Lockheed Martin 2010 Annual Report Download - page 70

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62
Note 7 – Inventories
Inventories consisted of the following components:
(In millions)
2010
2009
Work-in-process, primarily related to long-term contracts and programs in progress
$ 6,523
$ 5,565
Less: customer advances and progress payments
(4,788)
(3,941)
1,735
1,624
Other inventories
643
559
$ 2,378
$ 2,183
Work-in-process inventories at December 31, 2010 and 2009 included general and administrative costs of $522 million and
$550 million. During 2010, 2009, and 2008, general and administrative costs incurred and recorded in inventories totaled $2,325
million, $2,352 million, and $2,324 million, and general and administrative costs charged to cost of sales from inventories totaled
$2,352 million, $2,108 million, and $2,213 million.
Note 8 – Property, Plant, and Equipment
Property, plant, and equipment consisted of the following components:
(In millions)
2010
2009
Land
$ 111
$ 112
Buildings
5,264
5,010
Machinery and equipment
6,583
6,283
11,958
11,405
Less: accumulated depreciation and amortization
(7,404)
(6,885)
$ 4,554
$ 4,520
Note 9 – Income Taxes
Our provision for federal and foreign income tax expense for continuing operations consisted of the following components:
(In millions)
2010
2009
2008
Federal income taxes:
Current
$ 589
$ 667
$ 1,378
Deferred
589
583
55
Total federal income taxes
1,178
1,250
1,433
Foreign income taxes:
Current
8
(4)
26
Deferred
(5)
(15)
—
Total foreign income taxes
3
(19)
26
Income tax expense
$ 1,181
$ 1,231
$ 1,459
State income taxes are included in our operations as general and administrative costs and, under U.S. Government regulations,
are allowable in establishing prices for the products and services we sell to the U.S. Government. Therefore, a substantial portion of
state income taxes is included in our net sales and cost of sales. As a result, the impact of certain transactions on our operating profit
and other matters disclosed in these financial statements is disclosed net of state income taxes. Our total net state income tax expense
was $168 million for 2010 (including state income taxes related to the sale of EIG), $144 million for 2009, and $221 million for 2008.