Lockheed Martin [LMT] on Monday said it will take a $1.5 billion non-cash charge when it reports second quarter financial results after purchasing group annuity contracts that will see it transfer about $4.3 billion in gross pension obligations and related plan assets to Athene Holding Ltd.


The non-operating charge will be about $1.2 billion after taxes and clip $4.50 from per share earnings. The company said the actual settlement charge will depend on final actuarial assumptions.

The charge was not included in the company’s earnings guidance provided in April of $26.70 earnings per share this year. Lockheed Martin will update its financial outlook when it releases second quarter results, which typically occurs in late July.

Athene on Jan. 1, 2023 will begin paying and administering the retirement benefits of about 13,600 Lockheed Martin U.S. retirees and beneficiaries. Lockheed Martin said it purchased the contracts using assets from its master retirement trust. There will be no changes to the benefits of the retirees and beneficiaries.