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Air Force Awards Lockheed Martin Two Contracts Totalling $109 Million to Replenish Laser Guided Bomb Kits

ARCHBALD, PA, November 24th, 2003 -- Lockheed Martin (NYSE: LMT) has received 100 percent of a Department of Defense supplemental appropriation to provide Paveway II laser guided bomb (LGB) kits, replacing those expended in Operation Iraqi Freedom. Hill Air Force Base in Ogden, UT, awarded Lockheed Martin a $56 million contract to produce kits for the U.S. Air Force and $53 million to provide them for the U.S. Navy. The award is in addition to a $106.6 million contract that Lockheed Martin received from the Air Force in February that was included in the base year of an "indefinite delivery, indefinite quantity" contract with six one-year options.

All of the Air Force kits will be GBU-12s while the Navy order will include both GBU-12s and GBU-16s. Paveway II GBU-12 kits are used on 500-lb. bombs, while GBU-16 kits are used on 1,000-lb. bombs.

"This important weapons system was used extensively in Operation Iraqi Freedom," said Maj. Jose Delarosa, Paveway II program manager at Hill AFB.

"We're proud to have this opportunity to do our part in supporting U.S. fighting men and women," said Cynthia Sailar, vice president and general manager of Lockheed Martin's facility in Archbald, where the kits are made. "We appreciate our customers' confidence and will execute this contract with great pride."

Each LGB kit consists of a Computer Control Group, which is the front-end guidance system, plus an Air Foil Group, which includes flight stability fins on the back of each Paveway II LGB. The kits significantly improve the accuracy of gravity weapons - often referred to as "dumb bombs" - thereby reducing collateral damage and risks to U.S. and allied ground forces. Since 1990, Lockheed Martin has delivered to the U.S. Navy and customers in nine countries over 40,000 laser guided training rounds (LGTR), which are used to train aircrews in place of more expensive laser guided bombs. The Paveway II guidance kits built and tested by Lockheed Martin draw on key technologies and components from the training rounds, but meet more stringent live-weapon and aircraft-interface specifications.

Ellen Mitchell, 315-456-3296
e-mail: ellen.j.mitchell@lmco.com