Lockheed Martin (LMT) 10-K 25 Feb 10 2009 FY Annual report Financial data

Statement Of Income

Statement Of Income (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Net Sales
Products	$36,336	$34,809	$35,267
Services	8,853	7,922	6,595
Sales Revenue, Net, Total	45,189	42,731	41,862
Cost of Sales
Products	(32,301)	(30,874)	(31,479)
Services	(7,993)	(7,147)	(5,874)
Unallocated Corporate Costs	(671)	(61)	(275)
Cost of Goods and Services Sold	(40,965)	(38,082)	(37,628)
Gross Profit, Total	4,224	4,649	4,234
Other Income (Expense), Net	242	482	293
Operating Profit	4,466	5,131	4,527
Interest Expense	(305)	(341)	(352)
Other Non-operating Income (Expense), Net	123	(88)	193
Earnings Before Income Taxes	4,284	4,702	4,368
Income Tax Expense	(1,260)	(1,485)	(1,335)
Net Earnings	$3,024	$3,217	$3,033
Earnings Per Common Share
Basic	7.86	8.05	7.29
Diluted	7.78	7.86	7.1

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Current Assets
Cash and Cash Equivalents	$2,391	$2,168
Receivables	6,061	5,296
Inventories	2,183	1,902
Deferred Income Taxes	815	755
Other Current Assets	1,027	562
Total Current Assets	12,477	10,683
Property, Plant, and Equipment, Net	4,520	4,488
Goodwill	9,948	9,526
Purchased Intangibles, Net	311	355
Prepaid Pension Asset	160	122
Deferred Income Taxes	3,779	4,651
Other Assets	3,916	3,614
Assets, Total	35,111	33,439
Current Liabilities
Accounts Payable	2,030	2,030
Customer Advances and Amounts in Excess of Costs Incurred	5,049	4,535
Salaries, Benefits and Payroll Taxes	1,648	1,684
Current Maturities of Long-term Debt	0	242
Other Current Liabilities	1,976	2,051
Total Current Liabilities	10,703	10,542
Long-term Debt, Net	5,052	3,563
Accrued Pension Liabilities	10,823	12,004
Other Postretirement Benefit Liabilities	1,308	1,386
Other Liabilities	3,096	3,079
Total Liabilities	30,982	30,574
Stockholders' Equity
Common Stock, $1 Par Value Per Share	373	393
Additional Paid-in Capital	0	0
Retained Earnings	12,351	11,621
Accumulated Other Comprehensive Income (Loss)	(8,595)	(9,149)
Total Stockholders' Equity	4,129	2,865
Liabilities and Stockholders' Equity, Total	$35,111	$33,439

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Common Stock, Par Value	$1	$1

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Operating Activities
Net earnings	$3,024	$3,217	$3,033
Adjustments to reconcile net earnings to Net Cash Provided by Operating Activities
Depreciation and amortization of plant and equipment	750	727	666
Amortization of purchased intangibles	104	118	153
Stock-based compensation	154	155	149
Excess tax benefits on stock-based compensation	(21)	(92)	(124)
Deferred income taxes	542	72	110
Contributions related to our qualified defined benefit plans	(1,482)	(109)	(335)
Changes in operating assets and liabilities:
Receivables	(719)	(333)	(324)
Inventories	(233)	(183)	(57)
Accounts payable	(21)	(141)	(66)
Customer advances and amounts in excess of costs incurred	482	313	394
Other	593	677	639
Net cash provided by operating activities	3,173	4,421	4,238
Investing Activities
Expenditures for property, plant and equipment	(852)	(926)	(940)
Acquisitions of businesses / investments in affiliates	(435)	(233)	(337)
Net proceeds from (payments for) short-term investment transactions	(279)	272	48
Other	48	(20)	24
Net cash used for investing activities	(1,518)	(907)	(1,205)
Financing Activities
Repurchases of common stock	(1,851)	(2,931)	(2,127)
Issuances of common stock and related amounts	40	250	350
Excess tax benefits on stock-based compensation	21	92	124
Common stock dividends	(908)	(737)	(615)
Issuance of long-term debt, net of related costs	1,464	491	0
Repayments of long-term debt	(242)	(1,103)	(32)
Net cash used for financing activities	(1,476)	(3,938)	(2,300)
Effect of exchange rate changes on cash and cash equivalents	44	(56)	3
Net increase (decrease) in cash and cash equivalents	223	(480)	736
Cash and cash equivalents at beginning of year	2,168	2,648	1,912
Cash and Cash Equivalents at end of year	$2,391	$2,168	$2,648

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Beginning Balance at Dec. 31, 2006	$421	$755	$9,269	($3,561)	$6,884
Net earnings			3,033		3,033
Common stock dividends declared ($2.34 in 2009, $1.83 in 2008 and $1.47 in 2007 per share)			(615)		(615)
Repurchases of common stock	(22)	(1,634)	(471)		(2,127)
Stock-based awards and ESOP activity	10	879			889
Adoption of accounting pronouncement related to uncertain income tax positions			31		31
Postretirement benefit plans:
Unrecognized amounts, net of tax benefit of ($121) in 2009, $4,011 in 2008 and tax of ($840) in 2007				1,527	1,527
Reclassification adjustment for recognition of prior period amounts, net of $158 in 2009, $25 in 2008 and $98 in 2007 tax				179	179
Other, net of tax $13 in 2009, $16 in 2008 and $7 in 2007				4	4
Ending Balance at Dec. 31, 2007	409	0	11,247	(1,851)	9,805
Net earnings			3,217		3,217
Common stock dividends declared ($2.34 in 2009, $1.83 in 2008 and $1.47 in 2007 per share)			(737)		(737)
Repurchases of common stock	(29)	(796)	(2,106)		(2,931)
Stock-based awards and ESOP activity	8	738			746
Conversion of debentures	5	58			63
Postretirement benefit plans:
Unrecognized amounts, net of tax benefit of ($121) in 2009, $4,011 in 2008 and tax of ($840) in 2007				(7,299)	(7,299)
Reclassification adjustment for recognition of prior period amounts, net of $158 in 2009, $25 in 2008 and $98 in 2007 tax				46	46
Foreign currency translation adjustments				(74)	(74)
Other, net of tax $13 in 2009, $16 in 2008 and $7 in 2007				29	29
Ending Balance at Dec. 31, 2008	393	0	11,621	(9,149)	2,865
Net earnings			3,024		3,024
Common stock dividends declared ($2.34 in 2009, $1.83 in 2008 and $1.47 in 2007 per share)			(908)		(908)
Repurchases of common stock	(25)	(440)	(1,386)		(1,851)
Stock-based awards and ESOP activity	5	440			445
Postretirement benefit plans:
Unrecognized amounts, net of tax benefit of ($121) in 2009, $4,011 in 2008 and tax of ($840) in 2007				214	214
Reclassification adjustment for recognition of prior period amounts, net of $158 in 2009, $25 in 2008 and $98 in 2007 tax				281	281
Foreign currency translation adjustments				82	82
Other, net of tax $13 in 2009, $16 in 2008 and $7 in 2007				(23)	(23)
Ending Balance at Dec. 31, 2009	$373	$0	$12,351	($8,595)	$4,129

2_Statement Of Shareholders Equ

Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Common stock dividends declared, per share	2.34	1.83	1.47
Unrecognized amounts, tax benefit (tax)	($121)	$4,011	($840)
Reclassification adjustment for recognition of prior period amounts, tax	158	25	98
Other, tax	$13	$16	$7

Significant Accounting Policies

Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Significant Accounting Policies	Note 1 Significant Accounting Policies Organization Lockheed Martin Corporation is a global security company engaged in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products, and provides a broad range of management, engineering, technical, scientific, logistic, and information services. As a systems integrator, our products and services range from electronics and information systems, including integrated net-centric solutions, to missiles, aircraft, and spacecraft. We serve both domestic and international customers with products and services that have defense, civil, and commercial applications, with our principal customers being agencies of the U.S. Government. Basis of consolidation and classifications Our consolidated financial statements include the accounts of subsidiaries we control and other entities where we are the primary beneficiary. We eliminate intercompany balances and transactions in consolidation. Our receivables, inventories, customer advances, and certain amounts in other current liabilities are primarily attributable to long-term contracts or programs in progress for which the related operating cycles are longer than one year. In accordance with industry practice, we include these items in Current Assets and Current Liabilities. We have reclassified certain amounts for prior years to conform to the 2009 presentation. We have evaluated subsequent events through the time of filing this Form 10-K with the United States Securities and Exchange Commission (SEC) on February25, 2010. No material subsequent events have occurred since December31, 2009 that required recognition or disclosure in these financial statements. Use of estimates We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP). In doing so, we are required to make estimates and assumptions, including estimates of anticipated contract costs and revenues utilized in the earnings recognition process, that affect the reported amounts in the financial statements and accompanying notes. Due to the size and nature of many of our programs, the estimation of total revenues and cost at completion is subject to a wide range of variables, including assumptions for schedule and technical issues. Our actual results may differ from those estimates. Cash and cash equivalents Cash equivalents include highly liquid instruments with original maturities of 90 days or less. Receivables Receivables include amounts billed and currently due from customers, and unbilled costs and accrued profits primarily related to revenues on long-term contracts that have been recognized for accounting purposes but not yet billed to customers. As we recognize those revenues, we reflect appropriate amounts of customer advances, performance-based payments, and progress payments as an offset to the related receivables balance. Inventories We record inventories at the lower of cost or estimated net realizable value. Costs on long-term contracts and programs in progress represent recoverable costs incurred for production or contract-specifi

Earnings Per Share

Earnings Per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share	Note 2 Earnings Per Share We compute basic and diluted per share amounts based on net earnings for the periods presented. We use the weighted average number of common shares outstanding during the period to calculate basic earnings per share. Our calculation of diluted per share amounts includes the dilutive effects of stock options and restricted stock based on the treasury stock method in the weighted average number of common shares. Unless otherwise noted, we present all per share amounts cited in these consolidated financial statements on a per diluted share basis. The calculations of basic and diluted earnings per share are as follows: (In millions, except per share data) 2009 2008 2007 Net earnings for basic and diluted computations $ 3,024 $ 3,217 $ 3,033 Weighted average common shares outstanding Average number of common shares outstanding for basic computations 384.8 399.7 416.0 Dilutive stock options, restricted stock and convertible securities 4.1 9.7 11.1 Average number of common shares outstanding for diluted computations 388.9 409.4 427.1 Earnings per common share Basic $ 7.86 $ 8.05 $ 7.29 Diluted $ 7.78 $ 7.86 $ 7.10 Stock options to purchase 11.2million and 3.5million shares of common stock outstanding at December31, 2009 and 2008 had exercise prices that were in excess of the average market price of our common stock at the respective dates. As such, we did not include these stock options in our calculation of diluted earnings per share, as their effect would have been anti-dilutive. No stock options to purchase common stock outstanding at December31, 2007 had exercise prices that were in excess of the average market price of our common stock at December31, 2007. As of August15, 2008, all of our $1.0 billion of floating rate convertible debentures had been delivered for conversion or were redeemed. Upon conversion of the debentures, we paid cash for the principal amount of the debentures relative to our conversion obligations, and satisfied the conversion obligations in excess of the principal amount by issuing 5.0million shares of our common stock (see Note 9). The accounting standard for earnings per share required an assumption that shares would be used to pay the conversion obligations in excess of the accreted principal amount and that those shares would be included in our calculation of weighted average common shares outstanding for the diluted earnings per share computation up to the date the convertible securities were converted. The number of shares included in the computation for the year ended December31, 2007 did not have a material impact on earnings per share.

Other Income

Other Income (Expense), Net
	12 Months Ended Dec. 31, 2009 USD / shares
Other Income (Expense), Net	Note 3 Other Income (Expense), Net The components of other income (expense), net included the following: (In millions) 2009 2008 2007 Included in operating profit Equity in net earnings of equity investees $ 282 $ 289 $ 203 Loss on sale of foreign subsidiary (24 ) Gain on sale of ownership interests in LKEI and ILS 108 Earnings from elimination of reserves associated with various land sales 85 Gain on sale of Comsat International 25 Gain on sales of land 25 Reversal of legal reserves due to settlement 21 Other activities, net (16 ) 19 $ 242 $ 482 $ 293 See Note 14 for a discussion of certain transactions included in the table above. Other non-operating income (expense), net consisted of gains (losses) on investments held in the Rabbi Trust and interest income associated with our cash, cash equivalents, and short-term investments.

Information on Business Segment

Information on Business Segments
	12 Months Ended Dec. 31, 2009 USD / shares
Information on Business Segments	Note 4 Information on Business Segments We operate in four principal business segments: Aeronautics, Electronic Systems, Information Systems Global Services, and Space Systems. We organize our business segments based on the nature of the products and services offered. In the following tables of financial data, the total of the operating results of these business segments is reconciled, as appropriate, to the corresponding consolidated amount. With respect to the caption Operating profit, the reconciling item Unallocated Corporate income (expense), net includes the FAS/CAS pension adjustment (see discussion below), costs for certain stock-based compensation programs (including stock-based compensation costs for stock options and restricted stock as discussed in Note 12), the effects of items not considered part of managements evaluation of segment operating performance, Corporate costs not allocated to the operating segments and other miscellaneous Corporate activities. Since the activities of the investees in which certain business segments hold equity interests are closely aligned with the operations of those segments, the equity earnings (losses) from those investees are included in the operating profit of the respective segments. For financial data other than operating profit where amounts are reconciled to consolidated totals, all activities other than those pertaining to the principal business segments are included in Corporate activities. The FAS/CAS pension adjustment represents the difference between pension expense or income calculated for financial reporting purposes under GAAP and pension costs calculated and funded in accordance with U.S. Government Cost Accounting Standards (CAS), which are reflected in our business segment results. CAS is a major factor in determining our pension funding requirements, and governs the extent of allocability and recoverability of pension costs on government contracts. The CAS expense is recovered through the pricing of our products and services on U.S. Government contracts, and therefore recognized in segment net sales. The results of operations of our segments only include pension expense as determined and funded in accordance with CAS rules. Transactions between segments are generally negotiated and accounted for under terms and conditions similar to other government and commercial contracts. These intercompany transactions are eliminated in consolidation and for purposes of the presentation of net sales in the related table that follows. Other accounting policies of the business segments are the same as those described in Note 1. The following is a brief description of the activities of the principal business segments: Aeronautics Engaged in the research, design, development, manufacture, integration, sustainment, support, and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles, and related technologies. Major products and programs include design, development, production and sustainment of the F-35 international multi-role, stealth fighter; the F-22 air dominance and multi-mission stealth fighter; the F-16 internationa

Receivables

Receivables
	12 Months Ended Dec. 31, 2009 USD / shares
Receivables	Note 5 Receivables Receivables consisted of the following components: (In millions) 2009 2008 U.S. Government Amounts billed $ 1,648 $ 1,698 Unbilled costs and accrued profits 2,718 2,590 Less: customer advances and progress payments (486 ) (471 ) 3,880 3,817 Foreign governments and commercial Amounts billed 598 487 Unbilled costs and accrued profits 1,811 1,127 Less: customer advances (228 ) (135 ) 2,181 1,479 $ 6,061 $ 5,296 We expect to bill substantially all of the December31, 2009 unbilled costs and accrued profits during 2010.

Inventories

Inventories
	12 Months Ended Dec. 31, 2009 USD / shares
Inventories	Note 6 Inventories Inventories consisted of the following components: (In millions) 2009 2008 Work-in-process, primarily related to long-term contracts and programs in progress $ 5,565 $ 4,631 Less: customer advances and progress payments (3,941 ) (3,396 ) 1,624 1,235 Other inventories 559 667 $ 2,183 $ 1,902 Work-in-process inventories at December31, 2009 and 2008 included general and administrative costs of $703 million and $434 million. During 2009, 2008, and 2007, general and administrative costs incurred and recorded in inventories totaled $2,377 million, $2,344 million, and $2,077 million, and general and administrative costs charged to cost of sales from inventories totaled $2,108 million, $2,213 million, and $2,103 million.

Property, Plant, and Equipment

Property, Plant, and Equipment
	12 Months Ended Dec. 31, 2009 USD / shares
Property, Plant, and Equipment	Note 7 Property, Plant, and Equipment Property, plant, and equipment consisted of the following components: (In millions) 2009 2008 Land $ 112 $ 109 Buildings 5,010 4,756 Machinery and equipment 6,283 6,034 11,405 10,899 Less: accumulated depreciation and amortization (6,885 ) (6,411 ) $ 4,520 $ 4,488

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes	Note 8 Income Taxes Our provision for federal and foreign income tax expense consisted of the following components: (In millions) 2009 2008 2007 Federal income taxes Current $ 710 $ 1,385 $ 1,199 Deferred 557 72 107 Total federal income taxes 1,267 1,457 1,306 Foreign income taxes Current 8 28 26 Deferred (15 ) 3 Total foreign income taxes (7 ) 28 29 Income tax expense $ 1,260 $ 1,485 $ 1,335 State income taxes are included in our operations as general and administrative costs and, under U.S. Government regulations, are allowable 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 other matters disclosed in these financial statements is disclosed net of state income taxes. Our total net state income tax expense was $144 million for 2009, $221 million for 2008, and $199 million for 2007. Our reconciliation of income tax expense computed using the U.S. federal statutory income tax rate of 35% to actual income tax expense is as follows: (In millions) 2009 2008 2007 Income tax expense at the U.S. federal statutory tax rate $ 1,499 $ 1,646 $ 1,528 Reduction in tax expense: U.S. production activity benefit (39 ) (67 ) (55 ) Research tax credit (43 ) (36 ) (30 ) Tax deductible dividends (49 ) (38 ) (32 ) Closure of IRS examinations (69 ) (59 ) Other, net (39 ) (20 ) (17 ) Income tax expense $ 1,260 $ 1,485 $ 1,335 In 2009, the IRS examinations of our U.S. Federal Income Tax Returns for the years 2005-2007 and 2008 were resolved and settled. As a result, we recognized additional tax benefits and reduced our income tax expense for 2009 by $69 million ($0.18 per share), including related interest. This reduction in income tax expense reduced our effective income tax rate for 2009 by 1.6%. In 2007, the IRS examination of our U.S. Federal Income Tax Returns for the years 2003 2004 was resolved and settled, and claims were filed for additional extraterritorial income (ETI) tax benefits for years prior to 2005. As a result, we recognized additional tax benefits and reduced our income tax expense for 2007 by $59 million ($0.14 per share), including related interest, which reduced our effective tax rate for 2007 by 1.4%. Current income taxes payable of $217 million and $277 million at December31, 2009 and 2008 are included in other current liabilities on the Balance Sheet. The primary components of our federal and foreign deferred income tax assets and liabilities at December31 were as follows: (In millions) 2009 2008 Deferred tax assets related to: Contract accounting

Debt

Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Debt	Note 9 Debt Our long-term debt is primarily in the form of publicly issued notes and debentures, as follows: (In millions) Interest Rate 2009 2008 Notes due 12/1/2009 8.20% $ $ 241 Notes due 3/14/2013 4.12% 500 500 Debentures due 4/15/2013 7.38% 150 150 Debentures due 5/1/2016 7.65% 600 600 Notes due 11/15/2019 4.25% 900 Debentures due 9/15/2023 7.00% 200 200 Notes due 6/15/2024 8.38% 167 167 Debentures due 6/15/2025 7.63% 150 150 Debentures due 5/1/2026 7.75% 423 423 Debentures due 12/1/2029 8.50% 317 317 Debentures due 5/1/2036 7.20% 300 300 Notes due 9/1/2036 6.15% 1,079 1,079 Notes due 11/15/2039 5.50% 600 Unamortized discount N/A (351 ) (340 ) Other Various 17 18 5,052 3,805 Less: Current maturities of long-term debt (242 ) $ 5,052 $ 3,563 In November 2009, we issued a total of $1.5 billion of long-term notes in a registered public offering, $900 million of which are due in 2019 and have a fixed coupon interest rate of 4.25%. The remaining $600 million of long-term notes are due in 2039 and have a fixed coupon interest rate of 5.50%. In March 2008, we issued $500 million of long-term notes in a registered public offering. These notes are due in 2013 and have a fixed coupon interest rate of 4.12%. On June26, 2008, our Board of Directors authorized and we announced the planned redemption of any and all of our $1.0 billion in original principal amount of floating rate convertible debentures that remained outstanding on August15, 2008. As of August15, 2008, all of the debentures had been delivered for conversion or were redeemed. The aggregate amount paid in cash subsequent to conversion of the debentures was $1.0 billion, representing the principal amount of the debentures relative to our conversion obligations, which was equal to the original principal amount of the debentures. In addition, the conversion rate for the debentures from the time of our announcement in June 2008 through August15, 2008 was 13.7998 shares of common stock for each $1,000 in original principal amount of debentures, equating to a conversion price of $72.46. The conversion obligations in excess of the principal amount, computed based on the closing price of our common stock over the cash settlement averaging period as defined in the indenture, totaled $571 million, and resulted in the issuance of 5.0million shares of our common stock. The issuance of the common shares for the conversion obligations was recognized in stockholders equity as a $5 million increase to common stock and a corresponding decrease to additional paid-in capital. Also, deferred tax liabilities of $69 million attributable to interest deductions associated with the debentures have been credited to additional paid-in capital due to their conversion. At December31, 2009 and 2008, we had in place a $1.5 billion revolving credit facility with a group o

Postretirement Benefit Plans

Postretirement Benefit Plans
	12 Months Ended Dec. 31, 2009 USD / shares
Postretirement Benefit Plans	Note 10 Postretirement Benefit Plans Defined Contribution Plans We maintain a number of defined contribution plans, most with 401(k) features that cover substantially all of our employees. Under the provisions of our 401(k) plans, most employees eligible contributions are matched at rates specified in the plan documents. Our contributions were $364 million in 2009, $351 million in 2008, and $327 million in 2007, the majority of which were funded in our common stock. Our Salaried Savings Plan is a defined contribution plan with a 401(k) feature that includes an Employee Stock Ownership Plan (ESOP) Fund. Our matching contributions to the Salaried Savings Plan have been fulfilled through newly issued shares or purchases of common stock from participant account balance reallocations. At December31, 2009, the Salaried Savings Plan held 60.3million issued and outstanding shares of our common stock, all of which were allocated to participant accounts. Certain plans for hourly employees include an ESOP Fund. In one such plan, the match is made, generally at the election of the participant, in either our common stock or cash that may be invested at the participants direction in one of the plans other investment options. Contributions to these plans were made with newly issued shares to the Hourly ESOP Fund or through cash contributed to the trust for the Hourly ESOP Fund. Any contributions that participants directed to be invested in our common stock were used by the investment manager to purchase common stock either in the open market or from participant account balance reallocations. This ESOP Fund held 1.9million issued and outstanding shares of our common stock at December31, 2009, all of which were allocated to participant accounts. Defined Benefit Pension Plans and Retiree Medical and Life Insurance Plans Most of our employees hired on or before December31, 2005 are covered by qualified defined benefit pension plans, and we provide certain health care and life insurance benefits to eligible retirees. We also sponsor nonqualified defined benefit pension plans to provide for benefits in excess of qualified plan limits. Non-union represented employees hired on or after January1, 2006 do not participate in our qualified defined benefit pension plans, but are eligible to participate in our qualified defined contribution plan in addition to our other retirement savings plans. They also have the ability to participate in our retiree medical plans, but we do not subsidize the cost of their participation in those plans as we do with employees hired before January1, 2006. We have made contributions to trusts established to pay future benefits to eligible retirees and dependents (including Voluntary Employees Beneficiary Association trusts and 401(h) accounts, the assets of which will be used to pay expenses of certain retiree medical plans). We use December31 as the measurement date. Benefit obligations as of the end of each year reflect assumptions in effect as of those dates. Net pension and net retiree medical costs for each of the years presented were based on assumptions in effect at the end of the respective preceding year. Th

Stockholders' Equity

Stockholders' Equity
	1/1/2009 - 12/31/2009 USD / shares
Stockholders' Equity	Note 11 Stockholders Equity At December31, 2009, our authorized capital was composed of 1.5 billion shares of common stock and 50million shares of series preferred stock. Of the 375million shares of common stock issued and outstanding, 373million shares were considered outstanding for Balance Sheet presentation purposes; the remaining shares were held in the Rabbi Trust. No preferred stock shares were issued and outstanding at December31, 2009. In 2002, we announced a share repurchase program for the repurchase of our common stock from time-to-time. Under the program, we have discretion to determine the number and price of the shares to be repurchased, and the timing of any repurchases in compliance with applicable law and regulation. As of December31, 2009, our Board of Directors has authorized a total of 178.0million shares for repurchase under the program, including 20.0million additional shares that were authorized in September 2009. As of December31, 2009, we had repurchased a total of 149.2million shares under the program, and there remained approximately 28.8million shares that may be repurchased in the future. During 2009, 2008, and 2007, we repurchased 24.9million, 29.0million, and 21.6million common shares under the program for $1,851 million, $2,931 million, and $2,127 million. As we repurchase our common shares, we reduce common stock for the $1 of par value of the shares repurchased, with the remainder of the purchase price over par value recorded as a reduction of additional paid-in capital. Due to the volume of repurchases made under our share repurchase program, additional paid-in capital was reduced to zero, with the remainder of the excess of purchase price over par value of $1,386 million and $2,106 million recorded as a reduction of retained earnings in 2009 and 2008.

Stock-Based Compensation

Stock-Based Compensation
	12 Months Ended Dec. 31, 2009 USD / shares
Stock-Based Compensation	Note 12 Stock-Based Compensation During 2009, 2008, and 2007, we recorded non-cash compensation cost related to stock options and restricted stock totaling $154 million, $155million, and $149 million, which is included on our Statement of Earnings in cost of sales. The net impact to earnings for the respective years was $99 million ($0.26 per share), $100 million ($0.24 per share), and $96 million ($0.22 per share). Stock-Based Compensation Plans We had two stock-based compensation plans in place at December31, 2009: the Lockheed Martin Amended and Restated 2003 Incentive Performance Award Plan (the Award Plan) and the Lockheed Martin Directors Equity Plan (the Directors Plan). Under the Award Plan, we have the right to grant key employees stock-based incentive awards, including options to purchase common stock, stock appreciation rights, restricted stock, or stock units. Employees also may receive cash-based incentive awards. We evaluate the types and mix of stock-based incentive awards on an ongoing basis and may vary the mix based on our overall strategy regarding compensation. Under the Award Plan, the exercise price of options to purchase common stock may not be less than 100% of the market value of our stock on the date of grant. No award of stock options may become fully vested prior to the second anniversary of the grant, and no portion of a stock option grant may become vested in less than one year (except for 1.5million stock options that are specifically exempted from vesting restrictions). The minimum vesting period for restricted stock or stock units payable in stock is three years. Award agreements may provide for shorter vesting periods or vesting following termination of employment in the case of death, disability, divestiture, retirement, change of control, or layoff. The Award Plan does not impose any minimum vesting periods on other types of awards. The maximum term of a stock option or any other award is 10 years. We generally recognize compensation cost for stock options ratably over the three-year vesting period for active, non-retirement eligible employees. For active, retirement-eligible employees (i.e., those who have attained age 55 with five years of service), we generally recognize expense over the initial one-year vesting period. When an option holder becomes retirement eligible, we accelerate the recognition of any expense not previously recognized for options held for at least one year. We use the Black-Scholes option pricing model to estimate the fair value of stock options. We record restricted stock awards (RSAs) and restricted stock units (RSUs) issued under the Award Plan based on the market value of our common stock on the date of the award. We recognize the related compensation expense over the vesting period. Employees who are granted RSAs receive the restricted shares and the related cash dividends. They may vote their shares, but may not sell or transfer shares prior to vesting. The RSAs generally vest over three to five years from the grant date. Employees who are granted RSUs also receive dividend-equivalent cash payments; however, the shares are not issued and the employees have no

Legal Proceedings, Commitments,

Legal Proceedings, Commitments, and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Legal Proceedings, Commitments, and Contingencies	Note 13 Legal Proceedings, Commitments, and Contingencies We are a party to or have property subject to litigation and other proceedings, including matters arising under provisions relating to the protection of the environment. We believe the probability is remote that the outcome of these matters will have a material adverse effect on the Corporation as a whole. We cannot predict the outcome of legal proceedings with certainty. These matters include the following items that have been previously reported. Legal Proceedings On June24, 2009, the U.K. Ministry of Defence (MoD) sent us a letter alleging that we were in default on the Soothsayer contract under which we were providing electronic warfare equipment to the British military.The total value of the contract is UK 144million, of which UK 39million has been paid to date (representing approximately US $233 million and US $63 million, based on the exchange rate as of December31, 2009).The MoD has demanded repayment of amounts paid under the contract, liquidated damages of UK 2million (representing approximately US $3 million based on the exchange rate as of December31, 2009), interest on those amounts, and has reserved the right to collect any excess future re-procurement costs.We dispute the MoDs position. Following an unsuccessful mediation effort in October 2009, we served notice of arbitration on the MoD pursuant to the contract terms. We plan to seek damages for wrongful termination of the contract (including costs incurred but not paid). On April24, 2009, we filed a declaratory judgment action against the N.Y. Metropolitan Transportation Authority and its Capital Construction Company (collectively, the MTA) asking the U.S. District Court for the Southern District of N.Y. to find that the MTA is in material breach of our agreement based on the MTAs failure to provide access to sites where work must be performed and the customer-furnished equipment necessary to complete the contract.The contract provides for the design and installation of an integrated electronic security system for the MTA and has a total value of $323 million, of which $241 million has been paid to date.The MTA filed an answer and counterclaim on May26, 2009, alleging that we breached the contract, and subsequently terminated the contract for alleged default.The MTA is seeking monetary damages and other relief under the contract, including the cost to complete the contract and potential re-procurement costs.We dispute the MTAs allegations and are defending against them.On July2, 2009, the sureties under the performance bond that we posted for the contract filed their own declaratory judgment action seeking to be excused from performing for the MTA (noting that they were unable to conclude that we were in material default under the contract) or, in the alternative, seeking indemnification from us.On July7, 2009, we filed an amended complaint against the MTA adding claims for wrongful termination and for breach of contract damages (including costs incurred but not paid). The MTA has filed an amended counterclaim. Discovery is proceeding in the action. On November30, 2007, the Department of Justice (DoJ)

Acquisitions and Divestitures

Acquisitions and Divestitures
	12 Months Ended Dec. 31, 2009 USD / shares
Acquisitions and Divestitures	Note 14 Acquisitions and Divestitures Acquisitions We used cash in 2009, 2008, and 2007 for acquisition activities, including the acquisitions of businesses and investments in affiliates. The amounts used in each year also included certain payments related to acquisitions completed in years prior to the respective years. We have accounted for the acquisition of businesses in 2009 under the acquisition method, which requires that all of the assets acquired and liabilities assumed be measured and recorded at their acquisition-date fair values. In prior years, we accounted for acquisitions under the purchase method of accounting by allocating the purchase price to the assets acquired and liabilities assumed based on their estimated fair values. We used approximately $435 million in 2009 for acquisition activities. Those activities included the acquisition of, among others, Universal Systems Technology, Inc., which provides interactive training and simulation, homeland security, and technical solutions to various U.S. and international government agencies; and Gyrocam Systems LLC, which develops and supplies gyrostabilized optical surveillance systems and sustainment field services, primarily to the U.S. military. Accounting adjustments related to business acquisitions completed in 2009 included recording goodwill aggregating $396 million, $168 million of which will be amortized for tax purposes, and $56 million of other intangible assets, primarily relating to the value of contracts we acquired. We used approximately $233 million in 2008 for acquisition activities including the acquisition of, among others, Eagle Group International, LLC, which provides logistics, information technology, training, and healthcare services to the U.S. Department of Defense. Purchase accounting adjustments related to business acquisitions completed in 2008 included recording goodwill aggregating $170 million, $93 million of which will be amortized for tax purposes, and $18 million of other intangible assets, primarily relating to the value of contracts we acquired. We used a total of approximately $337 million in 2007 for acquisition activities, including an additional contribution of $177 million related to our investment in ULA discussed below. Those activities also included the acquisition of, among others, Management Systems Designers, Inc., a provider of information technology and scientific solutions supporting government life science, national security, and other civil agency missions. Purchase accounting adjustments related to business acquisitions completed in 2007 included recording goodwill aggregating $120 million, none of which will be amortized for tax purposes, and $12 million of other intangible assets, primarily relating to the value of contracts we acquired. These acquisitions were not material to our consolidated results of operations in 2009, 2008, and 2007. Divestitures Businesses In the second quarter of 2007, we sold our remaining 20% interest in Comsat International for $26 million in cash. The transaction resulted in a gain, net of state income taxes, of $25 million that we recorded in other income (expenses), net

Fair Value Measurements

Fair Value Measurements
	12 Months Ended Dec. 31, 2009 USD / shares
Fair Value Measurements	Note 15 Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. The standard is applicable whenever assets and liabilities are measured and included in the financial statements at fair value. The fair value hierarchy established in the standard prioritizes the inputs used in valuation techniques into three levels as follows: Level 1 Observable inputs quoted prices in active markets for identical assets and liabilities; Level 2 Observable inputs other than quoted prices in active markets for identical assets and liabilities includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and Level 3 Unobservable inputs includes amounts derived from valuation models where one or more significant inputs are unobservable and require us to develop relevant assumptions. At December31, 2009, we have no assets or liabilities measured and recorded at fair value on our Balance Sheet on a recurring basis that are categorized as Level 3, or that were transferred in or out of the Level 3 category during 2009. The following table presents assets and liabilities measured and recorded at fair value on our Balance Sheet on a recurring basis and their level within the fair value hierarchy as of December31, 2009: (In millions) Level1 Level2 Balance as of December31, 2009 Assets Equity securities (a) $ 89 $ $ 89 Mutual funds (a) 428 428 U.S. Government securities (b) 412 412 Corporate debt securities (b) 80 80 U.S. Government-sponsored enterprise securities (b) 60 60 Other securities (b) 34 34 Derivative assets (c) 21 21 Total assets $ 517 $ 607 $ 1,124 Derivative liabilities (c) 23 23 Net assets $ 517 $ 584 $ 1,101 (a) Equity securities and interests in mutual funds are valued using quoted market prices. (b) U.S. Government securities, corporate debt securities, U.S. Government-sponsored enterprise securities, and other securities are valued based on inputs other than quoted prices that are observable for the asset (e.g., interest rates and yield curves observable at commonly quoted intervals). (c) Derivative assets and liabilities relate to foreign currency exchange contracts and are valued based on observable market prices, but are not exchanged in an active market. See Note 1 under the caption Derivative financial instruments for further information related to our derivative instruments. The estimated fair values of our long-term debt instruments at December31, 2009 and 2008, aggregated approximately $5,926 million and $4,782 million, compared with a carrying amount of approximately $5,403 million and $4,145 million, exclu

Leases

Leases
	12 Months Ended Dec. 31, 2009 USD / shares
Leases	Note 16 Leases We rent certain equipment and facilities under operating leases. Our total rental expense under operating leases was $384 million, $371 million, and $338 million for 2009, 2008, and 2007. Future minimum lease commitments at December31, 2009 for all operating leases that have a remaining term of more than one year were $1.5 billion ($314 million in 2010, $267 million in 2011, $227 million in 2012, $166 million in 2013, $130 million in 2014 and $355 million in later years). Certain major plant facilities and equipment are furnished by the U.S. Government under short-term or cancelable arrangements.

Summary of Quarterly Informatio

Summary of Quarterly Information (Unaudited)
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Quarterly Information (Unaudited)	Note 17 Summary of Quarterly Information (Unaudited) 2009 Quarters (a) (In millions, except per share data) First Second Third(c) Fourth(d) Net sales $ 10,373 $ 11,236 $ 11,056 $ 12,524 Operating profit 1,057 1,083 1,085 1,241 Net earnings 666 734 797 827 Basic earnings per share 1.69 1.90 2.09 2.19 Diluted earnings per share (b) 1.68 1.88 2.07 2.17 2008 Quarters (a) (In millions, except per share data) First (e) Second(f) Third (g) Fourth (h) Net sales $ 9,983 $ 11,039 $ 10,577 $ 11,132 Operating profit 1,178 1,363 1,242 1,348 Net earnings 730 882 782 823 Basic earnings per share 1.80 2.21 1.97 2.08 Diluted earnings per share (b) 1.75 2.15 1.92 2.05 (a) It is our practice to close the books and records on the Sunday prior to the end of the calendar quarter to align our financial closing with our business processes. This practice only affects interim periods, as our fiscal year ends on December31. (b) The sum of the quarterly earnings per share amounts for 2009 and 2008 do not equal the diluted earnings per share amount included on the Statement of Earnings, primarily due to the dilutive effects of our convertible debentures in 2008 (see Note 2) and the timing of share repurchases during 2009 and 2008. (c) Net earnings for the third quarter of 2009 included the recognition of tax benefits related to the resolution of issues with the IRS for tax years 2005-2007 (see Note 8), which increased net earnings by $58 million ($0.15 per share). (d) Net earnings for the fourth quarter of 2009 included the recognition of tax benefits related to the resolution of issues with the IRS for tax year 2008 (see Note 8), which increased net earnings by $11 million ($0.03 per share). (e) Net earnings for the first quarter of 2008 included a portion of the deferred gain recognized in connection with the transaction to sell our ownership interests in LKEI and ILS (see Note 14), which increased net earnings by $10 million ($0.02 per share). (f) Net earnings for the second quarter of 2008 included a gain related to the elimination of reserves associated with various land sales that occurred in prior years (see Note 14), which increased net earnings by $56 million ($0.14 per share). (g) Net earnings for the third quarter of 2008 included a portion of the deferred gain recognized in connection with the transaction to sell our ownership interests in LKEI and ILS (see Note 14), which increased net earnings by $28 million ($0.07 per share). (h) Net earnings for the fourth quarter of 2008 included the final portion of the deferred gain recognized in connection with the transaction to sell our ownership interests in LKEI and ILS (see Note 14), which increased net earnings by $32 million ($0.08 per share). Also, net earnings for the fourth quarter of 2008 increased by $36 million ($0.09 per share) due to the recognition of a tax

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 31, 2010	Jun. 28, 2009
Trading Symbol	LMT
Entity Registrant Name	LOCKHEED MARTIN CORP
Entity Central Index Key	0000936468
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		375,428,680
Entity Public Float			$30,900,000,000