<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-KA
AMENDMENT TO ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995.
Commission file number 1-4238
LORAL AEROSPACE SAVINGS PLAN
LORAL CORPORATION
600 Third Avenue
New York, New York 10016
<PAGE> 2
The registrant hereby amends its filing on Form 11-K for the Loral Aerospace
Savings Plan filed on June 28, 1996 to correct certain typographical errors.
Items #1, 2 and 3 are amended in their entirety.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Savings
Committee has duly caused this amendment to be signed by the undersigned
thereunto duly authorized.
LORAL AEROSPACE SAVINGS PLAN
----------------------------------------
(Plan)
Date: July 25, 1996 BY: STEPHEN L. JACKSON
----------------------------------------
Stephen L. Jackson
Member of Savings Committee
<PAGE> 3
LORAL AEROSPACE SAVINGS PLAN
TABLE OF CONTENTS
Page
----
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available For Benefits With Fund
Information As Of December 31, 1995 4
Statement of Net Assets Available For Benefits With Fund
Information As Of December 31, 1994 5
Statement of Changes in Net Assets Available For Benefits
With Fund Information For the Year Ended December 31, 1995 6
Notes to Financial Statements 8
Supplemental Schedules:
Item 27a - Schedule Of Assets Held For Investment Purposes
As of December 31, 1995 17
Item 27d - Schedule Of Reportable Transactions
For The Year Ended December 31, 1995 18
Exhibit:
Consent of Independent Accountants 20
<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
----------------
To the Plan Committee of Lockheed Martin
Corporation and Participants
of the Lockheed Martin Aerospace Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Loral Aerospace Savings Plan (the "Plan"), which is now known as the
Lockheed Martin Aerospace Savings Plan, as of December 31, 1995 and
1994, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1995. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1995 and 1994, and the changes in net assets available for benefits
for the year ended December 31, 1995, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of (1) assets
held for investment purposes as of December 31, 1995, and (2) reportable
transactions for the year ended December 31, 1995, are presented for the purpose
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of the 1974. The Fund Information
2
<PAGE> 5
REPORT OF INDEPENDENT ACCOUNTANTS
(continued)
in the statements of net assets available for benefits and the statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for benefits
and changes in net assets available for benefits of each fund. The supplemental
schedules and Fund Information have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Coopers & Lybrand L.L.P.
Newport Beach, California
June 26, 1996
3
<PAGE> 6
LORAL AEROSPACE SAVINGS PLAN
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
Participant Directed
---------------------------------------------------------------
Blue Chip Growth & Intermediate
Growth Magellan Income Asset Overseas Bond
Fund Fund Portfolio Manager Fund Fund
---- ---- --------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments $149,081 $10,003 $7,023 $2,329 $2,153 $6,100
---------------------------------------------------------------
Net assets available for
benefits $149,081 $10,003 $7,023 $2,329 $2,153 $6,100
===============================================================
<CAPTION>
Participant Directed Non-Participant Directed
--------------------------------------------------- ---------------------------
Retirement
Money Blended 1992 Loral Participant Loral Ford
Market Income Income Stock Loan Stock Stock
Porfolio Fund Fund Fund Fund Fund Fund Total
------ ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments $68,059 $73,800 $40,775 $229,867 $16,138 $ 39,341 $149,179 $793,848
--------------------------------------------------- ---------------------------
Net assets available for
benefits $68,059 $73,800 $40,775 $229,867 $16,138 $ 39,341 $149,179 $793,848
=================================================== ===========================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
LORAL AEROSPACE SAVINGS PLAN
Statement of Net Assets Available for Benefits with Fund Information
As of December 31, 1994
(In thousands)
<TABLE>
<CAPTION>
Participant Directed Non-Participant Directed
----------------------------------------------------------- ------------------------
Common Current Loral Participant Loral Ford
Stock Interest Bond Income Stock Loan Stock Stock
Fund Fund Fund Fund Fund Fund Fund Fund Total
---- ---- ---- ---- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets:
Investments $104,745 $66,854 $3,184 $123,532 $60,489 $19,037 $69,519 $165,629 $612,989
Accrued investment income 8 297 1 2,199 2,505
Other receivables 764 1,039 439 103 17 2,362
Interfund receivable (payable) 2,558 404 578 (7,338) 1,956 2,248 (406)
----------------------------------------------------------- ----------------------------
Total assets 108,075 68,594 4,202 118,393 62,445 19,140 71,767 165,240 617,856
Liabilities:
Other liabilities 18 215 7 708 8 15 971
----------------------------------------------------------- ----------------------------
Net assets available for benefits $108,057 $68,379 $4,202 $118,393 $62,438 $18,432 $71,759 $165,225 $616,885
=========================================================== ============================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 8
LORAL AEROSPACE SAVINGS PLAN
Statement of Changes In Net Assets Available for
Plan Benefits with Fund Information
For the Year Ended December 31, 1995
(In Thousands)
<TABLE>
<CAPTION>
Comerica Funds
Non-participant -------------------------------------
Participant Directed Directed Participant directed
------------------------ --------------- -------------------------------------
Loral Participant Loral Ford Common Current
Stock Loan Stock Stock Stock Interest Bond Income
Fund Fund Fund Fund Fund Fund Fund Fund
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions:
Contributions:
Rollovers $312
Employer $12,517
Participant 12,331 2,038 515 149 1,126
Investment income:
Dividends 1,943 344 1,531
Interest 8 1,107 1,737
Net investment gain from
bank collective trust funds 10,051 874 142
Net investment gain (loss) from
registered investment company
Net appreciation (depreciation)
in fair value of investments 96,414 24,182 7,219
-------------------------------------------------------------------------------------
Total additions 111,008 1,107 37,043 8,750 12,089 1,389 291 2,863
-------------------------------------------------------------------------------------
Deductions:
Benefits paid to participants 11,366 2,650 2,470 13,973 2,557 7,339 27 5,274
Administrative expenses 6 13 2 27 3
-------------------------------------------------------------------------------------
Total deductions 11,372 2,650 2,470 13,986 2,559 7,366 27 5,277
-------------------------------------------------------------------------------------
Interfund transfers 68,594 (828) (66,991) (8,957) 1,031 (3,093) 284 1,045
Transfer to new trustee (801) 77 (1,853) (118,618) (59,309) (4,750) (117,024)
-------------------------------------------------------------------------------------
Net increase (decrease) 167,429 (2,294) (32,418) (16,046) (108,057) (68,379) (4,202) (118,393)
Net assets available for
benefits at December 31, 1994 62,438 18,432 71,759 165,225 108,057 68,379 4,202 118,393
---------------------------------------------------------------------------------------
Net assets available for
benefits at December 31, 1995 $229,867 $16,138 $39,341 $149,179 $0 $0 $0 $0
=======================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
continued
6
<PAGE> 9
LORAL AEROSPACE SAVINGS PLAN
Statement of Changes in Net Assets Available for
Plan Benefits with Fund Information, Continued
For the Year Ended December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
Fidelity Asset Management Trust Company
-------------------------------------------------
Participant Directed
-------------------------------------------------
Blue Chip Growth & Asset
Growth Magellan Income Manager Overseas
Fund Fund Portfolio Fund Fund
---- ---- --------- ---- ----
<S> <C> <C> <C> <C> <C>
Additions:
Contributions:
Rollovers $438 $390 $150 $54 $38
Employer 1
Participant 10,631 803 409 148 186
Investment Income:
Dividends
Interest
Net investment gain from
bank collective trust funds
Net investment gain (loss) from
registered investment co. 26,795 363 700 130 55
Net appreciation (depreciation)
in fair value of investments
-------------------------------------------------
Total Additions 37,865 1,556 1,259 332 279
-------------------------------------------------
Deductions:
Benefits paid to participants 6,182 98 23 10 23
Administrative expenses 9 1 1
-------------------------------------------------
Total deductions 6,191 99 24 10 23
-------------------------------------------------
Interfund transfers (1,231) 8,482 5,767 2,003 1,891
Transfer to new trustee 118,638 64 21 4 6
-------------------------------------------------
Net increase (decrease) $149,081 $10,003 $7,023 $2,329 $2,153
Net assets available for
benefits at December 31, 1994
-------------------------------------------------
Net assets available for
benefits at December 31, 1995 $149,081 $10,003 $7,023 $2,329 $2,153
=================================================
<CAPTION>
Fidelity Asset Management Trust Company
------------------------------------------------------
Participant Directed
------------------------------------------------------
Retirement
Intermediate Money Blended 1992
Bond Market Income Income
Fund Portfolio Fund Fund Total
---- ---------- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Additions:
Contributions:
Rollovers $30 $1,606 $165 $3,183
Employer 1 230 12,749
Participant 724 2,543 5,255 36,858
Investment Income:
Dividends 3,818
Interest 3,185 2,072 8,109
Net investment gain from
bank collective trust funds 11,067
Net investment gain (loss) from
registered investment co. 483 7,995 36,521
Net appreciation (depreciation)
in fair value of investments 127,815
------------------------------------------------------
Total Additions 1,238 12,374 8,605 2,072 240,120
------------------------------------------------------
Deductions:
Benefits paid to participants 204 4,668 4,336 1,745 62,945
Administrative expenses 1 139 8 2 212
------------------------------------------------------
Total deductions 205 4,807 4,344 1,747 63,157
------------------------------------------------------
Interfund transfers 318 (1,252) (7,063) 0
Transfer to new trustee 4,749 61,744 76,602 40,450 0
------------------------------------------------------
Net increase (decrease) $6,100 $68,059 $73,800 $40,775 $176,963
Net assets available for
benefits at December 31, 1994 616,885
------------------------------------------------------
Net assets available for
benefits at December 31, 1995 $6,100 $68,059 $73,800 $40,775 $793,848
======================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 10
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. Plan Description:
General
The Loral Aerospace Savings Plan (the "Plan") was established by Loral
Aerospace Corporation ("LAC") effective January 1, 1991. LAC, a
wholly-owned subsidiary of Loral Aerospace Holdings, Inc. ("LAH"), is the
Plan sponsor. LAC and Space Systems/Loral ("SS/L"), a majority-owned
subsidiary of LAH, and any of their affiliated companies are the
"Participating Employers." LAH is a wholly-owned subsidiary of Loral
Corporation ("Loral").
Effective April 23, 1996, Lockheed Martin Corporation ("Lockheed Martin")
acquired substantially all the outstanding shares of Loral Corporation
and renamed the Plan Lockheed Martin Aerospace Savings Plan. SS/L and
certain other divisions were not acquired by Lockheed Martin. It is the
intention of Lookheed Martin to spin off the accounts of the entities
not acquired into a new plan, effective July 1, 1996.
The Plan is a defined contribution plan designed to provide eligible
employees with systematic savings and tax-advantaged long-term savings
for retirement. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA). Regular employees of a
Participating Employer are eligible to participate in the Plan as of
their date of hire.
A complete description of the Plan's provisions is contained in the Plan
document.
Investment Options
Effective March 31, 1995, the Trustee was changed from Comerica Bank
("Comerica") to Fidelity Management Trust Company ("Fidelity"), and all
funds were invested in similar investment vehicles with Fidelity.
Beginning April 1, 1995, participants may direct their contributions in
5% increments in any of nine investment options:
Loral Stock Fund - Funds are invested in Loral Corporation Common
Stock and are reflected as participant directed in the accompanying
financial statements.
Fidelity Blue Chip Growth Fund - Funds are invested primarily in a
diversified portfolio of common stocks of well-known and established
companies--normally at least 65% of these securities are issued by
"blue chip" companies.
Fidelity Growth & Income Portfolio - Funds are invested mainly in
securities of companies that offer potential growth of earnings while
paying current dividends.
8
<PAGE> 11
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
Fidelity Asset Manager Fund - Funds are invested in stocks, bonds, and
short-term investments, both in the U.S. and abroad, to blend the
long-term performance of equity and fixed income investments.
Fidelity Magellan Fund - Funds are invested for capital appreciation
in a broad range of stocks of domestic, multinational, and foreign
companies that have significant activities and interests outside the
U.S.
Fidelity Overseas Fund - Funds are invested in foreign securities with
the objective of long-term growth.
Fidelity Retirement Money Market Portfolio - Funds are invested
in a diversified portfolio of high-quality, interest-bearing, money
market instruments with short-term maturities.
Blended Income Fund - Funds are invested in guaranteed investment
contracts with various insurance companies and the Fidelity short-term
Interest Fund. The investment contracts have fixed rates of interest
for fixed periods of time. Certain limitations over contributions,
withdrawals and loans to or from the Fund are defined by the Plan
and/or the Contract. Pending the purchase of investment contracts,
funds are invested in the Fidelity short-term Interest Fund.
Fidelity Intermediate Bond Fund - Funds are invested in fixed income
securities which include bonds, notes, convertible bonds,
mortgage-backed and asset-backed securities, domestic and foreign
government and government agency securities, zero coupon bonds, and
short-term obligations, such as commercial paper and notes, bank
deposits and other financial institution obligations and repurchase
agreements.
Prior to April 1, 1995, participants could direct their contribution in
10% increments in any of five investment options:
Loral Stock Fund - Funds are invested in Loral Corporation Common
Stock and are reflected as participant directed in the accompanying
financial statements.
Common Stock Fund - Funds are invested in shares of bank collective
trust funds, which invest mainly in common stocks.
Current Interest Fund - Funds are invested in shares of a short-term
bank collective trust fund, which invests in high-quality, short-term
money market instruments.
Income Fund - Funds are invested in guaranteed investment contracts
with various insurance companies. A participant with an account
invested in an Income Fund contract is an unsecured creditor of the
insurance company that issued the contract. Certain limitations over
contributions, withdrawals and transfers to other investment funds are
defined in the contracts.
9
<PAGE> 12
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
Bond Fund - Funds are invested in shares of a registered investment
company which invests primarily in corporate bonds. This Fund became
an investment election effective January 1, 1994.
The 1992 Income Fund is an interest-bearing contract with Prudential
Insurance Company and is a carryover fund from the previous trustee. No
contributions may be made to the 1992 Income Fund, and no transfers may
be made out of the 1992 Income Fund until it matures on January 1, 1996.
The Ford Stock Fund is a carry-over fund resulting from the transfer of
assets from a prior plan. Contributions and reinvestment of dividends
into this fund are no longer permitted. Dividends received on Ford Stock
are invested in the Retirement Money Market Fund (beginning April 1,
1995) and in the Current Interest Fund (prior to April 1, 1995).
As of December 31, 1995, there were approximately 12,570 participants in
the Plan, some of whom have elected to invest in more than one fund.
Participant Accounts
A participant's account is credited with (a) the participant's
contribution, (b) the employer's matching contribution and (c) an
allocation of Plan earnings, net of certain investment management fees.
Allocations are based on a participant's account balance as a percentage
of the sum of all participants' account balances.
Vesting and Forfeitures
Participants are immediately vested in their contributions plus actual
earnings thereon. Generally, participants vest 100% in employer
contributions plus actual earnings thereon after completion of five years
of service and, thereafter, vest immediately in all future employer
contributions. On termination of service due to death, disability, or
retirement, participants become fully vested. Non-vested employer
contributions are forfeited upon termination or withdrawal. These amounts
are used for certain Plan administrative expenses or to reduce future
employer contributions. Forfeitures for the year ended December 31, 1995
were approximately $3,900,000 and will be used to reduce employer
contributions in 1996.
Contributions
The Plan has both a Tax-Efficient Savings ("TES") and a Regular Savings
feature. Under the Plan, and subject to limits imposed by the Internal
Revenue Code ("IRC"), participants may elect a reduction in eligible
salary up to 15% with a corresponding TES contribution in the same amount
made to the Plan by the Corporation on their behalf. Such contributions
are excluded from the participant's taxable income. Subject to limits
imposed by the IRC, participants may also contribute up to 10% of their
base salaries to the Regular Savings feature of the Plan on an after-tax
basis.
10
<PAGE> 13
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
Participants' contributions are matched at a rate of $.60 for each dollar
of TES and/or Regular Savings contributions, up to 6% of a participant's
base salary, unless a Participating Employer determines to make a lesser
contribution or no contribution. All employer matching contributions are
invested in Loral Stock and are reflected as non-participant directed in
the accompanying financial statements with the exception of one division
whose matching contribution is in cash and can be directed into any Fund
by the participants.
Payment of Benefits
Upon termination, participants receive the vested portion of their
account balance as soon as practicable after termination. Terminated
participants who have an account balance in excess of $3,500 may elect to
leave their account balance in the Plan and withdraw it at any time up to
age 65.
Tax-efficient Savings Assets ("TES")
Assets in a participant's TES account may be withdrawn only for
financial hardship before termination of employment or before reaching
age 59 1/2. Financial hardship is determined pursuant to provisions of
the IRC. Generally, a 10% penalty will be imposed on certain
withdrawals of pre-tax assets made before the participant reaches age
59 1/2. After age 59 1/2, TES assets may be withdrawn in total or in
part at any time.
Regular Savings Assets
Assets in a participant's Regular Savings account may be withdrawn in
total or in part at any time in accordance with the Plan provisions.
Employer Contributions
Withdrawals of Ford Stock and/or Loral Stock in participants' Employer
Contribution accounts are available at the end of the two-year period
following the year in which the Employer Contributions were made, if
they are vested and the Employer Contributions were made prior to
March 1, 1995. Employer Contributions made on or after March 1, 1995
must remain invested in Loral Stock until the participant is eligible
to retire or upon termination of employment, if vested.
Payment of Administrative Expenses
Most administrative expenses are paid by the Plan. The Plan permits the
Participating Employers to use forfeitures from participants' non-vested
accounts to pay certain administrative expenses, to the extent not paid
by LAC or Loral.
11
<PAGE> 14
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
Loans
The Plan permits active participants to borrow from assets in their TES
accounts that are not invested in the Blended Income Fund (beginning
April 1, 1995) or the Income Fund (through March 31, 1995). The minimum
loan amount is $1,000. The maximum loan permitted is the lesser of: (1)
$50,000 minus the highest outstanding loan balance during the last twelve
months, (2) 50% of the vested account balance, or (3) the assets in the
TES Account which are eligible for a loan. The amounts in (2) and (3) are
reduced by any loan balance outstanding. Beginning April 1, 1995,
participants may have only one outstanding loan at a time, with the
exception of those loans that were outstanding on March 31, 1995 prior to
the change in trustee. No new loans will be made until all outstanding
loans are repaid. The interest rate for the loan is the prime rate as
defined in the Plan document. This interest rate will remain the same for
the term of the loan. Interest rates range from 6% to 9.75%.
The term of a loan can be up to five years except for loans to purchase a
primary residence, which can have a term of 10 years. Loan repayment is
made through payroll deductions. Repayment of the entire balance is
permitted at any time. Beginning April 1, 1995, all loan repayments are
allocated to the investment funds elected by a participant for current
TES Contributions. Prior to April, 1995, all loan repayments were made to
the Current Interest Fund.
2. Summary of Significant Accounting Policies:
Basis of Accounting
The financial statements of the Plan are prepared under the accrual
method of accounting.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value except for its guaranteed
investment contracts in the 1992 Income Fund and the Blended Income Fund,
which are valued at contract value.
Investments in the Loral Stock Fund and the Ford Stock Fund are valued at
their quoted market prices on the last business day of the year.
Shares of collective trust funds and registered investment company funds
are valued at quoted market prices which represent the net asset value of
shares held by the Plan at year-end. Loans receivable from participants
are valued at cost which approximates fair value.
Effective January 1, 1995, the Plan adopted Statement of Position ("SOP")
94-4 "Reporting of Investment Contracts Held by Health and Welfare
Benefit Plans and Defined-Contribution Pension Plans." The adoption of
this statement had no effect on the financial statements of the Plan. In
accordance with this statement, guaranteed investment contracts with
various insurance companies are stated at contract value as reported by
the insurance companies. Contract value represents contributions made
under the contract, plus earnings at the contract rate, less withdrawals
and expenses.
12
<PAGE> 15
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
The Plan presents in the statement of changes in net assets available for
benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Investment transactions are accounted for on a trade date basis. Dividend
income is recorded on the ex-dividend date. Interest income is recorded
when earned.
Payment of Benefits
Benefits are recorded when paid. Amounts allocated to withdrawing
participants as of December 31, 1994 of approximately $5,986,000 were
paid in 1995. These payments are reported as liabilities on Form 5500 as
of December 31, 1994. There were no amounts allocated to withdrawing
participants as of December 31, 1995.
Reclassifications
The statement of net assets available for benefits as of December 31,
1994 has been reclassified to present information related to participant
loans as a separate fund.
Risks and Uncertainties
The plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds and other
investment securities. Investment securities are exposed to various
risks, such as interest rate, market and credit. Due to the level of risk
associated with certain investment securities and the level of
uncertainty related to change in the value of investment securities, it
is at least reasonably possible that changes in risks in the near term
would materially affect participants' account balances and the amounts
reported in the statement of net assets available for plan benefits and
the statement of changes in net assets available for plan benefits.
Financial Instruments
Certain Fidelity investment options ("Portfolios") may enter into forward
foreign currency contracts to protect securities and related receivables
and payables against fluctuations in future foreign currency rates. A
forward contract is an agreement to buy or sell currencies of different
countries on a specified future date at a specified rate. Risks
associated with such contracts include the movement in the value of the
foreign currency relative to the U.S. dollar and the ability of the
counterparty to perform. The market value of the contract will fluctuate
with changes in currency exchange rates.
A Portfolio invests in futures contracts solely for the purposes of
hedging its existing portfolio securities, or securities the Portfolio
intends to purchase, against fluctuations in value caused by changes in
prevailing market interest rates. The use of future transactions involves
the risk of imperfect correlation in movements in the price of futures
contracts, interest rates and the underlying hedged assets, and the
possible inability of counterparties to meet the term of their contracts.
When the contract is closed, the Portfolio records a realized gain to the
difference between the value at the contract at the time it was opened
and the value at the time it was closed.
13
<PAGE> 16
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
3. Investments:
Plan investments at December 31, 1995 were as follows (dollars in
thousands):
<TABLE>
<CAPTION>
Face Amount Fair/Contract
or Shares/Units Value Cost
--------------- ------------- ----
<S> <C> <C> <C>
Loral Corporation Common Stock** 7,610,137 $269,208* $116,708
Fidelity Blue Chip Growth Fund 4,845,009 149,081* 135,957
Fidelity Growth & Income Fund 259,622 7,023 6,547
Fidelity Asset Manager Fund 146,932 2,329 2,242
Fidelity Magellan Fund 116,347 10,003 10,244
Fidelity Overseas Fund 74,049 2,153 2,133
Fidelity Retirement Money Market
Portfolio Fund 68,058,536 68,059* 68,059
Blended Income Fund:
Fidelity Short Term Investment Fund 2,520,099 2,520 2,520
Guaranteed Investment Contracts:
John Hancock Mutual Life
Insurance Company 6.07%,
maturing December 31, 1996 27,333,391 27,334 27,334
Commonwealth Life
Insurance Company 5.47%,
maturing January 1, 1997 41,919,021 41,920* 41,920
Metropolitan Life
Insurance Company 7.96%,
maturing December 31, 1997 2,026,052 2,026 2,026
--------
73,800
Fidelity Intermediate Bond Fund 585,992 6,100 5,909
1992 Income Fund:
Guaranteed Investment Contract:
Prudential Asset Management
Group 7.02%, maturing
January 1, 1996 40,774,675 40,775* 40,775
Ford Motor Company Common Stock 5,166,386 149,179* 72,232
Participant Loans 16,138 16,138
--------
$793,848
========
</TABLE>
*Represents greater than 5% of net assets available for benefits.
**Includes both participant directed and non-participant directed amounts.
14
<PAGE> 17
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
Plan investments at December 31, 1994 were as follows (dollars in
thousands):
<TABLE>
<CAPTION>
Face Amount Fair/Contract
or Shares/Units Value Cost
--------------- ------------- ----
<S> <C> <C> <C>
Loral Stock Fund**:
Loral Corporation Common Stock 3,432,529 $130,007* $ 82,663
Comerica Short-Term Investment Fund 700 1 1
--------
130,008
--------
Common Stock Fund:
Comerica MediumCap Index Fund 108,339 13,336 11,145
Comerica 500 Index Fund 487,986 90,069* 67,423
Comerica Short-Term Investment Fund 1,339,888 1,340 1,340
--------
104,745
--------
Income Fund:
Guaranteed Investment Contracts:
Protective Life Insurance
Company 8.80%, maturing
January 1, 1995 $ 37,719 37,719* 37,719
Prudential Asset Management
Group 7.02%, maturing
January 1, 1996 $ 42,186 42,186* 42,186
John Hancock Mutual Life
Insurance Company 6.07%,
maturing December 31, 1996 $ 31,537 31,537* 31,537
Commonwealth Life
Insurance Company 5.47%,
maturing January 1, 1997 $ 12,090 12,090 12,090
--------
123,532
--------
Current Interest Fund:
Comerica Short-Term Investment Fund 66,853,867 66,854* 66,854
Participant Loans 19,037 19,037 19,037
--------
85,891
--------
Bond Fund:
Fidelity Intermediate Bond Fund 311,310 3,060 3,259
Comerica Short-Term Investment Fund 124,409 124 124
--------
3,184
--------
Ford Stock Fund:
Ford Motor Company Common Stock 5,940,696 165,597* 66,431
Comerica Short-Term Investment Fund 31,938 32 32
--------
165,629
--------
Total Investments $612,989
========
</TABLE>
*Represents greater than 5% of net assets available for benefits.
**Includes both participant directed and non-participant directed amounts.
15
<PAGE> 18
LORAL AEROSPACE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
(continued)
4. Guaranteed Investment Contracts With Insurance Companies:
The Plan invests in several guaranteed investment contracts with
insurance companies, which are included in the Blended Income Fund and
the 1992 Income Fund (beginning April 1, 1995) and the Income Fund (prior
to March 31, 1995). In accordance with SOP 94-4, the guaranteed
investment contracts are stated at contract value, which approximates
fair value. The average yield for the Blended Income Fund and the 1992
Income Fund for the period from April 1, 1995 through December 31, 1995
was 5.67% and 7.00%, respectively. The average yield for the Income Fund
for the period from January 1, 1995 through March 31, 1995 was 5.62% and
for the year ended December 31, 1994 was 6.19%. The crediting interest
rates of the investment contracts range from 5.47% to 7.96%.
5. Plan Termination:
Although the Participating Employers have not expressed an intent to do
so, the Participating Employers can discontinue their contributions at
any time and terminate the Plan subject to the provisions of ERISA. In
the event of a discontinuance and/or termination of the Plan,
participants will become 100% vested and the net assets of the Plan will
be allocated among the participants and their beneficiaries in accordance
with the provisions of ERISA.
6. Tax Status:
The Internal Revenue Service has determined and informed the Company by a
letter dated March 18, 1996 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
(IRC).
Based upon present applicable laws and regulations, participants will not
be subject to Federal income tax on the TES contributions or Employer
Contributions made on their behalf or on the earnings credited to their
account until such time as they are withdrawn.
7. Concentration of Credit Risk:
Approximately 33% of the Plan's assets are invested in mutual funds with
Fidelity at December 31, 1995. Approximately 28% of the Plan's assets
were invested in collective trust funds with Comerica Bank at December
31, 1994.
16
<PAGE> 19
LORAL AEROSPACE SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(a) (b) Identity of Issue, (c) Description of Investment including (d) Cost (e) Current/
borrower, lessor or maturity date, rate of interest, contract
similar party collateral, par or maturity value value
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* Loral Corporation Common Stock, 7,610,137 shares $116,708 $269,208
Ford Motor Company Common Stock, 5,166,386 shares 72,232 149,179
* Fidelity Management Trust Fidelity Blue Chip Growth Fund 135,957 149,081
Company Fidelity Growth & Income Fund 6,547 7,023
Fidelity Asset Manager Fund 2,242 2,329
Fidelity Magellan Fund 10,244 10,003
Fidelity Overseas Fund 2,133 2,153
Fidelity Retirement Money Market Portfolio 68,059 68,059
Fidelity Intermediate Bond Fund 5,909 6,100
Fidelity Short-Term Investment Fund 2,520 2,520
Prudential Asset Management Guaranteed investment contract, 7.02%,
Group maturing January 1, 1996 40,775 40,775
John Hancock Mutual Life Guaranteed investment contract, 6.07%,
Insurance Company maturing December 31, 1996 27,334 27,334
Commonwealth Life Insurance Guaranteed investment contract, 5.47%,
Company maturing January 1, 1997 41,920 41,920
Metropolitan Life Insurance Guaranteed investment contract, 7.96%
Company maturing December 31, 1997 2,026 2,026
* Participant loans Interest rates ranging from 6% to 9.75% 16,138
--------
$793,848
========
</TABLE>
* Party-in-interest
-17-
<PAGE> 20
LORAL AEROSPACE SAVINGS PLAN
ITEM 27d -- SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
====================================================================================================================================
(a) Identity of (b) Description of asset (c) Total (d) Total (e) Total (f) Total value (g) Net gain
party involved (including interest rate number of number value of of sales or (loss)
and maturity in case purchases of sales purchases
of loan)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
SINGLE TRANSACTIONS(1)
* Comerica Bank 500 Index Fund 1 $103,046 $31,706
Short-Term Investment Fund 1 $118,103
short-Term Investment Fund 1 37,719
Short-Term Investment Fund 1 118,103
Short-Term Investment Fund 1 59,847
Short-Term Investment Fund 1 31,693
Commonwealth Guaranteed Investment
Life insurance Contract, 5.47%, maturing
Company January 1, 1997 1 31,693
Protective Life Guaranteed Investment
Insurance Contract, 8.80%, maturing
Company January 1, 1995 1 37,719
Continued
* Party-in-interest
</TABLE>
(1) Amounts represent single transactions greater than 5% of the current value
of net assets at the beginning of the year.
(2) Amounts represent the total series of transactions (including any single
transactions greater than 5%) greater than 5% of the current value of the
net assets at the beginning of the year.
-18-
<PAGE> 21
LORAL AEROSPACE SAVINGS PLAN
ITEM 27d -- SCHEDULE OF REPORTABLE TRANSACTIONS (CONTINUED)
FOR THE YEAR ENDED DECEMBER 31, 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(a) Identity of (b) Description of asset (c) Total (d) Total (e) Total (f) Total (i) Net gain
party involved (including interest rate number of number value of value or (loss)
and maturity in case purchases of sales purchases of sales
of loan)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Series of Transactions(2)
* Comerica Bank 500 Index Fund 3 1 $ 3,917 $103,046 $31,706
* Comerica Bank Short-Term Investment Fund 61 49 185,865 254,183
* Fidelity Management Fidelity Blue Chip Growth Fund 165 149 153,070 18,952 1,840
Trust Company Fidelity Retirement Money Market Portfolio 173 154 88,625 20,566
Blended Income Fund 163 150 88,738 14,938
Prudential Asset Guaranteed Investment Contract, 44 78 42,527 1,753
Management Group 7.02%, maturing January 1, 1996
Commonwealth Life Guaranteed Investment Contract, 5 3 34,113 2,748
Insurance Company 5.47%, maturing January 1, 1997
Ford Motor Company Common Stock 38 54 79,441 14,621 7,412
* Loral Corporation Common Stock 117 82 126,453 19,590 9,845
</TABLE>
- -------------
* Party-in-Interest
(1) Amounts represent single transactions greater than 5% of the current value
of net assets at the beginning of the year.
(2) Amounts represent the total series of transactions (including any single
transactions greater than 5%) greater than 5% of the current value of the
net assets at the beginning of the year.
-19-
<PAGE> 22
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Lockheed Martin Corporation on Form S-8 (File No. 33-06479) of our report dated
June 26, 1996, on our audits of the financial statements of Loral Aerospace
Savings Plan as of December 31, 1995 and 1994, and for the year ended December
31, 1995, which report is included in this Annual Report on Form 11-KA.
Coopers & Lybrand L.L.P.
Newport Beach, California
July 25, 1996
20
