#1TIT LOCKHEED MARTIN TEXEEN CYBER INNOVATION + TECHNOLO Lockheed Martin Corporation 1st Quarter 2015 Financial Results Conference Call April 21, 2015 / 11:00 am EDT Webcast login at www.lockheedmartin.com/investor Webcast replay & podcast available by 2:00 p.m. EDT April 21, 2015 at www.lockheedmartin.com/investor Audio replay available from 2:00 p.m. EDT April 21, 2015 through midnight April 22, 2015 Access the audio replay at: 855-859-2056 U.S. and Canada 404-537-3406 International Replay confirmation code: 93138031#2Forward Looking Statements Our presentation contains "forward-looking statements" or projections based on Lockheed Martin's current expectations and assumptions. These statements are not guarantees of future performance and are subject to risks and uncertainties. Actual results may differ materially due to factors such as: the Corporation's reliance on contracts with the U.S. Government, all of which are conditioned upon the availability of funding; declining budgets; affordability initiatives; the implementation of automatic sequestration under the Budget Control Act of 2011; U.S. Government operations under a continuing resolution or the failure to adopt a budget which may cause contracts to be delayed, canceled or funded at lower levels or which may cause the Corporation to put its funds at ris risks related to the development, performance, schedule, cost and requirements of complex and technologically advanced programs including the Corporation's largest, the F-35 program; economic, industry, business and political conditions (domestic and international) including their effects on governmental policy; the Corporation's success in growing international sales and expanding into adjacent markets and risks associated with doing business in new markets and internationally; the competitive environment for the Corporation's products and services, including increased market pressures in the Corporation's services businesses, competition from outside the aerospace and defense industry, and increased bid protests; planned production rates for significant programs and compliance with stringent performance and reliability standards; the performance of key suppliers, teammates, joint venture partners, subcontractors, and customers; the timing and customer acceptance of product deliveries; the Corporation's ability to attract and retain key personnel and transfer knowledge to new personnel; the impact of work stoppages or other labor disruptions; cyber security or other security threats, or other disruptions; the ability to implement, pace and effect of capitalization changes; the Corporation's ability to recover certain costs under U.S. Government contracts and changes in contract mix; the accuracy of the Corporation's estimates and projections; risk of a future impairment of goodwill or other long-term assets; movements in interest rates and other changes that may affect pension plan assumptions and actual returns on pension plan assets; realizing the anticipated benefits of acquisitions or divestitures, ventures, teaming arrangements or internal reorganizations, and the Corporation's efforts to increase the efficiency of its operations and improve the affordability of its products and services; the adequacy of the Corporation's insurance and indemnities; materials availability; the effect of changes in (or the interpretation of): legislation, regulation or policy, including those applicable to procurement, cost allow ability or recovery, accounting, taxation or export, and; the outcome of legal proceedings, bid protests, environmental remediation efforts, government allegations that we have failed to comply with law, other contingencies and U.S. Government identification of deficiencies in the Corporation's business systems. Except where required by applicable law, we disclaim any duty to update these forward-looking statements. Our SEC filings (found at www.lockheedmartin.com/investor, or through the website maintained by the SEC at www.sec.gov), including, our Annual Report on Form 10-K for the year ended Dec. 31, 2014, contain more information on the types of risks and other factors that could adversely affect these statements. Chart 2 April 21, 2015#31st Quarter 2015 Overview Achieved Sales of $10.1 Billion Achieved Segment Operating Margin* of 12.9% and Earnings Per Share of $2.74 Generated $957 Million in Cash From Operations Returned $1.1 Billion of Cash to Stockholders, Including Repurchasing 3.0 M Shares for $604 Million ● Increased 2015 Full Year Outlook for Operating Profit and Earnings Per Share *See Chart 14 for Definitions of Non-GAAP Measures Chart 3 Solid Start to 2015 April 21, 2015#4Sales Summary Chart 4 $12.0 $9.0 $6.0 ($B) $3.0 $0.0 $10.7B 1Q 2014 $10.1B 1Q 2015 1Q Sales Met Expectations... Tracking to Full Year Outlook April 21, 2015#5Segment Operating Margins* 13.4% 12.9% 11 12% Chart 5 10% Segment Margin (%) 8% 6% 4% 1Q 2014 *See Chart 14 for Definitions of Non-GAAP Measures 1Q 2015 1Q Margin Above Expectations... Resulting in Increase to Outlook April 21, 2015#6Earnings Per Share $2.87 $2.74 11 Chart 6 $2.50 $2.00 $1.50 $1.00 $ EPS $0.50 $0.00 1Q 2014 1Q 2015 Solid EPS Performance in 1Q 2015 April 21, 2015#7Cash Returned to Stockholders Cash From Ops $ 957 M Less CapEx (118) Free Cash Flow* $839 M $1,500 Chart 7 $1,000 ($M) $500 $0 Share Repurchases $1,102 M $498M Dividends $604M Shares 1Q 2015 *See Chart 14 for Definitions of Non-GAAP Measures 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Dividends Strong Cash Returns to Stockholders Total Cash Returned (% FCF*) 131% April 21, 2015#82015 Outlook Update ($M, Except EPS) Orders Sales EPS Segment Operating Profit* Unallocated Corp Inc / (Exp) FAS/CAS Pension Adjustment Other, Net Operating Profit Cash From Operations *See Chart 14 for Definitions of Non-GAAP Measures Prior (Jan) $43,500 - 45,000 Chart 8 $43,500 45,000 $5,100 -5,250 - 475 ~ (275) $5,300 - 5,450 $10.80 11.10 ≥ $5,000 Current (April) No Change No Change $5,150 - 5,300 No Change No Change $5,350 - 5,500 $10.85 11.15 No Change April 21, 2015#92015 EPS Outlook Reconciliation January 2015 Outlook Increase in Segment Operating Profit* Share Repurchase Activity / Lower Share Count Increased Interest Expense April 2015 Outlook *See Chart 14 for Definitions of Non-GAAP Measures Chart 9 EPS $10.80 $11.10 - ~ 0.11 2 -0.07 ~ (0.13) $10.85 $11.15 April 21, 2015#102015 Sales Outlook ($M) Sales (Prior) Aeronautics $14,700 - 15,000 MFC $7,000-7,300 Space $7,500 - 7,800 Chart 10 IS & GS $7,300 - 7,600 MST $7,000-7,300 $43,500 45,000M Sales (Current) Aeronautics $14,700 - 15,000 MFC $7,000 -7,300 Space $7,500 - 7,800 No Change to Sales Outlook IS & GS $7.300 7,600 MST $7,000-7,300 $43,500 45,000M April 21, 2015#112015 Segment Operating Profit* Outlook ($M) Segment Op Profit (Prior) Aeronautics $1,610 - 1,640 MFC $1,220 1,250 - Chart 11 Space $870 - 900 IS & GS $610 - 640 MST $790-820 Segment Op Profit (Current) Aeronautics $1,625 - 1,655 *See Chart 14 for Definitions of Non- GAAP Measures MFC $1,230 1,260 Space $900 - 930 IS & GS $590-620 MST $805-835 $5,100 -5,250M $5,150 - 5,300M Segment Operating Profit Outlook Increased By $50M April 21, 2015#12Summary ● • Solid Quarter of Operational and Financial Performance • Cash Deployment Actions Continuing to Generate Returns to Stockholders • Broad Portfolio Providing Financial Strength 1Q Results Achieved/Exceeded Internal Expectations... Enabled Increase to Full Year Outlook Chart 12 April 21, 2015#13Chart 13 Financial Appendix April 21, 2015