1995
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission file number 1-11437
[LOCKHEED MARTIN LOGO]
LOCKHEED MARTIN CORPORATION
(Exact name of registrant as specified in its charter)
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Maryland 52-1893632
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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6801 Rockledge Drive, Bethesda, Maryland 20817-1877 (301/897-6000)
(Address and telephone number of principal executive offices)
_______________
Securities registered pursuant to Section 12(b) of the Act:
Name of each
exchange
Title of Each Class on which registered
------------------------- ----------------------------
Common Stock, $1 par value New York Stock Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if the disclosure of delinquent files pursuant to Item
405 or Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Approximately $14,953,000,000 as of January 31, 1996.
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date. Common Stock, $1 par value,
198,748,774 shares outstanding as of January 31, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Lockheed Martin Corporation's 1995 Annual Report to Shareholders
are incorporated by reference in Parts I, II and IV of this Form 10-K.
Portions of Lockheed Martin Corporation's 1996 Definitive Proxy Statement are
incorporated by reference in Part III of this Form 10-K.
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________________________________________________________________________________
PART I
ITEM 1. BUSINESS
GENERAL
Lockheed Martin Corporation ("Lockheed Martin" or the "Corporation") was
incorporated on August 29, 1994 under the Maryland General Corporation Law in
order to effect the combination (the "Combination") of the businesses of
Lockheed Corporation ("Lockheed") with the businesses of Martin Marietta
Corporation ("Martin Marietta"). On August 29, 1994, Lockheed and Martin
Marietta entered into an Agreement and Plan of Reorganization, which was amended
on February 7, 1995 (as amended, the "Reorganization Agreement"). On March 15,
1995, the Combination was consummated and Martin Marietta and Lockheed became
wholly owned subsidiaries of Lockheed Martin on the terms set forth in the
Reorganization Agreement.
On January 25, 1996, Lockheed Martin entered into an Agreement and Plans of
Merger and Complete Liquidation with certain of its direct and indirect wholly
owned subsidiaries. As a result, on January 28, 1996, each of Lockheed,
Lockheed Missiles and Space Company, Inc., Lockheed Sanders, Inc., Martin
Marietta and Martin Marietta Technologies, Inc. were merged with and into
Lockheed Martin.
The business of Lockheed Martin consists of the businesses previously
conducted by Lockheed and Martin Marietta and their respective subsidiaries.
Lockheed Martin is a diversified enterprise principally engaged in the
conception, research,
development, design, manufacture and integration of advanced technology products
and services with core businesses organized into five major operating sectors:
Space & Strategic Missiles; Aeronautics; Information & Technology Services;
Electronics; and Energy & Environment.
On June 26, 1995, Lockheed Martin unveiled a corporate-wide consolidation
plan that, when fully implemented, is expected to yield annual savings of
approximately $1.8 billion. Under the consolidation plan, Lockheed Martin will
close 12 facilities and laboratories as well as 26 duplicative field offices in
the U.S. and abroad, eliminating approximately 12,000 positions and some 7.7
million square feet of excess capacity over five years. The total cost to
implement the consolidation plan, which is expected to be largely completed over
the next two years, is estimated to be approximately $1.7 billion. These costs
will be funded by cash generated from operations supplemented, as necessary, by
borrowings. The consolidation plan resulted in a pre-tax charge of $525 million
in the second quarter of 1995. In addition, in the first quarter of 1995, the
Corporation recorded a pre-tax charge of $165 million for other merger related
costs.
Space & Strategic Missiles Sector
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Space & Strategic Missiles Sector's activities include the design,
development, engineering and production of civil, commercial and military space
systems, including spacecraft, space launch vehicles and supporting ground
systems and services; satellites; strategic fleet ballistic missiles; tactical
missile systems; electronics and instrumentation; remote sensing
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technology; space- and ground-based strategic systems; and surface- and space-
based information and communications systems.
Major programs of Space & Strategic Missiles Sector include the Titan IV
expendable launch vehicle, accounting for approximately 14% of the Sector's 1995
sales, the Trident family of submarine launched, strategic deterrent, fleet
ballistic missiles, and the Atlas expendable launch vehicle. In addition, the
Sector produces various government and commercial satellites, including
environmental monitoring satellites, such as Landsat and TIROS, military and
civilian communications satellites, including the MILSTAR communications
satellite, and the Theater High Altitude Area Defense (THAAD) ground-based
theater air defense system. Through Space & Strategic Missiles Sector, Lockheed
Martin also is a principal subcontractor on the space station, has contracted to
build spacecraft for Motorola's IRIDIUM(R) global communications system, and has
established a joint venture company with two major Russian aerospace firms,
Khrunichev State Research and Production Space Center and RSC Energia, which
markets the services of the Atlas and Proton rockets to commercial customers
world-wide. The Sector also is engaged in a substantial amount of classified
activities.
Space & Strategic Missiles Sector's Astro Space Commercial unit is building
the next series of satellites for the International Telecommunications Satellite
Organization (INTELSAT), which will provide voice, data and television
transmission for use by over 125 nations. The Technical Operations unit
controls approximately 50 orbiting spacecraft, including the Hubble Space
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Telescope. The Missiles & Space unit integrated Hubble's complex systems with
its spacecraft and provides service and support functions for NASA, including
preparing and executing the in-orbit repair mission and providing operations
support at NASA's Goddard Space Flight Center. In the area of remote sensing
technology, the Sector is producing the Earth Observing System (EOS AM-1)
satellite bus, which will be utilized by NASA to measure properties of the
atmosphere, such as pollution levels, and collect data on soil and minerals.
Sales by the Sector represented approximately 33% of the Corporation's
total sales in 1995. Sales to the United States Government, excluding Foreign
Military Sales, represented approximately 80% of the Sector's sales in 1995.
Aeronautics Sector
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Aeronautics Sector is involved in the design, development, engineering and
production of fighter, bomber, special mission, airlift, antisubmarine warfare,
reconnaissance, surveillance and high performance aircraft; systems for military
operations; aircraft controls and subsystems; thrust reversers and shipboard
vertical missile launching systems; and aircraft modification and maintenance
and logistics support for military and civilian customers.
Lockheed Martin is the prime contractor for the F-16 "Fighting Falcon"
fighter aircraft, which was the Corporation's largest program in 1995,
accounting for 8% of the Corporation's 1995 revenues and approximately 28% of
the Sector's sales. Lockheed Martin, through the Aeronautics Sector, is also a
significant
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contractor for the Air Force's F-22 air superiority fighter program, designed to
produce the next generation of tactical fighter, and for production of the C-130
series of airlift aircraft, designed primarily for military transport, but also
modified to perform many other missions including humanitarian aid and disaster
relief. Aeronautics Sector received two international orders in 1995 for the
most recent aircraft in the C-130 series, the C-130J. Aeronautics Sector
delivered eight P-3 maritime patrol aircraft in 1995 and will continue to
provide spares and support activities for the P-3. In addition, Aeronautics
Sector supports the F-117 stealth fighter bomber and designs, produces and
supports missile launching systems such as the Vertical Launching System for the
U.S. Navy and international customers. Through The Skunk Works, Aeronautics
Sector performs a substantial amount of classified work.
Sales by Aeronautics Sector represented approximately 29% of the
Corporation's total sales in 1995. Sales to the United States Government,
excluding Foreign Military Sales, represented approximately 65% of the Sector's
sales in 1995.
Information & Technology Services Sector
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Information & Technology Services Sector is involved in the development and
operation of large, complex information systems; designing, manufacturing and
marketing computer graphics products; developing and manufacturing high capacity
data storage products; electronics contract manufacturing services; and
providing advanced transportation systems and services, and payload integration,
astronaut training and flight operations support. The Sector's
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customers include state and municipal governments, NASA and other federal civil
government agencies, national intelligence agencies, the Department of Defense
and commercial markets.
Information & Technology Services Sector's largest program, representing
approximately 11% of the Sector's sales in 1995, involves performance of
processing services for NASA's space shuttle program. In addition, the Sector
produces the external tank for the space shuttle and provides engineering and
test analysis services to NASA. In 1995, NASA selected United Space Alliance, a
limited liability company owned by Lockheed Martin and Rockwell International,
to be its sole source space shuttle program prime contractor in an effort to
reduce costs through streamlined operations.
Lockheed Martin's CalComp, Access Graphics and MountainGate businesses are
involved in commercial markets for computer graphics, hardware distribution and
data storage devices. Lockheed Martin Commercial Electronics Company provides
electronics contract manufacturing services for companies in the computer,
telecommunications and medical instruments industries.
Sales by the Sector represented approximately 20% of Lockheed Martin's
total sales in 1995. Sales to the United States Government, excluding Foreign
Military Sales, represented approximately 64% of Information & Technology
Services Sector's sales in 1995.
Electronics Sector
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Electronics Sector's activities primarily relate to the design,
development, engineering and production of high-performance
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electronic systems for undersea, shipboard, land-based and airborne
applications. Major product lines include advanced technology missiles, night
navigation and targeting systems for aircraft; submarine and surface ship combat
systems; airborne, ship and land-based radar; radio frequency, infrared, and
electro-optical countermeasure systems; surveillance systems; control systems;
ordnance; and aircraft component manufacturing and assembly.
Lockheed Martin is the prime contractor for the U.S. Navy's AEGIS fleet air
defense system, Electronics Sectors' largest program accounting for
approximately 19% of the Sector's sales in 1995. In 1995, the U.S. Navy
selected Electronics Sector to upgrade the AEGIS Computer System by improving
the system's phased array radar, cooperative engagement capability, near-shore
performance and anti-tactical ballistic missile capability. Electronics
Sector's production of the LANTIRN navigation and targeting system for the U.S.
Air Force concluded in 1994. Production, however, continues for international
customers and the U.S. Navy has announced plans to integrate the LANTIRN
targeting pod on the F-14 Tomcat aircraft.
The Sector is the primary contractor for the AN/BSY-2 submarine combat
system for the Seawolf attack submarine. In addition, Electronics Sector
produces the Target Acquisition Designation Sight/Pilot Night Vision Sensor
(TADS/PNVS), as well as providing fire control and guidance systems to the
Trident II Submarine Program. The Corporation expects that the production of
Hellfire II, an upgraded air-launched, anti-armor missile used in the Apache and
Supercobra helicopters, as well as the production of
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fixed-site, mobile and tactical versions of Ground-Based Radar will account for
an increasing percentage of the Sector's sales in 1996.
Sales by Electronics Sector represented approximately 14% of the
Corporation's total sales in 1995. Sales to the United States Government,
excluding Foreign Military Sales, represented approximately 73% of the Sector's
sales in 1995.
Energy & Environment Sector
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Energy & Environment Sector is responsible for Lockheed Martin's energy and
environmental businesses, including the management of various U.S. Department of
Energy (DoE) activities. Lockheed Martin is the largest management and
operations contractor within the DoE's system of laboratories and other
facilities and is responsible for managing operations with an annual budget of
approximately $4.7 billion. Lockheed Martin, through Energy & Environment
Sector, manages the Oak Ridge National Laboratory and Energy Systems, science
research facilities that play a role in (i) the development of safe, economic
and environmentally acceptable technologies for the efficient production and use
of energy, (ii) programs related to the national defense and (iii) environmental
and other technical programs for the Department of Energy and other federal
agencies. The Sector also manages the Sandia National Laboratories, a federally
funded research and development center with responsibilities for national
security programs in defense, energy and the environment, and the Idaho National
Engineering Laboratory, an engineering and testing research center focusing on
environmental remediation and energy research.
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Sales by the Sector represented less than 1% of the Corporation's total
sales in 1995. Sales to the United States Government represented approximately
88% of the Sector's sales in 1995.
Additional Activities and Business Segment Reporting
- ----------------------------------------------------
In addition to the above activities, Lockheed Martin has real estate
subsidiaries in Florida and Maryland, runs research laboratories and carries on
other miscellaneous activities. Lockheed Martin owns approximately 81% of
Martin Marietta Materials, Inc., a publicly traded corporation which is
principally engaged in the production of aggregates used for the construction of
infrastructure projects and in commercial and residential construction and in
manufacturing and producing high-purity magnesia-based products.
For business segment reporting in the Corporation's financial statements,
the Space & Strategic Missiles; Aeronautics; Information & Technology Services
and Electronics Sectors each comprise reportable business segments. The Energy
& Environment Sector, together with the additional activities described in the
preceding paragraph, is reported as Energy, Materials and Other.
Recent Developments
- -------------------
In January 1996, Lockheed Martin and its wholly owned subsidiary LAC
Acquisition Corporation entered into an Agreement and Plan of Merger with Loral
Corporation, dated as of January 7, 1996 (the "Loral Merger Agreement"),
pursuant to which Lockheed Martin agreed to initiate a tender offer for all the
issued and outstanding shares of common stock of Loral Corporation (together
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with the associated preferred stock purchase rights) (collectively, "Loral
Shares") for an aggregate consideration of $38 per share, net to the seller in
cash, without interest, (the "Tender Offer"). The Tender Offer was initiated on
January 12, 1996. The consummation of the transactions contemplated by the
Loral Merger Agreement are subject to a number of conditions, including there
being validly tendered and not withdrawn prior to the expiration of the Tender
Offer a specified percentage of Loral Shares and the receipt of certain
regulatory approvals. The Corporation expects closing of the transactions to
occur late in the first quarter or early in the second quarter of 1996.
The Corporation intends to obtain the funds needed to consummate the Tender
Offer, estimated to be approximatley $8.4 billion, from loans to be obtained
under credit agreements with a syndicate of commercial banks or, alternatively,
through the issuance of commercial paper backed by the credit agreements.
Following the closing of the Tender Offer, it is anticipated that the
Corporation will refinance all or a portion of these borrowings with funds
raised in the public or private securities markets. The Corporation has entered
into interest rate hedging agreements to offset a portion of its exposure to
rising interest rates related to the anticipated long-term financings. Such
agreements expose the Corporation to certian risks including, but not limited
to, market risks, risks arising from the possibility that the anticipated
financing needs do not materialize and the risk of nonperformance by the
counterparty to the hedging arrangements. Procedures are in place to monitor
these risks and the Corporation does not believe these risks to be material.
COMPETITION AND RISK
Lockheed Martin's sales to the U.S. Government, excluding Foreign Military
Sales, amounted to approximately 69% of net sales for the year ended December
31, 1995. Approximately 13% of net sales for fiscal year 1995 were sales to
foreign governments and approximately 18% of net sales were to commercial
customers worldwide.
Lockheed Martin encounters extensive competition in all of its lines of
business with numerous other contractors on the basis of price, technical and
managerial capability. Its business involves rapidly advancing technologies and
is subject to many uncertainties including, but not limited to, those resulting
from changes in federal budget priorities, particularly the size and scope of
the defense budget, and dependence on Congressional appropriations.
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Substantial efforts are undertaken continually on a long-term basis in order to
maintain existing levels of business.
Approximately 69% of the 1995 sales of the Corporation were made to the
United States Government, either as a prime contractor or as a subcontractor,
for which there is intense competition. Accordingly, a significant portion of
the Corporation's sales are subject to inherent risks, including uncertainty of
economic conditions, changes in government policies and requirements that may
reflect military and political developments, availability of funds, complexity
of designs and the rapidity with which product lines become obsolete due to
technological advances, technical or schedule progress, difficulty of
forecasting costs and schedules when bidding on developmental and highly
sophisticated technical work and other factors characteristic of the industry.
Due to the intense competition for available government business, the
maintenance and/or expansion of government business increasingly requires the
Corporation to invest in its working capital and fixed asset base.
Certain risks inherent in the current defense and aerospace business
environment are discussed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" on page 44 through page 56 of the
Corporation's 1995 Annual Report to Shareholders (the "1995 Annual Report").
Earnings may vary materially depending upon the types of long-term
government contracts undertaken, the costs incurred in their performance, the
achievement of other performance objectives and the stage of performance at
which the right to receive fees,
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particularly under incentive and award fee contracts, is finally determined.
The Corporation's international business involves additional risks, such as
exposure to currency fluctuations, offset obligations and changes in foreign
economic and political environments. In addition, international transactions
frequently involve increased financial and legal risks arising from stringent
contractual terms and conditions and widely differing legal systems, customs and
mores in various foreign countries. The Corporation expects that international
sales as a percentage of the overall sales of the Corporation will continue to
increase in future years as a result of, among other things, the continuing
changes in the United States defense industry.
A portion of Lockheed Martin's business includes classified programs that
cannot be specifically discussed, the operating results of which are included in
the Corporation's consolidated financial statements. The nature of and business
risks associated with classified programs do not differ materially from those of
the Corporation's other government programs and products.
PATENTS
The Corporation owns numerous patents and patent applications, some of
which, together with licenses under patents owned by others, are utilized in its
operations. While such patents and licenses are, in the aggregate, important to
the operation of the Corporation's business, no existing patent, license or
other similar intellectual property right is of such importance that its
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loss or termination would, in the opinion of management, materially affect the
Corporation's business.
RAW MATERIALS AND SEASONALITY
The Corporation has not experienced significant difficulties in its ability
to obtain raw materials and other supplies needed in its manufacturing process,
nor does the Corporation expect such difficulties to arise in the future. No
material portion of the business of the Corporation is considered to be
seasonal.
GOVERNMENT CONTRACTS AND REGULATIONS
All government contracts and, in general, subcontracts thereunder are
subject to termination in whole or in part at the convenience of the United
States Government as well as for default. Long-term government contracts and
related orders are subject to cancellation if appropriations for subsequent
performance periods become unavailable. Lockheed Martin generally would be
entitled to receive payment for work completed and allowable termination or
cancellation costs if any of its government contracts were to be terminated for
convenience. Upon termination for convenience of cost-reimbursement-type
contracts, the contractor is normally entitled, to the extent of available
funding, to reimbursement of allowable costs plus a portion of the fee related
to work accomplished. Upon termination for convenience of fixed-price-type
contracts, the contractor is normally entitled, to the extent of available
funding, to receive the purchase price for delivered items, reimbursement for
allowable costs for work in process, and
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an allowance for profit thereon or adjustment for loss if completion of
performance would have resulted in a loss.
In addition to the right of the government to terminate, government
contracts are conditioned upon the continuing availability of Congressional
appropriations. Congress usually appropriates funds on a fiscal-year basis even
though contract performance may extend over many years. Consequently, at the
outset of a program, the contract is usually partially funded, and additional
funds are normally only appropriated to the contract by Congress in future
years.
BACKLOG
Lockheed Martin's total negotiated backlog at December 31, 1995, was
approximately $41.1 billion compared with approximately $42.2 billion at the end
of 1994. The approximate total negotiated backlog of the Sectors at December
31, 1995 was as follows: Space & Strategic Missiles $16.2 billion, Aeronautics
$14.8 billion, Information & Technology Services $4.7 billion and Electronics
$5.4 billion. Unlike the other Sectors, the Energy & Environment Sector is not
itself a reportable business segment. The reportable business segment of which
the Energy & Environment Sector is part, Energy, Materials and Other, had total
negotiated backlog at December 31, 1995 of approximately $8 million. These
figures include both unfilled firm orders for the Corporation's products for
which funding has been both authorized and appropriated by the customer
(Congress, in the case of U.S. Government customers) and firm orders for which
funding has not been appropriated.
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Backlog information and comparisons thereof as of different dates may not
be accurate indicators of future sales or the ratio of Lockheed Martin's future
sales to the United States Government versus its sales to other customers.
Of the Corporation's total 1995 year-end backlog, approximately $26
billion, or 63%, is not expected to be filled within one year.
ENVIRONMENTAL REGULATION
Lockheed Martin's operations are subject to and affected by a variety of
federal, state, and local environmental protection laws and regulations. The
Corporation is involved in environmental responses at certain of its facilities
and at certain waste disposal sites not currently owned by the Corporation
(third-party sites) where the Corporation has been designated a "Potentially
Responsible Party" (PRP) by the U.S. Environmental Protection Agency (EPA). At
such third-party sites, the EPA or a state agency has identified the site as
requiring removal or remedial action under the federal "Superfund" and other
related federal or state laws governing the remediation of hazardous materials.
Generally, PRPs that are ultimately determined to be "responsible parties" are
strictly liable for site clean-ups and usually agree among themselves to share,
on an allocated basis, in the costs and expenses for investigation and
remediation of the hazardous materials. Under existing environmental laws,
however, responsible parties are jointly and severally liable and, therefore,
the Corporation is potentially liable for the full cost of funding such
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remediation. In the unlikely event that the Corporation were required to fund
the entire cost of such remediation, the statutory framework provides that the
Corporation may pursue rights of contribution from the other PRPs.
At third-party sites, the Corporation continues to pursue a course of
action designed to minimize and mitigate its potential liability through
assessing the legal basis for its involvement, including an analysis of such
factors as (i) the amount and nature of materials disposed of by the
Corporation, (ii) the allocation process, if any, used to assign all costs to
all involved parties, and (iii) the scope of the response action that is or may
reasonably be required. The Corporation also continues to pursue active
participation in steering committees, consent orders and other appropriate and
available avenues. Management believes that this approach should minimize the
Corporation's proportionate share of liability at third-party sites where other
PRPs share liability.
Although the Corporation's involvement and extent of responsibility varies
at each site, management, after an assessment of each site and consultation with
environmental experts and counsel, has concluded that the probability is remote
that the Corporation's actual or potential liability as a PRP in each or all of
these sites will have a material adverse effect on the Corporation's
consolidated financial position or results of operations. While the possibility
of insurance coverage is considered in the Corporation's efforts to minimize and
mitigate its potential liability, this possibility is not taken into account in
management's assessment of whether it is likely that its actual
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or potential liability will have a material adverse effect on the Corporation's
consolidated financial position.
In addition, Lockheed Martin manages various government-owned facilities on
behalf of the government. At such facilities, environmental compliance and
remediation costs have historically been the responsibility of the government
and the Corporation relied (and continues to rely with respect to past
practices) upon government funding to pay such costs. While the government
remains responsible for capital costs associated with environmental compliance,
responsibility for fines and penalties associated with environmental
noncompliance, in certain instances, is being shifted from the government to the
contractor with such fines and penalties no longer constituting allowable costs
under the contracts pursuant to which such facilities are managed.
Management does not believe that adherence to presently applicable
environmental regulations at its own facilities or in its contract management
capacity at government-owned facilities will have a material adverse effect on
Lockheed Martin's consolidated financial position or results of operations. For
additional details, see "Legal Proceedings" on page 23 through page 27. See
also "Note 14 -- Commitments and Contingencies" of the "Notes to Consolidated
Financial Statements" on page 73 through page 74 and "Management's Discussion
and Analysis of Financial Condition and Results of Operations, Environmental
Matters" on page 55 through page 56 of the 1995 Annual Report.
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RESEARCH AND DEVELOPMENT
Lockheed Martin conducts significant research and development activities,
both under contract funding and with Independent Research and Development (IR&D)
funds. Lockheed Martin expended $778 million in 1995, $813 million in 1994 and
$851 million in 1993 using IR&D and bid and proposal funds, a substantial
portion of which was included in overhead allocable to United States Government
contracts.
During fiscal year 1995, the Corporation did not undertake the development
of a new product or line of business requiring the investment of a material
amount of the Corporation's total assets.
See "Research and Development and Similar Costs" in "Note 1--Summary of
Significant Accounting Policies" of the "Notes to Consolidated Financial
Statements" on page 63 of the 1995 Annual Report.
EMPLOYEES
As of December 31, 1995, Lockheed Martin had approximately 160,000
employees, (including the approximatley 4,000 persons employed by Martin
Marietta Materials, Inc.) the majority of whom were located in the United
States. The Corporation has a continuing need for many skilled and professional
personnel in order to meet contract schedules and obtain new and ongoing orders
for its products. Approximately 34,500 of Lockheed Martin's employees are
covered by collective bargaining agreements with various international and local
unions. Management considers employee relations generally to be good and
believes that the probability is remote that
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renegotiating these contracts will have a material adverse effect on its
business.
FORWARD LOOKING STATEMENTS - SAFE HARBOR PROVISIONS
This Annual Report on Form 10-K contains statements which, to the extent
that they are not recitations of historical fact, constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All forward looking
statements involve risks and uncertainties. The forward looking statements in
this document are intended to be subject to the safe harbor protection provided
by Sections 27A and 21E. For a discussion identifying some important factors
that could cause actual results to vary materially from those anticipated in the
forward looking statements see the Corporation's Securities and Exchange
Commission filings, including but not limited to, the discussion of "Competition
and Risk" and the discussion of "Government Contracts and Regulations" on pages
10 through 12 and 13 through 14 of this Annual Report on Form 10-K and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 44 through 56 of the 1995 Annual Report and "Note 1 -
Summary of Significant Accounting Policies" and "Note 14 - Commitments and
Contingencies" of the Notes to Consolidated Financial Statements on pages 62
through 63 and 73 through 74, respectively, of the Audited Financial Statements
included in the 1995 Annual Report.
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ITEM 2. PROPERTIES
At December 31, 1995, the Corporation, excluding Martin Marietta Materials,
Inc., operated in approximately 409 offices, facilities, manufacturing plants,
warehouses, service centers, and laboratories throughout the United States and
internationally. Of these, the Corporation owned approximately 35 locations
aggregating approximately 33.2 million square feet of floor space. The
Corporation leased space at approximately 374 of its locations aggregating
approximately 16.7 million square feet. Additionally, the Corporation manages
or occupies various government-owned facilities at Marshall Space Flight Center
in Alabama; Livermore, Palmdale, Palo Alto, Santa Cruz, Sunnyvale and Vanderberg
Air Force Base in California; Largo, Cape Canaveral Air Force Station, and
Kennedy Space Center in Florida; Marietta, Georgia; the United States Enrichment
facilities at Paducah, Kentucky and Piketon, Ohio; the NASA Michoud Assembly
Facility near New Orleans, Louisiana; Pittsfield, Massachusetts; Stennis Space
Center in Mississippi; Las Vegas, Nevada; Sandia National Laboratories in New
Mexico; Johnson City and Knolls Atomic Power Laboratory at Niskayuna, New York;
the Department of Energy facility at Oak Ridge, the Department of Energy's Idaho
National Engineering Laboratory and the Army Ordnance plant at Milan, Tennessee;
Houston and Ft. Worth, Texas; and Jericho, Vermont, among others. The United
States Government also furnishes certain equipment and property used by the
Corporation.
The Corporation owns corporate office buildings located in Bethesda,
Maryland and Calabasas, California in fee simple, and leases corporate office
facilities in Arlington (Crystal City),
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Virginia. In addition, the Corporation owns and leases office and manufacturing
facilities for various operating sectors. Following are some of the major
locations, with their approximate square footage indicated:
SQUARE FOOTAGE (M)
-------------------
SECTOR LOCATION OWNED LEASED
- ------------------------ ------------------------ ------- ---------
Aeronautics Ontario, California 1.0
Palmdale, California 2.2
Marietta, Georgia 1.7
Middle River, Maryland 2.1
Greenville, .6
South Carolina
Ft. Worth, Texas .9
Electronics Orlando, Florida 2.3
Pittsfield, .9
Massachusetts
Nashua, New Hampshire 2.5
Camden, New Jersey .6
Moorestown, New Jersey .9
Syracuse, New York 1.8
Utica, New York .5
Information & Orlando, Florida 1.0
Technology Services King of Prussia,
Pennsylvania .5 .6
Reston, Virginia .8
Space & Strategic Sunnyvale and Palo Alto, 6.5 2.4
Missiles California
Kearny Mesa, California
Waterton and Littleton, 1.2
Colorado 4.0
East Windsor, New Jersey
King of Prussia, .7
Pennsylvania .9
Finally, the Corporation owns various tracts of land which are available
for sale or development. The location and approximate size of these land
tracts include:
LOCATION ACREAGE
- ----------------------------------- -------
Potrero Creek, California 9,100
Beaumont Gateway, California 2,800
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LOCATION ACREAGE
- ----------------------------------- -------
Meridian Test Range, Texas 2,784
Orlando, Florida 2,000
Littleton, Colorado (Deer Creek) 1,000
Palmdale Trust, California 650
Austin, Texas 600
That portion of the Corporation's activity related to engineering and
research and development does not lend itself to productive capacity
analysis. In the area of manufacturing, most of the operations are of a
job-order nature, rather than an assembly line process, and productive
equipment has multiple uses for multiple products.
Management believes that all of the Corporation's major physical
facilities are in good condition and are adequate for their intended use.
-22-
ITEM 3. LEGAL PROCEEDINGS
Lockheed Martin is primarily engaged in providing products and services
under contracts with the United States Government and, to a lesser degree,
under foreign government contracts, some of which are funded by the United
States Government. All such contracts are subject to extensive legal and
regulatory requirements and, from time to time, agencies of the United
States Government investigate whether Lockheed Martin's operations are
being conducted in accordance with these requirements. Such investigations
could result in administrative, civil or criminal liabilities including
repayments, fines or penalties being imposed upon Lockheed Martin or could
lead to suspension or debarment from future government contracting by
Lockheed Martin. Lockheed Martin is also a party to or has its property
subject to various other litigation and proceedings, including matters
arising under provisions relating to the protection of the environment
(collectively "proceedings").
On June 7, 1990, Boggs, et al. v. Divested Atomic Energy Corporation, et
-------------------------------------------------------
al., was filed against various defendants including Martin Marietta Energy
----
Systems ("MMES"). Plaintiffs' request for class certification was granted
and the case is pending in the United States District Court for the Eastern
District of Ohio. Plaintiffs seek $600 million based upon allegations that
the defendants discharged hazardous substances into the environment. In
the event that any damages are awarded in these proceedings, such damages
will be allowable costs under contracts between MMES and the Department of
Energy.
-23-
On December 28, 1993, MMES received a subpoena issued by a federal grand
jury in the Eastern District of Virginia seeking documents relating to
subcontracts with two of MMES's suppliers. MMES was not identified as a
target of the investigation and was recently advised that criminal
investigation has been declined.
On December 22, 1994 the Corporation's Ordnance Systems Facility received
a subpoena issued by the Department of Defense Inspector General's Office
("DoD IG") seeking documents relating to health and safety matters at the
facility. Documents responsive to the subpoena were produced and no further
information has been requested.
By letter dated September 21, 1995, the Corporation informed the DoD IG
that the Corporation had become aware of certain potential accounting
issues which the Corporation was investigating with respect to the LANTIRN
program. On February 12, 1996, the Corporation was served with a DoD IG
subpoena seeking documents related to the price proposal submitted in
connection with a LANTIRN program contract awarded in 1992. This was among
the items disclosed in the Corporation's letter.
On November 29, 1994, the Corporation received a subpoena issued by the
DoD IG seeking documents pertaining to testing of the AN/BQG-5 Stand-Alone
Wide Aperture Array Sonar which is produced by the Corporation's Ocean,
Radar & Sensor Systems company. Documents responsive to the subpoena were
produced.
On June 27, 1994, the Corporation received a DoD IG subpoena seeking
documents related to Lockheed Martin's Compu-Scene IV image
-24-
generator product. The documents were produced and the investigation was
later closed.
On May 4, 1995 the Corporation received a subpoena issued by the DoD IG
seeking documents relating to the Advanced Concept Center and the
Information Systems and Technologies businesses which are parts of the
Lockheed Martin Management & Data Systems company. The documents were
produced and the government's investigation of this matter is continuing.
On May 9, 1995, the Corporation received a subpoena seeking the
production of documents before a federal grand jury in Boise, Idaho. The
investigation appears to relate to alleged violations of environmental laws
and regulations pertaining to handling hazardous waste at the Idaho
National Engineering Laboratory. The investigation is continuing.
The United States Environmental Protection Agency and the U.S. Army
Criminal Investigative Command are conducting a criminal investigation to
determine whether the Corporation improperly disposed of wastes from The
Skunk Works at a government site in Nevada. It does not appear that the
Corporation is the target of the investigation.
Lockheed Martin Missiles and Space Company (which on January 28, 1996 was
merged with and into the Corporation) has voluntarily produced documents to
the U.S. Air Force Office of Special Investigations concerning the extent
to which the Corporation accurately responded to the government's request
for proposal in the Integrated Computer-Aided Software Engineering (I-CASE)
procurement. The government's investigation is continuing.
-25-
On March 31, 1995, Lockheed Sanders, Inc. was served with a subpoena by
the DoD IG seeking documents relating to a contract with the U.S. Navy for
the production of computer chip kits used in the AN/ALQ-126B On-board
Defensive Electronic Countermeasures systems. After documents responsive
to the subpoena were produced, the investigation was closed.
On June 12, 1995, the Corporation received a federal grand jury subpoena
issued by the United States District Court for the Central District of
California seeking documents relating to the Corporation's business in
Korea. The Corporation is in the process of producing the documents
requested and the government's investigation is continuing.
On July 3, 1995, the Corporation received a subpoena directed to Lockheed
Martin Tactical Aircraft Systems company seeking the production of
documents before a federal grand jury sitting in the Northern District of
Texas relating to the Corporation's use of foreign consultants and
commission representatives. The Corporation has produced the documents
requested.
On September 6, 1995, Lockheed Aeromod Centers, Inc. was served with a
civil complaint filed by Pima County, Arizona. The Complaint alleges (i)
that on two dates in 1991 and three dates in 1992 the Company exceeded
certain discharge parameters set forth in the Company's wastewater
discharge permit, (ii) that the Company was late in notifying the County
with respect to two of these instances and (iii) that the Company did not
fully test its wastewater discharge on two occasions in 1992. As a result,
the County alleges that it is entitled to up to $2.5 million in civil
penalties.
-26-
On January 23, 1996, a DoD IG subpoena was served on Lockheed Martin
Electronics & Missiles seeking documents relating to the software
development portion of the Paperless LANTIRN Automated Depot ("PLAD")
contract. It is believed that the government is investigating allegations
that the Corporation's proposal for the PLAD contract was defectively
priced.
On January 23, 1996, Lockheed Martin Electronics & Missiles was served
with a federal grand jury subpoena issued by the United States District
Court for the Middle District of Florida at Jacksonville seeking documents
related to the manufacture and testing of two circuit card assemblies used
in the production of the Hellfire missile.
Lockheed Martin is involved in various other legal and environmental
proceedings arising in the ordinary course of its business, but in the
opinion of management and counsel the probability is remote that the
outcome of any such litigation or proceedings, whether specifically
described above or referred to generally in this paragraph, will have a
material adverse effect on the results of Lockheed Martin's operations or
its financial position. See also "Note 14 -- Commitments and
Contingencies" of the "Notes to Consolidated Financial Statements" on page
73 through page 74 and "Management's Discussion and Analysis of Financial
Condition and Results of Operations, Environmental Matters" on page 55
through page 56 of the 1995 Annual Report.
-27-
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of 1995.
ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Lockheed Martin Corporation are listed below.
There were no family relationships among any of the executive officers and
directors of the Corporation. All officers serve at the pleasure of the
Board of Directors.
POSITIONS AND
OFFICES HELD WITH PRINCIPAL OCCUPATION AND
NAME CORPORATION BUSINESS EXPERIENCE
(AGE AT 12/31/95) (YEAR ELECTED) (PAST FIVE YEARS)
- ---------------------- ------------------- -----------------------------------------
Norman R. Augustine President and President of Lockheed Martin Corporation
(60) Chief Executive since March 1995 and Chief Executive
Officer; Director Officer of Lockheed Martin Corporation
(1995) since January 1, 1996. Chairman of the
Board of Martin Marietta from 1988 to
1995 and Chief Executive Officer from
1987 to 1995.
Marcus C. Bennett Senior Vice Senior Vice President and Chief
(59) President and Financial Officer of Lockheed Martin
Chief Financial Corporation since March 1995. Vice
Officer; Director President and Chief Financial Officer of
(1995) Martin Marietta since 1988.
Vance D. Coffman Executive Vice Director since 1996; Executive Vice
(51) President and President and Chief Operating Officer
Chief Operating since 1996; President and Chief
Officer; Director Operating Officer, Space and Strategic
(1996) Missiles Sector from March 1995 to
December 1995; previously served in
Lockheed Corporation as Executive Vice
President, from 1992-1995; and President
of Lockheed Space Systems Division from
1988-1992.
Minoru S. Araki President, President, Lockheed Missiles and Space
(64) Missiles & Space Company, Inc. since March 1995;
Previously served in Lockheed
Corporation as Executive Vice President,
Missiles and Space Systems Group
and
-28-
POSITIONS AND
OFFICES HELD WITH PRINCIPAL OCCUPATION AND
NAME CORPORATION BUSINESS EXPERIENCE
(AGE AT 12/31/95) (YEAR ELECTED) (PAST FIVE YEARS)
- ---------------------- ------------------- -----------------------------------------
Executive Vice President - Lockheed
Missiles & Space Company, Inc., from
October 1988 to March 1995.
James A. Blackwell, Sector President President and Chief Operating Officer,
Jr. (55) - Aeronautics Aeronautics Sector since March 1995;
previously served in Lockheed
Corporation as Vice President and
President from April 1993 to March 1995,
Lockheed Aeronautical Systems Company;
served as an executive employee of
Lockheed Aeronautical Systems Company
from 1986 until March 1995.
Melvin R. Brashears Sector President President and Chief Operating Officer
(50) - Space & Space and Strategic Missiles Sector,
Strategic January 1996; Deputy, Space and
Missiles Strategic Missiles Sector from November
1995 to December 1995; Executive Vice
President of Lockheed Missiles & Space
Company, Inc. from March 1995 - November
1995 and President of Lockheed
Commercial Space Company; previously
served in Lockheed Corporation as Vice
President and Assistant General Manager,
Space Systems Division, Lockheed
Missiles and Space Company, Inc., from
1992 - 1995; Director of Advanced Space
Programs, from 1991-1992.
Thomas A. Corcoran Sector President President and Chief Operating Officer,
(51) - Electronics Electronics Sector since March 1995;
previously served in Martin Marietta
Corporation as President, Electronics
Group, from 1993-March 1995; previously
served at General Electric Corporation
as Vice President and General Manager,
from 1990-1993.
Dain M. Hancock President, President, Tactical Aircraft Systems
(54) Tactical Aircraft since March 1995; previously served in
Systems Lockheed Corporation as Vice President
from 1993 to March 1995; and Vice
President and F-16 Program Director,
Lockheed Fort Worth Company, from 1993
to March 1995. From 1966 until 1993 he
was an employee of General Dynamics
Corporation.
John R. Kreik (51) President, President, Sanders; previously served in
Sanders Lockheed Corporation as President,
Lockheed Sanders, Inc. from 1990-1995.
-29-
POSITIONS AND
OFFICES HELD WITH PRINCIPAL OCCUPATION AND
NAME CORPORATION BUSINESS EXPERIENCE
(AGE AT 12/31/95) (YEAR ELECTED) (PAST FIVE YEARS)
- ---------------------- ------------------- -----------------------------------------
James W. McAnally, President, President, Astronautics since March
Jr. (59) Astronautics 1995; previously served in Martin
Marietta Corporation as President,
Astronautics from 1993 to March 1995.
John S. McLellan President, President, Aeronautical Systems since
(54) Aeronautical March 1995; previously served in
Systems Lockheed Corporation as Vice President
and Executive Vice President, Lockheed
Aeronautical Systems Company from March
1994 to March 1995; served as President,
Lockheed Aircraft Service Company-
Ontario from February 1992 to March
1994; served as Executive Vice President
from April 1989 to February 1992.
Frank H. Menaker, Vice President Vice President and General Counsel for
Jr. (55) and General Lockheed Martin Corporation since March
Counsel 1995, after having served in the same
capacity for Martin Marietta Corporation
since 1981.
Albert Narath (62) Sector President President and Chief Operating Officer,
- Energy & Energy and Environment Sector, Lockheed
Environment Martin Corporation from August 15, 1995
to present; President, Sandia
Corporation from April 1989 to August
14, 1995.
Robert E. Rulon Vice President Vice President and Controller since
(52) and Controller March 1995; previously served in
Lockheed Corporation as Vice President
and Controller from 1992-1995; served as
Vice President, Internal Audit from
1990-1992.
Walter E. Vice President Vice President and Treasurer since March
Skowronski (47) and Treasurer 1995; previously served in Lockheed
Corporation as Vice President and
Treasurer from 1992-1995; served as
staff Vice President, Investor Relations
from 1990-1992.
Peter B. Teets (53) Sector President President and Chief Operating Officer,
- Information & Information and Technology Services
Technology Sector since March 1995; previously
Services served in Martin Marietta Corporation as
Corporate Vice President (since 1985)
and President, Space Group, from 1993-
1995; served as President, Astronautics
Group from 1987-1993.
-30-
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
There were approximately 43,300 holders of record of Lockheed Martin
Corporation Common Stock, $1 par value, as of January 31, 1996. The
Corporation's Common Stock is traded on the New York Stock Exchange, Inc.
Information concerning stock prices and dividends paid during the past two
years is as follows:
Common Dividends Paid and Market Prices/*/
------------------------------------------
Market Price
Quarter Dividends Paid High/Low High/Low
- -------- ----------------- ------------ ---------
1995 1994 1995 1994
---- ---- ---- ----
First N/A N/A 54.375/50.25 N/A
Second .35 N/A 64.875/50.00 N/A
Third .35 N/A 68.125/59.50 N/A
Fourth .35 N/A 79.50/63.00 N/A
---- ------------
Year 1.05 N/A 79.50/50.00 N/A
/*/ The first day that the Corporation's Common Stock was publicly traded was
March 16, 1995
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item 6 is included under the caption
"Six-Year Summary" on page 77 of the 1995 Annual Report, and that
information is hereby incorporated by reference in this Form 10-K.
-31-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item 7 is included under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on page 44 through page 56 of the 1995 Annual Report, and that
information is hereby incorporated by reference in this Form 10-K.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item 8 is included under the captions
"Consolidated Statement of Earnings," "Consolidated Statement of Cash
Flows," "Consolidated Balance Sheet," "Consolidated Statement of
Stockholders' Equity," and "Notes to Consolidated Financial Statements" on
page 57 through page 76 of the Audited Consolidated Financial Statements
included in the 1995 Annual Report and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on page 44
through page 56 of the 1995 Annual Report. This information is hereby
incorporated by reference in this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
-32-
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning directors required by this Item 10 is
included under the caption "Election of Directors" in the Corporation's
definitive Proxy Statement to be filed pursuant to Regulation 14A no later
than March 26, 1996 (the "1996 Proxy Statement"), and that information is
hereby incorporated by reference in this Form 10-K. Information concerning
executive officers required by this Item 10 is located under Part I, Item
4(a) on page 28 through page 30 of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item 11 is included in the text and
tables under the caption "Compensation of Executive Officers" in the 1996
Proxy Statement and that information, except for the information required
by Item 402(k) and 402(l) of Regulation S-K, is hereby incorporated by
reference in this Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item 12 is included under the heading
"Securities Owned by Management" and "Voting Securities and Record Date" in
the 1996 Proxy Statement and that information is hereby incorporated by
reference in this Form 10-K.
-33-
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not Applicable.
-34-
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) List of Financial Statements filed as part of the Form 10-K.
Page
----
The following financial statements of Lockheed Martin Corporation
and consolidated subsidiaries, included in the 1995 Annual
Report, are incorporated by reference into Item 8 on page 32 of
this Annual Report on Form 10-K. Page numbers refer to the 1995
Annual Report:
Consolidated Statement of Earnings--
Years ended December 31, 1995, 1994 and 1993.............. 58
Consolidated Statement of Cash Flows--
Years ended December 31, 1995, 1994 and 1993.............. 59
Consolidated Balance Sheet--
December 31, 1995 and 1994................................ 60
Consolidated Statement of Stockholders' Equity--
Years ended December 31, 1995, 1994 and 1993.............. 61
Notes to Consolidated Financial Statements--
Years ended December 31, 1995, 1994 and 1993.............. 62
(2) List of Financial Statement Schedules filed as part of this
Form 10-K.
All schedules have been omitted because they are not applicable,
not required, or the information has been otherwise supplied in
the financial statements or notes to the financial statements.
Ernst & Young LLP
The report of Lockheed Martin's independent auditors with respect
to the above-referenced financial statements appears on page 57
of
-35-
the 1995 Annual Report and that report is hereby incorporated by
reference in this Form 10-K. The consent of Lockheed Martin's
independent auditors appears on page 49.
(b) The following report on Form 8-K was filed during the last
quarter of the period covered by this report:
(1) Lockheed Martin Corporation Current Report on Form 8-K filed
with the Securities and Exchange Commission on October 2,
1995.
During the first quarter of 1996, Lockheed Martin Corporation
made the following filings on Form 8-K:
(1) Lockheed Martin Corporation Current Report on Form 8-K filed
with the Securities and Exchange Commission on January 12,
1996.
(c) Exhibits
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession.
(a) Agreement and Plans of Merger and Complete
Liquidation dated as of January 25, 1996.
(b) Agreement and Plan of Reorganization, dated as of
August 29, 1994, among the Corporation, Martin
Marietta Corporation and Lockheed Corporation, as
amended as of February 7, 1995 (incorporated by
reference to Exhibit 2.1 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(c) Plan and Agreement of Merger, dated as of August
29, 1994, among Lockheed Corporation, Pacific Sub,
Inc. and the Corporation (incorporated by
reference to Exhibit 2.2 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(d) Plan and Agreement of Merger, dated as of August
29, 1994, among Martin Marietta Corporation,
Atlantic Sub, Inc. and the Corporation
(incorporated by reference to Exhibit 2.3 to
Lockheed
-36-
Martin Corporation's Registration Statement on
Form S-4 (No. 33-57645) filed with the Commission
on February 9, 1995).
(e) Agreement and Plan of Merger, dated as of January
7, 1996, by and among Loral Corporation, Lockheed
Martin Corporation and LAC Acquisition Corporation
(incorporated by reference to Exhibit (C)(2) to
the Schedule 14D-1 filed with the Commission on
January 12, 1996 by the Corporation and LAC
Acquisition Corporation).
(3)(i) Articles of Incorporation.
(a) Articles of Amendment and Restatement of Lockheed
Martin Corporation (formerly Parent Corporation)
filed with the State Department of Assessments and
Taxation of the State of Maryland on February 7,
1995 (incorporated by reference to Exhibit 3.1 to
Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 9, 1995).
(ii) Bylaws
(a) Copy of the Bylaws of Lockheed Martin Corporation
as amended on February 6, 1995 (incorporated by
reference to Exhibit 3.2 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(4) (a) Indenture dated April 22, 1993, between Martin
Marietta Corporation, Technologies, and
Continental Bank, National Association as Trustee
(incorporated by reference to Exhibit 4 of the
Corporation's filing on Form 8-K on April 15,
1993).
No other instruments defining the rights of
holders of long-term debt are filed since the
total amount of securities authorized under any
such instrument does not exceed 10% of the total
assets of the Corporation on a consolidated basis.
The Corporation agrees to furnish a copy of such
instruments to the Securities and Exchange
Commission upon request.
(b) See Exhibits 3.1 and 3.2.
(10)* (a) Format of the agreements between Martin
Marietta Corporation and certain officers to
provide for continuity of management in the event
of a change in control of the Corporation
(incorporated by reference
-37-
to Exhibit 10.14 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
(b) Lockheed Martin Corporation 1995 Omnibus
Performance Award Plan (incorporated by reference
to Exhibit 10.36 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
(c) Lockheed Martin Corporation Directors Deferred
Stock Plan (incorporated by reference to Exhibit
10.37 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
(d) Lockheed Martin Corporation Directors Deferred
Compensation Plan.
(e) Lockheed Martin Corporation Directors Retirement
Plan.
(f) Lockheed Martin Corporation Directors Charitable
Award Plan.
(g) Lockheed Martin Corporation Death Benefit and
Business Travel Accident Insurance Policy for
Directors.
(h) Lockheed Martin Corporation Financial Counseling
Program for Directors.
(i) Lockheed Martin Corporation Elected Officers Post
Retirement Death Benefit Plan.
(j) Lockheed Martin Corporation Senior Management
Financial Counseling Program.
(k) Lockheed Martin Corporation Directors Personal
Liability and Accidental Death Plan.
(l) Lockheed Martin Corporation Management Incentive
Compensation Plan.
(m) Trust Agreement, dated February 14, 1996, between
Lockheed Martin Corporation and Bankers Trust
Company.
(n) Agreement Containing Consent Order, dated December
22, 1994, among the Corporation, Lockheed
Corporation, Martin Marietta Corporation and the
Federal Trade Commission (incorporated by
reference to Exhibit 10.4 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(o) Confidentiality and Standstill Agreement, dated
March 29, 1994, between Martin Marietta
Corporation and Lockheed Corporation (incorporated
by reference to Exhibit 10.5 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(p) Reconfiguration Agreement, dated August 29, 1994,
among Martin Marietta Corporation, the Corporation
and General Electric Company (incorporated by
reference to Exhibit 10.2 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(q) Amendment to the Reconfiguration Agreement, dated
November 30, 1994, among Martin Marietta
Corporation, the
-38-
Corporation and General Electric Company
(incorporated by reference to Exhibit 10.3 to
Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 9, 1995).
(r) Standstill Agreement, dated April 2, 1993, between
Martin Marietta Corporation and General Electric
Company (incorporated by reference to Exhibit 10.1
to Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 9, 1995).
(s) Restructuring , Financing, and Distribution
Agreement, dated as of January 7, 1996, by and
among Loral Corporation, Loral Aerospace Holdings,
Inc., Loral Aerospace Corp., Loral General Partner
Inc., Loral Globalstar, L.P., Loral Globalstar
Limited, Loral Telecommunications Acquisition,
Inc. ("to be renamed Loral Space & Communications
Ltd.") and Lockheed Martin Corporation
(incorporated by reference to Exhibit (C)(3) to
the Schedule 14D-1 filed with the Commission on
January 12, 1996 by the Corporation and LAC
Acquisition Corporation).
(t) Form of Stockholders Agreement to be entered into
by and among Loral Corporation (which will
become "Lockheed Martin Tactical Systems, Inc.")
and Loral Space & Communications Ltd.
(incorporated by reference to Exhibit (C)(4) to
the Schedule 14D-1 filed with the Commission on
January 12, 1996 by the Corporation and LAC
Acquisition Corporation).
(u) Form of Tax Sharing Agreement to be entered into
by and among Lockheed Martin Tactical Systems,
Inc., Loral Space & Communications Ltd., Lockheed
Martin Corporation and LAC Acquisition Corporation
(incorporated by reference to Exhibit (C)(5) to
the Schedule 14D-1 filed with the Commission on
January 12, 1996 by the Corporation and LAC
Acquisition Corporation).
(v) Martin Marietta Corporation Directors Deferred
Compensation Plan, as amended (incorporated by
reference to Exhibit 10(iii)(a) to Martin Marietta
Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994).
(w) Martin Marietta Corporation Post-Retirement Income
Maintenance Plan for Directors, as amended
(incorporated by reference to Exhibit 10(iii)(b)
to Martin Marietta Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31,
1994).
(x) Martin Marietta Corporation Financial Counseling
Program for directors, officers, company
presidents, and other key employees, as amended
(incorporated by reference to Exhibit 10.6 to
Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 9, 1995).
(y) Martin Marietta Corporation Executive Incentive
Plan, as amended (incorporated by reference to
Exhibit 10.7 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
(z) Deferred Compensation and Estate Supplement Plan,
as amended (incorporated by reference to Exhibit
10(iii)(e) to Martin Marietta
-39-
Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994).
(aa) Martin Marietta Corporation Post-Retirement Death
Benefit Plan for Senior Executives, as amended
(incorporated by reference to Exhibit 10.9 to
Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 9, 1995).
(bb) Martin Marietta Corporation 1979 Stock Option Plan
for Key Employees, as amended (incorporated by
reference to Exhibit 10.11 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(cc) Martin Marietta Corporation 1984 Stock Option Plan
for Key Employees, as amended (incorporated by
reference to Exhibit 10.12 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995) (The plan amendment dated
September 28, 1995 is included as Exhibit 10(cc)
to this Annual Report on Form 10-K.)
(dd) Martin Marietta Corporation Amended Omnibus
Securities Award Plan, as amended March 25, 1993
(incorporated by reference to Exhibit 10.13 to
Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 9, 1995).
(ee) Martin Marietta Corporation Supplemental Excess
Retirement Plan, as amended (incorporated by
reference to Exhibit 10.15 to Lockheed Martin
Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(ff) Martin Marietta Corporation Restricted Stock Award
Plan, as amended (incorporated by reference to
Exhibit 10.16 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
-40-
(gg) Martin Marietta Corporation Long Term Performance
Incentive Compensation Plan (incorporated by
reference to Exhibit 10(iii)(m) to Martin Marietta
Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994).
(hh) Amended and Restated Martin Marietta Corporation
Long-Term Performance Incentive Compensation Plan
(incorporated by reference to Exhibit 10(iii)(n)
to Martin Marietta Corporation's Annual Report on
Form 10-K for the fiscal year ended December 31,
1994).
(ii) Martin Marietta Corporation Directors' Life
Insurance Program (incorporated by reference to
Exhibit 10.17 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
(jj) Martin Marietta Corporation Executive Special
Early Retirement Option and Plant Closing
Retirement Option Plan (incorporated by reference
to Exhibit 10.18 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
(kk) Martin Marietta Supplementary Pension Plan for
Employees of Transferred GE Operations
(incorporated by reference to Exhibit 10.19 to
Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 9, 1995).
(ll) Form of Employment Agreement between Martin
Marietta Corporation and certain officers
(incorporated by reference to Exhibit 10.20 to
Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 9, 1995).
(mm) Martin Marietta Corporation Deferred Compensation
Plan for Selected Officers (incorporated by
reference to Exhibit 10.10 to Lockheed Martin
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Corporation's Registration Statement on Form S-4
(No. 33-57645) filed with the Commission on
February 9, 1995).
(nn) Lockheed Corporation 1992 Employee Stock Option
Program (incorporated by reference to the
Registration Statement on Form S-8 (No. 33-49003)
of Lockheed Corporation filed with the Commission
on September 11, 1992).
(oo) Amendment to Lockheed Corporation 1992 Employee
Stock Option Plan (incorporated by reference to
Exhibit 10.22 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
(pp) Lockheed Corporation 1986 Employee Stock Purchase
Program, as amended, (incorporated by reference to
Exhibit 10.23 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 5, 1995).
(The amendment to the plan dated September 28,
1995 is included as Exhibit 10(pp) to this Annual
Report on Form 10-K).
(qq) Lockheed Corporation 1982 Employee Stock Purchase
Program, as amended, (incorporated by reference to
Exhibit 10.24 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 5, 1995).
(The amendment to the plan dated September 28,
1995 is included as Exhibit 10(qq) to this Annual
Report on Form 10-K).
(rr) Incentive Retirement Benefit Plan for Certain
Executives of Lockheed Corporation, as amended
(incorporated by reference to Exhibit 10.6 to
Lockheed Corporation's Annual Report on Form 10-K
for the year ended December 25, 1994).
(ss) Supplemental Retirement Benefit Plan for Certain
Transferred Employees of Lockheed Corporation, as
amended (incorporated by reference to Exhibit 10.7
to Lockheed Corporation's Annual Report on
Form 10-K for the year ended December 25, 1994).
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(tt) Supplemental Benefit Plan of Lockheed Corporation,
as amended.
(uu) Long-Term Performance Plan of Lockheed Corporation
and its Subsidiaries (incorporated by reference to
Exhibit 10.28 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 9, 1995).
(vv) Amended and Restated Supplemental Savings Plan of
Lockheed Corporation.
(ww) Deferred Compensation Plan for Directors of
Lockheed Corporation, as amended.
(xx) Lockheed Corporation Retirement Plan for
Directors, as amended.
(yy) Form of Lockheed Corporation Termination Benefits
Agreement effective January 1, 1991 (included in
Form 8, Amendment No. 1 to Exhibit 28 of Form 8-K
dated November 5, 1990 of Lockheed Corporation and
incorporated herein by reference).
(zz) Trust Agreement, as amended February 3, 1995,
between Lockheed Corporation and First Interstate
Bank of California (incorporated by reference to
Exhibit 10.33 to Lockheed Martin Corporation's
Registration Statement on
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Form S-4 (No. 33-57645) filed with the Commission
on February 9, 1995).
(ab) Lockheed Corporation Directors' Deferred
Compensation Plan Trust Agreement, as amended
(incorporated by reference to Exhibit 10.34 to
Lockheed Martin Corporation's Registration
Statement on Form S-4 (No. 33-57645) filed with
the Commission on February 5, 1995). (The
amendment to the trust agreement dated September
30, 1995 is included as Exhibit 10(ab) to this
Annual Report on Form 10-K).
(ac) Trust Agreement, dated December 22, 1994, between
Lockheed Corporation and J.P. Morgan California
with respect to certain employee benefit plans of
Lockheed Corporation (incorporated by reference to
Exhibit 10.35 to Lockheed Martin Corporation's
Registration Statement on Form S-4 (No. 33-57645)
filed with the Commission on February 5, 1995).
(The amendment to the trust agreement dated
September 30, 1995 is included as Exhibit 10(ac)
to this Annual Report on Form 10-K).
(ad) Lockheed Corporation Deferred Management Incentive
Compensation Plan, as amended.
(ae) Lockheed Corporation 1992 Employee Stock Option
Program, as amended (incorporated by reference to
Lockheed Corporation's Registration Statement (No.
33-49003) and Exhibit 10.22 to Lockheed Martin
Corporation's Registration Statement of Form S-4
(No. 33-57645) filed with the Commission on
February 5, 1995). (The amendment to the plan
dated September 28, 1995 is included as Exhibit
(ae) to this Annual Report on Form 10-K).
(af) Lockheed Martin Corporation Deferred Management
Incentive Compensation Plan.
* Exhibits (10)(a) through 10(m) and 10(v) through (10)(af)
constitute management contracts or compensatory plans or
arrangements required to be filed as an Exhibit to this Form
pursuant to Item 14(c) of this Report.
(11) Computation of net earnings per common share for
the years ended December 31, 1995, 1994 and 1993.
(12) Computation of ratio of earnings to fixed charges
for the year ended December 31, 1995.
(13) 1995 Annual Report to Security Holders (including
an appendix describing graphic and image
material). Those portions of the 1995 Annual
Report to Security Holders which are not
incorporated by reference in this Annual Report on
Form 10-K shall not be deemed to be "filed" as
part of this Report.
(21) List of Subsidiaries of Lockheed Martin
Corporation.
(23) Consent of Ernst & Young LLP, Independent Auditors
for Lockheed Martin Corporation (included in this
Form 10-K at page 49).
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(24) Powers of Attorney.
(27) Financial Data Schedule.
Other material incorporated by reference:
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LOCKHEED MARTIN CORPORATION
Date: March 13, 1996 By: /s/ FRANK H. MENAKER, JR.
-----------------------------------------
Frank H. Menaker, Jr.
Vice President and
General Counsel
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
- -------------------------------- ------------------------- ------------------
/s/Norman R. Augustine* President, Chief March 4, 1996
- -------------------------------- Executive Officer and
NORMAN R. AUGUSTINE Director
/s/Marcus C. Bennett* Senior Vice President, February 22, 1996
- -------------------------------- Chief Financial Officer
MARCUS C. BENNETT and Director
/s/Robert E. Rulon* Chief Accounting Officer February 22, 1996
- --------------------------------
ROBERT E. RULON
/s/Lynne V. Cheney* Director February 22, 1996
- --------------------------------
LYNNE V. CHENEY
/s/A. James Clark* Director February 22, 1996
- --------------------------------
A. JAMES CLARK
/s/Vance D. Coffman* Director February 22, 1996
- --------------------------------
VANCE D. COFFMAN
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SIGNATURES TITLE DATE
- -------------------------------- ------------------------- ------------------
/s/Edwin I. Colodny* Director February 22, 1996
- --------------------------------
EDWIN I. COLODNY
/s/Lodwrick M. Cook* Director February 22, 1996
- --------------------------------
LODWRICK M. COOK
/s/James L. Everett, III* Director February 22, 1996
- --------------------------------
JAMES L. EVERETT, III
/s/Houston K. Flournoy* Director February 22, 1996
- --------------------------------
HOUSTON K. FLOURNOY
/s/James F. Gibbons* Director February 22, 1996
- --------------------------------
JAMES F. GIBBONS
/s/Edward L. Hennessy, Jr.* Director February 22, 1996
- --------------------------------
EDWARD L. HENNESSY, JR.
/s/Edward E. Hood, Jr.* Director February 22, 1996
- --------------------------------
EDWARD E. HOOD, JR.
/s/Caleb B. Hurtt* Director February 22, 1996
- --------------------------------
CALEB B. HURTT
/s/Gwendolyn S. King* Director February 22, 1996
- --------------------------------
GWENDOLYN S. KING
/s/Lawrence O. Kitchen* Director February 22, 1996
- --------------------------------
LAWRENCE O. KITCHEN
/s/Gordon S. Macklin* Director February 22, 1996
- --------------------------------
GORDON S. MACKLIN
/s/Vincent N. Marafino* Director February 22, 1996
- --------------------------------
VINCENT N. MARAFINO
/s/Eugene F. Murphy* Director February 22, 1996
- --------------------------------
EUGENE F. MURPHY
/s/David S. Potter* Director February 22, 1996
- --------------------------------
DAVID S. POTTER
/s/Frank Savage* Director February 22, 1996
- --------------------------------
FRANK SAVAGE
/s/Daniel M. Tellep* Director February 22, 1996
- --------------------------------
DANIEL M. TELLEP
/s/Carlisle A.H. Trost* Director February 22, 1996
- --------------------------------
CARLISLE A.H. TROST
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SIGNATURES TITLE DATE
- -------------------------------- ------------------------- ------------------
/s/James R. Ukropina* Director February 22, 1996
- --------------------------------
JAMES R. UKROPINA
/s/Douglas C. Yearley* Director February 22, 1996
- --------------------------------
DOUGLAS C. YEARLEY
*By: /s/ STEPHEN M. PIPER March 13, 1996
------------------------------
(Stephen M. Piper, Attorney-in-fact**)
_____________________
** By authority of Powers of Attorney filed with this Annual Report on
Form 10-K.
-48-
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form
10-K) of Lockheed Martin Corporation of our report dated January 23, 1996,
included in the 1995 Annual Report to Shareholders of Lockheed Martin
Corporation.
We also consent to the incorporation by reference in the following
Registration Statements:
(1) Registration Statement Number 33-58067 of Lockheed Martin Corporation
on Form S-3, dated March 14, 1995;
(2) Registration Statement Numbers: 33-58073, 33-58075, 33-58077, 33-
58079, 33-58081, 33-58083, 33-58085, 33-58089 and 33-58097 of Lockheed
Martin Corporation on Forms S-8, each dated March 15, 1995;
(3) Post-Effective Amendment No. 1, dated March 15, 1995 to Registration
Statement Number 33-57645 of Lockheed Martin Corporation on Form S-8;
and
(4) Registration Statement Number 33-63155 of Lockheed Martin Corporation
on Form S-8, dated October 3, 1995;
of our report dated January 23, 1996, with respect to the consolidated
financial statements incorporated herein by reference.
ERNST & YOUNG LLP
Washington, D.C.
March 11, 1996
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