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U.S MAJORS REPORT CONTIUNING GROWTH

U.S MAJORS REPORT CONTIUNING GROWTH

Lockheed Martin Corporation

27 Jul 10. Lockheed Martin Corporation (NYSE: LMT) today reported second quarter 2010 net sales of $11.4bn, a 3 percent increase over the $11.1bn in 2009. Earnings from continuing operations for the second quarter of 2010 were $727m, or $1.96 per diluted share, compared to $731m, or $1.87 per diluted share, in 2009. Cash from operations in the second
quarter of 2010 was $1.2bn, compared to $1.1bn in 2009.

“We had strong second quarter financial results,” said Chairman and CEO Bob Stevens. “Operationally, we’re continuing to implement affordability initiatives that will enhance performance and lower cost, and our dedicated workforce is focused on meeting our commitments. Strategically, we decided to divest two units and realign others to strengthen performance over the long term. In the new reality of escalating demands and increasing constraints on resources, we continue to refine our portfolio of capabilities and services to provide the best, most affordable solutions for our customers, a secure future for our employees and value for our shareholders.”

Realignment and Planned Divestitures

As previously announced on June 2, 2010, we have taken certain portfolio-shaping actions designed to strengthen our business over the long term, as follows: Disclosed plans to divest most of Enterprise Integration Group (EIG) and Pacific Architects and Engineers, Inc. (PAE), two businesses within Information Systems & Global Solutions (IS&GS); and Realigned two IS&GS businesses, Readiness & Stability Operations (RSO) and Savi Technology, Inc., with our Simulation, Training and Support business to form the Global Training & Logistics (GT&L) line of business within Electronic Systems.

We are actively marketing PAE for sale and expect the transaction to occur around the end of 2010. As a result, PAE’s operating results are included in discontinued operations and its assets and liabilities are classified as held for sale on the balance sheet. The plan to divest PAE is a result of customers seeking a different mix of services that do not fit with our long-term strategy.

We are currently evaluating the relative merits of a sale transaction for EIG compared to a spin-off of the EIG business to our stockholders. EIG’s financial results will remain in IS&GS’ continuing operations until we either conclude that a sale is probable or close a spin-off transaction. We expect a transaction to occur around the end of 2010. Our decision to divest EIG was based on our analysis of the U.S. Government’s increased concerns about perceived organizational conflicts of interest within the defense contracting community. We have never had an organizational conflict of interest violation; however, the potential for conflicts arises in circumstances where a contractor providing certain types of advisory services or support to the U.S. Government is also involved in systems development activities. EIG provides systems engineering, architecture, and integration services and support to a broad range of government customers.

Certain financial information herein has been reclassified to reflect the realignment between the Electronic Systems and IS&GS business segments and to exclude the PAE business from the IS&GS business segment.

Our outlook does not include any financial effect of the voluntary executive separation program announced on July 6, 2010 as the financial results of the program will not be known until later in 2010. Our outlook also does not incorporate any financial effect related to the research and development (R&D) tax credit, which expired on Dec. 31, 2009. The R&D tax credit benefit will not be incorporated into our 2010 outlook or results unless it is extended by Congress. The benefit of the R&D tax credit was approximately $0.11 per share for 2009.

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