Lockheed Martin 1999 Annual Report Download - page 56

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Lockheed Martin Corporation
(In millions) 1999 1998 1997
Foreign governments
(a)(b)
Systems Integration $ 2,167 $ 2,157 $ 1,930
Space Systems 146 37 94
Aeronautical Systems 2,501 2,721 2,737
Technology Services 106 97 100
Corporate and Other —1 —
$ 4,920 $ 5,013 $ 4,861
Commercial
(b)
Systems Integration $ 438 $ 443 $ 695
Space Systems 957 1,413 1,737
Aeronautical Systems 19 32 41
Technology Services 122 120 371
Corporate and Other 976 937 1,968
$ 2,512 $ 2,945 $ 4,812
(a) Sales made to foreign governments through the U.S. Government
are included in the foreign governments category above.
(b) Export sales, included in the foreign governments and commercial
categories above, were approximately $5.7 billion, $6.1 billion
and $5.9 billion in 1999, 1998 and 1997, respectively.
Note 18—Summary of Quarterly Information (Unaudited)
(In millions, except
1999 Quarters
per share data) First
(a)
Second
(b)
Third
(c)
Fourth
(d)
Net sales $6,188 $6,203 $6,157 $6,982
Earnings from operations 487 131 488 559
Earnings (loss) before
cumulative effect of
change in accounting 268 (41) 217 293
Net (loss) earnings (87) (41) 217 293
Diluted earnings (loss) per
share before cumulative
effect of change in
accounting .70 (.11) .57 .76
Diluted (loss) earnings
per share (.23) (.11) .57 .76
(In millions, except
1998 Quarters
per share data) First Second
(e)
Third
(f)
Fourth
(g)
Net sales $6,217 $6,520 $6,349 $7,180
Earnings from operations 618 638 696 400
Net earnings 269 289 318 125
Diluted earnings per share .71 .76 .83 .33
(a) Net loss for the first quarter of 1999 includes a nonrecurring and
unusual gain from the Corporation’s sale of 4.5 million of its shares
of L-3 as part of a secondary public offering by L-3. The gain favor-
ably impacted the net loss by $74 million, or $.19 per diluted
share. Net loss also includes the effect of the Corporation’s adop-
tion of SOP No. 98-5 pertaining to the costs of start-up activities
which resulted in the recognition of a cumulative effect adjustment
that negatively impacted the net loss by $355 million, or $.93
per diluted share.
(b) Net loss for the second quarter of 1999 includes the effects of
negative adjustments related to changes in estimate on the C-130J
airlift aircraft program due to cost growth and a reduction in pro-
duction rates, based on a current evaluation of the program’s
performance. These adjustments, net of state income tax benefits,
negatively impacted (loss) earnings before income taxes and
cumulative effect of change in accounting by $197 million, and
increased the net loss by $128 million, or $.33 per diluted share.
Net loss for the second quarter also includes the effects of negative
adjustments related to changes in estimate on the Titan IV program
due to reduced award and incentive fees resulting from the Titan IV
launch failure on April 30, 1999 as well as a more conservative
assessment of future program performance. These adjustments, net
of state income tax benefits, negatively impacted (loss) earnings
before income taxes and cumulative effect of change in accounting
by $84 million, and increased the net loss by $54 million, or $.14
per diluted share. Also, net earnings for the second quarter of
1999 include a nonrecurring and unusual item related to portfolio
shaping activities which increased the net loss by $12 million, or
$.03 per diluted share.
(c) Net earnings for the third quarter of 1999 include nonrecurring
and unusual items related to gains from the sale of surplus real
estate and a net gain associated with sales of various non-core
businesses and investments and other portfolio shaping items.
On a combined basis, these nonrecurring and unusual items
increased net earnings by $34 million, or $.09 per diluted share.
(d) Net earnings for the fourth quarter of 1999 include a nonrecurring
and unusual gain from the Corporation’s sale of its remaining inter-
est in L-3, which increased net earnings by $27 million, or $.07
per diluted share. Net earnings for the fourth quarter of 1999 also
include nonrecurring and unusual gains related to the Corporation’s
sale of surplus real estate, and a net gain associated with sales of
various non-core businesses and investments and other portfolio
shaping items. On a combined basis, these items increased net
earnings by $39 million, or $.10 per diluted share.
(e) Net earnings for the second quarter of 1998 include a nonrecur-
ring and unusual gain related to the initial public offering of L-3’s
stock. This gain increased net earnings by $12 million, or $.03
per diluted share.
(f) Net earnings for the third quarter of 1998 include an adjustment
resulting from significant improvement in the Atlas launch vehicle
program based upon a current evaluation of the program’s histori-
cal performance. This change in estimate, net of state income
taxes, increased pretax earnings by $120 million and increased
net earnings by $78 million, or $.21 per diluted share. Net earn-
ings for the third quarter of 1998 include a nonrecurring and
unusual gain related to the Corporation’s portfolio shaping
actions which increased net earnings by $12 million, or $.03
per diluted share.
(g) Net earnings for the fourth quarter of 1998 include an adjustment
resulting from the impact of the restructure of a commercial satellite
program which increased net earnings by approximately $32 mil-
lion, or $.08 per diluted share. Net earnings for the fourth quarter
of 1998 include the effects of a nonrecurring and unusual after-tax
charge of $183 million, or $.48 per diluted share, related to
CalComp, a majority-owned subsidiary of the Corporation (see
Note 4), and a nonrecurring and unusual gain related to the
Corporation’s sale of surplus real estate which increased net
income by $23 million, or $.06 per diluted share.