TURKEY TO UPGRADE LOCKHEED MARTIN F-16 FLEET WITH ADVANCED SYSTEMS

FORT WORTH, Texas, April 26, 2005

The governments of the United States and Turkey signed a Letter of Offer and Acceptance (LOA) for the systems upgrade of Turkish F-16 aircraft at an estimated total value of $1.1 billion. Lockheed Martin [NYSE: LMT] will be the principal contractor for the program.

The upgrade program will create a robust, common avionics configuration for Turkey’s fleets of F-16 Block 40 and Block 50 aircraft.

“Turkey is a long-time, valued customer, and we are pleased to be expanding our relationship with them,” said June Shrewsbury, vice president, F-16 programs. “The Turkish Air Force is taking advantage of a cost-effective upgrade program to their F-16s. This program is based on a similar approach by the U.S. Air Force; therefore, much of the design and development effort has already been accomplished, and our task will be to address unique aspects of the Turkish configuration. Other countries have expressed interest in a similar upgrade package for their F-16s.”

The Turkish configuration being integrated consists of the APG-68(V)9 multimode radar (currently being installed on new Advanced Block 50/52 F-16s), color cockpit displays and recorders, new core avionics processors, the Joint Helmet-Mounted Cueing System, Link 16 data link, advanced interrogator/transponder, integrated precision navigation, a unique electronic warfare system, and compatibility with a number of new weapons and targeting systems.

“The F-16 upgrade is extremely important to Turkey,” said Shrewsbury. “The new capabilities will ensure their F-16s remain world-class fighters for many more years. The commonality with the F-16s of the USAF and other allies allows for interoperability in coalition operations as well as logistics advantages. This upgrade also provides a large growth potential, which will allow additional capabilities to be integrated through software changes in conjunction with other F-16 users. Finally, the aircraft modifications are being performed by TUSAS Aerospace Industries, which will help sustain the Turkish industrial base.”

The estimated LOA value includes components provided by the worldwide F-16 supplier team. The estimated value of Lockheed Martin’s portion is about $800 million, and tasks include the development effort, kit accumulation, technical assistance for kit installation, upgrades to pilot training systems, logistics support and training. Kit installation will be performed by TUSAS Aerospace Industries (by separate agreement) with technical assistance from Lockheed Martin.

This program, titled Peace Onyx III, is being processed as a Foreign Military Sales program through the U.S. government and follows Peace Onyx I (160 new F-16s in late 1980s to mid-1990s) and Peace Onyx II (80 new F-16s in late 1990s). The LOA signature clears the way for contract negotiations to begin with the industry participants. The long-lead contract with Lockheed Martin is expected to be signed in July.

BACKGROUND INFORMATION

The F-16 is the choice of 24 countries. More than 4,000 aircraft have been delivered worldwide from assembly lines in five countries. The F-16 program has been characterized by unprecedented international cooperation among governments, air forces and aerospace industries. Major upgrades to all F-16 versions are being incorporated to keep the fleet modern and fully supportable over the aircraft’s long service life.

Lockheed Martin Aeronautics Co., a business area of Lockheed Martin, is a leader in the design, research and development, systems integration, production and support of advanced military aircraft and related technologies. Its customers include the military services of the United States and allied countries throughout the world. Products include the F-16, F/A-22, F-35 JSF, F-117, C-5, C-130, C-130J, P-3, S-3 and U-2. The company produces major components for the F-2 fighter, and is a co-developer of the C-27J tactical transport and T-50 advanced jet trainer.

Headquartered in Bethesda, Md., Lockheed Martin Corp. employs about 130,000 people worldwide and is principally engaged in the research, design, development, manufacture and integration of advanced technology systems, products and services. The corporation reported 2004 sales of $35.5 billion.

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