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Lockheed Martin Annual Report Disclosure Analysis

In: Business and Management

Submitted By adrianbram
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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. Government. Such classified programs are consequently not specifically described in the Annual Report. Instead, they are implicitly included in the consolidated business segment results.

* General Analysis of the 2012 Annual Report
The Annual Report shows the financial data based on customer category. It is shown that in 2012, the total net sales to the U.S. Government accounted for more than 82% of Lockheed Martin’s total net sales. This figure shows the dependence of Lockheed Martin with the U.S. Government. It also shows the amount of money that the U.S. government spent for the purchase of military weapon and equipment from Lockheed Martin in 2012.

The Annual Report also shows the financial data based on business segments. It only states the figures for the net sales, operating profit, intersegment sales, depreciation & amortization and capital expenditure of each business segment. There is no specific information elaborating on the proportion of expenditures for Research and Development. Since Lockheed Martin is working on a number of classified projects with the U.S. Government, it is assumed that some figures for Research and Development expenditures are…...

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