- Fourth quarter earnings per share up 8% to
- Fourth quarter net earnings up 3% to
- Fourth quarter net sales up 3% to
- Generated
- Provides updated outlook for 2009
For the year ended
"Our results for 2008 reflect excellent operational and financial performance across all business areas, despite the difficult economic environment," said
Summary Reported Results and Outlook
The following table presents the Corporation's results for the periods referenced in accordance with generally accepted accounting principles (GAAP):
REPORTED RESULTS 4th Quarter Year ----------- ---- (In millions, except per share data) 2008 2007 2008 2007 ---- ---- ---- ---- Net sales $11,132 $10,841 $42,731 $41,862 ======= ======= ======= ======= Operating profit ---------------- Segment operating profit $1,255 $1,256 $4,970 $4,691 Unallocated corporate, net: FAS/CAS pension adjustment 32 (12) 128 (58) Stock compensation expense (40) (33) (155) (149) Unusual items, net 48 -- 193 71 Other, net 53 4 (5) (28) -- - --- ---- 1,348 1,215 5,131 4,527 Interest expense 77 87 341 352 Other non-operating (expense) income, net (1) (102) 54 (88) 193 ----- -- ---- --- Earnings before income taxes 1,169 1,182 4,702 4,368 Income taxes 346 383 1,485 1,335 --- --- ----- ----- Net earnings $823 $799 $3,217 $3,033 ==== ==== ====== ====== Diluted earnings per share $2.05 $1.89 $7.86 $7.10 ========= ======== ========= ========= Cash from operations(2) $997 $425 $4,421 $4,238 ========= ===== ======== ======== (1) Includes interest income and unrealized (losses) gains, net on marketable securities held to fund certain non-qualified employee benefit obligations. (2) In the fourth quarter of 2008, the Corporation reclassified the effect of exchange rate changes on cash from "Cash from operations" to a separate caption in the Statement of Cash Flows for all periods presented (see Attachment F to this Press Release).
The following table and other sections of this press release contain forward-looking statements, which are based on the Corporation's current expectations. Actual results may differ materially from those projected. See the "Forward-Looking Statements" discussion contained in this press release.
2009 FINANCIAL OUTLOOK(1) 2009 Projections ---------------- (In millions, except per Current Update October 2008 share data and percentages) -------------- ------------- Net sales $44,700 - $45,700 $44,250 - $45,250 ================= ================= Operating profit: ----------------- Segment operating profit $5,175 - $5,275 $5,100 - $5,250 Unallocated corporate, net: FAS/CAS pension adjustment (470) (60) Stock compensation expense (160) (160) Unusual items, net -- -- Other, net (80) (80) 4,465 - 4,565 $4,800 - $4,950 Interest expense (305) (305) Other non-operating (expense) income, net (2) -- 35 Earnings before income $4,160 - $4,260 $4,530 - $4,680 taxes Diluted earnings per share $7.05 - $7.25 $7.65 - $7.90 Cash from operations >/= $4,000 >/= $4,000 ----------- ----------- ROIC(3) >/= 18.0% >/= 20.0% ----------- ----------- (1) All amounts approximate. (2) Includes interest income and unrealized (losses) gains, net on marketable securities held to fund certain non-qualified employee benefit obligations. (3) See discussion of non-GAAP performance measures at the end of this document.
The revision in the Corporation's projected 2009 diluted earnings per share results primarily from the net impact of the following:
-- a higher level of projected sales and segment operating profit in our Information Systems & Global Services and Electronic Systems business segments; -- an increase in projected FAS pension expense related to the following updates: -- as a result of significant declines in interest rates during the last few weeks of December, the Corporation selected a 6.125% discount rate at the year-end 2008 measurement date versus the 7.50% assumed in the prior outlook; -- actual return on plan assets in 2008 of (28%) as compared to the (25%) return assumed in the prior outlook; and -- the benefit of $109 million in pre-funding for various pension trusts during the fourth quarter of 2008, as discussed below. -- a reduction in Other non-operating income as a result of declines in assumed yields on cash balances; and -- the benefit of a reduction in projected weighted average shares outstanding.
It is the Corporation's practice not to incorporate adjustments to its outlook for proposed acquisitions, divestitures, joint ventures, or other unusual activities until such transactions have been consummated.
Re-Measurement of Post-Retirement Benefit Plans
In accordance with the provisions of Statement of Financial Accounting Standards 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans," (FAS 158), the Corporation is required to re-measure its pension and other post-retirement plans at
The net impact of the annual re-measurement process was a non-cash, balance sheet only adjustment, which decreased stockholders' equity by approximately
The Corporation made discretionary payments totaling
Balanced Cash Deployment Strategy
The Corporation continued to execute its balanced cash deployment strategy during 2008 by:
-- repurchasing 6.7 million shares at a cost of $575 million in the quarter and 29.0 million shares at a cost of $2.9 billion in the year; -- retiring $1.0 billion of long-term debt in the third quarter as a result of the floating rate convertible debt redemption and a total of $1.1 billion during the year; -- making capital expenditures of $423 million during the quarter and $926 million during the year; -- paying cash dividends of $227 million in the quarter and $737 million in the year; and -- investing $38 million in the quarter and $233 million during the year for acquisition and investment activities.
Segment Results
The Corporation operates in four principal business segments: Electronic Systems; Information Systems & Global Services (IS&GS); Aeronautics; and Space Systems.
The following table presents the operating results of the four business segments and reconciles these amounts to the Corporation's consolidated financial results.
(In millions) 4th Quarter Year ----------- ---- 2008 2007 2008 2007 ---- ---- ---- ---- Net sales --------- Electronic Systems $2,934 $2,874 $11,620 $11,143 IS&GS 3,299 2,835 11,611 10,213 Aeronautics 2,865 3,004 11,473 12,303 Space Systems 2,034 2,128 8,027 8,203 ----- ----- ----- ----- Total net sales $11,132 $10,841 $42,731 $41,862 ======= ======= ======= ======= Operating profit ---------------- Electronic Systems $369 $360 $1,508 $1,410 IS&GS 307 275 1,076 949 Aeronautics 369 385 1,433 1,476 Space Systems 210 236 953 856 --- --- --- --- Segment operating profit 1,255 1,256 4,970 4,691 Unallocated corporate income (expense), net 93 (41) 161 (164) -- ---- --- ----- Total operating profit $1,348 $1,215 $5,131 $4,527 ====== ====== ====== ======
In the following comparison of segment operating results, changes in net sales and operating profit are generally expressed in terms of volume and/or performance. Volume refers to increases (or decreases) in sales resulting from varying production activity levels, deliveries or services levels on individual contracts. Volume changes typically include a corresponding change in operating profit based on the estimated profit rate at completion for a particular contract for design, development and production activities. Performance generally refers to changes in contract booking rates. These changes on our contracts for products usually relate to profit recognition associated with revisions to total estimated costs at completion of the contracts that reflect improved (or deteriorated) operating or award fee performance on a particular contract. Changes in contract booking rates on contracts for products are recognized by recording adjustments in the current period for the inception-to-date effect of the changes on current and prior periods. Recognition of the inception-to-date adjustment in the current or prior periods may affect the comparison of segment operating results.
Electronic Systems
($ millions) 4th Quarter Year ----------- ---- 2008 2007 2008 2007 ---- ---- ---- ---- Net sales $2,934 $2,874 $11,620 $11,143 Operating profit $369 $360 $1,508 $1,410 Operating margin 12.6% 12.5% 13.0% 12.7%
Net sales for Electronic Systems increased by 2% for the quarter and 4% for the year ended
Operating profit for Electronic Systems increased by 3% for the quarter and 7% for the year ended
Information Systems & Global Services
($ millions) 4th Quarter Year ----------------- ---- 2008 2007 2008 2007 ---- ---- ---- ---- Net sales $3,299 $2,835 $11,611 $10,213 Operating profit $307 $275 $1,076 $949 Operating margin 9.3% 9.7% 9.3% 9.3%
Net sales for IS&GS increased by 16% for the quarter and 14% for the year ended
Operating profit for IS&GS increased by 12% for the quarter and 13% for the year ended
Aeronautics
($ millions) 4th Quarter Year ----------- ---- 2008 2007 2008 2007 ---- ---- ---- ---- Net sales $2,865 $3,004 $11,473 $12,303 Operating profit $369 $385 $1,433 $1,476 Operating margin 12.9% 12.8% 12.5% 12.0%
Net sales for Aeronautics decreased by 5% for the quarter and 7% for the year ended
Operating profit decreased by 4% for the quarter and 3% for the year ended
Space Systems
($ millions) 4th Quarter Year ----------------- ---- 2008 2007 2008 2007 ---- ---- ---- ---- Net sales $2,034 $2,128 $8,027 $8,203 Operating profit $210 $236 $953 $856 Operating margin 10.3% 11.1% 11.9% 10.4%
Net sales for Space Systems decreased 4% for the quarter and 2% for the year ended
Operating profit decreased by 11% for the quarter and increased by 11% for the year ended
Unallocated Corporate Income (Expense), Net
($ millions) 4th Quarter Year ----------------- ---- 2008 2007 2008 2007 ---- ---- ---- ---- FAS/CAS pension adjustment $32 $(12) $128 $(58) Stock compensation expense (40) (33) (155) (149) Unusual items, net 48 -- 193 71 Other, net 53 4 (5) (28) -- - - ---- Unallocated corporate income (expense), net $93 $(41) $161 $(164) === ===== ==== ======
Consistent with the manner in which the Corporation's business segment operating performance is evaluated by senior management, certain items are excluded from the business segment results and included in "Unallocated corporate income (expense), net." See the Corporation's 2007 Form 10-K for a description of "Unallocated corporate income (expense), net," including the FAS/CAS pension adjustment.
The FAS/CAS pension adjustment (calculated as the difference between FAS 87 expense and the CAS cost amounts) moved from expense to income in 2008 due to an increase in the discount rate and other factors such as actual return on plan assets. This change is consistent with the Corporation's previously disclosed assumptions used to compute the 2008 amounts.
For purposes of segment reporting, the following unusual items were included in "Unallocated corporate income (expense), net" for the quarters and years ended
2008 -
-- A fourth quarter gain, net of state income taxes, of $48 million representing the recognition of the remaining portion of the deferred net gain from the 2006 sale of the Corporation's ownership interest in Lockheed Khrunichev Energia International, Inc. (LKEI) and International Launch Services, Inc. (ILS). At the time of the sale, the Corporation deferred recognition of any gains pending the expiration of its responsibility to refund advances for future launch services. -- A third quarter gain, net of state income taxes, of $44 million representing the recognition of a portion of the deferred net gain from the 2006 sale of the Corporation's ownership interest in LKEI and ILS. -- Second quarter earnings, net of state income taxes, of $85 million associated with reserves related to various land sales that are no longer required. Reserves were recorded at the time of each land sale based on the U.S. Government's assertion of its right to share in the sale proceeds. This matter was favorably settled with the U.S. Government in the second quarter. -- A first quarter gain, net of state income taxes, of $16 million representing the recognition of a portion of the deferred net gain from the 2006 sale of the Corporation's ownership interest in LKEI and ILS.
Recognition of the deferred net gain increased net earnings by
2007 -
-- A second quarter gain, net of state income taxes, of $25 million related to the sale of the Corporation's remaining 20% interest in COMSAT International. -- A first quarter gain, net of state income taxes, of $25 million related to the sale of land. -- First quarter earnings, net of state income taxes, of $21 million related to the reversal of legal reserves from the settlement of certain litigation claims.
These items and the 2007 first quarter income tax benefit of
The increase in "Other, net" for the quarter and year ended
The Corporation also reported in "other non-operating (expense) income, net" for both the quarter and year ended
Income Taxes
Our effective income tax rates were 29.6% and 31.6% for the quarter and year ended
The Emergency Economic Stabilization Act of 2008 signed by the President on
Headquartered in
Web site: www.lockheedmartin.com
Conference call: Lockheed Martin will webcast the earnings conference call (listen-only mode) at
http://www.lockheedmartin.com/investor.
FORWARD-LOOKING STATEMENTS
Statements in this release that are "forward-looking statements" are based on Lockheed Martin's current expectations and assumptions. Forward-looking statements in this release include estimates of future sales, earnings and cash flow. These statements are not guarantees of future performance and are subject to risks and uncertainties. Actual results could differ materially due to factors such as: the availability of government funding for our products and services both domestically and internationally; changes in government and customer priorities and requirements (including changes to respond to the priorities of the new U.S. Administration and Congress, Department of Defense reviews, budgetary constraints, and cost-cutting initiatives); the impact of economic recovery and stimulus plans and continued military operations in
These are only some of the factors that may affect the forward-looking statements contained in this press release. For further information regarding risks and uncertainties associated with Lockheed Martin's business, please refer to the Corporation's SEC filings, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors," and "Legal Proceedings" sections of the Corporation's 2007 annual report on Form 10-K, which may be obtained at the Corporation's website: http://www.lockheedmartin.com
It is the Corporation's policy to only update or reconfirm its financial projections by issuing a press release. The Corporation generally plans to provide a forward-looking outlook as part of its quarterly earnings release but reserves the right to provide an outlook at different intervals or to revise its practice in future periods. All information in this release is as of
NON-GAAP PERFORMANCE MEASURES
The Corporation believes that reporting ROIC provides investors with greater visibility into how effectively Lockheed Martin uses the capital invested in its operations. The Corporation uses ROIC to evaluate multi-year investment decisions and as a long-term performance measure, and also uses ROIC as a factor in evaluating management performance for incentive compensation purposes. ROIC is not a measure of financial performance under generally accepted accounting principles, and may not be defined and calculated by other companies in the same manner. ROIC should not be considered in isolation or as an alternative to net earnings as an indicator of performance.
The Corporation calculates ROIC as follows:
Net earnings plus after-tax interest expense divided by average invested capital (stockholders' equity plus debt), after adjusting stockholders' equity by adding back adjustments related to postretirement benefit plans.
(In millions, except 2008 Actual 2007 Actual percentages) ----------- ----------- Net Earnings $3,217 $3,033 Interest Expense (multiplied by 65%)(1) 222 229 Return $3,439 $3,262 Average Debt(2, 5) $4,346 $4,416 Average Equity(3, 5) 8,236 7,661 Average Benefit Plan Adjustments(4,5) 3,256 3,171 Average Invested Capital $15,838 $15,248 Return on Invested Capital 21.7% 21.4%
(In millions, except 2009 Projections percentages) ---------------- Current Update October 2008 -------------- ------------ Net Earnings Combined Combined Interest Expense (multiplied by 65%) (1) Return >/= $3,000 >/= $3,300 Average Debt (2, 5) Combined Combined Average Equity (3, 5) Average Benefit Plan Adjustments(4,5) Average Invested Capital < / = $16,650 < / = $16,500 Return on Invested Capital >/= 18.0% >/= 20.0% (1) Represents after-tax interest expense utilizing the federal statutory rate of 35%. (2) Debt consists of long-term debt, including current maturities, and short-term borrowings (if any). (3) Equity includes non-cash adjustments, primarily for unrecognized benefit plan actuarial losses and prior service costs, the adjustment for the adoption of FAS 158 in 2006 and the additional minimum pension liability in years prior to 2007. (4) Average Benefit Plan Adjustments reflect the cumulative value of entries identified in our Statement of Stockholders' Equity discussed in Note 3. (5) Yearly averages are calculated using balances at the start of the year and at the end of each quarter.
LOCKHEED MARTIN CORPORATION Consolidated Condensed Statement of Earnings Unaudited (In millions, except per share data and percentages) QUARTER ENDED YEAR ENDED ------------- ---------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2008 2007 2008 2007 -------- --------- --------- --------- Net sales $11,132 $10,841 $42,731 $41,862 Cost of sales 9,865 9,717 38,082 37,628 ----- ----- ------ ------ 1,267 1,124 4,649 4,234 Other income (expense), net 81 91 482 293 -- -- --- --- Operating profit 1,348 1,215 5,131 4,527 Interest expense 77 87 341 352 Other non-operating (expense) income, net (102) 54 (88) 193 ---- -- --- --- Earnings before income taxes 1,169 1,182 4,702 4,368 Income tax expense 346 383 1,485 1,335 --- --- ----- ----- Net earnings $823 $799 $3,217 $3,033 ==== ==== ====== ====== Effective tax rate 29.6% 32.4% 31.6% 30.6% ==== ==== ==== ==== Earnings per common share: Basic $2.08 $1.94 $8.05 $7.29 Diluted $2.05 $1.89 $7.86 $7.10 Average number of shares outstanding: Basic 395.8 412.3 399.7 416.0 Diluted 400.7 423.4 409.4 427.1 Common shares reported in stockholders' equity at quarter end: 392.7 409.4 A LOCKHEED MARTIN CORPORATION Net Sales, Operating Profit and Margins Unaudited (In millions, except percentages) QUARTER ENDED YEAR ENDED ------------- ---------- Dec. 31, Dec. 31, % Dec. 31, Dec. 31, % 2008 2007 Change 2008 2007 Change --------- --------- ------ --------- --------- ------ Net sales --------- Electronic Systems $2,934 $2,874 2% $11,620 $11,143 4% Information Systems & Global Services 3,299 2,835 16 11,611 10,213 14 Aeronautics 2,865 3,004 (5) 11,473 12,303 (7) Space Systems 2,034 2,128 (4) 8,027 8,203 (2) ----- ----- ----- ----- Total net sales $11,132 $10,841 3% $42,731 $41,862 2% ======= ======= ======= ======= Operating profit ---------------- Electronic Systems $369 $360 3% $1,508 $1,410 7% Information Systems & Global Services 307 275 12 1,076 949 13 Aeronautics 369 385 (4) 1,433 1,476 (3) Space Systems 210 236 (11) 953 856 11 --- --- --- --- Segment operating profit 1,255 1,256 - 4,970 4,691 6 Unallocated corporate income (expense) , net 93 (41) 161 (164) -- --- --- ---- $1,348 $1,215 11% $5,131 $4,527 13% ====== ====== ====== ====== Margins: -------- Electronic Systems 12.6% 12.5% 13.0% 12.7% Information Systems & Global Services 9.3 9.7 9.3 9.3 Aeronautics 12.9 12.8 12.5 12.0 Space Systems 10.3 11.1 11.9 10.4 Total operating segments 11.3% 11.6% 11.6% 11.2% Total consolidated 12.1% 11.2% 12.0% 10.8% B LOCKHEED MARTIN CORPORATION Selected Financial Data Unaudited (In millions, except per share data) QUARTER ENDED YEAR ENDED ------------- ---------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2008 2007 2008 2007 ---------- ---------- ---------- ---------- Unallocated corporate income (expense), net ---------------------- FAS/CAS pension adjustment $32 $(12) $128 $(58) Stock compensation expense (40) (33) (155) (149) Unusual items, net 48 - 193 71 Other, net 53 4 (5) (28) -- - -- --- Unallocated corporate income (expense) , net $93 $(41) $161 $(164) === ==== ==== ===== QUARTER ENDED YEAR ENDED ------------- ---------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2008 2007 2008 2007 ---------- ---------- ---------- ---------- FAS/CAS pension adjustment --------------- FAS 87 expense $(115) $(169) $(462) $(687) Less: CAS costs (147) (157) (590) (629) ---- ---- ---- ---- FAS/CAS pension adjustment -income (expense) $32 $(12) $128 $(58) === ==== ==== ==== QUARTER ENDED YEAR ENDED DECEMBER 31, 2008 DECEMBER 31, 2008 ----------------- ----------------- Earnings Earnings Operating Net per Operating Net per profit earnings share profit earnings share ---------- -------- --------- ---------- -------- --------- Unusual Items - 2008 -------- ILS/LKEI deferred gain $48 $32 $0.08 $108 $70 $0.17 Earnings associated with prior years' land sales - - - 85 56 0.14 - - - -- -- ---- $48 $32 $0.08 $193 $126 $0.31 === === ===== ==== ==== ===== QUARTER ENDED YEAR ENDED DECEMBER 31, 2007 DECEMBER 31, 2007 ----------------- ----------------- Earnings Earnings Operating Net per Operating Net per profit earnings share profit earnings share ---------- -------- --------- ---------- -------- --------- Unusual Items - 2007 -------- Gain on sale of interest in Comsat Inter- national $- $- $- $25 $16 $0.04 Gain on sale of surplus land - - - 25 16 0.04 Earnings from reversal of legal reserves - - - 21 14 0.03 Benefit from closure of an IRS audit - - - - 59 0.14 - - - - -- ---- $- $- $- $71 $105 $0.25 == == == === ==== ===== C LOCKHEED MARTIN CORPORATION Selected Financial Data Unaudited (In millions) QUARTER ENDED YEAR ENDED ------------- ---------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2008 2007 2008 2007 --------- --------- --------- --------- Depreciation and amortization of plant and equipment -------------------------- Electronic Systems $63 $77 $252 $227 Information Systems & Global Services 17 16 66 68 Aeronautics 53 60 190 181 Space Systems 57 46 166 136 -- -- --- --- Segments 190 199 674 612 Unallocated corporate expense, net 15 13 53 54 -- -- -- -- Total depreciation and amortization $205 $212 $727 $666 ==== ==== ==== ==== QUARTER ENDED YEAR ENDED ------------- ---------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2008 2007 2008 2007 --------- --------- --------- --------- Amortization of purchased intangibles ------------------------- Electronic Systems $2 $5 $10 $27 Information Systems & Global Services 11 13 44 55 Aeronautics 12 12 50 50 Space Systems 2 3 5 9 - - - - Segments 27 33 109 141 Unallocated corporate expense, net 1 3 9 12 - - - -- Total amortization of purchased intangibles $28 $36 $118 $153 === === ==== ==== D LOCKHEED MARTIN CORPORATION Consolidated Condensed Balance Sheet Unaudited (In millions) December 31, December 31, 2008 2007 ---- ---- Assets ------ Cash and cash equivalents $2,168 $2,648 Short-term investments 61 333 Receivables 5,296 4,925 Inventories 1,902 1,718 Deferred income taxes 755 756 Other current assets 500 560 --- --- Total current assets 10,682 10,940 Property, plant and equipment, net 4,488 4,320 Goodwill 9,526 9,387 Purchased intangibles, net 355 463 Prepaid pension asset 122 313 Deferred income taxes 4,651 760 Other assets 3,610 2,743 ----- ----- Total assets $33,434 $28,926 ======= ======= Liabilities and Stockholders' Equity ------------------------------------ Accounts payable $2,013 $2,163 Customer advances and amounts in excess of costs incurred 4,535 4,212 Current maturities of long-term debt 242 104 Other accrued expenses 3,734 3,549 ----- ----- Total current liabilities 10,524 10,028 Long-term debt, net 3,563 4,303 Accrued pension liabilities 12,004 1,192 Other postretirement and other noncurrent liabilities 4,478 3,598 Stockholders' equity 2,865 9,805 ----- ----- Total liabilities and stockholders' equity $33,434 $28,926 ======= ======= Total debt-to-capitalization ratio: 57% 31% == == E LOCKHEED MARTIN CORPORATION Consolidated Condensed Statement of Cash Flows Unaudited (In millions) YEAR ENDED ---------- Dec. 31, Dec. 31, 2008 2007 --------- --------- Operating Activities -------------------- Net earnings $3,217 $3,033 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 727 666 Amortization of purchased intangibles 118 153 Stock-based compensation 155 149 Excess tax benefit on stock compensation (92) (124) Changes in operating assets and liabilities: Receivables (333) (324) Inventories (183) (57) Accounts payable (159) (66) Customer advances and amounts in excess of costs incurred 313 394 Other 658 414 --- --- Net cash provided by operating activities (a) 4,421 4,238 ----- ----- Investing Activities -------------------- Expenditures for property, plant and equipment (926) (940) Sale of short-term investments, net 272 48 Acquisitions of businesses / investments in affiliates (233) (337) Divestiture of investment in affiliate - 26 Other (20) (2) --- -- Net cash used for investing activities (907) (1,205) ---- ------ Financing Activities -------------------- Repurchases of common stock (2,931) (2,127) Issuances of common stock and related amounts 250 350 Excess tax benefit on stock compensation 92 124 Common stock dividends (737) (615) Issuance of long-term debt and related costs 491 - Repayments of long-term debt (1,103) (32) ------ --- Net cash used for financing activities (3,938) (2,300) ------ ------ Effect of exchange rate changes on cash (a) (56) 3 Net (decrease) increase in cash and cash equivalents (480) 736 Cash and cash equivalents at beginning of period 2,648 1,912 ----- ----- Cash and cash equivalents at end of period $2,168 $2,648 ====== ====== (a) In the fourth quarter of 2008, the Corporation reclassified the effect of exchange rate changes on cash from "Other" within "Net cash provided by operating activities" to a separate reconciling item in the Consolidated Condensed Statement of Cash Flows. Prior year amounts have been reclassified to conform to this presentation. F LOCKHEED MARTIN CORPORATION Consolidated Condensed Statement of Stockholders' Equity Unaudited (In millions) Accumulated Additional Other Total Common Paid-In Retained Comprehensive Stockholders' Stock Capital Earnings Loss Equity ----- ------- -------- ---- ------ Balance at January 1, 2008 $409 $- $11,247 $(1,851) $9,805 Net earnings 3,217 3,217 Common stock dividends (a) (737) (737) Conversion of debentures 5 58 63 Stock-based awards and ESOP activity 8 738 746 Repurchases of common stock(b) (29) (796) (2,106) (2,931) Other comprehensive loss (c) (7,298) (7,298) Balance at December 31, ---- ------ ------- -------- ------ 2008 $393 $- $11,621 $(9,149) $2,865 ==== ====== ======= ======== ====== (a) Includes dividends ($0.42 per share) declared and paid in the first, second and third quarters and a dividend ($0.57 per share) paid in the fourth quarter. (b) The Corporation repurchased 6.7 million shares for $575 million during the fourth quarter. During the year, the Corporation repurchased 29.0 million shares for $2.9 billion. The Corporation has 33.7 million shares remaining under its share repurchase program as of the end of 2008. (c) At December 31, 2008, the Corporation recognized a non-cash, after-tax reduction of stockholders' equity of approximately $7.25 billion, as a result of the required remeasurement of the pension plans. The decrease was primarily the result of actual return on plan assets in 2008 of (28%) and a lower discount rate at December 31, 2008 of 6.125% compared to 6.375% at December 31, 2007. G LOCKHEED MARTIN CORPORATION Operating Data Unaudited (In millions) December 31, December 31, 2008 2007 ---- ---- Backlog ------- Electronic Systems $22,500 $21,200 Information Systems & Global Services 13,300 11,800 Aeronautics 27,200 26,300 Space Systems 17,900 17,400 ------ ------ Total $80,900 $76,700 ======= ======= QUARTER ENDED YEAR ENDED ------------- ---------- Dec. 31, Dec. 31, Dec. 31, Dec. 31, Aircraft Deliveries 2008 2007 2008 2007 ------------ ---- ---- ---- ---- F-16 5 9 28 41 F-22 6 7 23 24 C-130J 3 3 12 12 H
SOURCE Lockheed Martin Corporation