As you may or may not have noticed, the United States seems to be on a perpetual war-footing with Congress and the President threatening (and in no specific order), China, Iran, North Korea, Russia, Syria along with the nation’s current activities in Iraq and Afghanistan. One of the major beneficiaries of all of this military activity is Lockheed Martin, America’s largest defense contractor. Let’s look at a few details about Lockheed Martin that will give us a sense of the how much of this company’s bottom line is funded by U.S. taxpayers.
Here is a screen capture from Lockheed Martin’s 2016 Annual Report showing the key financial metrics for the year:
A very significant 23 percent of the company’s annual revenue was derived from sales of the Lightning II variant of this:
In 2016, the company’s Aeronautics business segment had sales of $17.8 billion or 38 percent of total sales with the U.S. government accounting for 66 percent or $11.75 billion of the total. Of the $17.8 billion, 62 percent came from the sale, sustainment and development of F-35 aircraft.
In 2016, the company produced a record 46 F-35 aircraft. The USAF declared Initial Operational Capability for the F-35A variant and will ultimately operate 1763 of the fifth-generation fighters. In combination with the U.S. Department of Defense, the company announced two initiatives to reduce the cost of the F-35, hoping to achieve a target price of $85 million per unit for the 2019 year (in 2019 dollars). With the planned USAF purchase of 1763 F-35A conventional takeoff and landing variants, the company will see revenues of $149.86 billion from this single aircraft, courtesy of U.S. taxpayers if they meet their target per unit price. In addition, other nations have expressed interest in the F-35:
Japan – 42 F-35A on order – delivered 1 in 2016
Israel – 50 F-35A on order – delivered 2 in 2016
Italy – 90 F-35A on order – delivered 1 in 2016
Denmark – 27 F-35A on order
Lockheed’s second largest area of growth is its missile defense business, also known as Missiles and Fire Control which had sales of $6.6 billion or 14 percent of total consolidated net sales. It builds the Aegis, Patriot Advanced Capability 3 (PAC-3), Terminal High Altitude Area Defense (THAAD) and the Medium Extended Air Defense System (MEADS). It also develops and produces the Multiple Launch Rocket System, the Hellfire missile, the Javelin tactical missile and the Joint Air-to-Surface Standoff Missiles. This sector’s biggest customer was the U.S. Government which was responsible for 61 percent or $4.356 billion of total sales.
Let’s briefly look at the sales revenues from Lockheed’s other business sectors and how much of each sector’s revenue was from the U.S. Government:
1.) Rotary and Mission Systems: Total sales – $13.5 billion, U.S. Government responsible for 68 percent or $9.18 billion
If we add up these three sectors, the U.S. government is responsible for $33.84 billion or 71.6 percent of Lockheed Martin’s total net sales in 2016. In other words, U.S. taxpayers are responsible for Lockheed Martin’s existence; without taxpayer-funded purchases, Lockheed Martin would be a far, far smaller company than it currently is.
Let’s look at how the American taxpayers are funding this defense behemoth. In fiscal 2016, the U.S. federal governments total tax receipts, both individual and corporate, were $2.897 trillion with individuals being responsible for 89.9 percent of the total. If we take the amount paid to Lockheed Martin, we find that they received 1.17 cent of every dollar that was paid to the U.S. government in federal taxes, meaning that individuals are responsible for 1.05 cents of the amount paid to Lockheed Martin. This means that individual taxpayers are responsible for $30.42 billion of Lockheed Martin’s 2016 sales revenues. According to the IRS, there are 139.6 million taxpayers (2014 data – the latest available from the IRS) meaning that each U.S. taxpayer including those who have paid no taxes has essentially “written a cheque” for $217.91 to Lockheed Martin in 2016.
Let’s close with this from Lockheed Martin’s 2016 Proxy Statement:
At least we know that five individuals are benefitting substantially from the taxpayer’s investment in America’s largest defense contractor and why war plays such an important role in Corporate America! Not bad for a company whose main business is to kill and maim.
Click HERE to read more and view the original source of this article.