10-KPeriod: FY2011

LOCKHEED MARTIN CORP Annual Report, Year Ended Dec 31, 2011

Filed February 23, 2012For Securities:LMT

Summary

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 billion 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 billion 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.

Financial Highlights

48 data points
Beta

Revenue

$46.50B

8.1% Gross Margin

Net Income

$2.65B

5.7% Net Margin

EPS (Diluted)

$7.81

Total Assets

$37.91B

Cash & Equivalents

$3.58B

Free Cash Flow

$3.27B

Financial Statements
Beta
Revenue$46.50B
Cost of Revenue$42.76B
Gross Profit$3.74B
R&D Expenses$585.00M
Operating Income$4.02B
Interest Expense$354.00M
Net Income$2.65B
EPS (Basic)$7.90
EPS (Diluted)$7.81
Shares Outstanding (Basic)335.90M
Shares Outstanding (Diluted)339.90M

Key Highlights

  • 1Revenue of $46.5 billion driven primarily by U.S. Government contracts (82% of total sales).
  • 2Four key business segments: Aeronautics, Electronic Systems, IS&GS, and Space Systems.
  • 3Net earnings of $2.65 billion, with a focus on cost reduction and operational efficiency.
  • 4Total backlog of $80.7 billion at year-end 2011, indicating a strong pipeline of future work.
  • 5Actively managing capital through share repurchases and dividend payments, returning capital to shareholders.
  • 6Significant investment in R&D and technological advancement across its segments.
  • 7Exposure to risks related to U.S. government budget fluctuations, procurement regulations, and international market dynamics.

Frequently Asked Questions

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.

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.

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.

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.