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☒
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ANNUAL 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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PART I
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Page
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 4(a).
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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ITEM 16.
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•
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F-35 Lightning II Joint Strike Fighter - international multi-role, multi-variant, fifth generation stealth fighter;
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•
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C-130 Hercules - international tactical airlifter;
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•
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F-16 Fighting Falcon - low-cost, combat-proven, international multi-role fighter; and
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•
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F-22 Raptor - air dominance and multi-mission fifth generation stealth fighter.
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•
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The Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense (THAAD) air and missile defense programs. PAC-3 is an advanced defensive missile for the U.S. Army and international customers designed to intercept and eliminate incoming airborne threats using kinetic energy. THAAD is a transportable defensive missile system for the U.S. Government and international customers designed to engage targets both within and outside of the Earth’s atmosphere.
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•
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The Multiple Launch Rocket System (MLRS), Hellfire, Joint Air-to-Surface Standoff Missile (JASSM) and Javelin tactical missile programs. MLRS is a highly mobile, automatic system that fires surface-to-surface rockets and missiles from the M270 and High Mobility Artillery Rocket System platforms produced for the U.S. Army and international customers. Hellfire is an air-to-ground missile used on rotary and fixed-wing aircraft, which is produced for the U.S. Army, Navy, Marine Corps and international customers. JASSM is an air-to-ground missile launched from fixed-wing aircraft, which is produced for the U.S. Air Force and international customers. Javelin is a shoulder-fired anti-armor rocket system, which is produced for the U.S. Army, Marine Corps and international customers.
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•
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The Apache, Sniper Advanced Targeting Pod (SNIPER®) and Infrared Search and Track (IRST21®) fire control systems programs. The Apache fire control system provides weapons targeting capability for the Apache helicopter for the U.S. Army and international customers. SNIPER is a targeting system for several fixed-wing aircraft and is produced for the U.S. Air Force and international customers. IRST21 provides long-range infrared detection and tracking of airborne threats and is used on several fixed-wing aircraft. IRST21 is produced for the U.S. Air Force, the U.S. Navy, the National Guard and international customers.
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•
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The Special Operations Forces Global Logistics Support Services (SOF GLSS) program provides logistics support services to the special operations forces of the U.S. military.
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•
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Hypersonics programs, several programs with the U.S. Air Force and U.S. Army to design, develop and build hypersonic strike weapons.
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•
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The Black Hawk® and Seahawk® helicopters manufactured for U.S. and foreign governments.
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•
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The Aegis Combat System (Aegis) serves as an air and missile defense system for the U.S. Navy and international customers and is also a sea and land-based element of the U.S. missile defense system.
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•
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The CH-53K King Stallion helicopter delivering the next generation heavy lift helicopter for the U.S. Marine Corps.
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•
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The LCS and the Multi-Mission Surface Combatant (MMSC) programs to provide surface combatant ships for the U.S. Navy and international customers that are designed to operate in shallow waters and the open ocean.
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•
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The VH-92A helicopter manufactured for the U.S. Marine One transport mission.
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•
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The Command, Control, Battle Management and Communications (C2BMC) contract, a program to provide an air operations center for the Ballistic Missile Defense System for the U.S. Government.
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•
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The United Kingdom’s nuclear deterrent program operated by the AWE Management Limited (AWE) joint venture.
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•
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The Trident II D5 Fleet Ballistic Missile (FBM), a program with the U.S. Navy for the only submarine-launched intercontinental ballistic missile currently in production in the U.S.
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•
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The Space Based Infrared System (SBIRS) and Next Generation Overhead Persistent Infrared (Next Gen OPIR) system programs, which provide the U.S. Air Force with enhanced worldwide missile warning capabilities.
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•
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The Orion Multi-Purpose Crew Vehicle (Orion), a spacecraft for the National Aeronautics and Space Administration (NASA) utilizing new technology for human exploration missions beyond low earth orbit.
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•
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Global Positioning System (GPS) III, a program to modernize the GPS satellite system for the U.S. Air Force.
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•
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Hypersonics programs, several programs with the U.S. Air Force, U.S. Army and U.S. Navy to design, develop and build hypersonic strike weapons.
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•
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The Advanced Extremely High Frequency (AEHF) system, the next generation of highly secure communications satellites for the U.S. Air Force.
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•
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require certification and disclosure of all cost or pricing data in connection with certain types of contract negotiations;
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•
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impose specific and unique cost accounting practices that may differ from U.S. generally accepted accounting principles (GAAP);
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•
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impose acquisition regulations, which may change or be replaced over time, that define which costs can be charged to the U.S. Government, how and when costs can be charged, and otherwise govern our right to reimbursement under certain U.S. Government and foreign contracts;
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•
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require specific security controls to protect U.S. Government controlled unclassified information and restrict the use and dissemination of information classified for national security purposes and the export of certain products, services and technical data; and
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•
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require the review and approval of contractor business systems, defined in the regulations as: (i) Accounting System; (ii) Estimating System; (iii) Earned Value Management System, for managing cost and schedule performance on certain complex programs; (iv) Purchasing System; (v) Material Management and Accounting System, for planning, controlling and accounting for the acquisition, use, issuing and disposition of material; and (vi) Property Management System.
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•
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Aeronautics - Palmdale, California; Marietta, Georgia; Greenville, South Carolina; and Fort Worth, Texas.
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•
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Missiles and Fire Control - Camden, Arkansas; Ocala and Orlando, Florida; Lexington, Kentucky; and Grand Prairie, Texas.
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•
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Rotary and Mission Systems - Shelton and Stratford, Connecticut; Orlando, Florida; Moorestown/Mt. Laurel, New Jersey; Owego and Syracuse, New York; Manassas, Virginia; and Mielec, Poland.
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•
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Space - Huntsville, Alabama; Sunnyvale, California; Colorado Springs and Denver, Colorado; Cape Canaveral, Florida; Valley Forge, Pennsylvania; and Reading, England.
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•
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Corporate activities - Bethesda, Maryland.
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Owned
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Leased
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Government-
Owned
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Total
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||||||||
Aeronautics
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5.0
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2.7
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14.5
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22.2
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Missiles and Fire Control
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6.7
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3.0
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1.8
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11.5
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Rotary and Mission Systems
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11.2
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6.1
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0.5
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17.8
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Space
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8.8
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2.1
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5.4
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16.3
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Corporate activities
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2.6
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1.0
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—
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3.6
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Total
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34.3
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14.9
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22.2
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71.4
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ITEM 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Period (a)
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Total
Number of
Shares
Purchased
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Average
Price Paid
Per Share
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Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (b)
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Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs (b)
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(in millions)
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September 30, 2019 – October 27, 2019
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349,909
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$
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375.53
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349,909
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$
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3,161
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October 28, 2019 – November 24, 2019(c)
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658,886
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$
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381.99
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658,886
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$
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2,811
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November 25, 2019 – December 31, 2019(c)(d)
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268,914
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$
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382.20
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257,363
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$
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2,811
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Total(c)
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1,277,709
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$
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380.27
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1,266,158
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(a)
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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, October 28, 2019 was the first day of our November 2019 fiscal month.
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(b)
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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 $2.8 billion as of December 31, 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.
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(c)
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During the fourth quarter of 2019, we entered into an accelerated share repurchase (ASR) agreement to repurchase $350 million of our common stock. We paid $350 million and received an initial delivery of 658,886 shares on October 30, 2019. Upon final settlement of the ASR agreement on December 20, 2019, we received an additional delivery of 257,363 shares of our common stock based on the average price paid per share of $381.99, calculated with reference to the volume weighted average price per share of our common stock over the term of the agreement, less a negotiated discount. See “Note 12 – Stockholders’ Equity” included in our Notes to Consolidated Financial Statements.
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(d)
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During the quarter ended December 31, 2019, the total number of shares purchased included 11,551 shares that were transferred to us by employees in satisfaction of tax withholding obligations associated with the vesting of restricted stock units. These purchases were made pursuant to a separate authorization by our Board of Directors and are not included within the program.
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(In millions, except per share data)
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2019
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2018
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2017
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2016
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2015
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|||||
Operating results (a)
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||||||||||
Net sales
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$
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59,812
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|
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$
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53,762
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|
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$
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49,960
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|
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$
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47,290
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$
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40,536
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Operating profit (b)(c)(d)(e)(f)
|
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8,545
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|
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7,334
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|
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6,744
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|
|
5,888
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|
|
5,233
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|
|||||
Net earnings from continuing operations (b)(c)(d)(e)(f)(g)(h)
|
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6,230
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|
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5,046
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|
|
1,890
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|
|
3,661
|
|
|
3,126
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|
|||||
Net earnings from discontinued operations (i)
|
|
—
|
|
|
—
|
|
|
73
|
|
|
1,512
|
|
|
479
|
|
|||||
Net earnings (c)(d)(e)(f)(g)(h)
|
|
6,230
|
|
|
5,046
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|
|
1,963
|
|
|
5,173
|
|
|
3,605
|
|
|||||
Earnings from continuing operations per common share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic (b)(c)(d)(e)(f)(g)(h)
|
|
22.09
|
|
|
17.74
|
|
|
6.56
|
|
|
12.23
|
|
|
10.07
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|
|||||
Diluted (b)(c)(d)(e)(f)(g)(h)
|
|
21.95
|
|
|
17.59
|
|
|
6.50
|
|
|
12.08
|
|
|
9.93
|
|
|||||
Earnings from discontinued operations per common share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
—
|
|
|
—
|
|
|
0.26
|
|
|
5.05
|
|
|
1.55
|
|
|||||
Diluted
|
|
—
|
|
|
—
|
|
|
0.25
|
|
|
4.99
|
|
|
1.53
|
|
|||||
Earnings per common share
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic (b)(c)(d)(e)(f)(g)(h)
|
|
22.09
|
|
|
17.74
|
|
|
6.82
|
|
|
17.28
|
|
|
11.62
|
|
|||||
Diluted (b)(c)(d)(e)(f)(g)(h)
|
|
21.95
|
|
|
17.59
|
|
|
6.75
|
|
|
17.07
|
|
|
11.46
|
|
|||||
Cash dividends declared per common share
|
|
$
|
9.00
|
|
|
$
|
8.20
|
|
|
$
|
7.46
|
|
|
$
|
6.77
|
|
|
$
|
6.15
|
|
Balance sheet (a)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and short-term investments (c)
|
|
$
|
1,514
|
|
|
$
|
772
|
|
|
$
|
2,861
|
|
|
$
|
1,837
|
|
|
$
|
1,090
|
|
Total current assets (j)
|
|
17,095
|
|
|
16,103
|
|
|
17,505
|
|
|
14,780
|
|
|
14,573
|
|
|||||
Goodwill
|
|
10,604
|
|
|
10,769
|
|
|
10,807
|
|
|
10,764
|
|
|
10,695
|
|
|||||
Total assets (c)(j)(k)
|
|
47,528
|
|
|
44,876
|
|
|
46,620
|
|
|
47,560
|
|
|
49,304
|
|
|||||
Total current liabilities (j)
|
|
13,972
|
|
|
14,398
|
|
|
12,913
|
|
|
12,456
|
|
|
13,918
|
|
|||||
Total debt, net
|
|
12,654
|
|
|
14,104
|
|
|
14,263
|
|
|
14,282
|
|
|
15,261
|
|
|||||
Total liabilities (c)(j)(k)
|
|
44,357
|
|
|
43,427
|
|
|
47,396
|
|
|
46,083
|
|
|
46,207
|
|
|||||
Total equity (deficit) (c)(g)
|
|
3,171
|
|
|
1,449
|
|
|
(776
|
)
|
|
1,477
|
|
|
3,097
|
|
|||||
Common shares in stockholders’ equity at year-end
|
|
280
|
|
|
281
|
|
|
284
|
|
|
289
|
|
|
303
|
|
|||||
Cash flow information
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities (c)
|
|
$
|
7,311
|
|
|
$
|
3,138
|
|
|
$
|
6,476
|
|
|
$
|
5,189
|
|
|
$
|
5,101
|
|
Net cash used for investing activities (l)
|
|
(1,241
|
)
|
|
(1,075
|
)
|
|
(1,147
|
)
|
|
(985
|
)
|
|
(9,734
|
)
|
|||||
Net cash (used for) provided by financing activities (m)
|
|
(5,328
|
)
|
|
(4,152
|
)
|
|
(4,305
|
)
|
|
(3,457
|
)
|
|
4,277
|
|
|||||
Backlog (a)(n)
|
|
$
|
143,981
|
|
|
$
|
130,468
|
|
|
$
|
105,493
|
|
|
$
|
103,458
|
|
|
$
|
94,756
|
|
(a)
|
Amounts for 2015 do not reflect the impact of the adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), as amended, in the first quarter of 2018.
|
(b)
|
Our operating profit and net earnings from continuing operations and earnings per share from continuing operations were affected by severance and restructuring charges of $96 million ($76 million, or $0.26 per share, after-tax) in 2018, severance charges of $80 million ($52 million, or $0.17 per share, after-tax) in 2016, and severance charges of $82 million ($53 million, or $0.17 per share, after-tax) in 2015. See “Note 15 – Severance and Restructuring Charges” included in our Notes to Consolidated Financial Statements for a discussion of 2018 severance and restructuring charges.
|
(c)
|
The impact of our postretirement benefit plans can cause our operating profit, net earnings, cash flows and certain amounts recorded on our consolidated balance sheets to fluctuate. Accordingly, our net earnings were affected by a net FAS/CAS pension adjustment of $1.5 billion in 2019, $1.0 billion in 2018, $876 million in 2017, $902 million in 2016, and $400 million in 2015. We made pension contributions of $1.0 billion in 2019, $5.0 billion in 2018, $46 million in 2017, $23 million in 2016, and $5 million in 2015, and these contributions caused fluctuations in our operating cash flows and cash balance between each of those years. See “Critical Accounting Policies - Postretirement Benefit Plans” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information.
|
(d)
|
In 2019 and 2017, we recorded a previously deferred non-cash gain of $51 million ($38 million, or $0.13 per share, after-tax) and $198 million ($122 million, or $0.42 per share, after-tax) related to properties sold in 2015 as a result of completing our remaining obligations.
|
(e)
|
For the year ended December 31, 2019, net earnings include a gain of $34 million (approximately $0 after-tax) for the sale of our Distributed Energy Solutions business.
|
(f)
|
For the year ended December 31, 2018, operating profit includes a non-cash asset impairment charge of $110 million ($83 million, or $0.29 per share, after-tax) related to our equity method investee, Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC). For the year ended December 31, 2017, operating profit includes a $64 million ($40 million, or $0.14 per share, after-tax)
|
(g)
|
In 2017, we recorded a net one-time tax charge of $2.0 billion ($6.77 per share), substantially all of which was non-cash, primarily related to the estimated impact of the Tax Cuts and Jobs Act (see “Note 9 – Income Taxes” included in our Notes to Consolidated Financial Statements). This charge along with our annual re-measurement adjustment related to our postretirement benefit plans of $1.4 billion resulted in a deficit in our total equity as of December 31, 2017.
|
(h)
|
Net earnings for the year ended December 31, 2019 include benefits of $127 million ($0.45 per share) for additional tax deductions for the prior year, primarily attributable to foreign derived intangible income treatment based on proposed tax regulations released on March 4, 2019 and our change in tax accounting method. Net earnings for the year ended December 31, 2018 include benefits of $146 million ($0.51 per share) for additional tax deductions for the prior year, primarily attributable to true-ups to the net one-time charges related to the Tax Cuts and Jobs Act enacted on December 22, 2017 and our change in tax accounting method (see “Note 9 – Income Taxes” included in our Notes to Consolidated Financial Statements).
|
(i)
|
Our net earnings from discontinued operations in 2016 includes a $1.2 billion net gain related to the divestiture of our IS&GS business in 2016.
|
(j)
|
Included in total current assets are assets of discontinued operations of $1.0 billion in 2015. Included in total current liabilities are liabilities of discontinued operations of $900 million in 2015. Included in total assets are assets of discontinued operations of $4.1 billion in 2015. Included in total liabilities are liabilities of discontinued operations of $1.2 billion in 2015.
|
(k)
|
Effective January 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). As of December 31, 2019, right-of-use operating lease assets were $1.0 billion and operating lease liabilities were $1.1 billion. Approximately $855 million of operating lease liabilities were classified as noncurrent. There was no impact to our consolidated statements of earnings or cash flows as a result of adopting this standard. Prior periods were not restated for the adoption of ASU 2016-02. See “Note 8 – Leases” included in our Notes to Consolidated Financial Statements.
|
(l)
|
The increase in our cash used for investing activities in 2015 was attributable to acquisitions of businesses, including the $9.0 billion acquisition of Sikorsky in 2015, net of cash acquired.
|
(m)
|
The increase in our cash provided by financing activities in 2015 was primarily a result of the debt incurred to fund the Sikorsky acquisition.
|
(n)
|
Backlog at December 31, 2015 includes approximately $15.6 billion related to Sikorsky, but excludes $4.8 billion related to our IS&GS business.
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Net sales
|
|
$
|
59,812
|
|
|
$
|
53,762
|
|
|
$
|
49,960
|
|
Cost of sales
|
|
(51,445
|
)
|
|
(46,488
|
)
|
|
(43,589
|
)
|
|||
Gross profit
|
|
8,367
|
|
|
7,274
|
|
|
6,371
|
|
|||
Other income, net
|
|
178
|
|
|
60
|
|
|
373
|
|
|||
Operating profit (a)(b)(c)(d)
|
|
8,545
|
|
|
7,334
|
|
|
6,744
|
|
|||
Interest expense
|
|
(653
|
)
|
|
(668
|
)
|
|
(651
|
)
|
|||
Other non-operating expense, net
|
|
(651
|
)
|
|
(828
|
)
|
|
(847
|
)
|
|||
Earnings from continuing operations before income taxes
|
|
7,241
|
|
|
5,838
|
|
|
5,246
|
|
|||
Income tax expense (e)(f)
|
|
(1,011
|
)
|
|
(792
|
)
|
|
(3,356
|
)
|
|||
Net earnings from continuing operations
|
|
6,230
|
|
|
5,046
|
|
|
1,890
|
|
|||
Net earnings from discontinued operations
|
|
—
|
|
|
—
|
|
|
73
|
|
|||
Net earnings
|
|
$
|
6,230
|
|
|
$
|
5,046
|
|
|
$
|
1,963
|
|
Diluted earnings per common share
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
21.95
|
|
|
$
|
17.59
|
|
|
$
|
6.50
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.25
|
|
|||
Total diluted earnings per common share
|
|
$
|
21.95
|
|
|
$
|
17.59
|
|
|
$
|
6.75
|
|
(a)
|
For the year ended December 31, 2018, operating profit includes a non-cash asset impairment charge of $110 million related to our equity method investee, Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC). For the year ended December 31, 2017, operating profit includes a $64 million charge, which represents our portion of a non-cash asset impairment charge recorded by AMMROC. See “Note 1 – Significant Accounting Policies” included in our Notes to Consolidated Financial Statements for more information.
|
(b)
|
For the year ended December 31, 2018, operating profit includes $96 million of severance and restructuring charges. See “Note 15 – Severance and Restructuring Charges” included in our Notes to Consolidated Financial Statements for a discussion of 2018 severance and restructuring charges.
|
(c)
|
For the years ended December 31, 2019 and December 31, 2017, operating profit includes a previously deferred non-cash gain of approximately $51 million and $198 million related to properties sold in 2015.
|
(d)
|
For the year ended December 31, 2019, operating profit includes a gain of $34 million for the sale of our Distributed Energy Solutions business.
|
(e)
|
In 2017, we recorded a net one-time tax charge of $2.0 billion ($6.77 per share), substantially all of which was non-cash, primarily related to the estimated impact of the Tax Cuts and Jobs Act. See “Income Tax Expense” section below and “Note 9 – Income Taxes” included in our Notes to Consolidated Financial Statements for additional information.
|
(f)
|
Net earnings for the year ended December 31, 2019 include benefits of $127 million ($0.45 per share) for additional tax deductions for the prior year, primarily attributable to foreign derived intangible income treatment based on proposed tax regulations released on March 4, 2019 and our change in tax accounting method. Net earnings for the year ended December 31, 2018 include benefits of $146 million ($0.51 per share) for additional tax deductions for the prior year, primarily attributable to true-ups to the net one-time charges related to the Tax Cuts and Jobs Act enacted on December 22, 2017 and our change in tax accounting method. See “Income Tax Expense” section below and “Note 9 – Income Taxes” included in our Notes to Consolidated Financial Statements for additional information.
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|||
Products
|
|
$
|
50,053
|
|
|
|
$
|
45,005
|
|
|
|
$
|
42,502
|
|
|
% of total net sales
|
|
83.7
|
|
%
|
|
83.7
|
|
%
|
|
85.1
|
|
%
|
|||
Services
|
|
9,759
|
|
|
|
8,757
|
|
|
|
7,458
|
|
|
|||
% of total net sales
|
|
16.3
|
|
%
|
|
16.3
|
|
%
|
|
14.9
|
|
%
|
|||
Total net sales
|
|
$
|
59,812
|
|
|
|
$
|
53,762
|
|
|
|
$
|
49,960
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|||
Cost of sales – products
|
|
$
|
(44,589
|
)
|
|
|
$
|
(40,293
|
)
|
|
|
$
|
(38,417
|
)
|
|
% of product sales
|
|
89.1
|
|
%
|
|
89.5
|
|
%
|
|
90.4
|
|
%
|
|||
Cost of sales – services
|
|
(8,731
|
)
|
|
|
(7,738
|
)
|
|
|
(6,673
|
)
|
|
|||
% of service sales
|
|
89.5
|
|
%
|
|
88.4
|
|
%
|
|
89.5
|
|
%
|
|||
Severance and restructuring charges
|
|
—
|
|
|
|
(96
|
)
|
|
|
—
|
|
|
|||
Other unallocated, net
|
|
1,875
|
|
|
|
1,639
|
|
|
|
1,501
|
|
|
|||
Total cost of sales
|
|
$
|
(51,445
|
)
|
|
|
$
|
(46,488
|
)
|
|
|
$
|
(43,589
|
)
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Net sales
|
|
|
|
|
|
|
||||||
Aeronautics
|
|
$
|
23,693
|
|
|
$
|
21,242
|
|
|
$
|
19,410
|
|
Missiles and Fire Control
|
|
10,131
|
|
|
8,462
|
|
|
7,282
|
|
|||
Rotary and Mission Systems
|
|
15,128
|
|
|
14,250
|
|
|
13,663
|
|
|||
Space
|
|
10,860
|
|
|
9,808
|
|
|
9,605
|
|
|||
Total net sales
|
|
$
|
59,812
|
|
|
$
|
53,762
|
|
|
$
|
49,960
|
|
Operating profit
|
|
|
|
|
|
|
||||||
Aeronautics
|
|
$
|
2,521
|
|
|
$
|
2,272
|
|
|
$
|
2,176
|
|
Missiles and Fire Control
|
|
1,441
|
|
|
1,248
|
|
|
1,034
|
|
|||
Rotary and Mission Systems
|
|
1,421
|
|
|
1,302
|
|
|
902
|
|
|||
Space
|
|
1,191
|
|
|
1,055
|
|
|
980
|
|
|||
Total business segment operating profit
|
|
6,574
|
|
|
5,877
|
|
|
5,092
|
|
|||
Unallocated items
|
|
|
|
|
|
|
||||||
FAS/CAS operating adjustment (a)
|
|
2,049
|
|
|
1,803
|
|
|
1,613
|
|
|||
Stock-based compensation
|
|
(189
|
)
|
|
(173
|
)
|
|
(158
|
)
|
|||
Severance and restructuring charges (b)
|
|
—
|
|
|
(96
|
)
|
|
—
|
|
|||
Other, net (c)
|
|
111
|
|
|
(77
|
)
|
|
197
|
|
|||
Total unallocated, net
|
|
1,971
|
|
|
1,457
|
|
|
1,652
|
|
|||
Total consolidated operating profit
|
|
$
|
8,545
|
|
|
$
|
7,334
|
|
|
$
|
6,744
|
|
(a)
|
The FAS/CAS operating adjustment represents the difference between the service cost component of FAS pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS. For a detail of the FAS/CAS operating adjustment and the total net FAS/CAS pension adjustment, see the table below.
|
(b)
|
See “Consolidated Results of Operations – Restructuring Charges” discussion above for information on charges related to certain severance actions at our business segments. Severance and restructuring charges for initiatives that are not significant are included in business segment operating profit.
|
(c)
|
Other, net in 2019 includes a previously deferred non-cash gain of $51 million related to properties sold in 2015 as a result of completing our remaining obligations and a gain of $34 million for the sale of our Distributed Energy Solutions business. Other, net in 2018 includes a non-cash asset impairment charge of $110 million related to our equity method investee, AMMROC (see “Note 1 – Significant Accounting Policies” included in our Notes to Consolidated Financial Statements for more information). Other, net in 2017 includes a previously deferred non-cash gain of $198 million related to properties sold in 2015 as a result of completing our remaining obligations and a $64 million charge, which represents our portion of a non-cash asset impairment charge recorded by AMMROC (see “Note 1 – Significant Accounting Policies” included in our Notes to Consolidated Financial Statements for more information).
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Total FAS expense and CAS costs
|
|
|
|
|
|
|
||||||
FAS pension expense
|
|
$
|
(1,093
|
)
|
|
$
|
(1,431
|
)
|
|
$
|
(1,372
|
)
|
Less: CAS pension cost
|
|
2,565
|
|
|
2,433
|
|
|
2,248
|
|
|||
Net FAS/CAS pension adjustment
|
|
$
|
1,472
|
|
|
$
|
1,002
|
|
|
$
|
876
|
|
|
|
|
|
|
|
|
||||||
Service and non-service cost reconciliation
|
|
|
|
|
|
|
||||||
FAS pension service cost
|
|
(516
|
)
|
|
(630
|
)
|
|
(635
|
)
|
|||
Less: CAS pension cost
|
|
2,565
|
|
|
2,433
|
|
|
2,248
|
|
|||
FAS/CAS operating adjustment
|
|
2,049
|
|
|
1,803
|
|
|
1,613
|
|
|||
Non-operating FAS pension expense (a)
|
|
(577
|
)
|
|
(801
|
)
|
|
(737
|
)
|
|||
Net FAS/CAS pension adjustment
|
|
$
|
1,472
|
|
|
$
|
1,002
|
|
|
$
|
876
|
|
(a)
|
We record the non-service cost components of net periodic benefit cost as part of other non-operating expense, net in the consolidated statement of earnings. The non-service cost components in the table above relate only to our qualified defined benefit pension plans. We incurred total non-service costs for our qualified defined benefit pension plans in the table above, along with similar costs for our other postretirement benefit plans of $116 million, $67 million, and $109 million for the years ended 2019, 2018 and 2017.
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|||
Net sales
|
|
$
|
23,693
|
|
|
|
$
|
21,242
|
|
|
|
$
|
19,410
|
|
|
Operating profit
|
|
2,521
|
|
|
|
2,272
|
|
|
|
2,176
|
|
|
|||
Operating margin
|
|
10.6
|
|
%
|
|
10.7
|
|
%
|
|
11.2
|
|
%
|
|||
Backlog at year-end
|
|
$
|
55,636
|
|
|
|
$
|
55,601
|
|
|
|
$
|
35,692
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|||
Net sales
|
|
$
|
10,131
|
|
|
|
$
|
8,462
|
|
|
|
$
|
7,282
|
|
|
Operating profit
|
|
1,441
|
|
|
|
1,248
|
|
|
|
1,034
|
|
|
|||
Operating margin
|
|
14.2
|
|
%
|
|
14.7
|
|
%
|
|
14.2
|
|
%
|
|||
Backlog at year-end
|
|
$
|
25,796
|
|
|
|
$
|
21,363
|
|
|
|
$
|
17,729
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|||
Net sales
|
|
$
|
15,128
|
|
|
|
$
|
14,250
|
|
|
|
$
|
13,663
|
|
|
Operating profit
|
|
1,421
|
|
|
|
1,302
|
|
|
|
902
|
|
|
|||
Operating margin
|
|
9.4
|
|
%
|
|
9.1
|
|
%
|
|
6.6
|
|
%
|
|||
Backlog at year-end
|
|
$
|
34,296
|
|
|
|
$
|
31,320
|
|
|
|
$
|
30,030
|
|
|
|
|
2019
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|||
Net sales
|
|
$
|
10,860
|
|
|
|
$
|
9,808
|
|
|
|
$
|
9,605
|
|
|
Operating profit
|
|
1,191
|
|
|
|
1,055
|
|
|
|
980
|
|
|
|||
Operating margin
|
|
11.0
|
|
%
|
|
10.8
|
|
%
|
|
10.2
|
|
%
|
|||
Backlog at year-end
|
|
$
|
28,253
|
|
|
|
$
|
22,184
|
|
|
|
$
|
22,042
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Cash and cash equivalents at beginning of year
|
|
$
|
772
|
|
|
$
|
2,861
|
|
|
$
|
1,837
|
|
Operating activities
|
|
|
|
|
|
|
||||||
Net earnings
|
|
6,230
|
|
|
5,046
|
|
|
1,963
|
|
|||
Non-cash adjustments
|
|
1,549
|
|
|
1,186
|
|
|
4,530
|
|
|||
Changes in working capital
|
|
(672
|
)
|
|
(1,401
|
)
|
|
(427
|
)
|
|||
Other, net
|
|
204
|
|
|
(1,693
|
)
|
|
410
|
|
|||
Net cash provided by operating activities
|
|
7,311
|
|
|
3,138
|
|
|
6,476
|
|
|||
Net cash used for investing activities
|
|
(1,241
|
)
|
|
(1,075
|
)
|
|
(1,147
|
)
|
|||
Net cash used for financing activities
|
|
(5,328
|
)
|
|
(4,152
|
)
|
|
(4,305
|
)
|
|||
Net change in cash and cash equivalents
|
|
742
|
|
|
(2,089
|
)
|
|
1,024
|
|
|||
Cash and cash equivalents at end of year
|
|
$
|
1,514
|
|
|
$
|
772
|
|
|
$
|
2,861
|
|
|
|
Payments Due By Period
|
||||||||||||||||||
|
|
Total
|
|
Less Than
1 Year
|
|
Years
2 and 3
|
|
Years
4 and 5
|
|
After
5 Years
|
||||||||||
Total debt (a)
|
|
$
|
13,799
|
|
|
$
|
1,250
|
|
|
$
|
906
|
|
|
$
|
786
|
|
|
$
|
10,857
|
|
Interest payments
|
|
9,277
|
|
|
571
|
|
|
1,048
|
|
|
979
|
|
|
6,679
|
|
|||||
Other liabilities
|
|
2,914
|
|
|
252
|
|
|
567
|
|
|
400
|
|
|
1,695
|
|
|||||
Operating lease obligations
|
|
1,287
|
|
|
280
|
|
|
344
|
|
|
217
|
|
|
446
|
|
|||||
Purchase obligations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
|
55,491
|
|
|
28,564
|
|
|
22,528
|
|
|
3,483
|
|
|
916
|
|
|||||
Capital expenditures
|
|
839
|
|
|
446
|
|
|
309
|
|
|
84
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
|
$
|
83,607
|
|
|
$
|
31,363
|
|
|
$
|
25,702
|
|
|
$
|
5,949
|
|
|
$
|
20,593
|
|
(a)
|
Total debt excludes approximately $15 million of debt issued by a consolidated joint venture as we do not guarantee the debt.
|
|
|
Commitment Expiration By Period
|
||||||||||||||||||
|
|
Total
Commitment
|
|
Less Than
1 Year
|
|
Years
2 and 3
|
|
Years
4 and 5
|
|
After
5 Years
|
||||||||||
Standby letters of credit (a)
|
|
$
|
2,233
|
|
|
$
|
1,030
|
|
|
$
|
779
|
|
|
$
|
298
|
|
|
$
|
126
|
|
Surety bonds
|
|
359
|
|
|
350
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|||||
Third-party Guarantees
|
|
996
|
|
|
199
|
|
|
317
|
|
|
151
|
|
|
329
|
|
|||||
Total commitments
|
|
$
|
3,588
|
|
|
$
|
1,579
|
|
|
$
|
1,105
|
|
|
$
|
449
|
|
|
$
|
455
|
|
(a)
|
Approximately $725 million of standby letters of credit in the “Less Than 1 Year” category, $456 million in the “Years 2 and 3” category and $225 million in the “Years 4 and 5” category are expected to renew for additional periods until completion of the contractual obligation.
|
|
|
Revenue recognition based on the percentage of completion method
|
|
|
|
Description of the Matter
|
|
For the year ended December 31, 2019, the Corporation recorded net sales of $59.8 billion. As more fully described in Note 1 to the consolidated financial statements, the Corporation generates the majority of its net sales from long-term contracts with its customers whereby substantially all of the Corporation’s revenue is recognized over time using the percentage-of-completion cost-to-cost measure of progress. Under the percentage-of-completion cost-to-cost measure of progress, the Corporation measures progress towards completion based on the ratio of costs incurred to date to the estimated total costs to complete the performance obligation(s) (referred to as the estimate-at-completion analysis). The Corporation estimates profit on these contracts as the difference between total estimated revenues, including estimated variable consideration, and total estimated cost at completion and recognizes that profit as costs are incurred using the current estimate of the profit booking rate.
The percentage-of-completion cost-to-cost method requires management to make significant estimates and assumptions to estimate contract sales, costs and profit associated with its contracts with customers. At the outset of a long-term contract, the Corporation identifies risks to the achievement of the technical, schedule and cost aspects of the contract, and estimates the variable consideration to be received. Throughout the contract life cycle, the Corporation monitors and assesses the effects of those risks on its estimates of sales and total costs to complete the contract. Profit booking rates may increase during the performance of the contract if the Corporation successfully retires risks surrounding the technical, schedule and cost aspects of the contract, which would decrease the estimated total costs to complete the contract or increase the variable consideration it expects to receive on the contract. Conversely, the profit booking rates may decrease if the estimated total costs to complete the contract increase or the Corporation’s estimates of variable consideration they expect to receive decrease. Changes to the profit booking rates resulting from changes in estimates could have a material effect on the Corporation’s results of operations.
Auditing the Corporation’s estimate-at-completion analyses used in its revenue recognition process was complex due to the judgment involved in evaluating the significant estimates and assumptions made by management in the creation and subsequent updates to the Corporation’s estimate-at-completion analyses and related profit booking rates. The estimate-at-completion analyses and profit booking rate of each contract consider risks surrounding the Corporation’s ability to estimate the variable consideration to be received and to achieve the technical, schedule, and cost aspects of the contract.
|
|
|
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant internal controls over the Corporation’s revenue recognition process. For example, we tested internal controls over management’s review of the estimate-at-completion analyses and the significant assumptions underlying the estimated contract value (including variable consideration) and estimated total costs to complete. We also tested internal controls that management executes to validate the data used in the estimate-at-completion analyses was complete and accurate.
To test the accuracy of the Corporation’s estimate-at-completion analyses, our audit procedures included, among others, comparing estimates of labor costs, subcontractor costs, materials and variable consideration to historical results of similar contracts, and agreeing the key terms, including the terms of the variable consideration, to contract documentation and management’s estimates. We also performed sensitivity analyses over the significant assumptions to evaluate the change in the profit booking rates resulting from changes in the assumptions.
|
|
|
|
|
|
Goodwill and Indefinite-Lived Intangible Asset Impairment Assessments - Sikorsky Reporting Unit and Trademark
|
|
|
|
Description of the Matter
|
|
At December 31, 2019, the Corporation’s Sikorsky reporting unit had a goodwill balance of $2.7 billion, and the Sikorsky indefinite-lived trademark intangible asset was $887 million, which represented approximately 6% and 2% of total assets, respectively. As discussed in Note 1 and Note 3 to the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level using either a qualitative or quantitative approach. Under the quantitative approach to test for goodwill impairment, the Corporation compares the fair value of a reporting unit to its carrying amount, including goodwill. Generally, the Corporation estimates the fair value of its reporting units using a combination of a discounted cash flows analysis and market-based valuation methodologies. Similarly, the trademark intangible asset is not amortized but rather is tested by management for impairment at least annually using a market-based valuation methodology.
Auditing management’s annual impairment tests over the Sikorsky reporting unit goodwill and trademark intangible asset was complex and highly judgmental due to the significant estimation required in determining the fair values. In particular, the fair value estimates were sensitive to significant assumptions, such as revenue growth rates, operating margins, cash flows, terminal value, and weighted average cost of capital, which are affected by expectations about future market or economic conditions and expected future operating results of the Sikorsky business.
|
|
|
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant internal controls over the Corporation’s goodwill impairment review and trademark intangible asset impairment process, including controls over management’s review of the valuation models and significant assumptions described above. We also tested the internal controls management executes to validate the data used in the valuation models was complete and accurate.
To test the estimated fair values of the Sikorsky reporting unit and trademark intangible asset, we performed audit procedures that included, among others, assessing the valuation methodologies used by the Corporation, involving our valuation specialists to assist in testing the significant assumptions described above that are used in the valuations, and testing the completeness and accuracy of the underlying data the Corporation used in its analyses. For example, we compared the significant assumptions to current industry, market and economic trends, historical results of the Sikorsky business, and other relevant factors. We also performed a sensitivity analysis over the significant assumptions to evaluate the impact that changes in significant assumptions would have on the fair value of the reporting unit and trademark intangible asset.
|
|
|
|
|
|
Defined Benefit Pension Plan Obligation
|
|
|
|
Description of the Matter
|
|
At December 31, 2019, the Corporation’s aggregate obligation for its qualified defined benefit pension plans was $48.67 billion and exceeded the gross fair value of the related plan assets of $35.44 billion, resulting in a net unfunded qualified defined benefit pension obligation of $13.23 billion. As explained in Note 11 of the consolidated financial statements, the Corporation remeasures the qualified defined benefit pension assets and obligations at the end of each year or more frequently upon the occurrence of certain events. The amounts are measured using actuarial valuations, which depend on key assumptions such as the discount rate, the expected long-term rate of return on plan assets, and participant longevity.
Auditing the defined benefit pension obligation was complex and required the involvement of specialists as a result of the judgmental nature of the actuarial assumptions such as discount rate, expected long-term rate of return on plan assets, and participant longevity, used in the measurement process. These assumptions have a significant effect on the projected benefit obligation, with the discount rate being the most sensitive of those assumptions.
|
|
|
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of relevant internal controls over management’s measurement and valuation of the defined benefit pension obligation calculations. For example, we tested the internal controls over management’s review of the defined benefit pension obligation calculations, the significant actuarial assumptions and the data inputs provided to the actuaries.
To test the defined benefit pension obligation, our audit procedures included, among others, evaluating the methodology used, the significant actuarial assumptions described above and the underlying data used by the Corporation. We compared the actuarial assumptions used by management to historical trends and evaluated the change in the defined benefit pension obligation from prior year due to the change in service cost, interest cost, benefit payments, actuarial gains and losses, contributions, new longevity assumptions and plan amendments. In addition, we involved our actuarial specialists to assist in evaluating management’s methodology for determining the discount rate that reflects the maturity and duration of the benefit payments and is used to measure the defined benefit pension obligation. As part of this assessment, we compared the projected cash flows to prior year and compared the current year benefits paid to the prior year projected cash flows.
To evaluate the mortality rate and the longevity, we evaluated management’s selection of mortality base tables and improvement scales, adjusted for entity-specific factors. We also tested the completeness and accuracy of the underlying data, including the participant data provided to the Corporation’s actuarial specialists. Lastly, to evaluate the expected return on plan assets, we assessed whether management’s assumption was consistent with a range of returns for a portfolio of comparative investments.
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Net sales
|
|
|
|
|
|
|
||||||
Products
|
|
$
|
50,053
|
|
|
$
|
45,005
|
|
|
$
|
42,502
|
|
Services
|
|
9,759
|
|
|
8,757
|
|
|
7,458
|
|
|||
Total net sales
|
|
59,812
|
|
|
53,762
|
|
|
49,960
|
|
|||
Cost of sales
|
|
|
|
|
|
|
||||||
Products
|
|
(44,589
|
)
|
|
(40,293
|
)
|
|
(38,417
|
)
|
|||
Services
|
|
(8,731
|
)
|
|
(7,738
|
)
|
|
(6,673
|
)
|
|||
Severance and restructuring charges
|
|
—
|
|
|
(96
|
)
|
|
—
|
|
|||
Other unallocated, net
|
|
1,875
|
|
|
1,639
|
|
|
1,501
|
|
|||
Total cost of sales
|
|
(51,445
|
)
|
|
(46,488
|
)
|
|
(43,589
|
)
|
|||
Gross profit
|
|
8,367
|
|
|
7,274
|
|
|
6,371
|
|
|||
Other income, net
|
|
178
|
|
|
60
|
|
|
373
|
|
|||
Operating profit
|
|
8,545
|
|
|
7,334
|
|
|
6,744
|
|
|||
Interest expense
|
|
(653
|
)
|
|
(668
|
)
|
|
(651
|
)
|
|||
Other non-operating expense, net
|
|
(651
|
)
|
|
(828
|
)
|
|
(847
|
)
|
|||
Earnings from continuing operations before income taxes
|
|
7,241
|
|
|
5,838
|
|
|
5,246
|
|
|||
Income tax expense
|
|
(1,011
|
)
|
|
(792
|
)
|
|
(3,356
|
)
|
|||
Net earnings from continuing operations
|
|
6,230
|
|
|
5,046
|
|
|
1,890
|
|
|||
Net earnings from discontinued operations
|
|
—
|
|
|
—
|
|
|
73
|
|
|||
Net earnings
|
|
$
|
6,230
|
|
|
$
|
5,046
|
|
|
$
|
1,963
|
|
Earnings per common share
|
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
22.09
|
|
|
$
|
17.74
|
|
|
$
|
6.56
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.26
|
|
|||
Basic earnings per common share
|
|
$
|
22.09
|
|
|
$
|
17.74
|
|
|
$
|
6.82
|
|
Diluted
|
|
|
|
|
|
|
||||||
Continuing operations
|
|
$
|
21.95
|
|
|
$
|
17.59
|
|
|
$
|
6.50
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
0.25
|
|
|||
Diluted earnings per common share
|
|
$
|
21.95
|
|
|
$
|
17.59
|
|
|
$
|
6.75
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Net earnings
|
|
$
|
6,230
|
|
|
$
|
5,046
|
|
|
$
|
1,963
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
||||||
Postretirement benefit plans
|
|
|
|
|
|
|
||||||
Net other comprehensive loss recognized during the period, net of tax benefit of $586 million in 2019, $136 million in 2018 and $375 million in 2017
|
|
(2,182
|
)
|
|
(501
|
)
|
|
(1,380
|
)
|
|||
Amounts reclassified from accumulated other comprehensive loss, net of tax expense of $247 million in 2019, $327 million in 2018 and $437 million in 2017
|
|
908
|
|
|
1,202
|
|
|
802
|
|
|||
Other, net
|
|
41
|
|
|
(75
|
)
|
|
141
|
|
|||
Other comprehensive income (loss), net of tax
|
|
(1,233
|
)
|
|
626
|
|
|
(437
|
)
|
|||
Comprehensive income
|
|
$
|
4,997
|
|
|
$
|
5,672
|
|
|
$
|
1,526
|
|
|
|
December 31,
|
||||||
|
|
2019
|
|
|
2018
|
|
||
Assets
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,514
|
|
|
$
|
772
|
|
Receivables, net
|
|
2,337
|
|
|
2,444
|
|
||
Contract assets
|
|
9,094
|
|
|
9,472
|
|
||
Inventories
|
|
3,619
|
|
|
2,997
|
|
||
Other current assets
|
|
531
|
|
|
418
|
|
||
Total current assets
|
|
17,095
|
|
|
16,103
|
|
||
Property, plant and equipment, net
|
|
6,591
|
|
|
6,124
|
|
||
Goodwill
|
|
10,604
|
|
|
10,769
|
|
||
Intangible assets, net
|
|
3,213
|
|
|
3,494
|
|
||
Deferred income taxes
|
|
3,319
|
|
|
3,208
|
|
||
Other noncurrent assets
|
|
6,706
|
|
|
5,178
|
|
||
Total assets
|
|
$
|
47,528
|
|
|
$
|
44,876
|
|
Liabilities and equity
|
|
|
|
|
||||
Current liabilities
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,281
|
|
|
$
|
2,402
|
|
Contract liabilities
|
|
7,054
|
|
|
6,491
|
|
||
Salaries, benefits and payroll taxes
|
|
2,466
|
|
|
2,122
|
|
||
Current maturities of long-term debt and commercial paper
|
|
1,250
|
|
|
1,500
|
|
||
Other current liabilities
|
|
1,921
|
|
|
1,883
|
|
||
Total current liabilities
|
|
13,972
|
|
|
14,398
|
|
||
Long-term debt, net
|
|
11,404
|
|
|
12,604
|
|
||
Accrued pension liabilities
|
|
13,234
|
|
|
11,410
|
|
||
Other postretirement benefit liabilities
|
|
337
|
|
|
704
|
|
||
Other noncurrent liabilities
|
|
5,410
|
|
|
4,311
|
|
||
Total liabilities
|
|
44,357
|
|
|
43,427
|
|
||
Stockholders’ equity
|
|
|
|
|
||||
Common stock, $1 par value per share
|
|
280
|
|
|
281
|
|
||
Additional paid-in capital
|
|
—
|
|
|
—
|
|
||
Retained earnings
|
|
18,401
|
|
|
15,434
|
|
||
Accumulated other comprehensive loss
|
|
(15,554
|
)
|
|
(14,321
|
)
|
||
Total stockholders’ equity
|
|
3,127
|
|
|
1,394
|
|
||
Noncontrolling interests in subsidiary
|
|
44
|
|
|
55
|
|
||
Total equity
|
|
3,171
|
|
|
1,449
|
|
||
Total liabilities and equity
|
|
$
|
47,528
|
|
|
$
|
44,876
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Operating activities
|
|
|
|
|
|
|
||||||
Net earnings
|
|
$
|
6,230
|
|
|
$
|
5,046
|
|
|
$
|
1,963
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
1,189
|
|
|
1,161
|
|
|
1,195
|
|
|||
Stock-based compensation
|
|
189
|
|
|
173
|
|
|
158
|
|
|||
Deferred income taxes
|
|
222
|
|
|
(244
|
)
|
|
3,448
|
|
|||
Severance and restructuring charges
|
|
—
|
|
|
96
|
|
|
—
|
|
|||
Gain on property sale
|
|
(51
|
)
|
|
—
|
|
|
(198
|
)
|
|||
Gain on divestiture of IS&GS business
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|||
Changes in assets and liabilities
|
|
|
|
|
|
|
||||||
Receivables, net
|
|
107
|
|
|
(179
|
)
|
|
(902
|
)
|
|||
Contract assets
|
|
378
|
|
|
(1,480
|
)
|
|
390
|
|
|||
Inventories
|
|
(622
|
)
|
|
(119
|
)
|
|
(79
|
)
|
|||
Accounts payable
|
|
(1,098
|
)
|
|
914
|
|
|
(189
|
)
|
|||
Contract liabilities
|
|
563
|
|
|
(537
|
)
|
|
353
|
|
|||
Postretirement benefit plans
|
|
81
|
|
|
(3,574
|
)
|
|
1,316
|
|
|||
Income taxes
|
|
(151
|
)
|
|
1,077
|
|
|
(1,210
|
)
|
|||
Other, net
|
|
274
|
|
|
804
|
|
|
304
|
|
|||
Net cash provided by operating activities
|
|
7,311
|
|
|
3,138
|
|
|
6,476
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(1,484
|
)
|
|
(1,278
|
)
|
|
(1,177
|
)
|
|||
Other, net
|
|
243
|
|
|
203
|
|
|
30
|
|
|||
Net cash used for investing activities
|
|
(1,241
|
)
|
|
(1,075
|
)
|
|
(1,147
|
)
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Repurchases of common stock
|
|
(1,200
|
)
|
|
(1,492
|
)
|
|
(2,001
|
)
|
|||
Dividends paid
|
|
(2,556
|
)
|
|
(2,347
|
)
|
|
(2,163
|
)
|
|||
Proceeds from issuance of commercial paper, net
|
|
(600
|
)
|
|
600
|
|
|
—
|
|
|||
Repayments of long-term debt
|
|
(900
|
)
|
|
(750
|
)
|
|
—
|
|
|||
Other, net
|
|
(72
|
)
|
|
(163
|
)
|
|
(141
|
)
|
|||
Net cash used for financing activities
|
|
(5,328
|
)
|
|
(4,152
|
)
|
|
(4,305
|
)
|
|||
Net change in cash and cash equivalents
|
|
742
|
|
|
(2,089
|
)
|
|
1,024
|
|
|||
Cash and cash equivalents at beginning of year
|
|
772
|
|
|
2,861
|
|
|
1,837
|
|
|||
Cash and cash equivalents at end of year
|
|
$
|
1,514
|
|
|
$
|
772
|
|
|
$
|
2,861
|
|
|
Common
Stock
|
Additional
Paid-In
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders’
Equity
(Deficit)
|
Noncontrolling
Interests in
Subsidiary
|
Total
Equity
(Deficit)
|
||||||||||||||||||
Balance at December 31, 2016
|
$
|
289
|
|
$
|
—
|
|
|
$
|
13,195
|
|
$
|
(12,102
|
)
|
|
$
|
1,382
|
|
|
$
|
95
|
|
|
$
|
1,477
|
|
Net earnings
|
—
|
|
—
|
|
|
1,963
|
|
—
|
|
|
1,963
|
|
|
—
|
|
|
1,963
|
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
—
|
|
|
—
|
|
(437
|
)
|
|
(437
|
)
|
|
—
|
|
|
(437
|
)
|
|||||||
Repurchases of common stock
|
(7
|
)
|
(398
|
)
|
|
(1,596
|
)
|
—
|
|
|
(2,001
|
)
|
|
—
|
|
|
(2,001
|
)
|
|||||||
Dividends declared ($7.46 per share)
|
—
|
|
—
|
|
|
(2,157
|
)
|
—
|
|
|
(2,157
|
)
|
|
—
|
|
|
(2,157
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
2
|
|
398
|
|
|
—
|
|
—
|
|
|
400
|
|
|
—
|
|
|
400
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
|||||||
Balance at December 31, 2017
|
$
|
284
|
|
$
|
—
|
|
|
$
|
11,405
|
|
$
|
(12,539
|
)
|
|
$
|
(850
|
)
|
|
$
|
74
|
|
|
$
|
(776
|
)
|
Net earnings
|
—
|
|
—
|
|
|
5,046
|
|
—
|
|
|
5,046
|
|
|
—
|
|
|
5,046
|
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
—
|
|
|
—
|
|
626
|
|
|
626
|
|
|
—
|
|
|
626
|
|
|||||||
Repurchases of common stock
|
(5
|
)
|
(404
|
)
|
|
(1,083
|
)
|
—
|
|
|
(1,492
|
)
|
|
—
|
|
|
(1,492
|
)
|
|||||||
Dividends declared ($8.20 per share)
|
—
|
|
—
|
|
|
(2,342
|
)
|
—
|
|
|
(2,342
|
)
|
|
—
|
|
|
(2,342
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
2
|
|
404
|
|
|
—
|
|
—
|
|
|
406
|
|
|
—
|
|
|
406
|
|
|||||||
Reclassification of income tax effects from tax reform
|
—
|
|
—
|
|
|
2,408
|
|
(2,408
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
(19
|
)
|
|||||||
Balance at December 31, 2018
|
$
|
281
|
|
$
|
—
|
|
|
$
|
15,434
|
|
$
|
(14,321
|
)
|
|
$
|
1,394
|
|
|
$
|
55
|
|
|
$
|
1,449
|
|
Net earnings
|
—
|
|
—
|
|
|
6,230
|
|
—
|
|
|
6,230
|
|
|
—
|
|
|
6,230
|
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
—
|
|
|
—
|
|
(1,233
|
)
|
|
(1,233
|
)
|
|
—
|
|
|
(1,233
|
)
|
|||||||
Repurchases of common stock
|
(4
|
)
|
(483
|
)
|
|
(713
|
)
|
—
|
|
|
(1,200
|
)
|
|
—
|
|
|
(1,200
|
)
|
|||||||
Dividends declared ($9.00 per share)
|
—
|
|
—
|
|
|
(2,550
|
)
|
—
|
|
|
(2,550
|
)
|
|
—
|
|
|
(2,550
|
)
|
|||||||
Stock-based awards, ESOP activity and other
|
3
|
|
483
|
|
|
—
|
|
—
|
|
|
486
|
|
|
—
|
|
|
486
|
|
|||||||
Net decrease in noncontrolling interests in subsidiary
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
(11
|
)
|
|||||||
Balance at December 31, 2019
|
$
|
280
|
|
$
|
—
|
|
|
$
|
18,401
|
|
$
|
(15,554
|
)
|
|
$
|
3,127
|
|
|
$
|
44
|
|
|
$
|
3,171
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Weighted average common shares outstanding for basic computations
|
|
282.0
|
|
|
284.5
|
|
|
287.8
|
|
Weighted average dilutive effect of equity awards
|
|
1.8
|
|
|
2.3
|
|
|
2.8
|
|
Weighted average common shares outstanding for diluted computations
|
|
283.8
|
|
|
286.8
|
|
|
290.6
|
|
|
|
Aeronautics
|
|
|
MFC
|
|
|
RMS
|
|
|
Space
|
|
|
Total
|
|
|||||
Balance at December 31, 2017
|
|
$
|
171
|
|
|
$
|
2,265
|
|
|
$
|
6,784
|
|
|
$
|
1,587
|
|
|
$
|
10,807
|
|
Other
|
|
—
|
|
|
(3
|
)
|
|
(33
|
)
|
|
(2
|
)
|
|
(38
|
)
|
|||||
Balance at December 31, 2018
|
|
171
|
|
|
2,262
|
|
|
6,751
|
|
|
1,585
|
|
|
10,769
|
|
|||||
Distributed Energy Solutions divestiture
|
|
—
|
|
|
(175
|
)
|
|
—
|
|
|
—
|
|
|
(175
|
)
|
|||||
Other
|
|
—
|
|
|
2
|
|
|
7
|
|
|
1
|
|
|
10
|
|
|||||
Balance at December 31, 2019
|
|
$
|
171
|
|
|
$
|
2,089
|
|
|
$
|
6,758
|
|
|
$
|
1,586
|
|
|
$
|
10,604
|
|
|
|
2019
|
|
|
2018
|
||||||||||||||||||||||
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||||
Finite-Lived:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer programs
|
|
$
|
3,184
|
|
|
$
|
(967
|
)
|
|
|
$
|
2,217
|
|
|
|
$
|
3,184
|
|
|
$
|
(735
|
)
|
|
|
$
|
2,449
|
|
Customer relationships
|
|
344
|
|
|
(243
|
)
|
|
|
101
|
|
|
|
344
|
|
|
(199
|
)
|
|
|
145
|
|
||||||
Other
|
|
53
|
|
|
(45
|
)
|
|
|
8
|
|
|
|
53
|
|
|
(40
|
)
|
|
|
13
|
|
||||||
Total finite-lived intangibles
|
|
3,581
|
|
|
(1,255
|
)
|
|
|
2,326
|
|
|
|
3,581
|
|
|
(974
|
)
|
|
|
2,607
|
|
||||||
Indefinite-Lived:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademark
|
|
887
|
|
|
—
|
|
|
|
887
|
|
|
|
887
|
|
|
—
|
|
|
|
887
|
|
||||||
Total acquired intangibles
|
|
$
|
4,468
|
|
|
$
|
(1,255
|
)
|
|
|
$
|
3,213
|
|
|
|
$
|
4,468
|
|
|
$
|
(974
|
)
|
|
|
$
|
3,494
|
|
•
|
Aeronautics – Engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies.
|
•
|
Missiles and Fire Control – Provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support and integration services; manned and unmanned ground vehicles; and energy management solutions.
|
•
|
Rotary and Mission Systems – Provides design, manufacture, service and support for a variety of military and commercial helicopters; ship and submarine mission and combat systems; mission systems and sensors for rotary and fixed-wing aircraft; sea and land-based missile defense systems; radar systems; the Littoral Combat Ship (LCS); the Multi-Mission Surface Combatant; simulation and training services; and unmanned systems and technologies. In addition, RMS supports the needs of customers in cybersecurity and delivers communications and command and control capability through complex mission solutions for defense applications.
|
•
|
Space – Engaged in the research and development, design, engineering and production of satellites, space transportation systems, and strategic, advanced strike, and defensive systems. Space provides network-enabled situational awareness and integrates complex space and ground global systems to help our customers gather, analyze and securely distribute critical intelligence data. Space is also responsible for various classified systems and services in support of vital national security systems. Operating profit for our Space business segment also includes our share of earnings for our 50% ownership interest in ULA, which provides expendable launch services to the U.S. Government. Our investment in ULA totaled $709 million and $687 million at December 31, 2019 and 2018.
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Net sales
|
|
|
|
|
|
|
||||||
Aeronautics
|
|
$
|
23,693
|
|
|
$
|
21,242
|
|
|
$
|
19,410
|
|
Missiles and Fire Control
|
|
10,131
|
|
|
8,462
|
|
|
7,282
|
|
|||
Rotary and Mission Systems
|
|
15,128
|
|
|
14,250
|
|
|
13,663
|
|
|||
Space
|
|
10,860
|
|
|
9,808
|
|
|
9,605
|
|
|||
Total net sales
|
|
$
|
59,812
|
|
|
$
|
53,762
|
|
|
$
|
49,960
|
|
Operating profit
|
|
|
|
|
|
|
||||||
Aeronautics
|
|
$
|
2,521
|
|
|
$
|
2,272
|
|
|
$
|
2,176
|
|
Missiles and Fire Control
|
|
1,441
|
|
|
1,248
|
|
|
1,034
|
|
|||
Rotary and Mission Systems
|
|
1,421
|
|
|
1,302
|
|
|
902
|
|
|||
Space
|
|
1,191
|
|
|
1,055
|
|
|
980
|
|
|||
Total business segment operating profit
|
|
6,574
|
|
|
5,877
|
|
|
5,092
|
|
|||
Unallocated items
|
|
|
|
|
|
|
||||||
FAS/CAS operating adjustment (a)
|
|
2,049
|
|
|
1,803
|
|
|
1,613
|
|
|||
Stock-based compensation
|
|
(189
|
)
|
|
(173
|
)
|
|
(158
|
)
|
|||
Severance and restructuring charges (b)
|
|
—
|
|
|
(96
|
)
|
|
—
|
|
|||
Other, net (c)
|
|
111
|
|
|
(77
|
)
|
|
197
|
|
|||
Total unallocated, net
|
|
1,971
|
|
|
1,457
|
|
|
1,652
|
|
|||
Total consolidated operating profit
|
|
$
|
8,545
|
|
|
$
|
7,334
|
|
|
$
|
6,744
|
|
(a)
|
The FAS/CAS operating adjustment represents the difference between the service cost component of FAS pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS. For a detail of the FAS/CAS operating adjustment and the total net FAS/CAS pension adjustment, see the table below.
|
(b)
|
See “Note 15 – Severance and Restructuring Charges” for information on charges related to certain severance actions at our business segments. Severance and restructuring charges for initiatives that are not significant are included in business segment operating profit.
|
(c)
|
Other, net in 2019 includes a previously deferred non-cash gain of $51 million related to properties sold in 2015 as a result of completing our remaining obligations and a gain of $34 million for the sale of its Distributed Energy Solutions business. Other, net in 2018 includes a non-cash asset impairment charge of $110 million related to our equity method investee, AMMROC (see “Note 1 – Significant Accounting Policies”). Other, net in 2017 includes a previously deferred non-cash gain of $198 million related to properties sold in 2015 as a result of completing our remaining obligations (see “Note 7 – Property, Plant and Equipment, net”) and a $64 million charge, which represents our portion of a non-cash asset impairment charge recorded by AMMROC. (see “Note 1 – Significant Accounting Policies”).
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Total FAS expense and CAS costs
|
|
|
|
|
|
|
||||||
FAS pension expense
|
|
$
|
(1,093
|
)
|
|
$
|
(1,431
|
)
|
|
$
|
(1,372
|
)
|
Less: CAS pension cost
|
|
2,565
|
|
|
2,433
|
|
|
2,248
|
|
|||
Net FAS/CAS pension adjustment
|
|
$
|
1,472
|
|
|
$
|
1,002
|
|
|
$
|
876
|
|
|
|
|
|
|
|
|
||||||
Service and non-service cost reconciliation
|
|
|
|
|
|
|
||||||
FAS pension service cost
|
|
(516
|
)
|
|
(630
|
)
|
|
(635
|
)
|
|||
Less: CAS pension cost
|
|
2,565
|
|
|
2,433
|
|
|
2,248
|
|
|||
FAS/CAS operating adjustment
|
|
2,049
|
|
|
1,803
|
|
|
1,613
|
|
|||
Non-operating FAS pension expense (a)
|
|
(577
|
)
|
|
(801
|
)
|
|
(737
|
)
|
|||
Net FAS/CAS pension adjustment
|
|
$
|
1,472
|
|
|
$
|
1,002
|
|
|
$
|
876
|
|
(a)
|
We record the non-service cost components of net periodic benefit cost as part of other non-operating expense, net in the consolidated statement of earnings. The non-service cost components in the table above relate only to our qualified defined benefit pension plans. We incurred total non-service costs for our qualified defined benefit pension plans in the table above, along with similar costs for our other postretirement benefit plans of $116 million, $67 million, and $109 million for the years ended 2019, 2018 and 2017.
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Intersegment sales
|
|
|
|
|
|
|
||||||
Aeronautics
|
|
$
|
217
|
|
|
$
|
120
|
|
|
$
|
122
|
|
Missiles and Fire Control
|
|
515
|
|
|
423
|
|
|
355
|
|
|||
Rotary and Mission Systems (a)
|
|
1,872
|
|
|
1,759
|
|
|
1,801
|
|
|||
Space
|
|
352
|
|
|
237
|
|
|
111
|
|
|||
Total intersegment sales
|
|
$
|
2,956
|
|
|
$
|
2,539
|
|
|
$
|
2,389
|
|
Depreciation and amortization
|
|
|
|
|
|
|
||||||
Aeronautics
|
|
$
|
318
|
|
|
$
|
304
|
|
|
$
|
311
|
|
Missiles and Fire Control
|
|
124
|
|
|
105
|
|
|
99
|
|
|||
Rotary and Mission Systems
|
|
464
|
|
|
458
|
|
|
468
|
|
|||
Space
|
|
213
|
|
|
229
|
|
|
245
|
|
|||
Total business segment depreciation and amortization
|
|
1,119
|
|
|
1,096
|
|
|
1,123
|
|
|||
Corporate activities
|
|
70
|
|
|
65
|
|
|
72
|
|
|||
Total depreciation and amortization
|
|
$
|
1,189
|
|
|
$
|
1,161
|
|
|
$
|
1,195
|
|
Capital expenditures
|
|
|
|
|
|
|
||||||
Aeronautics
|
|
$
|
526
|
|
|
$
|
460
|
|
|
$
|
371
|
|
Missiles and Fire Control
|
|
300
|
|
|
244
|
|
|
156
|
|
|||
Rotary and Mission Systems
|
|
272
|
|
|
255
|
|
|
308
|
|
|||
Space
|
|
258
|
|
|
255
|
|
|
179
|
|
|||
Total business segment capital expenditures
|
|
1,356
|
|
|
1,214
|
|
|
1,014
|
|
|||
Corporate activities
|
|
128
|
|
|
64
|
|
|
163
|
|
|||
Total capital expenditures
|
|
$
|
1,484
|
|
|
$
|
1,278
|
|
|
$
|
1,177
|
|
(a)
|
During 2019 a program within our RMS business segment, which primarily performed work for our Aeronautics business segment, was realigned under Aeronautics. The 2018 and 2017 RMS intersegment sales have been adjusted to reflect the current program structure.
|
|
|
2019
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
20,319
|
|
|
$
|
8,424
|
|
|
$
|
12,206
|
|
|
$
|
9,104
|
|
|
$
|
50,053
|
|
Services
|
|
3,374
|
|
|
1,707
|
|
|
2,922
|
|
|
1,756
|
|
|
9,759
|
|
|||||
Total net sales
|
|
$
|
23,693
|
|
|
$
|
10,131
|
|
|
$
|
15,128
|
|
|
$
|
10,860
|
|
|
$
|
59,812
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
17,239
|
|
|
$
|
6,449
|
|
|
$
|
10,382
|
|
|
$
|
2,135
|
|
|
$
|
36,205
|
|
Cost-reimbursable
|
|
6,454
|
|
|
3,682
|
|
|
4,746
|
|
|
8,725
|
|
|
23,607
|
|
|||||
Total net sales
|
|
$
|
23,693
|
|
|
$
|
10,131
|
|
|
$
|
15,128
|
|
|
$
|
10,860
|
|
|
$
|
59,812
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
14,776
|
|
|
$
|
7,524
|
|
|
$
|
10,803
|
|
|
$
|
9,322
|
|
|
$
|
42,425
|
|
International (a)
|
|
8,733
|
|
|
2,465
|
|
|
3,822
|
|
|
1,511
|
|
|
16,531
|
|
|||||
U.S. commercial and other
|
|
184
|
|
|
142
|
|
|
503
|
|
|
27
|
|
|
856
|
|
|||||
Total net sales
|
|
$
|
23,693
|
|
|
$
|
10,131
|
|
|
$
|
15,128
|
|
|
$
|
10,860
|
|
|
$
|
59,812
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
14,960
|
|
|
$
|
7,666
|
|
|
$
|
11,306
|
|
|
$
|
9,349
|
|
|
$
|
43,281
|
|
Asia Pacific
|
|
3,882
|
|
|
420
|
|
|
1,451
|
|
|
73
|
|
|
5,826
|
|
|||||
Europe
|
|
3,224
|
|
|
516
|
|
|
769
|
|
|
1,419
|
|
|
5,928
|
|
|||||
Middle East
|
|
1,465
|
|
|
1,481
|
|
|
979
|
|
|
19
|
|
|
3,944
|
|
|||||
Other
|
|
162
|
|
|
48
|
|
|
623
|
|
|
—
|
|
|
833
|
|
|||||
Total net sales
|
|
$
|
23,693
|
|
|
$
|
10,131
|
|
|
$
|
15,128
|
|
|
$
|
10,860
|
|
|
$
|
59,812
|
|
(a)
|
International sales include foreign military sales contracted through the U.S. Government, direct commercial sales with international governments and commercial and other sales to international customers.
|
|
|
2018
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
18,207
|
|
|
$
|
6,945
|
|
|
$
|
11,714
|
|
|
$
|
8,139
|
|
|
$
|
45,005
|
|
Services
|
|
3,035
|
|
|
1,517
|
|
|
2,536
|
|
|
1,669
|
|
|
8,757
|
|
|||||
Total net sales
|
|
$
|
21,242
|
|
|
$
|
8,462
|
|
|
$
|
14,250
|
|
|
$
|
9,808
|
|
|
$
|
53,762
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
15,719
|
|
|
$
|
5,653
|
|
|
$
|
9,975
|
|
|
$
|
1,892
|
|
|
$
|
33,239
|
|
Cost-reimbursable
|
|
5,523
|
|
|
2,809
|
|
|
4,275
|
|
|
7,916
|
|
|
20,523
|
|
|||||
Total net sales
|
|
$
|
21,242
|
|
|
$
|
8,462
|
|
|
$
|
14,250
|
|
|
$
|
9,808
|
|
|
$
|
53,762
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
13,321
|
|
|
$
|
6,088
|
|
|
$
|
10,083
|
|
|
$
|
8,224
|
|
|
$
|
37,716
|
|
International (a)
|
|
7,735
|
|
|
2,190
|
|
|
3,693
|
|
|
1,538
|
|
|
15,156
|
|
|||||
U.S. commercial and other
|
|
186
|
|
|
184
|
|
|
474
|
|
|
46
|
|
|
890
|
|
|||||
Total net sales
|
|
$
|
21,242
|
|
|
$
|
8,462
|
|
|
$
|
14,250
|
|
|
$
|
9,808
|
|
|
$
|
53,762
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
13,507
|
|
|
$
|
6,272
|
|
|
$
|
10,557
|
|
|
$
|
8,270
|
|
|
$
|
38,606
|
|
Asia Pacific
|
|
3,335
|
|
|
427
|
|
|
1,433
|
|
|
85
|
|
|
5,280
|
|
|||||
Europe
|
|
2,837
|
|
|
321
|
|
|
829
|
|
|
1,416
|
|
|
5,403
|
|
|||||
Middle East
|
|
1,380
|
|
|
1,404
|
|
|
781
|
|
|
37
|
|
|
3,602
|
|
|||||
Other
|
|
183
|
|
|
38
|
|
|
650
|
|
|
—
|
|
|
871
|
|
|||||
Total net sales
|
|
$
|
21,242
|
|
|
$
|
8,462
|
|
|
$
|
14,250
|
|
|
$
|
9,808
|
|
|
$
|
53,762
|
|
(a)
|
International sales include foreign military sales contracted through the U.S. Government, direct commercial sales with international governments and commercial and other sales to international customers.
|
|
|
2017
|
||||||||||||||||||
|
|
Aeronautics
|
|
MFC
|
|
RMS
|
|
Space
|
|
Total
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Products
|
|
$
|
16,981
|
|
|
$
|
5,940
|
|
|
$
|
11,398
|
|
|
$
|
8,183
|
|
|
$
|
42,502
|
|
Services
|
|
2,429
|
|
|
1,342
|
|
|
2,265
|
|
|
1,422
|
|
|
7,458
|
|
|||||
Total net sales
|
|
$
|
19,410
|
|
|
$
|
7,282
|
|
|
$
|
13,663
|
|
|
$
|
9,605
|
|
|
$
|
49,960
|
|
Net sales by contract type
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed-price
|
|
$
|
13,828
|
|
|
$
|
5,102
|
|
|
$
|
10,059
|
|
|
$
|
2,058
|
|
|
$
|
31,047
|
|
Cost-reimbursable
|
|
5,582
|
|
|
2,180
|
|
|
3,604
|
|
|
7,547
|
|
|
18,913
|
|
|||||
Total net sales
|
|
$
|
19,410
|
|
|
$
|
7,282
|
|
|
$
|
13,663
|
|
|
$
|
9,605
|
|
|
$
|
49,960
|
|
Net sales by customer
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Government
|
|
$
|
12,609
|
|
|
$
|
4,467
|
|
|
$
|
9,715
|
|
|
$
|
8,088
|
|
|
$
|
34,879
|
|
International (a)
|
|
6,641
|
|
|
2,672
|
|
|
3,575
|
|
|
1,446
|
|
|
14,334
|
|
|||||
U.S. commercial and other
|
|
160
|
|
|
143
|
|
|
373
|
|
|
71
|
|
|
747
|
|
|||||
Total net sales
|
|
$
|
19,410
|
|
|
$
|
7,282
|
|
|
$
|
13,663
|
|
|
$
|
9,605
|
|
|
$
|
49,960
|
|
Net sales by geographic region
|
|
|
|
|
|
|
|
|
|
|
||||||||||
United States
|
|
$
|
12,769
|
|
|
$
|
4,610
|
|
|
$
|
10,088
|
|
|
$
|
8,159
|
|
|
$
|
35,626
|
|
Asia Pacific
|
|
2,823
|
|
|
516
|
|
|
1,344
|
|
|
92
|
|
|
4,775
|
|
|||||
Europe
|
|
2,331
|
|
|
305
|
|
|
927
|
|
|
1,270
|
|
|
4,833
|
|
|||||
Middle East
|
|
1,316
|
|
|
1,798
|
|
|
572
|
|
|
81
|
|
|
3,767
|
|
|||||
Other
|
|
171
|
|
|
53
|
|
|
732
|
|
|
3
|
|
|
959
|
|
|||||
Total net sales
|
|
$
|
19,410
|
|
|
$
|
7,282
|
|
|
$
|
13,663
|
|
|
$
|
9,605
|
|
|
$
|
49,960
|
|
(a)
|
International sales include foreign military sales contracted through the U.S. Government, direct commercial sales with international governments and commercial and other sales to international customers.
|
|
|
2019
|
|
|
2018
|
|
||
Assets (a)
|
|
|
|
|
||||
Aeronautics
|
|
$
|
9,109
|
|
|
$
|
8,435
|
|
Missiles and Fire Control
|
|
5,030
|
|
|
5,017
|
|
||
Rotary and Mission Systems
|
|
18,751
|
|
|
18,333
|
|
||
Space
|
|
5,844
|
|
|
5,445
|
|
||
Total business segment assets
|
|
38,734
|
|
|
37,230
|
|
||
Corporate assets (b)
|
|
8,794
|
|
|
7,646
|
|
||
Total assets
|
|
$
|
47,528
|
|
|
$
|
44,876
|
|
(a)
|
We have no long-lived assets with material carrying values located in foreign countries.
|
(b)
|
Corporate assets primarily include cash and cash equivalents, deferred income taxes, assets for the portion of environmental costs that are probable of future recovery and investments held in a separate trust.
|
|
|
2019
|
|
|
2018
|
|
||
Receivables, net
|
|
$
|
2,337
|
|
|
$
|
2,444
|
|
Contract assets
|
|
9,094
|
|
|
9,472
|
|
||
Contract liabilities
|
|
7,054
|
|
|
6,491
|
|
|
|
2019
|
|
|
2018
|
|
||
Materials, spares and supplies
|
|
$
|
532
|
|
|
$
|
446
|
|
Work-in-process
|
|
2,783
|
|
|
2,161
|
|
||
Finished goods
|
|
304
|
|
|
390
|
|
||
Total inventories
|
|
$
|
3,619
|
|
|
$
|
2,997
|
|
|
|
2019
|
|
|
2018
|
|
||
Land
|
|
$
|
136
|
|
|
$
|
135
|
|
Buildings
|
|
7,013
|
|
|
6,553
|
|
||
Machinery and equipment
|
|
8,128
|
|
|
7,871
|
|
||
Construction in progress
|
|
1,701
|
|
|
1,530
|
|
||
Total property, plant and equipment
|
|
16,978
|
|
|
16,089
|
|
||
Less: accumulated depreciation and amortization
|
|
(10,387
|
)
|
|
(9,965
|
)
|
||
Total property, plant and equipment, net
|
|
$
|
6,591
|
|
|
$
|
6,124
|
|
|
Total
|
2020
|
2021
|
2022
|
2023
|
2024
|
Thereafter
|
|||||||||||||||||||||
Operating leases
|
$
|
1,287
|
|
|
$
|
280
|
|
|
$
|
190
|
|
|
$
|
154
|
|
|
$
|
119
|
|
|
$
|
98
|
|
|
$
|
446
|
|
|
Less: imputed interest
|
$
|
182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
1,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Federal income tax expense (benefit):
|
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
|
||||||
Operations
|
|
$
|
698
|
|
|
$
|
975
|
|
|
$
|
(189
|
)
|
One-time charge due to tax legislation (a)
|
|
—
|
|
|
(6
|
)
|
|
43
|
|
|||
Deferred
|
|
|
|
|
|
|
||||||
Operations
|
|
235
|
|
|
(194
|
)
|
|
1,607
|
|
|||
One-time charge due to tax legislation (a)
|
|
—
|
|
|
(37
|
)
|
|
1,843
|
|
|||
Total federal income tax expense
|
|
933
|
|
|
738
|
|
|
3,304
|
|
|||
Foreign income tax expense (benefit):
|
|
|
|
|
|
|
||||||
Current
|
|
91
|
|
|
67
|
|
|
53
|
|
|||
Deferred
|
|
(13
|
)
|
|
(13
|
)
|
|
(1
|
)
|
|||
Total foreign income tax expense
|
|
78
|
|
|
54
|
|
|
52
|
|
|||
Total income tax expense
|
|
$
|
1,011
|
|
|
$
|
792
|
|
|
$
|
3,356
|
|
(a)
|
Represents one-time charge in 2017 primarily due to the re-measurement of certain net deferred tax assets using the lower U.S. corporate income tax rate and a deemed repatriation tax, and true-up to this charge in 2018.
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|
Amount
|
|
Rate
|
|||||||||
Income tax expense at the U.S. federal statutory tax rate
|
|
$
|
1,521
|
|
|
21.0
|
%
|
|
$
|
1,226
|
|
|
21.0
|
%
|
|
$
|
1,836
|
|
|
35.0
|
%
|
Research and development tax credit
|
|
(148
|
)
|
|
(2.0
|
)
|
|
(138
|
)
|
|
(2.4
|
)
|
|
(115
|
)
|
|
(2.2
|
)
|
|||
Foreign derived intangible income deduction
|
|
(122
|
)
|
|
(1.7
|
)
|
|
(61
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits for share-based payment awards
|
|
(63
|
)
|
|
(0.9
|
)
|
|
(55
|
)
|
|
(0.9
|
)
|
|
(106
|
)
|
|
(2.0
|
)
|
|||
Tax deductible dividends
|
|
(62
|
)
|
|
(0.9
|
)
|
|
(59
|
)
|
|
(1.0
|
)
|
|
(94
|
)
|
|
(1.8
|
)
|
|||
Tax accounting method change (a)
|
|
(15
|
)
|
|
(0.2
|
)
|
|
(61
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred tax write-down and transition tax (b)
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
(0.7
|
)
|
|
1,886
|
|
|
35.9
|
|
|||
U.S. manufacturing deduction benefit (c)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(0.1
|
)
|
|||
Other, net (d)
|
|
(100
|
)
|
|
(1.3
|
)
|
|
(17
|
)
|
|
(0.4
|
)
|
|
(44
|
)
|
|
(0.8
|
)
|
|||
Income tax expense
|
|
$
|
1,011
|
|
|
14.0
|
%
|
|
$
|
792
|
|
|
13.6
|
%
|
|
$
|
3,356
|
|
|
64.0
|
%
|
(a)
|
Recognized tax benefit of $15 million and $61 million in 2019 and 2018, from our change in a tax accounting method related to restoration of tax basis.
|
(b)
|
Includes a deferred tax re-measurement and transition tax true-up in 2018 and one-time charge in 2017 primarily due to the re-measurement of certain net deferred tax assets using the lower U.S. corporate income tax rate and a deemed repatriation tax.
|
(c)
|
Includes a reduction in our 2017 manufacturing benefit as a result of our decision to accelerate contributions to our pension funds in 2018. The Tax Act repealed the manufacturing benefit for years after 2017.
|
(d)
|
Includes additional $98 million deduction for foreign derived intangible income related to prior year recognized in 2019 reflecting proposed tax regulations released on March 4, 2019.
|
|
|
2019
|
|
|
2018
|
|
||
Deferred tax assets related to:
|
|
|
|
|
||||
Accrued compensation and benefits
|
|
$
|
659
|
|
|
$
|
584
|
|
Pensions
|
|
3,057
|
|
|
2,623
|
|
||
Other postretirement benefit obligations
|
|
71
|
|
|
148
|
|
||
Contract accounting methods
|
|
349
|
|
|
539
|
|
||
Foreign company operating losses and credits
|
|
49
|
|
|
38
|
|
||
Other (a)
|
|
345
|
|
|
160
|
|
||
Valuation allowance (b)
|
|
(28
|
)
|
|
(20
|
)
|
||
Deferred tax assets, net
|
|
4,502
|
|
|
4,072
|
|
||
Deferred tax liabilities related to:
|
|
|
|
|
||||
Goodwill and purchased intangibles
|
|
330
|
|
|
296
|
|
||
Property, plant and equipment
|
|
340
|
|
|
296
|
|
||
Exchanged debt securities and other (a)
|
|
525
|
|
|
294
|
|
||
Deferred tax liabilities
|
|
1,195
|
|
|
886
|
|
||
Net deferred tax assets
|
|
$
|
3,307
|
|
|
$
|
3,186
|
|
(a)
|
Includes deferred tax assets and liabilities related to lease liability and ROU asset.
|
(b)
|
A valuation allowance was provided against certain foreign company deferred tax assets arising from carryforwards of unused tax benefits.
|
|
|
2019
|
|
|
2018
|
|
||
Notes
|
|
|
|
|
||||
4.25% due 2019
|
|
$
|
—
|
|
|
$
|
900
|
|
2.50% due 2020
|
|
1,250
|
|
|
1,250
|
|
||
3.35% due 2021
|
|
900
|
|
|
900
|
|
||
3.10% due 2023
|
|
500
|
|
|
500
|
|
||
2.90% due 2025
|
|
750
|
|
|
750
|
|
||
3.55% due 2026
|
|
2,000
|
|
|
2,000
|
|
||
3.60% due 2035
|
|
500
|
|
|
500
|
|
||
4.50% and 6.15% due 2036
|
|
1,054
|
|
|
1,054
|
|
||
4.07% due 2042
|
|
1,336
|
|
|
1,336
|
|
||
3.80% due 2045
|
|
1,000
|
|
|
1,000
|
|
||
4.70% due 2046
|
|
1,326
|
|
|
1,326
|
|
||
4.09% due 2052
|
|
1,578
|
|
|
1,578
|
|
||
Other notes with rates from 4.85% to 9.13%, due 2022 to 2041
|
|
1,618
|
|
|
1,618
|
|
||
Commercial paper
|
|
—
|
|
|
600
|
|
||
Total debt
|
|
13,812
|
|
|
15,312
|
|
||
Less: unamortized discounts and issuance costs
|
|
(1,158
|
)
|
|
(1,208
|
)
|
||
Total debt, net
|
|
12,654
|
|
|
14,104
|
|
||
Less: current portion
|
|
(1,250
|
)
|
|
(1,500
|
)
|
||
Long-term debt, net
|
|
$
|
11,404
|
|
|
$
|
12,604
|
|
|
|
Qualified Defined
Benefit Pension Plans (a)
|
|
|
Retiree Medical and
Life Insurance Plans
|
||||||||||||||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
||||||
Service cost
|
|
$
|
516
|
|
|
$
|
630
|
|
|
$
|
635
|
|
|
|
$
|
14
|
|
|
$
|
19
|
|
|
$
|
19
|
|
Interest cost
|
|
1,806
|
|
|
1,740
|
|
|
1,835
|
|
|
|
97
|
|
|
91
|
|
|
103
|
|
||||||
Expected return on plan assets
|
|
(2,300
|
)
|
|
(2,395
|
)
|
|
(2,249
|
)
|
|
|
(110
|
)
|
|
(135
|
)
|
|
(128
|
)
|
||||||
Recognized net actuarial losses
|
|
1,404
|
|
|
1,777
|
|
|
1,506
|
|
|
|
2
|
|
|
5
|
|
|
19
|
|
||||||
Amortization of net prior service (credit) cost
|
|
(333
|
)
|
|
(321
|
)
|
|
(355
|
)
|
|
|
42
|
|
|
15
|
|
|
15
|
|
||||||
Total net periodic benefit cost
|
|
$
|
1,093
|
|
|
$
|
1,431
|
|
|
$
|
1,372
|
|
|
|
$
|
45
|
|
|
$
|
(5
|
)
|
|
$
|
28
|
|
(a)
|
Total net periodic benefit cost associated with our qualified defined benefit plans represents pension expense calculated in accordance with GAAP (FAS pension expense). We are required to calculate pension expense in accordance with both GAAP and CAS rules, each of which results in a different calculated amount of pension expense. The CAS pension cost is recovered through the pricing of our products and services on U.S. Government contracts and, therefore, is recognized in net sales and cost of sales for products and services. We include the difference between FAS pension service cost and CAS pension cost, referred to as the FAS/CAS operating adjustment, as a component of other unallocated, net on our consolidated statements of earnings (see Note 4 – Information on Business Segments).
|
|
|
Qualified Defined
Benefit Pension Plans
|
|
|
Retiree Medical and
Life Insurance Plans
|
||||||||||||
|
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
||||
Change in benefit obligation
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
43,305
|
|
|
$
|
48,686
|
|
|
|
$
|
2,348
|
|
|
$
|
2,602
|
|
Service cost
|
|
516
|
|
|
630
|
|
|
|
14
|
|
|
19
|
|
||||
Interest cost
|
|
1,806
|
|
|
1,740
|
|
|
|
97
|
|
|
91
|
|
||||
Benefits paid
|
|
(2,294
|
)
|
|
(2,379
|
)
|
|
|
(229
|
)
|
|
(224
|
)
|
||||
Settlements
|
|
(1,933
|
)
|
|
(1,821
|
)
|
|
|
—
|
|
|
—
|
|
||||
Actuarial losses (gains)
|
|
6,403
|
|
|
(3,281
|
)
|
|
|
(1
|
)
|
|
(311
|
)
|
||||
Changes in longevity assumptions
|
|
860
|
|
|
(162
|
)
|
|
|
(70
|
)
|
|
(8
|
)
|
||||
Plan amendments and curtailments (a)
|
|
11
|
|
|
(108
|
)
|
|
|
(6
|
)
|
|
101
|
|
||||
Medicare Part D subsidy
|
|
—
|
|
|
—
|
|
|
|
2
|
|
|
9
|
|
||||
Participants’ contributions
|
|
—
|
|
|
—
|
|
|
|
71
|
|
|
69
|
|
||||
Ending balance
|
|
$
|
48,674
|
|
|
$
|
43,305
|
|
|
|
$
|
2,226
|
|
|
$
|
2,348
|
|
Change in plan assets
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance at fair value
|
|
$
|
32,002
|
|
|
$
|
33,095
|
|
|
|
$
|
1,644
|
|
|
$
|
1,883
|
|
Actual return on plan assets
|
|
6,667
|
|
|
(1,893
|
)
|
|
|
342
|
|
|
(94
|
)
|
||||
Benefits paid
|
|
(2,294
|
)
|
|
(2,379
|
)
|
|
|
(229
|
)
|
|
(224
|
)
|
||||
Settlements
|
|
(1,933
|
)
|
|
(1,821
|
)
|
|
|
—
|
|
|
—
|
|
||||
Company contributions
|
|
1,000
|
|
|
5,000
|
|
|
|
59
|
|
|
1
|
|
||||
Medicare Part D subsidy
|
|
—
|
|
|
—
|
|
|
|
2
|
|
|
9
|
|
||||
Participants’ contributions
|
|
—
|
|
|
—
|
|
|
|
71
|
|
|
69
|
|
||||
Ending balance at fair value
|
|
$
|
35,442
|
|
|
$
|
32,002
|
|
|
|
$
|
1,889
|
|
|
$
|
1,644
|
|
Unfunded status of the plans
|
|
$
|
(13,232
|
)
|
|
$
|
(11,303
|
)
|
|
|
$
|
(337
|
)
|
|
$
|
(704
|
)
|
(a)
|
The 2018 qualified defined benefit pension plan includes a $119 million curtailment gain.
|
|
|
Qualified Defined
Benefit Pension Plans |
|
|
Retiree Medical and
Life Insurance Plans
|
||||||||||||
|
|
2019
|
|
|
2018
|
|
|
|
2019
|
|
|
2018
|
|
||||
Prepaid pension asset
|
|
$
|
2
|
|
|
$
|
107
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued postretirement benefit liabilities
|
|
(13,234
|
)
|
|
(11,410
|
)
|
|
|
(337
|
)
|
|
(704
|
)
|
||||
Accumulated other comprehensive loss (pre-tax) related to:
|
|
|
|
|
|
|
|
|
|
||||||||
Net actuarial losses
|
|
20,609
|
|
|
19,117
|
|
|
|
(69
|
)
|
|
236
|
|
||||
Prior service (credit) cost
|
|
(1,586
|
)
|
|
(1,931
|
)
|
|
|
120
|
|
|
167
|
|
||||
Total (a)
|
|
$
|
19,023
|
|
|
$
|
17,186
|
|
|
|
$
|
51
|
|
|
$
|
403
|
|
(a)
|
Accumulated other comprehensive loss related to postretirement benefit plans, after-tax, of $15.5 billion and $14.3 billion at December 31, 2019 and 2018 (see “Note 12 – Stockholders’ Equity”) includes $19.0 billion ($15.0 billion, net of tax) and $17.2 billion ($13.5 billion, net of tax) for qualified defined benefit pension plans, $51 million ($39 million, net of tax) and $403 million ($316 million, net of tax) for retiree medical and life insurance plans and $667 million ($527 million, net of tax) and $542 million ($428 million, net of tax) for other plans.
|
|
|
Incurred but Not Yet
Recognized in Net
Periodic Benefit Cost
|
|
|
Recognition of
Previously
Deferred Amounts
|
||||||||||||||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
||||||
|
|
Gains (losses)
|
|
|
(Gains) losses
|
||||||||||||||||||||
Actuarial gains and losses
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Qualified defined benefit pension plans
|
|
$
|
(2,283
|
)
|
|
$
|
(570
|
)
|
|
$
|
(1,172
|
)
|
|
|
$
|
1,104
|
|
|
$
|
1,396
|
|
|
$
|
974
|
|
Retiree medical and life insurance plans
|
|
238
|
|
|
71
|
|
|
77
|
|
|
|
2
|
|
|
4
|
|
|
12
|
|
||||||
Other plans
|
|
(133
|
)
|
|
83
|
|
|
(66
|
)
|
|
|
42
|
|
|
55
|
|
|
44
|
|
||||||
|
|
(2,178
|
)
|
|
(416
|
)
|
|
(1,161
|
)
|
|
|
1,148
|
|
|
1,455
|
|
|
1,030
|
|
||||||
|
|
Credit (cost)
|
|
|
(Credit) cost
|
||||||||||||||||||||
Net prior service credit and cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Qualified defined benefit pension plans
|
|
(8
|
)
|
|
(6
|
)
|
|
(219
|
)
|
|
|
(263
|
)
|
|
(255
|
)
|
|
(229
|
)
|
||||||
Retiree medical and life insurance plans
|
|
4
|
|
|
(79
|
)
|
|
—
|
|
|
|
33
|
|
|
12
|
|
|
10
|
|
||||||
Other plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(10
|
)
|
|
(10
|
)
|
|
(9
|
)
|
||||||
|
|
(4
|
)
|
|
(85
|
)
|
|
(219
|
)
|
|
|
(240
|
)
|
|
(253
|
)
|
|
(228
|
)
|
||||||
|
|
$
|
(2,182
|
)
|
|
$
|
(501
|
)
|
|
$
|
(1,380
|
)
|
|
|
$
|
908
|
|
|
$
|
1,202
|
|
|
$
|
802
|
|
|
|
Qualified Defined Benefit
Pension Plans
|
|
|
Retiree Medical and
Life Insurance Plans
|
||||||||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
Weighted average discount rate
|
|
3.250
|
%
|
|
4.250
|
%
|
|
3.625
|
%
|
|
|
3.250
|
%
|
|
4.250
|
%
|
|
3.625
|
%
|
Expected long-term rate of return on assets
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.50
|
%
|
|
|
7.00
|
%
|
|
7.00
|
%
|
|
7.50
|
%
|
Health care trend rate assumed for next year
|
|
|
|
|
|
|
|
|
8.00
|
%
|
|
8.25
|
%
|
|
8.50
|
%
|
|||
Ultimate health care trend rate
|
|
|
|
|
|
|
|
|
4.50
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|||
Year that the ultimate health care trend rate is reached
|
|
|
|
|
|
|
|
|
2034
|
|
|
2032
|
|
|
2032
|
|
Asset Class
|
Asset Allocation
Ranges
|
Cash and cash equivalents
|
0-20%
|
Equity
|
15-65%
|
Fixed income
|
10-60%
|
Alternative investments:
|
|
Private equity funds
|
0-15%
|
Real estate funds
|
0-10%
|
Hedge funds
|
0-20%
|
Commodities
|
0-15%
|
|
December 31, 2019
|
|
|
December 31, 2018
|
||||||||||||||||||||||||||||
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||||||
Investments measured at fair value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash and cash equivalents (a)
|
$
|
1,961
|
|
|
$
|
1,961
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,727
|
|
|
$
|
1,727
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. equity securities
|
7,189
|
|
|
7,182
|
|
|
—
|
|
|
7
|
|
|
|
3,936
|
|
|
3,927
|
|
|
3
|
|
|
6
|
|
||||||||
International equity securities
|
7,244
|
|
|
7,217
|
|
|
23
|
|
|
4
|
|
|
|
5,406
|
|
|
5,400
|
|
|
—
|
|
|
6
|
|
||||||||
Commingled equity funds
|
1,933
|
|
|
582
|
|
|
1,351
|
|
|
—
|
|
|
|
3,587
|
|
|
1,436
|
|
|
2,151
|
|
|
—
|
|
||||||||
Fixed income (a):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Corporate debt securities
|
5,208
|
|
|
—
|
|
|
5,206
|
|
|
2
|
|
|
|
4,890
|
|
|
—
|
|
|
4,888
|
|
|
2
|
|
||||||||
U.S. Government securities
|
2,260
|
|
|
—
|
|
|
2,260
|
|
|
—
|
|
|
|
3,399
|
|
|
—
|
|
|
3,399
|
|
|
—
|
|
||||||||
U.S. Government-sponsored enterprise securities
|
530
|
|
|
—
|
|
|
530
|
|
|
—
|
|
|
|
571
|
|
|
—
|
|
|
571
|
|
|
—
|
|
||||||||
Other fixed income investments (b)
|
3,134
|
|
|
35
|
|
|
2,135
|
|
|
964
|
|
|
|
2,926
|
|
|
—
|
|
|
1,988
|
|
|
938
|
|
||||||||
Total
|
$
|
29,459
|
|
|
$
|
16,977
|
|
|
$
|
11,505
|
|
|
$
|
977
|
|
|
|
$
|
26,442
|
|
|
$
|
12,490
|
|
|
$
|
13,000
|
|
|
$
|
952
|
|
Investments measured at NAV (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commingled equity funds
|
181
|
|
|
|
|
|
|
|
|
|
144
|
|
|
|
|
|
|
|
||||||||||||||
Other fixed income investments
|
32
|
|
|
|
|
|
|
|
|
|
29
|
|
|
|
|
|
|
|
||||||||||||||
Private equity funds
|
4,019
|
|
|
|
|
|
|
|
|
|
4,014
|
|
|
|
|
|
|
|
||||||||||||||
Real estate funds
|
2,493
|
|
|
|
|
|
|
|
|
|
2,117
|
|
|
|
|
|
|
|
||||||||||||||
Hedge funds
|
1,069
|
|
|
|
|
|
|
|
|
|
828
|
|
|
|
|
|
|
|
||||||||||||||
Total investments measured at NAV
|
7,794
|
|
|
|
|
|
|
|
|
|
7,132
|
|
|
|
|
|
|
|
||||||||||||||
Receivables, net
|
78
|
|
|
|
|
|
|
|
|
|
72
|
|
|
|
|
|
|
|
||||||||||||||
Total
|
$
|
37,331
|
|
|
|
|
|
|
|
|
|
$
|
33,646
|
|
|
|
|
|
|
|
(a)
|
Cash and cash equivalents, equity securities and fixed income securities included derivative assets and liabilities whose fair values were not material as of December 31, 2019 and 2018. LMIMCo’s investment policies restrict the use of derivatives to either establish long or short exposures for purposes consistent with applicable investment mandate guidelines or to hedge risks to the extent of a plan’s current exposure to such risks. Most derivative transactions are settled on a daily basis.
|
(b)
|
Level 3 investments include $857 million at December 31, 2019 and $810 million at December 31, 2018 related to the buy-in contract discussed above.
|
(c)
|
Certain investments that are valued using the NAV per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy and are included in the table to permit reconciliation of the fair value hierarchy to the aggregate postretirement benefit plan assets.
|
|
|
2020
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
|
2024
|
|
|
2025 – 2029
|
|
||||||
Qualified defined benefit pension plans
|
|
$
|
2,300
|
|
|
$
|
2,360
|
|
|
$
|
2,450
|
|
|
$
|
2,530
|
|
|
$
|
2,600
|
|
|
$
|
13,540
|
|
Retiree medical and life insurance plans
|
|
160
|
|
|
160
|
|
|
160
|
|
|
160
|
|
|
150
|
|
|
700
|
|
|
|
Postretirement
Benefit Plans (a)
|
|
Other, net
|
|
|
AOCL
|
|
||||
Balance at December 31, 2016
|
|
$
|
(11,981
|
)
|
|
$
|
(121
|
)
|
|
$
|
(12,102
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(1,380
|
)
|
|
120
|
|
|
(1,260
|
)
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses
|
|
1,030
|
|
|
—
|
|
|
1,030
|
|
|||
Amortization of net prior service credits
|
|
(228
|
)
|
|
—
|
|
|
(228
|
)
|
|||
Other
|
|
—
|
|
|
21
|
|
|
21
|
|
|||
Total reclassified from AOCL
|
|
802
|
|
|
21
|
|
|
823
|
|
|||
Total other comprehensive (loss) income
|
|
(578
|
)
|
|
141
|
|
|
(437
|
)
|
|||
Balance at December 31, 2017
|
|
(12,559
|
)
|
|
20
|
|
|
(12,539
|
)
|
|||
Other comprehensive loss before reclassifications
|
|
(501
|
)
|
|
(105
|
)
|
|
(606
|
)
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses
|
|
1,455
|
|
|
—
|
|
|
1,455
|
|
|||
Amortization of net prior service credits
|
|
(253
|
)
|
|
—
|
|
|
(253
|
)
|
|||
Other
|
|
—
|
|
|
30
|
|
|
30
|
|
|||
Total reclassified from AOCL
|
|
1,202
|
|
|
30
|
|
|
1,232
|
|
|||
Total other comprehensive (loss) income
|
|
701
|
|
|
(75
|
)
|
|
626
|
|
|||
Reclassification of income tax effects from tax reform(b)
|
|
(2,396
|
)
|
|
(12
|
)
|
|
(2,408
|
)
|
|||
Balance at December 31, 2018
|
|
(14,254
|
)
|
|
(67
|
)
|
|
(14,321
|
)
|
|||
Other comprehensive loss before reclassifications
|
|
(2,182
|
)
|
|
18
|
|
|
(2,164
|
)
|
|||
Amounts reclassified from AOCL
|
|
|
|
|
|
|
||||||
Recognition of net actuarial losses
|
|
1,148
|
|
|
—
|
|
|
1,148
|
|
|||
Amortization of net prior service credits
|
|
(240
|
)
|
|
—
|
|
|
(240
|
)
|
|||
Other
|
|
—
|
|
|
23
|
|
|
23
|
|
|||
Total reclassified from AOCL
|
|
908
|
|
|
23
|
|
|
931
|
|
|||
Total other comprehensive income (loss)
|
|
(1,274
|
)
|
|
41
|
|
|
(1,233
|
)
|
|||
Balance at December 31, 2019
|
|
$
|
(15,528
|
)
|
|
$
|
(26
|
)
|
|
$
|
(15,554
|
)
|
(a)
|
AOCL related to postretirement benefit plans is shown net of tax benefits of $4.2 billion at December 31, 2019, $3.9 billion at December 31, 2018 and $6.5 billion at December 31, 2017. These tax benefits include amounts recognized on our income tax returns as current deductions and deferred income taxes, which will be recognized on our tax returns in future years. See “Note 9 – Income Taxes” and “Note 11 – Postretirement Benefit Plans” for more information on our income taxes and postretirement benefit plans.
|
(b)
|
During 2018, we reclassified the impact of the income tax effects related to the Tax Cuts and Jobs Act of 2017 (the Tax Act) from AOCL to retained earnings by the same amount with zero impact to total equity.
|
|
|
Number
of RSUs
(In thousands)
|
|
Weighted Average
Grant-Date Fair
Value Per Share
|
|||||
Nonvested at December 31, 2016
|
|
788
|
|
|
|
$
|
183.00
|
|
|
Granted
|
|
519
|
|
|
|
254.58
|
|
|
|
Vested
|
|
(624
|
)
|
|
|
201.65
|
|
|
|
Forfeited
|
|
(32
|
)
|
|
|
223.23
|
|
|
|
Nonvested at December 31, 2017
|
|
651
|
|
|
|
$
|
220.21
|
|
|
Granted
|
|
406
|
|
|
|
353.99
|
|
|
|
Vested
|
|
(470
|
)
|
|
|
271.50
|
|
|
|
Forfeited
|
|
(24
|
)
|
|
|
282.07
|
|
|
|
Nonvested at December 31, 2018
|
|
563
|
|
|
|
$
|
271.23
|
|
|
Granted
|
|
581
|
|
|
|
305.30
|
|
|
|
Vested
|
|
(523
|
)
|
|
|
269.00
|
|
|
|
Forfeited
|
|
(21
|
)
|
|
|
302.78
|
|
|
|
Nonvested at December 31, 2019
|
|
600
|
|
|
|
$
|
305.06
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mutual funds
|
|
$
|
1,363
|
|
|
$
|
1,363
|
|
|
$
|
—
|
|
|
$
|
978
|
|
|
$
|
978
|
|
|
$
|
—
|
|
U.S. Government securities
|
|
99
|
|
|
—
|
|
|
99
|
|
|
105
|
|
|
—
|
|
|
105
|
|
||||||
Other securities
|
|
319
|
|
|
171
|
|
|
148
|
|
|
144
|
|
|
28
|
|
|
116
|
|
||||||
Derivatives
|
|
18
|
|
|
—
|
|
|
18
|
|
|
22
|
|
|
—
|
|
|
22
|
|
||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives
|
|
23
|
|
|
—
|
|
|
23
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||||
Assets measured at NAV
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other commingled funds
|
|
19
|
|
|
|
|
|
|
18
|
|
|
|
|
|
|
|
2019 Quarters (a)
|
||||||||||||||
|
|
First (c)
|
|
|
Second
|
|
|
Third (d)
|
|
|
Fourth
|
|
||||
Net sales
|
|
$
|
14,336
|
|
|
$
|
14,427
|
|
|
$
|
15,171
|
|
|
$
|
15,878
|
|
Operating profit
|
|
2,283
|
|
|
2,008
|
|
|
2,105
|
|
|
2,149
|
|
||||
Net earnings
|
|
1,704
|
|
|
1,420
|
|
|
1,608
|
|
|
1,498
|
|
||||
Basic earnings per common share (b)
|
|
6.03
|
|
|
5.03
|
|
|
5.70
|
|
|
5.32
|
|
||||
Diluted earnings per common share (b)
|
|
5.99
|
|
|
5.00
|
|
|
5.66
|
|
|
5.29
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2018 Quarters (a)
|
||||||||||||||
|
|
First
|
|
|
Second(e)
|
|
|
Third
|
|
|
Fourth(f)
|
|
||||
Net sales
|
|
$
|
11,635
|
|
|
$
|
13,398
|
|
|
$
|
14,318
|
|
|
$
|
14,411
|
|
Operating profit
|
|
1,725
|
|
|
1,795
|
|
|
1,963
|
|
|
1,851
|
|
||||
Net earnings
|
|
1,157
|
|
|
1,163
|
|
|
1,473
|
|
|
1,253
|
|
||||
Basic earnings per common share (b)
|
|
4.05
|
|
|
4.08
|
|
|
5.18
|
|
|
4.43
|
|
||||
Diluted earnings per common share (b)
|
|
4.02
|
|
|
4.05
|
|
|
5.14
|
|
|
4.39
|
|
(a)
|
Quarters are typically 13 weeks in length but, due to our fiscal year ending on December 31, the number of weeks in a reporting period may vary slightly during the year and for comparable prior year periods.
|
(b)
|
The sum of the quarterly earnings per share amounts do not equal the earnings per share amounts included on our consolidated statements of earnings. The difference in 2019 and 2018 relates to the timing of our share repurchases.
|
(c)
|
The first quarter of 2019 includes a previously deferred gain of approximately $51 million ($38 million, or $0.13 per share, after-tax) related to properties sold in 2015 as a result of completing our remaining obligations. The first quarter of 2019 also includes benefits of $75 million, or $0.26 per share, from additional tax deductions, based on proposed tax regulations released on March 4, 2019, which clarified that foreign military sales qualify as foreign derived intangible income. Approximately $65 million, or $0.23 per share, of the total benefit was recorded discretely because it relates to the prior year.
|
(d)
|
The third quarter of 2019 includes benefits of $62 million, or $0.22 per share, for additional tax deductions for the prior year, primarily attributable to foreign derived intangible income treatment based on proposed tax regulations released on March 4, 2019 and our change in tax accounting method.
|
(e)
|
The second quarter of 2018 includes a $96 million ($76 million, or $0.26 per share, after-tax) severance and restructuring charge (see “Note 15 – Severance and Restructuring Charges”).
|
(f)
|
The fourth quarter of 2018 includes a non-cash asset impairment charge of $110 million ($83 million, or $0.29 per share, after-tax) related to our equity method investee, AMMROC (see “Note 1 – Significant Accounting Policies”).
|
|
Page
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
4.3
|
|
|
|
|
|
4.4
|
|
|
|
|
|
4.5
|
|
|
|
|
|
4.6
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
10.23
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
21
|
|
|
|
|
|
23
|
|
|
|
|
|
24
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document contained in Exhibit 101
|
*
|
Exhibits 10.3 through 10.31 constitute management contracts or compensatory plans or arrangements.
|
|
|
Lockheed Martin Corporation
|
||
|
|
(Registrant)
|
||
|
|
|
|
|
Date: February 7, 2020
|
|
By:
|
|
/s/ Brian P. Colan
|
|
|
|
|
Brian P. Colan
|
|
|
|
|
Vice President, Controller, and Chief Accounting Officer
|
|
Signatures
|
|
|
Titles
|
|
Date
|
|
/s/ Marillyn A. Hewson
|
|
|
Chairman, President and Chief Executive Officer (Principal Executive Officer)
|
|
February 7, 2020
|
|
Marillyn A. Hewson
|
|
|
|
|
|
|
/s/ Kenneth R. Possenriede
|
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
February 7, 2020
|
|
Kenneth R. Possenriede
|
|
|
|
|
|
|
/s/ Brian P. Colan
|
|
|
Vice President, Controller, and Chief Accounting Officer (Principal Accounting Officer)
|
|
February 7, 2020
|
|
Brian P. Colan
|
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*
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Director
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February 7, 2020
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Daniel F. Akerson
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*
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Director
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February 7, 2020
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David B. Burritt
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*
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Director
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February 7, 2020
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Bruce A. Carlson
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*
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Director
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February 7, 2020
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James O. Ellis, Jr.
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*
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Director
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February 7, 2020
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Thomas J. Falk
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*
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Director
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February 7, 2020
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Ilene S. Gordon
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*
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Director
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February 7, 2020
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Vicki A. Hollub
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*
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Director
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February 7, 2020
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Jeh C. Johnson
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*
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Director
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February 7, 2020
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Debra L. Reed-Klages
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*
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Director
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February 7, 2020
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James D. Taiclet, Jr.
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Date: February 7, 2020
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By:
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/s/ Maryanne R. Lavan
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Maryanne R. Lavan
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Attorney-in-fact
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This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
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Lockheed Martin Corporation
6801 Rockledge Drive Bethesda, MD 20817
Marillyn A. Hewson
Chairman, President and Chief Executive Officer
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Name of Subsidiary
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Place of Formation
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AWE Management Limited
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United Kingdom
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AWE PLC
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United Kingdom
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Helicopter Support, Inc.
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Connecticut
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Lockheed Martin Aerospace Systems Integration, LLC
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Delaware
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Lockheed Martin Australia Pty Limited
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Australia
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Lockheed Martin Canada Inc.
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Canada
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Lockheed Martin Global, Inc.
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Delaware
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Lockheed Martin Investments Inc.
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Delaware
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Lockheed Martin Overseas, LLC
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Delaware
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Lockheed Martin UK Ampthill Limited
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United Kingdom
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Lockheed Martin UK Limited
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United Kingdom
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Polskie Zaklady Lotnicze Sp. Zo.o
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Poland
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Sikorsky Aircraft Corporation
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Delaware
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Sikorsky International Operations, Inc.
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Delaware
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Zeta Associates, Inc.
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Virginia
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•
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33-63155 on Form S-8, dated October 3, 1995;
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•
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33-58083 on Form S-8 (Post-Effective Amendment No. 1), dated January 22, 1997;
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•
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333-20117 and 333-20139 on Form S-8, each dated January 22, 1997;
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•
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333-27309 on Form S-8, dated May 16, 1997;
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•
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333-37069 on Form S-8, dated October 2, 1997;
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•
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333-40997 on Form S-8, dated November 25, 1997;
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•
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333-58069 on Form S-8, dated June 30, 1998;
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•
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333-92197 on Form S-8, dated December 6, 1999;
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•
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333-92363 on Form S-8, dated December 8, 1999;
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•
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333-78279 on Form S-8 (Post-Effective Amendment No. 2), dated August 3, 2000;
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•
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333-56926 on Form S-8, dated March 12, 2001;
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•
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333-105118 on Form S-8, dated May 9, 2003;
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•
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333-113769, 333-113770, 333-113771, 333-113772, and 333-113773 on Form S-8, each dated March 19, 2004;
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•
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333-115357 on Form S-8, dated May 10, 2004;
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•
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333-127084 on Form S-8, dated August 1, 2005;
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•
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333-146963 on Form S-8, dated October 26, 2007;
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•
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333-155687 on Form S-8, dated November 25, 2008;
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•
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333-162716 on Form S-8, dated October 28, 2009;
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•
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333-155684 on Form S-8 (Post-Effective Amendment No. 1), dated August 23, 2011;
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•
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333-176440 on Form S-8, dated August 23, 2011;
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•
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333-188118 on Form S-8, dated April 25, 2013;
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•
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333-195466 on Form S-8, dated April 24, 2014 and July 23, 2014 (Post-Effective Amendment No.1);
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•
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333-219373 on Form S-3, dated July 20, 2017; and
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•
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333-219374 on Form S-3, dated July 20, 2017.
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/s/ Daniel F. Akerson
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DANIEL F. AKERSON
Director
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/s/ David B. Burritt
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DAVID B. BURRITT
Director |
/s/ Bruce A. Carlson
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BRUCE A. CARLSON
Director |
/s/ James O. Ellis, Jr.
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JAMES O. ELLIS, JR.
Director |
/s/ Thomas J. Falk
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THOMAS J. FALK
Director |
/s/ Ilene S. Gordon
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ILENE S. GORDON
Director |
/s/ Vicki A. Hollub
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VICKI A. HOLLUB
Director
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/s/ Jeh C. Johnson
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JEH C. JOHNSON
Director
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/s/ Debra L. Reed-Klages
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DEBRA L. REED-KLAGES
Director
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/s/ James D. Taiclet, Jr.
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JAMES D. TAICLET, JR.
Director
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1.
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I have reviewed this Annual Report on Form 10-K of Lockheed Martin Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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;
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5.
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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):
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(a)
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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
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(b)
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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.
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/s/ Marillyn A. Hewson
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Marillyn A. Hewson
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Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of Lockheed Martin Corporation;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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;
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5.
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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):
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(a)
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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
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(b)
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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.
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/s/ Kenneth R. Possenriede
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Kenneth R. Possenriede
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
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/s/ Marillyn A. Hewson
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Marillyn A. Hewson
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Chief Executive Officer
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/s/ Kenneth R. Possenriede
|
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Kenneth R. Possenriede
|
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Chief Financial Officer
|