 12,372 | $ | (9,010 | ) | $ | 3,708 |
(a) |
Includes dividends ($0.63 per
share) declared and paid in the first, second and third quarters and a
dividend ($0.75 per share) declared and paid in the fourth
quarter.
|
(b) |
The Corporation repurchased 13.2
million shares for $916 million during the fourth
quarter. Year-to-date, the Corporation repurchased 33.0 million
common shares for $2,483
million. In October 2010, the Corporation's Board of Directors
approved a new share repurchase program for the repurchase of its common
stock, up to an authorized amount of $3.0
billion.
|
(c) | At December 31, 2010, the Corporation recognized a non-cash, after-tax reduction to stockholders' equity of $430 million, as a result of the required re-measurement of its postretirement benefit plans. The decrease was primarily due to the net result of a lower discount rate at December 31, 2010 of 5.50% compared to 5.875% at December 31, 2009, partially offset by an actual return on plan assets in 2010 of approximately 13.0%. Partially offsetting the $430 million reduction to stockholders' equity was other comprehensive income of $15 million resulting from foreign currency translation and other adjustments. |
25
LOCKHEED
MARTIN CORPORATION
|
Operating
Data
|
Unaudited
|
December
31,
|
December
31,
|
|||||||
2010
|
2009
|
|||||||
Backlog | ||||||||
(In
millions)
|
||||||||
Aeronautics
|
$ | 27,500 | $ | 26,700 | ||||
Electronic
Systems
|
23,200 | 23,100 | ||||||
Information
Systems & Global Solutions
|
9,700 | 10,600 | ||||||
Space
Systems
|
17,800 | 16,800 | ||||||
Total
|
$ | 78,200 | $ | 77,200 |
QUARTER
ENDED
|
YEAR
ENDED
|
||||||||||||||||
Aircraft
Deliveries
|
December 31, 2010
|
December 31, 2009
|
December 31, 2010
|
December 31, 2009
|
|||||||||||||
F-16
|
3 | 7 | 20 | 31 | |||||||||||||
F-22
|
7 | 6 | 20 | 20 | |||||||||||||
C-130J
|
9 | 6 | 25 | 16 |
26