Lockheed Martin Reports Third Quarter 2020 Results
"In the third quarter, our dedicated workforce and resilient supply chain continued to support our customers' vital national security missions, overcoming the challenges of the pandemic," said
Summary Financial Results
The following table presents the corporation's summary financial results.
(in millions, except per share data) |
Quarters Ended1 |
Nine Months Ended |
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|
|
|
|
||||||||||||||
Net sales |
$ |
16,495 |
$ |
15,171 |
$ |
48,366 |
$ |
43,934 |
|||||||||
Business segment operating profit2 |
$ |
1,762 |
$ |
1,665 |
$ |
5,277 |
$ |
4,934 |
|||||||||
Unallocated items |
|||||||||||||||||
FAS/CAS operating adjustment |
469 |
513 |
1,407 |
1,537 |
|||||||||||||
Other, net3,4 |
(84) |
(73) |
(329) |
(75) |
|||||||||||||
Total unallocated items |
385 |
440 |
1,078 |
1,462 |
|||||||||||||
Consolidated operating profit |
$ |
2,147 |
$ |
2,105 |
$ |
6,355 |
$ |
6,396 |
|||||||||
Net earnings (loss) from |
|||||||||||||||||
Continuing operations |
$ |
1,753 |
$ |
1,608 |
$ |
5,096 |
$ |
4,732 |
|||||||||
Discontinued operations5 |
(55) |
— |
(55) |
— |
|||||||||||||
Net earnings6 |
$ |
1,698 |
$ |
1,608 |
$ |
5,041 |
$ |
4,732 |
|||||||||
Diluted earnings (loss) per share from |
|||||||||||||||||
Continuing operations |
$ |
6.25 |
$ |
5.66 |
$ |
18.12 |
$ |
16.66 |
|||||||||
Discontinued operations5 |
(0.20) |
— |
(0.20) |
— |
|||||||||||||
Diluted earnings per share |
$ |
6.05 |
$ |
5.66 |
$ |
17.92 |
$ |
16.66 |
|||||||||
Cash generated from operations7,8 |
$ |
1,880 |
$ |
2,490 |
$ |
6,376 |
$ |
5,821 |
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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 |
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2 |
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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3 |
In the first nine months of 2020, the corporation recognized a non-cash impairment charge of |
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4 |
In the first nine months of 2019, the corporation recognized a previously deferred non-cash gain of |
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5 |
Discontinued operations for the third quarter and first nine months of 2020 include a |
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6 |
Net earnings for the third quarter and the first nine months of 2019 included a benefit of approximately |
||||||||||||||||
7 |
Cash generated from operations in the third quarter of 2020 reflects the receipt of approximately |
||||||||||||||||
8 |
Cash generated from operations for the first nine months of 2020 reflects the receipt of approximately |
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2020 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, or new accounting standards until such items have been consummated, enacted or adopted. For additional factors that may impact the corporation's actual results, refer to the "Forward-Looking Statements" section in this news release.
(in millions, except per share data) |
Current Guidance1 |
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Net sales |
|
|
||||
Business segment operating profit |
|
|
||||
Net FAS/CAS pension adjustment2 |
|
|
||||
Diluted earnings per share from continuing operations |
|
|
||||
Cash from operations |
≥$8,000 |
≥$8,000 |
||||
1 |
The corporation's 2020 financial outlook reflects the currently expected impacts related to COVID-19, however, the ultimate impacts of COVID-19 on the corporation's financial outlook for 2020 and beyond remains uncertain. |
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2 |
The net FAS/CAS pension adjustment is presented as a single amount and includes total expected |
2021 Financial Trends
The corporation expects its 2021 net sales to increase to greater than or equal to
The corporation currently expects a total net FAS/CAS pension benefit of approximately
COVID-19
The global outbreak of the coronavirus disease 2019 (COVID-19) was declared a pandemic by the
Cash Activities
The corporation's cash activities in the third quarter of 2020 included the following:
- paying cash dividends of
$672 million , compared to$621 million in the third quarter of 2019; - repurchasing 0.2 million shares for
$85 million , which includes$26 million paid for shares repurchased in the second quarter of 2020; compared to repurchasing 0.6 million shares for$210 million in the third quarter of 2019; and - making capital expenditures of
$408 million , compared to$308 million in the third quarter of 2019.
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),
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
|
|
|
|
|||||||||||||||
Net sales |
||||||||||||||||||
Aeronautics |
$ |
6,680 |
$ |
6,178 |
$ |
19,552 |
$ |
17,312 |
||||||||||
Missiles and Fire Control |
2,971 |
2,601 |
8,391 |
7,362 |
||||||||||||||
|
3,998 |
3,709 |
11,783 |
11,239 |
||||||||||||||
Space |
2,846 |
2,683 |
8,640 |
8,021 |
||||||||||||||
Total net sales |
$ |
16,495 |
$ |
15,171 |
$ |
48,366 |
$ |
43,934 |
||||||||||
Operating profit |
||||||||||||||||||
Aeronautics |
$ |
705 |
$ |
665 |
$ |
2,116 |
$ |
1,842 |
||||||||||
Missiles and Fire Control |
405 |
349 |
1,171 |
1,093 |
||||||||||||||
|
404 |
342 |
1,209 |
1,068 |
||||||||||||||
Space |
248 |
309 |
781 |
931 |
||||||||||||||
Total business segment operating profit |
1,762 |
1,665 |
5,277 |
4,934 |
||||||||||||||
Unallocated items |
||||||||||||||||||
FAS/CAS operating adjustment |
469 |
513 |
1,407 |
1,537 |
||||||||||||||
Other, net |
(84) |
(73) |
(329) |
(75) |
||||||||||||||
Total unallocated items |
385 |
440 |
1,078 |
1,462 |
||||||||||||||
Total consolidated operating profit |
$ |
2,147 |
$ |
2,105 |
$ |
6,355 |
$ |
6,396 |
||||||||||
Net sales and operating profit of the corporation's business segments exclude intersegment sales, cost of sales, and profit as these activities are eliminated in consolidation. Operating profit of the corporation's business segments includes the corporation's share of earnings or losses from equity method investees as the operating activities of the investees are closely aligned with the operations of its business segments.
Operating profit of the corporation's business segments also excludes the FAS/CAS operating adjustment described below, a portion of corporate costs not considered allowable or allocable to contracts with the
The corporation recovers CAS pension cost through the pricing of its products and services on
Changes in net sales and operating profit generally are expressed in terms of volume. Changes in volume refer to increases or decreases in sales or operating profit resulting from varying production activity levels, deliveries or service levels on individual contracts. Volume changes in segment operating profit are typically based on the current profit booking rate for a particular contract. In addition, comparability of the corporation's segment sales, operating profit and operating margin may be impacted favorably or unfavorably by changes in profit booking rates on the corporation's contracts for which it recognizes revenue over time using the percentage-of-completion cost-to-cost method to measure progress towards completion. Increases in profit booking rates, typically referred to as risk retirements, usually relate to revisions in the estimated total costs to fulfill the performance obligations that reflect improved conditions on a particular contract. Conversely, conditions on a particular contract may deteriorate, resulting in an increase in the estimated total costs to fulfill the performance obligations and a reduction in the profit booking rate. Increases or decreases in profit booking rates are recognized in the current period and reflect the inception-to-date effect of such changes.
Segment operating profit and margin may also be impacted favorably or unfavorably by other items, which may or may not impact sales. Favorable items may include the positive resolution of contractual matters, 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 24 percent of total segment operating profit in the third quarter of 2020 as compared to 29 percent in the third quarter of 2019.
Aeronautics
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
|
|
|
|
|||||||||||||||
Net sales |
$ |
6,680 |
$ |
6,178 |
$ |
19,552 |
$ |
17,312 |
||||||||||
Operating profit |
$ |
705 |
$ |
665 |
$ |
2,116 |
$ |
1,842 |
||||||||||
Operating margin |
10.6 |
% |
10.8 |
% |
10.8 |
% |
10.6 |
% |
Aeronautics' net sales in the third quarter of 2020 increased $502 million, or 8 percent, compared to the same period in 2019. The increase was primarily attributable to higher net sales of approximately $325 million for the F-35 program due to increased volume on development, sustainment, and production contracts; and about
Aeronautics' operating profit in the third quarter of 2020 increased $40 million, or 6 percent, compared to the same period in 2019. Operating profit increased approximately $65 million for the F-35 program due to higher volume on production, development, and sustainment contracts and higher risk retirements on production contracts. This increase was partially offset by a decrease of approximately
Missiles and Fire Control
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
|
|
|
|
|||||||||||||||
Net sales |
$ |
2,971 |
$ |
2,601 |
$ |
8,391 |
$ |
7,362 |
||||||||||
Operating profit |
$ |
405 |
$ |
349 |
$ |
1,171 |
$ |
1,093 |
||||||||||
Operating margin |
13.6 |
% |
13.4 |
% |
14.0 |
% |
14.8 |
% |
MFC's net sales in the third quarter of 2020 increased $370 million, or 14 percent, compared to the same period in 2019. The increase was primarily attributable to higher net sales of approximately
MFC's operating profit in the third quarter of 2020 increased $56 million, or 16 percent, compared to the same period in 2019. Operating profit increased approximately $50 million for integrated air and missile defense programs due to increased volume and higher risk retirements on international contracts (primarily PAC-3); and about $45 million for tactical and strike missile programs due to higher volume (primarily GMLRS and HIMARS) and higher risk retirements (primarily Long Range Standoff Weapon (LRSO)). These increases were partially offset by a decrease of approximately
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
|
|
|
|
|||||||||||||||
Net sales |
$ |
3,998 |
$ |
3,709 |
$ |
11,783 |
$ |
11,239 |
||||||||||
Operating profit |
$ |
404 |
$ |
342 |
$ |
1,209 |
$ |
1,068 |
||||||||||
Operating margin |
10.1 |
% |
9.2 |
% |
10.3 |
% |
9.5 |
% |
RMS' net sales in the third quarter of 2020 increased $289 million, or 8 percent, compared to the same period in 2019. Net sales increased approximately
RMS' operating profit in the third quarter of 2020 increased $62 million, or 18 percent, compared to the same period in 2019. Operating profit increased approximately
Space
(in millions) |
Quarters Ended |
Nine Months Ended |
||||||||||||||||
|
|
|
|
|||||||||||||||
Net sales |
$ |
2,846 |
$ |
2,683 |
$ |
8,640 |
$ |
8,021 |
||||||||||
Operating profit |
$ |
248 |
$ |
309 |
$ |
781 |
$ |
931 |
||||||||||
Operating margin |
8.7 |
% |
11.5 |
% |
9.0 |
% |
11.6 |
% |
Space's net sales in the third quarter of 2020 increased $163 million, or 6 percent, compared to the same period in 2019. The increase was primarily attributable to higher net sales of approximately
Space's operating profit in the third quarter of 2020 decreased $61 million, or 20 percent, compared to the same period in 2019. Operating profit decreased approximately
Total equity earnings recognized by Space (primarily ULA) represented approximately $5 million, or 2 percent of Space's operating profit in the third quarter of 2020, compared to approximately
Income Taxes
The corporation's effective income tax rate was 14.7 percent in the third quarter of 2020, compared to 9.7 percent in the third quarter of 2019. The rate for the third quarter of 2019 was lower primarily due to a $62 million benefit, or
The rates for both periods benefited from additional tax deductions based on proposed tax regulations released on
The rates for both periods also benefited from the research and development tax credit, dividends paid to the corporation's defined contribution plans with an employee stock ownership plan feature, and tax deductions for employee equity awards.
Use of Non-GAAP Financial Measures
This news release contains the following non-generally accepted accounting principles (non-GAAP) financial measures (as defined by
Business segment operating profit represents operating profit from the corporation's business segments before unallocated income and expense. This measure is used by the corporation's senior management in evaluating the performance of its business segments and is a performance goal in the corporation's annual incentive plan. Business segment operating margin is calculated by dividing business segment operating profit by sales. The table below reconciles the non-GAAP measure business segment operating profit with the most directly comparable GAAP financial measure, consolidated operating profit.
(in millions) |
2020 Financial Outlook1 |
|||||
Current Update |
July Outlook |
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Business segment operating profit (non-GAAP) |
|
|
||||
FAS/CAS operating adjustment2 |
~1,875 |
~1,875 |
||||
Other, net |
~(405) |
~(390) |
||||
Consolidated operating profit (GAAP) |
|
|
||||
1 |
The corporation's 2020 financial outlook reflects the currently expected impacts related to COVID-19, however, the ultimate impact of COVID-19 on the corporation's financial outlook for 2020 and beyond remains uncertain. |
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2 |
Refer to the supplemental table "Other Financial and Operating Information" included in this news release for a detail of the FAS/CAS operating adjustment, which excludes $215 million of expected non-service FAS income that will be recorded in non-operating income (expense). |
Conference Call Information
For additional information, visit the corporation's 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 impact of the COVID-19 disease or future epidemics on our business, including the potential for facility closures or work stoppages, supply chain disruptions, program delays, our ability to recover our costs under contracts, changing government funding and acquisition priorities and payment policies and regulations; and potential impacts to the fair value of our assets;
- our 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 our ability to negotiate favorable contract terms; - budget uncertainty, affordability initiatives or the risk of future budget cuts;
- risks related to the development, production, sustainment, performance, schedule, cost and requirements of complex and technologically advanced programs including our largest, the F-35 program;
- planned production rates for significant programs; compliance with stringent performance and reliability standards; materials availability;
- the performance and financial viability of key suppliers, teammates, joint ventures, joint venture partners, subcontractors and customers;
- economic, industry, business and political conditions including their effects on governmental policy and government actions that disrupt our supply chain or prevent the sale or delivery of our products (such as delays in obtaining Congressional approvals for exports requiring Congressional notification and export license delays due to COVID-19);
- trade policies or sanctions (including potential Chinese sanctions on us or our suppliers, teammates or partners;
Turkey's removal from the F-35 program and potentialU.S. Government sanctions onTurkey and theKingdom of Saudi Arabia ); - our success expanding into and doing business in adjacent markets and internationally and the differing risks posed by international sales;
- changes in foreign national priorities and foreign government budgets;
- the competitive environment for our products and services, including increased pricing pressures, aggressive pricing in the absence of cost realism evaluation criteria, competition from outside the aerospace and defense industry, and bid protests;
- the timing and customer acceptance of product deliveries;
- our ability to continue to innovate and develop new products and to attract and retain key personnel and transfer knowledge to new personnel; the impact of work stoppages or other labor disruptions;
- the impact of cyber or other security threats or other disruptions to our businesses;
- our ability to implement and continue, and the timing and impact of, capitalization changes such as share repurchases and dividend payments;
- our ability to recover costs under
U.S. Government contracts and changes in contract mix; - the accuracy of our estimates and projections and the potential impact of changes in
U.S. or foreign tax laws; - timing and estimates regarding pension funding and movements in interest rates and other changes that may affect pension plan assumptions, stockholders' equity, the level of the FAS/CAS adjustment and actual returns on pension plan assets;
- the successful operation of joint ventures that we do not control and our ability to recover our investments;
- realizing the anticipated benefits of acquisitions or divestitures, joint ventures, teaming arrangements or internal reorganizations;
- our efforts to increase the efficiency of our operations and improve the affordability of our products and services;
- the risk of an impairment of our assets, including the potential impairment of goodwill, intangible assets and inventory recorded as a result of the acquisition of the Sikorsky business;
- the availability and adequacy of our insurance and indemnities;
- our ability to benefit fully from or adequately protect our intellectual property rights;
- procurement and other regulations and policies affecting our industry, including federal rules prohibiting the use of certain Chinese telecommunications equipment, export of our products, cost allowability or recovery, preferred contract type, and performance and progress payments policy, including a reversal or modification to the
DoD's increase to the progress payment rate in response to COVID-19; - the effect of changes in accounting, taxation, or export laws, regulations, and policies and their interpretation or application; and
- the outcome of legal proceedings, bid protests, environmental remediation efforts, audits, government investigations or government allegations that we have failed to comply with law, other contingencies and
U.S. Government identification of deficiencies in our business systems.
These are only some of the factors that may affect the forward-looking statements contained in this news release. For a discussion identifying additional important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, see the corporation's filings with the
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.
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Consolidated Statements of Earnings1 |
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(unaudited; in millions, except per share data) |
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Quarters Ended |
Nine Months Ended |
||||||||||||||||
|
|
|
|
||||||||||||||
Net sales |
$ |
16,495 |
$ |
15,171 |
$ |
48,366 |
$ |
43,934 |
|||||||||
Cost of sales |
(14,359) |
(13,108) |
(41,926) |
(37,690) |
|||||||||||||
Gross profit |
2,136 |
2,063 |
6,440 |
6,244 |
|||||||||||||
Other (expense) income, net2,3 |
11 |
42 |
(85) |
152 |
|||||||||||||
Operating profit |
2,147 |
2,105 |
6,355 |
6,396 |
|||||||||||||
Interest expense |
(145) |
(162) |
(442) |
(496) |
|||||||||||||
Other non-operating income (expense), net |
54 |
(162) |
135 |
(491) |
|||||||||||||
Earnings from continuing operations before income taxes |
2,056 |
1,781 |
6,048 |
5,409 |
|||||||||||||
Income tax expense4 |
(303) |
(173) |
(952) |
(677) |
|||||||||||||
Net earnings from continuing operations |
1,753 |
1,608 |
5,096 |
4,732 |
|||||||||||||
Net loss from discontinued operations5 |
(55) |
— |
(55) |
— |
|||||||||||||
Net earnings |
$ |
1,698 |
$ |
1,608 |
$ |
5,041 |
$ |
4,732 |
|||||||||
Effective tax rate |
14.7 |
% |
9.7 |
% |
15.7 |
% |
12.5 |
% |
|||||||||
Earnings (loss) per common share |
|||||||||||||||||
Basic |
|||||||||||||||||
Continuing operations |
$ |
6.28 |
$ |
5.70 |
$ |
18.19 |
$ |
16.77 |
|||||||||
Discontinued operations5 |
(0.20) |
— |
(0.20) |
— |
|||||||||||||
Basic earnings per common share |
$ |
6.08 |
$ |
5.70 |
$ |
17.99 |
$ |
16.77 |
|||||||||
Diluted |
|||||||||||||||||
Continuing operations |
$ |
6.25 |
$ |
5.66 |
$ |
18.12 |
$ |
16.66 |
|||||||||
Discontinued operations5 |
(0.20) |
— |
(0.20) |
— |
|||||||||||||
Diluted earnings per common share |
$ |
6.05 |
$ |
5.66 |
$ |
17.92 |
$ |
16.66 |
|||||||||
Weighted average shares outstanding |
|||||||||||||||||
Basic |
279.3 |
282.0 |
280.1 |
282.2 |
|||||||||||||
Diluted |
280.6 |
283.9 |
281.3 |
284.0 |
|||||||||||||
Common shares reported in stockholders' equity at end of period |
278 |
281 |
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 |
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2 |
In the first nine months of 2020, the corporation recognized a non-cash impairment charge of |
||||||||||||||||
3 |
In the first nine months of 2019, the corporation recognized a previously deferred non-cash gain of |
||||||||||||||||
4 |
Net earnings for the third quarter and the first nine months of 2019 included a benefit of approximately |
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5 |
Net loss from discontinued operations for the third quarter and the first nine months of 2020 includes a |
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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 |
||||||||||||||||||||
|
|
% |
|
|
% |
||||||||||||||||
Net sales |
|||||||||||||||||||||
Aeronautics |
$ |
6,680 |
$ |
6,178 |
8% |
$ |
19,552 |
$ |
17,312 |
13% |
|||||||||||
Missiles and Fire Control |
2,971 |
2,601 |
14% |
8,391 |
7,362 |
14% |
|||||||||||||||
|
3,998 |
3,709 |
8% |
11,783 |
11,239 |
5% |
|||||||||||||||
Space |
2,846 |
2,683 |
6% |
8,640 |
8,021 |
8% |
|||||||||||||||
Total net sales |
$ |
16,495 |
$ |
15,171 |
9% |
$ |
48,366 |
$ |
43,934 |
10% |
|||||||||||
Operating profit |
|||||||||||||||||||||
Aeronautics |
$ |
705 |
$ |
665 |
6% |
$ |
2,116 |
$ |
1,842 |
15% |
|||||||||||
Missiles and Fire Control |
405 |
349 |
16% |
1,171 |
1,093 |
7% |
|||||||||||||||
|
404 |
342 |
18% |
1,209 |
1,068 |
13% |
|||||||||||||||
Space |
248 |
309 |
(20%) |
781 |
931 |
(16%) |
|||||||||||||||
Total business segment operating profit |
1,762 |
1,665 |
6% |
5,277 |
4,934 |
7% |
|||||||||||||||
Unallocated items |
|||||||||||||||||||||
FAS/CAS operating adjustment |
469 |
513 |
1,407 |
1,537 |
|||||||||||||||||
Stock-based compensation |
(67) |
(54) |
(182) |
(158) |
|||||||||||||||||
Other, net1,2 |
(17) |
(19) |
(147) |
83 |
|||||||||||||||||
Total unallocated items |
385 |
440 |
(13%) |
1,078 |
1,462 |
(26%) |
|||||||||||||||
Total consolidated operating profit |
$ |
2,147 |
$ |
2,105 |
2% |
$ |
6,355 |
$ |
6,396 |
(1%) |
|||||||||||
Operating margin |
|||||||||||||||||||||
Aeronautics |
10.6% |
10.8% |
10.8% |
10.6% |
|||||||||||||||||
Missiles and Fire Control |
13.6% |
13.4% |
14.0% |
14.8% |
|||||||||||||||||
|
10.1% |
9.2% |
10.3% |
9.5% |
|||||||||||||||||
Space |
8.7% |
11.5% |
9.0% |
11.6% |
|||||||||||||||||
Total business segment operating margin |
10.7% |
11.0% |
10.9% |
11.2% |
|||||||||||||||||
Total consolidated operating margin |
13.0% |
13.9% |
13.1% |
14.6% |
1 |
In the first nine months of 2019, the corporation recognized a previously deferred non-cash gain of |
||||||||||||||||||||
2 |
In the first nine months of 2020, the corporation recognized a non-cash impairment charge of |
|
|||||||||
Consolidated Balance Sheets |
|||||||||
(in millions, except par value) |
|||||||||
|
|
||||||||
(unaudited) |
|||||||||
Assets |
|||||||||
Current assets |
|||||||||
Cash and cash equivalents |
$ |
3,585 |
$ |
1,514 |
|||||
Receivables, net |
2,480 |
2,337 |
|||||||
Contract assets |
10,388 |
9,094 |
|||||||
Inventories |
3,293 |
3,619 |
|||||||
Other current assets |
544 |
531 |
|||||||
Total current assets |
20,290 |
17,095 |
|||||||
Property, plant and equipment, net |
6,803 |
6,591 |
|||||||
|
10,589 |
10,604 |
|||||||
Intangible assets, net |
3,013 |
3,213 |
|||||||
Deferred income taxes |
3,198 |
3,319 |
|||||||
Other noncurrent assets |
6,880 |
6,706 |
|||||||
Total assets |
$ |
50,773 |
$ |
47,528 |
|||||
Liabilities and equity |
|||||||||
Current liabilities |
|||||||||
Accounts payable |
$ |
1,491 |
$ |
1,281 |
|||||
Contract liabilities |
7,354 |
7,054 |
|||||||
Salaries, benefits and payroll taxes |
2,818 |
2,466 |
|||||||
Current maturities of long-term debt |
1,000 |
1,250 |
|||||||
Other current liabilities |
2,538 |
1,921 |
|||||||
Total current liabilities |
15,201 |
13,972 |
|||||||
Long-term debt, net |
11,675 |
11,404 |
|||||||
Accrued pension liabilities |
12,765 |
13,234 |
|||||||
Other noncurrent liabilities |
6,146 |
5,747 |
|||||||
Total liabilities |
45,787 |
44,357 |
|||||||
Stockholders' equity |
|||||||||
Common stock, |
278 |
280 |
|||||||
Additional paid-in capital |
90 |
— |
|||||||
Retained earnings |
19,844 |
18,401 |
|||||||
Accumulated other comprehensive loss |
(15,259) |
(15,554) |
|||||||
Total stockholders' equity |
4,953 |
3,127 |
|||||||
Noncontrolling interests in subsidiary |
33 |
44 |
|||||||
Total equity |
4,986 |
3,171 |
|||||||
Total liabilities and equity |
$ |
50,773 |
$ |
47,528 |
|||||
|
||||||||
Consolidated Statements of Cash Flows |
||||||||
(unaudited; in millions) |
||||||||
Nine Months Ended |
||||||||
|
|
|||||||
Operating activities |
||||||||
Net earnings |
$ |
5,041 |
$ |
4,732 |
||||
Adjustments to reconcile net earnings to net cash provided by operating activities |
||||||||
Depreciation and amortization |
927 |
867 |
||||||
Stock-based compensation |
182 |
158 |
||||||
Equity method investment impairment |
128 |
— |
||||||
Tax resolution related to former IS&GS business |
55 |
— |
||||||
Gain on property sale |
— |
(51) |
||||||
Changes in assets and liabilities |
||||||||
Receivables, net |
(143) |
60 |
||||||
Contract assets |
(1,294) |
(1,532) |
||||||
Inventories |
326 |
(477) |
||||||
Accounts payable |
247 |
524 |
||||||
Contract liabilities |
300 |
286 |
||||||
Postretirement benefit plans |
(130) |
828 |
||||||
Income taxes |
58 |
(117) |
||||||
Other, net |
679 |
543 |
||||||
Net cash provided by operating activities |
6,376 |
5,821 |
||||||
Investing activities |
||||||||
Capital expenditures |
(1,044) |
(841) |
||||||
Other, net |
27 |
38 |
||||||
Net cash used for investing activities |
(1,017) |
(803) |
||||||
Financing activities |
||||||||
Dividends paid |
(2,036) |
(1,881) |
||||||
Repurchases of common stock |
(1,100) |
(710) |
||||||
Issuance of long-term debt, net of related costs |
1,131 |
— |
||||||
Repayments of current and long-term debt |
(1,150) |
— |
||||||
Repayments of commercial paper, net |
— |
(600) |
||||||
Other, net |
(133) |
(60) |
||||||
Net cash used for financing activities |
(3,288) |
(3,251) |
||||||
Net change in cash and cash equivalents |
2,071 |
1,767 |
||||||
Cash and cash equivalents at beginning of period |
1,514 |
772 |
||||||
Cash and cash equivalents at end of period |
$ |
3,585 |
$ |
2,539 |
|
|||||||||||||||||||||||||||||
Consolidated Statement of Equity |
|||||||||||||||||||||||||||||
(unaudited; in millions) |
|||||||||||||||||||||||||||||
Common |
Additional |
Retained |
Accumulated |
Total |
Noncontrolling |
Total |
|||||||||||||||||||||||
Balance at |
$ |
280 |
$ |
— |
$ |
18,401 |
$ |
(15,554) |
$ |
3,127 |
$ |
44 |
$ |
3,171 |
|||||||||||||||
Net earnings |
— |
— |
5,041 |
— |
5,041 |
— |
5,041 |
||||||||||||||||||||||
Other comprehensive income, net of tax1 |
— |
— |
— |
295 |
295 |
— |
295 |
||||||||||||||||||||||
Repurchases of common stock |
(3) |
(256) |
(841) |
— |
(1,100) |
— |
(1,100) |
||||||||||||||||||||||
Dividends declared2 |
— |
— |
(2,757) |
— |
(2,757) |
— |
(2,757) |
||||||||||||||||||||||
Stock-based awards, ESOP activity and other |
1 |
346 |
— |
— |
347 |
— |
347 |
||||||||||||||||||||||
Net decrease in noncontrolling interests in subsidiary |
— |
— |
— |
— |
— |
(11) |
(11) |
||||||||||||||||||||||
Balance at |
$ |
278 |
$ |
90 |
$ |
19,844 |
$ |
(15,259) |
$ |
4,953 |
$ |
33 |
$ |
4,986 |
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 |
|
|||||||||
Other Financial and Operating Information |
|||||||||
(unaudited; in millions, except for aircraft deliveries and weeks) |
|||||||||
2020 |
2019 |
||||||||
Total FAS income (expense) and CAS costs |
|||||||||
FAS pension income (expense)1 |
$ |
115 |
$ |
(1,093) |
|||||
Less: CAS pension cost |
1,975 |
2,565 |
|||||||
Net FAS/CAS pension adjustment |
$ |
2,090 |
$ |
1,472 |
|||||
Service and non-service cost reconciliation |
|||||||||
FAS pension service cost |
$ |
(100) |
$ |
(516) |
|||||
Less: CAS pension cost |
1,975 |
2,565 |
|||||||
FAS/CAS operating adjustment |
1,875 |
2,049 |
|||||||
Non-operating FAS pension income (expense)2 |
215 |
(577) |
|||||||
Net FAS/CAS pension adjustment |
$ |
2,090 |
$ |
1,472 |
1 |
The corporation projects FAS pension income in 2020, compared to FAS pension expense in 2019, as a result of completing the planned freeze of its salaried pension plans effective |
||||||||
2 |
The corporation records the non-service cost components of net periodic benefit cost as part of other non-operating income (expense) in the consolidated statement of earnings. The non-service cost components in the table above relate only to the corporation's qualified defined benefit pension plans. The corporation expects total non-service income (cost) for its qualified defined benefit pension plans in the table above, along with non-service cost for its other postretirement benefit plans of |
Backlog |
|
|
||||||||||
Aeronautics |
$ |
57,763 |
$ |
55,636 |
||||||||
Missiles and Fire Control |
30,290 |
25,796 |
||||||||||
|
36,137 |
34,296 |
||||||||||
Space |
26,257 |
28,253 |
||||||||||
Total backlog |
$ |
150,447 |
$ |
143,981 |
||||||||
Quarters Ended |
Nine Months Ended |
|||||||||||
Aircraft Deliveries |
|
|
|
|
||||||||
F-35 |
31 |
28 |
78 |
83 |
||||||||
C-130J |
3 |
6 |
11 |
19 |
||||||||
Government helicopter programs |
19 |
20 |
48 |
61 |
||||||||
International military helicopter programs |
3 |
2 |
7 |
5 |
||||||||
Number of Weeks in Reporting Period |
2020 |
2019 |
||||||||||
First quarter |
13 |
13 |
||||||||||
Second quarter |
13 |
13 |
||||||||||
Third quarter |
13 |
13 |
||||||||||
Fourth quarter |
13 |
13 |
View original content:http://www.prnewswire.com/news-releases/
SOURCE
Media Contact: Jarrod Agen, 301-897-6412; jarrod.p.agen@lmco.com; Investor Relations Contacts: Greg Gardner, 301-897-6584; greg.m.gardner@lmco.com; David Weston, 301-897-6455; david.weston@lmco.com