Lockheed Martin 2013 Annual Report Download - page 51

In addition, we have projects underway to modernize certain of our facilities, inclusive of our efforts to consolidate and
reduce leased facilities. We also incur capital expenditures for information technology to support programs and general
enterprise information technology infrastructure, inclusive of costs for development or purchase of internal-use software.
The following table provides a summary of our cash flow information followed by a discussion of the key elements (in
millions):
2013 2012 2011
Cash and cash equivalents at beginning of period $ 1,898 $ 3,582 $ 2,261
Operating activities
Net earnings 2,981 2,745 2,655
Non-cash adjustments 1,570 2,133 1,210
Changes in working capital (98) (1,061) 674
Other, net 93 (2,256) (286)
Net cash provided by operating activities 4,546 1,561 4,253
Net cash used for investing activities (1,121) (1,177) (788)
Net cash used for financing activities (2,706) (2,068) (2,144)
Net change in cash and cash equivalents 719 (1,684) 1,321
Cash and cash equivalents at end of year $ 2,617 $ 1,898 $ 3,582
Operating Activities
2013 compared to 2012
Net cash provided by operating activities increased $3.0 billion in 2013 as compared to 2012 primarily due to lower
pension contributions, a lower increase in working capital, a tax refund in 2013 as discussed below, and improved operating
results. We made $2.25 billion in contributions to our qualified defined benefit pension plans during 2013, compared to
$3.6 billion during 2012. The $1.0 billion decline in the growth of working capital (defined as receivables, net and
inventories, net less accounts payable and customer advances and amounts in excess of costs incurred) was attributable to
higher cash receipts related to accounts receivable, primarily on F-35 production contracts (including amounts from resolving
U.S. Government contractual withholds). Partially offsetting the improved accounts receivable collections were higher
payments to suppliers, primarily on F-35 production contracts. In addition, there was lower growth in inventories in 2013 as
compared to 2012 primarily due to the timing of advance payments applied to inventory.
We made tax payments, net of refunds received, of $787 million during 2013, compared to $890 million during 2012.
We expect our 2014 net tax payments will increase over our 2013 tax payments, which were reduced by a $550 million
refund from the IRS primarily attributable to our tax-deductible discretionary pension contributions during the fourth quarter
of 2012.
2012 compared to 2011
Net cash provided by operating activities decreased $2.7 billion in 2012 as compared to 2011 primarily due to changes in
working capital of $1.7 billion and increased pension contributions of $1.1 billion, net of CAS recoveries. The decrease of
$1.7 billion in cash provided by working capital (defined as accounts receivable and inventories less accounts payable and
customer advances and amounts in excess of costs incurred) was driven by higher payments of accounts payable due to
timing as well as the timing of production and billing cycles affecting customer advances and progress payments applied to
inventories. Additionally, growth in accounts receivable, primarily due to the timing of finalizing contract negotiations on
F-35 production contracts in the fourth quarter of 2012, which delayed our billings, as well as the impact of U.S. Government
withholdings on the F-35 program reduced the cash provided by operating activities.
Investing Activities
Capital expenditures – Capital expenditures amounted to $836 million in 2013, $942 million in 2012, and $987 million
in 2011.
Acquisitions and other activities – Acquisition activities include both the acquisition of businesses and investments in
affiliates. We paid $269 million in 2013 for acquisition activities, primarily related to the acquisition of Amor Group
(Note 14). In 2012, we paid $259 million for acquisition activities, primarily related to the acquisitions of Chandler/May,
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