21st Century Security
Releases
Lockheed Martin Corporation
"We had strong second quarter financial results," said Chairman and CEO Bob Stevens. "Operationally, we're continuing to implement affordability initiatives that will enhance performance and lower cost, and our dedicated workforce is focused on meeting our commitments. Strategically, we decided to divest two units and realign others to strengthen performance over the long term. In the new reality of escalating demands and increasing constraints on resources, we continue to refine our portfolio of capabilities and services to provide the best, most affordable solutions for our customers, a secure future for our employees and value for our shareholders."
Realignment and Planned Divestitures
As previously announced on June 2, 2010, we have taken certain portfolio-shaping actions designed to strengthen our business over the long term, as follows:
-- Disclosed plans to divest most of Enterprise Integration Group (EIG)
and Pacific Architects and Engineers, Inc. (PAE), two businesses
within Information Systems & Global Solutions (IS&GS); and
-- Realigned two IS&GS businesses, Readiness & Stability Operations (RSO)
and Savi Technology, Inc., with our Simulation, Training and Support
business to form the Global Training & Logistics (GT&L) line of
business within Electronic Systems.
We are actively marketing PAE for sale and expect the transaction to occur around the end of 2010. As a result, PAE's operating results are included in discontinued operations and its assets and liabilities are classified as held for sale on the balance sheet. The plan to divest PAE is a result of customers seeking a different mix of services that do not fit with our long-term strategy.
We are currently evaluating the relative merits of a sale transaction for EIG compared to a spin-off of the EIG business to our stockholders. EIG's financial results will remain in IS&GS' continuing operations until we either conclude that a sale is probable or close a spin-off transaction. We expect a transaction to occur around the end of 2010.
Our decision to divest EIG was based on our analysis of the U.S. Government's increased concerns about perceived organizational conflicts of interest within the defense contracting community. We have never had an organizational conflict of interest violation; however, the potential for conflicts arises in circumstances where a contractor providing certain types of advisory services or support to the U.S. Government is also involved in systems development activities. EIG provides systems engineering, architecture, and integration services and support to a broad range of government customers.
Certain financial information herein has been reclassified to reflect the realignment between the Electronic Systems and IS&GS business segments and to exclude the PAE business from the IS&GS business segment.
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 2nd Quarter Year-to-Date
----------- ------------
(In millions, except per share
data) 2010 2009 2010 2009
---- ---- ---- ----
Net sales $11,442 $11,072 $21,915 $21,280
======= ======= ======= =======
Operating profit
----------------
Segment operating profit $1,287 $1,272 $2,435 $2,466
Unallocated corporate, net:
FAS/CAS pension adjustment (110) (115) (220) (229)
Stock compensation expense (41) (42) (82) (72)
Other, net (1) (37) (26) (35)
- --- --- ---
Operating profit 1,135 1,078 2,107 2,130
Interest expense 86 74 173 148
Other non-operating income
(expense), net(1) (19) 46 9 43
--- --- --- ---
Earnings from continuing
operations before income taxes 1,030 1,050 1,943 2,025
Income tax expense(2) 303 319 675 628
- - - -
Net earnings:
Earnings from continuing
operations 727 731 1,268 1,397
Earnings from discontinued
operations(3) 98 3 104 3
--- --- --- ---
Net earnings $825 $734 $1,372 $1,400
==== ==== ====== ======
Diluted earnings per share:
Continuing operations $1.96 $1.87 $3.38 $3.54
Discontinued operations 0.26 0.01 0.28 0.01
-- -- -- --
Diluted earnings per share $2.22 $1.88 $3.66 $3.55
===== ===== ===== =====
Cash from operations $1,225 $1,136 $2,874 $2,354
====== ====== ====== ======
1 Includes interest income and unrealized gains (losses), net on
marketable securities held in a Rabbi Trust to fund certain employee
benefit obligations.
2 The 2010 year-to-date amount includes an unusual charge resulting
from legislation that eliminates the tax deduction for benefit costs
reimbursed under Medicare Part D, which increased income tax expense
by $96 million.
3 The 2010 2nd quarter and year-to-date amounts include a $96
million tax benefit due to the recognition of a deferred tax asset
for PAE book and tax differences recorded when the decision was made
to dispose of PAE.
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.
2010 FINANCIAL OUTLOOK (1) 2010 Projections
----------------
(In millions, except per share
data and percentages) April 2010 Current Update
---------- --------------
Net sales $46,250 - $47,250 $45,500 - $46,500
================= =================
Operating profit:
-----------------
Segment operating profit $5,025 - $5,125 $5,025 - $5,125
Unallocated corporate expense,
net:
FAS/CAS pension adjustment (440) (440)
Stock compensation expense (170) (170)
Other, net (120) (100)
---- ----
Operating profit 4,295 - 4,395 4,315 - 4,415
Interest expense (350) (350)
Other non-operating income, net 30 10
Earnings from continuing
operations before income taxes
$3,975 - $4,075 $3,975 - $4,075
Diluted earnings per share from
continuing operations
$7.00 - $7.20 $7.15 - $7.35
Cash from operations >/= $3,300 >/= $3,400
ROIC(2) >/=16.0% >/= 17.0%
1 All amounts approximate.
--------------------------
2 See discussion of non-GAAP performance measures at the end of this
document.
--------------------------------------------------------------------
The Corporation's updated outlook for 2010 net sales, diluted earnings per share, and cash from operations incorporates: the removal of $750 million in projected net sales and $30 million in projected segment operating profit relating to PAE discontinued operations; a $30 million increase in projected segment operating profit driven by improved performance within Space Systems; and a net $0.15 per share improvement primarily due to a reduction in projected weighted average shares outstanding as a result of higher than anticipated share repurchase activity during the second quarter.
Our outlook for 2010 cash from operations anticipates that we will make at least $1.4 billion in discretionary contributions to our pension trust during 2010. We have made discretionary contributions of $350 million to our pension trusts through June 2010. We anticipate recovering approximately $1.0 billion as CAS cost during 2010, with the remainder being recoverable in future years.
Our outlook does not include any financial effect of the voluntary executive separation program announced on July 6, 2010 as the financial results of the program will not be known until later in 2010. Our outlook also does not incorporate any financial effect related to the research and development (R&D) tax credit, which expired on Dec. 31, 2009. The R&D tax credit benefit will not be incorporated into our 2010 outlook or results unless it is extended by Congress. The benefit of the R&D tax credit was approximately $0.11 per share for 2009.
Cash Deployment Strategy
We continued to execute our cash deployment strategy in the second quarter of 2010 by:
-- repurchasing 9.7 million shares at a cost of $782 million in the
quarter and 16.2 million shares at a cost of $1.3 billion for the
year-to-date period;
-- paying cash dividends totaling $233 million in the quarter and $471
million for the year-to-date period; and
-- expending capital of $131 million during the quarter and $223 million
during the first six months of the year.
In May 2010, we issued $728 million of new 5.72 percent Notes due 2040 (the New Notes), in exchange for $611 million of our then outstanding debt securities (the Old Notes). We paid a premium of $158 million, of which $117 million was in the form of New Notes and $41 million was paid in cash. The premium will be amortized to interest expense over the life of the New Notes.
Segment Results
The Corporation operates in four principal business segments: Aeronautics; Electronic Systems; IS&GS; and Space Systems.
The segment results and discussions that follow reflect the previously discussed realignment between the Electronic Systems and IS&GS business segments as well as the exclusion of PAE from IS&GS as discontinued operations. EIG results continue to be included in the continuing operations of IS&GS.
Operating profit for the business segments includes equity earnings (losses) from their investments, because the operating activities of the investees are closely aligned with the operations of those segments. Our largest equity investments are United Launch Alliance (ULA) and United Space Alliance (USA), both of which are part of 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) 2nd Quarter Year-to-Date
----------- ------------
2010 2009 2010 2009
---- ---- ---- ----
Net sales
---------
Aeronautics $3,146 $3,086 $6,079 $5,867
Electronic Systems 3,528 3,395 6,804 6,564
Information Systems & Global
Solutions 2,688 2,535 5,034 4,875
Space Systems 2,080 2,056 3,998 3,974
-- -- -- --
Total net sales $11,442 $11,072 $21,915 $21,280
======= ======= ======= =======
Operating profit
----------------
Aeronautics $372 $399 $696 $754
Electronic Systems 432 425 836 825
Information Systems & Global
Solutions 238 224 445 451
Space Systems 245 224 458 436
Segment operating profit 1,287 1,272 2,435 2,466
Unallocated corporate income
(expense), net (152) (194) (328) (336)
---- ---- ---- ----
Total operating profit $1,135 $1,078 $2,107 $2,130
====== ====== ====== ======
In our discussion of comparative results, changes in net sales and operating profit generally are expressed in terms of volume and performance.
Volume refers to increases or decreases in sales resulting from varying production activity levels, deliveries, or service levels on individual contracts. Volume changes typically include a corresponding change in operating profit based on the estimated profit rate at completion for a particular contract for design, development and production activities.
Performance generally refers to changes in contract profit booking rates. These changes to our contracts for products usually relate to profit recognition associated with revisions to total estimated costs at completion of the contracts that reflect improved (or deteriorated) operating or award fee performance on a particular contract. Changes in contract profit booking rates on contracts for products are recognized by recording adjustments in the current period for the inception-to-date effect of the changes on current and prior periods. Recognition of the inception-to-date adjustment in the current or prior periods may affect the comparison of segment operating results.
Aeronautics
-----------
($ millions) 2nd Quarter Year-to-Date
----------- ------------
2010 2009 2010 2009
---- ---- ---- ----
Net sales $3,146 $3,086 $6,079 $5,867
Operating
profit $372 $399 $696 $754
Operating
margin 11.8% 12.9% 11.4% 12.9%
Net sales for Aeronautics increased by 2 percent for the quarter and 4 percent for the first six months of 2010 from the comparable 2009 periods. In both periods, sales increased in Air Mobility and declined in Combat Aircraft. The increase in Air Mobility primarily was attributable to higher volume on C-130J programs including deliveries and support activities. There were six C-130J deliveries in the second quarter of 2010 (compared to three in the second quarter of 2009) and nine in the first six months of 2010 (compared to six in the comparable period of 2009). The decrease in Combat Aircraft principally was due to lower volume on the F-35 System Development and Demonstration (SDD) contract, F-16 programs, including a decline in deliveries, as well as lower volume on F-22 and other combat aircraft programs. These decreases partially were offset by higher volume on the F-35 production contracts. There were five F-16 deliveries in the second quarter of 2010 (compared to eight in the second quarter of 2009) and 11 in the first six months of 2010 (compared to 16 in the comparable period of 2009). Other Aeronautics Programs sales were relatively unchanged between periods.
Operating profit for Aeronautics decreased by 7 percent for the quarter and 8 percent for the first six months of 2010 from the comparable 2009 periods. In both periods, the decline in operating profit primarily was due to decreases in Combat Aircraft, which partially were offset by increases in Air Mobility and Other Aeronautics Programs. The decrease in Combat Aircraft's operating profit primarily was due to the lower volume on the F-35 SDD contract, F-16 and F-22 programs as well as a decrease in the level of favorable performance adjustments on other combat aircraft programs in 2010 compared to 2009. These decreases more than offset increased operating profit resulting from higher volume and improved performance on F-35 production contracts. The increase in Air Mobility operating profit primarily was due to the higher volume on C-130J and other air mobility programs. The increase in Other Aeronautics Programs mainly was attributable to improved performance in sustainment activities and higher volume and improved performance on P-3 programs.
Electronic Systems
------------------
($ millions) 2nd Quarter Year-to-Date
----------- ------------
2010 2009 2010 2009
---- ---- ---- ----
Net sales $3,528 $3,395 $6,804 $6,564
Operating
profit $432 $425 $836 $825
Operating
margin 12.2% 12.5% 12.3% 12.6%
Net sales for Electronic Systems increased by 4 percent for the quarter and first six months of 2010 from the comparable 2009 periods. In both periods, sales increased in GT&L and Missiles & Fire Control (M&FC) but declined in Mission Systems & Sensors (MS2). The increase at GT&L primarily was due to growth on readiness and stability operations and higher volume on simulation & training programs. The increase at M&FC primarily was due to higher volume on air defense and certain tactical missile programs, which partially were offset in the six month period by lower volume on fire control systems. The decrease at MS2 mainly was due to lower volume on ship & aviation systems and undersea warfare programs, which partially were offset by higher volume on surface naval warfare and radar system programs.
Operating profit for Electronic Systems increased by 2 percent for the quarter and 1 percent for the first six months of 2010 from the comparable 2009 periods. During the quarter, operating profit increased at M&FC and GT&L but declined at MS2. The increase at M&FC mainly was due to higher volume and improved performance on certain tactical missile programs and improved performance on fire control systems, which partially were offset by declines on air defense programs. The increase at GT&L primarily was attributable to higher volume on readiness and stability operations, which partially were offset by lower profitability on certain simulation & training programs in 2010. The decrease at MS2 primarily was attributable to lower volume and performance on undersea warfare system programs and lower volume on ship & aviation system programs, which partially were offset by higher volume and improved performance on radar system programs in 2010.
During the first six months of the year, operating profit increased at M&FC and GT&L but declined at MS2. The increase at M&FC mainly was due to higher volume and improved performance on certain tactical missile programs and higher volume on air defense programs. The increase at GT&L primarily was attributable to higher volume on readiness and stability operations, which partially were offset by the absence in 2010 of a benefit recognized in the first quarter of 2009 from favorably resolving a contract matter at simulation & training programs. The decrease at MS2 primarily was attributable to lower volume and performance on undersea warfare system programs, which partially were offset by higher volume and improved performance on radar system programs in 2010.
Information Systems & Global Solutions
--------------------------------------
($ millions) 2nd Quarter Year-to-Date
----------- ------------
2010 2009 2010 2009
---- ---- ---- ----
Net sales $2,688 $2,535 $5,034 $4,875
Operating
profit $238 $224 $445 $451
Operating
margin 8.9% 8.8% 8.8% 9.3%
Net sales for IS&GS increased by 6 percent for the quarter and 3 percent for the first six months of 2010 from the comparable 2009 periods. In both periods, sales increased in Civil but declined in Defense and Intelligence. Civil increased principally due to higher volume on enterprise civilian services. Defense sales primarily decreased due to lower volume on mission and combat systems activities. Sales in Intelligence programs declined slightly mainly due to lower volume on security solutions, which partially were offset by higher volume in enterprise integration activities.
Operating profit for IS&GS increased by 6 percent for the quarter and decreased by 1 percent in the first six months of 2010 from the comparable 2009 periods. During the second quarter, operating profit increased in Intelligence and Civil but declined in Defense. The increase in Intelligence programs mainly was due to improved performance on security solutions, enterprise integration activities and other intelligence activities. The increase in Civil was mainly due to higher volume on enterprise civilian services. The decrease in operating profit at Defense primarily was attributable to lower volume on mission and combat systems activities.
During the first six months of the year, operating profit increases in Civil and Intelligence were more than offset by a decline in Defense. The increase in Civil was mainly due to higher volume on enterprise civilian services. The increase in Intelligence programs mainly was due to higher volume and improved performance on enterprise integration and other intelligence activities. The decrease in operating profit at Defense primarily was attributable to lower volume on mission and combat systems activities.
Space Systems
-------------
($ millions) 2nd Quarter Year-to-Date
----------- ------------
2010 2009 2010 2009
---- ---- ---- ----
Net sales $2,080 $2,056 $3,998 $3,974
Operating
profit $245 $224 $458 $436
Operating
margin 11.8% 10.9% 11.5% 11.0%
Net sales for Space Systems increased by 1 percent for the quarter and first six months of 2010 from the comparable 2009 periods. In both periods, sales growth at Satellites and Space Transportation partially were offset by declines in Strategic & Defensive Missile Systems (S&DMS). The sales growth in Satellites primarily was attributable to higher volume in government satellite activities. There were no commercial satellite deliveries during the second quarter and first six months of 2010 or 2009. The increase in Space Transportation principally was due to higher volume on the Orion program, which partially was offset by lower volume on the space shuttle external tank program. S&DMS sales decreased mainly due to lower volume on defensive missile and strategic missile programs.
Operating profit for Space Systems increased by 9 percent for the quarter and 5 percent for the first six months of 2010 from the comparable 2009 periods. Operating profit increased in all three lines of business during the quarter. The increase in Space Transportation mainly was attributable to higher volume on the Orion program, which partially was offset by lower volume on the space shuttle's external tank program. Satellites' operating profit increased primarily due to higher volume and improved performance on government satellite programs, which partially was offset by performance on commercial satellite programs. S&DMS operating profit increased mainly due to improved performance on strategic missile programs. Equity earnings represented 26 percent of operating profit at Space Systems in the second quarter of 2010, compared to 28 percent in the second quarter of 2009.
During the first six months of the year, operating profit increases in Space Transportation and S&DMS partially were offset by a decline in Satellites' operating profit. The increase in Space Transportation mainly was attributable to higher equity earnings on the ULA joint venture and higher volume on the Orion program, which partially were offset by lower volume on the space shuttle's external tank program. Satellites' operating profit decreased primarily due to performance on commercial satellite programs and a lower level of favorable performance adjustments on government satellite programs in 2010 as compared to 2009. S&DMS operating profit increased mainly due to improved performance on strategic missile and defensive missile programs. Equity earnings represented 25 percent of operating profit at Space Systems in the first six months of 2010, compared to 22 percent in the first six months of 2009.
Unallocated Corporate Expense, Net
----------------------------------
($ millions) 2nd Quarter Year-to-Date
----------- ------------
2010 2009 2010 2009
---- ---- ---- ----
FAS/CAS pension
adjustment $(110) $(115) $(220) $(229)
Stock compensation
expense (41) (42) (82) (72)
Other, net (1) (37) (26) (35)
--- --- --- ---
Unallocated
corporate
expense, net $(152) $(194) $(328) $(336)
----- ----- ----- -----
See the Corporation's 2009 Form 10-K for a description of "Unallocated corporate costs," including the FAS/CAS pension adjustment.
Income Taxes
Our effective income tax rates were 29.4 percent and 34.7 percent for the quarter and six months ended June 27, 2010 compared to 30.4 percent and 31.0 percent for the quarter and six months ended June 28, 2009. The effective tax rate for the second quarter of 2010 was lower than the comparable period in 2009 primarily due to a reduction in our provision for foreign taxes. The effective tax rate for the first six months of 2010 was higher than the comparable period in 2009 primarily due to the enactment of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. These Acts eliminated our tax deduction for company-paid retiree prescription drug expenses to the extent they are reimbursed under Medicare Part D, beginning in 2013. Since the tax benefits associated with these future deductions were reflected as deferred tax assets in our 2009 financial statements, the elimination of the tax deductions resulted in a reduction in deferred tax assets and an increase in income tax expense in the first quarter of 2010. This increase in income tax expense reduced 2010 net earnings by $96 million.
The effective tax rates for both periods included tax benefits for U.S. manufacturing activities and dividends related to our employee stock ownership plans. The second quarter and first six months of 2009 tax rates included benefits related to the R&D credit, which expired on Dec. 31, 2009.
Discontinued Operations
Discontinued operations includes the operating results for PAE for all periods presented and a $96 million tax benefit in 2010 due to the recognition of a deferred tax asset for PAE book and tax differences recorded when the decision was made to dispose of PAE.
Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 136,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation's 2009 sales from continuing operations were $44.5 billion.
Web site: www.lockheedmartin.com
Conference call: Lockheed Martin will webcast the earnings conference call (listen-only mode) at 11:00 a.m. E.T. on July 27, 2010. 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 due to performance, cost growth,
or other factors;
-- changes in government and customer priorities and requirements
(including changes to respond to the priorities of Congress and the
Administration, 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;
-- failure to have key programs recertified after notice of exceeding
cost-growth thresholds specified by the Nunn-McCurdy process;
-- the award or termination of contracts;
-- actual returns (or losses) on pension plan assets, interest and
discount rates and other changes that may affect pension plan
assumptions;
-- the effect of capitalization changes (such as share repurchase
activity, advance pension funding, option exercises, or debt levels)
on earnings per share;
-- difficulties in developing and producing operationally advanced
technology systems;
-- the timing and customer acceptance of product deliveries;
-- materials availability and performance by key suppliers,
subcontractors and customers;
-- charges from any future impairment reviews that may result in the
recognition of losses and a reduction in the book value of goodwill or
other long-term assets;
-- 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; including the potential that a delay in the
divestiture of EIG could result in U.S. Government customers electing
not to renew existing or award new contracts to EIG;
-- the outcome of legal proceedings and other contingencies (including
lawsuits, government investigations or audits, and the cost of
completing environmental remediation efforts);
-- the competitive environment for the Corporation's products and
services;
-- the ability to attract and retain key personnel; and
-- economic, business and political conditions domestically and
internationally.
These are only some of the factors that may affect the forward-looking statements contained in this press release. For further information regarding risks and uncertainties associated with Lockheed Martin's business, please refer to the Corporation's SEC filings, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors," and "Legal Proceedings" sections of the Corporation's 2009 annual report on Form 10-K, 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 July 26, 2010. 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) 2010 Projections
April 2010 Current Update
Net Earnings
Interest Expense
(multiplied by 65%) (1) Combined Combined
Return >/= $ 2,860 >/= $ 3,000
Average debt (2, 5)
Average equity (3, 5) Combined Combined
Average Benefit Plan
Adjustments(4,5)
</= $
Average Invested Capital 17,900 </= $ 17,650
Return on invested
capital >/= 16.0% >/= 17.0%
(1) Represents after-tax interest expense utilizing the federal
statutory rate of 35 percent. Interest expense is added back to net
earnings as it represents the return to debt holders. Debt is
included as a component of average invested capital.
(2) Debt consists of long-term debt, including current maturities,
and short-term borrowings (if any).
(3) Equity includes non-cash adjustments, primarily to recognize the
funded /unfunded status of our benefit plans.
(4) Average Benefit Plan Adjustments reflect the cumulative value of
entries identified in our Statement of Stockholders' Equity
discussed in Note 11.
(5) Yearly averages are calculated using balances at the start of the
year and at the end of
each quarter.
LOCKHEED MARTIN CORPORATION
Condensed Consolidated Statements of Earnings
Unaudited
(In millions, except per share data and percentages)
THREE MONTHS ENDED
------------------
June 28,
June 27, 2010 (a) 2009 (a)
------------- ---------
Net sales $11,442 $11,072
Cost of sales 10,382 10,060
------ ------
Gross profit 1,060 1,012
Other income, net 75 66
--- ---
Operating profit 1,135 1,078
Interest expense 86 74
Other non-operating
income (expense), net (19) 46
--- ---
Earnings from continuing
operations before income
taxes 1,030 1,050
Income tax expense 303 319
--- ---
Earnings from continuing
operations 727 731
Earnings from discontinued
operations (b), (c) 98 3
--- ---
Net earnings $825 $734
==== ====
Effective tax rate 29.4% 30.4%
==== ====
Earnings per common share:
Basic
Continuing operations $1.98 $1.89
Discontinued operations 0.27 0.01
---- ----
Basic earnings per common
share $2.25 $1.90
Diluted
Continuing operations $1.96 $1.87
Discontinued operations 0.26 0.01
---- ----
Diluted earnings per
common share $2.22 $1.88
Average number of shares
outstanding
Basic 367.6 386.9
Diluted 371.7 390.9
Common shares reported in
stockholders' equity at
quarter end:
SIX MONTHS ENDED
----------------
June 28,
June 27, 2010 (a) 2009 (a)
------------- ---------
Net sales $21,915 $21,280
Cost of sales 19,927 19,263
------ ------
Gross profit 1,988 2,017
Other income, net 119 113
--- ---
Operating profit 2,107 2,130
Interest expense 173 148
Other non-operating
income (expense), net 9 43
--- ---
Earnings from continuing
operations before income
taxes 1,943 2,025
Income tax expense 675 628
--- ---
Earnings from continuing
operations 1,268 1,397
Earnings from discontinued
operations (b), (c) 104 3
--- ---
Net earnings $1,372 $1,400
====== ======
Effective tax rate 34.7% 31.0%
==== ====
Earnings per common share:
Basic
Continuing operations $3.42 $3.58
Discontinued operations 0.28 0.01
---- ----
Basic earnings per common
share $3.70 $3.59
Diluted
Continuing operations $3.38 $3.54
Discontinued operations 0.28 0.01
---- ----
Diluted earnings per
common share $3.66 $3.55
Average number of shares
outstanding
Basic 370.6 390.2
Diluted 374.7 394.2
Common shares reported in
stockholders' equity at
quarter end: 360.0 381.7
(a) It is our practice to close our books and records on the Sunday
prior to the end of the calendar quarter. The interim financial
statements and tables of financial information included herein are
labeled based on that convention.
(b) In June 2010, we announced plans to divest Pacific Architects and
Engineers, Inc. (PAE). As a result, the consolidated financial
statements have been reclassified to reflect PAE as a discontinued
operation.
(c) The 2010 2nd quarter and year-to-date amounts include a $96
million tax benefit due to the recognition of a deferred tax asset
for PAE book and tax differences recorded when the decision was made
to dispose of PAE.
LOCKHEED MARTIN CORPORATION
Net Sales, Operating Profit and Margins (a)
Unaudited
(In millions, except percentages)
THREE MONTHS ENDED
------------------
June 27, June 28, %
2010 2009 Change
--------- --------- -------
Net sales
---------
Aeronautics $3,146 $3,086 2%
Electronic Systems 3,528 3,395 4
Information
Systems & Global
Solutions 2,688 2,535 6
Space Systems 2,080 2,056 1
----- -----
Total net sales $11,442 $11,072 3%
======= =======
Operating profit
----------------
Aeronautics $372 $399 (7)%
Electronic Systems 432 425 2
Information
Systems & Global
Solutions 238 224 6
Space Systems 245 224 9
--- ---
Segment operating
profit 1,287 1,272 1
Unallocated
corporate
expense, net (152) (194)
---- ----
Total operating
profit $1,135 $1,078 5%
====== ======
Margins
-------
Aeronautics 11.8% 12.9%
Electronic Systems 12.2 12.5
Information
Systems & Global
Solutions 8.9 8.8
Space Systems 11.8 10.9
Total operating
segments 11.2 11.5
Total consolidated 9.9% 9.7%
SIX MONTHS ENDED
----------------
June 27, June 28, %
2010 2009 Change
--------- --------- -------
Net sales
---------
Aeronautics $6,079 $5,867 4%
Electronic Systems 6,804 6,564 4
Information Systems &
Global Solutions 5,034 4,875 3
Space Systems 3,998 3,974 1
----- -----
Total net sales $21,915 $21,280 3%
======= =======
Operating profit
----------------
Aeronautics $696 $754 (8)%
Electronic Systems 836 825 1
Information Systems &
Global Solutions 445 451 (1)
Space Systems 458 436 5
--- ---
Segment operating
profit 2,435 2,466 (1)
Unallocated corporate
expense, net (328) (336)
---- ----
Total operating
profit $2,107 $2,130 (1)%
====== ======
Margins
-------
Aeronautics 11.4% 12.9%
Electronic Systems 12.3 12.6
Information Systems &
Global Solutions 8.8 9.3
Space Systems 11.5 11.0
Total operating
segments 11.1 11.6
Total consolidated 9.6% 10.0%
(a) In June 2010, we announced the realignment of two IS&GS
businesses, Readiness & Stability Operations (RSO) and Savi
Technology, Inc., with our Simulation, Training and Support business
to form the Global Training & Logistics line of business within
Electronic Systems. All of the business segment information
presented in the attachments has been reclassified to reflect this
realignment and to exclude the PAE business from the IS&GS business
segment information for all prior periods presented. PAE is now
presented in discontinued operations. In connection with the
realignment and divestiture activities announced in June, IS&GS'
name was changed to Information Systems & Global Solutions,
replacing "Services" with "Solutions" to better reflect its focus
and scope.
LOCKHEED MARTIN CORPORATION
Effect of Realignment on ESBA and IS&GS Net Sales, Operating Profit
and Margins (a)
Unaudited
(In millions, except percentages)
THREE MONTHS ENDED
------------------
June 27, June 28,
2010 2009
--------- ---------
Electronic
Systems
Net Sales
---------
Results under old
structure $3,088 $3,076
Realignment 440 319
--- ---
Reported under
new structure $3,528 $3,395
====== ======
Operating profit
----------------
Results under old
structure $405 $406
Realignment 27 19
--- ---
Reported under
new structure $432 $425
==== ====
Margins
-------
Results under old
structure 13.1% 13.2%
Realignment (0.9) (0.7)
Reported under
new structure 12.2% 12.5%
SIX MONTHS ENDED
----------------
June 27, June 28,
2010 2009
--------- ---------
Electronic
Systems
Net Sales
---------
Results under old
structure $6,002 $5,989
Realignment 802 575
--- ---
Reported under
new structure $6,804 $6,564
====== ======
Operating profit
----------------
Results under old
structure $793 $796
Realignment 43 29
--- ---
Reported under
new structure $836 $825
==== ====
Margins
-------
Results under old
structure 13.2% 13.3%
Realignment (0.9) (0.7)
Reported under
new structure 12.3% 12.6%
THREE MONTHS ENDED
------------------
June 27, June 28,
2010 2009
--------- ---------
Information
Systems & Global
Solutions
Net Sales
---------
Results under old
structure $3,277 $3,018
Realignment (440) $(319)
PAE to
discontinued
operations (149) (164)
---- ----
Reported under
new structure $2,688 $2,535
====== ======
Operating profit
----------------
Results under old
structure $269 $248
Realignment (27) (19)
PAE to
discontinued
operations (b) (4) (5)
--- ---
Reported under
new structure $238 $224
==== ====
Margins
-------
Results under old
structure 8.2% 8.2%
Realignment and
exclusions 0.6 0.6
Reported under
new structure 8.9% 8.8%
SIX MONTHS ENDED
----------------
June 27, June 28,
2010 2009
--------- ---------
Information
Systems & Global
Solutions
Net Sales
---------
Results under old
structure $6,149 $5,779
Realignment (802) (575)
PAE to
discontinued
operations (313) (329)
---- ----
Reported under
new structure $5,034 $4,875
====== ======
Operating profit
----------------
Results under old
structure $502 $490
Realignment (43) (29)
PAE to
discontinued
operations (b) (14) (10)
--- ---
Reported under
new structure $445 $451
==== ====
Margins
-------
Results under old
structure 8.2% 8.5%
Realignment and
exclusions 0.7 0.8
Reported under
new structure 8.8% 9.3%
(a)In June 2010, we announced the realignment of two IS&GS
businesses, Readiness & Stability Operations (RSO) and Savi
Technology, Inc., with our Simulation, Training and Support business
to form the Global Training & Logistics line of business within
Electronic Systems. We also announced plans to divest our PAE
business. PAE is now presented in discontinued operations. This
attachment shows what the results would have been under the old
structure before the realignment, the impact of the realignment and
the results under the new structure.
(b) Earnings from discontinued operations on the Income Statement
includes the operating profit amounts noted above plus interest
income, interest expense and income tax expense or benefits. These
amounts totaled $94 million and $90 million in the second quarter
and first six months of 2010 as compared to ($2) million and ($7)
million in the comparable 2009 periods.
LOCKHEED MARTIN CORPORATION
Selected Financial Data
Unaudited
(In millions, except per share data)
THREE MONTHS ENDED
------------------
June 27, June 28,
2010 2009
-------- --------
Unallocated
corporate
expense, net
-------------
FAS/CAS pension
adjustment $(110) $(115)
Stock
compensation
expense (41) (42)
Other, net (1) (37)
---
Unallocated
corporate
expense, net $(152) $(194)
===== =====
THREE MONTHS ENDED
------------------
June 27, June 28,
2010 2009
-------- --------
FAS/CAS pension
adjustment
---------------
FAS pension
expense $(357) $(259)
Less: CAS costs (247) (144)
---- ----
FAS/CAS pension
adjustment $(110) $(115)
===== =====
THREE MONTHS ENDED JUNE 27, 2010 (a)
-----------------------------------
Operating Net
profit earnings Earnings
per
---------- --------- share
------
Unusual Item -
2010
--------------
Elimination of
Medicare Part D
deferred tax
assets $- $- $-
=== === ===
SIX MONTHS ENDED
----------------
June 27, June 28,
2010 2009
-------- --------
Unallocated
corporate
expense, net
-------------
FAS/CAS pension
adjustment $(220) $(229)
Stock
compensation
expense (82) (72)
Other, net (26) (35)
--- ---
Unallocated
corporate
expense, net $(328) $(336)
===== =====
SIX MONTHS ENDED
----------------
June 27, June 28,
2010 2009
-------- --------
FAS/CAS pension
adjustment
---------------
FAS pension
expense $(714) $(518)
Less: CAS costs (494) (289)
---- ----
FAS/CAS pension
adjustment $(220) $(229)
===== =====
SIX MONTHS ENDED JUNE 27, 2010 (a)
---------------------------------
Operating Net
profit earnings Earnings
per
---------- --------- share
------
Unusual Item -
2010
--------------
Elimination of
Medicare Part D
deferred tax
assets $- $(96) $(0.25)
=== ==== ======
(a) There were no unusual items reported in the first six months of
2009.
LOCKHEED MARTIN CORPORATION
Selected Financial Data
Unaudited
(In millions)
THREE MONTHS ENDED
------------------
June 27, June 28,
2010 2009
--------- ---------
Depreciation and amortization
of plant and equipment
-----------------------------
Aeronautics $48 $47
Electronic Systems 58 60
Information Systems & Global
Solutions 14 17
Space Systems 44 42
--- ---
Segments 164 166
Unallocated corporate expense,
net 15 15
--- ---
Total depreciation and
amortization of plant and
equipment $179 $181
==== ====
THREE MONTHS ENDED
------------------
June 27, June 28,
2010 2009
--------- ---------
Amortization of purchased
intangibles
-------------------------
Aeronautics $13 $13
Electronic Systems 5 5
Information Systems & Global
Solutions 4 8
Space Systems - 1
--- ---
Total amortization of
purchased intangibles $22 $27
=== ===
SIX MONTHS ENDED
----------------
June 27, June 28,
2010 2009
--------- ---------
Depreciation and amortization
of plant and equipment
-----------------------------
Aeronautics $95 $94
Electronic Systems 112 118
Information Systems & Global
Solutions 28 31
Space Systems 87 85
--- ---
Segments 322 328
Unallocated corporate expense,
net 29 28
--- ---
Total depreciation and
amortization of plant and
equipment $351 $356
==== ====
SIX MONTHS ENDED
----------------
June 27, June 28,
2010 2009
--------- ---------
Amortization of purchased
intangibles
-------------------------
Aeronautics $25 $25
Electronic Systems 11 9
Information Systems & Global
Solutions 12 17
Space Systems 1 3
--- ---
Total amortization of
purchased intangibles $49 $54
=== ===
LOCKHEED MARTIN CORPORATION
Condensed Consolidated Balance Sheets
(In millions, except percentages)
(Unaudited)
DECEMBER
JUNE 27, 31,
2010 2009
---- ----
Assets
------
Cash and Cash Equivalents $2,722 $2,391
Short-Term Investments 877 346
Accounts Receivable, Net 6,383 5,840
Inventories 2,360 2,131
Deferred Income Taxes 962 812
Assets of Discontinued
Operations Held for Sale 499 537
Other Current Assets 409 656
--- ---
Total Current Assets 14,212 12,713
Property, Plant and
Equipment, Net 4,381 4,517
Goodwill 9,797 9,810
Purchased Intangibles, Net 179 226
Prepaid Pension Asset 167 160
Deferred Income Taxes 3,614 3,779
Other Assets 3,889 3,906
----- -----
Total Assets $36,239 $35,111
======= =======
Liabilities and
Stockholders' Equity
---------------------
Accounts Payable $2,271 $2,014
Customer Advances and
Amounts in Excess of Costs
Incurred 5,180 5,039
Liabilities of Discontinued
Operations Held for Sale 281 280
Other Current Liabilities 4,127 3,392
----- -----
Total Current Liabilities 11,859 10,725
Long-term Debt, Net 5,019 5,052
Accrued Pension Liabilities 11,194 10,823
Other Postretirement
Benefit Liabilities and
Other Noncurrent
Liabilities 4,433 4,382
Stockholders' Equity 3,734 4,129
----- -----
Total Liabilities and
Stockholders' Equity $36,239 $35,111
======= =======
Total debt-to-
capitalization ratio: 57% 55%
=== ===
LOCKHEED MARTIN CORPORATION
Condensed Consolidated Statements of Cash Flows
Unaudited
(In millions)
SIX MONTHS ENDED
----------------
June 27, June 28,
2010 2009
--------- ---------
Operating Activities
--------------------
Net earnings $1,372 $1,400
Adjustments to reconcile
net earnings to
net cash provided by
operating activities:
Depreciation and
amortization of plant and
equipment 351 356
Amortization of purchased
intangibles 49 54
Stock-based compensation 82 72
Excess tax benefits on
stock compensation (8) (13)
Changes in operating assets
and liabilities:
Accounts receivable, net (552) (812)
Inventories (197) 101
Accounts payable 247 118
Customer advances and
amounts in excess of costs
incurred 137 219
Other 1,393 859
----- ---
Net cash provided by
operating activities 2,874 2,354
----- -----
Investing Activities
--------------------
Expenditures for property,
plant and equipment (223) (299)
Net cash used for short-
term investment
transactions (531) -
Acquisition of businesses /
investments in affiliates (22) (187)
Other (28) (14)
--- ---
Net cash used for investing
activities (804) (500)
---- ----
Financing Activities
--------------------
Repurchases of common stock (1,247) (969)
Issuances of common stock
and related amounts 37 23
Excess tax benefits on
stock compensation 8 13
Common stock dividends (471) (449)
Cash premium and
transaction costs for debt
exchange (47) -
--- ---
Net cash used for financing
activities (1,720) (1,382)
------ ------
Effect of exchange rate
changes on cash and cash
equivalents (19) 32
Net increase in cash and
cash equivalents 331 504
Cash and cash equivalents
at beginning of period 2,391 2,168
----- -----
Cash and cash equivalents
at end of period $2,722 $2,672
====== ======
LOCKHEED MARTIN CORPORATION
Condensed Consolidated Statement of Stockholders' Equity
Unaudited
(In millions, except per share data)
Additional
Common Paid-In Retained
Stock Capital Earnings
----- ------- --------
Balance at
December
31, 2009 $373 $- $12,351
Net earnings - - 1,372
Common stock
dividends
declared
(a) - - (704)
Stock-based
awards and
other 3 251 -
Common stock
repurchases
(b) (16) (251) (1,031)
Other
comprehensive
loss - - -
Balance at
June 27,
2010 $360 $- $11,988
Accumulated
Other Total
Comprehensive Stockholders'
Loss Equity
---- ------
Balance at
December
31, 2009 $(8,595) 4,129
Net earnings - 1,372
Common stock
dividends
declared
(a) - (704)
Stock-based
awards and
other - 254
Common stock
repurchases
(b) - (1,298)
Other
comprehensive
loss (19) (19)
Balance at
June 27,
2010 $(8,614) $3,734
(a) Includes dividends ($0.63 per share) declared and paid in the
first and second quarters. This amount also includes a dividend
($0.63 per share) that was declared on June 24, 2010 and is payable
on September 24, 2010 to stockholders of record on
September 1, 2010.
(b) We repurchased 9.7 million shares for $781.8 million during the
second quarter. Year-to-date, we repurchased 16.2 million
common shares for $1.3 billion. We have 12.6 million shares
remaining under our share repurchase program as of June 27, 2010.
LOCKHEED MARTIN CORPORATION
Operating Data
Unaudited
June December
27, 31,
2010 2009
---- ----
Backlog
-------
(In millions)
Aeronautics $24,400 $26,700
Electronic Systems 21,900 23,100
Information
Systems & Global
Solutions 9,900 10,900
Space Systems 16,600 16,800
Total $72,800 $77,500
======= =======
SIX MONTHS
THREE MONTHS ENDED ENDED
------------------ -----------
June June June June
Aircraft 27, 28, 27, 28,
Deliveries 2010 2009 2010 2009
----------- ----- ----- ----- -----
F-16 5 8 11 16
F-22 4 5 8 10
C-130J 6 3 9 6
LOCKHEED MARTIN CORPORATION
Condensed Consolidated Statements of Earnings - Unaudited
(In millions, except per share data and percentages)
THREE MONTHS ENDED
------------------
March 28,
2010
----
Net sales $10,473
Cost of sales 9,545
-----
Gross profit 928
Other income, net 44
---
Operating profit 972
Interest expense 87
Other non-
operating income
(expense), net 28
---
Earnings from
continuing
operations before
income taxes 913
Income tax expense 372
---
Earnings from
continuing
operations 541
Earnings (loss)
from discontinued
operations (a) 6
---
Net earnings $547
====
Effective tax rate 40.7%
====
Earnings per common
share:
Basic
Continuing
operations $1.45
Discontinued
operations 0.01
----
Basic earnings per
common share $1.46
Diluted
Continuing
operations $1.43
Discontinued
operations 0.02
----
Diluted earnings
per common share $1.45
THREE MONTHS ENDED
------------------
March June September December
29, 28, 27, 31,
2009 2009 2009 2009
---- ---- ---- ----
Net sales $10,208 $11,072 $10,893 $12,332
Cost of sales 9,203 10,060 9,894 11,103
----- ------ ----- ------
Gross profit 1,005 1,012 999 1,229
Other income, net 47 66 82 28
--- --- --- ---
Operating profit 1,052 1,078 1,081 1,257
Interest expense 74 74 74 86
Other non-
operating income
(expense), net (3) 46 54 26
--- --- --- ---
Earnings from
continuing
operations before
income taxes 975 1,050 1,061 1,197
Income tax expense 309 319 267 353
--- --- --- ---
Earnings from
continuing
operations 666 731 794 844
Earnings (loss)
from discontinued
operations (a) - 3 3 (17)
--- --- --- ---
Net earnings $666 $734 $797 $827
==== ==== ==== ====
Effective tax rate 31.7% 30.4% 25.2% 29.5%
==== ==== ==== ====
Earnings per common
share:
Basic
Continuing
operations $1.69 $1.89 $2.08 $2.23
Discontinued
operations - 0.01 0.01 (0.04)
--- ---- ---- -----
Basic earnings per
common share $1.69 $1.90 $2.09 $2.19
Diluted
Continuing
operations $1.68 $1.87 $2.06 $2.21
Discontinued
operations - 0.01 0.01 (0.04)
--- ---- ---- -----
Diluted earnings
per common share $1.68 $1.88 $2.07 $2.17
YEAR ENDED DECEMBER
31,
--------------------
2008 2007
---- ----
Net sales $41,926 $41,232
Cost of sales 37,291 37,018
------ ------
Gross profit 4,635 4,214
Other income, net 475 295
--- ---
Operating profit 5,110 4,509
Interest expense 332 341
Other non-
operating income
(expense), net (91) 189
--- ---
Earnings from
continuing
operations before
income taxes 4,687 4,357
Income tax expense 1,479 1,318
----- -----
Earnings from
continuing
operations 3,208 3,039
Earnings (loss)
from discontinued
operations (a) 9 (6)
--- ---
Net earnings $3,217 $3,033
====== ======
Effective tax rate 31.6% 30.3%
==== ====
Earnings per common
share:
Basic
Continuing
operations $8.03 $7.31
Discontinued
operations 0.02 (0.02)
---- -----
Basic earnings per
common share $8.05 $7.29
Diluted
Continuing
operations $7.84 $7.12
Discontinued
operations 0.02 (0.02)
---- -----
Diluted earnings
per common share $7.86 $7.10
(a) In June 2010, we announced plans to divest Pacific Architects
and Engineers, Inc. (PAE). As a result, the consolidated financial
statements have been reclassified to reflect PAE as
a discontinued operation.
LOCKHEED MARTIN CORPORATION
Net Sales, Operating Profit and Margins - Realigned Business Segments
Unaudited
(In millions, except percentages)
THREE
MONTHS
ENDED
------
March 28,
2010
----
Net sales:
----------
Aeronautics $2,933
Electronic Systems 3,276
Information Systems & Global Solutions 2,346
Space Systems 1,918
Total net sales $10,473
=======
Operating profit:
-----------------
Aeronautics $324
Electronic Systems 404
Information Systems & Global Solutions 207
Space Systems 213
Segment operating profit 1,148
Unallocated corporate expense, net (176)
----
Total operating profit $972
====
Margins:
--------
Aeronautics 11.0%
Electronic Systems 12.3
Information Systems & Global Solutions 8.8
Space Systems 11.1
Total operating segments 11.0
Total consolidated 9.3%
THREE MONTHS ENDED
------------------
March June
29, 28,
2009 2009
---- ----
Net sales:
----------
Aeronautics $2,781 $3,086
Electronic Systems 3,169 3,395
Information Systems & Global Solutions 2,340 2,535
Space Systems 1,918 2,056
Total net sales $10,208 $11,072
======= =======
Operating profit:
-----------------
Aeronautics $355 $399
Electronic Systems 400 425
Information Systems & Global Solutions 227 224
Space Systems 212 224
Segment operating profit 1,194 1,272
Unallocated corporate expense, net (142) (194)
---- ----
Total operating profit $1,052 $1,078
====== ======
Margins:
--------
Aeronautics 12.8% 12.9%
Electronic Systems 12.6 12.5
Information Systems & Global Solutions 9.7 8.8
Space Systems 11.1 10.9
Total operating segments 11.7 11.5
Total consolidated 10.3% 9.7%
THREE MONTHS ENDED
------------------
September December
27, 31,
2009 2009
---- ----
Net sales:
----------
Aeronautics $3,084 $3,250
Electronic Systems 3,254 3,714
Information Systems & Global Solutions 2,482 2,761
Space Systems 2,073 2,607
Total net sales $10,893 $12,332
======= =======
Operating profit:
-----------------
Aeronautics $397 $426
Electronic Systems 404 431
Information Systems & Global Solutions 225 272
Space Systems 236 300
Segment operating profit 1,262 1,429
Unallocated corporate expense, net (181) (172)
---- ----
Total operating profit $1,081 $1,257
====== ======
Margins:
--------
Aeronautics 12.9% 13.1%
Electronic Systems 12.4 11.6
Information Systems & Global Solutions 9.1 9.9
Space Systems 11.4 11.5
Total operating segments 11.6 11.6
Total consolidated 9.9% 10.2%
YEAR ENDED DECEMBER
31,
--------------------
2008 2007
---- ----
Net sales:
----------
Aeronautics $11,473 $12,303
Electronic Systems 12,803 12,046
Information Systems & Global Solutions 9,623 8,680
Space Systems 8,027 8,203
Total net sales $41,926 $41,232
======= =======
Operating profit:
-----------------
Aeronautics $1,433 $1,476
Electronic Systems 1,583 1,441
Information Systems & Global Solutions 980 900
Space Systems 953 856
Segment operating profit 4,949 4,673
Unallocated corporate expense, net 161 (164)
--- ----
Total operating profit $5,110 $4,509
====== ======
Margins:
--------
Aeronautics 12.5% 12.0%
Electronic Systems 12.4 12.0
Information Systems & Global Solutions 10.2 10.4
Space Systems 11.9 10.4
Total operating segments 11.8 11.3
Total consolidated 12.2% 10.9%
LOCKHEED MARTIN CORPORATION
Selected Financial Data - Realigned Business Segments
Unaudited
(In millions)
THREE
MONTHS
ENDED
------
March 28,
2010
----
Depreciation and amortization of plant and equipment
----------------------------------------------------
Aeronautics $47
Electronic Systems 54
Information Systems & Global Solutions 14
Space Systems 43
Segments 158
Unallocated corporate expense, net 14
Total depreciation and amortization of plant and
equipment $172
====
Amortization of purchased intangibles
-------------------------------------
Aeronautics $12
Electronic Systems 6
Information Systems & Global Solutions 8
Space Systems 1
Segments 27
Unallocated corporate expense, net -
Total amortization of purchased intangibles $27
---
THREE MONTHS ENDED
------------------
March June September December
29, 28, 27, 31,
2009 2009 2009 2009
---- ---- ---- ----
Depreciation and
amortization of plant
and equipment
----------------------
Aeronautics $47 $47 $49 $55
Electronic Systems 58 60 61 66
Information Systems &
Global Solutions 14 17 17 18
Space Systems 43 42 46 51
Segments 162 166 173 190
Unallocated corporate
expense, net 13 15 15 16
Total depreciation and
amortization of plant
and equipment $175 $181 $188 $206
==== ==== ==== ====
Amortization of purchased
intangibles
-------------------------
Aeronautics $12 $13 $13 $12
Electronic Systems 4 5 4 5
Information Systems &
Global Solutions 9 8 8 9
Space Systems 2 1 2 (3)
Segments 27 27 27 23
Unallocated corporate
expense, net - - - -
Total amortization of
purchased intangibles $27 $27 $27 $23
--- --- --- ---
YEAR ENDED DECEMBER
31,
--------------------
2008 2007
---- ----
Depreciation and amortization of plant and
equipment
------------------------------------------
Aeronautics $190 $181
Electronic Systems 257 230
Information Systems & Global Solutions 61 65
Space Systems 166 136
Segments 674 612
Unallocated corporate expense, net 53 54
Total depreciation and amortization of plant
and equipment $727 $666
==== ====
Amortization of purchased intangibles
-------------------------------------
Aeronautics $50 $50
Electronic Systems 18 34
Information Systems & Global Solutions 36 48
Space Systems 5 9
Segments 109 141
Unallocated corporate expense, net 9 12
Total amortization of purchased intangibles $118 $153
---- ----
LOCKHEED MARTIN CORPORATION
Backlog - Realigned Business Segments
Unaudited
(In millions)
March 28, March 29, June 28,
2010 2009 2009
---- ---- ----
Backlog:
--------
Aeronautics $26,000 $27,100 $27,900
Electronic Systems 22,300 24,000 22,100
Information Systems & Global
Solutions 10,600 11,400 10,400
Space Systems 15,700 17,800 18,400
Total backlog $74,600 $80,300 $78,800
======= ======= =======
September 27, December 31, December 31,
2009 2009 2008
---- ---- ----
Backlog:
--------
Aeronautics $25,900 $26,700 $27,200
Electronic Systems 21,700 23,100 23,500
Information Systems & Global
Solutions 10,200 10,900 11,800
Space Systems 18,000 16,800 17,900
------
Total backlog $75,800 $77,500 $80,400
======= ======= =======
First Call Analyst: Randa Middleton
FCMN Contact:
SOURCE: Lockheed Martin Corporation
CONTACT: News Media, Jeff Adams, +1-301-897-6308, Investor Relations,
Jerry Kircher, +1-301-897-6584, both of Lockheed Martin Corporation
Web Site: http://www.lockheedmartin.com/