Lockheed Martin 2002 Annual Report Download - page 36

FORTY-THREE
LIQUIDITY AND CASH FLOWS
Operating Activities
Operating activities provided $2.3 billion of cash in 2002,
compared to $1.8 billion in 2001 and $2.0 billion in 2000.
Operating activities included earnings (loss) from continuing
operations, as adjusted for noncash items, and the cash pro-
vided by changes in our operating assets and liabilities.
Management of our working capital accounts (accounts
receivable, inventory, accounts payable and customer
advances) contributed $202 million of cash flow in 2002, $1.1
billion in 2001 and $355 million in 2000. The timing of
income tax payments or refunds also affects our operating
cash flows. In 2002, we received $117 million from the settle-
ment of the R&D tax credit claim while in 2001, we paid $655
million of income taxes related to divested businesses.
Included in operating activities is cash provided from discon-
tinued operations of $25 million in 2002, $34 million in 2001
and $25 million in 2000. Operating cash flows were sufficient
to operate our businesses, finance capital expenditures and to
pay dividends on our common stock each year.
Investing Activities
Investing activities used $539 million of cash in 2002, com-
pared to providing $139 million in 2001 and $1.8 billion in
2000. Cash used for property, plant and equipment expendi-
tures increased 7% in 2002 and 24% in 2001 and included $10
million in 2002, $74 million in 2001 and $58 million in 2000
for the discontinued businesses. During 2002, we received
proceeds of $134 million from the sale of our discontinued
telecommunications businesses and $93 million primarily
from the disposal of property, plant and equipment.
Investments of $104 million were made in 2002, primarily
related to our acquisition of OAO Corporation.
During 2001, we received proceeds of $825 million from
the sale of our IMS business. Investments in affiliated compa-
nies of $192 million primarily consisted of $140 million to
complete our funding commitment to Astrolink and $30 mil-
lion to Intelsat. The remainder of the 2001 activity was attrib-
utable to proceeds from the disposal of property, plant and
equipment, and various other investing activities.
During 2000, we received $1.7 billion from the sale of our
AES business, $510 million from the sale of our Control
Systems business and $164 million from the sale of a portion
of our investment in Inmarsat. Investments in affiliated compa-
nies of $257 million mainly consisted of our funding commit-
ment to Astrolink of $127 million and an additional
investment in Intelsat of $58 million. Proceeds from the sale
of property and other activities contributed $175 million to our
investing activities.
Financing Activities
Financing activities provided $77 million of cash in 2002, as
compared to using $2.6 billion in 2001 and $2.7 billion in
2000. Proceeds of $436 million from stock option activity
more than offset dividend payments of $199 million, repay-
ment of debt (primarily ESOP obligations) of $110 million
and $50 million for the repurchase of 1 million shares of com-
mon stock in 2002. Including the $450 million of debentures
we called in 2003 to be repaid early and the $150 million of
debt we recorded relating to our guarantee of Space Imaging,
LLC’s existing credit facility (see the related discussions
under Capital Structure and Resources), debt maturities will
amount to $1,365 million in 2003.
During 2001, improved operating cash flows and cash
provided by investing activities allowed us to reduce our long-
term debt by approximately $2.4 billion. The reduction in
long-term debt was primarily attributable to the pre-payment
of notes issued to a wholly-owned subsidiary of General
Electric Company (GE), payments on scheduled debt maturi-
ties, and the early retirement of certain other debt instruments.
Net Cash Provided by
Operating Activities
(In millions)
200020012002
0
500
1,000
1,500
2,000
$2,500
Lockheed Martin Corporation