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11913000000
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2.15
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0.84
63000000
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10-Q
false
N.A.
2009-06-28
LOCKHEED MARTIN CORP
0000936468
LMT
--12-31
Yes
No
Yes
Large Accelerated Filer
504000000
3.59
3.55
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
</p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 6 – LEGAL PROCEEDINGS AND
CONTINGENCIES</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> <br /></font><font face="ARIAL" size="2"><b><i>Legal
Proceedings</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">On June 24, 2009, the U.K.
Ministry of Defence (MoD) sent us a letter declaring that we are 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 $238 million and US $64
million, based on the exchange rate as of June 28,
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 June 28, 2009), interest on those amounts, and has
reserved the right to collect any excess future re-procurement
costs. We dispute the MoD’s position and plan to proceed
to alternative dispute resolution pursuant to the contract terms
and to seek damages for wrongful termination of the contract
(including costs incurred but not paid).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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 are cooperating with the investigation.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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</font>
<!-- 28 Begin_Flowing_Text * DO NOT REMOVE OR EDIT --><font face=
"ARIAL" size="2">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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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 first tier plaintiffs are pursuing
their appellate remedies, and opposing counsel has asked the trial
court to consider procedures for the litigation of the next round
of individual plaintiffs.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Environmental Matters</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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. 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 which 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.</font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We perform quarterly reviews of
environmental remediation sites and record liabilities and assets
in the period it becomes probable that a liability has been
incurred and the amounts can be reasonably estimated. At
June 28, 2009 and December 31, 2008, the aggregate amount
of liabilities recorded relative to environmental matters was $821
million and $809 million. Of that amount, $706 million and $694
million were 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 in U.S. Government contracts.
We have recorded assets totaling $690 million and $683 million at
June 28, 2009 and December 31, 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. Of that amount,
$592 million and $585 million were recorded in other assets on the
Balance Sheet, with the remainder recorded in other current
assets.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We cannot reasonably determine the
extent of our financial exposure in all cases at this time. There
are a number of former operating facilities which 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 (<i>e.g.,</i> assessing the
extent of the contamination). We also are pursuing claims for
contribution to site cleanup costs against other potentially
responsible parties (PRPs), including the U.S.
Government.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We are conducting remediation
activities under various consent decrees and orders relating to
soil and groundwater contamination at certain sites of former
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).</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Letters of Credit and Other
Arrangements</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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 $3.1
billion at June 28, 2009 and December 31, 2008. Letters
of credit and surety bonds are generally available for draw down in
the event we do not perform.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Investment in United Launch
Alliance</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In connection with the closing of the
transaction to form United Launch Alliance, LLC (ULA) on
December 1, 2006, we and Boeing have each committed to
providing up to $25 million in additional capital contributions and
$200 million in other financial support to ULA, as required. The
non-capital financial support will be made in the form of a
revolving credit facility between us and ULA or guarantees of ULA
financing with third parties, in either case to the extent
necessary for ULA to meet its working capital needs. 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. To satisfy our non-capital financial support
commitment, we and Boeing put into place at closing a revolving
credit agreement with ULA, under which no amounts have been
drawn.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">As of December 31, 2008, we and
Boeing each had provided a total of $3 million of funding to ULA
under the additional capital contribution commitment. In the second
quarter of 2009, we each contributed the remaining commitment of
$22 million to ULA. Prior to those contributions, 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 the
first six months of 2009. On June 25, 2009, we and Boeing each
received from ULA an additional dividend payment of $45
million.</font></p>
<!-- 9 Repeat_Hdr_End * DO NOT REMOVE OR EDIT -->
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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. No dividends other
than the $100 million received in the fourth quarter of 2008 and
the $22 million received during the second quarter of 2009 were
distributed prior to June 1, 2009. 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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In addition, both we and Boeing have
cross-indemnified ULA related to certain financial support
arrangements (<i>e.g.</i>, 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
June 28, 2009, and that it will not be necessary to make
payments under the cross-indemnities.</font></p>
</div>
1.14
54000000
15596000000
19592000000
3670000000
356000000
32000000
13000000
13000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
</p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 7 – FAIR VALUE MEASUREMENTS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">FAS 157, <i>Fair Value
Measurements</i>, defines fair value, establishes a market-based
framework or hierarchy for measuring fair value, and expands
disclosures about fair value measurements. FAS 157 is applicable
whenever another accounting pronouncement requires or permits
assets and liabilities to be measured at fair value, but does not
require any new fair value measurements.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">The fair value hierarchy established in
FAS 157 prioritizes the inputs used in valuation techniques into
three levels as follows:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Level 1 –
Observable inputs – quoted prices in active markets for
identical assets and liabilities;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Level 2 –
Observable inputs other than the quoted prices in active markets
for identical assets and liabilities – includes quoted prices
for similar instruments, quoted prices for identical or similar
instruments in inactive markets, and amounts derived from valuation
models where all significant inputs are observable in active
markets; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">Level 3 –
Unobservable inputs – includes amounts derived from valuation
models where one or more significant inputs are unobservable and
require us to develop relevant assumptions. At June 28, 2009,
we have no assets or liabilities that are categorized as Level 3.
During 2009, we had no assets or liabilities that were transferred
in or out of the Level 3 category.</font></p>
</td>
</tr>
</tbody>
</table>
<p align="left"><font face="ARIAL" size=
"2">       The following table
presents assets and liabilities measured and recorded at fair value
on our Balance Sheet on a recurring basis and their level within
the fair value hierarchy as of June 28, 2009:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="69%"></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 valign="bottom"> <font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>Balance as of</b></font><br />
<font face="ARIAL" size="1"><b>June 28,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle" colspan="8"><font face="ARIAL"
size="1"><b><i>(In millions)</i></b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Equity securities</font><font face="ARIAL" size=
"1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(a)</sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">233</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">233</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">U.S. Government securities</font><font face="ARIAL" size=
"1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(a)</sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">96</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">96</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Corporate debt securities</font><font face="ARIAL" size=
"1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(b)</sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">145</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">145</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other securities</font><font face="ARIAL" size=
"1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(b)</sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">95</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">95</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Derivative assets</font><font face="ARIAL" size=
"1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(c)</sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">37</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">37</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">329</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">277</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">606</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Derivative liabilities</font><font face="ARIAL" size=
"1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(c)</sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">—  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">21</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">21</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Net assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">            329</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">            256</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">585</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style=
"MARGIN-TOP: 0px; MARGIN-BOTTOM: 2px; WIDTH: 10%; LINE-HEIGHT: 8px; BORDER-BOTTOM: #000000 0.5pt solid">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face="ARIAL" size=
"2">(a)</font></td>
<td valign="top" align="left"><font face="ARIAL" size="2">Equity
securities and U.S. Government securities are valued using quoted
market prices.</font></td>
</tr>
</tbody>
</table>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face="ARIAL" size=
"2">(b)</font></td>
<td valign="top" align="left"><font face="ARIAL" size="2">Corporate
debt securities and other securities are valued based on inputs
other than quoted prices that are observable for the asset
(<i>e.g.</i>, interest rates and yield curves observable at
commonly quoted intervals).</font></td>
</tr>
</tbody>
</table>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face="ARIAL" size=
"2">(c)</font></td>
<td valign="top" align="left"><font face="ARIAL" size=
"2">Derivative assets and liabilities relate to foreign currency
exchange contracts and are valued based on observable market
prices, but are not exchanged in an active market. See Note 8 under
the caption “Derivative Financial Instruments” for
further information related to our derivative
instruments.</font></td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">At June 28, 2009, the estimated
fair values of our long-term debt instruments aggregated $4,704
million, compared with a carrying amount of $4,144 million,
excluding the $339 million unamortized discount. The fair values
were estimated based on quoted market prices of debt with terms and
due dates similar to our long-term debt instruments. Our cash
equivalents include highly liquid instruments with original
maturities of 90 days or less. Due to the short maturity of these
instruments, the carrying amount on our Balance Sheet approximates
fair value.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">As of June 28, 2009, our non-financial
assets and liabilities that are recorded at fair value on a
nonrecurring basis were not material.</font></p>
</div>
2017000000
2032000000
632000000
118000000
219000000
-101000000
-859000000
812000000
152000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 4 – INVENTORIES</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="81%"></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 valign="bottom"> <font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>December 31,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle" colspan="6"><font face="ARIAL"
size="1"><b><i>(In millions)</i></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Work-in-process, primarily related to long-term contracts
and programs in progress</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>5,387</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4,631</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Less: customer advances and progress payments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(3,845</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(3,396</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>1,542</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,235</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other inventories</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>310</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">667</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>      1,852</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,902</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
</tbody>
</table>
</div>
-1382000000
-500000000
2354000000
1400000000
2140000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 1 – BASIS OF PRESENTATION</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We have prepared the condensed
consolidated financial statements in this Form 10-Q in accordance
with accounting principles generally accepted in the United States
for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. We have continued to follow
the accounting policies disclosed in the consolidated financial
statements included in our 2008 Form 10-K filed with the Securities
and Exchange Commission (SEC).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">It is our practice to close our books
and records on the Sunday prior to the end of the calendar quarter
to align our financial closing with our business processes. The
interim financial statements and tables of financial information
included herein are labeled based on that convention. This practice
only affects interim periods, as our fiscal years end on
December 31.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">The interim financial information in
this Form 10-Q reflects all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation of our
results of operations for the interim periods. The results of
operations for the quarter or six months ended June 28, 2009
are not necessarily indicative of results to be expected for the
full year.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We have reclassified certain amounts
for the prior period to conform to the 2009 presentation. For the
six months ended June 29, 2008, we reclassified $5 million
from operating activities to “Effect of exchange rate changes
on cash and cash equivalents” on our Statement of Cash Flows.
The reclassification related to the effect of exchange rate changes
on cash held in foreign currencies.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We have evaluated subsequent events
through the time of filing this Form 10-Q with the SEC on
July 22, 2009. No material subsequent events have occurred
since June 28, 2009 that required recognition or disclosure in
these financial statements.</font></p>
</div>
326000000
44000000
0
14000000
969000000
449000000
187000000
299000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 5 – POSTRETIREMENT BENEFIT
PLANS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">The net pension cost as determined by
FAS 87 and the net postretirement benefit cost as determined by FAS
106, <i>Employers’ Accounting for Postretirement Benefits
Other Than Pensions</i>, related to our qualified defined benefit
pension plans and our retiree medical and life insurance plans
include the following components:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="64%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size="1"><b>Quarter
Ended</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size="1"><b>Six Months
Ended</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle" colspan="14"><font face="ARIAL"
size="1"><b><i>(In millions)</i></b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><u>Qualified defined benefit pension plans</u></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Service cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>218</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">205</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>435</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">411</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Interest cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>453</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">435</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>906</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">870</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected return on plan assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(507</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>)</b> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(546</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(1,014</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>)</b> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(1,091</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Amortization of prior service cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>20</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">20</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>40</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">40</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Recognized net actuarial losses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>75</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>151</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total net pension expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>259</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">115</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>518</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">231</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><u>Retiree medical and life insurance plans</u></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Service cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>9</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">11</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>18</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">22</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Interest cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>41</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">45</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>82</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">90</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Expected return on plan assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(27</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>)</b> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(39</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(54</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>)</b> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(77</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Amortization of prior service cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(6</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>)</b> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(6</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(12</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>)</b> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">(12</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Recognized net actuarial losses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>11</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>22</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total net postretirement expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>            28</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">            12</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>            56</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">            24</font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In 2008, we made discretionary
prepayments totaling $109 million related to our qualified defined
benefit pension plans and $120 million related to our retiree
medical and life insurance plans. These prepayments reduce our cash
funding requirements for 2009. There were no contributions in the
first six months of 2009. Based on our known requirements as of
June 28, 2009, we do not expect there to be any required cash
contributions related to the qualified defined benefit pension
plans or the medical and life insurance plans for the remainder of
2009 due to the prepayments made in prior years. We may review
options for further discretionary contributions in 2009.</font></p>
</div>
23000000
0
0
17498000000
21609000000
4111000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 3 – INFORMATION ON BUSINESS
SEGMENTS</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We operate in four principal business
segments: Electronic Systems, Information Systems & Global
Services (IS&GS), Aeronautics, and Space Systems. We organize
our business segments based on the nature of the products and
services offered.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In the following table, total operating
profit of the business segments is reconciled to the corresponding
consolidated amount. The reconciling item “Unallocated
Corporate income (expense), net” includes the FAS/CAS pension
adjustment (see discussion below), costs for certain stock-based
compensation programs (including stock-based compensation costs for
stock options and restricted stock units), the effects of items not
considered part of management’s evaluation of segment
operating performance, Corporate costs not allocated to the
operating segments, and other miscellaneous Corporate activities.
Since the activities of the investees in which certain business
segments hold equity interests are closely aligned with the
operations of those segments, the equity earnings (losses) from
those investees are included in the operating profit of the
respective segments.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">The FAS/CAS pension adjustment
represents the difference between pension expense or income
calculated for financial reporting purposes under GAAP in
accordance with FAS 87, <i>Employers’ Accounting for
Pensions</i>, and pension costs calculated and funded in
accordance</font> <font face="ARIAL" size="2">with U.S.
Government Cost Accounting Standards (CAS), which are reflected in
our business segment results. CAS is a major factor in determining
our pension funding requirements, and governs the extent to which
pension costs can be allocated to and recovered on government
contracts. The CAS expense is recovered through the pricing of our
products and services on U.S. Government contracts and, therefore,
recognized in segment net sales. The results of operations of our
segments only include pension expense as determined and funded in
accordance with CAS rules.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">Transactions between segments are
negotiated and accounted for under terms and conditions similar to
other government and commercial contracts; however, these
intercompany transactions are eliminated in consolidation and for
purposes of the presentation of net sales in the related table that
follows.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>Selected Financial Data by Business
Segment</b></font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
 </p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="65%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size="1"><b>Quarter
Ended</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="6"><font face="ARIAL" size="1"><b>Six Months
Ended</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,</b></font><br />
<font face="ARIAL" size="1"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 29,</b></font><br />
<font face="ARIAL" size="1"><b>2008</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle" colspan="13"><font face="ARIAL"
size="1"><b><i>(In millions)</i></b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom" colspan="12"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b><u>Net sales</u></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Electronic Systems</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>3,076</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3,095</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>5,989</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5,884</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Information Systems & Global Services</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>3,018</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,858</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>5,779</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5,362</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Aeronautics</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>3,086</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,884</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>5,867</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">5,691</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Space Systems</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>2,056</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,202</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>3,974</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4,085</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>11,236</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">11,039</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>21,609</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">21,022</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b><u>Operating profit</u></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Electronic Systems</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>406</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">409</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>796</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">775</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Information Systems & Global Services</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>248</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">272</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>490</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">502</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Aeronautics</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>399</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">366</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>754</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">689</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Space Systems</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>224</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">268</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>436</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">499</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total business segments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>1,277</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,315</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>2,476</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,465</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Unallocated Corporate income (expense), net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(194</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">48</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>(336</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>) </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">76</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>1,083</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,363</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>2,140</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,541</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b><u>Intersegment revenue</u></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Electronic Systems</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>205</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">146</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>378</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">286</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Information Systems & Global Services</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>254</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">243</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>490</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">458</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Aeronautics</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>57</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">36</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>99</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">71</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Space Systems</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>33</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">38</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>67</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">67</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>549</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">463</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>1,034</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">882</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<tr>
<td height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
<td colspan="4" height="16"></td>
<td colspan="3" height="16"></td>
</tr>
<tr>
<td valign="bottom"> <font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>December 31,<br />
2008</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle" colspan="6"><font face="ARIAL"
size="1"><b><i>(In millions)</i></b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b><i><u>Assets</u></i></b></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom" colspan="5"></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Electronic Systems</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>8,839</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">8,515</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Information Systems & Global Services</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>7,591</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">7,593</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Aeronautics</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>3,903</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">3,521</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Space Systems</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>3,071</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2,908</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<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 style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total business segments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>23,404</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">22,537</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Corporate activities</font> <font face="ARIAL" size=
"1"><sup style=
"VERTICAL-ALIGN: baseline; BOTTOM: 0.8ex; POSITION: relative">(1)</sup></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>11,384</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">10,902</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<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 style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 5em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>      34,788</b></font></td>
<td valign="bottom" nowrap="nowrap"><font face="ARIAL" size=
"2"><b>  </b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">33,439</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<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 style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style=
"MARGIN-TOP: 0px; MARGIN-BOTTOM: 2px; WIDTH: 10%; LINE-HEIGHT: 8px; BORDER-BOTTOM: #000000 0.5pt solid">
 </p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="4%"><font face="ARIAL" size=
"2">(1)</font></td>
<td valign="top" align="left"><font face="ARIAL" size="2">Assets
primarily include cash and cash equivalents, short-term
investments, deferred income taxes, the prepaid pension asset, the
deferred environmental asset, and investments held in a Rabbi
Trust.</font></td>
</tr>
</tbody>
</table>
</div>
72000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 8 - OTHER</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Matters Included in Earnings</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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 in the second
quarter of 2008 by $56 million ($0.14 per share).</font><font size=
"1"> </font></p>
<!-- 18 Folio_Start * DO NOT REMOVE OR EDIT -->
<!-- 9 Repeat_Hdr_End * DO NOT REMOVE OR EDIT -->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2"><br />
     In the first quarter of 2008, we
recognized, net of state income taxes, a gain of $16 million in
other income (expense), net, representing a portion of the deferred
net gain recorded in connection with the transaction to sell our
ownership interests in Lockheed Khrunichev Energia International,
Inc. and International Launch Services, Inc. in 2006. The gain
increased net earnings by $10 million ($0.02 per share).</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Long-term Debt</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">On June 26, 2008, our Board of
Directors authorized and we announced the planned redemption of any
and all of our $1.0 billion in original principal amount of
floating rate convertible debentures that remained outstanding on
August 15, 2008 (see Note 2). As of August 15, 2008, all
of the debentures had been delivered for conversion or were
redeemed.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In the first quarter of 2008, we issued
$500 million of long-term notes. The notes have a fixed coupon
interest rate of 4.12% and are due in 2013.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Stockholders’ Equity</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><i>Share Repurchase Program</i></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We used cash to repurchase shares of
our common stock as follows:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">In the first six months
of 2009, $969 million to repurchase 13.2 million common shares
that were executed and settled during the six-month period, and an
additional $39 million to repurchase 0.5 million common shares
in June 2009 that were settled in July 2009; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">In the first six months
of 2008, $1,930 million to repurchase 18.3 million common
shares that were executed and settled during the six-month period,
and an additional $25 million to repurchase 0.3 million common
shares in June 2008 that were settled in July 2008.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">As we repurchase common shares under
our share repurchase program, we reduce common stock for the $1 of
par value of the shares repurchased, with the remainder of the
purchase price over par value recorded as a reduction of additional
paid-in capital. If additional paid-in capital is reduced to zero,
we record the remainder of the excess of purchase price over par
value as a reduction of retained earnings.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">Our share repurchase program provides
for the repurchase of up to 158.0 million shares of our common
stock from time-to-time at management’s discretion. As of
June 28, 2009, we had repurchased a total of
138.0 million shares under the program, and there remained
approximately 20.0 million shares that may be repurchased in
the future.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><i>Dividends</i></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">During the first six months of 2009, we
declared and paid quarterly dividends totaling $449 million ($0.57
per share per quarter). We also declared our third quarter 2009
dividend totaling $221 million ($0.57 per share), which was
recorded as a current liability and a reduction of retained
earnings. The dividend will be paid in September 2009. During the
first six months of 2008, we declared and paid quarterly dividends
totaling $340 million ($0.42 per share per quarter). We also
declared our third quarter 2008 dividend totaling $168 million
($0.42 per share), which was recorded as a current liability and a
reduction of retained earnings. This dividend was paid in September
2008.</font></p>
<div> </div>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="9%"><!-- 9 Repeat_Hdr_End * DO NOT REMOVE OR EDIT -->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><i>Comprehensive Income</i></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">The components of comprehensive income
for the three months and six months ended June 28, 2009 and
June 29, 2008 consisted of the following:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="70%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="5"><font face="ARIAL" size=
"1"><b>Three Months Ended</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="5"><font face="ARIAL" size="1"><b>Six Months
Ended</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="+0"> <font size=
"1"> </font></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,<br />
2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,<br />
2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 29,<br />
2008</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle" colspan="11"><font face="ARIAL"
size="1"><b><i>(In millions)</i></b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Net earnings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>734</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">882</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>1,400</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,612</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Other comprehensive income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>41</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">22</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>40</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">35</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Comprehensive income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>775</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">904</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>    1,440</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">    1,647</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Income Tax and Interest Payments</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We made federal and foreign income tax
payments, net of refunds received, of $411 million and $444 million
during the six-month periods ended June 28, 2009 and
June 29, 2008. Over the next 12 months, it is expected that
the IRS examinations of our U.S. Federal Income Tax Returns for
2005-2007 and for 2008, IRS Appeals review of 2003-2004, and
certain non-domestic income tax issues will be resolved. It is
reasonably possible that resolution of these matters could cause a
reduction in our unrecognized tax benefits of up to $225 million,
only a portion of which would affect net earnings.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">Our total interest payments were $143
million and $162 million during the six-month periods ended June
28, 2009 and June 29, 2008.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Derivative Financial Instruments</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In the first quarter of 2009, we
adopted FAS 161, <i>Disclosures about Derivative Instruments and
Hedging Activities—an amendment of FASB Statement
No. 133</i>, which requires enhanced qualitative disclosures
about our objectives and strategies for using derivatives and
quantitative disclosures about the fair value amounts of gains and
losses on derivative instruments.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">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 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, to the extent these derivatives are
effective hedges. 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 June 28, 2009 was $1.8 billion. There were no
interest rate derivatives outstanding at June 28,
2009.</font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="9%"><!--##PBEnd##--></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">The effect of our derivative
instruments on the Statement of Earnings for the quarter and six
months ended June 28, 2009 was not material. The fair values
of our derivative assets and liabilities as of June 28, 2009
were $37 million and $21 million, and were recorded in other
current assets and other current liabilities. These amounts were
not material to our financial statements. See Note 7 for further
discussion on the fair value measurements related to our derivative
instruments.</font></p>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b><i>Recent Accounting Pronouncements</i></b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In June 2009, the Financial Accounting
Standards Board (FASB) issued FAS 167, <i>Amendments to FASB
Interpretation No. 46(R)</i>, which changes the approach to
determining the primary beneficiary of a variable interest entity
(“VIE”) and requires companies to more frequently
assess whether they must consolidate VIEs. This new standard is
effective for us beginning on January 1, 2010. We are
currently assessing the potential impacts, if any, on our
consolidated financial statements.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In May 2009, the FASB issued FAS 165,
<i>Subsequent Events</i>, which establishes general standards of
accounting and disclosure for events that occur after the balance
sheet date but before the financial statements are issued. This new
standard was effective beginning with our second quarter financial
reporting and did not have a material impact on our results of
operations, financial position, or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In April 2009, the FASB issued FASB
Staff Position (FSP) FAS 157-4, <i>Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not
Orderly</i>, which was effective beginning with our second quarter
financial reporting. The FSP provides additional guidance for
estimating fair value when the volume and level of activity for the
asset and liability have significantly decreased and provides
guidance on identifying circumstances that indicate a transaction
is not orderly. The FSP amends FAS 157 to require interim
disclosures of the valuation techniques and related inputs used to
measure fair value and any changes to those valuation techniques
and inputs. The FSP also provides additional guidance on defining
the major categories of equity and debt securities measured at fair
value in meeting the disclosure requirements of FAS 157. The
adoption of the FSP did not have a material impact on our results
of operations, financial position, or cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In April 2009, the FASB issued FSP FAS
107-1 and APB 28-1, <i>Interim Disclosures about Fair Value of
Financial Instruments</i>, which was effective beginning with our
second quarter financial reporting. The FSP amends FAS 107,
<i>Disclosures about Fair Value of Financial Instruments</i>, and
Accounting Principles Board Opinion 28, <i>Interim Financial
Reporting</i>, to require disclosures about fair value of financial
instruments for interim financial statements of publicly traded
companies. The adoption of the FSP did not have a material impact
on our results of operations, financial position, or cash
flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In April 2009, the FASB issued FSP FAS
115-2 and FAS 124-2, <i>Recognition and Presentation of
Other-Than-Temporary Impairments</i>, which was effective beginning
with our second quarter financial reporting. The FSP amends
existing guidance for determining whether an other-than-temporary
impairment of debt securities has occurred and enhances existing
disclosures with regard to other-than-temporary impairment for debt
and equity securities. The adoption of the FSP did not impact our
results of operations, financial position, or cash
flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In May 2008, the FASB issued FSP APB
14-1, <i>Accounting for Convertible Debt Instruments That May Be
Settled in Cash upon Conversion (Including Partial Cash
Settlement),</i> which was effective beginning with our first
quarter 2009 financial reporting. The FSP requires retrospective
application to all periods presented and does not grandfather
existing debt instruments. The FSP changes the accounting for our
previously outstanding $1.0 billion in original principal amount of
floating rate convertible debentures in that it requires 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</font> <font face="ARIAL" size="2">would
reflect the value of the conversion feature of the debentures. We
did not adopt the provisions of the new rule for the floating rate
convertible debentures that were delivered for conversion or
redeemed in August 2008, as the impact on our previously reported
financial statements was not material.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In December 2007, the FASB issued
FAS 160, <i>Noncontrolling Interests in Consolidated Financial
Statements — an amendment of ARB No. 51</i>, which was
effective beginning with our first quarter 2009 financial
reporting. This standard requires 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 requires gains or losses from the sale
of stock of subsidiaries where control is maintained to be
recognized as an equity transaction. We did not adopt the
presentation or disclosure provisions of this standard relative to
our noncontrolling interests, as the impact on our financial
statements was not material.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">In the first quarter of 2009, we
adopted the following accounting pronouncements, none of which had
a material impact on our results of operations, financial position,
or cash flows:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">FAS 157 as it relates
to certain non-financial assets and liabilities;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">FSP EITF 03-6-1,
<i>Determining Whether Instruments Granted in Share-Based Payment
Transactions Are Participating Securities</i>;</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">FAS 141(R), <i>Business
Combinations</i>; and</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 6px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table style="BORDER-COLLAPSE: collapse" cellspacing="0"
cellpadding="0" width="100%" border="0">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" align="left" width="3%"><font face="ARIAL" size=
"2">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font face="ARIAL" size="2">FAS 161 (see
“Derivative Financial Instruments” section
above).</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
</td>
</tr>
</tbody>
</table>
</div>
123000000
<div>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2"><b>NOTE 2 – EARNINGS PER SHARE</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">We compute basic and diluted per share
amounts based on net earnings for the periods presented. We use the
weighted average number of common shares outstanding during the
period to calculate basic earnings per share. The weighted average
number of common shares used in our calculation of diluted per
share amounts includes the dilutive effects of stock options and
restricted stock units based on the treasury stock method, and
shares related to our convertible debentures discussed
below.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2">Unless otherwise noted, we present all
per share amounts cited in these financial statements on a
“per diluted share” basis.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font face="ARIAL"
size="2">      The calculations of basic
and diluted earnings per share are as follows:</font></p>
<p style="MARGIN-TOP: 0px; FONT-SIZE: 12px; MARGIN-BOTTOM: 0px">
<font size="+0"> </font></p>
<table cellspacing="0" cellpadding="0" width="100%" align="center"
border="0"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="72%"></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
<td valign="bottom" width="1%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="5"><font face="ARIAL" size="1"><b>Quarter
Ended</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="5"><font face="ARIAL" size=
"1"><b>Six Months Ended</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 29,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 28,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle" colspan="2"><font face="ARIAL" size=
"1"><b>June 29,<br />
2008</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="middle" colspan="11"><font face="ARIAL"
size="1"><b><i>(In millions, except per share
data)</i></b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Net earnings for basic and diluted
computations</b></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>734</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">882</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>1,400</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">1,612</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Weighted average common shares
outstanding:</b></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Average number of common shares outstanding for basic
computations</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>386.9</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">399.3</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>390.2</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">402.9</font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Dilutive stock options, restricted stock units and
convertible securities</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>4.0</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">10.2</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>4.0</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">10.3</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Average number of common shares outstanding for diluted
computations</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>390.9</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">409.5</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b> </b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>394.2</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2"> </font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">413.2</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 1em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2"><b>Earnings per common share</b></font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Basic</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>1.90</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">2.21</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>3.59</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">4.00</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="MARGIN-LEFT: 3em; TEXT-INDENT: -1em"><font face="ARIAL"
size="2">Diluted</font></p>
</td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>      1.88</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">      2.15</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size=
"2"><b>$</b></font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2"><b>      3.55</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font face="ARIAL" size="2">$</font></td>
<td valign="bottom" align="right"><font face="ARIAL" size=
"2">      3.90</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px; TEXT-INDENT: 4%">
<font face="ARIAL" size="2"><font size="2">On June 26, 2008,
our Board of Directors authorized and we announced the planned
redemption of any and all of our $1.0 billion in original principal
amount of floating rate convertible debentures that remained
outstanding on August 15, 2008. In August 2008, all of the
debentures were delivered for conversion or were redeemed.
Statement of Financial Accounting Standards (FAS) 128, <i>Earnings
Per Share</i>, required an assumption that shares would be used to
pay the conversion obligations in excess of the accreted principal
amount and that those shares would be included in our calculation
of weighted average common shares outstanding for the diluted
earnings per share computation up to the date the convertible
securities were converted. The number of shares included in the
computation for the quarter and six months ended June 29, 2008
did not have a material impact on earnings per
share.</font></font></p>
</div>
0000936468
2009-01-01
2009-06-28
0000936468
2008-01-01
2008-06-29
0000936468
2009-03-30
2009-06-28
0000936468
2008-03-31
2008-06-29
0000936468
2008-12-31
0000936468
2007-12-31
0000936468
2009-06-28
0000936468
2008-06-29
0000936468
2008-06-27
iso4217:USD
shares
iso4217:USD
shares