Lockheed Martin 2012 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... Profit Consolidated Operating Profit Net Earnings Diluted Earnings Per Common Share Cash Dividends Per Common Share Average Diluted Common Shares Outstanding Cash, Cash Equivalents and Short-Term Investments Total Assets Total Debt Stockholders' Equity Common Shares Outstanding at Year-End Net Cash...

  • Page 3
    ...3UHVLGHQW$HURQDXWLFV6RQGUD/%DUERXU([HFXWLYH Vice President, Information Systems & Global Solutions (effective April 1); Linda R. Gooden, Executive Vice President, Information Systems & Global Solutions (stepping down April 1 and retiring May 1). 7KLVOHWWHULQFOXGHVUHIHUHQFHVWRVHJPHQW...

  • Page 4
    ... teams with vision, expertise and unwavering commitment to performing with excellence. The success of these transitions is a testament to our robust succession plan and the strong support of our board of directors for our talent development programs. Among our operational highlights for the year...

  • Page 5
    ... and innovate global IT security. In May, ZHZHUHVHOHFWHGE\WKH'HIHQVH'HSDUWPHQW¶V&\EHU Crime Center to provide technical and operational support to their mission of cyber counterintelligence DQGFRXQWHUWHUURULVP,Q2FWREHUWKH'HIHQVH Information Systems Agency selected us to manage the...

  • Page 6
    a wide range of critical cyber missions and strengthen our information technology portfolio. 8QPDQQHG6\VWHPV Building upon our core capabilities in unmanned systems, and addressing growth opportunities in critical technology areas, we DFTXLUHGWKUHH¿UPVZLWKVWUDWHJLFXQPDQQHGV\VWHPV ...

  • Page 7
    ...Perform on the F-35 for the three U.S. services, eight international partners, and two security cooperation partners; ‡Grow our missile defense portfolio through Aegis, 3$&DQG7+$$' ‡Expand our airlift business with the C-130J and C-5M; ‡Expand our combat ships and mission systems business...

  • Page 8
    ... to the Chief Executive Officer Lockheed Martin Corporation EXECUTIVE OFFICERS Dale P. Bennett Executive Vice President Mission Systems and Training Richard H. Edwards Executive Vice President Missiles and Fire Control Linda R. Gooden Executive Vice President Information Systems & Global Solutions...

  • 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, 2012 Commission file number 1-11437 LOCKHEED MARTIN CORPORATION (Exact name of registrant as specified in its charter) Maryland (State or other jurisdiction...

  • Page 10
    ...'s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ...Selected Financial Data ...Management's Discussion and Analysis of Financial Condition and Results of Operations ...Quantitative and Qualitative Disclosures About Market Risk ...Financial Statements and...

  • Page 11
    ... return cash to investors in the form of dividends and share repurchases. We are a Maryland corporation and were formed in 1995 by combining the businesses of Lockheed Corporation and Martin Marietta Corporation. Our principal executive offices are located at 6801 Rockledge Drive, Bethesda, Maryland...

  • Page 12
    ... total consolidated net sales in each of 2011 and 2010. Aeronautics is engaged in the research, design, development, manufacture, integration, sustainment, support, and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies...

  • Page 13
    ... to invest in new technologies to maintain and enhance competitiveness in military aircraft design, development, and production. Information Systems & Global Solutions In 2012, our IS&GS business segment generated net sales of $8.8 billion, which represented 19% of our total consolidated net sales...

  • Page 14
    ... Logistics Support Services program, which provides logistics support services to the special operations forces of the U.S. military. Mission Systems and Training In 2012, our MST business segment generated net sales of $7.6 billion, which represented 16% of our total consolidated net sales. MST...

  • Page 15
    ...: value of our products and services to the customer; technical and management capability; the ability to develop and implement complex, integrated system architectures; financing and total cost of ownership; release of technology; our demonstrated ability to execute and perform against contract...

  • Page 16
    ... certain products, services, and technical data; and ‰ require the review and approval of contractor business systems, defined in the regulations as: (i) Accounting; (ii) Estimating; (iii) Earned Value Management Systems (EVMS, for managing cost and schedule performance on certain complex programs...

  • Page 17
    ... in 2012, $585 million in 2011, and $639 million in 2010. See "Research and development and similar costs" in "Note 1 - Significant Accounting Policies" of our consolidated financial statements. Employees At December 31, 2012, we had about 120,000 employees, approximately 95% of whom were located in...

  • Page 18
    ... sales in future years. For more information regarding the F-35 program, see "Status of F-35 Program" in Management's Discussion and Analysis of Financial Condition and Results of Operations. Based upon our diverse range of defense, homeland security, and information technology products and services...

  • Page 19
    ...over financial reporting. For example, the U.S. Government is currently withholding certain funds on receivables for the F-35 program due to the DCMA's prior withdrawal of its validation and determination of compliance of the Earned Value Management Systems at our Fort Worth, Texas location. In 2012...

  • Page 20
    ... performance, advanced technology solutions, and service at an affordable cost and with the agility that our customers require to satisfy their mission objectives. International sales may pose different risks. In 2012, our sales to international customers accounted for 17% of our total consolidated...

  • Page 21
    ...contracts and programs, our performance, our ability to control costs, and evolving U.S. Government procurement policies. Our profitability and cash flow may vary materially depending on the types of long-term government contracts undertaken, the nature of the products produced or services performed...

  • Page 22
    ... return on our plan assets as well as other actuarial assumptions which may cause our earnings, cash flows, and stockholders' equity to fluctuate significantly from year to year. Many of our employees are covered by defined benefit pension plans, and we provide certain health care and life insurance...

  • Page 23
    ...position, cash flow and stockholders' equity, see "Critical Accounting Policies - Postretirement Benefit Plans" in Management's Discussion and Analysis of Financial Conditions and Results of Operations and "Note 9 - Postretirement Plans" of our consolidated financial statements. If we fail to manage...

  • Page 24
    ... our consolidated financial statements. In order to be successful, we must attract and retain key employees and manage leadership transitions effectively. Our business has a continuing need to attract large numbers of skilled personnel, including personnel holding security clearances, to support the...

  • Page 25
    ... of our businesses. At December 31, 2012, our business segments occupied facilities at the following major locations: ‰ Aeronautics - Palmdale, California; Marietta, Georgia; Greenville, South Carolina; and Fort Worth and San Antonio, Texas. ‰ Information Systems & Global Solutions - Goodyear...

  • Page 26
    ..." of our consolidated financial statements. From time-to-time, agencies of the U.S. Government investigate whether our operations are being conducted in accordance with applicable regulatory requirements. U.S. Government investigations of us, whether relating to government contracts or conducted for...

  • Page 27
    ... - Electronic Systems from January 2010 to December 2012; President, Systems Integration - Owego from September 2008 to December 2009; Executive Vice President - Global Sustainment for Aeronautics from February 2007 to August 2008; President, Lockheed Martin Logistics Services Company from January...

  • Page 28
    ... OF EQUITY SECURITIES At January 31, 2013, we had 34,400 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...

  • Page 29
    ...We repurchased a total of 3.1 million shares of our common stock for $286 million during the quarter ended December 31, 2012 under a share repurchase program that we announced in October 2010. Our Board of Directors has approved a share repurchase program for the repurchase of our common stock from...

  • Page 30
    ... (c) CASH DIVIDENDS PER COMMON SHARE BALANCE SHEET Cash, cash equivalents and short-term investments (d) Total current assets Goodwill Total assets (e) Total current liabilities Long-term debt, net (d) Total liabilities (e) Stockholders' equity (e) COMMON SHARES AT YEAR-END CASH FLOW DATA Net cash...

  • Page 31
    ...a global security and aerospace company 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, scientific, logistic, and information services...

  • Page 32
    ... related to sequestration we may experience delays in the receipt of orders for our products and services due to lack of funding, and those delays may affect our results of operations and cash flows. While the specific effects of sequestration still cannot be determined, automatic across-the-board...

  • Page 33
    ... information technology and services expertise, has enabled us to provide products and services to a number of government agencies, including the Departments of Homeland Security, Justice, Commerce, Health and Human Services, Transportation, and Energy, the U.S. Postal Service, the Social Security...

  • Page 34
    ...continued demand by federal and civil government agencies for upgrading and investing in new information technology systems and solutions in order to reduce costs of operations, but at a slower pace in the near term. In addition, we believe there are opportunities in the health care and energy space...

  • Page 35
    ...IS&GS business segment. Sim Industries designs, develops, and manufactures full-motion and fixed-based civil aviation flight simulators for a wide range of airline customers and independent pilot training centers worldwide and has been included in our MST business segment. These companies complement...

  • Page 36
    ...) in 2010. For additional information, see "Note 14 - Acquisitions and Divestitures" of our consolidated financial statements. Consolidated Results of Operations Since our operating cycle is long-term and involves many types of contracts for the design, development, and manufacturing of products and...

  • Page 37
    ...in 2012 compared to 2011 due to production volume and deliveries, as well as higher risk retirements on certain programs. Product sales increased about $555 million at Aeronautics (e.g., F-35 LRIP contracts, F-16 deliveries); about $510 million at MST (e.g., ship and aviation system programs); about...

  • Page 38
    ... risk retirements and lower reserves on ship and aviation system programs at MST. The increase of $429 million, or 1%, in cost of product sales during 2011 compared to 2010 was attributable to higher cost of product sales at our Aeronautics and MFC business segments, partially offset by lower cost...

  • Page 39
    ...included increased FAS pension expense in 2011 compared to 2010 due primarily to the decrease in the discount rate in 2011. For more information, see the related discussion in "Critical Accounting Policies - Postretirement Benefit Plans." Other Income, Net Other income, net for 2012 was $238 million...

  • Page 40
    ... expense for stock-based compensation programs; the effects of items not considered part of management's evaluation of segment operating performance, such as charges related to significant severance actions in 2012 and 2011 and the charges in 2010 related to the VESP and the facilities consolidation...

  • Page 41
    ... years presented. Summary operating results for each of our business segments were as follows (in millions): 2012 Net sales Aeronautics Information Systems & Global Solutions Missiles and Fire Control Mission Systems and Training Space Systems Total net sales Operating profit Aeronautics Information...

  • Page 42
    ..., asset impairments and insurance recoveries, among others. Segment operating profit and items such as risk retirements, reductions of profit booking rates, or other matters are presented net of state income taxes. Our consolidated net adjustments not related to volume, including net profit rate...

  • Page 43
    ...lower operating profit of about $90 million from the F-35 development contract primarily due to the inceptionto-date effect of reducing the profit booking rate in the second quarter of 2012; approximately $50 million from decreased production volume and risk retirements on the F-22 program partially...

  • Page 44
    ... range from 2012 levels due to the expected decline in net sales as well as changes in aircraft mix, resulting in a slight decline in operating margins between the years. Information Systems & Global Solutions Our IS&GS business segment provides management services, integrated information technology...

  • Page 45
    ... 14,400 2010 $ 6,930 973 14.0% 12,800 Net sales Operating profit Operating margins Backlog at year-end 2012 compared to 2011 MFC's net sales for 2012 were comparable to 2011. Net sales decreased approximately $130 million due to lower volume and risk retirements on various services programs, and...

  • Page 46
    ... profit Operating margins Backlog at year-end 2012 compared to 2011 MST's net sales for 2012 increased $447 million, or 6%, compared to 2011. The increase in net sales for 2012 was attributable to higher volume and risk retirements of approximately $395 million from ship and aviation system programs...

  • Page 47
    ...ship and aviation system programs (primarily Maritime Patrol Aircraft and PTDS) and approximately $75 million for training and logistics solutions programs. Partially offsetting these decreases was higher sales of about $165 million from production on the LCS program. MST's operating profit for 2011...

  • Page 48
    ... of businesses, and managed our debt levels. We have generated strong operating cash flows, which have been the primary source of funding for our operations, debt service and repayments, capital expenditures, share repurchases, dividends, acquisitions, and postretirement benefit plan funding. We...

  • Page 49
    ... production of the F-35 combat aircraft. In addition, we have projects underway to modernize certain of our facilities, inclusive of our efforts to consolidate and reduce leased facilities. We also incur capital expenditures for information technology to support programs and general enterprise...

  • Page 50
    ... sale of EIG (Note 14). During 2011, we decreased our short-term investments by $510 million compared to an increase of $171 million in 2010. Financing Activities Dividends and share activity - We paid dividends totaling $1.4 billion ($4.15 per share) in 2012, $1.1 billion ($3.25 per share) in 2011...

  • Page 51
    ... covenants. The debt-related financial covenants in our revolving credit facility exclude the effect of adjustments to stockholders' equity resulting from re-measuring the funded status of postretirement plans. In addition, as a Maryland corporation, so long as we are able to pay our indebtedness as...

  • Page 52
    ... table for capital expenditures generally include amounts for facilities and equipment related to customer contracts. We also may enter into industrial cooperation agreements, sometimes referred to as offset agreements, as a condition to obtaining orders for our products and services from certain...

  • Page 53
    ... contract value to the deliverables based on their relative estimated selling prices. The contracts or contract modifications we evaluate for multiple elements typically are long term in nature and include the provision of both products and services. Based on the nature of our business, we generally...

  • Page 54
    ... the contract. For contracts to provide services to the U.S. Government, sales are generally recorded using the cost-to-cost method. Award and incentive fees, as well as penalties related to contract performance, are considered in estimating sales and profit rates on contracts accounted for...

  • Page 55
    ..., asset impairments and insurance recoveries, among others. Segment operating profit and items such as risk retirements, reductions of profit booking rates, or other matters are presented net of state income taxes. Services Method of Accounting Under a fixed-price service contract, we are paid...

  • Page 56
    ... discount rate, the expected long-term rate of return on plan assets, and employee turnover and mortality for all postretirement benefit plans; funding levels; the expected rates of increase in future compensation levels for the participants in our defined benefit pension plans; and the health care...

  • Page 57
    ... assumption is based on several factors including historical market index returns, the anticipated long-term allocation of plan assets, the historical return data for the trust funds, plan expenses, and the potential to outperform market index returns. The actual return in any specific year likely...

  • Page 58
    ... expenditures relating to our U.S. Government business, after deducting any recoveries received from insurance or other PRPs, are allowable in establishing prices of our products and services. As a result, most of the expenditures we incur are included in our net sales and cost of sales according...

  • Page 59
    ...cash flows employed in the DCF analyses are based on our best estimate of future sales and operating costs, based primarily on existing firm orders, expected future orders, contracts with suppliers, labor agreements, and general market conditions; changes in working capital; long-term business plans...

  • Page 60
    ...but our income tax expense and payments would be materially reduced in subsequent years. Our net deferred tax assets as of December 31, 2012 and 2011 were $6.1 billion and $5.7 billion, based on a 35% Federal statutory income tax rate, and primarily relate to our postretirement benefit plans. If the...

  • Page 61
    ... fair value on our Balance Sheet in other noncurrent assets. The trust holds investments in marketable equity securities and fixed-income securities that are exposed to price changes and changes in interest rates. A portion of the liabilities associated with the deferred compensation plans supported...

  • Page 62
    ... Public Accounting Firm, on the Audited Consolidated Financial Statements Board of Directors and Stockholders Lockheed Martin Corporation We have audited the accompanying consolidated balance sheets of Lockheed Martin Corporation as of December 31, 2012 and 2011, and the related consolidated...

  • Page 63
    Lockheed Martin Corporation Consolidated Statements of Earnings (in millions, except per share data) Years Ended December 31, 2012 Net sales Products Services Total net sales Cost of sales Products Services Severance and other charges Other unallocated costs Total cost of sales Gross profit Other ...

  • Page 64
    Lockheed Martin Corporation Consolidated Statements of Comprehensive Income (in millions) Years Ended December 31, Net earnings Other comprehensive (loss) income, net of tax Postretirement benefit plans: Unrecognized amounts in 2012, 2011, and 2010, net of tax benefit of $1.8 billion, $1.6 billion, ...

  • Page 65
    Lockheed Martin Corporation Consolidated Balance Sheets (in millions, except par value) December 31, 2012 Assets Current assets Cash and cash equivalents Receivables, net Inventories, net Deferred income taxes Other current assets Total current assets Property, plant, and equipment, net Goodwill ...

  • Page 66
    Lockheed Martin Corporation Consolidated Statements of Cash Flows (in millions) Years Ended December 31, 2012 2011 2010 Operating activities Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Stock-based compensation ...

  • Page 67
    ... Balance at December 31, 2011 Net earnings Other comprehensive loss, net of tax Repurchases of common stock Dividends declared ($4.15 per share) Stock-based awards and ESOP activity Balance at December 31, 2012 The accompanying notes are an integral part of these consolidated financial statements...

  • Page 68
    Lockheed Martin Corporation Notes to Consolidated Financial Statements Note 1 - Significant Accounting Policies Organization - We are a global security and aerospace company principally engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology ...

  • Page 69
    ... discount rate, the expected long-term rate of return on plan assets, the rates of increase in future compensation levels, health care cost trend rates, and employee turnover and mortality, each as appropriate based on the nature of the plans. We recognize on a plan-by-plan basis the funded status...

  • Page 70
    ..., asset impairments and insurance recoveries, among others. Segment operating profit and items such as risk retirements, reductions of profit booking rates, or other matters are presented net of state income taxes. Our consolidated net adjustments not related to volume, including net profit rate...

  • Page 71
    ...31, 2012 and 2011, the fair value of our trading securities totaled $874 million and $781 million and was included in other noncurrent assets on the Balance Sheets. Our trading securities are held in a separate trust, which includes investments to fund our deferred compensation plan liabilities. Net...

  • Page 72
    ... on our tax returns in future years. See Note 7 and Note 9 for more information on our income taxes and postretirement plans. Recent accounting pronouncements - Effective January 1, 2012, we retrospectively adopted new guidance issued by the Financial Accounting Standards Board by presenting total...

  • Page 73
    ... in the research, design, development, manufacture, integration, sustainment, support, and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies. ‰ Information Systems & Global Solutions - Provides management services...

  • Page 74
    .../CAS pension adjustment described below; expense for stock-based compensation programs; the effects of items not considered part of management's evaluation of segment operating performance, such as charges related to significant severance actions in 2012 and 2011 and the charges in 2010 related to...

  • Page 75
    ... net sales Operating profit Aeronautics Information Systems & Global Solutions Missiles and Fire Control Mission Systems and Training Space Systems Total business segment operating profit Unallocated expenses, net Severance and other charges (a) Other unallocated expenses, net (b) Total consolidated...

  • Page 76
    ... Data by Business Segment (continued) Net Sales by Customer Category Net sales by customer category were as follows (in millions): 2012 U.S. Government Aeronautics Information Systems & Global Solutions Missiles and Fire Control Mission Systems and Training Space Systems Total U.S. Government net...

  • Page 77
    ... advances and amounts in excess of costs incurred for each of our business segments were as follows (in millions): 2012 Assets Aeronautics Information Systems & Global Solutions Missiles and Fire Control Mission Systems and Training Space Systems Total business segment assets Corporate assets...

  • Page 78
    ...our operating profit and of other matters presented in these financial statements is disclosed net of state income taxes. Our total net state income tax expense was $183 million for 2012, $149 million for 2011, and $168 million for 2010 (including state income taxes related to the sale of Enterprise...

  • Page 79
    ... and development tax credit IRS appeals and audit resolution Medicare Part D law change Other, net Income tax expense Our U.S. manufacturing activity benefit is based on income derived from qualified production activity (QPA) in the U.S. The deduction rate, which was 9% for 2012, 2011, and 2010, is...

  • Page 80
    ... compensation and benefits Pensions Other postretirement benefit obligations Contract accounting methods Sale of discontinued operations Foreign company operating losses and credits Other Valuation allowance (a) Deferred tax assets, net Deferred tax liabilities related to: Goodwill and purchased...

  • Page 81
    ... discounts Less: current maturities of long-term debt Total long-term debt, net In December 2012, we issued notes totaling $1.3 billion with a fixed interest rate of 4.07% maturing in December 2042 (the New Notes) in exchange for outstanding notes totaling $1.2 billion with interest rates ranging...

  • Page 82
    ...' equity. The funded status is measured as the difference between the fair value of the plan's assets and the benefit obligation of the plan. The net periodic benefit cost recognized each year included the following (in millions): Qualified Defined Benefit Pension Plans (a) 2012 2011 2010...

  • Page 83
    ..., plan assets, and unfunded status related to our qualified defined benefit pension plans and our retiree medical and life insurance plans (in millions): Qualified Defined Benefit Pension Plans 2012 2011 Change in benefit obligation Beginning balance Service cost Interest cost Benefits paid...

  • Page 84
    ... plans, net of tax, for the years ended December 31, 2012, 2011, and 2010 (in millions): Incurred but Not Yet Recognized in Net Periodic Benefit Cost 2012 2011 2010 Gains (losses) Actuarial gains and losses Qualified defined benefit pension plans Retiree medical and life insurance plans Other plans...

  • Page 85
    ... and Life Insurance Plans 2012 2011 2010 3.75% 4.50% 5.50% 8.00% 8.00% 8.50% 9.00% 5.00% 2029 9.50% 5.00% 2021 10.00% 5.50% 2021 Discount rate Expected long-term rate of return on assets Rate of increase in future compensation levels Health care trend rate assumed for next year Ultimate health care...

  • Page 86
    ... included on our Balance Sheets. The following table presents the fair value of the assets (in millions) of our qualified defined benefit pension plans and retiree medical and life insurance plans by asset category and their level within the fair value hierarchy, which has three levels based on the...

  • Page 87
    ...public investment vehicles valued using the Net Asset Value (NAV) provided by the fund manager. The NAV is the total value of the fund divided by the number of shares outstanding. Commingled equity funds are categorized as Level 1 if traded at their NAV on a nationally recognized securities exchange...

  • Page 88
    ... share repurchase program, additional paid-in capital was reduced to zero, with the remainder of the excess of purchase price over par value of $108 million and $1.8 billion recorded as a reduction of retained earnings in 2012 and 2011. Note 11 - Stock-Based Compensation During 2012, 2011, and 2010...

  • Page 89
    ...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 90
    ...-Scholes option pricing model to determine the fair values of stock-based compensation awards during 2012, 2011, and 2010: 2012 0.78% 5.40% 0.283 5 years 2011 1.97% 4.20% 0.277 5 years 2010 2.49% 3.40% 0.272 5 years Risk-free interest rate Dividend yield Volatility factors Expected option life RSUs...

  • Page 91
    ... effect on the Corporation's financial statements the previously disclosed class action lawsuit filed by the City of Pontiac General Employees' Retirement System against the Corporation and three of our executives. On April 24, 2009, we filed a declaratory judgment action against the New York...

  • Page 92
    ... and facilities under operating leases. Certain major plant facilities and equipment are furnished by the U.S. Government under short-term or cancelable arrangements. Our total rental expense under operating leases was $302 million, $347 million, and $399 million for 2012, 2011, and 2010. Future...

  • Page 93
    ... the business segments also reflect changes in program lifecycles, where several of our major programs are either transitioning out of development and into production or are ending. Upon separation, terminated employees received lump-sum severance payments based on years of service. During 2011, we...

  • Page 94
    .... We sold EIG for $815 million and recognized a gain, net of tax, of $184 million ($.50 per share) in 2010, which is included in discontinued operations. We received net proceeds of $798 million related to the sale, which are included in investing activities on our 2010 Statement of Cash Flows. We...

  • Page 95
    ... rate swap contracts, primarily are determined based on the present value of future cash flows using model-derived valuations that use observable inputs such as interest rates, credit spreads, and foreign currency exchange rates. We did not have any transfers of assets or liabilities between levels...

  • Page 96
    ... and procedures as of December 31, 2012. The evaluation was performed with the participation of senior management of each business segment and key Corporate functions, under the supervision of the Chief Executive Officer (CEO) and Chief Financial Officer (CFO). Based on this evaluation, the CEO and...

  • Page 97
    ... the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Lockheed Martin Corporation as of December 31, 2012 and 2011, and the related consolidated statements of earnings, comprehensive income, stockholders' equity, and cash flows for each of the three years...

  • Page 98
    ... Over Financial Reporting There were no changes in our internal control over financial reporting during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. None. OTHER INFORMATION...

  • Page 99
    ... without charge, 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...

  • Page 100
    ... 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, 2012. Number of securities to Weighted average exercise be issued upon exercise price of outstanding of outstanding options...

  • Page 101
    ...Cash Flows - Years ended December 31, 2012, 2011, and 2010 ...Consolidated Statements of Stockholders' Equity - Years ended December 31, 2012, 2011, and 2010 ...Notes to Consolidated Financial Statements ... 55 56 57 58 59 60 The report of Lockheed Martin Corporation's independent registered public...

  • Page 102
    ... 10.8 to Lockheed Martin Corporation's Annual Report on Form 10-K for the year ended December 31, 2010). Lockheed Martin Corporation Supplemental Savings Plan, as amended. Amendment to Terms of Outstanding Stock Option Relating to Exercise Period for Employees of Divested Business (incorporated by...

  • Page 103
    ... the year ended December 31, 2009). Lockheed Martin Corporation Special Termination Plan for Certain Management Employees (incorporated by reference to Exhibit 10 to Lockheed Martin Corporation's Quarterly Report on Form 10-Q for the quarter ended June 27, 2010). Form of Stock Option Award Agreement...

  • Page 104
    ... 2011 Incentive Performance Award Plan, as amended (incorporated by reference to Exhibit 10.1 to Lockheed Martin Corporation's Current Report on Form 8-K filed with the SEC on January 28, 2013). Forms of Long-Term Incentive Performance Award Agreements (2012-2014 performance period), Forms of Stock...

  • Page 105
    ...signed on its behalf by the undersigned, thereunto duly authorized. LOCKHEED MARTIN CORPORATION Date: February 28, 2013 Christopher J. Gregoire Vice President and Controller (Chief Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed...

  • Page 106
    ... with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the...

  • Page 107
    ... with respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the...

  • Page 108
    ... In connection with the Annual Report of Lockheed Martin Corporation (the Corporation) on Form 10-K for the period ended December 31, 2012 as filed with the U.S. Securities and Exchange Commission on the date hereof (the "Report"), I, Marillyn A. Hewson, Chief Executive Officer and President of the...

  • Page 109
    .../investor DIVIDEND REINVESTMENT PLAN Lockheed Martin Direct Invest, our direct stock purchase and dividend reinvestment 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...

  • Page 110
    ...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 Chlorine Free...