Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 11-K

 

 

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the Fiscal Year Ended December 31, 2012		Commission File No. 1-11437

 

 

 

A.	Full title of the plan and the address of the plan, if different from that of the issuer named below:

LOCKHEED MARTIN CORPORATION

SALARIED SAVINGS PLAN

 

B.	Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

LOCKHEED MARTIN CORPORATION

6801 Rockledge Drive

Bethesda, MD 20817

 

 

 

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Table of Contents

Lockheed Martin Corporation

Salaried Savings Plan

Financial Statements and Supplemental Schedule

Year ended December 31, 2012

Contents

 

Report of Independent Registered Public Accounting Firm			1
Financial Statements for the Lockheed Martin Corporation Salaried Savings Plan
Statement of Net Assets Available for Benefits			2-3
Statement of Changes in Net Assets Available for Benefits			4
Notes to Financial Statements			5
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)			14
Signature			33
Exhibit Index			34

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Table of Contents

Report of Independent Registered Public Accounting Firm

Plan Administrator

Lockheed Martin Corporation

Salaried Savings Plan

We have audited the accompanying statements of net assets available for benefits of the Lockheed Martin Corporation Salaried Savings Plan as of December 31, 2012 and 2011, and the related statement of changes in net assets available for benefits for the year ended December 31, 2012. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Lockheed Martin Corporation Salaried Savings Plan at December 31, 2012 and 2011, and the changes in its net assets available for benefits for the year ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.

Our audits were conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2012, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Such information is the responsibility of the Plan’s management. The information has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Mitchell & Titus, LLP

Washington, DC

June 21, 2013

 

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Lockheed Martin Corporation Salaried Savings Plan

Statement of Net Assets Available for Benefits

December 31, 2012

 

		ESOP Fund				401(h) Trust				Participant- Directed Investments				Total
		(In thousands)
Assets
Investments:
Interest in Lockheed Martin Corporation Defined Contribution Plans Master Trust		$	3,201,786			$	—			$	18,612,961			$	21,814,747
Net assets held in 401(h) trust			—				340,745				—				340,745
Receivables:
Participant contributions			—				—				15,173				15,173
Lockheed Martin Corporation contributions			5,179				—				—				5,179
Notes receivable from participants			—				—				234,353				234,353
Total assets			3,206,965				340,745				18,862,487				22,410,197
Liabilities
Administrative expenses payable			—				—				2,246				2,246
Amounts related to obligation of 401(h) trust			—				340,745				—				340,745
Total liabilities			—				340,745				2,246				342,991
Net assets reflecting investments at fair value			3,206,965				—				18,860,241				22,067,206
Adjustment from fair value to contract value for fully benefit-responsive investment contracts			—				—				(87,819	)			(87,819	)
Total net assets available for benefits		$	3,206,965			$	—			$	18,772,422			$	21,979,387

See accompanying notes to financial statements.

 

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Lockheed Martin Corporation Salaried Savings Plan

Statement of Net Assets Available for Benefits

December 31, 2011

 

		ESOP Fund				401(h) Trust				Participant- Directed Investments				Total
		(In thousands)
Assets
Investments:
Interest in Lockheed Martin Corporation Defined Contribution Plans Master Trust		$	2,982,608			$	—			$	16,688,089			$	19,670,697
Net assets held in 401(h) trust			—				313,907				—				313,907
Receivables:
Participant contributions			—				—				15,195				15,195
Lockheed Martin Corporation contributions			5,193				—				—				5,193
Notes receivable from participants			—				—				238,436				238,436
Total assets			2,987,801				313,907				16,941,720				20,243,428
Liabilities
Administrative expenses payable			—				—				2,861				2,861
Amounts related to obligation of 401(h) trust			—				313,907				—				313,907
Total liabilities			—				313,907				2,861				316,768
Net assets reflecting investments at fair value			2,987,801				—				16,938,859				19,926,660
Adjustment from fair value to contract value for fully benefit-responsive investment contracts			—				—				(67,300	)			(67,300	)
Total net assets available for benefits		$	2,987,801			$	—			$	16,871,559			$	19,859,360

See accompanying notes to financial statements.

 

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Lockheed Martin Corporation Salaried Savings Plan

Statement of Changes in Net Assets Available for Benefits

Year ended December 31, 2012

 

		ESOP Fund				Participant- Directed Investments				Total
		(In thousands)
Net assets available for benefits at beginning of year		$	2,987,801			$	16,871,559			$	19,859,360
Additions to net assets:
Contributions:
Participant			34,763				853,454				888,217
Lockheed Martin Corporation			286,917				—				286,917
Total contributions			321,680				853,454				1,175,134
Interest income on notes receivable from participants			—				21,430				21,430
Net investment gain from participation in Lockheed Martin Corporation Defined Contribution Plans Master Trust			563,112				1,889,283				2,452,395
Total additions			884,792				2,764,167				3,648,959
Deductions from net assets:
Distributions and withdrawals			665,454				837,959				1,503,413
Administrative expenses			174				29,053				29,227
Total deductions			665,628				867,012				1,532,640
Change in net assets			219,164				1,897,155				2,116,319
Transfers from other plans			—				3,708				3,708
Net assets available for benefits at end of year		$	3,206,965			$	18,772,422			$	21,979,387

See accompanying notes to financial statements.

 

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Table of Contents

Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

1.	Description of the Plan

The following description of the Lockheed Martin Corporation Salaried Savings Plan (the Plan) provides only general information. Participants should refer to the Summary Plan Description for a more complete description of the Plan’s provisions.

General

The Plan is a defined contribution plan covering all salaried employees of Lockheed Martin Corporation (Lockheed Martin or the Corporation) in groups to which Plan participation is extended by the Corporation, including employees in the United States and certain U.S. citizens working abroad.

The assets of the Plan, excluding the receivables, are held and invested on a commingled basis in the Lockheed Martin Corporation Defined Contribution Plans Master Trust (the Master Trust) under an agreement between Lockheed Martin and State Street Bank and Trust Company (the Trustee). The recordkeeper is ING. Lockheed Martin is the Plan Sponsor and the Plan Administrator.

The Plan includes an Employee Stock Ownership Plan (ESOP) feature. Cash dividends declared on Lockheed Martin common stock allocated to participants’ accounts under the Employee Stock Ownership Plan Fund (ESOP Fund) and dividends received related to the Lockheed Martin Stock Fund may be reinvested in the participant’s account or distributed to the participant, at the discretion of the participant. In the event the participant does not make an election, the allocated dividends will be reinvested in the participant’s account. In order for dividends to be distributed to a participant, the participant’s balances in the Corporation’s stock must be held under the ESOP Fund or the Lockheed Martin Stock Fund as of the close of business on the day before the ex-dividend date. Any distribution of dividends to a participant must not occur later than 90 days following the plan year in which the dividend was paid.

Contributions

Eligible employees are automatically enrolled in the Plan at a rate of 3% of their base salary in before-tax contributions. The Plan has an auto-escalation feature whereby contributions for those automatically enrolled are increased 1% each year up to 8%. The Plan allows eligible employees to make contributions on a before-tax, after-tax, or Roth 401(k) basis. Each year, eligible employees can make contributions of up to 25% of the employee’s base salary, subject to regulatory limitations. The Corporation generally contributes an amount equal to 50% of the first 8% of the participant’s basic contribution. Participants are immediately vested in all employer contributions. Substantially all employer contributions to the Plan consist of the Corporation’s common stock invested in the ESOP Fund.

Participant contributions may be invested in one or more of the available investment funds at the participant’s election. Participants may change the investment mix of their account balance up to 12 times during a calendar year. In addition, the participant will always be provided at least one trading opportunity each calendar quarter regardless of the number of prior investment trades they placed for the year. The participant will have one final opportunity to transfer all or part of their transferable account balance to the Stable Value Fund during the fourth quarter of the year. Amounts that are transferred out of the Stable Value Fund must remain invested in a Core or Target Date Fund for at least 90 days before they are eligible to be transferred into the Government Short Term Fund, the Treasury Inflation-Protected Securities (TIPS) Fund, or the Self-Managed Account (SMA). Participants may make an unlimited number of transfers out of the Lockheed Martin Stock Fund or the ESOP Fund.

An option available to participants is the SMA, whereby a participant may elect to invest up to 75% of the participant’s transferable account balance in stocks, mutual funds, bonds, or other investments offered by the Plan at the participant’s direction. No investment contribution may be made directly to the SMA. A participant’s initial transfer to the SMA must be at least $3,000, and subsequent transfers must be at least $1,000. No distribution, withdrawal, or loan may be made directly from the assets in the SMA.

The Plan permits catch-up contributions for participants age 50 or older as permitted by the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001.

Participant Accounts

Each participant’s account is credited with the participant’s contribution, the employer’s matching contribution and the respective investment earnings or losses, less expenses, of the individual funds in which the account is invested.

 

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Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

Notes Receivable from Participants

Each participant may borrow from their total account balance a minimum of $500 and up to a maximum amount equal to the lesser of 50% of their account balance or $50,000 (minus their highest outstanding loan balance from the past 12 months, if any). The loans are secured by the balance in the participant’s account and bear interest of 1% over a published prime rate. Principal and interest are paid ratably through weekly payroll deductions. Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest.

Payment of Benefits

On termination of service due to death, disability or retirement, a participant or beneficiary may elect to receive his or her account balance through a number of payout options. A participant is entitled to the account balance at the time his or her employment with the Corporation ends.

Plan Termination

Although it has not expressed any intent to do so, the Board of Directors of Lockheed Martin has the right to amend, suspend or terminate the Plan at any time, subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). In the event of Plan termination, participants will receive a payment equal to the total value of their accounts.

Transfer of Assets

Effective January 1, 2010, most salaried employees in the Corporation’s Information Systems & Global Solutions business area who were participating in the Lockheed Martin Corporation Operations Support Savings Plan (OSSP) stopped participating in the OSSP and began participating in the Plan. In 2011, most of these employees had their account balances transferred from the OSSP to the Plan. Account balances of these employees with outstanding loans in the OSSP were not transferred; however, these account balances are subject to transfer to the Plan when the loans are repaid. During 2012, assets of the OSSP in amount of $3,417,000 were transferred to the Plan.

In 2012, net assets of $291,000 were transferred to the Plan from the Resource Management, Inc. 401(k) Plan. This amount reflects the participant account balances of current and former employees of Procerus Technologies, L.C., a business that was acquired by the Corporation in 2012.

ESOP Feature

There were 34,653,315 and 36,469,315 shares of Lockheed Martin common stock in the ESOP Fund as of December 31, 2012 and 2011, respectively.

401(h) Arrangement

The Plan has an arrangement that qualifies under Section 401(h) of the Internal Revenue Code (the IRC). The 401(h) arrangement is used by the Corporation to fund in part the Corporation’s portion of post-retirement medical expenses incurred under various medical plans sponsored by the Corporation for salaried employees who retired on or after January 1, 1993. In accordance with Section 401(h) of the IRC, the Plan’s investment in the 401(h) account may not be used, or diverted for any purpose other than providing health and welfare benefits for retirees. Plan participants do not contribute to the 401(h) account. Employer contributions or qualified transfers to the 401(h) account are determined annually at the discretion of the Corporation. The assets of the 401(h) account are held by the Northern Trust Company.

 

2.	Summary of Significant Accounting Policies

Basis of Accounting

The financial statements of the Plan are prepared based on the accrual basis of accounting.

 

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Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

Payment of Benefits

Benefits are recorded when paid.

Risks and Uncertainties

The Plan, through the Master Trust, invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.

Investment Valuation and Income Recognition

Investments in the Master Trust are reported at fair value. Fair value is the price that would have been received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 7 for additional disclosure of fair value measurements. Purchases and sales of securities in the Master Trust are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net realized and unrealized gain/loss on investments bought and sold as well as held during the year are included in net investment gain from the Master Trust on the Statement of Changes in Net Assets Available for Benefits.

Administrative Expenses

Direct administrative expenses are paid by the Master Trust and generally allocated to the Plan either on a pro rata basis or directly if specifically related to the Plan. Other indirect administrative expenses are paid by the Corporation.

Recent Accounting Pronouncements

In May 2011, the FASB issued amended guidance to converge the fair value measurement guidance in GAAP with International Financial Reporting Standards. Some of the amendments clarify the application of existing fair value measurement requirements, while other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amended guidance became effective for the Plan on January 1, 2012 and did not have a material impact on the Plan’s financial statements and disclosures.

 

3.	Reconciliation of Financial Statements to Form 5500

The Plan’s interest in the Master Trust on the Statement of Net Assets Available for Benefits exceeded the related amount on the Form 5500 as of December 31, 2012 and 2011 by $87,819,000 and $67,300,000, respectively, due to the adjustment from fair value to contract value for fully benefit responsive investment contracts.

The net assets of the 401(h) trust are reflected as net assets available for benefits on the Form 5500, but not in these financial statements as they may only be used to pay retiree medical benefits. Differences in the Plan’s interest in the net investment gain in the Master Trust and administrative expenses reported in the financial statements arose from the classification of certain administrative expenses and interest income on notes receivable from participants, which are included in the net investment gain in the Master Trust for Form 5500 reporting purposes.

 

		December 31,
		2012				2011
		(In thousands)
Net assets available for benefits per the financial statements		$	21,979,387			$	19,859,360
Add: Net assets held in 401(h) trust per Form 5500			340,745				313,907
Net assets available for benefits per the Form 5500		$	22,320,132			$	20,173,267

 

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Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

The following is a reconciliation of the changes in net assets available for benefits for the year ended December 31, 2012, per the financial statements to the Form 5500:

 

		Amounts per Financial Statements				401(h) Trust				Amounts per Form 5500
		(In thousands)
Interest and dividend income		$	—			$	6,311			$	6,311
Net realized and unrealized gain			—				21,113				21,113
		Amounts per Financial Statements				Differences				Amounts per Form 5500
		(In thousands)
Net investment gain from participation in Lockheed Martin Corporation Defined Contribution		$	2,452,359			$	(5,551	)		$	2,446,808
Administrative expenses			(29,227	)			26,981				(2,246	)
Interest income on notes receivable from participants			21,430				(21,430	)			—

 

4.	Income Tax Status

The Internal Revenue Service (IRS) has determined and informed the Corporation by letter dated July 20, 2011, that the Plan and related trust are designed in accordance with applicable sections of the IRC. The Plan has been amended since receiving the determination letter. However, the Plan Administrator and the Plan’s counsel believe that the Plan is designed and is currently being operated in compliance with the applicable provisions of the IRC. The Plan was submitted for an updated IRS determination letter on January 23, 2013.

GAAP requires plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits, to be sustained upon examination by the IRS. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2012, there are no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan Administrator believes it is no longer subject to income tax examinations for years prior to 2005.

 

5.	Legal Proceeding

On September 11, 2006, the Corporation and Lockheed Martin Investment Management Company (LMIMCo), a wholly-owned subsidiary of the Corporation, were named as defendants in a lawsuit filed in the U.S. District Court for the Southern District of Illinois, seeking to represent a putative class of participants and beneficiaries in the Plan. Plaintiffs have alleged that the Corporation or LMIMCo caused the Plan to pay certain expenses that were higher than reasonable and breached fiduciary duties under ERISA by offering certain allegedly imprudent investment options and providing inadequate disclosures to the Plan’s participants. On March 31, 2009, the Court dismissed a number of plaintiffs’ claims, leaving three claims for trial: plaintiffs’ claims involving the company stock funds, the Stable Value Fund, and overall administrative fees. On September 24, 2012, following plaintiffs’ amended motion for class certification on these remaining claims, the Court denied class certification of the Stable Value Fund claims, granted class certification of the administrative fees claims, and partially granted class certification of the company stock funds claims. The U.S. Court of Appeals for the Seventh Circuit has granted plaintiffs’ petition seeking discretionary review of the class certification of the Stable Value Fund claim and a hearing was held on May 29, 2013. The complaint does not allege a specific calculation of damages, and the Corporation reasonably cannot estimate the possible loss, or range of loss, which could be incurred by the Corporation if plaintiffs were to prevail in their claims, but believe that the Corporation and LMIMCo have substantial defenses. The Corporation disputes the allegations and is defending against them. As a consequence of the Court’s dismissal of a number of plaintiffs’ claims and related decisions by the Court on class certification with respect to the remaining claims, the Corporation believes that the proceedings are no longer material to the Corporation or LMIMCo. Additionally, an adverse decision would not result in any loss to the Plan. Accordingly, the Plan Sponsor does not anticipate reporting on this matter in future periods.

 

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Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

6.	Parties-in-Interest Transactions

The Plan makes certain investments through the Master Trust, which are considered to be party-in-interest transactions for which a statutory exemption from the prohibited transaction regulation exists. The Master Trust owes direct reimbursements of $1,200,000 to the Corporation for certain expenses incurred by the Corporation in providing services to the Plan.

In addition, notes receivable from participants are considered to be party-in-interest transactions for which a statutory exemption from the prohibited transaction regulation exists.

Certain funds are sponsored by Northern Trust Investments, a wholly-owned subsidiary of The Northern Trust Company. The Northern Trust Company is the trustee of the 401(h) Account. Therefore, investments in these funds are considered to be party-in-interest transactions for which a statutory exemption from the prohibited transaction regulation exists.

The Master Trust invests in common stock of the Corporation, the Plan Sponsor. The Master Trust held 48,627,663 and 51,897,215 shares of the Company’s common stock as of December 31, 2012 and 2011, respectively. Dividends earned by the Master Trust on the Company’s common stock were $209,902,000 for the year ended December 31, 2012.

The Master Trust invests in certain investments that are sponsored by State Street, the Trustee. These investments include the following: Government Short Term Fund, S&P 500 Indexed Equity Fund, Small Mid-Cap Indexed Equity Fund, and MSCI EAFE Indexed Equity Fund.

The 401(h) account invests in common stock of the ING Groep NV, the parent company of the recordkeeper. Therefore, investments in ING Groep NV common stock are considered to be party-in-interest transactions for which a statutory exemption from the prohibited transaction regulation exists.

 

7.	Master Trust & 401(h) Account

General

The Plan’s interest in the Master Trust is stated at the fair value of the underlying net assets in the Master Trust. The assets, realized and unrealized gains and losses, and investment income of the Master Trust are allocated among the plans included therein based on the number of participant units outstanding in each fund and other investment options in which the plans invest daily. The Plan’s interest in the Master Trust’s net assets as of December 31, 2012 and 2011 was 90.22% and 90.15%, respectively.

The Master Trust invests in a Stable Value Fund that contains the following components: a managed separate account paired with a wrap contract to create a synthetic guaranteed investment contract (GIC), and a common/collective trust (CCT), the Invesco Institutional N.A., Inc. Group Trust Fund Retirement Savings (Invesco-CCT). In June 2012, the Stable Value Portfolio that resided in the portion of the Stable Value Fund managed by State Street Global Advisors (SSGA) for Employee Benefit Trusts (SSGA-CCT) contract was terminated and transferred to the Invesco-CCT. The Stable Value Fund investment components provide the Master Trust with a medium for collective investment and reinvestment in one or more bank, insurance company, or synthetic investment contracts that are considered fully benefit- responsive, as well as a significant investment in a Short-Term Investment Fund or a Government Short-Term Investment Fund.

A fully benefit-responsive investment contract provides a liquidity guarantee by a financially responsible third party, of principal and previously accrued interest for liquidations, transfers, loans or withdrawals initiated by plan participants exercising their rights to withdraw, borrow or transfer funds under the terms of the plan. Contract value is the relevant measurement attribute for that portion of net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan.

 

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Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

The following table summarizes the adjustments from fair value to contract value related to fully benefit-responsive investment contracts included in the Stable Value Fund:

 

		2012												2011
Type		Investment at Fair Value				Wrap Contract at Fair Value				Adjustment to Contract Value				Investments at Fair Value				Wrap Contract at Fair Value				Adjustment to Contract Value
		(In thousands)												(In thousands)
SSGA - CCT			N/A				N/A				N/A			$	736,195			$	82			$	(2,179	)
Invesco - CCT		$	4,227,585			$	1,279			$	(97,353	)		$	1,817,045			$	455			$	(72,481	)

A synthetic GIC is a wrap contract paired with an underlying investment or investments, usually a portfolio of high-quality, intermediate term fixed income securities. The wrap contract in the managed separate accounts purchased from certain banks and insurance companies credits a stated interest rate for a specified period of time. Investment gains and losses are amortized over the expected duration through the calculation of the interest rate applicable to the Plan on a prospective basis. The synthetic GIC provides for a variable crediting rate and the issuer of the wrap contract provides assurance that future adjustments to the crediting rate cannot result in a crediting rate less than zero. The crediting rate is primarily based on the current yield-to-maturity of the covered investments, plus or minus amortization of the difference between the market value and contract value of the covered investments over the duration of the covered investments at the time of computation. The crediting rate is most impacted by the change in the annual effective yield-to-maturity of the underlying securities, but is also affected by the differential between the contract value and the market value of the covered investments. This difference is amortized over the duration of the covered investments. Depending on the change in duration from reset period to reset period, the magnitude of the impact to the crediting rate of the contract to market difference is heightened or lessened. The crediting rate can be adjusted periodically.

The Master Trust invests in a Short-Term Investment Fund or Government Short-Term Investment Fund, consisting of U.S. Treasury obligations and commercial paper, that is used as a temporary investment to hold contributions from the day the cash is transferred from the Corporation to the Trustee until the day the cash is invested in a particular fund. Occasionally, the fund may invest in unleveraged securities, which may be considered derivatives, for liquidity or asset allocation purposes. At December 31, 2012 and 2011, there were no material investments in derivatives. The related earnings from the Short-Term Investment Fund or Government Short-Term Investment Fund are used to pay certain expenses related to participant accounts.

In order to provide appropriate liquidity to meet ongoing daily cash outflow requirements for the Lockheed Martin stock funds and the other investment funds that are investment alternatives for the Plan that are beneficiaries of the Master Trust, the Master Trust may be able to receive advances from the Stable Value Fund or the Corporation. The Stable Value Fund may make an advance only after considering its own liquidity needs. Any investment fund that receives an advance will compensate the Stable Value Fund for income lost due to any such advance by paying interest on such advance calculated on a compounded daily basis based on an annual rate equal to the interest crediting rate to the Short Term Investment Fund or the Government Short-Term Investment Fund portion of the Stable Value Fund, as appropriate. The Lockheed Martin stock funds may borrow, without interest, up to $200,000,000 from the Corporation, as evidenced by a promissory note, which requires repayment within three business days after the advance. As of December 31, 2012 and 2011, there were no such advances payable to the Corporation.

Fair Value of Assets

The accounting standard for fair value measurements defines fair value, establishes a market-based framework or hierarchy for measuring fair value, and expands disclosures about fair value measurements. The standard is applicable whenever assets and liabilities are measured and included in the financial statements at fair value.

The fair value hierarchy established in the standard prioritizes the inputs used in valuation techniques into three levels as follows:

 

•

Level 1 – Observable inputs – quoted prices in active markets for identical assets and liabilities;

 

•

Level 2 – Observable inputs other than the quoted prices in active markets for identical assets and liabilities – includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and

 

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Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

•

Level 3 – Unobservable inputs – includes amounts derived from valuation models where one or more significant inputs are unobservable and require us to develop relevant assumptions.

The following table presents the fair value of the assets in the Master Trust by asset category and their level within the fair value hierarchy as of December 31, 2012 and their appreciation (depreciation) for the year ended December 31, 2012:

 

		Level 1				Level 2				Level 3				Total				Appreciation (Depreciation)
		(In thousands)
Cash and cash equivalents		$	801,678			$	—			$	—			$	801,678			$	(188	)
Equity:
U.S. equity securities			2,318,655				—				—				2,318,655				266,486
U.S. equity securities - Lockheed Martin			4,491,512				—				—				4,491,512				584,318
International equity securities			479,775				—				—				479,775				58,833
Commingled equity funds			2,537,140				8,632,264				—				11,169,404				1,343,668
Fixed income:
Corporate debt securities			—				95,215				—				95,215				5,151
U.S. Government securities			—				1,701,640				—				1,701,640				30,062
Other fixed income securities			6,763				3,156,228				—				3,162,991				4,201
Alternative investments:
Wrap contract			—				—				1,279				1,279				824
Total Investment Assets at Fair Value		$	10,635,523			$	13,585,347			$	1,279			$	24,222,149			$	2,293,355
Unsettled trades, net															(33,312	)
Adjustment from fair value to contract value for fully benefit-responsive investment contracts															(97,353	)
Total net assets														$	24,091,484

Interest and dividend income earned by the Master Trust for the year ended December 31, 2012 was $454,183,000.

The following table presents the fair value of the assets in the Master Trust by asset category and their level within the fair value hierarchy as of December 31, 2011:

 

		Level 1				Level 2				Level 3				Total
						(In thousands)
Cash and cash equivalents		$	959,819			$	—			$	—			$	959,819
Equity:
U.S. equity securities			2,373,144				—				—				2,373,144
U.S. equity securities - Lockheed Martin			4,201,589				—				—				4,201,589
International equity securities			283,363				454				—				283,817
Commingled equity funds			2,165,399				5,311,893				—				7,477,292
Fixed income:
Corporate debt securities			—				99,242				—				99,242
U.S. Government securities			—				1,875,380				—				1,875,380
Other fixed income securities			4,361				4,539,437				—				4,543,798
Alternative investments:
Wrap contracts			—				—				537				537
Total Investment Assets at Fair Value		$	9,987,675			$	11,826,406			$	537			$	21,814,618
Unsettled trades, net															(10,757	)
Adjustment from fair value to contract value for fully benefit-responsive investment contracts															(74,660	)
Total net assets														$	21,729,201

 

11

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Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

The fair value of the wrap contracts of $1,279,000 and $537,000 at December 31, 2012 and 2011, respectively, are considered Level 3 investments due to certain unobservable inputs as described below. The change in the fair value during 2012 was primarily due to unrealized gains.

The Master Trust recognizes transfers between the Levels 1, 2, and 3 fair value classifications as of the date of the change in circumstances that causes the transfer. During 2012, there were no transfers between Levels 1, 2, and 3.

401(h) Account

The assets in the 401(h) account are held outside the Master Trust in a separate trust. The following table presents the fair value of the assets in the 401(h) account by asset category and their level within the fair value hierarchy as of December 31, 2012 and their appreciation for the year ended December 31, 2012:

 

		Level 1				Level 2				Level 3				Total				Appreciation
		(In thousands)
Cash and cash equivalents		$	20,883			$	—			$	—			$	20,883			$	76
Equity:
U.S. equity securities			53,127				—				—				53,127				7,876
International equity securities			36,277				18				—				36,295				5,638
Commingled equity funds			112,073				—				—				112,073				4,350
Fixed income:
U.S. Government securities			—				114,776				—				114,776				2,825
Other fixed income securities			—				322				2,162				2,484				242
Total assets		$	222,360			$	115,116			$	2,162			$	339,638			$	21,007
Receivables, net															1,107
Total net assets														$	340,745

The following table presents the fair value of the assets in the 401(h) account by asset category and their level within the fair value hierarchy as of December 31, 2011:

 

		Level 1				Level 2				Level 3				Total
						(In thousands)
Cash and cash equivalents		$	13,496			$	—			$	—			$	13,496
Equity:
U.S. equity securities			46,588				—				—				46,588
International equity securities			45,568				—				—				45,568
Commingled equity funds			86,178				899				—				87,077
Fixed income:
Corporate debt securities			—				59				—				59
U.S. Government securities			—				113,876				—				113,876
Other fixed income securities			—				—				1,209				1,209
Alternative investments:
Commodities			4,349				—				—				4,349
Total assets		$	196,179			$	114,834			$	1,209			$	312,222
Receivables, net															1,685
Total net assets														$	313,907

 

12

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Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements

 

The following table presents the changes during 2012 in the fair value of 401(h) account assets categorized as Level 3 in the preceding tables:

 

		Balance, beginning of year				Realized gains				Unrealized gains				Purchases				Sales				Settlements				Balance, end of year
		(In thousands)
Other fixed income securities		$	1,209			$	2			$	159			$	2,321			$	(1,228	)		$	(301	)		$	2,162

The 401(h) account recognizes transfers between the Levels 1, 2, and 3 fair value classifications as of the date of the change in circumstances that causes the transfer. During 2012, there were no transfers between Levels 1, 2 and 3.

Valuation Techniques

Cash equivalents are mostly comprised of short-term money-market instruments and are valued at cost, which approximates fair value.

U.S. equity securities and international equity securities categorized as Level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year. International equity securities categorized as Level 2 are not traded on an active exchange, or if the closing price is not available, the trustee obtains corroborated, indicative quotes from a pricing vendor, broker, or investment manager.

Commingled equity funds are public investment vehicles valued using the Net Asset Value (NAV) provided by the fund manager. The NAV is the total value of the fund divided by the number of shares outstanding. Commingled equity funds are categorized as Level 1 if traded at their NAV on a nationally recognized securities exchange or categorized as Level 2 if the NAV is corroborated by observable market data (e.g., purchases or sales activity).

Other fixed income securities categorized as Level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year. Corporate debt securities, U.S. Government securities, and other fixed income securities categorized as Level 2 are valued by the trustee using pricing models that use verifiable observable market data (e.g., interest rates and yield curves observable at commonly quoted intervals), bids provided by brokers or dealers, or quoted prices of securities with similar characteristics. Other fixed income securities are categorized at Level 3 when valuations using observable inputs are unavailable. The trustee obtains pricing based on indicative quotes or bid evaluations from vendors, brokers or the investment manager.

Other fixed income securities in the Master Trust categorized as Level 2 also include the Stable Value Fund. Securities within the Stable Value Fund for which market quotations are readily available are valued in accordance with such market quotations. If market quotations are not available with respect to any such security, the fair value of the security is determined in good faith by the issuer of the Stable Value Fund.

Individual assets of the synthetic GIC categorized as Level 2 are valued at representative quoted market prices. The fair value of the wrap contracts associated with the synthetic GIC is categorized as Level 3 and is determined using the income approach methodology. Each wrap contract is valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer.

Commodities are traded on an active commodity exchange and are valued at their closing prices on the last trading day of the year.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

13

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		401(h) Trust **
		U.S. Government Securities
		CMO Small Business Admin Gtd Dev Partn Ctf 5.49% 02/01/27			345,276			$	345			$	397
		Small Business Admin Gtd Dev Partn CD 5.24% Due 1-23/02-1-10			204,255				204				228
		Small Business Admin Gtd Dev Partn Ctf 5.31% Due 08-01-2022			132,841				137				146
		Small Business Admin Gtd Dev Partn Ctf 5.1% Due 09-01-2023			152,509				153				169
		Small Business Admin Gtd Dev Partn Ctf 5.35% Due 02-01-2026			294,403				294				336
		U.S. Treasury Inflation Indexed Bonds 0.75% Due 02-15-2042			755,000				787				846
		U.S. Treasury Bonds 5.081% Due 04-15-2028			1,565,000				2,788				3,548
		U.S. Treasury Bonds 2.75% Due 08-15-2042			1,775,000				1,772				1,714
		U.S. Treasury Inflation Indexed Notes 1.375% Due 01-15-2020			2,425,000				2,553				3,075
		U.S. Treasury Bonds 2.125% Due 02-15-2041			1,705,000				2,331				2,659
		U.S. Treasury Bonds Dated 8-15-2010 3.875% Due 08-15-2040			27,025,000				28,437				32,481
		U.S. Treasury Bonds 4.25% Due 11-15-2040			4,735,000				4,662				6,046
		U.S. Treasury Bonds Dated 02-15-1996 6% Due 02-15-2026			2,875,000				3,828				4,160
		U.S. Treasury Bonds Dated 02-15-2000 6.25% Due 05-15-2030			2,460,000				3,330				3,804
		U.S. Treasury Bonds Dated 02-15-2001 5.375% 02-15-2031			2,905,000				3,765				4,147
		U.S. Treasury Bonds Dated 08-15-1993 6.25% Due 08-15-2023			2,540,000				3,337				3,642
		U.S. Treasury Bonds Dated 08-15-1997 6.375% Due 08-15-2027			2,640,000				3,673				4,000
		U.S. Treasury Bonds Dated 11-15-2012 2.75% Due 11-15-2042			3,700,000				3,655				3,565
		U.S. Treasury Inflation Indexed Bonds 1.75% Due 01-15-2028			1,495,000				1,588				2,137
		U.S. Treasury Inflation Indexed Notes 1.25% Due 07-15-2020			2,935,000				3,022				3,693
		U.S. Treasury Bonds 4.375% Due 05-15-2040			4,975,000				5,371				6,476
		U.S. Treasury Bonds 4.75% Due 02-15-2041			2,340,000				2,960				3,226
		U.S. Treasury Bonds Dated 05-16-2011 4.375% Due 05-15-2041			6,865,000				8,271				8,944
		U.S. Treasury Inflation Indexed Bonds 2.00% Due 01-15-2026			1,015,000				1,219				1,551
		U.S. Treasury Inflation Indexed Bonds 2.375% Due 01-15-2025			1,055,000				1,398				1,746
		U.S. Treasury Notes Dated 8/15/2011 2.125% Due 08-15-2021			720,000				741				757
		U.S. Treasury Inflation Indexed Notes 2.00% Due 01-15-2016			910,000				1,086				1,176
		U.S. Treasury Inflation Indexed Notes 0.125% Due 01-15-2022			1,115,000				1,187				1,237
		U.S. Treasury Inflation Indexed Notes 2.00% Due 07-15-2014			1,460,000				1,813				1,891
		U.S. Treasury Inflation Indexed Notes Dated 07-15-2011 Due 07-15-2021			1,020,000				1,130				1,190
		U.S. Treasury Inflation Indexed Notes 04-15-2016			1,895,000				1,928				2,091
		U.S. Treasury Inflation Indexed Bonds 2.625% Due 07-15-2017			2,765,000				3,325				3,698
		Total U.S. Government Securities						$	101,090			$	114,776

 

14

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock
		1st Quantum Minerals LTD			1,286			$	29			$	28
		Abb LTD			7,726				147				158
		Abbott Laboratories			15,900				804				1,041
		Accenture PLC			4,400				211				293
		Adecco SA			668				36				35
		Adidas AG			589				40				52
		Aeon Co. LTD			2,900				35				33
		AFLAC Inc			2,000				91				106
		AGL Energy LTD			3,989				60				64
		Agnico Eagle Mines			1,125				53				59
		Agrium Inc			2,161				165				215
		AIA Group LTD			60,400				207				236
		Air Products & Chemicals Inc			118				11				10
		Air Water Inc			946				11				12
		Akzo Nobel NV			779				39				51
		Alimentation Couch			1,679				47				82
		Allegheny Technologies Inc			3,383				108				103
		Allergan Inc			6,800				437				624
		Allianz SE			925				112				128
		Alstom			1,309				64				52
		Amer Movil SAB			286				7				7
		American Express Co			4,600				205				264
		American International Group Inc			2,700				95				95
		Ameriprise Financial Inc			1,500				95				94
		Amerisourcebergen Corp			9,900				390				427
		Anadarko Petro Corp			547				42				41
		Analog Devices Inc			11,744				466				494
		Andritz AG			2,060				79				132
		Anglo American			1,221				40				38
		Anglogold Ashanti LTD			299				11				9

 

15

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Anheuser Busch InBev			7,879			$	449			$	686
		Antofagasta			1,073				22				23
		Apache Corp			4,100				389				322
		Aperam SA			1,568				24				24
		Apple Inc			3,954				1,421				2,108
		Arcelormittal			2,319				35				40
		Asahi Group Holdings LTD			2,900				61				62
		Asahi Kasei Corp			8,242				52				48
		Asciano LTD			6,282				31				30
		ASML Holding NV			1,952				93				124
		Astellas Pharma			3,100				124				139
		Astral Media Inc			1,360				47				63
		Astrazeneca			6,096				293				288
		AT&T Inc			8,700				229				293
		Aurico Gold Inc			5,496				36				45
		Australia & New Zealand Bank Group			6,938				166				180
		Autogrill SPA			6,216				83				71
		Aviva			7,091				45				43
		Azbil Corp			1,700				39				34
		BAE Systems			10,683				59				59
		Balfour Beatty			4,704				16				21
		Banco Bradesco			8,368				141				145
		Banco Santander			15,278				106				123
		Bank Of China			34,000				13				15
		Bank of New York Mellon Corp			6,300				166				162
		Bank of Yokohama			10,000				47				46
		Barclays			14,936				60				64
		Barrick Gold Corp			3,633				169				127
		BASF			1,197				94				112
		Bauer AG			1,303				60				33

 

16

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Baxter International Inc			4,178			$	176			$	279
		Bayer AG			3,890				289				369
		BBVA			11,433				89				105
		BCE Inc			1,217				49				52
		Bed Bath & Beyond Inc			4,700				258				263
		Belgacom SA			1,246				45				36
		Bell Aliant Inc			2,855				81				75
		Berkshire Hathaway Inc			8,495				665				762
		BG Group PLC			22,351				497				368
		BHP Billiton LTD			5,646				218				217
		BHP Billiton PLC			4,399				132				152
		Bilfinger Berger			1,047				76				101
		Biogen Idec Inc			1,300				184				191
		BK Mandiri			209,000				159				176
		Blackrock Inc			862				150				178
		Bluescope Steel			5,516				16				20
		BNP Paribas			3,232				136				181
		Bouygues			910				40				27
		BP PLC			53,103				383				367
		Brambles LTD			5,844				42				46
		Bridgestone Corp			2,700				64				69
		British American Tobacco			3,514				181				178
		British Sky Broadcasting Group			4,512				47				56
		BT Group			30,640				78				115
		Cairn Energy PLC			990				12				4
		Cameron International Corp			9,465				421				534
		Canadian Imperial Bank			2,667				203				214
		Canadian Natural Resource			3,543				135				102
		Canadian Pacific Railway LTD			6,571				619				668
		Canon Inc			6,000				278				232

 

17

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Casino Guich-Perrachon			511			$	48			$	49
		Celanese Corp			606				23				27
		Centerra Gold Inc			1,102				10				10
		Central Japan Railway			500				40				40
		Centrica			8,875				49				48
		Cheung Kong (Holdings)			5,000				61				77
		Chevron Corp			6,163				458				666
		China Life Insurance Co. LTD			184				8				9
		China Mobile LTD			3,239				160				190
		China ShenHua Energy			7,638				30				33
		Chubb Corp			3,800				208				286
		Chubu Electric Power Co Inc			3,600				81				48
		Chugai Pharmacy Co. LTD			1,800				31				34
		Chunghwa Telecom Co. LTD			358				11				12
		Cie Financie Richemont			5,492				284				428
		Cisco Systems Inc			19,400				353				381
		Citigroup Inc			8,993				334				356
		Cobalt International Energy Inc			441				14				11
		Coca Cola Co			40,155				1,276				1,456
		Coca-Cola Amatil LTD			3,827				48				53
		Colgate-Palmolive Co			10,463				908				1,094
		Coloplast			535				18				26
		Comerica Inc			5,900				183				179
		Commonwealth Bank Of Australia			2,798				139				181
		Compass Group			7,198				71				85
		Concho Resources Inc			143				13				12
		Consol Energy Inc			363				16				12
		Costco Wholesale Corp New			6,600				441				652
		Covidien PLC			12,690				613				733
		Credit Suisse AG			13,076				423				318

 

18

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Crown Holdings Inc			863			$	31			$	32
		Crown LTD			5,682				50				63
		CVS Caremark Corp			8,400				269				406
		Daiichi Sankyo			4,200				80				64
		Daimler AG			573				30				31
		Danone SA			2,623				167				173
		DBS Group Holdings			9,426				107				115
		Delhaize Group			828				61				33
		Denison Mines Corp			3,538				5				4
		Denso Corp			1,600				49				55
		Deutsche Bank AG			833				36				36
		Deutsche Telekom			5,751				72				65
		Devon Energy Corp			6,700				456				349
		Diageo PLC			14,197				310				412
		DNB ASA			4,989				51				63
		Don Quijote			3,800				145				139
		Doutor Nichires Ho			2,900				37				38
		DR Horton Inc			6,942				136				137
		Dril-Quip Inc			201				15				15
		Du Pont E I De Nemours & Co			855				39				38
		E. On AG			3,200				69				59
		East Japan Railway Co			1,800				107				116
		Ebay Inc			8,100				306				413
		Ecolab Inc			2,520				167				181
		Eldorado Gold Corp			5,006				82				64
		Eli Lilly & Co			2,596				95				128
		EMC Corp			6,700				175				170
		Emerson Electric Co			4,800				230				254
		Enel Spa			10,326				43				43

 

19

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Table of Contents

Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Eni Spa			1,801			$	40			$	44
		Ensco PLC			115				6				7
		EOG Resources Inc			207				21				25
		Ericsson			7,731				85				77
		Eros International			10,600				37				40
		Essilor International SA			721				65				72
		Eutelsat Communications SA			829				31				27
		Evs Broadcast Equipment			1,244				78				73
		Express Scripts Holding Co			10,413				589				562
		Exxon Mobil Corp			13,073				974				1,131
		Familymart Co			1,600				58				66
		Ford Motor Co			16,000				182				207
		Fortescue Metals Group LTD			6,027				24				29
		France Telecom			10,390				215				114
		Freeport-Mcmoran Copper & Gold Inc			3,700				137				127
		Fresenius SE & KGAA			1,620				145				186
		Fuji Oil Co LTD			2,300				32				33
		Gazprom Sponsor			1,612				18				15
		GDF SUEZ			5,122				147				105
		Geberit AG			77				16				17
		General Dynamics Corp			4,100				279				284
		General Electric Co			46,500				876				976
		Gerresheimer AG			1,927				76				102
		Givaudan AG			40				30				42
		Glaxosmithkline			9,449				201				205
		Goldcorp Inc			3,650				174				134
		Goldman Sachs Group Inc			1,700				283				217
		Google Inc			1,231				798				873
		HCC Insurance Holdings Inc			4,300				120				160
		Heidelbergcement AG			487				25				29

 

20

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Heineken NV			1,288			$	65			$	86
		Hennes & Mauritz AB			3,830				126				132
		Hollyfrontier Corp			687				24				32
		Home Depot Inc			9,411				305				582
		Hon Hai Precision			1,510				10				9
		Honda Motor Co			800				30				29
		Honeywell International Inc			7,249				397				460
		Hoya Corp			2,700				67				53
		HSBC Holdings			29,734				284				313
		Iamgold Corp			9,117				127				104
		Iberdrola SA			4,234				27				23
		Imperial Tobacco			3,235				128				125
		Indo Tambangray			4,536				21				20
		Industrial & Commercial Bank China			192,000				128				136
		Infineon Technologies			14,590				112				118
*		ING Groep NV			6,155				54				57
		Inmarsat			3,614				25				34
		Inmet Mining Corp			355				20				26
		Inpex Corporation			11				72				58
		Intesa Sanpaolo			28,275				47				48
		Investor AB			2,712				55				71
		IT Holdings Corp			3,200				35				39
		Itochu Corp			3,400				31				36
		Itoham Foods Inc			10,000				32				44
		ITV			72,000				107				123
		Jardine Matheson Holdings			2,000				109				124
		JB Hi-Fi			8,100				226				229
		JCDecaux SA			771				22				18
		JFE Holdings Inc			1,770				25				33
		Johnson & Johnson			7,322				442				513

 

21

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Johnson Controls Inc			3,146			$	88			$	97
		JP Morgan Chase & Co			15,400				625				677
		JSC MMC Norilsk Nickel			810				14				15
		Julius Baer Gruppe			1,256				46				44
		Juniper Networks Inc			22,700				418				447
		Kaiser Alum Corp			638				33				39
		Kansai Electric Power Co			3,900				85				41
		Kao Corp			2,400				62				62
		Kazakhmys			1,522				16				19
		KBC Groep			4,600				137				159
		Kddi Corp			1,600				106				113
		Keppel Corp			23,900				167				215
		Keyence Corp			518				133				143
		Kingfisher			7,672				30				35
		Kinross Gold Corp			16,069				186				156
		Kirin Holdings Co			8,000				106				94
		Kissei Pharm Co			2,100				41				39
		Kodiak Oil & Gas Corp			3,884				37				34
		Komatsu			2,900				63				73
		Koninklijke Ahold			2,077				28				28
		Koninklijke DSM NV			909				45				55
		Koninklijke KPN			8,495				119				42
		Korea Electric Power Corp			737				8				10
		Kraft Foods Inc			4,356				155				198
		Kubota Corp			21,000				191				239
		Kyocera Corp			600				51				54
		L-3 Communications Holding Corp			1,800				134				138
		Lagardere SCA			1,994				82				66
		Lanxess AG			446				33				39
		Las Vegas Sands Corp			3,600				193				166

 

22

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Lawson Inc			1,000			$	49			$	68
		Legrand SA			2,800				114				118
		Linde AG			156				23				27
		Lloyds Banking Group			172,000				114				134
		L’Oreal			892				105				123
		LVMH Moet Hennessy Louis Vuitton			970				158				178
		Lyondellbasell Industries NV			311				17				18
		Makita Corp			5,500				195				253
		Man Group			10,237				40				14
		Marathon Oil Corp			1,485				42				46
		Marathon Petroleum Corp			4,870				197				307
		Markel Corp Holding Co			833				346				361
		Maruwa Co LTD			900				26				30
		McDonalds Corp			5,300				344				468
		Mead Westvaco Corp			1,116				31				36
		Merck & Co Inc New			8,300				295				340
		Merck KGAA			160				14				21
		Metro AG			726				21				20
		Michelin (CGDE)			3,228				239				305
		Microsoft Corp			23,575				638				630
		Mitsubishi Corp			3,900				92				74
		Mitsubishi Electric CP			7,000				65				59
		Mitsubishi UFJ Financial			44,199				201				236
		Mitsui & Co LTD			7,800				114				116
		Mitusbishi Tanabe			3,000				44				39
		Mizuho Financial Group			98,900				157				180
		Mondelez International Inc			45,347				1,035				1,155
		Monsanto Co New			8,513				591				806
		Mosaic Co			387				22				22
		MTN Group LTD			874				17				18

 

23

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		National Australia Bank			3,498			$	86			$	91
		National Oilwell Varco			1,924				150				132
		Neopost			303				26				16
		Nestle SA			7,556				431				492
		Newcrest Mining LTD			4,125				127				95
		Newmont Mining Corp New			1,700				91				79
		News Corp			4,000				82				102
		Nexen Inc			1,122				26				30
		Nextera Energy Inc			5,200				287				360
		Nidec Corporation			800				81				46
		Nike Inc			15,038				585				776
		Nippon Steel Corp			15,514				39				38
		Nippon Telegraph & Telephone Corp			4,500				213				189
		Nissan Motor Co LTD			4,800				42				45
		Noble Energy Inc			243				24				25
		Nokia OYJ			8,191				80				32
		Nordea Bank AB			11,620				117				111
		Nordstrom Inc			2,500				94				134
		Norfolk Southern Corp			3,800				232				235
		Norsk Hydro ASA			4,420				22				22
		Novartis AG			10,051				599				631
		Novo-Nordisk			528				59				86
		NTT Docomo Inc			111				189				159
		NTT Urban Development Corp			29				20				28
		O Reilly Automotive Inc			5,541				467				495
		Oasis Pete Inc			469				14				15
		Occidental Petroleum Corp			17,147				1,342				1,314
		Oceaneering International Inc			502				25				27
		OMV AG			222				8				8
		Ophir Energy PLC			1,938				17				16

 

24

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Oracle Corp			53,891			$	1,469			$	1,796
		Osaka Gas Co LTD			18,000				74				65
		Overseas Union Enterprise			54,000				136				123
		Packaging Corp of America			1,504				45				58
		Pan American Silver Corp			1,776				36				33
		Panasonic Corp			4,500				63				27
		Parker-Hannifin Corp			1,700				138				145
		Partners Group Holding			116				21				27
		Pearson			2,424				38				47
		Pepsico Inc			16,606				1,087				1,136
		Pernod Ricard			1,118				115				129
		Petroleo Brasileiro SA Petrobras			2,800				95				55
		Petrologistics LP			1,074				15				15
		Petsmart Inc			1,400				59				96
		Pfizer Inc			14,000				255				351
		Philip Morris International			11,100				888				928
		Philips Eleconics NV (Koninhlijke)			5,387				124				141
		Phillips 66			464				23				25
		Pioneer Natural Resources Co			208				21				22
		Potash Corporation of Saskatchewan Inc			3,700				177				151
		PPG Industries Inc			126				11				17
		Prada SPA			17,600				101				168
		Praxair Inc			3,738				309				409
		Proassurance Corp			2,000				87				84
		Procter & Gamble			22,165				1,356				1,505
		Prudential PLC			22,976				248				323
		Prudential Financial Inc			4,600				255				245
		QBE Insurance Group LTD			2,527				41				29
		Qualcomm Inc			25,206				1,117				1,563
		Quebecor Inc			2,194				75				85

 

25

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Raffles Medical			28,195			$	50			$	60
		Reckitt Benckiser Group PLC			3,311				182				209
		Reed Elsevier			7,618				64				79
		Repsol SA			1,054				28				22
		Research In Motion			3,476				109				41
		Rio Tinto			9,492				548				549
		Roche Holdings AG Genusscheine			1,916				314				385
		Rogers Commnications Inc			2,046				78				93
		Ross Stores Inc			3,200				113				173
		Round One Corp			11,300				57				65
		Royal Bank of Canada			3,150				172				189
		Royal Dutch Shell A			4,980				167				171
		Royal Dutch Shell B			7,526				258				266
		RPM International Inc			1,036				28				30
		Sabmiller			1,815				66				83
		Sainsbury PLC			4,251				27				24
		Saipem			5,559				251				215
		Sampo OYJ Ser‘A’			1,526				43				49
		Samsung Electronic			18				11				13
		Sanofi			7,446				549				701
		Santen Pharm Co			1,100				40				42
		SAP AG Ord			19,648				127				187
		Schlumberger LTD			19,057				1,308				1,320
		Schneider Electric			906				61				65
		Schoeller Bleckman			933				68				98
		Seadrill LTD			4,847				164				177
		Semafo Inc			4,192				17				14
		Semen Indonesia (Persero)			84,500				108				139
		Sempra Energy Inc			3,000				166				213

 

26

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Seven & I Holdings Co LTD			4,200			$	114			$	118
		SGS SA			136				221				301
		Shin-Etsu Chemical			2,130				115				129
		Shire PLC			3,835				111				118
		Shoppers Drug Mart Inc			792				34				34
		Siemens AG			3,072				302				334
		Silver Standard Resources Inc			734				11				11
		Silver Wheaton Corp			105				4				4
		Singapore Telecommunications			47,000				114				127
		Skand Enskilda Banken			1,547				11				13
		Skanska AB			2,570				47				42
		SMC Corp			1,100				168				198
		Smith & Nephew			8,540				79				94
		Sodexho Eur4			632				46				53
		Softbank Corp			5,500				177				200
		Sony Financial Holdings			2,700				43				48
		Spectris			3,648				66				122
		St. Jude Medical Inc			7,748				292				280
		Standard Chartered			14,279				356				365
		Stanley Black & Decker Inc			2,000				134				148
		Starbucks Corp			16,599				795				890
		Statoilhydro ASA			5,450				125				136
		Stryker Corp			7,600				418				417
		Sumitomo Corp			5,300				68				67
		Sumitomo Mitsui Financial Group			4,699				142				169
		Sumitomo Mitsui Trust Holdings Inc			37,840				123				132
		Suncor Energy Inc			4,349				159				143
		Suncorp Group LTD			5,583				48				59
		Swedbank AG			2,181				36				43

 

27

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Swedish Match			1,185			$	38			$	40
		Swisscom AG			281				116				121
		Symantec Corp			15,400				271				290
		Syngenta AG			1,201				376				481
		Tabcorp Holdings LTD			11,642				34				37
		Tahoe Resources Inc			438				10				8
		Taiwan Semiconductor Mfg Co LTD			849				13				15
		Takeda Pharmaceutical Co			3,100				143				138
		Target Corp			5,799				302				343
		Tatts Group LTD			14,212				37				44
		Teck Resources LTD			3,722				138				135
		Telefonica SA			6,090				105				82
		Telenor ASA			6,149				100				124
		Teliasonera AB			18,456				147				125
		Telstra Corp LTD			21,274				66				97
		Telus Corporation			768				44				50
		Tesco			32,707				201				179
		Teva Pharmaceutical Industries			6,990				364				261
		Thermo Fisher Corp			10,481				542				668
		Tiffany & Co			1,300				82				75
		Time Warner Cable Inc			2,100				149				204
		Timken Co			1,200				46				57
		TJX Companies Inc			5,800				115				246
		Tokio Marine Holdings Inc			7,300				202				201
		Tokyo Gas Co LTD			18,000				88				82
		Tokyo Steel Manufacturing Co LTD			2,900				31				14
		Toll Holdings LTD			5,317				27				25
		Toray Inds Inc			2,396				14				15
		Toshiba Corp			13,000				47				51
		Total SA			4,048				216				208

 

28

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		Toyota Motor Corp			3,600			$	131			$	167
		Transalta Corp			8,423				161				128
		Transcanada Corp			3,664				153				173
		Transcontinental			2,819				27				32
		TSI Holdings Co LTD			6,095				46				35
		Turkiye Garanti Bankasi			1,081				5				6
		Turkiye Halk Banka Try1			12,250				108				120
		UBS AG			4,129				69				64
		Unicredit SPA			10,239				56				50
		Unilever N V New York			10,500				349				402
		Unilever NV CVA			5,624				185				214
		Unilever PLC			8,919				259				343
		Union Pacific Corp			2,465				243				310
		United Health Group Inc			7,500				274				407
		United Parcel Service Inc			8,500				582				627
		United Technologies Corp			6,042				428				496
		UPM-Kymmene Corp			2,730				35				32
		US Bancorp			11,400				283				364
		Vale SA			780				14				16
		Vinci SA			867				46				41
		Visa Inc			9,120				727				1,382
		Vivendi SA			7,546				193				169
		Vodafone Group			251,296				685				631
		Wal-Mart De Mexico			222				6				7
		Walt Disney Co			16,764				601				835
		Wells Fargo & Co			32,400				1,074				1,107
		Wesfarmers LTD			2,918				93				112
		West Japan Railway			2,100				90				83
		Westpac Banking Corp			5,193				115				140
		Wirecard AG			5,584				83				137

 

29

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Common Stock (continued)
		WIS Energy			7,364			$	184			$	271
		WM Morrison Supermarkets PLC			9,589				43				41
		Woodside Petroleum			1,129				42				40
		Woolworths LTD			4,626				125				141
		WPP PLC			24,077				269				348
		Xstrata PLC			15,413				313				265
		Yamana Gold Inc			4,971				82				85
		Yamato Holdings			2,600				40				39
		Yara International			648				30				32
		Zurich Financial Services			293				58				78
		Total Common Stock						$	77,853			$	87,725
		Preferred Stock
		Companhia De Bebidas Das Americas ADR			399			$	15			$	17
		Itau Unibanco Holding SA ADR			595				10				10
		Klabin SA			2,547				9				16
		Petroleo Brasileiro Petrobras SA ADR			430				10				8
		Volkswagen AG			716				129				162
		Total Preferred Stock						$	173			$	213
		Partnership/Joint Venture Interests
		Enterprise Products Partners LP			554			$	28			$	28
		Memorial Prodtn Partnerships LP			523				14				16
		Plains All American Pipeline LP			928				37				42
		Total Partnership/Joint Venture Interests						$	79			$	86

 

30

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Value of Interest in Registered Investment Companies
		FTSE China 25 Index Fund			216			$	8			$	9
		Market Vectors Gold Miners ETF			12,685				647				588
		MSCI Emerging Markets Index Fund			1,865				76				83
		MSCI Malaysia Free Index Fund			1,061				16				16
		MSCI South Korea Capped Index Fund			606				36				38
		MSCI Switzerland Capped Index Fund			1,295				29				35
		Northern Institutional Funds Government Portfolio			79,688,272				79,688				79,688
		Palladium Tracking Shares Ben Int			1,556				102				108
		Powershares DB Commodity Index Tracking Fund			238,069				6,582				6,613
		S&P India Nifty 50 Index Fund			317				8				8
		S&P Latin America 40 Index Fund			109				5				5
		S&P/TSX 60 Index Fund			1,646				27				29
		S&P/TSX Global Gold Index Fund			26,849				534				509
		SPDR Gold Trust Gold Shares			203				31				33
		Van Eck International Investor Gold Fund			103				3				2
		Vanguard FTSE Emerging Markets ETF			208,734				8,776				9,295
		Vanguard Tax-Managed International Fund			426,000				13,835				15,008
		Vision Opportunity China Fund LTD			50,000				19				6
		Total Value of Interest in Registered Investment Companies						$	110,422			$	112,073

 

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Lockheed Martin Corporation Salaried Savings Plan

Employer Identification Number 52-1893632, Plan Number 017

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)***

December 31, 2012

 

				(c) Description of Investment, Including Maturity Date, Rate of								(e)
		(b)		Interest, Collateral, Par,				(d)				Current
(a)		Identity of Issue, Borrower, Lessor, or Similar Party		or Maturity Value				Cost				Value
								(In thousands)
		Cash and Cash Equivalents			20,882,532			$	20,883			$	20,883
		Other Investments
		American Tower Corp			6,290			$	284			$	486
		Brazil Indexed Notes due 05/15/2045			120				156				180
		Bundesrepub. Deutschlan 2.5% Bonds due 04/07/2044			100,000				134				142
		Dexus Property Group Stapled			47,501				44				50
		Digital Realty Trust Inc			2,158				158				146
		Malaysia 0% T-Bills 2/15/2013			810,000				261				264
		Malaysia 0% T-Bills 1/31/2013			940,000				299				307
		Mexico 3.5% Bonds 12/14/2017			16,240				671				678
		Mexico 8.5% Bonds 11/18/2038			93,950				885				914
		Mirvac Group Stapled Securities			49,406				60				76
		SCA Property Group Stapled			925				1				1
		Simon Property Group Inc			1,600				153				253
		Stockland NPV Stapled Units			23,974				89				88
		Westfield Group NPV Stapled Units			11,706				110				128
		Westfield Retail T Units NPV Stapled Units			20,924				55				66
		Weyerhaeuser Co			3,700				93				103
		Total Other Investments						$	3,453			$	3,882
		Total 401(h) Trust**						$	313,953			$	339,638
*		Notes receivable from participants (Interest rates ranging from 3.25% to 10.50%; varying maturities)							—			$	234,353

 

*	Party-in-interest for which a statutory exemption exists.

**	401(h) Trust net assets include interest and dividends receivable of $9,443,000 and pending trades receivable of $1,313,000 and payable of $9,649,000

***	Schedule reflects the assets held in the 401(h) account and notes receivable from participants and excludes assets held in the Lockheed Martin Corporation Defined Contribution Plans Master Trust.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, Lockheed Martin Corporation, as Plan Administrator, has duly caused this annual report to be signed on its behalf of the Plan by the undersigned hereunto duly authorized.

 

						Lockheed Martin Corporation Salaried Savings Plan, by Lockheed Martin Corporation as Plan Administrator
Date		June 21, 2013				by:		/s/ David Filomeo
								David Filomeo, Vice President,
								Total Rewards & Performance Management

 

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EXHIBIT INDEX

 

Exhibit Number		Description
23		Consent of Independent Registered Public Accounting Firm

 

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