Lockheed Martin Reports Third Quarter 2018 Results
"Our team achieved another quarter of strong growth leading us to improve our expectations for our full-year financial results," said
Adoption of New Accounting Standards
As previously reported, effective
Summary Financial Results
The following table presents the corporation's summary financial results.
(in millions, except per share data) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
Sept. 30, |
Sept. 24, |
Sept. 30, |
Sept. 24, |
|||||||||||||||
Net sales |
$ |
14,318 |
$ |
12,341 |
$ |
39,351 |
$ |
36,116 |
||||||||||
Business segment operating profit1 |
$ |
1,586 |
$ |
1,287 |
$ |
4,362 |
$ |
3,725 |
||||||||||
Unallocated items |
||||||||||||||||||
FAS/CAS operating adjustment |
451 |
403 |
1,353 |
1,210 |
||||||||||||||
Special item - severance and |
— |
— |
(96) |
— |
||||||||||||||
Other, net |
(74) |
(13) |
(136) |
(140) |
||||||||||||||
Total unallocated items |
377 |
390 |
1,121 |
1,070 |
||||||||||||||
Consolidated operating profit |
$ |
1,963 |
$ |
1,677 |
$ |
5,483 |
$ |
4,795 |
||||||||||
Net earnings |
$ |
1,473 |
$ |
963 |
$ |
3,793 |
$ |
2,707 |
||||||||||
Diluted earnings per share |
$ |
5.14 |
$ |
3.32 |
$ |
13.21 |
$ |
9.29 |
||||||||||
Cash generated from operations3 |
$ |
361 |
$ |
1,754 |
$ |
921 |
$ |
4,964 |
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1 |
Business segment operating profit is a non-GAAP measure. See the Non-GAAP Financial Measures section of this news release for more information. |
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2 |
Unallocated items for the first nine months of 2018 includes the previously announced 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 (RMS) business. |
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3 |
Cash from operations in the third quarter and the first nine months of 2018 is after pension contributions of $1.5 billion and $5.0 billion, respectively. |
2018 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 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 Update |
July Outlook |
||||
Net sales |
~$53,000 |
$51,600 – $53,100 |
||||
Business segment operating profit |
~$5,800 |
$5,575 – $5,725 |
||||
Net FAS/CAS pension adjustment1 |
~$1,010 |
~$1,010 |
||||
Diluted earnings per share |
~$17.50 |
$16.75 – $17.05 |
||||
Cash from operations |
≥ $3,400 |
≥ $3,300 |
||||
1 |
Consistent with the corporation's historical presentation, the net FAS/CAS pension adjustment is presented as a single amount and includes expected 2018 U.S. Government cost accounting standards (CAS) pension cost of approximately $2.4 billion and expected financial accounting standards (FAS) pension expense of approximately $1.4 billion. CAS pension cost and the service cost component of FAS pension expense will be included in operating profit as part of cost of sales. The non-service cost component of FAS pension expense will be included in non-operating expense on the corporation's consolidated statement 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. |
2019 Financial Trends
The corporation expects its 2019 net sales to increase by approximately 5.0 percent to 6.0 percent as compared to the 2018 outlook. Total business segment operating margin in 2019 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
The corporation expects the net 2019 FAS/CAS pension benefit to be approximately
Cash Activities
The corporation's cash activities in the third quarter of 2018 consisted of the following:
- making contributions to its pension trust of
$1 .5 billion, compared to no contributions in the third quarter of 2017; - paying cash dividends of
$569 million , compared to$522 million in the third quarter of 2017; - repurchasing 0.6 million shares for
$216 million , compared to 1.6 million shares for$500 million in the third quarter of 2017; - making capital expenditures of
$339 million , compared to$222 million in the third quarter of 2017 and; - receiving net proceeds of
$490 million for issuance of commercial paper, compared to no net proceeds in the third quarter of 2017.
As previously reported on
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), RMS and Space. During the third quarter of 2018 the corporation realigned certain programs among the lines of business at MFC. The amounts discussed and presented for the MFC lines of business results reflect this realignment for all periods presented. 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. 30, |
Sept. 24, |
Sept. 30, |
Sept. 24, |
|||||||||||||||
Net sales |
||||||||||||||||||
Aeronautics |
$ |
5,642 |
$ |
4,716 |
$ |
15,361 |
$ |
13,758 |
||||||||||
Missiles and Fire Control |
2,273 |
1,957 |
6,035 |
5,290 |
||||||||||||||
Rotary and Mission Systems |
3,848 |
3,363 |
10,637 |
9,904 |
||||||||||||||
Space |
2,555 |
2,305 |
7,318 |
7,164 |
||||||||||||||
Total net sales |
$ |
14,318 |
$ |
12,341 |
$ |
39,351 |
$ |
36,116 |
||||||||||
Operating profit |
||||||||||||||||||
Aeronautics |
$ |
600 |
$ |
513 |
$ |
1,646 |
$ |
1,519 |
||||||||||
Missiles and Fire Control |
332 |
298 |
872 |
785 |
||||||||||||||
Rotary and Mission Systems |
361 |
257 |
1,013 |
656 |
||||||||||||||
Space |
293 |
219 |
831 |
765 |
||||||||||||||
Total business segment operating profit |
1,586 |
1,287 |
4,362 |
3,725 |
||||||||||||||
Unallocated items |
||||||||||||||||||
FAS/CAS operating adjustment |
451 |
403 |
1,353 |
1,210 |
||||||||||||||
Special item - severance and restructuring |
— |
— |
(96) |
— |
||||||||||||||
Other, net |
(74) |
(13) |
(136) |
(140) |
||||||||||||||
Total unallocated items |
377 |
390 |
1,121 |
1,070 |
||||||||||||||
Total consolidated operating profit |
$ |
1,963 |
$ |
1,677 |
$ |
5,483 |
$ |
4,795 |
||||||||||
Net sales of the business segments exclude intersegment sales as these activities are eliminated in consolidation. 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. In addition, operating profit of the corporation's business segments includes total pension costs recoverable on
Operating profit of the business segments excludes the FAS/CAS operating adjustment, which represents the difference between the service cost component of pension expense recorded in accordance with FAS and CAS pension cost; the adjustment from CAS to the FAS service cost component for all other postretirement benefit plans; 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 certain asset impairments; gains or losses from significant 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 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 a period of time using the percentage-of-completion cost-to-cost method to measure progress towards completion. Increases in the 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 34 percent of total segment operating profit in the third quarter of 2018, compared to approximately 28 percent in the third quarter of 2017.
Aeronautics
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
Sept. 30, |
Sept. 24, |
Sept. 30, |
Sept. 24, |
|||||||||||||||
Net sales |
$ |
5,642 |
$ |
4,716 |
$ |
15,361 |
$ |
13,758 |
||||||||||
Operating profit |
$ |
600 |
$ |
513 |
$ |
1,646 |
$ |
1,519 |
||||||||||
Operating margin |
10.6 |
% |
10.9 |
% |
10.7 |
% |
11.0 |
% |
Aeronautics' net sales in the third quarter of 2018 increased
Aeronautics' operating profit in the third quarter of 2018 increased
Missiles and Fire Control
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
Sept. 30, |
Sept. 24, |
Sept. 30, |
Sept. 24, |
|||||||||||||||
Net sales |
$ |
2,273 |
$ |
1,957 |
$ |
6,035 |
$ |
5,290 |
||||||||||
Operating profit |
$ |
332 |
$ |
298 |
$ |
872 |
$ |
785 |
||||||||||
Operating margin |
14.6 |
% |
15.2 |
% |
14.4 |
% |
14.8 |
% |
MFC's net sales in the third quarter of 2018 increased
MFC's operating profit in the third quarter of 2018 increased
Rotary and Mission Systems
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
Sept. 30, |
Sept. 24, |
Sept. 30, |
Sept. 24, |
|||||||||||||||
Net sales |
$ |
3,848 |
$ |
3,363 |
$ |
10,637 |
$ |
9,904 |
||||||||||
Operating profit |
$ |
361 |
$ |
257 |
$ |
1,013 |
$ |
656 |
||||||||||
Operating margin |
9.4 |
% |
7.6 |
% |
9.5 |
% |
6.6 |
% |
RMS' net sales in the third quarter of 2018 increased $485 million, or 14 percent, compared to the same period in 2017. The increase was primarily attributable to higher net sales of approximately
RMS' operating profit in the third quarter of 2018 increased $104 million, or 40 percent, compared to the same period in 2017. Operating profit increased approximately
Space
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
Sept. 30, |
Sept. 24, |
Sept. 30, |
Sept. 24, |
|||||||||||||||
Net sales |
$ |
2,555 |
$ |
2,305 |
$ |
7,318 |
$ |
7,164 |
||||||||||
Operating profit |
$ |
293 |
$ |
219 |
$ |
831 |
$ |
765 |
||||||||||
Operating margin |
11.5 |
% |
9.5 |
% |
11.4 |
% |
10.7 |
% |
Space's net sales in the third quarter of 2018 increased
Space's operating profit in the third quarter of 2018 increased
Total equity earnings recognized by Space (primarily ULA) represented approximately
Income Taxes
The corporation's effective income tax rate was 6.5 percent in the third quarter of 2018, compared to 25.8 percent in the third quarter of 2017. The lower rate for the third quarter of 2018 was primarily due to the reduction of the federal statutory rate from 35 percent to 21 percent and the deduction for foreign derived intangible income, both as a result of the Tax Cuts and Jobs Act (the Tax Act) enacted in
Use of Non-GAAP Financial Measures
This news release contains the following non-generally accepted accounting principles (GAAP) financial measures (as defined by U.S. Securities and Exchange Commission Regulation G). While the corporation believes that these non-GAAP financial measures may be useful in evaluating the financial performance of
Business segment operating profit represents the total earnings from the corporation's business segments before unallocated income and expense, interest expense, other non-operating income and expenses, and income tax 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.
(in millions) |
2018 Financial Outlook |
|||||
Current Update |
July Outlook |
|||||
Business segment operating profit (non-GAAP) |
~$5,800 |
$5,575 – $5,725 |
||||
FAS/CAS operating adjustment1 |
~1,805 |
~1,805 |
||||
Other, net |
~(275) |
~(270) |
||||
Consolidated operating profit (GAAP) |
~$7,330 |
$7,110 – $7,260 |
||||
1 |
Refer to the supplemental table "Other Financial and Operating Information" of this news release for a detail of the FAS/CAS operating adjustment, which excludes $795 million of expected non-service cost that will be recorded in other non-operating expense, net in accordance with ASU 2017-07. |
Conference Call Information
For additional information, visit our website: www.lockheedmartin.com.
About
Headquartered in
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
- the corporation's reliance on contracts with the
U.S. Government , which are conditioned upon the availability of funding and can be terminated by theU.S. Government for convenience, and the corporation's ability to negotiate favorable contract terms; - budget uncertainty; affordability initiatives; the risk of future sequestration under the Budget Control Act of 2011 or other budget cuts;
- risks related to the development, production, sustainment, 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 including their effects on governmental policy (including legislation, the effect of which is to temporarily prohibit deliveries of F-35s to
Turkey until certain conditions are met (although not affecting payments to the corporation), or other trade policies or sanctions); - the corporation's success expanding into and doing business in adjacent markets and internationally; the differing risks posed by international sales, including those involving commercial relationships with unfamiliar customers and different cultures; its ability to recover investments, which is frequently dependent upon the successful operation of ventures that it does not control; and changes in foreign national priorities, and foreign government budgets;
- the competitive environment for the corporation's 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;
- 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;
- the timing and customer acceptance of product deliveries;
- the corporation's 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 the corporation's businesses;
- the corporation's ability to implement and continue capitalization changes such as share repurchases and dividend payments, pension funding as well as the pace and effect of any such capitalization changes;
- 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;
- movements in interest rates and other changes that may affect pension plan assumptions, equity, the level of the FAS/CAS adjustment 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;
- risk of an impairment of goodwill and intangible assets, investments or other long-term 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 impairment of its equity investment in Advanced Military Maintenance,
Repair and Overhaul Center LLC (AMMROC); - the adequacy of the corporation's insurance and indemnities;
- the effect of changes in (or in the interpretation of) procurement and other regulations and policies affecting the corporation's industry, including export, cost allowability or recovery, aggressive government positions with respect to the use and ownership of intellectual property and potential changes to the
Department of Defense's acquisition regulations relating to progress payments and performance-based payments; - the effect of changes in accounting, taxation (including the impact of the Tax Cuts and Jobs Act), or export regulations; and
- the outcome of legal proceedings, bid protests, environmental remediation efforts, government investigations or government allegations that the corporation has 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
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 |
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Consolidated Statements of Earnings1 |
|||||||||
(unaudited; in millions, except per share data) |
|||||||||
Quarters Ended |
Nine Months Ended |
||||||||
Sept. 30, |
Sept. 24, |
Sept. 30, |
Sept. 24, |
||||||
Net sales |
$ 14,318 |
$ 12,341 |
$ 39,351 |
$ 36,116 |
|||||
Cost of sales |
(12,397) |
(10,741) |
(34,019) |
(31,454) |
|||||
Gross profit |
1,921 |
1,600 |
5,332 |
4,662 |
|||||
Other income, net |
42 |
77 |
151 |
133 |
|||||
Operating profit |
1,963 |
1,677 |
5,483 |
4,795 |
|||||
Interest expense |
(177) |
(162) |
(497) |
(477) |
|||||
Other non-operating expense, net |
(211) |
(218) |
(631) |
(644) |
|||||
Earnings before income taxes |
1,575 |
1,297 |
4,355 |
3,674 |
|||||
Income tax expense |
(102) |
(334) |
(562) |
(967) |
|||||
Net earnings |
$ 1,473 |
$ 963 |
$ 3,793 |
$ 2,707 |
|||||
Effective tax rate |
6.5 |
% |
25.8 |
% |
12.9 |
% |
26.3 |
% |
|
Earnings per common share |
|||||||||
Basic |
$ 5.18 |
$ 3.35 |
$ 13.31 |
$ 9.38 |
|||||
Diluted |
$ 5.14 |
$ 3.32 |
$ 13.21 |
$ 9.29 |
|||||
Weighted average shares outstanding |
|||||||||
Basic |
284.3 |
287.1 |
284.9 |
288.5 |
|||||
Diluted |
286.7 |
290.0 |
287.2 |
291.3 |
|||||
Common shares reported in stockholders' equity at end of period |
283 |
285 |
|||||||
1 The corporation closes its books and records on the last Sunday of the calendar quarter to align its financial closing with its business |
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processes, which was on Sept. 30 for the third quarter of 2018 and Sept. 24 for the third quarter of 2017. The consolidated financial |
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statements and tables of financial information included herein are labeled based on that convention. This practice only affects interim periods, |
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as the corporation's fiscal year ends on Dec. 31. |
Lockheed Martin Corporation |
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Business Segment Summary Operating Results |
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(unaudited; in millions) |
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Quarters Ended |
Nine Months Ended |
|||||||||||||||
Sept. 30, |
Sept. 24, |
% Change |
Sept. 30, |
Sept. 24, |
% Change |
|||||||||||
Net sales |
||||||||||||||||
Aeronautics |
$ 5,642 |
$ 4,716 |
20 |
% |
$ 15,361 |
$ 13,758 |
12 |
% |
||||||||
Missiles and Fire Control |
2,273 |
1,957 |
16 |
% |
6,035 |
5,290 |
14 |
% |
||||||||
Rotary and Mission Systems |
3,848 |
3,363 |
14 |
% |
10,637 |
9,904 |
7 |
% |
||||||||
Space |
2,555 |
2,305 |
11 |
% |
7,318 |
7,164 |
2 |
% |
||||||||
Total net sales |
$ 14,318 |
$ 12,341 |
16 |
% |
$ 39,351 |
$ 36,116 |
9 |
% |
||||||||
Operating profit |
||||||||||||||||
Aeronautics |
$ 600 |
$ 513 |
17 |
% |
$ 1,646 |
$ 1,519 |
8 |
% |
||||||||
Missiles and Fire Control |
332 |
298 |
11 |
% |
872 |
785 |
11 |
% |
||||||||
Rotary and Mission Systems |
361 |
257 |
40 |
% |
1,013 |
656 |
54 |
% |
||||||||
Space |
293 |
219 |
34 |
% |
831 |
765 |
9 |
% |
||||||||
Total business segment operating profit |
1,586 |
1,287 |
23 |
% |
4,362 |
3,725 |
17 |
% |
||||||||
Unallocated items |
||||||||||||||||
FAS/CAS operating adjustment |
451 |
403 |
1,353 |
1,210 |
||||||||||||
Special item - severance and restructuring charges1 |
- |
- |
(96) |
- |
||||||||||||
Other, net |
(74) |
(13) |
(136) |
(140) |
||||||||||||
Total unallocated items |
377 |
390 |
(3) |
% |
1,121 |
1,070 |
5 |
% |
||||||||
Total consolidated operating profit |
$ 1,963 |
$ 1,677 |
17 |
% |
$ 5,483 |
$ 4,795 |
14 |
% |
||||||||
Operating margin |
||||||||||||||||
Aeronautics |
10.6 |
% |
10.9 |
% |
10.7 |
% |
11.0 |
% |
||||||||
Missiles and Fire Control |
14.6 |
% |
15.2 |
% |
14.4 |
% |
14.8 |
% |
||||||||
Rotary and Mission Systems |
9.4 |
% |
7.6 |
% |
9.5 |
% |
6.6 |
% |
||||||||
Space |
11.5 |
% |
9.5 |
% |
11.4 |
% |
10.7 |
% |
||||||||
Total business segment operating margin |
11.1 |
% |
10.4 |
% |
11.1 |
% |
10.3 |
% |
||||||||
Total consolidated operating margin |
13.7 |
% |
13.6 |
% |
13.9 |
% |
13.3 |
% |
||||||||
1 Unallocated items include severance and restructuring charges totaling $96 million ($76 million, or $0.26 per share, after tax), |
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which was recorded in the second quarter of 2018 and is associated with planned workforce reductions and the consolidation |
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of certain operations at the corporation's Rotary and Mission Systems (RMS) business segment. |
Lockheed Martin Corporation |
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Consolidated Balance Sheets |
||||
(unaudited; in millions, except par value) |
||||
Sept. 30, |
Dec. 31, |
|||
Assets |
||||
Current assets |
||||
Cash and cash equivalents |
$ 897 |
$ 2,861 |
||
Receivables, net |
2,416 |
2,265 |
||
Contract assets |
9,769 |
7,992 |
||
Inventories |
3,050 |
2,878 |
||
Other current assets |
727 |
1,509 |
||
Total current assets |
16,859 |
17,505 |
||
Property, plant and equipment, net |
5,902 |
5,775 |
||
Goodwill |
10,788 |
10,807 |
||
Intangible assets, net |
3,570 |
3,797 |
||
Deferred income taxes |
3,036 |
3,156 |
||
Other noncurrent assets |
5,340 |
5,580 |
||
Total assets |
$ 45,495 |
$ 46,620 |
||
Liabilities and equity |
||||
Current liabilities |
||||
Accounts payable |
$ 2,691 |
$ 1,467 |
||
Contract liabilities |
6,489 |
7,028 |
||
Salaries, benefits and payroll taxes |
2,165 |
1,785 |
||
Current maturities of long-term debt and commercial paper |
1,240 |
750 |
||
Other current liabilities |
2,619 |
1,883 |
||
Total current liabilities |
15,204 |
12,913 |
||
Long-term debt, net |
13,486 |
13,513 |
||
Accrued pension liabilities |
10,692 |
15,703 |
||
Other postretirement benefit liabilities |
700 |
719 |
||
Other noncurrent liabilities |
4,411 |
4,548 |
||
Total liabilities |
44,493 |
47,396 |
||
Stockholders' equity |
||||
Common stock, $1 par value per share |
283 |
284 |
||
Additional paid-in capital |
- |
- |
||
Retained earnings |
14,737 |
11,405 |
||
Accumulated other comprehensive loss |
(14,077) |
(12,539) |
||
Total stockholders' equity (deficit) |
943 |
(850) |
||
Noncontrolling interests in subsidiary |
59 |
74 |
||
Total equity (deficit) |
1,002 |
(776) |
||
Total liabilities and equity |
$ 45,495 |
$ 46,620 |
Lockheed Martin Corporation |
|||
Consolidated Statements of Cash Flows |
|||
(unaudited; in millions) |
|||
Nine Months Ended |
|||
Sept. 30, |
Sept. 24, |
||
Operating activities |
|||
Net earnings |
$ 3,793 |
$ 2,707 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities |
|||
Depreciation and amortization |
857 |
880 |
|
Stock-based compensation |
148 |
133 |
|
Severance and restructuring charges |
96 |
- |
|
Changes in assets and liabilities |
|||
Receivables, net |
(151) |
(834) |
|
Contract assets |
(1,777) |
(228) |
|
Inventories |
(172) |
(66) |
|
Accounts payable |
1,237 |
1,229 |
|
Contract liabilities |
(539) |
(492) |
|
Postretirement benefit plans |
(3,935) |
1,012 |
|
Income taxes |
729 |
(202) |
|
Other, net |
635 |
825 |
|
Net cash provided by operating activities |
921 |
4,964 |
|
Investing activities |
|||
Capital expenditures |
(819) |
(670) |
|
Other, net |
146 |
15 |
|
Net cash used for investing activities |
(673) |
(655) |
|
Financing activities |
|||
Dividends paid |
(1,725) |
(1,591) |
|
Repurchases of common stock |
(826) |
(1,500) |
|
Proceeds from issuance of commercial paper, net |
490 |
- |
|
Other, net |
(151) |
(114) |
|
Net cash used for financing activities |
(2,212) |
(3,205) |
|
Net change in cash and cash equivalents |
(1,964) |
1,104 |
|
Cash and cash equivalents at beginning of period |
2,861 |
1,837 |
|
Cash and cash equivalents at end of period |
$ 897 |
$ 2,941 |
Lockheed Martin Corporation |
|||||||||||||
Consolidated Statement of Equity |
|||||||||||||
(unaudited; in millions) |
|||||||||||||
Accumulated |
|||||||||||||
Additional |
Other |
Total |
Noncontrolling |
||||||||||
Common |
Paid-in |
Retained |
Comprehensive |
Stockholders' |
Interests |
Total |
|||||||
Stock |
Capital |
Earnings |
Loss |
Equity |
in Subsidiary |
Equity |
|||||||
Balance at Dec. 31, 2017 |
$ 284 |
$ - |
$ 11,405 |
$ (12,539) |
$ (850) |
$ 74 |
$ (776) |
||||||
Net earnings |
- |
- |
3,793 |
- |
3,793 |
- |
3,793 |
||||||
Other comprehensive income, net of tax1 |
- |
- |
- |
870 |
870 |
- |
870 |
||||||
Repurchases of common stock |
(3) |
(300) |
(523) |
- |
(826) |
- |
(826) |
||||||
Dividends declared2 |
- |
- |
(2,346) |
- |
(2,346) |
- |
(2,346) |
||||||
Stock-based awards, ESOP activity and other |
2 |
300 |
- |
- |
302 |
- |
302 |
||||||
Reclassification of effects from tax reform3 |
- |
- |
2,408 |
(2,408) |
- |
- |
- |
||||||
Net decrease in noncontrolling interests in subsidiary |
- |
- |
- |
- |
- |
(15) |
(15) |
||||||
Balance at Sept. 30, 2018 |
$ 283 |
$ - |
$ 14,737 |
$ (14,077) |
$ 943 |
$ 59 |
$ 1,002 |
||||||
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 $2.00 per share declared for the first, second and third quarters of 2018 and dividends of $2.20 per share declared for the |
|||||||||||||
fourth quarter of 2018. |
|||||||||||||
3 In the first quarter of 2018, the corporation adopted ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification |
|||||||||||||
of Certain Tax Effects from Accumulated Other Comprehensive Income. Accordingly, the corporation reclassified the stranded income tax effects in |
|||||||||||||
accumulated other comprehensive loss resulting from the Tax Cuts and Jobs Act to retained earnings. |
Lockheed Martin Corporation |
|||||||||
Other Financial and Operating Information |
|||||||||
(unaudited; in millions, except for deliveries) |
|||||||||
2018 |
2017 |
||||||||
Total FAS expense and CAS costs |
|||||||||
FAS pension expense |
$ (1,425) |
$ (1,372) |
|||||||
Less: CAS pension cost |
2,435 |
2,248 |
|||||||
Net FAS/CAS pension adjustment |
$ 1,010 |
$ 876 |
|||||||
Service and non-service cost reconciliation |
|||||||||
FAS pension service cost |
$ (630) |
$ (635) |
|||||||
Less: CAS pension cost |
2,435 |
2,248 |
|||||||
FAS/CAS operating adjustment |
1,805 |
1,613 |
|||||||
Non-operating FAS pension expense1 |
(795) |
(737) |
|||||||
Net FAS/CAS pension adjustment |
$ 1,010 |
$ 876 |
|||||||
1 The corporation records the non-service cost components of net periodic benefit cost as part of other non- |
|||||||||
Backlog |
Sept. 30, |
Dec. 31, |
|||||||
Aeronautics |
$ 36,766 |
$ 35,692 |
|||||||
Missiles and Fire Control |
19,930 |
17,729 |
|||||||
Rotary and Mission Systems |
29,214 |
30,030 |
|||||||
Space |
23,281 |
22,042 |
|||||||
Total backlog |
$ 109,191 |
$ 105,493 |
|||||||
Quarters Ended |
Nine Months Ended |
||||||||
Aircraft Deliveries |
Sept. 30, |
Sept. 24, |
Sept. 30, |
Sept. 24, |
|||||
F-35 |
20 |
15 |
59 |
44 |
|||||
F-16 |
- |
2 |
- |
7 |
|||||
C-130J |
7 |
5 |
18 |
16 |
|||||
C-5 |
1 |
1 |
4 |
5 |
|||||
Government helicopter programs |
28 |
39 |
75 |
110 |
|||||
Commercial helicopter programs |
1 |
- |
2 |
3 |
|||||
International military helicopter programs |
4 |
2 |
5 |
3 |
View original content:http://www.prnewswire.com/news-releases/lockheed-martin-reports-third-quarter-2018-results-300735640.html
SOURCE
Media Contact: Bill Phelps, 301-897-6308, william.phelps@lmco.com; Investor Relations Contacts: Greg Gardner, 301-897-6584, greg.m.gardner@lmco.com; Kelly Stevens, 301-897-6455; kelly.stevens@lmco.com