BETHESDA, Md.,
July 22 /PRNewswire-FirstCall/ --
Lockheed Martin
Corporation (NYSE: LMT) today reported second quarter 2008 net earnings of
$882 million (
$2.15 per diluted share), compared to
$778 million (
$1.82 per
diluted share) in 2007. Net sales were
$11.0 billion, a 4% increase over
second quarter 2007 sales of
$10.7 billion. Cash from operations for the
second quarter of 2008 was
$1.5 billion, compared to
$1.4 billion in 2007.
"In line with our expectations, the Corporation had a strong second
quarter, strategically, operationally and financially," said Bob Stevens,
Chairman, President and CEO. "This performance reflects the dedication of our
talented work force and leadership team's focus on consistent performance for
our customers and stockholders."
Summary Reported Results and Outlook
The following table presents the Corporation's results for the quarter and
year-to-date periods, in accordance with generally accepted accounting
principles (GAAP):
REPORTED RESULTS 2nd Quarter Year-to-Date
(In millions, except per 2008 2007 2008 2007
share data)
Net sales $11,039 $10,651 $21,022 $19,926
Operating profit
Segment operating profit $1,315 $1,210 $2,465 $2,209
Unallocated corporate, net:
FAS/CAS pension adjustment 32 (14) 64 (28)
Unusual items, net 85 25 101 71
Stock compensation expense (40) (33) (75) (82)
Other, net (29) (24) (14) (21)
1,363 1,164 2,541 2,149
Interest expense 92 93 179 186
Other non-operating
income/(expense), net 34 67 27 104
Earnings before income taxes 1,305 1,138 2,389 2,067
Income taxes 423 360 777 599
Net earnings $882 $778 $1,612 $1,468
Diluted earnings per share $2.15 $1.82 $3.90 $3.42
Cash from operations $1,491 $1,404 $2,373 $2,886
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.
2008 FINANCIAL OUTLOOK (1) 2008 Projections
(In millions, except per Current Update April 2008
share data and percentages)
Net sales $41,900 - $42,900 $41,800 - $42,800
Operating profit:
Segment operating profit $4,825 - $4,925 $4,750 - $4,875
Unallocated corporate
expense, net:
FAS/CAS pension adjustment 125 125
Unusual items, net 100 15
Stock compensation expense (155) (155)
Other, net (40) (40)
4,855 - 4,955 4,695 - 4,820
Interest expense (345) (360)
Other non-operating
income/(expense), net 45 45
Earnings before income taxes $4,555 - $4,655 $4,380 - $4,505
Diluted earnings per share $7.45 - $7.60 $7.15 - $7.35
Cash from operations >/= $4,300 >/= $4,200
ROIC (2) >/= 20.0% >/= 19.0%
(1) All amounts approximate
(2) See discussion of non-GAAP performance measures at the end of this
document
The increase in the Corporation's projected 2008 net sales results from
the acquisition of the Eagle Group during the second quarter.
The increase in the Corporation's projected 2008 diluted earnings per
share results primarily from:
* higher projected segment operating profit due to improved performance
from Aeronautics, Electronic Systems, and Information Systems & Global
Services;
* earnings of $0.14 per share recognized on an unusual item in the second
quarter; and
* a decrease in interest expense as a result of the scheduled redemption
on August 15, 2008 of the Corporation's $1 billion floating rate convertible
debentures as announced on June 26, 2008.
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.
Balanced Cash Deployment Strategy
The Corporation continued to execute its balanced cash deployment strategy
during the second quarter as follows:
* repurchased 7.3 million shares at a cost of $770 million in the quarter
and 18.6 million shares at a cost of $2.0 billion for the year-to-date period;
* made capital expenditures of $170 million during the quarter and $274
million during the first six months of the year;
* paid cash dividends of $168 million in the quarter and $340 million for
the year-to-date period;
* repaid $103 million of long-term debt in the quarter; and
* invested $77 million in the quarter and $88 million during the first
half of the year for acquisition and investment activities.
Segment Results
The Corporation operates in four principal business segments: Aeronautics;
Electronic Systems; Information Systems & Global Services (IS&GS); 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) 2nd Quarter Year-to-Date
2008 2007 2008 2007
Net sales
Aeronautics $2,884 $3,136 $5,691 $5,957
Electronic Systems 3,095 2,927 5,884 5,442
IS&GS 2,858 2,520 5,362 4,665
Space Systems 2,202 2,068 4,085 3,862
Total net sales $11,039 $10,651 $21,022 $19,926
Operating profit
Aeronautics $366 $378 $689 $677
Electronic Systems 409 387 775 704
IS&GS 272 231 502 429
Space Systems 268 214 499 399
Segment operating profit 1,315 1,210 2,465 2,209
Unallocated corporate
income (expense), net 48 (46) 76 (60)
Total operating profit $1,363 $1,164 $2,541 $2,149
The following discussion compares the operating results for the quarters
and year-to-date periods.
Aeronautics
($ millions) 2nd Quarter Year-to-Date
2008 2007 2008 2007
Net sales $2,884 $3,136 $5,691 $5,957
Operating profit $366 $378 $689 $677
Operating margin 12.7% 12.1% 12.1% 11.4%
Net sales for Aeronautics decreased by 8% for the quarter and 4% for the
six months of 2008 from the comparable 2007 periods. In both periods,
decreases in Combat Aircraft sales more than offset increases in Air Mobility
and Other Aeronautics Programs. The decrease in Combat Aircraft for both the
quarter and the six months was due primarily to lower volume on F-16 programs.
The increase in Air Mobility for the quarter and first half of the year was
due primarily to higher volume on C-130J programs, including deliveries and
support activities. There were three C-130J deliveries in the second quarter
of 2008 and six during the first six months of the year compared to three and
five deliveries in the comparable periods of 2007. The increase in Other
Aeronautics Programs for both periods was due mainly to higher volume in
sustainment services activities.
Operating profit decreased by 3% for the quarter and increased by 2% for
the six months of 2008 from the comparable 2007 periods. During the quarter,
operating profit decreases in Combat Aircraft and Air Mobility offset an
increase in Other Aeronautics Programs. In Combat Aircraft, the decline was
due mainly to lower volume on F-16 programs. The decrease in operating profit
at Air Mobility was attributable primarily to performance on C-5 programs
offset partially by improved performance on C-130 programs. The increase in
Other Aeronautics Programs was due mainly to higher volume and improved
performance in sustainment services activities. During the first six months of
the year, an increase in Other Aeronautics Programs was offset partially by
declines in Air Mobility and Combat Aircraft. The increase in Other
Aeronautics Programs was due mainly to higher volume in sustainment services
activities. In Air Mobility operating profit decreased due to performance on
C-5 programs which was partially offset by improved performance and the
delivery of one additional C-130J in 2008.
Electronic Systems
($ millions) 2nd Quarter Year-to-Date
2008 2007 2008 2007
Net sales $3,095 $2,927 $5,884 $5,442
Operating profit $409 $387 $775 $704
Operating margin 13.2% 13.2% 13.2% 12.9%
Net sales for Electronic Systems increased by 6% for the quarter and 8%
for the six months of 2008 from the comparable 2007 periods. During the
quarter and the first half of the year, sales increased due mainly to higher
volume in fire control and tactical missile programs at Missiles & Fire
Control (M&FC) and undersea systems, surface systems, and radar systems
activities at Maritime Systems & Sensors (MS2). These increases were offset
partially in both periods by declines in platform integration activities at
Platform, Training & Energy (PT&E).
Operating profit for Electronic Systems increased by 6% for the quarter
and 10% for the six months of 2008 from the comparable 2007 periods. In both
the quarter and six month periods, the increases in operating profit were
attributable primarily to higher volume and improved performance in tactical
missile and fire control programs at M&FC and radar systems at MS2. In both
periods, these increases were offset partially by declines in operating profit
at PT&E due mainly to performance in the second quarter on platform
integration programs.
Information Systems & Global Services
($ millions) 2nd Quarter Year-to-Date
2008 2007 2008 2007
Net sales $2,858 $2,520 $5,362 $4,665
Operating profit $272 $231 $502 $429
Operating margin 9.5% 9.2% 9.4% 9.2%
Net sales for IS&GS increased by 13% for the quarter and 15% for the six
months of 2008 from the comparable 2007 periods. Sales increased in all three
lines of business for both the quarter and six months. The increase in Global
Services was due principally to global and mission services activities. The
increase in Mission Solutions was driven primarily by mission and combat
support solutions activities and global security solutions programs. The
increase in Information Systems was due to higher volume on information
technology programs.
Operating profit for IS&GS increased by 18% for the quarter and 17% for
the six months of 2008 from the comparable 2007 periods. In both the quarter
and the six month periods, the increase in operating profit was driven by
Information Systems and Mission Solutions. The increase in Information Systems
was due to higher volume on IT programs and a benefit from a contract
restructuring during the first quarter of 2008. Mission Solutions operating
profit grew due to higher volume and improved performance on secure enterprise
solutions and mission and combat support solutions activities.
Space Systems
($ millions) 2nd Quarter Year-to-Date
2008 2007 2008 2007
Net sales $2,202 $2,068 $4,085 $3,862
Operating profit $268 $214 $499 $399
Operating margin 12.2% 10.3% 12.2% 10.3%
Net sales for Space Systems increased by 6% for both the quarter and six
month periods of 2008 from the comparable 2007 periods. In both periods, sales
growth in Space Transportation was offset partially by a decline in
Satellites. The sales growth in Space Transportation was due primarily to
higher volume on the Orion program. In Satellites, reduced volume in
government satellite activities was offset partially by an increase in
commercial satellite activities in both periods. There was one commercial
satellite delivery during the second quarter and two during the first six
months of 2008. In the first six months of 2007 there was one commercial
satellite delivery in the second quarter.
Operating profit increased by 25% for both the quarter and six months of
2008 from the comparable 2007 periods. In both periods, the increase in
operating profit was due to growth in Space Transportation and Satellites. In
Space Transportation, the increase was attributable mainly to higher equity
earnings on the United Launch Alliance joint venture, volume on the Orion
program and the results from successful negotiations of a terminated
commercial launch service contract in the first quarter of 2008. In
Satellites, the increase was attributable mainly to higher volume and improved
performance on commercial satellite activities.
Unallocated Corporate Income (Expense), Net
($ millions) 2nd Quarter Year-to-Date
2008 2007 2008 2007
FAS/CAS pension adjustment $32 $(14) $64 $(28)
Unusual items, net 85 25 101 71
Stock compensation expense (40) (33) (75) (82)
Other, net (29) (24) (14) (21)
Unallocated corporate
income (expense), net $48 $(46) $76 $(60)
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) switched to an income item 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 these amounts.
For purposes of segment reporting, the following unusual items were
included in "Unallocated corporate income (expense), net" for the quarters and
six-month periods of 2008 and 2007:
2008 --
* 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;
and
* 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 Lockheed Khrunichev
Energia International, Inc. (LKEI) and International Launch Services, Inc.
(ILS). At the time of the sale, the Corporation deferred recognition of the
gain pending the expiration of its responsibility to refund advances for
future launch services. At June 29, 2008, a deferred gain (net of federal and
state taxes) of $57 million remained to be recognized as an unusual item as
future launch services are provided.
The reversal of reserves associated with the favorable settlement
increased net earnings by $56 million ($0.14 per share) during the second
quarter. This item, coupled with the first quarter item, increased net
earnings by $66 million ($0.16 per share) during the six months ended June 29,
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; and
* 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.
The COMSAT International sale increased net earnings by $16 million ($0.04
per share) during the second quarter. This sale, coupled with the first
quarter items and the 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 six months ended June 24, 2007.
Income Taxes
Our effective income tax rates were 32.4% and 32.5% for the quarter and
six months ended June 29, 2008 and 31.6% and 29.0% for the quarter and six
months ended June 24, 2007. The effective rates for all periods were lower
than the statutory rate of 35% due to tax benefits for U.S. manufacturing
activities and dividends related to our employee stock ownership plans. The
effective tax rates for the quarter and six months periods in 2008 are higher
than the comparable periods in 2007 primarily due to the expiration of the
research tax credit at the end of 2007 and a benefit recorded in the first
quarter of 2007 arising from the closure of the IRS examination of the 2003
and 2004 tax years.
Headquartered in Bethesda, Md., Lockheed Martin employs approximately
140,000 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 2007 sales of $41.9
billion.
Conference call: Lockheed Martin will webcast the earnings conference
call (listen-only mode) at 11 a.m. E.D.T. on July 22, 2008. 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 election cycles, Congressional actions, Department of Defense
reviews, budgetary constraints, and cost-cutting initiatives); 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, changes in accounting, tax rules, 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/regulatory 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.
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 July 21, 2008. 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 Outlook
Current Update April 2008
Net Earnings Combined Combined
Interest Expense (multiplied by 65%) (1)
Return >/= $3,290 >/= $3,185
Average debt (2, 5)
Average equity (3, 5) Combined Combined
Average Benefit Plan Adjustments (4,5)
Average Invested Capital < / = $16,450 < / = $16,750
Return on invested capital >/= 20% >/= 19%
(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.
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Statement of Earnings
Unaudited
(In millions, except per share data and percentages)
THREE MONTHS ENDED SIX MONTHS ENDED
June 29, June 24, June 29, June 24,
2008(a) 2007(a) 2008(a) 2007(a)
Net sales $11,039 $10,651 $21,022 $19,926
Cost of sales 9,848 9,597 18,762 17,962
1,191 1,054 2,260 1,964
Other income and expenses, net 172 110 281 185
Operating profit 1,363 1,164 2,541 2,149
Interest expense 92 93 179 186
Other non-operating income
(expense), net 34 67 27 104
Earnings before income taxes 1,305 1,138 2,389 2,067
Income tax expense 423 360 777 599
Net earnings $882 $778 $1,612 $1,468
Effective tax rate 32.4% 31.6% 32.5% 29.0%
Earnings per common share:
Basic $2.21 $1.87 $4.00 $3.50
Diluted $2.15 $1.82 $3.90 $3.42
Average number of shares outstanding
Basic 399.3 416.7 402.9 419.1
Diluted 409.5 426.5 413.2 429.1
Common shares reported in stockholders'
equity at quarter end: 393.9 412.0
(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.
A
LOCKHEED MARTIN CORPORATION
Net Sales, Segment Operating Profit and Margins
Unaudited
(In millions, except percentages)
THREE MONTHS ENDED
June 29, 2008 June 24, 2007 % Change
Net sales
Aeronautics $2,884 $3,136 (8) %
Electronic Systems 3,095 2,927 6
Information Systems & Global Services 2,858 2,520 13
Space Systems 2,202 2,068 6
Total net sales $11,039 $10,651 4
Operating profit
Aeronautics $366 $378 (3) %
Electronic Systems 409 387 6
Information Systems & Global Services 272 231 18
Space Systems 268 214 25
Segment operating profit 1,315 1,210 9
Unallocated corporate income
(expense), net 48 (46)
$1,363 $1,164 17
Margins:
Aeronautics 12.7 % 12.1 %
Electronic Systems 13.2 13.2
Information Systems & Global Services 9.5 9.2
Space Systems 12.2 10.3
Total operating segments 11.9 % 11.4 %
Total consolidated 12.3 % 10.9 %
SIX MONTHS ENDED
June 29, 2008 June 24, 2007 % Change
Net sales
Aeronautics $5,691 $5,957 (4) %
Electronic Systems 5,884 5,442 8
Information Systems & Global Services 5,362 4,665 15
Space Systems 4,085 3,862 6
Total net sales $21,022 $19,926 6
Operating profit
Aeronautics $689 $677 2 %
Electronic Systems 775 704 10
Information Systems & Global Services 502 429 17
Space Systems 499 399 25
Segment operating profit 2,465 2,209 12
Unallocated corporate income
(expense), net 76 (60)
$2,541 $2,149 18
Margins:
Aeronautics 12.1 % 11.4 %
Electronic Systems 13.2 12.9
Information Systems & Global Services 9.4 9.2
Space Systems 12.2 10.3
Total operating segments 11.7 % 11.1 %
Total consolidated 12.1 % 10.8 %
B
LOCKHEED MARTIN CORPORATION
Selected Financial Data
Unaudited
(In millions, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
June 29, June 24, June 29, June 24,
2008 2007 2008 2007
Unallocated corporate income
(expense), net
FAS/CAS pension adjustment $32 $(14) $64 $(28)
Unusual items, net 85 25 101 71
Stock compensation expense (40) (33) (75) (82)
Other, net (29) (24) (14) (21)
Unallocated corporate income
(expense), net $48 $(46) $76 $(60)
THREE MONTHS ENDED SIX MONTHS ENDED
June 29, June 24, June 29, June 24,
2008 2007 2008 2007
FAS/CAS pension adjustment
FAS 87 expense $(115) $(172) $(231) $(343)
Less: CAS costs (147) (158) (295) (315)
FAS/CAS pension adjustment -
income (expense) $32 $(14) $64 $(28)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 29, 2008 JUNE 29, 2008
Earn- Earn-
Opera- ings Opera- ings
ting Net per ting Net per
profit earnings share profit earnings share
Unusual Items - 2008
Earnings associated with
prior years' land sales $85 $56 $0.14 $85 $56 $0.14
Partial recognition of the
deferred gain from the 2006
sale of LKEI and ILS - - - 16 10 0.02
$85 $56 $0.14 $101 $66 $0.16
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 24, 2007 JUNE 24, 2007
Earn- Earn-
Opera- ings Opera- ings
ting Net per ting Net per
profit earnings share profit earnings share
Unusual Items - 2007
Gain on sale of interest
in Comsat International $25 $16 $0.04 $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
$25 $16 $0.04 $71 $105 $0.25
C
LOCKHEED MARTIN CORPORATION
Selected Financial Data
Unaudited
(In millions)
THREE MONTHS ENDED SIX MONTHS ENDED
June 29, June 24, June 29, June 24,
2008 2007 2008 2007
Depreciation and amortization of
plant and equipment
Aeronautics $43 $40 $85 $79
Electronic Systems 66 49 120 94
Information Systems & Global Services 17 16 33 31
Space Systems 37 28 73 57
Segments 163 133 311 261
Unallocated corporate expense, net 12 14 24 27
Total depreciation and
amortization $175 $147 $335 $288
THREE MONTHS ENDED SIX MONTHS ENDED
June 29, June 24, June 29, June 24,
2008 2007 2008 2007
Amortization of purchased intangibles
Aeronautics $13 $13 $26 $26
Electronic Systems 1 5 6 16
Information Systems & Global Services 10 14 23 29
Space Systems - 2 2 4
Segments 24 34 57 75
Unallocated corporate expense, net 3 3 6 6
Total amortization of purchased
intangibles $27 $37 $63 $81
D
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Balance Sheet
Unaudited
(In millions)
JUNE 29, DECEMBER 31,
2008 2007
Assets
Cash and cash equivalents $3,214 $2,648
Short-term investments 96 333
Receivables 5,218 4,925
Inventories 1,623 1,718
Deferred income taxes 724 756
Other current assets 433 560
Total current assets 11,308 10,940
Property, plant and equipment, net 4,256 4,320
Goodwill 9,484 9,387
Purchased intangibles, net 409 463
Prepaid pension asset 322 313
Deferred income taxes 849 760
Other assets 2,833 2,743
Total assets $29,461 $28,926
Liabilities and Stockholders' Equity
Accounts payable $1,993 $2,163
Customer advances and amounts in
excess of costs incurred 4,208 4,254
Other accrued expenses 4,054 3,350
Current maturities of long-term debt 1,001 104
Total current liabilities 11,256 9,871
Long-term debt, net 3,803 4,303
Accrued pension liabilities 1,431 1,192
Other postretirement and other
noncurrent liabilities 3,637 3,755
Stockholders' equity 9,334 9,805
Total liabilities and stockholders' equity $29,461 $28,926
Total debt-to-capitalization ratio: 34% 31%
E
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Statement of Cash Flows
Unaudited
(In millions)
SIX MONTHS ENDED
June 29, 2008 June 24, 2007
Operating Activities
Net earnings $1,612 $1,468
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 335 288
Amortization of purchased intangibles 63 81
Stock-based compensation 75 82
Excess tax benefit on stock compensation (43) (61)
Changes in operating assets and liabilities:
Receivables (266) (618)
Inventories 95 282
Accounts payable (176) (94)
Customer advances and amounts in
excess of costs incurred (3) 720
Other 681 738
Net cash provided by operating
activities 2,373 2,886
Investing Activities
Expenditures for property, plant and equipment (274) (254)
Sale of short-term investments, net 237 52
Acquisitions of businesses /
investments in affiliates (88) (136)
Divestiture of investment in affiliate - 26
Other 40 (11)
Net cash used for investing activities (85) (323)
Financing Activities
Repurchases of common stock (1,930) (1,394)
Issuances of common stock and related amounts 117 193
Excess tax benefit on stock compensation 43 61
Common stock dividends (340) (295)
Issuance of long-term debt and related costs 491 -
Repayments of long-term debt (103) (32)
Net cash used for financing activities (1,722) (1,467)
Net increase in cash and cash equivalents 566 1,096
Cash and cash equivalents at beginning
of period 2,648 1,912
Cash and cash equivalents at end of period $3,214 $3,008
F
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) Income Equity
Balance at
January 1, 2008 $409 $- $11,247 $(1,851) $9,805
Net earnings 1,612 1,612
Common stock
dividends (a) (508) (508)
Stock-based awards
and ESOP activity 4 341 345
Repurchases of
common stock (b) (19) (341) (1,595) (1,955)
Other comprehensive
income 35 35
Balance at
June 29, 2008 $394 $- $10,756 $(1,816) $9,334
(a) Includes dividends ($0.42 per share) declared and paid in the first
and second quarters. This amount also includes a dividend ($0.42 per
share) that was declared on June 26, 2008 and is payable on
September 26, 2008 to shareholders of record on September 2, 2008.
(b) The Corporation repurchased 7.3 million shares for $770 million during
the second quarter. Year-to-date, the Corporation has repurchased
18.6 million common shares for $2.0 billion. The Corporation has
14.1 million shares remaining under its share repurchase program as of
June 29, 2008.
G
LOCKHEED MARTIN CORPORATION
Operating Data
Unaudited
(In millions)
June 29, December 31,
2008 2007
Backlog
Aeronautics $25,800 $26,300
Electronic Systems 19,700 21,200
Information Systems & Global
Services 11,900 11,800
Space Systems 17,100 17,400
Total $74,500 $76,700
THREE MONTHS ENDED SIX MONTHS ENDED
Aircraft Deliveries June 29, June 24, June 29, June 24,
2008 2007 2008 2007
F-16 7 12 16 21
F-22 6 7 10 10
C-130J 3 3 6 5
H
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