What is the financial impact of the divestitures?

The divested units, EIG and PAE, represent a relatively small portion of Lockheed Martin's overall financial performance, contributing approximately 3% to the corporation's revenue and less than 3% to its operating profit. This suggests the divestiture is strategic rather than driven by a need to significantly reduce losses.

Why is Lockheed Martin making these changes?

These actions are part of a broader strategy to reshape the company's portfolio and strengthen its long-term performance. The realignments and divestitures aim to improve focus, optimize resources, and better align business units with their respective markets and competencies.

How will the IS&GS business change?

The Information Systems & Global Services (IS&GS) segment is being renamed to Information Systems & Global Solutions. This change reflects an updated focus and scope of the segment's operations, moving from 'Services' to 'Solutions' to better represent its offerings.

LMT 8-K: Regulation FD

Q: What are the main strategic changes Lockheed Martin is implementing?

Lockheed Martin is divesting most of its Enterprise Integration Group (EIG) and its subsidiary Pacific Architects and Engineers, Inc. (PAE). Additionally, it is realigning two other business units, Readiness & Stability Operations (RSO) and Savi Technology, Inc., into a new Global Training and Logistics business under the Electronic Systems segment. The company is also rebranding its IS&GS segment to Information Systems & Global Solutions.

Summary

Lockheed Martin Corporation (LMT) announced on June 2, 2010, a series of strategic actions aimed at reshaping its business portfolio and enhancing long-term performance. These initiatives involve divesting certain assets and realigning other business units to better focus on core competencies and optimize operational efficiency. The most significant development is the planned divestiture of most of the Enterprise Integration Group (EIG) and its subsidiary Pacific Architects and Engineers, Inc. (PAE). These units, part of the Information Systems & Global Services (IS&GS) segment, collectively represent a small portion of LMT's revenue and operating profit, indicating a strategic move to shed non-core or lower-margin businesses. Simultaneously, two other IS&GS units, Readiness & Stability Operations (RSO) and Savi Technology, Inc., are being integrated into the Electronic Systems segment under a new business line named Global Training and Logistics. This realignment aims to create a more cohesive offering in simulation, training, and support services, reflecting an international scope. The IS&GS segment itself is also being rebranded to Information Systems & Global Solutions to better align with its evolving focus.

Key Highlights

1Lockheed Martin announced strategic portfolio reshaping actions on June 2, 2010.
2The company plans to divest most of the Enterprise Integration Group (EIG) and Pacific Architects and Engineers, Inc. (PAE).
3EIG and PAE together account for approximately 3% of LMT's revenue and less than 3% of operating profit.
4Two IS&GS units, Readiness & Stability Operations (RSO) and Savi Technology, Inc., are being realigned with the Simulation, Training and Support (STS) unit under Electronic Systems.
5A new business line, Global Training and Logistics, will be formed from the combined RSO and Savi Technology operations.
6The Information Systems & Global Services (IS&GS) segment is being renamed to Information Systems & Global Solutions.
7These actions are designed to strengthen the company's performance over the long term.

LOCKHEED MARTIN CORP 8-K Report, Regulation FD Disclosure (Jun 2, 2010)

Summary

Key Highlights

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