01—Abstract
Summary
Summary of the 10-K filed February 23, 2012. Cited figures are marked; the original filing is the authoritative source.
Lockheed Martin Corporation's (LMT) 2011 10-K filing reveals a company heavily reliant on U.S. government contracts, with 82% of its $46.5 billiona in net sales coming from this sector in 2011.
The company operates across four key segments: Aeronautics, Electronic Systems, Information Systems & Global Solutions (IS&GS), and Space Systems. Despite facing a challenging economic environment and anticipated defense budget pressures, LMT is strategically focusing on core program execution, cost reduction, and disciplined portfolio expansion into international and adjacent markets. Financially, the company reported stable net sales of $46.5 billionb for 2011, a slight increase from the previous year, with net earnings of $2.65 billion.
Key financial metrics like operating profit remained strong, though a significant portion of stockholders' equity was impacted by postretirement benefit plan adjustments. LMT is actively managing its capital structure, evidenced by share repurchases and dividend payments, while navigating significant investments in research and development and ongoing operational restructuring.
02—Key points
Key Highlights
- Revenue of $46.5 billion driven primarily by U.S. Government contracts (82% of total sales).
- Four key business segments: Aeronautics, Electronic Systems, IS&GS, and Space Systems.
- Net earnings of $2.65 billion, with a focus on cost reduction and operational efficiency.
- Total backlog of $80.7 billion at year-end 2011, indicating a strong pipeline of future work.
- Actively managing capital through share repurchases and dividend payments, returning capital to shareholders.
- Significant investment in R&D and technological advancement across its segments.
- Exposure to risks related to U.S. government budget fluctuations, procurement regulations, and international market dynamics.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Lockheed Martin kept $0.06.
- Revenue$46.50B100.0%
- Cost of revenue−$42.76B91.9%
- Gross profit$3.74B8.1%
- Operating costs$276.0M0.6%
- Operating income$4.02B8.6%
- Interest, other & tax−$1.36B2.9%
- Net income$2.65B5.7%
04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 23, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $46.50B$45.67B | +1.8% |
| Cost of Revenue | $42.76B$41.83B | +2.2% |
| Gross Profit | $3.74B$3.84B | −2.6% |
| R&D Expenses | $585.00M$639.00M | −8.5% |
| Operating Income | $4.02B$4.11B | −2.1% |
| Interest Expense | $354.00M$345.00M | +2.6% |
| Net Income | $2.65B$2.88B | −7.7% |
| EPS (Basic) | $7.90$7.90 | 0.0% |
| EPS (Diluted) | $7.81$7.81 | 0.0% |
| Shares Outstanding (Basic) | 335.90M364.20M | −7.8% |
| Shares Outstanding (Diluted) | 339.90M368.30M | −7.7% |
05—Questions
Frequently Asked Questions
What is Lockheed Martin's primary source of revenue?
Lockheed Martin's primary source of revenue is from U.S. Government contracts, which accounted for 82% of its net sales in 2011. This includes contracts with the Department of Defense (61% of total sales) and other government agencies.
How is Lockheed Martin organized?
Lockheed Martin is organized into four main business segments: Aeronautics, Electronic Systems, Information Systems & Global Solutions (IS&GS), and Space Systems. Each segment focuses on distinct areas of aerospace, defense, and technology.
What are the main financial performance indicators mentioned in the report?
Key financial performance indicators include net sales ($46.5 billion in 2011), operating profit ($3.98 billion in 2011), net earnings ($2.65 billion in 2011), and diluted earnings per share ($7.81 in 2011). The company also emphasizes its total backlog ($80.7 billion) as an indicator of future revenue.
What are the key risks facing Lockheed Martin?
Major risks highlighted include a heavy dependence on U.S. government contracts and potential reductions in defense spending, increased competition, non-compliance with procurement rules and regulations, international sales volatility, and the financial impact of pension and postretirement benefit plans. Additionally, cyber threats and potential environmental costs are noted as significant risks.
06—Continue