LOCKHEED MARTIN Agrees to team with rolls-royce and vt group FOR UK MOD Military FLYING TRAINING SYSTEM

10 September 2003

LONDON, United Kingdom Sept 10, 2003 – Lockheed Martin today agreed to team with Rolls-Royce plc and VT Group plc to pursue the Training Systems Integrator role for the UK Ministry of Defence’s Military Flying Training System (MFTS).

Each member of the team brings a unique and complementary knowledge base to this partnership making available, and enabling, the world-class capability inherent within each company for success in the Training Systems Integrator role. Lockheed Martin is the world’s leading provider of military aircrew training bringing a wealth of knowledge in training systems design and development. The VT Group both provides and supports current flying training through partnership with the UK MOD. Rolls-Royce offers a unique mix of programme management and asset financing skills embedded in the UK environment. This team, acting in partnership with the UK MOD, the Royal Air Force, Royal Navy and Army Air Corps, will provide the future military aircrew of the UK Armed Forces with the opportunity to receive state of the art training technologies in a total service that is second to none.

“The Lockheed Martin, VT Group and Rolls-Royce team offers the optimal combination of skills to perform as Training Systems Integrator and enable the MOD to train selected Tri-Service Military Aviators to defined standards in a timely and sustainable manner," said Dan Crowley, President, Lockheed Martin Information Systems.

John Boughton, Director of Customer Business - Rolls-Royce Defence Aerospace, said: "This strong teaming agreement allows us the best opportunity to formulate the most competitive solution to this unique customer requirement."

VT Group chief executive Paul Lester said “Our skills and experience in Military Flying Training will considerably enhance the consortium’s capability to provide the best solution to the UK armed forces’ future training requirements.”

Lockheed Martin UK, a unit of Lockheed Martin Corporation, is a leader in systems integration working on major programmes spanning the aerospace, defence, civil and commercial sectors with significant capabilities in the transport infrastructure market. In the UK, Lockheed Martin has annual sales in the range of £400-600 million working with more than 75 business partners. Lockheed Martin employs approximately 1,000 people at over 10 UK facilities including London, Havant, Southampton, Yeovil, Swindon, Hertford, Bristol and Cornwall.

Headquartered in Bethesda, Maryland, Lockheed Martin employs about 125,000 people worldwide and is principally engaged in the research, design, development, manufacture and integration of advanced technology systems, products and services.

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Notes to Editors:

The UK Military Flying Training System will replace the present flying training arrangements for the Royal Navy, the Royal Air Force, and the Army Air Corps before the end of the present decade.

UKMFTS is a genuinely tri-Service programme which will cater for the different training needs of the entire flying element of the UK front line, ranging from fast-jet pilots and navigators, through rotary wing pilots and rear crews, to multi-engine pilots and rear crews. This programme will encompass all flying training which takes place from the moment young men and women are selected, through to their arrival at the conversion unit for their designated operational aircraft.

Timing: Following a successful Initial Gate Submission at the end of 2002 the programme has entered the current assessment phase. ISP is due in 2007 with FSP due in 2012.

Lockheed Martin, was recently tasked to undertake the UK Military Flying Training System (UK MFTS) Live / Synthetic Balance study in partnership with the Cranfield College of Aeronautics and Training Systems Technology. Lockheed Martin is a leader in the design, development, installation, operation and integration of training and simulation systems for global defense, civil, and commercial markets. Lockheed Martin develops and maintains flight training systems using proven Instructional Systems Development, systems engineering, and logistics processes. Capabilities span the live, virtual, constructive and test-instrumentation training domains for flight, naval, and ground systems applications. Lockheed Martin addresses this continuum with military products ranging from high fidelity virtual simulators to modern war-gaming models, offering tailored solutions to meet readiness requirements. In the UK, Lockheed Martin was responsible for successfully delivering the world’s largest and most sophisticated simulation system, the Combined Arms Tactical Trainer (CATT).

VT Group plc is a leading provider of products and services, primarily to Governments in the UK, USA and the Middle East. The Group is divided into two businesses - support services, shipbuilding. Together, these activities employ 10,000 people worldwide. Turnover is in the region of £600m. VT Support Services - encompassing both civil and military activities - now accounts for over 75 per cent of turnover. Military support is tri-service and includes training, platform and equipment maintenance and facilities management, while civil support focuses on training and education, careers guidance, and specialist engineering.

VT is one of the world’s leading designers and builders of naval ships, both for the Royal Navy and overseas customers. Products include destroyers, frigates, patrol vessels, attack craft, mine-hunters and smaller boats for the paramilitary and commercial market.

Rolls-Royce plc operates in four global markets - civil aerospace, defence aerospace, marine and energy. It is investing in technology and capability that can be exploited in each of these sectors to create a competitive range of products.

The success of these products is demonstrated by the company’s rapid and substantial gains in market share over recent years. As a result, engine deliveries have grown and the company now has a total of 54,000 gas turbines in service worldwide. The investments in product, capability and infrastructure to gain this market position create high barriers to entry. Annual sales total nearly £6 billion, of which 50 per cent currently comes from aftermarket services. The order book stands at more than £17 billion, which, together with aftermarket demand, provides visibility as to future activity levels.

Contacts:

Lockheed Martin
Mark Douglas 020-7798-2850

Chris Trippick
020-7798-2856

Rolls-Royce
Justine Steele 0117-979-0991

VT Group
Phil Rood 01489 775213 Mob 07941-164756