<PAGE>
1994
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
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, 1994 COMMISSION FILE NUMBER 1-11437
[LOGO OF LOCKHEED MARTIN APPEARS HERE]
LOCKHEED MARTIN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
MARYLAND 52-1893632
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
----------------
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:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
<S> <C>
Common Stock, $1 par value New York Stock Exchange, Inc.
</TABLE>
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 filers 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 $10,532,000,000 as of March 31, 1995.
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,
199,648,000 shares outstanding as of March 31, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
N/A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* This Annual Report on Form 10-K is being filed pursuant to Rule 15d-2 under
the Securities Exchange Act of 1934 and contains only certified financial
statements as required by Rule 15d-2.
<PAGE>
On March 15, 1995, Lockheed Corporation ("Lockheed") and Martin Marietta
Corporation ("Martin Marietta") consummated a transaction (the "Combination")
pursuant to which Lockheed and Martin Marietta became wholly-owned subsidiaries
of a newly created holding corporation, Lockheed Martin Corporation ("Lockheed
Martin"). A detailed description of the Combination is included within the
Joint Proxy Statement/Prospectus which forms a part of Lockheed Martin's Form
S-4 Registration Statement relating to the Combination (Registration Statement
No. 33-57645) filed with the Securities and Exchange Commission on February 9,
1995.
Rule 15d-2 under the Securities Exchange Act of 1934 provides generally that,
if a registrant files a registration statement under the Securities Act of 1933
which does not contain certified financial statements for the registrant's last
full fiscal year (or for the life of the registrant if less than a full fiscal
year), then the registrant shall, within 90 days after the effective date of
the registration statement, file a special report furnishing certified
financial statements for such last full fiscal year or other period as the case
may be. Rule 15d-2 further provides that such special financial report is to be
filed under cover of the facing sheet appropriate for annual reports of the
registrant.
Lockheed Martin's Form S-4 Registration Statement referenced above did not
contain the certified financial statements contemplated by Rule 15d-2,
therefore, as required by Rule 15d-2, these are being filed with the Securities
and Exchange Commission under cover of the facing page of an Annual Report on
Form 10-K.
1
<PAGE>
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
The following Financial Statements of Lockheed Martin Corporation are filed
as part of this Form 10-K. Page numbers refer to this Form 10-K.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors 8
Consolidated Statement of Earnings-- 9
Years ended December 31, 1994, 1993 and 1992
Consolidated Statement of Cash Flows-- 10
Years ended December 31, 1994, 1993 and 1992
Consolidated Balance Sheet-- 12
December 31, 1994 and 1993
Consolidated Statement of Stockholders' Equity-- 14
Years ended December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements 16
Five Year Summary 44
</TABLE>
(a)(2) List of Financial Statement Schedules filed as part of this Form 10-K
None.
(b) Reports on Form 8-K
Not applicable to this filing.
(c) Exhibits
<TABLE>
<C> <S>
(23) Consent of Ernst & Young LLP, Independent Auditors
(24) Powers of Attorney
(27) Financial Data Schedule
</TABLE>
2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS CAUSED THIS REPORT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Lockheed Martin Corporation
Date: 9 May 1995 /s/ Frank H. Menaker, Jr.
By: _________________________________
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/ Daniel M. Tellep* Chief Executive May 9, 1995
- ------------------------------------- Officer and
DANIEL M. TELLEP Director
/s/ Marcus C. Bennett* Chief Financial May 9, 1995
- ------------------------------------- Officer and
MARCUS C. BENNETT Director
/s/ Robert E. Rulon* Chief Accounting May 9, 1995
- ------------------------------------- Officer
ROBERT E. RULON
/s/ Norman R. Augustine* Director May 9, 1995
- -------------------------------------
NORMAN R. AUGUSTINE
/s/ Lynne V. Cheney* Director May 9, 1995
- -------------------------------------
LYNNE V. CHENEY
/s/ A. James Clark* Director May 9, 1995
- -------------------------------------
A. JAMES CLARK
/s/ Edwin I. Colodny* Director May 9, 1995
- -------------------------------------
EDWIN I. COLODNY
3
<PAGE>
SIGNATURES TITLE DATE
/s/ Lodwrick M. Cook* Director May 9, 1995
- -------------------------------------
LODWRICK M. COOK
/s/ James L. Everett, III* Director May 9, 1995
- -------------------------------------
JAMES L. EVERETT, III
/s/ Houston I. Flournoy* Director May 9, 1995
- -------------------------------------
HOUSTON I. FLOURNOY
/s/ James F. Gibbons* Director May 9, 1995
- -------------------------------------
JAMES F. GIBBONS
/s/ Edward L. Hennessy, Jr.* Director May 9, 1995
- -------------------------------------
EDWARD L. HENNESSY, JR.
/s/ Edward E. Hood, Jr.* Director May 9, 1995
- -------------------------------------
EDWARD E. HOOD, JR.
/s/ Caleb B. Hurtt* Director May 9, 1995
- -------------------------------------
CALEB B. HURTT
/s/ Gwendolyn S. King* Director May 9, 1995
- -------------------------------------
GWENDOLYN S. KING
/s/ Lawrence O. Kitchen* Director May 9, 1995
- -------------------------------------
LAWRENCE O. KITCHEN
/s/ Gordon S. Macklin* Director May 9, 1995
- -------------------------------------
GORDON S. MACKLIN
4
<PAGE>
SIGNATURES TITLE DATE
/s/ Vincent N. Marafino* Director May 9, 1995
- -------------------------------------
VINCENT N. MARAFINO
/s/ Eugene F. Murphy* Director May 9, 1995
- -------------------------------------
EUGENE F. MURPHY
/s/ Allen E. Murray* Director May 9, 1995
- -------------------------------------
ALLEN E. MURRAY
/s/ David S. Potter* Director May 9, 1995
- -------------------------------------
DAVID S. POTTER
/s/ Frank Savage* Director May 9, 1995
- -------------------------------------
FRANK SAVAGE
/s/ Carlisle A. H. Trost* Director May 9, 1995
- -------------------------------------
CARLISLE A. H. TROST
/s/ James R. Ukropina* Director May 9, 1995
- -------------------------------------
JAMES R. UKROPINA
/s/ Douglas C. Yearley* Director May 9, 1995
- -------------------------------------
DOUGLAS C. YEARLEY
/s/ Stephen M. Piper
*By: ________________________________
(Stephen M. Piper, Attorney-in-fact**)
May 9, 1995
- --------
** By authority of Powers of Attorney filed with this Annual Report on
Form 10-K
5
<PAGE>
Audited Consolidated Financial
Statements
Lockheed Martin Corporation
As of December 31, 1994 and 1993 and for the three
years in the period ended December 31, 1994
with Report of Independent Auditors
6
<PAGE>
Lockheed Martin Corporation
Audited Consolidated Financial Statements
As of December 31, 1994 and 1993 and for the three
years in the period ended December 31, 1994
Contents
Report of Independent Auditors....................................... 8
Audited Consolidated Financial Statements
Consolidated Statement of Earnings............................... 9
Consolidated Statement of Cash Flows............................. 10
Consolidated Balance Sheet....................................... 12
Consolidated Statement of Stockholders' Equity................... 14
Notes to Consolidated Financial Statements....................... 16
Five Year Summary.................................................... 44
7
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Stockholders
Lockheed Martin Corporation
We have audited the accompanying consolidated balance sheet of Lockheed Martin
Corporation as of December 31, 1994 and 1993, and the related consolidated
statements of earnings, stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1994. These financial statements
are the responsibility of the Corporation'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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Lockheed Martin Corporation at December 31, 1994 and 1993, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1994, in conformity with generally accepted accounting
principles.
The Corporation changed its method of accounting for the Employee Stock
Ownership Plan effective January 1, 1994 as discussed in Note 1 to the
consolidated financial statements. Additionally, as discussed in Note 1 and Note
8 to the consolidated financial statements, effective January 1, 1992, the
Corporation changed its methods of accounting for post-retirement and post-
employment benefits and income taxes.
Washington, D.C.
May 5, 1995
8
<PAGE>
Lockheed Martin Corporation
Consolidated Statement of Earnings
<TABLE>
<CAPTION>
Year ended December 31,
1994 1993 1992
-------------------------------------------
<S> <C> <C> <C>
(In millions, except per share data)
Net sales $ 22,906 $ 22,397 $ 16,030
Costs and expenses 21,127 20,857 14,891
-------------------------------------------
Earnings from operations 1,779 1,540 1,139
Other income and expenses, net 200 44 42
-------------------------------------------
1,979 1,584 1,181
Interest expense 304 278 177
-------------------------------------------
Earnings before income taxes and cumulative effect
of changes in accounting 1,675 1,306 1,004
Income tax expense 620 477 355
-------------------------------------------
Earnings before cumulative effect of changes in
accounting 1,055 829 649
Cumulative effect of changes in accounting (37) -- (1,010)
-------------------------------------------
Net earnings (loss) $ 1,018 $ 829 $ (361)
===========================================
Earnings (loss) per common share:
Assuming no dilution:
Before cumulative effect of changes in
accounting $ 5.32 $ 3.99 $ 3.31
Cumulative effect of changes in accounting (.20) -- (5.15)
-------------------------------------------
$ 5.12 $ 3.99 $ (1.84)
===========================================
Assuming full dilution:
Before cumulative effect of changes in
accounting $ 4.83 $ 3.75 $ 3.31
Cumulative effect of changes in accounting (.17) -- (5.15)
-------------------------------------------
$ 4.66 $ 3.75 $ (1.84)
===========================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
9
<PAGE>
Lockheed Martin Corporation
Consolidated Statement of Cash Flows
<TABLE>
<CAPTION>
Year ended December 31,
1994 1993 1992
------------------------------------------
(In millions)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Earnings before cumulative effect of changes in
accounting $ 1,055 $ 829 $ 649
Adjustments to reconcile earnings to net cash
provided by operating activities:
Depreciation and amortization 638 680 520
Amortization of intangible assets 299 256 74
Deferred income taxes 73 165 (13)
Gain - Materials public offering (118) -- --
Acquisition termination fee (50) -- --
Changes in operating assets and liabilities:
Receivables (169) 80 212
Inventories (221) 63 225
Customer advances (42) (246) (62)
Other current liabilities 63 (165) (401)
Other liabilities (120) (174) (16)
Other 85 (29) (10)
------------------------------------------
Net cash provided by operating activities 1,493 1,459 1,178
------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to properties, net of purchased operations (509) (536) (498)
Acquisition of GD Fort Worth Division -- (1,521) --
Acquisition of GE Aerospace -- (883) --
Other acquisition activities (125) (16) (19)
Net proceeds -- Materials public offering 189 -- --
Purchases of marketable securities -- -- (200)
Proceeds from sales of marketable securities -- 114 214
Other (57) 34 (88)
------------------------------------------
Net cash used for investing activities (502) (2,808) (591)
------------------------------------------
</TABLE>
10
<PAGE>
Lockheed Martin Corporation
Consolidated Statement of Cash Flows (continued)
<TABLE>
<CAPTION>
Year ended December 31,
1994 1993 1992
------------------------------------------
(In millions)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings $ (7) $ (9) $ (2)
Increases in long-term debt 43 2,281 345
Repayments and extinguishments of long-term debt (512) (741) (492)
Issuances of common stock 32 88 44
Purchases of common stock -- -- (266)
Dividends on common stock (214) (215) (204)
Dividends on preferred stock (60) (45) --
------------------------------------------
Net cash (used for) provided by financing
activities (718) 1,359 (575)
------------------------------------------
Net increase in cash and cash equivalents 273 10 12
Cash and cash equivalents at beginning of year 366 356 344
------------------------------------------
Cash and cash equivalents at end of year $ 639 $ 366 $ 356
==========================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
11
<PAGE>
Lockheed Martin Corporation
Consolidated Balance Sheet
<TABLE>
<CAPTION>
December 31,
1994 1993
----------------------
(In millions)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 639 $ 366
Receivables 3,473 3,277
Inventories 3,159 2,614
Deferred income taxes 597 326
Other current assets 275 378
----------------------
Total current assets 8,143 6,961
Property, plant and equipment 3,455 3,643
Intangible assets related to contracts and programs acquired 1,971 2,127
Cost in excess of net assets acquired 2,831 2,697
Deferred income taxes -- 283
Other assets 1,649 1,397
----------------------
$18,049 $17,108
======================
</TABLE>
12
<PAGE>
Lockheed Martin Corporation
Consolidated Balance Sheet (continued)
<TABLE>
<CAPTION>
December 31,
1994 1993
------------------------
(In millions)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,306 $ 1,245
Customer advances 1,544 1,102
Salaries, benefits and payroll taxes 767 757
Income taxes 111 204
Current maturities of long-term debt 285 346
Other current liabilities 1,622 1,537
------------------------
Total current liabilities 5,635 5,191
Long-term debt 3,594 4,026
Post-retirement benefit liabilities 1,756 1,719
Other liabilities 978 971
Stockholders' equity:
Series A preferred stock, $50 liquidation preference per share 1,000 1,000
Common stock, $1 par value per share 199 198
Additional paid-in capital 734 689
Retained earnings 4,470 3,721
Unearned ESOP shares (317) --
Guarantee of ESOP obligations -- (407)
------------------------
6,086 5,201
------------------------
$18,049 $17,108
========================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
13
<PAGE>
Lockheed Martin Corporation
Consolidated Statement of Stockholders' Equity
<TABLE>
<CAPTION>
Additional Unearned Guarantee Total
Preferred Common Paid-in Retained ESOP of ESOP Stockholders'
Stock Stock Capital Earnings Shares Obligations Equity
--------------------------------------------------------------------------------------------------
(In millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1991 $ -- $ 201 $ 781 $ 3,695 $ -- $ (452) $4,225
Earnings before cumulative effect
of changes in accounting -- -- -- 649 -- -- 649
Cumulative effect of changes in
accounting -- -- -- (1,010) -- -- (1,010)
Dividends declared on common
stock ($1.04 per share) -- -- -- (204) -- -- (204)
Reduction of ESOP obligations
guaranteed -- -- -- -- -- 21 21
Tax benefits from dividends paid
to ESOP on unallocated shares -- -- -- 6 -- -- 6
Stock awards and options
exercised -- 3 58 -- -- -- 61
Common shares purchased -- (9) (257) -- -- -- (266)
--------------------------------------------------------------------------------------------------
Balance at December 31, 1992 -- 195 582 3,136 -- (431) 3,482
Net earnings -- -- -- 829 -- -- 829
Preferred stock issued 1,000 -- -- -- -- -- 1,000
Dividends declared on preferred
stock ($2.25 per share) -- -- -- (45) -- -- (45)
Dividends declared on common
stock ($1.09 per share) -- -- -- (215) -- -- (215)
Reduction of ESOP obligations
guaranteed -- -- -- -- -- 24 24
Tax benefits from dividends paid
to ESOP on unallocated shares
and stock options exercised -- -- -- 16 -- -- 16
Stock awards and options exercised -- 3 107 -- -- -- 110
--------------------------------------------------------------------------------------------------
Balance at December 31, 1993 1,000 198 689 3,721 -- (407) 5,201
</TABLE>
14
<PAGE>
Lockheed Martin Corporation
Consolidated Statement of Stockholders' Equity (continued)
<TABLE>
<CAPTION>
Additional Unearned Guarantee Total
Preferred Common Paid-in Retained ESOP of ESOP Stockholders'
Stock Stock Capital Earnings Shares Obligations Equity
--------------------------------------------------------------------------------------------
(In millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1993 $1,000 $198 $689 $3,721 $ -- $(407) $5,201
Earnings before cumulative effect of
change in accounting -- -- -- 1,055 -- -- 1,055
Cumulative effect of change in
accounting -- -- -- (37) (350) 407 20
Dividends declared on preferred stock
($3.00 per share) -- -- -- (60) -- -- (60)
Dividends declared on common stock
($1.14 per share) -- -- -- (214) -- -- (214)
Reduction of ESOP unearned
compensation -- -- -- -- 33 -- 33
Premium on allocated ESOP shares -- -- 14 -- -- -- 14
Tax benefits from stock
options exercised -- -- -- 5 -- -- 5
Stock awards and options exercised -- 1 31 -- -- -- 32
--------------------------------------------------------------------------------------------
Balance at December 31, 1994 $1,000 $199 $734 $4,470 $(317) $ -- $6,086
============================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
15
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements
December 31, 1994
Note 1 -- Basis of Presentation
On August 29, 1994, Lockheed Martin Corporation, a newly formed corporation
(Lockheed Martin or the Corporation), Lockheed Corporation (Lockheed) and Martin
Marietta Corporation (Martin Marietta) (collectively, the Corporations) entered
into an Agreement and Plan of Reorganization (the Reorganization Agreement)
whereby the Corporations would merge through an exchange of stock (the Business
Combination). The Business Combination was consummated after stockholders'
approval on March 15, 1995.
Under the terms of the Reorganization Agreement, each outstanding share of
Lockheed common stock was exchanged for 1.63 shares of Lockheed Martin common
stock, each outstanding share of Martin Marietta common stock was exchanged for
one share of Lockheed Martin common stock and each outstanding share of Martin
Marietta's Series A preferred stock, all of which was held by General Electric
Company (GE) subject to a Standstill Agreement (see Note 10), was exchanged for
one share of Lockheed Martin Series A preferred stock.
The Business Combination constituted a tax-free reorganization and
qualified for the pooling of interests method of accounting. Under this
accounting method, the assets and liabilities of Lockheed and Martin Marietta
were carried forward to Lockheed Martin at their historical recorded bases. The
accompanying consolidated financial statements, which reflect the combined
balance sheets, results of operations and cash flows for Lockheed Martin, have
been derived from the balance sheets, results of operations and cash flows of
the separate Corporations for periods before the Business Combination, combined,
reclassified and conformed, as appropriate, to reflect amounts for the combined
entity. Sales and earnings of the individual entities were as follows:
<TABLE>
<CAPTION>
As Previously Reported
----------------------
Lockheed
Martin Combining Martin
Lockheed Marietta Adjustments Combined
---------------------------------------------------
(In millions, except per share data)
<S> <C> <C> <C> <C>
Year ended December 31, 1994:
Net sales $13,130 $9,874 $(98) $22,906
Earnings before cumulative effect of
change in accounting 445 636 (26) 1,055
Earnings per share before cumulative
effect of change in accounting,
assuming full dilution 4.29* 5.05 -- 4.83
</TABLE>
16
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
<TABLE>
<CAPTION>
As Previously Reported
----------------------------
Lockheed
Martin Combining Martin
Lockheed Marietta Adjustments Combined
------------------------------------------------
(In millions, except per share data)
<S> <C> <C> <C> <C>
Year ended December 31, 1993:
Net sales $13,071 $9,436 $(110) $22,397
Net earnings 422 450 (43) 829
Earnings per share,
assuming full dilution 4.11* 3.80 -- 3.75
Year ended December 31, 1992:
Net sales $10,100 $5,954 $ (24) $16,030
Earnings before cumulative
effect of changes in
accounting 348 345 (44) 649
Earnings per share before
cumulative effect of changes
in accounting, assuming full
dilution 3.47* 3.60 -- 3.31
</TABLE>
* Amounts for Lockheed have been adjusted for the 1.63 exchange ratio
related to the Business Combination.
Combining adjustments were recorded to eliminate intercompany sales and
cost of sales in each year. No adjustments were made to eliminate the related
intercompany profit in ending inventories as such amounts were not material.
Adjustments were also made to conform Lockheed's method of accounting for timing
differences in cost recognition between Statement of Financial Accounting
Standards (SFAS) No. 87, "Employers' Accounting for Pensions," and applicable
government contract accounting principles to be consistent with Martin
Marietta's method, and to conform Lockheed's provisions for state income taxes
to Martin Marietta's methodology. Further adjustments were recorded to reflect
the tax impact of these adjustments.
Adjustments were also made to conform the timing of the adoption, effective
January 1, 1992, of SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," and SFAS No. 112, "Employers' Accounting for
Postemployment Benefits" for the Corporation. The adoption of SFAS No. 106
resulted in a cumulative effect adjustment (net of a deferred tax benefit of
$604 million) which reduced net earnings by $988 million, or $5.04 per common
share assuming full dilution. Similarly, the adoption of SFAS No. 112 resulted
in the recordation of a cumulative effect adjustment of $22 million, or $.11 per
common share assuming full dilution.
The Corporation elected to adopt, effective January 1, 1994, the American
Institute of Certified Public Accountants (AICPA) Statement of Position (SOP)
No. 93-6, "Employers' Accounting for Employee Stock Ownership Plans," to account
for the Employee Stock Ownership Plan (ESOP) feature
17
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
of the Lockheed Salaried Savings Plan. Adoption of this accounting method
resulted in a cumulative effect adjustment which reduced net earnings for 1994
by $37 million, or $.17 per common share assuming full dilution. In accordance
with the provisions of the SOP, the unallocated common shares held by the ESOP
trust (Unallocated ESOP Shares) have been excluded from weighted average
outstanding shares in calculating earnings per share. For 1994, the weighted
average Unallocated ESOP Shares excluded in calculating earnings per share
totaled approximately 11.5 million equivalent shares of Lockheed Martin common
stock.
The Corporation currently estimates that costs and expenses to be incurred
in connection with consummating the Business Combination and integrating the
operations of Lockheed and Martin Marietta could total approximately $850
million, and that a significant portion of these costs and expenses will result
in charges to earnings. During the first quarter of 1995, the Corporation
recorded a pre-tax charge of $165 million for merger related expenses.
Note 2 -- Summary of Significant Accounting Policies
Basis of consolidation -- The consolidated financial statements include
the accounts of wholly-owned and majority-owned subsidiaries (including Lockheed
and Martin Marietta). All material intercompany transactions have been
eliminated in consolidation.
Cash and cash equivalents -- Cash and cash equivalents are net of
outstanding checks that are funded daily as presented for payment. Cash
equivalents are generally comprised of highly liquid instruments with maturities
of three months or less when purchased. Due to the short maturity of these
instruments, carrying value on the Corporation's consolidated balance sheet
approximates fair value.
Inventories -- Inventories are stated at the lower of cost or estimated
net realizable value. Costs on long-term contracts and programs in progress
represent recoverable costs incurred for production, allocable operating
overhead, and, for contracts and programs with the U.S. government, research and
development and general and administrative expenses, less amounts attributed to
cost of sales. General and administrative expenses related to commercial
contracts and programs are expensed as incurred. Costs of other product and
supply inventories are principally determined by the first-in, first-out (FIFO)
or average cost methods.
Inventories are primarily attributable to long-term contracts or programs
on which the related operating cycles are longer than one year. In accordance
with industry practice, these inventories are included in current assets.
Property, plant and equipment -- Property, plant and equipment are carried
principally at cost. Depreciation is provided on plant and equipment generally
using accelerated methods of depreciation during the first half of the estimated
useful lives of the assets; thereafter, generally straight-line
18
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
depreciation is used. Estimated useful lives generally range from 8 years to 40
years for buildings and 2 years to 20 years for machinery and equipment.
Intangible Assets -- Intangible assets related to contracts and programs
acquired are amortized over the estimated periods of benefit (15 years or less)
and are displayed on the consolidated balance sheet net of accumulated
amortization of $305 million and $152 million at December 31, 1994 and 1993,
respectively. Cost in excess of net assets acquired (goodwill) is amortized
ratably over appropriate periods primarily ranging from 20 to 40 years, and is
displayed on the consolidated balance sheet net of accumulated amortization of
$343 million and $246 million at December 31, 1994 and 1993, respectively. The
carrying values of intangible assets are reviewed if the facts and circumstances
indicate impairment of their carrying value, and any impairment indicated is
recorded in the current period.
Environmental matters -- The Corporation records a liability for
environmental matters when it is probable that a liability has been incurred and
the amount can be reasonably estimated. A substantial portion of the costs are
expected to be reflected in sales and costs of sales pursuant to U.S. government
agreement or regulation. At the time a liability is recorded for future
environmental costs, an asset may be recorded for probable future recovery
through pricing U.S. government business. The portion of those costs expected to
be allocated to commercial business is reflected in costs and expenses at the
time the liability is established.
Sales and earnings -- Sales under cost-reimbursement-type contracts are
recorded as costs are incurred. Applicable estimated profits are included in
earnings in the proportion that incurred costs bear to total estimated costs.
Sales and anticipated profits under certain fixed-price contracts that require
substantial performance over a long period of time before deliveries begin are
accounted for under the percentage-of-completion (cost-to-cost) method.
Sales for the Atlas launch services program made principally to customers,
including the U.S. government, on commercial terms, are recorded upon delivery
of launch services. Cost of sales attributable to each launch is determined
under the program average cost method.
Under all other contracts, sales are recorded at delivery or on completion
of specific tasks and estimated contract profits are taken into earnings in
proportion to recorded sales.
Incentives or penalties and awards applicable to performance on contracts
are considered in estimating sales and profit rates and are recorded when there
is sufficient information to assess anticipated contract performance. Some
contracts include provisions for adjusting prices to reflect specification
changes and other matters. For accounting purposes, periodic estimates of such
adjustments are used in recording sales and costs and expenses. When adjustments
in contract value or
19
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
estimated costs are determined, any changes from prior estimates are reflected
in earnings in the current period.
Any anticipated losses on contracts or programs are charged to earnings
when identified.
Research and development and similar costs -- Corporation-sponsored
research and development costs primarily include research and development and
bid and proposal effort related to government products and services. Except for
certain arrangements described below, these costs are generally included as part
of the general and administrative costs that are allocated among all contracts
and programs under U.S. government contractual arrangements. Corporation-
sponsored product development costs not otherwise allocable are charged to
expense when incurred. Under certain arrangements in which a customer shares in
product development costs, the Corporation's portion of such unreimbursed costs
is expensed as incurred. Customer-sponsored research and development costs
incurred pursuant to contracts are accounted for as contract costs.
Earnings per share -- Earnings per share are based on the weighted average
number of common shares outstanding during the year. For 1994, the weighted
average number of common shares outstanding excluded unallocated shares held by
the Lockheed Salaried ESOP (see Note 1).
Earnings per share, assuming no dilution, were computed in 1994 and 1993
based on net earnings less the dividend requirement of preferred stock. The
weighted average number of common shares outstanding, assuming no dilution, was
approximately 187.0 million in 1994, 196.6 million in 1993 and 196.1 million in
1992.
Fully diluted earnings per share in 1994 and 1993 assumed that the average
number of common shares was increased by the conversion of preferred stock. The
weighted average number of common shares outstanding, assuming full dilution,
was approximately 218.3 million in 1994, 221.1 million in 1993 and 196.1 million
in 1992.
Note 3 -- Acquisitions
On May 1, 1994, Martin Marietta completed its acquisition of the Space
Systems Division of General Dynamics Corporation (the Space Systems Division)
for cash. This transaction was accounted for under the purchase method of
accounting, wherein cost in excess of net assets acquired of approximately $213
million was recognized. Operations of the Space Systems Division have been
included in the Corporation's Space and Strategic Missiles segment from the
closing date. Pro forma financial data related to this transaction has not been
presented, based on materiality considerations.
On April 2, 1993, Martin Marietta consummated a transaction (the GE
Transaction) with General Electric Company (GE) to combine the aerospace and
certain other businesses of GE (collectively, the
20
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
GE Aerospace businesses) with the businesses of Martin Marietta in the form of
affiliated corporations. The GE Aerospace operations have been included in the
Corporation's results of operations since that date. If the GE Transaction were
presented on an unaudited pro forma basis as if it had occurred as of January 1,
1993, the Corporation's 1993 net sales would increase by approximately $1
billion and net earnings would increase by less than 1.5%.
The exchange consideration of approximately $3 billion for the GE
Transaction consisted of cash, preferred stock (valued at $1 billion), retention
by GE of certain accounts receivable and the assumption of payment obligations
related to certain GE indebtedness ($750 million). The GE Transaction was
accounted for under the purchase method of accounting, wherein approximately
$1.9 billion of cost in excess of net assets acquired was recognized after
recording approximately $700 million relating to contracts and programs acquired
and other purchase adjustments necessary to allocate the purchase price to the
value of assets acquired and liabilities assumed.
Effective February 28, 1993, Lockheed acquired the tactical military
aircraft business of General Dynamics Corporation (formerly, the GD Fort Worth
Division) for approximately $1.5 billion in cash, plus the assumption of certain
liabilities related to the business. The acquisition was accounted for under the
purchase method of accounting. The excess of the purchase price over the fair
value of the net assets acquired represented intangible assets related to the
aircraft programs acquired and amounted to approximately $1.5 billion. Pro forma
financial data for 1993 related to this transaction has not been presented based
on materiality considerations.
Note 4 -- Receivables
Receivables consisted of the following components:
<TABLE>
<CAPTION>
1994 1993
-----------------------
(In millions)
<S> <C> <C>
U.S. government:
Amounts billed $ 984 $ 896
Unbilled costs and accrued profits 1,383 1,439
Commercial and foreign governments:
Amounts billed 662 602
Unbilled costs and accrued profits,
primarily related to foreign
government contracts 444 340
-----------------------
$3,473 $3,277
=======================
</TABLE>
21
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
Unbilled costs and accrued profits consisted primarily of revenues on
long-term contracts that had been recognized for accounting purposes but not yet
billed to customers. The amount of these unbilled costs and accrued profits not
expected to be billed within one year is not significant.
Note 5 -- Inventories
Inventories consisted of the following components:
<TABLE>
<CAPTION>
1994 1993
-----------------------
(In millions)
<S> <C> <C>
Work in process, primarily on long-term
contracts and programs in progress $ 4,678 $ 4,837
Less customer advances and progress payments (2,172) (3,106)
-----------------------
2,506 1,731
Other inventories 653 883
-----------------------
$ 3,159 $ 2,614
=======================
</TABLE>
Customer advances and progress payments applied above are those where the
customer has title to, or a security interest in, inventories identified with
the related contracts. Other customer advances are classified as current
liabilities. Inventories do not include any significant amounts of unamortized
production costs, other deferred costs, claims or similar items subject to
uncertainty concerning their realization.
An analysis of general and administrative costs, including research and
development costs, included in work in process inventories follows:
<TABLE>
<CAPTION>
1994 1993 1992
------------------------------------
(In millions)
<S> <C> <C> <C>
Beginning of year $ 499 $ 243 $ 231
Incurred during the year 1,761 1,882 1,400
Charged to costs and expenses during
the year:
Research and development (659) (696) (588)
Other general and administrative (1,121) (930) (800)
------------------------------------
End of year $ 480 $ 499 $ 243
====================================
</TABLE>
22
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
In addition, included in costs and expenses in 1994, 1993, and 1992, were
general and administrative costs, including research and development costs, of
approximately $154 million, $155 million, and $145 million, respectively,
incurred by commercial business units or programs.
Note 6 -- Property, Plant and Equipment
Property, plant and equipment consisted of the following components:
<TABLE>
<CAPTION>
1994 1993
-------------------------
(In millions)
<S> <C> <C>
Land $ 332 $ 327
Buildings 2,419 2,523
Machinery and equipment 5,425 5,546
-------------------------
8,176 8,396
Less accumulated depreciation
and amortization (4,721) (4,753)
-------------------------
$ 3,455 $ 3,643
=========================
</TABLE>
Note 7 -- Debt
Long-term debt consisted of the following components:
<TABLE>
<CAPTION>
Range of
Type Interest
(Maturity Dates) Rates 1994 1993
- ---------------- ----- -------------------------
(In millions)
<S> <C> <C> <C>
Notes Payable:
Fixed rate (1995-2023) 4.55 - 9.375% $ 2,515 $ 2,640
Variable rate (1995) * 200 200
Debentures (2011 - 2023) 7 - 7.75% 403 401
ESOP Obligations (1995-2004) 8.27 - 8.41% 382 407
Payment obligations
assumed from GE (1996) 5.025% 310 622
Other obligations 6 - 9% 69 102
-------------------------
3,879 4,372
Less current maturities (285) (346)
-------------------------
$ 3,594 $ 4,026
=========================
</TABLE>
* Interest rates vary based on the Eurodollar rate.
23
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
In February 1994, $125 million of 9.5% notes were defeased in substance
(see Note 9).
Included in Notes Payable are $300 million of 9.375% notes due in 1999
which stipulate that, in the event of both a "designated event" and a related
"rating decline" occurring within a specified period of time, holders of the
notes may require the Corporation to redeem the notes and pay accrued interest.
In general, a "designated event" occurs when any one of certain ownership,
control, or capitalization changes takes place. A "rating decline" occurs when
the ratings assigned to Lockheed debt are reduced below investment-grade levels.
Included in Debentures are $150 million of 7.75% obligations which may be
redeemed by the Corporation at specified prices on or after April 15, 2003. Also
included in Debentures are $103 million of 7% obligations which were originally
sold at approximately 54% of their principal amount. These debentures, which are
redeemable in whole or in part at the Corporation's option at 100% of their
principal amount, bear interest at an effective rate of 13.25%.
A leveraged ESOP incorporated into the Lockheed Salaried Savings Plan
(401(k)) (see Note 11) borrowed $500 million through a private placement of
notes in 1989. These notes are being repaid in quarterly installments over terms
ending in 2004. The ESOP note agreement stipulates that, in the event that the
ratings assigned to Lockheed's long-term senior unsecured debt are below
investment grade, holders of the notes may require Lockheed to purchase the
notes and pay accrued interest. These notes are obligations of the ESOP but
guaranteed by Lockheed and are reported as debt on the Corporation's
consolidated balance sheet.
The Corporation's long-term debt maturities for the five years following
December 31, 1994, are: $285 million in 1995; $723 million in 1996; $163 million
in 1997; $375 million in 1998; and $351 million in 1999.
Certain of the financing agreements of the Corporation contain certain
restrictive covenants relating to debt, requirements for limitations on
encumbrances and on sale and lease-back transactions, and provisions which
relate to certain changes in control.
Statement of Financial Accounting Standards (SFAS) No. 107, "Disclosures
about Fair Value of Financial Instruments," and SFAS No. 119, "Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments,"
require the disclosure of the fair value of financial instruments, both assets
and liabilities recognized and not recognized on the consolidated balance sheet,
for which it is practicable to estimate fair value. Unless otherwise indicated
elsewhere in the notes to the consolidated
24
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
financial statements, the carrying value of the Corporation's financial
instruments approximates fair value. The estimated fair values of the
Corporation's long-term debt instruments at December 31, 1994, aggregated $3,815
million, compared with a carrying amount of $3,879 million on the consolidated
balance sheet. The fair values were estimated based on quoted market prices for
those instruments publicly traded. For privately placed debt, the fair values
were estimated based on the quoted market prices for the same or similar issues,
or on current rates offered to the Corporation for debt of the same remaining
maturities.
On March 15, 1995, the Corporation entered into a revolving credit
agreement (the Credit Agreement) with a group of domestic and foreign banks. The
Credit Agreement makes available $1.5 billion through March 14, 2000. Borrowings
under the Credit Agreement would be unsecured and bear interest, at the
Corporation's option, at rates based on the Eurodollar rate or a bank base rate
(as defined). The Credit Agreement contains a financial covenant relating to
leverage, and provisions which relate to certain changes in control. Borrowings
under the Credit Agreement would be unconditionally guaranteed by Lockheed,
Martin Marietta, and Martin Marietta Technologies, Inc. (Technologies), a
wholly-owned subsidiary of Martin Marietta. There have been no borrowings under
the Credit Agreement.
Prior to the Business Combination, Lockheed had a $1 billion credit
facility and Technologies had a $800 million credit facility, both with
substantially the same terms and conditions as the Credit Agreement. The
existing credit facilities of Lockheed and Technologies were terminated
immediately prior to the consummation of the Business Combination.
Interest payments were $276 million in 1994, $262 million in 1993 and $162
million in 1992.
Note 8 -- Income Taxes
Effective January 1, 1992, the Corporation adopted Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." The impact
of adopting this standard on the Corporation's earnings and financial position
was not material. Deferred income tax assets and liabilities on the consolidated
balance sheet reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. SFAS 109 requires a valuation
allowance if it is more likely than not that some portion or all of the deferred
tax assets will not be realized. The Corporation has no deferred tax assets
which require a valuation allowance.
The provision for federal and foreign income taxes consisted of the
following components:
25
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
<TABLE>
<CAPTION>
1994 1993 1992
---------------------------------
(In millions)
<S> <C> <C> <C>
Federal income taxes:
Current $538 $304 $361
Deferred 73 165 (13)
---------------------------------
Total federal income taxes 611 469 348
Foreign income taxes 9 8 7
---------------------------------
Total income taxes provided $620 $477 $355
=================================
</TABLE>
Net provisions for state income taxes are included in general and
administrative expenses, which are primarily allocable to government contracts.
Such state income taxes were $50 million for 1994, $86 million for 1993, and $84
million for 1992.
All of the pretax earnings shown in the Corporation's consolidated
statement of earnings were included in the computation of the provision for U.S.
federal income tax.
The Corporation's effective income tax rate varied from the statutory
federal income tax rate because of the following tax differences:
<TABLE>
<CAPTION>
1994 1993 1992
------------------------------------
<S> <C> <C> <C>
Statutory tax rate 35.0% 35.0% 34.0%
Increase (reduction) in tax rate from:
Nondeductible amortization 2.1 2.0 1.3
Revisions to prior years' estimated
liabilities (.9) 1.2 (.1)
Other, net .8 (1.7) .2
------------------------------------
37.0% 36.5% 35.4%
====================================
</TABLE>
The primary components of the Corporation's deferred income tax assets and
liabilities at December 31 were as follows:
<TABLE>
<CAPTION>
1994 1993
---- ----
(In millions)
<S> <C> <C>
Deferred tax assets related to:
Accumulated post-retirement benefit obligations $ 731 $ 697
Accrued compensation and benefits 376 282
Contract accounting methods 126 116
Financial reserves 102 112
Other 36 82
----------------------
1,371 1,289
</TABLE>
26
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
<TABLE>
<CAPTION>
<S> <C> <C>
Deferred tax liabilities related to:
Intangible assets 558 472
Property, plant and equipment 280 208
----------------------
838 680
----------------------
Net deferred tax assets $ 533 $ 609
======================
</TABLE>
Income tax payments were $514 million in 1994, $491 million in 1993 and
$402 million in 1992.
Note 9 -- Other Income and Expenses
Other income and expenses, net consisted of the following components:
<TABLE>
<CAPTION>
1994 1993 1992
------------------------------------
(In millions)
<S> <C> <C> <C>
Gain--Materials public offering $ 118 $ -- $ --
Royalty income 59 33 18
Acquisition termination fee 50 -- --
Interest income 34 22 44
Other (61) (11) (20)
------------------------------------
$ 200 $ 44 $ 42
====================================
</TABLE>
In February 1994, Martin Marietta Materials, Inc. (Materials) sold through
an initial public offering approximately 8.8 million shares of its common stock.
After the offering, Technologies owns approximately 81% of the outstanding stock
of Materials. Minority interest of $71 million is included in other liabilities
at December 31, 1994. A portion of the proceeds from the offering was used to
defease in substance $125 million of 9.5% Notes. Technologies recognized a
pretax gain, net of a loss on debt defeasance, of $118 million from Materials'
initial public offering. The net after-tax gain from these transactions was $70
million, or $.32 per share assuming full dilution.
During March 1994, Martin Marietta entered into an Agreement and Plan of
Merger with Grumman Corporation (Grumman) and made an offer to purchase for cash
all outstanding shares of common stock of Grumman. Subsequently, Grumman reached
agreement with and accepted Northrop Corporation's competing offer to purchase
its outstanding common shares. In April 1994, the Corporation received $50
million plus reimbursement of expenses from Grumman pursuant to the termination
provisions of the Agreement and Plan of Merger.
27
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
Note 10 -- Stockholders' Equity and Related Items
Capital structure -- The authorized capital structure of the Corporation is
composed of 750 million shares of common stock (199 million shares issued), 50
million shares of series preferred stock (no shares issued), and 20 million
shares of Series A preferred stock (20 million shares issued).
The Series A preferred stock has a par value of $1 per share (liquidation
preference of $50 per share). As part of the consideration for the GE
Transaction, Martin Marietta issued to GE all of the authorized and outstanding
shares of Series A preferred stock of Martin Marietta. Under the terms of the
Business Combination, each outstanding share of Martin Marietta's Series A
preferred stock was exchanged for one share of Lockheed Martin Series A
preferred stock. Dividends are cumulative and paid at an annual rate of $3.00
per share, or 6%. The shares held by GE are convertible into approximately 13%
of the shares of the Corporation's common stock after giving effect to such
conversion, and have an aggregate liquidation preference of $1 billion. The
Series A preferred stock is nonvoting except in special circumstances. The
Series A preferred stock is held under a Standstill Agreement. Among other
things, the Standstill Agreement imposes certain limitations on either the
increase or disposal of GE's interest in voting securities of the Corporation,
on GE's solicitation of proxies and stockholder proposals, on GE's voting of its
shares and on GE's ability to place or remove members of the Corporation's Board
of Directors. In addition, the Standstill Agreement requires the Corporation to
recommend to its shareholders the election of two persons designated by GE to
serve as directors of the Corporation.
Under Maryland General Corporation Law, shares of common stock reacquired
by a Corporation constitute unissued shares. For financial reporting purposes,
reacquired shares are recorded as reductions to issued common stock and to
additional paid-in capital.
Stock option and award plans -- On March 15, 1995, the stockholders
approved the Lockheed Martin 1995 Omnibus Performance Award Plan (Omnibus Plan).
Under the Omnibus Plan, employees of the Corporation may be granted stock-based
incentive awards, including options to purchase common stock, stock appreciation
rights, restricted stock or other stock-based incentive awards. Employees may
also be granted cash-based incentive awards, such as performance units. These
awards may be granted either singly or in combination with other awards. Options
to purchase common stock will be at an exercise price of not less than 100% of
the market value of the underlying stock on the date of grant. The number of
shares of Lockheed Martin common stock that may be issued in respect of awards
under the Omnibus Plan will not exceed 12 million shares. The Omnibus Plan does
not impose any minimum vesting periods on options or other awards. The maximum
term of an option or any other award is ten years. The Omnibus Plan allows the
Corporation to provide for financing of purchases, subject to certain
conditions, by interest-bearing notes payable to the Corporation.
28
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
Prior to the Business Combination, Lockheed and Martin Marietta had also
utilized share-based and cash-based incentive award plans. Under the terms of
certain of these plans, consummation of the Business Combination resulted in the
acceleration of payment of certain benefits that would otherwise have been
payable over time, early vesting of certain benefits that would otherwise not be
fully vested, and, in some cases, the use of modified formulas for calculating
the amounts of such benefits. In addition, the Reorganization Agreement provided
for each outstanding stock option, stock appreciation right and other stock-
based incentive award to be converted into a similar instrument of Lockheed
Martin upon consummation of the Business Combination.
29
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
The following table summarizes the stock option activity under the
Lockheed and Martin Marietta plans during 1994:
<TABLE>
<CAPTION>
Number of Shares
----------------
Available for Options
Grant Outstanding Option Price Range
------------------------------------------------
<S> <C> <C> <C> <C>
December 31, 1993 3,783,523 8,468,935 $19.595 - $44.500
Additions 2,119,116 -- --
Options granted (2,402,665) 2,397,665 38.767 - 44.875
Exercised -- (1,462,946) 19.750 - 40.375
Terminated 151,785 (159,485) 19.938 - 44.875
------------------------------------------------
December 31, 1994 3,651,759 9,244,169 $19.595 - $44.875
------------------------------------------------
</TABLE>
At December 31, 1994, 5,241,092 options outstanding were exercisable. Due
to the consummation of the Business Combination and the passage of time,
7,303,818 options outstanding were exercisable at March 31, 1995.
Note 11 -- Post-Retirement Benefit Plans
The Corporation maintains separate plans for post-retirement benefits for
Lockheed and Martin Marietta, and in some cases, benefit plans vary for
corporations owned by these two subsidiaries.
DEFINED CONTRIBUTION PLANS
The Corporation maintains a number of contributory 401(k) savings plans
for salaried employees (the Salaried Plans) and hourly employees (the Hourly
Plans) which cover substantially all employees.
The Lockheed Salaried Plans -- In 1989, a leveraged Employee Stock
Ownership Plan (ESOP) was created and incorporated into the Lockheed Salaried
Plan. The ESOP purchased approximately 17.4 million shares of the Corporation's
common stock with the proceeds from a $500 million note issue which is
guaranteed by Lockheed (see Note 7). These shares are held in a suspense account
in a salaried ESOP awaiting release and allocation to participants as described
below. As a result of the Business Combination, each share of Lockheed common
stock was exchanged for 1.63 shares of Lockheed Martin common stock; throughout
this discussion, the number of shares of Lockheed common stock have been
adjusted for the conversion to Lockheed Martin common shares.
Under provisions of the Lockheed Salaried Plan, employees' eligible
contributions are matched by the Corporation at an established rate. The
Corporation's matching obligation is accounted for as compensation expense and
was $103 million in 1994, $104 million in 1993, and $91 million in 1992.
30
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
Since January 1992, one half of the Corporation match has consisted of cash
contributions to employee-selected investment options (including Lockheed stock)
and one half of the Corporation match has consisted of Lockheed stock. The
Lockheed stock portion of the matching obligation is fulfilled, in part, with
stock released from the suspense account at approximately 1.2 million shares per
year based upon the debt repayment schedule through the year 2004. The balance
of the stock portion of the matching obligation is fulfilled through purchases
of Lockheed stock from retiring participants or on the open market.
Corporation payments to the Lockheed salaried ESOP trust for the stock
portion of the matching obligation consist of matching funds and dividends on
the unallocated shares, adjusted by an amount (Cash Requirements Adjustment)
sufficient to allow total cash payments to fully service the ESOP debt and meet
the Corporation's matching obligation to employees that is not otherwise
satisfied through the allocation of suspense account shares. In 1993 and 1992,
the effects on earnings of the Cash Requirements Adjustments were not
significant.
Effective for 1994, the Corporation adopted SOP No. 93-6. Under this
accounting, the cost of the ESOP includes the interest paid by the ESOP trust to
service the debt (approximately $33 million). The Cash Requirements Adjustment
in 1994 insignificantly affected the measurement of additional paid-in capital
resulting from the release of suspense account shares. The impact of the ESOP on
the Corporation also included special tax benefits on dividends paid on
allocated and unallocated ESOP shares which produced insignificant adjustments
to retained earnings in 1993 and 1992, and an insignificant adjustment to
income tax expense for 1994.
The Lockheed salaried ESOP trust held approximately 23 million issued
shares of the Corporation's common stock at December 31, 1994, and approximately
24 million shares at December 31, 1993 and 1992, representing about 11 percent,
12 percent, and 13 percent of the total Lockheed Martin common shares
outstanding, respectively. The 23 million shares held at December 31, 1994
consisted of approximately 12 million allocated shares and 11 million
unallocated shares, including an insignificant number of unallocated shares
committed to be allocated after year-end. The unallocated shares are outstanding
for voting, dividends and other Corporate purposes, but are not included as
outstanding shares in earnings per share calculations under SOP No. 93-6. The
fair value of the unreleased ESOP shares at December 31, 1994 was approximately
$483 million.
The Lockheed Hourly Plans -- In 1990, ESOPs were created and incorporated
into the Lockheed Hourly Plans. The Corporation matches an established rate of
participating employees' eligible
31
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
contributions to the Hourly Plans through payments to an ESOP trust. The
Corporation's match consists of Lockheed stock purchased by the ESOPs on the
open market and from retiring participants. The required match, which is
reported as compensation expense, was $12 million in 1994, $15 million in 1993,
and $16 million in 1992. The hourly ESOP trust held approximately two million
issued and outstanding shares of the Corporation's common stock at December 31,
1994.
Dividends on Allocated Shares -- Dividends paid to the Lockheed salaried
and hourly ESOP trusts on the allocated shares are paid by check annually by the
ESOP trusts to the participants based upon the number of shares allocated to
each participant.
The Martin Marietta Plans -- Martin Marietta sponsors a number of
contributory 401(k) savings plans which cover substantially all employees. Under
the provisions of the plans, certain contributions of eligible employees are
matched by the Corporation at an established rate. The Corporation's
contributions for the years ended December 31, 1994, 1993 and 1992 were $77
million, $48 million and $16 million, respectively. Plan assets at December 31,
1994, which are held in a master trust, included approximately 8.5 million
shares of the Corporation's common stock.
DEFINED BENEFIT PLANS
Most employees are covered by contributory or noncontributory defined
benefit pension plans. Benefits for salaried plans are generally based on
average compensation and years of service, while those for hourly plans are
based on negotiated benefits and years of service. Substantially all benefits
are paid from funds previously provided to trustees. The Corporation's funding
policy is to make contributions that are consistent with U.S. government cost
allowability and Internal Revenue Service deductibility requirements, subject to
the full-funding limits of the Employee Retirement Income Security Act of 1974
(ERISA). When any funded plan exceeds the full-funding limits of ERISA, no
contribution is made to that plan.
The net pension cost of the Corporation's defined benefit plans includes
the following components:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(In millions)
<S> <C> <C> <C>
Service cost--benefits earned during
the year $ 440 $ 386 $ 292
Interest cost 842 807 622
Net amortization and other components (1,060) 326 (292)
Actual return on assets 64 (1,259) (434)
Employee contributions (3) (3) (3)
-----------------------------
Net pension cost $ 283 $ 257 $ 185
=============================
</TABLE>
32
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
The increase in net pension cost in 1993 from 1992 reflects costs
associated with the acquisitions of the Fort Worth Division of General Dynamics
and the GE Aerospace businesses.
The following table sets forth the defined benefit plans' funded status and
amounts recognized in the Corporation's consolidated balance sheet as of
December 31:
<TABLE>
<CAPTION>
1994 1993
---- ----
(In millions)
<S> <C> <C>
Plan assets at fair value $ 11,845 $ 12,371
====================
Actuarial present value of benefit obligations:
Vested $ 9,423 $ 10,073
Non-vested 118 143
--------------------
Accumulated benefit obligation 9,541 10,216
Effect of projected future salary increases 1,330 1,642
--------------------
Projected benefit obligation (PBO) 10,871 11,858
--------------------
Plan assets greater than PBO 974 513
Reconciling items:
Unrecognized net asset existing at the date of
initial application of SFAS No. 87 (369) (459)
Unrecognized prior-service cost 584 306
Unrecognized (gain) (984) (91)
--------------------
Prepaid pension cost $ 205 $ 269
====================
</TABLE>
The changes in 1994 from 1993 resulted from a decrease in the accumulated
benefit obligation primarily due to a higher discount rate, offset, in part, by
benefit payments in 1994. The fair value of plan assets for Lockheed and Martin
Marietta exceeded the respective accumulated benefit obligations for each year
presented above. The fair value of plan assets for Lockheed exceeded the
projected benefit obligation (PBO) by $1,103 million and $705 million at
December 31, 1994 and 1993, respectively. The PBO for Martin Marietta
exceeded the fair value of plan assets by $129 million and $192 million,
respectively, at those dates.
At December 31, 1994, approximately 49 percent of the Lockheed plan assets
were equity securities and the rest were primarily fixed income securities;
approximately 44 percent of the Martin Marietta plan assets were equity
securities and the rest were primarily fixed income securities and cash
equivalents. Actuarial determinations were based on various assumptions
displayed in the following table. Net pension costs in 1994, 1993, and 1992 were
based on assumptions in effect at the end of the respective preceding year.
Benefit obligations as of each year-end were based on assumptions in effect as
of those dates.
33
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Assumptions used at December 31:
Plan discount rates 8.25-8.50% 7.0-7.5% 6.3-8.0%
Rates of increase in future
compensation levels 5.5-6.0% 6.0% 6.0-7.0%
Expected long-term rate of return
on assets 8.0-8.75% 8.0-8.75% 8.0%
</TABLE>
RETIREE MEDICAL AND LIFE INSURANCE PLANS
Certain health care and life insurance benefits are provided to eligible
retirees by the Corporation or its subsidiaries. These benefits are paid by
the Corporation or funded through several trusts.
Upon adopting SFAS No. 106, effective the beginning of fiscal 1992, the
Corporation elected to record the transition obligation (present value of future
retiree medical benefits attributed to years prior to 1992) on the immediate
recognition basis (see Note 1). Under the accrual accounting method of SFAS
No. 106, the present value of the actuarially determined expected future cost of
providing medical benefits is attributed to each year of employee service. The
service and interest cost recognized each year is added to the accumulated
retiree medical benefit obligation.
The net periodic post-retirement benefit cost for the years ending
December 31, included the following components:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
(In millions)
<S> <C> <C> <C>
Service cost--benefits earned during the year $ 54 $ 47 $ 28
Interest cost 164 153 129
Net amortization and other components (29) 11 (9)
Actual return on assets (3) (35) (6)
Curtailment gain (21) (28) --
------------------------
Net periodic cost $ 165 $ 148 $ 142
========================
</TABLE>
Since 1988, the Corporation has made contributions to irrevocable trusts
(including Voluntary Employees' Beneficiary Association (VEBA) trusts and
401(h) accounts) established to pay future medical benefits to eligible Martin
Marietta retirees and dependents. At December 31, 1994, plan assets were
invested principally in listed stocks and bonds and cash equivalents. For
Lockheed retiree medical
34
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
benefits, a VEBA trust was established and began receiving funding in 1991, and
other trusts established under Internal Revenue Service (IRS) regulations began
receiving funding in 1992. At December 31, 1994, plan assets were invested
principally in listed stocks and fixed income securities.
The following table sets forth the post-retirement benefit plans'
obligations and funded status as of December 31:
<TABLE>
<CAPTION>
1994 1993
---- ----
(In millions)
<S> <C> <C>
Plan assets at fair value $ 423 $ 393
==================
Actuarial present value of benefit obligations:
Active employees, eligible to retire $ 371 $ 300
Active employees, not eligible to retire 402 623
Former employees 1,480 1,470
------------------
Accumulated post-retirement benefit
obligation (APBO) $2,253 $2,393
==================
Assets less than APBO $1,830 $2,000
Unrecognized prior service cost (5) 7
Unrecognized (gain) loss 24 (169)
------------------
Post-retirement benefit unfunded liability $1,849 $1,838
==================
</TABLE>
The decline in the APBO from 1993 to 1994 was primarily due to a higher
discount rate at year-end 1994.
Actuarial determinations were based on various assumptions displayed in
the following table. Net retiree medical costs for 1994, 1993, and 1992 were
based on assumptions in effect at the end of the respective preceding years.
Benefit obligations as of the end of each year reflect assumptions in effect as
of those dates.
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Assumptions used at December 31:
Plan discount rates 8.25-8.5% 7.0-7.5% 6.3-8.25%
Expected long-term rate of return
on assets 8.0-8.75% 8.0-8.75% 8.0%
</TABLE>
35
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
The following table presents the medical trend rates for the plans:
<TABLE>
<CAPTION>
1994 1993 1992
---------------------------------
<S> <C> <C> <C>
Initial:
Lockheed early retirees (pre-65) 11.0% 13.0% 13.0%
Lockheed other retirees 6.0% 9.0% 10.0%
Martin Marietta retirees 7.5% 7.5% 7.5%
Ultimate Lockheed (20 years and after)
Early 5.0% 5.0% 6.0%
Other 2.0% 2.0% 2.0%
Ultimate Martin Marietta (7 years and after) 4.5% 4.5% 4.5%
</TABLE>
An increase of one percentage point in the assumed medical trend rates
would result in an increase in the APBO of approximately 8.6% at December 31,
1994, and a 1994 post-retirement benefit cost increase of approximately 10.1%.
The Corporation believes that the cost containment features it has previously
adopted and the funding approaches underway will allow it to effectively manage
its retiree medical expenses, but it will continue to monitor the costs of
retiree medical benefits and may further modify the plans if circumstances
warrant.
Note 12 -- Leases
Total rental expenses under operating leases, net of immaterial amounts of
sublease rentals and contingent rentals, were $265 million, $257 million, and
$197 million for 1994, 1993, and 1992, respectively.
Future minimum lease commitments at December 31, 1994, for all operating
leases that have a remaining term of more than one year were $863 million ($193
million in 1995, $153 million in 1996, $114 million in 1997, $96 million in
1998, $84 million in 1999, and $223 million in later years). Certain major plant
facilities and equipment are furnished by the U.S. government under short-term
or cancelable arrangements.
Note 13 -- Commitments and Contingencies
The Corporation or its subsidiaries are parties or have property subject to
litigation and other proceedings, including matters arising under provisions
relating to the protection of the environment, that have the potential to affect
the results of the Corporation's operations or its financial position. These
matters include the following items.
36
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
Environmental Matters -- In March 1991, Lockheed entered into a consent
decree with the U.S. Environmental Protection Agency (EPA) relating to certain
property in Burbank, California, which obligates the Corporation to design and
construct facilities to monitor, extract, and treat groundwater and operate and
maintain such facilities for approximately eight years. The Corporation
estimates that expenditures required to comply with the terms of the consent
decree over the remaining term of the project will be approximately $90 million.
Lockheed has also been operating under a cleanup and abatement order from
the California Regional Water Quality Control Board affecting its facilities in
Burbank, California. This order requires site assessment and action to abate
groundwater contamination by a combination of groundwater and soil cleanup and
treatment. Based on experience derived from initial remediation activities, the
Corporation estimates the anticipated costs of these actions in excess of the
requirements under the EPA consent decree to approximate $155 million over the
remaining term of the project; however, this estimate is likely to change as
work progresses and as additional experience is gained.
In addition, the Corporation is involved in several other proceedings and
potential proceedings relating to environmental matters, including disposal of
hazardous wastes and soil and water contamination. The Corporation has not
incurred any material costs relating to these environmental matters. The extent
of the Corporation's financial exposure cannot in all cases be reasonably
estimated at this time. A liability of approximately $250 million for those
cases in which an estimate of financial exposure can be determined has been
recorded.
Under an agreement with the U.S. government, the Burbank groundwater
treatment and soil remediation expenditures referenced above are being allocated
to the Corporation's operations as general and administrative costs and, under
existing government regulations, these and other environmental expenditures
related to U.S. government business, after deducting any recoveries from
insurance or other responsible parties, are allowable in establishing the prices
of the Corporation's products and services. As a result, a substantial portion
of the expenditures will be reflected in the Corporation's sales and cost of
sales pursuant to U.S. government agreement or regulation. The Corporation has
recorded a liability for probable future environmental costs as discussed above,
and has recorded an asset for probable future recovery of the portion of these
costs in pricing of the Corporation's products and services for U.S. government
business. The portion that is expected to be allocated to commercial business
has been reflected in cost of sales. The recorded amounts do not reflect the
possible recovery of portions of the environmental costs through insurance
policy coverage or from other potentially responsible parties to the
contamination, which the Corporation is pursuing as required by agreement and
U.S. government regulation. Any such recoveries, when received, would reduce the
Corporation's liability as well as the allocated amounts to be included in the
Corporation's U.S. government sales and cost of sales.
37
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
Legal Proceedings -- On June 22, 1994, an indictment was returned by a
federal grand jury sitting in Atlanta, Georgia, against Lockheed and two of its
employees. The indictment charged that Lockheed and the two employees, one of
whom was a regional vice president of one of Lockheed's subsidiaries and the
other a divisional director of sales for the Middle East and North Africa,
violated the Foreign Corrupt Practices Act (FCPA), conspired to violate the
FCPA, conspired to commit wire fraud, and impaired and impeded agencies of the
United States Department of Defense. The indictment related to allegations that
Lockheed retained a sales and marketing consultant in Egypt who was a member of
the Egyptian Parliament, and that the consultant received retainer payments and
a $1 million contract termination payment in connection with the sale by
Lockheed of three C- 130 Hercules aircraft, in violation of the FCPA.
By letter dated August 18, 1994, the Acting Assistant Secretary,
Department of State, Bureau of Political-Military Affairs (State Department)
advised Lockheed that it would be the State Department's policy prospectively to
deny defense-related export privileges to Lockheed Aeronautical Systems
Corporation (LASC), a division of Lockheed. The State Department, referring to
Sections 38, 39 and 42 of the Arms Export Control Act (22 U.S.C. Sections 2778,
2779 and 2791) announced that its action arose from the June 22, 1994,
indictment discussed above. The State Department announced that its action is
confined to LASC and does not affect any other divisions or subsidiaries of
Lockheed, although it is possible that the State Department could expand its
action in the future to cover Lockheed or other divisions of Lockheed or the
Corporation or any of its divisions. Moreover, the State Department announced
that the action does not apply to any approvals granted to LASC's programs
before June 22, 1994, but rather to future export license applications. Lockheed
may seek exceptions to the announced policy on a case-by-case basis at the
discretion of the State Department, Office of Defense Controls, which must
consider United States foreign policy and national security interests, as well
as law enforcement concerns. There is no stated time frame within which the
State Department must review an exception request. Lockheed has submitted
written exception requests on several major aircraft programs. The State
Department has granted these requests in a timely manner consistent with
Lockheed's business plans. There can be no assurances as to how long the State
Department will take to review any future exception requests or whether any
other exceptions will be granted.
On January 27, 1995, Lockheed and the United States of America entered
into a plea agreement pursuant to which Lockheed agreed to plead guilty to one
count of conspiring to violate the bribery provisions of the FCPA and conspiring
to falsify its books, records and accounts. All other counts of the indictment
referred to above were dismissed. To the knowledge of the Corporation's
management and counsel, no directors or executive officers of the Corporation
have been or will be indicted in connection with this matter. Lockheed agreed to
pay the U.S. Government $24.8 million, which was reflected as a charge against
earnings in the fourth quarter of 1994, consisting of a fine of $21.8 million
and a civil
38
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
settlement of $3 million. The United States Attorney's Office stated that
Lockheed fully cooperated in its efforts to gather documents and in making
witnesses available during the course of the investigation. The plea agreement
does not preclude the possibility that the Department of Defense, the State
Department, or the Securities and Exchange Commission may take further action
against Lockheed or the Corporation or any of their divisions as a result of
Lockheed's guilty plea, which could include the possibility of suspension or
debarment from future government contracting. The Corporation is cooperating
with these regulatory agencies to satisfy their concerns. The Corporation is
also in the process of reviewing its relationships with all international sales
and marketing consultants to assure compliance with its policies.
The Corporation or its subsidiaries are parties or have property subject to
litigation and other proceedings, including matters arising under provisions
relating to the protection of the environment, in addition to those described
above. In the opinion of management and counsel, the probability is remote that
the outcome of litigation and proceedings will have a material adverse effect on
the results of the Corporation's operations or its financial position.
Letters of Credit and Other Matters -- The Corporation has entered into
standby letter of credit agreements and other arrangements with financial
institutions primarily relating to the guarantee of future performance on
certain contracts. At December 31, 1994, the Corporation had contingent
liabilities on outstanding letters of credit, guarantees, and other arrangements
aggregating approximately $533 million.
At December 31, 1994, Lockheed Finance Corporation (LFC) had entered into
approximately $320 million in interest rate swap agreements to reduce the impact
of changes in interest rates on its operations. The effect of these agreements
is that the aggregate of the carrying value of LFC's financial instruments
approximates their fair market value. LFC is exposed to credit loss, to the
extent of future interest rate differentials, in the event of nonperformance by
the intermediaries to the interest rate swap agreements. The Corporation does
not anticipate nonperformance by the intermediaries.
Note 14 -- Information on Industry Segments and Major Customers
The Corporation operates in four principal business segments: Aeronautics,
Space and Strategic Missiles, Electronics, and Information and Technology
Services. All other activities of the Corporation fall within the Energy,
Materials and Other segment.
Aeronautics -- Engaged in the design, development, engineering and
production of fighter/bomber, special mission and high performance aircraft;
systems for military operations, airlift, antisubmarine warfare, and
reconnaissance and surveillance; aircraft controls and subsystems (thrust
reversers); and aircraft modification and maintenance for military and civilian
customers.
39
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
Space and Strategic Missiles -- Engaged in the design, development,
engineering and production of civil, commercial and military space launch
vehicles, satellites, spacecraft, strategic fleet ballistic missiles, tactical
defense missiles, space- and ground-based strategic systems, and surface- and
space-based information and communications systems.
Electronics -- Engaged in the design, development, engineering and
production of high-performance 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-optic countermeasures systems; surveillance
systems; control systems; ordnance; and aircraft component manufacturing and
assembly.
Information and Technology Services -- Engaged in the design, development,
integration and operation of information systems for government and commercial
applications; provides technical and management services, including engineering,
operation and maintenance of radar, telemetry communications and instrumentation
systems, space shuttle processing and production of the space shuttle external
tank and associated electronics and instrumentation.
Energy, Materials and Other -- The Corporation also manages certain
facilities for the U.S. Department of Energy. The contractual arrangements
provide for the Corporation to be reimbursed for the cost of operations and
receive a fee for performing management services. The Corporation reflects only
the management fee in its sales and earnings for these government-owned
facilities. In addition, applicable employee benefit plans are separate from the
Corporation's plans. The Corporation also provides construction aggregates and
specialty chemical products to commercial and civil customers, provides
environmental remediation services to commercial and U.S. government customers,
and has investments in airport development and management as well as other
businesses.
SELECTED FINANCIAL DATA BY BUSINESS SEGMENT
<TABLE>
<CAPTION>
1994 1993 1992
-------------------------------------
(In millions)
<S> <C> <C> <C>
Net sales
Aeronautics $ 7,091 $ 6,601 $ 3,489
Space and Strategic Missiles 6,719 7,293 7,276
Electronics 4,055 4,092 2,141
Information and Technology Services 4,271 3,712 2,475
Energy, Materials and Other 770 699 649
-------------------------------------
$ 22,906 $ 22,397 $ 16,030
=====================================
</TABLE>
40
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
<TABLE>
<CAPTION>
1994 1993 1992
-----------------------------------
(In millions)
<S> <C> <C> <C>
Operating profit
Aeronautics $ 511 $ 479 $ 254
Space and Strategic Missiles 476 507 544
Electronics 456 331 164
Information and Technology Services 228 145 111
Energy, Materials and Other 308 122 108
-----------------------------------
$ 1,979 $ 1,584 $ 1,181
===================================
Depreciation and amortization
Aeronautics $ 126 $ 137 $ 115
Space and Strategic Missiles 217 218 178
Electronics 139 161 95
Information and Technology Services 77 92 68
Energy, Materials and Other 79 72 64
-----------------------------------
$ 638 $ 680 $ 520
===================================
Expenditures for property, plant and
equipment
Aeronautics $ 96 $ 155 $ 148
Space and Strategic Missiles 175 163 174
Electronics 101 77 77
Information and Technology Services 67 77 46
Energy, Materials and Other 70 64 53
-----------------------------------
$ 509 $ 536 $ 498
===================================
Identifiable assets
Aeronautics $ 4,591 $ 5,119 $ 2,709
Space and Strategic Missiles 4,195 3,341 2,778
Electronics 3,338 3,485 1,731
Information and Technology Services 2,450 2,138 1,031
Energy, Materials and Other 3,475 3,025 2,578
-----------------------------------
$18,049 $ 17,108 $ 10,827
===================================
</TABLE>
41
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
SALES BY CUSTOMER CATEGORY
<TABLE>
<CAPTION>
1994 1993 1992
------------------------------------
(In millions)
<S> <C> <C> <C>
U.S. government*
Aeronautics $ 4,970 $ 4,937 $ 2,620
Space and Strategic Missiles 5,594 6,663 7,066
Electronics 2,999 3,042 1,781
Information and Technology Services 2,849 2,737 1,738
Energy, Materials and Other 152 118 99
------------------------------------
$ 16,564 $17,497 $13,304
====================================
Foreign governments
Aeronautics $ 1,958 $ 1,408 $ 595
Space and Strategic Missiles 290 282 172
Electronics 703 665 299
Information and Technology Services 155 9 6
Energy, Materials and Other -- -- --
------------------------------------
$ 3,106 $ 2,364 $ 1,072
====================================
Commercial
Aeronautics $ 163 $ 256 $ 274
Space and Strategic Missiles 835 348 38
Electronics 353 385 61
Information and Technology Services 1,267 966 731
Energy, Materials and Other 618 581 550
------------------------------------
$ 3,236 $ 2,536 $ 1,654
====================================
</TABLE>
* Sales made to foreign governments through the U.S. government are
included in sales to foreign governments.
Export sales were $3.6 billion, $2.8 billion, and $1.1 billion in 1994,
1993, and 1992, respectively.
42
<PAGE>
Lockheed Martin Corporation
Notes to Consolidated Financial Statements (Continued)
Note 15 -- Summary of Quarterly Information (Unaudited)
<TABLE>
<CAPTION>
1994 Quarters
-----------------------------------------------
First * Second Third Fourth
------- ------ ----- ------
(In millions, except per share data)
<S> <C> <C> <C> <C>
Net sales $5,036 $5,562 $5,704 $6,604
Earnings from operations 402 453 443 481
Earnings before cumulative effect of
change in accounting 272 259 254 270
Earnings per common share before
cumulative effect of change in
accounting, assuming full dilution 1.25 1.19 1.16 1.23
<CAPTION>
1993 Quarters **
-----------------------------------------------
First Second Third Fourth
------- ------ ----- ------
(In millions, except per share data)
<S> <C> <C> <C> <C>
Net sales $3,649 $5,935 $5,913 $6,900
Earnings from operations 273 400 416 451
Net earnings 143 206 237 243
Earnings per common share, assuming full
dilution .73 .90 1.04 1.06
</TABLE>
* First quarter 1994 earnings exclude the cumulative effect of the change
in accounting for ESOP resulting from the adoption of SOP No. 93-6. The
cumulative effect reduced net earnings by $37 million, or $.17 per common
share assuming full dilution.
** The sum of per share earnings by quarter for 1993 does not equal
earnings per share for the year because the average number of shares
outstanding increased during the second quarter of 1993 as a result of the
assumed conversion of the Series A preferred stock.
43
<PAGE>
Lockheed Martin Corporation
Consolidated Financial Data
Five Year Summary
(in millions, except per share)
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Operating Results
Net sales $ 22,906 $ 22,397 $ 16,030 $ 15,871 $ 16,089
Costs and expenses 21,127 20,857 14,891 14,767 15,178
- -----------------------------------------------------------------------------------------------------------
Earnings from Operations 1,779 1,540 1,139 1,104 911
Other income and expenses, net 200 44 42 (49) 34
- -----------------------------------------------------------------------------------------------------------
1,979 1,584 1,181 1,055 945
Interest expense 304 278 177 176 180
- -----------------------------------------------------------------------------------------------------------
Earnings before income taxes and
cumulative effect of changes in
accounting 1,675 1,306 1,004 879 765
Income tax expense 620 477 355 261 161
- -----------------------------------------------------------------------------------------------------------
Earnings before cumulative effect of
changes in accounting 1,055 829 649 618 604
Cumulative effect of changes in accounting (37) -- (1,010) -- --
- -----------------------------------------------------------------------------------------------------------
Net Earnings (Loss) $ 1,018 $ 829 $ (361) $ 618 $ 604
===========================================================================================================
Per Common Share
Assuming no dilution:
Before cumulative effect of changes in
accounting $ 5.32 $ 3.99 $ 3.31 $ 3.05 $ 2.97
Cumulative effect of changes in accounting (.20) -- (5.15) -- --
==============================================================
$ 5.12 $ 3.99 $ (1.84) $ 3.05 $ 2.97
==============================================================
Assuming full dilution:
Before cumulative effect of changes in
accounting $ 4.83 $ 3.75 $ 3.31 $ 3.05 $ 2.97
Cumulative effect of changes in accounting (.17) -- (5.15) -- --
==============================================================
$ 4.66 $ 3.75 $ (1.84) $ 3.05 $ 2.97
==============================================================
Cash Dividends $ 1.14 $ 1.09 $ 1.04 $ .98 $ .90
===========================================================================================================
Condensed Balance Sheet Data
Current assets $ 8,143 $ 6,961 $ 5,157 $ 5,553 $ 5,442
Property, plant and equipment 3,455 3,643 3,139 3,155 3,200
Intangible assets related to contracts and
programs acquired 1,971 2,127 42 52 59
Cost in excess of net assets acquired 2,831 2,697 841 864 882
Deferred income taxes -- 283 392 -- 49
Other assets 1,649 1,397 1,256 895 834
- -----------------------------------------------------------------------------------------------------------
Total $ 18,049 $ 17,108 $ 10,827 $ 10,519 $ 10,466
===========================================================================================================
Current liabilities--other $ 5,350 $ 4,845 $ 3,176 $ 3,833 $ 4,235
Current maturities of long-term debt 285 346 327 298 30
Long-term debt 3,594 4,026 1,803 1,997 2,392
Post-retirement benefit liabilities 1,756 1,719 1,579 54 --
Other liabilities 978 971 460 112 38
Stockholders' equity 6,086 5,201 3,482 4,225 3,771
- -----------------------------------------------------------------------------------------------------------
Total $ 18,049 $ 17,108 $ 10,827 $ 10,519 $ 10,466
===========================================================================================================
Common Shares Outstanding at year end 199.1 197.9 194.1 201.4 200.7
</TABLE>
44
<PAGE>
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We 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; and
(3) Post-Effective Amendment No. 1, dated March 15, 1995 to Registration
Statement Number 33-57645 of Lockheed Martin Corporation on Form S-8;
of our report, dated May 5, 1995, with respect to the consolidated financial
statements of Lockheed Martin Corporation included in Lockheed Martin
Corporation's Annual Report (Form 10-K, pursuant to Rule 15d-2 of the
Securities Exchange Act of 1934) for the year ended December 31, 1994.
Ernst & Young LLP
Washington, D.C.
May 5, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ DANIEL M. TELLEP
- -----------------------------
Name: Daniel M. Tellep
Title: Chairman of the Board, Chief Executive Officer
and Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ MARCUS C. BENNETT
- -----------------------------
Name: Marcus C. Bennett
Title: Senior Vice President & Chief Financial Officer
and Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ ROBERT E. RULON
- -----------------------------
Name: Robert E. Rulon
Title: Controller and Chief Accounting Officer,
Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ NORMAN R. AUGUSTINE
- -----------------------------
Name: Norman R. Augustine
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ LYNNE V. CHENEY
- -----------------------------
Name: Lynne V. Cheney
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ A. JAMES CLARK
- -----------------------------
Name: A. James Clark
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ EDWIN I. COLODNY
- -----------------------------
Name: Edwin I. Colodny
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ LODWRICK M. COOK
- -----------------------------
Name: Lodwrick M. Cook
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ JAMES L. EVERETT, III
- -----------------------------
Name: James L. Everett, III
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ HOUSTON I. FLOURNOY
- -----------------------------
Name: Houston I. Flournoy
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ JAMES F. GIBBONS
- -----------------------------
Name: James F. Gibbons
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ EDWARD L. HENNESSY, Jr.
- ------------------------------
Name: Edward L. Hennessy, Jr.
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ EDWARD E. HOOD, Jr.
- -----------------------------
Name: Edward E. Hood, Jr.
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ CALEB B. HURTT
- -----------------------------
Name: Caleb B. Hurtt
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ GWENDOLYN S. KING
- -----------------------------
Name: Gwendolyn S. King
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ LAWRENCE O. KITCHEN
- -----------------------------
Name: Lawrence O. Kitchen
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ GORDON S. MACKLIN
- -----------------------------
Name: Gordon S. Macklin
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ VINCENT N. MARAFINO
- -----------------------------
Name: Vincent N. Marafino
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ EUGENE F. MURPHY
- -----------------------------
Name: Eugene F. Murphy
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ ALLEN E. MURRAY
- -----------------------------
Name: Allen E. Murray
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ DAVID S. POTTER
- -----------------------------
Name: David S. Potter
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ FRANK SAVAGE
- -----------------------------
Name: Frank Savage
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ CARLISLE A. H. TROST
- -----------------------------
Name: Carlisle A. H. Trost
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ JAMES R. UKROPINA
- -----------------------------
Name: James R. Ukropina
Title: Director, Lockheed Martin Corporation
April 27, 1995
<PAGE>
POWER OF ATTORNEY
The undersigned hereby constitutes and appoints Frank H. Menaker, Jr.,
William T. Vinson and Stephen M. Piper, and each of them singly, my true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, with full power to do any and all acts and things for me and in
my place and stead, in any and all capacities, including but not limited to,
that listed below, in connection with the preparation, execution and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934 (the "Securities Exchange Act") of an Annual Report on Form
10-K of Lockheed Martin Corporation ("Form 10-K") and all amendments or
supplements thereto for the purpose of filing with the Commission Lockheed
Martin Corporation's audited consolidated financial statements and related
materials for the years 1994, 1993 and 1992 and in connection with all matters
required by the Commission directly or indirectly related to the Form 10-K.
/s/ DOUGLAS C. YEARLEY
- -----------------------------
Name: Douglas C. Yearley
Title: Director, Lockheed Martin Corporation
April 27, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
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QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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