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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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52-1893632
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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6801 Rockledge Drive,
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Bethesda,
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Maryland
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20817
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $1 par value
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LMT
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New York Stock Exchange
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Page
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 6.
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Quarters Ended
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Nine Months Ended
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||||||||||||||||
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September 29,
2019 |
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September 30,
2018 |
|
September 29,
2019 |
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September 30,
2018 |
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Net sales
|
|
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|
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||||||||
Products
|
|
$
|
12,728
|
|
|
|
$
|
11,918
|
|
|
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$
|
36,701
|
|
|
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$
|
32,830
|
|
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Services
|
|
2,443
|
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|
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2,400
|
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7,233
|
|
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6,521
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||||
Total net sales
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15,171
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|
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14,318
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|
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43,934
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39,351
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Cost of sales
|
|
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||||||||
Products
|
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(11,339
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)
|
|
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(10,701
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)
|
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(32,638
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)
|
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(29,391
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)
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||||
Services
|
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(2,211
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)
|
|
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(2,070
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)
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(6,452
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)
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(5,726
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)
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|
||||
Severance and restructuring charges
|
|
—
|
|
|
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—
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|
|
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—
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(96
|
)
|
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||||
Other unallocated, net
|
|
442
|
|
|
|
374
|
|
|
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1,400
|
|
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1,194
|
|
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||||
Total cost of sales
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(13,108
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)
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|
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(12,397
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)
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(37,690
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)
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(34,019
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)
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Gross profit
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2,063
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1,921
|
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6,244
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5,332
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Other income, net
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42
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42
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152
|
|
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151
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Operating profit
|
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2,105
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|
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1,963
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|
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6,396
|
|
|
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5,483
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Interest expense
|
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(162
|
)
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(177
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)
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(496
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)
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(497
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)
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Other non-operating expense, net
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(162
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)
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(211
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)
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(491
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)
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(631
|
)
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Earnings before income taxes
|
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1,781
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|
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1,575
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5,409
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4,355
|
|
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Income tax expense
|
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(173
|
)
|
|
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(102
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)
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|
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(677
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)
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(562
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)
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Net earnings
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|
$
|
1,608
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|
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$
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1,473
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$
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4,732
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|
|
$
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3,793
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||||||||
Earnings per common share
|
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Basic
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$
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5.70
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$
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5.18
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$
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16.77
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$
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13.31
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Diluted
|
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$
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5.66
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|
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$
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5.14
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$
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16.66
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$
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13.21
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Cash dividends paid per common share
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$
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2.20
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$
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2.00
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$
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6.60
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$
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6.00
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Quarters Ended
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Nine Months Ended
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||||||||||||||||
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September 29,
2019 |
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September 30,
2018 |
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September 29,
2019 |
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September 30,
2018 |
||||||||||||
Net earnings
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$
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1,608
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|
|
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$
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1,473
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|
|
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$
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4,732
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|
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$
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3,793
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Other comprehensive income, net of tax
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|
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Recognition of previously deferred postretirement benefit plan amounts
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227
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300
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681
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|
900
|
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Other, net
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(41
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)
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18
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(13
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)
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(30
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)
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Other comprehensive income, net of tax
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186
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|
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|
318
|
|
|
|
668
|
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|
870
|
|
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Comprehensive income
|
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$
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1,794
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$
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1,791
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|
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$
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5,400
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$
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4,663
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September 29,
2019 |
|
December 31,
2018 |
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(unaudited)
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Assets
|
|
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|
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Current assets
|
|
|
|
|
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|
||||
Cash and cash equivalents
|
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$
|
2,539
|
|
|
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$
|
772
|
|
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Receivables, net
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2,384
|
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|
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2,444
|
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Contract assets
|
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11,004
|
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|
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9,472
|
|
|
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Inventories
|
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3,474
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|
|
|
2,997
|
|
|
||
Other current assets
|
|
402
|
|
|
|
418
|
|
|
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Total current assets
|
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19,803
|
|
|
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16,103
|
|
|
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Property, plant and equipment, net
|
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6,240
|
|
|
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6,124
|
|
|
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Goodwill
|
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10,762
|
|
|
|
10,769
|
|
|
||
Intangible assets, net
|
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3,278
|
|
|
|
3,494
|
|
|
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Deferred income taxes
|
|
2,912
|
|
|
|
3,208
|
|
|
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Other noncurrent assets
|
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6,280
|
|
|
|
5,178
|
|
|
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Total assets
|
|
$
|
49,275
|
|
|
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$
|
44,876
|
|
|
Liabilities and equity
|
|
|
|
|
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|
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Current liabilities
|
|
|
|
|
|
|
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Accounts payable
|
|
$
|
2,904
|
|
|
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$
|
2,402
|
|
|
Contract liabilities
|
|
6,777
|
|
|
|
6,491
|
|
|
||
Salaries, benefits and payroll taxes
|
|
2,308
|
|
|
|
2,122
|
|
|
||
Current maturities of long-term debt and commercial paper
|
|
900
|
|
|
|
1,500
|
|
|
||
Other current liabilities
|
|
2,626
|
|
|
|
1,883
|
|
|
||
Total current liabilities
|
|
15,515
|
|
|
|
14,398
|
|
|
||
Long-term debt, net
|
|
12,652
|
|
|
|
12,604
|
|
|
||
Accrued pension liabilities
|
|
11,436
|
|
|
|
11,410
|
|
|
||
Other postretirement benefit liabilities
|
|
677
|
|
|
|
704
|
|
|
||
Other noncurrent liabilities
|
|
5,058
|
|
|
|
4,311
|
|
|
||
Total liabilities
|
|
45,338
|
|
|
|
43,427
|
|
|
||
Stockholders’ equity
|
|
|
|
|
|
|
||||
Common stock, $1 par value per share
|
|
281
|
|
|
|
281
|
|
|
||
Additional paid-in capital
|
|
—
|
|
|
|
—
|
|
|
||
Retained earnings
|
|
17,265
|
|
|
|
15,434
|
|
|
||
Accumulated other comprehensive loss
|
|
(13,653
|
)
|
|
|
(14,321
|
)
|
|
||
Total stockholders’ equity
|
|
3,893
|
|
|
|
1,394
|
|
|
||
Noncontrolling interests in subsidiary
|
|
44
|
|
|
|
55
|
|
|
||
Total equity
|
|
3,937
|
|
|
|
1,449
|
|
|
||
Total liabilities and equity
|
|
$
|
49,275
|
|
|
|
$
|
44,876
|
|
|
|
|
Nine Months Ended
|
||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
||||||
Operating activities
|
|
|
|
|
|
|
||||
Net earnings
|
|
$
|
4,732
|
|
|
|
$
|
3,793
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
|
867
|
|
|
|
857
|
|
|
||
Stock-based compensation
|
|
158
|
|
|
|
148
|
|
|
||
Gain on property sale
|
|
(51
|
)
|
|
|
—
|
|
|
||
Severance and restructuring charges
|
|
—
|
|
|
|
96
|
|
|
||
Changes in assets and liabilities
|
|
|
|
|
|
|
||||
Receivables, net
|
|
60
|
|
|
|
(151
|
)
|
|
||
Contract assets
|
|
(1,532
|
)
|
|
|
(1,777
|
)
|
|
||
Inventories
|
|
(477
|
)
|
|
|
(172
|
)
|
|
||
Accounts payable
|
|
524
|
|
|
|
1,237
|
|
|
||
Contract liabilities
|
|
286
|
|
|
|
(539
|
)
|
|
||
Postretirement benefit plans
|
|
828
|
|
|
|
(3,935
|
)
|
|
||
Income taxes
|
|
(117
|
)
|
|
|
729
|
|
|
||
Other, net
|
|
543
|
|
|
|
635
|
|
|
||
Net cash provided by operating activities
|
|
5,821
|
|
|
|
921
|
|
|
||
Investing activities
|
|
|
|
|
|
|
||||
Capital expenditures
|
|
(841
|
)
|
|
|
(819
|
)
|
|
||
Other, net
|
|
38
|
|
|
|
146
|
|
|
||
Net cash used for investing activities
|
|
(803
|
)
|
|
|
(673
|
)
|
|
||
Financing activities
|
|
|
|
|
|
|
||||
Dividends paid
|
|
(1,881
|
)
|
|
|
(1,725
|
)
|
|
||
Repurchases of common stock
|
|
(710
|
)
|
|
|
(826
|
)
|
|
||
(Repayments of) proceeds from commercial paper, net
|
|
(600
|
)
|
|
|
490
|
|
|
||
Other, net
|
|
(60
|
)
|
|
|
(151
|
)
|
|
||
Net cash used for financing activities
|
|
(3,251
|
)
|
|
|
(2,212
|
)
|
|
||
Net change in cash and cash equivalents
|
|
1,767
|
|
|
|
(1,964
|
)
|
|
||
Cash and cash equivalents at beginning of period
|
|
772
|
|
|
|
2,861
|
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
2,539
|
|
|
|
$
|
897
|
|
|
|
Common
Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Total
Stockholders’ Equity |
Noncontrolling
Interests in Subsidiary |
Total
Equity |
||||||||||||||||||
Balance at June 30, 2019
|
$
|
281
|
|
$
|
—
|
|
|
$
|
16,408
|
|
$
|
(13,839
|
)
|
|
$
|
2,850
|
|
|
$
|
46
|
|
|
$
|
2,896
|
|
Net earnings
|
—
|
|
—
|
|
|
1,608
|
|
—
|
|
|
1,608
|
|
|
—
|
|
|
1,608
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
186
|
|
|
186
|
|
|
—
|
|
|
186
|
|
|||||||
Repurchases of common stock
|
—
|
|
(146
|
)
|
|
(72
|
)
|
—
|
|
|
(218
|
)
|
|
—
|
|
|
(218
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
|
(679
|
)
|
—
|
|
|
(679
|
)
|
|
—
|
|
|
(679
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
—
|
|
146
|
|
|
—
|
|
—
|
|
|
146
|
|
|
—
|
|
|
146
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||
Balance at September 29, 2019
|
$
|
281
|
|
$
|
—
|
|
|
$
|
17,265
|
|
$
|
(13,653
|
)
|
|
$
|
3,893
|
|
|
$
|
44
|
|
|
$
|
3,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at June 24, 2018
|
$
|
283
|
|
$
|
—
|
|
|
$
|
14,528
|
|
$
|
(14,395
|
)
|
|
$
|
416
|
|
|
$
|
63
|
|
|
$
|
479
|
|
Net earnings
|
—
|
|
—
|
|
|
1,473
|
|
—
|
|
|
1,473
|
|
|
—
|
|
|
1,473
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
318
|
|
|
318
|
|
|
—
|
|
|
318
|
|
|||||||
Repurchases of common stock
|
(1
|
)
|
(139
|
)
|
|
(63
|
)
|
—
|
|
|
(203
|
)
|
|
—
|
|
|
(203
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
|
(1,201
|
)
|
—
|
|
|
(1,201
|
)
|
|
—
|
|
|
(1,201
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
1
|
|
139
|
|
|
—
|
|
—
|
|
|
140
|
|
|
—
|
|
|
140
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
|||||||
Balance at September 30, 2018
|
$
|
283
|
|
$
|
—
|
|
|
$
|
14,737
|
|
$
|
(14,077
|
)
|
|
$
|
943
|
|
|
$
|
59
|
|
|
$
|
1,002
|
|
|
Common
Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Total
Stockholders’ Equity |
Noncontrolling
Interests in Subsidiary |
Total
Equity |
||||||||||||||||||
Balance at December 31, 2018
|
$
|
281
|
|
$
|
—
|
|
|
$
|
15,434
|
|
$
|
(14,321
|
)
|
|
$
|
1,394
|
|
|
$
|
55
|
|
|
$
|
1,449
|
|
Net earnings
|
—
|
|
—
|
|
|
4,732
|
|
—
|
|
|
4,732
|
|
|
—
|
|
|
4,732
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
668
|
|
|
668
|
|
|
—
|
|
|
668
|
|
|||||||
Repurchases of common stock
|
(2
|
)
|
(366
|
)
|
|
(350
|
)
|
—
|
|
|
(718
|
)
|
|
—
|
|
|
(718
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
|
(2,551
|
)
|
—
|
|
|
(2,551
|
)
|
|
—
|
|
|
(2,551
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
2
|
|
366
|
|
|
—
|
|
—
|
|
|
368
|
|
|
—
|
|
|
368
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||||||
Balance at September 29, 2019
|
$
|
281
|
|
$
|
—
|
|
|
$
|
17,265
|
|
$
|
(13,653
|
)
|
|
$
|
3,893
|
|
|
$
|
44
|
|
|
$
|
3,937
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2017
|
$
|
284
|
|
$
|
—
|
|
|
$
|
11,405
|
|
$
|
(12,539
|
)
|
|
$
|
(850
|
)
|
|
$
|
74
|
|
|
$
|
(776
|
)
|
Net earnings
|
—
|
|
—
|
|
|
3,793
|
|
—
|
|
|
3,793
|
|
|
—
|
|
|
3,793
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
870
|
|
|
870
|
|
|
—
|
|
|
870
|
|
|||||||
Repurchases of common stock
|
(3
|
)
|
(300
|
)
|
|
(523
|
)
|
—
|
|
|
(826
|
)
|
|
—
|
|
|
(826
|
)
|
|||||||
Dividends declared
|
—
|
|
—
|
|
|
(2,346
|
)
|
—
|
|
|
(2,346
|
)
|
|
—
|
|
|
(2,346
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
2
|
|
300
|
|
|
—
|
|
—
|
|
|
302
|
|
|
—
|
|
|
302
|
|
|||||||
Reclassification of income tax effects from tax reform
|
—
|
|
—
|
|
|
2,408
|
|
(2,408
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|||||||
Balance at September 30, 2018
|
$
|
283
|
|
$
|
—
|
|
|
$
|
14,737
|
|
$
|
(14,077
|
)
|
|
$
|
943
|
|
|
$
|
59
|
|
|
$
|
1,002
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||
Weighted average common shares outstanding for basic computations
|
|
282.0
|
|
|
|
284.3
|
|
|
|
282.2
|
|
|
|
284.9
|
|
|
Weighted average dilutive effect of equity awards
|
|
1.9
|
|
|
|
2.4
|
|
|
|
1.8
|
|
|
|
2.3
|
|
|
Weighted average common shares outstanding for diluted computations
|
|
283.9
|
|
|
|
286.7
|
|
|
|
284.0
|
|
|
|
287.2
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
6,178
|
|
|
|
$
|
5,642
|
|
|
|
$
|
17,312
|
|
|
|
$
|
15,361
|
|
|
Missiles and Fire Control
|
|
2,601
|
|
|
|
2,273
|
|
|
|
7,362
|
|
|
|
6,035
|
|
|
||||
Rotary and Mission Systems
|
|
3,709
|
|
|
|
3,848
|
|
|
|
11,239
|
|
|
|
10,637
|
|
|
||||
Space
|
|
2,683
|
|
|
|
2,555
|
|
|
|
8,021
|
|
|
|
7,318
|
|
|
||||
Total net sales
|
|
$
|
15,171
|
|
|
|
$
|
14,318
|
|
|
|
$
|
43,934
|
|
|
|
$
|
39,351
|
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
665
|
|
|
|
$
|
600
|
|
|
|
$
|
1,842
|
|
|
|
$
|
1,646
|
|
|
Missiles and Fire Control
|
|
349
|
|
|
|
332
|
|
|
|
1,093
|
|
|
|
872
|
|
|
||||
Rotary and Mission Systems
|
|
342
|
|
|
|
361
|
|
|
|
1,068
|
|
|
|
1,013
|
|
|
||||
Space
|
|
309
|
|
|
|
293
|
|
|
|
931
|
|
|
|
831
|
|
|
||||
Total business segment operating profit
|
|
1,665
|
|
|
|
1,586
|
|
|
|
4,934
|
|
|
|
4,362
|
|
|
||||
Unallocated items
|
|
|
|
|
|
|
|
|
|
|||||||||||
FAS/CAS operating adjustment (a)
|
|
513
|
|
|
|
451
|
|
|
|
1,537
|
|
|
|
1,353
|
|
|
||||
Stock-based compensation
|
|
(54
|
)
|
|
|
(50
|
)
|
|
|
(158
|
)
|
|
|
(148
|
)
|
|
||||
Severance and restructuring charges (b)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(96
|
)
|
|
||||
Other, net
|
|
(19
|
)
|
|
|
(24
|
)
|
|
|
83
|
|
|
|
12
|
|
|
||||
Total unallocated items
|
|
440
|
|
|
|
377
|
|
|
|
1,462
|
|
|
|
1,121
|
|
|
||||
Total consolidated operating profit
|
|
$
|
2,105
|
|
|
|
$
|
1,963
|
|
|
|
$
|
6,396
|
|
|
|
$
|
5,483
|
|
|
Intersegment sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
58
|
|
|
|
$
|
35
|
|
|
|
$
|
147
|
|
|
|
$
|
87
|
|
|
Missiles and Fire Control
|
|
107
|
|
|
|
122
|
|
|
|
372
|
|
|
|
330
|
|
|
||||
Rotary and Mission Systems
|
|
530
|
|
|
|
544
|
|
|
|
1,648
|
|
|
|
1,509
|
|
|
||||
Space
|
|
91
|
|
|
|
63
|
|
|
|
244
|
|
|
|
156
|
|
|
||||
Total intersegment sales
|
|
$
|
786
|
|
|
|
$
|
764
|
|
|
|
$
|
2,411
|
|
|
|
$
|
2,082
|
|
|
(a)
|
The FAS/CAS operating adjustment represents the difference between the service cost component of financial accounting standards (FAS) pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS.
|
(b)
|
Unallocated items for the nine months ended September 30, 2018 include charges totaling $96 million ($76 million, or $0.26 per share, after tax) related to certain severance and restructuring actions at our RMS business segment. See “Note 11 – Other” (under the caption “Severance and Restructuring Charges”) for more information.
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Total FAS expense and CAS costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension expense
|
|
$
|
(274
|
)
|
|
|
$
|
(356
|
)
|
|
|
$
|
(820
|
)
|
|
|
$
|
(1,069
|
)
|
|
Less: CAS pension cost
|
|
642
|
|
|
|
608
|
|
|
|
1,924
|
|
|
|
1,825
|
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
368
|
|
|
|
$
|
252
|
|
|
|
$
|
1,104
|
|
|
|
$
|
756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service and non-service cost reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension service cost
|
|
$
|
(129
|
)
|
|
|
$
|
(157
|
)
|
|
|
$
|
(387
|
)
|
|
|
$
|
(472
|
)
|
|
Less: CAS pension cost
|
|
642
|
|
|
|
608
|
|
|
|
1,924
|
|
|
|
1,825
|
|
|
||||
FAS/CAS operating adjustment
|
|
513
|
|
|
|
451
|
|
|
|
1,537
|
|
|
|
1,353
|
|
|
||||
Non-operating FAS pension cost(a)
|
|
(145
|
)
|
|
|
(199
|
)
|
|
|
(433
|
)
|
|
|
(597
|
)
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
368
|
|
|
|
$
|
252
|
|
|
|
$
|
1,104
|
|
|
|
$
|
756
|
|
|
(a)
|
The non-service cost components of net periodic benefit cost relate only to our qualified defined benefit pension plans. In addition to the non-service cost components in the table above, we incurred similar costs for our other postretirement benefit plans of $30 million and $87 million for the quarter and nine months ended September 29, 2019 and $16 million and $49 million for the quarter and nine months ended September 30, 2018.
|
|
|
Quarter Ended September 29, 2019
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
5,340
|
|
|
$
|
2,172
|
|
|
$
|
2,982
|
|
|
$
|
2,234
|
|
|
$
|
12,728
|
|
Services
|
|
838
|
|
|
429
|
|
|
727
|
|
|
449
|
|
|
2,443
|
|
|||||
Total net sales
|
|
$
|
6,178
|
|
|
$
|
2,601
|
|
|
$
|
3,709
|
|
|
$
|
2,683
|
|
|
$
|
15,171
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
4,567
|
|
|
$
|
1,681
|
|
|
$
|
2,536
|
|
|
$
|
527
|
|
|
$
|
9,311
|
|
Cost-reimbursable
|
|
1,611
|
|
|
920
|
|
|
1,173
|
|
|
2,156
|
|
|
5,860
|
|
|||||
Total net sales
|
|
$
|
6,178
|
|
|
$
|
2,601
|
|
|
$
|
3,709
|
|
|
$
|
2,683
|
|
|
$
|
15,171
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
3,509
|
|
|
$
|
1,995
|
|
|
$
|
2,763
|
|
|
$
|
2,332
|
|
|
$
|
10,599
|
|
International (a)
|
|
2,631
|
|
|
572
|
|
|
804
|
|
|
343
|
|
|
4,350
|
|
|||||
U.S. commercial and other
|
|
38
|
|
|
34
|
|
|
142
|
|
|
8
|
|
|
222
|
|
|||||
Total net sales
|
|
$
|
6,178
|
|
|
$
|
2,601
|
|
|
$
|
3,709
|
|
|
$
|
2,683
|
|
|
$
|
15,171
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
3,547
|
|
|
$
|
2,029
|
|
|
$
|
2,905
|
|
|
$
|
2,340
|
|
|
$
|
10,821
|
|
Asia Pacific
|
|
1,046
|
|
|
107
|
|
|
317
|
|
|
17
|
|
|
1,487
|
|
|||||
Europe
|
|
1,106
|
|
|
138
|
|
|
168
|
|
|
326
|
|
|
1,738
|
|
|||||
Middle East
|
|
455
|
|
|
318
|
|
|
206
|
|
|
—
|
|
|
979
|
|
|||||
Other
|
|
24
|
|
|
9
|
|
|
113
|
|
|
—
|
|
|
146
|
|
|||||
Total net sales
|
|
$
|
6,178
|
|
|
$
|
2,601
|
|
|
$
|
3,709
|
|
|
$
|
2,683
|
|
|
$
|
15,171
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine Months Ended September 29, 2019
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
14,876
|
|
|
$
|
6,051
|
|
|
$
|
9,064
|
|
|
$
|
6,710
|
|
|
$
|
36,701
|
|
Services
|
|
2,436
|
|
|
1,311
|
|
|
2,175
|
|
|
1,311
|
|
|
7,233
|
|
|||||
Total net sales
|
|
$
|
17,312
|
|
|
$
|
7,362
|
|
|
$
|
11,239
|
|
|
$
|
8,021
|
|
|
$
|
43,934
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
12,777
|
|
|
$
|
4,660
|
|
|
$
|
7,681
|
|
|
$
|
1,585
|
|
|
$
|
26,703
|
|
Cost-reimbursable
|
|
4,535
|
|
|
2,702
|
|
|
3,558
|
|
|
6,436
|
|
|
17,231
|
|
|||||
Total net sales
|
|
$
|
17,312
|
|
|
$
|
7,362
|
|
|
$
|
11,239
|
|
|
$
|
8,021
|
|
|
$
|
43,934
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
10,420
|
|
|
$
|
5,528
|
|
|
$
|
8,113
|
|
|
$
|
6,900
|
|
|
$
|
30,961
|
|
International (a)
|
|
6,736
|
|
|
1,717
|
|
|
2,773
|
|
|
1,098
|
|
|
12,324
|
|
|||||
U.S. commercial and other
|
|
156
|
|
|
117
|
|
|
353
|
|
|
23
|
|
|
649
|
|
|||||
Total net sales
|
|
$
|
17,312
|
|
|
$
|
7,362
|
|
|
$
|
11,239
|
|
|
$
|
8,021
|
|
|
$
|
43,934
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
10,576
|
|
|
$
|
5,645
|
|
|
$
|
8,466
|
|
|
$
|
6,923
|
|
|
$
|
31,610
|
|
Asia Pacific
|
|
2,736
|
|
|
315
|
|
|
1,065
|
|
|
48
|
|
|
4,164
|
|
|||||
Europe
|
|
2,751
|
|
|
363
|
|
|
509
|
|
|
1,035
|
|
|
4,658
|
|
|||||
Middle East
|
|
1,127
|
|
|
1,003
|
|
|
738
|
|
|
15
|
|
|
2,883
|
|
|||||
Other
|
|
122
|
|
|
36
|
|
|
461
|
|
|
—
|
|
|
619
|
|
|||||
Total net sales
|
|
$
|
17,312
|
|
|
$
|
7,362
|
|
|
$
|
11,239
|
|
|
$
|
8,021
|
|
|
$
|
43,934
|
|
(a)
|
International sales include foreign military sales (FMS) contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
|
|
|
Quarter Ended September 30, 2018
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
4,799
|
|
|
$
|
1,873
|
|
|
$
|
3,132
|
|
|
$
|
2,114
|
|
|
$
|
11,918
|
|
Services
|
|
843
|
|
|
400
|
|
|
716
|
|
|
441
|
|
|
2,400
|
|
|||||
Total net sales
|
|
$
|
5,642
|
|
|
$
|
2,273
|
|
|
$
|
3,848
|
|
|
$
|
2,555
|
|
|
$
|
14,318
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
4,163
|
|
|
$
|
1,536
|
|
|
$
|
2,710
|
|
|
$
|
534
|
|
|
$
|
8,943
|
|
Cost-reimbursable
|
|
1,479
|
|
|
737
|
|
|
1,138
|
|
|
2,021
|
|
|
5,375
|
|
|||||
Total net sales
|
|
$
|
5,642
|
|
|
$
|
2,273
|
|
|
$
|
3,848
|
|
|
$
|
2,555
|
|
|
$
|
14,318
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
3,700
|
|
|
$
|
1,625
|
|
|
$
|
2,765
|
|
|
$
|
2,174
|
|
|
$
|
10,264
|
|
International (a)
|
|
1,909
|
|
|
600
|
|
|
959
|
|
|
362
|
|
|
3,830
|
|
|||||
U.S. commercial and other
|
|
33
|
|
|
48
|
|
|
124
|
|
|
19
|
|
|
224
|
|
|||||
Total net sales
|
|
$
|
5,642
|
|
|
$
|
2,273
|
|
|
$
|
3,848
|
|
|
$
|
2,555
|
|
|
$
|
14,318
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
3,733
|
|
|
$
|
1,673
|
|
|
$
|
2,889
|
|
|
$
|
2,193
|
|
|
$
|
10,488
|
|
Asia Pacific
|
|
854
|
|
|
126
|
|
|
377
|
|
|
8
|
|
|
1,365
|
|
|||||
Europe
|
|
691
|
|
|
112
|
|
|
213
|
|
|
324
|
|
|
1,340
|
|
|||||
Middle East
|
|
326
|
|
|
347
|
|
|
202
|
|
|
30
|
|
|
905
|
|
|||||
Other
|
|
38
|
|
|
15
|
|
|
167
|
|
|
—
|
|
|
220
|
|
|||||
Total net sales
|
|
$
|
5,642
|
|
|
$
|
2,273
|
|
|
$
|
3,848
|
|
|
$
|
2,555
|
|
|
$
|
14,318
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
13,080
|
|
|
$
|
4,935
|
|
|
$
|
8,753
|
|
|
$
|
6,062
|
|
|
$
|
32,830
|
|
Services
|
|
2,281
|
|
|
1,100
|
|
|
1,884
|
|
|
1,256
|
|
|
6,521
|
|
|||||
Total net sales
|
|
$
|
15,361
|
|
|
$
|
6,035
|
|
|
$
|
10,637
|
|
|
$
|
7,318
|
|
|
$
|
39,351
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
11,284
|
|
|
$
|
4,043
|
|
|
$
|
7,368
|
|
|
$
|
1,394
|
|
|
$
|
24,089
|
|
Cost-reimbursable
|
|
4,077
|
|
|
1,992
|
|
|
3,269
|
|
|
5,924
|
|
|
15,262
|
|
|||||
Total net sales
|
|
$
|
15,361
|
|
|
$
|
6,035
|
|
|
$
|
10,637
|
|
|
$
|
7,318
|
|
|
$
|
39,351
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
9,909
|
|
|
$
|
4,215
|
|
|
$
|
7,729
|
|
|
$
|
6,114
|
|
|
$
|
27,967
|
|
International (a)
|
|
5,321
|
|
|
1,696
|
|
|
2,562
|
|
|
1,162
|
|
|
10,741
|
|
|||||
U.S. commercial and other
|
|
131
|
|
|
124
|
|
|
346
|
|
|
42
|
|
|
643
|
|
|||||
Total net sales
|
|
$
|
15,361
|
|
|
$
|
6,035
|
|
|
$
|
10,637
|
|
|
$
|
7,318
|
|
|
$
|
39,351
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
10,040
|
|
|
$
|
4,339
|
|
|
$
|
8,075
|
|
|
$
|
6,156
|
|
|
$
|
28,610
|
|
Asia Pacific
|
|
2,394
|
|
|
349
|
|
|
1,002
|
|
|
62
|
|
|
3,807
|
|
|||||
Europe
|
|
1,877
|
|
|
227
|
|
|
592
|
|
|
1,082
|
|
|
3,778
|
|
|||||
Middle East
|
|
903
|
|
|
1,091
|
|
|
516
|
|
|
18
|
|
|
2,528
|
|
|||||
Other
|
|
147
|
|
|
29
|
|
|
452
|
|
|
—
|
|
|
628
|
|
|||||
Total net sales
|
|
$
|
15,361
|
|
|
$
|
6,035
|
|
|
$
|
10,637
|
|
|
$
|
7,318
|
|
|
$
|
39,351
|
|
(a)
|
International sales include foreign military sales (FMS) contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
|
|
|
September 29,
2019 |
|
December 31,
2018 |
||||||
Assets
|
|
|
|
|
|
|
||||
Aeronautics
|
|
$
|
10,441
|
|
|
|
$
|
8,435
|
|
|
Missiles and Fire Control
|
|
5,276
|
|
|
|
5,017
|
|
|
||
Rotary and Mission Systems
|
|
18,843
|
|
|
|
18,333
|
|
|
||
Space
|
|
5,821
|
|
|
|
5,445
|
|
|
||
Total business segment assets
|
|
40,381
|
|
|
|
37,230
|
|
|
||
Corporate assets (a)
|
|
8,894
|
|
|
|
7,646
|
|
|
||
Total assets
|
|
$
|
49,275
|
|
|
|
$
|
44,876
|
|
|
(a)
|
Corporate assets primarily include cash and cash equivalents, deferred income taxes, environmental receivables, and investments held in a separate trust to fund certain of our non-qualified deferred compensation plans.
|
|
|
September 29,
2019 |
|
December 31,
2018 |
||||||
Contract assets
|
|
$
|
11,004
|
|
|
|
$
|
9,472
|
|
|
Contract liabilities
|
|
6,777
|
|
|
|
6,491
|
|
|
|
|
September 29,
2019 |
|
December 31,
2018 |
||||||
Materials, spares and supplies
|
|
$
|
460
|
|
|
|
$
|
446
|
|
|
Work-in-process
|
|
2,696
|
|
|
|
2,161
|
|
|
||
Finished goods
|
|
318
|
|
|
|
390
|
|
|
||
Total inventories
|
|
$
|
3,474
|
|
|
|
$
|
2,997
|
|
|
|
Total
|
Remainder of
2019
|
2020
|
2021
|
2022
|
2023
|
Thereafter
|
|||||||||||||||||||||
Operating leases
|
$
|
1,248
|
|
|
$
|
134
|
|
|
$
|
210
|
|
|
$
|
179
|
|
|
$
|
143
|
|
|
$
|
107
|
|
|
$
|
475
|
|
|
Less: imputed interest
|
$
|
167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
1,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Qualified defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
129
|
|
|
|
$
|
157
|
|
|
|
$
|
387
|
|
|
|
$
|
472
|
|
|
Interest cost
|
|
452
|
|
|
|
435
|
|
|
|
1,355
|
|
|
|
1,305
|
|
|
||||
Expected return on plan assets
|
|
(575
|
)
|
|
|
(599
|
)
|
|
|
(1,725
|
)
|
|
|
(1,796
|
)
|
|
||||
Recognized net actuarial losses
|
|
351
|
|
|
|
444
|
|
|
|
1,053
|
|
|
|
1,332
|
|
|
||||
Amortization of prior service credits
|
|
(83
|
)
|
|
|
(81
|
)
|
|
|
(250
|
)
|
|
|
(244
|
)
|
|
||||
Total net periodic benefit cost
|
|
$
|
274
|
|
|
|
$
|
356
|
|
|
|
$
|
820
|
|
|
|
$
|
1,069
|
|
|
Retiree medical and life insurance plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
4
|
|
|
|
$
|
4
|
|
|
|
$
|
11
|
|
|
|
$
|
13
|
|
|
Interest cost
|
|
25
|
|
|
|
23
|
|
|
|
73
|
|
|
|
69
|
|
|
||||
Expected return on plan assets
|
|
(28
|
)
|
|
|
(34
|
)
|
|
|
(83
|
)
|
|
|
(101
|
)
|
|
||||
Recognized net actuarial losses
|
|
1
|
|
|
|
2
|
|
|
|
2
|
|
|
|
4
|
|
|
||||
Amortization of prior service costs
|
|
10
|
|
|
|
4
|
|
|
|
31
|
|
|
|
11
|
|
|
||||
Total net periodic benefit cost (credit)
|
|
$
|
12
|
|
|
|
$
|
(1
|
)
|
|
|
$
|
34
|
|
|
|
$
|
(4
|
)
|
|
|
|
September 29, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
|
$
|
998
|
|
|
$
|
998
|
|
|
$
|
—
|
|
|
$
|
978
|
|
|
$
|
978
|
|
|
$
|
—
|
|
U.S. Government securities
|
|
88
|
|
|
—
|
|
|
88
|
|
|
105
|
|
|
—
|
|
|
105
|
|
||||||
Other securities
|
|
285
|
|
|
135
|
|
|
150
|
|
|
144
|
|
|
28
|
|
|
116
|
|
||||||
Derivatives
|
|
30
|
|
|
—
|
|
|
30
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
|
37
|
|
|
—
|
|
|
37
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||||
Assets measured at NAV (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other commingled funds
|
|
18
|
|
|
|
|
|
|
18
|
|
|
|
|
|
(a)
|
Net Asset Value (NAV) is the total value of the fund divided by the number of the fund’s shares outstanding.
|
|
|
Postretirement
Benefit Plans
|
|
Other, net
|
|
AOCL
|
||||||
Balance at December 31, 2018
|
|
$
|
(14,254
|
)
|
|
$
|
(67
|
)
|
|
$
|
(14,321
|
)
|
Other comprehensive income before reclassifications
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses (a)
|
|
861
|
|
|
—
|
|
|
861
|
|
|||
Amortization of net prior service credits (a)
|
|
(180
|
)
|
|
—
|
|
|
(180
|
)
|
|||
Other
|
|
—
|
|
|
17
|
|
|
17
|
|
|||
Total reclassified from AOCL
|
|
681
|
|
|
17
|
|
|
698
|
|
|||
Total other comprehensive income
|
|
681
|
|
|
(13
|
)
|
|
668
|
|
|||
Balance at September 29, 2019
|
|
$
|
(13,573
|
)
|
|
$
|
(80
|
)
|
|
$
|
(13,653
|
)
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2017
|
|
$
|
(12,559
|
)
|
|
$
|
20
|
|
|
$
|
(12,539
|
)
|
Other comprehensive loss before reclassifications
|
|
—
|
|
|
(53
|
)
|
|
(53
|
)
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses (a)
|
|
1,092
|
|
|
—
|
|
|
1,092
|
|
|||
Amortization of net prior service credits (a)
|
|
(192
|
)
|
|
—
|
|
|
(192
|
)
|
|||
Other
|
|
—
|
|
|
23
|
|
|
23
|
|
|||
Total reclassified from AOCL
|
|
900
|
|
|
23
|
|
|
923
|
|
|||
Total other comprehensive income (loss)
|
|
900
|
|
|
(30
|
)
|
|
870
|
|
|||
Reclassification of income tax effects from tax reform(b)
|
|
(2,396
|
)
|
|
(12
|
)
|
|
(2,408
|
)
|
|||
Balance at September 30, 2018
|
|
$
|
(14,055
|
)
|
|
$
|
(22
|
)
|
|
$
|
(14,077
|
)
|
(a)
|
Reclassifications from AOCL related to our postretirement benefit plans were recorded as a component of net periodic benefit cost for each period presented (see “Note 7 – Postretirement Benefit Plans”). These amounts include $227 million and $300 million, net of tax, for the quarters ended September 29, 2019 and September 30, 2018, which are comprised of the recognition of net actuarial losses of $287 million and $364 million for the quarters ended September 29, 2019 and September 30, 2018 and the amortization of net prior service credits of $(60) million and $(64) million for the quarters ended September 29, 2019 and September 30, 2018.
|
(b)
|
Upon adoption of ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220) during the first quarter of 2018, we reclassified the impact of the income tax effects related to the Tax Cuts and Jobs Act (the Tax Act) from AOCL to retained earnings by the same amount with zero impact to total equity.
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Net sales
|
|
$
|
15,171
|
|
|
|
$
|
14,318
|
|
|
|
$
|
43,934
|
|
|
|
$
|
39,351
|
|
|
Cost of sales
|
|
(13,108
|
)
|
|
|
(12,397
|
)
|
|
|
(37,690
|
)
|
|
|
(34,019
|
)
|
|
||||
Gross profit
|
|
2,063
|
|
|
|
1,921
|
|
|
|
6,244
|
|
|
|
5,332
|
|
|
||||
Other income, net
|
|
42
|
|
|
|
42
|
|
|
|
152
|
|
|
|
151
|
|
|
||||
Operating profit
|
|
2,105
|
|
|
|
1,963
|
|
|
|
6,396
|
|
|
|
5,483
|
|
|
||||
Interest expense
|
|
(162
|
)
|
|
|
(177
|
)
|
|
|
(496
|
)
|
|
|
(497
|
)
|
|
||||
Other non-operating expense, net
|
|
(162
|
)
|
|
|
(211
|
)
|
|
|
(491
|
)
|
|
|
(631
|
)
|
|
||||
Earnings before income taxes
|
|
1,781
|
|
|
|
1,575
|
|
|
|
5,409
|
|
|
|
4,355
|
|
|
||||
Income tax expense
|
|
(173
|
)
|
|
|
(102
|
)
|
|
|
(677
|
)
|
|
|
(562
|
)
|
|
||||
Net earnings
|
|
$
|
1,608
|
|
|
|
$
|
1,473
|
|
|
|
$
|
4,732
|
|
|
|
$
|
3,793
|
|
|
Diluted earnings per common share
|
|
$
|
5.66
|
|
|
|
$
|
5.14
|
|
|
|
$
|
16.66
|
|
|
|
$
|
13.21
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Products
|
|
$
|
12,728
|
|
|
|
$
|
11,918
|
|
|
|
$
|
36,701
|
|
|
|
$
|
32,830
|
|
|
% of total net sales
|
|
83.9
|
%
|
|
|
83.2
|
%
|
|
|
83.5
|
%
|
|
|
83.4
|
%
|
|
||||
Services
|
|
2,443
|
|
|
|
2,400
|
|
|
|
7,233
|
|
|
|
6,521
|
|
|
||||
% of total net sales
|
|
16.1
|
%
|
|
|
16.8
|
%
|
|
|
16.5
|
%
|
|
|
16.6
|
%
|
|
||||
Total net sales
|
|
$
|
15,171
|
|
|
|
$
|
14,318
|
|
|
|
$
|
43,934
|
|
|
|
$
|
39,351
|
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Cost of sales – products
|
|
$
|
(11,339
|
)
|
|
|
$
|
(10,701
|
)
|
|
|
$
|
(32,638
|
)
|
|
|
$
|
(29,391
|
)
|
|
% of product sales
|
|
89.1
|
%
|
|
|
89.8
|
%
|
|
|
88.9
|
%
|
|
|
89.5
|
%
|
|
||||
Cost of sales – services
|
|
(2,211
|
)
|
|
|
(2,070
|
)
|
|
|
(6,452
|
)
|
|
|
(5,726
|
)
|
|
||||
% of service sales
|
|
90.5
|
%
|
|
|
86.3
|
%
|
|
|
89.2
|
%
|
|
|
87.8
|
%
|
|
||||
Severance and restructuring charges
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(96
|
)
|
|
||||
Other unallocated, net
|
|
442
|
|
|
|
374
|
|
|
|
1,400
|
|
|
|
1,194
|
|
|
||||
Total cost of sales
|
|
$
|
(13,108
|
)
|
|
|
$
|
(12,397
|
)
|
|
|
$
|
(37,690
|
)
|
|
|
$
|
(34,019
|
)
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
6,178
|
|
|
|
$
|
5,642
|
|
|
|
$
|
17,312
|
|
|
|
$
|
15,361
|
|
|
Missiles and Fire Control
|
|
2,601
|
|
|
|
2,273
|
|
|
|
7,362
|
|
|
|
6,035
|
|
|
||||
Rotary and Mission Systems
|
|
3,709
|
|
|
|
3,848
|
|
|
|
11,239
|
|
|
|
10,637
|
|
|
||||
Space
|
|
2,683
|
|
|
|
2,555
|
|
|
|
8,021
|
|
|
|
7,318
|
|
|
||||
Total net sales
|
|
$
|
15,171
|
|
|
|
$
|
14,318
|
|
|
|
$
|
43,934
|
|
|
|
$
|
39,351
|
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
|||||||||||
Aeronautics
|
|
$
|
665
|
|
|
|
$
|
600
|
|
|
|
$
|
1,842
|
|
|
|
$
|
1,646
|
|
|
Missiles and Fire Control
|
|
349
|
|
|
|
332
|
|
|
|
1,093
|
|
|
|
872
|
|
|
||||
Rotary and Mission Systems
|
|
342
|
|
|
|
361
|
|
|
|
1,068
|
|
|
|
1,013
|
|
|
||||
Space
|
|
309
|
|
|
|
293
|
|
|
|
931
|
|
|
|
831
|
|
|
||||
Total business segment operating profit
|
|
1,665
|
|
|
|
1,586
|
|
|
|
4,934
|
|
|
|
4,362
|
|
|
||||
Unallocated items
|
|
|
|
|
|
|
|
|
|
|||||||||||
FAS/CAS operating adjustment (a)
|
|
513
|
|
|
|
451
|
|
|
|
1,537
|
|
|
|
1,353
|
|
|
||||
Stock-based compensation
|
|
(54
|
)
|
|
|
(50
|
)
|
|
|
(158
|
)
|
|
|
(148
|
)
|
|
||||
Severance and restructuring charges (b)
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(96
|
)
|
|
||||
Other, net
|
|
(19
|
)
|
|
|
(24
|
)
|
|
|
83
|
|
|
|
12
|
|
|
||||
Total unallocated items
|
|
440
|
|
|
|
377
|
|
|
|
1,462
|
|
|
|
1,121
|
|
|
||||
Total consolidated operating profit
|
|
$
|
2,105
|
|
|
|
$
|
1,963
|
|
|
|
$
|
6,396
|
|
|
|
$
|
5,483
|
|
|
(a)
|
The FAS/CAS operating adjustment represents the difference between the service cost component of financial accounting standards (FAS) pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS.
|
(b)
|
Unallocated items for the nine months ended September 30, 2018 include charges totaling $96 million ($76 million, or $0.26 per share, after tax) related to certain severance and restructuring actions at our RMS business segment. See “Note 11 – Other” included in our Notes to Consolidated Financial Statements (under the caption “Severance and Restructuring Charges”) for more information.
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Total FAS expense and CAS costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension expense
|
|
$
|
(274
|
)
|
|
|
$
|
(356
|
)
|
|
|
$
|
(820
|
)
|
|
|
$
|
(1,069
|
)
|
|
Less: CAS pension cost
|
|
642
|
|
|
|
608
|
|
|
|
1,924
|
|
|
|
1,825
|
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
368
|
|
|
|
$
|
252
|
|
|
|
$
|
1,104
|
|
|
|
$
|
756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Service and non-service cost reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FAS pension service cost
|
|
$
|
(129
|
)
|
|
|
$
|
(157
|
)
|
|
|
$
|
(387
|
)
|
|
|
$
|
(472
|
)
|
|
Less: CAS pension cost
|
|
642
|
|
|
|
608
|
|
|
|
1,924
|
|
|
|
1,825
|
|
|
||||
FAS/CAS operating adjustment
|
|
513
|
|
|
|
451
|
|
|
|
1,537
|
|
|
|
1,353
|
|
|
||||
Non-operating FAS pension cost(a)
|
|
(145
|
)
|
|
|
(199
|
)
|
|
|
(433
|
)
|
|
|
(597
|
)
|
|
||||
Net FAS/CAS pension adjustment
|
|
$
|
368
|
|
|
|
$
|
252
|
|
|
|
$
|
1,104
|
|
|
|
$
|
756
|
|
|
(a)
|
The non-service cost components of net periodic benefit cost relate only to our qualified defined benefit pension plans. In addition to the non-service cost components in the table above, we incurred similar costs for our other postretirement benefit plans of $30 million and $87 million for the quarter and nine months ended September 29, 2019 and $16 million and $49 million for the quarter and nine months ended September 30, 2018.
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Net sales
|
|
$
|
6,178
|
|
|
|
$
|
5,642
|
|
|
|
$
|
17,312
|
|
|
|
$
|
15,361
|
|
|
Operating profit
|
|
665
|
|
|
|
600
|
|
|
|
1,842
|
|
|
|
1,646
|
|
|
||||
Operating margin
|
|
10.8
|
%
|
|
|
10.6
|
%
|
|
|
10.6
|
%
|
|
|
10.7
|
%
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Net sales
|
|
$
|
2,601
|
|
|
|
$
|
2,273
|
|
|
|
$
|
7,362
|
|
|
|
$
|
6,035
|
|
|
Operating profit
|
|
349
|
|
|
|
332
|
|
|
|
1,093
|
|
|
|
872
|
|
|
||||
Operating margin
|
|
13.4
|
%
|
|
|
14.6
|
%
|
|
|
14.8
|
%
|
|
|
14.4
|
%
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Net sales
|
|
$
|
3,709
|
|
|
|
$
|
3,848
|
|
|
|
$
|
11,239
|
|
|
|
$
|
10,637
|
|
|
Operating profit
|
|
342
|
|
|
|
361
|
|
|
|
1,068
|
|
|
|
1,013
|
|
|
||||
Operating margin
|
|
9.2
|
%
|
|
|
9.4
|
%
|
|
|
9.5
|
%
|
|
|
9.5
|
%
|
|
|
|
Quarters Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||
Net sales
|
|
$
|
2,683
|
|
|
|
$
|
2,555
|
|
|
|
$
|
8,021
|
|
|
|
$
|
7,318
|
|
|
Operating profit
|
|
309
|
|
|
|
293
|
|
|
|
931
|
|
|
|
831
|
|
|
||||
Operating margin
|
|
11.5
|
%
|
|
|
11.5
|
%
|
|
|
11.6
|
%
|
|
|
11.4
|
%
|
|
|
|
Nine Months Ended
|
||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
||||||
Cash and cash equivalents at beginning of year
|
|
$
|
772
|
|
|
|
$
|
2,861
|
|
|
Operating activities
|
|
|
|
|
|
|
||||
Net earnings
|
|
4,732
|
|
|
|
3,793
|
|
|
||
Non-cash adjustments
|
|
974
|
|
|
|
1,101
|
|
|
||
Changes in working capital
|
|
(1,139
|
)
|
|
|
(1,402
|
)
|
|
||
Other, net
|
|
1,254
|
|
|
|
(2,571
|
)
|
|
||
Net cash provided by operating activities
|
|
5,821
|
|
|
|
921
|
|
|
||
Net cash used for investing activities
|
|
(803
|
)
|
|
|
(673
|
)
|
|
||
Net cash used for financing activities
|
|
(3,251
|
)
|
|
|
(2,212
|
)
|
|
||
Net change in cash and cash equivalents
|
|
1,767
|
|
|
|
(1,964
|
)
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
2,539
|
|
|
|
$
|
897
|
|
|
•
|
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 impact of continuing resolution funding mechanisms and the potential for a government shutdown (including the potential that we work on unfunded contracts to preserve their cost and/or schedule);
|
•
|
risks related to the development, production, sustainment, performance, schedule, cost and requirements of complex and technologically advanced programs including our largest, the F-35 program;
|
•
|
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;
|
•
|
economic, industry, business and political conditions including their effects on governmental policy and government actions that disrupt our supply chain or prevent the sale or delivery of our products (such as delays in obtaining Congressional approvals for exports requiring Congressional notification);
|
•
|
trade policies or sanctions (including the impact of potential U.S. Government sanctions on Turkey and Turkey’s removal from the F-35 program and potential sanctions on the Kingdom of Saudi Arabia);
|
•
|
our success expanding into and doing business in adjacent markets and internationally and the differing risks posed by international sales;
|
•
|
changes in foreign national priorities and foreign government budgets;
|
•
|
the competitive environment for our products and services, including increased pricing pressures, aggressive pricing in the absence of cost realism evaluation criteria, competition from outside the aerospace and defense industry, and increased bid protests;
|
•
|
the timing and customer acceptance of product deliveries;
|
•
|
our ability to continue to innovate and develop new products and to attract and retain key personnel and transfer knowledge to new personnel; the impact of work stoppages or other labor disruptions;
|
•
|
the impact of cyber or other security threats or other disruptions to our businesses;
|
•
|
our ability to implement and continue, and the timing and impact of, capitalization changes such as share repurchases and dividend payments;
|
•
|
our ability to recover costs under U.S. Government contracts and changes in contract mix;
|
•
|
the accuracy of our estimates and projections;
|
•
|
timing and estimates regarding pension funding and movements in interest rates and other changes that may affect pension plan assumptions, stockholders’ equity, the level of the FAS/CAS adjustment and actual returns on pension plan assets;
|
•
|
the successful operation of ventures that we do not control and our ability to recover our investments;
|
•
|
realizing the anticipated benefits of acquisitions or divestitures, ventures, teaming arrangements or internal reorganizations;
|
•
|
our efforts to increase the efficiency of our operations and improve the affordability of our products and services;
|
•
|
risk of an impairment of our assets, including the potential impairment of goodwill, intangible assets and inventory recorded as a result of the acquisition of the Sikorsky business and the potential further impairment of our equity investment in Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC);
|
•
|
the availability and adequacy of our insurance and indemnities;
|
•
|
the effect of changes in (or in the interpretation of) procurement and other regulations and policies affecting our industry, including export of our products, cost allowability or recovery, aggressive government positions on the use and ownership of intellectual property and potential changes to the DoD’s acquisition regulations relating to progress payments and performance-based payments and a preference for fixed-price contracts;
|
•
|
the effect of changes in accounting, taxation, or export laws, regulations, and policies; and
|
•
|
the outcome of legal proceedings, bid protests, environmental remediation efforts, government investigations or government allegations that we have failed to comply with law, other contingencies and U.S. Government identification of deficiencies in our business systems.
|
(a)
|
We close our books and records on the last Sunday of each month to align our financial closing with our business processes, except for the month of December, as our fiscal year ends on December 31. As a result, our fiscal months often differ from the calendar months. For example, July 28, 2019 was the last day of our July 2019 fiscal month.
|
(b)
|
In October 2010, our Board of Directors approved a share repurchase program pursuant to which we are authorized to repurchase our common stock in privately negotiated transactions or in the open market at prices per share not exceeding the then-current market prices. From time to time, our Board of Directors authorizes increases to our share repurchase program. The total remaining authorization for future common share repurchases under our share repurchase program was $3.3 billion as of September 29, 2019, including a $1.0 billion increase to the program authorized by our Board of Directors on September 26, 2019. Under the program, management has discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable law and regulation. This includes purchases pursuant to Rule 10b5-1 plans, including accelerated share repurchases. The program does not have an expiration date.
|
(c)
|
During the quarter ended September 29, 2019, the total number of shares purchased included 634 shares that were transferred to us by employees in satisfaction of tax withholding obligations associated with the vesting of restricted stock units. These purchases were made pursuant to a separate authorization by our Board of Directors and are not included within the program.
|
Exhibit No.
|
|
Description
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
15
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101
|
|
|
Lockheed Martin Corporation
|
|
|
(Registrant)
|
|
|
|
Date: October 24, 2019
|
|
By: /s/ Brian P. Colan
|
|
|
Brian P. Colan
|
|
|
Vice President and Controller
|
|
|
(Duly Authorized Officer and Chief Accounting Officer)
|
Annual Cash Retainer
|
$155,000 per year through December 31, 2019; $162,500 per year effective January 1, 2020
|
Annual Equity Retainer
|
$155,000 through December 31, 2019; $162,500 effective January 1, 2020, payable under the Lockheed Martin Corporation Directors Equity Plan*
|
Audit Committee Chairman Retainer
|
$30,000 per year
|
Management Development and Compensation Committee Chairman Retainer
|
$30,000 per year
|
Other Committee Chairman Retainers
|
$20,000 per year
|
Lead Director Retainer
|
$35,000 per year through December 31, 2019; $50,000 per year effective January 1, 2020
|
Travel Accident Insurance
|
$1,000,000
|
Deferred Compensation Plan
|
Deferral plan for cash retainer
|
Director Education
|
Reimbursed for costs and expenses
|
Stock Ownership Guidelines
|
Ownership in common stock or stock units with a value equivalent to five times the annual cash retainer within five years of joining the Board
|
•
|
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: October 24, 2019
|
|
|
|
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/ Kenneth R. Possenriede
|
|
|
|
Kenneth R. Possenriede
|
|
|
|
Chief Financial Officer
|
|
Date: October 24, 2019
|
|
|
|
(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/ Kenneth R. Possenriede
|
|
|
|
|
Kenneth R. Possenriede
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
Date: October 24, 2019
|
|
|
|
|