Form 11-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 11-K

 

 

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS

AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Mark One):

x Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2014

 

¨ Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934

Commission File Number: 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

 

 

 


Lockheed Martin Corporation

Salaried Savings Plan

Financial Statements and Supplemental Schedule

Table of Contents

 

Report of Independent Registered Public Accounting Firm

  1   

Financial Statements:

Statements of Net Assets Available for Benefits as of December 31, 2014 and 2013

  2-3   

Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2014

  4   

Notes to Financial Statements

  5   

Supplemental Schedule:

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

  14   

Signature

  28   

Exhibit Index

  29   


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, 2014 and 2013, and the related statement of changes in net assets available for benefits for the year ended December 31, 2014. 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, 2014 and 2013, and the changes in its net assets available for benefits for the year ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.

The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2014, has been subjected to audit procedures performed in conjunction with the audit of the Lockheed Martin Corporation Salaried Savings Plan’s financial statements. The information in the supplemental schedule is the responsibility of the Plan’s management. Our audit procedures included determining whether the information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental schedule. In forming our opinion on the information, we evaluated whether such information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole.

 

/s/ Mitchell & Titus, LLP

Washington, D.C.

June 22, 2015


Lockheed Martin Corporation Salaried Savings Plan

Statement of Net Assets Available for Benefits

December 31, 2014

(in thousands)

 

  ESOP
Fund
  401(h)
account
  Participant-
Directed

Investments
  Total  

Assets

Investments:

Interest in Lockheed Martin Corporation Defined Contribution Plans Master Trust

$ 5,705,138    $ —     $ 23,109,866    $ 28,815,004   

Net assets held in 401(h) account

  —       365,153      —       365,153   

Receivables:

Participant contributions

  —       —       14,985      14,985   

Employer contributions

  5,111      —       —       5,111   

Notes receivable from participants

  —       —       237,970      237,970   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

  5,710,249      365,153      23,362,821      29,438,223   

Liabilities

Administrative expenses payable

  —       —       2,739      2,739   

Amounts related to obligation of 401(h) account

  —       365,153      —       365,153   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

  —       365,153      2,739      367,892   
  

 

 

    

 

 

    

 

 

   

 

 

 

Net assets reflecting investments at fair value

  5,710,249      —       23,360,082      29,070,331   

Adjustment from fair value to contract value for fully benefit-responsive investment contracts

  —       —       (47,619   (47,619
  

 

 

    

 

 

    

 

 

   

 

 

 

Total net assets available for benefits

$ 5,710,249    $ —     $ 23,312,463    $ 29,022,712   
  

 

 

    

 

 

    

 

 

   

 

 

 

The accompanying notes are an integral part of these financial statements.

 

2


Lockheed Martin Corporation Salaried Savings Plan

Statement of Net Assets Available for Benefits

December 31, 2013

(in thousands)

 

  ESOP
Fund
  401(h)
account
  Participant-
Directed

Investments
  Total  

Assets

Investments:

Interest in Lockheed Martin Corporation Defined Contribution Plans Master Trust

$ 4,737,141    $ —     $ 21,817,496    $ 26,554,637   

Net assets held in 401(h) account

  —       340,670      —       340,670   

Receivables:

Participant contributions

  —       —       15,026      15,026   

Employer contributions

  5,113      —       —       5,113   

Notes receivable from participants

  —       —       235,704      235,704   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

  4,742,254      340,670      22,068,226      27,151,150   

Liabilities

Administrative expenses payable

  —       —       1,985      1,985   

Amounts related to obligation of 401(h) account

  —       340,670      —       340,670   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

  —       340,670      1,985      342,655   
  

 

 

    

 

 

    

 

 

   

 

 

 

Net assets reflecting investments at fair value

  4,742,254      —       22,066,241      26,808,495   

Adjustment from fair value to contract value for fully benefit-responsive investment contracts

  —       —       (14,670   (14,670
  

 

 

    

 

 

    

 

 

   

 

 

 

Total net assets available for benefits

$ 4,742,254    $ —     $ 22,051,571    $ 26,793,825   
  

 

 

    

 

 

    

 

 

   

 

 

 

The accompanying notes are an integral part of these financial statements.

 

3


Lockheed Martin Corporation Salaried Savings Plan

Statement of Changes in Net Assets Available for Benefits

Year Ended December 31, 2014

(in thousands)

 

  ESOP
Fund
  Participant-
Directed
Investments
  Total  

Net assets available for benefits at beginning of year

$ 4,742,254    $ 22,051,571    $ 26,793,825   
  

 

 

    

 

 

    

 

 

 

Additions to net assets:

Contributions:

Participant

  36,634      845,223      881,857   

Employer

  282,512      —       282,512   
  

 

 

    

 

 

    

 

 

 

Total contributions

  319,146      845,223      1,164,369   

Interest in net investment gain from participation in Lockheed Martin Corporation Defined Contribution Plans Master Trust

  1,499,624      1,623,368      3,122,992   

Interest income on notes receivable from participants

  —       10,352      10,352   
  

 

 

    

 

 

    

 

 

 

Total additions

  1,818,770      2,478,943      4,297,713   

Deductions from net assets:

Distributions and withdrawals

  850,534      1,193,126      2,043,660   

Administrative expenses

  241      33,999      34,240   
  

 

 

    

 

 

    

 

 

 

Total deductions

  850,775      1,227,125      2,077,900   
  

 

 

    

 

 

    

 

 

 

Change in net assets

  967,995      1,251,818      2,219,813   

Transfers from other plans

  —       9,074      9,074   
  

 

 

    

 

 

    

 

 

 

Net assets available for benefits at end of year

$ 5,710,249    $ 23,312,463    $ 29,022,712   
  

 

 

    

 

 

    

 

 

 

The accompanying notes are an integral part of these financial statements.

 

4


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 about the Plan’s provisions. Participants should refer to the Plan document and 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 U.S. and certain U.S. citizens working abroad. Eligible employees are automatically enrolled in the Plan when they are hired, unless they affirmatively decline to participate.

The Plan includes an Employee Stock Ownership Plan (ESOP) feature. Cash dividends paid on Lockheed Martin common stock in both the Employee Stock Ownership Plan Fund (ESOP Fund) and the Lockheed Martin Stock Fund are automatically reinvested in those funds, unless the participant elects to receive the dividend directly as taxable income.

The assets of the Plan, excluding 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 Voya (formerly named ING). Lockheed Martin is the Plan Sponsor and the Plan Administrator.

Plan Merger and Transfer of Assets

Effective January 1, 2010, most salaried employees in the Corporation’s Information Systems & Global Solutions business segment who were participating in the Lockheed Martin Corporation Operations Support Savings Plan (OSSP) became eligible to contribute to the Plan and ineligible to contribute to the OSSP. In 2011, most of these employees had their account balances transferred from the OSSP to the Plan. Account balances of employees with outstanding loans in the OSSP were not immediately transferred; however, these account balances are subject to transfer to the Plan when the loans are repaid. During 2014, assets of the OSSP in amount of $9,074,000 were transferred to the Plan.

Contributions

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. If automatically enrolled, a participant’s contribution is set at 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% unless changed by the participant. 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. The Corporation contributes an amount equal to 50% of the first 8% of the participant’s basic contribution. Substantially all employer contributions to the Plan consist of the Corporation’s common stock invested in the ESOP Fund. Participants are immediately vested in all employer contributions.

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 account balance to the Stable Value Fund during the fourth quarter of each 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-Directed Brokerage Account (SDBA). 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 SDBA, 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. A participant’s initial transfer to the SDBA must be at least $3,000, and subsequent transfers must be at least $1,000. No distributions, withdrawal, or loan may be made directly from the assets in the SDBA.

 

5


Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements (continued)

 

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.

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.

ESOP Feature

There were 29,471,771 and 31,755,856 shares of the Corporation’s common stock in the ESOP Fund as of December 31, 2014 and 2013, respectively.

401(h) Arrangement

The Plan has an arrangement that qualifies under Section 401(h) of the Internal Revenue Code (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 on the accrual basis of accounting.

The Plan, through the Master Trust, invests in a Stable Value Fund which holds synthetic guaranteed investment contracts (synthetic GICs) that are fully benefit-responsive (see Note 3). The Plan is required to report fully benefit-responsive investment contracts at fair value. However, contract value is the relevant measurement attribute for 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. The Statement of Net Assets Available for Benefits presents the fair value of the fully benefit-responsive investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared using the contract value basis for fully benefit-responsive investment contracts.

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.

 

6


Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements (continued)

 

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 3 for discussion 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. Gains and losses on investments bought and sold as well as held during the year are included in interest in net investment gain from the Master Trust on the Statement of Changes in Net Assets Available for Benefits. Interest income on notes receivable from participants is recorded on the accrual basis.

Administrative Expenses

Direct administrative expenses are paid by the Master Trust and generally allocated to the Plan proportionally based on the Plan’s interest in the Master Trust’s net assets or directly if specifically related to the Plan. Certain indirect administrative expenses are paid by the Corporation and are excluded from these financial statements. Expenses paid by the Plan are shown on the Statement of Changes in Net Assets Available for Benefits.

Accounting Standards

In May 2015, the Financial Accounting Standards Board (FASB) issued new guidance that eliminates the current requirement to categorize within the fair value hierarchy investments with fair values measured at net asset value (NAV) using the practical expedient in Accounting Standards Codification (ASC) 820 “Fair Value Measurement”. The new guidance will require entities to disclose the fair values of such investments as a reconciling item between the balance sheet amounts and the amounts reported in the fair value hierarchy table. Entities will be required to continue to disclose information describing the nature and risks of the investments measured using the NAV practical expedient. The new disclosures are required for the Plan beginning on January 1, 2017. Early adoption is permitted. The new guidance only impacts footnote disclosures and will not impact the financial statements.

 

3. 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 participating plans included therein proportionally based on each plan’s interest in the Master Trust’s net assets. The Plan’s interest in the Master Trust’s net assets as of December 31, 2014 and 2013 was 90.68% and 90.54%, respectively.

The Plan, through the Master Trust, invests in a Stable Value Fund which holds synthetic guaranteed investment contracts (synthetic GICs) that are fully benefit-responsive and managed separate accounts. A synthetic GIC, also known as a wrap contract, is an investment contract issued by an insurance company or other financial institution paired with an underlying investment or investments, usually a portfolio of high quality fixed income securities. These investment contracts provide that realized and unrealized gains and losses on the underlying investments are amortized over the duration of the underlying investments through adjustments to the future interest-crediting rates. The primary factors affecting the future interest-crediting rates of the wrap contracts include the level of market interest rates, the amount and timing of participant contributions, transfers, and withdrawals into or out of the wrap contracts, the investment returns generated by the investments that back the wrap contracts, and the duration of the underlying investments covered by the wrap contracts. The future interest-crediting rates may not be less than 0% and are adjusted monthly or quarterly based on the yield to maturity of the underlying investments, a market value to contract value ratio of the underlying investments, and the durations of the underlying investments. The contracts are fully benefit-responsive, which guarantees that all qualified participant withdrawals will occur at contract value, which represents contributions made under the contract, plus earnings, less withdrawals and contract administrative expenses.

 

7


Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements (continued)

 

In certain circumstances the amount withdrawn from the contract would be payable at fair value rather than at contract value. These events include termination of the Plan, a material adverse change to the provisions of the Plan, a withdrawal from a wrap contract in order to switch to a different investment provider, or adoption of a successor plan that does not meet the wrap contract issuer’s underwriting criteria for issuance of a duplicate wrap contract. The Plan Administrator does not believe that the occurrence of any of these events is probable. Also, the following events would permit the contract issuers to terminate the contracts prior to their scheduled maturity date: the Plan’s loss of its qualified status, uncured material breaches of responsibilities, or material and adverse changes to the provisions of the Plan. If one of these events were to occur, the contract issuer could terminate the contract at the fair value of the underlying investments.

The average yield of the synthetic GICs based on actual earnings was approximately 1.29% and 1.49% for the years ended December 31, 2014 and 2013, respectively. The average yield of the synthetic GICs based on interest rate credited to participants was approximately 1.42% and 1.45% for the years ended December 31, 2014 and 2013, respectively.

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. 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, 2014 and 2013, there were no such advances payable to the Corporation. Occasionally, the Master Trust and 401(h) account invest in derivative financial instruments for liquidity or asset allocation purposes. At December 31, 2014 and 2013, there were no material investments in derivatives.

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 requires disclosures regarding 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 – Quoted prices in active markets for identical assets and liabilities;

 

  Level 2 – Observable inputs, other than Level 1 prices, such as quoted prices for similar instruments in active markets, 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

 

  Level 3 – Unobservable inputs where valuation models are supported by little or no market activity that one or more significant inputs are unobservable and require us to develop relevant assumptions.

 

8


Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements (continued)

 

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, 2014 and their appreciation (depreciation) for the year ended December 31, 2014 (in thousands):

 

  Level 1   Level 2   Level 3   Total   Appreciation
(Depreciation)
 

Cash and cash equivalents

$ 959,691    $ —      $ —      $ 959,691    $ (315

Equity:

U.S. equity securities

  2,571,646      —        —        2,571,646      2,077,959   

U.S. equity securities - Lockheed Martin

  8,040,348      —        —        8,040,348      2,620   

International equity securities

  305,058      —        —        305,058      (27,429

Commingled equity funds

  1,517,292      11,272,251      —        12,789,543      768,604   

Fixed income:

Corporate debt securities

  —        92,502      —        92,502      (1,282

U.S. Government securities

  —        1,240,889      —        1,240,889      5,331   

Other fixed income securities

  122,044      5,680,499      —        5,802,543      131,739   

Alternative investments:

Wrap contract

  —        —        896      896      (60
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Investment Assets at Fair Value

$ 13,516,079    $ 18,286,141    $ 896    $ 31,803,116    $ 2,957,167   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Payables, net

  (19,702

Adjustment from fair value to contract value for fully benefit-responsive investment contracts

  (52,514
           

 

 

   

Total net assets

$ 31,730,900   
           

 

 

   

Interest and dividend income earned by the Master Trust for the year ended December 31, 2014 was $429,486,000.

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, 2013 (in thousands):

 

  Level 1   Level 2   Level 3   Total  

Cash and cash equivalents

$ 740,972    $ —      $ —      $ 740,972   

Equity:

U.S. equity securities

  2,451,804      —        —        2,451,804   

U.S. equity securities - Lockheed Martin

  6,648,103      —        —        6,648,103   

International equity securities

  566,954      —        —        566,954   

Commingled equity funds

  1,738,218      10,287,343      —        12,025,561   

Fixed income:

Corporate debt securities

  —        99,553      —        99,553   

U.S. Government securities

  —        1,002,045      —        1,002,045   

Other fixed income securities

  74,758      5,762,505      —        5,837,263   

Alternative investments:

Wrap contract

  —        —        956      956   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Investment Assets at Fair Value

$ 12,220,809    $ 17,151,446    $ 956    $ 29,373,211   
  

 

 

    

 

 

    

 

 

    

 

 

 

Payables, net

  (37,837

Adjustment from fair value to contract value for fully benefit-responsive investment contracts

  (16,201
           

 

 

 

Total net assets

$ 29,319,173   
           

 

 

 

 

9


Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements (continued)

 

The fair value of the wrap contract of $896,000 and $956,000 at December 31, 2014 and 2013, respectively, are considered Level 3 investments due to certain unobservable inputs as described below. The change in the fair value during 2014 was due to unrealized losses.

The Master Trust recognizes transfers between levels of the fair value hierarchy as of the date of the change in circumstances that causes the transfer. During 2014, 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, 2014 (in thousands):

 

  Level 1   Level 2   Total  

Cash and cash equivalents

$ 129,260    $ —      $ 129,260   

Equity:

U.S. equity securities

  52,680      —        52,680   

International equity securities

  54,517      —        54,517   

Commingled equity funds

  34,575      —        34,575   

Fixed income:

Corporate debt securities

  —        32,501      32,501   

Other fixed income securities

  —        60,813      60,813   
  

 

 

    

 

 

    

 

 

 

Total assets

$ 271,032    $ 93,314    $ 364,346   
  

 

 

    

 

 

    

 

 

 

Receivables, net

  807   
        

 

 

 

Total net assets

$ 365,153   
        

 

 

 

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, 2013 (in thousands):

 

  Level 1   Level 2   Level 3   Total  

Cash and cash equivalents

$ 109,619    $ —      $ —      $ 109,619   

Equity:

U.S. equity securities

  66,592      —        —        66,592   

International equity securities

  37,786      —        —        37,786   

Commingled equity funds

  21,449      —        —        21,449   

Fixed income:

U.S. Government securities

  —        100,984      —        100,984   

Other fixed income securities

  —        1,412      1,387      2,799   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total assets

$ 235,446    $ 102,396    $ 1,387    $ 339,229   
  

 

 

    

 

 

    

 

 

    

 

 

 

Receivables, net

  1,441   
           

 

 

 

Total net assets

$ 340,670   
           

 

 

 

 

10


Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements (continued)

 

The following table presents the changes during 2014 in the fair value of 401(h) account assets categorized as Level 3 in the preceding tables (in thousands):

 

  Balance,
beginning
of year
  Realized gains   Sales   Balance, end
of year
 

Other fixed income securities

$ 1,387    $ 23    $ (1,410 $ —     
  

 

 

    

 

 

    

 

 

    

 

 

 

The 401(h) account recognizes transfers between levels of the fair value hierarchy as of the date of the change in circumstances that causes the transfer. During 2014, 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.

Commingled equity funds are investment vehicles valued using the Net Asset Value (NAV) provided by the fund managers. 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). These funds may be redeemed on a daily or monthly basis, depending upon notification requirements, liquidity, and other matters.

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 GICs are invested in fixed income securities and are categorized as Level 2 as they are valued at representative quoted market prices. The fair values of the wrap contracts associated with the synthetic GICs are categorized as Level 3 and are determined by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the credit-worthiness of the issuer.

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.

 

4. 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 held 41,721,605 and 44,675,225 shares of the Corporation’s common stock as of December 31, 2014 and 2013, respectively. Dividends earned by the Master Trust on the Corporation’s common stock were $234,578,000 for the year ended December 31, 2014. 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.

 

11


Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements (continued)

 

Also, the Master Trust owed the Corporation $1,100,000 and $1,000,000 as of December 31, 2014 and 2013, respectively, for certain expenses paid by the Corporation in providing services to the Plan.

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 401(h) account invests in common stock of the ING Groep NV, which was the parent company of the recordkeeper until March 3, 2015. 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.

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.

 

5. Income Tax Status

The Internal Revenue Service (IRS) has determined and informed the Corporation by letter dated October 17, 2013, that the Plan is designed in accordance with applicable sections of the IRC and, therefore, the related trust is exempt from taxation. The Plan has been amended since issuance of the determination letter. However, the Plan Administrator and the Corporation’s counsel believe that the current design and operations of the Plan are in compliance with the applicable provisions of the IRC.

GAAP requires plan management to evaluate tax positions taken by the Plan to determine whether the Plan has taken any uncertain positions that more likely than not would not 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, 2014, there are no uncertain positions taken or expected to be taken that would require recognition of a liability or asset or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions, but no tax audits are in progress. The Plan Administrator believes the Plan is no longer subject to income tax examinations for years prior to 2011.

 

6. Reconciliation of Financial Statements to Form 5500

The following is a reconciliation of the net assets available for benefits as of December 31, 2014 and 2013 per the financial statements to the Form 5500 (in thousands):

 

  December 31,  
  2014   2013  

Net assets available for benefits per the financial statements

$ 29,022,712    $ 26,793,825   

Add: Net assets held in 401(h) account per Form 5500

  365,153      340,670   

Add: Adjustment from fair value to contract value for fully benefit-responsive investment contracts

  47,619      14,670   
  

 

 

    

 

 

 

Net assets available for benefits per the Form 5500

$ 29,435,484    $ 27,149,165   
  

 

 

    

 

 

 

The net assets of the 401(h) account 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.

 

12


Lockheed Martin Corporation Salaried Savings Plan

Notes to Financial Statements (continued)

 

The following is a reconciliation of the changes in net assets available for benefits for the year ended December 31, 2014, per the financial statements to the Form 5500 (in thousands):

 

  Amounts per
Financial
Statements
  401(h)
account
  Amounts per
Form 5500
 

Interest and dividend income

$             —     $ 6,192    $        6,192   

Net realized and unrealized loss

  —        18,648      18,648   

Administrative expense

  —       (357   (357

 

  Amounts per
Financial
Statements
  Differences   Amounts per
Form 5500
 

Interest in net investment gain from participation in Lockheed Martin Corporation Defined Contribution Plans Master Trust

$ 3,122,992    $ (26,470 $ 3,149,462   

Administrative expenses

  (34,240   31,501      (2,739

Interest income on notes receivable from participants

  10,352      (10,352   —    

Adjustment from fair value to contract value for fully benefit-responsive investment contracts

  —       (47,619   47,619  

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. The Plan’s interest in the net investment gain in the Master Trust reported in the financial statements also differed from the related amount per the Form 5500 as a result of the adjustment from fair value to contract value for fully benefit-responsive investment contracts.

 

13


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

401(h) account **

Corporate Debt Securities - Preferred

Alabama Power Co 4.15% Due 08-15-2044

  215,000    $ 213    $ 226   

America Movil Sab De 4.375% Due 07-16-2042

  200,000      178      192   

Amgen Inc 5.375% Due 05-15-2043

  375,000      405      436   

Anheuser-Busch 2.625% Due 01-17-2023

  425,000      400      413   

Apache Corp 4.25% Due 01-15-2044

  270,000      251      236   

Bank of America Corp 4.1% Due 07-24-2023

  315,000      320      332   

Berkshire Hathaway 4.4% Due 05-15-2042

  295,000      290      317   

BHP Billiton Finance 5% Due 09-30-2043

  100,000      106      113   

Centerpoint Energy 4.5% Due 04-01-2044

  15,000      15      17   

Cisco System Inc 5.5% Due 01-15-2040

  100,000      115      122   

Citigroup Inc 3.75% Due 06-16-2024

  545,000      544      557   

Consolidated Edison Co of New York 3.95% Due 03-01-2043

  200,000      184      199   

Corning Inc 4.75% Due 03-15-2042

  75,000      77      80   

DTE Electric Co 4.3% Due 07-01-2044

  185,000      185      201   

General Electric Co 4.125% Due 10-09-2042

  765,000      738      792   

Goldman Sachs 4.8% Due 07-08-2044

  440,000      438      471   

JP Morgan Chase & Co 3.625% Due 05-13-2024

  435,000      433      445   

Lowe’s Companies Inc 4.65% Due 04-15-2042

  200,000      204      222   

Metlife Inc Sr Nt Ser D Step Up 09-15-2023 09-11-2015

  190,000      203      207   

Morgan Stanley 3.7% Due 10-23-2024

  258,000      258      262   

Nbcuniversal Media 4.45% Due 01-15-2043

  775,000      752      821   

Northern States Power Co 4.125% Due 05-15-2044

  95,000      95      100   

Northwestern Mutual Life 6.063% Due 03-30-2040

  235,000      292      304   

Oracle Corp 4.5% Due 07-08-2044

  450,000      454      489   

Pepsico Inc 3.6% Due 08-13-2042

  110,000      99      103   

Pepsico Inc 4.25% Due 10-22-2044

  75,000      75      78   

Philip Morris International 4.125% Due 03-04-2043

  150,000      140      147   

PVTPL Guardian Life Insurance Co of America 4.875% Due 06-19-2064

  225,000      226      240   

PVTPL Medtronic Inc 4.625% Due 03-15-2045

  131,000      131      142   

PVTPL Sabmiller Holdings Inc 4.95% Due 01-15-2042

  200,000      206      225   

PVTPL Teachers Insurance 4.9% Due 09-15-2044

  340,000      342      379   

Rio Tinto Finance USA 4.125% Due 08-21-2042

  85,000      77      83   

Southern California Edison Co 4.65% Due 10-01-2043

  275,000      290      311   

Target Corp 4% Due 07-01-2042

  265,000      246      269   

Transcanada 5% Due 10-16-2043

  150,000      159      157   

Union Pacific Corp 4.3% Due 06-15-2042

  250,000      243      266   

Unitedhealth Group 3.95% Due 10-15-2042

  250,000      227      248   

United Technologies 4.5% Due 06-01-2042

  325,000      332      354   

Vodafone Group PLC 4.375% Due 02-19-2043

  265,000      240      258   

Wal-Mart Stores 4.3% Due 04-22-2044

  330,000      329      360   

Wellpoint Inc 4.625% Due 05-15-2042

  225,000      218      236   

Wells Fargo & Co New Medium Term Notes 4.65% Due 11-04-2044

  201,000      201      207   
        

 

 

    

 

 

 

Total Corporate Debt Securities - Preferred

$ 10,931    $ 11,617   

 

14


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Corporate Debt Securities –Other

21st Century Fox 4.75% Due 09-15-2044

  525,000    $ 527    $ 574   

Actavis Funding 4.85% Due 06-15-2044

  110,000      111      112   

Alleghany Corp Del 4.9% Due 09-15-2044

  150,000      149      157   

Altria Group Inc 5.375% Bonds Due 01-31-2044

  225,000      238      256   

Antero Resources Finance Corp 5.375% Due 11-01-2021

  161,000      165      156   

Appalachian Power Co 4.4% Due 05-15-2044

  310,000      308      326   

AT&T Inc 4.35% Due 06-15-2045

  1,235,000      1,095      1,164   

Barrick Gold Corp 5.25% Due 04-01-2042

  135,000      129      125   

Barrick North America Finance 5.75% Due 05-01-2043

  65,000      64      65   

Becton Dickinson & 4.685% Due 12-15-2044

  30,000      30      32   

Berkshire Hathaway 4.5% Due 02-01-2045

  210,000      212      220   

Burlington Northn Santa 4.55% Due 09-01-2044

  5,000      5      5   

Canadian Natural Resources LTD 3.8% Due 04-15-2024

  122,000      125      120   

Canadian Natural Resources LTD 6.25% Due 03-15-2038

  175,000      210      195   

Cenovus Energy Inc 5.2% Due 09-15-2043

  225,000      237      217   

Chesapeake Energy Corp 7.25% Due 12-15-2018

  65,000      74      71   

Cimarex Energy Co 4.375% Due 06-01-2024

  29,000      29      28   

Cimarex Energy Co 5.875% Due 05-01-2022

  125,000      138      130   

CMS Energy Corp 4.7% Due 03-31-2043

  350,000      349      373   

Conagra Foods Inc 4.65% Due 01-25-2043

  270,000      264      282   

Concho Resources Inc 5.0% Due 04-01-2023

  140,000      145      141   

Consol Energy Inc 8.25% Due 04-01-2020

  85,000      93      88   

Continental Resources Inc 4.9% Due 06-01-2044

  245,000      240      212   

Continental Resources Inc 5.0% Due 09-15-2022

  75,000      79      73   

CVS Caremark Corp 5.3% Due 12-05-2043

  175,000      194      209   

Devon Energy Corp 4.75% Due 05-15-2042

  228,000      229      230   

Dominion Resources Inc 4.05% Due 09-15-2042

  675,000      609      658   

Dow Chemical Co 4.375% Due 11-15-2042

  275,000      255      266   

Dow Chemical Co 4.625% Due 10-01-2044

  80,000      79      81   

Duke Energy Corp 3.75% Due 04-15-2024

  225,000      225      234   

El Paso Pipelines 4.7% Due 11-01-2042

  225,000      202      203   

Embarq Corp 7.995% Due 06-01-2036

  40,000      43      45   

Encana Corp 5.15% Due 11-15-2041

  275,000      284      252   

Energy Transfer 5.15% Due 02-01-2043

  250,000      244      247   

Enterprise Products 5.1% Due 02-15-2045

  450,000      468      484   

Fedex Corp Bond 5.1% Due 01-15-2044

  166,000      173      192   

Hartford Financial Services 4.3% Due 04-15-2043

  250,000      234      256   

Hess Corp 5.6% Due 02-15-2041

  175,000      193      188   

Kinder Morgan Energy Partners LP 5.0% Due 03-01-2043

  630,000      585      598   

Kraft Foods Group 5% Due 06-04-2042

  225,000      237      248   

Kroger Co 5.0% Due 04-15-2042

  125,000      127      136   

L-3 Communications 3.95% Due 05-28-2024

  170,000      169      171   

LYB International Finance BV 4.875% Due 03-15-2044

  205,000      210      211   

 

15


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Corporate Debt Securities –Other (Continued)

Marathon Pete Corp 4.75% Due 09-15-2044

  350,000    $ 345    $ 331   

Markwest Energy 6.75% Due 11-01-2020

  10,000      11      10   

Midamerican Energy 5.15% Due 11-15-2043

  431,250      463      488   

Molson Coors 5.0% Due 05-01-2042

  295,000      303      320   

Mondelez International Inc 6.5% Due 02-09-2040

  50,000      63      67   

Newmont Mining Corp 4.875% Due 03-15-2042

  170,000      141      148   

Nisource Finance Corp 5.25% Due 02-15-2043

  200,000      206      229   

Noble Energy Inc 5.05% Due 11-15-2044

  75,000      74      74   

Noble Energy Inc 5.25% Due 11-15-2043

  300,000      316      305   

Noble Holdings International 5.25% Due 03-15-2042

  375,000      369      296   

Oasis Pete Inc New 7.25% Due 02-01-2019

  34,000      36      32   

Orange SA 5.5% Due 02-06-2044

  150,000      158      176   

Pacific Gas & Electric Co 4.3% Due 03-15-2045

  10,000      10      10   

Pacific Gas & Electric Co 4.75% Due 02-15-2044

  450,000      456      495   

Petrobras Global 5.625% Due 05-20-2043

  95,000      85      77   

Phillips 66 4.875% Due 11-15-2044

  105,000      103      108   

Phillips 66 5.875% Due 05-01-2042

  200,000      233      230   

PPL Capital Funding INC 3.95% Due 03-15-2024

  450,000      452      469   

PSEG Power LLC 4.3% Due 11-15-2023

  105,000      109      110   

PVTPL BAE System Holdings Inc Note 3.8% Due 10-07-2024

  125,000      125      128   

PVTPL Canadian Oil Sands LTD Note 6.0% Due 04-01-2042

  205,000      224      185   

PVTPL Heineken NV Note 4.0% Due 10-01-2042

  375,000      338      365   

PVTPL Huntington Ingalls Industries Inc Note 5.0% Due 12-15-2021/12-02-2014

  25,000      25      25   

PVTPL Liberty Mutual Group Inc Note 4.85% Due 08-01-2044

  235,000      235      239   

PVTPLErac USA Finance LLC Note 5.625% Due 03-15-2042

  150,000      168      175   

Range Resources Corp 5.75% Due 06-01-2021

  79,000      85      82   

Rogers Communications Inc 4.5% Due 03-15-2043

  365,000      348      367   

Scripps Networks 3.9% Due 11-15-2024

  453,000      451      461   

Sempra Energy 3.55% Due 06-15-2024

  95,000      95      96   

Sempra Energy 4.05% Notes Due 12-01-2023

  500,000      513      529   

Teck Resources LTD 5.2% Due 03-01-2042

  195,000      177      159   

Thomson Reuters 4.5% Due 05-23-2043

  325,000      301      325   

Time Warner Cable 4.5% Due 09-15-2042

  430,000      395      442   

Time Warner Inc 6.25% Due 03-29-2041

  425,000      501      528   

Transcontinental Gas Pipe Line Co LLC 4.45% Due 08-01-2042

  55,000      52      52   

Vale SA 5.625% Due 09-11-2042

  300,000      283      279   

Valero Energy Corp 6.625% Due 06-15-2037

  125,000      151      148   

Verizon 3.85% Due 11-01-2042

  1,840,000      1,629      1,640   

Weatherford International LTD Bermuda 5.95% Due 04-15-2042

  100,000      109      85   

Whiting Pete Corp 5.75% Due 03-15-2021

  109,000      116      101   

Xcel Energy Inc 4.8% Due 09-15-2041

  100,000      104      112   

Yum Brands Inc 5.35% Due 11-01-2043

  325,000      344      355   
        

 

 

    

 

 

 

Total Corporate Debt Securities - Other

$ 20,478    $ 20,884   

 

16


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock

Abb LTD

  3,232    $ 62    $ 69   

Actavis PLC

  2,700      539      695   

Adidas AG

  1,755      155      122   

Adobe System Inc

  10,111      640      735   

Aetna Inc

  4,900      336      435   

AGL Energy

  7,321      103      80   

Agrium Inc

  4,761      409      452   

AIA Group LTD

  73,555      313      409   

Aisin Seiki Co

  800      31      29   

Akzo Nobel NV

  726      47      51   

Alcatel-Lucent

  105,608      417      380   

Alimentation Couch

  2,249      78      95   

Allergan Inc

  4,724      533      1,004   

Allianz SE

  3,371      535      560   

Amazon.com Inc

  934      275      290   

Amcor LTD

  6,699      67      74   

American Express Co

  4,200      248      391   

American International Group Inc

  9,400      370      526   

Ameriprise Financial Inc

  4,500      332      595   

Anadarko Petro Corp

  2,400      215      198   

Analog Devices Inc

  12,111      483      672   

Anglo American

  1,195      28      22   

Anheuser Busch Inbev

  14,606      1,195      1,649   

Apple Inc

  8,838      536      976   

Asahi Group Holdings LTD

  2,000      50      62   

Asahi Kasei Corp

  4,000      32      37   

Asciano LTD

  8,236      39      41   

ASML Holding NV

  3,463      263      375   

Assa Abloy

  860      43      46   

Astellas Pharma

  9,100      102      128   

Astrazeneca

  3,614      195      257   

ATCO LTD

  3,370      143      139   

Aurizon Holdings LTD

  25,501      107      96   

Australia and New Zealand Banking Group

  16,946      472      445   

Avago Technologies LTD

  7,100      371      714   

B/E Aerospace Inc

  11,456      628      665   

Baidu Inc

  1,550      269      353   

Baker Hughes Inc

  3,300      236      185   

Balfour Beatty

  3,134      11      10   

Banco Bradesco SA

  24,469      335      327   

 

17


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock (continued)

Banco Santander

  28,418    $ 249    $ 241   

Bank of America Corp

  37,100      454      664   

Bank of Nova Scotia

  1,177      66      67   

Bank of Yokohama

  2,000      9      11   

Barclays PLC

  70,168      297      266   

Barrick Gold Corp

  6,360      153      69   

BASF

  1,994      202      169   

Bayer AG

  8,201      894      1,121   

Bayerische Motoren Werke AG

  1,068      114      116   

BBVA

  15,491      184      147   

BCE Inc

  2,690      113      124   

Belgacom SA

  1,534      43      56   

Berkshire Hathaway Inc

  8,761      692      1,315   

BG Group PLC

  38,323      772      517   

BHP Billiton LTD

  6,697      228      161   

BHP Billiton PLC

  20,626      667      447   

Blackrock Inc

  1,262      286      451   

BNP Paribas

  8,124      517      484   

Bombardier Inc

  7,745      29      28   

BP PLC

  121,756      1,197      974   

Bridgestone Corp

  2,600      86      91   

British American Tobacco

  6,232      321      340   

BT Group

  20,369      110      128   

Burberry Group

  1,890      47      48   

Canadian Oil Sands

  2,747      52      25   

Canon Inc

  14,900      526      477   

Celestica Inc

  2,902      32      34   

Cenovus Energy Inc

  2,493      65      52   

Central Japan Railway

  200      27      30   

Centrica

  25,056      139      109   

Chubu Electric Power Co Inc

  4,300      61      51   

Cie De St-Gobain

  5,300      297      226   

Cigna Corp

  5,800      471      597   

Citigroup Inc

  13,793      595      746   

Citrix System Inc

  3,900      227      249   

Clariant AG

  15,600      299      262   

CLP Holdings LTD

  13,000      106      113   

CMS Energy Corp

  10,300      339      358   

Coca-Cola Amatil

  3,979      31      30   

Comfortdelgro Corp LTD

  213,245      419      418   

 

18


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock (continued)

Commonwealth Bank of Australia

  2,476    $ 153    $ 174   

Compass Group PLC

  2,621      32      45   

Core Laboratories NV

  3,591      534      432   

Credit Agricole SA

  3,221      47      42   

Credit Suisse AG

  14,021      429      354   

CSL LTD

  1,993      130      141   

CSX Corp

  15,700      449      569   

CTT Correios De Portugal SA

  36,800      383      357   

CVS Health Corp

  7,300      415      703   

Daiichi Sankyo

  4,900      85      69   

Daimler AG

  1,809      148      151   

Daiwa Securities Group Inc

  56,700      518      448   

DBS Group Holdings

  29,137      373      453   

Denso Corp

  1,200      57      57   

Deutsche Bank AG

  5,973      253      181   

Deutsche Post AG

  5,605      166      183   

Deutsche Telekom AG

  15,458      217      248   

Diageo PLC

  6,472      176      187   

Discover Financial Service

  5,400      344      354   

DNB ASA

  17,800      277      263   

Domtar Corp

  684      25      28   

Don Quijote Holdings Co LTD

  5,700      272      397   

Dufry AG

  1,906      303      286   

E.ON SE

  7,769      147      133   

East Japan Railway Co

  1,800      135      137   

Ebara Corp

  65,600      399      272   

Ecolab Inc

  8,795      895      919   

EMC Corp

  14,408      356      428   

Empire Co

  1,804      124      136   

Enel S.p.A

  8,640      38      39   

Eni S.p.A

  7,898      334      224   

Ericsson

  5,232      62      63   

Exxon Mobil Corp

  18,252      1,513      1,687   

F5 Networks Inc

  4,500      507      587   

Familymart Co

  1,300      55      49   

Fanuc Corp

  400      70      67   

Ford Motor Co

  7,900      92      122   

Fraport (Frankfurt Airport Services)

  566      37      33   

 

19


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock (continued)

Fresenius SE&KGaA

  8,592    $ 360    $ 449   

Fuji Heavy Industries

  1,000      28      36   

Fujifilm Holdings Corp

  12,500      320      386   

GDF Suez

  1,250      34      29   

General Dynamics Corp

  1,300      88      179   

General Electric Co

  5,200      122      131   

General Mills Inc

  2,600      133      139   

Gildan Activewear

  5,531      321      314   

Gilead Sciences Inc

  4,800      408      452   

Glaxosmithkline PLC

  19,670      485      422   

Glencore PLC

  25,941      132      121   

Google Inc

  1,428      584      754   

Grifols SA

  10,705      392      364   

Hanesbrands Inc

  3,200      184      357   

Harley Davidson

  3,100      200      204   

Hartford Financial Service Group Inc

  15,600      555      650   

Heineken NV

  881      56      63   

Hennes & Mauritz

  2,686      97      112   

Hermes International

  30      10      11   

Hewlett Packard Co

  22,600      547      907   

Hitachi

  17,463      119      131   

Honda Motor Co

  3,900      145      115   

Honeywell International Inc

  9,689      578      968   

Hong Kong & China Gas

  38,900      85      89   

HSBC Holdings

  48,087      491      456   

Huntington Bancshares Inc

  40,600      376      427   

IAMGOLD Corp

  10,241      88      28   

Iberdrola SA

  18,888      111      128   

Imperial Tobacco

  5,637      217      249   

Inditex

  3,264      88      94   

Indivior PLC

  2,272      4      5   

Industrial & Commercial Bank China

  366,100      233      267   

Infineon Technologies AG

  30,684      297      328   

*

ING Groep NV

  7,716      82      101   

Inpex Corp

  4,700      62      53   

INS Australia

  18,202      100      93   

Intact Financial Corp

  1,167      69      85   

Intuit

  7,121      450      657   

Investor AB

  1,526      36      56   

Itochu Corp

  1,600      20      17   

 

20


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock (continued)

ITV

  107,248    $ 271    $ 360   

Japan Tobacco Inc

  16,800      518      466   

Jardine Matheson Holdings

  6,400      360      390   

Johnson & Johnson

  3,529      215      369   

JP Morgan Chase & Co

  13,900      607      870   

Julius Baer Group

  1,115      42      51   

Kansai Electric Power Co

  4,400      57      42   

Kao Corp

  700      23      28   

KBC Groep NV

  9,339      455      525   

KDDI Corp

  2,500      133      159   

Keyence Corp

  100      43      45   

Kinross Gold Corp

  22,308      102      63   

Kion Group AG

  6,300      282      242   

Kirin Holdings Co

  4,000      57      50   

KLX Inc

  5,728      237      236   

Komatsu

  1,600      37      36   

Koninklijke Ahold

  3,648      64      65   

Koninklijke Dsm

  19      1      1   

Koninklijke Philip

  6,440      175      188   

Kroger Co

  11,100      644      713   

Kubota Corp

  24,000      294      352   

L-3 Communications Holdings Corp

  2,400      250      303   

Las Vegas Sands Corp

  4,600      318      268   

Laurentian Bank Canada

  964      42      42   

Lawson Inc

  1,100      82      67   

Liberty Global PLC

  15,554      621      751   

Linde AG

  182      36      34   

Lloyds Banking Group

  512,837      575      606   

London Stock Exchange Group

  2,880      68      100   

LVMH Moet Hennessy Louis Vuitton SA

  623      95      100   

Lyondellbasell Industries NV

  2,900      210      230   

Magna International Inc

  626      61      68   

Mapfre SA

  12,191      56      42   

Markel Corp Holding Co

  1,231      547      841   

Marubeni Corp

  4,000      31      24   

Mazda Motor Corp

  1,400      33      34   

Mediaset

  87,800      406      365   

Merck KGAA

  1,728      130      164   

Mettler-Toledo International Inc

  3,115      734      942   

Michelin (CGDE)

  4,027      403      367   

 

21


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock (continued)

Microsoft Corp

  8,700    $ 367    $ 404   

Mitsubishi Chemical

  7,000      33      34   

Mitsubishi Corp

  6,100      123      113   

Mitsubishi Electric Corp

  7,000      87      84   

Mitsubishi Heavy Industries

  2,014      12      11   

Mitsubishi UFJ Financial Group

  28,699      156      159   

Mitsui & Co LTD

  1,200      18      16   

Mitsui Fudosan Co LTD

  3,000      96      81   

Mizuho Financial Group

  87,500      165      148   

Mondelez International Inc

  21,188      509      770   

Monsanto Co

  1,100      128      131   

Morgan Stanley

  8,000      219      310   

Muenchener Rueckve

  515      107      103   

National Australia Bank

  3,230      94      89   

National Grid

  11,221      137      161   

Natural Resources

  2,515      91      78   

Nestle SA

  7,936      507      583   

Nextera Energy Inc

  5,500      415      585   

Nippon Telegraph & Telephone Corp

  3,400      188      176   

Nissan Motor Co LTD

  6,500      67      57   

Nordea Bank AB

  33,952      455      394   

Novartis AG

  14,729      1,050      1,369   

Novo-Nordisk AS

  6,405      227      271   

NTT Docomo Inc

  8,900      141      131   

O Reilly Automotive Inc

  4,309      648      830   

Oil Search LTD

  9,942      75      64   

Omron Corp

  8,700      316      395   

Open Text Co

  4,547      248      265   

Oracle Corp

  26,823      733      1,206   

Orix Corp

  6,200      91      79   

Osaka Gas Co LTD

  23,000      94      87   

OSRAM Licht AG

  102      3      4   

Oversea-Chinese Banking Corp

  6,000      48      47   

Paccar Inc

  4,700      293      320   

Pan Amern Silver Corp

  512      10      5   

Partners Group Holding

  208      46      61   

Pearson

  6,525      117      121   

Pepsico Inc

  4,529      292      428   

Perrigo Co LTD

  1,500      241      251   

 

22


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock (continued)

Pfizer Inc

  6,800    $ 166    $ 212   

Potash Corp Saskatchewan Inc

  7,500      292      265   

Praxair Inc

  3,854      322      499   

Precision Castparts Corp

  2,044      469      492   

Procter & Gamble

  6,528      393      595   

Prudential

  20,779      367      483   

Prudential Financial Inc

  5,400      319      489   

Qualcomm Inc

  9,286      391      690   

Reckitt Benckiser Group PLC

  2,272      156      185   

Reed Elsevier

  1,563      24      27   

Renault SA

  5,963      509      437   

Rentokil Initial

  179,300      355      339   

Resona Holdings

  12,100      62      62   

Rexel

  16,093      403      289   

Richemont

  5,809      462      519   

Rio Tinto LTD

  13,498      781      632   

Roche Holdings AG Genusscheine

  2,406      548      654   

Rogers Communications Inc

  1,421      58      55   

Rolls Royce Holdings

  2,700      49      37   

Ross Stores Inc

  1,800      88      170   

Royal Bank of Canada

  438      26      30   

Royal Dutch Shell

  17,959      625      615   

RWE AG

  11,207      436      348   

Ryohin Keikaku Co

  2,219      195      275   

Sabmiller PLC

  2,975      149      156   

Sainsbury PLC

  4,321      27      17   

Sampo PLC

  560      28      26   

Samsung Electronic

  406      230      246   

Sandisk Corp

  4,900      447      480   

Sanofi

  8,805      803      806   

Santen Pharmceutical Co

  500      19      27   

SAP AG

  6,355      452      448   

Schlumberger LTD

  8,237      617      704   

Sensata Technologies Holdings

  12,327      469      646   

Seven & I Holdings Co LTD

  4,100      146      149   

SGS SA

  183      376      377   

Shaw Communication

  3,555      86      96   

Shin-Etsu Chemical

  1,300      74      85   

Shionogi & Co LTD

  1,800      39      47   

Shire PLC

  2,081      98      147   

Shiseido Co LTD

  3,100      50      44   

 

23


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock (continued)

Siemens AG

  2,231    $ 250    $ 253   

Singapore Telecommunications

  41,000      112      121   

SJM Holdings LTD

  19,690      31      31   

Sky PLC

  5,040      59      71   

Skyworks Solutions Inc Com

  5,900      331      429   

SMC Corp

  1,500      333      400   

Smith & Nephew

  2,933      33      54   

Societe Generale

  1,100      55      47   

Softbank Corp

  7,891      517      475   

SPX Corp

  3,100      270      266   

SSE PLC

  4,973      117      126   

St. Jude Medical Inc

  7,989      302      520   

Standard Chartered PLC

  4,558      101      68   

Starbucks Corp

  7,263      418      596   

Statoil ASA

  11,997      302      210   

Sumitomo Corp

  5,700      74      59   

Sumitomo Mitsui Financial Group

  19,999      850      730   

Sumitomo Mitsui Trust Holdings Inc

  26,840      112      104   

Suncor Energy Inc

  2,833      94      90   

Svenska Cellulosa

  2,406      63      52   

Svenska Handelsbkn

  2,101      96      98   

Swatch Group

  103      65      46   

Swedbank AG

  697      16      17   

Swisscom AG

  152      81      80   

Syngenta

  1,082      363      348   

Takeda Pharmaceutical Co

  3,700      173      154   

Tele2 AB

  25,700      315      312   

Telefonica SA

  14,957      230      216   

Telenor ASA

  3,098      63      63   

Teliasonera AB

  11,096      85      71   

Telstra Corp LTD

  25,361      118      124   

Telus Corp

  3,678      123      133   

Tesco

  30,122      176      89   

Teva Pharmaceutical Industries

  11,263      553      648   

Thermo Fisher Corp

  2,924      252      366   

Thomas Cook Group

  80,666      182      161   

TJX Companies Inc

  11,979      713      822   

Tokio Marine Holdings Inc

  16,600      485      545   

Tokyo Gas Co LTD

  23,000      118      125   

Toll Holdings LTD

  9,454      51      46   

 

24


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Common Stock (continued)

Toray Industries Inc

  6,000    $ 41    $ 48   

Toshiba Corp

  12,000      50      51   

Total SA

  13,243      765      681   

Toyo Suisan Kaisha

  1,000      31      33   

Toyota Industries

  800      37      41   

Toyota Motor Corp

  12,800      698      807   

Transcanada Corp

  2,443      108      120   

Transdigm Group Inc

  4,309      644      846   

Treasury Wine Estates

  71,400      318      279   

Triumph Group Inc

  3,500      255      235   

Tullow Oil

  3,451      50      22   

Tyson Foods Inc (Delaware)

  23,400      800      938   

UBS Group

  11,561      210      199   

Unicredit SPA

  58,200      421      376   

Unilever NV

  6,596      243      261   

Unilever PLC

  14,406      511      590   

Union Pacific Corp

  5,082      253      605   

United Continental Holdings Inc

  6,600      420      441   

United Oversea Bank

  3,000      54      56   

Universal Health Services Inc

  3,700      233      412   

V F Corp

  4,300      255      322   

Visa Inc

  3,187      392      836   

Vodafone Group

  261,856      980      909   

Volvo AB

  3,384      48      37   

Walt Disney Co

  6,000      255      565   

Wells Fargo & Co

  12,700      428      696   

Wesfarmers LTD

  1,252      45      43   

Western Digital Corp

  2,800      255      310   

Westpac Banking Corp

  3,067      81      83   

Wirecard AG

  9,384      302      414   

Wm Morrison Supermarkets

  42,226      160      121   

Woodside Petroleum

  1,549      47      48   

Woolworths LTD

  2,145      63      54   

WPP PLC

  21,000      324      440   

Xilinx Inc

  6,600      272      286   

Yandex NV

  4,100      134      74   

Zimmer Holdings Inc

  3,900      399      442   

Zurich Insurance Group AG

  208      50      65   
        

 

 

    

 

 

 

Total Common Stock

$ 90,798    $ 103,518   

 

25


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

(a)

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares or
Units
  (d)
Cost
  (e)
Current
Value
 

Preferred Stock

Henkel AG & Co

  499    $ 52    $ 54   

Volkswagen AG

  2,376      546      531   
        

 

 

    

 

 

 

Total Preferred Stock

$ 598    $ 585   

Value of Interest in Registered Investment Companies

Blackrock Strategic Income Opportunities Portfolio

  2,122,922    $ 21,798    $ 21,463   

Ishares Core MSCI Emerging Markets ETF Fund

  141,200      7,300      6,641   

Ishares MSCI Emerging Markets Index Fund ETF

  175,000      6,912      6,876   

Ishares MSCI Germany ETF

  4,115      130      113   

Ishares MSCI Janpan ETF

  4,517      55      51   

Ishares MSCI Switzerland Capped ETF

  6,655      217      211   

Ishares North American Natural Resources ETF

  35,314      1,514      1,353   

Ishares S&P TSX 60 Unit

  19,379      367      359   

Ishares S&P TSX Unit

  8,903      127      123   

Ishares U.S. Home Construction ETF Fund

  70,017      1,773      1,812   

Ishares U.S. Real Estate ETF Dow Jones U S Real Estate Index Fund

  15,167      1,016      1,165   

Market Vectors Agribusiness ETF

  39,845      2,066      2,093   

Neuberger Berman Income Funds New Highincome Bond Fund

  969,657      9,200      8,678   

*

Northern Institutional Funds Government Portfolio

  111,785,372      111,785      111,785   

Select Sector SPDR Fund

  10,592      483      515   

Select Sector SPDR Industrial

  19,777      1,010      1,119   

SPDR S&P Metals & Mining ETF

  14,338      578      443   

SPDR S&P Oil & Gas Exploration and Production ETF

  30,554      2,097      1,462   

Van Eck International Investor Gold

  104      3      1   

Vanguard FTSE Developed Markets ETF

  270,300      8,779      10,239   
        

 

 

    

 

 

 

Total Value of Interest in Registered Investment Companies

$ 177,210    $ 176,502   

Common Collective Trust

*

Northern Trust Collective Tips Index Fund - Non Lending

  134,026    $ 17,548    $ 17,827   

*

Northern Trust Collective Aggregate Bond Index Fund-Non Lending

  97,618      12,336      12,844   
        

 

 

    

 

 

 

Total Value of Interest in Registered Investment Companies

$ 29,884    $ 30,671   

Cash and Cash Equivalents

  17,516,685    $ 17,517    $ 17,517   

 

26


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)***

(in thousands, excluding shares or units)

December 31, 2014

 

 

(b)

Identity of Issue, Borrower, Lessor, or Similar Party and Description

(c)
Number of Shares
or Units
  (d)
Cost
  (e)
Current
Value
 

(a)

Other Investments
American Tower Corp   18,296    $ 1,157    $ 1,809   
Cominar Real Estate Trust Units   476      7      8   
Extra Space Storage Inc   6,500      295      381   
Goodman Group (Stapled Units)   10,907      50      51   
Mirvac Group Stapled Securities   34,509      51      50   
Simon Property Group Inc   2,300      264      419   
SL Green Realty Corp   2,400      228      286   
Stockland Stapled Units   11,155      39      37   
Westfield Group Stapled Units   7,109      46      52   
       

 

 

    

 

 

 
Total Other Investments $ 2,137    $ 3,093   
       

 

 

    

 

 

 
Total 401(h) account** $ 349,553    $ 364,387   
       

 

 

    

 

 

 

*

Notes receivable from participants (Interest rates ranging from 3.25% to 10.50%; varying maturities)

$ —     $ 237,970   

 

* Party-in-interest for which a statutory exemption exists.
** The 401(h) account’s net assets include interest and dividends receivable of $807,000 and pending trades receivable of $10,158,000 and payable of $10,199,000.
*** This 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 by the undersigned hereunto duly authorized.

 

Lockheed Martin Corporation Salaried Savings Plan, by Lockheed Martin Corporation as Plan Administrator
Date: June 22, 2015 by:

/s/ J. Richard Jager

J. Richard Jager,
Vice President, Benefits

 

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EXHIBIT INDEX

 

Exhibit
Number

  

Description

23    Consent of Independent Registered Public Accounting Firm

 

29