Lockheed Martin 1996 Annual Report Download - page 55

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Net Earnings
In millions
During the fourth quarter of 1996, the Corporation
recorded nonrecurring pretax charges, net of state income
tax benefits, of $307 million. Approximately one-half of
the charges reflected the financial impacts of a conservative
strategy on the part of the Corporation toward its environ-
mental remediation business with regard to current business
conditions, existing contractual issues on a Department of
Energy (DOE) program and the pursuit of other environ-
mental opportunities. The remaining charges resulted from
a number of other corporate actions to improve efficiencies,
increase competitiveness and focus on core businesses.
During the first quarter of 1995, the Corporation
recorded a pretax charge of $165 million for merger related
expenses in connection with the formation of Lockheed
Martin. During the second quarter of 1995, the Corporation
recorded a pretax charge of $525 million in conjunction
with a corporate-wide consolidation plan under which the
Corporation would close certain facilities and laboratories
and eliminate duplicative field offices in the U.S. and
abroad, eliminating up to approximately 12,000 positions.
This charge represented the portion of the accrued costs
and net realizable value adjustments that were not probable
of recovery.
In February 1994, Materials sold through an initial pub-
lic offering (IPO) approximately 8.8 million shares, or 19
percent of its common stock. A portion of the proceeds from
the offering was used to defease in substance certain long-
term debt. The Corporation recognized a pretax gain, net of
a loss on debt defeasance, of $118 million from the Materials
IPO. During March 1994, the Corporation entered into an
Agreement and Plan of Merger with Grumman Corporation
(Grumman) which was subsequently terminated by Grum-
man. In April 1994, the Corporation received $50 million
plus reimbursement of expenses pursuant to the termination
provisions of the Agreement and Plan of Merger.
Reported net earnings for 1996 were approximately
$1.3 billion, or $6.04 per common share assuming full dilu-
tion. Both amounts represent increases from the reported
1995 net earnings of $682 million, or $3.05 per share, and
Earnings Per Common Share,
Assuming Full Dilution
In dollars
Lockheed Martin Corporation