Lockheed Martin 1999 Annual Report Download - page 54

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Lockheed Martin Corporation
seeking, among other things, recovery of approximately
$54 million previously paid by LMITCO to the Corporation
under the Pit 9 contract. The Corporation is defending
this action while continuing to pursue its certified REA.
Discovery has been ongoing since August 2, 1999. On
October 1, 1999, the U.S. Court of Federal Claims stayed
the DOE’s motion to dismiss the Corporation’s lawsuit, find-
ing that the Court has jurisdiction. The Court ordered dis-
covery to commence and gave leave to the DOE to convert
its motion to dismiss to a motion for summary judgment
if supported by discovery. The Corporation continues to
assert its position in the litigation while continuing its efforts
to resolve the dispute through non-litigation means.
Letters of credit and other matters— The Corporation has
entered into standby letter of credit agreements and other
arrangements with financial institutions primarily relating to
the guarantee of future performance on certain contracts.
At December 31, 1999, the Corporation had contingent
liabilities on outstanding letters of credit, guarantees, and
other arrangements aggregating approximately $1.1 billion.
Note 17—Information on Industry Segments
and Major Customers
On September 27, 1999, Lockheed Martin announced
the results to date of its strategic and organizational review
that began June 9, 1999. As a result of this review, the
Corporation has implemented a new organizational struc-
ture which was effective October 1, 1999 that realigns
its core lines of business into four principal business seg-
ments. All other activities of the Corporation fall within the
Corporate and Other segment. Prior period amounts have
been adjusted to conform with the new organizational
structure.
Transactions between segments are generally negoti-
ated and accounted for under terms and conditions that
are similar to other government and commercial contracts;
however, these intercompany transactions are eliminated
in consolidation. Other accounting policies of the business
segments are the same as those described in
“ Note 1—
Summary of Significant Accounting Policies.
”
Systems Integration— Engaged in the design, development,
integration and production of high performance electronic
systems for undersea, shipboard, land, and airborne
applications. Major product lines include missiles and fire
control systems; air and theater missile defense systems;
surface ship and submarine combat systems; anti-submarine
and undersea warfare systems; avionics and ground com-
bat vehicle integration; platform integration systems; com-
mand, control, communications, computers and intelligence
(C4I) systems for naval, airborne and ground applications;
surveillance and reconnaissance systems; air traffic control
systems; and postal automation systems.
Space Systems— Engaged in the design, development,
engineering and production of civil, commercial and
military space systems. Major product lines include space-
craft, space launch vehicles, manned space systems and
their supporting ground systems and services; and strategic
fleet ballistic missiles. In addition to its consolidated busi-
ness units, the segment has investments in joint ventures that
are principally engaged in businesses which complement
and enhance other activities of the segment.
Aeronautical Systems— Engaged in design, research and
development, and production of tactical aircraft, surveillance/
command systems, reconnaissance systems, platform sys-
tems integration and advanced development programs.
Major programs include the F-22 air-superiority fighter, the
Joint Strike Fighter, the F-16 multi-role fighter, the C-130J
airlift aircraft, the X-33 reusable launch vehicle technology
demonstrator, and Airborne Early Warning & Control sys-
tems programs.
Technology Services— Provides a wide array of manage-
ment, engineering, scientific, logistic and information
services to federal agencies and other customers. Major
product lines include engineering, science and information
services for NASA; aircraft maintenance and modification
services; operation, maintenance, training, and logistics
support for military and civilian systems; launch, mission,
and analysis services for military, classified and commercial
satellites; research, development, engineering and science