8-KAcquisitions & DispositionsFinancial EventsOther Events+1

LOCKHEED MARTIN CORP 8-K Report, Acquisition Completed (Nov 6, 2015)

Filed November 6, 2015For Securities:LMT

Summary

Lockheed Martin Corporation (LMT) announced on November 6, 2015, the completion of its acquisition of Sikorsky Aircraft Corporation and certain affiliated entities from United Technologies Corporation (UTC) for $9.083 billion in cash. This significant transaction, which closed on November 5, 2015, adds helicopter manufacturer Sikorsky to Lockheed Martin's portfolio and will be integrated into its Mission Systems and Training (MST) business area. The acquisition was funded through a combination of commercial paper, cash on hand, and a $6 billion 364-day credit facility. Investors should note that Lockheed Martin has assumed defense of a civil False Claims Act lawsuit and any potential liability related to Sikorsky's past contract with the U.S. Navy. While UTC did not believe a material loss was probable, Lockheed Martin will be evaluating the potential financial impact and may need to establish an accrual. The company also noted that the required financial statements and pro forma information for the acquired business will be filed in an amendment to this report.

Key Highlights

  • 1Completion of the acquisition of Sikorsky Aircraft Corporation from United Technologies Corporation for $9.083 billion in cash, effective November 5, 2015.
  • 2Sikorsky will be integrated into Lockheed Martin's Mission Systems and Training (MST) business area.
  • 3The acquisition was financed through a mix of commercial paper, existing cash, and a new $6 billion 364-day credit agreement.
  • 4Lockheed Martin has assumed responsibility for a civil False Claims Act lawsuit previously disclosed by UTC concerning Sikorsky's contract with the U.S. Navy.
  • 5The company is evaluating potential liabilities and exposures related to the assumed legal proceeding, with potential for financial impact.
  • 6Full financial statements and pro forma information for Sikorsky will be filed in a subsequent amendment to this 8-K filing.

Frequently Asked Questions

The total purchase price for Sikorsky Aircraft Corporation and its affiliated entities was $9,083,000,000 in cash. This amount includes an adjustment for working capital and net indebtedness, with a portion deferred pending approval from the Foreign Investment Promotion Board of India.

The acquisition was funded through a combination of sources, including commercial paper under Lockheed Martin's existing program, cash on hand, and a new $6 billion 364-day credit agreement entered into on November 6, 2015.

Lockheed Martin has assumed the defense and any potential liability for a civil False Claims Act lawsuit filed against Sikorsky and its subsidiaries by the U.S. Government. While UTC did not believe a material loss was probable, Lockheed Martin will be evaluating the potential loss and may need to record an accrual if a material loss is deemed probable. Investors should monitor future filings for updates on the company's assessment of this liability.

The detailed financial statements and pro forma financial information for the acquired Sikorsky business will be filed by amendment to this 8-K report as soon as practicable, but no later than 71 calendar days after the initial filing date.