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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lockheed Martin Corp | NYSE:LMT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.09 | 0.02% | 462.00 | 1,162 | 13:32:19 |
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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52-1893632
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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6801 Rockledge Drive,
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Bethesda,
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Maryland
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20817
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $1 par value
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LMT
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New York Stock Exchange
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Page
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 6.
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Quarters Ended
|
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Six Months Ended
|
||||||||||||||||
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June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
$
|
12,003
|
|
|
|
$
|
11,150
|
|
|
|
$
|
23,973
|
|
|
|
$
|
20,912
|
|
|
Services
|
|
2,424
|
|
|
|
2,248
|
|
|
|
4,790
|
|
|
|
4,121
|
|
|
||||
Total net sales
|
|
14,427
|
|
|
|
13,398
|
|
|
|
28,763
|
|
|
|
25,033
|
|
|
||||
Cost of sales
|
|
|
|
|
|
|
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|
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|
||||||||
Products
|
|
(10,674
|
)
|
|
|
(9,993
|
)
|
|
|
(21,299
|
)
|
|
|
(18,690
|
)
|
|
||||
Services
|
|
(2,194
|
)
|
|
|
(1,967
|
)
|
|
|
(4,241
|
)
|
|
|
(3,656
|
)
|
|
||||
Severance and restructuring charges
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
|
(96
|
)
|
|
||||
Other unallocated, net
|
|
434
|
|
|
|
411
|
|
|
|
958
|
|
|
|
820
|
|
|
||||
Total cost of sales
|
|
(12,434
|
)
|
|
|
(11,645
|
)
|
|
|
(24,582
|
)
|
|
|
(21,622
|
)
|
|
||||
Gross profit
|
|
1,993
|
|
|
|
1,753
|
|
|
|
4,181
|
|
|
|
3,411
|
|
|
||||
Other income, net
|
|
15
|
|
|
|
42
|
|
|
|
110
|
|
|
|
109
|
|
|
||||
Operating profit
|
|
2,008
|
|
|
|
1,795
|
|
|
|
4,291
|
|
|
|
3,520
|
|
|
||||
Interest expense
|
|
(163
|
)
|
|
|
(165
|
)
|
|
|
(334
|
)
|
|
|
(320
|
)
|
|
||||
Other non-operating expense, net
|
|
(162
|
)
|
|
|
(210
|
)
|
|
|
(329
|
)
|
|
|
(420
|
)
|
|
||||
Earnings before income taxes
|
|
1,683
|
|
|
|
1,420
|
|
|
|
3,628
|
|
|
|
2,780
|
|
|
||||
Income tax expense
|
|
(263
|
)
|
|
|
(257
|
)
|
|
|
(504
|
)
|
|
|
(460
|
)
|
|
||||
Net earnings
|
|
$
|
1,420
|
|
|
|
$
|
1,163
|
|
|
|
$
|
3,124
|
|
|
|
$
|
2,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share
|
|
|
|
|
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|
|
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||||||||
Basic
|
|
$
|
5.03
|
|
|
|
$
|
4.08
|
|
|
|
$
|
11.07
|
|
|
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$
|
8.13
|
|
|
Diluted
|
|
$
|
5.00
|
|
|
|
$
|
4.05
|
|
|
|
$
|
11.00
|
|
|
|
$
|
8.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends paid per common share
|
|
$
|
2.20
|
|
|
|
$
|
2.00
|
|
|
|
$
|
4.40
|
|
|
|
$
|
4.00
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net earnings
|
|
$
|
1,420
|
|
|
|
$
|
1,163
|
|
|
|
$
|
3,124
|
|
|
|
$
|
2,320
|
|
|
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Recognition of previously deferred postretirement benefit plan amounts
|
|
227
|
|
|
|
300
|
|
|
|
454
|
|
|
|
600
|
|
|
||||
Other, net
|
|
28
|
|
|
|
(106
|
)
|
|
|
28
|
|
|
|
(48
|
)
|
|
||||
Other comprehensive income, net of tax
|
|
255
|
|
|
|
194
|
|
|
|
482
|
|
|
|
552
|
|
|
||||
Comprehensive income
|
|
$
|
1,675
|
|
|
|
$
|
1,357
|
|
|
|
$
|
3,606
|
|
|
|
$
|
2,872
|
|
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||||
|
|
(unaudited)
|
|
|
|
|||||
Assets
|
|
|
|
|
|
|
||||
Current assets
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,167
|
|
|
|
$
|
772
|
|
|
Receivables, net
|
|
2,546
|
|
|
|
2,444
|
|
|
||
Contract assets
|
|
10,388
|
|
|
|
9,472
|
|
|
||
Inventories
|
|
3,599
|
|
|
|
2,997
|
|
|
||
Other current assets
|
|
400
|
|
|
|
418
|
|
|
||
Total current assets
|
|
18,100
|
|
|
|
16,103
|
|
|
||
Property, plant and equipment, net
|
|
6,170
|
|
|
|
6,124
|
|
|
||
Goodwill
|
|
10,775
|
|
|
|
10,769
|
|
|
||
Intangible assets, net
|
|
3,351
|
|
|
|
3,494
|
|
|
||
Deferred income taxes
|
|
3,163
|
|
|
|
3,208
|
|
|
||
Other noncurrent assets
|
|
6,281
|
|
|
|
5,178
|
|
|
||
Total assets
|
|
$
|
47,840
|
|
|
|
$
|
44,876
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
|
|
||||
Accounts payable
|
|
$
|
2,611
|
|
|
|
$
|
2,402
|
|
|
Contract liabilities
|
|
6,766
|
|
|
|
6,491
|
|
|
||
Salaries, benefits and payroll taxes
|
|
2,077
|
|
|
|
2,122
|
|
|
||
Current maturities of long-term debt and commercial paper
|
|
900
|
|
|
|
1,500
|
|
|
||
Other current liabilities
|
|
2,778
|
|
|
|
1,883
|
|
|
||
Total current liabilities
|
|
15,132
|
|
|
|
14,398
|
|
|
||
Long-term debt, net
|
|
12,637
|
|
|
|
12,604
|
|
|
||
Accrued pension liabilities
|
|
11,426
|
|
|
|
11,410
|
|
|
||
Other postretirement benefit liabilities
|
|
688
|
|
|
|
704
|
|
|
||
Other noncurrent liabilities
|
|
5,061
|
|
|
|
4,311
|
|
|
||
Total liabilities
|
|
44,944
|
|
|
|
43,427
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
|
||||
Common stock, $1 par value per share
|
|
281
|
|
|
|
281
|
|
|
||
Additional paid-in capital
|
|
—
|
|
|
|
—
|
|
|
||
Retained earnings
|
|
16,408
|
|
|
|
15,434
|
|
|
||
Accumulated other comprehensive loss
|
|
(13,839
|
)
|
|
|
(14,321
|
)
|
|
||
Total stockholders’ equity
|
|
2,850
|
|
|
|
1,394
|
|
|
||
Noncontrolling interests in subsidiary
|
|
46
|
|
|
|
55
|
|
|
||
Total equity
|
|
2,896
|
|
|
|
1,449
|
|
|
||
Total liabilities and equity
|
|
$
|
47,840
|
|
|
|
$
|
44,876
|
|
|
|
|
Six Months Ended
|
||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
||||||
Operating activities
|
|
|
|
|
|
|
||||
Net earnings
|
|
$
|
3,124
|
|
|
|
$
|
2,320
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
565
|
|
|
|
566
|
|
|
||
Stock-based compensation
|
|
104
|
|
|
|
98
|
|
|
||
Gain on property sale
|
|
(51
|
)
|
|
|
—
|
|
|
||
Severance and restructuring charges
|
|
—
|
|
|
|
96
|
|
|
||
Changes in assets and liabilities
|
|
|
|
|
|
|
||||
Receivables, net
|
|
(102
|
)
|
|
|
(217
|
)
|
|
||
Contract assets
|
|
(916
|
)
|
|
|
(1,289
|
)
|
|
||
Inventories
|
|
(602
|
)
|
|
|
(160
|
)
|
|
||
Accounts payable
|
|
237
|
|
|
|
1,224
|
|
|
||
Contract liabilities
|
|
275
|
|
|
|
(615
|
)
|
|
||
Postretirement benefit plans
|
|
552
|
|
|
|
(2,790
|
)
|
|
||
Income taxes
|
|
112
|
|
|
|
928
|
|
|
||
Other, net
|
|
33
|
|
|
|
399
|
|
|
||
Net cash provided by operating activities
|
|
3,331
|
|
|
|
560
|
|
|
||
Investing activities
|
|
|
|
|
|
|
||||
Capital expenditures
|
|
(533
|
)
|
|
|
(480
|
)
|
|
||
Other, net
|
|
25
|
|
|
|
151
|
|
|
||
Net cash used for investing activities
|
|
(508
|
)
|
|
|
(329
|
)
|
|
||
Financing activities
|
|
|
|
|
|
|
||||
Dividends paid
|
|
(1,260
|
)
|
|
|
(1,156
|
)
|
|
||
Repurchases of common stock
|
|
(500
|
)
|
|
|
(610
|
)
|
|
||
Repayments of commercial paper, net
|
|
(600
|
)
|
|
|
—
|
|
|
||
Other, net
|
|
(68
|
)
|
|
|
(145
|
)
|
|
||
Net cash used for financing activities
|
|
(2,428
|
)
|
|
|
(1,911
|
)
|
|
||
Net change in cash and cash equivalents
|
|
395
|
|
|
|
(1,680
|
)
|
|
||
Cash and cash equivalents at beginning of period
|
|
772
|
|
|
|
2,861
|
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,167
|
|
|
|
$
|
1,181
|
|
|
|
Common
Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Total
Stockholders’ Equity |
Noncontrolling
Interests in Subsidiary |
Total
Equity |
||||||||||||||||||
Balance at March 31, 2019
|
$
|
281
|
|
$
|
—
|
|
|
$
|
16,278
|
|
$
|
(14,094
|
)
|
|
$
|
2,465
|
|
|
$
|
57
|
|
|
$
|
2,522
|
|
Net earnings
|
—
|
|
—
|
|
|
1,420
|
|
—
|
|
|
1,420
|
|
|
—
|
|
|
1,420
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
255
|
|
|
255
|
|
|
—
|
|
|
255
|
|
|||||||
Repurchases of common stock
|
(1
|
)
|
(174
|
)
|
|
(41
|
)
|
—
|
|
|
(216
|
)
|
|
—
|
|
|
(216
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
|
(1,249
|
)
|
—
|
|
|
(1,249
|
)
|
|
—
|
|
|
(1,249
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
1
|
|
174
|
|
|
—
|
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||||||
Balance at June 30, 2019
|
$
|
281
|
|
$
|
—
|
|
|
$
|
16,408
|
|
$
|
(13,839
|
)
|
|
$
|
2,850
|
|
|
$
|
46
|
|
|
$
|
2,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at March 25, 2018
|
$
|
284
|
|
$
|
—
|
|
|
$
|
14,123
|
|
$
|
(14,589
|
)
|
|
$
|
(182
|
)
|
|
$
|
71
|
|
|
$
|
(111
|
)
|
Net earnings
|
—
|
|
—
|
|
|
1,163
|
|
—
|
|
|
1,163
|
|
|
—
|
|
|
1,163
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
194
|
|
|
194
|
|
|
—
|
|
|
194
|
|
|||||||
Repurchases of common stock
|
(1
|
)
|
(136
|
)
|
|
(186
|
)
|
—
|
|
|
(323
|
)
|
|
—
|
|
|
(323
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
|
(572
|
)
|
—
|
|
|
(572
|
)
|
|
—
|
|
|
(572
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
—
|
|
136
|
|
|
—
|
|
—
|
|
|
136
|
|
|
—
|
|
|
136
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|||||||
Balance at June 24, 2018
|
$
|
283
|
|
$
|
—
|
|
|
$
|
14,528
|
|
$
|
(14,395
|
)
|
|
$
|
416
|
|
|
$
|
63
|
|
|
$
|
479
|
|
|
Common
Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Total
Stockholders’ Equity |
Noncontrolling
Interests in Subsidiary |
Total
Equity |
||||||||||||||||||
Balance at December 31, 2018
|
$
|
281
|
|
$
|
—
|
|
|
$
|
15,434
|
|
$
|
(14,321
|
)
|
|
$
|
1,394
|
|
|
$
|
55
|
|
|
$
|
1,449
|
|
Net earnings
|
—
|
|
—
|
|
|
3,124
|
|
—
|
|
|
3,124
|
|
|
—
|
|
|
3,124
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
482
|
|
|
482
|
|
|
—
|
|
|
482
|
|
|||||||
Repurchases of common stock
|
(2
|
)
|
(220
|
)
|
|
(278
|
)
|
—
|
|
|
(500
|
)
|
|
—
|
|
|
(500
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
|
(1,872
|
)
|
—
|
|
|
(1,872
|
)
|
|
—
|
|
|
(1,872
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
2
|
|
220
|
|
|
—
|
|
—
|
|
|
222
|
|
|
—
|
|
|
222
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||||
Balance at June 30, 2019
|
$
|
281
|
|
$
|
—
|
|
|
$
|
16,408
|
|
$
|
(13,839
|
)
|
|
$
|
2,850
|
|
|
$
|
46
|
|
|
$
|
2,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2017
|
$
|
284
|
|
$
|
—
|
|
|
$
|
11,405
|
|
$
|
(12,539
|
)
|
|
$
|
(850
|
)
|
|
$
|
74
|
|
|
$
|
(776
|
)
|
Net earnings
|
—
|
|
—
|
|
|
2,320
|
|
—
|
|
|
2,320
|
|
|
—
|
|
|
2,320
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
552
|
|
|
552
|
|
|
—
|
|
|
552
|
|
|||||||
Repurchases of common stock
|
(2
|
)
|
(161
|
)
|
|
(460
|
)
|
—
|
|
|
(623
|
)
|
|
—
|
|
|
(623
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
|
(1,145
|
)
|
—
|
|
|
(1,145
|
)
|
|
—
|
|
|
(1,145
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
1
|
|
161
|
|
|
—
|
|
—
|
|
|
162
|
|
|
—
|
|
|
162
|
|
|||||||
Reclassification of income tax effects from tax reform
|
—
|
|
—
|
|
|
2,408
|
|
(2,408
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||||||
Balance at June 24, 2018
|
$
|
283
|
|
$
|
—
|
|
|
$
|
14,528
|
|
$
|
(14,395
|
)
|
|
$
|
416
|
|
|
$
|
63
|
|
|
$
|
479
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||
Weighted average common shares outstanding for basic computations
|
|
282.2
|
|
|
|
285.0
|
|
|
|
282.3
|
|
|
|
285.2
|
|
|
Weighted average dilutive effect of equity awards
|
|
1.7
|
|
|
|
2.1
|
|
|
|
1.8
|
|
|
|
2.3
|
|
|
Weighted average common shares outstanding for diluted computations
|
|
283.9
|
|
|
|
287.1
|
|
|
|
284.1
|
|
|
|
287.5
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
5,550
|
|
|
|
$
|
5,321
|
|
|
|
$
|
11,134
|
|
|
|
$
|
9,719
|
|
|
Missiles and Fire Control
|
|
2,411
|
|
|
|
2,085
|
|
|
|
4,761
|
|
|
|
3,762
|
|
|
||||
Rotary and Mission Systems
|
|
3,768
|
|
|
|
3,566
|
|
|
|
7,530
|
|
|
|
6,789
|
|
|
||||
Space
|
|
2,698
|
|
|
|
2,426
|
|
|
|
5,338
|
|
|
|
4,763
|
|
|
||||
Total net sales
|
|
$
|
14,427
|
|
|
|
$
|
13,398
|
|
|
|
$
|
28,763
|
|
|
|
$
|
25,033
|
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
592
|
|
|
|
$
|
572
|
|
|
|
$
|
1,177
|
|
|
|
$
|
1,046
|
|
|
Missiles and Fire Control
|
|
327
|
|
|
|
279
|
|
|
|
744
|
|
|
|
540
|
|
|
||||
Rotary and Mission Systems
|
|
347
|
|
|
|
341
|
|
|
|
726
|
|
|
|
652
|
|
|
||||
Space
|
|
288
|
|
|
|
274
|
|
|
|
622
|
|
|
|
538
|
|
|
||||
Total business segment operating profit
|
|
1,554
|
|
|
|
1,466
|
|
|
|
3,269
|
|
|
|
2,776
|
|
|
||||
Unallocated items
|
|
|
|
|
|
|
|
|
|
|||||||||||
FAS/CAS operating adjustment
(a)
|
|
512
|
|
|
|
451
|
|
|
|
1,024
|
|
|
|
902
|
|
|
||||
Stock-based compensation
|
|
(67
|
)
|
|
|
(60
|
)
|
|
|
(104
|
)
|
|
|
(98
|
)
|
|
||||
Severance and restructuring charges
(b)
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
|
(96
|
)
|
|
||||
Other, net
|
|
9
|
|
|
|
34
|
|
|
|
102
|
|
|
|
36
|
|
|
||||
Total unallocated items
|
|
454
|
|
|
|
329
|
|
|
|
1,022
|
|
|
|
744
|
|
|
||||
Total consolidated operating profit
|
|
$
|
2,008
|
|
|
|
$
|
1,795
|
|
|
|
$
|
4,291
|
|
|
|
$
|
3,520
|
|
|
Intersegment sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
47
|
|
|
|
$
|
27
|
|
|
|
$
|
89
|
|
|
|
$
|
52
|
|
|
Missiles and Fire Control
|
|
144
|
|
|
|
113
|
|
|
|
265
|
|
|
|
208
|
|
|
||||
Rotary and Mission Systems
|
|
538
|
|
|
|
504
|
|
|
|
1,118
|
|
|
|
965
|
|
|
||||
Space
|
|
85
|
|
|
|
48
|
|
|
|
153
|
|
|
|
93
|
|
|
||||
Total intersegment sales
|
|
$
|
814
|
|
|
|
$
|
692
|
|
|
|
$
|
1,625
|
|
|
|
$
|
1,318
|
|
|
(a)
|
The FAS/CAS operating adjustment represents the difference between the service cost component of FAS pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS.
|
(b)
|
Unallocated items for the quarter and six months ended June 24, 2018 include severance and restructuring charges totaling
$96 million
(
$76 million
, or
$0.26
per share, after tax) associated with planned workforce reductions and the consolidation of certain operations at our RMS business segment. See “
Note 11 – Other
” (under the caption “Severance and Restructuring Charges”) for more information.
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Total FAS expense and CAS costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension expense
|
|
$
|
(273
|
)
|
|
|
$
|
(357
|
)
|
|
|
$
|
(546
|
)
|
|
|
$
|
(713
|
)
|
|
Less: CAS pension cost
|
|
641
|
|
|
|
609
|
|
|
|
1,282
|
|
|
|
1,217
|
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
368
|
|
|
|
$
|
252
|
|
|
|
$
|
736
|
|
|
|
$
|
504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service and non-service cost reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension service cost
|
|
$
|
(129
|
)
|
|
|
$
|
(158
|
)
|
|
|
$
|
(258
|
)
|
|
|
$
|
(315
|
)
|
|
Less: CAS pension cost
|
|
641
|
|
|
|
609
|
|
|
|
1,282
|
|
|
|
1,217
|
|
|
||||
FAS/CAS operating adjustment
|
|
512
|
|
|
|
451
|
|
|
|
1,024
|
|
|
|
902
|
|
|
||||
Non-operating FAS pension cost
(a)
|
|
(144
|
)
|
|
|
(199
|
)
|
|
|
(288
|
)
|
|
|
(398
|
)
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
368
|
|
|
|
$
|
252
|
|
|
|
$
|
736
|
|
|
|
$
|
504
|
|
|
(a)
|
The non-service cost components of net periodic benefit cost relate only to our qualified defined benefit pension plans. In addition to the non-service cost components in the table above, we incurred similar costs for our other postretirement benefit plans of
$27 million
and
$57 million
for the
quarter and six months ended
June 30, 2019
and
$16 million
and
$33 million
for the
quarter and six months ended
June 24, 2018
.
|
|
|
Quarter Ended June 30, 2019
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
4,740
|
|
|
$
|
1,963
|
|
|
$
|
3,023
|
|
|
$
|
2,277
|
|
|
$
|
12,003
|
|
Services
|
|
810
|
|
|
448
|
|
|
745
|
|
|
421
|
|
|
2,424
|
|
|||||
Total net sales
|
|
$
|
5,550
|
|
|
$
|
2,411
|
|
|
$
|
3,768
|
|
|
$
|
2,698
|
|
|
$
|
14,427
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
4,040
|
|
|
$
|
1,444
|
|
|
$
|
2,526
|
|
|
$
|
535
|
|
|
$
|
8,545
|
|
Cost-reimbursable
|
|
1,510
|
|
|
967
|
|
|
1,242
|
|
|
2,163
|
|
|
5,882
|
|
|||||
Total net sales
|
|
$
|
5,550
|
|
|
$
|
2,411
|
|
|
$
|
3,768
|
|
|
$
|
2,698
|
|
|
$
|
14,427
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
3,476
|
|
|
$
|
1,900
|
|
|
$
|
2,675
|
|
|
$
|
2,332
|
|
|
$
|
10,383
|
|
International
(a)
|
|
2,010
|
|
|
475
|
|
|
974
|
|
|
360
|
|
|
3,819
|
|
|||||
U.S. commercial and other
|
|
64
|
|
|
36
|
|
|
119
|
|
|
6
|
|
|
225
|
|
|||||
Total net sales
|
|
$
|
5,550
|
|
|
$
|
2,411
|
|
|
$
|
3,768
|
|
|
$
|
2,698
|
|
|
$
|
14,427
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
3,540
|
|
|
$
|
1,936
|
|
|
$
|
2,794
|
|
|
$
|
2,338
|
|
|
$
|
10,608
|
|
Asia Pacific
|
|
784
|
|
|
86
|
|
|
418
|
|
|
23
|
|
|
1,311
|
|
|||||
Europe
|
|
847
|
|
|
103
|
|
|
143
|
|
|
328
|
|
|
1,421
|
|
|||||
Middle East
|
|
335
|
|
|
272
|
|
|
247
|
|
|
9
|
|
|
863
|
|
|||||
Other
|
|
44
|
|
|
14
|
|
|
166
|
|
|
—
|
|
|
224
|
|
|||||
Total net sales
|
|
$
|
5,550
|
|
|
$
|
2,411
|
|
|
$
|
3,768
|
|
|
$
|
2,698
|
|
|
$
|
14,427
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
9,536
|
|
|
$
|
3,879
|
|
|
$
|
6,082
|
|
|
$
|
4,476
|
|
|
$
|
23,973
|
|
Services
|
|
1,598
|
|
|
882
|
|
|
1,448
|
|
|
862
|
|
|
4,790
|
|
|||||
Total net sales
|
|
$
|
11,134
|
|
|
$
|
4,761
|
|
|
$
|
7,530
|
|
|
$
|
5,338
|
|
|
$
|
28,763
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
8,210
|
|
|
$
|
2,979
|
|
|
$
|
5,145
|
|
|
$
|
1,058
|
|
|
$
|
17,392
|
|
Cost-reimbursable
|
|
2,924
|
|
|
1,782
|
|
|
2,385
|
|
|
4,280
|
|
|
11,371
|
|
|||||
Total net sales
|
|
$
|
11,134
|
|
|
$
|
4,761
|
|
|
$
|
7,530
|
|
|
$
|
5,338
|
|
|
$
|
28,763
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
6,911
|
|
|
$
|
3,533
|
|
|
$
|
5,350
|
|
|
$
|
4,568
|
|
|
$
|
20,362
|
|
International
(a)
|
|
4,105
|
|
|
1,145
|
|
|
1,969
|
|
|
755
|
|
|
7,974
|
|
|||||
U.S. commercial and other
|
|
118
|
|
|
83
|
|
|
211
|
|
|
15
|
|
|
427
|
|
|||||
Total net sales
|
|
$
|
11,134
|
|
|
$
|
4,761
|
|
|
$
|
7,530
|
|
|
$
|
5,338
|
|
|
$
|
28,763
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
7,029
|
|
|
$
|
3,616
|
|
|
$
|
5,561
|
|
|
$
|
4,583
|
|
|
$
|
20,789
|
|
Asia Pacific
|
|
1,690
|
|
|
208
|
|
|
748
|
|
|
31
|
|
|
2,677
|
|
|||||
Europe
|
|
1,645
|
|
|
225
|
|
|
341
|
|
|
709
|
|
|
2,920
|
|
|||||
Middle East
|
|
672
|
|
|
685
|
|
|
532
|
|
|
15
|
|
|
1,904
|
|
|||||
Other
|
|
98
|
|
|
27
|
|
|
348
|
|
|
—
|
|
|
473
|
|
|||||
Total net sales
|
|
$
|
11,134
|
|
|
$
|
4,761
|
|
|
$
|
7,530
|
|
|
$
|
5,338
|
|
|
$
|
28,763
|
|
(a)
|
International sales include foreign military sales (FMS) contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
|
|
|
Quarter Ended June 24, 2018
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
4,511
|
|
|
$
|
1,709
|
|
|
$
|
2,904
|
|
|
$
|
2,026
|
|
|
$
|
11,150
|
|
Services
|
|
810
|
|
|
376
|
|
|
662
|
|
|
400
|
|
|
2,248
|
|
|||||
Total net sales
|
|
$
|
5,321
|
|
|
$
|
2,085
|
|
|
$
|
3,566
|
|
|
$
|
2,426
|
|
|
$
|
13,398
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
3,906
|
|
|
$
|
1,395
|
|
|
$
|
2,450
|
|
|
$
|
460
|
|
|
$
|
8,211
|
|
Cost-reimbursable
|
|
1,415
|
|
|
690
|
|
|
1,116
|
|
|
1,966
|
|
|
5,187
|
|
|||||
Total net sales
|
|
$
|
5,321
|
|
|
$
|
2,085
|
|
|
$
|
3,566
|
|
|
$
|
2,426
|
|
|
$
|
13,398
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
3,444
|
|
|
$
|
1,502
|
|
|
$
|
2,608
|
|
|
$
|
2,070
|
|
|
$
|
9,624
|
|
International
(a)
|
|
1,835
|
|
|
542
|
|
|
822
|
|
|
344
|
|
|
3,543
|
|
|||||
U.S. commercial and other
|
|
42
|
|
|
41
|
|
|
136
|
|
|
12
|
|
|
231
|
|
|||||
Total net sales
|
|
$
|
5,321
|
|
|
$
|
2,085
|
|
|
$
|
3,566
|
|
|
$
|
2,426
|
|
|
$
|
13,398
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
3,486
|
|
|
$
|
1,543
|
|
|
$
|
2,744
|
|
|
$
|
2,082
|
|
|
$
|
9,855
|
|
Asia Pacific
|
|
786
|
|
|
125
|
|
|
301
|
|
|
31
|
|
|
1,243
|
|
|||||
Europe
|
|
678
|
|
|
46
|
|
|
224
|
|
|
332
|
|
|
1,280
|
|
|||||
Middle East
|
|
320
|
|
|
364
|
|
|
143
|
|
|
(19
|
)
|
|
808
|
|
|||||
Other
|
|
51
|
|
|
7
|
|
|
154
|
|
|
—
|
|
|
212
|
|
|||||
Total net sales
|
|
$
|
5,321
|
|
|
$
|
2,085
|
|
|
$
|
3,566
|
|
|
$
|
2,426
|
|
|
$
|
13,398
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended June 24, 2018
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
8,281
|
|
|
$
|
3,062
|
|
|
$
|
5,621
|
|
|
$
|
3,948
|
|
|
$
|
20,912
|
|
Services
|
|
1,438
|
|
|
700
|
|
|
1,168
|
|
|
815
|
|
|
4,121
|
|
|||||
Total net sales
|
|
$
|
9,719
|
|
|
$
|
3,762
|
|
|
$
|
6,789
|
|
|
$
|
4,763
|
|
|
$
|
25,033
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
7,121
|
|
|
$
|
2,507
|
|
|
$
|
4,658
|
|
|
$
|
860
|
|
|
$
|
15,146
|
|
Cost-reimbursable
|
|
2,598
|
|
|
1,255
|
|
|
2,131
|
|
|
3,903
|
|
|
9,887
|
|
|||||
Total net sales
|
|
$
|
9,719
|
|
|
$
|
3,762
|
|
|
$
|
6,789
|
|
|
$
|
4,763
|
|
|
$
|
25,033
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
6,209
|
|
|
$
|
2,590
|
|
|
$
|
4,964
|
|
|
$
|
3,940
|
|
|
$
|
17,703
|
|
International
(a)
|
|
3,412
|
|
|
1,096
|
|
|
1,603
|
|
|
800
|
|
|
6,911
|
|
|||||
U.S. commercial and other
|
|
98
|
|
|
76
|
|
|
222
|
|
|
23
|
|
|
419
|
|
|||||
Total net sales
|
|
$
|
9,719
|
|
|
$
|
3,762
|
|
|
$
|
6,789
|
|
|
$
|
4,763
|
|
|
$
|
25,033
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
6,307
|
|
|
$
|
2,666
|
|
|
$
|
5,186
|
|
|
$
|
3,963
|
|
|
$
|
18,122
|
|
Asia Pacific
|
|
1,540
|
|
|
223
|
|
|
625
|
|
|
54
|
|
|
2,442
|
|
|||||
Europe
|
|
1,186
|
|
|
115
|
|
|
379
|
|
|
758
|
|
|
2,438
|
|
|||||
Middle East
|
|
577
|
|
|
744
|
|
|
314
|
|
|
(12
|
)
|
|
1,623
|
|
|||||
Other
|
|
109
|
|
|
14
|
|
|
285
|
|
|
—
|
|
|
408
|
|
|||||
Total net sales
|
|
$
|
9,719
|
|
|
$
|
3,762
|
|
|
$
|
6,789
|
|
|
$
|
4,763
|
|
|
$
|
25,033
|
|
(a)
|
International sales include foreign military sales (FMS) contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||||
Assets
|
|
|
|
|
|
|
||||
Aeronautics
|
|
$
|
9,750
|
|
|
|
$
|
8,435
|
|
|
Missiles and Fire Control
|
|
5,368
|
|
|
|
5,017
|
|
|
||
Rotary and Mission Systems
|
|
18,934
|
|
|
|
18,333
|
|
|
||
Space
|
|
5,912
|
|
|
|
5,445
|
|
|
||
Total business segment assets
|
|
39,964
|
|
|
|
37,230
|
|
|
||
Corporate assets
(a)
|
|
7,876
|
|
|
|
7,646
|
|
|
||
Total assets
|
|
$
|
47,840
|
|
|
|
$
|
44,876
|
|
|
(a)
|
Corporate assets primarily include cash and cash equivalents, deferred income taxes, environmental receivables, and investments held in a separate trust to fund certain of our non-qualified deferred compensation plans.
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||||
Contract assets
|
|
$
|
10,388
|
|
|
|
$
|
9,472
|
|
|
Contract liabilities
|
|
6,766
|
|
|
|
6,491
|
|
|
|
|
June 30,
2019 |
|
December 31,
2018 |
||||||
Materials, spares and supplies
|
|
$
|
452
|
|
|
|
$
|
446
|
|
|
Work-in-process
|
|
2,810
|
|
|
|
2,161
|
|
|
||
Finished goods
|
|
337
|
|
|
|
390
|
|
|
||
Total inventories
|
|
$
|
3,599
|
|
|
|
$
|
2,997
|
|
|
|
Total
|
Remainder of
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
|||||||||||||||||||||
Operating leases
|
$
|
1,242
|
|
|
$
|
184
|
|
|
$
|
191
|
|
|
$
|
163
|
|
|
$
|
128
|
|
|
$
|
99
|
|
|
$
|
477
|
|
|
Less: imputed interest
|
$
|
174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
1,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Qualified defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
129
|
|
|
|
$
|
158
|
|
|
|
$
|
258
|
|
|
|
$
|
315
|
|
|
Interest cost
|
|
451
|
|
|
|
435
|
|
|
|
903
|
|
|
|
870
|
|
|
||||
Expected return on plan assets
|
|
(575
|
)
|
|
|
(598
|
)
|
|
|
(1,150
|
)
|
|
|
(1,197
|
)
|
|
||||
Recognized net actuarial losses
|
|
351
|
|
|
|
444
|
|
|
|
702
|
|
|
|
888
|
|
|
||||
Amortization of prior service credits
|
|
(83
|
)
|
|
|
(82
|
)
|
|
|
(167
|
)
|
|
|
(163
|
)
|
|
||||
Total net periodic benefit cost
|
|
$
|
273
|
|
|
|
$
|
357
|
|
|
|
$
|
546
|
|
|
|
$
|
713
|
|
|
Retiree medical and life insurance plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
3
|
|
|
|
$
|
4
|
|
|
|
$
|
7
|
|
|
|
$
|
9
|
|
|
Interest cost
|
|
24
|
|
|
|
23
|
|
|
|
48
|
|
|
|
46
|
|
|
||||
Expected return on plan assets
|
|
(27
|
)
|
|
|
(33
|
)
|
|
|
(55
|
)
|
|
|
(67
|
)
|
|
||||
Recognized net actuarial losses
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
||||
Amortization of prior service costs
|
|
11
|
|
|
|
3
|
|
|
|
21
|
|
|
|
7
|
|
|
||||
Total net periodic benefit cost (credit)
|
|
$
|
11
|
|
|
|
$
|
(2
|
)
|
|
|
$
|
22
|
|
|
|
$
|
(3
|
)
|
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
|
$
|
1,031
|
|
|
$
|
1,031
|
|
|
$
|
—
|
|
|
$
|
978
|
|
|
$
|
978
|
|
|
$
|
—
|
|
U.S. Government securities
|
|
104
|
|
|
—
|
|
|
104
|
|
|
105
|
|
|
—
|
|
|
105
|
|
||||||
Other securities
|
|
244
|
|
|
113
|
|
|
131
|
|
|
144
|
|
|
28
|
|
|
116
|
|
||||||
Derivatives
|
|
26
|
|
|
—
|
|
|
26
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
|
49
|
|
|
—
|
|
|
49
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||||
Assets measured at NAV
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other commingled funds
|
|
19
|
|
|
|
|
|
|
18
|
|
|
|
|
|
(a)
|
Net Asset Value (NAV) is the total value of the fund divided by the number of the fund’s shares outstanding.
|
|
|
Postretirement
Benefit Plans
|
|
Other, net
|
|
AOCL
|
||||||
Balance at December 31, 2018
|
|
$
|
(14,254
|
)
|
|
$
|
(67
|
)
|
|
$
|
(14,321
|
)
|
Other comprehensive income before reclassifications
|
|
—
|
|
|
13
|
|
|
13
|
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses
(a)
|
|
574
|
|
|
—
|
|
|
574
|
|
|||
Amortization of net prior service credits
(a)
|
|
(120
|
)
|
|
—
|
|
|
(120
|
)
|
|||
Other
|
|
—
|
|
|
15
|
|
|
15
|
|
|||
Total reclassified from AOCL
|
|
454
|
|
|
15
|
|
|
469
|
|
|||
Total other comprehensive income
|
|
454
|
|
|
28
|
|
|
482
|
|
|||
Balance at June 30, 2019
|
|
$
|
(13,800
|
)
|
|
$
|
(39
|
)
|
|
$
|
(13,839
|
)
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2017
|
|
$
|
(12,559
|
)
|
|
$
|
20
|
|
|
$
|
(12,539
|
)
|
Other comprehensive loss before reclassifications
|
|
—
|
|
|
(62
|
)
|
|
(62
|
)
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses
(a)
|
|
728
|
|
|
—
|
|
|
728
|
|
|||
Amortization of net prior service credits
(a)
|
|
(128
|
)
|
|
—
|
|
|
(128
|
)
|
|||
Other
|
|
—
|
|
|
14
|
|
|
14
|
|
|||
Total reclassified from AOCL
|
|
600
|
|
|
14
|
|
|
614
|
|
|||
Total other comprehensive income (loss)
|
|
600
|
|
|
(48
|
)
|
|
552
|
|
|||
Reclassification of income tax effects from tax reform
(b)
|
|
(2,396
|
)
|
|
(12
|
)
|
|
(2,408
|
)
|
|||
Balance at June 24, 2018
|
|
$
|
(14,355
|
)
|
|
$
|
(40
|
)
|
|
$
|
(14,395
|
)
|
(a)
|
Reclassifications from AOCL related to our postretirement benefit plans were recorded as a component of net periodic benefit cost for each period presented (see “
Note 7 – Postretirement Benefit Plans
”). These amounts include
$227 million
and
$300 million
, net of tax, for the quarters ended
June 30, 2019
and
June 24, 2018
, which are comprised of the recognition of net actuarial losses of
$287 million
and
$364 million
for the quarters ended
June 30, 2019
and
June 24, 2018
and the amortization of net prior service credits of
$(60) million
and
$(64) million
for the quarters ended
June 30, 2019
and
June 24, 2018
.
|
(b)
|
Upon adoption of ASU 2018-02,
Income Statement - Reporting Comprehensive Income (Topic 220)
during the first quarter of 2018, we reclassified the impact of the income tax effects related to the Tax Cuts and Jobs Act (the Tax Act) from AOCL to retained earnings by the same amount with zero impact to total equity.
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net sales
|
|
$
|
14,427
|
|
|
|
$
|
13,398
|
|
|
|
$
|
28,763
|
|
|
|
$
|
25,033
|
|
|
Cost of sales
|
|
(12,434
|
)
|
|
|
(11,645
|
)
|
|
|
(24,582
|
)
|
|
|
(21,622
|
)
|
|
||||
Gross profit
|
|
1,993
|
|
|
|
1,753
|
|
|
|
4,181
|
|
|
|
3,411
|
|
|
||||
Other income, net
|
|
15
|
|
|
|
42
|
|
|
|
110
|
|
|
|
109
|
|
|
||||
Operating profit
|
|
2,008
|
|
|
|
1,795
|
|
|
|
4,291
|
|
|
|
3,520
|
|
|
||||
Interest expense
|
|
(163
|
)
|
|
|
(165
|
)
|
|
|
(334
|
)
|
|
|
(320
|
)
|
|
||||
Other non-operating expense, net
|
|
(162
|
)
|
|
|
(210
|
)
|
|
|
(329
|
)
|
|
|
(420
|
)
|
|
||||
Earnings before income taxes
|
|
1,683
|
|
|
|
1,420
|
|
|
|
3,628
|
|
|
|
2,780
|
|
|
||||
Income tax expense
|
|
(263
|
)
|
|
|
(257
|
)
|
|
|
(504
|
)
|
|
|
(460
|
)
|
|
||||
Net earnings
|
|
$
|
1,420
|
|
|
|
$
|
1,163
|
|
|
|
$
|
3,124
|
|
|
|
$
|
2,320
|
|
|
Diluted earnings per common share
|
|
$
|
5.00
|
|
|
|
$
|
4.05
|
|
|
|
$
|
11.00
|
|
|
|
$
|
8.07
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Products
|
|
$
|
12,003
|
|
|
|
$
|
11,150
|
|
|
|
$
|
23,973
|
|
|
|
$
|
20,912
|
|
|
% of total net sales
|
|
83.2
|
%
|
|
|
83.2
|
%
|
|
|
83.3
|
%
|
|
|
83.5
|
%
|
|
||||
Services
|
|
2,424
|
|
|
|
2,248
|
|
|
|
4,790
|
|
|
|
4,121
|
|
|
||||
% of total net sales
|
|
16.8
|
%
|
|
|
16.8
|
%
|
|
|
16.7
|
%
|
|
|
16.5
|
%
|
|
||||
Total net sales
|
|
$
|
14,427
|
|
|
|
$
|
13,398
|
|
|
|
$
|
28,763
|
|
|
|
$
|
25,033
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Cost of sales – products
|
|
$
|
(10,674
|
)
|
|
|
$
|
(9,993
|
)
|
|
|
$
|
(21,299
|
)
|
|
|
$
|
(18,690
|
)
|
|
% of product sales
|
|
88.9
|
%
|
|
|
89.6
|
%
|
|
|
88.8
|
%
|
|
|
89.4
|
%
|
|
||||
Cost of sales – services
|
|
(2,194
|
)
|
|
|
(1,967
|
)
|
|
|
(4,241
|
)
|
|
|
(3,656
|
)
|
|
||||
% of service sales
|
|
90.5
|
%
|
|
|
87.5
|
%
|
|
|
88.5
|
%
|
|
|
88.7
|
%
|
|
||||
Severance and restructuring charges
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
|
(96
|
)
|
|
||||
Other unallocated, net
|
|
434
|
|
|
|
411
|
|
|
|
958
|
|
|
|
820
|
|
|
||||
Total cost of sales
|
|
$
|
(12,434
|
)
|
|
|
$
|
(11,645
|
)
|
|
|
$
|
(24,582
|
)
|
|
|
$
|
(21,622
|
)
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
5,550
|
|
|
|
$
|
5,321
|
|
|
|
$
|
11,134
|
|
|
|
$
|
9,719
|
|
|
Missiles and Fire Control
|
|
2,411
|
|
|
|
2,085
|
|
|
|
4,761
|
|
|
|
3,762
|
|
|
||||
Rotary and Mission Systems
|
|
3,768
|
|
|
|
3,566
|
|
|
|
7,530
|
|
|
|
6,789
|
|
|
||||
Space
|
|
2,698
|
|
|
|
2,426
|
|
|
|
5,338
|
|
|
|
4,763
|
|
|
||||
Total net sales
|
|
$
|
14,427
|
|
|
|
$
|
13,398
|
|
|
|
$
|
28,763
|
|
|
|
$
|
25,033
|
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
592
|
|
|
|
$
|
572
|
|
|
|
$
|
1,177
|
|
|
|
$
|
1,046
|
|
|
Missiles and Fire Control
|
|
327
|
|
|
|
279
|
|
|
|
744
|
|
|
|
540
|
|
|
||||
Rotary and Mission Systems
|
|
347
|
|
|
|
341
|
|
|
|
726
|
|
|
|
652
|
|
|
||||
Space
|
|
288
|
|
|
|
274
|
|
|
|
622
|
|
|
|
538
|
|
|
||||
Total business segment operating profit
|
|
1,554
|
|
|
|
1,466
|
|
|
|
3,269
|
|
|
|
2,776
|
|
|
||||
Unallocated items
|
|
|
|
|
|
|
|
|
|
|||||||||||
FAS/CAS operating adjustment
(a)
|
|
512
|
|
|
|
451
|
|
|
|
1,024
|
|
|
|
902
|
|
|
||||
Stock-based compensation
|
|
(67
|
)
|
|
|
(60
|
)
|
|
|
(104
|
)
|
|
|
(98
|
)
|
|
||||
Severance and restructuring charges
(b)
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
|
(96
|
)
|
|
||||
Other, net
|
|
9
|
|
|
|
34
|
|
|
|
102
|
|
|
|
36
|
|
|
||||
Total unallocated items
|
|
454
|
|
|
|
329
|
|
|
|
1,022
|
|
|
|
744
|
|
|
||||
Total consolidated operating profit
|
|
$
|
2,008
|
|
|
|
$
|
1,795
|
|
|
|
$
|
4,291
|
|
|
|
$
|
3,520
|
|
|
(a)
|
The FAS/CAS operating adjustment represents the difference between the service cost component of FAS pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS.
|
(b)
|
Unallocated items for the quarter and six months ended June 24, 2018 include severance and restructuring charges totaling
$96 million
(
$76 million
, or
$0.26
per share, after tax) associated with planned workforce reductions and the consolidation of certain operations at our RMS business segment. See “
Note 11 – Other
” (under the caption “Severance and Restructuring Charges”) for more information.
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Total FAS expense and CAS costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension expense
|
|
$
|
(273
|
)
|
|
|
$
|
(357
|
)
|
|
|
$
|
(546
|
)
|
|
|
$
|
(713
|
)
|
|
Less: CAS pension cost
|
|
641
|
|
|
|
609
|
|
|
|
1,282
|
|
|
|
1,217
|
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
368
|
|
|
|
$
|
252
|
|
|
|
$
|
736
|
|
|
|
$
|
504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service and non-service cost reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension service cost
|
|
$
|
(129
|
)
|
|
|
$
|
(158
|
)
|
|
|
$
|
(258
|
)
|
|
|
$
|
(315
|
)
|
|
Less: CAS pension cost
|
|
641
|
|
|
|
609
|
|
|
|
1,282
|
|
|
|
1,217
|
|
|
||||
FAS/CAS operating adjustment
|
|
512
|
|
|
|
451
|
|
|
|
1,024
|
|
|
|
902
|
|
|
||||
Non-operating FAS pension cost
(a)
|
|
(144
|
)
|
|
|
(199
|
)
|
|
|
(288
|
)
|
|
|
(398
|
)
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
368
|
|
|
|
$
|
252
|
|
|
|
$
|
736
|
|
|
|
$
|
504
|
|
|
(a)
|
The non-service cost components of net periodic benefit cost relate only to our qualified defined benefit pension plans. In addition to the non-service cost components in the table above, we incurred similar costs for our other postretirement benefit plans of
$27 million
and
$57 million
for the
quarter and six months ended
June 30, 2019
and
$16 million
and
$33 million
for the
quarter and six months ended
June 24, 2018
.
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net sales
|
|
$
|
5,550
|
|
|
|
$
|
5,321
|
|
|
|
$
|
11,134
|
|
|
|
$
|
9,719
|
|
|
Operating profit
|
|
592
|
|
|
|
572
|
|
|
|
1,177
|
|
|
|
1,046
|
|
|
||||
Operating margin
|
|
10.7
|
%
|
|
|
10.7
|
%
|
|
|
10.6
|
%
|
|
|
10.8
|
%
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net sales
|
|
$
|
2,411
|
|
|
|
$
|
2,085
|
|
|
|
$
|
4,761
|
|
|
|
$
|
3,762
|
|
|
Operating profit
|
|
327
|
|
|
|
279
|
|
|
|
744
|
|
|
|
540
|
|
|
||||
Operating margin
|
|
13.6
|
%
|
|
|
13.4
|
%
|
|
|
15.6
|
%
|
|
|
14.4
|
%
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net sales
|
|
$
|
3,768
|
|
|
|
$
|
3,566
|
|
|
|
$
|
7,530
|
|
|
|
$
|
6,789
|
|
|
Operating profit
|
|
347
|
|
|
|
341
|
|
|
|
726
|
|
|
|
652
|
|
|
||||
Operating margin
|
|
9.2
|
%
|
|
|
9.6
|
%
|
|
|
9.6
|
%
|
|
|
9.6
|
%
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
|
June 30,
2019 |
|
June 24,
2018 |
||||||||||||
Net sales
|
|
$
|
2,698
|
|
|
|
$
|
2,426
|
|
|
|
$
|
5,338
|
|
|
|
$
|
4,763
|
|
|
Operating profit
|
|
288
|
|
|
|
274
|
|
|
|
622
|
|
|
|
538
|
|
|
||||
Operating margin
|
|
10.7
|
%
|
|
|
11.3
|
%
|
|
|
11.7
|
%
|
|
|
11.3
|
%
|
|
|
|
Six Months Ended
|
||||||||
|
|
June 30,
2019 |
|
June 24,
2018 |
||||||
Cash and cash equivalents at beginning of year
|
|
$
|
772
|
|
|
|
$
|
2,861
|
|
|
Operating activities
|
|
|
|
|
|
|
||||
Net earnings
|
|
3,124
|
|
|
|
2,320
|
|
|
||
Non-cash adjustments
|
|
618
|
|
|
|
760
|
|
|
||
Changes in working capital
|
|
(1,108
|
)
|
|
|
(1,057
|
)
|
|
||
Other, net
|
|
697
|
|
|
|
(1,463
|
)
|
|
||
Net cash provided by operating activities
|
|
3,331
|
|
|
|
560
|
|
|
||
Net cash used for investing activities
|
|
(508
|
)
|
|
|
(329
|
)
|
|
||
Net cash used for financing activities
|
|
(2,428
|
)
|
|
|
(1,911
|
)
|
|
||
Net change in cash and cash equivalents
|
|
395
|
|
|
|
(1,680
|
)
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,167
|
|
|
|
$
|
1,181
|
|
|
•
|
our
reliance on contracts with the U.S. Government, which are conditioned upon the availability of funding and can be terminated by the U.S. Government for convenience, and
our
ability to negotiate favorable contract terms;
|
•
|
budget uncertainty; affordability initiatives; the risk of future sequestration under the Budget Control Act of 2011 or other budget cuts; the impact of any future government shutdowns (including the potential that
we work
on unfunded contracts to preserve their cost and/or schedule);
|
•
|
risks related to the development, production, sustainment, performance, schedule, cost and requirements of complex and technologically advanced programs including
our
largest, the F-35 program;
|
•
|
economic, industry, business and political conditions including their effects on governmental policy (including government actions that disrupt our supply chain or prevent the sale or delivery of
our
products, such as delays in obtaining Congressional approvals for exports requiring Congressional notification to the Kingdom of Saudi Arabia, the United Arab Emirates and Turkey and the suspension of the sale of F-35 aircraft to Turkey and potential sanctions), or other trade policies or sanctions (including potential sanctions on the Kingdom of Saudi Arabia);
|
•
|
our
success expanding into and doing business in adjacent markets and internationally; the differing risks posed by international sales, including those involving commercial relationships with unfamiliar customers and different cultures;
our
ability to recover investments, which is frequently dependent upon the successful operation of ventures that
we do
not control; and changes in foreign national priorities, and foreign government budgets;
|
•
|
the competitive environment for
our
products and services, including increased pricing pressures, aggressive pricing in the absence of cost realism evaluation criteria, competition from outside the aerospace and defense industry, and increased bid protests;
|
•
|
planned production rates for significant programs; compliance with stringent performance and reliability standards; materials availability;
|
•
|
the performance and financial viability of key suppliers, teammates, ventures, venture partners, subcontractors and customers;
|
•
|
the timing and customer acceptance of product deliveries;
|
•
|
our
ability to continue to innovate and develop new products and to attract and retain key personnel and transfer knowledge to new personnel; the impact of work stoppages or other labor disruptions;
|
•
|
the impact of cyber or other security threats or other disruptions to
our
businesses;
|
•
|
our
ability to implement and continue and the timing and impact of capitalization changes such as share repurchases and dividend payments;
|
•
|
timing and estimates regarding pension funding and the success of
our
efforts to reduce volatility of
our
outstanding pension obligations and to accelerate CAS cost recovery and recover certain associated costs from the U.S. Government;
|
•
|
our
ability to recover certain costs under U.S. Government contracts and changes in contract mix;
|
•
|
the accuracy of
our
estimates and projections;
|
•
|
movements in interest rates and other changes that may affect pension plan assumptions, equity, the level of the FAS/CAS adjustment and actual returns on pension plan assets;
|
•
|
realizing the anticipated benefits of acquisitions or divestitures, ventures, teaming arrangements or internal reorganizations, and
our
efforts to increase the efficiency of
our
operations and improve the affordability of
our
products and services;
|
•
|
risk of an impairment of goodwill and intangible assets, investments or other long-term assets, including the potential impairment of goodwill, intangible assets and inventory recorded as a result of the acquisition of the Sikorsky business and the potential further impairment of
our
equity investment in Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC);
|
•
|
the adequacy of
our
insurance and indemnities;
|
•
|
the effect of changes in (or in the interpretation of) procurement and other regulations and policies affecting
our
industry, including export of
our
products from the U.S. and other countries, cost allowability or recovery, aggressive government positions with respect to the use and ownership of intellectual property and potential changes to the DoD’s acquisition regulations relating to progress payments and performance-based payments and a preference for fixed-price contracts;
|
•
|
the effect of changes in accounting, taxation, or export laws, regulations, and policies; and
|
•
|
the outcome of legal proceedings, bid protests, environmental remediation efforts, government investigations or government allegations that
we have
failed to comply with law, other contingencies and U.S. Government identification of deficiencies in
our
business systems.
|
(a)
|
We close our books and records on the last Sunday of each month to align our financial closing with our business processes, except for the month of December, as our fiscal year ends on December 31. As a result, our fiscal months often differ from the calendar months. For example, April 28, 2019 was the last day of our April 2019 fiscal month.
|
(b)
|
In October 2010, our Board of Directors approved a share repurchase program pursuant to which we are authorized to repurchase our common stock in privately negotiated transactions or in the open market at prices per share not exceeding the then-current market prices. From time to time, our Board of Directors authorizes increases to our share repurchase program. The total remaining authorization for future common share repurchases under our share repurchase program was
$2.5 billion
as of
June 30, 2019
. Under the program, management has discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable law and regulation. This includes purchases pursuant to Rule 10b5-1 plans, including accelerated share repurchases. The program does not have an expiration date.
|
(c)
|
During the quarter ended
June 30, 2019
, the total number of shares purchased included 1,240 shares that were transferred to us by employees in satisfaction of tax withholding obligations associated with the vesting of restricted stock units. These purchases were made pursuant to a separate authorization by our Board of Directors and are not included within the program.
|
Exhibit No.
|
|
Description
|
|
|
|
15
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
Lockheed Martin Corporation
|
|
|
(Registrant)
|
|
|
|
Date: July 23, 2019
|
|
By: /s/ Brian P. Colan
|
|
|
Brian P. Colan
|
|
|
Vice President and Controller
|
|
|
(Duly Authorized Officer and Chief Accounting Officer)
|
1 Year Lockheed Martin Chart |
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