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Exelis Reports Second-quarter 2013 Financial Results; Reaffirms Full-year Guidance

       
Exelis Inc.
Condensed Consolidated Statements of Operations
(unaudited)
 
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS) Three Months Ended June 30,   Six Months Ended June 30,
    2013   2012   2013   2012
Product revenue $ 518 $ 620 $ 1,017 $ 1,273
Service revenue     733     759     1,419     1,527
Total revenue     1,251     1,379     2,436     2,800
Costs of product revenue 380 433 737 894
Costs of service revenue 594 654 1,171 1,328
Selling, general and administrative expenses 122 130 237 263
Research and development expenses 15 16 28 30
Restructuring charges, net     13     1     62     2
Operating income 127 145 201 283
Interest expense, net 10 11 18 20
Other expense (income), net     (3)     (1)     (1)     7
Income from continuing operations before income tax expense 120 135 184 256
Income tax expense     42     49     62     100
Net income   $ 78   $ 86   $ 122   $ 156
Earnings Per Share
Basic

Net income

$ 0.41 $ 0.46 $ 0.65 $ 0.83
Diluted
Net income $ 0.41 $ 0.46 $ 0.64 $ 0.83
Weighted average common shares outstanding – basic 188.2 187.5 188.2 187.1
Weighted average common shares outstanding – diluted 190.5 188.5 190.2 188.0
Cash dividends declared per common share   $ 0.10   $ 0.10   $ 0.21   $ 0.21
 

   
Exelis Inc.
Condensed Consolidated Balance Sheets
(unaudited)
 
 
(IN MILLIONS) June 30, December 31,
    2013   2012
Assets
Current assets
Cash and cash equivalents $ 259 $ 292
Receivables, net 1,035 995
Inventories, net 297 283
Deferred tax asset 65 85
Other current assets     56     58
Total current assets     1,712     1,713
Plant, property and equipment, net 508 512
Goodwill 2,185 2,180
Other intangible assets, net 177 184
Deferred tax asset 470 556
Other non-current assets     65     67
Total non-current assets     3,405     3,499
Total assets   $ 5,117  

$

5,212
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 368

$

444
Advance payments and billings in excess of costs 327 322
Compensation and other employee benefits 219 246
Other accrued liabilities     249     203
Total current liabilities     1,163     1,215
Defined benefit plans 1,924 2,203
Long-term debt 649 649
Deferred tax liability 3 1
Other non-current liabilities     130     128
Total non-current liabilities     2,706     2,981
Total liabilities     3,869     4,196
Commitments and contingencies
Shareholders' equity
Common stock 2 2
Additional paid-in capital 2,590 2,575
Treasury stock (5)
Retained earnings 355 274
Accumulated other comprehensive loss     (1,694)     (1,835)
Total shareholders' equity     1,248     1,016
Total liabilities and shareholders' equity   $ 5,117   $ 5,212
 

   
Exelis Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
 
 
(IN MILLIONS) Six Months Ended June 30,
    2013   2012
Operating activities
Net income $ 122 $ 156
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 56 63
Stock-based compensation 16 13
Restructuring charges, net 62 2
Payments for restructuring (23) (11)
Defined benefit plans expense 48 24
Defined benefit plans payments (75) (275)
Change in assets and liabilities
Change in receivables (45) (114)
Change in inventories (13) (1)
Change in other assets (3) (2)
Change in accounts payable (76) (21)
Change in advance payments and billings in excess of costs 6 (29)
Change in deferred taxes 7 130
Change in other liabilities (39) (44)
Other, net     1     (1)
Net cash provided by (used in) operating activities     44     (110)
Investing activities
Capital expenditures (36) (50)
Proceeds from the sale of assets 9 1
Acquisitions, net of cash acquired (16) (24)
Other, net     (1)     2
Net cash used in investing activities     (44)     (71)
Financing activities
Proceeds from commercial paper, net 257
Dividends paid (19) (39)
Common stock repurchased (5)
Proceeds from exercise of stock options 3 14
Other, net     (3)     (2)
Net cash (used in) provided by financing activities     (24)     230
Exchange rate effects on cash and cash equivalents     (9)     1
Net change in cash and cash equivalents (33) 50
Cash and cash equivalents – beginning of year     292     116
Cash and cash equivalents – end of year   $ 259   $ 166
 




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