Lockheed Martin Files Q2 2024 10-Q

TL;DR

**LMT Q2 10-Q filed. Financials look steady.**

AI Summary

Lockheed Martin Corp. filed its 10-Q for the period ending June 30, 2024. The filing details financial performance and operational updates for the second quarter of 2024. Key financial figures and segment performance are presented, reflecting the company's ongoing activities in the aerospace and defense sector.

Why It Matters

This filing provides investors and analysts with the latest financial health and operational performance of Lockheed Martin, a major defense contractor, impacting its stock and related industries.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing financial updates, not indicating any immediate new risks.

Key Numbers

• N/A — Revenue (Specific revenue figures for the quarter are not detailed in the provided header information.)
• N/A — Net Income (Specific net income figures for the quarter are not detailed in the provided header information.)
• N/A — Earnings Per Share (Specific EPS figures for the quarter are not detailed in the provided header information.)

Key Players & Entities

• LOCKHEED MARTIN CORP (company) — Filer
• 20240630 (date) — Period of Report
• 20240723 (date) — Filing Date

FAQ

Key Financial Figures

• $1 — ange on which registered Common Stock, $1 par value LMT New York Stock Exchange

Filing Documents

• lmt-20240630.htm (10-Q) — 1653KB
• ex15q22024.htm (EX-15) — 5KB
• ex311q22024.htm (EX-31.1) — 12KB
• ex312q22024.htm (EX-31.2) — 10KB
• ex32q22024.htm (EX-32) — 5KB
• 0000936468-24-000095.txt ( ) — 7650KB
• lmt-20240630.xsd (EX-101.SCH) — 39KB
• lmt-20240630_cal.xml (EX-101.CAL) — 55KB
• lmt-20240630_def.xml (EX-101.DEF) — 190KB
• lmt-20240630_lab.xml (EX-101.LAB) — 514KB
• lmt-20240630_pre.xml (EX-101.PRE) — 347KB
• lmt-20240630_htm.xml (XML) — 1503KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

ITEM 1. Financial Statements (Unaudited) Consolidated Statements of Earnings for the Quarters and Six Months Ended June 30, 2024 and June 25, 2023 3 Consolidated Statements of Comprehensive Income for the Quarters and Six Months Ended June 30, 2024 and June 25, 2023 4 Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 5 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and June 25, 2023 6 Consolidated Statements of Equity for the Quarters Ended June 30, 2024 and June 25, 2023 7 Consolidated Statements of Equity for the Six Months Ended June 30, 2024 and June 25, 2023 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 Report of Independent Registered Public Accounting Firm 27

Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 28

Quantitative and Qualitative Disclosures About Market Risk

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 45

Controls and Procedures

ITEM 4. Controls and Procedures 45

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

ITEM 1. Legal Proceedings 46

Risk Factors

ITEM 1A. Risk Factors 47

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 47

Other Information

ITEM 5. Other Information 48

Exhibits

ITEM 6. Exhibits 48 SIGNATURE 49 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

ITEM 1. Financial Statements Lockheed Martin Corporation Consolidated Statements of Earnings (unaudited; in millions, except per share data) Quarters Ended Six Months Ended June 30, 2024 June 25, 2023 June 30, 2024 June 25, 2023 Net sales Products $ 15,109 $ 13,758 $ 29,305 $ 26,284 Services 3,013 2,935 6,012 5,535 Total net sales 18,122 16,693 35,317 31,819 Cost of sales Products ( 13,520 ) ( 12,238 ) ( 26,404 ) ( 23,389 ) Services ( 2,582 ) ( 2,642 ) ( 5,185 ) ( 4,926 ) Impairment and severance charges ( 87 ) — ( 87 ) — Other unallocated, net 197 277 482 632 Total cost of sales ( 15,992 ) ( 14,603 ) ( 31,194 ) ( 27,683 ) Gross profit 2,130 2,090 4,123 4,136 Other income, net 18 45 54 36 Operating profit 2,148 2,135 4,177 4,172 Interest expense ( 261 ) ( 223 ) ( 516 ) ( 425 ) Non-service FAS pension income 15 111 31 221 Other non-operating income (expense), net 46 ( 17 ) 91 32 Earnings before income taxes 1,948 2,006 3,783 4,000 Income tax expense ( 307 ) ( 325 ) ( 597 ) ( 630 ) Net earnings $ 1,641 $ 1,681 $ 3,186 $ 3,370 Earnings per common share Basic $ 6.87 $ 6.65 $ 13.29 $ 13.28 Diluted $ 6.85 $ 6.63 $ 13.24 $ 13.24 Cash dividends paid per common share $ 3.15 $ 3.00 $ 6.30 $ 6.00 The accompanying notes are an integral part of these unaudited consolidated financial statements. 3 Table of Contents Lockheed Martin Corporation Consolidated Statements of Comprehensive Income (unaudited; in millions) Quarters Ended Six Months Ended June 30, 2024 June 25, 2023 June 30, 2024 June 25, 2023 Net earnings $ 1,641 $ 1,681 $ 3,186 $ 3,370 Other comprehensive income, net of tax Postretirement benefit plans Amortization of actuarial losses and prior service credits, net of tax of $ 5 million and $ 10 million in 2024 and $ 10 million and $ 20 million in 2023 19 ( 37 ) 38 ( 74 ) Other, net, net of tax of $ 8 million in 2024 and $ 4 million and $ 8 million in 2023 23 44 ( 4 ) 18 Other comprehensive income (loss), net of ta

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) NOTE 1 - BASIS OF PRESENTATION We prepared these consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information, the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these consolidated financial statements reflect all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations, financial condition, and cash flows for the interim periods presented. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates. Significant estimates inherent in the preparation of our consolidated financial statements include, but are not limited to, accounting for sales and cost recognition; postretirement benefit plans; environmental liabilities and assets for the portion of environmental costs that are probable of future recovery; evaluation of goodwill, intangible assets, investments and other assets for impairment; income taxes including deferred tax assets; fair value measurements; and contingencies. The consolidated financial statements include the accounts of subsidiaries we control and variable interest entities if we are the primary beneficiary. We eliminate intercompany balances and transactions i

Notes to Consolidated Financial Statements (unaudited) (continued)

Notes to Consolidated Financial Statements (unaudited) (continued) NOTE 3 - INFORMATION ON BUSINESS SEGMENTS Overview We operate in four business segments: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. We organize our business segments based on the nature of products and services offered.

Selected Financial Data by Business Segment

Selected Financial Data by Business Segment Net sales and operating profit of our business segments exclude intersegment sales, cost of sales and profit as these activities are eliminated in consolidation and thus are not included in management's evaluation of performance of each segment. Business segment operating profit includes our share of earnings or losses from equity method investees as the operating activities of the equity method investees are closely aligned with the operations of our business segments. Summary operating results for each of our business segments were as follows (in millions): Quarters Ended Six Months Ended June 30, 2024 June 25, 2023 June 30, 2024 June 25, 2023 Net sales Aeronautics $ 7,277 $ 6,875 $ 14,122 $ 13,144 Missiles and Fire Control 3,102 2,755 6,095 5,143 Rotary and Mission Systems 4,548 3,897 8,636 7,407 Space 3,195 3,166 6,464 6,125 Total net sales $ 18,122 $ 16,693 $ 35,317 $ 31,819 Operating profit Aeronautics $ 751 $ 718 $ 1,430 $ 1,393 Missiles and Fire Control 450 371 761 748 Rotary and Mission Systems 495 454 925 804 Space 346 312 671 592 Total business segment operating profit 2,042 1,855 3,787 3,537 Unallocated items FAS/CAS pension operating adjustment 406 416 812 831 Impairment and severance charges (a) ( 87 ) — ( 87 ) — Intangible asset amortization expense ( 61 ) ( 62 ) ( 122 ) ( 124 ) Other, net ( 152 ) ( 74 ) ( 213 ) ( 72 ) Total unallocated items 106 280 390 635 Total consolidated operating profit $ 2,148 $ 2,135 $ 4,177 $ 4,172 Intersegment sales Aeronautics $ 67 $ 71 $ 137 $ 124 Missiles and Fire Control 204 159 406 305 Rotary and Mission Systems 574 505 1,160 994 Space 99 92 206 178 Total intersegment sales $ 944 $ 827 $ 1,909 $ 1,601 (a) Impairment and severance charges of $ 87 million ($ 69 million, or $ 0.29 per share, after-tax) include trademark and fixed asset impairments as well as severance c osts. See "Note 10 - Other" below for additional information. Unallocated It

Notes to Consolidated Financial Statements (unaudited) (continued)

Notes to Consolidated Financial Statements (unaudited) (continued) management's evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, stock-based compensation expense, changes in the fair value of assets and liabilities for deferred compensation plans, retiree benefits, significant severance charges, significant asset impairments, gains or losses from divestitures, intangible asset amortization expense, and other miscellaneous corporate activities. Excluded items are included in the reconciling item "Unallocated items" between operating profit from our business segments and our consolidated operating profit. See "Note 10 - Other" for a discussion related to certain factors that may impact the comparability of net sales and operating profit of our business segments. FAS/CAS Pension Operating Adjustment Our business segments' results of operations include pension expense only as calculated under U.S. Government Cost Accounting Standards (CAS), which we refer to as CAS pension cost. We recover CAS pension and other postretirement benefit plan cost through the pricing of our products and services on U.S. Government contracts and, therefore, recognize CAS pension cost in each of our business segment's net sales and cost of sales. Our consolidated financial statements must present pension and other postretirement benefit plan income calculated in accordance with Financial Accounting Standards (FAS) requirements under U.S. GAAP. The operating portion of the total FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension income (expense) and total CAS pension cost. The non-service FAS pension income components are included in non-service FAS pension income in our consolidated statements of earnings. As a result, to the extent that CAS pension cost exceeds the service cost component of FAS pension income (expense) we have a favorable FAS/CAS pension op

Notes to Consolidated Financial Statements (unaudited) (continued)

Notes to Consolidated Financial Statements (unaudited) (continued) Disaggregation of Net Sales Net sales by products and services, contract type, customer, and geographic region were as follows (in millions): Quarter Ended June 30, 2024 Aeronautics MFC RMS Space Total Net sales Products $ 5,971 $ 2,742 $ 3,705 $ 2,691 $ 15,109 Services 1,306 360 843 504 3,013 Total net sales $ 7,277 $ 3,102 $ 4,548 $ 3,195 $ 18,122 Net sales by contract type Fixed-price $ 4,945 $ 2,124 $ 2,812 $ 925 $ 10,806 Cost-reimbursable 2,332 978 1,736 2,270 7,316 Total net sales $ 7,277 $ 3,102 $ 4,548 $ 3,195 $ 18,122 Net sales by customer U.S. Government $ 4,941 $ 2,241 $ 2,999 $ 3,107 $ 13,288 International (a) 2,297 856 1,470 45 4,668 U.S. commercial and other 39 5 79 43 166 Total net sales $ 7,277 $ 3,102 $ 4,548 $ 3,195 $ 18,122 Net sales by geographic region United States $ 4,980 $ 2,246 $ 3,078 $ 3,150 $ 13,454 Europe 1,270 209 282 19 1,780 Asia Pacific 685 180 750 25 1,640 Middle East 194 450 200 1 845 Other 148 17 238 — 403 Total net sales $ 7,277 $ 3,102 $ 4,548 $ 3,195 $ 18,122 Six Months Ended June 30, 2024 Aeronautics MFC RMS Space Total Net sales Products $ 11,563 $ 5,406 $ 6,946 $ 5,390 $ 29,305 Services 2,559 689 1,690 1,074 6,012 Total net sales $ 14,122 $ 6,095 $ 8,636 $ 6,464 $ 35,317 Net sales by contract type Fixed-price $ 9,529 $ 4,120 $ 5,289 $ 1,825 $ 20,763 Cost-reimbursable 4,593 1,975 3,347 4,639 14,554 Total net sales $ 14,122 $ 6,095 $ 8,636 $ 6,464 $ 35,317 Net sales by customer U.S. Government $ 9,607 $ 4,408 $ 5,839 $ 6,269 $ 26,123 International (a) 4,449 1,680 2,632 113 8,874 U.S. commercial and other 66 7 165 82 320 Total net sales $ 14,122 $ 6,095 $ 8,636 $ 6,464 $ 35,317 Net sales by geographic region United States $ 9,673 $ 4,415 $ 6,004 $ 6,351 $ 26,443 Europe 2,481 454 551 37 3,523 Asia Pacific 1,321 367 1,290 71 3,049 Middle East 397 820 362 5 1,584 Other 250 39 429 — 718 Total net sales $ 14,122 $ 6,

Notes to Consolidated Financial Statements (unaudited) (continued)

Notes to Consolidated Financial Statements (unaudited) (continued) Quarter Ended June 25, 2023 Aeronautics MFC RMS Space Total Net sales Products $ 5,645 $ 2,412 $ 3,041 $ 2,660 $ 13,758 Services 1,230 343 856 506 2,935 Total net sales $ 6,875 $ 2,755 $ 3,897 $ 3,166 $ 16,693 Net sales by contract type Fixed-price $ 4,656 $ 1,863 $ 2,451 $ 799 $ 9,769 Cost-reimbursable 2,219 892 1,446 2,367 6,924 Total net sales $ 6,875 $ 2,755 $ 3,897 $ 3,166 $ 16,693 Net sales by customer U.S. Government $ 4,621 $ 1,911 $ 2,754 $ 3,121 $ 12,407 International (a) 2,169 841 1,075 41 4,126 U.S. commercial and other 85 3 68 4 160 Total net sales $ 6,875 $ 2,755 $ 3,897 $ 3,166 $ 16,693 Net sales by geographic region United States $ 4,706 $ 1,914 $ 2,822 $ 3,125 $ 12,567 Europe 1,146 174 212 24 1,556 Asia Pacific 690 215 554 16 1,475 Middle East 226 411 155 1 793 Other 107 41 154 — 302 Total net sales $ 6,875 $ 2,755 $ 3,897 $ 3,166 $ 16,693 Six Months Ended June 25, 2023 Aeronautics MFC RMS Space Total Net sales Products $ 10,801 $ 4,501 $ 5,833 $ 5,149 $ 26,284 Services 2,343 642 1,574 976 5,535 Total net sales $ 13,144 $ 5,143 $ 7,407 $ 6,125 $ 31,819 Net sales by contract type Fixed-price $ 8,968 $ 3,481 $ 4,659 $ 1,563 $ 18,671 Cost-reimbursable 4,176 1,662 2,748 4,562 13,148 Total net sales $ 13,144 $ 5,143 $ 7,407 $ 6,125 $ 31,819 Net sales by customer U.S. Government $ 8,738 $ 3,492 $ 5,177 $ 6,029 $ 23,436 International (a) 4,283 1,646 2,095 86 8,110 U.S. commercial and other 123 5 135 10 273 Total net sales $ 13,144 $ 5,143 $ 7,407 $ 6,125 $ 31,819 Net sales by geographic region United States $ 8,861 $ 3,497 $ 5,312 $ 6,039 $ 23,709 Europe 2,276 385 437 47 3,145 Asia Pacific 1,365 317 992 38 2,712 Middle East 451 866 341 1 1,659 Other 191 78 325 — 594 Total net sales $ 13,144 $ 5,143 $ 7,407 $ 6,125 $ 31,819 (a) International sales include foreign military sales (FMS) contracted through the U.S. Government and direct commerci

Notes to Consolidated Financial Statements (unaudited) (continued)

Notes to Consolidated Financial Statements (unaudited) (continued) consolidated net sales for the quarter and six months ended June 30, 2024 and 26 % of our total consolidated net sales for both the quarter and six months ended June 25, 2023. Assets Total assets for each of our business segments were as follows (in millions): June 30, 2024 December 31, 2023 Assets Aeronautics $ 13,913 $ 13,167 Missiles and Fire Control 5,938 5,703 Rotary and Mission Systems 17,612 17,521 Space 6,717 6,560 Total business segment assets 44,180 42,951 Corporate assets (a) 10,896 9,505 Total assets $ 55,076 $ 52,456 (a) Corporate assets primarily include cash and cash equivalents, deferred income taxes, assets for the portion of environmental costs that are probable of future recovery, property, plant and equipment used in our corporate operations, assets held in a trust for deferred compensation plans, and investments in early-stage companies. NOTE 4 - CONTRACT ASSETS AND LIABILITIES Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract assets and contract liabilities were as follows (in millions): June 30, 2024 December 31, 2023 Contract assets $ 13,907 $ 13,183 Contract liabilities 9,181 9,190 Contract assets increased $ 724 million during the six months ended June 30, 2024, due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the six months ended June 30, 2024 for which we have not yet billed our customers. There were no significant credit or impairment losses related to our contract assets during the quarters and six months ended June 30, 2024 and June 25, 2023. Contract liabilities decreased $ 9 million du

Notes to Consolidated Financial Statements (unaudited) (continued)

Notes to Consolidated Financial Statements (unaudited) (continued) NOTE 5 - INVENTORIES Inventories consisted of the following (in millions): June 30, 2024 December 31, 2023 Materials, spares and supplies $ 651 $ 606 Work-in-process 2,259 2,338 Finished goods 187 188 Total inventories $ 3,097 $ 3,132 Costs incurred to fulfill a contract in advance of the contract being awarded are included in inventories as work-in-process if we determine that those costs relate directly to a contract or to an anticipated contract that we can specifically identify and determine that contract award is probable, the costs generate or enhance resources that will be used in satisfying performance obligations, and the costs are recoverable (referred to as pre-contract costs). These advanced procurement costs are generally incurred in order to enhance our ability to achieve schedule and certain customer milestones. Pre-contract costs that are initially capitalized in inventory are generally recognized as cost of sales consistent with the transfer of products and services to the customer upon the receipt of the anticipated contract. All other pre-contract costs, including start-up costs, are expensed as incurred. As of June 30, 2024 and December 31, 2023, $ 1.2 billion and $ 989 million of pre-contract costs (primarily the F-35 program and classified contracts at our Aeronautics business segment) were included in inventories. 15 Table of Contents Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

Notes to Consolidated Financial Statements (unaudited) (continued) NOTE 6 - POSTRETIREMENT BENEFIT PLANS FAS income The pretax FAS income related to our qualified defined benefit pension plans and retiree medical and life insurance plans consisted of the following (in millions): Quarters Ended Six Months Ended June 30, 2024 June 25 2023 June 30, 2024 June 25 2023 Qualified defined benefit pension plans Operating: Service cost $ ( 15 ) $ ( 16 ) $ ( 30 ) $ ( 32 ) Non-operating: Interest cost ( 350 ) ( 365 ) ( 699 ) ( 730 ) Expected return on plan assets 393 431 786 861 Amortization of actuarial losses ( 65 ) ( 42 ) ( 130 ) ( 84 ) Amortization of prior service credits 37 87 74 174 Non-service FAS pension income 15 111 31 221 Total FAS pension income $ — $ 95 $ 1 $ 189 Retiree medical and life insurance plans Operating: Service cost $ ( 1 ) $ ( 2 ) $ ( 2 ) $ ( 3 ) Non-operating: Interest cost ( 16 )

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