<PAGE>
Exhibit 99
[LOGO]
For Immediate Release
---------------------
. LOCKHEED MARTIN REPORTS SECOND QUARTER 2000 EPS OF $0.11; $0.29 EXCLUDING
NONRECURRING AND UNUSUAL ITEMS
. GENERATES $1.0 BILLION OF FREE CASH FLOW IN THE QUARTER; RAISES FREE CASH
FLOW GUIDANCE BY $400 MILLION IN 2000
. RECORDS $16.7 BILLION IN NEW ORDERS TO ACHIEVE RECORD BACKLOG OF $57.1
BILLION
. REAFFIRMS 2000 EARNINGS OUTLOOK AT ABOUT $1.05 AND 15 - 25 PERCENT
PROJECTED ANNUAL EARNINGS GROWTH FROM 2000 BASE
BETHESDA, Maryland, July 20, 2000 - Lockheed Martin Corporation (NYSE: LMT)
today reported second quarter 2000 net earnings per share of $0.11 on a diluted
basis, compared to last year's second quarter net loss per share of $0.11 on a
diluted basis. Nonrecurring and unusual items decreased second quarter 2000
results by $0.18 per diluted share while such items increased the net loss per
diluted share in the comparable 1999 period by $0.03.
The Corporation reported it generated $1.0 billion of positive free cash flow in
the second quarter of 2000 and $1.4 billion year-to-date. Second quarter 2000
cash flow included an advance by the United Arab Emirates (UAE) for the purchase
of 80 "Block 60" F-16 aircraft and associated equipment. The advance resulted in
a cash benefit in the quarter to Lockheed Martin of more than $900 million. The
cash benefit for the year from the UAE advance, after subcontractor payments and
other disbursements, is expected to be between $200 million - $300 million. The
quarter also included a net payment of $150 million related to Globalstar
Telecommunications Ltd.'s (Globalstar) failure to repay borrowings under its
credit agreement. The Corporation is entitled to repayment by Globalstar of this
amount. Net debt, defined as total debt less invested cash, improved by
approximately $960 million during the quarter, bringing the net debt to
capitalization ratio to 61.3% at the end of June 2000, the lowest point in 11
quarters.
The Corporation increased its 2000 free cash flow outlook from at least $500
million to at least
<PAGE>
$900 million with an objective of generating $1.7 billion in free cash over the
two-year period 2000-2001, up from the previous expectation of $1.3 billion. The
2000 expectation was raised to reflect the continued focus on corporate-wide
improvements in cash management, a change in government billing policy that will
provide a one-time improvement to cash and ongoing sales of surplus real estate.
"We have made substantial progress in our efforts to achieve operational
excellence and improved financial performance throughout Lockheed Martin," said
Chairman and Chief Executive Officer Vance Coffman. "Our generation of free cash
flow is ahead of plan, and with the realization of full and fair value for our
announced divestitures, we will significantly reduce our net leverage in 2000
and 2001."
During the second quarter, the Corporation announced a definitive agreement for
the divestiture of Control Systems to BAE Systems North America. During the
third quarter the Corporation made the decision to sell its Aerospace
Electronics Systems to BAE Systems North America for $1.67 billion.
The Corporation reaffirmed its 2000 earnings outlook of about $1.05 per diluted
share, excluding the effects of any nonrecurring and unusual items. Lockheed
Martin also reaffirmed that it expects earnings per diluted share to increase in
the near-term by 15-25 percent annually from the 2000 base with expected results
for 2001 closer to the lower end of the range. It should be noted that the
Corporation's current estimates anticipate a reduction of employee retirement
plan (pension) income in 2001 of approximately $50 million compared to 2000
levels with continued declines in future years also anticipated.
The Corporation's backlog increased to a record $57.1 billion compared to $45.9
billion at year-end 1999. The backlog increase for the year includes an F-16
order for the UAE, worth approximately $6.4 billion. In addition, the
Corporation recorded approximately $6.5 billion in orders for the following:
THAAD Engineering, Manufacturing and Development (EMD) contract, F-16's for
Greece and Israel, Integrated Weapons System for Norwegian Frigates, and two
U.S. and two Italian C-130J airlift aircraft orders.
Citing new business wins, divestitures and program performance, Coffman added,
"We are exceptionally pleased with accomplishments in the second quarter
including, among others,
<PAGE>
achievement of a record backlog, increased cash flow outlook and the successful
inaugural flight of the Atlas III. We remain committed to restoring our
financial strength and flexibility and our performance to-date confirms we are
on the right path. We now are seeing the results of our efforts to drive a
culture of managing for value deep into the organization for the benefit of our
customers and shareholders. However, we must continue to be vigilant in our
dedication to operational performance and financial discipline."
SECOND QUARTER AND YEAR-TO-DATE DETAILED REVIEW
Sales for the second quarter of 2000 were $6.2 billion, compared with second
quarter 1999 sales of $6.2 billion. Sales for the first six months of 2000 were
$11.8 billion, down 5 percent when compared to the same period in 1999.
Net earnings for the second quarter 2000 totaled $42 million, or $0.11 per
diluted share. In the comparable period of 1999, the net loss was $41 million,
or $0.11 per diluted share. Second quarter 2000 earnings before federal and
state taxes included the effects of recording a reserve of $150 million related
to the amounts due from Globalstar, partially offset by a favorable adjustment
of $35 million relating to the charge recorded in 1998 associated with the
shutdown of CalComp operations which is substantially complete. The combination
of these nonrecurring and unusual items reduced diluted earnings per share by
$0.18. In the comparable 1999 period, pretax earnings included a $20 million
loss, or $0.03 per diluted share, associated with the write-down of the
Corporation's investment in Iridium LLC.
Reported net earnings year-to-date 2000 were $96 million, or $0.25 per diluted
share, compared to a loss of $128 million, or $0.34 per diluted share, for the
same period in 1999. Pretax earnings for 2000 include the aforementioned
nonrecurring and unusual items recorded in the second quarter as well as a net
pretax gain of $10 million, or $0.02 per diluted share, associated primarily
with the sale of surplus real estate. In the comparable 1999 period, pretax
earnings included the aforementioned write-down associated with Iridium as well
as a $114 million gain, or $0.19 per diluted share, associated with the
disposition of a portion of the Corporation's interest in L-3 Communications
Holdings, Inc. stock. Reported 1999 net earnings were reduced by a cumulative
effect adjustment of $355 million, or $0.93 per diluted share, related to
adopting the new accounting standard for start-up costs.
<PAGE>
In the first quarter of 2000, Management and Data Systems (M&DS) was realigned
from the Systems Integration Business Area to the Space Systems Business Area in
recognition of the increased importance of information technology related to
space-based systems and to take advantage of synergies within the Space Systems
Business Area in meeting the needs of our Department of Defense and intelligence
community customers. To complete this process, the Space Applications Systems
product line was transferred from the Systems Integration Business Area to the
Space Systems Business Area in the second quarter of 2000. Space Applications
Systems had sales of $28 million in second quarter 2000 and $57 million
year-to-date 2000 compared to $28 million in second quarter 1999 and $60 million
year-to-date 1999. The following segment results reflect these realignments.
Segment Results:
----------------
Systems Integration
-------------------
$Millions
2/nd/ Quarter Year-to-Date
------------------- ------------------
2000 1999 2000 1999
---- ---- ---- ----
Net Sales $2,334 $2,367 $4,405 $4,599
EBIT $ 202 $ 205 $ 370 $ 373
Margin 8.7% 8.7% 8.4% 8.1%
Systems Integration sales for the second quarter of 2000 were relatively flat,
declining 1 percent from the comparable 1999 period. Increases in sales on naval
electronics and surveillance systems and missiles and fire control activities
were more than offset by decreases in aerospace electronics programs and the C4I
(Command, Control, Communications Computers and Intelligence) line of business.
Earnings before interest and taxes (EBIT) were also slightly lower in the second
quarter 2000 consistent with the slight decline in sales, although margins
remained level. Year-to-date revenues were lower than the comparable period in
1999 due to volume declines in aerospace electronics program activities,
distribution technologies, formerly known as postal systems, and C4I, partially
offset by increases in naval electronics and surveillance systems and missiles
and fire control activities. For the first six months of 2000, EBIT was flat
versus the year-ago period due to the absence of a charge related to the missile
defense area that was recorded in the first quarter 1999. This benefit was
offset by decreased earnings consistent with the aforementioned decline in sales
as well as from volume in a certain tactical missile program. Systems
Integration sales are expected to grow modestly in 2000 compared to 1999 due to
timing in the second half of the year for distribution systems and missile and
fire control activities.
<PAGE>
Space Systems
-------------
<TABLE>
<CAPTION>
$Millions
2/nd/ Quarter Year-to-Date
----------------------------- --------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $1,780 $1,728 $3,452 $3,618
EBIT as reported $ 128 $ 46 $ 213 $ 210
Nonrecurring and unusual items $ 0 $ 20 ($17) $ 20
------ ------ ------ ------
Pro Forma EBIT $ 128 $ 66 $ 196 $ 230
Pro Forma Margin 7.2% 3.8% 5.7% 6.4%
</TABLE>
Space Systems EBIT for the second quarter of 2000, excluding nonrecurring and
unusual items, was higher than the same period in 1999 as a result of Titan IV
contract modifications which were previously anticipated and improved
performance in the 2000 period as well as the absence of a charge on the Titan
IV program recorded in the year-ago period. The contract modifications, which
resulted primarily from the U.S. Government's Broad Area Review team
recommendations, provide for a more balanced sharing of risk in the future.
Performance improvements resulted from the successful implementation of
corrective actions and initiatives since the Titan IV launch failure in April
1999. These adjustments resulted in an improvement to pretax earnings in the
second quarter of 2000 of approximately $50 million. As a result of a launch
failure in 1999, the segment recorded $90 million in negative adjustments
related to a change in estimate on the Titan IV program during the year-ago
period. Additionally, there were three launches of Atlas vehicles during the
second quarter of 2000 as compared to one in the year-ago period. Conversely,
there was one launch of a Proton vehicle during the second quarter of 2000 as
compared to two in the second quarter of 1999. Somewhat offsetting the
aforementioned increases in pro forma EBIT were the expensing of start-up costs
associated with the EELV program, commercial satellite performance, and lower
volume in reconnaissance activities. During the second quarter of 2000, sales
increased 3 percent due to a higher level of launch vehicle activities and the
aforementioned adjustments related to the Titan IV program. These increases were
partially offset by a decline in volume related to commercial satellites,
military satellites and classified program activities.
For the first six months of 2000, pro forma EBIT declined 15 percent. In
addition to the aforementioned factors in the quarter, year-to-date pro forma
EBIT was impacted by a $35 million charge on the Atlas program related to market
and pricing pressures in the first quarter of
<PAGE>
2000, a more conservative assessment of future program performance on the Titan
IV program recorded in the first quarter of 2000, and lower volume on military
satellites, government launch vehicles and classified activities. Sales year-to-
date declined due to volume reductions in government launch vehicles, military
satellites, classified programs and reconnaissance activities, partially offset
by the positive comparisons on the Titan IV program and increased activities on
commercial satellites and commercial launch vehicles. In 2000, the nonrecurring
and unusual items included gains associated with the sales of surplus real
estate. In 1999, the nonrecurring and unusual items included a loss associated
with the write-down of the Corporation's investment in Iridium.
Aeronautical Systems
--------------------
<TABLE>
<CAPTION>
$Millions
2/nd/ Quarter Year-to-Date
------------------------------ ---------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $1,253 $1,346 $2,289 $2,766
EBIT $ 89 ($118) $ 168 $ 46
Margin 7.1% (8.8%) 7.3% 1.7%
</TABLE>
Aeronautical Systems EBIT for the second quarter of 2000 was significantly
higher than 1999 reflecting the absence of a $210 million charge on the C-130J
airlift aircraft program due to a change in estimate recorded in the year-ago
period. Excluding the effects of this charge, which included the reversal of
previously recorded C-130J profit, EBIT was relatively flat. A profit decline
due to lower F-16 aircraft deliveries was offset by performance improvements on
other military aircraft. In the second quarter of 2000, there were 12 F-16
deliveries compared to 30 in the year-ago period and seven C-130J deliveries
compared to three in the second quarter of 1999. C-130J deliveries are currently
booked at zero profit. Sales declined 7 percent in the 2000 period primarily as
a result of the reduced F-16 aircraft deliveries. Year-to-date 2000 EBIT was
higher reflecting the absence of the aforementioned charge in 1999 related to
the C-130J program, net of profit recorded on the program in the first quarter
of 1999, partially offset by lower aircraft deliveries, primarily related to the
F-16 aircraft program. Year-to-date, there were 26 F-16 deliveries in 2000
versus 58 in the 1999 period and 10 C-130J deliveries in each year. Sales
declined in 2000 primarily as a result of the reduction in aircraft deliveries.
<PAGE>
Technology Services
-------------------
<TABLE>
<CAPTION>
$Millions
2/nd/ Quarter Year-to-Date
------------- ------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $599 $537 $1,063 $985
EBIT as Reported $ 36 $ 36 $ 62 $ 68
Nonrecurring and unusual items
$ 0 $ 0 $ 6 $ 0
---- ---- ------ ----
Pro Forma EBIT $ 36 $ 36 $ 68 $ 68
Pro Forma Margin 6.0% 6.7% 6.4% 6.9%
</TABLE>
Technology Services pro forma EBIT for the second quarter of 2000 was flat
versus the year-ago period. Increased profits in various federal technology
services programs as well as aircraft maintenance and logistics lines of
business were offset by lower profit on certain energy-related contracts and the
effects of the divestiture of the Lockheed Martin Hanford Company in the fourth
quarter of 1999. Sales for the quarter in 2000 were higher due to volume on the
Consolidated Space Operations Contract as well as the aforementioned aircraft
maintenance and logistics activities offset by the decline in energy programs.
Year-to-date 2000, the relationship of sales and profit amounts as compared to
related amounts in the year-ago period are due to the same factors discussed in
the quarter. In 2000, the nonrecurring and unusual item was related to portfolio
shaping activities.
Corporate and Other
-------------------
<TABLE>
<CAPTION>
$Millions
2/nd/ Quarter Year-to-Date
------------- ------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $246 $225 $565 $423
EBIT as reported ($130) ($35) ($162) $ 53
Nonrecurring and unusual items
$108 $ 0 $109 ($114)
---- -- ---- ------
Pro Forma EBIT ($22) ($35) ($53) ($61)
</TABLE>
Corporate and Other sales for the second quarter 2000 were higher by nine
percent due to the operations of Lockheed Martin Global Telecommunications
(LMGT) as well as growth in state and municipal services. The proforma loss for
the second quarter of 2000 improved as compared to the year-ago period due to
performance improvements in state and municipal services as well as the fact
that the second quarter of 1999 was negatively impacted by performance on an
information technology outsourcing contract and losses associated with the Real
3D operating unit which was sold later in 1999. Pro forma EBIT in the second
quarter of 2000 and 1999 reflect operating losses of $23 million for LMGT in
both periods. Year-to-date
<PAGE>
2000 sales were higher by 34 percent versus the comparable year-ago period. The
majority of the increase was due to growth in LMGT primarily associated with the
recognition of revenue on a Proton launch vehicle, which successfully launched
the ACeS 1 satellite in the first quarter of 2000. The remainder of the increase
is due to increased volume in state and municipal and information technology
outsourcing programs. Pro forma EBIT for the first six months of 2000 was
adversely affected by performance on information technology outsourcing
contracts and the absence of a favorable adjustment recorded by the segment's
Communications Industry Services line of business in the first quarter of 1999.
More than offsetting these items was the absence in 2000 of losses associated
with the Real 3D operating unit. Operating losses for LMGT were $45 million for
the first six months of 2000 compared to losses of $47 million in the year-ago
period. In the second quarter of 2000, the nonrecurring and unusual items
primarily related to the charge associated with Globalstar and the favorable
adjustment related to the charge associated with the shutdown of CalComp
operations. Year-to-date 1999, the nonrecurring and unusual item was associated
with the sale of a portion of the Corporation's holdings in L-3 stock.
Second Quarter 2000 Achievements
--------------------------------
In announcing second quarter 2000 earnings, Vance Coffman cited additional
events, program awards and Mission Success achievements during the quarter with
positive implications for Lockheed Martin's outlook:
. Lockheed Martin received program go-ahead on a $6.4 billion contract and an
initial payment for the UAE purchase of 80 "Block 60" F-16 aircraft.
. Lockheed Martin received a contract, valued in excess of $3 billion, to
begin the Engineering and Manufacturing Development phase of the Theater
High Altitude Area Defense (THAAD) system.
. Lockheed Martin was awarded a contract, valued in excess of $500 million,
to provide the integrated weapons system (IWS) for five new frigates for
the Royal Norwegian Navy. As a subcontractor to Empresa Nacional Bazan of
Spain, Lockheed Martin and its Norwegian partners will develop an IWS
derived from the Aegis combat system it produces for the U.S. Navy.
. The Corporation received all international regulatory approvals for the
LMGT/COMSAT merger; final FCC approval is anticipated in the third quarter.
. The Corporation was awarded a $1.2 billion contract for 50 F-16 aircraft
being procured by Greece.
<PAGE>
. In May, the Corporation received the contract for nine USAF F-16s being
procured with fiscal 2000 funding.
. The Corporation delivered 12 F-16 and 7 C-130J aircraft bringing the totals
delivered for the year 2000 to 26 and 10, respectively.
. In late April, Lockheed Martin delivered the 4,000/th/ F-16.
. The first production C-27J medium transport aircraft being developed by
Lockheed Martin Alenia Tactical Transport Systems made its initial flight
on May 12 at Alenia Aerospazio's facilities in Italy.
. Lockheed Martin successfully completed the launch of three Atlas rockets,
including the inaugural launch of the new Atlas III on May 24 carrying the
W-4 communications satellite for Paris-based Eutelsat.
. The U.S. Naval Air Systems Command selected Lockheed Martin Aircraft &
Logistics Centers as the winner of a recompetition to conduct depot level
maintenance of the C-9 aircraft fleets of the Navy, Air Force, and Marine
Corps. The entire 7-year contract with extensions has an estimated value of
$350 million.
. The government of the Republic of Argentina awarded Lockheed Martin a 5-
year, $230 million contract to continue performing maintenance and
modification services for its fleet of aircraft.
. Lockheed Martin was selected by the U.S. Navy to provide training
equipment, analysis and support for all types of naval aircraft through
2008 under a contract valued at up to $375 million.
. The U.S. Navy awarded Lockheed Martin a 10-year contract, worth up to
$556 million, to provide depot operations and lifetime support engineering
services for the Aegis combat system, currently in use aboard 27 cruisers
and 28 destroyers in the U.S. fleet.
. The U.S. Navy awarded Lockheed Martin a $142 million contract to support
logistics operations for the service's Consolidated Automated Support
System assets deployed worldwide. Including these orders, the Navy has
awarded the Corporation orders valued in excess of $1.1 billion since
January 2000.
. Lockheed Martin was awarded a $55 million contract by the Romanian
government to design and install an integrated weather system for the
nation.
. Building on its systems integration and engineering expertise, Lockheed
Martin was selected to develop and integrate a Positive Train Control (PTC)
system for the Illinois Department of Transportation. PTC links advanced
communications, monitoring and control technologies to provide safe and
efficient railroad operations.
. Highlighting the world-class software capabilities of the Systems
Integration business area, Lockheed Martin Information Systems was assessed
at Capability Maturity Model(R) Level 4
<PAGE>
by the Carnegie Mellon University Software Engineering Institute. With 11
companies - including nine within the Systems Integration business area -
assessed at levels 4 and 5, Lockheed Martin has more high-maturity software
development organizations than any other Corporation in the world.
. Lockheed Martin Space Systems, Hughes Space and Communications and TRW on
May 30 announced formation of a National Team to build the Department of
Defense's next generation of highly secure communication satellites known
as the Advanced Extremely High Frequency (Advanced EHF) system.
. Lockheed Martin Intersputnik received $39M in orders for transponder
services
. The Corporation $28-million contract from Astrolink LLC to design and
integrate equipment to test components of the Astrolink satellite
constellation.
###
NEWS MEDIA CONTACT: James Fetig, 301/897-6352
INVESTOR RELATIONS CONTACT: James Ryan, 301/897-6584 or
Randa Middleton, 301/897-6455
Web site: www.lmco.com
------------
Conference call: The call will be broadcast live at 1 p.m. July 20, 2000 over
the Internet (listen-only mode) at www.streetfusion.com or
--------------------
www.lockheedmartin.com (access the Investor Relations page).
----------------------
NOTE: Statements in this press release, including the statements
relating to projected future financial performance, are considered
forward-looking statements under the federal securities laws,
including the Private Securities Litigation Reform Act of 1995.
Sometimes these statements will contain words such as "believes,"
"expects," "intends," "plans," "estimates," "outlook," "forecast," and
other similar words. These statements are not guarantees of our future
performance and are subject to risks, uncertainties and other
important factors that could cause our actual performance or
achievements to be materially different from those we may project.
As for the forward-looking statements that relate to future financial
results and other projections, actual results will be different due to
the inherent nature of projections and may be better or worse than
projected. Given these uncertainties, you should not place any
reliance on these forward-looking statements. These forward-looking
statements also represent our estimates and assumptions only as of the
date that they were made. We expressly disclaim a duty to provide
updates to these forward-looking statements, and the estimates and
assumptions associated with them, after the date of this press release
to reflect events or circumstances or changes in expectations or the
occurrence of anticipated events.
In addition to the factors set forth in our filings with the
Securities and Exchange Commission (www.sec.gov), the following
-----------
factors could affect the forward-looking statements: timing and
uncertainty related to obtaining regulatory approval of announced
<PAGE>
divestitures; the ability to achieve or quantify savings for our
customers or ourselves through business area streamlining, staff
reductions, global cost-cutting program and other financial management
programs; the ability to obtain or the timing of obtaining future
government awards; the availability of government funding and customer
requirements; difficulties in developing and making operational
advanced technology systems in space and other business areas;
economic conditions; competitive environment; international business
and political conditions domestically and internationally; timing of
awards and contracts; timing and customer acceptance of product
delivery and launches; the outcome of contingencies, including
completion of any acquisitions and divestitures, litigation and
environmental remediation and program performance. These are only some
of the numerous factors which may affect the forward-looking
statements in this press release.
<PAGE>
LOCKHEED MARTIN CORPORATION
Consolidated Results
Preliminary and Unaudited
(In millions, except for per share data and percentages)
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
--------------------------- ---------------------------
2000 1999 % Change 2000 1999 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $6,212 $ 6,203 -% $11,774 $12,391 (5)%
Earnings before Interest and Taxes $ 325 $ 134 143% $ 651 $ 750 (13)%
Interest Expense $ 220 $ 191 15% $ 447 $ 383 17%
Pre-tax Earnings $ 105 $ (57) 284% $ 204 $ 367 (44)%
Income Taxes $ 63 $ (16) 494% $ 108 $ 140 (23)%
Effective Tax Rate 60% 28% N/M 53% 38% N/M
Earnings before Cumulative Effect of
Change in Accounting $ 42 $ (41) 202% $ 96 $ 227 (58)%
Cumulative Effect of Change in Accounting (a) - - N/M - $ (355) N/M
Net Earnings (Loss) $ 42 $ (41) 202% $ 96 $ (128) 175%
Basic Earnings (Loss) Per Share:
Earnings (Loss) before Cumulative Effect of
Change in Accounting $ 0.11 $ (0.11) 200% $ 0.25 $ 0.59 (58)%
Cumulative Effect of Change in Accounting (a) - - N/M - $ (0.93) N/M
------- ------- -------- --------
Earnings (Loss) Per Share $ 0.11 $ (0.11) 200% $ 0.25 $ (0.34) 174%
Average Basic Shares Outstanding 389.5 381.4 388.3 380.8
Diluted Earnings (Loss) Per Share:
Earnings (Loss) before Cumulative Effect of
Change in Accounting $ 0.11 $ (0.11) 200% $ 0.25 $ 0.59 (58)%
Cumulative Effect of Change in Accounting (a) - - N/M - $ (0.93) N/M
------- ------- -------- --------
Earnings (Loss) Per Share $ 0.11 $ (0.11) 200% $ 0.25 $ (0.34) 174%
Average Diluted Shares Outstanding 391.2 383.9 389.3 383.3
</TABLE>
(a) 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.
<PAGE>
LOCKHEED MARTIN CORPORATION
Segment Results Including Nonrecurring and Unusual Items
Preliminary and Unaudited
(In millions, except for percentages)
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
--------------------------- ----------------------------
2000 1999 % Change 2000 1999 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Systems Integration (a)
-------------------
Net Sales $2,334 $2,367 (1)% $4,405 $4,599 (4)%
Segment EBIT $ 202 $ 205 (1)% $ 370 $ 373 (1)%
Margins 8.7% 8.7% 8.4% 8.1%
Amortization of Goodwill and Contract Intangibles $ 68 $ 68 $ 136 $ 137
Space Systems (a)
-------------
Net Sales $1,780 $1,728 3% $3,452 $3,618 (5)%
Segment EBIT $ 128 $ 46 178% $ 213 $ 210 1%
Margins 7.2% 2.7% 6.2% 5.8%
Amortization of Goodwill and Contract Intangibles $ 14 $ 14 $ 28 $ 28
Aeronautical Systems
--------------------
Net Sales $1,253 $1,346 (7)% $2,289 $2,766 (17)%
Segment EBIT $ 89 $ (118) 175% $ 168 $ 46 265%
Margins 7.1% (8.8)% 7.3% 1.7%
Amortization of Goodwill and Contract Intangibles $ 20 $ 20 $ 40 $ 40
Technology Services (b)
-------------------
Net Sales $ 599 $ 537 12% $1,063 $ 985 8%
Segment EBIT $ 36 $ 36 -% $ 62 $ 68 (9)%
Margins 6.0% 6.7% 5.8% 6.9%
Amortization of Goodwill and Contract Intangibles $ 5 $ 5 $ 9 $ 9
Corporate and Other (c)
-------------------
Net Sales $ 246 $ 225 9% $ 565 $ 423 34%
Segment EBIT $ (130) $ (35) N/M% $ (162) $ 53 N/M
Margins N/M N/M N/M N/M
Amortization of Goodwill and Contract Intangibles $ 8 - $ 16 $ 1
</TABLE>
(a) 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.
(b) 1999 results include the operations of LM Hanford Company, which was
divested during 1999.
(c) 2000 and 1999 results include the operations of commercial information
technology and state and local government services lines of business as
well as the operations of LM Global Telecommunications, Inc. 1999 results
include the operations of Real3D, Inc. and the communications industry
services line of business which were divested during 1999.
<PAGE>
LOCKHEED MARTIN CORPORATION
Segment Results Excluding Nonrecurring and Unusual Items
Preliminary and Unaudited
(In millions, except for percentages)
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
---------------------------------------- -----------------------------------
2000 1999 % Change 2000 1999 % Change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Systems Integration (a)
-------------------
Net Sales $2,334 $2,367 (1) % $4,405 $4,599 (4) %
Segment EBIT $202 $205 (1) % $370 $373 (1) %
Margins 8.7% 8.7% 8.4% 8.1%
Amortization of Goodwill and Contract Intangibles $68 $68 $136 $137
Space Systems (a)
-------------
Net Sales $1,780 $1,728 3 % $3,452 $3,618 (5) %
Segment EBIT $128 $66 94 % $196 $230 (15) %
Margins 7.2% 3.8% 5.7% 6.4
Amortization of Goodwill and Contract Intangibles $14 $14 $28 $28
Aeronautical Systems
--------------------
Net Sales $1,253 $1,346 (7) % $2,289 $2,766 (17) %
Segment EBIT $89 ($118) 175 % $168 $46 265 %
Margins 7.1% (8.8%) 7.3% 1.7%
Amortization of Goodwill and Contract Intangibles $20 $20 $40 $40
Technology Services (b)
-------------------
Net Sales $599 $537 12 % $1,063 $985 8 %
Segment EBIT $36 $36 - % $68 $68 - %
Margins 6.0% 6.7% 6.4% 6.9%
Amortization of Goodwill and Contract Intangibles $5 $5 $9 $9
Corporate and Other (c)
-------------------
Net Sales $246 $225 9 % $565 $423 34 %
Segment EBIT ($22) ($35) N/M ($53) ($61) N/M
Margins N/M N/M N/M N/M
Amortization of Goodwill and Contract Intangibles $8 - $16 $1
</TABLE>
(a) 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.
(b) 1999 results include the operations of LM Hanford Company, which was
divested during 1999.
(c) 2000 and 1999 results include the operations of commercial information
technology and state and local government services lines of business as
well as the operations of LM Global Telecommunications, Inc. 1999 results
include the operations of Real3D, Inc. and the communications industry
services line of business which were divested during 1999.
<PAGE>
LOCKHEED MARTIN CORPORATION
Reconciliation of Pro Forma Net Earnings (a)
Preliminary and Unaudited
(In millions, except for per share amounts and percentages)
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
---------------------- ---------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Earnings (Loss) - As Reported $ 42 $ (41) $ 96 $ (128)
After Tax Loss on Globalstar Guarantee $ 91 - $ 91 -
After Tax Effect of Reversal of Calcomp Charge $ (21) - $ (21) -
After Tax Gain on L3 Disposition - - - $ (74)
After Tax Gain on Sale of Surplus Real Estate - - $ (10) -
After Tax Net Loss on Divestitures and Other - $ 12 $ 4 $ 12
Cumulative Effect of Change in Accounting - - - $ 355
------ ------- ------ ------
Pro Forma Net Earnings (Loss) $ 112 $ (29) $ 160 $ 165
Pro Forma Effective Tax Rate 47% 38% 47% 38%
Diluted Earnings (Loss) Per Share - As Reported $ 0.11 $(0.11) $ 0.25 ($0.34)
After Tax Loss on Globalstar Guarantee $ 0.23 - $ 0.23 -
After Tax Effect of Reversal of Calcomp Charge $(0.05) - $(0.05) -
After Tax Gain on L3 Disposition - - - $(0.19)
After Tax Gain on Sale of Surplus Real Estate - - $(0.03) -
After Tax Net Loss on Divestitures and Other - $ 0.03 $ 0.01 $ 0.03
Cumulative Effect of Change in Accounting - - - $ 0.93
------ ------ ------ ------
Pro Forma Diluted Earnings (Loss) Per Share $ 0.29 $(0.08) $ 0.41 $ 0.43
</TABLE>
(a) Excludes nonrecurring and unusual items.
<PAGE>
<TABLE>
<CAPTION>
LOCKHEED MARTIN CORPORATION
Other Financial Information
Preliminary and Unaudited
(In millions, except for percentages)
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
----------------------- ----------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
EBIT to Sales Margin 5.2% 2.2% 5.5% 6.1%
Amortization of Goodwill and Contract Intangibles
Resulting from Prior Acquisitions $115 $107 $ 229 $ 215
Depreciation and Amortization $117 $126 $ 242 $ 248
EBITDA $557 $367 $1,122 $1,213
JUNE 30, DECEMBER 31,
2000 1999 (a)
---------- ----------
Total Backlog $57,072 $45,913
-------------
Systems Integration $17,801 $13,971
Space Systems $15,181 $15,998
Aeronautical Systems $17,119 $ 9,003
Technology Services $ 4,454 $ 4,399
Corporate and Other $ 2,517 $ 2,542
Total Debt $11,461 $11,954
----------
Long-term (including current maturities) $11,453 $11,479
Short-term $ 8 $ 475
Cash and Cash Equivalents $ 1,249 $ 455
Stockholders' Equity $ 6,439 $ 6,361
Total Debt-to-Capital 64% 65%
Total Debt-to-Capital (net of invested cash) 61% 64%
</TABLE>
(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.
<PAGE>
LOCKHEED MARTIN CORPORATION
Operating Data
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
---------------------- ---------------------
2000 1999 2000 1999
---- ---- ---- ----
Deliveries
----------
<S> <C> <C> <C> <C>
F-16 12 30 26 58
C-130J 7 3 10 10
Launches
--------
Atlas 3 1 5 2
Proton 1 2 2 4
Athena - 1 - 2
Titan II - 1 - 1
Titan IV 1 3 1 3
</TABLE>
<PAGE>
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Balance Sheet
Preliminary and Unaudited
(In millions)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
---- ----
<S> <C> <C>
Assets
Cash and cash equivalents $ 1,249 $ 455
Accounts receivable 4,182 4,348
Inventories 3,809 4,051
Other current assets 1,737 1,842
------- -------
Total current assets 10,977 10,696
Property, plant and equipment 3,550 3,634
Goodwill and other intangible assets 10,208 10,421
Other noncurrent assets 5,157 5,261
------- -------
Total assets $29,892 $30,012
======= =======
Liabilities and Stockholders' Equity
Short-term borrowings $ 8 $ 475
Other accrued expenses 8,720 8,285
Current portion of long-term debt 803 52
------- -------
Total current liabilities 9,531 8,812
Long-term debt 10,650 11,427
Post-retirement and other noncurrent liabilities 3,272 3,412
Stockholders' equity 6,439 6,361
------- -------
Total liabilities and stockholders' equity $29,892 $30,012
======= =======
</TABLE>
<PAGE>
LOCKHEED MARTIN CORPORATION
Consolidated Condensed Statement of Cash Flows
Preliminary and Unaudited
(In millions)
<TABLE>
<CAPTION>
YEAR TO DATE JUNE 30,
-------------------------------------
2000 1999
----------- ---------
<S> <C> <C>
Operating Activities:
Earnings before cumulative effect of change in accounting $ 96 $ 227
Adjustments to reconcile earnings to net cash
provided by operating activities:
Depreciation and amortization 471 463
Changes in operating assets and liabilities 1,031 (866)
------ ------
Net cash provided by (used for) operating activities 1,598 (176)
Investing Activities:
Expenditures for property, plant & equipment (185) (276)
Sale of shares in L-3 Communications - 182
Other (43) 3
------ ------
Net cash used for investing activities (228) (91)
Financing Activities:
Net (repayments) borrowings of debt (490) 138
Common stock dividends (88) (171)
Other 2 15
------ ------
Net cash used for financing activities (576) (18)
Net increase (decrease) in cash and cash equivalents 794 (285)
Cash and cash equivalents at beginning of period 455 285
------ ------
Cash and cash equivalents at end of period $1,249 $ -
====== ======
</TABLE>
