<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) - January 20, 1998
--------
LOCKHEED MARTIN CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 1-11437 52-1893632
(State of other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
Incorporation)
6801 Rockledge Drive, Bethesda, Maryland 20817
(Address of principal executive offices) (Zip Code)
(301) 897-6000
(Registrant's telephone number, including area code)
---------
Not Applicable
(Former name or address, if changed since last report)
================================================================================
<PAGE>
Item 5. Other Events
The Corporation is filing this Current Report on Form 8-K in order to
provide the information contained in the Corporation's press release (and the
financial tables attached thereto) dated January 20, 1998 which is included as
Exhibit 99 to this Current Report on Form 8-K.
Item 7. Financial Statements and Exhibits
Exhibit No. Description
----------- -----------
99 Lockheed Martin Corporation Press Release (and
the financial tables attached thereto) dated
January 20, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LOCKHEED MARTIN CORPORATION
/s/ STEPHEN M. PIPER
--------------------
Stephen M. Piper
Associate General Counsel and
Assistant Secretary
21 January 1998
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
99 Lockheed Martin Corporation Press Release (and the
financial tables attached thereto) dated January 20, 1998.
<PAGE>
EXHIBIT 99
For Immediate Release
---------------------
LOCKHEED MARTIN ACHIEVES STRONG
1997 FINANCIAL PERFORMANCE
BETHESDA, Maryland, January 20, 1998 -- Lockheed Martin (NYSE:LMT) today
announced that, based on net earnings excluding non-recurring and unusual items,
its earnings per share, assuming dilution, for the fourth quarter of 1997
increased by 20% to $1.79, compared with $1.49 per share in the same 1996
period. For the entire year, comparable calculations reflect that earnings per
share, assuming dilution, increased 11% to $6.05 for 1997, versus $5.44 for
1996. (Non-recurring and unusual items and their impact on results are described
later.)
Net earnings for fourth-quarter 1997, excluding non-recurring and unusual items,
increased 12% to $363 million, compared with $323 million for the same 1996
period. For the entire year, excluding non-recurring and unusual items, net
earnings increased 7% to $1.29 billion, compared with $1.20 billion for 1996.
Fourth-quarter 1997 net sales reached $7.88 billion, a 3% increase over 1996
fourth-quarter revenues of $7.66 billion. For 1997, net sales reached $28.07
billion, a 4% improvement over 1996 revenues of $26.87 billion. Sales
comparisons for the fourth quarter and 1997 reflect divestitures of non-core
businesses, and the 1997 results include 12 months of revenues from Lockheed
Martin's April 1996 combination with Loral, versus only nine months in 1996.
Lockheed Martin's backlog also reflects the impact of divestitures and stood at
$47.1 billion at year-end 1997, compared with $50.4 billion at the end of 1996.
"The year just completed was distinguished by a number of key indicators: strong
free cash flow of nearly $900 million; organic sales growth of some 5%;
realizing approximately $750 million in after-tax proceeds from divestitures of
non-core businesses; capturing more than two-thirds of the dollar value of new
business for which we competed; and a nearly flawless performance of our
advanced-technology systems, products and services," said Vance D. Coffman, who
was named vice chairman and chief executive officer of Lockheed Martin during
1997.
<PAGE>
Non-recurring and unusual items in the fourth quarter of 1997 included a
tax-free gain of $311 million following a transaction with the General Electric
Company (GE) and after-tax charges of $303 million. The strategic transaction
with GE resulted in Lockheed Martin exchanging two non-core business units, the
Corporation's investment in a telecommunications partnership and approximately
$1.6 billion in cash for all outstanding shares of Lockheed Martin Series A
convertible preferred stock held by GE. The charges were identified in
connection with the Corporation's review of non-strategic lines of business, and
non-core investments and certain other assets.
Non-recurring items in the fourth quarter of 1996 included a net after-tax gain
of $351 million resulting principally from the exchange of Martin Marietta
Materials stock, and after-tax charges of $209 million resulting from the
financial impacts of a conservative corporate strategy regarding its
environmental remediation business and other corporate actions.
Including the aforementioned non-recurring and unusual items, net earnings for
fourth-quarter 1997 decreased 20% to $371 million, compared with $465 million
for the same 1996 period. For the entire year, including the aforementioned
non-recurring and unusual items, earnings decreased by 3% to $1.30 billion,
compared with $1.35 billion for 1996.
Based on net earnings including the aforementioned non-recurring and unusual
items, earnings per share, assuming dilution, for the fourth quarter of 1997
decreased by 14% to $1.83, compared with $2.14 per share in the same 1996
period. For the entire year, comparable calculations reflect that earnings per
share, assuming dilution, were $6.09 for each period.
All earnings per share amounts have been computed in accordance with Statement
of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share." Prior
year amounts computed under the new standard do not differ significantly from
amounts computed under previous guidance. For the sole purpose of calculating
1997 earnings per share under Securities and Exchange Commission guidelines, the
excess fair value of assets transferred to GE over the carrying value of the
preferred stock -- approximately $1.8 billion -- is required to be deducted from
net earnings to determine net earnings available to common shareholders.
As shown on the attached financial tables, this deduction has a significant
impact on the earnings per share calculation, but does not impact reported 1997
earnings. Due to the unusual nature of this item and because the preferred stock
redemption was an equity transaction, the earnings per share amounts discussed
herein exclude its impact.
<PAGE>
Coffman stated, "We completed major strategic actions in 1997 to better position
the Corporation for the future and achieved virtually all of our performance
objectives for the year. Going forward, we plan to take measures to create
additional shareholder value."
Coffman emphasized that consolidation actions resulting from previous
transactions are nearly completed and Lockheed Martin is on track to meet or
exceed its goal of $2.6 billion in annual steady state savings that are
enhancing competitiveness and profitability and greatly reducing customer costs.
Coffman also highlighted the Corporation's planned $11.6-billion strategic
combination with Northrop Grumman, which will enhance Lockheed Martin's position
in defense electronics, systems integration, information technology and
aeronautics markets. The combination is on schedule to be completed during
first quarter 1998. The consolidation plan to be announced following the
closing of the transaction is expected to produce additional efficiencies,
including cost savings benefiting customers, shareholders and employees.
"In sum, the past 12 months have been extremely successful and illustrate the
effectiveness of consolidation based on cultural integration, teamwork, Mission
Success, and customer responsiveness. We are continuing to build on the solid
foundation created by Dan Tellep and Norm Augustine, the first two chairmen and
chief executive officers of Lockheed Martin, whose leadership created an
exciting new Corporation with great long-term potential," Coffman said.
"Our objectives for the next 12 months include successfully integrating Northrop
Grumman operations with Lockheed Martin; continued strong cash flow and earnings
per share growth; increased productivity and continued dedication to 100%
Mission Success; and potential portfolio shaping and selective investments in
high-margin/high-growth businesses," he added.
"Our overarching goal is to produce superior shareholder returns from our core
lines of business and achieve profitable growth," said Coffman
Headquartered in Bethesda, Maryland, Lockheed Martin is a highly diversified
global enterprise principally engaged in the research, design, development,
manufacture and integration of advanced-technology systems, products and
services. The Corporation's core businesses span space and telecommunications,
electronics, information and services, aeronautics, energy and systems
integration.
<PAGE>
###
CONTACTS:
News Media: Charles Manor, Lockheed Martin News & Information, 301/897-6258
Analysts/Investors: James Ryan, Lockheed Martin Investor Relations, 301/897-6584
For further information, visit the Lockheed Martin Web Site at www.lmco.com
<PAGE>
Attachment 1
1997 IN REVIEW
--------------
In announcing 1997 earnings, Vance D. Coffman, Lockheed Martin's vice chairman
and CEO, cited additional events, program awards and Mission Success
achievements during the year with positive implications for Lockheed Martin's
outlook:
. The Corporation completed its transaction to reposition 10 business units as
a new independent company, L-3 Communications, with Lockheed Martin retaining
approximately a 35% equity stake in the new company;
. Lockheed Martin and the Intersputnik International Organization of Space
Communications formed a joint venture, Lockheed Martin Intersputnik, to
initially provide telecommunications services to customers in Eastern Europe,
South Asia, Africa and the Commonwealth of Independent States;
. The F-22 Raptor air superiority fighter achieved first flight, positioning
the program for procurement of the first production aircraft;
. The Corporation reached Joint Strike Fighter teaming agreements with Northrop
Grumman and British Aerospace and began component production for two concept
demonstrator aircraft;
. During the year, the Corporation had an unprecedented number of successful
launches, including eight Space Shuttle External Tanks, four Titan IV
rockets, eight Atlas boosters, one Athena I (formerly the Lockheed Martin
Launch Vehicle), three Russian Proton rockets; and through United Space
Alliance, a joint venture with Boeing, prepared the space shuttle for flight
on its eight 1997 missions;
. Lockheed Martin was selected as one of two companies awarded development
contracts for the U.S. Air Force's Evolved Expendable Launch Vehicle (EELV)
family of rockets comprising the Corporation's common core booster(TM)
design;
. During 1997, fifty-four commercial satellites, four civil and four military
satellites manufactured by Lockheed Martin were successfully launched,
including the first A2100 bus completed at the Corporation's new Commercial
Satellite Center. Six new orders were received during the year for the A2100
communications satellite;
. Lockheed Martin successfully supported two NASA missions to Mars. The
Lockheed Martin-built Mars Global Surveyor spacecraft successfully entered
orbit around Mars and the Pathfinder spacecraft landed safely on Mars
assisted by a Lockheed Martin-built aeroshell;
. During the year, Lockheed Martin received 25 domestic and international
postal contracts with a total order value of $437 million to provide advanced
recognition, automation, material handling and information management
systems;
<PAGE>
. The Corporation received the first major production contract for the Japanese
F-2 fighter program, which it is helping produce. The program has a multi-
billion dollar potential value. Korea's KTX-2 trainer, which the Corporation
also is helping develop, received full-scale development approval from the
Korean government;
. The Lockheed Martin/Texas Instruments Javelin joint venture received a $745-
million contract for full-rate production of the anti-armor missile system
for the U.S. Army and Marine Corps;
. Orders were received from the United States and Italy for 47 C-130J aircraft
in 1997, bringing total orders and options to 145 aircraft;
. The Corporation was awarded a contract by Raytheon for six tactical mobile
radars for a $1.4-billion Brazilian program to provide a comprehensive
surveillance system that will monitor the Amazon Region;
. The Lockheed Martin/Tenix joint venture was selected to manage to completion
the $1-billion Jindalee Operational Radar Network, a wide-area surveillance
system of over-the-horizon radars in Australia;
. Lockheed Martin was selected by the Spanish Ministry of Defense to provide
combat systems for that nation's new F-100 class Navy frigates;
. The Corporation received a follow-on order from Singapore for 12 F-16
aircraft and a total of 117 F-16 aircraft were delivered in 1997, bringing to
more than 3,600 the number of F-16 deliveries since program inception;
. Lockheed Martin received a $1 billion, 10-year contract to help the Federal
Aviation Administration modernize the nation's air traffic control system;
. The U.S. Patent and Trademark Office awarded an eight-year, $254-million
program to Lockheed Martin for information systems development and
maintenance;
. Lockheed Martin's X-33 reusable launch vehicle successfully completed a
critical design review, providing go-ahead for assembly of the subscale
prototype;
. Lockheed Martin also was selected as the North American Numbering Plan
Administrator and signed four Local Number Portability contracts, serving
phone carriers in 24 states. Local number portability allows customers to
keep existing telephone numbers if they switch local service providers;
. The Environmental Protection Agency awarded Lockheed Martin two five-year
contracts totaling nearly $500 million to support the agency's computing and
telecommunications requirements.
###
<PAGE>
LOCKHEED MARTIN CORPORATION
Consolidated Results
(In millions, except per share data)
Attachment 2
<TABLE>
<CAPTION>
QUARTER ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------- -----------------------
1997 1996 % Change 1997 1996 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $7,878 $7,662 3% $28,069 $26,875 4%
Earnings before Interest and Taxes $ 666 $ 801 -17% $ 2,779 $ 2,733 2%
Interest Expense $ 227 $ 214 6% $ 842 $ 700 20%
Pre-tax Earnings $ 439 $ 587 -25% $ 1,937 $ 2,033 -5%
Income Taxes $ 68 $ 122 -44% $ 637 $ 686 -7%
Effective Tax Rate 15% 21% N/M 33% 34% N/M
Net Earnings $ 371 $ 465 -20% $ 1,300 $ 1,347 -3%
Earnings Per Share Assuming No Dilution:
Earnings before redemption of preferred stock $ 1.95 $ 2.41 -19% $ 6.73 $ 6.80 -1%
Redemption of Series A preferred stock (9.79) - N/M (9.85) - N/M
Net (loss) earnings per common share ($7.84) $ 2.41 N/M ($3.12) $ 6.80 N/M
Average shares assuming no dilution 186.5 185.2 185.3 189.1
Earnings Per Share Assuming Full Dilution:
Earnings before redemption of preferred stock $ 1.83 $ 2.14 -14% $ 6.09 $ 6.09 0%
Redemption of Series A preferred stock (8.99) - N/M (8.55) - N/M
Net (loss) earnings per common share * $ 2.14 N/M * $ 6.09 N/M
Average shares assuming full dilution 203.2 216.2 213.5 221.3
</TABLE>
*Antidilutive
<PAGE>
LOCKHEED MARTIN CORPORATION
Other Financial Information
(In millions, except per share data and percentages)
RECONCILIATION OF EARNINGS EXCLUDING NONRECURRING AND UNUSUAL ITEMS
<TABLE>
<CAPTION>
QUARTER ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------- -----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Earnings - As Reported $371 $465 $1,300 $1,347
Gain on Redemption of Preferred Shares ($311) $0 ($311) $0
Gain on Materials Stock Exchange $0 ($351) $0 ($351)
Nonrecurring and Unusual Charges $303 $209 $303 $209
Adjusted Net Earnings $363 $323 $1,292 $1,205
Earnings per Share, Assuming Full Dilution -
As Reported $1.83 $2.14 $6.09 $6.09
Effect of Nonrecurring and Unusual Items ($0.04) ($0.65) ($0.04) ($0.65)
Adjusted Earnings per Share, Assuming Full Dilution $1.79 $1.49 $6.05 $5.44
<CAPTION>
OTHER FINANCIAL INFORMATION
QUARTER ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------- -----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
EBIT to Sales Margin 8.5% 10.5% 9.9% 10.2%
Amortization of Goodwill and Contract Intangibles
Resulting form Prior Acquisitions (pretax) $109 $110 $446 $402
</TABLE>
<TABLE>
<CAPTION>
12/31/97 12/31/96
-------- --------
<S> <C> <C>
Backlog $47,059 * $50,406
Total Debt $11,898 * $11,478
- ---------- -------- --------
Long-term (including current maturities) $11,404 * $10,368
Short-term $494 * $1,110
Cash and Cash Equivalents $0 * $0
Stockholders' Equity $5,176 * $6,856
Total debt-to-capital 69.7% * 62.6%
* Preliminary
</TABLE>
<PAGE>
LOCKHEED MARTIN CORPORATION
Segment Results Excluding Nonrecurring and Unusual Items
(In millions)
<TABLE>
<CAPTION>
QUARTER ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------- -----------------------
1997 1996 % Change 1997 1996 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Space & Strategic Missiles
- --------------------------
Net Sales 2,475 2,205 12% 8,303 7,904 5%
Segment EBIT 298 208 43% 1,140 998 14%
Margins 12.0% 9.4% 13.7% 12.6%
Amortization of Goodwill & Contract Intangibles 7 7 0% 29 29 0%
Electronics
- -----------
Net Sales 1,877 2,080 -10% 7,069 6,675 6%
Segment EBIT 216 263 -18% 663 673 -1%
Margins 11.5% 12.6% 9.4% 10.1%
Amortization of Goodwill & Contract Intangibles 54 61 -11% 228 199 15%
Information & Services*
- -----------------------
Net Sales 1,510 1,623 -7% 6,468 5,893 10%
Segment EBIT 63 159 -60% 326 376 -13%
Margins 4.2% 9.8% 5.0% 6.4%
Amortization of Goodwill & Contract Intangibles 26 28 -7% 107 92 16%
Aeronautics
- -----------
Net Sales 1,945 1,619 20% 6,045 5,596 8%
Segment EBIT 217 122 78% 656 487 35%
Margins 11.2% 7.5% 10.9% 8.7%
Amortization of Goodwill & Contract Intangibles 20 20 0% 80 80 0%
Energy & Other**
- ----------------
Net Sales 71 135 -47% 184 807 -77%
Segment EBIT 18 (9) N/M 140 141 -1%
Margins N/M N/M N/M N/M
</TABLE>
* 1996 and 1Q 1997 include the operations of certain businesses split off as L3
Communications Corporation effective March 30, 1997.
** 1996 results include the operations of Martin Marietta Materials, Inc., which
was divested in the fourth quarter of 1996.
