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Lockheed Martin Production Award Will Deliver Expanded Missile Defense Capability for the U.S. Navy's Area Defense Against Tactical Ballistic Missiles

MOORESTOWN, N.J., February 16, 2001 - Lockheed Martin Naval Electronics & Surveillance Systems (NE&SS)-Surface Systems announced today that it received $182.5 million as part of a multi-year contract from the U.S. Navy for the production of three Aegis Weapon Systems. The three Baseline 7 Phase 1 Aegis Weapon Systems incorporate the latest technology that enables Arleigh Burke-class destroyers to intercept and destroy incoming ballistic missiles.

The current award is part of a multi-year funding agreement between Lockheed Martin and the Navy, which began in 1998, for the production of 13 Aegis Weapon Systems. Recent successful tests of the Aegis system, including incorporating system improvements and reliable, low-cost commercial computer equipment, continues to demonstrate the system's ability to meet and defeat new and emerging threats while driving down costs.

"This contract allows Lockheed Martin to continue providing the U.S. Navy with the Aegis Weapon System," said Fred P. Moosally, president, Surface Systems. "The advanced technology of the Baseline 7 Phase 1 system integrates area ballistic missile defense with anti-air warfare, along with the most advanced commercial-off-the-shelf computer technology and the Navy's most advanced phased array radar AN/SPY-1D(V). All of this means that our sailors are getting the most advanced systems and capabilities to detect and defeat threats. The significance of that is immeasurable."

Lockheed Martin is the Aegis Combat System Engineering Agent responsible for the design and integration of a complete shipboard, multi-warfare combat system which encompasses detection, command and control, weapon and support systems for the Aegis class of guided missile cruisers and destroyers. From inception, the Aegis Program has been designed for technology insertion. Aegis ships have seen a continuous stream of innovation including the introduction of the Vertical Launching System and Tomahawk missiles. They are the first to deploy ballistic missile defense while also being able to defeat anti-air warfare threats, or incoming missiles, such as Exocets.

Under the contract, Lockheed Martin will begin delivering systems in April of this year and continue through January 2007. The work will be performed in Moorestown, New Jersey. The Moorestown business segment of Lockheed Martin is the Navy's pre-eminent combat system integrator for surface platforms.

The Aegis Weapon System is designed, built and integrated by Lockheed Martin NE&SS-Surface Systems, headquartered in Moorestown, N.J. NE&SS-Surface Systems is home to 4,100 employees and is one of five major lines of business comprising the Lockheed Martin NE&SS business segment. NE&SS provides surface ship and submarine weapon systems, antisubmarine warfare and ocean surveillance systems, missile launching systems, radar and sensor systems, ship systems integration services and other advanced systems and services to customers worldwide. NE&SS is an operating segment of the Lockheed Martin Systems Integration business area.

Headquartered in Bethesda, Md., Lockheed Martin Systems Integration is one of four principal business areas within the Lockheed Martin Corporation (NYSE: LMT). The other business areas are aeronautics, space and technology services.

For information on Lockheed Martin Naval Electronics & Surveillance Systems visit: http://ness.external.lmco.com/

For additional information on NE&SS-Surface Systems, visit: http://ness.external.lmco.com/nessm