Lockheed Martin 2011 Annual Report Download - page 4

II
Lockheed Martin Corporation
As refl ected in this report, fi nancial results were
consistently strong in 2011 with sales of $46.5
billion, representing a two percent increase over
2010. We grew our diluted earnings per share
from continuing operations to $7.85, and we
grew our backlog to a record $80.7 billion at the
end of 2011.
Balanced cash deployment is a key element of
our strategy. In 2011, we generated $4.3 billion
in cash from operations after making $2.3
billion in contributions to our pension plans.
We deployed cash to generate shareholder
value through cash dividends of $1.1 billion
and share repurchases of $2.4 billion. Our total
shareholder return for the year was 21 percent,
outperforming all major indices.
Our record of strong cash generation has
allowed us to pursue selected acquisitions that
add greater depth to our portfolio. In 2011, we
completed our acquisition of QTC Holdings,
Inc., the largest provider of outsourced medical
evaluation services to the U.S. Government and
Department of Veterans Affairs. Our distinction
as the number one supplier of IT services to the
federal government, coupled with QTC’s case
management services and health care expertise,
now position us to help improve health care for
veterans, reservists, active duty, and civilian
government personnel. We also acquired
Netherlands-based Sim-Industries, B.V., which
develops and manufactures fl ight simulators
for a wide range of airline customers. These
acquisitions demonstrate our commitment to
expand into closely related markets that build on
our core capabilities and grow our customer base.
Structuring and Managing the
Enterprise for Effi ciency
Because we operate in a dynamic environment,
we continuously evolve our organizational
structure to respond with even greater agility
and precision to changing business conditions
and customer priorities. To that end, in
September 2011 we created the Executive
Offi ce of the Chairman to include the Chief
Executive Offi cer and Chief Operating Offi cer.
Through this structure, we stay closely aligned
on all operational and functional matters as they
arise, and we act interchangeably and decisively
to ensure we meet our customers’ expectations,
and that we focus on excellent performance and
profi table growth. We are confi dent this new
structure better aligns business strategy with
program execution and affordability.
Additionally, we announced this year the
appointment of Larry A. Lawson as executive
vice president for Aeronautics, effective
April 1. Larry, who currently serves as vice
president and general manager of the F-35
program, brings a keen understanding of the
entire Aeronautics portfolio. He succeeds
Ralph D. Heath, whose leadership of our
Aeronautics business has been defi ned by
innovation, attention to performance, and a
dedication to the highest standards of ethics and
accountability.
Operational Excellence Drives
Financial Results
We realize that affordability – creating greater
effi ciencies and lowering costs in everything
we do – is a permanent feature of our corporate
culture. We monitor all aspects of our operations
to ensure we are always aligned with business
needs and positioned to offer value to our
customers. We also work closely with our
29,000 active suppliers to drive affordability
into every program.
We also recognize that the greatest contributor
to the vitality of this company is solid execution
on our customers’ programs. We have made
considerable progress on the development and
production phases of the F-35 as evidenced by
Secretary of Defense Leon Panetta’s lifting of the
probation on the F-35B Short-Takeoff/Vertical