Lockheed Martin 2007 Annual Report Download - page 87

U.S. income taxes and foreign withholding taxes have not been provided on earnings of $136 million that have not been
distributed by our non-U.S. companies at December 31, 2007. Our intention is to permanently reinvest these earnings,
thereby indefinitely postponing their remittance. If these earnings were remitted, we estimate that the additional income taxes
after foreign tax credits would be about $11 million.
Our federal and foreign income tax payments, net of refunds received, were $1,131 million in 2007, $859 million in
2006, and $599 million in 2005. Included in these amounts are tax payments and refunds related to our divestiture activities.
Note 9 – Other Income (Expense), Net
(In millions) 2007 2006 2005
Included in Operating profit
Equity in net earnings (losses) of equity investees $203 $130 $108
Gain on sale of Comsat International 25 ——
Gain on sales of land 25 51 —
Earnings from reversal of legal reserves due to settlement 21 ——
Gains on sales of various investment interests —127 203
Earnings from expiration of AES transaction indemnification —29 —
Gain on sale of Space Imaging’s assets —23 —
Other activities, net 19 (24) 5
$293 $336 $316
Included in Non-operating income (expense), net
Interest income $193 $199 $143
Debt-related expenses and charges —(16) (10)
$193 $183 $133
See Notes 2 and 7 for a discussion of certain of the transactions included in the table above.
Note 10 – Stockholders’ Equity
At December 31, 2007, our authorized capital was composed of 1.5 billion shares of Common stock and 50 million
shares of series preferred stock. Of the 412 million shares of Common stock issued and outstanding, 409 million shares were
considered outstanding for Balance Sheet presentation purposes; the remaining shares were held in trusts we established to
pay future benefits to eligible retirees and dependents under certain benefit plans. No preferred stock shares were issued and
outstanding at December 31, 2007.
In October 2002, we announced a share repurchase program for the repurchase of our common stock from time-to-time.
Under the program, we have 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. As of December 31, 2007, our Board of Directors has
authorized a total of 128 million shares for repurchase under the program, including 20 million additional shares that were
authorized in September 2007. As of December 31, 2007, we had repurchased a total of 95.3 million shares under the
program, and there remained approximately 32.7 million shares that may be repurchased in the future.
During the years ended December 31, 2007, 2006 and 2005, we repurchased common shares under the program as
follows:
• In 2007, we repurchased 21.6 million common shares for $2,127 million in transactions that were executed and
settled during the year;
• In 2006, we repurchased 27.6 million common shares for $2,104 million in transactions that were executed and
settled during the year, and paid $11 million for the settlement of 0.2 million shares purchased in 2005; and
• In 2005, we repurchased 19.5 million common shares for $1,211 million in transactions that were executed and
settled during the year, and paid $99 million for the settlement of 1.8 million common shares purchased in 2004.
As we repurchase our common shares, we reduce common stock for the $1 of par value of the shares repurchased, with
the remainder of the purchase price over par value recorded as a reduction of Additional paid-in capital. Due to the volume of
repurchases made under our share repurchase program, Additional paid-in capital was reduced to zero in 2007, with the
remainder of the excess of purchase price over par value of $471 million recorded as a reduction of Retained earnings at
December 31, 2007.
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