Summary
Lockheed Martin Corporation (LMT) filed an 8-K report on December 1, 2004, announcing an adjustment to the conversion rate of its $1 billion Floating Rate Convertible Senior Debentures due 2033. The conversion rate will increase from 13.1939 shares of common stock to 13.3326 shares per $1,000 principal amount of debentures. This change effectively lowers the conversion price to $75.00 per share, making the debentures slightly more attractive to convert into common stock.
Key Highlights
- 1Announcement of an adjustment to the conversion rate for LMT's $1 billion Floating Rate Convertible Senior Debentures due 2033.
- 2The conversion rate will be adjusted from 13.1939 to 13.3326 shares of common stock per $1,000 principal amount of debentures.
- 3The resulting conversion price per share will be $75.00.
- 4The adjustment is effective immediately prior to the opening of business on December 2, 2004.
- 5This adjustment potentially makes the debentures more attractive for conversion into LMT common stock.
- 6The company attached the press release dated December 1, 2004, as an exhibit.
Frequently Asked Questions
The main purpose of this 8-K filing is to officially announce an adjustment to the conversion rate of Lockheed Martin's outstanding convertible senior debentures.
The conversion rate increase from 13.1939 to 13.3326 shares per $1,000 debenture means that each debenture can now be converted into slightly more shares of Lockheed Martin's common stock. This effectively lowers the conversion price to $75.00 per share, which can make the debentures more attractive to holders who might want to convert them, especially if the stock price is trading above $75.00.
The adjustment to the conversion rate will be effective immediately prior to the opening of business on December 2, 2004.
This adjustment impacts existing shareholders indirectly. If holders of the convertible debentures decide to convert their debentures into common stock due to the more favorable conversion terms, it would result in an increase in the total number of outstanding shares, potentially diluting the ownership percentage of existing shareholders. The extent of this impact depends on how many debenture holders choose to convert.