Lockheed Martin 2009 Annual Report Download

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LOCKHEED MARTIN CORPORATION
2009 ANNUAL REPORT
F-35 Lightning II: The Backbone of Next Generation
Tactical Aviation for America and its Allies

Table of contents

  • Page 1
    L OCKHEED M ARTIN C ORPORATION 2009 A NNUAL R EPORT F-35 Lightning II: The Backbone of Next Generation Tactical Aviation for America and its Allies

  • Page 2
    ... presented above, refer to Selected Financial Data, Management's Discussion and Analysis of Financial Condition and Results of Operations, and the Notes to Consolidated Financial Statements in our 2009 Annual Report on Form 10-K. For additional information concerning return on invested capital...

  • Page 3
    ... and Chief Financial Officer; Marillyn A. Hewson, Executive Vice President, Electronic Systems; Ralph D. Heath, Executive Vice President, Aeronautics. Photograph taken in Lockheed Martin's Center for Leadership Excellence which opened in 2009. LOCKHEED MARTIN CORPORATION 1 2009 ANNUAL REPORT

  • Page 4
    ... Helicopter program and the cancellation of the Multiple Kill Vehicle (MKV), the Transformational Communications Satellite (TSAT) and its ground segment (TSAT Mission Operations System). These setbacks, driven largely by shifting customer LOCKHEED MARTIN CORPORATION 2 2009 ANNUAL REPORT

  • Page 5
    ... range of skills and experience to the job, having served previously as our Chief Financial Officer and as Executive Vice President of the Electronic Systems business area. He understands our customers' changing environment and will lead our operations with an uncompromising commitment to perform...

  • Page 6
    ... our international presence through mutually beneficial partnerships with governments and industry worldwide. Our goal is to grow international sales from the current 14 percent to at least 20 percent of our business over the next five years. LOCKHEED MARTIN CORPORATION 4 2009 ANNUAL REPORT

  • Page 7
    ... will retire from the Board this year. We are extremely grateful for their valuable contributions to Lockheed Martin. The independent directors of our Board have elected Douglas H. McCorkindale as our new Lead Director, effective April 22, 2010. LOCKHEED MARTIN CORPORATION 5 2009 ANNUAL REPORT

  • Page 8
    ... Operating Officer Joanne M. Maguire Executive Vice President Space Systems John C. McCarthy Vice President and Treasurer Robert J. Stevens Chairman and Chief Executive Officer Bruce L. Tanner Executive Vice President and Chief Financial Officer LOCKHEED MARTIN CORPORATION 6 2009 ANNUAL REPORT

  • Page 9
    ... 20549 Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2009 Commission file number 1-11437 LOCKHEED MARTIN CORPORATION (Exact name of registrant as specified in its charter) Maryland (State or other jurisdiction...

  • Page 10
    ... ...Management's Discussion and Analysis of Financial Condition and Results of Operations ...Financial Section Roadmap ...Industry Considerations ...Critical Accounting Policies ...Results of Operations ...Discussion of Business Segments ...Liquidity and Cash Flows ...Capital Structure and Resources...

  • Page 11
    ...14 Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...Certain Relationships and Related Transactions, and Director Independence ...Principal Accounting Fees and Services...

  • Page 12
    ... 1. BUSINESS General Lockheed Martin Corporation is a global security company that is principally engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products. We also provide a broad range of management, engineering, technical...

  • Page 13
    ... of the Aeronautics business. Electronic Systems Our Electronic Systems segment manages complex programs and designs, develops, and integrates hardware and software solutions to ensure the mission readiness of armed forces and government agencies worldwide. Major lines of business include: air and...

  • Page 14
    ..., and support services. We also manage and operate the Sandia National Laboratories for the U.S. Department of Energy. Effective January 1, 2010, the ground vehicles line of business from the former Systems Integration - Owego, which includes the Joint Light Tactical Vehicle program, was realigned...

  • Page 15
    ... 2009, U.S. Government customers accounted for approximately 94% of the segment's total net sales. Civil Our Civil line of business supports the nation's needs in the areas of human capital, data protection and sharing, financial services, energy and environment, health, security, human exploration...

  • Page 16
    ... business designs, develops, manufactures, and integrates advanced technology satellite systems for government and commercial applications. We are responsible for various classified systems and services in support of vital national security systems. Its core programs include the Space-Based...

  • Page 17
    ... on performance. A portion of our business is classified by the U.S. Government and cannot be specifically described. The operating results of these classified programs are included in our consolidated financial statements. The business risks associated with classified programs historically have...

  • Page 18
    ... respect to future sales, income and cash flows, program performance, the outcome of litigation, environmental remediation cost estimates, and planned acquisitions or dispositions of assets are examples of forward-looking statements. Numerous factors, including potentially the risk factors described...

  • Page 19
    ... operating that site. Changes in global security strategy and planning may affect future procurement priorities and existing programs. We cannot predict whether potential changes in security, defense, and intelligence priorities will afford new or additional opportunities for our businesses in terms...

  • Page 20
    ...: • advanced and unproven technologies; • explosive or other inherently dangerous components; • systems such as spacecraft, satellites, intelligence systems, and homeland security applications that operate in extreme, high demand, or high risk conditions; Designing, developing, integrating...

  • Page 21
    ... products and services sold internationally. Where we are unable to secure indemnification or qualification under the SAFETY Act or choose not to do so, we may nevertheless elect to provide the product or service when we think the related risks are manageable or when emergency conditions relative to...

  • Page 22
    ... period financial performance. For additional information on accounting policies and internal controls we have in place for recognizing sales and profits, see our discussion under Management's Discussion and Analysis of Financial Condition and Results of Operations - "Critical Accounting Policies...

  • Page 23
    ..., and manage post-closing matters (e.g., integrate acquired companies and employees, realize anticipated operating synergies, and improve margins) efficiently and effectively. Investment, acquisition, joint venture, and divestiture transactions often require substantial management resources and have...

  • Page 24
    ... of our financial exposure cannot in all cases be reasonably estimated at this time. Among the variables management must assess in evaluating costs associated with these cases and remediation sites generally are the status of site assessment, extent of the contamination, changing cost estimates...

  • Page 25
    ...-looking statements, see the preceding discussion of Government Contracts and Regulation beginning on page 9, Risk Factors beginning on page 10, Management's Discussion and Analysis of Financial Condition and Results of Operations beginning on page 26, and Note 1 - Significant Accounting Policies...

  • Page 26
    ..., Texas. • Space Systems-Sunnyvale, California and Denver, Colorado. • Corporate activities-Bethesda, Maryland. The following is a summary of our floor space by business segment at December 31, 2009: (Square feet in millions) Aeronautics Electronic Systems Information Systems and Global Services...

  • Page 27
    ..., Systems Integration - Owego from September 2008 to December 2009; Executive Vice President - Global Sustainment for Aeronautics from March 2007 to August 2008; President, Lockheed Martin Logistics Services from January 2007 to February 2007; and President and General Manager, Kelly Aviation Center...

  • Page 28
    ... as Executive Vice President and Chief Financial Officer since September 2007. He previously served as Vice President of Finance and Business Operations for Aeronautics from April 2006 to August 2007, and Vice President of Finance and Business Operations for Electronic Systems from May 2002 to March...

  • Page 29
    ...holders of record of our common stock, par value $1 per share. Our common stock is traded on the New York Stock Exchange (NYSE) under the symbol LMT. Information concerning the stock prices based on intra-day trading prices as reported on the NYSE composite transaction tape and dividends paid during...

  • Page 30
    ... the program. Equity Compensation Plan Information The following table provides information about our equity compensation plans that authorize the issuance of shares of Lockheed Martin common stock to employees and directors. The information is provided as of December 31, 2009. Number of securities...

  • Page 31
    ...for calculating outstanding shares for reporting in the Annual Report. Employees may defer Management Incentive Compensation Plan ("MICP") and Long-Term Incentive Performance ("LTIP") amounts earned and payable to them to the Deferred Management Incentive Compensation Plan ("DMICP"). At the election...

  • Page 32
    ...-Term Debt, Net Accrued Pension Liabilities Other Postretirement Benefit Liabilities Other Liabilities Stockholders' Equity Total COMMON SHARES AT YEAR-END CASH FLOW DATA Cash Provided by Operating Activities Cash Used for Investing Activities Cash Used for Financing Activities RETURN ON INVESTED...

  • Page 33
    ... the funded status of our benefit plans. The total of annual benefit plan adjustments to equity were: 2009 = $495 million; 2008 = $(7,253) million; 2007 = $1,706 million; 2006 = $(1,883) million; and 2005 = $(105) million. As these entries are recorded in the fourth quarter, the value added back...

  • Page 34
    ... Lockheed Martin is a global security company that principally is engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems and products. We provide a broad range of management, engineering, technical, scientific, logistic, and information...

  • Page 35
    ... policies: Contract accounting/revenue recognition Postretirement benefit plans Environmental matters Goodwill Stock-based compensation Discussion of business segments Liquidity and cash flows Capital structure and resources Legal proceedings, commitments and contingencies Income taxes Location...

  • Page 36
    ... use of information technology and knowledge-based solutions, and vastly improved levels of network and cybersecurity, all appear to be national priorities. To meet these changing dynamics, we have been growing our portfolio of expertise, diversifying our business, and expanding systems integration...

  • Page 37
    ... expertise, as well as our existing advanced technology products and services, into adjacent military product lines, such as the Littoral Combat Ship and the Joint Light Tactical Vehicle programs. We also have unmanned systems capabilities, including air, ground, and underwater systems. In the...

  • Page 38
    ...our business from the Administration's stated policy of returning certain work to U.S. Government employees, known as "in-sourcing". We believe that there will be continued demand by federal and civil government agencies for upgrading and investing in new information technology systems and solutions...

  • Page 39
    ... other joint venture participants to the extent of their contractual performance obligations. We remain committed to growth in our sales to international customers. We conduct business with foreign governments primarily through Aeronautics and Electronic Systems. Our international sales are composed...

  • Page 40
    ...of revenue recognition on our C-130J tactical transport aircraft program and Multiple Launch Rocket System program. For certain other long-term, fixedprice DD&P contracts that, along with other factors, require us to deliver minimal quantities over a longer period of time or to perform a substantial...

  • Page 41
    ... Audit Agency. For other information on accounting policies we have in place for recognizing sales and profits, see our discussion under "Sales and earnings" in Note 1 to the financial statements. Postretirement Benefit Plans Most of our employees are covered by defined benefit pension plans, and...

  • Page 42
    are the discount rate and the expected long-term rate of return on plan assets for all postretirement benefit plans; the rates of increase in future compensation levels for our defined benefit pension plans; and the health care cost trend rates for our retiree medical plans. We use judgment in ...

  • Page 43
    ...from public markets, to determine if any adjustments should be recorded in the fair values. At December 31, 2009, these types of investments represented approximately 11% of the total fair value of the postretirement benefit plan assets. Other Considerations U.S. Government Cost Accounting Standards...

  • Page 44
    ...We have recorded assets totaling $740 million at December 31, 2009 for the portion of environmental costs that are probable of future recovery in pricing of our products and services for agencies of the U.S. Government. The amount that is expected to be allocated to our commercial businesses or that...

  • Page 45
    ... of our business to be a reporting unit if it constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. We estimate the fair value of each reporting unit using a discounted cash flow methodology that...

  • Page 46
    ... more than offset increased operating profit at the Aeronautics, Electronic Systems and Space Systems business segments. The higher unallocated Corporate costs in 2009 mainly were attributable to the impact of the FAS/CAS pension adjustment, which resulted in expense in 2009 of $456 million as...

  • Page 47
    ... services for its aircraft. Sales at Aeronautics are expected to grow overall in 2010 primarily due to the projected increase in F-35 production activities. Our Electronic Systems business segment manages complex programs and designs, develops, and integrates hardware and software solutions...

  • Page 48
    ... total. (In millions) Net Sales Aeronautics Electronic Systems Information Systems & Global Services Space Systems Total Operating Profit Aeronautics Electronic Systems Information Systems & Global Services Space Systems Total business segments Unallocated Corporate income (expense), net Total 2009...

  • Page 49
    ... the estimated profit rate at completion for a particular contract for products. Performance generally refers to changes in contract profit booking rates. These changes on our contracts for products usually relate to profit recognition associated with revisions to total estimated costs at completion...

  • Page 50
    ...increases in Other Aeronautics Programs and Air Mobility. In Combat Aircraft, operating profit declined $86 million mainly due to lower volume on F-16 programs and lower volume and the decline in 2008 of the amount of favorable inception-to-date performance adjustments on the F-22 program. There was...

  • Page 51
    ...orders on integrated defense technology and tactical systems programs at MS2. Effective January 1, 2010, the ground vehicles line of business from the former Systems Integration - Owego, which includes the Joint Light Tactical Vehicle program, was realigned as part of Lockheed Martin Missiles & Fire...

  • Page 52
    ... third quarter of 2007 for asset impairment on the Delta II medium lift launch vehicles. In Satellites, operating profit declined by $42 million during the year due to lower volume and performance on certain government satellite programs. Total equity earnings recognized by Space Systems represented...

  • Page 53
    ...by GAAP. For example, gains and losses related to the disposition of businesses or investments managed by Corporate, as well as certain other Corporate activities, are not considered by management in evaluating the operating performance of business segments. There were no such items in 2009; however...

  • Page 54
    ... Systems and an increase in inventories on Combat Aircraft programs at Aeronautics, which partially were offset by increases in customer advances and amounts in excess of costs incurred on Government Satellite programs at Space and the timing of accounts payable activities. Operating working capital...

  • Page 55
    ... in operating working capital primarily was due to an increase in inventories on Combat Aircraft programs at Aeronautics and a decrease in customer advances and amounts in excess of costs incurred on various programs in the Missiles & Fire Control line of business at Electronic Systems. Net Cash...

  • Page 56
    ...average invested capital (stockholders' equity plus debt), after adjusting stockholders' equity by adding back amounts related to postretirement benefit plans. We believe that reporting ROIC provides investors with greater visibility into how effectively we use the capital invested in our operations...

  • Page 57
    ...shelf registration in November 2009 for general corporate purposes. We actively seek to finance our business in a manner that preserves financial flexibility while minimizing borrowing costs to the extent practicable. We review changes in financial market, and economic conditions to manage the types...

  • Page 58
    ... mainly include expected payments under deferred compensation plans, non-qualified pension plans, environmental liabilities, and business acquisition agreements. Obligations related to environmental liabilities represent our estimate of obligations for sites at which we are performing remediation...

  • Page 59
    ...their acquisition-date fair values. Acquisition activities in 2009 included the following, among others: • Universal Systems & Technology, Inc., which provides interactive training and simulation, homeland security, and technical solutions to various U.S. and international government agencies; and...

  • Page 60
    ..., Management Systems Designers, Inc., a provider of information technology (IT) and scientific solutions supporting government life science, national security, and other civil agency missions. In each year, the amounts used for acquisitions included certain payments related to businesses acquired...

  • Page 61
    ... assurance that assets are safeguarded and transactions are properly executed and recorded. Our disclosure controls and procedures are also designed to ensure that information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer...

  • Page 62
    ..., the financial condition, results of operations and cash flows of the Corporation. The consolidated financial statements have been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report included herein. The management of Lockheed Martin is also...

  • Page 63
    ... related consolidated statements of earnings, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2009 of Lockheed Martin Corporation and our report dated February 25, 2010 expressed an unqualified opinion thereon. Baltimore, Maryland February 25, 2010...

  • Page 64
    ...the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the...

  • Page 65
    Lockheed Martin Corporation Consolidated Statement of Earnings (In millions, except per share data) Net Sales Products Services Cost of Sales Products Services Unallocated Corporate Costs Year ended December 31, 2009 2008 2007 $ 36,336 $ 34,809 8,853 7,922 45,189 42,731 $ 35,267 6,595 41,862 Other ...

  • Page 66
    ... Current Maturities of Long-term Debt Other Current Liabilities Total Current Liabilities Long-term Debt, Net Accrued Pension Liabilities Other Postretirement Benefit Liabilities Other Liabilities Total Liabilities Stockholders' Equity Common Stock, $1 Par Value Per Share Additional Paid-in Capital...

  • Page 67
    ...benefit plans Changes in operating assets and liabilities: Receivables Inventories Accounts payable Customer advances and amounts in excess of costs incurred Other Net cash provided by operating activities Investing Activities Expenditures for property, plant and equipment Acquisitions of businesses...

  • Page 68
    ...2006 Net earnings Common stock dividends declared ($1.47 per share) Repurchases of common stock Stock-based awards and ESOP activity Adoption of accounting pronouncement related to uncertain income tax positions Other comprehensive income (loss): Postretirement benefit plans: Unrecognized amounts in...

  • Page 69
    ... Consolidated Financial Statements December 31, 2009 Note 1 - Significant Accounting Policies Organization - Lockheed Martin Corporation is a global security company engaged in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and...

  • Page 70
    ... purchased intangibles at December 31, 2009 included $41 million of intangibles with indefinite lives. Capitalized software - We capitalize certain direct costs associated with the development of internal-use software. Expenditures are included in operating activities on our Statement of Cash Flows...

  • Page 71
    ...future pricing of our products and services to agencies of the U.S. Government. Assets recorded at December 31, 2009 and 2008 for deferred costs related to various consolidation and restructuring activities were not material. Impairment of certain long-lived assets - We review the carrying values of...

  • Page 72
    ... of our foreign currency exchange contracts are designated as cash flow hedges. We may also use derivative financial instruments to manage our exposure to changes in interest rates. Our financial instruments that are subject to interest rate risk principally include fixed rate long-term debt. We do...

  • Page 73
    ... and presentation of other-than-temporary impairments; Fair value disclosures related to certain non-financial assets and liabilities; Determining whether instruments granted in share-based payment transactions are participating securities; Revised accounting rules related to business combinations...

  • Page 74
    ... Rabbi Trust and interest income associated with our cash, cash equivalents, and short-term investments. Note 4 - Information on Business Segments We operate in four principal business segments: Aeronautics, Electronic Systems, Information Systems & Global Services, and Space Systems. We organize...

  • Page 75
    ...Electronic Systems - Engaged in managing complex programs and designs, develops, and integrates hardware and software solutions to ensure the mission readiness of armed forces and government agencies worldwide. Global security solutions include advanced sensors, decision systems, and weapons for air...

  • Page 76
    ... Financial Data by Business Segment (In millions) Net sales Aeronautics Electronic Systems Information Systems & Global Services Space Systems Total Operating profit (a) Aeronautics Electronic Systems Information Systems & Global Services Space Systems Total business segments Unallocated Corporate...

  • Page 77
    ...) Assets (c) Aeronautics Electronic Systems Information Systems & Global Services Space Systems Total business segments Corporate activities (d) Total Goodwill Aeronautics Electronic Systems Information Systems & Global Services Space Systems Total Customer advances and amounts in excess of costs...

  • Page 78
    ... Information Systems & Global Services Space Systems Total Foreign governments (a) (b) Aeronautics Electronic Systems Information Systems & Global Services Space Systems Total Commercial and Other (b) Aeronautics Electronic Systems Information Systems & Global Services Space Systems Total 2009...

  • Page 79
    ... related to long-term contracts and programs in progress Less: customer advances and progress payments Other inventories 2009 $ 5,565 (3,941) 1,624 559 $ 2,183 2008 $ 4,631 (3,396) 1,235 667 $ 1,902 Work-in-process inventories at December 31, 2009 and 2008 included general and administrative costs...

  • Page 80
    ...of our federal and foreign deferred income tax assets and liabilities at December 31 were as follows: (In millions) Deferred tax assets related to: Contract accounting methods Accrued compensation and benefits Pensions (a) Other postretirement benefit obligations Foreign company operating losses and...

  • Page 81
    ... tax benefits related to permanent and temporary tax adjustments that, exclusive of interest, totaled $217 million and $250 million at December 31, 2009 and 2008. The change in the liabilities resulted from the following: (In millions) Balance at January 1 Tax positions related to the current year...

  • Page 82
    .... At December 31, 2009, the Salaried Savings Plan held 60.3 million issued and outstanding shares of our common stock, all of which were allocated to participant accounts. Certain plans for hourly employees include an ESOP Fund. In one such plan, the match is made, generally at the election of the...

  • Page 83
    ... of the plan. Benefit Obligations and Funded Status The following provides a reconciliation of benefit obligations, plan assets, and unfunded status related to our qualified defined benefit pension plans and retiree medical and life insurance plans: Defined Benefit Pension Plans 2009 2008 $ 30...

  • Page 84
    ... Accumulated benefit obligation Fair value of plan assets 2009 $32,689 28,920 21,866 2008 $30,292 26,814 18,288 The following provides a reconciliation of benefit obligations and the unfunded status related to our nonqualified defined benefit pension plans. We have set aside certain assets totaling...

  • Page 85
    ...Qualified defined benefit pension plans Service cost Interest cost Expected return on plan assets Recognized net actuarial losses Amortization of prior service cost Total net pension expense Retiree medical and life insurance plans Service cost Interest cost Expected return on plan assets Recognized...

  • Page 86
    ... and Expected Benefit Payments We generally refer to CAS and Internal Revenue Code rules in determining funding requirements for our defined benefit pension plans. In 2009, we made required contributions of $2 million related to our retiree medical and life insurance plans. Also in 2009, we made...

  • Page 87
    .... Plan Assets Investment policies and strategies - Lockheed Martin Investment Management Company (LMIMCo), our whollyowned subsidiary, has the fiduciary responsibility for making investment decisions related to the assets of our defined benefit pension plans and retiree medical and life insurance...

  • Page 88
    ... equity securities included shares of our issued and outstanding common stock purchased by investment managers in the amounts of $7 million (less than 0.03% of plan assets) as of December 31, 2009. As of December 31, 2009, the assets associated with our foreign defined benefit pension plans were...

  • Page 89
    ... excess of purchase price over par value of $1,386 million and $2,106 million recorded as a reduction of retained earnings in 2009 and 2008. Note 12 - Stock-Based Compensation During 2009, 2008, and 2007, we recorded non-cash compensation cost related to stock options and restricted stock totaling...

  • Page 90
    ...their annual compensation in the form of equity-based compensation. Each director may elect to receive his or her equity-based compensation in the form of stock units that track investment returns to changes in value of our common stock with dividends reinvested, options to purchase common stock, or...

  • Page 91
    ... Risk-free interest rate Dividend yield Volatility factors Expected option life RSU and RSA Activity The following table summarizes activity related to nonvested RSUs and RSAs during 2009: Number of RSUs / RSAs (In thousands) 2,464 1,608 (1,004) (99) 2,969 83 Weighted Average Grant-Date Fair Value...

  • Page 92
    ... support services. We cooperated with the investigation. On October 5, 2009, we received notice from the Department of Justice Antitrust Division that the grand jury investigation has been closed without charges being filed. On September 11, 2006, we and Lockheed Martin Investment Management Company...

  • Page 93
    ...Plan and the Hourly Savings Plan (the Plans). Plaintiffs allege that we or LMIMCo caused the Plans to pay expenses that were higher than reasonable by, among other actions, permitting service providers of the Plans to engage in revenue sharing, paying investment management fees for the company stock...

  • Page 94
    ...our history of receiving reimbursement for such costs. Approximately $630 million and $585 million are recorded in other assets on the Balance Sheet, with the remainder recorded in other current assets. We perform quarterly reviews of the status of our environmental sites and the related liabilities...

  • Page 95
    ..., Management Systems Designers, Inc., a provider of information technology and scientific solutions supporting government life science, national security, and other civil agency missions. Purchase accounting adjustments related to business acquisitions completed in 2007 included recording goodwill...

  • Page 96
    .... Under the terms of the joint venture master agreement, Atlas and Delta expendable launch vehicles will continue to be available as alternatives on individual launch missions. We are accounting for our 50% investment in ULA under the equity method of accounting. The net book value of the assets we...

  • Page 97
    ... fair value hierarchy as of December 31, 2009: Balance as of December 31, 2009 $ 89 428 412 80 60 34 21 $1,124 23 $1,101 (In millions) Assets Equity securities (a) Mutual funds (a) U.S. Government securities (b) Corporate debt securities (b) U.S. Government-sponsored enterprise securities (b) Other...

  • Page 98
    ... quarter of 2009 was reported on a Form 8-K during that period. In lieu of filing a separate Form 8-K to report the information described below, we have elected to include the following information in this Form 10-K as permitted by SEC rules. Background. Beginning in 2009, our Board of Directors...

  • Page 99
    ...'s indemnification of any director, officer, or employee of the Corporation who is made a party or is threatened to be made a party to any threatened, pending or completed action, suit, or proceeding, whether civil, criminal, administrative or investigative (each, a "covered person"). The amendments...

  • Page 100
    ..., by contacting Investor Relations, Lockheed Martin Corporation, 6801 Rockledge Drive, Bethesda, Maryland 20817. We are required to disclose any change to, or waiver from, our Code of Ethics and Business Conduct for our Chief Executive Officer and senior financial officers. We use our website to...

  • Page 101
    ... 25, 2010. Indenture, dated May 16, 1996, among Lockheed Martin Corporation, Lockheed Martin Tactical Systems, Inc. and First Trust of Illinois, National Association as Trustee (incorporated by reference to Exhibit 4.A to Lockheed Martin Corporation's Current Report on Form 8-K filed with the SEC on...

  • Page 102
    ... Death Benefit Plan for Elected Officers, as amended June 28, 2007 (incorporated by reference to Exhibit 99.1 to Lockheed Martin Corporation's Current Report on Form 8-K filed with the SEC on July 3, 2007). Deferred Performance Payment Plan of Lockheed Martin Corporation Space & Strategic...

  • Page 103
    ...10-Q for the quarter ended June 29, 2008). Lockheed Martin Corporation 2009 Directors Equity Plan (incorporated by reference to Appendix E to Lockheed Martin Corporation's Definitive Proxy Statement on schedule 14A filed with the SEC on March 14, 2008). Forms of Long-Term Incentive Performance Award...

  • Page 104
    ... Calculation Linkbase Document XBRL Taxonomy Extension Definition Linkbase Document XBRL Taxonomy Extension Label Linkbase Document XBRL Taxonomy Extension Presentation Linkbase Document Exhibits 10.1 through 10.17, 10.20 through 10.23, and 10.25 through 10.35 constitute management contracts...

  • Page 105
    ...(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. LOCKHEED MARTIN CORPORATION MARK R. BOSTIC Acting Vice President and Controller (Chief Accounting Officer) Date: February 25, 2010 97

  • Page 106
    ...and Chief Operating Officer Executive Vice President and Chief Financial Officer Director Date February 25, 2010 February 25, 2010 February 25, 2010 February 25, 2010 *By: (JAMES B. COMEY, Attorney-in-fact**) February 25, 2010 ** By authority of Powers of Attorney filed with this Annual Report on...

  • Page 107
    ... Chief Executive Officer, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Lockheed Martin Corporation; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light...

  • Page 108
    ... Chief Financial Officer, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Lockheed Martin Corporation; Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light...

  • Page 109
    ...with the Annual Report of Lockheed Martin Corporation (the "Corporation") on Form 10-K for the period ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert J. Stevens, Chairman and Chief Executive Officer of the Corporation, certify...

  • Page 110
    ... with the Annual Report of Lockheed Martin Corporation (the "Corporation") on Form 10-K for the period ended December 31, 2009 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bruce L. Tanner, Executive Vice President and Chief Financial Officer of the...

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  • Page 113
    ... plan, provides new investors and current stockholders with a convenient, cost-effective way to purchase Lockheed Martin common stock, increase holdings and manage the investment. For more information about Lockheed Martin Direct Invest, contact our transfer agent, Computershare Trust Company...

  • Page 114
    Lockheed Martin Corporation 6801 Rockledge Drive Bethesda, MD 20817 www.lockheedmartin.com The cover and insert of this report are printed on Rolland Enviro100 Print, which contains 100% post-consumer fibre, is manufactured in Canada using renewable biogas energy and is certified EcoLogo, Processed...