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   
Lockheed฀MartinCorporation
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS
December31,2005
the฀ remaining฀ service฀ lives฀ of฀ the฀ employees฀ eligible฀ for฀ the฀
benefit.฀The฀impact฀of฀adoption฀of฀the฀FSP฀was฀a฀reduction฀of฀
the฀ FAS฀ 106฀ postretirement฀ expense฀ for฀ the฀ year฀ ended฀
December฀31,฀2005฀of฀approximately฀$35฀million.฀The฀postre-
tirement฀ expense฀ computed฀ under฀ FAS฀ 106฀ does฀ not฀ include฀
the฀effects฀of฀U.S.฀Government฀Cost฀Accounting฀Standards฀or฀
income฀tax฀benefits.฀
The฀ actuarial฀ assumptions฀ used฀ to฀ determine฀ the฀ benefit฀
obligations฀ at฀ December฀ 31,฀ 2005฀ and฀ 2004฀ related฀ to฀ the฀
Corporations฀defined฀benefit฀pension฀and฀postretirement฀ben-
efit฀plans,฀as฀appropriate,฀are฀as฀follows:
Benefit฀Obligation฀
Assumptions
 2004
Discount฀rates  5.75%
Rates฀of฀increase฀in฀future฀
฀ compensation฀levels  5.50
The฀decrease฀in฀the฀discount฀rate฀from฀December฀31,฀2004฀
to฀December฀31,฀2005฀resulted฀in฀an฀increase฀in฀the฀projected฀
benefit฀ obligations฀ of฀ the฀ Corporations฀ defined฀ benefit฀ pen-
sion฀ plans฀ at฀ December฀ 31,฀ 2005฀ of฀ approximately฀ $465฀
million.฀The฀decrease฀in฀the฀rate฀of฀increase฀in฀future฀compen-
sation฀levels฀from฀December฀31,฀ 2004฀to฀December฀31,฀2005฀
resulted฀ in฀ a฀ decrease฀ in฀ the฀ projected฀ benefit฀ obligations฀ of฀
the฀Corporations฀defined฀benefit฀pension฀plans฀at฀December฀31,฀
2005฀of฀approximately฀$483฀million.฀
The฀ actuarial฀ assumptions฀ used฀ to฀ determine฀ the฀ net฀
expense฀related฀to฀the฀Corporations฀defined฀benefit฀pension฀and฀
postretirement฀benefit฀plans฀for theyears฀ended฀December31,฀
2005,฀2004฀and฀2003,฀as฀appropriate,฀are฀as฀follows:
Pension฀Cost฀Assumptions
 2004 2003
Discount฀rates  6.25% 6.75%
Expected฀long-term฀rates฀of฀฀
฀ return฀on฀assets  8.50 8.50
Rates฀of฀increase฀in฀future฀
฀ compensation฀levels  5.50 5.50
The฀ long-term฀ rate฀ of฀ return฀ assumption฀ represents฀ the฀
expected฀average฀rate฀of฀earnings฀on฀the฀funds฀invested฀or฀to฀
be฀invested฀to฀provide฀for฀the฀benefits฀included฀in฀the฀benefit฀
obligations.฀That฀assumption฀is฀determined฀based฀on฀a฀number฀
of฀factors,฀including฀historical฀market฀index฀returns,฀the฀antici-
pated฀ long-term฀ asset฀ allocation฀ of฀ the฀ plans,฀ historical฀ plan฀
return฀ data,฀ plan฀ expenses฀ and฀ the฀ potential฀ to฀ outperform฀
market฀index฀returns.
The฀medical฀trend฀rates฀used฀in฀measuring฀the฀postretire-
ment฀ benefit฀ obligation฀ were฀ 10.2%฀ in฀ 2005฀ and฀ 11.0%฀ in฀
2004,฀and฀were฀assumed฀to฀ultimately฀decrease฀to฀5.0%฀by฀the฀
year฀ 2012.฀ An฀ increase฀ or฀ decrease฀ of฀ one฀ percentage฀ point฀
in฀the฀assumed฀medical฀trend฀rates฀would฀result฀in฀a฀change฀in฀
the฀postretirement฀benefit฀obligation฀of฀approximately฀5%฀and฀
(4)%,฀respectively,฀at฀December฀31,฀2005,฀and฀a฀change฀in฀the฀
2005฀postretirement฀service฀cost฀plus฀interest฀cost฀of฀approxi-
mately฀4%฀and฀(4)%,฀respectively.฀The฀medical฀trend฀rate฀for฀
2006฀is฀10.0%.
The฀ asset฀ allocations฀ of฀ the฀ Corporation’s฀ plans฀ at฀
December฀ 31,฀ 2005฀ and฀ 2004,฀ by฀ asset฀ category,฀ were฀ as฀
follows:
Defined฀
Benefit฀
Pension฀Plans
Retiree฀Medical฀
and฀Life฀
Insurance฀Plans
 2004  2004
Asset฀category:
฀ Equity฀securities  64%  58%
฀ Debt฀securities  32  41
฀ Other 41
 100%  100%