<PAGE>
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-71409
Registration No. 333-91195
Prospectus Supplement to Prospectus dated March 29, 1999.
$3,000,000,000
[logo of Lockheed Martin appears here]
$750,000,000 7.95% Notes due December 1, 2005
$1,000,000,000 8.20% Notes due December 1, 2009
$1,250,000,000 8.50% Debentures due December 1, 2029
----------------
Lockheed Martin is offering two series of notes and one series of debentures.
Lockheed Martin will pay interest on both series of notes and the series of
debentures on June 1 and December 1 of each year. Lockheed Martin will make the
first interest payment on June 1, 2000. Lockheed Martin will issue the notes
and debentures only in denominations of $1,000 and integral multiples of
$1,000.
Lockheed Martin may not redeem any of the 7.95% Notes or the 8.20% Notes
prior to maturity. Lockheed Martin has the option to redeem all or a portion
of the 8.50% Debentures at any time at the redemption prices set forth in this
prospectus supplement.
----------------
Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or passed on the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
----------------
<TABLE>
<CAPTION>
Per Per
7.95% 8.20% Per 8.50%
Note Total Note Total Debenture Total
------- ------------ ------- ------------ --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Initial public offering
price.................. 99.808% $748,560,000 99.983% $999,830,000 99.609% $1,245,112,500
Underwriting discount... .600% $4,500,000 .650% $6,500,000 .875% $10,937,500
Proceeds, before
expenses, to Lockheed
Martin................. 99.208% $744,060,000 99.333% $993,330,000 98.734% $1,234,175,000
</TABLE>
The initial public offering prices set forth above do not include accrued
interest, if any. Interest on the notes and debentures will accrue from
November 23, 1999 and must be paid by the purchaser if the notes and debentures
are delivered after November 23, 1999.
----------------
The Underwriters expect to deliver the notes and debentures in book-entry
form only through the facilities of The Depository Trust Company against
payment in New York, New York on November 23, 1999.
Joint Book-Running Managers
Goldman, Sachs & Co. J.P. Morgan & Co.
----------------
Banc of America Securities LLC
Banc One Capital Markets, Inc.
Bear, Stearns & Co. Inc.
Credit Suisse First Boston
Deutsche Banc Alex. Brown
Nesbitt Burns Securities Inc.
Salomon Smith Barney
----------------
Prospectus Supplement dated November 18, 1999.
<PAGE>
You should rely only on the information we have included or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not authorized anyone to provide you with any other information. If you
receive any unauthorized information, you must not rely on it. We are offering
to sell the notes and the debentures only in places where sales are permitted.
You should not assume that the information we have included in this prospectus
supplement or the accompanying prospectus is accurate as of any date other than
the date of this prospectus supplement or the accompanying prospectus, or that
any information we have incorporated by reference is accurate as of any date
other than the date of the document incorporated by reference.
Forward-Looking Statements
We make statements in this prospectus supplement, the prospectus and the
documents incorporated by reference that are considered forward-looking
statements under the federal securities laws. Sometimes these statements will
contain words such as "believes," "expects," "intends," "plans" and other
similar words. These statements are not guarantees of our future performance
and are subject to risks, uncertainties and other important factors that could
cause our actual performance or achievements to be materially different from
those we may project. We do not have an obligation to publicly update or revise
any forward-looking statements. These forward-looking statements represent our
estimates and assumptions only as of the date they were made. These risks,
uncertainties and other important factors include our ability to identify and
negotiate strategic alliances or joint ventures to pursue various business
opportunities, our ability to consummate the sale of certain operating units
and the success of our efforts to strategically realign our businesses and to
reorganize our management structure. See "Forward-Looking Statements" in the
prospectus and the documents incorporated by reference for other risks,
uncertainties and other important factors to consider.
In addition, as for forward-looking statements that relate to future
financial results and other projections, actual results will be different due
to the inherent nature of projections and may be better or worse than
projected. The forward-looking statements that relate to future financial
results are not financial statements, are not audited and are not prepared in
accordance with generally accepted accounting principles. These future
financial results exclude nonrecurring and unusual items that may have a
positive or negative effect on our projections. We expressly disclaim a duty to
provide updates to these forward-looking statements or the estimates and
assumptions associated with them, after the date they were made to reflect
events or circumstances or changes in expectations or the occurrence of
anticipated events.
Recent Developments
Ongoing Strategic Review of Our Businesses
In September 1999, we announced a major organizational realignment, which
includes realigning our businesses, flattening our management structure,
reducing corporate staff, evaluating the divestiture of non-core operations and
enhancing financial management processes. Our new organizational structure,
among other things, consolidated and refocused our lines of business from
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27 to 17, reassigned certain key senior management and realigned our sector
organizational layer from five to four core business areas. On an ongoing
basis, we will continue to explore the sale of various investment holdings and
excess real estate, to review our businesses to identify ways to improve
organizational effectiveness and performance and to clarify and focus on our
core business strategy.
Business Areas
Our four core business areas are:
. Systems Integration, with 1998 sales of approximately $10.9 billion,
includes command, control, communications, computers and intelligence
(C4I) systems; electronics platform integration; missiles and fire
control systems; and naval electronics and surveillance systems.
. Space Systems, with 1998 sales of approximately $7.0 billion, includes
space launch, commercial and government satellites, and strategic
missiles lines of business. Space Systems programs include our Titan and
Atlas launch vehicle families, the Proton launch vehicle through our
joint ventures with two Russian aerospace companies, the Super
Lightweight external fuel tank for the NASA space shuttle, the A2100
communications satellite and the Trident II (D5) fleet ballistic
missile.
. Aeronautical Systems, with 1998 sales of approximately $5.5 billion,
includes tactical aircraft, airlift, and aeronautical research and
development lines of business. Major Aeronautical Systems programs
include the F-16 multi-role fighter, the F-22 air-superiority fighter,
the C-130J airlift aircraft, the Joint Strike Fighter (JSF) and the X-33
reusable launch vehicle programs.
. Technology Services, with 1998 sales of approximately $2.0 billion,
includes federal services, energy programs and aeronautical services
lines of business.
All other activities outside of these four core business areas will be
included in our Corporate and Other segment, which includes the commercial
information technology and state and local government services lines of
business. The Corporate and Other segment also includes Lockheed Martin Global
Telecommunications, Inc. (LMGT), a wholly-owned subsidiary that was formed from
the combination of our investments in certain joint ventures and businesses.
After consummation of the merger, COMSAT's business operations and the
operations of LMGT will be integrated. Given the substantial investment needed
to grow our global telecommunications services business, we may seek support
from strategic partners for LMGT or raise capital from the public debt or
equity markets, although we cannot predict the outcome of these efforts.
Possible Divestitures
We are considering a number of operating units for possible divestiture,
subject to appropriate valuation, negotiation and corporate approval. Each
operating unit identified specializes in components that are outside our
redefined core business areas. At this time, the operating units identified for
possible divestiture are:
. Aerospace Electronics Systems, which includes Sanders in Nashua and
Manchester, New Hampshire; Infrared Imaging Systems in Lexington,
Massachusetts; Fairchild Systems in
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Syosset and Yonkers, New York and Milpitas, California; and our space
electronics product line in Manassas, Virginia, other than the undersea
systems business and Defense Message System program;
. the Control Systems Business, which includes flight controls, digital
engine controls, launch vehicle controls and hybrid-electric propulsion
systems, in Johnson City, New York and Ft. Wayne, Indiana;
. the Environmental Management Business, which includes Hanford
Corporation of Richland, Washington; Retech of Ukiah, California; and
the Energy Technologies unit, other than energy defense programs and
energy research, which will be retained as core businesses within the
technology services business area, based in Bethesda, Maryland.
For these possible divestitures, we announced in September 1999 that we
expect that the divestiture evaluation process will take six to nine months to
complete. Our ability to complete this process is dependent upon general
market conditions, market conditions relating to the financing of these types
of transactions, the evaluation by prospective purchasers of the businesses
identified as candidates for sale, the performance and prospects of those
businesses and the potential effect of the divestitures on shareholder value.
Based on preliminary data, and assuming that all of the potential
transactions listed above are approved by our Board of Directors and
ultimately consummated in the future, management estimates that the potential
one-time effects, if combined, could result in a decrease to net earnings of
approximately $1 billion. However, the potential proceeds from these
transactions, if consummated, could generate in excess of $1 billion in cash
that, after transaction costs and associated tax payments, will be used to pay
down debt. Financial effects, if any, that may result will be recorded when
the transactions are consummated or when losses can be estimated. Management
cannot predict the timing of the potential divestitures, the amount of
proceeds that may be realized or whether any or all of the potential
transactions will take place.
Reposition Certain Related High-Growth Businesses
In addition to the above initiatives, we also announced that we intend to
evaluate alternatives relative to maximizing the value of three business units
that serve the commercial information technology and state and local
government services markets. These units have been identified by management as
having high growth potential but are distinct from our core business segments.
As each of these businesses will require additional capital and expertise to
fully maximize its value, we may seek support through strategic partnerships
or joint ventures, or by accessing public equity markets, although we cannot
predict the outcome of those efforts.
Transaction with COMSAT
The accompanying prospectus summarizes the agreement we entered into with
COMSAT Corp. in September 1998. On September 18, 1999, in connection with the
first phase of this transaction, after satisfaction of all conditions to
closing, including COMSAT shareholder and applicable government agency
approvals, we completed a tender offer for approximately 26 million shares of
common stock for $45.50 per share for an aggregate cost of approximately $1.2
billion. As a result, we now own approximately 49% of the outstanding common
stock of COMSAT.
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On September 17, 1999, PanAmSat Corporation filed pleadings in the United
States District Court of Appeals for the District of Columbia Circuit seeking a
review of certain actions taken by the FCC which resulted in the FCC's
authorization to proceed with the Tender Offer. Lockheed Martin and COMSAT have
each filed pleadings stating their intention to intervene in the matters before
the court.
The second phase of the transaction, which will result in consummation of the
COMSAT merger, is to be accomplished by an exchange of one share of our common
stock for each remaining share of COMSAT common stock. Consummation of the
COMSAT merger remains contingent on the satisfaction of certain conditions,
including the enactment of federal legislation necessary to remove existing
restrictions on ownership of shares of COMSAT common stock and receiving
appropriate government agency approvals for the COMSAT merger. Legislation
necessary to remove these restrictions cleared the U.S. Senate on July 1, 1999.
On November 10, 1999, the U.S. House of Representatives also passed
legislation, which, if adopted into law, would remove these restrictions. There
are substantial differences between the two bills which we hope will be
resolved in conference. As it is likely that Congress will adjourn in the near
future, there is no assurance that this will occur during this legislative
session or at all, or that any legislation that does become law would not have
an adverse effect on COMSAT's business.
There are several features of the legislation that passed the U.S. House of
Representatives that, if passed into law, would likely significantly injure
COMSAT's business. Although we anticipate a favorable outcome in conference, if
Congress enacts legislation that we determine in good faith (after consultation
with COMSAT) would reasonably be expected to have a Significant Adverse Effect
on COMSAT's business (as defined in the Merger Agreement), we would have the
right to elect not to complete the COMSAT merger. If the COMSAT merger is not
completed by September 18, 2000, under the terms of the Merger Agreement, we or
COMSAT could terminate the Merger Agreement, we could elect not to exercise
this right or the parties could agree to extend this date. If the COMSAT merger
is not consummated, we will not be able to achieve all of our objectives with
respect to the COMSAT transaction and will be unable to exercise control over
COMSAT.
Discussions with the United Arab Emirates
In 1998, the United Arab Emirates selected our new "Block 60" F-16 as its
advanced fighter aircraft. Representatives of the U.S. Government, the
government of the United Arab Emirates and Lockheed Martin have engaged in
extensive negotiations relating to the sale of these aircraft. Significant
negotiations continued during the recent Dubai Air Show but final contract
terms were not reached. There is no assurance that a final agreement will be
reached or the timing of any agreement.
Use of Proceeds
We will use the net proceeds from the sale of the notes and the debentures,
estimated to be $2,969,946,000 after deducting underwriting discounts and
estimated expenses, to repay indebtedness and for general corporate purposes.
The indebtedness to be repaid represents the indebtedness incurred under our
credit facilities and a portion of the indebtedness incurred upon the issuance
of commercial paper. As of November 17, 1999, our commercial paper bears
interest at a weighted
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average rate of 6.66% per annum with a weighted average maturity of 55.8 days.
At September 30, 1999, we had $2 billion of commercial paper that was
classified as long-term debt. As of November 17, 1999, our credit facilities
bear interest at a weighted average rate of 6.0875% per annum with a weighted
average maturity of 22 days. As of November 17, 1999, the weighted average rate
and weighted average maturity of our commercial paper together with our credit
facilities was 6.28% per annum and 33.3 days, respectively.
Capitalization
The following table shows our capitalization on a consolidated basis as of
September 30, 1999, and as adjusted to reflect the issuance of the notes and
the debentures and the repayment of existing indebtedness.
<TABLE>
<CAPTION>
As of
September 30, 1999
(Unaudited)
--------------------
Actual As Adjusted
------- -----------
(In millions)
<S> <C> <C>
Short-term debt and
current maturities of
long-term debt........... $ 1,570 $ 570
Long-term debt:
7.95% Notes due December
1, 2005................. -- 750
8.20% Notes due December
1, 2009................. -- 1,000
8.50% Debentures due
December 1, 2029........ -- 1,250
Commercial paper......... 2,000 --
Other.................... 8,463 8,463
------- -------
Total long-term debt.... 10,463 11,463
Stockholders' equity:
Common stock............. 394 394
Additional paid-in
capital................. 187 187
Retained earnings........ 5,695 5,695
Accumulated other
comprehensive income.... 9 9
Unearned ESOP shares..... (159) (159)
------- -------
Total stockholders'
equity................. 6,126 6,126
------- -------
Total capitalization...... $18,159 $18,159
======= =======
</TABLE>
Ratio of Earnings to Fixed Charges
For the nine months ended September 30, 1999 and September 30, 1998, the
unaudited ratios of earnings to fixed charges were 2.2X and 3.0X, respectively.
Our computation of the ratio of earnings to fixed charges includes Lockheed
Martin, our consolidated subsidiaries and companies in which we own 50% or less
of the equity. "Earnings" are determined by adding "total fixed charges,"
excluding interest capitalized, to earnings from continuing operations before
income taxes, eliminating equity in undistributed earnings and adding back
losses of companies in which we own at least 20% but less than 50% of the
equity. "Total fixed charges" consists of interest on all indebtedness,
amortization of debt discount or premium, interest capitalized and an interest
factor attributable to rents.
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Selected Historical Financial Information
We are providing the following financial information to aid you in analyzing
the financial aspects of this offering. The table presents certain of our
historical financial information on a consolidated basis. The information was
derived from our audited financial statements for the years ended December 31,
1997 and 1998, supplemented by the Current Report on Form 8-K we filed on
October 27, 1999 relating to our new organizational realignment, and unaudited
financial statements for the nine months ended September 30, 1998 and 1999. In
management's opinion, the interim financial data include all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation of
the results of operations and financial position for each of the periods
presented. Results for the nine months ended September 30, 1999 are not
necessarily indicative of results which may be expected for any other interim
period or for the 1999 year as a whole. This information is only a summary and
you should read it in conjunction with Lockheed Martin's historical financial
statements and related notes contained in our annual reports and other
information we have filed with the SEC. See "Where You Can Find More
Information" in the prospectus.
<TABLE>
<CAPTION>
At or for
Nine Months
Ended At or for
September 30, Year Ended
(Unaudited) December 31,
--------------- ----------------
1999(3) 1998(4) 1998(5) 1997(6)
------- ------- ------- -------
(In millions, except per share
data)
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales
Systems Integration....................... $ 7,980 $ 7,702 $10,895 $10,853
Space Systems............................. 4,345 5,332 7,039 7,931
Aeronautical Systems...................... 3,980 3,974 5,459 5,319
Technology Services....................... 1,569 1,408 1,935 1,989
Corporate and Other....................... 674 670 938 1,977
------- ------- ------- -------
Total................................... $18,548 $19,086 $26,266 $28,069
======= ======= ======= =======
Operating profit (loss)(1)
Systems Integration....................... $ 712 $ 723 $ 949 $ 843
Space Systems............................. 268 750 954 1,090
Aeronautical Systems...................... 151 471 649 561
Technology Services....................... 97 102 135 187
Corporate and Other....................... 80 10 (165) 98
------- ------- ------- -------
Total................................... $ 1,308 $ 2,056 $ 2,522 $ 2,779
======= ======= ======= =======
Earnings before cumulative effect of change
in accounting.............................. $ 444 $ 876 $ 1,001 $ 1,300
======= ======= ======= =======
Net earnings................................ $ 89 $ 876 1,001 1,300
======= ======= ======= =======
Net earnings (loss) per common share(2)
Basic:
Before cumulative effect of change in
accounting............................... $ 1.16 $ 2.33 $ 2.66 $ (1.56)
Net earnings (loss) ...................... $ .23 $ 2.33 $ 2.66 $ (1.56)
======= ======= ======= =======
Diluted:
Before cumulative effect of change in
accounting............................... $ 1.16 $ 2.30 $ 2.63 $ (1.56)
Net earnings (loss) ...................... $ .23 $ 2.30 $ 2.63 $ (1.56)
======= ======= ======= =======
Cash dividends declared per common share.... $ .66 $ .60 $ .82 $ .80
======= ======= ======= =======
</TABLE>
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<TABLE>
<CAPTION>
At or for
Nine Months Ended At or for
September 30, Year Ended
(Unaudited) December 31,
----------------- ---------------
1999(3) 1998(4) 1998(5) 1997(6)
-------- -------- ------- -------
(In millions)
<S> <C> <C> <C> <C> <C>
Cash Flow Data:
Depreciation and amortization........... $ 705 $ 744 $ 1,005 $ 1,052
Expenditures for property, plant and
equipment.............................. 442 477 697 750
Dividends on common and preferred
stock.................................. 258 229 310 352
Balance Sheet Data:
Cash and cash equivalents............... $ -- $ 183 $ 285 $ --
Total assets............................ 29,558 29,762 28,744 28,361
Short-term borrowings................... 1,223 1,193 1,043 494
Current maturities of long-term debt.... 347 579 886 876
Total debt.............................. 12,033 11,955 10,886 11,898
Stockholders' equity.................... 6,126 6,008 6,137 5,176
</TABLE>
- --------
(1) Operating profit (loss) is defined as earnings (loss) before interest and
taxes.
(2) All share and per share amounts have been restated to reflect a two-for-one
stock split in the form of a stock dividend in December 1998.
(3) Includes adjustments for changes in estimates in the Aeronautical Systems
segment related to the C-130J airlift aircraft program which reduced
operating profit by $197 million, and negatively impacted net earnings by
$128 million, or $.33 per diluted share. Also includes adjustments for
changes in estimates in the Space Systems segment related to the Titan IV
program which reduced operating profit by $84 million, and negatively
impacted net earnings by $54 million, or $.14 per diluted share. Includes
the effects of nonrecurring and unusual items in the Space Systems segment
which, on a combined basis, impacted operating profit and net earnings by
less than $5 million. Also includes the effects of nonrecurring and unusual
gains in the Corporate and Other segment which increased operating profit
by $148 million, and favorably impacted net earnings by $95 million, or
$.24 per diluted share. Includes a cumulative effect adjustment related to
a change in the method of accounting for the costs of start-up activities,
which negatively impacted net earnings by $355 million, or $.93 per diluted
share.
(4) Includes an adjustment for a change in estimate in the Space Systems
segment related to the Atlas II program which increased operating profit by
$120 million, and increased net earnings by $78 million, or $.21 per
diluted share. Also includes the effects of a nonrecurring and unusual gain
in the Corporate and Other segment which contributed $18 million to
operating profit and increased net earnings $12 million, or $.03 per
diluted share.
(5) In addition to the items in (4) above, includes the effects of a
nonrecurring and unusual charge recorded in the Corporate and Other segment
which negatively impacted operating profit (loss) by $233 million, and
decreased net earnings by $183 million, or $.48 per diluted share.
(6) Includes the effects of a tax-free gain recorded in the Corporate and Other
segment which increased operating profit by $311 million, and the effects
of nonrecurring and unusual charges of $457 million (decreased segment
operating profit as follows: Systems Integration--$71 million; Space
Systems--$87 million; Aeronautical Systems--$20 million; Technology
Services--$24 million; Corporate and Other--$255 million), $303 million
after tax, which, on a combined basis, decreased the diluted loss per share
by $.02. Loss per share also includes the effects of a deemed dividend
resulting from a transaction with the holder of Lockheed Martin's series A
preferred stock which reduced the basic and diluted per share amounts by
$4.93.
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<PAGE>
Description of Debt Securities
The following description of the particular terms of the notes and the
debentures offered by this prospectus supplement is in addition to the
description of the general terms and provisions of debt securities under the
heading "Description of Debt Securities" in the accompanying prospectus. You
should read the indenture for terms that may be important to you. A copy of the
indenture will be provided to you upon request.
We will issue the notes and the debentures in the aggregate principal amount
of $3,000,000,000.
We will issue the 7.95% Notes in the aggregate principal amount of
$750,000,000, the 8.20% Notes in the aggregate principal amount of
$1,000,000,000 and the 8.50% Debentures in the aggregate principal amount of
$1,250,000,000. The 7.95% Notes will mature on December 1, 2005, the 8.20%
Notes will mature on December 1, 2009 and the 8.50% Debentures will mature on
December 1, 2029. We will issue the notes and the debentures only in book-entry
form, in denominations of $1,000 and integral multiples of $1,000. The notes
and the debentures will bear interest at the annual rates shown on the cover of
this prospectus supplement and will accrue interest from November 23, 1999 or
from the most recent date to which interest has been paid or provided for.
Interest will be payable twice a year, on June 1 and December 1, beginning on
June 1, 2000, to the person in whose name a note or debenture is registered at
the close of business on the May 15 or November 15 that precedes the date on
which interest will be paid. The notes and the debentures will not be subject
to any sinking fund or mandatory redemption provisions.
Further Issuances
We may, without the consent of the holders of the applicable series of notes
or debentures, issue additional notes or debentures having the same ranking and
the same interest rate, maturity and other terms as the applicable debt
securities. Any additional notes or debentures with the same terms, together
with the applicable debt securities, will constitute a single series of notes
or debentures under the indenture. No additional notes or debentures may be
issued if an event of default has occurred with respect to the applicable
series of notes or debentures.
Optional Redemption
We cannot redeem the 7.95% Notes or the 8.20% Notes prior to their maturity.
We may, at our option, redeem all or any part of the 8.50% Debentures. If we
choose to do so, we will mail a notice of redemption to you not less than 20
days and not more than 60 days before this redemption occurs. The redemption
price will be equal to the greater of:
(1) 100% of the principal amount of the debentures to be redeemed; and
(2) the sum of the present values of the Remaining Scheduled Payments on
the debentures, discounted to the redemption date on a semiannual
basis, assuming a 360-day year consisting of twelve 30-day months, at
the Treasury Rate plus 25 basis points.
In either case, the redemption price will also include interest accrued to
the date of redemption on the principal balance of the debentures being
redeemed.
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<PAGE>
"Treasury Rate" means, for any redemption date, the annual rate equal to the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
equal to the Comparable Treasury Price, expressed as a percentage of its
principal amount, for that redemption date. The yield of the Comparable
Treasury Issue will be computed as of the second business day immediately
preceding the redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by one of the investment banking firms named below that would be used,
at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to
the applicable remaining term of the debentures.
The investment banks we may use to select a Comparable Treasury Issue for
this purpose are Goldman, Sachs & Co. and J.P. Morgan Securities Inc., each of
their successors, and any two other nationally recognized investment banking
firms that we will appoint from time to time that are primary dealers of U.S.
government securities in New York City, each of whom we call a "Reference
Treasury Dealer." If any of the firms named in the preceding sentence ceases to
be a primary dealer of U.S. government securities in New York City, we will
appoint another nationally recognized investment banking firm as a substitute.
"Comparable Treasury Price" means, for any redemption date:
(1) the average of the Reference Treasury Dealer Quotations obtained by the
trustee for that redemption date after excluding the highest and lowest
of those Reference Treasury Dealer Quotations; or
(2) if the trustee obtains fewer than four Reference Treasury Dealer
Quotations, the average of all those quotations.
"Reference Treasury Dealer Quotation" means, with respect to any redemption
date, the average, as determined by the trustee, of the bid and asked prices
for the Comparable Treasury Issue, expressed in each case as a percentage of
its principal amount, quoted in writing to the trustee by a Reference Treasury
Dealer as of 3:30 p.m., New York time, on the third business day preceding that
redemption date. The trustee shall seek Reference Treasury Dealer Quotations in
respect of any redemption date from each of the then-existing Reference
Treasury Dealers.
"Remaining Scheduled Payments" means, with respect to each debenture being
redeemed, the remaining scheduled payments of principal and interest on that
debenture that would be due after the related redemption date but for the
redemption. If, however, the redemption date is not an interest payment date
with respect to that debenture, the amount of the next succeeding scheduled
interest payment on that debenture that would have been due will be reduced by
the amount of interest accrued on the debenture to the redemption date.
On or after any redemption date, the debentures or any portion of the
debentures called for redemption will stop accruing interest. On or before any
redemption date, we will deposit with the paying agent or the trustee money
sufficient to pay the accrued interest on the debentures to be redeemed and
their redemption price. If less than all of the debentures are redeemed, the
trustee will choose the debentures to be redeemed by any method that it deems
fair and appropriate.
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Ranking
The notes and the debentures of each series will be our unsecured and
unsubordinated obligations and will rank equally in right of payment with the
notes or debentures of the other series and with all of our other senior
unsecured and unsubordinated indebtedness.
Defeasance
We may discharge or defease certain of our obligations with respect to the
notes or the debentures by irrevocably depositing with the trustee, in trust,
cash or government securities sufficient to pay all sums due on the notes or
the debentures, respectively. The establishment of such a trust will be
conditioned on the delivery by Lockheed Martin to the trustee of an opinion of
counsel, who may be counsel to Lockheed Martin, to the effect that, based on
applicable U.S. federal income tax law or a ruling published by the United
States Internal Revenue Service, the defeasance and discharge will not be
deemed, or result in, a taxable event with respect to the holders of the notes
or the debentures.
Book-Entry Delivery and Settlement
We will issue the notes and the debentures of each series in the form of one
or more permanent global notes in definitive, fully registered, book-entry
form. The global notes will be deposited with or on behalf of The Depository
Trust Company and registered in the name of Cede & Co., as nominee of DTC.
Beneficial interests in the global notes will be represented through book-entry
accounts of financial institutions acting on behalf of beneficial owners as
direct and indirect participants in DTC.
DTC has advised us as follows:
. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code
and a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934;
. DTC holds securities that its participants deposit with DTC and
facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in participants'
accounts, thereby eliminating the need for physical movement of
securities certificates;
. direct participants include securities brokers and dealers, banks, trust
companies, clearing corporations and other organizations;
. access to the DTC system is also available to others such as securities
brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a direct participant, either
directly or indirectly; and
. the rules applicable to DTC and its participants are on file with the
SEC.
DTC has also advised us that:
. DTC's management is aware that some computer applications, systems and
the like for processing data that are dependent upon calendar dates,
including dates before, on and after
S-11
<PAGE>
January 1, 2000, may encounter "Year 2000 problems." DTC has informed
its participants and other members of the financial community that it
has developed and is implementing a program so that its systems, as the
same relate to the timely payment of distributions (including principal
and income payments) to securityholders, book-entry deliveries and
settlement of trades within DTC, continue to function appropriately.
This program includes a technical assessment and a remediation plan,
each of which is complete. Additionally, DTC's plan includes a testing
phase, which is expected to be completed within appropriate time frames.
. DTC's ability to perform its services properly also is dependent upon
other parties, including issuers and their agents, as well as third-
party vendors from whom DTC licenses software and hardware, and third-
party vendors on whom DTC relies for information or the provision of
services, including telecommunication and electrical utility service
providers, among others. DTC has informed the financial community that
it is contacting, and will continue to contact, third-party vendors from
whom DTC acquires services to impress upon them the importance of such
services being Year 2000 compliant and to determine the extent of their
efforts for Year 2000 remediation and, as appropriate, testing of their
systems. In addition, DTC is in the process of developing such
contingency plans as it deems appropriate.
. The foregoing information with respect to DTC has been provided to the
financial community for informational purposes only and is not intended
to serve as a representation, warranty or contract modification of any
kind.
We have provided the following description of the operations and procedures
of DTC solely as a matter of convenience. These operations and procedures are
solely within the control of DTC and are subject to change by them from time
to time. Neither Lockheed Martin, the underwriters nor the trustee takes any
responsibility for these operations or procedures, and you are urged to
contact DTC or its participants directly to discuss these matters.
We expect that under procedures established by DTC:
. upon deposit of the global notes with DTC or its custodian, DTC will
credit on its internal system the accounts of direct participants
designated by the underwriters with portions of the principal amounts of
the global notes, and
. ownership of the notes and the debentures will be shown on, and the
transfer of ownership thereof will be effected only through, records
maintained by DTC or its nominee, with respect to interests of direct
participants, and the records of direct and indirect participants, with
respect to interests of persons other than participants.
The laws of some jurisdictions may require that purchasers of securities
take physical delivery of those securities in definitive form. Accordingly,
the ability to transfer interests in the notes or the debentures represented
by a global note to those persons may be limited. In addition, because DTC can
act only on behalf of its participants, who in turn act on behalf of persons
who hold interests through participants, the ability of a person having an
interest in notes or the debentures represented by a global note to pledge or
transfer those interests to persons or entities that do not participate in
DTC's system, or otherwise to take actions in respect of such interest, may be
affected by the lack of a physical definitive security in respect of such
interest.
S-12
<PAGE>
So long as DTC or its nominee is the registered owner of a global note, DTC
or that nominee will be considered the sole owner or holder of the notes or the
debentures represented by that global note for all purposes under the indenture
and under the notes and the debentures. Except as provided below, owners of
beneficial interests in a global note will not be entitled to have notes or
debentures represented by that global note registered in their names, will not
receive or be entitled to receive physical delivery of certificated notes or
debentures and will not be considered the owners or holders thereof under the
indenture or under the notes or the debentures for any purpose, including with
respect to the giving of any direction, instruction or approval to the trustee.
Accordingly, each holder owning a beneficial interest in a global note must
rely on the procedures of DTC and, if that holder is not a direct or indirect
participant, on the procedures of the participant through which that holder
owns its interest, to exercise any rights of a holder of notes or debentures
under the indenture or the global note.
Neither Lockheed Martin nor the trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of notes and the debentures by DTC or for maintaining, supervising or reviewing
any records of those organizations relating to the notes or the debentures.
Payments on the notes and the debentures represented by the global notes will
be made to DTC or its nominee, as the case may be, as the registered owner
thereof. We expect that DTC or its nominee, upon receipt of any payment on the
notes or the debentures represented by a global note, will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the global note as shown in the records of DTC or its nominee. We
also expect that payments by participants to owners of beneficial interests in
the global note held through such participants will be governed by standing
instructions and customary practice as is now the case with securities held for
the accounts of customers registered in the names of nominees for such
customers. The participants will be responsible for those payments.
Settlement for the notes and the debentures will be made by the underwriters
in immediately available funds. The notes and the debentures will trade in
DTC's Same-Day Funds Settlement System until maturity. Secondary market trading
between DTC participants will occur in the ordinary way in accordance with DTC
rules and will be settled in immediately available funds. So long as DTC
continues to make its Settlement System available to Lockheed Martin, it is
anticipated that payments of principal of and interest on the notes and the
debentures will be made by us in immediately available funds.
S-13
<PAGE>
Underwriting
Lockheed Martin and the underwriters for the offering named below have
entered into an underwriting agreement and a pricing agreement with respect to
the notes and debentures. Subject to certain conditions, each underwriter has
severally agreed to purchase the principal amount of notes and debentures
indicated in the following table.
<TABLE>
<CAPTION>
Principal Principal Principal
Amount of Amount of Amount of
Underwriters 7.95% Notes 8.20% Notes 8.50% Debentures
------------ ------------ -------------- ----------------
<S> <C> <C> <C>
Goldman, Sachs & Co. ............ $270,000,000 $ 360,000,000 $ 450,000,000
J.P. Morgan Securities Inc. ..... 270,000,000 360,000,000 450,000,000
Banc of America Securities LLC... 30,000,000 40,000,000 50,000,000
Banc One Capital Markets, Inc. .. 30,000,000 40,000,000 50,000,000
Bear, Stearns & Co. Inc. ........ 30,000,000 40,000,000 50,000,000
Credit Suisse First Boston
Corporation..................... 30,000,000 40,000,000 50,000,000
Deutsche Bank Securities Inc. ... 30,000,000 40,000,000 50,000,000
Nesbitt Burns Securities Inc. ... 30,000,000 40,000,000 50,000,000
Salomon Smith Barney Inc. ....... 30,000,000 40,000,000 50,000,000
------------ -------------- --------------
Total............................ $750,000,000 $1,000,000,000 $1,250,000,000
============ ============== ==============
</TABLE>
----------------
Notes and debentures sold by the underwriters to the public will initially be
offered at the respective initial public offering prices set forth on the cover
of this prospectus supplement. Any notes or debentures sold by the underwriters
to securities dealers may be sold at such price less a concession not in excess
of .35% of the principal amount of the 7.95% Notes, .40% of the principal
amount of the 8.20% Notes and .50% of the principal amount of the 8.50%
Debentures. The underwriters may allow, and such dealers may reallow, a
discount not in excess of .25% of the principal amount of the 7.95% Notes, the
8.20% Notes and the 8.50% Debentures, respectively, to other brokers and
dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
The notes and debentures are new issues of securities with no established
trading market. Lockheed Martin has been advised by the underwriters that the
underwriters intend to make a market in the notes and the debentures but are
not obligated to do so and may discontinue market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
the notes and debentures.
In connection with the offering, the underwriters may purchase and sell the
notes and debentures in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of notes or debentures than they are required to purchase in the
offering. Stabilizing transactions consist of certain bids or purchases made
for the purpose of preventing or retarding a decline in the market price of the
notes or debentures while the offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a particular
underwriter repays to the underwriters a portion of the underwriting discount
received by it because the underwriters have repurchased notes or debentures
sold by or for the account of such underwriter in stabilizing or short covering
transactions.
S-14
<PAGE>
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the notes and the debentures. As a result, the price
of the notes or the debentures may be higher than the price that otherwise
might exist in the open market. If these activities are commenced, they may be
discontinued by the underwriters at any time. These transactions may be
effected in the over-the-counter market or otherwise.
Goldman, Sachs & Co., J.P. Morgan Securities Inc. and certain other
underwriters are currently performing, have in the past performed, and may in
the future perform, commercial or investment banking services for Lockheed
Martin and its affiliates for which they have received, and may in the future
receive, fees or other compensation. More than 10% of the net proceeds of this
offering of notes and debentures, not including any underwriting compensation,
will be used to repay indebtedness incurred upon the issuance of commercial
paper and indebtedness outstanding under our credit facilities. Credit Suisse
First Boston Corporation and affiliates of Goldman, Sachs & Co. are primary
dealers of our commercial paper and are affiliated with members of the National
Association of Securities Dealers, Inc. who will participate in this offering.
Included among the banks which are party to our credit facilities are
affiliates of J.P. Morgan Securities Inc., Banc of America Securities LLC and
Salomon Smith Barney Inc., who are members of the NASD and will participate in
this offering as underwriters. Accordingly, this offering is being made in
compliance with NASD Rule 2710(c)(8). See "Use of Proceeds."
Validity of the Debt Securities
King & Spalding, Washington, D.C., will issue an opinion about the legality
of the notes and the debentures for us. Cravath, Swaine & Moore, New York, New
York will pass on the validity of the notes and the debentures for the
underwriters. Cravath, Swaine & Moore has in the past and continues to
represent us in various matters not related to this offering.
S-15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Prospectus
[logo of Lockheed Martin appears here]
Lockheed Martin Corporation
6801 Rockledge Drive
Bethesda, Maryland 20817
(301) 897-6000
You should read the prospectus
Debt Securities supplement and this prospectus
carefully before you invest.
This prospectus describes debt securities that we may issue and sell at
various times:
. our prospectus supplements will contain the specific terms of each
series.
. we can issue debt securities with a total offering price of up to $2.5
billion under this prospectus.
. we may sell the debt securities to or through underwriters, dealers or
agents. We also may sell debt securities directly to investors.
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
This Prospectus is dated March 29, 1999.
<PAGE>
Table of Contents
<TABLE>
<S> <C>
About This Prospectus....................................................... 2
Where You Can Find More Information......................................... 2
Forward-Looking Statements.................................................. 3
Lockheed Martin Corporation................................................. 4
Use of Proceeds............................................................. 5
Ratio of Earnings to Fixed Charges.......................................... 5
Description of Debt Securities.............................................. 6
Plan of Distribution........................................................ 12
Validity of the Debt Securities............................................. 13
Experts..................................................................... 13
</TABLE>
About This Prospectus
This prospectus is part of a registration statement that we filed with the
SEC using a "shelf" registration process. Under this shelf registration
process, we may sell any combination of the debt securities described in this
prospectus in one or more offerings for total proceeds of up to $2.5 billion.
This prospectus provides you with a general description of the securities we
may offer. Each time we sell securities, we will provide a prospectus
supplement that will contain specific information about the terms of that
offering. The prospectus supplement may add, update or change information
contained in this prospectus. It is important for you to consider the
information contained in this prospectus and any prospectus supplement together
with additional information described under the next heading, Where You Can
Find More Information.
Where You Can Find More Information
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. Our SEC filings are available on the SEC's web site
at http://www.sec.gov. You also may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information about their public reference rooms, including copy charges. You
also can obtain information about us from the New York Stock Exchange at 20
Broad Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede information in this prospectus and
in our other filings with the SEC. We incorporate by reference the documents
listed below, which we already have filed with the SEC, and any future filings
we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we sell all of the debt securities:
. our Annual Report on Form 10-K for the year ended December 31, 1998; and
. our Current Reports on Form 8-K filed January 19, 1999, January 28,
1999, February 10, 1999 and February 16, 1999.
2
<PAGE>
You may read or copy these documents through our web site at
http://www.lockheedmartin.com. You may request a copy of these filings at no
cost, by writing or calling us at the following address:
Lockheed Martin Corporation
6801 Rockledge Drive
Bethesda, Maryland 20817
(301) 897-6000
Attention: Corporate Secretary
You should rely only on the information contained in, or incorporated by
reference into, this prospectus or any applicable prospectus supplement. We
have not authorized anyone to provide you with additional or different
information. You should not assume that the information in this prospectus, any
prospectus supplement, or any document incorporated by reference is accurate as
of any date other than the date of those documents.
You may also obtain from the SEC a copy of the registration statement and
exhibits that we filed with the SEC when we registered the debt securities. The
registration statement may contain additional information that may be important
to you.
Forward-Looking Statements
We make statements in this prospectus and the documents incorporated by
reference that are considered forward-looking statements under the federal
securities laws. Sometimes these statements will contain words such as
"believes," "expects," "intends," "plans" and other similar words. These
statements are not guarantees of our future performance and are subject to
risks, uncertainties and other important factors that could cause our actual
performance or achievements to be materially different from those we may
project. These forward-looking statements also represent our estimates and
assumptions only as of the date they were made. These risks, uncertainties and
factors include:
. the effects of government budgets and requirements;
. worldwide general economic, business and regulatory conditions;
. our "Year 2000" issues, including our international and third party
issues;
. the timing of future government awards and contracts;
. risks inherent in designing and implementing innovative advanced
technology;
. our performance under existing government awards and contracts;
. whether the COMSAT transaction will be consummated; and
. our ability to realize savings as a result of our global cost reduction
program.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. Please see the documents incorporated by reference
for more information on these factors.
3
<PAGE>
Lockheed Martin Corporation
We are a highly diversified global enterprise principally engaged in the
conception, research, design, development, manufacture, integration and
operation of advanced technology products and services.
We operate through five business sectors:
. Space & Strategic Missiles sector -- designs, develops, manufactures and
integrates space systems, including spacecraft, space launch vehicles,
manned space systems and their supporting ground systems and services;
strategic fleet ballistic missiles; and defensive missiles;
. Electronics sector -- designs, develops, manufactures and integrates
high performance electronic systems for undersea, shipboard, land,
airborne and space programs;
. Aeronautics sector -- designs, develops, manufactures and integrates
airlift, tactical and reconnaissance aircraft as well as
surveillance/command, maintenance/modification/logistics, and other
development programs;
. Information & Services sector -- designs, develops, integrates, and
operates large, complex information systems which include command and
control, intelligence, simulation and training and air traffic
management; and provides state and local government transaction
processing, commercial information technology services, and performs a
broad range of engineering, science and technology services for federal
government customers; and
. Energy & Environment sector -- conducts and operates nuclear operations
management, nuclear materials management and technology-driven
remediation programs.
Expanding Our Global Network Telecommunications Services Business - Transaction
Agreement with COMSAT Corporation
In September 1998, we entered into an agreement with COMSAT Corporation to
combine COMSAT with one of our subsidiaries in a two-phase transaction with an
estimated value for COMSAT of approximately $2.7 billion as of that date.
COMSAT is in the commercial satellite communications business. We believe that
the combination is consistent with our strategic plans to expand into this
business and enhance the combined companies' ability to increase its customer
base and enhance its ability to provide existing customers with expanded
services.
In the first phase of this transaction, our subsidiary commenced a cash
tender offer to purchase up to 49%, subject to certain adjustments, of the
outstanding shares of COMSAT common stock at $45.50 per share. Currently, the
tender offer expires on May 3, 1999, but it can be extended for periods of up
to 60 days until at least the earlier of September 18, 1999 or satisfaction of
certain conditions to closing. The second phase of the transaction is the
completion of the merger through the exchange of one share of our common stock
for each share of COMSAT common stock not purchased in the tender offer. COMSAT
stockholders are scheduled to vote on the proposed merger at COMSAT's annual
meeting of shareholders on June 18, 1999.
Current FCC regulations do not allow a company that is not an "FCC authorized
common carrier" to purchase more than 10% of COMSAT. We have filed an
application with the FCC for our acquisition subsidiary to acquire a COMSAT
common carrier subsidiary through a merger and for
4
<PAGE>
FCC designation of that subsidiary as an FCC authorized common carrier allowed
to purchase up to 49% of COMSAT. On January 21, 1999, the Chairman of the House
Committee on Commerce and the Chairman of the Senate Subcommittee on
Communications sent a letter to the FCC urging it not to take any action to
permit any company to purchase more than 10% of COMSAT prior to Congress
amending the Communications Satellite Act of 1962. An amendment to the
Satellite Act may involve the privatization of Intelstat and lifting ownership
limits on COMSAT.
If the FCC does not proceed with its review of our filings related to the
tender offer or does not otherwise proceed on the schedule that we anticipate,
we may not be able to complete the tender offer by September 18, 1999. If the
tender offer is not completed by September 18, 1999, any of the parties may
terminate the merger agreement. The parties may elect to not do this or elect
to amend the agreement to extend this date. There are other conditions to
consummating the tender offer, including antitrust clearance by the Department
of Justice.
Consummation of the merger is subject to, among other things, the closing of
the tender offer, the enactment of federal legislation necessary to allow us to
acquire the remaining COMSAT shares and certain additional regulatory
approvals. If Congress does not make progress on satellite reform legislation,
even if the tender offer is completed, the merger may not occur in 1999. On the
other hand, if Congress timely acts on the legislation, the merger may occur in
1999. If the necessary legislation is not enacted or the additional regulatory
approvals are not obtained, even if we consummate the tender offer, we will not
be able to consummate the merger nor will we be able to control COMSAT.
In August 1998, we formed Lockheed Martin Global Telecommunications, Inc., a
wholly-owned subsidiary, to focus on expanding our presence in the global
telecommunications services market. Effective in January 1999, we transferred
certain investments in joint ventures and business units from some of our
sectors to this subsidiary. If the COMSAT transaction is consummated, we intend
to combine COMSAT's operations with this subsidiary's operations.
Use of Proceeds
We will use the net proceeds from the sale of the debt securities for general
corporate purposes. These purposes may include repayment of debt, working
capital needs, capital expenditures, acquisitions and any other general
corporate purpose. If we identify a specific purpose for the net proceeds of an
offering, we will describe that purpose in the applicable prospectus
supplement.
Ratio of Earnings to Fixed Charges
The following table shows ratios of earnings to fixed charges, which are
unaudited, for each of the periods indicated. The ratios include us, our
consolidated subsidiaries and companies in which we own 50% or less of the
equity. For the table's purposes, "earnings" are determined by adding "total
fixed charges," excluding interest capitalized, to earnings from continuing
operations before income taxes, eliminating equity in undistributed earnings
and adding back losses of companies in which we own 20% to 50% of the equity.
"Total fixed charges" consists of interest on all indebtedness, amortization of
debt discount or premium, interest capitalized, and an interest factor
attributable to rents.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
2.8x 3.1x 3.5x 4.1x 5.6x
</TABLE>
5
<PAGE>
Description of Debt Securities
As used in this prospectus, "debt securities" means the debentures, notes,
bonds and other evidences of indebtedness that we issue and a trustee
authenticates and delivers under the applicable indenture. We will describe the
particular terms of any series of debt securities, and the extent to which the
general terms summarized below may apply, in the prospectus supplement relating
to that series.
We initially will issue debt securities under an indenture between us and
U.S. Bank Trust National Association, as trustee, and have summarized selected
provisions of this indenture on the following pages. The summary is not
complete. The form of this indenture has been filed as an exhibit to this
registration statement and you should read the indenture for provisions that
may be important to you. If you would like more information on these
provisions, see "Where You Can Find More Information" on how to locate the
indenture.
If we use another trustee or another indenture for a series of debt
securities, we will provide the details in a prospectus supplement. We will
file the forms of any other indentures with the SEC at the time we use them.
Terms
The indenture provides for the issuance of debt securities in one or more
series. A prospectus supplement relating to a series of debt securities will
include specific terms relating to the offering. These terms will include some
or all of the following:
. the title and type of the debt securities;
. any limit on the total principal amount of the debt securities;
. the price or prices at which we will sell the debt securities;
. the maturity date or dates of the debt securities;
. the rate or rates, which may be fixed or variable, per annum at which
the debt securities will bear interest and the date from which such
interest will accrue;
. the dates on which interest will be payable and the related record
dates;
. whether payments of principal or interest will be determined by any
index, formula or other method and the manner of determining the amount
of such payments;
. the place or places of payments on the debt securities;
. any redemption dates, prices, obligations and restrictions on the debt
securities;
. any mandatory or optional sinking fund or purchase fund or analogous
provisions;
. the denominations in which the debt securities will be issued, if other
than $1,000 or multiples of $1,000;
. the currency in which principal and interest will be paid, if other than
US Dollars;
. any provisions granting special rights upon the occurrence of specified
events;
. any deletions from, changes in or additions to the events of default or
the covenants specified in the indenture;
. any trustees, authenticating or paying agents, transfer agents,
registrars or other agents for the debt securities if other than U.S.
Bank Trust National Association;
. any conversion or exchange features of the debt securities;
6
<PAGE>
. any special tax implications of the debt securities; and
. any other material terms of the debt securities.
We may issue debt securities that are convertible into or exchangeable for
our common stock, or the debt or equity of another company. We may also
continuously offer debt securities in a medium term note program. If we issue
these types of debt securities, we will provide additional information in a
prospectus supplement.
We may sell debt securities at a discount below their stated principal
amount, bearing no interest or interest at a rate that, at the time of
issuance, is different than market rates. When we refer to the principal and
interest on debt securities, we also mean the payment of any additional amounts
that we are required to pay under the indenture or the debt securities,
including amounts for certain taxes, assessments or other governmental charges
imposed on holders of debt securities.
Denomination, Form, Payment and Transfer
Normally, we will denominate and make payments on debt securities in U.S.
dollars. If we issue debt securities denominated, or with payments, in a
foreign or composite currency, a prospectus supplement will specify the
currency or composite currency.
We may from time to time issue debt securities as registered securities. This
means that holders will be entitled to receive certificates representing the
debt securities registered in their name. You can transfer or exchange debt
securities in registered form without service charge, upon reimbursement of any
taxes or government charges. This transfer or exchange can be made at the
trustee's corporate trust office or at any other office maintained by us for
such purposes. If the debt securities are in registered form, we can pay
interest by check mailed to the person in whose name the debt securities are
registered on the days specified in the indenture.
As a general rule, however, we will issue debt securities in book-entry form.
This means that one or more permanent global certificates registered in the
name of a depositary, or a nominee of the depositary, will represent the debt
securities. Only persons who have accounts with depositaries, which are known
as participants, or persons that may hold interests through participants, can
have beneficial ownership interests in global certificates representing a
series of debt securities. The depositary will maintain a computerized book-
entry and transfer system that keeps track of the principal amounts of debt
securities held in the accounts of participants. Participants keep records of
the interests of their clients who have purchased debt securities through them.
Beneficial ownership interests in debt securities issued in book-entry form may
be shown only on, and may be transferred only through, records maintained by
the depositary and its participants. Some states require that certain
purchasers receive securities only in certificate form. These state laws may
limit the ability of beneficial owners to transfer their interests.
The Depositary Trust Company, or DTC, frequently acts as the depositary for
debt securities. DTC is owned by a number of its participants and by the NYSE,
AMEX and the NASD. The information below regarding DTC, which is based on
information from DTC, has been provided for informational purposes only and is
not intended to serve as a representation, warranty or contract modification of
any kind. If the debt securities of any series are issued in book-entry form
and the depositary is someone other than DTC, we will provide you with
additional information in a prospectus supplement.
7
<PAGE>
DTC holds securities that its participants deposit. Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and other organizations. DTC's book-entry system is also available to other
organizations such as securities brokers and dealers, banks and trust companies
that work through a participant. DTC electronically records the settlement
among participants of their securities transactions in deposited securities.
Issuers make interest and principal payments to DTC, which in turn credits
payments to participants' accounts according to their beneficial ownership
interests as reflected in DTC's records. In addition, DTC currently assigns any
voting rights to participants by using an omnibus proxy. These payments and
voting rights are governed by the customary practices between the participants
and holders of beneficial interests.
DTC will be the sole owner of the global certificates. We, the trustee and
the paying agent have no responsibility or liability for the records relating
to beneficial ownership interests in the global certificates or for the
payments of principal and interest due for the accounts of beneficial holders
of interests in the global certificates. The global certificates representing a
series of debt securities normally may not be transferred except by DTC to its
nominees or successors in accordance with the indenture. A series of debt
securities represented by global certificates will be exchangeable for debt
securities in registered form with the same terms in authorized denominations
if:
. DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and we do not appoint a successor depositary within 90 days; or
. we decide not to require all of the debt securities of a series to be
represented by global certificates and notify the trustee of that
decision.
Events of Default
Unless we indicate otherwise in a prospectus supplement, the following are
events of default under the indenture with respect to any issued debt
securities:
. failure to pay the principal or any premium on any debt security of that
series when due;
. failure for 30 days to pay interest on any debt security of that series
when due;
. failure to perform any other covenant in the indenture that continues
for 90 days after we have been given written notice of such failure; or
. certain events in bankruptcy, insolvency or reorganization.
An event of default for one series of debt securities does not necessarily
constitute an event of default for any other series. The trustee may withhold
notice to the debt securities holders of any default, except a payment default,
if it considers such action to be in the holders' interests.
If an event of default occurs and continues, the trustee, or the holders of
at least 25% in aggregate principal amount of the debt securities of the
series, may declare the entire principal of all the debt securities of that
series to be due and payable immediately. If this happens, subject to certain
conditions, the holders of a majority of the aggregate principal amount of the
debt securities of that series can void the acceleration of payment.
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The indenture provides that the trustee has no obligation to exercise any of
its rights at the direction of any holders, unless the holders offer the
trustee reasonable indemnity. If they provide this indemnification, the holders
of a majority in principal amount of any series of debt securities have the
right to direct any proceeding, remedy, or power available to the trustee with
respect to that series.
Certain Covenants
Under the indenture, we will agree to:
. pay the principal, interest and any premium on the debt securities when
due;
. maintain a place of payment;
. deliver a report to the trustee at the end of each fiscal year reviewing
our obligations under the indenture; and
. deposit sufficient funds with any paying agent on or before the due date
for payment of any principal, interest or any premium.
The indenture restricts our ability and the ability of certain of our
subsidiaries to encumber certain assets, including principal properties. If we,
or any restricted subsidiary, as defined below, pledge or mortgage any of our
property to secure any debt, then we will, unless an exception applies, pledge
or mortgage the same property to the trustee to secure the debt securities for
as long as such debt is secured by such property.
This restriction will not apply in certain situations. Assets may be
encumbered if the encumbrance is a permitted lien, as defined below, without
regard to the amount of debt secured by the encumbrance. Assets also may be
encumbered if the sum of the following does not exceed 10% of our consolidated
net tangible assets:
. the amount of debt secured by such assets, plus
. the total amount of other secured debt not permitted by this
restriction, excluding debt that is secured by a permitted lien, plus
. the total amount of secured debt existing at the date of the indenture,
plus
. the total amount of attributable debt in respect of certain sale-
leaseback transactions.
Permitted liens include:
. liens on a corporation's property, stock or debt at the time it becomes
a restricted subsidiary;
. liens on property at the time we or a restricted subsidiary acquires the
property, provided that no such lien extends to any of our other
property or any other property of a restricted subsidiary;
. liens securing payment of a property's purchase price or to secure debt
incurred within one year after the property's acquisition for the
purpose of financing the purchase price;
. liens securing debt owing by a restricted subsidiary to us or another
restricted subsidiary;
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. liens on property of an entity at the time such entity is merged into or
consolidated with us or a restricted subsidiary or at the time we or a
restricted subsidiary acquire all or substantially all of the assets of
the entity;
. liens in favor of any customer to secure payments or performance
pursuant to any contract or statute, any related indebtedness, or debt
guaranteed by a government or governmental authority;
. liens arising pursuant to any order of attachment, distraint or similar
legal process so long as the execution or other enforcement is
effectively stayed and the claims secured are being contested in good
faith by appropriate proceedings;
. materialmen's, suppliers', tax or similar liens arising in the ordinary
course of business for sums not overdue or which are being contested in
good faith by appropriate proceedings; and
. any renewal, extension or replacement for any lien permitted by one of
the exceptions described above or a lien existing on the date that debt
securities of a series are first issued, provided that the renewal,
extension, or replacement is limited to all or any part of the same
property subject to the existing lien.
Except in certain circumstances, the indenture also restricts our ability and
the abilities of certain of our subsidiaries to enter into sale-leaseback
transactions. The indenture will not otherwise limit our ability to incur
additional debt, unless we tell you this in a prospectus supplement.
The following are summaries of definitions for certain terms we have just
used. For the full definition of these terms, you should refer to the form of
the indenture filed as an exhibit to the registration statement.
Attributable debt for a lease means the carrying value of the capitalized
rental obligation determined under generally accepted accounting principles.
Consolidated net tangible assets means our total assets, including the assets
of our subsidiaries, as reflected in our most recent balance sheet, less
current liabilities, goodwill, patents and trademarks.
Principal property means, with certain exceptions, any manufacturing facility
located in the United States and owned by us or by one or more restricted
subsidiaries and which has, as of the date the lien is incurred, a net book
value, after deduction of depreciation and similar charges, greater than 3% of
consolidated net tangible assets, or any manufacturing facility or other
property declared to be a principal property by our chief executive officer or
chief financial officer by delivery of a certificate to that effect to the
trustee.
Restricted subsidiary means one of our subsidiaries that has substantially
all of its assets located in, or carries on substantially all of its business
in, the United States and that owns a principal property, except that a
subsidiary shall not be a restricted subsidiary if its shares are registered
with the SEC or if it is required to file periodic reports with the SEC.
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Sale-leaseback transaction means, subject to certain exceptions, an
arrangement pursuant to which we, or a restricted subsidiary, transfer a
principal property to a person and contemporaneously lease it back from that
person.
Consolidation, Merger or Sale
We may neither consolidate with nor merge into another corporation nor
transfer all or substantially all of our assets to another corporation unless:
. the successor corporation assumes all of our obligations under the debt
securities and the indenture;
. immediately after giving effect to the transaction, no event of default
and no circumstances which, after notice or lapse of time or both, would
become an event of default, shall have happened and be continuing; and
. we have delivered to the trustee an officers' certificate and a legal
opinion confirming that we have complied with the indenture.
Redemption, Sinking Fund and Defeasance
We may redeem some or all of the debt securities at our option, subject to
the conditions stated in the applicable prospectus supplement. If a series of
debt securities is subject to a sinking fund, the prospectus supplement will
describe those terms.
The indenture permits us to discharge or defease certain of our obligations
for any series of debt securities at any time. We may defease a series of debt
securities by depositing with the trustee cash or government securities
sufficient to pay all sums due on that series. Under certain circumstances, if
we defease a series of debt securities, our legal obligation to pay principal,
interest and any premium on that series will be discharged. We can defease one
series of debt securities without defeasing any other series.
Under U.S. federal income tax law, a discharge of our obligation to pay
principal, interest and any premium on the debt securities would be treated as
an exchange of the debt securities for a new security representing an interest
in the trust. Each holder would be required to recognize gain or loss equal to
any difference between the holder's cost or other tax basis for the debt
securities and the value of the holder's interest in the trust. Holders would
not be required to recognize gain or loss in the event of a defeasance of
certain contractual obligations without a discharge of our legal obligation to
pay principal, interest and any premium on the debt securities. Prospective
investors are urged to consult their own tax advisers as to the consequences of
a discharge, including the applicability and effect of tax laws other than U.S.
federal income tax law.
Changes to the Indenture
Holders who own more than 50% in principal amount of the debt securities of a
series can agree with us to change the provisions of the indenture relating to
that series. However, no change can affect the payment terms or the percentage
required to change other terms without the consent of all holders of debt
securities of the affected series.
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We may enter into supplemental indentures for other specified purposes and to
make changes that would not materially adversely affect your interests,
including the creation of any new series of debt securities, without the
consent of any holder of debt securities.
Initial Trustee
U.S. Bank Trust National Association will serve as trustee under the
indenture. It also is the trustee under other indentures pursuant to which our
debt securities have been issued. If we use a different trustee for any debt
securities, we will let you know in a prospectus supplement.
Plan of Distribution
We may sell any series of debt securities:
. through underwriters or dealers;
. through agents; or
. directly to one or more purchasers.
For each series of debt securities, the prospectus supplement will describe:
. the initial public offering price;
. the names of any underwriters, dealers or agents;
. the purchase price of the debt securities;
. our proceeds from the sale of the debt securities;
. any underwriting discounts, agency fees, or other compensation payable
to underwriters or agents;
. any discounts or concessions allowed or reallowed or paid to dealers;
and
. the securities exchanges on which the debt securities will be listed, if
any.
If we use underwriters in the sale, they will buy the debt securities for
their own account. The underwriters may then resell the debt securities in one
or more transactions at a fixed public offering price or at varying prices
determined at the time of sale or thereafter. The obligations of the
underwriters to purchase the debt securities will be subject to certain
conditions. The underwriters will be obligated to purchase all the debt
securities offered if they purchase any debt securities. Any initial public
offering price and any discounts or concessions allowed or re-allowed or paid
to dealers may be changed from time to time.
If we use dealers in the sale, we will sell debt securities to such dealers
as principals. The dealers may then resell the debt securities to the public at
varying prices to be determined by such dealers at the time of resale. If we
use agents in the sale, they will use their reasonable best efforts to solicit
purchases for the period of their appointment. If we sell directly, no
underwriters or agents would be involved. We are not making an offer of debt
securities in any state that does not permit such an offer.
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Underwriters, dealers and agents that participate in the debt securities
distribution may be deemed to be underwriters as defined in the Securities Act
of 1933. Any discounts, commissions, or profit they receive when they resell
the debt securities may be treated as underwriting discounts and commissions
under that Act. We may have agreements with underwriters, dealers and agents to
indemnify them against certain civil liabilities, including certain liabilities
under the Securities Act of 1933, or to contribute with respect to payments
that they may be required to make.
We may authorize underwriters, dealers or agents to solicit offers from
certain institutions whereby the institution contractually agrees to purchase
the debt securities from us on a future date at a specified price. This type of
contract may be made only with institutions that we specifically approve. Such
institutions could include banks, insurance companies, pension funds,
investment companies and educational and charitable institutions. The
underwriters, dealers or agents will not be responsible for the validity or
performance of these contracts.
Underwriters, dealers and agents may be our customers or may engage in
transactions with us or perform services for us in the ordinary course of
business.
Validity of the Debt Securities
King & Spalding, Washington, D.C., will issue an opinion about the legality
of the debt securities for us. Underwriters, dealers or agents, who we will
identify in a prospectus supplement, may have their counsel opine about certain
legal matters relating to the debt securities.
Experts
Ernst & Young LLP, our independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1998 as set forth in their report, which is incorporated by
reference into this prospectus. Our consolidated financial statements are
incorporated by reference in reliance upon their report, given upon their
authority as experts in accounting and auditing.
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No dealer, salesperson or other person is authorized to give any information or
to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell only the notes and the debentures offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current only as of its date.
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TABLE OF CONTENTS
Prospectus Supplement
<TABLE>
<CAPTION>
Page
----
<S> <C>
Forward-Looking Statements................................................. S-2
Recent Developments........................................................ S-2
Use of Proceeds............................................................ S-5
Capitalization............................................................. S-6
Ratio of Earnings to Fixed Charges......................................... S-6
Selected Historical Financial Information.................................. S-7
Description of Debt Securities............................................. S-9
Underwriting............................................................... S-14
Validity of the Debt Securities............................................ S-15
Prospectus
About This Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
Forward-Looking Statements................................................. 3
Lockheed Martin Corporation................................................ 4
Use of Proceeds............................................................ 5
Ratio of Earnings to Fixed Charges......................................... 5
Description of Debt Securities............................................. 6
Plan of Distribution....................................................... 12
Validity of the Debt Securities............................................ 13
Experts.................................................................... 13
</TABLE>
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$3,000,000,000
Lockheed Martin Corporation
$750,000,000
7.95% Notes due December 1, 2005
$1,000,000,000
8.20% Notes due December 1, 2009
$1,250,000,000
8.50% Debentures due December 1, 2029
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[logo of Lockheed Martin appears here]
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Goldman, Sachs & Co.
J.P. Morgan & Co.
Banc of America Securities LLC
Banc One Capital Markets, Inc.
Bear, Stearns & Co. Inc.
Credit Suisse First Boston
Deutsche Banc Alex. Brown
Nesbitt Burns Securities Inc.
Salomon Smith Barney
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