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Lockheed Martin Annual Report Disclosure Analysis

926 words - 4 pages

Lockheed Martin
* Background Information
Headquartered in Bethesda, Md., Lockheed Martin is the largest arms-producing and military services company in the world, in addition to being the largest federal contractor in the United States of America. Its core business areas are Aeronautics, Information Systems & Global Solutions, Missiles & Fire Control, Mission Systems & Training and Space Systems.

* Disclosure Policy
Lockheed Martin mentions about its disclosure policy under the section of Management’s Discussion and Analysis of Financial Condition and Results of Operation in its Annual Report. It has a number of programs that are designated as classified by the U.S. ...view middle of the document...

However, Lockheed Martin’s Annual Report provides descriptions about the products and services of each business segment and the outlook of the business segments based on the analysis of the U.S. Government situation. It shows that Lockheed Martin is open about its relationship and projects with the U.S. Government. However, as it mentions in the Annual report, it can only disclose information regarding unclassified projects and it cannot specifically disclose the information regarding the classified projects.

The 2012 financial statements have been audited by Ernst and Young. The financial statements are considered to present the information fairly and the internal control of Lockheed Martin Corporation expressed an unqualified opinion, in accordance with the standards of the Public Company Accounting Oversight Board (United States).

* Industry Focus and Analysis from the Annual Reports of 2010, 2011, 2012

2010 | Aeronautics | Information Systems | Missiles & Fire Control | Mission Systems | Space Systems |
Operating Profit (US$ millions) | 1498 | 814 | 973 | 713 | 1030 |
Depreciation & Amortization(US$ millions) | 334 | 106 | 103 | 183 | 212 |
Capital Expenditures (US$ millions) | 422 | 67 | 112 | 176 | 205 |
2011 | Aeronautics | Information Systems | Missiles & Fire Control | Mission Systems | Space Systems |
Operating Profit (US$ millions) | 1630 | 874 | 1069 | 645 | 1063 |
Depreciation & Amortization(US$ millions) | 345 | 83 | 102 | 174 | 199 |
Capital Expenditures(US$ millions) | 361 | 71 | 119 | 161 | 192 |
2012 | Aeronautics | Information Systems | Missiles & Fire Control | Mission Systems | Space Systems |
Operating Profit (US$ millions) | 1699 | 808 | 1256 | 737 | 1083 |
Depreciation & Amortization(US$ millions) | 311 | 92 | 104 | 179 | 191 |
Capital Expenditures(US$ millions) | 271 | 78 | 128 | 158 | 167 |

Based on the table above, Lockheed Martin’s Aeronautics division has the highest contribution towards the firm’s operating profit throughout the 3 year period. Correspondingly, the depreciation and amortization expenses, as well as the general capital expenditures, of the Aeronautics division has always been the highest ones. It can...

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