Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 28, 2020 | Jul. 14, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 28, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-11437 | |
Entity Registrant Name | LOCKHEED MARTIN CORPORATION | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-1893632 | |
Entity Address, Address Line One | 6801 Rockledge Drive, | |
Entity Address, City or Town | Bethesda, | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20817 | |
City Area Code | 301 | |
Local Phone Number | 897-6000 | |
Title of 12(b) Security | Common Stock, $1 par value | |
Trading Symbol | LMT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 279,542,050 | |
Entity Central Index Key | 0000936468 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Total net sales | $ 16,220 | $ 14,427 | $ 31,871 | $ 28,763 |
Total cost of sales | (14,007) | (12,434) | (27,567) | (24,582) |
Gross profit | 2,213 | 1,993 | 4,304 | 4,181 |
Other (expense) income, net | (127) | 15 | (96) | 110 |
Operating profit | 2,086 | 2,008 | 4,208 | 4,291 |
Interest expense | (149) | (163) | (297) | (334) |
Other non-operating income (expense), net | 25 | (162) | 81 | (329) |
Earnings before income taxes | 1,962 | 1,683 | 3,992 | 3,628 |
Income tax expense | (336) | (263) | (649) | (504) |
Net earnings | $ 1,626 | $ 1,420 | $ 3,343 | $ 3,124 |
Earnings per common share | ||||
Basic (in dollars per share) | $ 5.81 | $ 5.03 | $ 11.92 | $ 11.07 |
Diluted (in dollars per share) | 5.79 | 5 | 11.87 | 11 |
Cash dividends paid per common share (in dollars per share) | $ 2.40 | $ 2.20 | $ 4.80 | $ 4.40 |
Products | ||||
Total net sales | $ 13,572 | $ 12,003 | $ 26,738 | $ 23,973 |
Total cost of sales | (12,092) | (10,674) | (23,834) | (21,299) |
Services | ||||
Total net sales | 2,648 | 2,424 | 5,133 | 4,790 |
Total cost of sales | (2,339) | (2,194) | (4,552) | (4,241) |
Other unallocated, net | ||||
Total cost of sales | $ 424 | $ 434 | $ 819 | $ 958 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 1,626 | $ 1,420 | $ 3,343 | $ 3,124 |
Other comprehensive income, net of tax | ||||
Recognition of previously deferred postretirement benefit plan amounts | 110 | 227 | 220 | 454 |
Other, net | 28 | 28 | (69) | 28 |
Other comprehensive income, net of tax | 138 | 255 | 151 | 482 |
Comprehensive income | $ 1,764 | $ 1,675 | $ 3,494 | $ 3,606 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 28, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 2,855,000,000 | $ 1,514,000,000 |
Receivables, net | 2,835,000,000 | 2,337,000,000 |
Contract assets | 9,821,000,000 | 9,094,000,000 |
Inventories | 3,521,000,000 | 3,619,000,000 |
Other current assets | 538,000,000 | 531,000,000 |
Total current assets | 19,570,000,000 | 17,095,000,000 |
Property, plant and equipment, net | 6,663,000,000 | 6,591,000,000 |
Goodwill | 10,579,000,000 | 10,604,000,000 |
Intangible assets, net | 3,077,000,000 | 3,213,000,000 |
Deferred income taxes | 3,127,000,000 | 3,319,000,000 |
Other noncurrent assets | 6,587,000,000 | 6,706,000,000 |
Total assets | 49,603,000,000 | 47,528,000,000 |
Current liabilities | ||
Accounts payable | 1,453,000,000 | 1,281,000,000 |
Contract liabilities | 7,481,000,000 | 7,054,000,000 |
Salaries, benefits and payroll taxes | 2,488,000,000 | 2,466,000,000 |
Current maturities of long-term debt | 500,000,000 | 1,250,000,000 |
Other current liabilities | 2,966,000,000 | 1,921,000,000 |
Total current liabilities | 14,888,000,000 | 13,972,000,000 |
Long-term debt, net | 12,174,000,000 | 11,404,000,000 |
Accrued pension liabilities | 12,921,000,000 | 13,234,000,000 |
Other noncurrent liabilities | 5,834,000,000 | 5,747,000,000 |
Total liabilities | 45,817,000,000 | 44,357,000,000 |
Stockholders’ equity | ||
Common stock, $1 par value per share | 278,000,000 | 280,000,000 |
Additional paid-in capital | 0 | 0 |
Retained earnings | 18,876,000,000 | 18,401,000,000 |
Accumulated other comprehensive loss | (15,403,000,000) | (15,554,000,000) |
Total stockholders’ equity | 3,751,000,000 | 3,127,000,000 |
Noncontrolling interests in subsidiary | 35,000,000 | 44,000,000 |
Total equity | 3,786,000,000 | 3,171,000,000 |
Total liabilities and equity | $ 49,603,000,000 | $ 47,528,000,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 28, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 28, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net earnings | $ 3,343 | $ 3,124 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation and amortization | 608 | 565 |
Stock-based compensation | 115 | 104 |
Equity method investment impairment | 128 | 0 |
Gain on property sale | 0 | (51) |
Changes in assets and liabilities | ||
Receivables, net | (498) | (102) |
Contract assets | (727) | (916) |
Inventories | 98 | (602) |
Accounts payable | 191 | 237 |
Contract liabilities | 427 | 275 |
Postretirement benefit plans | (77) | 552 |
Income taxes | 473 | 112 |
Other, net | 415 | 33 |
Net cash provided by operating activities | 4,496 | 3,331 |
Investing activities | ||
Capital expenditures | (636) | (533) |
Other, net | 4 | 25 |
Net cash used for investing activities | (632) | (508) |
Financing activities | ||
Dividends paid | (1,364) | (1,260) |
Repurchases of common stock | (1,015) | (500) |
Issuance of long-term debt, net of related costs | 1,131 | 0 |
Repayments of current and long-term debt | (1,150) | 0 |
Repayments of commercial paper, net | 0 | (600) |
Other, net | (125) | (68) |
Net cash used for financing activities | (2,523) | (2,428) |
Net change in cash and cash equivalents | 1,341 | 395 |
Cash and cash equivalents at beginning of period | 1,514 | 772 |
Cash and cash equivalents at end of period | $ 2,855 | $ 1,167 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | Noncontrolling Interests in Subsidiary |
Beginning Balance at Dec. 31, 2018 | $ 1,449 | $ 281 | $ 0 | $ 15,434 | $ (14,321) | $ 1,394 | $ 55 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 3,124 | 3,124 | 3,124 | ||||
Other comprehensive income, net of tax | 482 | 482 | 482 | ||||
Repurchases of common stock | (500) | (2) | (220) | (278) | (500) | ||
Dividends declared | (1,872) | (1,872) | (1,872) | ||||
Stock-based awards, ESOP activity and other | 222 | 2 | 220 | 222 | |||
Net decrease in noncontrolling interests in subsidiary | (9) | (9) | |||||
Ending Balance at Jun. 30, 2019 | 2,896 | 281 | 0 | 16,408 | (13,839) | 2,850 | 46 |
Beginning Balance at Mar. 31, 2019 | 2,522 | 281 | 0 | 16,278 | (14,094) | 2,465 | 57 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 1,420 | 1,420 | 1,420 | ||||
Other comprehensive income, net of tax | 255 | 255 | 255 | ||||
Repurchases of common stock | (216) | (1) | (174) | (41) | (216) | ||
Dividends declared | (1,249) | (1,249) | (1,249) | ||||
Stock-based awards, ESOP activity and other | 175 | 1 | 174 | 175 | |||
Net decrease in noncontrolling interests in subsidiary | (11) | (11) | |||||
Ending Balance at Jun. 30, 2019 | 2,896 | 281 | 0 | 16,408 | (13,839) | 2,850 | 46 |
Beginning Balance at Dec. 31, 2019 | 3,171 | 280 | 0 | 18,401 | (15,554) | 3,127 | 44 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 3,343 | 3,343 | 3,343 | ||||
Other comprehensive income, net of tax | 151 | 151 | 151 | ||||
Repurchases of common stock | (1,041) | (3) | (197) | (841) | (1,041) | ||
Dividends declared | (2,027) | (2,027) | (2,027) | ||||
Stock-based awards, ESOP activity and other | 198 | 1 | 197 | 198 | |||
Net decrease in noncontrolling interests in subsidiary | (9) | (9) | |||||
Ending Balance at Jun. 28, 2020 | 3,786 | 278 | 0 | 18,876 | (15,403) | 3,751 | 35 |
Beginning Balance at Mar. 29, 2020 | 3,487 | 279 | 0 | 18,708 | (15,541) | 3,446 | 41 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 1,626 | 1,626 | 1,626 | ||||
Other comprehensive income, net of tax | 138 | 138 | 138 | ||||
Repurchases of common stock | (277) | (1) | (168) | (108) | (277) | ||
Dividends declared | (1,350) | (1,350) | (1,350) | ||||
Stock-based awards, ESOP activity and other | 168 | 168 | 168 | ||||
Net decrease in noncontrolling interests in subsidiary | (6) | (6) | |||||
Ending Balance at Jun. 28, 2020 | $ 3,786 | $ 278 | $ 0 | $ 18,876 | $ (15,403) | $ 3,751 | $ 35 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 28, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION We prepared these consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information, the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these consolidated financial statements reflect all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations, financial condition, and cash flows for the interim periods presented. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates. Significant estimates inherent in the preparation of our consolidated financial statements include, but are not limited to, accounting for sales and cost recognition, postretirement benefit plans, assets for the portion of environmental costs that are probable of future recovery and liabilities, evaluation of goodwill, investments and other assets for impairment, income taxes including deferred tax assets, fair value measurements and contingencies. The consolidated financial statements include the accounts of subsidiaries we control and variable interest entities if we are the primary beneficiary. We eliminate intercompany balances and transactions in consolidation. We close our books and records on the last Sunday of the calendar quarter, which was on June 28 for the second quarter of 2020 and June 30 for the second quarter of 2019, to align our financial closing with our business processes. The consolidated financial statements and tables of financial information included herein are labeled based on that convention. This practice only affects interim periods as our fiscal year ends on December 31. We adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments—Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , effective January 1, 2020 using the modified retrospective approach. The new standard changes how we account for credit losses for financial assets and certain other instruments, including trade receivables and contract assets, that are not measured at fair value through net income. Under legacy standards, we recognized an impairment of receivables when it was probable that a loss had been incurred. Under the new standard, we are required to recognize estimated credit losses expected to occur over the estimated life or remaining contractual life of an asset (which includes losses that may be incurred in future periods) using a broader range of information including reasonable and supportable forecasts about future economic conditions. The adoption of the standard did not have a significant impact on our results of operations, financial position or cash flows. We adopted ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Topic 715-20): Disclosure Framework—Changes to the Disclosure Requirements For Defined Benefit Plans , effective January 1, 2020. The new standard modifies the annual disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The guidance requires disclosure changes to be presented on a retrospective basis. As this standard relates only to financial disclosures, its adoption did not have an impact to our results of operations, financial position or cash flows. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the full year or future periods. Unless otherwise noted, we present all per share amounts cited in these consolidated financial statements on a “per diluted share” basis. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019 (2019 Form 10-K). |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 28, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The weighted average number of shares outstanding used to compute earnings per common share were as follows (in millions): Quarters Ended Six Months Ended June 28, June 30, June 28, June 30, Weighted average common shares outstanding for basic computations 279.8 282.2 280.5 282.3 Weighted average dilutive effect of equity awards 1.0 1.7 1.2 1.8 Weighted average common shares outstanding for diluted computations 280.8 283.9 281.7 284.1 We compute basic and diluted earnings per common share by dividing net earnings by the respective weighted average number of common shares outstanding for the periods presented. Our calculation of diluted earnings per common share also includes the dilutive effects for the assumed vesting of outstanding restricted stock units (RSUs) and performance stock units (PSUs) and exercise of outstanding stock options based on the treasury stock method. There were no significant anti-dilutive equity awards during the quarters and six months ended June 28, 2020 or June 30, 2019. |
INFORMATION ON BUSINESS SEGMENT
INFORMATION ON BUSINESS SEGMENTS | 6 Months Ended |
Jun. 28, 2020 | |
Segment Reporting [Abstract] | |
INFORMATION ON BUSINESS SEGMENTS | INFORMATION ON BUSINESS SEGMENTS We operate in four business segments: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. We organize our business segments based on the nature of products and services offered. Net sales and operating profit of our business segments exclude intersegment sales, cost of sales, and profit as these activities are eliminated in consolidation. Business segment operating profit includes our share of earnings or losses from equity method investees as the operating activities of the equity method investees are closely aligned with the operations of our business segments. Business segment operating profit also excludes the FAS/CAS operating adjustment described below, a portion of corporate costs not considered allowable or allocable to contracts with the U.S. Government under the applicable U.S. government cost accounting standards (CAS) or federal acquisition regulations (FAR), and other items not considered part of management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, environmental costs, stock-based compensation expense, retiree benefits, significant severance actions, significant asset impairments, gains or losses from significant divestitures, and other miscellaneous corporate activities. Excluded items are included in the reconciling item “Unallocated items” between operating profit from our business segments and our consolidated operating profit. See “Note 10 – Other” for a discussion related to certain factors that may impact the comparability of net sales and operating profit of our business segments. Summary operating results for each of our business segments were as follows (in millions): Quarters Ended Six Months Ended June 28, June 30, June 28, June 30, Net sales Aeronautics $ 6,503 $ 5,550 $ 12,872 $ 11,134 Missiles and Fire Control 2,801 2,411 5,420 4,761 Rotary and Mission Systems 4,039 3,768 7,785 7,530 Space 2,877 2,698 5,794 5,338 Total net sales $ 16,220 $ 14,427 $ 31,871 $ 28,763 Operating profit Aeronautics $ 739 $ 592 $ 1,411 $ 1,177 Missiles and Fire Control 370 327 766 744 Rotary and Mission Systems 429 347 805 726 Space 252 288 533 622 Total business segment operating profit 1,790 1,554 3,515 3,269 Unallocated items FAS/CAS operating adjustment (a) 469 512 938 1,024 Stock-based compensation (73) (67) (115) (104) Other, net (b) (100) 9 (130) 102 Total unallocated items 296 454 693 1,022 Total consolidated operating profit $ 2,086 $ 2,008 $ 4,208 $ 4,291 Intersegment sales Aeronautics $ 61 $ 47 $ 120 $ 89 Missiles and Fire Control 140 144 276 265 Rotary and Mission Systems 502 461 1,000 960 Space 105 85 213 153 Total intersegment sales $ 808 $ 737 $ 1,609 $ 1,467 (a) The FAS/CAS operating adjustment represents the difference between the service cost component of financial accounting standards (FAS) pension income (expense) and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS. (b) Other, net for the quarter and six months ended June 28, 2020 includes a non-cash impairment charge of $128 million ($96 million, or $0.34 per share, after tax) recognized on our investment in the international equity method investee, Advanced Military Maintenance, Repair and Overhaul Center (AMMROC) that we entered into an agreement to sell in July 2020. Our total net FAS/CAS pension adjustment for the quarters and six months ended June 28, 2020 and June 30, 2019, including the service and non-service cost components of FAS pension income (expense) for our qualified defined benefit pension plans, were as follows (in millions): Quarters Ended Six Months Ended June 28, June 30, June 28, June 30, Total FAS income (expense) and CAS costs FAS pension income (expense) $ 29 $ (273) $ 59 $ (546) Less: CAS pension cost 495 641 989 1,282 Net FAS/CAS pension adjustment $ 524 $ 368 $ 1,048 $ 736 Service and non-service cost reconciliation FAS pension service cost $ (26) $ (129) $ (51) $ (258) Less: CAS pension cost 495 641 989 1,282 FAS/CAS operating adjustment 469 512 938 1,024 Non-operating FAS pension income (expense) 55 (144) 110 (288) Net FAS/CAS pension adjustment $ 524 $ 368 $ 1,048 $ 736 We recover CAS pension and other postretirement benefit plan cost through the pricing of our products and services on U.S. Government contracts and, therefore, recognize CAS cost in each of our business segment’s net sales and cost of sales. Our consolidated financial statements must present FAS pension and other postretirement benefit plan expense calculated in accordance with FAS requirements under U.S. GAAP. The operating portion of the net FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension income (expense) and total CAS pension cost. The non-service FAS pension income (expense) component is included in other non-operating income (expense), net in our consolidated statements of earnings. As a result, to the extent that CAS pension cost exceeds the service cost component of FAS pension income (expense), we have a favorable FAS/CAS operating adjustment. We expect to have FAS pension income in 2020, compared to FAS pension expense in prior periods. We no longer have service costs for certain of our plans as a result of completing the planned freeze of our salaried pension plans effective January 1, 2020 that was previously announced on July 1, 2014. See “Note 6 – Postretirement Benefit Plans” for additional information regarding the corporation’s FAS pension expense or income and CAS pension cost. Net sales by products and services, contract type, customer, and geographic region were as follows (in millions): Quarter Ended June 28, 2020 Aeronautics MFC RMS Space Total Net sales Products $ 5,474 $ 2,422 $ 3,259 $ 2,417 $ 13,572 Services 1,029 379 780 460 2,648 Total net sales $ 6,503 $ 2,801 $ 4,039 $ 2,877 $ 16,220 Net sales by contract type Fixed-price $ 4,467 $ 1,877 $ 2,639 $ 483 $ 9,466 Cost-reimbursable 2,036 924 1,400 2,394 6,754 Total net sales $ 6,503 $ 2,801 $ 4,039 $ 2,877 $ 16,220 Net sales by customer U.S. Government $ 5,352 $ 2,098 $ 2,926 $ 2,533 $ 12,909 International (a) 1,132 699 1,011 330 3,172 U.S. commercial and other 19 4 102 14 139 Total net sales $ 6,503 $ 2,801 $ 4,039 $ 2,877 $ 16,220 Net sales by geographic region United States $ 5,371 $ 2,102 $ 3,028 $ 2,547 $ 13,048 Asia Pacific 353 72 464 16 905 Europe 506 170 170 314 1,160 Middle East 213 442 213 — 868 Other 60 15 164 — 239 Total net sales $ 6,503 $ 2,801 $ 4,039 $ 2,877 $ 16,220 Six Months Ended June 28, 2020 Aeronautics MFC RMS Space Total Net sales Products $ 10,929 $ 4,697 $ 6,245 $ 4,867 $ 26,738 Services 1,943 723 1,540 927 5,133 Total net sales $ 12,872 $ 5,420 $ 7,785 $ 5,794 $ 31,871 Net sales by contract type Fixed-price $ 9,051 $ 3,595 $ 5,121 $ 1,002 $ 18,769 Cost-reimbursable 3,821 1,825 2,664 4,792 13,102 Total net sales $ 12,872 $ 5,420 $ 7,785 $ 5,794 $ 31,871 Net sales by customer U.S. Government $ 9,385 $ 4,053 $ 5,714 $ 5,016 $ 24,168 International (a) 3,453 1,359 1,866 750 7,428 U.S. commercial and other 34 8 205 28 275 Total net sales $ 12,872 $ 5,420 $ 7,785 $ 5,794 $ 31,871 Net sales by geographic region United States $ 9,419 $ 4,061 $ 5,919 $ 5,044 $ 24,443 Asia Pacific 1,348 147 782 44 2,321 Europe 1,454 338 337 712 2,841 Middle East 541 849 420 (6) 1,804 Other 110 25 327 — 462 Total net sales $ 12,872 $ 5,420 $ 7,785 $ 5,794 $ 31,871 (a) International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers. Quarter Ended June 30, 2019 Aeronautics MFC RMS Space Total Net sales Products $ 4,740 $ 1,963 $ 3,023 $ 2,277 $ 12,003 Services 810 448 745 421 2,424 Total net sales $ 5,550 $ 2,411 $ 3,768 $ 2,698 $ 14,427 Net sales by contract type Fixed-price $ 4,040 $ 1,444 $ 2,526 $ 535 $ 8,545 Cost-reimbursable 1,510 967 1,242 2,163 5,882 Total net sales $ 5,550 $ 2,411 $ 3,768 $ 2,698 $ 14,427 Net sales by customer U.S. Government $ 3,476 $ 1,900 $ 2,675 $ 2,332 $ 10,383 International (a) 2,010 475 974 360 3,819 U.S. commercial and other 64 36 119 6 225 Total net sales $ 5,550 $ 2,411 $ 3,768 $ 2,698 $ 14,427 Net sales by geographic region United States $ 3,540 $ 1,936 $ 2,794 $ 2,338 $ 10,608 Asia Pacific 784 86 418 23 1,311 Europe 847 103 143 328 1,421 Middle East 335 272 247 9 863 Other 44 14 166 — 224 Total net sales $ 5,550 $ 2,411 $ 3,768 $ 2,698 $ 14,427 Six Months Ended June 30, 2019 Aeronautics MFC RMS Space Total Net sales Products $ 9,536 $ 3,879 $ 6,082 $ 4,476 $ 23,973 Services 1,598 882 1,448 862 4,790 Total net sales $ 11,134 $ 4,761 $ 7,530 $ 5,338 $ 28,763 Net sales by contract type Fixed-price $ 8,210 $ 2,979 $ 5,145 $ 1,058 $ 17,392 Cost-reimbursable 2,924 1,782 2,385 4,280 11,371 Total net sales $ 11,134 $ 4,761 $ 7,530 $ 5,338 $ 28,763 Net sales by customer U.S. Government $ 6,911 $ 3,533 $ 5,350 $ 4,568 $ 20,362 International (a) 4,105 1,145 1,969 755 7,974 U.S. commercial and other 118 83 211 15 427 Total net sales $ 11,134 $ 4,761 $ 7,530 $ 5,338 $ 28,763 Net sales by geographic region United States $ 7,029 $ 3,616 $ 5,561 $ 4,583 $ 20,789 Asia Pacific 1,690 208 748 31 2,677 Europe 1,645 225 341 709 2,920 Middle East 672 685 532 15 1,904 Other 98 27 348 — 473 Total net sales $ 11,134 $ 4,761 $ 7,530 $ 5,338 $ 28,763 (a) International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers. Our Aeronautics business segment includes our largest program, the F-35 Lightning II Joint Strike Fighter, an international multi-role, multi-variant, stealth fighter aircraft. Net sales for the F-35 program represented approximately 28% of our total consolidated net sales for both the quarter and six months ended June 28, 2020 and 26% of our total consolidated net sales for both the quarter and six months ended June 30, 2019. Total assets for each of our business segments were as follows (in millions): June 28, December 31, Assets Aeronautics $ 9,801 $ 9,109 Missiles and Fire Control 5,257 5,030 Rotary and Mission Systems 18,498 18,751 Space 6,221 5,844 Total business segment assets 39,777 38,734 Corporate assets (a) 9,826 8,794 Total assets $ 49,603 $ 47,528 (a) 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. |
CONTRACT ASSETS AND LIABILITIES
CONTRACT ASSETS AND LIABILITIES | 6 Months Ended |
Jun. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT ASSETS AND LIABILITIES | CONTRACT ASSETS AND LIABILITIES Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract assets and contract liabilities were as follows (in millions): June 28, December 31, Contract assets $ 9,821 $ 9,094 Contract liabilities 7,481 7,054 Contract assets increased $727 million during the six months ended June 28, 2020, primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the six months ended June 28, 2020 for which we have not yet billed our customers. There were no significant credit or impairment losses related to our contract assets during the quarters and six months ended June 28, 2020 and June 30, 2019. Contract liabilities increased $427 million during the six months ended June 28, 2020, primarily due to payments received in excess of revenue recognized on these performance obligations. During the quarter and six months ended June 28, 2020, we recognized $1.0 billion and $2.6 billion of our contract liabilities that existed at December 31, 2019 as revenue. During the quarter and six months ended June 30, 2019, we recognized $1.1 billion and $2.9 billion of our contract liabilities at December 31, 2018 as revenue. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 28, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following (in millions): June 28, December 31, Materials, spares and supplies $ 564 $ 532 Work-in-process 2,644 2,783 Finished goods 313 304 Total inventories $ 3,521 $ 3,619 Costs incurred to fulfill a contract in advance of the contract being awarded are included in inventories as work-in-process if we determine that those costs relate directly to a contract or to an anticipated contract that we can specifically identify and contract award is probable, the costs generate or enhance resources that will be used in satisfying |
POSTRETIREMENT BENEFIT PLANS
POSTRETIREMENT BENEFIT PLANS | 6 Months Ended |
Jun. 28, 2020 | |
Retirement Benefits [Abstract] | |
POSTRETIREMENT BENEFIT PLANS | POSTRETIREMENT BENEFIT PLANS Our pretax net periodic benefit (income) cost related to our qualified defined benefit pension plans and retiree medical and life insurance plans consisted of the following (in millions): Quarters Ended Six Months Ended June 28, June 30, June 28, June 30, Qualified defined benefit pension plans Service cost $ 26 $ 129 $ 51 $ 258 Interest cost 384 451 769 903 Expected return on plan assets (566) (575) (1132) (1,150) Recognized net actuarial losses 212 351 424 702 Amortization of prior service credits (85) (83) (171) (167) Total net periodic benefit (income) cost $ (29) $ 273 $ (59) $ 546 Retiree medical and life insurance plans Service cost $ 4 $ 3 $ 7 $ 7 Interest cost 17 24 35 48 Expected return on plan assets (32) (27) (64) (55) Recognized net actuarial losses (1) — (2) 1 Amortization of prior service costs 9 11 19 21 Total net periodic benefit (income) cost $ (3) $ 11 $ (5) $ 22 As previously announced on July 1, 2014, we completed the final step of the planned freeze of our qualified and nonqualified defined benefit pension plans for salaried employees effective January 1, 2020; the plans are now fully frozen. With the freeze complete, the majority of our salaried employees participate in an enhanced defined contribution retirement savings plan. We record the service cost component of net periodic benefit cost (for our bargained plans beginning in 2020) as part of cost of sales and the non-service cost components of net periodic benefit cost as part of other non-operating income (expense), net in the consolidated statements of earnings. The recognized net actuarial losses and amortization of prior service credits or costs in the table above, along with similar costs related to our other postretirement benefit plans ($5 million and $10 million for the quarter and six months ended June 28, 2020, and $9 million and $20 million for the quarter and six months ended June 30, 2019) were reclassified from accumulated other comprehensive loss (AOCL) and recorded as a component of net periodic benefit (income) cost for the periods presented. These costs totaled $140 million ($110 million, net of tax) and $280 million ($220 million, net of tax) during the quarter and six months ended June 28, 2020, and $288 million ($227 million, net of tax) and $577 million ($454 million, net of tax) during the quarter and six months ended June 30, 2019 and were recorded on our consolidated statements of comprehensive income as an increase to other comprehensive income. The required funding of our qualified defined benefit pension plans is determined in accordance with the Employee Retirement Income Security Act of 1974 (ERISA), as ame nded by the Pension Protection Act of 2006 (PPA), along with consideration of CAS and Internal Revenue Code rules. There were no contributions to our qualified defined benefit pension plans during the quarters and six months ended June 28, 2020 and June 30, 2019. |
LEGAL PROCEEDINGS AND CONTINGEN
LEGAL PROCEEDINGS AND CONTINGENCIES | 6 Months Ended |
Jun. 28, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS AND CONTINGENCIES | LEGAL PROCEEDINGS AND CONTINGENCIES We are a party to or have property subject to litigation and other proceedings that arise in the ordinary course of our business, including matters arising under provisions relating to the protection of the environment, and are subject to contingencies related to certain businesses we previously owned. These types of matters could result in fines, penalties, cost reimbursements or contributions, compensatory or treble damages or non-monetary sanctions or relief. We believe the probability is remote that the outcome of each of these matters, including the legal proceedings described below, will have a material adverse effect on the corporation as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on our net earnings in any particular interim reporting period. Among the factors that we consider in this assessment are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if estimable), the progress of the case, existing law and precedent, the opinions or views of legal counsel and other advisers, our experience in similar cases and the experience of other companies, the facts available to us at the time of assessment and how we intend to respond to the proceeding or claim. Our assessment of these factors may change over time as individual proceedings or claims progress. Although we cannot predict the outcome of legal or other proceedings with certainty, where there is at least a reasonable possibility that a loss may have been incurred, GAAP requires us to disclose an estimate of the reasonably possible loss or range of loss or make a statement that such an estimate cannot be made. We follow a thorough process in which we seek to estimate the reasonably possible loss or range of loss, and only if we are unable to make such an estimate do we conclude and disclose that an estimate cannot be made. Accordingly, unless otherwise indicated below in our discussion of legal proceedings, a reasonably possible loss or range of loss associated with any individual legal proceeding cannot be estimated. Legal Proceedings As a result of our acquisition of Sikorsky Aircraft Corporation (Sikorsky), we assumed the defense of and any potential liability for two civil False Claims Act lawsuits pending in the U.S. District Court for the Eastern District of Wisconsin. In October 2014, the U.S. Government filed a complaint in intervention in the first suit, which was brought by qui tam relator Mary Patzer, a former Derco Aerospace (Derco) employee. In May 2017, the U.S. Government filed a complaint in intervention in the second suit, which was brought by qui tam relator Peter Cimma, a former Sikorsky Support Services, Inc. (SSSI) employee. In November 2017, the Court consolidated the cases into a single action for discovery and trial. The U.S. Government alleges that Sikorsky and two of its wholly-owned subsidiaries, Derco and SSSI, violated the civil False Claims Act and the Truth in Negotiations Act in connection with a contract the U.S. Navy awarded to SSSI in June 2006 to support the Navy’s T-34 and T-44 fixed-wing turboprop training aircraft. SSSI subcontracted with Derco, primarily to procure and manage spare parts for the training aircraft. The U.S. Government contends that SSSI overbilled the Navy on the contract as the result of Derco’s use of prohibited cost-plus-percentage-of-cost pricing to add profit and overhead costs as a percentage of the price of the spare parts that Derco procured and then sold to SSSI. The U.S. Government also alleges that Derco’s claims to SSSI, SSSI’s claims to the Navy, and SSSI’s yearly Certificates of Final Indirect Costs from 2006 through 2012 were false and that SSSI submitted inaccurate cost or pricing data in violation of the Truth in Negotiations Act for a sole-sourced, follow-on “bridge” contract. The U.S. Government’s complaints assert common law claims for breach of contract and unjust enrichment. The U.S. Government further alleged violations of the Anti-Kickback Act and False Claims Act based on a monthly “chargeback,” through which SSSI billed Derco for the cost of certain SSSI personnel, allegedly in exchange for SSSI’s permitting a pricing arrangement that was “highly favorable” to Derco. On January 12, 2018, the Corporation filed a partial motion to dismiss intended to narrow the U.S. Government’s claims, including by seeking dismissal of the Anti-Kickback Act allegations. The Corporation also moved to dismiss Cimma as a party under the False Claims Act’s first-to-file rule, which permits only the first relator to recover in a pending case. The District Court granted these motions, in part, on July 20, 2018, dismissing the Government’s claims under the Anti-Kickback Act and dismissing Cimma as a party to the litigation. The U.S. Government seeks damages of approximately $52 million, subject to trebling, plus statutory penalties. We believe that we have legal and factual defenses to the U.S. Government’s remaining claims. Although we continue to evaluate our liability and exposure, we do not currently believe that it is probable that we will incur a material loss. If, contrary to our expectations, the U.S. Government prevails in this matter and proves damages at or near $52 million and is successful in having such damages trebled, the outcome could have an adverse effect on our results of operations in the period in which a liability is recognized and on our cash flows for the period in which any damages are paid. On February 8, 2019, the Department of Justice (DOJ) filed a complaint in the U.S. District Court for the Eastern District of Washington alleging, among other counts, civil False Claims Act and civil Anti-Kickback Act violations against Mission Support Alliance, LLC (MSA), Lockheed Martin, Lockheed Martin Services, Inc. (LMSI) and a current Lockheed Martin vice president. The dollar amount of damages sought is not specified but DOJ seeks treble damages with respect to the False Claims Act and penalties that are subject to doubling under the Anti-Kickback Act. The allegations relate primarily to information technology services performed by LMSI under a subcontract to MSA and the pricing by MSA and LMSI of those services as well as Lockheed Martin’s payment of standard incentive compensation to certain employees who were seconded to MSA, including the vice president. MSA is a joint venture that holds a prime contract to provide infrastructure support services at DOE’s Hanford facility. On April 23, 2019, the parties each filed partial motions to dismiss the U.S. Government’s False Claims Act and Anti-Kickback Act allegations. On January 13, 2020, the court dismissed the Anti-Kickback Act claim against all defendants with prejudice and denied the motions to dismiss the False Claims Act claims. On August 16, 2016, we divested our former Information Systems & Global Solutions (IS&GS) business segment to Leidos Holdings, Inc. (Leidos) in a transaction that resulted in IS&GS becoming part of Leidos (the Transaction). In the Transaction, Leidos acquired IS&GS’ interest in MSA and the liabilities related to Lockheed Martin’s participation in MSA. Included within the liabilities assumed were those associated with this lawsuit. Lockheed Martin transferred to Leidos a reserve of approximately $38 million established by Lockheed Martin with respect to its potential liability and that of its affiliates and agreed to indemnify Leidos with respect to the liabilities assumed for damages to Leidos for 100% of amounts in excess of this reserve up to $64 million and 50% of amounts in excess of $64 million. We cannot reasonably estimate our exposure at this time, but it is possible that a settlement by or judgment against any of the defendants could implicate Lockheed Martin’s indemnification obligations as described above. At present, in view of what we believe to be the strength of the defenses, our belief that Leidos assumed the liabilities, and our view of the structure of the indemnity, we do not believe it probable that we will incur a material loss and have not taken any reserve. On April 24, 2009, we filed a declaratory judgment action against the New York Metropolitan Transportation Authority and its Capital Construction Company (collectively, the MTA) asking the U.S. District Court for the Southern District of New York to find that the MTA is in material breach of our agreement based on the MTA’s failure to provide access to sites where work must be performed and the customer-furnished equipment necessary to complete the contract. The MTA filed an answer and counterclaim alleging that we breached the contract and subsequently terminated the contract for alleged default. The primary damages sought by the MTA are the costs to complete the contract and potential re-procurement costs. While we are unable to estimate the cost of another contractor to complete the contract and the costs of re-procurement, we note that our contract with the MTA had a total value of $323 million, of which $241 million was paid to us, and that the MTA is seeking damages of approximately $190 million. We dispute the MTA’s allegations and are defending against them. Additionally, following an investigation, our sureties on a performance bond related to this matter, who were represented by independent counsel, concluded that the MTA’s termination of the contract was improper. Finally, our declaratory judgment action was later amended to include claims for monetary damages against the MTA of approximately $95 million. This matter was taken under submission by the District Court in December 2014, after a five-week bench trial and the filing of post-trial pleadings by the parties. We continue to await a decision from the District Court. Although this matter relates to our former IS&GS business, we retained the litigation when we divested IS&GS in 2016. Environmental Matters We are involved in proceedings and potential proceedings relating to soil, sediment, surface water, and groundwater contamination, disposal of hazardous substances, and other environmental matters at several of our current or former facilities, facilities for which we may have contractual responsibility, and at third-party sites where we have been designated as a potentially responsible party (PRP). A substantial portion of environmental costs will be included in our net sales and cost of sales in future periods pursuant to U.S. Government regulations. At the time a liability is recorded for future environmental costs, we record assets for estimated future recovery considered probable through the pricing of products and services to agencies of the U.S. Government, regardless of the contract form (e.g., cost-reimbursable, fixed-price). We continually evaluate the recoverability of our assets for the portion of environmental costs that are probable of future recovery by assessing, among other factors, U.S. Government regulations, our U.S. Government business base and contract mix, our history of receiving reimbursement of such costs, and efforts by some U.S. Government representatives to limit such reimbursement. We include the portions of those environmental costs expected to be allocated to our non-U.S. Government contracts or determined not to be recoverable under U.S. Government contracts in our cost of sales at the time the liability is established. At June 28, 2020 and December 31, 2019, the aggregate amount of liabilities recorded relative to environmental matters was $805 million and $810 million, most of which are recorded in other noncurrent liabilities on our consolidated balance sheets. We have recorded assets for the portion of environmental costs that are probable of future recovery totaling $698 million and $703 million at June 28, 2020 and December 31, 2019, most of which are recorded in other noncurrent assets on our consolidated balance sheets, for the estimated future recovery of these costs, as we consider the recovery probable based on the factors previously mentioned. We project costs and recovery of costs over approximately 20 years. Environmental remediation activities usually span many years, which makes estimating liabilities a matter of judgment because of uncertainties with respect to assessing the extent of the contamination as well as such factors as changing remediation technologies and changing regulatory environmental standards. We are monitoring or investigating a number of former and present operating facilities for potential future remediation. We perform quarterly reviews of the status of our environmental remediation sites and the related liabilities and receivables. Additionally, in our quarterly reviews, we consider these and other factors in estimating the timing and amount of any future costs that may be required for remediation activities, and we record a liability when it is probable that a loss has occurred or will occur and the loss can be reasonably estimated. The amount of liability recorded is based on our estimate of the costs to be incurred for remediation at a particular site. We do not discount the recorded liabilities, as the amount and timing of future cash payments are not fixed or cannot be reliably determined. We cannot reasonably determine the extent of our financial exposure in all cases as, although a loss may be probable or reasonably possible, in some cases it is not possible at this time to estimate the loss or reasonably possible loss or range of loss. We also pursue claims for recovery of costs incurred or for contribution to site remediation costs against other PRPs, including the U.S. Government, and are conducting remediation activities under various consent decrees, orders, and agreements relating to soil, groundwater, sediment, or surface water contamination at certain sites of former or current operations. Under agreements related to certain sites in California, New York and Washington, the U.S. Government reimburses us an amount equal to a percentage, specific to each site, of expenditures for certain remediation activities in the U.S. Government’s capacity as a PRP under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). In addition to the proceedings and potential proceedings discussed above, California previously established a maximum level of the contaminant hexavalent chromium in drinking water of 10 parts per billion (ppb). This standard was successfully challenged by the California Manufacturers and Technology Association (CMTA) for failure to conduct the required economic feasibility analysis. In response to the court’s ruling, the State Water Resources Control Board (State Board), a branch of the California Environmental Protection Agency, withdrew the hexavalent chromium standard from the published regulations, leaving only the 50 ppb standard for total chromium. The State Board has indicated it will work to re-establish a hexavalent chromium standard. Further, the U.S. Environmental Protection Agency (U.S. EPA) is considering whether to regulate hexavalent chromium. California is also reevaluating its existing drinking water standard of 6 ppb for perchlorate. The U.S. EPA decided in June 2020 not to regulate perchlorate in drinking water at the federal level. If substantially lower standards are adopted for perchlorate (in California) or for hexavalent chromium (in California or at the federal level), we expect a material increase in our estimates for environmental liabilities and the related assets for the portion of the increased costs that are probable of future recovery in the pricing of our products and services for the U.S. Government. The amount that would be allocable to our non-U.S. Government contracts or that is determined not to be recoverable under U.S. Government contracts would be expensed, which may have a material effect on our earnings in any particular interim reporting period. We also are evaluating the potential impact of existing and contemplated legal requirements addressing a class of compounds known generally as per- and polyfluoroalkyl compounds (PFAS). PFAS compounds have been used ubiquitously, such as in fire-fighting foams, manufacturing processes, and stain- and stick-resistant products (e.g., Teflon, stain-resistant fabrics). Because we have used products and processes over the years containing some of those compounds, they likely exist as contaminants at many of our cleanup sites. Governmental authorities have announced plans, and in some instances have begun, to regulate certain of these compounds at extremely low concentrations in drinking water, which could lead to increased cleanup costs at many of our sites. Letters of Credit, Surety Bonds and Third-Party Guarantees We have entered into standby letters of credit and surety bonds issued on our behalf by financial institutions, and we have directly issued guarantees to third parties primarily relating to advances received from customers and the guarantee of future performance on certain contracts. Letters of credit and surety bonds generally are available for draw down in the event we do not perform. In some cases, we may guarantee the contractual performance of third parties such as joint venture partners. We had total outstanding letters of credit, surety bonds and third-party guarantees aggregating $3.3 billion and $3.6 billion at June 28, 2020 and December 31, 2019. Third-party guarantees do not include guarantees issued on behalf of subsidiaries and other consolidated entities. At June 28, 2020 and December 31, 2019, third-party guarantees totaled $748 million and $996 million, of which approximately 68% and 76% related to guarantees of contractual performance of joint ventures to which we currently are or previously were a party. These amounts represent our estimate of the maximum amounts we would expect to incur upon the contractual non-performance of the joint venture, joint venture partners or divested businesses. Generally, we also have cross-indemnities in place that may enable us to recover amounts that may be paid on behalf of a joint venture partner. In determining our exposures, we evaluate the reputation, performance on contractual obligations, technical capabilities and credit quality of our current and former joint venture partners and the transferee under novation agreements all of which include a guarantee as required by the FAR. At June 28, 2020 and December 31, 2019, there were no material amounts recorded in our financial statements related to third-party guarantees or novation agreements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 28, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following (in millions): June 28, 2020 December 31, 2019 Total Level 1 Level 2 Total Level 1 Level 2 Assets Mutual funds $ 1,099 $ 1,099 $ — $ 1,363 $ 1,363 $ — U.S. Government securities 79 — 79 99 — 99 Other securities 346 153 193 319 171 148 Derivatives 50 — 50 18 — 18 Liabilities Derivatives 28 — 28 23 — 23 Assets measured at NAV (a) Other commingled funds 18 19 (a) Net Asset Value (NAV) is the total value of the fund divided by the number of the fund’s shares outstanding. Substantially all assets measured at fair value, other than derivatives, represent investments held in a separate trust to fund certain of our nonqualified deferred compensation plans and are recorded in other noncurrent assets on our consolidated balance sheets. The fair values of mutual funds and certain other securities are determined by reference to the quoted market price per unit in active markets multiplied by the number of units held without consideration of transaction costs. The fair values of U.S. Government and other securities are determined using pricing models that use observable inputs (e.g., interest rates and yield curves observable at commonly quoted intervals), bids provided by brokers or dealers or quoted prices of securities with similar characteristics. The fair values of derivative instruments, which consist of foreign currency forward contracts, including embedded derivatives, and interest rate swap contracts, are primarily determined based on the present value of future cash flows using model-derived valuations that use observable inputs such as interest rates, credit spreads and foreign currency exchange rates. The derivatives outstanding at both June 28, 2020 and December 31, 2019 consist of foreign currency forward contracts, interest rate swaps and foreign currency related contract embedded derivatives. We use derivative instruments principally to reduce our exposure to market risks from changes in foreign currency exchange rates and interest rates. We do not enter into or hold derivative instruments for speculative trading purposes. We transact business globally and are subject to risks associated with changing foreign currency exchange rates. We enter into foreign currency hedges such as forward and option contracts that change in value as foreign currency exchange rates change. Our most significant foreign currency exposures relate to the British pound sterling, the euro, the Canadian dollar and the Australian dollar. These contracts hedge forecasted foreign currency transactions in order to mitigate fluctuations in our earnings and cash flows associated with changes in foreign currency exchange rates. We designate foreign currency hedges as cash flow hedges. We also are exposed to the impact of interest rate changes primarily through our borrowing activities. For fixed rate borrowings, we may use variable interest rate swaps, effectively converting fixed rate borrowings to variable rate borrowings in order to reduce the amount of interest paid. These swaps are designated as fair value hedges. For variable rate borrowings, we may use fixed interest rate swaps, effectively converting variable rate borrowings to fixed rate borrowings in order to mitigate the impact of interest rate changes on earnings. These swaps are designated as cash flow hedges. We also may enter into derivative instruments that are not designated as hedges and do not qualify for hedge accounting, which are intended to mitigate certain economic exposures. The aggregate notional amount of our outstanding interest rate swaps was $572 million and $750 million at June 28, 2020 and December 31, 2019. The aggregate notional amount of our outstanding foreign currency hedges at June 28, 2020 and December 31, 2019 was $3.4 billion and $3.8 billion. The fair values of our outstanding interest rate swaps and foreign currency hedges at June 28, 2020 and December 31, 2019 were not significant. Derivative instruments did not have a material impact on net earnings and comprehensive income during the quarters and six months ended June 28, 2020 and June 30, 2019. Substantially all of our derivatives are designated for hedge accounting. In addition to the financial instruments listed in the table above, we hold other financial instruments, including cash and cash equivalents, receivables, accounts payable and debt. The carrying amounts for cash and cash equivalents, receivables and accounts payable approximated their fair values. The estimated fair value of our outstanding debt was $16.9 billion and $15.9 billion at June 28, 2020 and December 31, 2019. The outstanding principal amount of debt was $13.8 billion at both June 28, 2020 and December 31, 2019, excluding $1.1 billion and $1.2 billion of unamortized discounts and issuance costs at June 28, 2020 and December 31, 2019. The estimated fair values of our outstanding debt were determined based on observable inputs (Level 2). |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 28, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Repurchases of Common Stock During the six months ended June 28, 2020, we repurchased 1.4 million shares for $541 million under repurchase plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, some of which were settled subsequent to the end of the second quarter. Additionally, during the first quarter of 2020, we entered into an accelerated share repurchase (ASR) agreement to repurchase $500 million of our common stock through April 2020. Under the terms of the ASR agreement, in March 2020 we paid $500 million and received an initial delivery of 1.0 million shares of our common stock. Upon final settlement of the ASR agreement in April 2020, we received an additional 0.4 million shares of our common stock for no additional consideration based on the average price paid per share of $347.16, calculated with reference to the volume-weighted average price (VWAP) of our common stock over the term of the agreement, less a negotiated discount. The total remaining authorization for future common share repurchases under our share repurchase program was $1.8 billion as of June 28, 2020. As we repurchase our common shares, we reduce common stock for the $1 of par value of the shares repurchased, with the excess purchase price over par value recorded as a reduction of additional paid-in capital. If additional paid-in capital is reduced to zero, we record the remainder of the excess purchase price over par value as a reduction of retained earnings. Due to the volume of repurchases and the prices at which these were made, additional paid-in capital was reduced to zero, with the remainder of the excess purchase price over par value of $841 million and $278 million recorded as a reduction to retained earnings during the six months ended June 28, 2020 and June 30, 2019. Dividends We declared cash dividends totaling $1.4 billion ($4.80 per share) and $2.0 billion ($7.20 per share) during the quarters and six months ended June 28, 2020, compared to $1.2 billion ($4.40 per share) and $1.9 billion ($6.60 per share) during the quarters and six months ended June 30, 2019. In June 2020, we declared our 2020 third quarter dividend totaling $671 million ($2.40 per share), which will be paid in September 2020 and in June 2019, we declared our 2019 third quarter dividend totaling $624 million ($2.20 per share), which was paid in September 2019. Restricted Stock Unit Grants During the six months ended June 28, 2020, we granted certain employees approximately 0.5 million RSUs with a weighted average grant date fair value of $384.17 per RSU. The grant date fair value of these RSUs is equal to the closing market price of our common stock on the grant date less a discount to reflect the delay in payment of dividend-equivalent cash payments that are made only upon vesting, which is generally three years from the grant date. We recognize the grant date fair value of RSUs, less estimated forfeitures, as compensation expense ratably over the requisite service period, which is shorter than the vesting period if the employee is retirement eligible on the date of grant or will become retirement eligible before the end of the vesting period. Accumulated Other Comprehensive Loss Changes in the balance of AOCL, net of tax, consisted of the following (in millions): Postretirement Other, net AOCL Balance at December 31, 2019 $ (15,528) $ (26) $ (15,554) Other comprehensive income before reclassifications — 3 3 Amounts reclassified from AOCL Recognition of net actuarial losses (a) 344 — 344 Amortization of net prior service credits (a) (124) — (124) Other — (72) (72) Total reclassified from AOCL 220 (72) 148 Total other comprehensive income 220 (69) 151 Balance at June 28, 2020 $ (15,308) $ (95) $ (15,403) Balance at December 31, 2018 $ (14,254) $ (67) $ (14,321) Other comprehensive income before reclassifications — 13 13 Amounts reclassified from AOCL Recognition of net actuarial losses (a) 574 — 574 Amortization of net prior service credits (a) (120) — (120) Other — 15 15 Total reclassified from AOCL 454 15 469 Total other comprehensive income 454 28 482 Balance at June 30, 2019 $ (13,800) $ (39) $ (13,839) (a) Reclassifications from AOCL related to our postretirement benefit plans were recorded as a component of net periodic benefit cost for each period presented (see “Note 6 – Postretirement Benefit Plans”). These amounts include $110 million and $227 million, net of tax, for the quarters ended June 28, 2020 and June 30, 2019, which are comprised of the recognition of net actuarial losses of $172 million and $287 million for the quarters ended June 28, 2020 and June 30, 2019 and the amortization of net prior service credits of $62 million and $60 million for the quarters ended June 28, 2020 and June 30, 2019. |
OTHER
OTHER | 6 Months Ended |
Jun. 28, 2020 | |
Accounting Policies [Abstract] | |
OTHER | OTHER Changes in Estimates Significant estimates and assumptions are made in estimating contract sales and costs, including the profit booking rate. At the outset of a long-term contract, we identify and monitor risks to the achievement of the technical, schedule and cost aspects of the contract, as well as variable consideration, and assess the effects of those risks on our estimates of sales and total costs to complete the contract. The estimates consider the technical requirements (e.g., a newly-developed product versus a mature product), the schedule and associated tasks (e.g., the number and type of milestone events) and costs (e.g., material, labor, subcontractor, overhead, general and administrative and the estimated costs to fulfill our industrial cooperation agreements, sometimes referred to as offset or localization agreements, required under certain contracts with international customers). The initial profit booking rate of each contract considers risks surrounding the ability to achieve the technical requirements, schedule and costs in the initial estimated total costs to complete the contract. Profit booking rates may increase during the performance of the contract if we successfully retire risks surrounding the technical, schedule and cost aspects of the contract, which decreases the estimated total costs to complete the contract or may increase the variable consideration we expect to receive on the contract. Conversely, our profit booking rates may decrease if the estimated total costs to complete the contract increase or our estimates of variable consideration we expect to receive decrease. All of the estimates are subject to change during the performance of the contract and may affect the profit booking rate. When estimates of total costs to be incurred on a contract exceed total estimates of the transaction price, a provision for the entire loss is determined at the contract level and is recorded in the period in which the loss is determined. In addition, comparability of our segment sales, operating profit and operating margin may be impacted favorably or unfavorably by changes in profit booking rates on our contracts for which we recognize revenue over time using the percentage-of-completion cost-to-cost method to measure progress towards completion. Increases in the profit booking rates, typically referred to as risk retirements, usually relate to revisions in the estimated total costs to fulfill the performance obligations that reflect improved conditions on a particular contract. Conversely, conditions on a particular contract may deteriorate, resulting in an increase in the estimated total costs to fulfill the performance obligations and a reduction in the profit booking rate. Increases or decreases in profit booking rates are recognized in the current period and reflect the inception-to-date effect of such changes. Segment operating profit and margin may also be impacted favorably or unfavorably by other items, which may or may not impact sales. Favorable items may include the positive resolution of contractual matters, cost recoveries on severance and restructuring charges, insurance recoveries and gains on sales of assets. Unfavorable items may include the adverse resolution of contractual matters; restructuring charges, except for significant severance actions, which are excluded from segment oper ating results; reserves for disputes; certain asset impairments; and losses on sales of certain assets. Our consolidated net adjustments not related to volume, including net profit booking rate adjustments and other matters, increased segment operating profit by approximately $480 million and $945 million during the quarter and six months ended June 28, 2020 and $420 million and $985 million during the quarter and six months ended June 30, 2019. These adjustments increased net earnings by approximately $379 million ($1.35 per share) and $747 million ($2.65 per share) during the quarter and six months ended June 28, 2020 and $332 million ($1.17 per share) and $778 million ($2.74 per share) during the quarter and six months ended June 30, 2019. We recognized net sales from performance obligations satisfied in prior periods of approximately $495 million and $1.0 billion during the quarter and six months ended June 28, 2020, and $560 million and $1.2 billion during the quarter and six months ended June 30, 2019, which primarily relate to changes in profit booking rates that impacted revenue. As previously disclosed in our 2019 Form 10-K, we are responsible for a program to design, develop and construct a ground-based radar at our RMS business segment. The program has experienced performance issues for which we have periodically accrued reserves. As of June 28, 2020, cumulative losses were approximately $240 million on this program. We may continue to experience issues related to customer requirements and our performance under this contract and have to record additional charges. However, based on the losses previously recorded and our current estimate of the sales and costs to complete the program, at this time we do not anticipate that additional losses, if any, would be material to our operating results or financial condition. As previously disclosed in our 2019 Form 10-K, we have a program, EADGE-T, to design, integrate, and install an air missile defense command, control, communications, computers - intelligence (C4I) system for an international customer that has experienced performance issues and for which we have periodically accrued reserves at our RMS business segment. As of June 28, 2020, cumulative losses remained at approximately $260 million. We continue to monitor program requirements and our performance. At this time, we do not anticipate additional charges that would be material to our operating results or financial condition. As previously disclosed in our 2019 Form 10-K, we have two commercial satellite programs at our Space business segment for which we have experienced performance issues related to the development and integration of a modernized LM 2100 satellite platform. These programs are for the delivery of three satellites in total, including two that launched in 2019 and one that launched in February 2020. We have periodically revised our estimated costs to complete these developmental commercial programs. As of June 28, 2020, cumulative losses remained at approximately $410 million for these programs. We do not anticipate that additional losses, if any, would be material to our operating results or financial condition. As previously disclosed in our 2019 Form 10-K, we are responsible for designing, developing and installing an upgraded turret for the Warrior Capability Sustainment Program. In 2018, we revised our estimated costs to complete the program as a consequence of performance issues, and recorded charges at our MFC business segment. As of June 28, 2020, cumulative losses remained at approximately $140 million on this program. We may continue to experience issues related to customer requirements and our performance under this contract and may have to record additional reserves. However, based on the losses already recorded and our current estimate of the sales and costs to complete the program, at this time we do not anticipate that additional losses, if any, would be material to our operating results or financial condition. Investment in Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC) As of June 28, 2020, we owned 40% of AMMROC, a joint venture located in the United Arab Emirates. We account for our investment in AMMROC using the equity method. AMMROC provides maintenance, repair and overhaul (MRO) and support services for fixed and rotary wing military aircraft in the South Asia, Middle East and North Africa (SAMENA) region. To date, substantially all of AMMROC’s business was dependent on a single customer contract to provide performance based logistics (PBL) services that was in the process of being re-competed. In April 2020, the customer awarded the contract to a competitor. As a result of the loss of this customer contract, we performed a strategic review of AMMROC’s business and evaluated various options for our investment. In July 2020, we executed an agreement to sell our investment in AMMROC to our joint venture partner for $307 million. The transaction, which is subject to closing conditions, is expected to close in the third quarter of 2020 and the purchase price will be paid in cash installments through September 2021. Accordingly, we adjusted the carrying value of our investment from $435 million to the expected selling price of $307 million as of June 28, 2020, which resulted in the recognition of a noncash impairment charge of $128 million ($96 million, or $0.34 per share, after tax) in our results of operations for the quarter ended June 28, 2020. Backlog Backlog (i.e., unfulfilled or remaining performance obligations) represents the sales we expect to recognize for our products and services for which control has not yet transferred to the customer. For our cost-reimbursable and fixed-priced-incentive contracts, the estimated consideration we expect to receive pursuant to the terms of the contract may exceed the contractual award amount. The estimated consideration is determined at the outset of the contract and is continuously reviewed throughout the contract period. In determining the estimated consideration, we consider the risks related to the technical, schedule and cost impacts to complete the contract and an estimate of any variable consideration. Periodically, we review these risks and may increase or decrease backlog accordingly. As the risks on such contracts are successfully retired, the estimated consideration from customers may be reduced, resulting in a reduction of backlog without a corresponding recognition of sales. As of June 28, 2020, our ending backlog was $150.3 billion. We expect to recognize approximately 37% of our backlog over the next 12 months and approximately 61% over the next 24 months as revenue, with the remainder recognized thereafter. Income Taxes Our effective income tax rate was 17.1% and 16.3% for the quarter and six months ended June 28, 2020, and 15.6% and 13.9% for the quarter and six months ended June 30, 2019. The higher rate for the quarter ended June 28, 2020 is primarily due to a decrease in tax deductions for foreign derived intangible income. The rates for all periods benefited from the research and development tax credit, tax deductions for foreign derived intangible income related to direct commercial sales, dividends paid to the corporation's defined contribution plans with an employee stock ownership plan feature, and tax deductions for employee equity awards. The rates for all periods also benefited from additional tax deductions based on proposed tax regulations released on March 4, 2019, which clarified that foreign military sales qualify for foreign derived intangible income treatment. On July 9, 2020, the U.S. Treasury Department issued final tax regulations related to foreign derived intangible income. The final tax regulations confirm foreign military sales qualify for foreign derived intangible income treatment. We continue to assess the other effects of the final regulations. May 2020 Debt Issuance On May 20, 2020, we issued a total of $1.2 billion of senior unsecured notes, consisting of $400 million aggregate principal amount of 1.85% Notes due in 2030 (the “2030 Notes”) and $750 million aggregate principal amount of 2.80% Notes due in 2050 (the “2050 Notes” and, together with the 2030 Notes, the “Notes”). The 2030 Notes mature on June 15, 2030 and the 2050 Notes mature on June 15, 2050. We will pay interest on the Notes semi-annually in arrears on June 15 and December 15 of each year beginning on December 15, 2020. We may, at our option, redeem the Notes of any series in whole or in part at any time and from time to time at a redemption price equal to the greater of 100% of the principal amount of the notes to be redeemed or an applicable “make-whole” amount, plus accrued and unpaid interest to the date of redemption. On June 16, 2020, we used the net proceeds from the offering plus cash on hand to redeem $750 million of the outstanding $1.25 billion in aggregate principal amount of our 2.50% Notes due in 2020, and $400 million of the outstanding $900 million in aggregate principal amount of our 3.35% Notes due in 2021 at their redemption price. Sale of Customer Receivables |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED | 6 Months Ended |
Jun. 28, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED | RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In 2017, the United Kingdom’s Financial Conduct Authority announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (LIBOR) and other interbank offered rates, which have been widely used as reference rates for various securities and financial contracts, including loans, debt and derivatives. This announcement indicates that the continuation of LIBOR on the current basis is not guaranteed after 2021. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate (SOFR). Currently, our credit facility and certain of our debt and derivative instruments reference LIBOR-based rates. The discontinuation of LIBOR will require these arrangements to be modified in order to replace LIBOR with an alternative reference interest rate, which could impact our future cost of funds. Our credit facility includes a provision for the determination of a successor LIBOR rate. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which temporarily simplifies the accounting for contract modifications, including hedging relationships, due to the transition from LIBOR and other interbank offered rates to alternative reference interest rates. For example, entities can elect not to remeasure the contracts at the modification date or reassess a previous accounting determination if certain conditions are met. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. We are currently evaluating the impact of the transition from LIBOR to alternative reference interest rates, but do not expect a significant impact to our operating results, financial position or cash flows. |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED (Policies) | 6 Months Ended |
Jun. 28, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
EARNINGS PER COMMON SHARE | We compute basic and diluted earnings per common share by dividing net earnings by the respective weighted average number of common shares outstanding for the periods presented. Our calculation of diluted earnings per common share also includes the dilutive effects for the assumed vesting of outstanding restricted stock units (RSUs) and performance stock units (PSUs) and exercise of outstanding stock options based on the treasury stock method. |
INVENTORY COSTS FOR CONTRACTS | Costs incurred to fulfill a contract in advance of the contract being awarded are included in inventories as work-in-process if we determine that those costs relate directly to a contract or to an anticipated contract that we can specifically identify and contract award is probable, the costs generate or enhance resources that will be used in satisfying performance obligations, and the costs are recoverable (referred to as pre-contract costs). Pre-contract costs that are initially capitalized in inventory are generally recognized as cost of sales consistent with the transfer of products and services to the customer upon the receipt of the anticipated contract. All other pre-contract costs, including start-up costs, are expensed as incurred. |
RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED | RECENT ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED In 2017, the United Kingdom’s Financial Conduct Authority announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (LIBOR) and other interbank offered rates, which have been widely used as reference rates for various securities and financial contracts, including loans, debt and derivatives. This announcement indicates that the continuation of LIBOR on the current basis is not guaranteed after 2021. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate (SOFR). Currently, our credit facility and certain of our debt and derivative instruments reference LIBOR-based rates. The discontinuation of LIBOR will require these arrangements to be modified in order to replace LIBOR with an alternative reference interest rate, which could impact our future cost of funds. Our credit facility includes a provision for the determination of a successor LIBOR rate. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which temporarily simplifies the accounting for contract modifications, including hedging relationships, due to the transition from LIBOR and other interbank offered rates to alternative reference interest rates. For example, entities can elect not to remeasure the contracts at the modification date or reassess a previous accounting determination if certain conditions are met. Additionally, entities can elect to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain conditions are met. The new standard was effective upon issuance and generally can be applied to applicable contract modifications through December 31, 2022. We are currently evaluating the impact of the transition from LIBOR to alternative reference interest rates, but do not expect a significant impact to our operating results, financial position or cash flows. |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Shares Outstanding Used to Compute Earnings Per Common Share | The weighted average number of shares outstanding used to compute earnings per common share were as follows (in millions): Quarters Ended Six Months Ended June 28, June 30, June 28, June 30, Weighted average common shares outstanding for basic computations 279.8 282.2 280.5 282.3 Weighted average dilutive effect of equity awards 1.0 1.7 1.2 1.8 Weighted average common shares outstanding for diluted computations 280.8 283.9 281.7 284.1 |
INFORMATION ON BUSINESS SEGME_2
INFORMATION ON BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Segment Reporting [Abstract] | |
Summary Of Operating Results and Total Assets For Each Business Segment | Summary operating results for each of our business segments were as follows (in millions): Quarters Ended Six Months Ended June 28, June 30, June 28, June 30, Net sales Aeronautics $ 6,503 $ 5,550 $ 12,872 $ 11,134 Missiles and Fire Control 2,801 2,411 5,420 4,761 Rotary and Mission Systems 4,039 3,768 7,785 7,530 Space 2,877 2,698 5,794 5,338 Total net sales $ 16,220 $ 14,427 $ 31,871 $ 28,763 Operating profit Aeronautics $ 739 $ 592 $ 1,411 $ 1,177 Missiles and Fire Control 370 327 766 744 Rotary and Mission Systems 429 347 805 726 Space 252 288 533 622 Total business segment operating profit 1,790 1,554 3,515 3,269 Unallocated items FAS/CAS operating adjustment (a) 469 512 938 1,024 Stock-based compensation (73) (67) (115) (104) Other, net (b) (100) 9 (130) 102 Total unallocated items 296 454 693 1,022 Total consolidated operating profit $ 2,086 $ 2,008 $ 4,208 $ 4,291 Intersegment sales Aeronautics $ 61 $ 47 $ 120 $ 89 Missiles and Fire Control 140 144 276 265 Rotary and Mission Systems 502 461 1,000 960 Space 105 85 213 153 Total intersegment sales $ 808 $ 737 $ 1,609 $ 1,467 (a) The FAS/CAS operating adjustment represents the difference between the service cost component of financial accounting standards (FAS) pension income (expense) and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS. (b) Other, net for the quarter and six months ended June 28, 2020 includes a non-cash impairment charge of $128 million ($96 million, or $0.34 per share, after tax) recognized on our investment in the international equity method investee, Advanced Military Maintenance, Repair and Overhaul Center (AMMROC) that we entered into an agreement to sell in July 2020. Our total net FAS/CAS pension adjustment for the quarters and six months ended June 28, 2020 and June 30, 2019, including the service and non-service cost components of FAS pension income (expense) for our qualified defined benefit pension plans, were as follows (in millions): Quarters Ended Six Months Ended June 28, June 30, June 28, June 30, Total FAS income (expense) and CAS costs FAS pension income (expense) $ 29 $ (273) $ 59 $ (546) Less: CAS pension cost 495 641 989 1,282 Net FAS/CAS pension adjustment $ 524 $ 368 $ 1,048 $ 736 Service and non-service cost reconciliation FAS pension service cost $ (26) $ (129) $ (51) $ (258) Less: CAS pension cost 495 641 989 1,282 FAS/CAS operating adjustment 469 512 938 1,024 Non-operating FAS pension income (expense) 55 (144) 110 (288) Net FAS/CAS pension adjustment $ 524 $ 368 $ 1,048 $ 736 Net sales by products and services, contract type, customer, and geographic region were as follows (in millions): Quarter Ended June 28, 2020 Aeronautics MFC RMS Space Total Net sales Products $ 5,474 $ 2,422 $ 3,259 $ 2,417 $ 13,572 Services 1,029 379 780 460 2,648 Total net sales $ 6,503 $ 2,801 $ 4,039 $ 2,877 $ 16,220 Net sales by contract type Fixed-price $ 4,467 $ 1,877 $ 2,639 $ 483 $ 9,466 Cost-reimbursable 2,036 924 1,400 2,394 6,754 Total net sales $ 6,503 $ 2,801 $ 4,039 $ 2,877 $ 16,220 Net sales by customer U.S. Government $ 5,352 $ 2,098 $ 2,926 $ 2,533 $ 12,909 International (a) 1,132 699 1,011 330 3,172 U.S. commercial and other 19 4 102 14 139 Total net sales $ 6,503 $ 2,801 $ 4,039 $ 2,877 $ 16,220 Net sales by geographic region United States $ 5,371 $ 2,102 $ 3,028 $ 2,547 $ 13,048 Asia Pacific 353 72 464 16 905 Europe 506 170 170 314 1,160 Middle East 213 442 213 — 868 Other 60 15 164 — 239 Total net sales $ 6,503 $ 2,801 $ 4,039 $ 2,877 $ 16,220 Six Months Ended June 28, 2020 Aeronautics MFC RMS Space Total Net sales Products $ 10,929 $ 4,697 $ 6,245 $ 4,867 $ 26,738 Services 1,943 723 1,540 927 5,133 Total net sales $ 12,872 $ 5,420 $ 7,785 $ 5,794 $ 31,871 Net sales by contract type Fixed-price $ 9,051 $ 3,595 $ 5,121 $ 1,002 $ 18,769 Cost-reimbursable 3,821 1,825 2,664 4,792 13,102 Total net sales $ 12,872 $ 5,420 $ 7,785 $ 5,794 $ 31,871 Net sales by customer U.S. Government $ 9,385 $ 4,053 $ 5,714 $ 5,016 $ 24,168 International (a) 3,453 1,359 1,866 750 7,428 U.S. commercial and other 34 8 205 28 275 Total net sales $ 12,872 $ 5,420 $ 7,785 $ 5,794 $ 31,871 Net sales by geographic region United States $ 9,419 $ 4,061 $ 5,919 $ 5,044 $ 24,443 Asia Pacific 1,348 147 782 44 2,321 Europe 1,454 338 337 712 2,841 Middle East 541 849 420 (6) 1,804 Other 110 25 327 — 462 Total net sales $ 12,872 $ 5,420 $ 7,785 $ 5,794 $ 31,871 (a) International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers. Quarter Ended June 30, 2019 Aeronautics MFC RMS Space Total Net sales Products $ 4,740 $ 1,963 $ 3,023 $ 2,277 $ 12,003 Services 810 448 745 421 2,424 Total net sales $ 5,550 $ 2,411 $ 3,768 $ 2,698 $ 14,427 Net sales by contract type Fixed-price $ 4,040 $ 1,444 $ 2,526 $ 535 $ 8,545 Cost-reimbursable 1,510 967 1,242 2,163 5,882 Total net sales $ 5,550 $ 2,411 $ 3,768 $ 2,698 $ 14,427 Net sales by customer U.S. Government $ 3,476 $ 1,900 $ 2,675 $ 2,332 $ 10,383 International (a) 2,010 475 974 360 3,819 U.S. commercial and other 64 36 119 6 225 Total net sales $ 5,550 $ 2,411 $ 3,768 $ 2,698 $ 14,427 Net sales by geographic region United States $ 3,540 $ 1,936 $ 2,794 $ 2,338 $ 10,608 Asia Pacific 784 86 418 23 1,311 Europe 847 103 143 328 1,421 Middle East 335 272 247 9 863 Other 44 14 166 — 224 Total net sales $ 5,550 $ 2,411 $ 3,768 $ 2,698 $ 14,427 Six Months Ended June 30, 2019 Aeronautics MFC RMS Space Total Net sales Products $ 9,536 $ 3,879 $ 6,082 $ 4,476 $ 23,973 Services 1,598 882 1,448 862 4,790 Total net sales $ 11,134 $ 4,761 $ 7,530 $ 5,338 $ 28,763 Net sales by contract type Fixed-price $ 8,210 $ 2,979 $ 5,145 $ 1,058 $ 17,392 Cost-reimbursable 2,924 1,782 2,385 4,280 11,371 Total net sales $ 11,134 $ 4,761 $ 7,530 $ 5,338 $ 28,763 Net sales by customer U.S. Government $ 6,911 $ 3,533 $ 5,350 $ 4,568 $ 20,362 International (a) 4,105 1,145 1,969 755 7,974 U.S. commercial and other 118 83 211 15 427 Total net sales $ 11,134 $ 4,761 $ 7,530 $ 5,338 $ 28,763 Net sales by geographic region United States $ 7,029 $ 3,616 $ 5,561 $ 4,583 $ 20,789 Asia Pacific 1,690 208 748 31 2,677 Europe 1,645 225 341 709 2,920 Middle East 672 685 532 15 1,904 Other 98 27 348 — 473 Total net sales $ 11,134 $ 4,761 $ 7,530 $ 5,338 $ 28,763 (a) International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers. Total assets for each of our business segments were as follows (in millions): June 28, December 31, Assets Aeronautics $ 9,801 $ 9,109 Missiles and Fire Control 5,257 5,030 Rotary and Mission Systems 18,498 18,751 Space 6,221 5,844 Total business segment assets 39,777 38,734 Corporate assets (a) 9,826 8,794 Total assets $ 49,603 $ 47,528 (a) 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. |
CONTRACT ASSETS AND LIABILITI_2
CONTRACT ASSETS AND LIABILITIES (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Contract Assets and Liabilities | Contract assets and contract liabilities were as follows (in millions): June 28, December 31, Contract assets $ 9,821 $ 9,094 Contract liabilities 7,481 7,054 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories consisted of the following (in millions): June 28, December 31, Materials, spares and supplies $ 564 $ 532 Work-in-process 2,644 2,783 Finished goods 313 304 Total inventories $ 3,521 $ 3,619 |
POSTRETIREMENT BENEFIT PLANS (T
POSTRETIREMENT BENEFIT PLANS (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Pretax Net Periodic Benefit Cost | Our pretax net periodic benefit (income) cost related to our qualified defined benefit pension plans and retiree medical and life insurance plans consisted of the following (in millions): Quarters Ended Six Months Ended June 28, June 30, June 28, June 30, Qualified defined benefit pension plans Service cost $ 26 $ 129 $ 51 $ 258 Interest cost 384 451 769 903 Expected return on plan assets (566) (575) (1132) (1,150) Recognized net actuarial losses 212 351 424 702 Amortization of prior service credits (85) (83) (171) (167) Total net periodic benefit (income) cost $ (29) $ 273 $ (59) $ 546 Retiree medical and life insurance plans Service cost $ 4 $ 3 $ 7 $ 7 Interest cost 17 24 35 48 Expected return on plan assets (32) (27) (64) (55) Recognized net actuarial losses (1) — (2) 1 Amortization of prior service costs 9 11 19 21 Total net periodic benefit (income) cost $ (3) $ 11 $ (5) $ 22 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured and Recorded at Fair Value | Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following (in millions): June 28, 2020 December 31, 2019 Total Level 1 Level 2 Total Level 1 Level 2 Assets Mutual funds $ 1,099 $ 1,099 $ — $ 1,363 $ 1,363 $ — U.S. Government securities 79 — 79 99 — 99 Other securities 346 153 193 319 171 148 Derivatives 50 — 50 18 — 18 Liabilities Derivatives 28 — 28 23 — 23 Assets measured at NAV (a) Other commingled funds 18 19 (a) Net Asset Value (NAV) is the total value of the fund divided by the number of the fund’s shares outstanding. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 28, 2020 | |
Equity [Abstract] | |
Schedule of Changes in the Balance of AOCL, Net of Tax | Changes in the balance of AOCL, net of tax, consisted of the following (in millions): Postretirement Other, net AOCL Balance at December 31, 2019 $ (15,528) $ (26) $ (15,554) Other comprehensive income before reclassifications — 3 3 Amounts reclassified from AOCL Recognition of net actuarial losses (a) 344 — 344 Amortization of net prior service credits (a) (124) — (124) Other — (72) (72) Total reclassified from AOCL 220 (72) 148 Total other comprehensive income 220 (69) 151 Balance at June 28, 2020 $ (15,308) $ (95) $ (15,403) Balance at December 31, 2018 $ (14,254) $ (67) $ (14,321) Other comprehensive income before reclassifications — 13 13 Amounts reclassified from AOCL Recognition of net actuarial losses (a) 574 — 574 Amortization of net prior service credits (a) (120) — (120) Other — 15 15 Total reclassified from AOCL 454 15 469 Total other comprehensive income 454 28 482 Balance at June 30, 2019 $ (13,800) $ (39) $ (13,839) (a) Reclassifications from AOCL related to our postretirement benefit plans were recorded as a component of net periodic benefit cost for each period presented (see “Note 6 – Postretirement Benefit Plans”). These amounts include $110 million and $227 million, net of tax, for the quarters ended June 28, 2020 and June 30, 2019, which are comprised of the recognition of net actuarial losses of $172 million and $287 million for the quarters ended June 28, 2020 and June 30, 2019 and the amortization of net prior service credits of $62 million and $60 million for the quarters ended June 28, 2020 and June 30, 2019. |
EARNINGS PER COMMON SHARE - Sch
EARNINGS PER COMMON SHARE - Schedule of Weighted Average Shares Outstanding Used to Compute Earnings Per Common Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Weighted average common shares outstanding for basic computations (in shares) | 279.8 | 282.2 | 280.5 | 282.3 |
Weighted average dilutive effect of equity awards (in shares) | 1 | 1.7 | 1.2 | 1.8 |
Weighted average common shares outstanding for diluted computations (in shares) | 280.8 | 283.9 | 281.7 | 284.1 |
EARNINGS PER COMMON SHARE - Nar
EARNINGS PER COMMON SHARE - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Significant anti-dilutive equity awards (in shares) | 0 | 0 | 0 | 0 |
INFORMATION ON BUSINESS SEGME_3
INFORMATION ON BUSINESS SEGMENTS - Narrative (Details) - segment | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Segment Reporting [Abstract] | ||||
Number of business segments | 4 | |||
Product Concentration Risk | Sales Revenue, Net | F-35 program | Aeronautics | ||||
Segment Reporting Information [Line Items] | ||||
Net sales for the F-35 program representing total consolidated net sales (as a percent) | 28.00% | 26.00% | 28.00% | 26.00% |
INFORMATION ON BUSINESS SEGME_4
INFORMATION ON BUSINESS SEGMENTS - Summary of Operating Results For Each Business Segment (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Net sales | ||||
Total net sales | $ 16,220 | $ 14,427 | $ 31,871 | $ 28,763 |
Operating profit | ||||
Total operating profit | 2,086 | 2,008 | 4,208 | 4,291 |
Unallocated items | ||||
Equity method investment impairment | 128 | 128 | 0 | |
Equity method investment impairment, after tax | $ 96 | $ 96 | ||
Equity method investment impairment (in USD per share) | $ 0.34 | $ 0.34 | ||
Aeronautics | ||||
Net sales | ||||
Total net sales | $ 6,503 | 5,550 | $ 12,872 | 11,134 |
Missiles and Fire Control | ||||
Net sales | ||||
Total net sales | 2,801 | 2,411 | 5,420 | 4,761 |
Rotary and Mission Systems | ||||
Net sales | ||||
Total net sales | 4,039 | 3,768 | 7,785 | 7,530 |
Space | ||||
Net sales | ||||
Total net sales | 2,877 | 2,698 | 5,794 | 5,338 |
Business segments | ||||
Net sales | ||||
Total net sales | 16,220 | 14,427 | 31,871 | 28,763 |
Operating profit | ||||
Total operating profit | 1,790 | 1,554 | 3,515 | 3,269 |
Business segments | Aeronautics | ||||
Net sales | ||||
Total net sales | 6,503 | 5,550 | 12,872 | 11,134 |
Operating profit | ||||
Total operating profit | 739 | 592 | 1,411 | 1,177 |
Business segments | Missiles and Fire Control | ||||
Net sales | ||||
Total net sales | 2,801 | 2,411 | 5,420 | 4,761 |
Operating profit | ||||
Total operating profit | 370 | 327 | 766 | 744 |
Business segments | Rotary and Mission Systems | ||||
Net sales | ||||
Total net sales | 4,039 | 3,768 | 7,785 | 7,530 |
Operating profit | ||||
Total operating profit | 429 | 347 | 805 | 726 |
Business segments | Space | ||||
Net sales | ||||
Total net sales | 2,877 | 2,698 | 5,794 | 5,338 |
Operating profit | ||||
Total operating profit | 252 | 288 | 533 | 622 |
Segment reconciling items | ||||
Unallocated items | ||||
FAS/CAS operating adjustment | 469 | 512 | 938 | 1,024 |
Stock-based compensation | (73) | (67) | (115) | (104) |
Other, net | (100) | 9 | (130) | 102 |
Total unallocated items | 296 | 454 | 693 | 1,022 |
Intersegment sales | ||||
Net sales | ||||
Total net sales | 808 | 737 | 1,609 | 1,467 |
Intersegment sales | Aeronautics | ||||
Net sales | ||||
Total net sales | 61 | 47 | 120 | 89 |
Intersegment sales | Missiles and Fire Control | ||||
Net sales | ||||
Total net sales | 140 | 144 | 276 | 265 |
Intersegment sales | Rotary and Mission Systems | ||||
Net sales | ||||
Total net sales | 502 | 461 | 1,000 | 960 |
Intersegment sales | Space | ||||
Net sales | ||||
Total net sales | $ 105 | $ 85 | $ 213 | $ 153 |
INFORMATION ON BUSINESS SEGME_5
INFORMATION ON BUSINESS SEGMENTS - FAS/CAS Pension Adjustment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Non-operating FAS pension income (expense) | $ 55 | $ (144) | $ 110 | $ (288) |
Net FAS/CAS pension adjustment | 524 | 368 | 1,048 | 736 |
Segment reconciling items | ||||
Segment Reporting Information [Line Items] | ||||
Less: CAS pension cost | 495 | 641 | 989 | 1,282 |
FAS pension service cost | (26) | (129) | (51) | (258) |
FAS/CAS operating adjustment | 469 | 512 | 938 | 1,024 |
Qualified defined benefit pension plans | ||||
Segment Reporting Information [Line Items] | ||||
FAS pension income (expense) | (29) | 273 | (59) | 546 |
FAS pension service cost | (26) | (129) | (51) | (258) |
Qualified defined benefit pension plans | Qualified Plan | ||||
Segment Reporting Information [Line Items] | ||||
FAS pension income (expense) | $ 29 | $ (273) | $ 59 | $ (546) |
INFORMATION ON BUSINESS SEGME_6
INFORMATION ON BUSINESS SEGMENTS - Income Statement Information For Each Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Net sales | ||||
Net sales | $ 16,220 | $ 14,427 | $ 31,871 | $ 28,763 |
Aeronautics | ||||
Net sales | ||||
Net sales | 6,503 | 5,550 | 12,872 | 11,134 |
MFC | ||||
Net sales | ||||
Net sales | 2,801 | 2,411 | 5,420 | 4,761 |
RMS | ||||
Net sales | ||||
Net sales | 4,039 | 3,768 | 7,785 | 7,530 |
Space | ||||
Net sales | ||||
Net sales | 2,877 | 2,698 | 5,794 | 5,338 |
United States | ||||
Net sales | ||||
Net sales | 13,048 | 10,608 | 24,443 | 20,789 |
United States | Aeronautics | ||||
Net sales | ||||
Net sales | 5,371 | 3,540 | 9,419 | 7,029 |
United States | MFC | ||||
Net sales | ||||
Net sales | 2,102 | 1,936 | 4,061 | 3,616 |
United States | RMS | ||||
Net sales | ||||
Net sales | 3,028 | 2,794 | 5,919 | 5,561 |
United States | Space | ||||
Net sales | ||||
Net sales | 2,547 | 2,338 | 5,044 | 4,583 |
Asia Pacific | ||||
Net sales | ||||
Net sales | 905 | 1,311 | 2,321 | 2,677 |
Asia Pacific | Aeronautics | ||||
Net sales | ||||
Net sales | 353 | 784 | 1,348 | 1,690 |
Asia Pacific | MFC | ||||
Net sales | ||||
Net sales | 72 | 86 | 147 | 208 |
Asia Pacific | RMS | ||||
Net sales | ||||
Net sales | 464 | 418 | 782 | 748 |
Asia Pacific | Space | ||||
Net sales | ||||
Net sales | 16 | 23 | 44 | 31 |
Europe | ||||
Net sales | ||||
Net sales | 1,160 | 1,421 | 2,841 | 2,920 |
Europe | Aeronautics | ||||
Net sales | ||||
Net sales | 506 | 847 | 1,454 | 1,645 |
Europe | MFC | ||||
Net sales | ||||
Net sales | 170 | 103 | 338 | 225 |
Europe | RMS | ||||
Net sales | ||||
Net sales | 170 | 143 | 337 | 341 |
Europe | Space | ||||
Net sales | ||||
Net sales | 314 | 328 | 712 | 709 |
Middle East | ||||
Net sales | ||||
Net sales | 868 | 863 | 1,804 | 1,904 |
Middle East | Aeronautics | ||||
Net sales | ||||
Net sales | 213 | 335 | 541 | 672 |
Middle East | MFC | ||||
Net sales | ||||
Net sales | 442 | 272 | 849 | 685 |
Middle East | RMS | ||||
Net sales | ||||
Net sales | 213 | 247 | 420 | 532 |
Middle East | Space | ||||
Net sales | ||||
Net sales | 0 | 9 | (6) | 15 |
Other | ||||
Net sales | ||||
Net sales | 239 | 224 | 462 | 473 |
Other | Aeronautics | ||||
Net sales | ||||
Net sales | 60 | 44 | 110 | 98 |
Other | MFC | ||||
Net sales | ||||
Net sales | 15 | 14 | 25 | 27 |
Other | RMS | ||||
Net sales | ||||
Net sales | 164 | 166 | 327 | 348 |
Other | Space | ||||
Net sales | ||||
Net sales | 0 | 0 | 0 | 0 |
U.S. Government | ||||
Net sales | ||||
Net sales | 12,909 | 10,383 | 24,168 | 20,362 |
U.S. Government | Aeronautics | ||||
Net sales | ||||
Net sales | 5,352 | 3,476 | 9,385 | 6,911 |
U.S. Government | MFC | ||||
Net sales | ||||
Net sales | 2,098 | 1,900 | 4,053 | 3,533 |
U.S. Government | RMS | ||||
Net sales | ||||
Net sales | 2,926 | 2,675 | 5,714 | 5,350 |
U.S. Government | Space | ||||
Net sales | ||||
Net sales | 2,533 | 2,332 | 5,016 | 4,568 |
International | ||||
Net sales | ||||
Net sales | 3,172 | 3,819 | 7,428 | 7,974 |
International | Aeronautics | ||||
Net sales | ||||
Net sales | 1,132 | 2,010 | 3,453 | 4,105 |
International | MFC | ||||
Net sales | ||||
Net sales | 699 | 475 | 1,359 | 1,145 |
International | RMS | ||||
Net sales | ||||
Net sales | 1,011 | 974 | 1,866 | 1,969 |
International | Space | ||||
Net sales | ||||
Net sales | 330 | 360 | 750 | 755 |
U.S. commercial and other | ||||
Net sales | ||||
Net sales | 139 | 225 | 275 | 427 |
U.S. commercial and other | Aeronautics | ||||
Net sales | ||||
Net sales | 19 | 64 | 34 | 118 |
U.S. commercial and other | MFC | ||||
Net sales | ||||
Net sales | 4 | 36 | 8 | 83 |
U.S. commercial and other | RMS | ||||
Net sales | ||||
Net sales | 102 | 119 | 205 | 211 |
U.S. commercial and other | Space | ||||
Net sales | ||||
Net sales | 14 | 6 | 28 | 15 |
Fixed-price | ||||
Net sales | ||||
Net sales | 9,466 | 8,545 | 18,769 | 17,392 |
Fixed-price | Aeronautics | ||||
Net sales | ||||
Net sales | 4,467 | 4,040 | 9,051 | 8,210 |
Fixed-price | MFC | ||||
Net sales | ||||
Net sales | 1,877 | 1,444 | 3,595 | 2,979 |
Fixed-price | RMS | ||||
Net sales | ||||
Net sales | 2,639 | 2,526 | 5,121 | 5,145 |
Fixed-price | Space | ||||
Net sales | ||||
Net sales | 483 | 535 | 1,002 | 1,058 |
Cost-reimbursable | ||||
Net sales | ||||
Net sales | 6,754 | 5,882 | 13,102 | 11,371 |
Cost-reimbursable | Aeronautics | ||||
Net sales | ||||
Net sales | 2,036 | 1,510 | 3,821 | 2,924 |
Cost-reimbursable | MFC | ||||
Net sales | ||||
Net sales | 924 | 967 | 1,825 | 1,782 |
Cost-reimbursable | RMS | ||||
Net sales | ||||
Net sales | 1,400 | 1,242 | 2,664 | 2,385 |
Cost-reimbursable | Space | ||||
Net sales | ||||
Net sales | 2,394 | 2,163 | 4,792 | 4,280 |
Products | ||||
Net sales | ||||
Net sales | 13,572 | 12,003 | 26,738 | 23,973 |
Products | Aeronautics | ||||
Net sales | ||||
Net sales | 5,474 | 4,740 | 10,929 | 9,536 |
Products | MFC | ||||
Net sales | ||||
Net sales | 2,422 | 1,963 | 4,697 | 3,879 |
Products | RMS | ||||
Net sales | ||||
Net sales | 3,259 | 3,023 | 6,245 | 6,082 |
Products | Space | ||||
Net sales | ||||
Net sales | 2,417 | 2,277 | 4,867 | 4,476 |
Services | ||||
Net sales | ||||
Net sales | 2,648 | 2,424 | 5,133 | 4,790 |
Services | Aeronautics | ||||
Net sales | ||||
Net sales | 1,029 | 810 | 1,943 | 1,598 |
Services | MFC | ||||
Net sales | ||||
Net sales | 379 | 448 | 723 | 882 |
Services | RMS | ||||
Net sales | ||||
Net sales | 780 | 745 | 1,540 | 1,448 |
Services | Space | ||||
Net sales | ||||
Net sales | $ 460 | $ 421 | $ 927 | $ 862 |
INFORMATION ON BUSINESS SEGME_7
INFORMATION ON BUSINESS SEGMENTS - Total Assets For Each Business Segment (Details) - USD ($) $ in Millions | Jun. 28, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 49,603 | $ 47,528 |
Business segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 39,777 | 38,734 |
Business segments | Aeronautics | ||
Segment Reporting Information [Line Items] | ||
Total assets | 9,801 | 9,109 |
Business segments | Missiles and Fire Control | ||
Segment Reporting Information [Line Items] | ||
Total assets | 5,257 | 5,030 |
Business segments | Rotary and Mission Systems | ||
Segment Reporting Information [Line Items] | ||
Total assets | 18,498 | 18,751 |
Business segments | Space | ||
Segment Reporting Information [Line Items] | ||
Total assets | 6,221 | 5,844 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 9,826 | $ 8,794 |
CONTRACT ASSETS AND LIABILITI_3
CONTRACT ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Jun. 28, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 9,821 | $ 9,094 |
Contract liabilities | $ 7,481 | $ 7,054 |
CONTRACT ASSETS AND LIABILITI_4
CONTRACT ASSETS AND LIABILITIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||||
Increase in contract assets | $ 727 | $ 916 | ||
Impairment loss | $ 0 | $ 0 | 0 | 0 |
Increase in contract liabilities | 427 | 275 | ||
Liability, revenue recognized | $ 1,000 | $ 1,100 | $ 2,600 | $ 2,900 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Jun. 28, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Materials, spares and supplies | $ 564 | $ 532 |
Work-in-process | 2,644 | 2,783 |
Finished goods | 313 | 304 |
Total inventories | 3,521 | 3,619 |
Capitalized contract cost | $ 638 | $ 493 |
POSTRETIREMENT BENEFIT PLANS -
POSTRETIREMENT BENEFIT PLANS - Schedule of Pretax Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Qualified defined benefit pension plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 26 | $ 129 | $ 51 | $ 258 |
Interest cost | 384 | 451 | 769 | 903 |
Expected return on plan assets | (566) | (575) | (1,132) | (1,150) |
Recognized net actuarial losses | 212 | 351 | 424 | 702 |
Amortization of prior service credits | (85) | (83) | (171) | (167) |
Total net periodic benefit (income) cost | (29) | 273 | (59) | 546 |
Retiree medical and life insurance plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 4 | 3 | 7 | 7 |
Interest cost | 17 | 24 | 35 | 48 |
Expected return on plan assets | (32) | (27) | (64) | (55) |
Recognized net actuarial losses | (1) | 0 | (2) | 1 |
Amortization of prior service credits | 9 | 11 | 19 | 21 |
Total net periodic benefit (income) cost | $ (3) | $ 11 | $ (5) | $ 22 |
POSTRETIREMENT BENEFIT PLANS _2
POSTRETIREMENT BENEFIT PLANS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Recognition of previously deferred postretirement benefit plan amounts, before tax | $ 140,000,000 | $ 288,000,000 | $ 280,000,000 | $ 577,000,000 |
Recognition of previously deferred postretirement benefit plan amounts, net of tax | 110,000,000 | 227,000,000 | 220,000,000 | 454,000,000 |
Retiree medical and life insurance plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Recognition of previously deferred postretirement benefit plan amounts, before tax | 5,000,000 | 9,000,000 | 10,000,000 | 20,000,000 |
Qualified defined benefit pension plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Material contributions to qualified defined benefit pension plans | $ 0 | $ 0 | $ 0 | $ 0 |
LEGAL PROCEEDINGS AND CONTING_2
LEGAL PROCEEDINGS AND CONTINGENCIES (Details) $ in Millions | Aug. 16, 2016USD ($) | Dec. 31, 2014 | Mar. 31, 2019 | Jun. 28, 2020USD ($)subsidiary | Dec. 31, 2019USD ($) | May 31, 2017lawsuit | Apr. 24, 2009USD ($) |
Loss Contingencies [Line Items] | |||||||
Damages sought by plaintiff | $ 52 | ||||||
Liabilities recorded relative to environmental matters | 805 | $ 810 | |||||
Environmental costs eligible for future recovery | $ 698 | 703 | |||||
Period over which costs and recovery of costs is projected | 20 years | ||||||
Outstanding letters of credit, surety bonds, and third-party guarantees | $ 3,300 | 3,600 | |||||
Third-party guarantees | $ 748 | $ 996 | |||||
Guarantees of contractual performance of joint ventures (as a percent) | 76.00% | 68.00% | |||||
N.Y. Metropolitan Transportation Authority | |||||||
Loss Contingencies [Line Items] | |||||||
Damages sought by plaintiff | $ 190 | ||||||
Contract value | $ 323 | ||||||
Contract payments received to date | 241 | ||||||
Claims for monetary damages against the plaintiff | $ 95 | ||||||
Period of bench trial | 35 days | ||||||
Leidos Holdings, Inc. | |||||||
Loss Contingencies [Line Items] | |||||||
Reserve transferred | $ 38 | ||||||
Indemnification percent, up to maximum reserve | 100.00% | ||||||
Maximum reserve | $ 64 | ||||||
Indemnification percent in excess of maximum reserve | 50.00% | ||||||
Sikorsky Aircraft Corporation | |||||||
Loss Contingencies [Line Items] | |||||||
Number of pending claims | lawsuit | 2 | ||||||
Number of entities involved in litigation | subsidiary | 2 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities Measured and Recorded at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Jun. 28, 2020 | Dec. 31, 2019 |
Assets | ||
Derivatives | $ 50 | $ 18 |
Liabilities | ||
Derivatives | 28 | 23 |
Mutual funds | ||
Assets | ||
Fair Value of Investments | 1,099 | 1,363 |
U.S. Government securities | ||
Assets | ||
Fair Value of Investments | 79 | 99 |
Other securities | ||
Assets | ||
Fair Value of Investments | 346 | 319 |
Level 1 | ||
Assets | ||
Derivatives | 0 | 0 |
Liabilities | ||
Derivatives | 0 | 0 |
Level 1 | Mutual funds | ||
Assets | ||
Fair Value of Investments | 1,099 | 1,363 |
Level 1 | U.S. Government securities | ||
Assets | ||
Fair Value of Investments | 0 | 0 |
Level 1 | Other securities | ||
Assets | ||
Fair Value of Investments | 153 | 171 |
Level 2 | ||
Assets | ||
Derivatives | 50 | 18 |
Liabilities | ||
Derivatives | 28 | 23 |
Level 2 | Mutual funds | ||
Assets | ||
Fair Value of Investments | 0 | 0 |
Level 2 | U.S. Government securities | ||
Assets | ||
Fair Value of Investments | 79 | 99 |
Level 2 | Other securities | ||
Assets | ||
Fair Value of Investments | 193 | 148 |
NAV | Other commingled funds | ||
Liabilities | ||
Assets measured at NAV | $ 18 | $ 19 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | Jun. 28, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding principal amount | $ 13,800,000,000 | $ 13,800,000,000 |
Unamortized discounts and issuance costs | 1,100,000,000 | 1,200,000,000 |
Interest rate swaps | Designated as hedges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate notional amount of outstanding interest rate swaps | 572,000,000 | 750,000,000 |
Foreign currency hedges | Designated as hedges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate notional amount of outstanding interest rate swaps | 3,400,000,000 | 3,800,000,000 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of outstanding debt | $ 16,900,000,000 | $ 15,900,000,000 |
STOCKHOLDERS' EQUITY - Repurcha
STOCKHOLDERS' EQUITY - Repurchases of Common Stock (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2020 | Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Shareholders Equity [Line Items] | ||||||
Common stock repurchased (in shares) | 1.4 | |||||
Reduction to stockholders' equity due to repurchases of common stock | $ 277,000,000 | $ 216,000,000 | $ 1,041,000,000 | $ 500,000,000 | ||
Cash paid for repurchases of common stock | 1,015,000,000 | 500,000,000 | ||||
Total remaining authorization for future common share repurchases | $ 1,800,000,000 | $ 1,800,000,000 | ||||
Par value of shares repurchased (in dollars per share) | $ 1 | $ 1 | $ 1 | |||
Additional paid-in capital after reduction | $ 0 | $ 0 | $ 0 | |||
Reduction to retained earnings | ||||||
Shareholders Equity [Line Items] | ||||||
Reduction to stockholders' equity due to repurchases of common stock | 108,000,000 | $ 41,000,000 | 841,000,000 | $ 278,000,000 | ||
Rule 10b-1 | ||||||
Shareholders Equity [Line Items] | ||||||
Reduction to stockholders' equity due to repurchases of common stock | 541,000,000 | |||||
Accelerated Share Repurchase Agreement | ||||||
Shareholders Equity [Line Items] | ||||||
Reduction to stockholders' equity due to repurchases of common stock | 1,000,000 | |||||
Accelerate Share Repurchase (ASR) authorized amount | $ 500,000,000 | 500,000,000 | ||||
Cash paid for repurchases of common stock | $ 0 | $ 500,000,000 | ||||
Shares acquired (in shares) | 0.4 | |||||
Shares acquired, average cost per share (in dollars per share) | $ 347.16 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 28, 2020 | Sep. 29, 2019 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Dividends Payable [Line Items] | |||||||||
Cash dividends paid and unpaid, amount | $ 624 | $ 1,350 | $ 1,249 | $ 2,027 | $ 1,872 | ||||
Cash dividends declared (in dollars per share) | $ 4.80 | $ 2.20 | $ 4.40 | $ 7.20 | $ 6.60 | ||||
Cash dividends paid per common share (in dollars per share) | $ 2.20 | $ 2.40 | $ 2.20 | $ 4.80 | $ 4.40 | ||||
Subsequent Event | |||||||||
Dividends Payable [Line Items] | |||||||||
Cash dividends paid and unpaid, amount | $ 671 | ||||||||
Cash dividends declared (in dollars per share) | $ 2.40 | ||||||||
Cash dividends paid per common share (in dollars per share) | $ 2.40 |
STOCKHOLDERS' EQUITY - Restrict
STOCKHOLDERS' EQUITY - Restricted Stock Unit Grants (Narrative) (Details) - RSUs - $ / shares shares in Millions | 3 Months Ended | 6 Months Ended |
Jun. 28, 2020 | Jun. 28, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs granted to certain employees (in shares) | 0.5 | |
Grant date fair value per RSU (in dollars per share) | $ 384.17 | |
Award vesting period | 3 years |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Changes in the Balance of AOCL, Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning Balance | $ 3,487 | $ 2,522 | $ 3,171 | $ 1,449 |
Other comprehensive income before reclassifications | 3 | 13 | ||
Total reclassified from AOCL | 110 | 227 | 148 | 469 |
Other comprehensive income, net of tax | 138 | 255 | 151 | 482 |
Ending Balance | 3,786 | 2,896 | 3,786 | 2,896 |
Postretirement Benefit Plans | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning Balance | (15,528) | (14,254) | ||
Other comprehensive income before reclassifications | 0 | 0 | ||
Total reclassified from AOCL | 220 | 454 | ||
Other comprehensive income, net of tax | 220 | 454 | ||
Ending Balance | (15,308) | (13,800) | (15,308) | (13,800) |
Other, net | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning Balance | (26) | (67) | ||
Other comprehensive income before reclassifications | 3 | 13 | ||
Total reclassified from AOCL | (72) | 15 | ||
Other comprehensive income, net of tax | (69) | 28 | ||
Ending Balance | (95) | (39) | (95) | (39) |
AOCL | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning Balance | (15,541) | (14,094) | (15,554) | (14,321) |
Other comprehensive income, net of tax | 138 | 255 | 151 | 482 |
Ending Balance | (15,403) | (13,839) | (15,403) | (13,839) |
Recognition of net actuarial losses | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Total reclassified from AOCL | 172 | 287 | 344 | 574 |
Amortization of net prior service credits | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Total reclassified from AOCL | $ (62) | $ (60) | (124) | (120) |
Other | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Total reclassified from AOCL | $ (72) | $ 15 |
OTHER - Changes in Estimates (D
OTHER - Changes in Estimates (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 29, 2020satellite | Jun. 28, 2020USD ($)$ / shares | Jun. 30, 2019USD ($)$ / shares | Jun. 28, 2020USD ($)satellite$ / shares | Jun. 30, 2019USD ($)$ / shares | Dec. 31, 2019satellite | Jun. 27, 2020USD ($) | |
Change in Accounting Estimate [Line Items] | |||||||
Performance obligation satisfied in previous period | $ 495 | $ 560 | $ 1,000 | $ 1,200 | |||
Number of satellites launched or to be launched | satellite | 1 | 3 | 2 | ||||
Equity method investment impairment | 128 | $ 128 | 0 | ||||
AMMROC | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Equity method investment impairment | 128 | ||||||
Equity method investment other than temporary impairment net of tax | $ 96 | ||||||
Equity method investment other than temporary impairment earnings per share (in dollars per share) | $ / shares | $ 0.34 | ||||||
Equity method investments | 307 | $ 307 | $ 435 | ||||
Ground Based Radar | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Cumulative losses on development | 240 | 240 | |||||
EADGE-T | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Cumulative losses on development | 260 | 260 | |||||
LM 2100 Project | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Cumulative losses on development | 410 | 410 | |||||
Warrior Capability Sustainment Program | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Cumulative losses on development | 140 | 140 | |||||
Contracts Accounted for under Percentage of Completion | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Increase in operating profit due to profit rate adjustments | 480 | 420 | 945 | 985 | |||
Increase in net earnings due to profit rate adjustments | $ 379 | $ 332 | $ 747 | $ 778 | |||
Increase in diluted earnings per common share due to profit rate adjustments (in dollars per share) | $ / shares | $ 1.35 | $ 1.17 | $ 2.65 | $ 2.74 | |||
Space | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Number of commercial satellite programs with performance issues | satellite | 2 |
OTHER - Investments (Details)
OTHER - Investments (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | 15 Months Ended | ||
Jun. 28, 2020 | Jun. 28, 2020 | Jun. 30, 2019 | Sep. 30, 2021 | Jun. 27, 2020 | |
Investment Holdings [Line Items] | |||||
Equity method investment impairment | $ 128 | $ 128 | $ 0 | ||
AMMROC | |||||
Investment Holdings [Line Items] | |||||
Ownership percent | 40.00% | 40.00% | |||
Equity method investments | $ 307 | $ 307 | $ 435 | ||
Equity method investment impairment | 128 | ||||
Equity method investment other than temporary impairment net of tax | $ 96 | ||||
Equity method investment other than temporary impairment earnings per share (in dollars per share) | $ 0.34 | ||||
AMMROC | Subsequent Event | Forecast | |||||
Investment Holdings [Line Items] | |||||
Proceeds from sale of investment | $ 307 |
OTHER - Backlog (Details)
OTHER - Backlog (Details) $ in Billions | Jun. 28, 2020USD ($) |
Accounting Policies [Abstract] | |
Remaining performance obligation | $ 150.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-06-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 37.00% |
Expected time of satisfaction | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-06-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 24.00% |
Expected time of satisfaction | 12 months |
OTHER - Income Taxes (Details)
OTHER - Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Effective income tax rate | 17.10% | 15.60% | 16.30% | 13.90% |
OTHER - Debt Issuance (Details)
OTHER - Debt Issuance (Details) - USD ($) | Jun. 16, 2020 | May 20, 2020 | Jun. 28, 2020 | Jun. 30, 2019 |
Debt Instrument [Line Items] | ||||
Repayments of current and long-term debt | $ 1,150,000,000 | $ 0 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 1,200,000,000 | |||
Debt instrument, redemption price, percentage | 100.00% | |||
1.85% Notes Due 2030 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 400,000,000 | |||
Interest percent | 1.85% | |||
2.8% Notes Due 2050 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 750,000,000 | |||
Interest percent | 2.80% | |||
3.35% Notes due 2021 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 900,000,000 | |||
Interest percent | 3.35% | |||
Repayments of current and long-term debt | $ 400,000,000 | |||
2.50% Notes due 2020 | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 1,250,000,000 | |||
Interest percent | 2.50% | |||
Repayments of current and long-term debt | $ 750,000,000 |
OTHER - Sale of Customer Receiv
OTHER - Sale of Customer Receivables (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2020 | Jun. 30, 2019 | Jun. 28, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Customer receivables sold | $ 121,000,000 | $ 96,000,000 | $ 267,000,000 | $ 200,000,000 |
Gains or losses related to sales of receivables | $ 0 | $ 0 | $ 0 | $ 0 |