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LOCKHEED MARTIN CORPORATION
Consolidated Results
Preliminary and Unaudited
(In millions, except for per share data and percentages)
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 % Change 2000 1999 % Change
Net Sales $7,595 $6,982 9 % $25,329 $25,530 (1)%
Earnings before
Interest and Taxes $580 $701 (17)% $1,205 $2,009 (40)%
Interest Expense $243 $226 8 % $919 $809 14 %
Pre-tax Earnings $337 $475 (29)% $286 $1,200 (76)%
Income Taxes $153 $182 (16)% $710 $463 53 %
Effective Tax Rate 45% 38% N/M N/M 39% N/M
Earnings before
Extraordinary Item $184 $293 (37)% ($424) $737 (158)%
Extraordinary Item (a) ($95) -- N/M ($95) -- N/M
Earnings before
Cumulative Effect of
Change in Accounting $89 $293 (70)% ($519) $737 (170)%
Cumulative Effect of
Change in Accounting
(b) -- -- -- -- ($355) N/M
Net Earnings (Loss) $89 $293 (70)% ($519) $382 (236)%
Basic Earnings (Loss)
Per Share:
Earnings before
Extraordinary Item
and Cumulative
Effect of Change
in Accounting $0.44 $0.77 (42)% ($1.05) $1.93 (154)%
Extraordinary Item
(a) ($0.23) -- N/M ($0.24) -- N/M
Cumulative Effect of
Change in Accounting
(b) -- -- N/M -- ($0.93) N/M
Earnings (Loss) Per
Share $0.21 $0.77 (73)% ($1.29) $1.00 (229)%
Average Basic Shares
Outstanding 421.0 384.6 400.8 382.3
Diluted Earnings (Loss)
Per Share:
Earnings before
Extraordinary Item
and Cumulative
Effect of Change
in Accounting $0.44 $0.76 (43)% ($1.05) $1.92 (155)%
Extraordinary Item
(a) ($0.23) -- N/M ($0.24) -- N/M
Cumulative Effect of
Change in Accounting
(b) -- -- N/M -- ($0.93) N/M
Earnings (Loss) Per
Share $0.21 $0.76 (72)% ($1.29) $0.99 (230)%
Average Diluted Shares
Outstanding 425.2 385.2 400.8 384.1
(a) During the fourth quarter, the Corporation recorded an extraordinary charge associated with the repurchase of approximately $1.9 billion of its outstanding debt issues.
(b) The Corporation adopted the American Institute of Certified Public Accountants' Statement of Position (SOP) No. 98-5, "Reporting on the Costs of Start-Up Activities" effective January 1, 1999.
LOCKHEED MARTIN CORPORATION
Segment Results Including Nonrecurring and Unusual Items
Preliminary and Unaudited
(In millions, except for percentages)
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 % Change 2000 1999 % Change
Systems Integration (a)(b)
Net Sales $2,917 $2,642 10 % $9,647 $9,570 1 %
Segment EBIT $428 $236 81 % $583 $880 (34)%
Margins 14.7% 8.9% 6.0% 9.2%
Amortization of Goodwill
and Contract Intangibles $50 $70 $245 $276
Depreciation and
Amortization $37 $60 $183 $223
Space Systems (b)
Net Sales $2,035 $1,812 12 % $7,127 $7,209 (1)%
Segment EBIT $90 $225 (60)% $416 $561 (26)%
Margins 4.4% 12.4% 5.8% 7.8%
Amortization of Goodwill
and Contract Intangibles $14 $14 $56 $57
Depreciation and
Amortization $48 $45 $152 $165
Aeronautics
Net Sales $1,558 $1,519 3 % $4,885 $5,499 (11)%
Segment EBIT $98 $96 2 % $343 $247 39 %
Margins 6.3% 6.3% 7.0% 4.5%
Amortization of Goodwill
and Contract Intangibles $21 $20 $81 $80
Depreciation and
Amortization $23 $23 $88 $82
Technology Services (c)
Net Sales $689 $692 -- % $2,318 $2,261 3 %
Segment EBIT $46 $40 15 % $126 $137 (8)%
Margins 6.7% 5.8% 5.4% 6.1%
Amortization of Goodwill
and Contract Intangibles $4 $5 $18 $18
Depreciation and
Amortization $4 $6 $15 $14
Global Telecommunications
(d)
Net Sales $268 $129 108 % $766 $389 97 %
Segment EBIT ($134) ($22) N/M ($215) ($97) N/M
Margins (50.0%) (17.1%) (28.1%) (24.9%)
Amortization of Goodwill
and Contract Intangibles $19 $8 $49 $8
Depreciation and
Amortization $17 $2 $45 $5
Corporate and Other (e)
Net Sales $128 $188 (32)% $586 $602 (3)%
Segment EBIT $52 $126 N/M ($48) $281 N/M
Margins N/M N/M N/M N/M
Amortization of Goodwill
and Contract Intangibles -- -- $1 $1
Depreciation and
Amortization $7 $11 $35 $40
(a) 1999 and 2000 results include the operations of Control Systems and the AES businesses, which were divested in September and November of 2000, respectively.
(b) 2000 and 1999 results have been restated to reflect the transfer of the Management and Data Systems operating unit and the Space Applications Systems product line from the Systems Integration business area to the Space Systems business area.
(c) 1999 results include the operations of LM Hanford Company, which was divested during 1999.
(d) A new segment called Global Telecommunications is presented. This new segment reflects the operations of Lockheed Martin Global Telecommunications (LMGT), which includes COMSAT and Integrated Business Solutions (IBS). The operations of both LMGT and IBS were previously included in the Corporate and Other business segment.
(e) 2000 and 1999 results include the operations of state and local government services lines of business. 1999 results include the operations of Real3D, Inc. and the communications industry services line of business which were divested during 1999.
LOCKHEED MARTIN CORPORATION
Segment Results Excluding Nonrecurring and Unusual Items
Preliminary and Unaudited
(In millions, except for percentages)
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 % Change 2000 1999 % Change
Systems Integration (a)(b)
Net Sales $2,917 $2,642 10 % $9,647 $9,570 1 %
Segment EBIT $277 $223 24 % $887 $867 2 %
Margins 9.5% 8.4% 9.2% 9.1%
Amortization of Goodwill
and Contract Intangibles $50 $70 $245 $276
Depreciation and
Amortization $37 $60 $183 $223
Space Systems (b)
Net Sales $2,035 $1,812 12 % $7,127 $7,209 (1)%
Segment EBIT $82 $203 (60)% $391 $540 (28)%
Margins 4.0% 11.2% 5.5% 7.5%
Amortization of Goodwill
and Contract Intangibles $14 $14 $56 $57
Depreciation and
Amortization $48 $45 $152 $165
Aeronautics
Net Sales $1,558 $1,519 3 % $4,885 $5,499 (11)%
Segment EBIT $98 $96 2 % $343 $247 39 %
Margins 6.3% 6.3% 7.0% 4.5%
Amortization of Goodwill
and Contract Intangibles $21 $20 $81 $80
Depreciation and
Amortization $23 $23 $88 $82
Technology Services (c)
Net Sales $689 $692 -- % $2,318 $2,261 3 %
Segment EBIT $46 $40 15 % $160 $137 17 %
Margins 6.7% 5.8% 6.9% 6.1%
Amortization of Goodwill
and Contract Intangibles $4 $5 $18 $18
Depreciation and
Amortization $4 $6 $15 $14
Global Telecommunications
(d)
Net Sales $268 $129 108 % $766 $389 97 %
Segment EBIT ($17) ($22) N/M ($98) ($97) N/M
Margins (6.3%) (17.1%) (12.8%) (24.9%)
Amortization of Goodwill
and Contract Intangibles $19 $8 $49 $8
Depreciation and
Amortization $17 $2 $45 $5
Corporate and Other (e)
Net Sales $128 $188 (32)% $586 $602 (3)%
Segment EBIT $52 $59 N/M $61 $66 N/M
Margins N/M N/M N/M N/M
Amortization of Goodwill
and Contract Intangibles -- -- $1 $1
Depreciation and
Amortization $7 $11 $35 $40
(a) 1999 and 2000 results include the operations of Control Systems and the AES businesses, which were divested in September and November of 2000, respectively.
(b) 2000 and 1999 results have been restated to reflect the transfer of the Management and Data Systems operating unit and the Space Applications Systems product line from the Systems Integration business area to the Space Systems business area.
(c) 1999 results include the operations of LM Hanford Company, which was divested during 1999.
(d) A new segment called Global Telecommunications is presented. This new segment reflects the operations of Lockheed Martin Global Telecommunications (LMGT), which includes COMSAT and Integrated Business Solutions (IBS). The operations of both LMGT and IBS were previously included in the Corporate and Other business segment.
(e) 2000 and 1999 results include the operations of state and local government services lines of business. 1999 results include the operations of Real3D, Inc. and the communications industry services line of business which were divested during 1999.
LOCKHEED MARTIN CORPORATION
Reconciliation of Pro Forma Net Earnings (a)
Preliminary and Unaudited
(In millions, except for per share amounts and percentages)
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
Net Earnings (Loss) - As Reported $89 $293 ($519) $382
After Tax Loss on AES Divestiture ($102) -- $878 --
After Tax Gain on Control Systems
Divestiture -- -- ($180) --
After Tax Loss Extinguishment of Debt $95 -- $95 --
After Tax Loss on Globalstar
Guarantee -- -- $91 --
After Tax Loss ACeS Impairment
Reserve $77 -- $77 --
After Tax Effect of Reversal of
Calcomp Charge -- -- ($21) --
After Tax Gain on L3 Disposition -- ($27) -- ($101)
After Tax Gain on Sale of Surplus
Real Estate ($6) ($21) ($19) ($37)
After Tax Net (Gain) Loss on Other
Portfolio
Shaping Activities $4 ($18) $30 ($24)
Cumulative Effect of Change in
Accounting -- -- -- $355
Pro Forma Net Earnings $157 $227 $432 $575
Pro Forma Effective Tax Rate 46.9% 39.5% 47.6% 39.5%
Diluted Earnings (Loss) Per Share -
As Reported (b) $0.21 $0.76 ($1.29) $0.99
After Tax Loss on AES Divestiture (b) ($0.24) -- $2.18 --
After Tax Gain on Control Systems
Divestiture (b) -- -- ($0.45) --
After Tax Loss Extinguishment of Debt $0.23 -- $0.24 --
After Tax Loss on Globalstar
Guarantee -- -- $0.23 --
After Tax Loss ACeS Impairment
Reserve (b) $0.18 -- $0.19 --
After Tax Effect of Reversal of
Calcomp Charge -- -- ($0.05) --
After Tax Gain on L3 Disposition -- ($0.07) -- ($0.26)
After Tax Gain on Sale of Surplus
Real Estate (b) ($0.01) ($0.05) ($0.05) ($0.10)
After Tax Net (Gain) Loss on Other
Portfolio
Shaping Activities $0.01 ($0.05) $0.07 ($0.06)
Cumulative Effect of Change in
Accounting -- -- -- $0.93
Pro Forma Diluted Earnings Per Share $0.38 $0.59 $1.07 $1.50
(a) Excludes nonrecurring and unusual items.
(b) Due to the impact that the issuance of Lockheed Martin shares in the merger with COMSAT had on the weighted average number of shares outstanding used in computing earnings per share, the earnings per share effects of individual transactions may be different for the quarter versus the year ended December 31, 2000.
LOCKHEED MARTIN CORPORATION
Other Financial Information
Preliminary and Unaudited
(In millions, except for per share amounts and percentages)
QUARTER ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2000 1999 2000 1999
Pro Forma EBIT $538 $599 $1,744 $1,760
Pro Forma EBIT to Sales Margin 7.1% 8.6% 6.9% 6.9%
Amortization of Goodwill and
Contract Intangibles
Resulting from Prior
Acquisitions $108 $117 $450 $440
Depreciation and Amortization $136 $147 $518 $529
Pro Forma EBITDA $782 $863 $2,712 $2,729
DECEMBER 31, DECEMBER 31,
2000 1999 (a)
Total Backlog $56,424 $45,913
Systems Integration $16,706 $13,971
Space Systems $14,976 $15,998
Aeronautics $17,570 $9,003
Technology Services $4,371 $4,399
Global Telecommunications $1,625 $1,533
Corporate and Other $1,176 $1,009
Total Debt $9,959 $11,954
Long-term (including current
maturities) $9,947 $11,479
Short-term $12 $475
Cash and Cash Equivalents $1,505 $455
Stockholders' Equity $7,154 $6,361
Total Debt-to-Capital 58% 65%
Total Debt-to-Capital (net of
invested cash) 54% 64%
(a) 1999 results have been restated to reflect the transfer of the Management and Data Systems operating unit and the Space Applications Systems product line from the Systems Integration business area to the Space Systems business area.
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Balance Sheet
Preliminary and Unaudited
(In millions)
DECEMBER 31, DECEMBER 31,
2000 1999
Assets
Cash and cash equivalents $1,505 $455
Accounts Receivable 4,156 4,348
Inventories 3,835 4,051
Other current assets 1,667 1,842
Total current assets 11,163 10,696
Property, plant and equipment 3,446 3,634
Goodwill and other intangible assets 9,943 10,421
Other noncurrent assets 5,304 5,261
Total assets $29,856 $30,012
Liabilities and Stockholders' Equity
Short-term borrowings $12 $475
Other accrued expenses 8,916 8,285
Current portion of long-term debt 882 52
Total current liabilities 9,810 8,812
Long-term debt 9,065 11,427
Post-retirement and other noncurrent
liabilities 3,827 3,412
Stockholders' equity 7,154 6,361
Total liabilities and
stockholders' equity $29,856 $30,012
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Statement of Cash Flows
Preliminary and Unaudited
(In millions)
YEAR ENDED DECEMBER 31,
2000 1999
Operating Activities
Earnings before cumulative effect of
change in accounting $(519) $737
Adjustments to reconcile earnings to
net cash
provided by operating activities:
Depreciation and amortization 968 969
Changes in operating assets and
liabilities 1,567 (629)
Net cash provided by operating
activities 2,016 1,077
Investing Activities
Expenditures for property, plant &
equipment (500) (669)
Sale of AES 1,670 --
Sale of Control Systems 510 --
Consummation of COMSAT tender offer -- (1,203)
Sale of shares in L-3 Communications -- 263
Other 82 (29)
Net cash provided by (used for)
investing activities 1,762 (1,638)
Financing Activities
Net decrease in short-term borrowings (463) (868)
Net (repayments) borrowings of debt (2,096) 1,927
Issuance of common stock 14 17
Common stock dividends (183) (345)
Net cash (used for) provided by
financing activities (2,728) 731
Net increase in cash and cash
equivalents 1,050 170
Cash and cash equivalents at
beginning of period 455 285
Cash and cash equivalents at end of
period $1,505 $455
PRNewswire -- Jan. 25
END SECOND AND FINAL ADD