Exelis announces third-quarter 2013 financial results

The forward-looking statements in this release are made as of the date hereof and the company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the company’s historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in the Exelis Inc. Form 10-K for the fiscal year ended December 31, 2012, and those described from time to time in our future reports filed with the Securities and Exchange Commission.

 
Exelis Inc.
Condensed Consolidated Statements of Operations
(unaudited)
 
 
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)    

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

      2013     2012     2013     2012
Product revenue $ 498     $ 611     $ 1,515     $ 1,884
Service revenue       643       750         2,062       2,277
Total revenue       1,141       1,361         3,577       4,161
Cost of product revenue 354 434 1,091 1,328
Cost of service revenue 537 649 1,708 1,977
Selling, general and administrative expenses 100 114 337 377
Research and development expenses 11 18 39 48
Restructuring and asset impairment charges, net       6       3         68       5
Operating income 133 143 334 426

Interest expense, net

10 9 28 29
Other expense (income), net       3       (4 )       2       3
Income from continuing operations before income tax expense 120 138 304 394
Income tax expense       40       50         102       150
Net income     $ 80     $ 88       $ 202     $ 244
Earnings Per Share
Basic
Net income $ 0.42 $ 0.47 $ 1.07 $ 1.30
Diluted
Net income $ 0.41 $ 0.47 $ 1.06 $ 1.30
Weighted average common shares outstanding – basic 188.5 187.6 188.3 187.3
Weighted average common shares outstanding – diluted 192.8 188.7 191.0 188.3
Cash dividends declared per common share     $ 0.10     $ 0.10       $ 0.31     $ 0.31
 
 
Exelis Inc.
Condensed Consolidated Balance Sheets
(unaudited)
 
 
(IN MILLIONS)     September 30,     December 31,
      2013     2012
Assets
Current assets
Cash and cash equivalents $ 309 $ 292
Receivables, net 1,012 995
Inventories, net 288 283
Deferred tax asset 29 85
Other current assets       56         58  
Total current assets       1,694         1,713  
Plant, property and equipment, net 500 512
Goodwill 2,184 2,180
Other intangible assets, net 173 184
Deferred tax asset 471 556
Other non-current assets       71         67  
Total non-current assets       3,399         3,499  
Total assets     $ 5,093       $ 5,212  
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable $ 351 $ 444
Advance payments and billings in excess of costs 335 322
Compensation and other employee benefits 192 246
Other accrued liabilities       229         203  
Total current liabilities       1,107         1,215  
Defined benefit plans 1,858 2,203
Long-term debt 649 649
Deferred tax liability 3 1
Other non-current liabilities       129         128  
Total non-current liabilities       2,639         2,981  
Total liabilities       3,746         4,196  
Commitments and contingencies (Note 15)
Shareholders' equity
Common stock 2 2
Additional paid-in capital 2,602 2,575
Treasury stock (5 )
Retained earnings 416 274
Accumulated other comprehensive loss       (1,668 )       (1,835 )
Total shareholders' equity       1,347         1,016  
Total liabilities and shareholders' equity     $ 5,093       $ 5,212  
 
 
Exelis Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
 
 
(IN MILLIONS)     Nine Months Ended September 30,
      2013     2012
Operating activities    
Net income $ 202 $ 244
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 85 97
Stock-based compensation 25 18
Restructuring and asset impairment charges, net 68 5
Payments for restructuring (42 ) (14 )
Defined benefit plans expense 69 36
Defined benefit plans payments (136 ) (293 )
Change in assets and liabilities
Change in receivables (22 ) (40 )
Change in inventories (4 ) 29
Change in other assets (5 ) 1
Change in accounts payable (93 ) (53 )
Change in advance payments and billings in excess of costs 13 (14 )
Change in deferred taxes 31 147
Change in other liabilities       (73 )       (66 )
Net cash provided by operating activities       118         97  
Investing activities
Capital expenditures (57 ) (86 )
Proceeds from the sale of assets 9 2
Acquisitions, net of cash acquired (16 ) (42 )
Other, net               (1 )
Net cash used in investing activities       (64 )       (127 )
Financing activities
Proceeds from commercial paper, net 134
Dividends paid (39 ) (39 )
Common stock repurchased (5 )
Proceeds from exercise of stock options 11 14
Other, net       (2 )       (7 )
Net cash (used in) provided by financing activities       (35 )       102  
Exchange rate effects on cash and cash equivalents       (2 )       6  
Net change in cash and cash equivalents 17 78
Cash and cash equivalents – beginning of year       292         116  
Cash and cash equivalents – end of period     $ 309       $ 194  
 

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