Lockheed Martin's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Lockheed Martin (LMT)

Q1 2012 Earnings Call

April 26, 2012 3:00 pm ET

Executives

Jerry F. Kircher - Vice President of Investor Relations

Robert J. Stevens - Chairman, Chief Executive Officer and Chairman of Executive Committee

Christopher Eugene Kubasik - President, Chief Operating Officer and Member of Executive Office of the Chairman

Bruce L. Tanner - Chief Financial Officer and Executive Vice President

Analysts

Richard Tobie Safran - The Buckingham Research Group Incorporated

Joseph Nadol - JP Morgan Chase & Co, Research Division

Robert Stallard - RBC Capital Markets, LLC, Research Division

Robert Spingarn - Crédit Suisse AG, Research Division

Cai Von Rumohr - Cowen and Company, LLC, Research Division

Douglas S. Harned - Sanford C. Bernstein & Co., LLC., Research Division

Samuel J. Pearlstein - Wells Fargo Securities, LLC, Research Division

Jason M. Gursky - Citigroup Inc, Research Division

Noah Poponak - Goldman Sachs Group Inc., Research Division

Myles A. Walton - Deutsche Bank AG, Research Division

George Shapiro

Michael S. Lewis - Lazard Capital Markets LLC, Research Division

Carter Copeland - Barclays Capital, Research Division

Peter J. Arment - Sterne Agee & Leach Inc., Research Division

Presentation

Operator

Good day, and welcome, everyone, to the Lockheed Martin's First Quarter 2012 Earnings Results Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Mr. Jerry Kircher, Vice President of Investor Relations. Please go ahead, sir.

Jerry F. Kircher

Thank you, Shawn, and good afternoon. I'd like to welcome everyone to our first quarter 2012 earnings conference call. Joining me today on the call are Bob Stevens, our Chairman and Chief Executive Officer; Chris Kubasik, our President and Chief Operating Officer; and Bruce Tanner, our Executive Vice President and Chief Financial Officer.

Statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the Safe Harbor provisions of federal securities laws. Actual results may differ. Please see today's press release and our SEC filings for a description of some of the factors that may cause actual results to vary materially from anticipated results.

We have posted charts on our website today that we plan to address during the call to supplement our comments. Please access our website at www.lockheedmartin.com and click on the Investor Relations link to view and follow the charts.

With that, I'd like to turn the call over to Bob.

Robert J. Stevens

Thanks, Jerry. Good afternoon, everyone. Thanks for joining our call today. By now, you've had an opportunity to review 2 releases from us today, one describing our first quarter performance and one describing the discussion I've had with our board regarding my retirement and our leadership transition plan. I'll start with the latter.

I'm very pleased to announce that our board has elected Chris Kubasik to be our next Chief Executive Officer and Marillyn Hewson to be our next President and Chief Operating Officer, with both appointments effective January 1, 2013. To assure a smooth and seamless transition, I'll continue to serve as CEO through the remainder of 2012 and, with shareholder and board approval, will serve as Chairman of the Board through January 2014.

Chris and Marillyn, along with Bruce and many others, have been full partners for many years in evolving our strategies and our operating concepts to deliver superior value to customers and sustain value to shareholders. Together, we have built a great leadership team with bench strength, an excellent workforce, a sound strategy, solid portfolio and an operational momentum upon which to build value. I'm very proud of them and all that they've accomplished. And I'm confident there'll be much more to come.

Let me anticipate at least one of your questions today. Why make this decision now? Well, I must tell you, I love what I do here. I believe in our mission, our values, our purpose, our people, our customers. Just having the opportunity to contribute at this level is such a privilege. I'm grateful to our board, and I'm grateful to our employees for the chance and for the support.

It would be great if it could go on forever, but there are realities. I'll be 61 years old in September, and 62.5 when the transition plan I've described is complete. We have a mandatory retirement age here at 65. By the end of this year, I will have served as our CEO for more than 8 years, as President and Chief Operating Officer for about 4 years before that and as Chief Financial Officer before that. By any measure, that's a full period of service.

When I assessed the complexities in the global security and economic environments, that new reality we've talked so much about, with the increasing velocity and volatility of global events that will shape our decision-making over many years, certainly, beyond my mandatory retirement age, I wanted to assure that we have a tested and trusted senior leadership team in place who can provide continuity and evolve our strategies over the longer term. We have that team in place now ready to go, and you know them well.

I've also studied leadership transition environments and have made my own assessments about what approaches are most successful and what works best. Let me give you 3 thoughts here. First, I believe longer-cycle transitions that assure a more complete transfer of responsibility are more effective than shorter ones, particularly for complex long cycle businesses like ours. Announcing our transition in April 2012 with an effective date in January 2013 gives us 8 months to focus on transition. And as I mentioned, with the support of our shareholders and the board, I'll remain as Chairman for another year through January 2014.

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