Lockheed Martin 2013 Annual Report Download - page 79

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Note 6 – Inventories, net
Inventories, net consisted of the following (in millions):
2013 2012
Work-in-process, primarily related to long-term contracts and programs in progress $ 7,073 $ 7,000
Less: customer advances and progress payments (4,834) (4,932)
2,239 2,068
Other inventories 738 869
Total inventories, net $ 2,977 $ 2,937
Work-in-process inventories at December 31, 2013 and 2012 included general and administrative costs of $630 million
and $623 million. General and administrative costs incurred and recorded in inventories totaled $2.4 billion in both 2013 and
2012 and $2.3 billion in 2011, and general and administrative costs charged to cost of sales from inventories totaled
$2.4 billion in both 2013 and 2012 and $2.2 billion in 2011.
Note 7 – Property, Plant, and Equipment, net
Property, plant, and equipment, net consisted of the following (in millions):
2013 2012
Land $99 $ 101
Buildings 5,602 5,388
Machinery and equipment 7,043 6,728
Construction in progress 622 768
13,366 12,985
Less: accumulated depreciation and amortization (8,660) (8,310)
Total property, plant, and equipment, net $ 4,706 $ 4,675
Note 8 – Income Taxes
Our provision for federal and foreign income tax expense for continuing operations consisted of the following
(in millions):
2013 2012 2011
Federal income tax expense:
Current $1,204 $ 387 $912
Deferred 3925 9
Total federal income tax expense 1,207 1,312 921
Foreign income tax expense (benefit):
Current 614 38
Deferred (8) 15
Total foreign income tax (benefit) expense (2) 15 43
Total income tax expense $1,205 $1,327 $964
State income taxes are included in our operations as general and administrative costs and, under U.S. Government
regulations, are allowable costs in establishing prices for the products and services we sell to the U.S. Government.
Therefore, a substantial portion of state income taxes is included in our net sales and cost of sales. As a result, the impact of
certain transactions on our operating profit and of other matters presented in these financial statements is disclosed net of
state income taxes. Our total net state income tax expense was $121 million for 2013, $183 million for 2012, and
$149 million for 2011.
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