BETHESDA, Md., Jan. 25, 2022 /PRNewswire/ -- Lockheed
Martin Corporation [NYSE: LMT] today reported fourth quarter 2021
net sales of $17.7 billion, compared
to $17.0 billion in the fourth
quarter of 2020. Net earnings from continuing operations in the
fourth quarter of 2021 were $2.0
billion, or $7.47 per
share, compared to $1.8 billion,
or $6.38 per share, in the
fourth quarter of 2020. Cash from operations was $4.3 billion in the fourth quarter of 2021,
compared to $1.8 billion in the
fourth quarter of 2020. Cash from operations in the fourth quarter
of 2020 was after $1.0 billion of
discretionary pension contributions.
"We closed the year on a strong note with solid growth in fourth
quarter sales, segment operating profit, and earnings per share,
while cash exceeded our projections as we delivered on our customer
commitments and drove strong execution," said Lockheed Martin
Chairman, President and CEO James
Taiclet. "We delivered significant value back to
shareholders in 2021, including $7
billion in dividends and share repurchases, and our team
continued to provide world-class support to our customers despite
the ongoing challenges of the global pandemic. Through our strong
balance sheet, we continue to invest in the many emerging growth
opportunities ahead – from new aircraft competitions around the
world, to our classified portfolio, to solid demand for our
signature programs, to emerging technologies like hypersonics.
Looking ahead to 2022, we will remain fully dedicated to service to
our customers and dynamic and disciplined capital allocation for
the benefit of our shareholders."
Net earnings for the quarter ended Dec.
31, 2021, included net gains of $85
million ($64 million, or
$0.23 per share, after-tax) due to
increases in the fair value of investments held in the Lockheed
Martin Ventures Fund. Net earnings for the year ended Dec. 31, 2021, included a noncash pension
settlement charge of $1.7 billion
($1.3 billion, or $4.72 per share, after-tax) associated with the
$4.9 billion gross pension liability
transfer completed in the third quarter; net gains of $265 million ($199
million, or $0.72 per share,
after-tax) due to increases in the fair value of investments held
in the Lockheed Martin Ventures Fund; and severance and
restructuring charges of $36 million
($28 million, or $0.10 per share, after-tax) announced in the
first quarter. Net earnings for the year ended Dec. 31, 2020, included a non-cash impairment
charge of $128 million ($96 million, or $0.34 per share, after tax) for an investment in
a joint venture; and severance charges of $27 million ($21
million, or $0.08 per share,
after-tax).
Update on Proposed Aerojet Rocketdyne Acquisition
Earlier this month, Lockheed Martin and Aerojet Rocketdyne
agreed with the Federal Trade Commission (FTC) that the parties
would not close the transaction before Jan.
27, 2022, to enable the parties to discuss the scope and
nature of the merchant supply and firewall commitments previously
offered by Lockheed Martin. Lockheed Martin has been advised by the
FTC that its concerns regarding the transaction cannot be addressed
adequately by the terms of a consent order. Lockheed Martin
believes it is highly likely that the FTC will vote to sue to block
the transaction and expects they will make a decision before
Jan. 27, 2022.
If the FTC sues to block the transaction, Lockheed Martin could
elect to defend the lawsuit or terminate the merger agreement.
Additional information concerning the transaction can be found in
Lockheed Martin's 2021 Form 10-K that has been filed with the
Securities and Exchange Commission.
Lockheed Martin continues to believe in the benefits of the
transaction for the United States
and its allies, the industry, and all of the company's
stakeholders.
Summary Financial Results
The following table presents the company's summary financial
results.
|
(in millions,
except per share data)
|
|
Quarters Ended
Dec. 31,
|
|
Years Ended Dec.
31,
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Net
sales
|
|
$
17,729
|
|
$
17,032
|
|
$
67,044
|
|
$
65,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit1
|
|
$
2,014
|
|
$
1,875
|
|
$
7,379
|
|
$
7,152
|
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
491
|
|
469
|
|
1,960
|
|
1,876
|
|
|
Severance and
restructuring charges2
|
|
—
|
|
(27)
|
|
(36)
|
|
(27)
|
|
|
Other,
net3
|
|
(50)
|
|
(28)
|
|
(180)
|
|
(357)
|
|
|
Total unallocated
items
|
|
441
|
|
414
|
|
1,744
|
|
1,492
|
|
|
Consolidated
operating profit
|
|
$
2,455
|
|
$
2,289
|
|
$
9,123
|
|
$
8,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss) from
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations2,3,4
|
|
$
2,049
|
|
$
1,792
|
|
$
6,315
|
|
$
6,888
|
|
|
Discontinued
operations5
|
|
—
|
|
—
|
|
—
|
|
(55)
|
|
|
Net
earnings
|
|
$
2,049
|
|
$
1,792
|
|
$
6,315
|
|
$
6,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share from
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations2,3,4
|
|
$
7.47
|
|
$
6.38
|
|
$
22.76
|
|
$
24.50
|
|
|
Discontinued
operations5
|
|
—
|
|
—
|
|
—
|
|
(0.20)
|
|
|
Diluted earnings
per share
|
|
$
7.47
|
|
$
6.38
|
|
$
22.76
|
|
$
24.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from
operations6
|
|
$
4,268
|
|
$
1,807
|
|
$
9,221
|
|
$
8,183
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Business segment
operating profit is a non-GAAP measure. See the "Use of Non-GAAP
Financial Measures" section of this news release for more
information.
|
|
2
|
Severance and
restructuring charges for the year ended Dec. 31, 2021 include
charges of $36 million ($28 million, or $0.10 per share, after-tax)
for previously announced actions at the company's Rotary and
Mission Systems business segment recognized in the first quarter of
2021. Severance and restructuring charges for the quarter and
year ended Dec. 31, 2020 include charges of $27 million ($21
million, or $0.08 per share, after-tax) for previously announced
actions related to corporate functions.
|
|
3
|
Other, net for the
year ended Dec. 31, 2020 includes a noncash impairment charge of
$128 million ($96 million, or $0.34 per share, after-tax) for the
investment in the international equity method investee, Advanced
Military Maintenance, Repair and Overhaul Center (AMMROC)
recognized in the second quarter of 2020.
|
|
4
|
Net earnings from
continuing operations for the quarter and year ended Dec. 31, 2021
include net gains of $85 million ($64 million, or $0.23 per share,
after-tax) and $265 million ($199 million, or $0.72 per share,
after-tax) due to increases in the fair value of investments held
in the Lockheed Martin Ventures Fund. Net earnings from continuing
operations for the year ended Dec. 31, 2021 also include a
previously announced noncash, non-operating pension settlement
charge of $1.7 billion ($1.3 billion, or $4.72 per share,
after-tax) related to the purchase of group annuity contracts to
transfer $4.9 billion of gross pension obligations to an insurance
company in the third quarter of 2021.
|
|
5
|
Net earnings from
discontinued operations for the year ended Dec. 31, 2020 include a
noncash charge in the third quarter of 2020 for $55 million ($0.20
per share) resulting from the resolution of certain tax matters
related to the former Information Systems & Global Solutions
business divested in 2016.
|
|
6
|
Cash from operations
for the year ended Dec. 31, 2021 is after employer payroll tax
payments of $942 million, compared to $222 million for the year
ended Dec. 31, 2020. In 2020, the company deferred the payment of
$460 million of the employer portion of payroll taxes pursuant to
the Coronavirus Aid, Relief, and Economic Security Act (CARES Act),
of which $230 million was paid in the fourth quarter of 2021 with
the remaining $230 million to be paid in the fourth quarter of
2022. In addition, cash from operations for the quarter and year
ended Dec. 31, 2020 is net of discretionary pension contributions
of $1.0 billion.
|
|
|
|
|
2022 Financial Outlook
The following table and other sections of this news release
contain forward-looking statements, which are based on the
company's current expectations. Actual results may differ
materially from those projected. It is the company's practice not
to incorporate adjustments into its financial outlook for proposed
acquisitions, divestitures, ventures, pension risk transfer
transactions, changes in law, or new accounting standards until
such items have been consummated, enacted or adopted. For
additional factors that may impact the company's actual results,
refer to the "Forward-Looking Statements" section in this news
release.
|
(in millions,
except per share data)
|
|
2022
Current Outlook1
|
|
|
|
|
|
|
|
Net sales
|
|
~$66,000
|
|
|
|
|
|
|
|
Business segment
operating profit2
|
|
~$7,175
|
|
|
|
|
|
|
|
Net FAS/CAS pension
adjustment3,4
|
|
~$2,260
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
~$26.70
|
|
|
|
|
|
|
|
Cash from
operations
|
|
≥$7,900
|
|
|
R&D capitalization
assumption5
|
|
~$500
|
|
|
Cash from operations
(excluding R&D)2
|
|
≥$8,400
|
|
|
|
|
|
|
|
Cash from
operations
|
|
≥$7,900
|
|
|
Capital
expenditures
|
|
~$(1,900)
|
|
|
Free cash
flow2
|
|
≥$6,000
|
|
|
|
|
|
|
1
|
The company's current
2022 financial outlook reflects known impacts from the COVID-19
pandemic based on the company's understanding at the time of this
news release and its experience to date. However, the company
cannot predict how the pandemic will evolve or what impact it will
continue to have. Therefore, no additional impacts to the company's
operations or its supply chain as a result of continued disruption
from, or policies in response to, COVID-19 for periods subsequent
to the time of this news release have been incorporated into the
company's current 2022 financial outlook. The ultimate impacts of
COVID-19 on the company's financial results for 2022 and beyond
remain uncertain and there can be no assurance that the company's
underlying assumptions are correct. Additionally, the current 2022
financial outlook does not include any future gains or losses
related to changes in valuations of the company's investments held
in the Lockheed Martin Ventures Fund as the company cannot predict
changes in the valuation of its investments or market events. It
also assumes continued accelerated payments to suppliers, with a
focus on small and at-risk businesses. Further, the 2022 financial
outlook does not incorporate the pending acquisition of Aerojet
Rocketdyne Holdings, Inc. and related transaction costs.
|
|
2
|
Business segment
operating profit, cash from operations (excluding R&D) and free
cash flow are non-GAAP measures. See the "Use of Non-GAAP Financial
Measures" section of this news release for more
information.
|
|
3
|
The net FAS/CAS
pension adjustment is presented as a single amount and includes
total expected U.S. Government cost accounting standards (CAS)
pension cost of approximately $1.8 billion and total expected
financial accounting standards (FAS) pension income of
approximately $460 million. CAS pension cost and the service cost
component of FAS pension income are included in operating profit.
The non-service cost components of FAS pension income are included
in non-operating income (expense). For additional detail regarding
the pension amounts reported in operating and non-operating
results, refer to the supplemental table included at the end of
this news release.
|
|
4
|
The net FAS/CAS
pension adjustment was calculated using a 2.875% discount rate at
Dec. 31, 2021, an approximate 10.5% return on plan assets in 2021,
and an expected 6.5% long-term rate of return on plan assets in
future years.
|
|
5
|
A provision of the
Tax Cuts and Jobs Act of 2017 went into effect on Jan. 1, 2022 that
requires companies to capitalize and amortize research and
development costs over five years rather than deducting such costs
in the year incurred for tax purposes. The company currently
estimates that unless the provision is deferred, modified, or
repealed, this change will result in an additional $500 million of
tax payments in 2022, which has been reflected in the company's
current 2022 financial outlook for cash from operations. This
change is not expected to have a significant impact on the
company's net earnings.
|
|
|
|
|
|
|
|
Cash Deployment Activities
The company's cash deployment activities in the quarter and year
end Dec. 31, 2021, included the
following:
- accelerating $2.2 billion of
payments to suppliers during the quarter ended Dec. 31, 2021, that were due in the first quarter
of 2022, compared to accelerating $2.1
billion of payments to suppliers in the fourth quarter of
2020 that were due in the first quarter of 2021;
- making no pension contributions during the quarter and year
ended Dec. 31, 2021, compared to
making discretionary pension contributions of $1.0 billion during the quarter and year ended
Dec. 31, 2020;
- making capital expenditures of $607
million and $1.5 billion
during the quarter and year ended Dec. 31,
2021, compared to $722 million
and $1.8 billion during the quarter
and year ended Dec. 31, 2020;
- paying cash dividends of $762
million and $2.9 billion
during the quarter and year ended Dec. 31,
2021, compared to $728 million
and $2.8 billion during the quarter
and year ended Dec. 31, 2020;
- paying $2.1 billion to repurchase
6.1 million shares (including 2.2 million shares received upon
settlement of an accelerated share repurchase agreement (ASR) in
January 2022) and $4.1 billion to repurchase 11.7 million shares
(including the 2.2 million shares received upon settlement of an
ASR in January 2022) during the
quarter and year ended Dec. 31, 2021,
compared to no shares repurchased and paying $1.1 billion to repurchase 3.0 million shares
during the quarter and year ended Dec. 31,
2020;
- making no repayments and a scheduled repayment of $500 million of long-term debt during the quarter
and year ended Dec. 31, 2021,
compared to making repayments of $500
million and $1.7 billion of
long-term debt during the quarter and year ended Dec. 31, 2020; and
- receiving no proceeds from the issuance of debt during the year
ended Dec. 31, 2021, compared to
receiving $1.1 billion of net
proceeds from the issuance of debt during the year ended
Dec. 31, 2020.
Segment Results
The company operates in four business segments organized based
on the nature of products and services offered: Aeronautics,
Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS)
and Space. The following table presents summary operating results
of the company's business segments and reconciles these amounts to
the company's consolidated financial results.
|
(in millions)
|
|
Quarters Ended
Dec. 31,
|
|
Years Ended Dec.
31,
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
7,127
|
|
$
6,714
|
|
$
26,748
|
|
$
26,266
|
|
|
Missiles and Fire
Control
|
|
3,219
|
|
2,866
|
|
11,693
|
|
11,257
|
|
|
Rotary and Mission
Systems
|
|
4,460
|
|
4,212
|
|
16,789
|
|
15,995
|
|
|
Space
|
|
2,923
|
|
3,240
|
|
11,814
|
|
11,880
|
|
|
Total net
sales
|
|
$
17,729
|
|
$
17,032
|
|
$
67,044
|
|
$
65,398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
820
|
|
$
727
|
|
$
2,799
|
|
$
2,843
|
|
|
Missiles and Fire
Control
|
|
438
|
|
374
|
|
1,648
|
|
1,545
|
|
|
Rotary and Mission
Systems
|
|
448
|
|
406
|
|
1,798
|
|
1,615
|
|
|
Space
|
|
308
|
|
368
|
|
1,134
|
|
1,149
|
|
|
Total business
segment operating profit
|
|
2,014
|
|
1,875
|
|
7,379
|
|
7,152
|
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
491
|
|
469
|
|
1,960
|
|
1,876
|
|
|
Severance and
restructuring charges
|
|
—
|
|
(27)
|
|
(36)
|
|
(27)
|
|
|
Other, net
|
|
(50)
|
|
(28)
|
|
(180)
|
|
(357)
|
|
|
Total unallocated
items
|
|
441
|
|
414
|
|
1,744
|
|
1,492
|
|
|
Total consolidated
operating profit
|
|
$
2,455
|
|
$
2,289
|
|
$
9,123
|
|
$
8,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales and operating profit of the company's business
segments exclude intersegment sales, cost of sales, and profit as
these activities are eliminated in consolidation. Operating profit
of the company's business segments includes the company's share of
earnings or losses from equity method investees as the operating
activities of the investees are closely aligned with the operations
of its business segments.
Operating profit of the company's business segments also
excludes the FAS/CAS pension operating adjustment described below,
a portion of corporate costs not considered allowable or allocable
to contracts with the U.S. Government under the applicable U.S.
Government cost accounting standards (CAS) or federal acquisition
regulations (FAR), and other items not considered part of
management's evaluation of segment operating performance such as a
portion of management and administration costs, legal fees and
settlements, environmental costs, stock-based compensation expense,
retiree benefits, significant severance actions, significant asset
impairments, gains or losses from divestitures, and other
miscellaneous corporate activities.
The company recovers CAS pension cost through the pricing of its
products and services on U.S. Government contracts and, therefore,
recognizes CAS pension cost in each of its business segments' net
sales and cost of sales. The company's consolidated financial
statements must present pension and other postretirement benefit
plan income calculated in accordance with FAS requirements under
U.S. generally accepted accounting principles. The operating
portion of the net FAS/CAS pension adjustment represents the
difference between the service cost component of FAS pension
(expense) income and total CAS pension cost. The non-service FAS
pension (expense) income component is included in other non-service
FAS pension (expense) income in our consolidated statements of
earnings. The net FAS/CAS pension adjustment increases or decreases
CAS pension cost to equal total FAS pension income (both service
and non-service).
Changes in net sales and operating profit generally are
expressed in terms of volume. Changes in volume refer to increases
or decreases in sales or operating profit resulting from varying
production activity levels, deliveries or service levels on
individual contracts. Volume changes in segment operating profit
are typically based on the current profit booking rate for a
particular contract. In addition, comparability of the company's
segment sales, operating profit and operating margin may be
impacted favorably or unfavorably by changes in profit booking
rates on the company's contracts for which it recognizes revenue
over time using the percentage-of-completion cost-to-cost method to
measure progress towards completion. Increases in profit booking
rates, typically referred to as risk retirements, usually relate to
revisions in the estimated total costs to fulfill the performance
obligations that reflect improved conditions on a particular
contract. Conversely, conditions on a particular contract may
deteriorate, resulting in an increase in the estimated total costs
to fulfill the performance obligations and a reduction in the
profit booking rate. Increases or decreases in profit booking rates
are recognized in the current period and reflect the
inception-to-date effect of such changes.
Segment operating profit and margin may also be impacted
favorably or unfavorably by other items, which may or may not
impact sales. Favorable items may include the positive resolution
of contractual matters, cost recoveries on severance and
restructuring charges, insurance recoveries and gains on sales of
assets. Unfavorable items may include the adverse resolution of
contractual matters; restructuring charges, except for significant
severance actions which are excluded from segment operating
results; reserves for disputes; certain asset impairments; and
losses on sales of certain assets.
The company's consolidated net adjustments not related to
volume, including net profit booking rate adjustments, represented
approximately 29% and 28% of total segment operating profit in the
quarter and year ended Dec. 31, 2021,
as compared to 25% and 26% in the quarter and year ended
Dec. 31, 2020.
Aeronautics
|
(in millions)
|
|
Quarters Ended
Dec. 31,
|
|
Years Ended Dec.
31,
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Net
sales
|
|
$
7,127
|
|
|
$
6,714
|
|
|
$
26,748
|
|
|
$
26,266
|
|
|
|
Operating
profit
|
|
820
|
|
|
727
|
|
|
2,799
|
|
|
2,843
|
|
|
|
Operating
margin
|
|
11.5
|
%
|
|
10.8
|
%
|
|
10.5
|
%
|
|
10.8
|
%
|
|
Aeronautics' net sales during the fourth quarter of 2021
increased $413 million, or 6%, compared to the same period in
2020. The increase was primarily attributable to higher net sales
of approximately $270 million for the
F-35 program due to higher volume on production contracts that was
partially offset by lower volume on development contracts; and
about $110 million for classified
contracts due to higher volume and risk retirements.
Aeronautics' operating profit during the fourth quarter of 2021
increased $93 million, or 13%, compared to the same period in
2020. The increase was primarily attributable to higher operating
profit of approximately $55 million
for classified contracts due to higher risk retirements; and about
$35 million for the C-130 program due
to higher risk retirements on sustainment activities. Operating
profit for the F-35 program was comparable as higher volume on
production contracts was offset by lower risk retirements on
sustainment contracts. Adjustments not related to volume, including
net profit booking rate adjustments, were $80 million higher in the fourth quarter of
2021 compared to the same period in 2020.
Aeronautics' net sales in 2021 increased $482 million, or
2%, compared to 2020. The increase was primarily attributable to
higher net sales of approximately $290
million on classified contracts due to higher volume; about
$180 million for the F-16 program due
to higher volume on production contracts that was partially offset
by lower sustainment volume; approximately $75 million for the F-35 program primarily due to
higher volume on production and sustainment contracts that was
partially offset by lower volume on development contracts; and
about $30 million for the C-130
program primarily due to higher volume on production contracts and
higher risk retirements on sustainment activities. These increases
were partially offset by a decrease of approximately $170 million for lower sustainment volume for the
F-22 program.
Aeronautics' operating profit in 2021 decreased
$44 million, or 2%, compared to 2020. The decrease was
primarily attributable to lower operating profit of approximately
$120 million for classified contracts
primarily due to a $225 million loss
recognized in the second quarter of 2021 for performance issues
experienced on a classified program that was partially offset by
higher risk retirements on other classified programs recognized in
the second half of 2021; and about $70
million for the F-35 program due to lower risk retirements
and volume on development contracts and lower risk retirements on
production contracts that were partially offset by higher risk
retirements and volume on sustainment contracts. These decreases
were partially offset by an increase of approximately $90 million for the C-130 program due to higher
risk retirements on sustainment contracts; and about $50 million for the F-16 program due to higher
risk retirements on sustainment contracts and higher production
volume. Adjustments not related to volume, including net profit
booking rate adjustments, were $60
million lower in 2021 compared to 2020.
Missiles and Fire Control
|
(in millions)
|
|
Quarters Ended
Dec. 31,
|
|
Years Ended Dec.
31,
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Net
sales
|
|
$
3,219
|
|
|
$
2,866
|
|
|
$
11,693
|
|
|
$
11,257
|
|
|
|
Operating
profit
|
|
438
|
|
|
374
|
|
|
1,648
|
|
|
1,545
|
|
|
|
Operating
margin
|
|
13.6
|
%
|
|
13.0
|
%
|
|
14.1
|
%
|
|
13.7
|
%
|
|
MFC's net sales during the fourth quarter of 2021 increased
$353 million, or 12%, compared to the same period in 2020. The
increase was primarily attributable to higher net sales of
approximately $200 million for
integrated air and missile defense programs due to higher volume
(primarily PAC-3); and about $190
million for tactical and strike missile programs due to
higher volume (primarily Hellfire, Long Range Anti-Ship Missile
(LRASM) and Joint Air-to-Surface Standoff Missile (JASSM)). These
increases were partially offset by a decrease of about $40 million for sensors and global sustainment
programs due to lower volume (primarily Special Operations Forces
Global Logistics Support Services (SOF GLSS)).
MFC's operating profit during the fourth quarter of 2021
increased $64 million, or 17%, compared to the same period in
2020. The increase was primarily attributable to higher operating
profit of approximately $40 million
for tactical and strike missile programs due to higher volume
(primarily Hellfire, LRASM and JASSM) and higher risk retirements
(primarily Guided Multiple Launch Rocket Systems (GMLRS)); and
about $25 million for integrated air
and missile defense programs due to higher volume (primarily
PAC-3). Adjustments not related to volume, including net profit
booking rate adjustments, were comparable in the fourth quarter of
2021 to the same period in 2020.
MFC's net sales in 2021 increased $436 million, or 4%,
compared to 2020. The increase was primarily attributable to higher
net sales of approximately $340
million for integrated air and missile defense programs due
to higher volume and risk retirements (primarily PAC-3); and about
$215 million for tactical and strike
missile programs due to higher volume (primarily LRASM and JASSM).
These increases were partially offset by a decrease of
approximately $90 million for sensors
and global sustainment programs due to lower volume (primarily
Sniper Advanced Targeting Pod (SNIPER®) and Apache) that
was partially offset by close out activities related to the Warrior
Capability Sustainment Program (Warrior) that was terminated by the
customer in March 2021.
MFC's operating profit in 2021 increased $103 million, or
7%, compared to 2020. The increase was primarily attributable to
higher operating profit of approximately $65
million for integrated air and missile defense programs due
to higher risk retirements and volume (primarily PAC-3); about
$45 million for tactical and strike
missile programs due to higher volume (primarily LRASM and JASSM)
and higher risk retirements (primarily GMLRS); and approximately
$20 million for sensors and global
sustainment programs due to the reversal of a portion of previously
recorded losses on the Warrior program in the second and third
quarters of 2021 that will not recur as a result of the program
being terminated, which was partially offset by lower volume
(primarily SNIPER and Apache). These increases were partially
offset by charges of approximately $25
million due to performance issues on an energy program
during the third quarter of 2021. Adjustments not related to
volume, including net profit booking rate adjustments, were
$85 million higher in 2021 compared
to 2020.
Rotary and Mission Systems
|
(in millions)
|
|
Quarters Ended
Dec. 31,
|
|
Years Ended Dec.
31,
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Net
sales
|
|
$
4,460
|
|
|
$
4,212
|
|
|
$
16,789
|
|
|
$
15,995
|
|
|
|
Operating
profit
|
|
448
|
|
|
406
|
|
|
1,798
|
|
|
1,615
|
|
|
|
Operating
margin
|
|
10.0
|
%
|
|
9.6
|
%
|
|
10.7
|
%
|
|
10.1
|
%
|
|
RMS' net sales during the fourth quarter of 2021 increased
$248 million, or 6%, compared to the same period in 2020. The
increase was primarily attributable to higher net sales of
approximately $115 million for
various C6ISR (command, control, communications, computers, cyber,
combat systems, intelligence, surveillance, and reconnaissance)
programs due to higher volume; about $70
million for training and logistics solutions (TLS) programs
due to higher volume; and approximately $45
million for integrated warfare systems and sensors (IWSS)
programs due to higher volume on Canadian Surface Combatant (CSC)
and Aegis programs.
RMS' operating profit during the fourth quarter of 2021
increased $42 million, or 10%, compared to the same
period in 2020. The increase was primarily attributable to higher
operating profit of approximately $30
million for Sikorsky helicopter programs due to higher risk
retirements (primarily Combat Rescue Helicopter (CRH) and VH-92A);
and about $20 million for C6ISR
programs due to higher risk retirements. Adjustments not related to
volume, including net profit booking rate adjustments, were
$10 million higher in the fourth
quarter of 2021 compared to the same period in 2020.
RMS' net sales in 2021 increased $794 million, or 5%,
compared to 2020. The increase was primarily attributable to higher
net sales of $540 million for
Sikorsky helicopter programs due to higher production volume (Black
Hawk, CH-53K and CRH); and about $340
million for TLS programs primarily due to the delivery of an
international pilot training system in the first quarter of 2021.
These increases were partially offset by lower net sales of about
$65 million for IWSS programs due to
lower volume on the LCS and TPQ-53 programs that were partially
offset by higher volume on the CSC and Aegis programs.
RMS' operating profit in 2021 increased $183 million, or
11%, compared to 2020. The increase was primarily attributable to
higher operating profit of approximately $140 million for Sikorsky helicopter programs due
to higher risk retirements (Black Hawk and CH-53K), higher
production volume (Black Hawk and CRH), and lower charges on the
CRH program in the first half of 2021; and about $10 million for TLS programs due to the delivery
of an international pilot training system in the first quarter of
2021. Operating profit for IWSS programs was comparable as lower
risk retirements on the LCS program and lower volume on the TPQ-53
program were offset by higher volume on the CSC program and lower
charges on a ground-based radar program. Adjustments not related to
volume, including net profit booking rate adjustments, were
$80 million higher in 2021 compared
2020.
Space
|
(in millions)
|
|
Quarters Ended
Dec. 31,
|
|
Years Ended Dec.
31,
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
Net
sales
|
|
$
2,923
|
|
|
$
3,240
|
|
|
$
11,814
|
|
|
$
11,880
|
|
|
|
Operating
profit
|
|
308
|
|
|
368
|
|
|
1,134
|
|
|
1,149
|
|
|
|
Operating
margin
|
|
10.5
|
%
|
|
11.4
|
%
|
|
9.6
|
%
|
|
9.7
|
%
|
|
Space's net sales during the fourth quarter of 2021 decreased
$317 million, or 10%, compared to the same period in 2020. The
decrease was primarily attributable to lower net sales of
approximately $385 million due to the
June 30, 2021, renationalization of
the Atomic Weapons Establishment (AWE) program after which date,
the ongoing operations are no longer included in the company's
financial results; and about $80
million for commercial civil space programs due to lower
volume (primarily Orion). These decreases were partially offset by
higher net sales of about $165
million for strategic and missile defense programs due to
higher volume (primarily Next Generation Interceptor (NGI), Fleet
Ballistic Missile (FBM) and hypersonic development).
Space's operating profit during the fourth quarter of 2021
decreased $60 million, or 16%, compared to the same period in
2020. The decrease was primarily attributable to approximately
$60 million of lower equity earnings
from the company's investment in United Launch Alliance (ULA) due
to launch vehicle mix; and about $25
million for commercial civil space programs due to lower
risk retirements and volume (primarily Orion). These decreases were
partially offset by an increase of approximately $10 million for strategic and missile defense
programs due to higher risk retirements (primarily FBM) that were
partially offset by lower risk retirements (primarily hypersonic
development). There was not a significant decrease in operating
profit for the AWE program as its operating profit in the fourth
quarter of 2020 was mostly offset by accelerated and incremental
amortization expense for intangible assets as a result of the
renationalization. Adjustments not related to volume, including net
profit booking rate adjustments, were $10
million higher in the fourth quarter of 2021 compared to the
same period in 2020.
Space's net sales in 2021 decreased $66 million, or 1%,
compared to 2020. The decrease was primarily attributable to lower
net sales of approximately $535
million due to the renationalization of the AWE program; and
about $105 million for commercial
civil space programs due to lower volume (primarily Orion). These
decreases were partially offset by higher net sales of
approximately $405 million for
strategic and missile defense programs due to higher volume
(primarily hypersonic development and NGI programs); and about
$140 million for national security
space programs due to higher volume and risk retirements (primarily
Next Gen OPIR and SBIRS).
Space's operating profit in 2021 decreased $15 million, or
1%, compared to 2020. The decrease was primarily attributable to
approximately $70 million of lower
equity earnings from the company's investment in ULA due to lower
launch volume and launch vehicle mix; and about $20 million due to the renationalization of the
AWE program. These decreases were partially offset by an increase
of about $35 million for strategic
and missile defense programs due to higher volume (primarily
hypersonic development programs); and approximately $25 million for national security space programs
due to higher risk retirements (primarily SBIRS and classified
programs) and higher volume (primarily Next Gen OPIR) that was
partially offset by charges of about $80
million on a commercial ground solutions program. Operating
profit was comparable for commercial civil space programs as higher
risk retirements (primarily space transportation programs) were
offset by lower volume (primarily Orion). Adjustments not related
to volume, including net profit booking rate adjustments, were
$100 million higher in 2021 compared
to 2020.
Total equity earnings (primarily ULA) represented approximately
$30 million, or 9%, and approximately
$65 million, or 6%, of Space's operating profit during the
quarter and year ended Dec. 31, 2021,
compared to approximately $90
million, or 24%, and approximately $135 million, or 12%, in the quarter and year
ended Dec. 31, 2020.
Income Taxes
The company's effective income tax rate was 17.7% and 16.4% in
the quarter and year ended Dec. 31,
2021, compared to 18.1% and 16.4% in the quarter and year
ended Dec. 31, 2020. The rates for
the year ended Dec. 31, 2021, and
Dec. 31, 2020, benefited from tax
deductions for foreign derived intangible income, the research and
development tax credit, dividends paid to the company's defined
contribution plans with an employee stock ownership plan feature
and tax deductions for employee equity awards. The rate for the
quarter ended Dec. 31, 2021 was lower
than the rate for the quarter ended Dec. 31,
2020 primarily due to increased research and development tax
credits partially offset by a reduction in the tax deduction for
foreign derived intangible income.
Use of Non-GAAP Financial Measures
This news release contains the following non-generally accepted
accounting principles (non-GAAP) financial measures (as defined by
U.S. Securities and Exchange Commission (SEC) Regulation G). While
management believes that these non-GAAP financial measures may be
useful in evaluating the financial performance of the company, this
information should be considered supplemental and is not a
substitute for financial information prepared in accordance with
GAAP. In addition, the company's definitions for non-GAAP financial
measures may differ from similarly titled measures used by other
companies or analysts.
Business segment operating profit
Business segment operating profit represents operating profit
from the company's business segments before unallocated income and
expense. This measure is used by the company's senior management in
evaluating the performance of its business segments and is a
performance goal in the company's annual incentive plan. Business
segment operating margin is calculated by dividing business segment
operating profit by sales. The table below reconciles the non-GAAP
measure business segment operating profit with the most directly
comparable GAAP financial measure, consolidated operating
profit.
|
(in
millions)
|
|
|
2022
Current Outlook1
|
|
|
Business segment
operating profit (non-GAAP)
|
|
|
~$7,175
|
|
|
FAS/CAS operating
adjustment2
|
|
|
~1,705
|
|
|
Other, net
|
|
|
~(350)
|
|
|
Consolidated
operating profit (GAAP)
|
|
|
~$8,530
|
|
|
|
|
|
|
|
1
|
The company's current
2022 financial outlook reflects known impacts from the COVID-19
pandemic based on the company's understanding at the time of this
news release and its experience to date. However, the company
cannot predict how the pandemic will evolve or what impact it will
continue to have. Therefore, no additional impacts to the Company's
operations or its supply chain as a result of continued disruption
from, or policies in response to, COVID-19 for periods subsequent
to the time of this news release have been incorporated into the
company's current 2022 financial outlook. The ultimate impacts of
COVID-19 on the company's financial outlook for 2022 and beyond
remain uncertain and there can be no assurance that the company's
underlying assumptions are correct.
|
|
2
|
Reflects the amount
by which expected total CAS pension cost of $1.8 billion, exceeds
the expected FAS pension service cost of $95 million. Excludes $555
million of expected non-service FAS pension income. Refer to the
supplemental table "Other Supplemental Information" included in
this news release for a detail of the FAS/CAS operating
adjustment.
|
|
|
|
|
Net FAS/CAS pension adjustment – adjusted
Net FAS/CAS pension adjustment has been adjusted for the third
quarter 2021 noncash, non-operating pension settlement charge of
$1.7 billion. Management believes
that the exclusion of the pension settlement charge related to the
accelerated recognition of actuarial losses previously included in
accumulated other comprehensive loss for certain pension plans as a
result of the purchase of group annuity contracts from an insurance
company, is useful to understanding the company's underlying
business performance and comparing performance from period to
period.
Free Cash Flow
Free Cash Flow is cash from operations less capital
expenditures. The company uses free cash flow to evaluate its
business performance and overall liquidity. The company believes
free cash flow is a useful measure for investors because it
represents the amount of cash generated from operations after
reinvesting in the business and that may be available to return to
stockholders and creditors (through dividends, stock repurchase and
debt repayments) or available to fund acquisitions. The entire free
cash flow amount is not necessarily available for discretionary
expenditures.
Cash from operations (excluding R&D)
Cash from operations (excluding R&D) is cash from operations
excluding the impact of a provision of the Tax Cuts and Jobs Act of
2017 related to research and development costs that went into
effect on Jan. 1, 2022. The provision
requires that companies capitalize and amortize research and
development costs over five years for tax purposes rather than
deducting such costs in the year incurred. The company believes
this adjusted measure of cash from operations is useful to
investors because it allows for a comparison against prior periods
of the company's ability to generate cash controlling for the
change in tax law, and because the impact of the new tax law will
lessen over the course of the five-year amortization period and
become immaterial in the sixth year.
Conference Call Information
Lockheed Martin Corporation will webcast live the earnings
results conference call (listen-only mode) on Tuesday, Jan. 25, 2022, at 11 a.m. EST. The live webcast and relevant
financial charts will be available for download on the Lockheed
Martin Investor Relations website at
www.lockheedmartin.com/investor.
For additional information, visit the company's website:
www.lockheedmartin.com.
About Lockheed Martin
Headquartered in Bethesda,
Maryland, Lockheed Martin Corporation is a global security
and aerospace company that employs approximately 114,000 people
worldwide and is principally engaged in the research, design,
development, manufacture, integration and sustainment of advanced
technology systems, products and services.
Forward-Looking Statements
This news release contains statements that, to the extent they
are not recitations of historical fact, constitute forward-looking
statements within the meaning of the federal securities laws, and
are based on Lockheed Martin's current expectations and
assumptions. The words "believe," "estimate," "anticipate,"
"project," "intend," "expect," "plan," "outlook," "scheduled,"
"forecast" and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of
future performance and are subject to risks and uncertainties.
Actual results may differ materially due to factors such as:
- the impact of COVID-19 or future epidemics on the company's
business, including potential supply chain disruptions, facility
closures, work stoppages, program delays, payment policies and
regulations, the company's ability to recover its costs under
contracts and uncertainty regarding the impacts of potential
vaccine mandates or other requirements;
- budget uncertainty, the risk of future budget cuts, the debt
ceiling and the potential for government shutdowns and changing
funding and acquisition priorities;
- the company's reliance on contracts with the U.S. Government,
which are dependent on U.S. Government funding and can be
terminated for convenience, and the company's ability to negotiate
favorable contract terms;
- risks related to the development, production, sustainment,
performance, schedule, cost and requirements of complex and
technologically advanced programs including the company's largest,
the F-35 program;
- planned production rates and orders for significant programs;
compliance with stringent performance and reliability standards;
materials availability;
- performance and financial viability of key suppliers,
teammates, joint ventures and partners, subcontractors and
customers;
- economic, industry, business and political conditions including
their effects on governmental policy and government actions that
disrupt the company's supply chain or prevent the sale or delivery
of its products (such as delays in approvals for exports requiring
Congressional notification);
- trade policies or sanctions (including potential Chinese
sanctions on the company or its suppliers, teammates or partners
and U.S. Government sanctions on Turkey and its removal from the F-35
program);
- the company's success expanding into and doing business in
adjacent markets and internationally and the differing risks posed
by international sales;
- changes in foreign national priorities and foreign government
budgets and planned orders;
- the competitive environment for the company's products and
services, including increased pricing pressures, aggressive pricing
in the absence of cost realism evaluation criteria, competition
from emerging competitors including startups and non-traditional
defense contractors, and bid protests;
- the timing and customer acceptance of product deliveries and
performance milestones;
- the company's ability to develop new technologies and products,
including emerging digital and network technologies and
capabilities;
- the company's ability to attract and retain a highly skilled
workforce; the impact of work stoppages or other labor
disruptions;
- cyber or other security threats or other disruptions faced by
the company or its suppliers;
- the company's ability to implement and continue, and the timing
and impact of, capitalization changes such as share repurchases and
dividend payments;
- the company's ability to recover costs under U.S. Government
contracts, our mix of fixed-price and cost-reimbursable contracts
and the impacts of cost overruns and significant increases in
inflation;
- the accuracy of the company's estimates and projections;
- the impact of pension risk transfers, including potential
noncash settlement charges; timing and estimates regarding pension
funding and movements in interest rates and other changes that may
affect pension plan assumptions, stockholders' equity, the level of
the FAS/CAS adjustment; actual returns on pension plan assets and
the impact of pension related legislation;
- the successful operation of joint ventures that the company
does not control;
- realizing the anticipated benefits of acquisitions or
divestitures, investments, joint ventures, teaming arrangements or
internal reorganizations, and market volatility in the fair value
of investments in the company's Lockheed Martin Ventures Fund that
are marked to market;
- risks related to the company's proposed acquisition of Aerojet
Rocketdyne, including the failure to obtain, delays in obtaining or
adverse conditions contained in any required regulatory approvals,
or any related litigation, and the company's ability to
successfully and timely integrate the business and realize
synergies and other expected benefits of the transaction;
- the company's efforts to increase the efficiency of its
operations and improve the affordability of its products and
services;
- the risk of an impairment of the company's assets, including
the potential impairment of goodwill recorded as a result of the
acquisition of the Sikorsky business;
- the availability and adequacy of the company's insurance and
indemnities;
- the company's ability to benefit fully from or adequately
protect its intellectual property rights;
- procurement and other regulations and policies affecting the
company's industry, export of its products, cost allowability or
recovery, preferred contract type, and performance and progress
payments policy, including a reversal or modification to the DoD's
increase to the progress payment rate in response to COVID-19;
- changes in accounting, U.S. or foreign tax, export or other
laws, regulations, and policies and their interpretation or
application; and
- the outcome of legal proceedings, bid protests, environmental
remediation efforts, audits, government investigations or
government allegations that the company has failed to comply with
law, other contingencies and U.S. Government identification of
deficiencies in its business systems.
These are only some of the factors that may affect the
forward-looking statements contained in this news release. For a
discussion identifying additional important factors that could
cause actual results to differ materially from those anticipated in
the forward-looking statements, see the company's filings with the
U.S. Securities and Exchange Commission including, but not limited
to, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Risk Factors" in the company's
Annual Report on Form 10-K for the year ended
Dec. 31, 2021. The company's filings may be accessed
through the Investor Relations page of its website,
www.lockheedmartin.com/investor, or through the website maintained
by the SEC at www.sec.gov.
The company's actual financial results likely will be different
from those projected due to the inherent nature of projections.
Given these uncertainties, forward-looking statements should not be
relied on in making investment decisions. The forward-looking
statements contained in this news release speak only as of the date
of its filing. Except where required by applicable law, the company
expressly disclaims a duty to provide updates to forward-looking
statements after the date of this news release to reflect
subsequent events, changed circumstances, changes in expectations,
or the estimates and assumptions associated with them. The
forward-looking statements in this news release are intended to be
subject to the safe harbor protection provided by the federal
securities laws.
Lockheed Martin
Corporation
|
Consolidated
Statements of Earnings
|
(unaudited;
in millions, except per share data)
|
|
|
|
|
Quarters Ended
Dec. 31,
|
|
Years Ended Dec.
31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Net
sales
|
|
$
17,729
|
|
|
$
17,032
|
|
|
$
67,044
|
|
|
$
65,398
|
|
|
Cost of
sales1
|
|
(15,307)
|
|
|
(14,818)
|
|
|
(57,983)
|
|
|
(56,744)
|
|
|
Gross
profit
|
|
2,422
|
|
|
2,214
|
|
|
9,061
|
|
|
8,654
|
|
|
Other income
(expense), net2
|
|
33
|
|
|
75
|
|
|
62
|
|
|
(10)
|
|
|
Operating
profit
|
|
2,455
|
|
|
2,289
|
|
|
9,123
|
|
|
8,644
|
|
|
Interest
expense
|
|
(146)
|
|
|
(149)
|
|
|
(569)
|
|
|
(591)
|
|
|
Non-service FAS
pension (expense)
income3
|
|
93
|
|
|
55
|
|
|
(1,292)
|
|
|
219
|
|
|
Other non-operating
income (expense), net4
|
|
88
|
|
|
(8)
|
|
|
288
|
|
|
(37)
|
|
|
Earnings from
continuing operations before
income taxes
|
|
2,490
|
|
|
2,187
|
|
|
7,550
|
|
|
8,235
|
|
|
Income tax
expense
|
|
(441)
|
|
|
(395)
|
|
|
(1,235)
|
|
|
(1,347)
|
|
|
Net earnings from
continuing operations
|
|
2,049
|
|
|
1,792
|
|
|
6,315
|
|
|
6,888
|
|
|
Net loss from
discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55)
|
|
|
Net
earnings
|
|
$
2,049
|
|
|
$
1,792
|
|
|
$
6,315
|
|
|
$
6,833
|
|
|
Effective tax
rate
|
|
17.7
|
%
|
|
18.1
|
%
|
|
16.4
|
%
|
|
16.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per common share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
7.50
|
|
|
$
6.41
|
|
|
$
22.85
|
|
|
$
24.60
|
|
|
Discontinued
operations5
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.20)
|
|
|
Basic earnings per
common share
|
|
$
7.50
|
|
|
$
6.41
|
|
|
$
22.85
|
|
|
$
24.40
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
7.47
|
|
|
$
6.38
|
|
|
$
22.76
|
|
|
$
24.50
|
|
|
Discontinued
operations5
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.20)
|
|
|
Diluted earnings per
common share
|
|
$
7.47
|
|
|
$
6.38
|
|
|
$
22.76
|
|
|
$
24.30
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
273.3
|
|
|
279.7
|
|
|
276.4
|
|
|
280.0
|
|
|
Diluted
|
|
274.3
|
|
|
281.0
|
|
|
277.4
|
|
|
281.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares
reported in stockholders'
equity at end
of period
|
|
|
|
|
|
271
|
|
|
279
|
|
|
|
|
|
|
|
|
|
|
|
1
|
During the quarter
ended March 28, 2021, the company recognized severance and
restructuring charges of $36 million ($28 million, or $0.10 per
share, after-
tax) for previously announced actions at the company's Rotary and
Mission Systems business segment. In the fourth quarter of 2020,
the
company recognized severance charges of $27 million ($21 million,
or $0.08 per share, after-tax) for previously announced actions
related to
corporate functions.
|
2
|
During the quarter
ended June 28, 2020, the company recognized a noncash impairment
charge of $128 million ($96 million, or $0.34 per share, after-
tax) for the investment in the international equity method
investee, Advanced Military Maintenance, Repair and Overhaul Center
(AMMROC).
|
3
|
During the quarter
ended Sept. 26, 2021, the company recognized a $1.7 billion ($1.3
billion, or $4.72 per share, after-tax) noncash, non-operating
pension
settlement charge related to the purchase of group annuity
contracts.
|
4
|
Other non-operating
income (expense), net for the quarter and year ended Dec. 31, 2021
include net gains of $85 million ($64 million, or $0.23
per share, after-tax) and $265 million ($199 million, or $0.72 per
share, after-tax) due to increases in the fair value of investments
held in the
Lockheed Martin Ventures Fund.
|
5
|
Net earnings from
discontinued operations for the year ended Dec. 31, 2020, include a
noncash charge in third quarter of 2020 for $55 million
($0.20 per share) resulting from the resolution of certain tax
matters related to the former Information Systems & Global
Solutions business
divested in 2016.
|
|
|
Lockheed Martin
Corporation
|
Business Segment
Summary Operating Results
|
(unaudited;
in millions)
|
|
|
|
|
Quarters Ended
Dec. 31,
|
|
|
|
Years Ended Dec.
31,
|
|
|
|
|
|
2021
|
|
2020
|
|
%
Change
|
|
2021
|
|
2020
|
|
%
Change
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
7,127
|
|
|
$
6,714
|
|
|
6%
|
|
$
26,748
|
|
|
$
26,266
|
|
|
2%
|
|
Missiles and Fire
Control
|
|
3,219
|
|
|
2,866
|
|
|
12%
|
|
11,693
|
|
|
11,257
|
|
|
4%
|
|
Rotary and Mission
Systems
|
|
4,460
|
|
|
4,212
|
|
|
6%
|
|
16,789
|
|
|
15,995
|
|
|
5%
|
|
Space
|
|
2,923
|
|
|
3,240
|
|
|
(10%)
|
|
11,814
|
|
|
11,880
|
|
|
(1%)
|
|
Total net
sales
|
|
$
17,729
|
|
|
$
17,032
|
|
|
4%
|
|
$
67,044
|
|
|
$
65,398
|
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
820
|
|
|
$
727
|
|
|
13%
|
|
$
2,799
|
|
|
$
2,843
|
|
|
(2%)
|
|
Missiles and Fire
Control
|
|
438
|
|
|
374
|
|
|
17%
|
|
1,648
|
|
|
1,545
|
|
|
7%
|
|
Rotary and Mission
Systems
|
|
448
|
|
|
406
|
|
|
10%
|
|
1,798
|
|
|
1,615
|
|
|
11%
|
|
Space
|
|
308
|
|
|
368
|
|
|
(16%)
|
|
1,134
|
|
|
1,149
|
|
|
(1%)
|
|
Total business
segment operating
profit
|
|
2,014
|
|
|
1,875
|
|
|
7%
|
|
7,379
|
|
|
7,152
|
|
|
3%
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
491
|
|
|
469
|
|
|
|
|
1,960
|
|
|
1,876
|
|
|
|
|
Severance and
restructuring charges1
|
|
—
|
|
|
(27)
|
|
|
|
|
(36)
|
|
|
(27)
|
|
|
|
|
Other,
net2
|
|
(50)
|
|
|
(28)
|
|
|
|
|
(180)
|
|
|
(357)
|
|
|
|
|
Total unallocated
items
|
|
441
|
|
|
414
|
|
|
7%
|
|
1,744
|
|
|
1,492
|
|
|
17%
|
|
Total consolidated
operating
profit
|
|
$
2,455
|
|
|
$
2,289
|
|
|
7%
|
|
$
9,123
|
|
|
$
8,644
|
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
11.5
|
%
|
|
10.8
|
%
|
|
|
|
10.5
|
%
|
|
10.8
|
%
|
|
|
|
Missiles and Fire
Control
|
|
13.6
|
%
|
|
13.0
|
%
|
|
|
|
14.1
|
%
|
|
13.7
|
%
|
|
|
|
Rotary and Mission
Systems
|
|
10.0
|
%
|
|
9.6
|
%
|
|
|
|
10.7
|
%
|
|
10.1
|
%
|
|
|
|
Space
|
|
10.5
|
%
|
|
11.4
|
%
|
|
|
|
9.6
|
%
|
|
9.7
|
%
|
|
|
|
Total business
segment operating
margin
|
|
11.4
|
%
|
|
11.0
|
%
|
|
|
|
11.0
|
%
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
operating
margin
|
|
13.8
|
%
|
|
13.4
|
%
|
|
|
|
13.6
|
%
|
|
13.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Severance and
restructuring charges for the year ended Dec. 31, 2021 include
charges of $36 million ($28 million, or $0.10 per share, after-tax)
for
previously announced actions at the company's Rotary and Mission
Systems business segment recognized in the first quarter of
2021. Severance
and restructuring charges for the quarter and year ended Dec. 31,
2020 include charges of $27 million ($21 million, or $0.08 per
share, after-tax) for
previously announced actions related to corporate functions
recognized in the fourth quarter of 2020.
|
2
|
Other, net for the
year ended Dec. 31, 2020 includes a noncash impairment charge of
$128 million ($96 million, or $0.34 per share, after-tax) for
the
investment in the international equity method investee, Advanced
Military Maintenance, Repair and Overhaul Center (AMMROC)
recognized in the
second quarter of 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lockheed Martin
Corporation
|
Selected Financial
Data
|
(unaudited;
in millions)
|
|
|
|
|
Quarters Ended
Dec. 31,
|
|
Years Ended Dec.
31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Amortization of
purchased intangibles
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
—
|
|
$
—
|
|
$
1
|
|
$
—
|
|
Missiles and Fire
Control
|
|
—
|
|
—
|
|
2
|
|
2
|
|
Rotary and Mission
Systems
|
|
58
|
|
58
|
|
232
|
|
232
|
|
Space
|
|
4
|
|
16
|
|
50
|
|
37
|
|
Total amortization
of purchased
intangibles
|
|
$
62
|
|
$
74
|
|
$
285
|
|
$
271
|
|
|
|
2022 Outlook
|
|
2021 Actual
|
|
Total FAS income
(expense) and CAS costs
|
|
|
|
|
|
FAS pension income
(expense)
|
|
$
460
|
|
$
(1,398)
|
|
Less: CAS pension
cost
|
|
1,800
|
|
2,066
|
|
Net FAS/CAS pension
adjustment
|
|
2,260
|
|
668
|
|
Less: pension
settlement charge
|
|
—
|
|
1,665
|
|
Net FAS/CAS pension
adjustment - adjusted1,2
|
|
$
2,260
|
|
$
2,333
|
|
|
|
|
|
|
|
Service and
non-service cost reconciliation
|
|
|
|
|
|
FAS pension service
cost
|
|
$
(95)
|
|
$
(106)
|
|
Less: CAS pension
cost
|
|
1,800
|
|
2,066
|
|
FAS/CAS operating
adjustment
|
|
1,705
|
|
1,960
|
|
FAS pension non-service
income (expense)
|
|
555
|
|
(1,292)
|
|
Net FAS/CAS pension
adjustment
|
|
2,260
|
|
668
|
|
Less: pension
settlement charge
|
|
—
|
|
1,665
|
|
Net FAS/CAS pension
adjustment - adjusted1,2
|
|
$
2,260
|
|
$
2,333
|
|
|
|
|
|
|
1
|
Net FAS/CAS pension
adjustment – adjusted is a non-GAAP measure. See the "Use of
Non-GAAP Financial Measures" section of this news release for more
information.
|
2
|
The non-service cost
components in the table above relate only to the company's
qualified defined benefit pension plans. The company
recognized a noncash, non-operating settlement charge of $1,665
million in the third quarter of 2021 related to the accelerated
recognition of actuarial losses previously included in accumulated
other comprehensive loss for certain pension plans as a result of
the purchase of group annuity contracts from an insurance
company.
|
Lockheed Martin
Corporation
|
Consolidated
Balance Sheets
|
(unaudited, in millions, except
par value)
|
|
|
|
|
Dec. 31, 2021
|
|
Dec. 31, 2020
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
3,604
|
|
$
3,160
|
|
Receivables,
net
|
|
1,963
|
|
1,978
|
|
Contract
assets
|
|
10,579
|
|
9,545
|
|
Inventories
|
|
2,981
|
|
3,545
|
|
Other current
assets
|
|
688
|
|
1,150
|
|
Total current
assets
|
|
19,815
|
|
19,378
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
7,597
|
|
7,213
|
|
Goodwill
|
|
10,813
|
|
10,806
|
|
Intangible assets,
net
|
|
2,706
|
|
3,012
|
|
Deferred income
taxes
|
|
2,290
|
|
3,475
|
|
Other noncurrent
assets
|
|
7,652
|
|
6,826
|
|
Total
assets
|
|
$
50,873
|
|
$
50,710
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
780
|
|
$
880
|
|
Salaries, benefits and
payroll taxes
|
|
3,108
|
|
3,163
|
|
Contract
liabilities
|
|
8,107
|
|
7,545
|
|
Current maturities of
long-term debt
|
|
6
|
|
500
|
|
Other current
liabilities
|
|
1,996
|
|
1,845
|
|
Total current
liabilities
|
|
13,997
|
|
13,933
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
11,670
|
|
11,669
|
|
Accrued pension
liabilities
|
|
8,319
|
|
12,874
|
|
Other noncurrent
liabilities
|
|
5,928
|
|
6,196
|
|
Total
liabilities
|
|
39,914
|
|
44,672
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Common stock, $1 par
value per share
|
|
271
|
|
279
|
|
Additional paid-in
capital
|
|
94
|
|
221
|
|
Retained
earnings
|
|
21,600
|
|
21,636
|
|
Accumulated other
comprehensive loss
|
|
(11,006)
|
|
(16,121)
|
|
Total stockholders'
equity
|
|
10,959
|
|
6,015
|
|
Noncontrolling
interests in subsidiary
|
|
—
|
|
23
|
|
Total
equity
|
|
10,959
|
|
6,038
|
|
Total liabilities and
equity
|
|
$
50,873
|
|
$
50,710
|
|
|
|
|
|
|
Lockheed Martin
Corporation
|
Consolidated
Statements of Cash Flows
|
(unaudited;
in millions)
|
|
|
|
Years Ended Dec.
31,
|
|
|
2021
|
|
2020
|
Operating
activities
|
|
|
|
|
Net
earnings
|
|
$
6,315
|
|
$
6,833
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
|
Depreciation and
amortization
|
|
1,364
|
|
1,290
|
Stock-based
compensation
|
|
227
|
|
221
|
Equity method
investment impairment
|
|
—
|
|
128
|
Tax resolution related
to former IS&GS business
|
|
—
|
|
55
|
Deferred income
taxes
|
|
(183)
|
|
5
|
Pension settlement
charge
|
|
1,665
|
|
—
|
Severance and
restructuring charges
|
|
36
|
|
27
|
Changes in assets and
liabilities
|
|
|
|
|
Receivables,
net
|
|
15
|
|
359
|
Contract
assets
|
|
(1,034)
|
|
(451)
|
Inventories
|
|
564
|
|
74
|
Accounts
payable
|
|
(98)
|
|
(372)
|
Contract
liabilities
|
|
562
|
|
491
|
Income
taxes
|
|
45
|
|
(19)
|
Postretirement benefit
plans
|
|
(267)
|
|
(1,197)
|
Other, net
|
|
10
|
|
739
|
Net cash provided
by operating activities
|
|
9,221
|
|
8,183
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
|
(1,522)
|
|
(1,766)
|
Acquisitions of
businesses
|
|
—
|
|
(282)
|
Other, net
|
|
361
|
|
38
|
Net cash used for
investing activities
|
|
(1,161)
|
|
(2,010)
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Issuance of long-term
debt, net of related costs
|
|
—
|
|
1,131
|
Repayments of
long-term debt
|
|
(500)
|
|
(1,650)
|
Repurchases of common
stock
|
|
(4,087)
|
|
(1,100)
|
Dividends
paid
|
|
(2,940)
|
|
(2,764)
|
Other, net
|
|
(89)
|
|
(144)
|
Net cash used for
financing activities
|
|
(7,616)
|
|
(4,527)
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
444
|
|
1,646
|
Cash and cash
equivalents at beginning of period
|
|
3,160
|
|
1,514
|
Cash and cash
equivalents at end of period
|
|
$
3,604
|
|
$
3,160
|
|
|
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Lockheed Martin
Corporation
|
Consolidated
Statement of Equity
|
(unaudited;
in millions)
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Comm on Stock
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Additional Paid-in Capital
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Retained Earnings
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Accumulated Other Comprehensive Loss
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Total Stockholders' Equity
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|
Noncontrolling Interests in
Subsidiary
|
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Total Equity
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|
Balance at Dec.
31, 2020
|
|
$
|
279
|
|
$
|
221
|
|
$
|
21,636
|
|
$
|
(16,121)
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|
$
|
6,015
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|
$
|
23
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|
$
|
6,038
|
|
Net
earnings
|
|
|
—
|
|
|
—
|
|
|
6,315
|
|
|
—
|
|
|
6,315
|
|
|
—
|
|
|
6,315
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Other comprehensive
income, net of tax1
|
|
|
—
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|
|
—
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—
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|
5,115
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|
|
5,115
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|
—
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|
5,115
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Dividends
declared2
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—
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|
|
—
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|
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(2,944)
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|
—
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|
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(2,944)
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|
|
—
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|
(2,944)
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Repurchases of common
stock
|
|
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(9)
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|
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(671)
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|
|
(3,407)
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|
—
|
|
|
(4,087)
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|
|
—
|
|
|
(4,087)
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|
Stock-based awards,
ESOP activity and
other
|
|
|
1
|
|
|
544
|
|
|
—
|
|
|
—
|
|
|
545
|
|
|
—
|
|
|
545
|
|
Net decrease in
noncontrolling interests
in subsidiary
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
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|
|
(23)
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|
|
(23)
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|
Balance at Dec.
31, 2021
|
|
$
|
271
|
|
$
|
94
|
|
$
|
21,600
|
|
$
|
(11,006)
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|
$
|
10,959
|
|
$
|
—
|
|
$
|
10,959
|
|
|
|
|
|
|
|
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|
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1
|
The change in other
comprehensive loss, net of tax primarily relates to amounts
recognized for the company's post-retirement benefit
plans.
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2
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Represents dividends
of $2.60 per share declared for each of the first, second and third
quarters of 2021 and dividends of $2.80 per share declared for the
fourth quarter of 2021.
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Lockheed Martin
Corporation
|
Other Financial
and Operating Information
|
(unaudited;
in millions, except for aircraft deliveries and
weeks)
|
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|
Backlog
|
|
Dec.
31,
2021
|
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Dec.
31,
2020
|
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Aeronautics
|
|
$
49,118
|
|
$
56,551
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|
Missiles and Fire
Control
|
|
27,021
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29,183
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Rotary and Mission
Systems
|
|
33,700
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36,249
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Space
|
|
25,516
|
|
25,148
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|
Total
backlog
|
|
$
135,355
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|
$
147,131
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Quarters Ended
Dec. 31,
|
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Years Ended Dec.
31,
|
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Aircraft
Deliveries
|
|
2021
|
|
2020
|
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2021
|
|
2020
|
|
F-35
|
|
52
|
|
42
|
|
142
|
|
120
|
|
C-130J
|
|
7
|
|
10
|
|
22
|
|
22
|
|
Government helicopter
programs
|
|
37
|
|
32
|
|
90
|
|
80
|
|
Commercial helicopter
programs
|
|
1
|
|
1
|
|
3
|
|
1
|
|
International
military helicopter programs
|
|
8
|
|
8
|
|
17
|
|
15
|
|
Number of Weeks in
Reporting Period1
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|
2022
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|
2021
|
|
2020
|
|
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First
quarter
|
|
12
|
|
12
|
|
13
|
|
|
|
Second
quarter
|
|
13
|
|
13
|
|
13
|
|
|
|
Third
quarter
|
|
13
|
|
13
|
|
13
|
|
|
|
Fourth
quarter
|
|
14
|
|
14
|
|
13
|
|
|
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|
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1
|
Calendar quarters are
typically comprised of 13 weeks. However, the company closes
its books and records on the last Sunday of each month, except for
the month of Dec., as its fiscal year ends on Dec. 31. As a result,
the number of weeks in a reporting quarter may vary slightly during
the year and for comparable prior year periods.
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SOURCE Lockheed Martin