21st Century Security
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Lockheed Martin Corporation
Net sales for the first six months of 2006 were $19.2 billion, an 8% increase over the $17.8 billion recorded in the comparable 2005 period. Net earnings for the six months ended June 30, 2006 were $1.2 billion ($2.68 per share) compared to $830 million ($1.85 per share) in 2005. Cash from operations for the first half of 2006 was $2.8 billion.
"All of our employees continue to focus on meeting customer commitments, capturing new orders, improving productivity and generating cash," said Bob Stevens, Chairman, President and CEO. "Our results reflect excellent operational and financial performance across all business areas. This performance enabled us to increase our 2006 financial outlook, as we drive toward our long standing goal of double-digit operating margins."
SUMMARY REPORTED RESULTS AND OUTLOOK
The following table presents the Corporation's results for the quarter and year-to-date periods ended June 30, in accordance with generally accepted accounting principles (GAAP):
REPORTED RESULTS 2nd Quarter Year-to-Date
(In millions, except per 2006 2005 2006 2005
share data)
Net sales $9,961 $9,295 $19,175 $17,783
Operating profit
Segment operating profit $976 $865 $1,907 $1,627
Unallocated corporate, net:
FAS/CAS pension adjustment (68) (156) (136) (311)
Unusual items, net 20 41 170 58
Stock compensation expense (27) - - (57) - -
Other, net 42 14 30 20
$943 $764 $1,914 $1,394
Net earnings $580 $461 $1,171 $830
Diluted earnings per share $1.34 $1.02 $2.68 $1.85
Cash from operations $1,613 $697 $2,798 $2,245
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.
2006 OUTLOOK 2006 Projections
(In millions, except per Current Update April 2006
share data)
Net sales $38,500 - $39,500 $38,000 - $39,500
Operating profit:
Segment operating profit $3,825 - $3,925 $3,625 - $3,725
Unallocated corporate
expense, net:
FAS/CAS pension adjustment approx. (275) approx. (275)
Unusual items, net approx. 170 approx. 150
Stock compensation expense approx. (110) approx. (110)
Other, net 15 - 40 5 - 30
$3,625 - $3,750 $3,395 - $3,520
Diluted earnings per share $5.10 - $5.30 $4.65 - $4.85
Cash from operations >/= $3,600 >/= $3,400
ROIC (1) > 16.5% > 14.8%
(1) A summary table showing the calculation of ROIC is displayed at the
end of this release.
The $0.45 increase in projected 2006 diluted earnings per share is primarily driven by improved operational performance in all business segments. In addition, the current outlook reflects a reduction in the projected full- year, weighted-average number of diluted shares outstanding as a result of share repurchase activity and the recognition of an incremental $20 million ($13 million after-tax or $0.03 per share) unusual gain during the second quarter.
It is the Corporation's practice not to incorporate adjustments to its outlook and projections for proposed acquisitions, divestitures, joint ventures, or other unusual activities until such transactions have been consummated.
CASH FLOW AND LEVERAGE
Cash from operations for the quarter and six months ended June 30, 2006 was $1.6 billion and $2.8 billion. The Corporation continued to execute its balanced cash deployment strategy during the quarter and first half of the year as follows:
* Repurchased 9.8 million of its common shares at a cost of $718 million
in the quarter and 21.5 million of its common shares at a cost of
$1.6 billion during the first six months of the year;
* Invested $321 million in the second quarter and $474 million during the
first six months of the year for acquisition activities;
* Repaid $194 million of debt in the quarter and $200 million during the
first six months;
* Made capital expenditures of $165 million in the quarter and
$263 million during the first six months of the year; and
* Paid cash dividends of $129 million in the quarter and $261 million for
the first half of year.
The Corporation's ratio of total debt-to-capitalization was 39% at the end of the second quarter, unchanged from the December 31, 2005 level. At June 30, 2006, the Corporation had $3.4 billion in cash and short-term investments.
SEGMENT RESULTS
The Corporation operates in five principal business segments: Electronic Systems, Integrated Systems & Solutions (IS&S), Information & Technology Services (I&TS), Aeronautics, and Space Systems. The results of Electronic Systems, IS&S and I&TS have been aggregated and reported as the Systems & IT Group due to the common focus on information technology and systems integration and engineering solutions across these segments.
Consistent with the manner in which the Corporation's business segment operating performance is evaluated, unusual items are excluded from segment results and included in "Unallocated corporate (expense) income, net." See our 2005 Form 10-K for a description of "Unallocated corporate (expense) income, net," including the FAS / CAS pension adjustment.
The following table presents the operating results of the Systems & IT Group, Aeronautics and Space Systems and reconciles these amounts to the Corporation's consolidated financial results.
(In millions) 2nd Quarter Year-to-Date
2006 2005 2006 2005
Net sales
Systems & IT Group
Electronic Systems $2,886 $2,740 $5,516 $4,997
Integrated Systems & Solutions 1,086 1,052 2,105 2,010
Information & Technology Services 1,070 998 1,995 1,843
Systems & IT Group 5,042 4,790 9,616 8,850
Aeronautics 2,818 2,879 5,489 5,645
Space Systems 2,101 1,626 4,070 3,288
Total net sales
$9,961 $9,295 $19,175 $17,783
Operating profit
Systems & IT Group
Electronic Systems $333 $295 $656 $527
Integrated Systems & Solutions 100 93 193 177
Information & Technology Services 93 86 175 157
Systems & IT Group 526 474 1,024 861
Aeronautics 261 245 501 467
Space Systems 189 146 382 299
Segment operating profit 976 865 1,907 1,627
Unallocated corporate (expense)
income, net: (33) (101) 7 (233)
Total operating profit $943 $764 $1,914 $1,394
The following discussion compares the operating results for the quarter and six months ended June 30, 2006 to the same periods in 2005.
Systems & IT Group
($ millions)
2nd Quarter Year-to-Date
2006 2005 2006 2005
Net sales $5,042 $4,790 $9,616 $8,850
Operating profit $526 $474 $1,024 $861
Net sales for the Systems & IT Group increased by 5% for the quarter and 9% for the six months ended June 30, 2006 from the 2005 periods. Each of the business segments in the group reported sales growth during the quarter and first half of the year.
In Electronic Systems, during the second quarter, sales increased due to higher volume in platform integration activities at Platform, Training & Transportation Solutions (PT&TS) and in surface system programs at Maritime Systems & Sensors (MS2). These increases were partially offset by a decline in fire control programs at Missiles & Fire Control (M&FC). For the first half of the year, the sales growth in Electronic Systems was due to volume increases in platform integration activities at PT&TS, surface system programs at MS2; and in air defense programs at M&FC. In IS&S, for both the quarter and year- to-date periods, the increases in sales were primarily attributable to higher volume and performance related to intelligence, defense and information assurance activities. In I&TS, for both the quarter and year-to-date periods, the increases in sales were primarily attributable to higher volume in Information Technology, which offset declines in NASA programs.
Operating profit for the Systems & IT Group increased by 11% for the quarter and 19% for the six months ended June 30, 2006 compared to the 2005 periods. Each of the business segments in the group reported growth in operating profit during the quarter and first half of the year.
In Electronic Systems, the increase in operating profit during the second quarter was attributable to improved performance on radar programs at MS2 and higher volume on platform integration activities at PT&TS which were partially offset by a decline in certain tactical missile programs at M&FC. For the six month period, Electronic Systems' operating profit increased mainly due to improved performance on radar programs at MS2 and fire control programs at M&FC as well as higher volume on platform integration activities at PT&TS. In IS&S, for both the quarter and first half of the year, the increases were primarily attributable to higher volume and performance related to intelligence, defense and information assurance activities. In I&TS, for both the quarter and year-to-date periods, the increases were due to improved performance in Defense Services.
Aeronautics
($ millions)
2nd Quarter Year-to-Date
2006 2005 2006 2005
Net sales $2,818 $2,879 $5,489 $5,645
Operating profit $261 $245 $501 $467
Net sales for Aeronautics decreased by 2% for the quarter and by 3% for the six months ended June 30, 2006 from the 2005 periods. During the quarter, sales declined in both Combat Aircraft and Air Mobility. The decrease in Combat Aircraft was due to lower volume on the F-22 and F-16 programs, which was partially offset by an increase in F-35 Lightning II volume. The decline in Air Mobility was mainly due to lower volume on the C-5 program. For the six month period, a decline in Air Mobility sales was partially offset by a slight increase in Combat Aircraft sales. The decline in Air Mobility was attributable to fewer C-130J deliveries and lower volume on the C-5 program. The increase in Combat Aircraft sales was mainly due to higher F-35 volume, partially offset by reduced volume on the F-16 and F-22 programs.
Segment operating profit increased by 7% for both the quarter and six months ended June 30, 2006 from the 2005 periods. During the quarter, increases in Air Mobility and other aeronautics programs more than offset a decline in Combat Aircraft. The increase in Air Mobility was mainly due to improved performance on the C-130J and other air mobility programs in 2006. In Combat Aircraft, declines in F-22 operating profit were partially offset by increases due to higher F-35 volume and improved F-16 performance. For the first half of the year, operating profit increased in Air Mobility and other aeronautics programs. Improved performance on C-130 programs accounted for the majority of the increase in Air Mobility. In Combat Aircraft, operating profit was relatively unchanged between periods. In 2006, higher operating profit on the F-35 program was offset by lower operating profit on the F-22 program. These fluctuations were attributable to the fact that in 2005, operating profit included a reduction in earnings on the F-35 program and increased volume and improved performance on the F-22 program.
Space Systems
($ millions)
2nd Quarter Year-to-Date
2006 2005 2006 2005
Net sales $2,101 $1,626 $4,070 $3,288
Operating profit $189 $146 $382 $299
Net sales for Space Systems increased by 29% for the quarter and 24% for the six months ended June 30, 2006 from the 2005 periods. In both periods, the sales growth was mainly due to volume increases in Satellites and Strategic & Defensive Missile Systems (S&DMS). The increases in Satellites were due to higher volume on both commercial and government programs. There were two commercial satellite deliveries in the second quarter of 2006 and three in the first six months of 2006 compared to no deliveries in the first six months of 2005. The increases in S&DMS were attributable to both the fleet ballistic missile and missile defense programs. In Launch Services, sales remained relatively unchanged for the quarter and six months ended June 30, 2006 from the 2005 periods.
Segment operating profit increased by 29% for the quarter and 28% for the six months ended June 30, 2006, when compared to the 2005 periods. For the quarter and six-month period, operating profit increased in Launch Services, Satellites and S&DMS. In Launch Services, operating profit increased due to improved performance on the Atlas program in both 2006 periods due to higher volume and risk reduction activities, including the first quarter definitization of the EELV Launch Capabilities contract. In S&DMS, operating profit increased due to higher volume on the programs discussed above while the increase in Satellites was primarily driven by the increase in commercial satellite deliveries.
Unallocated Corporate (Expense) Income, Net
($ millions)
2nd Quarter Year-to-Date
2006 2005 2006 2005
FAS/CAS pension adjustment $(68) $(156) $(136) $(311)
Unusual items, net 20 41 170 58
Stock compensation expense (27) - - (57) - -
Other, net 42 14 30 20
Unallocated corporate (expense)
income, net $(33) $(101) $7 $(233)
The FAS/CAS pension adjustment (calculated as the difference between FAS 87 expense and the CAS cost amounts) decreased in 2006 compared to 2005. This decrease is consistent with the Corporation's previously disclosed assumptions used in computing these amounts. For more information see the Management's Discussion and Analysis of Financial Condition and Results of Operations section of our 2005 Annual Report on Form 10-K under the caption "Critical Accounting Policies."
Certain items are excluded from segment results as part of senior management's evaluation of segment operating performance. Therefore, for purposes of segment reporting, the following unusual items were included in "Unallocated Corporate (expense) income, net" for the quarters and six months ended June 30, 2006 and 2005:
2006 -
* A second quarter gain, net of state income taxes, of $20 million related
to the sale of land;
* A first quarter gain, net of state income taxes, of $127 million related
to the sale of 21 million of our shares of Inmarsat; and
* A first quarter gain, net of state income taxes, of $23 million, related
to the sale of the assets of Space Imaging, LLC.
These items increased our net earnings by $13 million ($0.03 per share) and $111 million ($0.25 per share) during the quarter and six months ended June 30, 2006.
2005 -
* A second quarter recognition of a deferred gain, net of state income
taxes, of $41 million related to the June 2005 initial public offering
of shares of Inmarsat;
* A first quarter gain, net of state income taxes, of $47 million related
to the sale of our 25% interest in Intelsat, Ltd.; and
* A first quarter charge, net of state income tax benefits, of $30 million
related to impairment in the value of a single telecommunications
satellite operated by one of our wholly-owned subsidiaries.
On a net basis, these items increased our net earnings by $27 million ($0.06 per share) and $39 million ($0.09 per share) during the quarter and six months ended June 30, 2005.
The Corporation adopted FAS 123(R) "Share-Based Payments" prospectively on January 1, 2006 and recognized stock compensation expense on stock options and grants of other stock based incentive awards during the second quarter of $27 million ($17 million after-tax or $0.04 per share) and $57 million ($35 million after-tax or $0.08 per share) for the first six months of 2006.
The increase in "Other, net" is primarily attributable to other corporate activities including an increase in interest income recorded in the 2006 period, resulting mainly from higher cash balances and interest rates.
Headquartered in Bethesda, Md., Lockheed Martin employs about 135,000 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 2005 sales of $37.2 billion.
Web site: www.lockheedmartin.com
Conference call: Lockheed Martin will webcast the earnings conference call (listen-only mode) at 11 a.m. E.T. on July 25, 2006. 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 because of 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 Department of Defense reviews, Congressional actions, budgetary constraints, cost-cutting initiatives, terrorist threats and homeland security); the impact of continued military operations in Iraq and Afghanistan on funding for existing defense programs; the award or termination of contracts; return on pension plan assets, interest and discount rates and other changes that may impact pension plan assumptions; 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 or changes in accounting or tax rules or pronouncements; 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, government/regulatory and environmental remediation efforts); the competitive environment for the Corporation's products and services; and economic, business and political conditions domestically and internationally.
These are only some of the factors that may affect the forward-looking statements contained in this press release. For further information regarding risks and uncertainties associated with Lockheed Martin's business, please refer to the Corporation's SEC filings, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors," and "Legal Proceedings" sections of the Corporation's 2005 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 earnings, sales, cash and ROIC outlook 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 July 24, 2006. 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 minimum pension liability balances.
(In millions, except 2006 Outlook 2005 Actual 2004 Actual
percentages)
Net Earnings
Interest Expense $1,825 $1,266
(multiplied by 65%) (1) Combined 241 276
Return > $2,450 $2,066 $1,542
Average debt (2,5) 5,077 5,932
Average equity 3, 5 Combined 7,590 7,015
Average minimum pension
liability (4,5) 1,545 1,296
Average Invested Capital < $ 14,850 $14,212 $14,243
Return on invested capital > 16.5% 14.5% 10.8%
(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 for other comprehensive losses,
primarily for the additional minimum pension liability.
(4) Minimum pension liability values reflect the cumulative value of
entries identified in our Statement of Stockholders Equity under the
caption "Minimum pension liability." The annual minimum pension
liability adjustments to equity were: 2001 = ($33M); 2002 =
($1,537M); 2003 = $331M; 2004 = ($285M); 2005 = ($105M). As these
entries are recorded in the fourth quarter, the value added-back to
our average equity in a given year is the cumulative impact of all
prior year entries plus 20% of the current year entry value.
(5) Yearly averages are calculated using balances at the start of the
year and at the end of each quarter.
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Statement of Earnings
Preliminary and Unaudited
(In millions, except per share data and percentages)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2006 2005 2006 2005
Net sales $9,961 $9,295 $19,175 $17,783
Cost of sales 9,121 8,637 17,575 16,583
840 658 1,600 1,200
Other income and expenses, net 103 106 314 194
Operating profit 943 764 1,914 1,394
Interest expense 92 94 186 184
Earnings before income taxes 851 670 1,728 1,210
Income tax expense 271 209 557 380
Net earnings $580 $461 $1,171 $830
Effective tax rate 31.8% 31.2% 32.2% 31.4%
Earnings per common share:
Basic $1.35 $1.03 $2.71 $1.87
Diluted $1.34 $1.02 $2.68 $1.85
Average number of shares outstanding:
Basic 428.8 445.3 432.4 443.3
Diluted 433.7 451.3 437.4 448.9
Common shares reported in
stockholders' equity at June 30: 421.5 441.2
LOCKHEED MARTIN CORPORATION
Net Sales, Operating Profit and Margins
Preliminary and Unaudited
(In millions, except percentages)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
% %
2006 2005 Change 2006 2005 Change
Net sales:
Systems & IT Group:
Electronic Systems $2,886 $2,740 $5,516 $4,997
Integrated Systems &
Solutions 1,086 1,052 2,105 2,010
Information & Technology
Services 1,070 998 1,995 1,843
Systems & IT Group 5,042 4,790 5% 9,616 8,850 9%
Aeronautics 2,818 2,879 (2%) 5,489 5,645 (3%)
Space Systems 2,101 1,626 29% 4,070 3,288 24%
Total net sales $9,961 $9,295 7% $19,175 $17,783 8%
Operating profit:
Systems & IT Group:
Electronic Systems $333 $295 $656 $527
Integrated Systems &
Solutions 100 93 193 177
Information & Technology
Services 93 86 175 157
Systems & IT Group 526 474 11% 1,024 861 19%
Aeronautics 261 245 7% 501 467 7%
Space Systems 189 146 29% 382 299 28%
Segment operating
profit 976 865 13% 1,907 1,627 17%
Unallocated corporate
(expense) / income, net (33) (101) 7 (233)
Total operating profit $943 $764 23% $1,914 $1,394 37%
Margins:
Systems & IT Group:
Electronic Systems 11.5% 10.8% 11.9% 10.5%
Integrated Systems &
Solutions 9.2% 8.8% 9.2% 8.8%
Information & Technology
Services 8.7% 8.6% 8.8% 8.5%
Systems & IT Group 10.4% 9.9% 10.6% 9.7%
Aeronautics 9.3% 8.5% 9.1% 8.3%
Space Systems 9.0% 9.0% 9.4% 9.1%
Total operating segments 9.8% 9.3% 9.9% 9.1%
Total Consolidated 9.5% 8.2% 10.0% 7.8%
LOCKHEED MARTIN CORPORATION
Selected Financial Data
Preliminary and Unaudited
(In millions)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2006 2005 2006 2005
Summary of unallocated corporate
(expense) / income, net
FAS/CAS pension adjustment $(68) $(156) $(136) $(311)
Unusual items, net 20 41 170 58
Stock compensation expense (27) - (57) -
Other, net 42 14 30 20
Unallocated corporate
(expense)/ income, net $(33) $(101) $7 $(233)
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2006 2005 2006 2005
FAS/CAS pension adjustment
FAS 87 expense $(234) $(280) $(468) $(559)
Less: CAS costs (166) (124) (332) (248)
FAS/CAS pension adjustment -
expense $(68) $(156) $(136) $(311)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2006 JUNE 30, 2006
Operating Net Earnings Operating Net Earnings
profit earnings per share profit earnings per share
Unusual Items
Gain on sale
of land $20 $13 $0.03 $20 $13 $0.03
Gain on sale of
Inmarsat stock - - - 127 83 0.19
Gain on sale of
Space Imaging's
assets - - - 23 15 0.03
$20 $13 $0.03 $170 $111 $0.25
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2005 JUNE 30, 2005
Operating Net Earnings
Operating Net Earnings profit earnings (loss)
profit earnings per share (loss) (loss) per share
Unusual Items
Gain on
Inmarsat IPO $41 $27 $0.06 $41 $27 $0.06
Gain on sale of
Intelsat stock - - - 47 31 0.07
LMI impairment
charge - - - (30) (19) (0.04)
$41 $27 $0.06 $58 $39 $0.09
LOCKHEED MARTIN CORPORATION
Selected Financial Data
Preliminary and Unaudited
(In millions)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2006 2005 2006 2005
Depreciation and amortization of
property, plant and equipment
Systems & IT Group:
Electronic Systems $46 $43 $89 $84
Integrated Systems & Solutions 12 12 22 20
Information & Technology Services 4 4 7 7
Systems & IT Group 62 59 118 111
Aeronautics 36 31 71 60
Space Systems 35 32 65 63
Segments 133 122 254 234
Unallocated corporate expense, net 16 10 30 24
Total depreciation and
amortization $149 $132 $284 $258
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2006 2005 2006 2005
Amortization of purchased intangibles
Systems & IT Group:
Electronic Systems $12 $12 $24 $24
Integrated Systems & Solutions 4 3 8 7
Information & Technology Services 5 5 10 9
Systems & IT Group 21 20 42 40
Aeronautics 13 13 25 25
Space Systems 2 2 4 4
Segments 36 35 71 69
Unallocated corporate expense, net 3 3 7 6
Total amortization of purchased
intangibles $39 $38 $78 $75
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Balance Sheet
Preliminary and Unaudited
(In millions)
JUNE 30, DECEMBER 31,
2006 2005
Assets
Cash and cash equivalents $2,956 $2,244
Short-term investments 430 429
Receivables 4,367 4,579
Inventories 1,880 1,921
Other current assets 1,330 1,356
Total current assets 10,963 10,529
Property, plant and equipment, net 3,891 3,924
Goodwill 8,827 8,447
Purchased intangibles, net 525 560
Prepaid pension asset 1,269 1,360
Other assets 2,961 2,924
Total assets $28,436 $27,744
Liabilities and Stockholders' Equity
Accounts payable $1,935 $1,998
Customer advances and amounts in
excess of costs incurred 4,784 4,331
Other accrued expenses 3,143 2,897
Current maturities of long-term debt 41 202
Total current liabilities 9,903 9,428
Long-term debt 4,746 4,784
Accrued pension liabilities 2,441 2,097
Other postretirement and other
noncurrent liabilities 3,688 3,568
Stockholders' equity 7,658 7,867
Total liabilities and
stockholders' equity $28,436 $27,744
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Statement of Cash Flows
Preliminary and Unaudited
(In millions)
SIX MONTHS ENDED JUNE 30,
2006 2005
Operating Activities
Net earnings $1,171 $830
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization 284 258
Amortization of purchased intangibles 78 75
Changes in operating assets and liabilities:
Receivables 269 (124)
Inventories 44 107
Accounts payable (81) 194
Customer advances and amounts in
excess of costs incurred 453 544
Other 580 361
Net cash provided by operating activities 2,798 2,245
Investing Activities
Expenditures for property, plant and equipment (263) (208)
Purchases of short-term investments (1) (18)
Acquisitions of businesses /
investments in affiliated companies (474) (413)
Divestitures of businesses /
investments in affiliated companies 156 803
Other 50 3
Net cash (used for) / provided by
investing activities (532) 167
Financing Activities
Common stock activity, net (1,093) (149)
Common stock dividends (261) (222)
Repayments of long-term debt (200) (39)
Net cash used for financing activities (1,554) (410)
Net increase in cash and cash equivalents 712 2,002
Cash and cash equivalents at
beginning of period 2,244 1,060
Cash and cash equivalents at end of period $2,956 $3,062
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Statement of Stockholders' Equity
Preliminary and Unaudited
(In millions)
Additional Other Total
Common Paid-In Retained Unearned Comprehensive Stockholders'
Stock Capital Earnings Compensation Loss Equity
Balance at
January 1,
2006 $432 $1,724 $7,278 $(14) $(1,553) $7,867
Net
earnings 1,171 1,171
Common
stock
dividends(a) (389) (389)
Stock-
based
awards
and ESOP
activity 12 680 14 706
Repurchases
of common
stock (22) (1,568) (1,590)
Other
comprehensive
loss (107) (107)
Balance at
June 30,
2006 $422 $836 $8,060 $ - $(1,660) $7,658
(a) Includes dividends ($0.30 per share) declared and paid in the first
and second quarters. This amount also includes a dividend ($0.30 per
share) that was declared on June 22, 2006 and is payable on
September 29, 2006 to shareholders of record on September 1, 2006.
LOCKHEED MARTIN CORPORATION
Operating Data
Preliminary and Unaudited
(In millions)
JUNE 30, DECEMBER 31,
2006 2005
Backlog
Systems & IT Group:
Electronic Systems $21,110 $19,932
Integrated Systems & Solutions 4,665 3,974
Information & Technology Services 5,215 5,414
Systems & IT Group 30,990 29,320
Aeronautics 26,760 29,580
Space Systems 15,930 15,925
Total $73,680 $74,825
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2006 2005 2006 2005
Deliveries
F-16 12 16 30 30
F-22 9 4 15 7
C-130J 3 3 5 7
Launches
Atlas 1 - 2 2
Proton - 1 1 2
SOURCE: Lockheed Martin Corporation
CONTACT: News Media, Tom Jurkowsky, +1-301-897-6352; Investor Relations,
Jerry Kircher, +1-301-897-6584, or Mike Gabaly, +1-301-897-6455
Company News On-Call: http://www.prnewswire.com/comp/534163.html