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2015 Sustainability Report 2015 SUSTAINABILITY REPORT SCIENCE OF CITIZENSHIP 2015 SUSTAINABILITY REPORT SCIENCE OF CITIZENSHIP – 02 ABOUT THIS REPORT TABLE OF CONTENTS ABOUT THIS REPORT This is our fourth year using the Global Reporting Initiative’s (GRI) framework, OUR COMPANY 03 This is Lockheed Martin’s fifth sustainability the world’s most widely used sustainability report. We publish a report annually in April LEADERSHIP PERSPECTIVE 04 reporting framework. The report adheres on www.lockheedmartin.com/sustainability. OUR APPROACH 05 to GRI G4 Core, the latest guidelines. GOVERNANCE 16 Unless otherwise noted, this report includes The GRI Index is available on our website. PRODUCT PERFORMANCE 24 global data and activities for the calendar year 2015 from Lockheed Martin corporate An independent third party, DNV Global, assured TALENT COMPETITIVENESS 35 offices and five business segments: this report, including the Lockheed Martin SUPPLIER SUSTAINABILITY 45 Aeronautics, Information Systems & Global Sustainability Management Plan performance RESOURCE EFFICIENCY 51 Solutions, Missiles and Fire Control, Mission indicators and select GRI indicators. Details of INFORMATION SECURITY 58 Systems and Training, and Space Systems. the verification are in the letter of assurance. RECOGNITION 64 This report does not include data from We invite you to contact us with questions LEGAL NOTICES 65 Sikorsky operations, acquired in November 2015, or Sandia National Laboratories, or for more information at except where noted. The report provides [email protected]. environmental, social and governance data from the past five years, when available. ABOUT THE COVER: From spent rocket boosters and inactive satellites to stray hardware and paint flecks, there are hundreds of thousands of pieces of debris orbiting Earth at up to 17,500 mph. If orbital debris collides with functioning space technology, even the smallest piece could critically damage satellites that provide us with information we rely on, such as weather forecasts, GPS navigation, defense intelligence, banking security and more. Lockheed Martin is building Space Fence (shown on the cover and at left), a ground-based radar system that will provide the U.S. Air Force with uncued surveillance, detection, and tracking of space objects. Compared to its predecessor, Space Fence will quicken response times with improved accuracy and expanded surveillance coverage. Space Fence can track objects down to the size of a marble, bringing unprecedented situational awareness of our critical space-based communication and security infrastructure. 2015 SUSTAINABILITY REPORT SCIENCE OF CITIZENSHIP – 03 OUR COMPANY OVERVIEW NUMBER OF EMPLOYEES BY LOCATION BUSINESS SEGMENTS IN BRIEF SEGMENT SALES AND PERCENTAGES Lockheed Martin is a global security 93,900 + 2,500+ 1,000+ 800+ 200+ We operate in five business segments based on U.S.1 U.K.2 Australia2 Canada2 New Zealand the nature of the products and services offered. and aerospace company that employs E 1 As of Dec. 31, 2015. Does not include Sandia, Sikorsky, Our workforce also supports Lockheed Martin A about 126,000 people worldwide, including contract workers, interns or employees of certain subsidiaries International and Enterprise Operations. or joint ventures. Lockheed Martin International enables integrated the acquisition of 15,000 Sikorsky 2 Local Country Nationals. D business strategies for customers outside the U.S. to employees in November 2015. B deliver products and services for national security C ECONOMIC IMPACT SOCIAL IMPACT and citizen services. Enterprise Operations is Our scientists and engineers research, design, ($46.1 BILLION) ($55.81 MILLION) develop, manufacture, integrate and sustain comprised of headquarters personnel, business C A. Aeronautics advanced technology systems, products and B C function personnel and enterprise-wide shared services. We also provide a broad range services centers. $15.6B; 34% of management, engineering, technical, AERONAUTICS Information Systems A B. scientific, logistics and information services. Engaged in the research, design, development, manufacture, & Global Solutions Lockheed Martin primarily serves United States integration, sustainment, support and upgrade of advanced B military aircraft, including combat and air mobility aircraft, $5.5 B; 12% (U.S.) and allied government institutions that A unmanned air vehicles and related technologies. have charters to protect and provide essential C. Missiles and INFORMATION SYSTEMS & GLOBAL SOLUTIONS Fire Control services to billions of citizens worldwide. A. Cost of Sales3 $40,932M A. Charitable Provides advanced technology systems and expertise, We also serve commercial customers in sectors Contributions $26.98M integrated information technology solutions and management $6.7 B; 14% B. Profit $3,605M services across a broad spectrum of applications for civil, such as energy, financial services and hospitality. B. Employee C. Federal/Foreign defense, intelligence and other government customers. D. Mission Systems The Corporation’s net sales for 2015 were 4 Giving $19.18M and Training Taxes $1,418M MISSILES AND FIRE CONTROL $46.1 billion. This report covers our significant C. Sponsorships $9.65M Provides air and missile defense systems; tactical missiles and $9.1 B; 20% activities related to sustainability in the U.S., air-to-ground precision strike weapon systems; logistics; Australia, Canada and the United Kingdom (U.K.). fire control systems; mission operations support, readiness, E. Space Systems CUSTOMERS (% OF $46.1 BILLION NET SALES) engineering support and integration services; manned and $9.1 B; 20% Lockheed Martin is a corporation organized and A. U.S. Department unmanned ground vehicles; and energy management solutions. existing under the laws of Maryland, U.S., with C of Defense 58% MISSION SYSTEMS AND TRAINING D one form of equity security outstanding, common B. International5 21% Provides design, manufacture, service and support for a variety of military and civil helicopters; ship and submarine stock. Our complete financial statements and A C. U.S. Civil, National mission and combat systems; mission systems and sensors Aeronautics and Space explanation of beneficial ownership and changes B for rotary and fixed-wing aircraft; sea- and land-based missile in operations are available in our Annual Report Administration (NASA) defense systems; radar systems; the Littoral Combat Ship and Intelligence (LCS); simulation and training services; and unmanned and Proxy Statement. Agencies 20% systems and technologies. D. U.S. Commercial SPACE SYSTEMS and Other 1% Engaged in the research and development, design, engineering and production of satellites, strategic and 3 Includes salaries, global supply chain and other expenses. defensive missile systems, and space transportation systems. 4 Reflects recognized income tax expense, a 28.2% effective tax rate. 5 Foreign military sales and direct commercial sales to governments. OUR COMPANY LEADERSHIP PERSPECTIVE OUR APPROACH GOVERNANCE PRODUCT PERFORMANCE TALENT COMPETITIVENESS SUPPLIER SUSTAINABILITY RESOURCE EFFICIENCY INFORMATION SECURITY RECOGNITION LEGAL NOTICES 2015 SUSTAINABILITY REPORT SCIENCE OF CITIZENSHIP – 04 LEADERSHIP PERSPECTIVE Our industry’s commitment to the future also In this year’s report, you’ll see some of our most SUSTAINABILITY comes from working directly with governments significant accomplishments, including progress CORE ISSUES responsible for promoting strong, safe and on reducing our carbon footprint, enhancing GOVERNANCE Objective: Continually productive societies. More and more, international diversity and workplace inclusion, building on enhance efforts to uphold leaders agree that global and regional security our strong governance practices, and advancing high standards and controls is built on sustainable development. At Lockheed our culture of workplace ethics. for ethical business Martin, we know firsthand how to deliver conduct, compliance This report gives our customers, employees, and transparency environmental and social benefits to power shareholders and others a fuller understanding PRODUCT a safer and more prosperous world. of our efforts — well beyond our compliance record PERFORMANCE Objective: Innovate to As an industry, we also play an important role in or the progress we’ve made against performance deliver optimal economic setting the standards for ethics and integrity in indicators. We want our stakeholders to understand and performance value business. Our business conduct builds trust with what we’ve done to advance our goals, how we over the life cycle of our products Lockheed Martin Chairman, President and Chief Executive Officer, foreign governments and commercial clients who accomplished those milestones and what we are Marillyn A. Hewson, tours an S-97 Raider Helicopter. She welcomed want and need long-term partners, not short-term doing to raise the bar for the future. TALENT COMPETITIVENESS employees at the Sikorsky facility in Stratford, Connecticut to the contractors. Our core product offerings adhere Lockheed Martin family on November 6, 2015. At Lockheed Martin, we’re used to facing complex Objective: Foster a to strict procurement rules because they must high-performance, challenges head-on and pursuing breakthrough perform when it matters most. There is no room inclusive culture that solutions to the world’s most difficult problems. attracts, engages and At Lockheed Martin, our core values — to cut corners — and we make it a priority to We approach sustainability
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