F-35 Update

Steve Over February 2015

F-35 Program Information – Non-Export Controlled Information – REL TO F-35 Program

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page Cook 031015 - 2

Summary

F-35 Is Here!

• 9 Operating Bases, 130 Airplanes Flying, Surpassed 29,000 Flying Hours

• More Than 160 Pilots and 1,700 Maintainers Trained

• 88 Jets Under Construction at Fort Worth Plant

• 65% of Test Program Complete, On Track To Finish in 2017

• Price of an F-35A Reduced 57% Since 2010

• Total of 9 Countries Are Flying or Having Jets Built

• Korea Joined Israel and Japan as 3rd FMS Country September 2014

• First Italian FACO F-35 Rollout Set for 2015

• Nearly 50% of Jets Delivered in Next 5 Years Are International

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page

F-35 Program Information – Non-Export Controlled Information – REL TO F-35 Program

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page Cook 031015 - 3

F-35 Bed Down Through 2018

F-35 Global Deployment

United Kingdom (9)

RAF Marham

Australia (2)

Williamtown

Norway (9)

Orland FMS (32)

Total: 356 F-35A F-35B F-35C

Italy (7)

Amendola Grottaglie

F-35 Program Information – Non-Export Controlled Information – REL TO F-35 Program

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page Cook 031015 - 4

F-35 Bed Down Through 2020

F-35 Program Information – Non-Export Controlled Information – REL TO F-35 Program

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page Cook 031015 - 5

2014 Milestones

• First Delivery to Luke

• Start of 3i Flight Testing

• First Jet Arrival to Beaufort for the Marine Corps

• Delivery of First Australian Jet

• Start 3F Testing

• Complete First Carrier Ship Trials

• Complete 2B Flight Test for USMC IOC

• Continue Driving Costs Out of the Program Delivering on Major Customer Milestones

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page

F-35 Program Information – Non-Export Controlled Information – REL TO F-35 Program

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page Cook 031015 - 6

2015 Major F-35 Events

• First F-35 Rollout at Italian FACO

• Sea Trial – USMC F-35B OT-1

• Start of Pilot Training at Luke

• Marine Corps IOC

• Denmark Future Fighter Selection

• Sea Trial - USN F-35C DT-2

• Delivery of First F-35A to Norway

• Delivery of First F-35A to Hill AFB

• Signing LRIP 9-10 for Approximately 150 Aircraft

• Meeting Production Deliveries for 2015

• F-35 Theme at Armed Forces Bowl

• Sustainment Announcements for Support Systems

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page Cook 031015 - 6

DISTRIBUTION STATEMENT A: Approved for public release; distribution is unlimited. Approved for public release 02-11-15 JSF15-252.

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page Corp Media 021815 - 7

F-35A Price (TY$)

57% Reduction in Cost From LRIP 1-8

As of 1 Feb 2014

Buy Year $0

$50

$100

$150

$200

$250

0

50

100

150

200

250

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

LRIP 1 LRIP 2 LRIP 3 LRIP 4 LRIP 5 LRIP 6 LRIP 7 LRIP 8 LRIP 9 LRIP 10 LRIP 11 FR1-1 FR1-2 FR1-3 FR1-4

Lot A

vera

ge A

ircra

ft Pr

ice

TY$M

Airc

raft

Qua

ntity

USAF USDoN International SAR 2013 F-35A With Engine TY$

F-35 Program Information – Non-Export Controlled Information – REL TO F-35 Program

© 2015 Lockheed Martin Corporation Use or disclosure of the information contained herein is subject to the restrictions of the Cover Page Cook 031015 - 8

Blueprint for Affordability

• Saves Approximately $1.8 Billion by 2019

• Reduces the Cost of an F-35 Jet, by Approximately $10 Million by 2019

• F-35A Will Cost Less Than $80 Million per Jet in Then-Year Dollars by 2019

• Cost Savings Begin Now and Continue Throughout 25-Year Production Profile

Leveraging Ideas From Across the Global Supply Chain

Indu

stry

Indu

stry

Gov

ernm

ent

Gov

ernm

ent

Gov

ernm

ent

U.S

. Gov

ernm

ent

Indu

stry

Indu

stry

U.S

. Gov

ernm

ent

U.S

. Gov

ernm

ent

Potential USG Investment

$85M

$100M $100M $100M

$85M

LM, NGC and BAES Investment