beatandraise : SEC Filings Research with AI

beatandraise.com

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--12-31 LMT LOCKHEED MARTIN CORP No Yes 2009-12-31 10-K 0000936468 Yes Large Accelerated Filer false

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<div> Note 13 – Legal Proceedings, Commitments, and Contingencies We are a party to or have property subject to litigation and other proceedings, including matters arising under provisions relating to the protection of the environment. We believe the probability is remote that the outcome of these matters will have a material adverse effect on the Corporation as a whole. We cannot predict the outcome of legal proceedings with certainty. These matters include the following items that have been previously reported. Legal Proceedings On June 24, 2009, the U.K. Ministry of Defence (MoD) sent us a letter alleging that we were in default on the “Soothsayer” contract under which we were providing electronic warfare equipment to the British military. The total value of the contract is UK £144 million, of which UK £39 million has been paid to date (representing approximately US $233 million and US $63 million, based on the exchange rate as of December 31, 2009). The MoD has demanded repayment of amounts paid under the contract, liquidated damages of UK £2 million (representing approximately US $3 million based on the exchange rate as of December 31, 2009), interest on those amounts, and has reserved the right to collect any excess future re-procurement costs. We dispute the MoD’s position. Following an unsuccessful mediation effort in October 2009, we served notice of arbitration on the MoD pursuant to the contract terms. We plan to seek damages for wrongful termination of the contract (including costs incurred but not paid). On April 24, 2009, we filed a declaratory judgment action against the N.Y. Metropolitan Transportation Authority and its Capital Construction Company (collectively, the MTA) asking the U.S. District Court for the Southern District of N.Y. to find that the MTA is in material breach of our agreement based on the MTA’s failure to provide access to sites where work must be performed and the customer-furnished equipment necessary to complete the contract. The contract provides for the design and installation of an integrated electronic security system for the MTA and has a total value of $323 million, of which $241 million has been paid to date. The MTA filed an answer and counterclaim on May 26, 2009, alleging that we breached the contract, and subsequently terminated the contract for alleged default. The MTA is seeking monetary damages and other relief under the contract, including the cost to complete the contract and potential re-procurement costs. We dispute the MTA’s allegations and are defending against them. On July 2, 2009, the sureties under the performance bond that we posted for the contract filed their own declaratory judgment action seeking to be excused from performing for the MTA (noting that they were unable to conclude that we were in material default under the contract) or, in the alternative, seeking indemnification from us. On July 7, 2009, we filed an amended complaint against the MTA adding claims for wrongful termination and for breach of contract damages (including costs incurred but not paid). The MTA has filed an amended counterclaim. Discovery is proceeding in the action. On November 30, 2007, the Department of Justice (DoJ) filed a complaint in partial intervention in a lawsuit filed under the qui tam provisions of the Civil False Claims Act in the U.S. District Court for the Northern District of Texas, United States ex rel. Becker and Spencer v. Lockheed Martin Corporation et al., alleging that we should have known that a subcontractor falsified and inflated invoices submitted to us that were passed through to the government. We dispute the allegations and are defending against them. On February 22, 2007, we received a subpoena issued by a grand jury in the United States District Court for the District of Columbia. The subpoena requests documents related to our participation in a competition conducted in 2004-2005 by the National Archives and Records Administration for a $3 million contract to provide electronic document system support services. We cooperated with the investigation. On October 5, 2009, we received notice from the Department of Justice Antitrust Division that the grand jury investigation has been closed without charges being filed. On September 11, 2006, we and Lockheed Martin Investment Management Company (LMIMCo), our wholly-owned subsidiary, were named as defendants in a lawsuit filed in the U.S. District Court for the Southern District of Illinois, seeking to represent a class of purportedly similarly situated participants and beneficiaries in our Salaried Savings Plan and the Hourly Savings Plan (the Plans). Plaintiffs allege that we or LMIMCo caused the Plans to pay expenses that were higher than reasonable by, among other actions, permitting service providers of the Plans to engage in revenue sharing, paying investment management fees for the company stock funds, and causing the company stock funds to hold cash for liquidity, thus reducing the return on those funds. The plaintiffs further allege that we or LMIMCo failed to disclose information appropriately relating to the fees associated with managing the Plans. In August 2008, plaintiffs filed an amended complaint, adding allegations that we or LMIMCo breached fiduciary duties under ERISA by providing inadequate disclosures with respect to the Stable Value Fund offered under our 401(k) plans. In April 2009, the Judge dismissed the plaintiffs’ claims that were based on revenue sharing but let stand the claims about the company stock funds, the Stable Value Fund, and the overall fees paid by the plans. The Judge also certified a class for each plan for the claims concerning the Stable Value Fund and the overall fees paid by the plans. We are appealing that order. We dispute the allegations and are defending against them. On February 6, 2004, we submitted a certified contract claim to the United States requesting contractual indemnity for remediation and litigation costs (past and future) related to our former facility in Redlands, California. We submitted the claim consistent with a claim sponsorship agreement with The Boeing Company (Boeing), executed in 2001, in Boeing’s role as the prime contractor on the Short Range Attack Missile (SRAM) program. The contract for the SRAM program, which formed a significant portion of our work at the Redlands facility, had special contractual indemnities from the U.S. Air Force, as authorized by Public Law 85-804. On August 31, 2004, the United States denied the claim. Our appeal of that decision is pending with the Armed Services Board of Contract Appeals. On August 28, 2003, the DoJ filed complaints in partial intervention in two lawsuits filed under the qui tam provisions of the Civil False Claims Act in the United States District Court for the Western District of Kentucky, United States ex rel. Natural Resources Defense Council, et al., v. Lockheed Martin Corporation, et al., and United States ex rel. John D. Tillson v. Lockheed Martin Energy Systems, Inc., et al. The DoJ alleges that we committed violations of the Resource Conservation and Recovery Act at the Paducah Gaseous Diffusion Plant by not properly handling, storing, and transporting hazardous waste and that we violated the False Claims Act by misleading Department of Energy officials and state regulators about the nature and extent of environmental noncompliance at the plant. We dispute the allegations and are defending against them. As described in the “Environmental Matters” discussion below, we are subject to federal and state requirements for protection of the environment, including those for discharge of hazardous materials and remediation of contaminated sites. As a result, we are a party to or have property subject to various other lawsuits or proceedings involving environmental matters and remediation obligations. We have been in litigation with certain residents of Redlands, California since 1997 before the California Superior Court for San Bernardino County regarding allegations of personal injury, property damage, and other tort claims on behalf of individuals arising from our alleged contribution to regional groundwater contamination. On July 11, 2006, the California Court of Appeal dismissed the plaintiffs’ punitive damages claim. On September 23, 2008, the trial court dismissed the remaining first tier plaintiffs, ending the first round of individual trials; the California Court of Appeal affirmed this dismissal, and the California Supreme Court denied plaintiffs’ petition for review in January 2010. The parties are now working with the trial court to establish the procedures for the litigation of the next round of individual plaintiffs, and pre-trial proceedings are now underway. Environmental Matters We are involved in environmental proceedings and potential proceedings relating to soil and groundwater contamination, disposal of hazardous waste, and other environmental matters at several of our current or former facilities, or at third-party sites where we have been designated as a potentially responsible party. Environmental cleanup activities usually span several years, which make estimating liabilities a matter of judgment because of such factors as changing remediation technologies, assessments of the extent of contamination, and continually evolving regulatory environmental standards. We consider these and other factors in estimates of the timing and amount of any future costs that may be required for remediation actions, which results in the calculation of a range of estimates for a particular environmental site. We record a liability for the amount within the range that we determine to be our best estimate of the cost of remediation or, in cases where no amount within the range is better than another, we record an amount at the low end of the range. We do not discount the recorded liabilities, as the amount and timing of future cash payments are not fixed or cannot be reliably determined.   At December 31, 2009 and 2008, the aggregate amount of liabilities recorded relative to environmental matters was $877 million and $809 million. Approximately $748 million and $694 million are recorded in other liabilities on the Balance Sheet, with the remainder recorded in other current liabilities. A portion of environmental costs is eligible for future recovery in the pricing of our products and services on U.S. Government contracts. We have recorded assets totaling $740 million and $683 million at December 31, 2009 and 2008 for the estimated future recovery of these costs, as we consider the recovery probable based on government contracting regulations and our history of receiving reimbursement for such costs. Approximately $630 million and $585 million are recorded in other assets on the Balance Sheet, with the remainder recorded in other current assets. We perform quarterly reviews of the status of our environmental sites and the related liabilities and assets. Based on the reviews completed during the year, we increased the liability by $68 million and the asset deemed probable of recovery by $57 million from the amounts recorded at December 31, 2008. The amounts that were attributable to our commercial businesses or that were determined to be unallowable for pricing under U.S. Government contracts were expensed through cost of sales. We cannot reasonably determine the extent of our financial exposure in all cases at this time. There are a number of former operating facilities that we are monitoring or investigating for potential future remediation. In some cases, although a loss may be probable, it is not possible at this time to reasonably estimate the amount of any obligation for remediation activities because of uncertainties with respect to assessing the extent of the contamination or the applicable regulatory standard. We also are pursuing claims for contribution to site cleanup costs against other potentially responsible parties (PRPs), including the U.S. Government. We are conducting remediation activities, including under various consent decrees and orders relating to soil or groundwater contamination at certain sites of former or current operations. Under an agreement related to our Burbank and Glendale, California sites, the U.S. Government reimburses us an amount equal to approximately 50% of expenditures for certain remediation activities in its capacity as a PRP under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Letters of Credit and Other Arrangements We have entered into standby letter of credit agreements, surety bonds, and other arrangements with financial institutions and other third parties primarily relating to advances received from customers and/or the guarantee of future performance on certain contracts. We have total outstanding letters of credit, surety bonds, and other arrangements aggregating $3.6 billion and $3.1 billion at December 31, 2009 and 2008. Letters of credit and surety bonds are generally available for draw down in the event we do not perform. United Launch Alliance In connection with the closing of the transaction to form United Launch Alliance, L.L.C. (ULA) on December 1, 2006 (see Note 14), we and Boeing each committed to providing up to $25 million in additional capital contributions and $200 million in other financial support to ULA, as required. As of December 31, 2009, we and Boeing each had provided the $25 million of funding to ULA under the additional capital contribution commitment. Of that amount, $22 million was contributed in the second quarter of 2009, prior to which we each received a dividend from ULA in a like amount. Other than the $22 million contribution, we did not provide further funding to ULA during 2009. We and Boeing put into place at closing a revolving credit agreement with ULA to satisfy the required non-capital financial support commitment. We have agreed to provide this support for at least five years from the closing date of the transaction, and would expect to fund our requirements with cash on hand. No amounts have been drawn on the credit agreement. In the fourth quarter of 2008, we and Boeing each received a $100 million dividend payment. Prior to distribution of that dividend, we, Boeing, and ULA entered into an agreement whereby, if ULA does not have sufficient cash resources and/or credit capacity to make payments under the inventory supply agreement it has with Boeing, both we and Boeing would provide to ULA, in the form of an additional capital contribution, the level of funding required for ULA to make such payments. Such capital contributions would not exceed the aggregate amount of the dividends we received through June 1, 2009, which totaled $122 million. We currently believe that ULA will have sufficient operating cash flows and credit capacity to meet its obligations such that we would not be required to make a contribution under this agreement.   In addition, both we and Boeing have cross-indemnified ULA related to certain financial support arrangements (e.g., letters of credit, surety bonds, or foreign exchange contracts provided by either party) and guarantees by us and Boeing of the performance and financial obligations of ULA under certain launch service contracts. We believe ULA will be able to fully perform its obligations, as it has done through December 31, 2009, and that it will not be necessary to make payments under the cross-indemnities. </div>

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<div> Note 8 – Income Taxes Our provision for federal and foreign income tax expense consisted of the following components:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="75%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2007</td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="3"></td> <td height="8" colspan="3"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Federal income taxes </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Current </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">710</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,385</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,199</td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Deferred </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">557</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">72</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">107</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Total federal income taxes </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,267</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,457</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,306</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Foreign income taxes </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Current </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">28</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">26</td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Deferred </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(15</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">3</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Total foreign income taxes </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(7</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">28</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">29</td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Income tax expense </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,260</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,485</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,335</td> </tr> </table> State income taxes are included in our operations as general and administrative costs and, under U.S. Government regulations, are allowable in establishing prices for the products and services we sell to the U.S. Government. Therefore, a substantial portion of state income taxes is included in our net sales and cost of sales. As a result, the impact of certain transactions on our operating profit and other matters disclosed in these financial statements is disclosed net of state income taxes. Our total net state income tax expense was $144 million for 2009, $221 million for 2008, and $199 million for 2007.   Our reconciliation of income tax expense computed using the U.S. federal statutory income tax rate of 35% to actual income tax expense is as follows:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="73%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2007</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Income tax expense at the U.S. federal statutory tax rate </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,499</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,646</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,528</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Reduction in tax expense: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> U.S. production activity benefit </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(39</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(67</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(55</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Research tax credit </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(43</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(36</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(30</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Tax deductible dividends </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(49</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(38</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(32</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Closure of IRS examinations </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(69</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(59</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Other, net </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(39</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(20</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(17</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Income tax expense </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,260</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,485</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,335</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> In 2009, the IRS examinations of our U.S. Federal Income Tax Returns for the years 2005-2007 and 2008 were resolved and settled. As a result, we recognized additional tax benefits and reduced our income tax expense for 2009 by $69 million ($0.18 per share), including related interest. This reduction in income tax expense reduced our effective income tax rate for 2009 by 1.6%. In 2007, the IRS examination of our U.S. Federal Income Tax Returns for the years 2003 – 2004 was resolved and settled, and claims were filed for additional extraterritorial income (ETI) tax benefits for years prior to 2005. As a result, we recognized additional tax benefits and reduced our income tax expense for 2007 by $59 million ($0.14 per share), including related interest, which reduced our effective tax rate for 2007 by 1.4%. Current income taxes payable of $217 million and $277 million at December 31, 2009 and 2008 are included in other current liabilities on the Balance Sheet. The primary components of our federal and foreign deferred income tax assets and liabilities at December 31 were as follows:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="82%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Deferred tax assets related to: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Contract accounting methods </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">391</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">363</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Accrued compensation and benefits </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">796</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">745</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Pensions (a) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,664</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,361</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other postretirement benefit obligations </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">565</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">580</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Foreign company operating losses and credits </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">15</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">34</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Gross deferred tax assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,431</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6,083</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Valuation allowance (b) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(13</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(30</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Net deferred tax assets </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">5,418</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">6,053</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr> <td valign="top"> Deferred tax liabilities related to: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Goodwill and purchased intangibles </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">371</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">365</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Property, plant and equipment </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">343</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">235</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Other </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">111</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">63</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Deferred tax liabilities </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">825</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">663</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Net deferred tax assets (c) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">4,593</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">5,390</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="3%" align="left">(a)</td> <td valign="top" align="left"> The decrease in the deferred tax balance for the pension plans resulted from decreases in accrued pension liabilities. </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="3%" align="left">(b)</td> <td valign="top" align="left"> A valuation allowance has been provided against certain foreign company deferred tax assets arising from carryforwards of unused tax benefits. </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="3%" align="left">(c)</td> <td valign="top" align="left"> Net deferred tax assets as of December 31, 2009 and 2008 includes $1 million of net foreign current deferred tax liabilities and $16 million of net foreign noncurrent deferred tax liabilities, which are included on the Balance Sheet in other current liabilities and other liabilities, respectively. </td> </tr> </table>   We have recorded liabilities for unrecognized tax benefits related to permanent and temporary tax adjustments that, exclusive of interest, totaled $217 million and $250 million at December 31, 2009 and 2008. The change in the liabilities resulted from the following:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="85%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Balance at January 1 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">250</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">195</td> </tr> <tr> <td valign="top"> Tax positions related to the current year </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">39</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">55</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Increase (decrease) related to tax positions in prior years: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Recognition of benefits from resolution of issues with IRS </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(54</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Decreases related to settlements with taxing authorities </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(18</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Balance at December 31 </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">217</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">250</td> </tr> </table> The liabilities at the end of 2009 and 2008 were recorded in other current liabilities on the Balance Sheet. At December 31, 2009 and 2008, the amount of unrecognized tax benefits from permanent tax adjustments that, if recognized, would affect the effective tax rate, was $210 million and $238 million. The amount of net interest and penalties recognized as a component of income tax expense during 2009, 2008, and 2007, as well as the amount of interest and penalties accrued at December 31, 2009 and 2008, was not material. We have protested to the IRS Appeals Division certain proposed adjustments related to tax years 2003-2004, 2005-2007, and 2008, and we expect these issues to be resolved over the next year. It is reasonably possible that resolution of these and other matters over the next year could cause a reduction in our unrecognized tax benefits of up to $185 million, only a portion of which may affect net earnings. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various foreign jurisdictions. With few exceptions, the statute of limitations is no longer open for U.S. federal or non-U.S. income tax examinations for the years before 2003. U.S. income taxes and foreign withholding taxes have not been provided on earnings of $123 million, $139 million, and $136 million that have not been distributed by our non-U.S. companies during 2009, 2008, and 2007. Our intention is to permanently reinvest these earnings, thereby indefinitely postponing their remittance. If these earnings were remitted, we estimate that the additional income taxes after foreign tax credits would be approximately $29 million in 2009, $16 million in 2008, and $11 million in 2007. Our federal and foreign income tax payments, net of refunds received, were $986 million in 2009, $1,234 million in 2008, and $1,131 million in 2007. Included in these amounts are tax payments and refunds related to our divestiture activities. </div>

1260000000

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482000000

233000000

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719000000

305000000

<div> Note 6 – Inventories Inventories consisted of the following components:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="80%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Work-in-process, primarily related to long-term contracts and programs in progress </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">5,565</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,631</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Less: customer advances and progress payments </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(3,941</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(3,396</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,624</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,235</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Other inventories </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">559</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">667</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">2,183</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,902</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> Work-in-process inventories at December 31, 2009 and 2008 included general and administrative costs of $703 million and $434 million. During 2009, 2008, and 2007, general and administrative costs incurred and recorded in inventories totaled $2,377 million, $2,344 million, and $2,077 million, and general and administrative costs charged to cost of sales from inventories totaled $2,108 million, $2,213 million, and $2,103 million. </div>

-1476000000

-1518000000

3173000000

3024000000

4466000000

82000000

671000000

123000000

279000000

-48000000

1851000000

908000000

435000000

852000000

<div> Note 10 – Postretirement Benefit Plans Defined Contribution Plans We maintain a number of defined contribution plans, most with 401(k) features that cover substantially all of our employees. Under the provisions of our 401(k) plans, most employees’ eligible contributions are matched at rates specified in the plan documents. Our contributions were $364 million in 2009, $351 million in 2008, and $327 million in 2007, the majority of which were funded in our common stock. Our Salaried Savings Plan is a defined contribution plan with a 401(k) feature that includes an Employee Stock Ownership Plan (ESOP) Fund. Our matching contributions to the Salaried Savings Plan have been fulfilled through newly issued shares or purchases of common stock from participant account balance reallocations. At December 31, 2009, the Salaried Savings Plan held 60.3 million issued and outstanding shares of our common stock, all of which were allocated to participant accounts. Certain plans for hourly employees include an ESOP Fund. In one such plan, the match is made, generally at the election of the participant, in either our common stock or cash that may be invested at the participant’s direction in one of the plan’s other investment options. Contributions to these plans were made with newly issued shares to the Hourly ESOP Fund or through cash contributed to the trust for the Hourly ESOP Fund. Any contributions that participants directed to be invested in our common stock were used by the investment manager to purchase common stock either in the open market or from participant account balance reallocations. This ESOP Fund held 1.9 million issued and outstanding shares of our common stock at December 31, 2009, all of which were allocated to participant accounts.   Defined Benefit Pension Plans and Retiree Medical and Life Insurance Plans Most of our employees hired on or before December 31, 2005 are covered by qualified defined benefit pension plans, and we provide certain health care and life insurance benefits to eligible retirees. We also sponsor nonqualified defined benefit pension plans to provide for benefits in excess of qualified plan limits. Non-union represented employees hired on or after January 1, 2006 do not participate in our qualified defined benefit pension plans, but are eligible to participate in our qualified defined contribution plan in addition to our other retirement savings plans. They also have the ability to participate in our retiree medical plans, but we do not subsidize the cost of their participation in those plans as we do with employees hired before January 1, 2006. We have made contributions to trusts established to pay future benefits to eligible retirees and dependents (including Voluntary Employees’ Beneficiary Association trusts and 401(h) accounts, the assets of which will be used to pay expenses of certain retiree medical plans). We use December 31 as the measurement date. Benefit obligations as of the end of each year reflect assumptions in effect as of those dates. Net pension and net retiree medical costs for each of the years presented were based on assumptions in effect at the end of the respective preceding year. The rules related to accounting for postretirement benefit plans under GAAP require us to recognize on a plan-by-plan basis the funded status of our postretirement benefit plans, with a corresponding noncash adjustment to accumulated other comprehensive income (loss), net of tax, in stockholders’ equity. The funded status is measured as the difference between the fair value of the plan’s assets and the benefit obligation of the plan. Benefit Obligations and Funded Status The following provides a reconciliation of benefit obligations, plan assets, and unfunded status related to our qualified defined benefit pension plans and retiree medical and life insurance plans:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="62%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Defined Benefit Pension Plans</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Retiree Medical and Life Insurance Plans</td> <td valign="bottom"> </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">    2009    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Change in benefit obligations </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Benefit obligations at beginning of year </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">30,421</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">28,138</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,812</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,945</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Service cost </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">870</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">823</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">34</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">43</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Interest cost </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,812</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,741</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">165</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">180</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Benefits paid </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,510</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,474</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(366</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(368</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Medicare Part D subsidy </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">36</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">41</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Actuarial losses (gains) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,153</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,103</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">106</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(178</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Amendments </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">70</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">89</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Divestitures </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Participants’ contributions </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">142</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">139</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Benefit obligations at end of year </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">32,817</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">30,421</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2,938</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2,812</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Change in plan assets </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Fair value of plan assets at beginning of year </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">18,539</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">27,259</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,426</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,017</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Actual return on plan assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,644</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(7,354</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">330</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(525</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Benefits paid </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,510</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,474</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(366</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(368</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Medicare Part D subsidy </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">36</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">41</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Our contributions </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,482</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">109</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">60</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">120</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Participants’ contributions </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">142</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">139</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Divestitures and other </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(1</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(1</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Fair value of plan assets at end of year </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">22,154</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">18,539</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,630</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,426</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Unfunded status of the plans </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(10,663</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(11,882</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(1,308</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(1,386</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Amounts recognized in the Balance Sheet </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Prepaid pension asset </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">160</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">122</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Accrued postretirement benefit liabilities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(10,823</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(12,004</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,308</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,386</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Accumulated other comprehensive (income) loss (pre-tax) related to: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Net actuarial losses </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,809</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12,574</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">564</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">723</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Prior service cost (credit) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">457</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">467</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(53</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(85</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> </tr> </table>   The accumulated benefit obligation for all qualified defined benefit pension plans was $29.0 billion and $26.9 billion at December 31, 2009 and 2008. For qualified defined benefit pension plans in which the accumulated benefit obligation (ABO) was in excess of the fair value of the plans’ assets, the projected benefit obligation, ABO, and fair value of the plans’ assets are presented below.   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="79%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Projected benefit obligation </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">32,689</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">30,292</td> </tr> <tr> <td valign="top"> Accumulated benefit obligation </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">28,920</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">26,814</td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Fair value of plan assets </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">21,866</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">18,288</td> </tr> </table> The following provides a reconciliation of benefit obligations and the unfunded status related to our nonqualified defined benefit pension plans. We have set aside certain assets totaling $328 million and $161 million as of December 31, 2009 and 2008 in a Rabbi Trust which we expect to be used to pay obligations under our nonqualified plans. In accordance with GAAP, those assets may not be used to offset the amount of the benefit obligation similar to the qualified defined benefit pension and retiree medical and life insurance plans in the table above.   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="80%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="4" align="center">Nonqualified Defined Benefit Pension Plans</td> <td valign="bottom"> </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> (In millions) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">    2009    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">    2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Change in benefit obligations </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Benefit obligations at beginning of year </td> <td valign="bottom">  </td> <td valign="bottom" align="right">$  647</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">$  610</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Service cost </td> <td valign="bottom">  </td> <td valign="bottom" align="right">15</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">13</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Interest cost </td> <td valign="bottom">  </td> <td valign="bottom" align="right">39</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">38</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Benefits paid </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(50</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom" align="right">(57</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Actuarial losses (gains) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">86</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">43</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Benefit obligations at end of year </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">$  737</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">$  647</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Unfunded status of the plans (recognized in other liabilities) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">$ (737</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">$ (647</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> </tr> </table> The unrecognized net actuarial losses at December 31, 2009 and 2008 were $372 million and $309 million, and the unrecognized prior service costs were not material. The expense associated with these plans totaled $76 million in 2009, $71 million in 2008, and $73 million in 2007. We also sponsor a small number of other postemployment plans and foreign benefit plans. The aggregate liability for the other postemployment plans was $70 million and $74 million as of December 31, 2009 and 2008. The expense for the other postemployment plans, as well as the liability and expense associated with the foreign benefit plans, was not material to our results of operations, financial position, or cash flows. The unrecognized amounts recorded in accumulated other comprehensive income (loss) subsequently will be recognized as an expense consistent with our historical accounting policy for amortizing those amounts. Actuarial gains and losses incurred in future periods and not recognized as expense in those periods will be recognized as increases or decreases in other comprehensive income (loss), net of tax. As they are subsequently recognized as a component of expense, the amounts recorded in other comprehensive income (loss) in prior periods are adjusted.   The following postretirement benefit plan amounts were included as adjustments to other comprehensive income (loss), net of tax, during the years ended December 31, 2009 and 2008. The amounts listed under “Incurred but Not Recognized” reflect actuarial gains or losses due to differences between actual experience and the actuarial assumptions, and prior service costs or credits from improvements or reductions in plan benefits, each of which occurred during 2009 and 2008 and were recognized as a component of other comprehensive income at the end of the year. The amounts listed under “Reclassification Adjustment for Prior Period Amounts Recognized” reflect amounts that were amortized as a component of expense for the year and are no longer included in accumulated other comprehensive income as of the end of the year.   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="68%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Incurred but Not Recognized</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Reclassification Adjustment for Prior Period Amounts Recognized</td> <td valign="bottom"> </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> (In millions) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">    2009    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">    2008    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="8"></td> <td height="8" colspan="8"></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="6" align="center">Gains (losses)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center">(Gains) losses</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Actuarial gains and losses </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Qualified defined benefit pension plans </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">  298</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(6,865</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">  195</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Retiree medical and life insurance plans </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">77</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(323</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">27</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Nonqualified defined benefit pension plans </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(55</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(28</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">15</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">13</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Foreign benefit and other plans </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(55</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(21</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">7</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(5</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">265</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(7,237</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">244</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">10</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="8"></td> <td height="8" colspan="8"></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="6" align="center">Credit (cost)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="6" align="center">(Credit) cost</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Prior service credit and cost </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Qualified defined benefit pension plans </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(45</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(58</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">52</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">52</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Retiree medical and life insurance plans </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(15</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(16</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Foreign benefit and other plans </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(51</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(62</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">37</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">36</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">214</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(7,299</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">281</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">46</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> The unrecognized actuarial gain or loss included in accumulated other comprehensive income (loss) at the end of 2009 and expected to be recognized in net pension cost during 2010 is a loss of $595 million ($384 million net of income tax benefits) for our qualified defined benefit pension plans, a loss of $25 million ($16 million net of income tax benefits) for our retiree medical and life insurance plans, and a loss of $27 million ($17 million net of income tax benefits) for our nonqualified defined benefit pension plans. The amounts of unrecognized actuarial gain or loss for the foreign benefit and other plans are not expected to be material. The prior service credit or cost included in accumulated other comprehensive income (loss) at the end of 2009 and expected to be recognized in net pension cost during 2010 is a cost of $83 million ($54 million net of income tax benefits) for our qualified defined benefit pension plans and a credit of $16 million ($10 million net of income taxes) for our retiree medical and life insurance plans. The amounts of prior service cost for the nonqualified, foreign, and other plans are not expected to be material. No plan assets are expected to be returned to us in 2010. Net Pension and Postretirement Benefit Costs The net pension cost and the net postretirement benefit cost included the following components:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="74%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2007</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Qualified defined benefit pension plans </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Service cost </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">870</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">823</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">862</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Interest cost </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,812</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,741</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,631</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Expected return on plan assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,028</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,184</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,063</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Recognized net actuarial losses </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">302</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">168</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Amortization of prior service cost </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">80</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">80</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">89</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Total net pension expense </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,036</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">462</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">687</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Retiree medical and life insurance plans </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Service cost </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">34</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">43</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">51</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Interest cost </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">165</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">180</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">189</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Expected return on plan assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(106</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(153</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(144</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Recognized net actuarial losses </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">42</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">21</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Amortization of prior service credit </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(23</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(25</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(24</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Total net postretirement expense </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">112</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">46</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">93</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table>   Actuarial Assumptions The actuarial assumptions used to determine the benefit obligations at December 31, 2009 and 2008 related to our postretirement benefit plans were as follows:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="83%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="4" align="center">Benefit Obligation Assumptions</td> <td valign="bottom"> </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Discount rate </td> <td valign="bottom">  </td> <td valign="bottom" align="right">5.875</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">    </td> <td valign="bottom" align="right">6.125</td> <td valign="bottom" nowrap="nowrap">% </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Rate of increase in future compensation levels </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">5.000</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">5.000</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> The decrease in the discount rate from December 31, 2008 to December 31, 2009 resulted in an increase in the projected benefit obligations of our qualified defined benefit pension plans at December 31, 2009 of approximately $1.0 billion. The actuarial assumptions used to determine the net expense related to our postretirement benefit plans in 2009, 2008, and 2007 were as follows:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="75%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="7" align="center">Postretirement Benefit Plan Cost Assumptions</td> <td valign="bottom"> </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">2007</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Discount rate </td> <td valign="bottom">  </td> <td valign="bottom" align="right">6.125</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">  </td> <td valign="bottom" align="right">6.375</td> <td valign="bottom" nowrap="nowrap">% </td> <td valign="bottom">  </td> <td valign="bottom" align="right">5.875</td> <td valign="bottom" nowrap="nowrap">% </td> </tr> <tr> <td valign="top"> Expected long-term rate of return on assets </td> <td valign="bottom">  </td> <td valign="bottom" align="right">8.50  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">8.50  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" align="right">8.50  </td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Rate of increase in future compensation levels </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">5.00  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">5.00  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">5.00  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> The long-term rate of return assumption represents the expected average rate of earnings on the funds invested or to be invested to provide for the benefits included in the benefit obligations. That assumption is determined based on a number of factors, including historical market index returns, the anticipated long-term asset allocation of the plans, historical plan return data, plan expenses, and the potential to outperform market index returns. The medical trend rate used in measuring the postretirement benefit obligation was 10.0% in 2009 for pre-Medicare coverage and 9.5% for post-Medicare coverage, and was assumed to ultimately decrease to 5.0% by year 2020 for pre-Medicare coverage and year 2019 for post-Medicare coverage. A 10.0% rate was also used in 2008, and was assumed to ultimately decrease to 5.0% by the year 2016. An increase or decrease of one percentage point in the assumed medical trend rates would result in a change in the postretirement benefit obligation of 4.2% and (3.6)% at December 31, 2009, and a change in the 2009 postretirement service cost plus interest cost of 3.7% and (3.2)%. The medical trend rate for 2010 is 10.0% for pre-Medicare coverage and 9.5% for post-Medicare coverage. Contributions and Expected Benefit Payments We generally refer to CAS and Internal Revenue Code rules in determining funding requirements for our defined benefit pension plans. In 2009, we made required contributions of $2 million related to our retiree medical and life insurance plans. Also in 2009, we made discretionary contributions of $1,482 million related to our qualified defined benefit pension plans and $58 million related to our retiree medical and life insurance plans. Based on our known requirements as of December 31, 2009, no contributions related to the qualified defined benefit pension plans are expected to be required in 2010. We expect to make further discretionary payments of $1.4 billion related to the qualified defined benefit pension plans in 2010, as we anticipate that funding requirements under the Pension Protection Act beginning in 2011 will be higher than requirements in previous years. We also may review options for further contributions in 2010. Also, we expect to make required contributions related to the retiree medical and life insurance plans in 2010 in the amount of $155 million.   The following benefit payments and receipts, which reflect expected future service, are expected to be paid or received. The payments for the retiree medical and life insurance plans are shown net of estimated employee contributions for the respective years but are not shown net of the anticipated subsidy receipts.   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="57%"></td> <td valign="bottom" width="10%"></td> <td></td> <td></td> <td valign="bottom" width="13%"></td> <td></td> <td></td> <td valign="bottom" width="13%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom">    </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="5" nowrap="nowrap" align="center">Retiree Medical and Life Insurance Plans</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" nowrap="nowrap" align="center">Qualified Pension Benefits</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" nowrap="nowrap" align="center">Payments</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" nowrap="nowrap" align="center">Subsidy Receipts (a)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2010 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,640</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">260</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">30</td> </tr> <tr> <td valign="top"> 2011 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,710</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">270</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">40</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2012 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,780</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">280</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">40</td> </tr> <tr> <td valign="top"> 2013 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,860</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">280</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">40</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2014 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,950</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">290</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">50</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Years 2015 – 2019 </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">11,260</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,370</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">230</td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="3%" align="left">(a)</td> <td valign="top" align="left"> Amounts represent subsidy payments expected to be received under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Under that law, the U.S. Government makes subsidy payments to eligible employers to offset the cost of prescription drug benefits provided to plan participants. During 2009 and 2008, we received $36 million and $41 million in subsidy payments. </td> </tr> </table> Plan Assets Investment policies and strategies – Lockheed Martin Investment Management Company (LMIMCo), our wholly-owned subsidiary, has the fiduciary responsibility for making investment decisions related to the assets of our defined benefit pension plans and retiree medical and life insurance plans. LMIMCo’s investment objectives for the assets of the defined benefit pension and retiree medical and life insurance plans are (1) to minimize the net present value of expected funding contributions; (2) to ensure there is a high probability that each plan meets or exceeds our actuarial long-term rate of return assumptions; and (3) to diversify assets to minimize the risk of large losses. The nature and duration of benefit obligations, along with assumptions concerning asset class returns and return correlations, are considered when determining an appropriate asset allocation to achieve the investment objectives. Investment policies and strategies governing the assets of the plans are designed to achieve investment objectives within prudent risk parameters. Risk management practices include the use of external investment managers; the maintenance of a portfolio diversified by asset class, investment approach, and security holdings; and the maintenance of sufficient liquidity to meet benefit obligations as they come due. On a weighted-average basis, LMIMCo’s investment policies require that asset allocations of postretirement benefit plans be maintained within the following approximate ranges:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="79%"></td> <td valign="bottom" width="17%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     Asset Class</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap" align="center">Asset Allocation Ranges</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cash and cash equivalents </td> <td valign="bottom">  </td> <td valign="top" align="right">  0 – 20</td> <td valign="top" nowrap="nowrap">% </td> </tr> <tr> <td valign="top"> Equity </td> <td valign="bottom">  </td> <td valign="top" align="right">15 – 60</td> <td valign="top" nowrap="nowrap">% </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Fixed income </td> <td valign="bottom">  </td> <td valign="top" align="right">10 – 40</td> <td valign="top" nowrap="nowrap">% </td> </tr> <tr> <td valign="top"> Alternative investments: </td> <td valign="bottom">  </td> <td valign="top"></td> <td valign="top"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Private equity funds </td> <td valign="bottom">  </td> <td valign="bottom" align="right">  0 – 10</td> <td valign="bottom" nowrap="nowrap">% </td> </tr> <tr> <td valign="top"> Real estate funds </td> <td valign="bottom">  </td> <td valign="top" align="right">  0 – 10</td> <td valign="top" nowrap="nowrap">% </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Hedge funds </td> <td valign="bottom">  </td> <td valign="top" align="right">  0 – 10</td> <td valign="top" nowrap="nowrap">% </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Commodities </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top" align="right">  0 – 25</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top" nowrap="nowrap">% </td> </tr> </table>   Fair value of plan assets – Beginning in 2009, the rules related to accounting for postretirement benefit plans under GAAP require certain fair value disclosures related to postretirement benefit plan assets, even though those assets are not included on our Balance Sheet. The following table presents the fair value of the assets of our qualified defined benefit pension plans and retiree medical and life insurance plans by asset category and their level within the fair value hierarchy as of December 31, 2009. See Note 15 for the description of each level within the fair value hierarchy.   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="66%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 1</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 2</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 3</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"> Balance as of December 31, 2009 </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cash and cash equivalents </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,187</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,187</td> </tr> <tr> <td valign="top"> Equity (a): </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> U.S. equity securities (b) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,136</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">22</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,158</td> </tr> <tr> <td valign="top"> International equity securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,466</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">76</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">16</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3,558</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Commingled equity funds </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,310</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,450</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,760</td> </tr> <tr> <td valign="top"> Fixed income (a) : </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Corporate debt securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,301</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,306</td> </tr> <tr> <td valign="top"> U.S. Government securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,173</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,173</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other fixed income securities </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,299</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">37</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,336</td> </tr> <tr> <td valign="top"> Alternative investments: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Private equity funds </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,730</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,730</td> </tr> <tr> <td valign="top"> Real estate funds </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">125</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">125</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Hedge funds </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">750</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">750</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Commodities (a) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">161</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">481</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">642</td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Total </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">11,260</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">9,802</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">2,663</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">23,725</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Receivables, net </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">59</td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Total </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">23,784</td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="3%" align="left">(a)</td> <td valign="top" align="left"> Equity securities, fixed income securities, and commodities included derivative assets and liabilities whose fair values were not material as of December 31, 2009. LMIMCo’s investment policies restrict the use of derivatives to either establish long exposures for purposes of expediency or capital efficiency, or to hedge risks to the extent of a plan’s current exposure to such risks. Such derivative transactions are settled on a daily basis. </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="3%" align="left">(b)</td> <td valign="top" align="left"> U.S. equity securities included shares of our issued and outstanding common stock purchased by investment managers in the amounts of $7 million (less than 0.03% of plan assets) as of December 31, 2009. </td> </tr> </table> As of December 31, 2009, the assets associated with our foreign defined benefit pension plans were not material and have not been included in the table above. The following table presents the changes during 2009 in the fair value of plan assets categorized as Level 3 in the preceding table:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="40%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">International Equity</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"> Coming - led Equity Funds </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Corporate Debt</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Other Fixed Income</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Private Equity Funds</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Real Estate Funds</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Hedge Funds</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Total</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Balance at January 1, 2009 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">7</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">228</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">113</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">114</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,417</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">163</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">973</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">3,015</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Actual return on plan assets: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Realized gains (losses), net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(21</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">44</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Unrealized gains (losses), net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">92</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">44</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">133</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(103</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">57</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">236</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Purchases, sales, and settlements, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(71</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(84</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">114</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">65</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(279</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(243</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Transfers in and/or out of Level 3 </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(3</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(320</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(60</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(6</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(389</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Balance at December 31, 2009 </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">16</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">—  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">5</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">37</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1,730</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">125</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">750</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">2,663</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> Valuation techniques – Cash equivalents are mostly comprised of short-term money-market instruments and are valued at cost, which approximates fair value. U.S. equity securities and international equity securities categorized as Level 1 are traded on national and international exchanges and are valued at their closing prices on the last trading day of the year. For U.S. equity securities and international equity securities not traded on an active exchange, or if the closing price is not available, the trustee obtains indicative quotes from a pricing vendor, broker, or investment manager. These securities are categorized as Level 2 if the custodian obtains corroborated quotes from a pricing vendor or categorized as Level 3 if the custodian obtains uncorroborated quotes from a broker or investment manager. Commingled equity funds are public investment vehicles valued using the Net Asset Value (“NAV”) provided by the fund manager. The NAV is the total value of the fund divided by the number of shares outstanding. Commingled equity funds are categorized as Level 1 if traded at their NAV on a nationally recognized securities exchange or categorized as Level 2 if the NAV is corroborated by observable market data (e.g., purchases or sales activity). Fixed income securities categorized as Level 2 are valued by the trustee using pricing models that use verifiable observable market data (e.g. interest rates and yield curves observable at commonly quoted intervals), bids provided by brokers or dealers, or quoted prices of securities with similar characteristics. Private equity funds, real estate funds, hedge funds, and certain fixed income securities categorized as Level 3 are valued based on valuation models that include significant unobservable inputs and cannot be corroborated using verifiable observable market data. Valuations for private equity funds and real estate funds are determined by the general partners, while hedge funds are valued by independent administrators. Depending on the nature of the assets, the general partners or independent administrators use both the income and market approaches in their models. The market approach consists of analyzing market transactions for comparable assets while the income approach uses earnings or the net present value of estimated future cash flows adjusted for liquidity and other risk factors. Commodities categorized as Level 1 are traded on a commodity exchange and are valued at their closing prices on the last trading day of the year. Commodities categorized as Level 2 represent shares in a commingled commodity fund valued using the NAV, which is corroborated by observable market data. </div>

40000000

1464000000

<div> Note 7 – Property, Plant, and Equipment Property, plant, and equipment consisted of the following components:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="80%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Land </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">112</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">109</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Buildings </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,010</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,756</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Machinery and equipment </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">6,283</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">6,034</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">11,405</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10,899</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Less: accumulated depreciation and amortization </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(6,885</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(6,411</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">4,520</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">4,488</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> </div>

<div> Note 17 – Summary of Quarterly Information (Unaudited)   <table border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr> <td width="60%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="11" align="center">2009 Quarters (a)</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions, except per share data)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">First</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Second</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Third (c)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Fourth (d)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Net sales </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">10,373</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">11,236</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">11,056</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">12,524</td> </tr> <tr> <td valign="top"> Operating profit </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,057</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,083</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,085</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,241</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Net earnings </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">666</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">734</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">797</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">827</td> </tr> <tr> <td valign="top"> Basic earnings per share </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1.69</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1.90</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2.09</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2.19</td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Diluted earnings per share (b) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1.68</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1.88</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">2.07</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">2.17</td> </tr> <tr> <td height="16"></td> <td height="16" colspan="12"></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="11" align="center">2008 Quarters (a)</td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions, except per share data)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">First (e)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Second (f)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Third (g)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Fourth (h)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Net sales </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">9,983</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">11,039</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">10,577</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">11,132</td> </tr> <tr> <td valign="top"> Operating profit </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,178</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,363</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,242</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,348</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Net earnings </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">730</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">882</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">782</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">823</td> </tr> <tr> <td valign="top"> Basic earnings per share </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1.80</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2.21</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1.97</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2.08</td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top"> Diluted earnings per share (b) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1.75</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">2.15</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">1.92</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">2.05</td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="4%" align="left">(a)</td> <td valign="top" align="left"> It is our practice to close the books and records on the Sunday prior to the end of the calendar quarter to align our financial closing with our business processes. This practice only affects interim periods, as our fiscal year ends on December 31. </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="4%" align="left">(b)</td> <td valign="top" align="left"> The sum of the quarterly earnings per share amounts for 2009 and 2008 do not equal the diluted earnings per share amount included on the Statement of Earnings, primarily due to the dilutive effects of our convertible debentures in 2008 (see Note 2) and the timing of share repurchases during 2009 and 2008. </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="4%" align="left">(c)</td> <td valign="top" align="left"> Net earnings for the third quarter of 2009 included the recognition of tax benefits related to the resolution of issues with the IRS for tax years 2005-2007 (see Note 8), which increased net earnings by $58 million ($0.15 per share). </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="4%" align="left">(d)</td> <td valign="top" align="left"> Net earnings for the fourth quarter of 2009 included the recognition of tax benefits related to the resolution of issues with the IRS for tax year 2008 (see Note 8), which increased net earnings by $11 million ($0.03 per share). </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="4%" align="left">(e)</td> <td valign="top" align="left"> Net earnings for the first quarter of 2008 included a portion of the deferred gain recognized in connection with the transaction to sell our ownership interests in LKEI and ILS (see Note 14), which increased net earnings by $10 million ($0.02 per share). </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="4%" align="left">(f)</td> <td valign="top" align="left"> Net earnings for the second quarter of 2008 included a gain related to the elimination of reserves associated with various land sales that occurred in prior years (see Note 14), which increased net earnings by $56 million ($0.14 per share). </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="4%" align="left">(g)</td> <td valign="top" align="left"> Net earnings for the third quarter of 2008 included a portion of the deferred gain recognized in connection with the transaction to sell our ownership interests in LKEI and ILS (see Note 14), which increased net earnings by $28 million ($0.07 per share). </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="4%" align="left">(h)</td> <td valign="top" align="left"> Net earnings for the fourth quarter of 2008 included the final portion of the deferred gain recognized in connection with the transaction to sell our ownership interests in LKEI and ILS (see Note 14), which increased net earnings by $32 million ($0.08 per share). Also, net earnings for the fourth quarter of 2008 increased by $36 million ($0.09 per share) due to the recognition of a tax benefit related to the impact of the Emergency Economic Stabilization Act of 2008, which retroactively extended the research and development tax credit from January 1, 2008 to December 31, 2009. </td> </tr> </table> </div>

242000000

36336000000

45189000000

8853000000

<div> Note 5 – Receivables Receivables consisted of the following components:   <table border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr> <td width="79%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> U.S. Government </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Amounts billed </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,648</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,698</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Unbilled costs and accrued profits </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,718</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2,590</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Less: customer advances and progress payments </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(486</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(471</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">3,880</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">3,817</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr> <td valign="top"> Foreign governments and commercial </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Amounts billed </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">598</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">487</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Unbilled costs and accrued profits </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,811</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,127</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Less: customer advances </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(228</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(135</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">2,181</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">1,479</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">6,061</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">5,296</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> We expect to bill substantially all of the December 31, 2009 unbilled costs and accrued profits during 2010.   </div>

154000000

<div> Note 1 – Significant Accounting Policies Organization – Lockheed Martin Corporation is a global security company engaged in the research, design, development, manufacture, integration, operation, and sustainment of advanced technology systems and products, and provides a broad range of management, engineering, technical, scientific, logistic, and information services. As a systems integrator, our products and services range from electronics and information systems, including integrated net-centric solutions, to missiles, aircraft, and spacecraft. We serve both domestic and international customers with products and services that have defense, civil, and commercial applications, with our principal customers being agencies of the U.S. Government. Basis of consolidation and classifications – Our consolidated financial statements include the accounts of subsidiaries we control and other entities where we are the primary beneficiary. We eliminate intercompany balances and transactions in consolidation. Our receivables, inventories, customer advances, and certain amounts in other current liabilities are primarily attributable to long-term contracts or programs in progress for which the related operating cycles are longer than one year. In accordance with industry practice, we include these items in Current Assets and Current Liabilities. We have reclassified certain amounts for prior years to conform to the 2009 presentation. We have evaluated subsequent events through the time of filing this Form 10-K with the United States Securities and Exchange Commission (SEC) on February 25, 2010. No material subsequent events have occurred since December 31, 2009 that required recognition or disclosure in these financial statements. Use of estimates – We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles (GAAP). In doing so, we are required to make estimates and assumptions, including estimates of anticipated contract costs and revenues utilized in the earnings recognition process, that affect the reported amounts in the financial statements and accompanying notes. Due to the size and nature of many of our programs, the estimation of total revenues and cost at completion is subject to a wide range of variables, including assumptions for schedule and technical issues. Our actual results may differ from those estimates. Cash and cash equivalents – Cash equivalents include highly liquid instruments with original maturities of 90 days or less. Receivables – Receivables include amounts billed and currently due from customers, and unbilled costs and accrued profits primarily related to revenues on long-term contracts that have been recognized for accounting purposes but not yet billed to customers. As we recognize those revenues, we reflect appropriate amounts of customer advances, performance-based payments, and progress payments as an offset to the related receivables balance. Inventories – We record inventories at the lower of cost or estimated net realizable value. Costs on long-term contracts and programs in progress represent recoverable costs incurred for production or contract-specific facilities and equipment, allocable operating overhead, advances to suppliers and, in the case of contracts with the U.S. Government, research and development and general and administrative expenses. Pursuant to contract provisions, agencies of the U.S. Government and certain other customers have title to, or a security interest in, inventories related to such contracts as a result of advances, performance-based payments, and progress payments. We reflect those advances and payments as an offset against the related inventory balances. We expense general and administrative costs related to products and services provided essentially under commercial terms and conditions as incurred. We determine the costs of other product and supply inventories by the first-in first-out or average cost methods. Property, plant and equipment – We include property, plant, and equipment on our Balance Sheet principally at cost. We provide for depreciation and amortization on plant and equipment generally using accelerated methods during the first half of the estimated useful lives of the assets, and the straight-line method thereafter. The estimated useful lives of our plant and equipment generally range from 10 to 40 years for buildings and five to 15 years for machinery and equipment. Goodwill – We evaluate goodwill for potential impairment annually on October 1, or if impairment indicators are present. Our evaluation includes comparing the fair value of a reporting unit, using a discounted cash flow methodology, to its carrying value including goodwill recorded by the reporting unit. If the carrying value exceeds the fair value, we measure impairment by comparing the derived fair value of goodwill to its carrying value, and any impairment determined is recorded in the current period. We define reporting units at the business segment level or one level below the business segment. Purchased intangibles – We amortize on a straight-line basis intangible assets acquired as part of business combinations over their estimated useful lives unless their useful lives are determined to be indefinite. For material business combinations, the amounts we record related to purchased intangibles are determined from independent valuations. Our purchased intangibles primarily relate to contracts and programs acquired and customer relationships, which are amortized over periods of 10 years or less, and trade names that have indefinite lives. As of December 31, 2009 and 2008, purchased intangibles totaled $311 million and $355 million, net of accumulated amortization of $2,203 million and $2,098 million. Amortization expense related to these intangible assets was $104 million in 2009, $118 million in 2008, and $153 million in 2007. We estimate amortization expense will be $103 million in 2010, $93 million in 2011, $36 million in 2012, $27 million in 2013, and $7 million in 2014. The unamortized balance of purchased intangibles at December 31, 2009 included $41 million of intangibles with indefinite lives. Capitalized software – We capitalize certain direct costs associated with the development of internal-use software. Expenditures are included in operating activities on our Statement of Cash Flows. The amounts capitalized are included in other assets on our Balance Sheet and amortized on a straight-line basis over the estimated useful life of the resulting software, which ranges from two to seven years. We amortize capitalized internal-use software beginning when the asset is substantially ready for use. As of December 31, 2009 and 2008, capitalized software totaled $887 million and $758 million, net of accumulated amortization of $948 million and $796 million. Amortization expense related to capitalized software was $152 million in 2009, $135 million in 2008, and $114 million in 2007. Customer advances and amounts in excess of cost incurred – We receive advances, performance-based payments, and progress payments from customers that may exceed costs incurred on certain contracts, including contracts with agencies of the U.S. Government. We classify such advances, other than those reflected as a reduction of receivables or inventories as discussed above, as Current Liabilities. Environmental matters – We record a liability for environmental matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. The amount of liability recorded is based on our best estimate of the costs to be incurred for remediation at a particular site within a range of estimates for that site or, in cases where no amount within the range is better than another, we record an amount at the low end of the range. We do not discount the recorded liabilities, as the amount and timing of future cash payments are not fixed or cannot be reliably determined. We expect to include a substantial portion of environmental costs in net sales and cost of sales pursuant to U.S. Government agreement or regulation. At the time a liability is recorded for future environmental costs, we record an asset for estimated future recovery considered probable through the pricing of products and services to agencies of the U.S. Government. We include the portion of those costs expected to be allocated to commercial business or that is determined to be unallowable for pricing under U.S. Government contracts in cost of sales at the time the liability is established. Sales and earnings – We record sales and anticipated profits under long-term fixed-price design, development, and production (DD&P) contracts on a percentage of completion basis, generally using units-of-delivery as the basis to measure progress toward completing the contract and recognizing revenue. We include estimated contract profits in earnings in proportion to recorded sales. We record sales under certain long-term fixed-price DD&P contracts that, among other factors, provide for the delivery of minimal quantities or require a substantial level of development effort in relation to total contract value, upon achievement of performance milestones or using the cost-to-cost method of accounting where sales and profits are recorded based on the ratio of costs we incur to our estimate of total costs at completion. We record sales and an estimated profit under DD&P cost-reimbursement-type contracts as costs are incurred in the proportion that the incurred costs bear to total estimated costs. When adjustments in estimated contract revenues or estimated costs at completion are required, any changes from prior estimates are recognized by recording adjustments in the current period for the inception-to-date effect of the changes on current and prior periods. When estimates of total costs to be incurred on a contract exceed total estimates of revenue to be earned, a provision for the entire loss on the contract is recorded in the period the loss is determined. We record sales of products and services provided under essentially commercial terms and conditions upon delivery and passage of title. We consider incentives or penalties related to performance on DD&P contracts in estimating sales and profit rates, and record them when there is sufficient information to assess anticipated contract performance. We also consider estimates of award fees in estimating sales and profit rates based on actual awards and anticipated performance. We do not recognize incentive provisions that increase or decrease earnings based solely on a single significant event until the event occurs. We only include amounts representing contract change orders, claims, or other items in sales when they can be reliably estimated and realization is probable.   We record revenue under contracts for services other than those associated with DD&P activities either as services are performed or when a contractually required event has occurred, depending on the contract. The majority of our service contracts is in our Information Systems & Global Services segment. We record revenue under such services contracts on a straight-line basis over the period of contract performance, unless evidence suggests that the revenue is earned or the obligations are fulfilled in a different pattern. Costs we incur under these services contracts are expensed as incurred, except that we capitalize and recognize initial “set-up” costs over the life of the agreement. Award and incentive fees related to our performance on services contracts are recognized when they are fixed or determinable, which is typically on the date the amount is communicated to us by the customer. Research and development and similar costs – Except for certain arrangements described below, we account for independent research and development costs as part of the general and administrative costs that are allocated among all of our contracts and programs in progress under U.S. Government contractual arrangements. Costs for product development initiatives we sponsor that are not otherwise allocable are charged to expense when incurred. Under some arrangements in which a customer shares in product development costs, our portion of unreimbursed costs is expensed as incurred. Independent research and development costs charged to cost of sales totaled $750 million in 2009, $719 million in 2008, and $678 million in 2007. Costs we incur under customer-sponsored research and development programs pursuant to contracts are accounted for as net sales and cost of sales under the contract. Restructuring activities – Under existing U.S. Government regulations, certain costs we incur for consolidation or restructuring activities that we can demonstrate will result in savings in excess of the cost to implement those actions can be deferred and amortized for government contracting purposes and included as allowable costs in future pricing of our products and services to agencies of the U.S. Government. Assets recorded at December 31, 2009 and 2008 for deferred costs related to various consolidation and restructuring activities were not material. Impairment of certain long-lived assets – We review the carrying values of long-lived assets other than goodwill for impairment if events or changes in the facts and circumstances indicate that their carrying values may not be recoverable. We assess impairment by comparing the estimated undiscounted future cash flows of the related asset to its carrying value. If an asset is determined to be impaired, we recognize an impairment charge in the current period for the difference between the fair value of the asset and its carrying value. Investments in marketable securities – Investments in marketable securities consist of debt and equity securities of publicly-traded companies and are accounted for at fair value. Marketable securities are classified as either available-for-sale securities or trading securities. If classified as available-for-sale securities, unrealized gains and losses are reflected net of income taxes in accumulated other comprehensive income (loss) on the Statement of Stockholders’ Equity. If declines in the value of investments are determined to be other than temporary, a loss is recorded in earnings in the current period. We make such determinations by considering, among other factors, the length of time the fair value of the investment has been less than the carrying value, future business prospects for the investee, and information regarding market and industry trends for the investee’s business, if available. As of December 31, 2009 and 2008, the fair value of our available-for-sale securities totaled $346 million and $61 million and was included in other current assets on the Balance Sheet. If marketable securities are classified as trading securities, unrealized gains and losses are recorded in other non-operating income (expense), net on the Statement of Earnings. As of December 31, 2009 and 2008, the fair value of our trading securities totaled $757 million and $500 million and was included in other assets on the Balance Sheet. Our net unrealized gains (losses) on trading securities were $115 million in 2009, $(158) million in 2008, and $(13) million in 2007. Our trading securities are held in a Rabbi Trust, which includes investments to fund certain of our nonqualified deferred compensation plans. We record realized gains and losses on marketable securities in other non-operating income (expense), net. For purposes of computing realized gains and losses, we determine cost on a specific identification basis. Equity method investments – Investments where we have the ability to exercise significant influence over the investee are accounted for under the equity method of accounting and are included in other assets on the Balance Sheet. Significant influence typically exists if we have a 20% to 50% ownership interest in the investee. Under this method of accounting, our share of the net earnings or losses of the investee is included in operating profit in other income (expense), net since the activities of the investee are closely aligned with the operations of the business segment holding the investment. We evaluate our equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.   Derivative financial instruments – We use derivative financial instruments to manage our exposure to fluctuations in foreign currency exchange rates. Foreign currency exchange contracts are entered into to manage the foreign currency exchange rate risk of forecasted foreign currency denominated cash receipts and cash payments. The majority of our foreign currency exchange contracts are designated as cash flow hedges. We may also use derivative financial instruments to manage our exposure to changes in interest rates. Our financial instruments that are subject to interest rate risk principally include fixed rate long-term debt. We do not hold or issue derivative financial instruments for trading or speculative purposes. We record derivatives at their fair value. The classification of gains and losses resulting from changes in the fair values of derivatives is dependent on our intended use of the derivative and its resulting designation. Adjustments to reflect changes in fair values of derivatives attributable to the effective portion of hedges that we consider highly effective hedges are either reflected in earnings and largely offset by corresponding adjustments to the hedged items, or reflected net of income taxes in accumulated other comprehensive income (loss) until the hedged transaction is recognized in earnings. Changes in the fair value of the derivatives that are attributable to the ineffective portion of the hedges, or of derivatives that are not considered to be highly effective hedges, if any, are immediately recognized in earnings. The aggregate notional amount of the outstanding foreign currency exchange contracts at December 31, 2009 and 2008 was $1.9 billion and $1.4 billion. There were no interest rate derivatives outstanding at December 31, 2009 and 2008. The effect of our derivative instruments on the Statement of Earnings for the years ended December 31, 2009, 2008, and 2007 was not material. The fair values of our derivative assets as of December 31, 2009 and 2008 were $21 million and $100 million and were recorded in other current assets. The fair values of our derivative liabilities as of December 31, 2009 and 2008 were $23 million and $48 million and were recorded in other current liabilities. These amounts were not material to our financial statements. See Note 15 for further discussion on the fair value measurements related to our derivative instruments. Stock-based compensation – We recognize compensation cost related to all share-based payments (stock options, restricted stock awards, and restricted stock units) based on their estimated fair value at the date of grant. Income taxes – We periodically assess our tax filing exposures related to periods that are open to examination. Based on the latest available information, we evaluate tax positions to determine whether the position will more likely than not be sustained upon examination by the Internal Revenue Service (IRS). If we determine that the tax position is more likely than not to be sustained, we record the largest amount of benefit that is more likely than not to be realized when the tax position is settled. If we cannot reach that determination, no benefit is recorded. We record interest and penalties related to income taxes as a component of income tax expense in our consolidated financial statements. Comprehensive income (loss) – Comprehensive income (loss) and its components are presented on the Statement of Stockholders’ Equity. Accumulated other comprehensive income (loss) consisted of the following:   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="82%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">     (In millions)</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2009</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2008</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Postretirement benefit plan adjustments </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(8,564</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(9,059</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Foreign currency translation adjustments </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(26</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(108</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td style="BORDER-BOTTOM: #000000 1px solid" valign="top"> Other, net </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">(5</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="right">18</td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #000000 2px solid" valign="top">  </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(8,595</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" align="right">(9,149</td> <td style="BORDER-BOTTOM: #000000 2px solid" valign="bottom" nowrap="nowrap">) </td> </tr> </table> Recent accounting pronouncements – In October 2009, the Financial Accounting Standards Board (FASB) revised its accounting guidance related to revenue arrangements with multiple deliverables. The guidance relates to the determination of when the individual deliverables included in a multiple-element arrangement may be treated as separate units of accounting and modifies the manner in which the transaction consideration is allocated across the individual deliverables, thereby affecting the timing of revenue recognition. Also, the guidance expands the disclosure requirements for revenue arrangements with multiple deliverables. The guidance will be effective for us beginning on January 1, 2011, and may be applied retrospectively for all periods presented or prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted provided that the guidance is retroactively applied to the beginning of the year of adoption. We are currently assessing the potential effect, if any, on our financial statements. In June 2009, the FASB issued an accounting standard that changes the approach to determining the primary beneficiary of a variable interest entity (“VIE”) and requires companies to continuously assess whether they must consolidate VIEs. This standard is effective for us beginning on January 1, 2010. We do not expect the adoption of this accounting standard will have a material impact on our financial statements.   In December 2008, the FASB issued an accounting standard that requires additional disclosures about assets held in defined benefit pension plans and other postretirement plans (see Note 10). The accounting standard requires us to disclose the fair value of each major category of plan assets, the level within the fair value hierarchy that each major category of plan assets falls, and reconcile the beginning and ending balances of plan assets with fair values measured using significant unobservable inputs (Level 3 in the hierarchy). We adopted the provisions of the standard beginning with our 2009 annual consolidated financial statements. In 2009, we adopted accounting standards issued by the FASB related to the following topics, none of which had a material effect on our financial statements:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="2%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Accounting and disclosures for subsequent events; </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="2%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Determining fair value when the volume and level of activity for an asset or liability have significantly decreased and identifying transactions that are not orderly; </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="2%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Recognition and presentation of other-than-temporary impairments; </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="2%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Fair value disclosures related to certain non-financial assets and liabilities; </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="2%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Determining whether instruments granted in share-based payment transactions are participating securities; </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="2%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Revised accounting rules related to business combinations; and </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="5%"> </td> <td valign="top" width="2%" align="left">•</td> <td valign="top" width="1%"> </td> <td valign="top" align="left"> Increased disclosures related to derivative financial instruments (see “Derivative financial instruments” section above). </td> </tr> </table> Effective January 1, 2007, we adopted a FASB interpretation that sets forth consistent rules for accounting for uncertain income tax positions in accordance with GAAP (see Note 8). The cumulative effect of applying the provisions of this interpretation was a $31 million noncash increase to our opening balance of retained earnings in 2007. In May 2008, the FASB issued an accounting standard that affects the accounting for certain convertible debt instruments. The standard was effective beginning with our first quarter 2009 financial reporting, requires retrospective application to all periods presented, and does not grandfather existing debt instruments. The standard would have changed the accounting for our previously outstanding $1.0 billion in original principal amount of floating rate convertible debentures in that it would have required that we bifurcate the proceeds from the debt issuance between a debt and equity component as of the August 2003 issuance date and through the August 2008 date that they were converted or redeemed. The equity component would have reflected the value of the conversion feature of the debentures. We did not adopt the provisions of the standard for the floating rate convertible debentures that were delivered for conversion or redeemed in August 2008, as the effect on our previously reported financial statements was not material. In December 2007, the FASB issued an accounting standard that required that the noncontrolling interests in consolidated subsidiaries be presented as a separate component of stockholders’ equity in the balance sheet, that the amount of consolidated net earnings attributable to the parent and the noncontrolling interest be separately presented in the statement of earnings, and that the amount of consolidated other comprehensive income attributable to the noncontrolling interest be separately disclosed. The standard also required gains or losses from the sale of stock of subsidiaries where control is maintained to be recognized as an equity transaction. The standard was effective beginning with our first quarter 2009 financial reporting. We did not adopt the presentation or disclosure provisions of this standard relative to our noncontrolling interests, as the effect on our financial statements was not material. </div>

<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>

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