Lockheed Martin 2007 Annual Report Download - page 90

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RSU and RSA Activity
The following table summarizes activity related to nonvested RSUs and RSAs during the year ended December 31,
2007:
Number of
RSUs / RSAs
(In thousands)
Weighted Average
Grant-Date Fair
Value Per Share
Nonvested at December 31, 2006 1,787 $62.27
Granted 923 96.13
Vested (336) 56.25
Terminated (94) 70.33
Nonvested at December 31, 2007 2,280 76.60
Summary of 2007 Activity
As of December 31, 2007, we had $136 million of unrecognized compensation cost related to nonvested stock options,
RSUs and RSAs. We expect that cost to be recognized over a weighted-average period of 1.6 years. We received cash from
the exercise of stock options totaling $350 million, $627 million and $406 million for the years ended December 31, 2007,
2006 and 2005. In addition, we realized tax benefits of $133 million and $137 million from stock-based compensation
activities during 2007 and 2006. Consistent with FAS 123(R), we classified $124 million and $129 million of those benefits
as a financing cash inflow with a corresponding operating cash outflow in the Statement of Cash Flows. The remainder is
classified as cash from operations. We realized $69 million of tax benefits from stock-based compensation during the year
ended December 31, 2005 and included those tax benefits in cash from operations in their entirety.
2005 Reported and Pro Forma Results
Reported and pro forma earnings per share information for the year ended December 31, 2005 are as follows. The
disclosures for 2005 include $33 million ($0.08 per share) as an inception-to-date adjustment of fair value-based, pro forma
compensation expense related to retirement eligible employees with outstanding and unvested stock option awards. This
adjustment reflects the service period as one year rather than the original vesting period, since our stock option award
agreements allow employees to retain all stock option awards held through the initial one-year vesting date prior to
retirement and to continue vesting in the award as if their employment had continued.
The weighted average common shares outstanding for both the basic and fully diluted calculations are the same as those
used to compute earnings per share (see Note 3).
(In millions, except per share data) 2005
Net earnings
As reported $1,825
Fair value-based compensation cost, net of taxes
Fair value-based, pro forma compensation expense (56)
Inception-to-date adjustment (33)
Pro forma net earnings $1,736
Earnings per basic share
As reported $ 4.15
Fair value-based, pro forma compensation expense (0.12)
Inception-to-date adjustment (0.08)
Pro forma $ 3.95
Earnings per diluted share
As reported $ 4.10
Fair value-based, pro forma compensation expense (0.12)
Inception-to-date adjustment (0.08)
Pro forma $ 3.90
82