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the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule
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Item
1.01. Entry Into a Material Definitive Agreement.
On August 24, 2022, Lockheed Martin Corporation (the “Company”) entered into a new Revolving Credit Agreement (the “Revolving Credit Agreement”), among the Company, as borrower, the lenders listed therein (the “Lenders”), JPMorgan Chase Bank, N.A., as syndication agent, Citibank, N.A., Crédit Agricole Corporate and Investment Bank, Mizuho Bank, Ltd. and Wells Fargo Bank, National Association, as documentation agents, and Bank of America, N.A. (“BofA”), as administrative agent. The Revolving Credit Agreement consists of a $3.0 billion five-year unsecured revolving credit facility, with the option of the Company to increase the commitments
under the credit facility by an additional amount of up to $500 million (for an aggregate amount of up to $3.5 billion), subject to the agreement of one or more new or existing lenders to provide such additional amounts and certain other customary conditions. The Revolving Credit Agreement is available for any lawful corporate purposes of the Company, including supporting commercial paper borrowings.
The Revolving Credit Agreement replaces the Company’s revolving credit agreement dated as of August 24, 2021 (the “Former Credit Agreement”), among the Company, the lenders listed therein, BofA, as administrative agent, and
the other parties thereto, which had been scheduled to mature on August 24, 2026. The Former Credit Agreement, which had a total capacity of $3.0 billion and was undrawn, was terminated effective August 24, 2022.
The Revolving Credit Agreement matures on August 24, 2027, however, the Company may request that commitments be renewed for additional one-year periods under certain circumstances as set forth in the Revolving Credit Agreement.
Borrowings under the Revolving Credit Agreement are unsecured and bear interest at rates, based, at the Company’s option, on (x) the
“Base Rate” of interest in effect, (y) “Term SOFR”, which is a periodic fixed rate based on the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York (“SOFR”) with a term equivalent to the interest period for such borrowing, plus an adjustment of 0.10%, plus the “Term SOFR Margin”, or (z) a rate determined by a competitive bid process with a margin over or under the applicable Term SOFR or at an absolute rate. The “Base Rate” of interest is the highest of (i) the Federal Funds Rate plus 0.50%, (ii) BofA’s prime rate, and (iii) Term SOFR for a one month interest period plus 1.00%. The “Term SOFR Margin” ranges from 0.565% to 1.00% per annum based upon the Company’s senior unsecured long-term debt securities credit ratings (the “Credit Ratings”). A facility fee accrues and is payable quarterly in arrears
at a rate ranging from 0.06% to 0.125% per annum (based upon the Company’s Credit Ratings) on the aggregate commitments under the Revolving Credit Agreement.
The Revolving Credit Agreement contains customary representations, warranties and covenants, including covenants restricting the Company’s and certain of its subsidiaries’ ability to encumber assets and the Company’s ability to merge or consolidate with another entity. Further, the Revolving Credit Agreement contains a covenant requiring that the Company
not exceed a maximum leverage ratio of 65%, which is calculated as a ratio of Debt (as defined in the Revolving Credit Agreement) to the sum of Debt and Stockholders’ Equity (as defined in the Revolving Credit Agreement), each on a consolidated basis (the “Leverage Ratio Covenant”). The Leverage Ratio Covenant is calculated without giving effect to the impact on Stockholders’ Equity from (1) the re-measurement of the Company’s post-retirement benefit plans pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 715, Compensation-Retirement Benefits, and (2) the deferred tax write down and transition tax relating to the Tax Cuts and Jobs Act of 2017 recorded by the Company in the quarter ended December 31, 2017.
The Leverage Ratio Covenant also excludes from the calculation of Debt (x) Debt of the Company’s consolidated subsidiaries up to the greater of (A) $300 million and (B) 1.5% of Stockholders’ Equity, (y) Debt consisting of guarantees up to the greater of (A) $600 million and (B) 3.0% of Stockholders’ Equity and (z) Debt incurred to finance any acquisition with total consideration greater than $100 million until such acquisition has been consummated. In addition, for purposes of calculating Stockholders’ Equity for the Leverage Ratio Covenant, the Company may exclude up to $750 million of non-cash impairments during the term of the Revolving Credit Agreement.
The
Company may terminate, in whole or in part, the unused portion of the total commitments under the Revolving Credit Agreement at any time during the term of the Revolving Credit Agreement. Once terminated, a commitment may not be reinstated.
The obligation of the Company to pay amounts outstanding under the Revolving Credit Agreement may be accelerated upon the occurrence of an “Event of Default” as defined in the Revolving Credit Agreement. Such Events of Default include (1) the Company’s failure to pay when due the principal of, or within 5 days when due, the facility fee or the interest on borrowings under the credit facility, (2) the Company’s failure to comply
with certain covenants contained in the Revolving Credit Agreement (after expiration of any applicable grace periods), (3) any representation
or warranty of the Company in the Revolving Credit Agreement proving to be incorrect in any material respect when made, (4) the Company’s failure to pay, or the acceleration of, any Material Debt (as defined in the Revolving Credit Agreement), (5) the bankruptcy or insolvency of the Company or a Material Subsidiary (as defined in the Revolving Credit Agreement), (6) an unsatisfied judgment
in excess of $300 million against the Company or a Restricted Subsidiary (as defined in the Revolving Credit Agreement), or (7) a change in control of the Company.
The foregoing description of the Revolving Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Revolving Credit Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
No borrowings under the Revolving Credit Agreement were made at closing.
In
the ordinary course of their respective businesses, one or more of the Lenders, or their affiliates, have or may have various relationships with the Company and the Company’s subsidiaries involving the provision of a variety of financial services, including cash management, commercial banking, investment banking, trust or agency, foreign exchange, advisory or other financial services, for which they received, or will receive, customary fees and expenses.
Item 1.02 Termination of a Material Definitive Agreement.
In connection with and at the time that the
Company entered into the Revolving Credit Agreement, on August 24, 2022, the Former Credit Agreement originally scheduled to mature on August 24, 2026, was terminated. There were no outstanding borrowings under the Former Credit Agreement at the time of termination, and no termination penalties were paid as a result of the termination.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03 of this Current Report on Form 8-K.
Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
