Lockheed Martin 1999 Annual Report Download - page 46

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53
Lockheed Martin Corporation
Note 8—Property, Plant and Equipment
(In millions)
1999 1998
Land $ 218 $ 235
Buildings 3,027 2,979
Machinery and equipment 5,662 5,459
8,907 8,673
Less accumulated depreciation
and amortization (5,273) (5,160)
$ 3,634 $ 3,513
Note 9—Investments in Equity Securities
(In millions)
1999 1998
Equity method investments:
COMSAT Corporation $ 1,188 $ —
ACeS International, Ltd. 163 162
Astrolink International, LLC 148 —
Americom Asia-Pacific, LLC 114 105
Space Imaging LLC 86 99
L-3 Communications Holdings, Inc. —77
Other 72 85
1,771 528
Cost method investments:
Loral Space & Communications Ltd. 393 393
Other 46 27
439 420
$ 2,210 $ 948
At December 31, 1999, the carrying value of the
Corporation’s 49 percent investment in COMSAT exceeded
the Corporation’s share of COMSAT’s net assets by approx-
imately $900 million, and this amount is being amortized
ratably over 30 years. The Corporation also has commit-
ments to provide funding to Astrolink International, LLC total-
ing approximately $270 million at December 31, 1999.
The estimated fair value of the Corporation’s investment
in Loral Space & Communications Ltd., which consists of
45.9 million shares of Loral Space Series A Preferred
Stock, was $750 million at December 31, 1999.
Note 10—Debt
Type (Maturity Dates)
(In millions, except
Range of
interest rate data)
Interest Rates 1999 1998
Notes (2000–2022) 5.7 – 9.4% $ 6,778 $ 6,014
Debentures (2011–2036) 7.0 – 9.1% 4,407 3,160
Commercial paper 5.4 – 6.0% —300
ESOP obligations
(2000–2004) 8.4% 217 256
Other obligations
(2000–2016) 1.0 – 12.7% 77 113
11,479 9,843
Less current maturities (52) (886)
$11,427 $8,957
During the fourth quarter of 1999, the Corporation
issued $3.0 billion of long-term fixed rate debt securities,
the entire amount registered under its previously filed shelf
registration statement. These Notes and Debentures range
in maturity from six years to 30 years, with interest rates
ranging from 7.95% to 8.5%.
As of December 31, 1999, the Corporation had
$1.3 billion of notes outstanding which had been issued
to a wholly-owned subsidiary of GE in connection with the
GE Transaction. The notes are due November 17, 2002
and bear interest at a rate of approximately 6%. The agree-
ments relating to these notes require that, so long as the
aggregate principal amount of the notes exceeds $1.0
billion, the Corporation will recommend to its stockholders
the election of one person designated by GE to serve as a
director of the Corporation.
The registered holders of $300 million of 40 year
Debentures issued in 1996 may elect, between March 1
and April 1, 2008, to have their Debentures repaid by
the Corporation on May 1, 2008.
Included in Debentures are $112 million of 7% obliga-
tions ($175 million at face value) which were originally
sold at approximately 54 percent of their principal amount.