Lockheed Martin Corporation is a global aerospace and defense company that operates in four primary business segments, focusing on advanced military and defense technologies. The company designs and manufactures military aircraft, missile defense systems, helicopters, and space systems, with a significant portion of its sales coming from the U.S. Government, particularly the Department of Defense **[0000936468-24-000010_lmt-20231231.htm:4]** **[0000936468-24-000010_lmt-20231231.htm:110]** **[0000936468-24-000010_lmt-20231231.htm:49]**. Lockheed Martin's strategy centers on integrating advanced technologies into defense systems to enhance agility and adaptability **[0000936468-24-000010_lmt-20231231.htm:49]**.

1. **Aeronautics** - Develops advanced military aircraft, including the F-35 Lightning II, which is the company's largest program **[0000936468-24-000010_lmt-20231231.htm:4]**.
2. **Missiles and Fire Control (MFC)** - Provides air and missile defense systems, tactical missiles, and precision strike weapon systems **[0000936468-24-000010_lmt-20231231.htm:110]**.
3. **Rotary and Mission Systems (RMS)** - Designs and supports military and commercial helicopters, missile defense systems, and cyber solutions **[0000936468-24-000010_lmt-20231231.htm:110]**.
4. **Space** - Involved in satellites, space transportation systems, and strategic defense systems **[0000936468-24-000010_lmt-20231231.htm:110]**.

31f9dff23a00fbd8f85e0e77802b3a0689009b68a4916ab512c212700c2f56b9

| Metric (Unit) | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|---------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Cumulative losses on classified fixed-price incentive fee contract (Million USD) | **270** **[0000936468-23-000009_lmt-20221231.htm:111]** | **270** **[0000936468-23-000051_lmt-20230326.htm:24]** | **270** **[0000936468-23-000099_lmt-20230625.htm:27]** | **270** **[0000936468-23-000123_lmt-20230924.htm:27]** | **270** **[0000936468-24-000010_lmt-20231231.htm:99]** | **290** **[0000936468-24-000052_lmt-20240331.htm:22]** | **335** **[0000936468-24-000095_lmt-20240630.htm:24]** | **415** **[0000936468-24-000110_lmt-20240929.htm:29]** |
| Cumulative losses on Canadian Maritime Helicopter Program (Million USD) | N/A | N/A | **100** **[0000936468-23-000099_lmt-20230625.htm:41]** **[0000936468-23-000099_lmt-20230625.htm:43]** | **100** **[0000936468-23-000123_lmt-20230924.htm:42]** | **100** **[0000936468-24-000010_lmt-20231231.htm:100]** | **100** **[0000936468-24-000052_lmt-20240331.htm:24]** | **100** **[0000936468-24-000095_lmt-20240630.htm:26]** | **100** **[0000936468-24-000110_lmt-20240929.htm:29]** |
| Number of F-35 aircraft delivered | **53** **[0000936468-23-000004_ex991q42022.htm:27]** | **5** **[0000936468-23-000046_ex991q12023.htm:15]** | **50** **[LMT_3384052_1]** | **30** **[0000936468-23-000123_lmt-20230924.htm:50]** **[LMT_3337570_1]** | **18** **[0000936468-24-000006_ex991q42023.htm:29]** | **0** **[0000936468-24-000052_lmt-20240331.htm:42]** **[0000936468-24-000050_ex991q12024.htm:13]** | **0** **[0000936468-24-000093_ex991q22024.htm:17]** | **48** **[LMT_3403194_1]** **[0000936468-24-000107_ex991q32024.htm:15]** |
| Backlog of F-35 aircraft | **345** **[0000936468-23-000009_lmt-20221231.htm:55]** | **340** **[0000936468-23-000051_lmt-20230326.htm:43]** | **421** **[0000936468-23-000099_lmt-20230625.htm:49]** **[LMT_3384052_4]** | **391** **[0000936468-23-000123_lmt-20230924.htm:50]** | **373** **[0000936468-24-000010_lmt-20231231.htm:54]** | **373** **[0000936468-24-000052_lmt-20240331.htm:42]** | **373** **[0000936468-24-000095_lmt-20240630.htm:50]** | **325** **[0000936468-24-000110_lmt-20240929.htm:53]** |
| Reach-forward loss on classified program at MFC (Million USD) | **40** **[0000936468-24-000006_ex991q42023.htm:12]** | **100** **[0000936468-24-000052_lmt-20240331.htm:25]** **[0000936468-24-000052_lmt-20240331.htm:37]** **[0000936468-24-000050_ex991q12024.htm:4]** | **100** **[0000936468-24-000095_lmt-20240630.htm:27]** **[0000936468-24-000095_lmt-20240630.htm:23]** | **100** **[0000936468-24-000110_lmt-20240929.htm:30]** **[0000936468-24-000110_lmt-20240929.htm:26]** **[0000936468-24-000110_lmt-20240929.htm:47]** | N/A | N/A | N/A | N/A |

76cc1c9e5142b32068d1bd3548c7c3ab915b36c75cf39c07d58460528eb3b03d

| Segment/Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-----------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Aeronautics ($M) | **7,635**  **[0000936468-23-000004_ex991q42022.htm:10]**  | **6,269**  **[0000936468-23-000051_lmt-20230326.htm:33]**  | **6,875**  **[0000936468-23-000099_lmt-20230625.htm:37]**  | **6,717**  **[0000936468-23-000121_ex991q32023.htm:5]**  | **7,613**  **[0000936468-24-000006_ex991q42023.htm:9]**  | **6,845**  **[0000936468-24-000050_ex991q12024.htm:3]**  | **7,277**  **[0000936468-24-000093_ex991q22024.htm:4]**  | **6,487**  **[0000936468-24-000107_ex991q32024.htm:4]**  |
| Missiles and Fire Control ($M) | **3,287**  **[0000936468-23-000004_ex991q42022.htm:10]**  | **2,388**  **[0000936468-23-000051_lmt-20230326.htm:33]**  | **2,755**  **[0000936468-23-000099_lmt-20230625.htm:37]**  | **2,939**  **[0000936468-23-000121_ex991q32023.htm:5]**  | **3,171**  **[0000936468-24-000006_ex991q42023.htm:9]**  | **2,993**  **[0000936468-24-000050_ex991q12024.htm:3]**  | **3,102**  **[0000936468-24-000093_ex991q22024.htm:4]**  | **3,175**  **[0000936468-24-000107_ex991q32024.htm:4]**  |
| Rotary and Mission Systems ($M) | **4,803**  **[0000936468-23-000004_ex991q42022.htm:10]**  | **3,510**  **[0000936468-23-000051_lmt-20230326.htm:33]**  | **3,897**  **[0000936468-23-000099_lmt-20230625.htm:37]**  | **4,121**  **[0000936468-23-000121_ex991q32023.htm:5]**  | **4,711**  **[0000936468-24-000006_ex991q42023.htm:9]**  | **4,088**  **[0000936468-24-000050_ex991q12024.htm:3]**  | **4,548**  **[0000936468-24-000093_ex991q22024.htm:4]**  | **4,367**  **[0000936468-24-000107_ex991q32024.htm:4]**  |
| Space ($M) | **3,266**  **[0000936468-23-000004_ex991q42022.htm:10]**  | **2,959**  **[0000936468-23-000051_lmt-20230326.htm:33]**  | **3,166**  **[0000936468-23-000099_lmt-20230625.htm:37]**  | **3,101**  **[0000936468-23-000121_ex991q32023.htm:5]**  | **3,379**  **[0000936468-24-000006_ex991q42023.htm:9]**  | **3,269**  **[0000936468-24-000050_ex991q12024.htm:3]**  | **3,195**  **[0000936468-24-000093_ex991q22024.htm:4]**  | **3,075**  **[0000936468-24-000107_ex991q32024.htm:4]**  |

32459ee3957383a5fcc615252689b6c86341dd17723462029a0c3c8c4c5b3475

0d0e1cbc84b25d3f0ef1e75314f5cd897a13fc4119bf217a6a409ef44c666651

1. Regarding the F-35 program, can you elaborate on the specific challenges you are facing with the finalization of the TR3 software and how this might impact aircraft delivery schedules and cash flow in the coming quarters?  **[LMT_3403194_11]** 
2. Given the incremental losses you've realized on certain classified programs due to aggressive bidding, what measures are you implementing to improve cost estimation and bidding practices to prevent future cost overruns?  **[LMT_3403194_10]** 
3. With the anticipated pension contribution headwinds, can you provide more details on your plans to mitigate these, including any considerations for inorganic measures like debt issuance, and how this might affect your financial flexibility?  **[LMT_3403194_12]** 
4. Considering the increased demand reflected in your record backlog, what steps are you taking to address potential supply chain constraints to ensure you can meet production targets and customer commitments?  **[LMT_3403194_1]** 
5. In the context of the evolving tactical fighter landscape and the development of Collaborative Combat Aircraft (CCA), how is Lockheed Martin positioning itself to remain competitive, especially considering that non-traditional companies have been awarded contracts in Increment 1, and how does this influence your strategy for programs like NGAD and the F-35?  **[LMT_3403194_7]** 

52e3f14ec3e6073db1390bd34760ef227af41b1fdc81e628aabdaa3da5bbce57

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Sales**: Approximately **$71.25 billion**, reflecting a growth of **5%** over 2023  **[LMT_3403194_5]** .
  2. **Segment Operating Profit**: Approximately **$7.475 billion**, with margins of approximately **10.5%**  **[LMT_3403194_5]** .
  3. **Earnings Per Share (EPS)**: Approximately **$26.65**  **[LMT_3403194_5]** .
  4. **Free Cash Flow**: Approximately **$6.2 billion**  **[LMT_3403194_5]** .
  5. **Share Repurchase Target**: Approximately **$3.7 billion**  **[LMT_3403194_5]** .
  6. **Return to Shareholders**: Greater than **100%** of free cash flow  **[LMT_3403194_5]** .
  7. **F-35 Deliveries**: **90 to 110** aircraft  **[LMT_3403194_1]** .
  8. **Losses on MSC Classified Program**: **$325 million**  **[LMT_3403194_5]** .
  9. **Pension Contribution**: No contribution assumed  **[LMT_3403194_5]** .

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Sales**: Range of **$70.5 billion to $71.5 billion**, **5% growth**  **[LMT_3393950_6]** .
  2. **Segment Operating Profit**: Range of **$7.35 billion to $7.5 billion**, margins of **10.5%**  **[LMT_3393950_6]** .
  3. **Earnings Per Share (EPS)**: Range of **$26.10 to $26.60**  **[LMT_3393950_6]** .
  4. **Free Cash Flow**: Range of **$6 billion to $6.3 billion**  **[LMT_3393950_6]** .
  5. **Backlog**: Expected growth  **[LMT_3393950_6]** .
  6. **F-35 Deliveries**: **75 to 100** aircraft  **[LMT_3393950_1]** .
  7. **R&D and Capital Investments**: Over **$3 billion**  **[LMT_3393950_6]** .
  8. **Shareholder Returns**: **$4 billion** in share repurchases  **[LMT_3393950_6]** .
  9. **Program-Specific Guidance**: 
     - **F-35**: Deliveries to exceed production  **[LMT_3393950_1]** .
     - **MFC Classified Program**: Losses of **$325 million**  **[LMT_3393950_6]** .
  10. **Pension Contributions**: No contributions assumed  **[LMT_3393950_6]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Free Cash Flow**: Range of **$6 billion to $6.3 billion**  **[LMT_3380249_7]** .
  2. **Shareholder Returns**: **$4 billion** in share repurchases  **[LMT_3380249_7]** .
  3. **Sales Growth**: **5%** in Q1, low single-digit in Q2 and Q3, flattish to slightly down in Q4  **[LMT_3380249_15]** .
  4. **MFC Losses**: **$325 million** for the year  **[LMT_3380249_10]** .
  5. **Production Capacity Plans**:
     - PAC-3: 500 to 650 missiles by 2027.
     - GMLRS: 10,000 to 14,000 by 2025.
     - JASSM and LRASM: 650 to 1,100 by 2026.
     - HIMARS: 72 to 96 launchers next year  **[LMT_3380249_6]** .
  6. **F-35 Deliveries**: **75 to 110** aircraft  **[LMT_3380249_2]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Sales**: Range of **$68.5 billion to $70 billion**, **2.5% growth**  **[LMT_3370590_7]** .
  2. **Segment Operating Profit**: Range of **$7.175 billion to $7.375 billion**  **[LMT_3370590_7]** .
  3. **EPS**: Range of **$25.65 to $26.35**  **[LMT_3370590_7]** .
  4. **Free Cash Flow**: Range of **$6 billion to $6.3 billion**  **[LMT_3370590_7]** .
  5. **Pension Adjustment**: Decline by **$400 million** to less than **$1.7 billion**  **[LMT_3370590_7]** .
  6. **Segment Growth**: Growth in 3 of 4 segments, MFC leading at **7% growth**  **[LMT_3370590_7]** .
  7. **Margins**: Underlying margins approximately **11%**  **[LMT_3370590_7]** .

8e2d04e76e07ac0c013196d78266c27862deb0db3e4a2fb7a2c1ed2033212cc2

Cumulative losses on classified fixed-price incentive fee contract (Million USD)

Cumulative losses on Canadian Maritime Helicopter Program (Million USD)

Number of F-35 aircraft delivered

Backlog of F-35 aircraft

Reach-forward loss on classified program at MFC (Million USD)

2c87c63a2ebfec6952f7480663e871e05c0e73c1030925d0fcf24d2032845eb0

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from Debt [USD, Millions]

Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

20ea623c8b6efd2a88bb9a1b870266cb3f071c5ecb7d597f13c11ff43933beaf

- The Boeing Company - A primary competitor in the defense and aerospace industry  **[0000936468-24-000010_lmt-20231231.htm:10]** .
- General Dynamics - A primary competitor in the defense and aerospace industry  **[0000936468-24-000010_lmt-20231231.htm:10]** .
- L3Harris Technologies - A primary competitor in the defense and aerospace industry  **[0000936468-24-000010_lmt-20231231.htm:10]** .
- Northrop Grumman - A primary competitor in the defense and aerospace industry  **[0000936468-24-000010_lmt-20231231.htm:10]** .
- RTX Corporation - A primary competitor in the defense and aerospace industry  **[0000936468-24-000010_lmt-20231231.htm:10]** .

2e5b25613ef30a295885073f30efee0da1db1efcf9797a0f61f2fde089a639b4

**Annual guidance for FY 2024:**
- **Sales**: Approximately $71.25 billion  **[LMT_3403194_5]**  (raised from $70.5 billion–$71.5 billion  **[LMT_3393950_6]** )  
- **Segment Operating Profit**: Approximately $7.475 billion  **[LMT_3403194_5]**  (raised from $7.35 billion–$7.5 billion  **[LMT_3393950_6]** )  
- **Earnings Per Share (EPS)**: Approximately $26.65  **[LMT_3403194_5]**  (raised from $26.10–$26.60  **[LMT_3393950_6]** )  
- **Free Cash Flow**: Approximately $6.2 billion  **[LMT_3403194_5]**  (raised from $6.0 billion–$6.3 billion  **[LMT_3393950_6]** )  
- **Share Repurchase Target**: Approximately $3.7 billion  **[LMT_3403194_5]**  (lowered from $4 billion  **[LMT_3393950_6]** )  
- **Return to Shareholders**: Greater than 100% of free cash flow  **[LMT_3403194_5]**  (no prior guidance)  
- **F-35 Deliveries**: 90 to 110 aircraft  **[LMT_3403194_1]**  (raised from 75 to 100 aircraft  **[LMT_3393950_1]** )  
- **Losses on MSC Classified Program**: $325 million  **[LMT_3403194_5]**  (no change from $325 million  **[LMT_3393950_6]** )  
- **Pension Contribution**: No contribution assumed  **[LMT_3403194_5]**  (no change from no contribution  **[LMT_3393950_6]** )  

68f0268fb71c5d19184a066b87a58192d97802772735965d35a21334aae58fa4

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

1. **Classified Program Losses**  
   **Q:** What about MFC's margin guidance amid classified losses?  
   **A:** Management acknowledged that Missiles and Fire Control (MFC) margins were impacted by a **$100 million loss provision** recorded in the first quarter due to a classified program.  **[LMT_3380249_10]**  They anticipate an additional **$225 million** in losses in the back half of the year, with potential further losses exceeding **$1 billion**.  **[LMT_3380249_10]**  Despite this, they emphasize that the underlying performance of MFC is solid, and the long-term outlook for the classified program remains positive, expecting profitability around **2028**.  **[LMT_3380249_10]** **[LMT_3380249_16]** 

2. **F-35 TR-3 Delays**  
   **Q:** How will F-35 TR-3 delays affect production and revenue?  
   **A:** The F-35 program is experiencing delays in the TR-3 upgrade due to the complexity of integrating new hardware and software.  **[LMT_3380249_8]**  The company expects to deliver **combat training-capable aircraft** in the third quarter, with full combat capability following in the next few months.  **[LMT_3380249_8]**  While there could be pressure on the Lot 15 through 17 contract profitability and potential movement around in cash flow, management believes production will remain on track in **2024** and beyond, avoiding significant disruption.  **[LMT_3380249_8]** 

3. **Revenue Growth Outlook**  
   **Q:** How do NGI win and budget affect revenue outlook?  
   **A:** Management reported a solid start with **5% growth** in the first quarter, aligning with the midpoint guidance range of **2% to 2.5%**, potentially reaching the high end of **3.5%**.  **[LMT_3380249_9]**  They expressed higher confidence in continued growth, accelerating in **2024** and potentially increasing more in **2025** due to the NGI win and expected large supplemental budgets.  **[LMT_3380249_9]** 

4. **NGI Win and Costs**  
   **Q:** Are you confident in NGI costs and avoiding charges?  
   **A:** The company won the Next Generation Interceptor (NGI) contract ahead of schedule by leveraging their digital transformation and model-based engineering.  **[LMT_3380249_11]**  They are performing under a cost-plus contract with low margins as expected but nothing abnormal.  **[LMT_3380249_11]**  Management stated that the process did not require aggressive pricing, and they are confident in their cost estimates, having taken a **"middle-of-the-road" approach** to pricing.  **[LMT_3380249_11]** 

5. **Classified Program Profitability**  
   **Q:** When will the classified program become profitable?  
   **A:** Management expects the classified program in MFC to become profitable around **2028**.  **[LMT_3380249_16]**  Until then, they anticipate recording additional losses but emphasize that the long-term business case is accretive, providing strong returns above their cost of capital.  **[LMT_3380249_10]** **[LMT_3380249_16]** 

6. **Supply Chain and In-House Work**  
   **Q:** Is supply chain complexity limiting F-35 potential?  
   **A:** Acknowledging the complexity of the F-35's broad international supply chain, management plans to mitigate future programs by diversifying suppliers and increasing in-house work.  **[LMT_3380249_13]**  They intend to have **second and maybe third sources**, with geographic diversity to reduce supply chain issues experienced during events like COVID.  **[LMT_3380249_13]**  For future programs, they aim to control more of the supply chain where feasible.  **[LMT_3380249_13]** 

7. **Contract Structures Changes**  
   **Q:** Any changes in contract structures from customers?  
   **A:** Management has observed changes where contract structures are more closely aligned with the requested capabilities and technology maturation.  **[LMT_3380249_14]**  They are seeing fewer high-risk fixed-price development contracts, which previously did not work well for either party.  **[LMT_3380249_14]**  They emphasized the importance of aligning contract formats with risk, indicating they would adjust their risk premiums accordingly.  **[LMT_3380249_14]** **[LMT_3380249_16]** 

8. **Vertical Lift Business Outlook**  
   **Q:** How is the outlook for the vertical lift business?  
   **A:** Despite FARA being canceled, management describes the vertical lift business as **stable**.  **[LMT_3380249_12]**  The **CH-53K** program is a pillar, with revenues expected to **double between now and 2027-2028**.  **[LMT_3380249_12]**  While there will be declines in other programs, CH-53K will offset these, and they anticipate opportunities in Black Hawk modernization to maintain relevancy.  **[LMT_3380249_12]** 

9. **Quarterly Revenue Guidance**  
   **Q:** Will growth slow after a strong first quarter?  
   **A:** Management expects growth to slow to **low single digits** in the second and third quarters, with the fourth quarter being **flattish to slightly down** due to a strong prior year comparison.  **[LMT_3380249_15]**  Despite a **5%** normalized growth in the first quarter, they believe the company is well-positioned to meet their full-year guidance.  **[LMT_3380249_15]** 

10. **C2BMC and Strategy**  
    **Q:** How does C2BMC fit with mission-centric strategy?  
    **A:** Management views the C2BMC program as an example of extending existing programs to create integrated, mission-centric solutions.  **[LMT_3380249_17]**  They aim to build **"kill chains"** with diverse, **anti-fragile** data flows to enhance missions.  **[LMT_3380249_17]**  This approach involves open architecture systems allowing multiple routes of data flows, increasing the resilience and effectiveness of their offerings.  **[LMT_3380249_17]** 

779ab491410f31b8ae13494a1411c26554ef3b509523abcfa55a37624eb3f858

Aeronautics

Information Systems & Global Solutions

Missiles and Fire Control

Mission Systems and Training

Rotary and Mission Systems

Space Systems

Space

Products

Services

Total Revenue

d09f3d58f6fdc9f661dda2347762d69c5e7022a33579ab3a8cb26ebbce292e4a

a68c92aa840c426a351f31a18c7fb30ad3c03d807c31174d88f678026f87769d

| Name                  | Position                                                                 | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------|--------------------------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Timothy S. Cahill     | Executive Vice President – Missiles and Fire Control                     | November 2022    | Timothy S. Cahill is the Executive Vice President for the Missiles and Fire Control (MFC) business segment at Lockheed Martin. He previously served as Senior Vice President of Global Business Development & Strategy  **[0000936468-24-000010_lmt-20231231.htm:45]** **[0000936468-23-000009_lmt-20221231.htm:44]** .                  |
| Stephanie C. Hill     | Executive Vice President – Rotary and Mission Systems                    | June 2020        | Stephanie C. Hill has served as the Executive Vice President of the Rotary and Mission Systems (RMS) business segment at Lockheed Martin since June 2020. She was previously the Senior Vice President of Enterprise Business Transformation  **[0000936468-24-000010_lmt-20231231.htm:45]** . |
| Maryanne R. Lavan     | Senior Vice President, General Counsel and Corporate Secretary           | September 2010   | Maryanne R. Lavan has served as Senior Vice President, General Counsel and Corporate Secretary at Lockheed Martin Corporation since September 2010, providing legal counsel and overseeing corporate governance matters  **[0000936468-24-000010_lmt-20231231.htm:45]** **[0000936468-23-000009_lmt-20221231.htm:44]** .                   |
| Robert M. Lightfoot, Jr. | Executive Vice President – Space                                      | January 2022     | Robert M. Lightfoot, Jr. has served as the Executive Vice President of the Space business segment at Lockheed Martin since January 2022. He was previously Vice President, Operations for the Space business segment  **[0000936468-24-000010_lmt-20231231.htm:45]** **[0000936468-23-000009_lmt-20221231.htm:44]** .                      |
| Jesus Malave          | Chief Financial Officer                                                  | January 31, 2022 | Jesus Malave has served as the Chief Financial Officer of Lockheed Martin Corporation since January 31, 2022. He was previously the Senior Vice President and Chief Financial Officer at L3Harris Technologies, Inc.  **[0000936468-24-000010_lmt-20231231.htm:45]** **[0000936468-23-000034_lmt-20230313.htm:69]** .                      |
| H. Edward Paul, III   | Vice President and Controller                                            | June 2022        | H. Edward Paul, III has served as Vice President and Controller at Lockheed Martin Corporation since June 2022. He was previously Vice President, Accounting  **[0000936468-24-000010_lmt-20231231.htm:45]** **[0000936468-23-000009_lmt-20221231.htm:44]** .                                                                               |
| Maria A. Ricciardone  | Vice President, Treasurer and Investor Relations                         | January 1, 2024  | Maria A. Ricciardone has served as Vice President, Treasurer and Investor Relations at Lockheed Martin since January 1, 2024. She was previously Vice President, Investor Relations  **[0000936468-24-000010_lmt-20231231.htm:45]** .                                                          |
| Frank A. St. John     | Chief Operating Officer                                                  | June 2020        | Frank A. St. John is the Chief Operating Officer at Lockheed Martin Corporation since June 2020. He was previously Executive Vice President of Rotary and Mission Systems (RMS)  **[0000936468-24-000010_lmt-20231231.htm:46]** **[0000936468-23-000009_lmt-20221231.htm:45]** .                                                          |
| James D. Taiclet      | Chairman, President, and Chief Executive Officer                         | June 2020        | James D. Taiclet has served as Chairman, President, and Chief Executive Officer (CEO) of Lockheed Martin since June 2020. He was elected as Chairman in March 2021  **[0000936468-24-000010_lmt-20231231.htm:46]** **[0000936468-24-000032_lmt-20240315.htm:58]** **[0000936468-23-000009_lmt-20221231.htm:45]** .                                                                     |
| Gregory M. Ulmer      | Executive Vice President – Aeronautics                                   | February 2021    | Gregory M. Ulmer is the Executive Vice President for the Aeronautics business segment at Lockheed Martin since February 2021. He was previously Vice President and General Manager of the F-35 Lightning II Program  **[0000936468-24-000010_lmt-20231231.htm:46]** **[0000936468-23-000009_lmt-20221231.htm:45]** .                       |

d101d9cf5fa96e033381ede1bc289cb75487d7c766be360cd0396f75f1ecfa7a

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

1921fc5a9ae5a3c135938c419e205e428b03d5b79ad443482acbf4d976078f4b

| Program Details          | Program 1     |
|--------------------------|---------------|
| Approval Date            | October 2010  **[0000936468-24-000110_lmt-20240929.htm:62]** **[0000936468-24-000110_lmt-20240929.htm:24]**  |
| End Date/Duration        | No expiration date  **[0000936468-24-000110_lmt-20240929.htm:62]** **[0000936468-24-000110_lmt-20240929.htm:24]**  |
| Total additional amount  | **$3.0 billion** (October 2024)  **[0000936468-24-000110_lmt-20240929.htm:62]** **[0000936468-24-000110_lmt-20240929.htm:24]**  |
| Remaining authorization amount | **$10.3 billion** (as of 2024-12-21)  **[0000936468-24-000110_lmt-20240929.htm:62]** **[0000936468-24-000110_lmt-20240929.htm:24]**  |
| Details                  | Part of a strategy to return cash to stockholders through dividends and share repurchases. The program can be amended or terminated by the Board of Directors at any time.  **[0000936468-24-000110_lmt-20240929.htm:49]** **[0000936468-24-000010_lmt-20231231.htm:47]** **[0000936468-23-000009_lmt-20221231.htm:70]** **[0000936468-23-000123_lmt-20230924.htm:47]** **[0000936468-24-000110_lmt-20240929.htm:62]**  |

be0744bdc0921a209b9215df8ca76bd22ffdaae9b1ce4aa93cc2159aadc324e1

United States

Europe

Asia Pacific

Middle East

Other

- U.S. Government

- International

- U.S. Commercial and Other

54adc6d28e58e90a8d6ba7440420c73d3b35a70ab1d2e1d742bf1da25ce22c1d

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 1994  **[0000936468-24-000010_lmt-20231231.htm:88]**    | Present  | Current auditor   |

67c508823a54092b3664089f493f984a1f2df5a5ba018e953d5973fe4b5116e2

- **Strong international demand for F-35 jets** is expected to sustain the **production rate at 156 units per year**, with **Lockheed Martin ahead of China's fifth-generation aircraft production**. The CEO expresses confidence due to the **unique capabilities of the F-35**, including its integration with drones and advanced data systems like TR-3.  **[LMT_3413393_20]**
- **Record backlog growth of 10% for the year**, with expectations to continue growing in 2025. Lockheed Martin has visibility into significant upcoming contracts, including a **$10 billion order on the F-35 Lot 19**, multibillion-dollar contracts for **JASSM/LRASM multiyear**, **F-16 international opportunities**, and **CH-53K Lot 9** worth over **$1 billion**. This indicates a strong pipeline and future revenue growth.  **[LMT_3413393_18]**
- **Technological leadership in advanced defense capabilities**, including **counter-hypersonic efforts**, laser-based cruise missile defense, and **counter-UAS technologies**. Lockheed Martin is positioned to address a comprehensive solution to homeland defense, which includes multiple threats like intercontinental ballistic missiles, hypersonic attacks, cruise missiles, and drones.  **[LMT_3413393_22]**

4ca7685f01fea4b9c3ccd865bd07f3e9a1dbad224d82f172f15110c9d37f103c

- **Potential cash flow headwinds due to charges on classified programs:** The company anticipates that the Aero classified program "will be... a cash flow drag over the next **2 to 3 years**," impacting cash flow over this period.  **[LMT_3413393_16]**
- **Declining Aeronautics margins in 2025:** Despite new contracts, Aeronautics margins are expected to decrease due to "lower net profit adjustments," with profit adjustments "declining," and mix benefits being offset. The margins are expected to decrease by about **20 basis points year-over-year in '25**.  **[LMT_3413393_14]**
- **Risk of future charges due to increased exposure from fixed-price contracts:** There is concern that the defense industry could be "taking on more risk and opening itself up for more charges in the future," as the Department of Defense is "getting more pro fixed-price contracts in commercial terms."  **[LMT_3413393_10]**

5763be5622ea79f7a05a21132067f93b8630c1454a5211e1b088b8ebadb00125

1. **Aeronautics Charges and Future Risk**  
   **Q:** Have potential future charges in Aeronautics been reduced?  
   **A:** Management significantly reduced risk on the classified Aeronautics program after a comprehensive review led to a conservative charge in Q4. They implemented process changes, added technical resources, and enhanced monitoring to mitigate risks, giving confidence that future charges are less likely. Additionally, the 2025 outlook is better than previously projected, with revenue growth expected at **4% to 5%** due to improved throughput and rising expectations in supply chain and operations.  **[LMT_3413393_9]** 

2. **MFC Growth and Margins Outlook**  
   **Q:** What's the long-term outlook for MFC growth and margins?  
   **A:** MFC expects continued growth in 2025 and beyond, driven by programs like GMLRS, HIMARS, PAC-3, JASSM, and LRASM. Demand is strong both domestically and internationally. Margins are projected around **14%**, aligning with long-term expectations, although adjusted margins may be slightly lower due to expected lower net profit adjustments.  **[LMT_3413393_11]** 

3. **Free Cash Flow and Working Capital**  
   **Q:** How will working capital improvements impact free cash flow?  
   **A:** In 2024, working capital days were reduced by a couple, and for 2025, management plans to reduce it by another day, aiming to offset growth-related cash usage. Opportunities remain to drive asset productivity, particularly in contract assets and unbilled receivables across portfolios like F-35, Sikorsky, and segments like Space and MFC. These efforts are part of the plan to meet the **$6.7 billion** free cash flow outlook for 2025.  **[LMT_3413393_12]** **[LMT_3413393_13]** 

4. **F-35 Tech Refresh 3 Progress**  
   **Q:** What's the status of F-35 Tech Refresh 3 and Lot 19?  
   **A:** Progress on TR-3 is ongoing, with efforts to complete system integration and improve stability. Milestones are expected this year, but full capability declaration may extend into **2026**. Lot 18 definitization is expected in the first half of the year, with **Lot 19**, valued around **$10 billion**, to be finalized in the second half of the year.  **[LMT_3413393_15]** 

5. **Cash Impact of Unplanned Charges**  
   **Q:** How do unplanned charges affect cash flow and pension funding?  
   **A:** The Aero classified program's charge will create a cash flow drag over the next few years, not solely in 2025. As for pension funding in 2026, management plans to offset requirements through working capital improvements and leveraging their strong balance sheet, continuing strategies similar to prior years.  **[LMT_3413393_16]** 

6. **Supply Chain Improvements and Growth**  
   **Q:** How are supply chain issues affecting growth outlook?  
   **A:** Supply chain has improved, approaching pre-COVID levels, but discrete issues remain across the portfolio, impacting programs like CH-53K and MFC. With continued improvement, management feels more confident in achieving **4% to 5%** growth in 2025, and potentially sustaining mid-single-digit growth in the multiyear outlook.  **[LMT_3413393_21]** 

7. **F-35 Production Rates Confidence**  
   **Q:** Can 156 F-35 yearly production rate be maintained?  
   **A:** Management is confident in sustaining the **156** aircraft per year production rate due to strong demand from both U.S. and international customers. They believe reductions in U.S. quantities are unlikely, given the need for modern fleets and the F-35's critical role in maintaining deterrence against adversaries.  **[LMT_3413393_20]** 

8. **Backlog Growth Opportunities**  
   **Q:** Are there opportunities to grow backlog in 2025?  
   **A:** Management expects backlog growth in 2025, supported by significant contracts like **Lot 19** F-35 order (~$10 billion), a multiyear JASSM/LRASM contract, international F-16 opportunities, F-35 sustainment contracts, and CH-53K Lot 9. There's a strong line of sight to continued backlog growth while focusing on accelerating backlog conversion.  **[LMT_3413393_18]** 

9. **MFC Program Profitability Post-Charge**  
   **Q:** Will margins improve on the MFC program with the charge?  
   **A:** While details are limited due to the classified nature, management expects margins to improve substantially as the program scales and moves beyond fixed pricing phases. Over time, margins are expected to return to more reasonable levels, though not immediately matching standard MFC margins.  **[LMT_3413393_17]** 

10. **Defense Industry Risk with Fixed-Price Contracts**  
    **Q:** Are fixed-price contracts increasing industry risk?  
    **A:** Management is not concerned about potentially increased fixed-price contracts. They emphasize a disciplined bid process that accounts for risk, whether contracts are fixed-price or cost-plus. They believe aligning contract types with program risk levels is important, and have observed a trend towards more appropriate contracting regimes over the past 12-18 months.  **[LMT_3413393_10]** 

11. **Iron Dome and Homeland Defense**  
    **Q:** Does NGI contract relate to Iron Dome over the U.S.?  
    **A:** NGI (Next Generation Interceptor) will be an integral part of a broader Homeland Defense strategy, which includes defense against ICBMs, hypersonic attacks, cruise missiles, and UAV threats. The Iron Dome concept over the U.S. encompasses multiple layers and technologies beyond missile defense alone.  **[LMT_3413393_22]** 

12. **International Policy Impact on F-35**  
    **Q:** How might U.S. policies affect F-35 international customers?  
    **A:** Management views policy issues, such as U.S. actions related to Greenland and Denmark, as outside their purview. They focus on meeting strong international demand for the F-35 and refrain from commenting on policy matters, suggesting confidence in continued international sales despite geopolitical considerations.  **[LMT_3413393_23]** 

05d3efac4c1b9769fb59e179ec1e8a984faa6edc13c8adb9895ea775b133a0cf

Lockheed Martin’s Q4 underscores 10% backlog growth and a $10B F-35 Lot 19, supporting 156 jets/year. Management targets 4-5% revenue growth by 2025 despite a 20-bp Aeronautics margin dip and near-term classified program charges.

778d9cf91207ec4c836d8ad82200da926d3b5577d7e3a148cfc832019bd1c713

**Annual guidance for FY 2025:**  
- **Sales Growth**: 4%–5%  **[LMT_3413393_8]**  (lowered from 5%  **[LMT_3403194_5]** )  
- **Operating Margins**: 11%  **[LMT_3413393_8]**  (raised from 10.5%  **[LMT_3403194_5]** )  
- **Free Cash Flow**: 9% growth from 2024 adjusted results  **[LMT_3413393_8]**  (raised from $6.2B  **[LMT_3403194_5]** )  
- **Segment Operating Profit**: $8.15B  **[LMT_3413393_8]**  (raised from $7.475B  **[LMT_3403194_5]** )  
- **EPS**: Slight decline from the 2024 adjusted position  **[LMT_3413393_8]**  (lowered from $26.65  **[LMT_3403194_5]** )  
- **Missiles and Fire Control (MFC) Growth**: 8%  **[LMT_3413393_8]**  (no prior guidance)

c366d1805c422320a0a3c696339e87506558d93a1016396c2ff9d000538bbbf8

9ae640841f8fcd52eedc27e3f3996e6de57064fa4abe7107b1da642f9284b608

5f2beaf4918395d2e9637525df98bdb951582d0331f2a49677e9eb769e73bcd9

ab31930d48bcb540955cd5dd8c56e8e51b0f45796be49f9569db835493f6d283

- Total Revenue: $18.622B  **[0000936468-25-000009_lmt-20241231.htm:60]** **[0000936468-25-000009_lmt-20241231.htm:121]**  vs. $18.874B  **[0000936468-24-000010_lmt-20231231.htm:113]** **[0000936468-24-000010_lmt-20231231.htm:55]** , -1% YoY  
- Aeronautics: $8.009B  **[0000936468-25-000009_lmt-20241231.htm:121]**  vs. $7.613B  **[0000936468-24-000010_lmt-20231231.htm:113]** **[0000936468-24-000010_lmt-20231231.htm:55]** , +5% YoY  
- Missiles and Fire Control: $3.412B  **[0000936468-25-000009_lmt-20241231.htm:121]**  vs. $3.171B  **[0000936468-24-000010_lmt-20231231.htm:113]** **[0000936468-24-000010_lmt-20231231.htm:55]** , **+8% YoY**  
- Rotary and Mission Systems: $4.261B  **[0000936468-25-000009_lmt-20241231.htm:121]**  vs. $4.711B  **[0000936468-24-000010_lmt-20231231.htm:113]** **[0000936468-24-000010_lmt-20231231.htm:55]** , **-10% YoY**  
- Space: $2.94B  **[0000936468-25-000009_lmt-20241231.htm:121]**  vs. $3.379B  **[0000936468-24-000010_lmt-20231231.htm:113]** **[0000936468-24-000010_lmt-20231231.htm:55]** , **-13% YoY**  
- Services: $3.122B  **[0000936468-25-000009_lmt-20241231.htm:60]**  vs. $2.907B  **[0000936468-24-000010_lmt-20231231.htm:113]** **[0000936468-24-000010_lmt-20231231.htm:55]** , **+7% YoY**  
- Europe: $2.485B  **[0000936468-25-000009_lmt-20241231.htm:121]**  vs. $2.209B  **[0000936468-24-000010_lmt-20231231.htm:113]** , **+13% YoY**  
- Middle East: $0.762B  **[0000936468-25-000009_lmt-20241231.htm:121]**  vs. $1.015B  **[0000936468-24-000010_lmt-20231231.htm:113]** , **-25% YoY**  
- Other: $0.367B  **[0000936468-25-000009_lmt-20241231.htm:121]**  vs. $0.319B  **[0000936468-24-000010_lmt-20231231.htm:113]** , **+15% YoY**  

9a7a699eff476bacdd00738f03af2ff6768bf8836e176a3cd5c81a0ed24ec22b

Number of production F-35 aircraft delivered (aircraft)

Number of F-35A variants delivered (aircraft)

Number of F-35B variants delivered (aircraft)

Number of F-35C variants delivered (aircraft)

Number of F-35 backlog (aircraft)

Number of TR-3 configured F-35 aircraft delivered (aircraft)

Number of TR-2 configured F-35 aircraft delivered (aircraft)

efad444cd2e5012896f241cac0ec06f49f4c36058502717922e1042368ae2874

| Year   | Amount Due (in millions) | Debt Type                          | Interest Rate (%) | % of Total Debt                     |
|--------|---------------------------|------------------------------------|-------------------|--------------------------------------|
| 2025   | $500 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 4.95% Notes                       | 4.95 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 2.3% = (500 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2026   | $1,000 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 3.55% Notes                       | 3.55 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 4.6% = (1,000 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2027   | $750 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 5.10% Notes                       | 5.10 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 3.5% = (750 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2028   | $500 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 4.45% Notes                       | 4.45 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 2.3% = (500 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2029   | $650 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 4.50% Notes                       | 4.50 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 3.0% = (650 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2030   | $400 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 1.85% Notes                       | 1.85 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 1.9% = (400 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2031   | $600 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 4.70% Notes                       | 4.70 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 2.8% = (600 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2032   | $800 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 3.90% Notes                       | 3.90 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 3.7% = (800 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2033   | $1,000 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 5.25% Notes                       | 5.25 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 4.6% = (1,000 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2034   | $1,450 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 4.75% and 4.80% Notes             | 4.75-4.80 **[0000936468-25-000009_lmt-20241231.htm:127]** | 6.7% = (1,450 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2035   | $500 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 3.60% Notes                       | 3.60 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 2.3% = (500 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2036   | $1,054 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 4.50% and 6.15% Notes             | 4.50-6.15 **[0000936468-25-000009_lmt-20241231.htm:127]** | 4.9% = (1,054 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2042   | $1,336 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 4.07% Notes                       | 4.07 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 6.2% = (1,336 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2045   | $1,000 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 3.80% Notes                       | 3.80 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 4.6% = (1,000 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2046   | $1,326 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 4.70% Notes                       | 4.70 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 6.1% = (1,326 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2050   | $750 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 2.80% Notes                       | 2.80 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 3.5% = (750 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2052   | $1,578 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 4.09% Notes                       | 4.09 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 7.3% = (1,578 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2053   | $850 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 4.15% Notes                       | 4.15 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 3.9% = (850 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2054   | $1,000 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 5.70% Notes                       | 5.70 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 4.6% = (1,000 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2055   | $1,050 **[0000936468-25-000009_lmt-20241231.htm:127]**            | 5.20% Notes                       | 5.20 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 4.9% = (1,050 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2062   | $650 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 4.30% Notes                       | 4.30 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 3.0% = (650 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2063   | $750 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 5.90% Notes                       | 5.90 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 3.5% = (750 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2064   | $750 **[0000936468-25-000009_lmt-20241231.htm:127]**              | 5.20% Notes                       | 5.20 **[0000936468-25-000009_lmt-20241231.htm:127]**      | 3.5% = (750 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |
| 2025-2041 | $1,313 **[0000936468-25-000009_lmt-20241231.htm:127]**         | Other Notes (4.85% to 8.50%)      | 4.85-8.50 **[0000936468-25-000009_lmt-20241231.htm:127]** | 6.1% = (1,313 / 21,600) * 100 **[0000936468-25-000009_lmt-20241231.htm:87]** **[0000936468-25-000009_lmt-20241231.htm:127]** |

e2a495e30716a2214186cbb9d6ae4d31dc7fdfaf280d1c3f7ddbe022fa01556f

- **Lockheed Martin incurred significant charges totaling $145 million year-to-date on a classified program due to higher costs than expected, stemming from aggressive initial bidding.**  **[LMT_3403194_10]**
- **Delays in the F-35 Tech Refresh 3 (TR3) software finalization are impacting aircraft deliveries and cash flow**, with the company facing withheld payments and timing issues due to ongoing negotiations for Lot 18 and 19 contracts.  **[LMT_3403194_11]**
- **Growth projections for 2025 are modest**, with expectations of low single-digit growth overall, relying heavily on the Missiles and Fire Control segment for high single-digit growth, while other segments remain flat or grow slowly.  **[LMT_3403194_8]** **[LMT_3403194_13]**

9d7fdb59b3751198492c096ec931904eb6f0c9c87d61594f3afd4814329586b6

1. **Growth Outlook for 2025**  
   **Q:** Will growth in 2025 match or exceed 2024?  
   **A:** Management expects 2025 growth to be similar to 2024, supported by a robust backlog of **$158 billion**.  **[LMT_3393950_12]**  They emphasize strong demand and visibility into future growth but note the need to ensure operational capability to deliver on this demand.  **[LMT_3393950_12]** 

2. **Free Cash Flow Per Share Growth**  
   **Q:** Can free cash flow per share growth accelerate?  
   **A:** The company aims to increase absolute free cash flow in the low single-digit range and, with share repurchases, achieve mid-single-digit free cash flow per share growth.  **[LMT_3393950_9]**  While higher revenue provides a positive baseline, they are reviewing forecasts and may update this outlook in October.  **[LMT_3393950_9]** 

3. **F-35 Deliveries and Cash Flow Impact**  
   **Q:** What is the impact of F-35 deliveries on cash flow?  
   **A:** Lockheed Martin plans to deliver between **75 to 110 F-35 aircraft** in the second half.  **[LMT_3393950_7]**  Delivering more F-35s than produced next year will result in timing benefits for cash flow over the next few years, but specifics are under negotiation with the customer.  **[LMT_3393950_8]**  They do not expect significant incremental revenue but foresee cash flow improvements.  **[LMT_3393950_8]** 

4. **Supply Chain Improvements and Revenue Growth**  
   **Q:** Is the supply chain still a bottleneck for growth?  
   **A:** Supply chain conditions are improving, with increased on-time delivery and reduced part shortages.  **[LMT_3393950_10]**  This, along with a strong backlog, supports continued revenue growth.  **[LMT_3393950_10]**  However, challenges remain in ramping up major programs, and the company continues proactive measures to mitigate bottlenecks.  **[LMT_3393950_10]** 

5. **Missiles and Fire Control Growth**  
   **Q:** What is the outlook for MFC's growth and orders?  
   **A:** Missiles and Fire Control (MFC) is experiencing strong demand, with a book-to-bill ratio above **2** in the quarter.  **[LMT_3393950_11]**  They expect continued growth, with programs like PAC-3, GMLRS, Javelin, and JASSM/LRASM ramping up production significantly over the next few years.  **[LMT_3393950_11]** **[LMT_3393950_17]**  International partnerships, such as with Rheinmetall and production in Poland, are enabling this expansion.  **[LMT_3393950_17]** 

6. **Profitability and Margin Outlook**  
   **Q:** How will profitability change in the second half?  
   **A:** Second-half margins are expected to be lower due to anticipated program losses of about **$225 million** at MFC and a slowdown in profit adjustments.  **[LMT_3393950_13]**  Despite this, management believes 2024 will be a low watermark for margins, with gradual improvement expected in subsequent years.  **[LMT_3393950_13]** 

7. **Cash Flow and Pension Contributions**  
   **Q:** How will pension headwinds affect cash flow in 2025?  
   **A:** The company anticipates pension headwinds of approximately **$1 billion** due to reductions in CAS recoveries.  **[LMT_3393950_16]**  They plan to offset this through earnings growth, working capital improvements, and reduced tax payments related to R&D capitalization to continue growing free cash flow in low single digits.  **[LMT_3393950_16]** 

8. **NGAD Program Readiness**  
   **Q:** What's the status of Lockheed's role in NGAD?  
   **A:** While unable to discuss specifics, management affirmed readiness to design and produce next-generation combat aircraft.  **[LMT_3393950_14]**  They have high-tech facilities operational in multiple locations and are prepared to compete and deliver if the government initiates a competition for NGAD.  **[LMT_3393950_14]** 

9. **F-35 TR3 Production and Supply Chain**  
   **Q:** Is the supply chain ready for F-35 TR3 production?  
   **A:** Lockheed has engaged major suppliers to ensure they understand demand and quality requirements for TR3 components.  **[LMT_3393950_15]**  They are confident in suppliers' ability to meet production needs and have improved integration plans for testing and development.  **[LMT_3393950_15]** 

10. **Lessons from Ukraine Conflict**  
    **Q:** What lessons has Lockheed learned from Ukraine conflict?  
    **A:** The conflict highlighted the effectiveness of traditional systems like **Javelin** and **PAC-3**, emphasizing the need for adaptability.  **[LMT_3393950_18]**  Lockheed is enhancing existing systems and investing in technologies like unmanned aerial systems to respond to new threats.  **[LMT_3393950_18]** 

4e7ac130639231ee32d7f2bf385b42a348b7e29d325394030e659acea13bddf6

- Lockheed Martin expects **lower profit margins** in the second half of 2024 due to **$225 million in program losses** at Missiles and Fire Control (MFC) and fewer profit adjustments.  **[LMT_3393950_12]**
- **Deferral of final delivery payments** for the F-35 program may negatively impact cash flow, as negotiations with the U.S. government are ongoing and the timing of these payments remains uncertain.  **[LMT_3393950_9]**
- Supply chain challenges may hinder Lockheed Martin's ability to meet increased demand, potentially impacting future growth as the company needs to ensure it can **ramp up production significantly** over the next two years.  **[LMT_3393950_18]**

02f2befe22fc5a78e74255607853bc94a0f4890cee480d6b60af89c460b030b7

- **Lockheed Martin secured the Next-Generation Interceptor (NGI) contract ahead of schedule**, demonstrating their leadership in missile defense and positioning them for future growth.  **[LMT_3380249_11]**
- Despite challenges with the **F-35 TR-3 upgrade**, **Lockheed Martin maintains production on track**, expecting to deliver between **75 and 110 aircraft in 2024**, avoiding significant disruptions to production and cash flow.  **[LMT_3380249_8]**
- **Confidence in sustained growth into 2025 and beyond**, supported by a **strong backlog of $159 billion** and favorable FY '24 defense budget and expected supplemental funding, which underpins future growth over the next several years.  **[LMT_3380249_9]**

8497c72324fa0a4edc4bd7171b19e8726b32532a704c52ab32bb4005ef309667

- Lockheed Martin expects to **triple or quadruple F-16 deliveries in 2024**, indicating a strong production ramp and improving profitability over the next few years.  **[LMT_3370590_18]**
- The **Missiles and Fire Control** segment is projected to grow by **7% in 2024**, driven by increasing production of tactical and strike missiles like **HIMARS, JASSM, and LRASM**, with ramps continuing through **2025 to 2027**.  **[LMT_3370590_14]**
- Significant increases in **PAC-3 missile deliveries**, with volumes expected to reach **550 units by 2025** and **650 by 2027**, are contributing to strong growth in Integrated Air and Missile Defense programs.  **[LMT_3370590_14]**

51764872b547d6ae13624a1d01e2cab5f44d88f76262f5971db9fe7108187fdd

1. **Margin Outlook**  
   **Q:** Will margins improve in 2025 from the 2024 guide?  
   **A:** Management expects margins to gradually improve from the **10.5%** total company margin guide in 2024, anticipating an increase of **10 to 20 basis points** starting in 2025, continuing each year until reaching **11%** overall.  **[LMT_3370590_9]** 

2. **F-35 Production and Deliveries**  
   **Q:** How will TR-3 delays affect F-35 production rates?  
   **A:** Despite the delay in Tech Refresh 3 (TR-3), management believes they can maintain production rates of the F-35, with demand from U.S. and international customers remaining strong.  **[LMT_3370590_13]**  They expect to deliver a handful of F-35s in the first half of the year, with **90%** of deliveries occurring in the second half.  **[LMT_3370590_12]**  By the end of 2024, they anticipate having **100 to 120** undelivered aircraft in inventory.  **[LMT_3370590_15]** 

3. **Supply Chain Improvements**  
   **Q:** What actions are being taken to improve the supply chain?  
   **A:** Management is taking steps to address supply chain issues, including deploying resources such as manufacturing and quality engineers to support suppliers.  **[LMT_3370590_17]**  They are also working to stand up a third solid rocket motor supplier and considering international production opportunities in countries like Australia, Poland, the UK, and Germany.  **[LMT_3370590_17]**  If supply chain performance improves, this could drive results toward the high end of their sales, profit, and EPS range.  **[LMT_3370590_17]** 

4. **Missile Production Ramp-Up**  
   **Q:** What are the growth drivers for Missiles and Fire Control?  
   **A:** The key growth drivers are tactical and strike missiles, including **HIMARS**, **JASSM**, and **LRASM**, which will continue to ramp up through 2025 and beyond.  **[LMT_3370590_14]**  Integrated Air and Missile Defense is also a driver, particularly with **PAC-3** orders increasing to **550** by 2025 and **650** by 2027.  **[LMT_3370590_14]** 

5. **Contracting Environment**  
   **Q:** How is the competitive environment and contracting affecting margins?  
   **A:** Management is employing more pricing discipline and matching pricing with risk profiles, avoiding must-win programs that require taking excessive risks.  **[LMT_3370590_12]**  They are seeing an uptick in cost-plus contracts, which accounted for **41%** of sales in 2023, up from **38%** in 2022, causing some margin pressure but boding well for risk-sharing.  **[LMT_3370590_12]** 

6. **F-16 Production and Margins**  
   **Q:** What's the outlook for F-16 production and margins?  
   **A:** They delivered **5** F-16 aircraft in 2023 and expect to triple or quadruple deliveries in 2024.  **[LMT_3370590_18]**  While profitability has been pressured due to delays, they expect margins to improve over the next few years as they deliver on subsequent contracts.  **[LMT_3370590_18]** 

7. **Pension Contributions**  
   **Q:** What is the pension contribution schedule beyond 2024?  
   **A:** No contributions are required in 2024, but they anticipate required contributions of about **$1 billion** in 2025.  **[LMT_3370590_10]**  They are considering pulling that forward and utilizing their strong balance sheet but haven't made any firm decisions yet.  **[LMT_3370590_10]** 

8. **Black Hawk Opportunities**  
   **Q:** What are the opportunities for the Black Hawk going forward?  
   **A:** Management sees potential in modernizing the Black Hawk fleet by adding digital capabilities like autonomy and AI.  **[LMT_3370590_16]**  With a large existing fleet and interest from Congress, the upgraded Black Hawk could be a versatile and timely solution compared to new production aircraft.  **[LMT_3370590_16]** 

9. **Major Awards Expected**  
   **Q:** What major awards are expected in 2024?  
   **A:** Key anticipated awards include **F-35 Lot 18 and 19**, long-lead F-35 awards, classified contracts across the portfolio totaling multiple billions of dollars, significant **PAC-3** orders, and contracts in the hypersonics space, particularly on CPS (Conventional Prompt Strike).  **[LMT_3370590_11]** 

10. **Missile Demand and Supply Chain Impact**  
    **Q:** How are missile shortages affecting demand and supply chain?  
    **A:** While there's strong demand due to depletion of missile stockpiles, supply chain issues persist.  **[LMT_3370590_17]**  Management is taking actions to improve supply chain capacity, but these issues may weigh on the company's ability to convert demand into revenue.  **[LMT_3370590_17]** 

44caa0fa3dffb92845e1b79a9fcba93a0fc72a61d622f0140fe196a552b9cb22

4e574eb3230251d6cf60380fb9f560fbe35a9e3ca79b0e236bf2b658a1cfe6f1

- **Margin pressures across key programs due to lower profit adjustments and program losses**: Lockheed Martin is experiencing margin compression in several segments. In **Missiles and Fire Control (MFC)**, margins are expected to decline by **200 basis points** in 2024, primarily due to losses from a classified program impacting margins by **230 basis points**.  **[LMT_3370590_14]**  Additionally, margins in the **Aeronautics** segment are under pressure due to lower favorable profit adjustments on the **F-35** program and headwinds from inflation and supply chain disruptions on the **C-130** program.  **[LMT_3370590_8]**
- **Supply chain challenges impacting production and deliveries**: Ongoing supply chain issues are weighing on the company's ability to convert demand into revenue, particularly in missile production. Lockheed Martin is undertaking significant efforts, such as establishing a **third solid rocket motor supplier**, to address the fragility in the supply chain. These challenges could limit revenue growth and affect the company's ability to meet strong demand for its products.  **[LMT_3370590_17]**
- **Growing inventory and potential production adjustments due to delivery delays**: Delays in the **F-35** program, specifically in delivering the **Technology Refresh 3 (TR-3)** configuration, are resulting in a buildup of inventory. By the end of 2024, Lockheed Martin expects to have **100 to 120 undelivered F-35 aircraft** in inventory.  **[LMT_3370590_15]**  Continued delays could force the company to revisit its production cadence and potentially slow down production if deliveries cannot keep pace.  **[LMT_3370590_8]** **[LMT_3370590_13]**

8d3cc348b2b40b7ceb8c38f3d07263a3ba0d6bde372c905d5123e51e059ada8a

- Lockheed Martin ended Q3 with a record backlog of over **$165 billion**, reflecting a book-to-bill ratio of **1.3**, driven by strong orders for precision and air defense munitions like **Javelin** and guided multiple launch rockets.  **[LMT_3403194_1]** **[LMT_3403194_3]**
- The company is heavily investing in **autonomy**, **AI**, and **manned-unmanned teaming**, developing technologies through its **Skunkworks** and Lockheed Martin AI Center, positioning itself for future defense contracts and to meet evolving defense strategies.  **[LMT_3403194_7]** **[LMT_3403194_10]**
- Lockheed Martin generated **$2.1 billion** in free cash flow in the quarter, increased its quarterly dividend by **5%** to **$3.30**, marking the **22nd consecutive year of increases**, and extended its share repurchase authorization.  **[LMT_3403194_1]** **[LMT_3403194_3]**

e458da2853a594500bfa612671886447ca8a2e84d852ad30665b4465fd9bdbe6

- **The F-35 program is experiencing delays and complexities with the TR-3 and Block 4 upgrades**, leading to potential pressures on contract profitability and cash flow. Executives acknowledged that software integration is taking longer than predicted, and there could be pressure on contract profitability and cash flow.  **[LMT_3380249_8]**
- **The Missiles and Fire Control segment is facing significant losses due to a classified program, with potential additional losses exceeding \$1 billion**. The company recorded a \$100 million loss provision in Q1 and anticipates at least another \$225 million in losses for the year, affecting margins and profitability.  **[LMT_3380249_13]**
- **The complexity and scale of the F-35 supply chain has led to production issues and could be limiting the potential and affordability of the program**. The company is addressing weak spots in the supply chain, such as single-source suppliers, which have caused production delays.  **[LMT_3380249_16]**

9f86cee93e63f5b75e645330fa1e049ceee17a5d944026dc60fb9fbb6d95c1ca

1. **F-35 Program Challenges**  
   **Q:** How confident are you in resolving F-35 issues by Q4?  
   **A:** Management explained that two main issues affect the F-35 program: TR3 software finalization and Lot 18/19 contract negotiations.  **[LMT_3403194_11]**  They are delivering aircraft with "Release 1" software, allowing basic operations, but full combat capability ("Release 2") requires further software validations extending into 2025.  **[LMT_3403194_11]**  They anticipate delivering **90 to 110** F-35s in 2024 and **180** per year from 2025.  **[LMT_3403194_11]**  Cash flow is impacted due to delayed payments until contract negotiations are completed, but they expect payments will be released once agreements are finalized.  **[LMT_3403194_11]** 

2. **MFC Margin Outlook**  
   **Q:** Is MFC's operating performance improving or just accounting?  
   **A:** Management noted that MFC's performance is improving, delivering **14.4% margins** in the quarter, excluding losses related to a classified program.  **[LMT_3403194_9]**  Losses are recorded based on probability assessments and tend to be loaded into Q4.  **[LMT_3403194_9]**  They expect **$225 million** in losses in Q4 and similar levels in 2025.  **[LMT_3403194_9]** 

3. **2025 Growth Expectations**  
   **Q:** Is 2025 growth still projected at 5% like 2024?  
   **A:** Management stated that 2025 growth aligns with a low single-digit framework, with MFC driving high single-digit growth.  **[LMT_3403194_13]**  As visibility improves, they could achieve mid-single-digit growth, but this depends on production systems consistently growing at that rate.  **[LMT_3403194_13]** 

4. **Strategic Investments in AI and Autonomy**  
   **Q:** How is Lockheed positioning in AI and CCAs?  
   **A:** Lockheed is investing heavily in autonomy, AI, 5G connectivity, and related technologies that enable CCAs.  **[LMT_3403194_10]**  They've demonstrated autonomous capabilities with platforms like the Black Hawk helicopter and F-16, indicating potential applications to uncrewed systems.  **[LMT_3403194_10]** 

5. **Solid Rocket Motor Supply**  
   **Q:** What's the progress on solid rocket motor partnerships?  
   **A:** Lockheed is collaborating with industry partners to meet increased demand for solid rocket motors.  **[LMT_3403194_13]**  They formed a partnership with General Dynamics to design and produce a new solid rocket motor, aiming for certification testing in **2025** and production at rate by **2027**.  **[LMT_3403194_13]**  This adds a third supplier to strengthen the defense industrial base.  **[LMT_3403194_13]** 

6. **Pension Headwind Mitigation**  
   **Q:** How will you reduce pension headwinds after 2025?  
   **A:** Management is considering both organic measures, like working capital improvements, and inorganic options, such as issuing debt, to manage pension headwinds after 2025.  **[LMT_3403194_12]**  They're confident in offsetting the impact through a combination of these strategies.  **[LMT_3403194_12]** 

c40004f4681e2d5a988990d5b4854dc47eca64828169abf34a44fed99e0aeb21

- **Missiles and Fire Control (MFC) is expected to be the highest-growing segment within Lockheed Martin over the next 3 to 5 years**  **[LMT_3393950_11]** , driven by **strong domestic and international demand** and **significant production ramp-ups** in key programs like **PAC-3, GMLRS, Javelin, and JASSM/LRASM**.  **[LMT_3393950_18]**
- **Lockheed Martin's backlog remains robust at $158 billion**  **[LMT_3393950_10]** , with expectations to increase by the end of the year, providing **visibility into future growth in 2025 and beyond**.  **[LMT_3393950_10]**  **Supply chain improvements** are enabling the company to meet increased demand and support continued growth.  **[LMT_3393950_10]**
- **Strategic investments in digital technologies and open architectures** are enhancing Lockheed Martin's ability to adapt legacy systems rapidly, addressing evolving defense needs and capitalizing on lessons learned from recent conflicts like Ukraine.  **[LMT_3393950_9]**  This positions the company favorably to meet future defense requirements and drive growth.

18eb9e6c447dc1de17c110d2a43a683507997f43832d097bbde2b431316d5531

Lockheed Martin Corp (LMT)

Financials