Lockheed Martin 2005 Annual Report Download - page 61

   
Lockheed฀Martin฀Corporation
The฀reduction฀in฀income฀tax฀expense฀of฀$144฀million฀in฀
2004฀ from฀ the฀ closure฀ of฀ an฀ IRS฀ examination฀ primarily฀
resulted฀ from฀ the฀ examination฀ of฀ tax฀ periods฀ through฀
December฀31,฀2002.
Current฀income฀taxes฀payable฀of฀$71฀million฀and฀$28฀mil-
lion฀at฀December฀31,฀2005฀and฀2004,฀respectively,฀are฀included฀
in฀other฀current฀liabilities฀in฀the฀consolidated฀balance฀sheet.
The฀ primary฀ components฀ of฀ the฀ Corporation’s฀ federal฀
and฀ foreign฀ deferred฀ income฀ tax฀ assets฀ and฀ liabilities฀ at฀
December฀31฀were฀as฀follows:
(In฀millions)  2004
Deferred฀tax฀assets฀related฀to:
฀ Contract฀accounting฀methods   $฀ 689
฀ Accrued฀compensation฀and฀benefits  460
฀ ฀Accumulated฀postretirement฀฀
฀ benefit฀obligations  454
฀ Pensions฀  197
฀ Other  112
 1,912
Deferred฀tax฀liabilities฀related฀to:
฀ Purchased฀intangibles  264
฀ Property,฀plant฀and฀equipment  229
 493
Net฀deferred฀tax฀assets  $1,419(a)
(a)฀ ฀These฀ amounts฀ included฀ $555฀ million฀ and฀ $437฀ 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฀$599฀million฀in฀2005,฀$363฀million฀in฀2004฀and฀
$170฀million฀in฀2003.฀Included฀in฀these฀amounts฀are฀tax฀pay-
ments฀ and฀ refunds฀ related฀ to฀ the฀ Corporation’s฀ divestiture฀
activities.
The฀ Corporation฀ realized฀ an฀ income฀ tax฀ cash฀ benefit฀ of฀
$69฀million฀in฀2005,฀$34฀million฀in฀2004฀and฀$13฀million฀in฀
2003฀as฀a฀result฀of฀exercises฀of฀employee฀stock฀options.฀This฀
benefit฀is฀recorded฀in฀stockholders’฀equity฀ under฀the฀caption,฀
“Stock-based฀awards฀and฀ESOP฀activity.”

(In฀millions)  2004 2003
Interest฀income  $฀104 $฀ 75
Equity฀in฀net฀earnings฀(losses)฀of฀฀
฀ equity฀investees  67 107
Gains฀related฀to฀Inmarsat฀transactions  — —
Gain฀on฀sale฀of฀interest฀in฀Intelsat  — —
Gain฀on฀sale฀of฀interest฀in฀NeuStar  — —
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 —
Gain฀on฀sale฀of฀commercial฀IT฀business — 15
Other฀activities,฀net (15) (8)
 $฀121 $฀ 43

At฀December฀31,฀2005,฀the฀authorized฀capital฀of฀the฀Corporation฀
was฀composed฀of฀1.5฀billion฀shares฀of฀common฀stock,฀50฀mil-
lion฀shares฀of฀series฀preferred฀stock,฀and฀20฀million฀shares฀of฀
Series฀A฀preferred฀stock.฀Of฀the฀434฀million฀shares฀of฀common฀
stock฀issued฀and฀outstanding,฀approximately฀432฀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฀ benefit฀plans.฀No฀shares฀of฀the฀
series฀preferred฀stock฀were฀issued฀and฀no฀shares฀of฀the฀Series฀
A฀preferred฀stock฀were฀outstanding฀at฀December฀31,฀2005.
In฀ October฀ 2002,฀ the฀ Corporation฀ announced฀ a฀ share฀
repurchase฀ program฀ for฀ the฀ repurchase฀ of฀ up฀ to฀ 23฀ million฀
shares฀of฀its฀common฀stock฀from฀time-to-time.฀Under฀the฀pro-
gram,฀ management฀ 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฀regula-
tion.฀In฀February฀2004฀and฀September฀2005,฀an฀additional฀20฀
million฀shares฀and฀45฀million฀shares,฀respectively,฀were฀autho-
rized฀ for฀ repurchase฀ under฀ the฀ program.฀ The฀ Corporation฀
repurchased฀19.7฀million฀shares฀under฀the฀program฀in฀2005฀for฀
$1.2฀billion,฀14.7฀million฀shares฀in฀2004฀for฀$772฀million฀and฀
10.7฀million฀shares฀in฀2003฀for฀$482฀million.฀From฀the฀incep-
tion฀of฀the฀program฀through฀December฀31,฀2005,฀a฀total฀of฀46฀
million฀ shares฀ have฀ been฀ repurchased฀ under฀ the฀ program฀ for฀
$2.5฀ billion.฀ As฀ of฀December฀ 31,฀ 2005,฀a฀ total฀ of฀42฀million฀
shares฀may฀be฀repurchased฀in฀the฀future฀under฀the฀program.฀