When will Lockheed Martin adopt FAS 123R, and why the change in date?

Lockheed Martin intends to adopt FAS 123R effective January 1, 2006. This date was revised from an earlier planned adoption of July 1, 2005, due to the SEC deferring the compliance date for the standard by six months, allowing the company more time to prepare.

What is the expected financial impact of adopting FAS 123R?

Lockheed Martin had previously disclosed an estimated impact of adopting FAS 123R to be a reduction in earnings per share of approximately $0.10 to $0.20 on a full-year basis. However, the company notes that the ultimate impact is not yet known as the implementation methodology and valuation models are still under review.

What is FAS 123R and why is it significant for investors?

FAS 123R (Share-Based Payments) requires companies to recognize the cost of employee stock options and other equity-based compensation as an expense on their income statements. This is significant for investors as it can impact reported earnings, potentially reducing profitability compared to previous accounting methods where such expenses were often not fully recognized or expensed differently.

LMT 8-K: Regulation FD — Apr 18, 2005

Q: What is the main purpose of this 8-K filing?

The primary purpose of this 8-K filing is to announce Lockheed Martin Corporation's decision to adopt Financial Accounting Standard 123R (FAS 123R) related to share-based payments, and to update the timeline for its implementation.

Summary

This 8-K filing from Lockheed Martin Corporation (LMT) on April 18, 2005, primarily addresses the company's decision to adopt Financial Accounting Standard 123R (FAS 123R), Share-Based Payments. The company announced its intention to adopt the standard effective January 1, 2006, aligning with a SEC-imposed deferral of the compliance date. This adjustment provides Lockheed Martin with additional time to finalize its implementation strategy and assess the full financial impact of the new accounting standard.

Key Highlights

1Lockheed Martin Corporation (LMT) announced its intention to adopt FAS 123R, Share-Based Payments.
2The adoption of FAS 123R is now scheduled for January 1, 2006.
3This decision follows the SEC's deferral of the compliance date for FAS 123R by six months.
4Lockheed Martin previously planned to adopt the standard prospectively as of July 1, 2005.
5The company will use the additional time to further review and understand the impact of the standard.
6Previously disclosed estimated impact of FAS 123R was a reduction in earnings per share of approximately $0.10 to $0.20 on a full-year basis.
7The final impact of FAS 123R adoption is not yet known as implementation methodology and valuation models are still being finalized.

LOCKHEED MARTIN CORP 8-K Report, Regulation FD Disclosure (Apr 18, 2005)

Summary

Key Highlights

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