Fitch affirms Lockheed Martin

Fitch Ratings said it affirmed Lockheed Martin Corp.'s A- issuer default rating, A- senior unsecured debt, A- bank facility and F2 commercial paper programs.

The outlook is stable.

Fitch said the ratings represent the company's position as a leading defense contractor and strong defense spending, along with Lockheed's cash flow and liquidity, operating margins for the past several years, large backlog and certain improved programs.

Ratings concerns, the agency said, are the company's focus on share buybacks and dividends, the possibility of more spending on acquisitions, the U.S. government's budget deficits, some program issues and Lockheed's pension deficit. The ratings reflect the need for cash deployment but constrained debt reduction in the next several years.

The company's debt-to-EBITDA ratio improved to 1.1 times and its debt-to-EBITDA adjusted for non-cash pension expense improved to 1 times in 2006, from 1.5 times and 1.3 times, respectively, in 2005.

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