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Maryland
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52-1893632
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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6801 Rockledge Drive, Bethesda, Maryland
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20817
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(Address of principal executive offices)
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(Zip Code)
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Page
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 6.
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Quarters Ended
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Six Months Ended
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||||||||||||||||
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June 24,
2018 |
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June 25,
2017 |
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June 24,
2018 |
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June 25,
2017 |
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Net sales
|
|
|
|
|
|
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|
|
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|
||||||||
Products
|
|
$
|
11,150
|
|
|
|
$
|
10,622
|
|
|
|
$
|
20,912
|
|
|
|
$
|
20,235
|
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|
Services
|
|
2,248
|
|
|
|
1,941
|
|
|
|
4,121
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|
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3,540
|
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|
||||
Total net sales
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13,398
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|
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|
12,563
|
|
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25,033
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23,775
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|
||||
Cost of sales
|
|
|
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||||||||
Products
|
|
(9,993
|
)
|
|
|
(9,562
|
)
|
|
|
(18,690
|
)
|
|
|
(18,306
|
)
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|
||||
Services
|
|
(1,967
|
)
|
|
|
(1,706
|
)
|
|
|
(3,656
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)
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|
|
(3,140
|
)
|
|
||||
Severance and restructuring charges
|
|
(96
|
)
|
|
|
—
|
|
|
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(96
|
)
|
|
|
—
|
|
|
||||
Other unallocated, net
|
|
411
|
|
|
|
361
|
|
|
|
820
|
|
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733
|
|
|
||||
Total cost of sales
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(11,645
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)
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(10,907
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)
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(21,622
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)
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(20,713
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)
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||||
Gross profit
|
|
1,753
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|
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|
1,656
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|
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3,411
|
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3,062
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||||
Other income, net
|
|
42
|
|
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|
60
|
|
|
|
109
|
|
|
|
56
|
|
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||||
Operating profit
|
|
1,795
|
|
|
|
1,716
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|
|
|
3,520
|
|
|
|
3,118
|
|
|
||||
Interest expense
|
|
(165
|
)
|
|
|
(160
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)
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(320
|
)
|
|
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(315
|
)
|
|
||||
Other non-operating expense, net
|
|
(210
|
)
|
|
|
(214
|
)
|
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(420
|
)
|
|
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(426
|
)
|
|
||||
Earnings before income taxes
|
|
1,420
|
|
|
|
1,342
|
|
|
|
2,780
|
|
|
|
2,377
|
|
|
||||
Income tax expense
|
|
(257
|
)
|
|
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(387
|
)
|
|
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(460
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)
|
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(633
|
)
|
|
||||
Net earnings
|
|
$
|
1,163
|
|
|
|
$
|
955
|
|
|
|
$
|
2,320
|
|
|
|
$
|
1,744
|
|
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|
|
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||||||||
Earnings per common share
|
|
|
|
|
|
|
|
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|
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||||||||
Basic
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|
$
|
4.08
|
|
|
|
$
|
3.31
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|
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$
|
8.13
|
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|
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$
|
6.03
|
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Diluted
|
|
$
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4.05
|
|
|
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$
|
3.28
|
|
|
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$
|
8.07
|
|
|
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$
|
5.97
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|
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Cash dividends paid per common share
|
|
$
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2.00
|
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|
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$
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1.82
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|
|
$
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4.00
|
|
|
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$
|
3.64
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Net earnings
|
|
$
|
1,163
|
|
|
|
$
|
955
|
|
|
|
$
|
2,320
|
|
|
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$
|
1,744
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|
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Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
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|
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|
||||||||
Postretirement benefit plans
|
|
|
|
|
|
|
|
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|
|
||||||||
Amounts reclassified from accumulated other comprehensive loss
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|
300
|
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|
|
200
|
|
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|
600
|
|
|
|
402
|
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|
||||
Other comprehensive gain recognized during the period
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—
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—
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—
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3
|
|
|
||||
Other, net
|
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(106
|
)
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|
55
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|
|
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(48
|
)
|
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|
60
|
|
|
||||
Other comprehensive income, net of tax
|
|
194
|
|
|
|
255
|
|
|
|
552
|
|
|
|
465
|
|
|
||||
Comprehensive income
|
|
$
|
1,357
|
|
|
|
$
|
1,210
|
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|
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$
|
2,872
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|
|
|
$
|
2,209
|
|
|
|
|
June 24,
2018 |
|
December 31,
2017 |
||||||
Assets
|
|
|
|
|
|
|
||||
Current assets
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,181
|
|
|
|
$
|
2,861
|
|
|
Receivables, net
|
|
2,482
|
|
|
|
2,265
|
|
|
||
Contract assets
|
|
9,281
|
|
|
|
7,992
|
|
|
||
Inventories
|
|
3,038
|
|
|
|
2,878
|
|
|
||
Other current assets
|
|
522
|
|
|
|
1,509
|
|
|
||
Total current assets
|
|
16,504
|
|
|
|
17,505
|
|
|
||
Property, plant and equipment, net
|
|
5,786
|
|
|
|
5,775
|
|
|
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Goodwill
|
|
10,781
|
|
|
|
10,807
|
|
|
||
Intangible assets, net
|
|
3,646
|
|
|
|
3,797
|
|
|
||
Deferred income taxes
|
|
3,051
|
|
|
|
3,156
|
|
|
||
Other noncurrent assets
|
|
5,357
|
|
|
|
5,580
|
|
|
||
Total assets
|
|
$
|
45,125
|
|
|
|
$
|
46,620
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
|
|
||||
Accounts payable
|
|
$
|
2,675
|
|
|
|
$
|
1,467
|
|
|
Contract liabilities
|
|
6,413
|
|
|
|
7,028
|
|
|
||
Salaries, benefits and payroll taxes
|
|
2,051
|
|
|
|
1,785
|
|
|
||
Current maturities of long-term debt
|
|
750
|
|
|
|
750
|
|
|
||
Other current liabilities
|
|
1,992
|
|
|
|
1,883
|
|
|
||
Total current liabilities
|
|
13,881
|
|
|
|
12,913
|
|
|
||
Long-term debt, net
|
|
13,479
|
|
|
|
13,513
|
|
|
||
Accrued pension liabilities
|
|
12,196
|
|
|
|
15,703
|
|
|
||
Other postretirement benefit liabilities
|
|
706
|
|
|
|
719
|
|
|
||
Other noncurrent liabilities
|
|
4,384
|
|
|
|
4,548
|
|
|
||
Total liabilities
|
|
44,646
|
|
|
|
47,396
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
|
||||
Common stock, $1 par value per share
|
|
283
|
|
|
|
284
|
|
|
||
Additional paid-in capital
|
|
—
|
|
|
|
—
|
|
|
||
Retained earnings
|
|
14,528
|
|
|
|
11,405
|
|
|
||
Accumulated other comprehensive loss
|
|
(14,395
|
)
|
|
|
(12,539
|
)
|
|
||
Total stockholders’ equity (deficit)
|
|
416
|
|
|
|
(850
|
)
|
|
||
Noncontrolling interests in subsidiary
|
|
63
|
|
|
|
74
|
|
|
||
Total equity (deficit)
|
|
479
|
|
|
|
(776
|
)
|
|
||
Total liabilities and equity
|
|
$
|
45,125
|
|
|
|
$
|
46,620
|
|
|
|
|
Six Months Ended
|
||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
||||||
Operating activities
|
|
|
|
|
|
|
||||
Net earnings
|
|
$
|
2,320
|
|
|
|
$
|
1,744
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
566
|
|
|
|
581
|
|
|
||
Stock-based compensation
|
|
98
|
|
|
|
101
|
|
|
||
Severance and restructuring charges
|
|
96
|
|
|
|
—
|
|
|
||
Changes in assets and liabilities
|
|
|
|
|
|
|
||||
Receivables, net
|
|
(217
|
)
|
|
|
(619
|
)
|
|
||
Contract assets
|
|
(1,289
|
)
|
|
|
(170
|
)
|
|
||
Inventories
|
|
(160
|
)
|
|
|
(38
|
)
|
|
||
Accounts payable
|
|
1,224
|
|
|
|
940
|
|
|
||
Contract liabilities
|
|
(615
|
)
|
|
|
(388
|
)
|
|
||
Postretirement benefit plans
|
|
(2,790
|
)
|
|
|
685
|
|
|
||
Income taxes
|
|
928
|
|
|
|
3
|
|
|
||
Other, net
|
|
399
|
|
|
|
371
|
|
|
||
Net cash provided by operating activities
|
|
560
|
|
|
|
3,210
|
|
|
||
Investing activities
|
|
|
|
|
|
|
||||
Capital expenditures
|
|
(480
|
)
|
|
|
(448
|
)
|
|
||
Other, net
|
|
151
|
|
|
|
9
|
|
|
||
Net cash used for investing activities
|
|
(329
|
)
|
|
|
(439
|
)
|
|
||
Financing activities
|
|
|
|
|
|
|
||||
Dividends paid
|
|
(1,156
|
)
|
|
|
(1,069
|
)
|
|
||
Repurchases of common stock
|
|
(610
|
)
|
|
|
(1,000
|
)
|
|
||
Other, net
|
|
(145
|
)
|
|
|
(87
|
)
|
|
||
Net cash used for financing activities
|
|
(1,911
|
)
|
|
|
(2,156
|
)
|
|
||
Net change in cash and cash equivalents
|
|
(1,680
|
)
|
|
|
615
|
|
|
||
Cash and cash equivalents at beginning of period
|
|
2,861
|
|
|
|
1,837
|
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,181
|
|
|
|
$
|
2,452
|
|
|
|
Common
Stock
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders’
Equity
|
Noncontrolling
Interests in
Subsidiary
|
Total
Equity
|
|||||||||||||||||
Balance at December 31, 2017
|
$
|
284
|
|
$
|
—
|
|
$
|
11,405
|
|
$
|
(12,539
|
)
|
|
$
|
(850
|
)
|
|
$
|
74
|
|
|
$
|
(776
|
)
|
Net earnings
|
—
|
|
—
|
|
2,320
|
|
—
|
|
|
2,320
|
|
|
—
|
|
|
2,320
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
552
|
|
|
552
|
|
|
—
|
|
|
552
|
|
|||||||
Repurchases of common stock
|
(2
|
)
|
(161
|
)
|
(460
|
)
|
—
|
|
|
(623
|
)
|
|
—
|
|
|
(623
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
(1,145
|
)
|
—
|
|
|
(1,145
|
)
|
|
—
|
|
|
(1,145
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
1
|
|
161
|
|
—
|
|
—
|
|
|
162
|
|
|
—
|
|
|
162
|
|
|||||||
Reclassification of income tax effects from tax reform
|
—
|
|
—
|
|
2,408
|
|
(2,408
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||||||
Balance at June 24, 2018
|
$
|
283
|
|
$
|
—
|
|
$
|
14,528
|
|
$
|
(14,395
|
)
|
|
$
|
416
|
|
|
$
|
63
|
|
|
$
|
479
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2016
|
$
|
289
|
|
$
|
—
|
|
$
|
13,195
|
|
$
|
(12,102
|
)
|
|
$
|
1,382
|
|
|
$
|
95
|
|
|
$
|
1,477
|
|
Net earnings
|
—
|
|
—
|
|
1,744
|
|
—
|
|
|
1,744
|
|
|
—
|
|
|
1,744
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
—
|
|
465
|
|
|
465
|
|
|
—
|
|
|
465
|
|
|||||||
Repurchases of common stock
|
(4
|
)
|
(168
|
)
|
(828
|
)
|
—
|
|
|
(1,000
|
)
|
|
—
|
|
|
(1,000
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
(1,585
|
)
|
—
|
|
|
(1,585
|
)
|
|
—
|
|
|
(1,585
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
1
|
|
168
|
|
—
|
|
—
|
|
|
169
|
|
|
—
|
|
|
169
|
|
|||||||
Net decrease in noncontrolling interests in subsid
iary
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||||||
Balance at June 25, 2017
|
$
|
286
|
|
$
|
—
|
|
$
|
12,526
|
|
$
|
(11,637
|
)
|
|
$
|
1,175
|
|
|
$
|
84
|
|
|
$
|
1,259
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||
Weighted average common shares outstanding for basic computations
|
|
285.0
|
|
|
|
288.5
|
|
|
|
285.2
|
|
|
|
289.2
|
|
|
Weighted average dilutive effect of equity awards
|
|
2.1
|
|
|
|
2.7
|
|
|
|
2.3
|
|
|
|
2.8
|
|
|
Weighted average common shares outstanding for diluted computations
|
|
287.1
|
|
|
|
291.2
|
|
|
|
287.5
|
|
|
|
292.0
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
5,321
|
|
|
|
$
|
4,922
|
|
|
|
$
|
9,719
|
|
|
|
$
|
9,042
|
|
|
Missiles and Fire Control
|
|
2,085
|
|
|
|
1,784
|
|
|
|
3,762
|
|
|
|
3,333
|
|
|
||||
Rotary and Mission Systems
|
|
3,566
|
|
|
|
3,414
|
|
|
|
6,789
|
|
|
|
6,541
|
|
|
||||
Space
|
|
2,426
|
|
|
|
2,443
|
|
|
|
4,763
|
|
|
|
4,859
|
|
|
||||
Total net sales
|
|
$
|
13,398
|
|
|
|
$
|
12,563
|
|
|
|
$
|
25,033
|
|
|
|
$
|
23,775
|
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
572
|
|
|
|
$
|
567
|
|
|
|
$
|
1,046
|
|
|
|
$
|
1,006
|
|
|
Missiles and Fire Control
|
|
279
|
|
|
|
253
|
|
|
|
540
|
|
|
|
487
|
|
|
||||
Rotary and Mission Systems
(a)
|
|
341
|
|
|
|
271
|
|
|
|
652
|
|
|
|
399
|
|
|
||||
Space
|
|
274
|
|
|
|
256
|
|
|
|
538
|
|
|
|
546
|
|
|
||||
Total business segment operating profit
|
|
1,466
|
|
|
|
1,347
|
|
|
|
2,776
|
|
|
|
2,438
|
|
|
||||
Unallocated items
|
|
|
|
|
|
|
|
|
|
|||||||||||
FAS/CAS operating adjustment
(b)
|
|
451
|
|
|
|
404
|
|
|
|
902
|
|
|
|
807
|
|
|
||||
Stock-based compensation
|
|
(60
|
)
|
|
|
(57
|
)
|
|
|
(98
|
)
|
|
|
(101
|
)
|
|
||||
Severance and restructuring charges
(c)
|
|
(96
|
)
|
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
||||
Other, net
(d)
|
|
34
|
|
|
|
22
|
|
|
|
36
|
|
|
|
(26
|
)
|
|
||||
Total unallocated items
|
|
329
|
|
|
|
369
|
|
|
|
744
|
|
|
|
680
|
|
|
||||
Total consolidated operating profit
|
|
$
|
1,795
|
|
|
|
$
|
1,716
|
|
|
|
$
|
3,520
|
|
|
|
$
|
3,118
|
|
|
Intersegment sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
27
|
|
|
|
$
|
40
|
|
|
|
$
|
52
|
|
|
|
$
|
65
|
|
|
Missiles and Fire Control
|
|
113
|
|
|
|
66
|
|
|
|
208
|
|
|
|
139
|
|
|
||||
Rotary and Mission Systems
|
|
504
|
|
|
|
548
|
|
|
|
965
|
|
|
|
993
|
|
|
||||
Space
|
|
48
|
|
|
|
19
|
|
|
|
93
|
|
|
|
45
|
|
|
||||
Total intersegment sales
|
|
$
|
692
|
|
|
|
$
|
673
|
|
|
|
$
|
1,318
|
|
|
|
$
|
1,242
|
|
|
(a)
|
Operating profit at our RMS business segment for the
six months ended
June 25, 2017
includes a charge of
$120 million
(
$74 million
, or
$0.25
per share, after tax) recognized in the first quarter of 2017 for performance matters on the EADGE-T contract.
See “
Note 2 – Significant Accounting Policy Updates
” (under the caption “Revenue Recognition”)
for more information.
|
(b)
|
The FAS/CAS operating adjustment represents the difference between the service cost component of FAS pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with U.S. Government CAS. For a detail of the FAS/CAS operating adjustment and the total net FAS/CAS pension adjustment, see the table below.
|
(c)
|
Unallocated items for the quarter and
six months ended
June 24, 2018
include severance and restructuring charges totaling
$96 million
(
$76 million
, or
$0.26
per share, after tax) associated with planned workforce reductions and the consolidation of certain operations at our RMS business segment. See “
Note 11 – Other
” (under the caption “Severance and Restructuring Charges”)
for more information.
|
(d)
|
Other, net for the six months ended June 25, 2017 includes a
$64 million
charge (
$40 million
, or
$0.14
per share, after tax)
recognized in the first quarter of 2017, which represents our portion of a non-cash asset impairment charge recorded by our equity method investee,
Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC). See “
Note 11 – Other
” (under the caption “Equity Method Investee Impairment”) for more information.
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Total FAS expense and CAS costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension expense
|
|
$
|
(357
|
)
|
|
|
$
|
(343
|
)
|
|
|
$
|
(713
|
)
|
|
|
$
|
(688
|
)
|
|
Less: CAS pension cost
|
|
609
|
|
|
|
562
|
|
|
|
1,217
|
|
|
|
1,124
|
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
252
|
|
|
|
$
|
219
|
|
|
|
$
|
504
|
|
|
|
$
|
436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service and non-service cost reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension service cost
|
|
$
|
(158
|
)
|
|
|
$
|
(158
|
)
|
|
|
$
|
(315
|
)
|
|
|
$
|
(317
|
)
|
|
Less: CAS pension cost
|
|
609
|
|
|
|
562
|
|
|
|
1,217
|
|
|
|
1,124
|
|
|
||||
FAS/CAS operating adjustment
|
|
451
|
|
|
|
404
|
|
|
|
902
|
|
|
|
807
|
|
|
||||
Non-operating FAS pension expense
|
|
(199
|
)
|
|
|
(185
|
)
|
|
|
(398
|
)
|
|
|
(371
|
)
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
252
|
|
|
|
$
|
219
|
|
|
|
$
|
504
|
|
|
|
$
|
436
|
|
|
|
|
Quarter Ended June 24, 2018
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
4,511
|
|
|
$
|
1,709
|
|
|
$
|
2,904
|
|
|
$
|
2,026
|
|
|
$
|
11,150
|
|
Services
|
|
810
|
|
|
376
|
|
|
662
|
|
|
400
|
|
|
2,248
|
|
|||||
Total net sales
|
|
$
|
5,321
|
|
|
$
|
2,085
|
|
|
$
|
3,566
|
|
|
$
|
2,426
|
|
|
$
|
13,398
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
3,906
|
|
|
$
|
1,395
|
|
|
$
|
2,450
|
|
|
$
|
460
|
|
|
$
|
8,211
|
|
Cost-reimbursable
|
|
1,415
|
|
|
690
|
|
|
1,116
|
|
|
1,966
|
|
|
5,187
|
|
|||||
Total net sales
|
|
$
|
5,321
|
|
|
$
|
2,085
|
|
|
$
|
3,566
|
|
|
$
|
2,426
|
|
|
$
|
13,398
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
3,444
|
|
|
$
|
1,502
|
|
|
$
|
2,608
|
|
|
$
|
2,070
|
|
|
$
|
9,624
|
|
International
(a)
|
|
1,835
|
|
|
542
|
|
|
822
|
|
|
344
|
|
|
3,543
|
|
|||||
U.S. commercial and other
|
|
42
|
|
|
41
|
|
|
136
|
|
|
12
|
|
|
231
|
|
|||||
Total net sales
|
|
$
|
5,321
|
|
|
$
|
2,085
|
|
|
$
|
3,566
|
|
|
$
|
2,426
|
|
|
$
|
13,398
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
3,486
|
|
|
$
|
1,543
|
|
|
$
|
2,744
|
|
|
$
|
2,082
|
|
|
$
|
9,855
|
|
Asia Pacific
|
|
786
|
|
|
125
|
|
|
301
|
|
|
31
|
|
|
1,243
|
|
|||||
Europe
|
|
678
|
|
|
46
|
|
|
224
|
|
|
332
|
|
|
1,280
|
|
|||||
Middle East
|
|
320
|
|
|
364
|
|
|
143
|
|
|
(19
|
)
|
|
808
|
|
|||||
Other
|
|
51
|
|
|
7
|
|
|
154
|
|
|
—
|
|
|
212
|
|
|||||
Total net sales
|
|
$
|
5,321
|
|
|
$
|
2,085
|
|
|
$
|
3,566
|
|
|
$
|
2,426
|
|
|
$
|
13,398
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended June 24, 2018
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
8,281
|
|
|
$
|
3,062
|
|
|
$
|
5,621
|
|
|
$
|
3,948
|
|
|
$
|
20,912
|
|
Services
|
|
1,438
|
|
|
700
|
|
|
1,168
|
|
|
815
|
|
|
4,121
|
|
|||||
Total net sales
|
|
$
|
9,719
|
|
|
$
|
3,762
|
|
|
$
|
6,789
|
|
|
$
|
4,763
|
|
|
$
|
25,033
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
7,121
|
|
|
$
|
2,507
|
|
|
$
|
4,658
|
|
|
$
|
860
|
|
|
$
|
15,146
|
|
Cost-reimbursable
|
|
2,598
|
|
|
1,255
|
|
|
2,131
|
|
|
3,903
|
|
|
9,887
|
|
|||||
Total net sales
|
|
$
|
9,719
|
|
|
$
|
3,762
|
|
|
$
|
6,789
|
|
|
$
|
4,763
|
|
|
$
|
25,033
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
6,209
|
|
|
$
|
2,590
|
|
|
$
|
4,964
|
|
|
$
|
3,940
|
|
|
$
|
17,703
|
|
International
(a)
|
|
3,412
|
|
|
1,096
|
|
|
1,603
|
|
|
800
|
|
|
6,911
|
|
|||||
U.S. commercial and other
|
|
98
|
|
|
76
|
|
|
222
|
|
|
23
|
|
|
419
|
|
|||||
Total net sales
|
|
$
|
9,719
|
|
|
$
|
3,762
|
|
|
$
|
6,789
|
|
|
$
|
4,763
|
|
|
$
|
25,033
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
6,307
|
|
|
$
|
2,666
|
|
|
$
|
5,186
|
|
|
$
|
3,963
|
|
|
$
|
18,122
|
|
Asia Pacific
|
|
1,540
|
|
|
223
|
|
|
625
|
|
|
54
|
|
|
2,442
|
|
|||||
Europe
|
|
1,186
|
|
|
115
|
|
|
379
|
|
|
758
|
|
|
2,438
|
|
|||||
Middle East
|
|
577
|
|
|
744
|
|
|
314
|
|
|
(12
|
)
|
|
1,623
|
|
|||||
Other
|
|
109
|
|
|
14
|
|
|
285
|
|
|
—
|
|
|
408
|
|
|||||
Total net sales
|
|
$
|
9,719
|
|
|
$
|
3,762
|
|
|
$
|
6,789
|
|
|
$
|
4,763
|
|
|
$
|
25,033
|
|
(a)
|
International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
|
|
|
Quarter Ended June 25, 2017
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
4,206
|
|
|
$
|
1,452
|
|
|
$
|
2,863
|
|
|
$
|
2,101
|
|
|
$
|
10,622
|
|
Services
|
|
716
|
|
|
332
|
|
|
551
|
|
|
342
|
|
|
1,941
|
|
|||||
Total net sales
|
|
$
|
4,922
|
|
|
$
|
1,784
|
|
|
$
|
3,414
|
|
|
$
|
2,443
|
|
|
$
|
12,563
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
3,312
|
|
|
$
|
1,258
|
|
|
$
|
2,492
|
|
|
$
|
592
|
|
|
$
|
7,654
|
|
Cost-reimbursable
|
|
1,610
|
|
|
526
|
|
|
922
|
|
|
1,851
|
|
|
4,909
|
|
|||||
Total net sales
|
|
$
|
4,922
|
|
|
$
|
1,784
|
|
|
$
|
3,414
|
|
|
$
|
2,443
|
|
|
$
|
12,563
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
3,233
|
|
|
$
|
1,059
|
|
|
$
|
2,379
|
|
|
$
|
2,105
|
|
|
$
|
8,776
|
|
International
(a)
|
|
1,655
|
|
|
687
|
|
|
929
|
|
|
325
|
|
|
3,596
|
|
|||||
U.S. commercial and other
|
|
34
|
|
|
38
|
|
|
106
|
|
|
13
|
|
|
191
|
|
|||||
Total net sales
|
|
$
|
4,922
|
|
|
$
|
1,784
|
|
|
$
|
3,414
|
|
|
$
|
2,443
|
|
|
$
|
12,563
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
3,267
|
|
|
$
|
1,097
|
|
|
$
|
2,485
|
|
|
$
|
2,118
|
|
|
$
|
8,967
|
|
Asia Pacific
|
|
694
|
|
|
114
|
|
|
343
|
|
|
36
|
|
|
1,187
|
|
|||||
Europe
|
|
599
|
|
|
82
|
|
|
245
|
|
|
288
|
|
|
1,214
|
|
|||||
Middle East
|
|
300
|
|
|
482
|
|
|
126
|
|
|
1
|
|
|
909
|
|
|||||
Other
|
|
62
|
|
|
9
|
|
|
215
|
|
|
—
|
|
|
286
|
|
|||||
Total net sales
|
|
$
|
4,922
|
|
|
$
|
1,784
|
|
|
$
|
3,414
|
|
|
$
|
2,443
|
|
|
$
|
12,563
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended June 25, 2017
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
7,840
|
|
|
$
|
2,709
|
|
|
$
|
5,511
|
|
|
$
|
4,175
|
|
|
$
|
20,235
|
|
Services
|
|
1,202
|
|
|
624
|
|
|
1,030
|
|
|
684
|
|
|
3,540
|
|
|||||
Total net sales
|
|
$
|
9,042
|
|
|
$
|
3,333
|
|
|
$
|
6,541
|
|
|
$
|
4,859
|
|
|
$
|
23,775
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
6,228
|
|
|
$
|
2,343
|
|
|
$
|
4,728
|
|
|
$
|
1,102
|
|
|
$
|
14,401
|
|
Cost-reimbursable
|
|
2,814
|
|
|
990
|
|
|
1,813
|
|
|
3,757
|
|
|
9,374
|
|
|||||
Total net sales
|
|
$
|
9,042
|
|
|
$
|
3,333
|
|
|
$
|
6,541
|
|
|
$
|
4,859
|
|
|
$
|
23,775
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
5,916
|
|
|
$
|
2,136
|
|
|
$
|
4,674
|
|
|
$
|
4,117
|
|
|
$
|
16,843
|
|
International
(a)
|
|
3,058
|
|
|
1,132
|
|
|
1,700
|
|
|
715
|
|
|
6,605
|
|
|||||
U.S. commercial and other
|
|
68
|
|
|
65
|
|
|
167
|
|
|
27
|
|
|
327
|
|
|||||
Total net sales
|
|
$
|
9,042
|
|
|
$
|
3,333
|
|
|
$
|
6,541
|
|
|
$
|
4,859
|
|
|
$
|
23,775
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
5,984
|
|
|
$
|
2,201
|
|
|
$
|
4,841
|
|
|
$
|
4,144
|
|
|
$
|
17,170
|
|
Asia Pacific
|
|
1,225
|
|
|
206
|
|
|
617
|
|
|
40
|
|
|
2,088
|
|
|||||
Europe
|
|
1,102
|
|
|
157
|
|
|
447
|
|
|
622
|
|
|
2,328
|
|
|||||
Middle East
|
|
635
|
|
|
752
|
|
|
236
|
|
|
53
|
|
|
1,676
|
|
|||||
Other
|
|
96
|
|
|
17
|
|
|
400
|
|
|
—
|
|
|
513
|
|
|||||
Total net sales
|
|
$
|
9,042
|
|
|
$
|
3,333
|
|
|
$
|
6,541
|
|
|
$
|
4,859
|
|
|
$
|
23,775
|
|
(a)
|
International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
|
|
|
June 24,
2018 |
|
December 31,
2017 |
||||||
Assets
|
|
|
|
|
|
|
||||
Aeronautics
|
|
$
|
8,283
|
|
|
|
$
|
7,713
|
|
|
Missiles and Fire Control
|
|
4,812
|
|
|
|
4,577
|
|
|
||
Rotary and Mission Systems
|
|
18,495
|
|
|
|
18,292
|
|
|
||
Space
|
|
5,502
|
|
|
|
5,240
|
|
|
||
Total business segment assets
|
|
37,092
|
|
|
|
35,822
|
|
|
||
Corporate assets
(a)
|
|
8,033
|
|
|
|
10,798
|
|
|
||
Total assets
|
|
$
|
45,125
|
|
|
|
$
|
46,620
|
|
|
(a)
|
Corporate assets primarily include cash and cash equivalents, deferred income taxes, environmental receivables, and investments held in a separate trust to fund certain of our non-qualified deferred compensation plans.
|
|
|
June 24,
2018 |
|
December 31,
2017 |
||||||
Contract assets
|
|
$
|
9,281
|
|
|
|
$
|
7,992
|
|
|
Contract liabilities
|
|
$
|
6,413
|
|
|
|
$
|
7,028
|
|
|
|
|
June 24,
2018 |
|
December 31,
2017 |
||||||
Materials, spares and supplies
|
|
$
|
446
|
|
|
|
$
|
563
|
|
|
Work-in-process
|
|
2,074
|
|
|
|
1,823
|
|
|
||
Finished goods
|
|
518
|
|
|
|
492
|
|
|
||
Total inventories
|
|
$
|
3,038
|
|
|
|
$
|
2,878
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Qualified defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
158
|
|
|
|
$
|
158
|
|
|
|
$
|
315
|
|
|
|
$
|
317
|
|
|
Interest cost
|
|
435
|
|
|
|
460
|
|
|
|
870
|
|
|
|
918
|
|
|
||||
Expected return on plan assets
|
|
(598
|
)
|
|
|
(562
|
)
|
|
|
(1,197
|
)
|
|
|
(1,124
|
)
|
|
||||
Recognized net actuarial losses
|
|
444
|
|
|
|
377
|
|
|
|
888
|
|
|
|
753
|
|
|
||||
Amortization of prior service credits
|
|
(82
|
)
|
|
|
(90
|
)
|
|
|
(163
|
)
|
|
|
(176
|
)
|
|
||||
Total net periodic benefit cost
|
|
$
|
357
|
|
|
|
$
|
343
|
|
|
|
$
|
713
|
|
|
|
$
|
688
|
|
|
Retiree medical and life insurance plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
4
|
|
|
|
$
|
5
|
|
|
|
$
|
9
|
|
|
|
$
|
10
|
|
|
Interest cost
|
|
23
|
|
|
|
25
|
|
|
|
46
|
|
|
|
51
|
|
|
||||
Expected return on plan assets
|
|
(33
|
)
|
|
|
(32
|
)
|
|
|
(67
|
)
|
|
|
(64
|
)
|
|
||||
Recognized net actuarial losses
|
|
1
|
|
|
|
5
|
|
|
|
2
|
|
|
|
10
|
|
|
||||
Amortization of prior service costs
|
|
3
|
|
|
|
4
|
|
|
|
7
|
|
|
|
7
|
|
|
||||
Total net periodic benefit (credit) cost
|
|
$
|
(2
|
)
|
|
|
$
|
7
|
|
|
|
$
|
(3
|
)
|
|
|
$
|
14
|
|
|
|
|
June 24, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
|
$
|
1,067
|
|
|
$
|
1,067
|
|
|
$
|
—
|
|
|
$
|
917
|
|
|
$
|
917
|
|
|
$
|
—
|
|
U.S. Government securities
|
|
93
|
|
|
—
|
|
|
93
|
|
|
116
|
|
|
—
|
|
|
116
|
|
||||||
Derivatives
|
|
17
|
|
|
—
|
|
|
17
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||||
Other securities
|
|
158
|
|
|
30
|
|
|
128
|
|
|
209
|
|
|
39
|
|
|
170
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
|
101
|
|
|
—
|
|
|
101
|
|
|
106
|
|
|
—
|
|
|
106
|
|
||||||
Assets measured at NAV
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other commingled funds
|
|
18
|
|
|
|
|
|
|
19
|
|
|
|
|
|
(a)
|
Net Asset Value (NAV) is the total value of the fund divided by the number of the fund’s shares outstanding.
|
|
|
Postretirement
Benefit Plans
|
|
Other, net
|
|
AOCL
|
||||||
Balance at December 31, 2017
|
|
$
|
(12,559
|
)
|
|
$
|
20
|
|
|
$
|
(12,539
|
)
|
Other comprehensive income before reclassifications
|
|
—
|
|
|
(62
|
)
|
|
(62
|
)
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses
(a)
|
|
728
|
|
|
—
|
|
|
728
|
|
|||
Amortization of net prior service credits
(a)
|
|
(128
|
)
|
|
—
|
|
|
(128
|
)
|
|||
Other
|
|
—
|
|
|
14
|
|
|
14
|
|
|||
Total reclassified from AOCL
|
|
600
|
|
|
14
|
|
|
614
|
|
|||
Total other comprehensive income
|
|
600
|
|
|
(48
|
)
|
|
552
|
|
|||
Reclassification of income tax effects from tax reform
(b)
|
|
(2,396
|
)
|
|
(12
|
)
|
|
(2,408
|
)
|
|||
Balance at June 24, 2018
|
|
$
|
(14,355
|
)
|
|
$
|
(40
|
)
|
|
$
|
(14,395
|
)
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2016
|
|
$
|
(11,981
|
)
|
|
$
|
(121
|
)
|
|
$
|
(12,102
|
)
|
Other comprehensive income before reclassifications
|
|
3
|
|
|
53
|
|
|
56
|
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses
(a)
|
|
516
|
|
|
—
|
|
|
516
|
|
|||
Amortization of net prior service credits
(a)
|
|
(114
|
)
|
|
—
|
|
|
(114
|
)
|
|||
Other
|
|
—
|
|
|
7
|
|
|
7
|
|
|||
Total reclassified from AOCL
|
|
402
|
|
|
7
|
|
|
409
|
|
|||
Total other comprehensive income
|
|
405
|
|
|
60
|
|
|
465
|
|
|||
Balance at June 25, 2017
|
|
$
|
(11,576
|
)
|
|
$
|
(61
|
)
|
|
$
|
(11,637
|
)
|
(a)
|
Reclassifications from AOCL related to our postretirement benefit plans were recorded as a component of net periodic benefit cost for each period presented (see “
Note 7 – Postretirement Benefit Plans
”). These amounts include
$300 million
and
$200 million
, net of tax, for the quarters ended
June 24, 2018
and
June 25, 2017
, which are comprised of the recognition of net actuarial losses of
$364 million
and
$258 million
for the quarters ended
June 24, 2018
and
June 25, 2017
and the amortization of net prior service credits of
$(64) million
and
$(58) million
for the quarters ended
June 24, 2018
and
June 25, 2017
.
|
(b)
|
We reclassified the impact of the income tax effects related to the Tax Cuts and Jobs Act of 2017 (the Tax Act) from AOCL during the first quarter of 2018 to retained earnings by the same amount with zero impact to total equity. See ASU 2018-02 in “
Note 12 – Recent Accounting Pronouncements
” for additional information.
|
|
|
Quarter Ended
|
||||||||||||||||||
|
|
|
|
Adjustments for
|
|
|
||||||||||||||
|
|
Historical
|
|
ASC 606
|
|
ASU 2017-07
|
|
Adjusted
|
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
$
|
10,828
|
|
|
|
$
|
(206
|
)
|
|
|
$
|
—
|
|
|
|
$
|
10,622
|
|
|
Services
|
|
1,857
|
|
|
|
84
|
|
|
|
—
|
|
|
|
1,941
|
|
|
||||
Total net sales
|
|
12,685
|
|
|
|
(122
|
)
|
|
|
—
|
|
|
|
12,563
|
|
|
||||
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
(9,751
|
)
|
|
|
189
|
|
|
|
—
|
|
|
|
(9,562
|
)
|
|
||||
Services
|
|
(1,658
|
)
|
|
|
(48
|
)
|
|
|
—
|
|
|
|
(1,706
|
)
|
|
||||
Other unallocated, net
|
|
149
|
|
|
|
—
|
|
|
|
212
|
|
|
|
361
|
|
|
||||
Total cost of sales
|
|
(11,260
|
)
|
|
|
141
|
|
|
|
212
|
|
|
|
(10,907
|
)
|
|
||||
Gross profit
|
|
1,425
|
|
|
|
19
|
|
|
|
212
|
|
|
|
1,656
|
|
|
||||
Other income, net
|
|
60
|
|
|
|
—
|
|
|
|
—
|
|
|
|
60
|
|
|
||||
Operating profit
|
|
1,485
|
|
|
|
19
|
|
|
|
212
|
|
|
|
1,716
|
|
|
||||
Interest expense
|
|
(160
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(160
|
)
|
|
||||
Other non-operating expense, net
|
|
(2
|
)
|
|
|
—
|
|
|
|
(212
|
)
|
|
|
(214
|
)
|
|
||||
Earnings before income taxes
|
|
1,323
|
|
|
|
19
|
|
|
|
—
|
|
|
|
1,342
|
|
|
||||
Income tax expense
|
|
(381
|
)
|
|
|
(6
|
)
|
|
|
—
|
|
|
|
(387
|
)
|
|
||||
Net earnings
|
|
$
|
942
|
|
|
|
$
|
13
|
|
|
|
$
|
—
|
|
|
|
$
|
955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
3.27
|
|
|
|
$
|
0.04
|
|
|
|
$
|
—
|
|
|
|
$
|
3.31
|
|
|
Diluted
|
|
$
|
3.23
|
|
|
|
$
|
0.05
|
|
|
|
$
|
—
|
|
|
|
$
|
3.28
|
|
|
Cash dividends paid per common share
|
|
$
|
1.82
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
1.82
|
|
|
|
|
Six Months Ended
|
||||||||||||||||||
|
|
|
|
Adjustments for
|
|
|
||||||||||||||
|
|
Historical
|
|
ASC 606
|
|
ASU 2017-07
|
|
Adjusted
|
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
$
|
20,341
|
|
|
|
$
|
(106
|
)
|
|
|
$
|
—
|
|
|
|
$
|
20,235
|
|
|
Services
|
|
3,401
|
|
|
|
139
|
|
|
|
—
|
|
|
|
3,540
|
|
|
||||
Total net sales
|
|
23,742
|
|
|
|
33
|
|
|
|
—
|
|
|
|
23,775
|
|
|
||||
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Products
|
|
(18,438
|
)
|
|
|
132
|
|
|
|
—
|
|
|
|
(18,306
|
)
|
|
||||
Services
|
|
(3,034
|
)
|
|
|
(106
|
)
|
|
|
—
|
|
|
|
(3,140
|
)
|
|
||||
Other unallocated, net
|
|
308
|
|
|
|
—
|
|
|
|
425
|
|
|
|
733
|
|
|
||||
Total cost of sales
|
|
(21,164
|
)
|
|
|
26
|
|
|
|
425
|
|
|
|
(20,713
|
)
|
|
||||
Gross profit
|
|
2,578
|
|
|
|
59
|
|
|
|
425
|
|
|
|
3,062
|
|
|
||||
Other expense, net
|
|
56
|
|
|
|
—
|
|
|
|
—
|
|
|
|
56
|
|
|
||||
Operating profit
|
|
2,634
|
|
|
|
59
|
|
|
|
425
|
|
|
|
3,118
|
|
|
||||
Interest expense
|
|
(315
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(315
|
)
|
|
||||
Other non-operating expense, net
|
|
(1
|
)
|
|
|
—
|
|
|
|
(425
|
)
|
|
|
(426
|
)
|
|
||||
Earnings before income taxes
|
|
2,318
|
|
|
|
59
|
|
|
|
—
|
|
|
|
2,377
|
|
|
||||
Income tax expense
|
|
(613
|
)
|
|
|
(20
|
)
|
|
|
—
|
|
|
|
(633
|
)
|
|
||||
Net earnings
|
|
$
|
1,705
|
|
|
|
$
|
39
|
|
|
|
$
|
—
|
|
|
|
$
|
1,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
5.90
|
|
|
|
$
|
0.13
|
|
|
|
$
|
—
|
|
|
|
$
|
6.03
|
|
|
Diluted
|
|
$
|
5.84
|
|
|
|
$
|
0.13
|
|
|
|
$
|
—
|
|
|
|
$
|
5.97
|
|
|
Cash dividends paid per common share
|
|
$
|
3.64
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
3.64
|
|
|
|
|
|
Adjustments for
|
|
|||||||||||
|
|
Historical
|
|
ASC 606
|
|
Adjusted
|
|||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||
Current assets
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
2,861
|
|
|
|
$
|
—
|
|
|
|
$
|
2,861
|
|
|
Receivables, net
|
|
8,603
|
|
|
|
(6,338
|
)
|
|
|
2,265
|
|
|
|||
Contract assets
|
|
—
|
|
|
|
7,992
|
|
|
|
7,992
|
|
|
|||
Inventories
|
|
4,487
|
|
|
|
(1,609
|
)
|
|
|
2,878
|
|
|
|||
Other current assets
|
|
1,510
|
|
|
|
(1
|
)
|
|
|
1,509
|
|
|
|||
Total current assets
|
|
17,461
|
|
|
|
44
|
|
|
|
17,505
|
|
|
|||
Property, plant and equipment, net
|
|
5,775
|
|
|
|
—
|
|
|
|
5,775
|
|
|
|||
Goodwill
|
|
10,807
|
|
|
|
—
|
|
|
|
10,807
|
|
|
|||
Intangible assets, net
|
|
3,797
|
|
|
|
—
|
|
|
|
3,797
|
|
|
|||
Deferred income taxes
|
|
3,111
|
|
|
|
45
|
|
|
|
3,156
|
|
|
|||
Other noncurrent assets
|
|
5,570
|
|
|
|
10
|
|
|
|
5,580
|
|
|
|||
Total assets
|
|
$
|
46,521
|
|
|
|
$
|
99
|
|
|
|
$
|
46,620
|
|
|
Liabilities and equity
|
|
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Accounts payable
|
|
$
|
1,467
|
|
|
|
$
|
—
|
|
|
|
$
|
1,467
|
|
|
Contract liabilities
(a)
|
|
6,752
|
|
|
|
276
|
|
|
|
7,028
|
|
|
|||
Salaries, benefits and payroll taxes
|
|
1,785
|
|
|
|
—
|
|
|
|
1,785
|
|
|
|||
Current maturities of long-term debt
|
|
750
|
|
|
|
—
|
|
|
|
750
|
|
|
|||
Other current liabilities
|
|
1,883
|
|
|
|
—
|
|
|
|
1,883
|
|
|
|||
Total current liabilities
|
|
12,637
|
|
|
|
276
|
|
|
|
12,913
|
|
|
|||
Long-term debt, net
|
|
13,513
|
|
|
|
—
|
|
|
|
13,513
|
|
|
|||
Accrued pension liabilities
|
|
15,703
|
|
|
|
—
|
|
|
|
15,703
|
|
|
|||
Other postretirement benefit liabilities
|
|
719
|
|
|
|
—
|
|
|
|
719
|
|
|
|||
Other noncurrent liabilities
|
|
4,558
|
|
|
|
(10
|
)
|
|
|
4,548
|
|
|
|||
Total liabilities
|
|
47,130
|
|
|
|
266
|
|
|
|
47,396
|
|
|
|||
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
||||||
Common stock, $1 par value per share
|
|
284
|
|
|
|
—
|
|
|
|
284
|
|
|
|||
Additional paid-in capital
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|||
Retained earnings
|
|
11,573
|
|
|
|
(168
|
)
|
|
|
11,405
|
|
|
|||
Accumulated other comprehensive loss
|
|
(12,540
|
)
|
|
|
1
|
|
|
|
(12,539
|
)
|
|
|||
Total stockholders’ deficit
|
|
(683
|
)
|
|
|
(167
|
)
|
|
|
(850
|
)
|
|
|||
Noncontrolling interests in subsidiary
|
|
74
|
|
|
|
—
|
|
|
|
74
|
|
|
|||
Total deficit
|
|
(609
|
)
|
|
|
(167
|
)
|
|
|
(776
|
)
|
|
|||
Total liabilities and equity
|
|
$
|
46,521
|
|
|
|
$
|
99
|
|
|
|
$
|
46,620
|
|
|
(a)
|
Formerly referred to as customer advances and amounts in excess of costs incurred.
|
|
|
|
Adjustments for
|
|
|||||||||||
|
|
Historical
|
|
ASC 606
|
|
Adjusted
|
|||||||||
Operating activities
|
|
|
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
1,705
|
|
|
|
$
|
39
|
|
|
|
$
|
1,744
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
581
|
|
|
|
—
|
|
|
|
581
|
|
|
|||
Stock-based compensation
|
|
101
|
|
|
|
—
|
|
|
|
101
|
|
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
|
|
|
|
||||||
Receivables, net
|
|
(560
|
)
|
|
|
(59
|
)
|
|
|
(619
|
)
|
|
|||
Contract assets
|
|
—
|
|
|
|
(170
|
)
|
|
|
(170
|
)
|
|
|||
Inventories
|
|
(271
|
)
|
|
|
233
|
|
|
|
(38
|
)
|
|
|||
Accounts payable
|
|
940
|
|
|
|
—
|
|
|
|
940
|
|
|
|||
Contract liabilities
(a)
|
|
(316
|
)
|
|
|
(72
|
)
|
|
|
(388
|
)
|
|
|||
Postretirement benefit plans
|
|
685
|
|
|
|
—
|
|
|
|
685
|
|
|
|||
Income taxes
|
|
3
|
|
|
|
—
|
|
|
|
3
|
|
|
|||
Other, net
|
|
342
|
|
|
|
29
|
|
|
|
371
|
|
|
|||
Net cash provided by operating activities
|
|
$
|
3,210
|
|
|
|
$
|
—
|
|
|
|
$
|
3,210
|
|
|
(a)
|
Formerly referred to as customer advances and amounts in excess of costs incurred.
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Net sales
|
|
$
|
13,398
|
|
|
|
$
|
12,563
|
|
|
|
$
|
25,033
|
|
|
|
$
|
23,775
|
|
|
Cost of sales
|
|
(11,645
|
)
|
|
|
(10,907
|
)
|
|
|
(21,622
|
)
|
|
|
(20,713
|
)
|
|
||||
Gross profit
|
|
1,753
|
|
|
|
1,656
|
|
|
|
3,411
|
|
|
|
3,062
|
|
|
||||
Other income, net
|
|
42
|
|
|
|
60
|
|
|
|
109
|
|
|
|
56
|
|
|
||||
Operating profit
|
|
1,795
|
|
|
|
1,716
|
|
|
|
3,520
|
|
|
|
3,118
|
|
|
||||
Interest expense
|
|
(165
|
)
|
|
|
(160
|
)
|
|
|
(320
|
)
|
|
|
(315
|
)
|
|
||||
Other non-operating expense, net
|
|
(210
|
)
|
|
|
(214
|
)
|
|
|
(420
|
)
|
|
|
(426
|
)
|
|
||||
Earnings before income taxes
|
|
1,420
|
|
|
|
1,342
|
|
|
|
2,780
|
|
|
|
2,377
|
|
|
||||
Income tax expense
|
|
(257
|
)
|
|
|
(387
|
)
|
|
|
(460
|
)
|
|
|
(633
|
)
|
|
||||
Net earnings
|
|
$
|
1,163
|
|
|
|
$
|
955
|
|
|
|
$
|
2,320
|
|
|
|
$
|
1,744
|
|
|
Diluted earnings per common share
|
|
$
|
4.05
|
|
|
|
$
|
3.28
|
|
|
|
$
|
8.07
|
|
|
|
$
|
5.97
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Products
|
|
$
|
11,150
|
|
|
|
$
|
10,622
|
|
|
|
$
|
20,912
|
|
|
|
$
|
20,235
|
|
|
% of total net sales
|
|
83.2
|
%
|
|
|
84.5
|
%
|
|
|
83.5
|
%
|
|
|
85.1
|
%
|
|
||||
Services
|
|
2,248
|
|
|
|
1,941
|
|
|
|
4,121
|
|
|
|
3,540
|
|
|
||||
% of total net sales
|
|
16.8
|
%
|
|
|
15.5
|
%
|
|
|
16.5
|
%
|
|
|
14.9
|
%
|
|
||||
Total net sales
|
|
$
|
13,398
|
|
|
|
$
|
12,563
|
|
|
|
$
|
25,033
|
|
|
|
$
|
23,775
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Cost of sales – products
|
|
$
|
(9,993
|
)
|
|
|
$
|
(9,562
|
)
|
|
|
$
|
(18,690
|
)
|
|
|
$
|
(18,306
|
)
|
|
% of product sales
|
|
89.6
|
%
|
|
|
90.0
|
%
|
|
|
89.4
|
%
|
|
|
90.5
|
%
|
|
||||
Cost of sales – services
|
|
(1,967
|
)
|
|
|
(1,706
|
)
|
|
|
(3,656
|
)
|
|
|
(3,140
|
)
|
|
||||
% of service sales
|
|
87.5
|
%
|
|
|
87.9
|
%
|
|
|
88.7
|
%
|
|
|
88.7
|
%
|
|
||||
Severance and restructuring charges
|
|
(96
|
)
|
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
||||
Other unallocated, net
|
|
411
|
|
|
|
361
|
|
|
|
820
|
|
|
|
733
|
|
|
||||
Total cost of sales
|
|
$
|
(11,645
|
)
|
|
|
$
|
(10,907
|
)
|
|
|
$
|
(21,622
|
)
|
|
|
$
|
(20,713
|
)
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
5,321
|
|
|
|
$
|
4,922
|
|
|
|
$
|
9,719
|
|
|
|
$
|
9,042
|
|
|
Missiles and Fire Control
|
|
2,085
|
|
|
|
1,784
|
|
|
|
3,762
|
|
|
|
3,333
|
|
|
||||
Rotary and Mission Systems
|
|
3,566
|
|
|
|
3,414
|
|
|
|
6,789
|
|
|
|
6,541
|
|
|
||||
Space
|
|
2,426
|
|
|
|
2,443
|
|
|
|
4,763
|
|
|
|
4,859
|
|
|
||||
Total net sales
|
|
$
|
13,398
|
|
|
|
$
|
12,563
|
|
|
|
$
|
25,033
|
|
|
|
$
|
23,775
|
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
572
|
|
|
|
$
|
567
|
|
|
|
$
|
1,046
|
|
|
|
$
|
1,006
|
|
|
Missiles and Fire Control
|
|
279
|
|
|
|
253
|
|
|
|
540
|
|
|
|
487
|
|
|
||||
Rotary and Mission Systems
(a)
|
|
341
|
|
|
|
271
|
|
|
|
652
|
|
|
|
399
|
|
|
||||
Space
|
|
274
|
|
|
|
256
|
|
|
|
538
|
|
|
|
546
|
|
|
||||
Total business segment operating profit
|
|
1,466
|
|
|
|
1,347
|
|
|
|
2,776
|
|
|
|
2,438
|
|
|
||||
Unallocated items
|
|
|
|
|
|
|
|
|
|
|||||||||||
FAS/CAS operating adjustment
(b)
|
|
451
|
|
|
|
404
|
|
|
|
902
|
|
|
|
807
|
|
|
||||
Stock-based compensation
|
|
(60
|
)
|
|
|
(57
|
)
|
|
|
(98
|
)
|
|
|
(101
|
)
|
|
||||
Severance and restructuring charges
(c)
|
|
(96
|
)
|
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
||||
Other, net
(d)
|
|
34
|
|
|
|
22
|
|
|
|
36
|
|
|
|
(26
|
)
|
|
||||
Total unallocated items
|
|
329
|
|
|
|
369
|
|
|
|
744
|
|
|
|
680
|
|
|
||||
Total consolidated operating profit
|
|
$
|
1,795
|
|
|
|
$
|
1,716
|
|
|
|
$
|
3,520
|
|
|
|
$
|
3,118
|
|
|
(a)
|
Operating profit at our RMS business segment for the
six months ended
June 25, 2017
includes a charge of
$120 million
(
$74 million
, or
$0.25
per share, after tax) recognized in the first quarter of 2017 for performance matters on the EADGE-T contract.
See “
Note 2 – Significant Accounting Policy Updates
” (under the caption “Revenue Recognition”)
included in our Notes to Consolidated Financial Statements for more information.
|
(b)
|
The FAS/CAS operating adjustment represents the difference between the service cost component of FAS pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with U.S. Government CAS. For a detail of the FAS/CAS operating adjustment and the total net FAS/CAS pension adjustment, see the table below.
|
(c)
|
Unallocated items for the quarter and
six months ended
June 24, 2018
include severance and restructuring charges totaling
$96 million
(
$76 million
, or
$0.26
per share, after tax) associated with planned workforce reductions and the consolidation of certain operations at our RMS business segment. See “
Note 11 – Other
” (under the caption “Severance and Restructuring Charges”)
included in our Notes to Consolidated Financial Statements for more information.
|
(d)
|
Other, net for the six months ended June 25, 2017 includes a
$64 million
charge (
$40 million
, or
$0.14
per share, after tax)
recognized in the first quarter of 2017, which represents our portion of a non-cash asset impairment charge recorded by our equity method investee,
AMMROC. See “
Note 11 –
Other
” (under the caption “Equity Method Investee Impairment”) included in our Notes to Consolidated Financial Statements for more information.
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Total FAS expense and CAS costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension expense
|
|
$
|
(357
|
)
|
|
|
$
|
(343
|
)
|
|
|
$
|
(713
|
)
|
|
|
$
|
(688
|
)
|
|
Less: CAS pension cost
|
|
609
|
|
|
|
562
|
|
|
|
1,217
|
|
|
|
1,124
|
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
252
|
|
|
|
$
|
219
|
|
|
|
$
|
504
|
|
|
|
$
|
436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service and non-service cost reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension service cost
|
|
$
|
(158
|
)
|
|
|
$
|
(158
|
)
|
|
|
$
|
(315
|
)
|
|
|
$
|
(317
|
)
|
|
Less: CAS pension cost
|
|
609
|
|
|
|
562
|
|
|
|
1,217
|
|
|
|
1,124
|
|
|
||||
FAS/CAS operating adjustment
|
|
451
|
|
|
|
404
|
|
|
|
902
|
|
|
|
807
|
|
|
||||
Non-operating FAS pension expense
|
|
(199
|
)
|
|
|
(185
|
)
|
|
|
(398
|
)
|
|
|
(371
|
)
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
252
|
|
|
|
$
|
219
|
|
|
|
$
|
504
|
|
|
|
$
|
436
|
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Net sales
|
|
$
|
5,321
|
|
|
|
$
|
4,922
|
|
|
|
$
|
9,719
|
|
|
|
$
|
9,042
|
|
|
Operating profit
|
|
572
|
|
|
|
567
|
|
|
|
1,046
|
|
|
|
1,006
|
|
|
||||
Operating margin
|
|
10.7
|
%
|
|
|
11.5
|
%
|
|
|
10.8
|
%
|
|
|
11.1
|
%
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Net sales
|
|
$
|
2,085
|
|
|
|
$
|
1,784
|
|
|
|
$
|
3,762
|
|
|
|
$
|
3,333
|
|
|
Operating profit
|
|
279
|
|
|
|
253
|
|
|
|
540
|
|
|
|
487
|
|
|
||||
Operating margin
|
|
13.4
|
%
|
|
|
14.2
|
%
|
|
|
14.4
|
%
|
|
|
14.6
|
%
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Net sales
|
|
$
|
3,566
|
|
|
|
$
|
3,414
|
|
|
|
$
|
6,789
|
|
|
|
$
|
6,541
|
|
|
Operating profit
|
|
341
|
|
|
|
271
|
|
|
|
652
|
|
|
|
399
|
|
|
||||
Operating margin
|
|
9.6
|
%
|
|
|
7.9
|
%
|
|
|
9.6
|
%
|
|
|
6.1
|
%
|
|
|
|
Quarters Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
|
June 24,
2018 |
|
June 25,
2017 |
||||||||||||
Net sales
|
|
$
|
2,426
|
|
|
|
$
|
2,443
|
|
|
|
$
|
4,763
|
|
|
|
$
|
4,859
|
|
|
Operating profit
|
|
274
|
|
|
|
256
|
|
|
|
538
|
|
|
|
546
|
|
|
||||
Operating margin
|
|
11.3
|
%
|
|
|
10.5
|
%
|
|
|
11.3
|
%
|
|
|
11.2
|
%
|
|
|
|
Six Months Ended
|
||||||||
|
|
June 24,
2018 |
|
June 25,
2017 |
||||||
Cash and cash equivalents at beginning of year
|
|
$
|
2,861
|
|
|
|
$
|
1,837
|
|
|
Operating activities
|
|
|
|
|
|
|
||||
Net earnings
|
|
2,320
|
|
|
|
1,744
|
|
|
||
Non-cash adjustments
|
|
760
|
|
|
|
682
|
|
|
||
Changes in working capital
|
|
(1,057
|
)
|
|
|
(275
|
)
|
|
||
Other, net
|
|
(1,463
|
)
|
|
|
1,059
|
|
|
||
Net cash provided by operating activities
|
|
560
|
|
|
|
3,210
|
|
|
||
Net cash used for investing activities
|
|
(329
|
)
|
|
|
(439
|
)
|
|
||
Net cash used for financing activities
|
|
(1,911
|
)
|
|
|
(2,156
|
)
|
|
||
Net change in cash and cash equivalents
|
|
(1,680
|
)
|
|
|
615
|
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,181
|
|
|
|
$
|
2,452
|
|
|
•
|
our
reliance on contracts with the U.S. Government, which are conditioned upon the availability of funding and can be terminated by the U.S. Government for convenience, and
our
ability to negotiate favorable contract terms;
|
•
|
budget uncertainty; affordability initiatives; the risk of future sequestration under the Budget Control Act of 2011 or other budget cuts;
|
•
|
risks related to the development, production, sustainment, performance, schedule, cost and requirements of complex and technologically advanced programs including
our
largest, the F-35 program;
|
•
|
economic, industry, business and political conditions including their effects on governmental policy (including trade policy and sanctions);
|
•
|
our
success expanding into and doing business in adjacent markets and internationally; the differing risks posed by international sales, including those involving commercial relationships with unfamiliar customers and different cultures; our ability to recover investments, which is frequently dependent upon the successful operation of ventures that we do not control; and changes in foreign national priorities, and foreign government budgets;
|
•
|
the competitive environment for
our
products and services, including increased pricing pressures, competition from outside the aerospace and defense industry, and increased bid protests;
|
•
|
planned production rates for significant programs; compliance with stringent performance and reliability standards; materials availability;
|
•
|
the performance and financial viability of key suppliers, teammates, ventures, venture partners, subcontractors and customers;
|
•
|
the timing and customer acceptance of product deliveries;
|
•
|
our
ability to continue to innovate and develop new products and to attract and retain key personnel and transfer knowledge to new personnel; the impact of work stoppages or other labor disruptions;
|
•
|
the impact of cyber or other security threats or other disruptions to
our
businesses;
|
•
|
our
ability to implement and continue capitalization changes such as share repurchases and dividend payments, pension funding as well as the pace and effect of any such capitalization changes;
|
•
|
our
ability to recover certain costs under U.S. Government contracts and changes in contract mix;
|
•
|
the accuracy of
our
estimates and projections;
|
•
|
movements in interest rates and other changes that may affect pension plan assumptions, equity, the level of the FAS/CAS adjustment and actual returns on pension plan assets;
|
•
|
realizing the anticipated benefits of acquisitions or divestitures, ventures, teaming arrangements or internal reorganizations, and
our
efforts to increase the efficiency of
our
operations and improve the affordability of
our
products and services;
|
•
|
risk of an impairment of goodwill, investments or other long-term assets, including the potential impairment of goodwill, intangible assets and inventory recorded as a result of the acquisition of the Sikorsky business and the potential impairment of our equity investment in Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC);
|
•
|
the adequacy of
our
insurance and indemnities;
|
•
|
the effect of changes in (or the interpretation of): legislation, regulation or policy, including those applicable to procurement (including aggressive government positions seeking intellectual property and broad license rights to use and have others use such intellectual property), cost allowability or recovery, accounting, taxation (including the impact of the Tax Cuts and Jobs Act), or export; and
|
•
|
the outcome of legal proceedings, bid protests, environmental remediation efforts, government investigations or government allegations that we have failed to comply with law, other contingencies and U.S. Government identification of deficiencies in
our
business systems.
|
Period
(a)
|
|
Total Number
of Shares
Purchased
|
|
|
|
Average
Price Paid
Per Share
|
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs (b) |
|
Amount
Available for
Future Share
Repurchases
Under the
Plans or
Programs (b) |
||||||
|
|
|
|
|
|
|
|
|
|
(in millions)
|
||||||
March 26, 2018 – April 29, 2018
|
|
352,986
|
|
|
|
|
$
|
338.67
|
|
|
352,857
|
|
|
$
|
3,084
|
|
April 30, 2018 – May 27, 2018
|
|
281,149
|
|
|
|
|
$
|
316.60
|
|
|
280,828
|
|
|
$
|
2,995
|
|
May 28, 2018 – June 24, 2018
|
|
369,222
|
|
|
|
|
$
|
311.72
|
|
|
368,475
|
|
|
$
|
2,880
|
|
Total
|
|
1,003,357
|
|
(c)
|
|
$
|
322.57
|
|
|
1,002,160
|
|
|
|
(a)
|
We close our books and records on the last Sunday of each month to align our financial closing with our business processes, except for the month of December, as our fiscal year ends on December 31. As a result, our fiscal months often differ from the calendar months. For example,
June 24, 2018
was the last day of our
June 2018
fiscal month.
|
(b)
|
In October 2010, our Board of Directors approved a share repurchase program pursuant to which we are authorized to repurchase our common stock in privately negotiated transactions or in the open market at prices per share not exceeding the then-current market prices. From time to time, our Board of Directors authorizes increases to our share repurchase program. The total remaining authorization for future common share repurchases under our share repurchase program was
$2.9 billion
as of
June 24, 2018
. Under the program, management has discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable law and regulation. This includes purchases pursuant to Rule 10b5-1 plans. The program does not have an expiration date.
|
(c)
|
During the quarter ended
June 24, 2018
, the total number of shares purchased included
1,197
shares that were transferred to us by employees in satisfaction of tax withholding obligations associated with the vesting of restricted stock units and performance stock units. These purchases were made pursuant to a separate authorization by our Board of Directors and are not included within the program.
|
Exhibit No.
|
|
Description
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
15
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
Lockheed Martin Corporation
|
|
|
(Registrant)
|
|
|
|
Date: July 24, 2018
|
|
By: /s/ Brian P. Colan
|
|
|
Brian P. Colan
|
|
|
Vice President and Controller
|
|
|
(Duly Authorized Officer and Chief Accounting Officer)
|
1.
|
Exhibit A.1 of the Plan, Post-Employment Conduct Agreement for Elected Officers, and Exhibit A.2 of the Plan, Post-Employment Conduct Agreement for Non-Officers, are updated in their entirety in the forms attached hereto.
|
(i)
|
oversees, controls or affects the design, operation, research, manufacture, marketing, sale or distribution of “Competitive Products or Services” (as defined in Section 6 below) of or by the Restricted Company, or
|
(ii)
|
would involve a substantial risk that the “Confidential or Proprietary Information” (as defined in Section 1(c) below) of the Company (including but not limited to technical information or intellectual property, strategic plans, information relating to pricing offered to the Company by vendors or suppliers or to prices charged or pricing contemplated to be charged by the Company, information relating to employee performance, promotions or identification for promotion, or information relating to the Company’s cost base) could be used to the disadvantage of the Company.
|
(iii)
|
Post-employment Activity As a Lawyer – I acknowledge that as counsel to the Corporation, I owe ethical and fiduciary obligations to the Corporation and that at least some of these obligations will continue even after my Termination Date with the Corporation. I agree that after my Termination Date I will comply fully with all applicable ethical and fiduciary obligations that I owe to the Corporation. To the extent permitted by applicable law, including but not limited to any applicable rules governing attorney conduct, I agree that I will not:
|
a.
|
Represent any client in the same or a substantially related matter in which I represented the Corporation where the client’s interests are materially adverse to the Corporation; or
|
b.
|
Disclose confidential information relating to my representation of the Corporation, including the disclosure of information that is to the disadvantage of the Corporation, except for information that is or becomes generally known.
|
(i)
|
existing and contemplated business, marketing and financial business information such as business plans and methods, marketing information, cost estimates, forecasts, financial data, cost or pricing data, bid and proposal information, customer identification, sources of supply, contemplated product lines, proposed business alliances, and information about customers and competitors,
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(ii)
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existing and contemplated technical information and documentation pertaining to technology, know how, equipment, machines, devices and systems, computer hardware and software, compositions, formulas, products, processes, methods, designs, specifications, mask works, testing or evaluation procedures, manufacturing processes, production techniques, research and developmental activities, inventions, discoveries, and improvements, and
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(iii)
|
human resources and personnel information.
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(i)
|
I breach any of the covenants in Section 1;
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(ii)
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The Company determines that either (a) my intentional misconduct or gross negligence, or (b) my failure to report another person’s intentional misconduct or gross negligence of which I had knowledge during the period I was employed by the Company, contributed to the Company having to restate all or a portion of its financial statements filed for any period with the Securities and Exchange Commission; or
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(iii)
|
The Company determines that I engaged in fraud, bribery or any other illegal act or that my intentional misconduct or gross negligence (including the failure to report the acts of another person of which I had knowledge during the period I was employed by the Company) contributed to another person’s fraud, bribery or other illegal act, which in any such case adversely affected the Company’s financial position or reputation.
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Entity Name
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Description of the Competitive Business
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(i)
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oversees, controls or affects the design, operation, research, manufacture, marketing, sale or distribution of “Competitive Products or Services” (as defined in Section 6 below) of or by the Restricted Company, or
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(ii)
|
would involve a substantial risk that the “Confidential or Proprietary Information” (as defined in Section 1(c) below) of the Company (including but not limited to technical information or intellectual property, strategic plans, information relating to pricing offered to the Company by vendors or suppliers or to prices charged or pricing contemplated to be charged by the Company, information relating to employee performance, promotions or identification for promotion, or information relating to the Company’s cost base) could be used to the disadvantage of the Company.
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(iii)
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Post-employment Activity As a Lawyer – I acknowledge that as counsel to the Corporation, I owe ethical and fiduciary obligations to the Corporation and that at least some of these obligations will continue even after my Termination Date with the Corporation. I agree that after my Termination Date I will comply fully with all applicable ethical and fiduciary obligations that I owe to the Corporation. To the extent permitted by applicable law, including but not limited to any applicable rules governing attorney conduct, I agree that I will not:
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a.
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Represent any client in the same or a substantially related matter in which I represented the Corporation where the client’s interests are materially adverse to the Corporation; or
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b.
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Disclose confidential information relating to my representation of the Corporation, including the disclosure of information that is to the disadvantage of the Corporation, except for information that is or becomes generally known.
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(i)
|
existing and contemplated business, marketing and financial business information such as business plans and methods, marketing information, cost estimates, forecasts, financial data, cost or pricing data, bid and proposal information, customer identification, sources of supply, contemplated product lines, proposed business alliances, and information about customers and competitors,
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(ii)
|
existing and contemplated technical information and documentation pertaining to technology, know how, equipment, machines, devices and systems, computer hardware and software, compositions, formulas, products, processes, methods, designs, specifications, mask works, testing or evaluation procedures, manufacturing processes, production techniques, research and development activities, inventions, discoveries, and improvements, and
|
(iii)
|
human resources and personnel information.
|
(i)
|
I breach any of the covenants in Section 1;
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(ii)
|
The Company determines that either (a) my intentional misconduct or gross negligence, or (b) my failure to report another person’s intentional misconduct or gross negligence of which I had knowledge during the period I was employed by the Company, contributed to the Company having to restate all or a portion of its financial statements filed for any period with the Securities and Exchange Commission; or
|
(iii)
|
The Company determines that I engaged in fraud, bribery or any other illegal act or that my intentional misconduct or gross negligence (including the failure to report the acts of another person of which I had knowledge during the period I was employed by the Company) contributed to another person’s fraud, bribery or other illegal act, which in any such case adversely affected the Company’s financial position or reputation.
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Entity Name
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Description of the Competitive Business
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•
|
33-63155 on Form S-8, dated October 3, 1995;
|
•
|
33-58083 on Form S-8 (Post-Effective Amendment No. 1), dated January 22, 1997;
|
•
|
333-20117 and 333-20139 on Form S-8, each dated January 22, 1997;
|
•
|
333-27309 on Form S-8, dated May 16, 1997;
|
•
|
333-37069 on Form S-8, dated October 2, 1997;
|
•
|
333-40997 on Form S-8, dated November 25, 1997;
|
•
|
333-58069 on Form S-8, dated June 30, 1998;
|
•
|
333-92197 on Form S-8, dated December 6, 1999;
|
•
|
333-92363 on Form S-8, dated December 8, 1999;
|
•
|
333-78279 on Form S-8 (Post-Effective Amendments No. 2 and 3), each dated August 3, 2000;
|
•
|
333-56926 on Form S-8, dated March 12, 2001;
|
•
|
333-105118 on Form S-8, dated May 9, 2003;
|
•
|
333-113769, 333-113770, 333-113771, 333-113772, and 333-113773 on Form S-8, each dated March 19, 2004;
|
•
|
333-115357 on Form S-8, dated May 10, 2004;
|
•
|
333-127084 on Form S-8, dated August 1, 2005;
|
•
|
333-146963 on Form S-8, dated October 26, 2007;
|
•
|
333-155687 on Form S-8, dated November 25, 2008;
|
•
|
333-162716 on Form S-8, dated October 28, 2009;
|
•
|
333-155684 on Form S-8 (Post-Effective Amendment No. 1), dated August 23, 2011;
|
•
|
333-176440 on Form S-8, dated August 23, 2011;
|
•
|
333-188118 on Form S-8, dated April 25, 2013;
|
•
|
333-195466 on Form S-8, dated April 24, 2014 and July 23, 2014 (Post-Effective Amendment No.1);
|
•
|
333-219373 on Form S-3, dated July 20, 2017; and
|
•
|
333-219374 on Form S-3, dated July 20, 2017.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Lockheed Martin Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Marillyn A. Hewson
|
|
|
|
Marillyn A. Hewson
|
|
|
|
Chief Executive Officer
|
|
Date: July 24, 2018
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Lockheed Martin Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Bruce L. Tanner
|
|
|
|
Bruce L. Tanner
|
|
|
|
Chief Financial Officer
|
|
Date: July 24, 2018
|
|
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
|
|
|
|
/s/ Marillyn A. Hewson
|
|
|
|
|
Marillyn A. Hewson
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
/s/ Bruce L. Tanner
|
|
|
|
|
Bruce L. Tanner
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
Date: July 24, 2018
|
|
|
|
|