Lockheed Martin 2011 Annual Report Download - page 90

Download and view the complete annual report

Please find page 90 of the 2011 Lockheed Martin annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 110

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110

and accounts payable are carried at cost, which approximates fair value. The estimated fair values of our long-term debt
instruments at December 31, 2011 and 2010, aggregated approximately $7.8 billion and $6.2 billion, compared with a
carrying amount of approximately $7.0 billion and $5.5 billion, which excludes $506 million and $505 million of
unamortized discounts. The fair values were estimated based on quoted market prices of debt with terms and due dates
similar to our long-term debt instruments.
Note 16 – Summary of Quarterly Information (Unaudited)
2011 Quarters
(In millions, except per share data) First (a) Second (a) Third Fourth
Net sales (b) $10,626 $11,543 $12,119 $12,211
Operating profit 864 993 1,041 1,082
Net earnings from continuing operations (c) 556 748 665 698
Net earnings (loss) from discontinued operations (d) (26) (6) 35 (15)
Net earnings 530 742 700 683
Basic earnings per share (e) 1.52 2.16 2.12 2.12
Diluted earnings per share (e) 1.50 2.14 2.10 2.09
2010 Quarters
(In millions, except per share data) First (a) Second (a) Third Fourth
Net sales (b) $10,308 $11,259 $11,343 $12,761
Operating profit 938 1,119 877 1,115
Net earnings from continuing operations (c) 519 717 557 821
Net earnings from discontinued operations (d) 14 107 3 140
Net earnings 533 824 560 961
Basic earnings per share (e) 1.43 2.24 1.56 2.70
Diluted earnings per share (e) 1.41 2.22 1.54 2.67
(a) Net sales, operating profit, and net earnings (loss) from continuing and discontinued operations varies from the amounts
previously reported on Forms 10-Q as a result of Savi being classified as discontinued operations in the third quarter of 2011.
(b) The decrease in net sales from the fourth quarter of 2010 to the fourth quarter of 2011 is primarily due to declines in net sales
at our Electronic Systems, IS&GS, and Space Systems business segments. The decline at Electronic Systems was primarily
due to fewer deliveries on tactical missile programs and net declines in volume on various other programs. The decline at
IS&GS was primarily due to lower volume due to the absence of the Decennial Response Integration System (DRIS) program
that supported the 2010 U.S. census and a decline in activities on the Airborne Maritime Fixed Station Joint Tactical Radio
System (JTRS). The decline at Space Systems was primarily due to decreased volume related to satellite activities.
(c) The second quarter of 2011 included a reduction in income tax expense of $89 million due to the resolution of certain tax
matters (Note 8) and a charge of $97 million ($63 million after tax) related to severance actions (Note 2). The fourth quarter of
2011 included an increase of $107 million ($66 million after tax) in the non-cash FAS/CAS pension expense adjustment and a
decrease in R&D tax credits of $36 million, each as compared to the fourth quarter of 2010, and included a premium of
$46 million ($28 million after tax) on the early extinguishments of debt. The first quarter of 2010 included an increase in
income tax expense of $96 million resulting from legislation that eliminated the tax deduction for benefit costs reimbursed
under Medicare Part D (Note 8). The third quarter of 2010 included a charge of $178 million ($116 million after tax) related to
the VESP (Note 2). The fourth quarter of 2010 included a charge of $42 million ($27 million after tax) related to facilities
consolidation within our Electronic Systems business segment (Note 2).
(d) The third quarter of 2011 included a tax benefit of $66 million related to Savi and the second quarter of 2010 included a tax
benefit of $96 million related to PAE, both of which were recorded when the decision was made to dispose of each business.
The fourth quarter of 2010 included a gain of $184 million from the sale of EIG. See Note 14 for further information related to
these items.
(e) The sum of the quarterly earnings per share amounts do not equal the earnings per share amount included on our Statements of
Earnings, primarily due to the timing of our share repurchases during 2011 and 2010.
82