CLOUD

Lockheed Martin has reported fourth quarter 2013 net sales of $11.5 billion compared to $12.1 billion in the fourth quarter of 2012.  Net earnings from continuing operations in the fourth quarter of 2013 were $488 million, or $1.50 per diluted share, compared to $569 million, or $1.73 per diluted share, in the fourth quarter of 2012.  Cash from operations in the fourth quarter of 2013 was $938 million, after discretionary pension contributions of $750 million, compared to cash used in operations of ($1.3) billion after discretionary pension contributions of $2.5 billion in the fourth quarter of 2012.

Fourth quarter 2013 net earnings from continuing operations included special charges for a non-cash goodwill impairment charge of $195 million, net of state tax benefits, which reduced earnings by $176 million, or $0.54 per diluted share, and workforce reductions of $171 million, net of state tax benefits, which reduced earnings by $111 million, or $0.34 per diluted share.  Net earnings from continuing operations also included FAS/CAS pension expense of $120 million, which reduced earnings by $74 million, or $0.23 per diluted share.  Fourth quarter 2012 net earnings from continuing operations included FAS/CAS pension expense of $208 million, which reduced earnings by $128 million, or $0.39 per diluted share; an increase in income tax expense from reduced U.S. manufacturing deductions, which reduced earnings by $59 million, or $0.18 per diluted share; and special charges of $25 million, net of state tax benefits, related to workforce reductions at the Corporation's Aeronautics business segment, which reduced earnings by $16 million, or $0.05 per diluted share.

Net sales for 2013 were $45.4 billion compared to $47.2 billion in 2012.  Net earnings from continuing operations in 2013 were$3.0 billion, or $9.04 per diluted share, compared to $2.7 billion, or $8.36 per diluted share, during 2012. Cash from operations for 2013 was $4.5 billion after pension contributions of $2.25 billion compared to cash from operations for 2012 of $1.6 billionafter pension contributions of $3.6 billion.

Net earnings from continuing operations for 2013 included FAS/CAS pension expense of $482 million, which reduced earnings by $298 million, or $0.91 per diluted share. Net earnings from continuing operations also included special charges for a non-cash goodwill impairment charge of $195 million, net of state tax benefits, which reduced earnings by $176 million, or $0.54per diluted share, and workforce reductions of $201 million, net of state tax benefits, which reduced earnings by $130 million, or $0.40 per diluted share.  Net earnings from continuing operations for 2012 included FAS/CAS pension expense of $830 million, which reduced earnings by $513 million, or $1.56 per diluted share; an increase in income tax expense from reduced U.S. manufacturing deductions, which reduced earnings by $59 million, or $0.18 per diluted share; and special charges of $48 million, net of state tax benefits, related to workforce reductions at the Corporation's Aeronautics business segment and former Electronic Systems business segment in the third quarter of 2012, which reduced earnings by $31 million, or $0.09 per diluted share.

The following table presents summary operating results of the Corporation's five business segments and reconciles these amounts to the Corporation's consolidated financial results.

Information Systems & Global Solutions

IS&GS' net sales decreased $100 million, or 5 percent, for the fourth quarter and $479 million, or 5 percent, for 2013 compared to the same periods in 2012.  The decreases in both periods were attributable to lower net sales of approximately $130 millionfor the fourth quarter and about $495 million for 2013 due to decreased volume on various programs (command and control programs for classified customers and Next Generation Identification for both the fourth quarter and 2013, and En Route Automation Modernization programs for 2013); and approximately $40 million for the fourth quarter and approximately $320 million for 2013 due to the completion of certain programs (such as Total Information Processing Support Services for both the fourth quarter and 2013, and the Transportation Worker Identification Credential and the Outsourcing Desktop Initiative for NASA for 2013).  The decreases were partially offset by higher net sales of approximately $70 million for the fourth quarter and about $340 million for 2013 due to the start-up of certain programs (such as the Defense Information Systems Agency – Global Information Grid Services Management-Operations for both the fourth quarter and 2013, and the National Science Foundation Antarctic Support for 2013).

IS&GS' operating profit decreased $14 million, or 7 percent, for the fourth quarter and $49 million, or 6 percent, for 2013 compared to the same periods in 2012.  The net decrease in the fourth quarter operating profit was primarily attributable to lower volume and risk retirements on various programs.  The decrease in 2013 was primarily attributable to lower operating profit of about $55 million due to certain programs nearing the end of their lifecycles, partially offset by higher operating profit of approximately $15 million due to the start-up of certain programs.  Adjustments not related to volume, including net profit booking rate adjustments and other matters, were approximately $10 million lower for the quarter and comparable for the year ended Dec. 31, 2013 compared to the same periods in 2012.

"Our employees delivered exceptional performance for our customers in 2013 resulting in record backlog, earnings, and profit margin as well as strong cash generation," said Chairman, President, and CEO Marillyn Hewson.  "Looking ahead to 2014, we will continue our focus on improving operational efficiency, reducing our cost structure, investing in innovations to address our customers' future challenges and returning value to our shareholders."