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1.0.0.3 false Acquisitions and Divestitures false 1 $ false false iso4217_USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 iso4217_USD_per_shares Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares 0 5 Acquisitions and Divestitures 3 us-gaap_SignificantAcquisitionsAndDisposalsDescription us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div> Note 14 – Acquisitions and Divestitures Acquisitions We used cash in 2009, 2008, and 2007 for acquisition activities, including the acquisitions of businesses and investments in affiliates. The amounts used in each year also included certain payments related to acquisitions completed in years prior to the respective years. We have accounted for the acquisition of businesses in 2009 under the acquisition method, which requires that all of the assets acquired and liabilities assumed be measured and recorded at their acquisition-date fair values. In prior years, we accounted for acquisitions under the purchase method of accounting by allocating the purchase price to the assets acquired and liabilities assumed based on their estimated fair values. We used approximately $435 million in 2009 for acquisition activities. Those activities included the acquisition of, among others, Universal Systems & Technology, Inc., which provides interactive training and simulation, homeland security, and technical solutions to various U.S. and international government agencies; and Gyrocam Systems LLC, which develops and supplies gyrostabilized optical surveillance systems and sustainment field services, primarily to the U.S. military. Accounting adjustments related to business acquisitions completed in 2009 included recording goodwill aggregating $396 million, $168 million of which will be amortized for tax purposes, and $56 million of other intangible assets, primarily relating to the value of contracts we acquired. We used approximately $233 million in 2008 for acquisition activities including the acquisition of, among others, Eagle Group International, LLC, which provides logistics, information technology, training, and healthcare services to the U.S. Department of Defense. Purchase accounting adjustments related to business acquisitions completed in 2008 included recording goodwill aggregating $170 million, $93 million of which will be amortized for tax purposes, and $18 million of other intangible assets, primarily relating to the value of contracts we acquired. We used a total of approximately $337 million in 2007 for acquisition activities, including an additional contribution of $177 million related to our investment in ULA discussed below. Those activities also included the acquisition of, among others, Management Systems Designers, Inc., a provider of information technology and scientific solutions supporting government life science, national security, and other civil agency missions. Purchase accounting adjustments related to business acquisitions completed in 2007 included recording goodwill aggregating $120 million, none of which will be amortized for tax purposes, and $12 million of other intangible assets, primarily relating to the value of contracts we acquired. These acquisitions were not material to our consolidated results of operations in 2009, 2008, and 2007. Divestitures Businesses In the second quarter of 2007, we sold our remaining 20% interest in Comsat International for $26 million in cash. The transaction resulted in a gain, net of state income taxes, of $25 million that we recorded in other income (expenses), net, and an increase in net earnings of $16 million ($0.04 per share). In October 2006, we sold our ownership interests in Lockheed Khrunichev Energia International, Inc. (LKEI) and International Launch Services, Inc. (ILS). LKEI was a joint venture with Russian government-owned space firms that has exclusive rights to market launches of commercial, non-Russian-origin space payloads on the Proton family of rockets. One of the joint venture partners, Khrunichev State Research and Production Space Center (Khrunichev), is the manufacturer of the Proton launch vehicle and provider of the related launch services. ILS was a joint venture between LKEI and us to market Atlas and Proton launch services. In periods prior to the sale of these interests, we consolidated the results of operations of LKEI and ILS into our financial statements based on our controlling financial interest.   Contracts for Proton launch services usually required substantial advances from the customer prior to launch which were included as a liability on our Balance Sheet in customer advances and amounts in excess of costs incurred. Under the sale agreement, we were responsible to refund advances to certain customers if launch services were not provided and ILS did not refund the advances. Due to this continuing involvement with those customers of ILS, many of the risks related to this business had not been transferred and we had not recognized this transaction as a divestiture for financial reporting purposes. In 2008, in connection with the deferred gain we had recorded upon the sale of our interests in LKEI and ILS, Khrunichev provided the remaining launch services for which we had potential responsibility to refund advances, such that we were not required to repay advances. As a result, in 2008 we recognized the deferred gain, net of state income taxes, of $108 million, which increased net earnings by $70 million ($0.17 per share). As of December 31, 2008, no related assets or liabilities remained on our Balance Sheet. Land In the second quarter of 2008, we recognized, net of state income taxes, $85 million in other income (expense), net, due to the elimination of reserves related to various land sales in California. Reserves were originally recorded at the time of each land sale in 2007 and prior years based on the U.S. Government’s assertion that a significant portion of the sale proceeds should be allocated to the buildings and improvements on the properties, thereby giving the U.S. Government the right to share in the gains associated with the land sales. At the time the land sales occurred, we believed the value of the properties sold was attributable to the land versus the buildings and improvements. The dispute ultimately went to trial with the Armed Services Board of Contract Appeals (ASBCA), subsequent to which the ASBCA determined that our accounting for the land sales was in accordance with the Federal Acquisition Regulation and CAS. We reached a settlement with the U.S. Government in the second quarter of 2008, and the previously recorded reserves were no longer required. Resolution of this matter increased our net earnings by $56 million ($0.14 per share). In the first quarter of 2007, we sold certain land in California for $36 million in cash. The transaction resulted in a gain, net of state income taxes, of $25 million, which we recorded in other income (expense), net, and an increase in net earnings of $16 million ($0.04 per share). Investment in ULA On December 1, 2006, we completed a transaction with Boeing that resulted in the formation of ULA, a joint venture that combines the engineering, production, test, and launch operations associated with U.S. Government launches of our Atlas launch vehicles and Boeing’s Delta launch vehicles. Under the terms of the joint venture master agreement, Atlas and Delta expendable launch vehicles will continue to be available as alternatives on individual launch missions. We are accounting for our 50% investment in ULA under the equity method of accounting. The net book value of the assets we contributed and the liabilities that ULA assumed from us was initially determined to be $190 million as of the date of closing. We accounted for the transfer at net book value, with no gain or loss recognized. In August 2007, in connection with the agreement we reached with Boeing with respect to resolution of the final working capital and the value of the launch vehicle support contracts that we each contributed to form ULA, we made additional contributions totaling $177 million to ULA that was recorded as an increase in our investment in ULA. ULA also conformed the accounting policies of the contributed businesses. After the agreement was implemented and the conforming adjustments were recorded, our 50% ownership share of ULA’s net assets exceeded the book value of our investment by approximately $395 million, which we are recognizing ratably over 10 years. This amount and our share of ULA’s net earnings are reported as equity in net earnings (losses) of equity investees in other income (expense), net on the Statement of Earnings. Our investment in ULA totaled $454 million and $428 million at December  31, 2009 and 2008. See Note 13 for a description of our future funding commitments to ULA. </div> Note 14 – Acquisitions and Divestitures Acquisitions We used cash in 2009, 2008, and 2007 for acquisition activities, including the acquisitions of false false No definition available. No authoritative reference available. false false 1 1 false UnKnown UnKnown UnKnown false true