Lockheed Martin 2010 Annual Report Download - page 13

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5
Aeronautics
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.
In 2010, net sales at Aeronautics of $13.2 billion represented 29% of our total net sales. Aeronautics has three principal lines of
business, and the percentage that each contributed to its 2010 net sales was:
Our customers include the military services and various government agencies of the United States and allied countries around
the world. In 2010, U.S. Government customers accounted for 81% of Aeronautics’ net sales, and foreign government customers
accounted for 19%.
Combat Aircraft
Our Combat Aircraft business designs, develops, produces, and provides support for systems, logistics, upgrades, modifications,
maintenance and repair. Our major fighter aircraft programs include:
• The F-35 Lightning II Joint Strike Fighter – international multi-role, stealth fighter;
• The F-22 Raptor – air dominance and multi-mission stealth fighter; and
• The F-16 Fighting Falcon – low-cost, combat-proven, international multi-role fighter.
Sales to the U.S. Government under the F-35 program were 12% of our total net sales in 2010. During 2010, we continued to
work on the System Development and Demonstration (SDD) portion of the F-35 program, which we expect will continue into 2016.
We also are producing aircraft under low-rate initial production contracts.
In 2010, we reached agreement with the DoD on the contract for the fourth production lot of 31 F-35 aircraft, bringing the total
number of aircraft on order to 62. Also, the Israeli Government signed a letter of offer and acceptance with the U.S. Government for
the procurement of F-35 aircraft. Israel is expected to be the first country to receive the F-35 aircraft through the U.S. Government
foreign military sales process. For additional information on the F-35 program, see “Status of the F-35 Program” in Management’s
Discussion and Analysis of Financial Condition and Results of Operations on page 26 of this Form 10-K.
Production of the F-22 is scheduled to be completed in 2012, with on-going modernization and sustainment activities continuing
thereafter. We continue to produce F-16 aircraft for foreign governments under both foreign military and direct commercial sales.
Air Mobility
Our Air Mobility business designs, develops, produces, and provides support for systems, logistics, upgrades, modifications,
maintenance and repair of tactical and strategic airlift aircraft. Our major programs include production, support, and sustainment of the
C-130J Super Hercules, upgrade and support of the legacy C-130 Hercules worldwide fleet, support of the existing C-5A/B/C/M
Galaxy fleet, and modernization of Galaxy aircraft to the C-5M Super Galaxy configuration.
Other Aeronautics Programs (Including Advanced Research and Development)
We are involved in advanced development programs incorporating innovative design and rapid prototype applications. Our
Advanced Development Programs (ADP) organization, which includes the Skunk Works, is focused on future systems, including
unmanned aerial systems and next generation capabilities for long-range strike, intelligence, surveillance, reconnaissance, situational
awareness, and air mobility. We continue to explore technology advancement and insertion in existing aircraft, such as the F-35, F-22,
F-16, and C-130. We also are involved in numerous network enabled activities that allow separate systems to work together to
increase effectiveness, and continue to invest in new technologies to maintain and enhance competitiveness in military aircraft design
and development. In addition, we provide logistics support, sustaining engineering, aviation upgrades, modifications, and
maintenance, repair, and overhaul (MRO) for the P-3 Orion maritime patrol aircraft and the U-2 high-altitude reconnaissance aircraft.
Electronic Systems
Our Electronic Systems segment manages complex programs and designs, develops, produces, and integrates hardware and
software solutions to ensure the mission readiness of armed forces and government agencies worldwide.