SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR
15(d)
OF THE SECURITIES EXCHANGE ACT OF
1934
Date of Report (Date of Earliest
Event Reported) - January 22, 2009
LOCKHEED MARTIN
CORPORATION
(Exact name of registrant as
specified in its charter)
|
Maryland
|
1-11437
|
52-1893632
|
|
(State or other jurisdiction
of
Incorporation)
|
(Commission File
Number)
|
(IRS Employer
Identification No.) |
|
6801 Rockledge Drive, Bethesda,
Maryland
|
20817
|
|
(Address of principal executive
offices)
|
(Zip
Code)
|
(301) 897-6000
(Registrant’s telephone number,
including area code)
Not Applicable
(Former name or address, if changed
since last report)
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
| Item 2.02. |
Results of Operations and
Financial Condition.
|
On
January 22, 2009 Lockheed Martin Corporation announced its financial results for
the quarter and twelve months ended December 31, 2008. The press release is
furnished as Exhibit 99 to this Form. Exhibit 99 shall not be deemed “filed” for
purposes of the Securities Exchange Act of 1934, nor shall it be deemed
incorporated by reference in any filing under the Securities Act of
1933.
| Item 9.01. |
Financial Statements and
Exhibits.
|
|
Exhibit
No.
|
Description
|
|
|
99
|
Lockheed
Martin Corporation Press Release dated January 22, 2009 (earnings release
for the quarter and twelve months ended December 31,
2008).
|
- 2 -
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
| LOCKHEED MARTIN CORPORATION | ||
| |
|
|
| By | /s/ Martin T. Stanislav | |
|
Martin T.
Stanislav
Vice
President and Controller
|
||
January 22,
2009
- 3
- -
|
Exhibit
No.
|
Description
|
|
|
99
|
Lockheed
Martin Corporation Press Release dated January 22, 2009 (earnings release
for the quarter and twelve months ended December 31,
2008).
|
- 4
- -
Information
For Immediate
Release
LOCKHEED MARTIN ANNOUNCES
2008 FOURTH QUARTER AND
YEAR-END RESULTS
| · |
Fourth
quarter earnings per share up 8% to $2.05; Full year earnings per share up
11% to $7.86
|
| · |
Fourth
quarter net earnings up 3% to $823 million; Full year net earnings up 6%
to $3.2 billion
|
| · |
Fourth
quarter net sales up 3% to $11.1 billion; Full year net sales up 2% to
$42.7 billion
|
| · |
Generated
$997 million in cash from operations for the quarter; $4.4 billion
for the full year
|
| · |
Provides
updated outlook for
2009
|
BETHESDA, Md,
January 22, 2009 – Lockheed Martin Corporation (NYSE: LMT) today reported fourth
quarter 2008 net earnings of $823 million ($2.05 per diluted share), compared to
$799 million ($1.89 per diluted share) in 2007. Net sales were $11.1
billion, compared to fourth quarter 2007 sales of $10.8 billion. Cash
from operations for the fourth quarter of 2008 was $997 million, compared to
$425 million in 2007.
For the year ended
December 31, 2008, net earnings were $3.2 billion ($7.86 per share), compared to
$3.0 billion ($7.10 per share) in 2007. Net sales for 2008 were $42.7
billion, a 2% increase over the $41.9 billion in 2007. Cash from
operations for 2008 was $4.4 billion, compared to $4.2 billion in
2007. Return on Invested Capital (ROIC) was 21.7% for 2008 compared
to 21.4% in 2007.
"Our results for
2008 reflect excellent operational and financial performance across all business
areas, despite the difficult economic environment,” said Bob Stevens, Chairman,
President and CEO. “By holding steady to our strategy of diversifying,
differentiating and delivering to enhance shareholder and customer value, our
146,000 dedicated employees demonstrated their unwavering commitment to making
Lockheed Martin the world’s premier global security
company.”
Summary Reported Results and
Outlook
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
|
||||||||||||||
|
(In millions,
except per share data)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
|
Net
sales
|
$ | 11,132 | $ | 10,841 | $ | 42,731 | $ | 41,862 | ||||||||
|
Operating profit
|
||||||||||||||||
|
Segment
operating profit
|
$ | 1,255 | $ | 1,256 | $ | 4,970 | $ | 4,691 | ||||||||
|
Unallocated
corporate, net:
|
||||||||||||||||
|
FAS/CAS
pension adjustment
|
32 | (12 | ) | 128 | (58 | ) | ||||||||||
|
Stock
compensation expense
|
(40 | ) | (33 | ) | (155 | ) | (149 | ) | ||||||||
|
Unusual
items, net
|
48 | — | 193 | 71 | ||||||||||||
|
Other,
net
|
53 | 4 | (5 | ) | (28 | ) | ||||||||||
| 1,348 | 1,215 | 5,131 | 4,527 | |||||||||||||
|
Interest
expense
|
77 | 87 | 341 | 352 | ||||||||||||
|
Other
non-operating (expense) income, net
1
|
(102 | ) | 54 | (88 | ) | 193 | ||||||||||
|
Earnings
before income taxes
|
1,169 | 1,182 | 4,702 | 4,368 | ||||||||||||
|
Income
taxes
|
346 | 383 | 1,485 | 1,335 | ||||||||||||
|
Net
earnings
|
$ | 823 | $ | 799 | $ | 3,217 | $ | 3,033 | ||||||||
|
Diluted
earnings per share
|
$ | 2.05 | $ | 1.89 | $ | 7.86 | $ | 7.10 | ||||||||
|
Cash
from operations 2
|
$ | 997 | $ | 425 | $ | 4,421 | $ | 4,238 | ||||||||
| 1 |
Includes
interest income and unrealized (losses) gains, net on marketable
securities held to fund certain non-qualified employee benefit
obligations.
|
| 2 |
In the fourth
quarter of 2008, the Corporation reclassified the effect of exchange rate
changes on cash from “Cash from operations” to a separate caption in the
Statement of Cash Flows for all periods presented (see Attachment F to
this Press
Release).
|
2
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. See the
“Forward-Looking Statements” discussion contained in this press
release.
|
2009
FINANCIAL OUTLOOK 1
|
2009 Projections
|
||
|
(In millions,
except per share data and percentages)
|
Current Update
|
October 2008
|
|
|
Net
sales
|
$44,700 – $45,700
|
$44,250 –
$45,250
|
|
|
Operating
profit:
|
|||
|
Segment
operating profit
|
$5,175 – $5,275
|
$5,100 –
$5,250
|
|
|
Unallocated
corporate, net :
|
|||
|
FAS/CAS
pension adjustment
|
(470)
|
(60)
|
|
|
Stock
compensation expense
|
(160)
|
(160)
|
|
|
Unusual
items, net
|
—
|
—
|
|
|
Other,
net
|
(80)
|
(80)
|
|
|
4,465
– 4,565
|
$4,800 –
$4,950
|
||
|
Interest
expense
|
(305)
|
(305)
|
|
|
Other
non-operating (expense) income, net
2
|
—
|
35
|
|
|
Earnings
before income taxes
|
$4,160 –
$4,260
|
$4,530 –
$4,680
|
|
|
Diluted
earnings per share
|
$7.05 –
$7.25
|
$7.65 –
$7.90
|
|
|
Cash
from operations
|
≥ $4,000
|
≥ $4,000
|
|
|
ROIC
3
|
≥ 18.0%
|
≥ 20.0%
|
|
| 1 |
All amounts
approximate.
|
| 2 |
Includes
interest income and unrealized (losses) gains, net on marketable
securities held to fund certain non-qualified employee benefit
obligations.
|
| 3 |
See
discussion of non-GAAP performance measures at the end of this
document.
|
The revision in the
Corporation’s projected 2009 diluted earnings per share results primarily from
the net impact of the following:
|
·
|
a higher
level of projected sales and segment operating profit in our Information
Systems & Global Services and Electronic Systems business
segments;
|
|
·
|
an increase
in projected FAS pension expense related to the following
updates:
|
|
Ø
|
as a result
of significant declines in interest rates during the last few weeks of
December, the Corporation selected a 6.125% discount rate at the year-end
2008 measurement date versus the 7.50% assumed in the prior
outlook;
|
3
|
Ø
|
actual return
on plan assets in 2008 of (28%) as compared to the (25%) return assumed in
the prior outlook; and
|
|
Ø
|
the benefit
of $109 million in pre-funding for various pension trusts during the
fourth quarter of 2008, as discussed
below.
|
|
·
|
a reduction
in Other non-operating income as a result of declines in assumed yields on
cash balances; and
|
|
·
|
the benefit
of a reduction in projected weighted average shares
outstanding.
|
It
is the Corporation's practice not to incorporate adjustments to its outlook for
proposed acquisitions, divestitures, joint ventures, or other unusual activities
until such transactions have been consummated.
Re-Measurement of
Post-Retirement Benefit Plans
In
accordance with the provisions of Statement of Financial Accounting Standards
158, “Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans,” (FAS 158),
the Corporation is required to re-measure its pension and other post-retirement
plans at December 31 of each year and to recognize their funded status on the
balance sheet. The re-measurement at December 31, 2008 uses a 6.125%
discount rate and 2008 return on plan assets of (28%), as noted in the previous
section.
The net impact of
the annual re-measurement process was a non-cash, balance sheet only adjustment,
which decreased stockholders’ equity by approximately $7.25 billion,
after-tax. This adjustment increased our ratio of debt-to-total
capitalization from 31% at December 31, 2007 to 57% at December 31, 2008 (the
Corporation’s Balance Sheet and Statement of Stockholders’ Equity are presented
as Attachments E and G to this Press Release).
The Corporation
made discretionary payments totaling $229 million in the fourth quarter to
pre-fund the Corporation’s current estimate of the 2009 funding requirements for
its defined benefit pension plan trust ($109 million) and retiree medical plan
trust ($120 million).
4
Balanced Cash Deployment
Strategy
The Corporation
continued to execute its balanced cash deployment strategy during 2008
by:
|
·
|
repurchasing
6.7 million shares at a cost of $575 million in the quarter and 29.0
million shares at a cost of $2.9 billion in the
year;
|
|
·
|
retiring $1.0
billion of long-term debt in the third quarter as a result of the floating
rate convertible debt redemption and a total of $1.1 billion during the
year;
|
|
·
|
making
capital expenditures of $423 million during the quarter and $926 million
during the year;
|
|
·
|
paying cash
dividends of $227 million in the quarter and $737 million in the year;
and
|
|
·
|
investing $38
million in the quarter and $233 million during the year for acquisition
and investment activities.
|
5
Segment
Results
The Corporation
operates in four principal business segments: Electronic Systems; Information
Systems & Global Services (IS&GS); Aeronautics; and Space
Systems.
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
|
||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net sales
|
||||||||||||||||
|
Electronic
Systems
|
$ | 2,934 | $ | 2,874 | $ | 11,620 | $ | 11,143 | ||||||||
|
IS&GS
|
3,299 | 2,835 | 11,611 | 10,213 | ||||||||||||
|
Aeronautics
|
2,865 | 3,004 | 11,473 | 12,303 | ||||||||||||
|
Space
Systems
|
2,034 | 2,128 | 8,027 | 8,203 | ||||||||||||
|
Total
net sales
|
$ | 11,132 | $ | 10,841 | $ | 42,731 | $ | 41,862 | ||||||||
|
Operating profit
|
||||||||||||||||
|
Electronic
Systems
|
$ | 369 | $ | 360 | $ | 1,508 | $ | 1,410 | ||||||||
|
IS&GS
|
307 | 275 | 1,076 | 949 | ||||||||||||
|
Aeronautics
|
369 | 385 | 1,433 | 1,476 | ||||||||||||
|
Space
Systems
|
210 | 236 | 953 | 856 | ||||||||||||
|
Segment operating
profit
|
1,255 | 1,256 | 4,970 | 4,691 | ||||||||||||
|
Unallocated
corporate income (expense), net
|
93 | (41 | ) | 161 | (164 | ) | ||||||||||
|
Total
operating profit
|
$ | 1,348 | $ | 1,215 | $ | 5,131 | $ | 4,527 | ||||||||
In
the following comparison of segment operating results, changes in net sales and
operating profit are generally expressed in terms of volume and/or
performance. Volume refers to increases (or decreases) in sales resulting
from varying production activity levels, deliveries or services levels on
individual contracts. Volume changes typically include a corresponding
change in operating profit based on the estimated profit rate at completion for
a particular contract for design, development and production activities.
Performance generally refers to changes in contract booking rates. These
changes on our 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 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
Electronic
Systems
|
($
millions)
|
4th
Quarter
|
Year
|
||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
sales
|
$ | 2,934 | $ | 2,874 | $ | 11,620 | $ | 11,143 | ||||||||
|
Operating
profit
|
$ | 369 | $ | 360 | $ | 1,508 | $ | 1,410 | ||||||||
|
Operating
margin
|
12.6 | % | 12.5 | % | 13.0 | % | 12.7 | % | ||||||||
Net sales for
Electronic Systems increased by 2% for the quarter and 4% for the year ended
December 31, 2008 from the comparable 2007 periods. During the
quarter, higher sales volume on platform integration activities at Platform,
Training & Energy (PT&E) and surface systems and undersea systems
activities at Maritime Systems & Sensors (MS2) partially were offset by
lower sales volume on air defense and tactical missile programs at Missiles
& Fire Control (M&FC). For the year, sales increases in
M&FC and MS2 more than offset a decline in PT&E. The increase
in M&FC mainly was due to higher volume on fire control and tactical missile
programs. The increase in MS2 was attributable to higher volume on
surface systems, undersea systems and radar systems activities. The
decline in PT&E mainly was due to lower volume on platform integration
activities.
Operating profit
for Electronic Systems increased by 3% for the quarter and 7% for the year ended
December 31, 2008 from the comparable 2007 periods. In the quarter,
operating profit increases in MS2 and PT&E partially were offset by a
decline in M&FC. The increase in MS2 mainly was attributable to
improved performance on surface systems programs. The increase at
PT&E primarily was due to improved performance on platform integration
activities and simulation and training programs. The decline in
M&FC primarily was attributable to tactical missile programs. For
the year, operating profit increases at M&FC and MS2 more than offset a
decrease at PT&E. The increase in M&FC mainly was due to
improved performance on air defense programs and higher volume on tactical
missile and fire control programs. The increase in MS2 mainly was
attributable to higher volume and improved performance on surface systems,
underseas systems, and radar systems programs. The decrease at
PT&E primarily was due to performance on platform integration
activities.
7
Information Systems &
Global Services
|
($
millions)
|
4th Quarter
|
Year
|
||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
sales
|
$ | 3,299 | $ | 2,835 | $ | 11,611 | $ | 10,213 | ||||||||
|
Operating
profit
|
$ | 307 | $ | 275 | $ | 1,076 | $ | 949 | ||||||||
|
Operating
margin
|
9.3 | % | 9.7 | % | 9.3 | % | 9.3 | % | ||||||||
Net sales for
IS&GS increased by 16% for the quarter and 14% for the year ended December
31, 2008 from the comparable 2007 periods. Sales increased in all
three lines of business for both the quarter and the year. The
increase in Global Services principally was due to Pacific Architect &
Engineers (PAE) programs, mission services and other international
activities. The increase in Mission Solutions primarily was driven by
mission and combat support solutions activities, as well as by transportation
and security solutions. The increase in Information Systems mainly was due
to higher volume on enterprise solutions and services activities.
Operating profit
for IS&GS increased by 12% for the quarter and 13% for the year ended
December 31, 2008 from the comparable 2007 periods. Operating profit
increased in all three lines of business for both the quarter and the
year. The increase in Global Services operating profit primarily was
attributable to volume and improved performance on mission services programs and
other international activities. Mission Solutions operating
profit increased due to higher volume and improved performance on
transportation and security solutions programs, as well as mission and combat
support solutions activities. In Information Systems, operating
profit increased due to higher volume on information technology programs and a
benefit from a contract restructuring during the first quarter of 2008, which
more than offset declines in mission services activities.
Aeronautics
|
($
millions)
|
4th
Quarter
|
Year
|
||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
sales
|
$ | 2,865 | $ | 3,004 | $ | 11,473 | $ | 12,303 | ||||||||
|
Operating
profit
|
$ | 369 | $ | 385 | $ | 1,433 | $ | 1,476 | ||||||||
|
Operating
margin
|
12.9 | % | 12.8 | % | 12.5 | % | 12.0 | % | ||||||||
8
Net sales for
Aeronautics decreased by 5% for the quarter and 7% for the year ended December
31, 2008 from the comparable 2007 periods. In the quarter, decreases
in Combat Aircraft more than offset an increase in Other Aeronautics Programs
and Air Mobility. The decrease in Combat Aircraft was due to lower
volume on F-16 and F-22 programs, which more than offset an increase in F-35
volume. The increase in Other Aeronautics Programs mainly was due to
higher volume in sustainment services activities. The increase in Air
Mobility mainly was due to higher volume on C-130 support
activities. There were three C-130J deliveries in both the fourth
quarter of 2008 and the fourth quarter of 2007. During the year,
decreases in Combat Aircraft and Air Mobility more than offset increases in
Other Aeronautics Programs. The decrease in Combat Aircraft was due
to lower volume on F-16, F-22 and F-35 programs. The decrease in Air
Mobility primarily was due to lower volume on other air mobility
programs. There were 12 C-130J deliveries in both 2008 and
2007. The increase in Other Aeronautics Programs mainly was due to
higher volume in sustainment services activities.
Operating profit
decreased by 4% for the quarter and 3% for the year ended December 31, 2008 from
the comparable 2007 periods. During the quarter, operating profit
declines in Combat Aircraft more than offset increases in Air Mobility and Other
Aeronautics Programs. In Combat Aircraft, the decrease mainly was due
to lower volume and the decline in 2008 of the amount of favorable
inception-to-date performance adjustments recognized on the F-22 program, which
more than offset improved performance on F-16 programs. The increase
in Air Mobility primarily was due to higher volume and improved performance on
C-130 support activities. The increase in Other Aeronautics Programs
mainly was due to improved performance on sustainment services
activities. During 2008, operating profit declines in Combat Aircraft
partially were offset by increases in Other Aeronautics Programs and Air
Mobility. In Combat Aircraft, the decline mainly was due to lower
volume on F-16 programs and lower volume and the decline in 2008 of the amount
of favorable inception-to-date performance adjustments on the F-22
program. The increase in Other Aeronautics Programs mainly was due to
higher volume in sustainment services activities, which partially was offset by
a decrease in operating profit due to performance on a P-3 modification
contract. In Air Mobility, operating profit increased mainly due to
higher volume and improved performance on C-130 support activities, which more
than offset a decline on C-5 programs.
9
Space
Systems
|
($
millions)
|
4th Quarter
|
Year
|
||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
Net
sales
|
$ | 2,034 | $ | 2,128 | $ | 8,027 | $ | 8,203 | ||||||||
|
Operating
profit
|
$ | 210 | $ | 236 | $ | 953 | $ | 856 | ||||||||
|
Operating
margin
|
10.3 | % | 11.1 | % | 11.9 | % | 10.4 | % | ||||||||
Net sales for Space
Systems decreased 4% for the quarter and 2% for the year ended December 31, 2008
from the comparable 2007 periods. In both periods, a sales decline in
Satellites partially was offset by growth in Space Transportation. In
Satellites, sales declines during the quarter in commercial satellite activities
more than offset increases in government satellites programs. During the
year, sales declined in both commercial and government satellite activities due
to lower volume. There were no commercial satellite deliveries during
the fourth quarter of 2008, as compared to one delivery in the fourth quarter of
2007. There were two commercial satellite deliveries during 2008,
compared to four in 2007. The sales growth in Space Transportation
primarily was due to higher volume on the Orion program.
Operating profit
decreased by 11% for the quarter and increased by 11% for the year ended
December 31, 2008 from the comparable 2007 periods. During the quarter,
operating profit declined in both Satellites and Space Transportation. In
Satellites, operating profit declined in the quarter due to performance on
certain government satellite programs. In Space Transportation, the
decrease mainly was attributable to lower equity earnings on the United Launch
Alliance (ULA) joint venture, which offset higher volume on the Orion
program. During the year, the increase in operating profit was due to
Space Transportation, which partially was offset by a decline in
Satellites. In Space Transportation, the increase mainly was
attributable to higher equity earnings on the ULA joint venture, volume on
the Orion program, and the results from successful negotiations of a terminated
commercial launch service contract in the first quarter of 2008. The
improvement in ULA’s earnings also reflects the absence in 2008 of a charge
recognized in the third quarter of 2007 for asset impairment on the Delta II
medium lift launch vehicles. In Satellites, operating profit declined
during the year due to lower volume and performance on certain government
satellite programs.
10
Unallocated Corporate Income
(Expense), Net
|
($
millions)
|
4th Quarter
|
Year
|
||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
|
FAS/CAS
pension adjustment
|
$ | 32 | $ | (12 | ) | $ | 128 | $ | (58 | ) | ||||||
|
Stock
compensation expense
|
(40 | ) | (33 | ) | (155 | ) | (149 | ) | ||||||||
|
Unusual
items, net
|
48 |
—
|
193 | 71 | ||||||||||||
|
Other,
net
|
53 | 4 | (5 | ) | (28 | ) | ||||||||||
|
Unallocated
corporate income (expense), net
|
$ | 93 | $ | (41 | ) | $ | 161 | $ | (164 | ) | ||||||
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 income (expense),
net.” See the Corporation’s 2007 Form 10-K for a description of
“Unallocated corporate income (expense), net,” including the FAS/CAS pension
adjustment.
The FAS/CAS pension
adjustment (calculated as the difference between FAS 87 expense and the CAS cost
amounts) moved from expense to income in 2008 due to an increase in the discount
rate and other factors such as actual return on plan assets. This
change is consistent with the Corporation’s previously disclosed assumptions
used to compute the 2008 amounts.
For purposes of
segment reporting, the following unusual items were included in “Unallocated
corporate income (expense), net” for the quarters and years ended December 31,
2008 and 2007:
2008 –
|
·
|
A fourth
quarter gain, net of state income taxes, of $48 million representing the
recognition of the remaining portion of the deferred net gain from the
2006 sale of the Corporation’s ownership interest in Lockheed Khrunichev
Energia International, Inc. (LKEI) and International Launch Services, Inc.
(ILS). At the time of the sale, the Corporation deferred
recognition of any gains pending the expiration of its responsibility to
refund advances for future launch
services.
|
|
·
|
A third
quarter gain, net of state income taxes, of $44 million representing the
recognition of a portion of the deferred net gain from the 2006 sale of
the Corporation’s ownership interest in LKEI and
ILS.
|
11
|
·
|
Second
quarter earnings, net of state income taxes, of $85 million associated
with reserves related to various land sales that are no longer
required. Reserves were recorded at the time of each land sale
based on the U.S. Government’s assertion of its right to share in the sale
proceeds. This matter was favorably settled with the U.S.
Government in the second quarter.
|
|
·
|
A first
quarter gain, net of state income taxes, of $16 million representing the
recognition of a portion of the deferred net gain from the 2006 sale of
the Corporation’s ownership interest in LKEI and
ILS.
|
Recognition of the
deferred net gain increased net earnings by $32 million ($0.08 per share) during
the fourth quarter of 2008. This fourth quarter item, along with the
previously reported items increased net earnings by $126 million ($0.31 per
share) during the year ended December 31, 2008.
2007 –
|
·
|
A second
quarter gain, net of state income taxes, of $25 million related to the
sale of the Corporation’s remaining 20% interest in COMSAT
International.
|
|
·
|
A first
quarter gain, net of state income taxes, of $25 million related to the
sale of land.
|
|
·
|
First quarter
earnings, net of state income taxes, of $21 million related to the
reversal of legal reserves from the settlement of certain litigation
claims.
|
These items and the
2007 first quarter income tax benefit of $59 million ($0.14 per share) described
in the Income Taxes discussion below, increased net earnings by $105 million
($0.25 per share) during the year ended December 31, 2007.
The increase in
“Other, net” for the quarter and year ended December 31, 2008 from the
comparable periods in 2007 is primarily attributable to income from a reduction
in the value of certain market-based, non-qualified employee benefit
obligations.
The Corporation
also reported in “Other non-operating (expense) income, net” for both the
quarter and year ended December 31, 2008, unrealized losses on marketable
securities held to fund certain non-qualified employee benefit
obligations.
12
Income
Taxes
Our effective
income tax rates were 29.6% and 31.6% for the quarter and year ended December
31, 2008 and 32.4% and 30.6% for the comparable 2007 periods. The
effective rates for all periods were lower than the statutory rate of 35% due to
tax deductions for U.S. manufacturing activities, the research tax credit, and
dividends related to our employee stock ownership plan. The effective tax
rate for 2008 was higher than in 2007 primarily due to a benefit recorded in the
first quarter of 2007 arising from the closure of the IRS examination of the
2003 and 2004 tax years.
The Emergency
Economic Stabilization Act of 2008 signed by the President on October 3, 2008
retroactively extends the research and development (R&D) tax credit for two
years, from January 1, 2008 to December 31, 2009, and increases the alternative
simplified R&D credit rate from 12% to 14% for calendar year 2009. As
a result of these changes, we recorded additional earnings of approximately $36
million in the fourth quarter of 2008, which resulted in a lower effective tax
rate for the quarter ended December 31, 2008 than the comparable 2007
period.
13
Headquartered in
Bethesda, Md., Lockheed Martin is a global security company that employs about
146,000 people worldwide and is principally engaged in the research, design,
development, manufacture, integration and sustainment of advanced technology
systems, products and services. The corporation reported 2008 sales of
$42.7 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 p.m. E.S.T. on January 22, 2009. 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
our products and services both domestically and internationally; changes in
government and customer priorities and requirements (including changes to
respond to the priorities of the new U.S. Administration and Congress,
Department of Defense reviews, budgetary constraints, and cost-cutting
initiatives); the impact of economic recovery and stimulus plans and continued
military operations in Iraq and Afghanistan on funding for existing defense
programs; the award or termination of contracts; actual returns (or losses) on
pension plan assets, interest and discount rates and other changes that may
impact pension plan assumptions; changes in counter-party credit risk exposure;
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;
the future impact of legislation, rulemaking, and changes in accounting, tax,
defense procurement, 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 environmental remediation efforts); the
competitive environment for the Corporation’s products and services; and
economic, business and political conditions domestically and
internationally.
14
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 2007 annual report on Form 10-K,
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 January 21, 2009. Lockheed Martin undertakes no duty
to update any forward-looking statement to reflect subsequent events, actual
results or changes in the Corporation’s expectations. We also
disclaim any duty to comment upon or correct information that may be contained
in reports published by investment analysts or others.
NON-GAAP
PERFORMANCE MEASURES
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. ROIC is not a measure of financial performance under
generally accepted accounting principles, and may not be defined and calculated
by other companies in the same manner. ROIC should not be considered
in isolation or as an alternative to net earnings as an indicator of
performance.
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)
|
2008 Actual
|
2007 Actual
|
|||||
|
Net
Earnings
Interest
Expense (multiplied by 65%)
1
|
$
|
3,217
222
|
$
|
3,033
229
|
|||
|
RETURN
|
$ | 3,439 | $ | 3,262 | |||
|
Average
debt 2,
5
Average
equity 3,
5
Average
Benefit Plan Adjustments 4,5
|
$
|
4,346
8,236
3,256
|
$
|
4,416
7,661
3,171
|
|||
|
AVERAGE INVESTED CAPITAL
|
$ | 15,838 | $ | 15,248 | |||
|
RETURN ON INVESTED CAPITAL
|
21.7% | 21.4% | |||||
15
|
(In millions,
except percentages)
|
2009 Projections
|
|||
|
Current Update
|
October 2008
|
|||
|
Net
Earnings
Interest
Expense (multiplied by 65%)
1
|
 |
Combined
|
Combined
|
|
|
RETURN
|
≥
$3,000
|
≥ $3,300
|
||
|
Average
debt 2,
5
Average
equity 3,
5
Average
Benefit Plan Adjustments 4,5
|
 |
Combined
|
Combined
|
|
|
AVERAGE INVESTED CAPITAL
|
≤
$16,650
|
≤ $16,500
|
||
|
RETURN ON INVESTED CAPITAL
|
≥
18.0%
|
≥
20.0%
|
||
_______
|
1
|
Represents
after-tax interest expense utilizing the federal statutory rate of
35%.
|
|
2
|
Debt consists
of long-term debt, including current maturities, and short-term borrowings
(if any).
|
|
3
|
Equity
includes non-cash adjustments, primarily for unrecognized benefit plan
actuarial losses and prior service costs, the adjustment for the adoption
of FAS 158 in 2006 and the additional minimum pension liability in years
prior to 2007.
|
| 4 |
Average
Benefit Plan Adjustments reflect the cumulative value of entries
identified in our Statement of Stockholders’ Equity discussed in Note
3.
|
|
5
|
Yearly
averages are calculated using balances at the start of the year and at the
end of each quarter.
|
16
|
LOCKHEED MARTIN
CORPORATION
|
||||||||||||||
|
Consolidated Condensed
Statement of Earnings
|
||||||||||||||
|
Unaudited
|
||||||||||||||
|
(In millions, except per share
data and percentages)
|
||||||||||||||
|
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
|
December
31, 2008
|
December 31,
2007
|
December
31, 2008
|
December 31,
2007
|
|||||||||||||
|
Net
sales
|
$ | 11,132 | $ | 10,841 | $ | 42,731 | $ | 41,862 | ||||||||
|
Cost
of sales
|
9,865 | 9,717 | 38,082 | 37,628 | ||||||||||||
| 1,267 | 1,124 | 4,649 | 4,234 | |||||||||||||
|
Other
income (expense), net
|
81 | 91 | 482 | 293 | ||||||||||||
|
Operating
profit
|
1,348 | 1,215 | 5,131 | 4,527 | ||||||||||||
|
Interest
expense
|
77 | 87 | 341 | 352 | ||||||||||||
|
Other
non-operating (expense) income, net
|
(102 | ) | 54 | (88 | ) | 193 | ||||||||||
|
Earnings
before income taxes
|
1,169 | 1,182 | 4,702 | 4,368 | ||||||||||||
|
Income
tax expense
|
346 | 383 | 1,485 | 1,335 | ||||||||||||
|
Net
earnings
|
$ | 823 | $ | 799 | $ | 3,217 | $ | 3,033 | ||||||||
|
Effective
tax rate
|
29.6 | % | 32.4 | % | 31.6 | % | 30.6 | % | ||||||||
|
Earnings
per common share:
|
||||||||||||||||
|
Basic
|
$ | 2.08 | $ | 1.94 | $ | 8.05 | $ | 7.29 | ||||||||
|
Diluted
|
$ | 2.05 | $ | 1.89 | $ | 7.86 | $ | 7.10 | ||||||||
|
Average
number of shares outstanding:
|
||||||||||||||||
|
Basic
|
395.8 | 412.3 | 399.7 | 416.0 | ||||||||||||
|
Diluted
|
400.7 | 423.4 | 409.4 | 427.1 | ||||||||||||
|
Common
shares reported in stockholders' equity at quarter end:
|
392.7 | 409.4 | ||||||||||||||
17
|
LOCKHEED MARTIN
CORPORATION
|
||||||||||||||||||
|
Net Sales, Operating Profit and
Margins
|
||||||||||||||||||
|
Unaudited
|
||||||||||||||||||
|
(In millions, except
percentages)
|
||||||||||||||||||
|
QUARTER
ENDED
|
YEAR
ENDED
|
||||||||||||||||
|
December 31, 2008
|
December 31, 2007
|
% Change
|
December 31, 2008
|
December 31, 2007
|
% Change
|
||||||||||||
|
Net sales
|
|||||||||||||||||
|
Electronic
Systems
|
$ | 2,934 | $ | 2,874 |
2%
|
$ | 11,620 | $ | 11,143 |
4%
|
|||||||
|
Information
Systems & Global Services
|
3,299 | 2,835 |
16
|
11,611 | 10,213 |
14
|
|||||||||||
|
Aeronautics
|
2,865 | 3,004 |
(5)
|
11,473 | 12,303 |
(7)
|
|||||||||||
|
Space
Systems
|
2,034 | 2,128 |
(4)
|
8,027 | 8,203 |
(2)
|
|||||||||||
|
Total
net sales
|
$ | 11,132 | $ | 10,841 |
3%
|
$ | 42,731 | $ | 41,862 |
2%
|
|||||||
|
Operating profit
|
|||||||||||||||||
|
Electronic
Systems
|
$ | 369 | $ | 360 |
3%
|
$ | 1,508 | $ | 1,410 |
7%
|
|||||||
|
Information
Systems & Global Services
|
307 | 275 |
12
|
1,076 | 949 |
13
|
|||||||||||
|
Aeronautics
|
369 | 385 |
(4)
|
1,433 | 1,476 |
(3)
|
|||||||||||
|
Space
Systems
|
210 | 236 |
(11)
|
953 | 856 |
11
|
|||||||||||
|
Segment
operating profit
|
1,255 | 1,256 |
—
|
4,970 | 4,691 |
6
|
|||||||||||
|
Unallocated
corporate income (expense), net
|
93 | (41 | ) | 161 | (164 | ) | |||||||||||
| $ | 1,348 | $ | 1,215 |
11%
|
$ | 5,131 | $ | 4,527 |
13%
|
||||||||
|
Margins:
|
|||||||||||||||||
|
Electronic
Systems
|
12.6 | % | 12.5 | % | 13.0 | % | 12.7 | % | |||||||||
|
Information
Systems & Global Services
|
9.3 | 9.7 | 9.3 | 9.3 | |||||||||||||
|
Aeronautics
|
12.9 | 12.8 | 12.5 | 12.0 | |||||||||||||
|
Space
Systems
|
10.3 | 11.1 | 11.9 | 10.4 | |||||||||||||
|
Total
operating segments
|
11.3 | % | 11.6 | % | 11.6 | % | 11.2 | % | |||||||||
|
Total
consolidated
|
12.1 | % | 11.2 | % | 12.0 | % | 10.8 | % | |||||||||
18
|
LOCKHEED MARTIN
CORPORATION
|
|||||||||||||
|
Selected Financial
Data
|
|||||||||||||
|
Unaudited
|
|||||||||||||
|
(In millions, except per share
data)
|
|||||||||||||
|
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
|
December
31, 2008
|
December 31,
2007
|
December
31, 2008
|
December 31,
2007
|
|||||||||||||
|
Unallocated corporate income (expense),
net
|
||||||||||||||||
|
FAS/CAS
pension adjustment
|
$ | 32 | $ | (12 | ) | $ | 128 | $ | (58 | ) | ||||||
|
Stock
compensation expense
|
(40 | ) | (33 | ) | (155 | ) | (149 | ) | ||||||||
|
Unusual
items, net
|
48 |
—
|
193 | 71 | ||||||||||||
|
Other,
net
|
53 | 4 | (5 | ) | (28 | ) | ||||||||||
|
Unallocated
corporate income (expense), net
|
$ | 93 | $ | (41 | ) | $ | 161 | $ | (164 | ) | ||||||
|
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
|
December
31, 2008
|
December 31,
2007
|
December
31, 2008
|
December 31,
2007
|
|||||||||||||
|
FAS/CAS pension adjustment
|
||||||||||||||||
|
FAS 87
expense
|
$ | (115 | ) | $ | (169 | ) | $ | (462 | ) | $ | (687 | ) | ||||
|
Less: CAS
costs
|
(147 | ) | (157 | ) | (590 | ) | (629 | ) | ||||||||
|
FAS/CAS
pension adjustment - income (expense)
|
$ | 32 | $ | (12 | ) | $ | 128 | $ | (58 | ) | ||||||
|
QUARTER
ENDED DECEMBER 31, 2008
|
YEAR
ENDED DECEMBER 31, 2008
|
|||||||||||||||||||||||
|
Operating
profit
|
Net
earnings
|
Earnings
per
share
|
Operating
profit
|
Net
earnings
|
Earnings
per
share
|
|||||||||||||||||||
|
Unusual Items - 2008
|
||||||||||||||||||||||||
|
ILS/LKEI
deferred gain
|
$ | 48 | $ | 32 | $ | 0.08 | $ | 108 | $ | 70 | $ | 0.17 | ||||||||||||
|
Earnings
associated with prior years' land sales
|
—
|
—
|
—
|
85 | 56 | 0.14 | ||||||||||||||||||
| $ | 48 | $ | 32 | $ | 0.08 | $ | 193 | $ | 126 | $ | 0.31 | |||||||||||||
|
QUARTER
ENDED DECEMBER 31, 2007
|
YEAR
ENDED DECEMBER 31, 2007
|
|||||||||||||||||||||||
|
Operating
profit
|
Net
earnings
|
Earnings
per
share
|
Operating
profit
|
Net
earnings
|
Earnings
per
share
|
|||||||||||||||||||
|
Unusual Items - 2007
|
||||||||||||||||||||||||
|
Gain on sale
of interest in Comsat International
|
$ |
—
|
$ |
—
|
$ |
—
|
$ | 25 | $ | 16 | $ | 0.04 | ||||||||||||
|
Gain on sale
of surplus land
|
—
|
—
|
—
|
25 | 16 | 0.04 | ||||||||||||||||||
|
Earnings from
reversal of legal reserves
|
—
|
—
|
—
|
21 | 14 | 0.03 | ||||||||||||||||||
|
Benefit from
closure of an IRS audit
|
—
|
—
|
—
|
—
|
59 | 0.14 | ||||||||||||||||||
| $ |
—
|
$ |
—
|
$ |
—
|
$ | 71 | $ | 105 | $ | 0.25 | |||||||||||||
19
|
LOCKHEED MARTIN
CORPORATION
|
|||||||||||||
|
Selected Financial
Data
|
|||||||||||||
|
Unaudited
|
|||||||||||||
|
(In
millions)
|
|||||||||||||
|
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
|
December
31, 2008
|
December 31,
2007
|
December
31, 2008
|
December 31,
2007
|
|||||||||||||
|
Depreciation and amortization of plant and
equipment
|
||||||||||||||||
|
Electronic
Systems
|
$ | 63 | $ | 77 | $ | 252 | $ | 227 | ||||||||
|
Information
Systems & Global Services
|
17 | 16 | 66 | 68 | ||||||||||||
|
Aeronautics
|
53 | 60 | 190 | 181 | ||||||||||||
|
Space
Systems
|
57 | 46 | 166 | 136 | ||||||||||||
|
Segments
|
190 | 199 | 674 | 612 | ||||||||||||
|
Unallocated
corporate expense, net
|
15 | 13 | 53 | 54 | ||||||||||||
|
Total
depreciation and amortization
|
$ | 205 | $ | 212 | $ | 727 | $ | 666 | ||||||||
|
QUARTER
ENDED
|
YEAR
ENDED
|
|||||||||||||||
|
December
31, 2008
|
December 31,
2007
|
December
31, 2008
|
December 31,
2007
|
|||||||||||||
|
Amortization of purchased
intangibles
|
||||||||||||||||
|
Electronic
Systems
|
$ | 2 | $ | 5 | $ | 10 | $ | 27 | ||||||||
|
Information
Systems & Global Services
|
11 | 13 | 44 | 55 | ||||||||||||
|
Aeronautics
|
12 | 12 | 50 | 50 | ||||||||||||
|
Space
Systems
|
2 | 3 | 5 | 9 | ||||||||||||
|
Segments
|
27 | 33 | 109 | 141 | ||||||||||||
|
Unallocated
corporate expense, net
|
1 | 3 | 9 | 12 | ||||||||||||
|
Total
amortization of purchased intangibles
|
$ | 28 | $ | 36 | $ | 118 | $ | 153 | ||||||||
20
|
LOCKHEED MARTIN
CORPORATION
|
|||||||
|
Consolidated Condensed Balance
Sheet
|
|||||||
|
Unaudited
|
|||||||
|
(In
millions)
|
|||||||
|
DECEMBER
31,
|
DECEMBER
31,
|
|||||||
|
2008
|
2007
|
|||||||
|
Assets
|
||||||||
|
Cash and cash
equivalents
|
$ | 2,168 | $ | 2,648 | ||||
|
Short-term
investments
|
61 | 333 | ||||||
|
Receivables
|
5,296 | 4,925 | ||||||
|
Inventories
|
1,902 | 1,718 | ||||||
|
Deferred
income taxes
|
755 | 756 | ||||||
|
Other current
assets
|
500 | 560 | ||||||
|
Total
current assets
|
10,682 | 10,940 | ||||||
|
Property,
plant and equipment, net
|
4,488 | 4,320 | ||||||
|
Goodwill
|
9,526 | 9,387 | ||||||
|
Purchased
intangibles, net
|
355 | 463 | ||||||
|
Prepaid
pension asset
|
122 | 313 | ||||||
|
Deferred
income taxes
|
4,651 | 760 | ||||||
|
Other
assets
|
3,610 | 2,743 | ||||||
|
Total
assets
|
$ | 33,434 | $ | 28,926 | ||||
|
Liabilities and Stockholders'
Equity
|
||||||||
|
Accounts
payable
|
$ | 2,013 | $ | 2,163 | ||||
|
Customer
advances and amounts in excess of costs incurred
|
4,535 | 4,212 | ||||||
|
Current
maturities of long-term debt
|
242 | 104 | ||||||
|
Other accrued
expenses
|
3,734 | 3,549 | ||||||
|
Total
current liabilities
|
10,524 | 10,028 | ||||||
|
Long-term
debt, net
|
3,563 | 4,303 | ||||||
|
Accrued
pension liabilities
|
12,004 | 1,192 | ||||||
|
Other
postretirement and other noncurrent liabilities
|
4,478 | 3,598 | ||||||
|
Stockholders'
equity
|
2,865 | 9,805 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 33,434 | $ | 28,926 | ||||
|
Total
debt-to-capitalization ratio:
|
57 | % | 31 | % | ||||
21
|
LOCKHEED MARTIN
CORPORATION
|
|||||||
|
Consolidated Condensed
Statement of Cash Flows
|
|||||||
|
Unaudited
|
|||||||
|
(In
millions)
|
|||||||
|
YEAR
ENDED
|
|||||||
|
December
31, 2008
|
December 31,
2007
|
||||||
|
Operating Activities
|
|||||||
|
Net
earnings
|
$ | 3,217 | $ | 3,033 | |||
|
Adjustments
to reconcile net earnings to net cash provided by operating
activities:
|
|||||||
|
Depreciation
and amortization
|
727 | 666 | |||||
|
Amortization
of purchased intangibles
|
118 | 153 | |||||
|
Stock-based
compensation
|
155 | 149 | |||||
|
Excess
tax benefit on stock compensation
|
(92 | ) | (124 | ) | |||
|
Changes
in operating assets and liabilities:
|
|||||||
|
Receivables
|
(333 | ) | (324 | ) | |||
|
Inventories
|
(183 | ) | (57 | ) | |||
|
Accounts
payable
|
(159 | ) | (66 | ) | |||
|
Customer
advances and amounts in excess of costs incurred
|
313 | 394 | |||||
|
Other
|
658 | 414 | |||||
|
Net
cash provided by operating activities (a)
|
4,421 | 4,238 | |||||
|
Investing Activities
|
|||||||
|
Expenditures
for property, plant and equipment
|
(926 | ) | (940 | ) | |||
|
Sale of
short-term investments, net
|
272 | 48 | |||||
|
Acquisitions
of businesses / investments in affiliates
|
(233 | ) | (337 | ) | |||
|
Divestiture
of investment in affiliate
|
—
|
26 | |||||
|
Other
|
(20 | ) | (2 | ) | |||
|
Net
cash used for investing activities
|
(907 | ) | (1,205 | ) | |||
|
Financing Activities
|
|||||||
|
Repurchases
of common stock
|
(2,931 | ) | (2,127 | ) | |||
|
Issuances of
common stock and related amounts
|
250 | 350 | |||||
|
Excess tax
benefit on stock compensation
|
92 | 124 | |||||
|
Common stock
dividends
|
(737 | ) | (615 | ) | |||
|
Issuance of
long-term debt and related costs
|
491 |
—
|
|||||
|
Repayments of
long-term debt
|
(1,103 | ) | (32 | ) | |||
|
Net
cash used for financing activities
|
(3,938 | ) | (2,300 | ) | |||
|
Effect
of exchange rate changes on cash (a)
|
(56 | ) | 3 | ||||
|
Net
(decrease) increase in cash and cash equivalents
|
(480 | ) | 736 | ||||
|
Cash
and cash equivalents at beginning of period
|
2,648 | 1,912 | |||||
|
Cash
and cash equivalents at end of period
|
$ | 2,168 | $ | 2,648 | |||
|
(a)
|
In the fourth quarter of 2008, the Corporation reclassified the effect of exchange rate changes on cash from "Other"within "Net cash provided by operating activities" to a separate reconciling item in the Consolidated Condensed Statement of Cash Flows. Prior year amounts have been reclassified to conform to this presentation. | |
22
|
LOCKHEED MARTIN
CORPORATION
|
||||||||||||||||
|
Consolidated Condensed
Statement of Stockholders' Equity
|
||||||||||||||||
|
Unaudited
|
||||||||||||||||
|
(In
millions)
|
||||||||||||||||
|
Accumulated
|
||||||||||||||||||||
|
Additional
|
Other
|
Total
|
||||||||||||||||||
|
Common
|
Paid-In
|
Retained
|
Comprehensive
|
Stockholders'
|
||||||||||||||||
|
Stock
|
Capital
|
Earnings
|
Loss
|
Equity
|
||||||||||||||||
|
Balance
at January 1, 2008
|
$ | 409 | $ |
—
|
$ | 11,247 | $ | (1,851 | ) | $ | 9,805 | |||||||||
|
Net
earnings
|
3,217 | 3,217 | ||||||||||||||||||
|
Common
stock dividends (a)
|
(737 | ) | (737 | ) | ||||||||||||||||
|
Conversion
of debentures
|
5 | 58 | 63 | |||||||||||||||||
|
Stock-based
awards and ESOP activity
|
8 | 738 | 746 | |||||||||||||||||
|
Repurchases
of common stock (b)
|
(29 | ) | (796 | ) | (2,106 | ) | (2,931 | ) | ||||||||||||
|
Other
comprehensive loss (c)
|
(7,298 | ) | (7,298 | ) | ||||||||||||||||
|
Balance
at December 31, 2008
|
$ | 393 | $ |
—
|
$ | 11,621 | $ | (9,149 | ) | $ | 2,865 | |||||||||
| (a) |
Includes
dividends ($0.42 per share) declared and paid in the first, second and
third quarters and a dividend ($0.57 per share) paid in the fourth
quarter.
|
||||||||||||||||
| (b) |
The
Corporation repurchased 6.7 million shares for $575 million during the
fourth quarter. During the year, the Corporation repurchased
29.0 million shares for $2.9 billion. The Corporation has 33.7
million shares remaining under its share repurchase program as of the end
of 2008.
|
||||||||||||||||
| (c) |
At
December 31, 2008, the Corporation recognized a non-cash, after-tax
reduction of stockholders' equity of approximately $7.25 billion, as a
result of the required remeasurement of the pension plans. The
decrease was primarily the result of actual return on plan assets in 2008
of (28%) and a lower discount rate at December 31, 2008 of 6.125% compared
to 6.375% at December 31,
2007.
|
||||||||||||||||
23
|
LOCKHEED MARTIN
CORPORATION
|
|||||||
|
Operating
Data
|
|||||||
|
Unaudited
|
|||||||
|
(In
millions)
|
|||||||
|
December
31,
|
December
31,
|
|||||||
|
2008
|
2007
|
|||||||
|
Backlog
|
||||||||
|
Electronic
Systems
|
$ | 22,500 | $ | 21,200 | ||||
|
Information
Systems & Global Services
|
13,300 | 11,800 | ||||||
|
Aeronautics
|
27,200 | 26,300 | ||||||
|
Space
Systems
|
17,900 | 17,400 | ||||||
|
Total
|
$ | 80,900 | $ | 76,700 | ||||
|
QUARTER
ENDED
|
YEAR
ENDED
|
||||||||||||||||
|
December
31,
|
December
31,
|
December
31,
|
December
31,
|
||||||||||||||
|
Aircraft
Deliveries
|
2008
|
2007
|
2008
|
2007
|
|||||||||||||
| F-16 | 5 | 9 | 28 | 41 | |||||||||||||
| F-22 | 6 | 7 | 23 | 24 | |||||||||||||
| C-130J | 3 | 3 | 12 | 12 | |||||||||||||
24