Lockheed Martin 2015 Annual Report Download - page 60

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Capital expenditures amounted to $939 million in 2015, $845 million in 2014 and $836 million in 2013. The majority of
our capital expenditures were for equipment and facilities infrastructure that generally are incurred to support new and
existing programs across all of our business segments. We also incur capital expenditures for information technology to
support programs and general enterprise information technology infrastructure, inclusive of costs for the development or
purchase of internal-use-software.
Additionally, in 2015, we received cash proceeds of approximately $165 million related to three properties sold in
California.
Financing Activities
Net cash provided by financing activities increased $7.6 billion in 2015 compared to 2014 primarily due to proceeds
from new debt issuances, partially offset by increased repurchases of common stock and higher dividends paid. Net cash
used for financing activities increased $608 million in 2014 compared to 2013 primarily due to decreased proceeds from
stock option exercises in 2014, higher dividends paid and increased repurchases of common stock, partially offset by the
repayment of long-term notes in 2013.
In February 2015, we received net proceeds of $2.21 billion for the issuance of $2.25 billion of fixed interest-rate long-
term notes. In November 2015, we borrowed $7.0 billion of fixed interest-rate long-term notes and received net proceeds of
$6.9 billion (the November 2015 Notes). These proceeds were used to repay $6.0 billion of outstanding borrowings under a
364-day revolving credit facility that was used to finance a portion of the purchase price for the Sikorsky acquisition.
Additionally, in the fourth quarter of 2015, to partially finance the Sikorsky acquisition we borrowed and repaid
approximately $1.0 billion under our commercial paper program. See “Capital Structure, Resources and Other” for more
information about our debt financing activities.
We paid dividends totaling $1.9 billion ($6.15 per share) in 2015, $1.8 billion ($5.49 per share) in 2014 and $1.5 billion
($4.78 per share) in 2013. We have increased our quarterly dividend rate in each of the last three years, including a
10% increase in the quarterly dividend rate in the fourth quarter of 2015. We declared quarterly dividends of $1.50 per share
during each of the first three quarters of 2015 and $1.65 per share during the fourth quarter of 2015; $1.33 per share during
each of the first three quarters of 2014 and $1.50 per share during the fourth quarter of 2014; and $1.15 per share during each
of the first three quarters of 2013 and $1.33 per share during the fourth quarter of 2013.
We paid $3.1 billion, $1.9 billion and $1.8 billion to repurchase 15.2 million, 11.5 million and 16.2 million shares of our
common stock during 2015, 2014 and 2013.
Cash received from the issuance of our common stock in connection with employee stock option exercises during 2015,
2014 and 2013 totaled $174 million, $308 million and $827 million. The exercises resulted in the issuance of 2.2 million
shares, 3.7 million shares and 10.0 million shares of our common stock.
In 2013, we repaid $150 million of long-term notes with a fixed interest rate of 7.38% due to their scheduled maturities.
Capital Structure, Resources and Other
At December 31, 2015, we held cash and cash equivalents of $1.1 billion. As of December 31, 2015, approximately
$400 million of our cash and cash equivalents was held outside of the U.S. by foreign subsidiaries. Although those balances
are generally available to fund ordinary business operations without legal or other restrictions, a significant portion is not
immediately available to fund U.S. operations unless repatriated. Our intention is to permanently reinvest earnings from our
foreign subsidiaries. While we do not intend to do so, if this cash had been repatriated at the end of 2015, we estimate that
about $48 million of U.S. federal income tax would have been due after considering foreign tax credits.
Our outstanding debt, net of unamortized discounts and deferred financing costs, amounted to $15.3 billion at
December 31, 2015 and mainly is in the form of publicly-issued notes that bear interest at fixed rates. As of December 31,
2015, we were in compliance with all covenants contained in our debt and credit agreements.
We actively seek to finance our business in a manner that preserves financial flexibility while minimizing borrowing
costs to the extent practicable. We review changes in financial market and economic conditions to manage the types,
amounts and maturities of our indebtedness. We may at times refinance existing indebtedness, vary our mix of variable-rate
and fixed-rate debt or seek alternative financing sources for our cash and operational needs.
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