Lockheed Martin 2004 Annual Report Download - page 58

Lockheed Martin Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004
56
The primary components of the Corporation’s federal
deferred income tax assets and liabilities at December 31 were
as follows:
(In millions) 2004 2003
Deferred tax assets related to:
Contract accounting methods $ 689 $ 561
Accrued compensation and benefits 460 476
Accumulated post-retirement
benefit obligations 454 526
Pensions(a) 197 —
Basis differences of impaired investments 61 150
Other 51 39
1,912 1,752
Deferred tax liabilities related to:
Purchased intangibles 264 268
Property, plant and equipment 229 225
Pensions(a) —96
493 589
Net deferred tax assets $1,419(b) $1,163(b)
(a) The change in deferred tax balances related to pensions was due to the
recording of an adjustment to increase the minimum pension liability in
2004 and the excess of FAS 87 expense over tax deductible payments.
(b) These amounts included $437 million and $242 million, respectively, of net
noncurrent deferred tax assets which are in other assets in the consolidated
balance sheet.
Federal and foreign income tax payments, net of refunds
received, were $363 million in 2004, $170 million in 2003 and
$55 million in 2002. Included in these amounts are tax payments
and refunds related to the Corporation’s divestiture activities.
The Corporation realized an income tax cash benefit of
$34 million in 2004, $13 million in 2003 and $140 million in
2002 as a result of exercises of employee stock options. This
benefit is recorded in stockholders’ equity under the caption,
“Stock awards and options, and ESOP activity.”
NOTE 10 — OTHER INCOME AND EXPENSES, NET
(In millions) 2004 2003 2002
Interest income $ 104 $75 $47
Equity in net earnings (losses)
of equity investees 67 107 93
Charge for early repayment of debt (154) (146) —
Gain on sale of interest in New Skies 91 ——
Gain on sale of COMSAT General
business 28 ——
Space Imaging impairment and
related guarantee —19 (163)
Gain on sale of commercial IT business —15 —
Write-down of telecommunications
investments —— (776)
Other activities, net (15) (27) 8
$ 121 $ 43 $(791)
NOTE 11 — STOCKHOLDERS’ EQUITY AND
RELATED ITEMS
Capital stock — At December 31, 2004, the authorized capital
of the Corporation was composed of 1.5 billion shares of com-
mon stock, 50 million shares of series preferred stock, and 20
million shares of Series A preferred stock. Of the approximately
440 million shares of common stock issued and outstanding,
approximately 438 million shares were considered outstanding
for balance sheet presentation purposes; the remaining shares
were held by the Corporation in trusts established to pay future
benefits to eligible retirees and dependents under certain bene-
fit plans. No shares of the series preferred stock were issued
and no shares of the Series A preferred stock were outstanding
at December 31, 2004.
In October 2002, the Corporation announced a share repur-
chase program for the repurchase of up to 23 million shares of its
common stock from time-to-time. Under the program, manage-
ment has discretion to determine the number and price of the
shares to be repurchased, and the timing of any repurchases in
compliance with applicable law and regulation. In February 2004,
an additional 20 million shares were authorized for repurchase
under the program. The Corporation repurchased approximately
14.7 million shares under the program in 2004 for $772 million,
10.7 million shares in 2003 for $482 million, and 1.0 million