Lockheed Martin 2015 Annual Report Download - page 107

Accumulated Other Comprehensive Loss
Changes in the balance of AOCL, net of income taxes, consisted of the following (in millions):
Postretirement
Benefit Plans Other, net AOCL
Balance at December 31, 2012 (a) $(13,532) $ 39 $(13,493)
Other comprehensive income before reclassifications 2,868 11 2,879
Amounts reclassified from AOCL
Recognition of net actuarial losses 973 — 973
Amortization of net prior service costs 42 — 42
Other — (2) (2)
Total reclassified from AOCL 1,015 (2) 1,013
Total other comprehensive income 3,883 9 3,892
Balance at December 31, 2013 (a) (9,649) 48 (9,601)
Other comprehensive loss before reclassifications (2,870) (103) (2,973)
Amounts reclassified from AOCL
Recognition of net actuarial losses 806 — 806
Amortization of net prior service credits (100) — (100)
Other — (2) (2)
Total reclassified from AOCL 706 (2) 704
Total other comprehensive loss (2,164) (105) (2,269)
Balance at December 31, 2014 (a) (11,813) (57) (11,870)
Other comprehensive loss before reclassifications (351) (73) (424)
Amounts reclassified from AOCL
Recognition of net actuarial losses 1,109 — 1,109
Amortization of net prior service credits (259) — (259)
Other —— —
Total reclassified from AOCL 850 — 850
Total other comprehensive loss 499 (73) 426
Balance at December 31, 2015 (a) $(11,314) $ (130) $(11,444)
(a) AOCL related to postretirement benefit plans is shown net of tax benefits at December 31, 2015, 2014 and 2013 of $6.2 billion,
$6.4 billion and $5.3 billion. These tax benefits include amounts recognized on our income tax returns as current deductions and
deferred income taxes, which will be recognized on our tax returns in future years. See Note 9 and Note 11 for more information on
our income taxes and postretirement benefit plans.
Note 13 – Stock-Based Compensation
During 2015, 2014 and 2013, we recorded non-cash stock-based compensation expense totaling $138 million,
$164 million and $189 million, which is included as a component of other unallocated, net on our Statements of Earnings.
The net impact to earnings for the respective years was $90 million, $107 million and $122 million.
As of December 31, 2015, we had $79 million of unrecognized compensation cost related to nonvested awards, which is
expected to be recognized over a weighted average period of 1.7 years. We received cash from the exercise of stock options
totaling $174 million, $308 million and $827 million during 2015, 2014 and 2013. In addition, our income tax liabilities for
2015, 2014 and 2013 were reduced by $213 million, $215 million, $158 million due to recognized tax benefits on stock-
based compensation arrangements.
Stock-Based Compensation Plans
Under plans approved by our stockholders, we are authorized to grant key employees stock-based incentive awards,
including options to purchase common stock, stock appreciation rights, restricted stock units (RSUs), performance stock
units (PSUs) or other stock units. The exercise price of options to purchase common stock may not be less than the fair
market value of our stock on the date of grant. No award of stock options may become fully vested prior to the third
anniversary of the grant and no portion of a stock option grant may become vested in less than one year. The minimum
vesting period for restricted stock or stock units payable in stock is three years. Award agreements may provide for shorter or
pro-rated vesting periods or vesting following termination of employment in the case of death, disability, divestiture,
retirement, change of control or layoff. The maximum term of a stock option or any other award is 10 years.
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