Exhibit 99
FOR IMMEDIATE RELEASE
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LOCKHEED MARTIN REPORTS SECOND QUARTER NET LOSS OF $0.11 PER SHARE
BETHESDA, Maryland, July 20, 1999 -- Lockheed Martin Corporation (NYSE: LMT)
today reported a second quarter 1999 loss per share of $.11 on a diluted basis,
compared to second quarter 1998 diluted earnings per share of $.76. Net loss for
the second quarter 1999 totaled $41 million. In the second quarter of 1998, net
earnings were $289 million.
As disclosed by the Corporation on June 9, results for the second quarter of
1999 reflect the impact of increased cost growth and reduced production rates
related to the C-130J program, and the effects of problems in our commercial
satellite and space launch businesses.
Net sales for second quarter 1999 were $6.2 billion, compared with second
quarter 1998 sales of $6.5 billion. The Corporation's backlog totaled $45.0
billion at quarter's end compared with $45.3 billion at year-end 1998.
"These results are consistent with the revised performance outlook we released
June 9," stated Vance Coffman, Lockheed Martin chairman and chief executive
officer. "We are focused on our core aerospace and defense businesses to deliver
strong performance. As part of our previously announced detailed review of the
Corporation's business operations, our entire management team is directing its
full energies to improving organizational effectiveness, performance and
strategic alignment. We will build on our inherent strengths and competencies,
delivering better quality, cost performance and mission success for our
customers. Achieving these goals will translate into increased value for our
shareholders and a more rewarding environment for our employees." Coffman said.
In reporting on the Corporation's financial performance for the quarter, Coffman
highlighted a series of recent contract wins, milestones and business actions in
traditional and new business areas with long-term benefits to Lockheed Martin:
Second Quarter 1999 Highlights
. The government of Israel announced its decision to purchase of 50 F-16
aircraft valued at $1.8 billion to Lockheed Martin. Contract signature is
expected later this year.
. Greece announced its decision to purchase at least 50 additional F-16
aircraft in the updated Block 50+ configuration, with a contract
anticipated to be finalized later this year.
. Egypt signed government-to-government agreements for the purchase of an
additional 24 F-16 aircraft, and the Corporation delivered the first
aircraft in a previous order for 21 aircraft, which was the fifth lot of F-
16's procured by Egypt.
. An international team including Lockheed Martin was selected to develop the
Medium Extended Air Defense System (MEADS) for NATO. The three-year
technology
development effort is valued at approximately $250 million to Lockheed
Martin. Potential worldwide sales for the MEADS system, which will
incorporate the proven Lockheed Martin Patriot Advanced Capability-3 (PAC-
3) missile, are estimated at up to $15 billion.
. The Corporation delivered 30 F-16 and 3 C-130J aircraft during the quarter.
. On June 10, the Theater High Altitude Area Defense (THAAD) weapon system
successfully intercepted a target missile over White Sands Missile Range,
NM. This was the first "hit-to-kill" intercept for the system.
. Lockheed Martin successfully launched 1 Titan IV, 1 Titan II, 1 Atlas and 2
Proton rockets during the quarter.
. Lockheed Martin won a $21 million contract for Lockheed Martin Global
Telecommunications (LMGT) to provide a satellite gateway connecting ACeS
cellular telephone users to networks in Taiwan.
. Astrolink LLC was formed with commitments for $900 million in equity from
founding partners LMGT, Telespazio and TRW. Astrolink's goal is to provide
the world's first global, on-demand, wireless broadband service beginning
in 2003.
. The U.S. Senate passed its version of satellite reform legislation, an
important milestone toward the Corporation's acquisition of COMSAT.
. Buses equipped with Lockheed Martin Control Systems' hybrid diesel-electric
propulsion system completed reliability testing in New York City;
separately, two vehicles equipped with Lockheed Martin's HybriDrive(TM)
propulsion system were delivered to Boston in early June for an evaluation
of the technology.
. The U.S. Army Aviation and Missile Command and the Longbow Limited
Liability Company, a Lockheed Martin/Northrop Grumman joint venture,
executed on April 30 a contract to build more than 10,000 Longbow Hellfire
missiles and associated equipment. Potential value of the five-year
contract to the joint venture is $1.2 billion.
. Gateway, a leading U.S. personal computer maker, selected Lockheed Martin
to provide a wide range of information technology services under a multi-
year contract valued at several hundred million dollars.
. Lockheed Martin was one of 12 vendors awarded the GSA Millennia contract
for information technology services by the General Services
Administration's Federal Technology Service. The overall Millennia contract
is valued at $25 billion over 10 years and is designed to support large
system integration and software development.
. A team led by Lockheed Martin won a U.S. Air Force contract, valued at up
to $176 million to the team, to build F-16 Mission Training Centers for use
at air bases worldwide.
. Lockheed Martin received a contract worth approximately $267 million over
10 years from the U.S. Air Force to modify and operate formal school
training for C-130 Hercules aircrews.
. Lockheed Martin won four contracts to provide child support payment
processing in Pennsylvania, Georgia, Florida and Michigan valued at $225
million. Lockheed Martin will
now process more than $5 billion yearly in support payments on behalf of
needy children and their families. This represents more than 30 percent of
total child support payments processed nationally.
. The U.S. Customs Service selected Lockheed Martin to perform phased depot-
level maintenance for its fleet of P-3 Orion aircraft in May. The contract
is valued at up to $75 million over a 10-year period.
. Nimiq, a satellite built by Lockheed Martin to provide direct broadcast
television programming for Telesat Canada, was launched successfully May 20
from Baikonur Cosmodrome, Kazakhstan, on a Proton booster.
. The Landsat-7 earth remote sensing spacecraft, built by Lockheed Martin,
was launched successfully from Vandenberg AFB on April 15.
. On April 26, the Navy test-launched two Trident II D5 missiles marking the
84th and 85th consecutive successful tests of the missile.
. The U.K. Ministry of Defence presented its Project of the Year Award to the
Royal Navy Tomahawk Land Attack Missile project, for which Lockheed Martin
Undersea Systems performed the systems integration work.
Headquartered in Bethesda, Maryland, Lockheed Martin is a highly diversified
global enterprise principally engaged in the research, design, development,
manufacture and integration of advanced-technology systems, products and
services. The Corporation's core businesses span space, electronics,
aeronautics, information and services, telecommunications, energy and systems
integration. Employing more than 160,000 people worldwide, Lockheed Martin had
1998 sales surpassing $26 billion.
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NEWS MEDIA CONTACT: James Fetig 301/897-6352
INVESTOR RELATIONS CONTACT: James Ryan, 301/897-6584 or
Randa Middleton, 301/8976455
Web site: www.lmco.com
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NOTE: Statements which are not historical facts are forward-looking statements
made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements may use
terminology such as "anticipated," "expected," "believe," "should,"
"scheduled," and "estimated." The undertakings contained in these
statements involve risks and uncertainties that could cause actual
results to differ materially from anticipated results. These risks
include the availability of government funding and customer
requirements, such as the risks that worldwide sales for the MEADS
system may not reach its potential and that the Corporation's
participation in the GSA Millennia contract may not be substantial,
economic conditions, competitive environment, timing of awards and
contracts; timing of product delivery and launches, such as timing
issues resulting from Atlas and Proton launches being placed on hold
pending completion of reviews related to recent launch failures,
customer acceptance and the outcome of contingencies including
completion of acquisitions and divestitures, litigation and
environmental remediation, and program performance in addition to other
factors not listed. It is also unknown whether the Corporation will be
able to consummate the COMSAT transaction. See in this regard the
Corporation's filings with the Securities and Exchange Commission. The
Corporation does not undertake any obligation to publicly release any
revisions to forward looking statements to reflect events or
circumstances or changes in expectations after the date of this press
release or the occurrence of anticipated events.
LOCKHEED MARTIN CORPORATION
Consolidated Results
(In millions, except for per share data and percentages)
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
------------------------------------------ ----------------------------------------
1999 1998 % Change 1999 1998 % Change
Net Sales $6,203 $6,520 (5) % $12,391 $12,737 (3) %
Earnings before Interest and Taxes $134 $679 (80) % $750 $1,326 (43) %
Interest Expense $191 $221 (14) % $383 $434 (12) %
Pre-tax (Loss) Earnings ($57) $458 (112) % $367 $892 (59) %
Income Taxes ($16) $169 (109) % $140 $334 (58) %
Effective Tax Rate 28% 37% N/M 38% 37% N/M
(Loss) Earnings before Cumulative Effect of
Change in Accounting ($41) $289 (114) % $227 $558 (59) %
Cumulative Effect of Change in Accounting* - - N/M ($355) - N/M
Net (Loss) Earnings ($41) $289 (114) % ($128) $558 (123) %
Basic Earnings (Loss) Per Share:
Earnings before Cumulative Effect of
Change in Accounting ($0.11) $0.77 (114) % $0.59 $1.49 (60) %
Cumulative Effect of Change in
Accounting* - - N/M ($0.93) - N/M
-------- -------- --------- --------
Earnings (Loss) Per Share ($0.11) $0.77 (114) % ($0.34) $1.49 (123) %
Average Basic Shares Outstanding 381.4 375.9 380.8 374.5
Diluted Earnings (Loss) Per Share:
Earnings before Cumulative Effect of
Change in Accounting ($0.11) $0.76 (114) % $0.59 $1.47 (60) %
Cumulative Effect of Change in
Accounting* - - N/M ($0.93) - N/M
-------- -------- -------- --------
Earnings (Loss) Per Share ($0.11) $0.76 (114) % ($0.34) $1.47 (123) %
Average Diluted Shares Outstanding 383.9 381.0 383.3 379.7
* 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.
LOCKHEED MARTIN CORPORATION
Other Financial Information
(In millions, except for per share amounts and percentages)
RECONCILIATION OF EARNINGS EXCLUDING NONRECURRING AND UNUSUAL ITEMS
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
---------------------- ---------------------
1999 1998 1999 1998
---- ---- ---- ----
Net (Loss) Earnings - As Reported ($41) $289 ($128) $558
After Tax Gain on L3 Disposition - - ($74) -
Cumulative Effect of Change in Accounting - - $355 -
----------- ----------- ----------- -----------
Pro Forma Net Earnings ($41) $289 $153 $558
Diluted (Loss) Earnings Per Share - As Reported ($0.11) $0.76 ($0.34) $1.47
After Tax Gain on L3 Disposition - - ($0.19) -
Cumulative Effect of Change in Accounting - - $0.93 -
----------- ----------- ----------- -----------
Pro Forma Diluted Earnings Per Share ($0.11) $0.76 $0.40 $1.47
OTHER FINANCIAL INFORMATION
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
---------------------- ---------------------
1999 1998 1999 1998
---- ---- ---- ----
EBIT to Sales Margin 2.2% 10.4% 6.1% 10.4%
Amortization of Goodwill and Contract Intangibles
Resulting from Prior Acquisitions (pretax) $107 $108 $215 $218
Depreciation and Amortization $126 $133 $248 $276
EBITDA $367 $920 $1,213 $1,820
06/30/99 12/31/98
-------- --------
Backlog $44,961 * $45,345
Total Debt $11,034 * $10,886
- ---------- -------- -------
Long-term (including current maturities) $10,330 * $9,843
Short-term $704 * $1,043
Cash and Cash Equivalents $0 * $285
Stockholders' Equity $5,971 * $6,137
Total Debt-to-Capital 65%* 64%
* Preliminary data
LOCKHEED MARTIN CORPORATION
Segment Results Excluding Nonrecurring and Unusual Items
(In millions, except for percentages)
QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
--------------------------------------- ---------------------------------------
1999 1998 % Change 1999 1998 % Change
Electronics*
- ------------
Net Sales $1,816 $1,770 3 % $3,566 $3,468 3 %
Segment EBIT $181 $182 (1) % $333 $323 3 %
Margins 10.0% 10.3% 9.3% 9.3%
Amortization of Goodwill and Contract
Intangibles $55 $55 - % $112 $112 - %
Space & Strategic Missiles
- --------------------------
Net Sales $1,484 $2,005 (26) % $3,110 $3,912 (21) %
Segment EBIT $15 $234 (94) % $140 $501 (72) %
Margins 1.0% 11.7% 4.5% 12.8%
Amortization of Goodwill and Contract
Intangibles $8 $8 - $15 $15 - %
Aeronautics
- -----------
Net Sales $1,464 $1,381 6 % $3,000 $2,732 10 %
Segment EBIT ($117) $152 (177) % $52 $303 (83) %
Margins N/M 11.0% 1.7% 11.1%
Amortization of Goodwill and Contract
Intangibles $20 $20 - % $40 $40 - %
Information & Services**
- ------------------------
Net Sales $1,367 $1,282 7 % $2,568 $2,494 3 %
Segment EBIT $59 $71 (17) % $120 $126 (5) %
Margins 4.3% 5.5% 4.7% 5.1%
Amortization of Goodwill and Contract
Intangibles $24 $25 (4) % $48 $51 (6) %
Corporate and Other***
- ----------------------
Net Sales $72 $82 (12) % $147 $131 12 %
Segment EBIT ($4) $40 (110) % ($9) $73 (112) %
Margins N/M N/M N/M N/M
* 1998 results include the operations of LM Commercial Electronics divested
effective February 22, 1998.
** 1998 results include the operations of CalComp Technology, Inc., which is
currently executing a timely non-bankruptcy shutdown of its operations.
*** 1999 results include the operations of LM Global Telecommunications, Inc.