Lockheed Martin (LMT) 10-K risk factor changes: FY2023 vs FY2022

[removed: We] [added: While we] seek to identify, manage and mitigate risks to our business, [removed: but] risk and uncertainty cannot be eliminated or necessarily predicted.

Risks Related to our Reliance on Government [removed: Contracts][added: Contracts, our Industry and the Economy]

We derived 73% of our total consolidated net sales from the U.S. Government in [removed: 2022,] [added: 2023,] including 64% from the [removed: DoD.][added: Department of Defense (DoD).]

If appropriations are delayed or a government shutdown were to occur and [removed: were to] continue for an extended period of time, we could be at risk of [added: reduced orders,] program cancellations and other disruptions and nonpayment.

[removed: Shifting funding priorities or federal budget compromises, also could result in reductions] [added: A reduction] in overall [added: U.S.] defense [removed: spending] [added: spending,] on an absolute or inflation-adjusted basis, [removed: which] [added: because of shifting priorities, budget compromises or otherwise] could adversely [removed: impact] [added: affect] our business.

[removed: However,] [added: Failure to fund or the] termination of significant programs or contracts [added: by the U.S. Government] could adversely affect our business and [removed: future] financial performance.

While we would expect to compete and be well positioned as the incumbent on existing [removed: programs] [added: programs,] we may not be successful and, even if we are successful, the replacement programs may be funded at lower levels or result in lower margins.

In addition, our ability to grow in key areas such as hypersonics programs, classified programs and next-generation franchise programs [removed: also] will be affected by the overall budget environment and whether development programs transition to production and the timing of such transition, all of which are dependent on U.S. Government authorization and funding.

Consequently, contracts are often partially funded [removed: initially] [added: initially,] and additional funds are committed only as Congress makes further appropriations over time.

[removed: To the extent we incur costs in excess of funds obligated on a contract or in advance of a contract] award or contract definitization, we are at risk of not being reimbursed for those costs unless and until additional funds are obligated under the contract or the contract is successfully awarded, definitized and funded, which could adversely affect our results of operations, financial condition and cash flows.

The F-35 program comprises a material portion of our revenue and reductions or delays in funding for this program and risks related to [removed: the development, production, sustainment,] performance, schedule, cost and requirements of the program could adversely affect our performance.

The F-35 program, which consists of multiple development, production and sustainment contracts, is our largest program and represented [removed: 27%] [added: 26%] of our total consolidated net sales in [removed: 2022.][added: 2023.]

A decision by the U.S. [removed: Government or] [added: Government,] international [removed: partner and] [added: partners, or] FMS customer countries to cut spending on this program or reduce or delay planned orders would have an adverse impact on our business and results of operations.

[removed: Current] [added: Challenges and risks associated with this] program [removed: challenges] include [removed: our and our suppliers’ performance (including COVID-19 performance-related challenges),] [added: supplier performance,] software development, definitizing and receiving funding for contracts on a timely basis, execution of future flight tests and findings resulting from testing and operating the aircraft, the level of cost associated with life cycle [removed: operations] [added: operations, sustainment] and [removed: sustainment,] [added: potential contractual obligations,] inflation-related cost pressures and the ability to [removed: continue to] improve affordability.

See also the Risk Factor below captioned “We are heavily dependent on suppliers and if our subcontractors or other suppliers or teaming agreement or joint venture partners fail to perform their obligations, our performance and ability to win future business could be adversely affected” for [removed: a discussion of the risk of non-compliant parts and the supply chain.][added: further discussion.]

Our business and reputation could be adversely affected if we or those we do business with fail to comply with [removed: or adapt to existing or new procurement] [added: these] laws and [removed: regulations, which are regularly evolving.][added: regulations.]

We [removed: and others with which we do business] must comply with [added: extensive] laws and regulations relating to the award, administration and performance of U.S. Government contracts.

Generally, prime contractors have [removed: a] similar [removed: right] [added: termination rights] under subcontracts related to government contracts.

However, to the extent insufficient funds have been appropriated by the U.S. Government to [removed: the program to] cover our costs upon a termination for convenience, the U.S. Government may assert that it is not required to appropriate additional funding.

If a contract is terminated for default, the U.S. Government could make claims to reduce [removed: the contract value] [added: our recovery] or [removed: recover] [added: recoup] its procurement costs and could assess other special penalties, exposing us to liability and adversely affecting our ability to compete for future [removed: contracts and orders.]

[added: *Contract Termination.*] The [removed: decision to] [added: U.S. Government may] terminate [removed: programs or] [added: any of our government] contracts [removed: for] [added: at its] convenience or [added: for] default [added: based on our performance, either of which] could adversely affect our business and [removed: future] financial performance.

[added: *Undefinitized Contract Action (UCA).*] When operating under a [removed: UCA,] [added: undefinitized contract action (UCA), which is when we begin performing our obligations before] the [added: terms, specifications or price are finally agreed to between the parties, the] U.S. Government has the [removed: ability] [added: right] to unilaterally definitize contracts, which it has exercised in the past and [removed: which] [added: which,] absent a successful appeal, obligates us to perform under terms and conditions imposed by the U.S. Government.

[removed: Other changes] [added: For example, an increase] in [removed: procurement policy that could affect] the [removed: predictability] [added: use] of [removed: our profit rates or make it more difficult] [added: contract structures that shift risk] to [removed: compete on certain types of programs include favoring more] [added: the contractor, such as fixed-price development contracts and] incentive-based fee arrangements, [added: or the U.S Government] using different award fee criteria than historically used (such as the evaluation of environmental factors) [removed: or making government contract negotiation offers based upon their view of what] [added: could adversely affect] our [removed: costs should be (as compared] [added: profit rates or make it more difficult] to [removed: our actual costs).][added: win new contracts.]

[removed: In addition,] [added: Changes in regulations or interpretations of what are allowable costs under our government contracts could adversely impact our profitability and] changes in contract financing policy for fixed-price contracts, such as changes in performance and progress payments policies, could significantly affect the timing of our cash flows.

[removed: Additionally, the] [added: The] DoD is increasingly pursuing rapid acquisition pathways and procedures for new technologies, including through so called “other transaction authority” agreements (OTAs).

Under [removed: each type of contract,] [added: both fixed-price and cost-reimbursable contracts,] if we are unable to control costs, our operating results could be adversely affected.

Costs to complete a contract may increase for [removed: a variety of] [added: many] reasons, including technical and manufacturing challenges, schedule delays, workforce-related issues, [removed: or] inaccurate initial contract cost [removed: estimates.][added: estimates, the timeliness and availability of materials from suppliers, internal and subcontractor performance or product quality issues, inability to meet cost reduction initiatives or achieve efficiencies from digital transformation, changing laws or regulations, inflation and natural disasters.]

Under FFP contracts, we receive a fixed price irrespective of the actual costs we incur and [removed: we] therefore [added: we] carry the burden of any cost overruns.

Under FPI [removed: contracts, we generally share with] [added: contracts] the U.S. Government [removed: savings] [added: is responsible] for [removed: cost underruns less than target] [added: our] costs [added: up to a negotiated ceiling price] and [removed: expenses for] [added: we generally share, based on a negotiated sharing formula, savings from] cost [removed: overruns exceeding target costs] [added: underruns and expenses,] up to [removed: a] [added: the] negotiated ceiling [removed: price.][added: price, from cost overruns.]

Contracts for development programs include complex design and technical requirements and are often contracted on a cost-reimbursable basis, however, some of our existing development programs are contracted on a fixed-price [removed: basis or include cost-type contracting for the development phase with fixed-price production options.][added: basis.]

We expect we also will bid on similar [added: programs in the future.]

Fixed-price development work or [removed: fixed price] [added: fixed-price] production options, especially on competitively bid programs, is inherently riskier than cost-reimbursable work because the revenue is fixed, while the estimates of costs required to complete these contracts are subject to significant variability due to the [removed: complex and often experimental] nature of development programs.

[removed: This] [added: Bidding upfront on fixed-price production options] increases the risk that we may experience lower margins than expected, or a loss, on the production options because we must estimate the cost of producing a product before it has been developed.

[removed: We also have contracts] [added: Contracts] for the transition from development to production (e.g., low rate initial production (LRIP) [removed: contracts), where] [added: contracts) also create performance and financial risks to our business because of] the challenge of starting and stabilizing a manufacturing production and test line while [removed: the] [added: concurrently validating] final design [removed: is being validated] and managing change in requirements or capabilities [removed: create performance and financial risks to our business.][added: requested by the customer.]

[removed: If] [added: Additionally, if] competitors can offer lower cost services and products, or provide services or products more quickly, at equivalent or in some cases even reduced capabilities, we may lose new business opportunities or contract recompetes, which could adversely affect our future results.

[removed: Additionally, a] [added: A] substantial portion of our business is awarded through competitive bidding.

The U.S. Government also may not award us large competitive contracts that we otherwise might have won in an effort to maintain a [removed: broader] [added: broad] industrial base.

These arrangements may involve subcontracts, teaming arrangements, joint [removed: ventures] [added: ventures,] or supply agreements with other companies [removed: upon] [added: on] which we rely (contracting parties) and, in many cases, our contracting parties in turn rely on lower-tier subcontractors.

We [removed: occasionally] [added: sometimes] have disputes with our contracting parties, including disputes regarding the [added: cost,] quality and timeliness of work performed, workshares, customer concerns about the other party’s performance, issues related to lower-tier subcontractor performance, our failure to issue or extend task orders, or our hiring the personnel of a subcontractor, teammate or joint venture partner or vice versa.

We also could be adversely affected by actions [removed: by] or issues experienced by our contracting parties that are outside of our control, such as misconduct and reputational issues involving our contracting parties, which could subject us to liability or adversely affect our ability to compete for contract awards.

To the extent we incur costs in excess of funds obligated on a contract or in advance of a contract

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

See also the “Status of the F-35 Program” in Management Discussion and Analysis of Financial Condition and Results of Operations for a discussion of the current program status and specific challenges and risks, including with respect to Technology Refresh 3 (TR-3) configuration development and deliveries.

If a contract is terminated for convenience, we generally are protected by provisions covering reimbursement for costs incurred on the contract and profit on those costs.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

contracts and orders.

*Bid Protests.* U.S Government procurement laws permit legal challenges, referred to as bid protests, to the terms of a contract solicitation or the award of a contract.

Our efforts to protest or challenge any bids for contracts that were not awarded to us also may be unsuccessful.

Competition and changing procurement policies could adversely affect our business and financial results.

We operate in a highly competitive industry and our competitors may have more extensive or more specialized, engineering, technical, marketing and servicing capabilities than we do in certain areas.

Our competitors may develop new technologies, products or services that could replace our current offerings.

We are facing increased competition from startups and non-traditional defense contractors, which may have a lower cost structure or be able to move quickly in addition to being favored, in certain cases, by procurement policy.

Competitors may be willing to accept more risk or lower profitability in competing for contracts than we are.

U.S. Government procurement policies and procedures and the application thereof are regularly changing and such changes could adversely affect our profitability or the ability to win new business.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

We bear the risk for all cost overruns that exceed the negotiated ceiling price.

Many of our contracts include multiple option years exercisable at the customer’s discretion, which carries risk.

The customer may decline to exercise an option, or the customer may exercise an option on a contract for which we expect to incur a loss or perform at a low margin, either of which could adversely affect our financial results.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

Artificial intelligence technologies have rapidly developed and our business may be

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

adversely affected if we cannot successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner.

We may not be successful in identifying or developing emerging technologies and may spend significant resources on projects that ultimately are unsuccessful or yield a low return on the amount invested.

Geopolitical, macroeconomic and public health events and conditions could adversely affect our business, operating results, financial condition and cash flows.

*Geopolitical.* Our business is highly sensitive to geopolitical and security issues, including foreign policy actions taken by governments such, as tariffs, sanctions, embargoes, export and import controls and other trade restrictions, which can affect the demand for our products and services, the ability to sell our products and services, and disrupt our supply chain, all of which could adversely affect our business.

China’s Ministry of Commerce announced in 2023 that it had added Lockheed Martin Corporation to its “unreliable entities list” in connection with certain foreign military sales by the U.S. Government to Taiwan involving our products and services, and that it would impose certain sanctions against us, including a fine equal to twice the value of the arms that we had sold to Taiwan since September 2020.

In addition, China prohibited our CEO, COO and CFO from traveling or working in China.

In 2023, China also implemented broad-based export restrictions on certain minerals used in the production, among other things, of semiconductors and missile systems.

If China were to further restrict the export of certain materials, take further actions to enforce the existing sanctions on us or impose additional sanctions, or impose sanctions on our suppliers, teammates or partners, our business could be adversely affected.

If we are unable to successfully

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

In addition, macroeconomic conditions could cause budgetary pressures for our government customers resulting in reductions or delays in spending, which could adversely impact our business.

Interest rates also impact our pension.

For example, higher interest rates generally reduce the measure of our gross pension obligations while lower interest rates increase it.

*Public health.* We face a wide variety of risks related to public health crises, epidemics, pandemics or similar events, including COVID-19.

If a new health epidemic or outbreak were to occur, we could experience broad and varied impacts similar to the impact of COVID-19, including adverse impacts to our workforce and supply chain, inflationary pressures and increased costs, schedule or production delays, market volatility and other financial impacts.

If any of these were to occur, our future results and performance could be adversely impacted.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

Cyber-attacks and other security threats and disruptions could have a material adverse affect on our business.

We believe our diverse range of products and services generally make it less likely that cuts in any specific contract or program will affect our business on a long-term basis.

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

Our planned production rates and deliveries have been adversely affected and could continue to be adversely affected by COVID-19 or supplier performance challenges, which affect our results of operations.

For example, during 2022, we experienced a temporary halt of F-35 deliveries due to non-compliant materials in a component provided by a supplier, which affected timing of deliveries.

Additionally, as described in the “Status of the F-35 Program” in Management Discussion and Analysis of Financial Condition and Results of Operations, we are experiencing a pause in aircraft deliveries due to the suspension of Government Furnished Equipment (GFE) engine deliveries and corresponding flight restrictions that were issued by the U.S. Government.

If not resolved in a timely manner, this could impact our results of operations and cash flows.

Government contract laws and regulations can impose terms or obligations that are different than those typically found in commercial transactions.

One of the significant differences is that the U.S. Government may terminate any of our government contracts, not only for default based on our performance, but also at its convenience.

If a contract is terminated for convenience, we typically would be entitled to receive payments for our allowable costs incurred and the proportionate share of fees or earnings for the work performed.

Similarly, the U.S. Government could indirectly terminate a program or contract by not appropriating funding.

Another significant difference from commercial contracting is the existence in government contracting of the concept of an undefinitized contract action (UCA), which is when we begin performing our obligations before the terms, specifications or

price are finally agreed to between the parties.

In addition to the unique risks associated with government contracts, the U.S. Government utilizes procurement policies that could negatively impact our profitability or the ability to win new business.

For example, the U.S. Government has procurement policies that shift risk to contractors, such as using fixed-price contracts for development programs as described in the following risk factor.

If we cannot successfully adapt to the DoD’s rapid acquisition processes, then we may lose strategic new business opportunities in high-growth areas and our future performance and results could be adversely affected.

These could be caused by a variety of reasons, including labor shortages, the nature and complexity of the work performed, the timeliness and availability of materials from suppliers, internal and subcontractor performance or product quality issues, inability to meet cost reduction initiatives or achieve efficiencies from digital transformation, changing laws or regulations, inflation and natural disasters.

We carry the entire burden of cost overruns exceeding the ceiling price amount under FPI contracts.

programs in the future.

Many of our U.S. Government contracts include multiple option years and our expected sales or profits may be adversely affected if the U.S. Government decides not to exercise the options.

On the other hand, the U.S. Government may decide to exercise options for contracts under which it is expected that our costs may exceed the contract price or ceiling, which could result in losses or unreimbursed costs.

Increased competition and bid protests in a budget-constrained environment may make it more difficult to maintain our financial performance and customer relationships.

We are facing increased competition from startups and non-traditional defense contractors, while, at the same time, many of our customers are facing significant budget pressures and are trying to do more with less by cutting costs, using fixed price contracts, deferring large procurements, identifying more affordable solutions, performing certain work internally rather than hiring contractors, and reducing product development cycles.

To remain competitive, we must maintain consistently strong customer relationships, seek to understand customer priorities and provide superior performance, advanced technology solutions and services at an affordable cost with the agility that our customers require to satisfy their mission objectives in an increasingly price competitive environment.

Our success in achieving these goals may depend, among other things, on accurately assessing our customers’ needs and our competitors’ capabilities, containing our total costs relative to competitors, successfully and efficiently investing in emerging technologies, adopting innovative business models and adaptive pricing methods, effectively

collaborating across our business segments, and adopting and integrating new digital manufacturing and operating technologies and tools into our product lifecycles and processes.

Our efforts to protest or challenge any bids for contracts that were not awarded to us also may be unsuccessful, including, the December 2022 protest by Lockheed Martin Sikorsky, on behalf of Team DEFIANT, challenging the U.S. Army’s award under the Future Long Range Assault Aircraft competition.

The failure of our supply chain to comply with regulatory requirements that we flow down from our U.S. government prime contracts also could adversely affect our operating results, financial condition, or cash flows.

Complying with U.S.

Due to the complex and often experimental nature of the products and services we offer, we may experience (and have experienced in the past) technical difficulties during the development of new products or technologies.

These technical difficulties could result in delays and higher costs, which may negatively impact our financial results, and could divert resources from other projects, until such products or technologies are fully developed.

Additionally, there can be no assurance that our development projects will be successful or meet the needs of our customers.

Our competitors may also develop new technologies, or offerings, or more efficient ways to produce existing products that could cause our existing offerings to become obsolete or that could gain market acceptance before our own competitive offerings.

We also may not be successful in our efforts to grow in key areas such as hypersonics, classified programs, and winning next generation franchise programs, which could adversely affect our future performance.

Adverse macro-economic conditions, including inflation, could adversely impact our operating results.

For new contract proposals, we are factoring into our pricing heightened levels of inflation based on accepted DoD escalation indices and other assumptions, and in some cases seeking the inclusion of economic price adjustment (EPA) clauses, which would permit, subject to the particular contractual terms, cost adjustments in fixed-price contracts for unexpected inflation.

In addition, our business could be adversely impacted by reductions or delays in spending by non-U.S. government customers that are facing budget, inflationary or other pressures, such as increases in the cost of borrowing from rising interest rates.

While rising interest rates reduce the measure of our gross pension obligations, they also can lead to decline in pension plan assets with offsetting impacts on our net pension liability.

commercial markets or have fewer resources, may be adversely impacted to a more significant degree than we are by an economic downturn, which could affect their performance and adversely impact our operations.

The effects of COVID-19 and other potential future public health crises, epidemics, pandemics or similar events on our business, operating results, financial condition and cash flows are uncertain.

In 2022, our performance was affected by supply chain disruptions and delays, as well as labor challenges associated with employee absences, travel restrictions, site access, quarantine restrictions, remote work, and adjusted work schedules.

The MD&A generally discusses [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] items and year-to-year comparisons between [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022.]

Discussions of [removed: 2020] [added: 2021] items and year-to-year comparisons between [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results or Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2021] [added: 2022] filed with the SEC on January [removed: 25, 2022.][added: 26, 2023.]

In [removed: 2022,] [added: 2023,] 73% of our [removed: $66.0] [added: $67.6] billion in net sales were from the U.S. Government, either as a prime contractor or as a subcontractor (including 64% from the Department of Defense (DoD)), 26% were from international customers (including foreign military sales (FMS) contracted through the U.S. Government) and 1% were from U.S. commercial and other customers.

Our strategy consists of the design and development of platforms and systems that meet the [added: current needs of our customers and the] future requirements of 21st Century Security.

The aim of 21st Century Security is to integrate new and existing systems across all domains with advanced, open-architecture networking and operational technologies to make [added: defense] forces more agile, adaptive and unpredictable.

[removed: 21st Century Security is an overarching vision that will guide our investment and strategy and we] [added: We] are also focused on four elements for potential growth in the near to mid-term: current programs of record, classified programs, hypersonics and new awards.

We have multiple programs of record from each business segment that are entering growth stages, including the F-35 sustainment activity [removed: (Aeronautics),] [added: (Aeronautics);] increased [removed: PAC-3] [added: Patriot Advanced Capability-3 (PAC-3)] production rates [added: and increased demand for High Mobility Artillery Rocket System (HIMARS®) and Guided Multiple Launch Rocket Systems (GMLRS)] (Missiles and Fire [removed: Control),] [added: Control); radar surveillance systems and] CH-53K [added: King Stallion] heavy lift helicopter (Rotary and Mission [removed: Systems),] [added: Systems);] and the modernization and enhancements to the Trident II D5 Fleet Ballistic Missile [added: (FBM)] (Space).

We are currently performing on multiple [removed: hypersonic] [added: hypersonics] programs and following the successful completion of ongoing testing and evaluation activity, multiple programs are expected to enter early production phases [removed: between 2023 and] [added: through] 2026.

We also will continue to evaluate our portfolio and will make strategic acquisitions or divestitures, as appropriate, while deepening our connection to commercial industry through cooperative partnerships, joint [removed: ventures,] [added: ventures] and equity investments.

[removed: Heightened] [added: In addition, heightened] levels of inflation and the potential worsening of macro-economic conditions present risks for Lockheed Martin, our suppliers and the stability of the broader defense industrial base.

Russia’s invasion of Ukraine [removed: has] significantly elevated global geopolitical tensions and security [removed: concerns.][added: concerns resulting in increased]

[removed: As a result, we have received increased] interest for [removed: some] [added: certain] of our products and services as countries seek to improve their security [removed: posture, particularly in Europe.][added: posture.]

In addition, security assistance provided by the U.S. [removed: government] [added: Government and its allies] to Ukraine has created U.S. [removed: government] [added: Government and allied] demand to replenish U.S. stockpiles, resulting in additional and potential future orders for our [added: products, including for the ramp-up in production capacity for certain] products.

We [removed: are evaluating] [added: continue to work with the U.S. Government and our supply chain to evaluate increases in] capacity at [added: certain of] our operations [removed: and the supply chain] to anticipate potential demand and enable us to deliver critical capabilities.

[added: We also may explore the divestiture of] businesses, investments or ventures that no longer meet our needs or strategy or that could perform better outside of our organization or with a different owner.

The President’s [removed: FY] [added: Fiscal Year (FY)] 2024 budget request [removed: is anticipated to be] [added: was] submitted to Congress [removed: in] [added: on] March [added: 9,] 2023, initiating the FY 2024 defense authorization and appropriations legislative process.

In [removed: 2022,] [added: 2023,] approximately [removed: 74%] [added: 75%] of our sales to international customers were FMS and about [removed: 26%] [added: 25%] were DCS.

Additionally, in [removed: 2022,] [added: 2023,] substantially all of our sales from international customers were in our Aeronautics, MFC and RMS business segments.

Space’s sales from international customers were not material in [removed: 2022.][added: 2023.]

In [removed: 2022,] [added: 2023,] international customers accounted for 33% of Aeronautics’ net sales.

The U.S. Government and the partner countries continue to work together on the design, testing, [removed: production,] [added: production] and sustainment of the F-35 program.

In [removed: 2022,] [added: 2023,] international customers accounted for 31% of MFC’s net sales.

Our MFC business segment continues to generate significant international interest, most notably in the air and missile defense product line, which produces the [removed: Patriot Advanced Capability-3 (PAC-3)] [added: PAC-3] and Terminal High Altitude Area Defense (THAAD) systems.

[removed: Fourteen] [added: Fifteen] nations have chosen PAC-3 Cost Reduction Initiative (CRI) and PAC-3 Missile Segment Enhancement (MSE) to provide missile defense capabilities.

In [removed: 2022,] [added: 2023,] international customers accounted for [removed: 28%] [added: 31%] of RMS’ net sales.

Our RMS business segment continues to experience international interest in the Aegis Ballistic Missile Defense System (Aegis) for which we perform activities in the development, production, modernization, ship integration, test and lifetime support for ships of international customers such as Japan, Spain, Republic of [removed: Korea,] [added: Korea] and Australia.

We have ongoing combat systems programs associated with different classes of surface combatant ships for customers in Canada, [removed: Chile,] [added: Chile] and New Zealand.

We have active development, [removed: production,] [added: production] and sustainment support of the S-70 Black Hawk and MH-60 Seahawk helicopters to international customers, including India, Philippines, Australia, Republic of Korea, Thailand, the Kingdom of Saudi [removed: Arabia,] [added: Arabia] and Greece.

Additionally, in December 2021, the Israeli Ministry of Defense signed a Letter of Offer and Acceptance (LOA) to procure 12 CH-53K King Stallion heavy lift helicopters, [removed: of which] [added: with] the first four [removed: were] awarded in [removed: 2022.][added: 2022 and the remaining awarded in 2023.]

We [removed: saw] [added: continue to see] strong international demand for the [removed: F-35 in 2022.][added: F-35.]

[removed: As a result of the Finalization Phase, the] [added: The] Government of Canada [removed: recently] announced in January 2023 [removed: their] [added: its] commitment to purchase 88 F-35 aircraft.

Since program inception [added: through the end of 2023,] we [removed: have] delivered [removed: 894] [added: 992] production F-35 aircraft to U.S. and international customers, including [removed: 648] [added: 710] F-35A variants, [removed: 178] [added: 197] F-35B variants, and [removed: 68] [added: 85] F-35C variants, demonstrating the F-35 program’s continued progress and longevity.

[removed: Current program challenges] [added: Areas of focus] include our and our suppliers’ [removed: performance (including COVID-19 performance-related challenges),] [added: performance,] software [removed: development,] [added: development (including, in particular, software maturation related to the TR-3 configuration),] execution of future flight tests and findings resulting from testing and operating the aircraft, the level of cost associated with life cycle operations, sustainment and potential contractual obligations, inflation-related cost pressures, and the ability to improve affordability.

At December 31, [removed: 2022,] [added: 2023,] our backlog was [removed: $150.0] [added: $160.6] billion compared with [removed: $135.4] [added: $150.0] billion at December 31, [removed: 2021.][added: 2022.]

[added: We expect to recognize approximately 36%] of our backlog over the next 12 months and approximately [removed: 61%] [added: 62%] over the next 24 months as revenue, with the remainder recognized thereafter.

Funded backlog was [removed: $95.5] [added: $107.4] billion at December 31, [removed: 2022,] [added: 2023,] as compared to [removed: $88.5] [added: $95.5] billion at December 31, [removed: 2021.][added: 2022.]

Our operating cycle is primarily [removed: long term] [added: long-term] and involves many types of contracts for the design, development and manufacture of products and related activities with varying delivery schedules.

The following discussions of comparative results [removed: among years] should be reviewed in this context.

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | [added: | | |]

| Net sales | | | | | | $ | [removed: 65,984] [added: 67,571] | | | | | $ | [removed: 67,044] [added: 65,984] | | | | | $ | [removed: 65,398] [added: 67,044] | | [added: | | |]

Twenty-first Century Security is an overarching vision that guides our investment and strategy.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

U.S. Budget Environment

With nearly three quarters of our sales from the U.S. Government, U.S. Government spending levels, particularly defense spending, and timely funding thereof can affect our financial performance over the short and long term.

The request included $886 billion for National Defense, of which $842 billion is for the Department of Defense (DoD) base budget.

On June 3, 2023, the President signed H.R. 3746 “The Fiscal Responsibility Act” (FRA) into law.

The legislation suspended the debt ceiling until January 1, 2025, and, among other provisions, capped national defense spending at $886 billion for FY 2024 (President’s Budget Request level) and $895 billion for FY 2025.

Supplemental funding legislation is not subject to the budget caps.

If a continuing resolution is enacted and still in effect and Congress does not pass all twelve defense and non-defense discretionary appropriations bills by April 30, 2024, the FRA will result in a decrease in government spending for FY 2024 by one percent from FY 2023 enacted levels.

The House and Senate continue the legislative process on the FY 2024 budget.

On December 22, 2023, the President signed the FY 2024 National Defense Authorization Act (NDAA) into law.

The NDAA authorizes funding at the FRA cap of $886 billion for National Defense.

On January 19, 2024, the President signed a continuing resolution that extends funding of four appropriations bills to March 1, 2024 and the remaining eight to March 8, 2024.

This will provide Congress additional time to enact all twelve FY 2024 appropriations bills based on the overarching U.S. Government spending agreement reached by House and Senate leaders on January 7, 2024 which comports with the FRA cap of $886 billion for National Defense in FY 2024.

Overall, congressional sentiment remains strong for supporting the National Defense Strategy and defense spending.

However, the logistical and political challenges, especially in the U.S. House of Representatives, are complex and add funding risk.

Under the continuing resolution, funding at amounts consistent with appropriated levels for FY 2023 are available, subject to certain restrictions, but new contract and program starts are not authorized.

We expect our key programs will continue to be supported and funded under the continuing resolution.

However, during periods covered by continuing resolutions, we may experience delays in new awards of our products and services, and those delays may adversely affect our results of operations.

On October 20, 2023, the President submitted a $106 billion supplemental funding request to Congress for assistance to Ukraine, Israel and the Indo-Pacific; related U.S. restock of capacity transfers to Ukraine and Israel; and U.S. border security.

Congress has not yet acted on this request, which is part of the broader debate on FY 2024 U.S. Government funding and border security policy.

Supplemental and emergency funding are not subject to the FRA cap.

If enacted, this would provide a partial relief valve for DoD funding limits under the FRA or other limiting scenarios such as a prolonged continuing resolution.

If Congress is not able to enact FY 2024 appropriations bills or extend the continuing resolution, the U.S. Government will enter a whole or partial shutdown.

The impact of any government shutdown is uncertain.

However, if a government shutdown were to occur and were to continue for an extended period, we could be at risk of reduced orders, program cancellations, schedule delays, production halts and other disruptions and nonpayment, which could adversely affect our results of operations.

Further, if any one of the 12 appropriations bills is under a continuing resolution as of April 30, 2024, USG funding levels will reset to FY 2023 enacted levels minus 1% for the remainder of FY 2024 or until all 12 appropriations are enacted.

We anticipate the federal budget will continue to be subject to debate and compromise shaped by, among other things, heightened political tensions, the global security environment, inflationary pressures, and macroeconomic conditions.

The result may be shifting funding priorities, which could have material impacts on defense spending broadly and our programs.

Geopolitical and Economic Environment

We operate in a complex and evolving global security environment and our business is affected by geopolitical issues.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

Although we received new orders in 2023 attributable to a response to the conflict and continue to expect to receive them over the next several years, given the long-cycle nature of our business and current industry capacity, the orders did not result in a significant increase in 2023 sales.

Our business and financial performance is also affected by general economic conditions.

Supply chain disruptions persist, and we continue to experience supply chain challenges, including supplier shortages and performance issues, which have delayed certain customer deliveries and adversely impacted our performance and our 2023 financial results.

Although we continue working to minimize the impact of supply chain challenges, many of these challenges are industry wide or caused by geopolitical events that are outside of our control.

Certain costs, including rising labor rates and supplier costs, on several of our programs have increased as a result of inflation, and put pressure on achieving our expected margins on the programs.

In addition, some suppliers are reducing the typical duration of pricing validity in their proposals to us, which can be operationally challenging and increase the risk of cost volatility.

If we continue to experience high rates of inflation, and we are unable to successfully mitigate the impact, our future profits, margins and cash flows, particularly for existing fixed-price contracts, may be adversely affected.

Inflation and higher interest rates can also constrain the overall purchasing power of our customers for our products and services potentially impacting future orders.

COVID-19

COVID-19 continued to cause business impacts in 2022.

The emergence of the Omicron variant in late 2021 and resulting increase in COVID-19 cases in early 2022 adversely impacted our operations and our supply chain.

Our performance was affected during 2022 by supply chain disruptions and delays, as well as labor challenges associated with employee absences, travel restrictions, site access, quarantine restrictions, remote work, and adjusted work schedules.

The recovery from

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

that disruption has been slower than originally anticipated, in particular within our supply chain, and some of those supply chain impacts are expected to continue into 2023.

Attendance for employees required to be onsite fluctuated during 2022 based on COVID-19 developments.

We are actively engaging with our customers and are continuing to take measures to protect the health and safety of our employees.

In our on-going effort to mitigate supply chain risks, we accelerated payments of $1.5 billion to our suppliers as of December 31, 2022, that are due according to contractual terms in future periods, while consistently prioritizing small businesses, which make up over half of our active supply base, as well as at-risk businesses.

Additionally, we have deployed resources at supplier sites to improve oversight and performance.

We will continue to monitor supply chain risks, especially at small and at-risk related suppliers, and may continue to utilize accelerated payments in 2023 on an as needed basis.

The impact of COVID-19 on our operations and financial performance in future periods, including our ability to execute our programs in the expected timeframe, remains uncertain and will depend on a number of factors, including the impact of potential new COVID-19 variants or subvariants, the effectiveness and adoption of COVID-19 vaccines and therapeutics, and supplier impacts and related government actions to prevent and manage disease spread,.

The long-term impacts of COVID-19 on government budgets and other funding priorities, including international priorities, that impact demand for our products and services also are difficult to predict, but could negatively affect our future results and performance.

Inflation

During 2022, we have experienced impacts to our labor rates and suppliers have signaled inflation related cost pressures, which will flow through to our costs and pricing.

Although inflation did not significantly impact our financial results in 2022, if inflation remains at current levels for an extended period, or increases, and we are unable to successfully mitigate the impact, our costs are likely to increase, resulting in pressure on our profits, margins and cash flows, particularly for existing fixed-price contracts.

For new contract proposals, we are factoring into our pricing heightened levels of inflation based on accepted DoD escalation indices and other assumptions, and in some cases seeking the inclusion of economic price adjustment (EPA) clauses, which would permit, subject to the particular contractual terms, cost adjustments in fixed-price contracts for unexpected inflation.

In addition, inflation and the increases in the cost of borrowing from rising interest rates could constrain the overall purchasing power of our customers for our products and services, in particular in the near term to the extent inflation assumptions are less than current inflationary pressures.

Rising interest rates will also increase our borrowing costs on new debt and could affect the fair value of our investments.

While rising interest rates reduce the measure of our gross pension obligations, they can also lead to decline in pension plan assets with offsetting impacts on our net pension liability.

Conflict in Ukraine

We are beginning to see this interest result in initiation of new contract discussions, however, given the long-cycle nature of our business and current industry capacity, we do not expect a significant increase in near term sales from new contracts in response to the conflict.

In addition, the U.S. Government and other nations have implemented broad economic sanctions and export controls targeting Russia, which combined with the conflict have the potential to indirectly disrupt our supply chain and access to certain resources.

We have not, however, experienced significant adverse impacts to date and we will continue to monitor for any impacts and seek to mitigate disruption that may arise.

The conflict also has increased the threat of malicious cyber activity from nation states and other actors.

We have taken steps designed to enhance our defensive posture against tactics and techniques associated with this increased threat.

We also may explore the divestiture of

Renationalization of the Atomic Weapons Establishment Program

On June 30, 2021, the UK Ministry of Defence terminated the contract to operate the UK’s nuclear deterrent program and assumed control of the entity that manages the program (referred to as the renationalization of the Atomic Weapons Establishment (AWE program)).

Accordingly, the AWE program’s ongoing operations, including the entity that manages the program, are no longer included in our financial results as of that date.

Therefore, during 2021, AWE only generated sales of $885 million and operating profit of $18 million, which are included in Space’s financial results for the year ended December 31, 2021.

During the year ended December 31, 2020, AWE generated sales of $1.4 billion and operating profit of $35 million, which are included in Space’s financial results for 2020.

U.S. Government Funding

On March 28, 2022 the Administration submitted to Congress the President’s Fiscal Year (FY) 2023 budget request, which proposed $813.4 billion in total national defense spending, of which $773 billion was for the base budget of the Department of Defense (DoD).

On December 29, 2022, the President signed the FY 2023 Omnibus Appropriations Act into law, which provides $858 billion in total national defense funding, of which $816.7 billion is for the DoD base budget.

This reflects a $44.6 billion increase over the FY 2023 request for national defense spending, and a $43.7 billion increase for the DoD.

The FY 2023 Omnibus Appropriations Act also provided separate and additional funding of $47 billion for Ukraine, the fourth supplemental since March of 2022, bringing the total amount of supplemental funding authority provided to $113 billion.

In addition to the FY 2024 budget process, Congress will have to contend with the legal limit on U.S. debt, commonly known as the debt ceiling.

The current statutory limit of $31.4 trillion was reached in January, requiring the Treasury Department to take accounting measures to continue normally financing U.S. government obligations while avoiding exceeding the debt ceiling.

The estimated fair value of our outstanding debt was [removed: $16.0] [added: $18.5] billion at December 31, [removed: 2022] [added: 2023] and the outstanding principal amount [added: of debt, including short-term and long-term debt,] was [removed: $16.8] [added: $18.7] billion, excluding unamortized discounts and issuance costs of $1.3 billion.

A 10% change in the level of interest rates would not have a material impact on the fair value of our outstanding debt at December 31, [removed: 2022.][added: 2023.]

The aggregate notional amount of our outstanding interest rate swaps [removed: at December 31, 2022 and 2021] was $1.3 billion [added: at both December 31, 2023] and [removed: $500 million.][added: 2022.]

The aggregate notional amount of our outstanding foreign currency hedges at December 31, [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] was [removed: $7.3] [added: $6.5] billion and [removed: $4.0] [added: $7.3] billion.

At December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the net fair value of our derivative instruments was not material (see “Note 15 – Fair Value Measurements” included in our Notes to Consolidated Financial Statements).

As of December 31, [removed: 2022,] [added: 2023,] investments in the trust totaled [removed: $1.6] [added: $1.8] billion and are reflected at fair value on our consolidated balance sheet in other noncurrent assets.

Both the change in the fair value of the trust and the change in the value of the liabilities are recognized on our consolidated statements of earnings in other unallocated, net and were not material for the year ended December 31, [removed: 2022.][added: 2023.]

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

The increase in 2022 was designated on the additional debt we issued during the fourth quarter.

The increase in 2022 is due to the timing of foreign denominated international contract awards.

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

We are exposed to equity market risk through certain marketable securities.

The fair value of these marketable securities was $24 million as of December 31, 2022.

A 10% decrease in the market price of our marketable equity securities as of December 31, 2022 would not have a material impact on the carrying amounts of these securities or our consolidated financial statements.

Many of the same factors that could result in an adverse movement of equity market prices affect our non-marketable equity investments, although we cannot always quantify the impacts directly.

Financial markets are volatile, which could negatively affect the valuations and prospects of the companies we invest in, their ability to raise additional capital, and the likelihood of our ability to realize value in our investments through liquidity events such as initial public offerings, mergers, and private sales.

Our strategy consists of the design and development of platforms and systems that meet the [added: current needs of our customers and the] future requirements of 21st Century Security.

The aim of 21st Century Security is to integrate new and existing systems across all domains with advanced, open-architecture networking and operational technologies to make [added: defense] forces more agile, adaptive and unpredictable.

[removed: 21st Century Security is an overarching vision that will guide our investment and strategy and we] [added: We] are also focused on four elements for potential growth in the near to mid-term: current programs of record, classified programs, hypersonics and new awards.

We have multiple programs of record from each business segment that are entering growth stages, including the F-35 sustainment activity [removed: (Aeronautics),] [added: (Aeronautics);] increased [removed: PAC-3] [added: Patriot Advanced Capability-3 (PAC-3)] production rates [added: and increased demand for High Mobility Artillery Rocket System (HIMARS®) and Guided Multiple Launch Rocket Systems (GMLRS)] (Missiles and Fire [removed: Control),] [added: Control); radar surveillance systems and] CH-53K [added: King Stallion] heavy lift helicopter (Rotary and Mission [removed: Systems),] [added: Systems);] and the modernization and enhancements to the Trident II D5 Fleet Ballistic Missile [added: (FBM)] (Space).

We are currently performing on multiple [removed: hypersonic] [added: hypersonics] programs and following the successful completion of ongoing testing and evaluation activity, multiple programs are expected to enter early production phases [removed: between 2023 and] [added: through] 2026.

We also will continue to evaluate our portfolio and will make strategic acquisitions or divestitures, as appropriate, while deepening our connection to commercial industry through cooperative partnerships, joint [removed: ventures,] [added: ventures] and equity investments.

The F-35 program is our largest program, generating [removed: 27%] [added: 26%] of our total consolidated net sales, as well as [removed: 66%] [added: 64%] of Aeronautics’ net sales in [removed: 2022.][added: 2023.]

[removed: Sustainment provides logistics] and training support for the aircraft delivered to F-35 customers.

For additional information on the F-35 program, see “Status of [added: the F‑35 Program” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.]

- The Multiple Launch Rocket System (MLRS), [added: Precision Strike Missile (PrSM),] Joint Air-to-Surface Standoff Missile (JASSM), [added: Long Range Anti-Ship Missile (LRASM),] and Hellfire tactical and strike missile programs.

MLRS is a highly mobile, automatic system that fires surface-to-surface rockets and missiles from the M270 and High Mobility Artillery Rocket System [removed: (HIMARS®)] [added: (HIMARS)] platforms produced for the U.S. Army and international [removed: customers.][added: customers and PrSM is the next generation of precision strike surface-to-surface weapon systems that is compatible with the MLRS family of launchers in support of the U.S. Army.]

- The [removed: Apache,] [added: Apache fire control system,] Sniper Advanced Targeting Pod (SNIPER®) and Infrared Search and Track (IRST21®) [removed: fire control systems] [added: sensors and global sustainment] programs.

- The Javelin program, which is a [removed: one-man] [added: one-person] portable and platform-employable anti-tank and multi-target precision weapon system.

Javelin was developed and is currently produced for the U.S. Army and U.S. Marine Corps by a joint venture between Lockheed Martin and [removed: Raytheon Technologies.][added: RTX Corporation.]

RMS designs, manufactures, services and supports various military and commercial helicopters, surface ships, sea and land-based missile defense systems, radar systems, [added: laser systems,] sea and air-based mission and combat systems, command and control mission solutions, cyber solutions, and simulation and training solutions.

- Integrated warfare systems and sensors (IWSS) programs such as Aegis Combat System (Aegis) programs that serve as an air and missile defense system for the U.S. Navy and international customers and is also a sea and land-based element of the U.S. missile defense system, and the Littoral Combat Ship (LCS) and Multi-Mission Surface Combatant (MMSC) [removed: programs to provide surface combatant ships for the U.S. Navy and international customers that are designed to operate in shallow waters and the open ocean.]

- Command, control, communications, computers, cyber, combat systems, intelligence, surveillance, and reconnaissance (C6ISR) programs such as the Command, Control, Battle Management and Communications (C2BMC) program to provide [added: an air operations center for the Ballistic Missile Defense System for the U.S. Government, undersea combat systems programs largely serving the U.S. Navy, and Australia's Joint Air Battle Management System (AIR 6500).]

- The [removed: Space Based Infrared System (SBIRS) and] Next Generation Overhead Persistent Infrared (Next Gen OPIR) [removed: system programs,] [added: system,] which [removed: provide] [added: provides] the U.S. Space Force with enhanced worldwide missile warning capabilities.

Some of our products require relatively scarce raw [removed: materials.][added: materials, such as rare earth minerals.]

[removed: We rely on other companies to provide materials, components and products, including advanced microelectronics such as semiconductors, and to perform a portion of] the services that are provided to our customers under the terms of most of our contracts.

Due to the specialized nature of our business, our performance depends on identifying, attracting, developing, motivating and retaining a highly skilled workforce [added: with the requisite skills and,] in [added: many cases, security clearances, in] multiple areas, including engineering, science, manufacturing, information technology, cybersecurity, business development and strategy and management.

During [removed: 2022,] [added: 2023,] our human capital efforts were focused on continuing to accelerate the transformation of our technology for workforce management through investments in upgraded systems and [removed: processes, and continuing to increase our agility to meet the quickly changing needs of the business, all while maintaining a respectful, challenging, supportive and inclusive working environment.][added: processes.]

We use a variety of human capital measures in managing our business, including: workforce [removed: demographics; hiring metrics; talent management metrics, including retention rates of top talent;] [added: demographics] and [removed: diversity] metrics [removed: with respect] [added: in relation] to representation, attrition, hiring, promotions and [removed: leadership.][added: leadership; and talent management metrics, including retention rates of top talent.]

As of December 31, [removed: 2022,] [added: 2023,] we had a highly skilled workforce made up of approximately [removed: 116,000] [added: 122,000] employees, including approximately [removed: 60,000] [added: 65,000] engineers, scientists and information technology professionals.

As of December 31, [removed: 2022,] [added: 2023,] approximately 93% of our workforce was located in the U.S. and approximately 19% of our employees were covered by collective bargaining agreements with various unions.

Historically, we have been successful in [removed: negotiating renewals to] [added: renegotiating] expiring agreements without any material disruption of operating activities, and management considers employee and union relations to be good.

We have focused our diversity and inclusion initiatives on employee recruitment, including [removed: investments in minority-serving institutions] [added: active engagement] and [removed: outreach,] [added: outreach with minority-serving institutions,] employee training and development, such as efforts focused on expanding the diverse talent pipeline, and employee engagement, including through participation in our [removed: employee] Business Resource Groups.

Our Business Resource Groups are voluntary, employee-led groups that are open to all employees while [removed: focusing] [added: being aligned to demographic categories that we annually report] on [removed: workplace issues specific] to [removed: racial/ethnic,] [added: the U.S. Government, including race/ethnicity,] gender, [removed: sexual orientation/gender identity,] disability [removed: or] [added: and] veteran status.

Through these and other focused efforts, [added: including workforce availability,] we have improved the diversity of our overall U.S. workforce and within leadership positions, specifically in the representation of women, people of color and people with disabilities.

Additionally, [removed: our] [added: veteran] representation [removed: of veterans] [added: in our workforce] remains outstanding, at almost four times the current annual national percentage of veterans in the civilian workforce.

Employee Profile (as of December 31, [removed: 2022):][added: 2023):]

| Overall | | | | | | 23% | | | | | | [removed: 30%] [added: 32%] | | | | | | 21% | | | | | | [removed: 11%] [added: 12%] | | |

| Executives(b) | | | | | | 25% | | | | | | [removed: 16%] [added: 17%] | | | | | | 21% | | | | | | [removed: 11%] [added: 13%] | | |

Includes only U.S. employees and expatriates except for [added: data relating to] women, which also includes local country nationals.

An integral part of our people strategy is early career hiring through college and intern pipelines, particularly in technical [removed: fields.][added: fields and critical skills areas.]

Critical to attracting and retaining top talent is employee satisfaction, and we regularly conduct employee engagement surveys to gauge employee satisfaction and to understand the effectiveness of our people [removed: strategy.][added: strategy and assess employee’s intent to stay.]

We attract and reward our employees by providing market competitive compensation and benefits, including incentives and recognition plans that extend to [removed: nonrepresented] [added: non-represented] employees of all levels in our organization and encourage excellence through our pay-for-performance philosophy.

We [removed: also] have [removed: continued] a [removed: teleworking policy] [added: hybrid workforce model] that encourages flexible working arrangements for employees [added: and teams] who can meet our customer commitments remotely, which [removed: we believe helps] [added: has helped] recruit and retain talent.

In addition, we invest in the development of our employees through training, apprenticeship programs, [added: security clearance sponsorship,] leadership development plans and offering tuition assistance programs for continuing education or industry certifications.

[removed: This] [added: We believe this] employee development [removed: helps to make] [added: makes] us more competitive and also assists with leadership succession planning throughout the corporation.

Twenty-first Century Security is an overarching vision that guides our investment and strategy.

Sustainment provides logistics

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

LRASM is a precision guided anti-ship missile derived from JASSM and designed to interdict a variety of surface threats at very long range and produced for the U.S. Air Force, U.S. Navy, and international customers.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

programs to provide surface combatant ships for the U.S. Navy and international customers that are designed to operate in shallow waters and the open ocean.

- The Transport Layer program, a small satellite program designed to support resilient space communications for the Space Development Agency.

Other important materials and components, on which certain of our products rely, include aluminum, titanium, carbon fiber and advanced microelectronics, such as semiconductors.

We rely on other companies to provide materials, components and products and to perform a portion of

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

Although long-term agreements have historically helped enable a continued supply of these materials, the lingering effects of the COVID-19 pandemic, supply chain challenges, supplier disputes, regulatory restrictions, and inflationary pressures have caused certain parts’ shortages, extended lead times and pricing escalations affecting certain sources of supply.

We continue working to minimize the impact of supply chain challenges on us but many of the challenges are industry wide or caused by geopolitical events and general economic conditions that are outside of our control.

These dynamics are expected to continue in 2024.

We also focused on increasing our ability to meet the quickly changing needs of the business, all while maintaining a respectful, supportive and inclusive working environment and culture.

This has continued to be the case in 2023.

The categories have been expanded to gain a deeper understanding of our workforce to include military service, sexual-orientation and gender identity which are not part of our annual government submission.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

During 2023, we hired nearly 15,000 employees.

During the 2022-2023 academic year, we hired a record 6,000 college hires and interns.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

some international business.

Regulatory Matters

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

Classified Contracts

Commercial Aircraft

Environmental

Climate and Sustainability Reporting and Regulation

Various jurisdictions around the world in which we operate, including the U.S., the European Union, the United Kingdom, Australia and certain U.S. States, have adopted or proposed laws related to climate and sustainability reporting.

Other Applicable Regulations

Our businesses and operations are subject to both U.S. and non-U.S. government laws, regulations and procurement policies and practices, including regulations relating to product testing, import-export controls, technology transfer restrictions, foreign investment, tariffs, taxation, repatriation of earnings, sanctions, exchange controls, the Foreign Corrupt Practices Act and other anti-corruption laws and anti-boycott provisions of the U.S. Export Control Reform Act of 2018.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

the F‑35 Program” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

an air operations center for the Ballistic Missile Defense System for the U.S. Government, and undersea combat systems programs largely serving the U.S. Navy.

As previously announced, on June 30, 2021, the UK Ministry of Defence terminated the contract to operate the UK’s nuclear deterrent program and assumed control of the entity that manages the program (referred to as the renationalization of the Atomic Weapons Establishment (AWE program)).

Accordingly, the AWE program, including the entity that manages the program, was no longer included in our financial results as of that date.

Historically, we have been successful in obtaining the raw materials and other supplies needed in our manufacturing processes.

For example, aluminum and titanium are important raw materials used in certain of our Aeronautics and Space programs.

Long-term agreements have helped enable a continued supply of these materials.

In addition, carbon fiber is an important ingredient in composite materials used in our Aeronautics programs,

such as the F-35 aircraft.

During 2022, the COVID-19 pandemic, supply chain challenges, and increased demand caused global semiconductor chip shortages, extended lead times and pricing escalations and these are expected to continue in 2023.

During 2022, we hired more than 14,000 employees, despite the continuing challenges presented by the COVID-19 pandemic.

During 2022, these metrics continued to be negatively impacted by the absence from work and delays in the return to work related to COVID-19.

We continue to take steps to protect our employees from COVID-19 while sustaining production and related services, including by establishing minimum staffing and social distancing and mask wearing policies consistent with current governmental guidance, cleaning common areas more frequently, implementing a flexible teleworking policy for employees who can work from home, encouraging employee vaccinations while monitoring potential vaccine mandates, and instituting other measures designed to mitigate and prevent the spread of COVID-19.

for the procurement.

agreeable contract terms and, if a contract is unilaterally imposed upon us, it may negatively affect our expected profit and cash flows on a program or impose burdensome terms.

expressions are intended to identify forward-looking statements.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

For the fiscal year ended December 31, [removed: 2022][added: 2023]

| Title of each class | | | Trading [removed: Symbol] [added: Symbol(s)] | | | Name of each exchange on which registered | | |

The aggregate market value of voting and non-voting common stock held by non-affiliates of the registrant computed by reference to the last sales price of such stock, as of the last business day of the registrant’s most recently completed second fiscal quarter, which was June [removed: 24, 2022,] [added: 23, 2023,] was approximately [removed: $110.7] [added: $115.2] billion.

There were [removed: 255,297,298] [added: 241,643,304] shares of our common stock, $1 par value per share, outstanding as of January [removed: 20, 2023.][added: 19, 2024.]

Portions of Lockheed Martin Corporation’s [removed: 2023] [added: 2024] Definitive Proxy Statement are incorporated by reference into Part III of this Form 10‑K.

The [removed: 2023] [added: 2024] Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

For the Year Ended December 31, [removed: 2022][added: 2023]

| ITEM 1. | | | [removed: [Business](#i692d08b87629410bb3c9a1eb5b8d3191_13)] [added: [Business](#i4dd86b83b2af4001a0e0d2126a63bade_13)] | | | [removed: [3](#i692d08b87629410bb3c9a1eb5b8d3191_13)] [added: [3](#i4dd86b83b2af4001a0e0d2126a63bade_13)] | | |

| ITEM 1A. | | | [Risk [removed: Factors](#i692d08b87629410bb3c9a1eb5b8d3191_16)] [added: Factors](#i4dd86b83b2af4001a0e0d2126a63bade_19)] | | | [removed: [10](#i692d08b87629410bb3c9a1eb5b8d3191_16)] [added: [10](#i4dd86b83b2af4001a0e0d2126a63bade_19)] | | |

| ITEM 1B. | | | [Unresolved Staff [removed: Comments](#i692d08b87629410bb3c9a1eb5b8d3191_19)] [added: Comments](#i4dd86b83b2af4001a0e0d2126a63bade_22)] | | | [removed: [23](#i692d08b87629410bb3c9a1eb5b8d3191_19)] [added: [22](#i4dd86b83b2af4001a0e0d2126a63bade_22)] | | |

| ITEM 2. | | | [removed: [Properties](#i692d08b87629410bb3c9a1eb5b8d3191_22)] [added: [Properties](#i4dd86b83b2af4001a0e0d2126a63bade_25)] | | | [removed: [23](#i692d08b87629410bb3c9a1eb5b8d3191_22)] [added: [24](#i4dd86b83b2af4001a0e0d2126a63bade_25)] | | |

| ITEM 3. | | | [Legal [removed: Proceedings](#i692d08b87629410bb3c9a1eb5b8d3191_25)] [added: Proceedings](#i4dd86b83b2af4001a0e0d2126a63bade_28)] | | | [removed: [24](#i692d08b87629410bb3c9a1eb5b8d3191_25)] [added: [24](#i4dd86b83b2af4001a0e0d2126a63bade_28)] | | |

| ITEM 4. | | | [Mine Safety [removed: Disclosures](#i692d08b87629410bb3c9a1eb5b8d3191_28)] [added: Disclosures](#i4dd86b83b2af4001a0e0d2126a63bade_31)] | | | [removed: [24](#i692d08b87629410bb3c9a1eb5b8d3191_28)] [added: [24](#i4dd86b83b2af4001a0e0d2126a63bade_31)] | | |

| ITEM 4(a). | | | [Information about our Executive [removed: Officers](#i692d08b87629410bb3c9a1eb5b8d3191_31)] [added: Officers](#i4dd86b83b2af4001a0e0d2126a63bade_34)] | | | [removed: [24](#i692d08b87629410bb3c9a1eb5b8d3191_31)] [added: [25](#i4dd86b83b2af4001a0e0d2126a63bade_34)] | | |

| ITEM 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i692d08b87629410bb3c9a1eb5b8d3191_37)] [added: Securities](#i4dd86b83b2af4001a0e0d2126a63bade_40)] | | | [removed: [26](#i692d08b87629410bb3c9a1eb5b8d3191_37)] [added: [27](#i4dd86b83b2af4001a0e0d2126a63bade_40)] | | |

| ITEM 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i692d08b87629410bb3c9a1eb5b8d3191_43)] [added: Operations](#i4dd86b83b2af4001a0e0d2126a63bade_46)] | | | [removed: [30](#i692d08b87629410bb3c9a1eb5b8d3191_43)] [added: [29](#i4dd86b83b2af4001a0e0d2126a63bade_46)] | | |

| ITEM 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i692d08b87629410bb3c9a1eb5b8d3191_67)] [added: Risk](#i4dd86b83b2af4001a0e0d2126a63bade_70)] | | | [removed: [58](#i692d08b87629410bb3c9a1eb5b8d3191_67)] [added: [52](#i4dd86b83b2af4001a0e0d2126a63bade_70)] | | |

| ITEM 8. | | | [Financial Statements and Supplementary [removed: Data](#i692d08b87629410bb3c9a1eb5b8d3191_70)] [added: Data](#i4dd86b83b2af4001a0e0d2126a63bade_73)] | | | [removed: [60](#i692d08b87629410bb3c9a1eb5b8d3191_70)] [added: [53](#i4dd86b83b2af4001a0e0d2126a63bade_73)] | | |

| ITEM 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i692d08b87629410bb3c9a1eb5b8d3191_151)] [added: Disclosure](#i4dd86b83b2af4001a0e0d2126a63bade_151)] | | | [removed: [103](#i692d08b87629410bb3c9a1eb5b8d3191_151)] [added: [97](#i4dd86b83b2af4001a0e0d2126a63bade_151)] | | |

| ITEM 9A. | | | [Controls and [removed: Procedures](#i692d08b87629410bb3c9a1eb5b8d3191_154)] [added: Procedures](#i4dd86b83b2af4001a0e0d2126a63bade_154)] | | | [removed: [103](#i692d08b87629410bb3c9a1eb5b8d3191_154)] [added: [97](#i4dd86b83b2af4001a0e0d2126a63bade_154)] | | |

| ITEM 9B. | | | [Other [removed: Information](#i692d08b87629410bb3c9a1eb5b8d3191_160)] [added: Information](#i4dd86b83b2af4001a0e0d2126a63bade_160)] | | | [removed: [105](#i692d08b87629410bb3c9a1eb5b8d3191_160)] [added: [99](#i4dd86b83b2af4001a0e0d2126a63bade_160)] | | |

| ITEM 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i692d08b87629410bb3c9a1eb5b8d3191_163)] [added: Inspections](#i4dd86b83b2af4001a0e0d2126a63bade_163)] | | | [removed: [105](#i692d08b87629410bb3c9a1eb5b8d3191_163)] [added: [99](#i4dd86b83b2af4001a0e0d2126a63bade_163)] | | |

| ITEM 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i692d08b87629410bb3c9a1eb5b8d3191_169)] [added: Governance](#i4dd86b83b2af4001a0e0d2126a63bade_169)] | | | [removed: [105](#i692d08b87629410bb3c9a1eb5b8d3191_169)] [added: [99](#i4dd86b83b2af4001a0e0d2126a63bade_169)] | | |

| ITEM 11. | | | [Executive [removed: Compensation](#i692d08b87629410bb3c9a1eb5b8d3191_172)] [added: Compensation](#i4dd86b83b2af4001a0e0d2126a63bade_172)] | | | [removed: [105](#i692d08b87629410bb3c9a1eb5b8d3191_172)] [added: [99](#i4dd86b83b2af4001a0e0d2126a63bade_172)] | | |

| ITEM 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i692d08b87629410bb3c9a1eb5b8d3191_175)] [added: Matters](#i4dd86b83b2af4001a0e0d2126a63bade_175)] | | | [removed: [106](#i692d08b87629410bb3c9a1eb5b8d3191_175)] [added: [100](#i4dd86b83b2af4001a0e0d2126a63bade_175)] | | |

| ITEM 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i692d08b87629410bb3c9a1eb5b8d3191_178)] [added: Independence](#i4dd86b83b2af4001a0e0d2126a63bade_178)] | | | [removed: [106](#i692d08b87629410bb3c9a1eb5b8d3191_178)] [added: [100](#i4dd86b83b2af4001a0e0d2126a63bade_178)] | | |

| ITEM 14. | | | [Principal Accounting Fees and [removed: Services](#i692d08b87629410bb3c9a1eb5b8d3191_181)] [added: Services](#i4dd86b83b2af4001a0e0d2126a63bade_181)] | | | [removed: [106](#i692d08b87629410bb3c9a1eb5b8d3191_181)] [added: [100](#i4dd86b83b2af4001a0e0d2126a63bade_181)] | | |

| ITEM 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i692d08b87629410bb3c9a1eb5b8d3191_187)] [added: Schedules](#i4dd86b83b2af4001a0e0d2126a63bade_187)] | | | [removed: [107](#i692d08b87629410bb3c9a1eb5b8d3191_187)] [added: [101](#i4dd86b83b2af4001a0e0d2126a63bade_187)] | | |

| ITEM 16. | | | [Form 10-K [removed: Summary](#i692d08b87629410bb3c9a1eb5b8d3191_190)] [added: Summary](#i4dd86b83b2af4001a0e0d2126a63bade_190)] | | | [removed: [110](#i692d08b87629410bb3c9a1eb5b8d3191_190)] [added: [104](#i4dd86b83b2af4001a0e0d2126a63bade_190)] | | |

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

| ITEM 1C. | | | [Cybersecurity](#i4dd86b83b2af4001a0e0d2126a63bade_1549) | | | [22](#i4dd86b83b2af4001a0e0d2126a63bade_1549) | | |

| ITEM 6. | | | [\[Reserved\]](#i4dd86b83b2af4001a0e0d2126a63bade_43) | | | [28](#i4dd86b83b2af4001a0e0d2126a63bade_43) | | |

| [SIGNATURES](#i4dd86b83b2af4001a0e0d2126a63bade_193) | | | | | | [105](#i4dd86b83b2af4001a0e0d2126a63bade_193) | | |

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

| ITEM 6. | | | [Selected Financial Data](#i692d08b87629410bb3c9a1eb5b8d3191_40) | | | [28](#i692d08b87629410bb3c9a1eb5b8d3191_40) | | |

| [SIGNATURES](#i692d08b87629410bb3c9a1eb5b8d3191_193) | | | | | | [111](#i692d08b87629410bb3c9a1eb5b8d3191_193) | | |

We believe cybersecurity is critical to advancing our 21st Century Security vision and enabling our digital transformation efforts.

As an aerospace and defense company, we face a multitude of cybersecurity threats that range from attacks common to most industries, such as ransomware and denial-of-service, to attacks from more advanced and persistent, highly organized adversaries, including nation state actors, that target the defense industrial base and other critical infrastructure sectors.

Our customers, suppliers, subcontractors and joint venture partners face similar cybersecurity threats, and a cybersecurity incident impacting us or any of these entities could materially adversely affect our operations, performance and results of operations.

These cybersecurity threats and related risks make it imperative that we are a leader in the information security field, and we expend considerable resources on cybersecurity.

The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives.

Senior leadership, including our Chief Information Security Officer (CISO), regularly briefs the Board of Directors on our cybersecurity and information security posture and the Board of Directors is apprised of cybersecurity incidents deemed to have a moderate or higher business impact, even if immaterial to us.

The Classified Business and Security Committee of the Board of Directors is briefed by senior leadership, as appropriate, on the

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

cybersecurity of classified programs and the security of our classified business supply chain.

Other than oversight of classified business cybersecurity, the full Board retains oversight of cybersecurity because of its importance to Lockheed Martin and the heightened risk in the aerospace and defense industry.

In the event of an incident, we intend to follow our detailed incident response playbook, which outlines the steps to be followed from incident detection to mitigation, recovery and notification, including notifying functional areas (e.g. legal), as well as senior leadership and the Board, as appropriate.

Our corporate information security organization, led by our CISO, is responsible for our overall information security strategy, policy, security engineering, operations and cyber threat detection and response.

The current CISO has extensive information technology and program management experience, and has served many years in our corporate information security organization.

The corporate information security organization manages and continually enhances a robust enterprise security structure with the ultimate goal of preventing cybersecurity incidents to the extent feasible, while simultaneously increasing our system resilience in an effort to minimize the business impact should an incident occur.

Central to this organization is our computer incident response team (CIRT), which is responsible for the protection, detection and response capabilities used in the defense of Lockheed Martin’s data and enterprise computing networks.

Employees outside of our corporate information security organization also have a role in our cybersecurity defenses and they are immersed in a corporate culture supportive of security, which we believe improves our cybersecurity.

The corporate information security organization has implemented a governance structure and processes to assess, identify, manage and report cybersecurity risks.

We also have a corporate-wide counterintelligence and insider threat detection program to proactively identify external and internal threats, and mitigate those threats in a timely manner.

As a defense contractor, we must comply with extensive regulations, including requirements imposed by the Defense Federal Acquisition Regulation Supplement (DFARS) related to adequately safeguarding controlled unclassified information (CUI) and reporting cybersecurity incidents to the DoD.

We have implemented cybersecurity policies and frameworks based on industry and governmental standards to align closely with DoD requirements, instructions and guidance.

Moreover, we continue to work with the DoD on assessing cybersecurity risk and on policies and practices aimed at mitigating these risks.

For example, we have worked in collaboration with the other members of the defense industrial base to support DoD’s development of the Cybersecurity Maturity Model Certification (CMMC) program, DoD’s program to ensure members of the defense industrial base meet cybersecurity requirements for handling CUI and federal contract information.

We believe we are well positioned to meet the requirements of the CMMC and are preparing for certification once the requirements are effective.

In addition to following DoD guidance and implementing pre-existing third party frameworks, we have developed our own practices and frameworks, which we believe enhance our ability to identify and manage cybersecurity risks.

For example, we use a proactive risk management strategy that we developed and implemented called the Intelligence Driven Defense® model that seeks to identify and prevent cybersecurity incidents by understanding the nature of adversaries and using this information to minimize the impact of an attack.

Third parties also play a role in our cybersecurity.

We engage third-party services to conduct evaluations of our security controls, whether through penetration testing, independent audits or consulting on best practices to address new challenges.

These evaluations include testing both the design and operational effectiveness of security controls.

We also share and receive threat intelligence with our defense industrial base peers, government agencies, information sharing and analysis centers and cybersecurity associations.

Assessing, identifying and managing cybersecurity related risks are integrated into our overall enterprise risk management (ERM) process.

Cybersecurity related risks are included in the risk universe that the ERM function evaluates to assess top risks to the enterprise on an annual basis.

To the extent the ERM process identifies a heightened cybersecurity related risk, risk owners are assigned to develop risk mitigation plans, which are then tracked to completion.

The ERM process’s annual risk assessment is presented to the Board of Directors.

We rely heavily on our supply chain to deliver our products and services to our customers, and a cybersecurity incident at a supplier, subcontractor or joint venture partner could materially adversely impact us.

We assess third party cybersecurity controls through a cybersecurity questionnaire and include security and privacy addendums to our contracts where applicable.

We also contractually flow cybersecurity regulatory requirements to our subcontractors as required by the DFARS and other government agency specific requirements.

These contractual flow downs include the requirement that our subcontractors implement certain security controls, and that our subcontractors self-report the status of their implementation of these controls to the U.S. Government.

These government contracting regulations may create challenges for our supply chain and increase costs.

We also require that our subcontractors report cybersecurity incidents to us so that we can assess the impact of the incident on us.

For select suppliers, we engage third-party cybersecurity monitoring and alerting services, and seek to work directly with those suppliers to address potential deficiencies identified.

At December 31, [removed: 2022,] [added: 2023,] we owned or leased building space (including offices, manufacturing plants, warehouses, service centers, laboratories and other facilities) at [removed: 339] [added: 335] locations primarily in the U.S. Additionally, we manage or occupy [removed: 10] [added: 9] government-owned facilities under lease and other arrangements.

At December 31, [removed: 2022,] [added: 2023,] we had significant operations in the following locations:

The following is a summary of our square feet of floor space owned, leased, or utilized by business segment at December 31, [removed: 2022] [added: 2023] (in millions):

| Aeronautics | | | | | | 5.5 | | | | | | | | | 3.0 | | | | | | | | | [removed: 14.7] [added: 14.8] | | | | | | | | | [removed: 23.2] [added: 23.3] | | | | | |

| Missiles and Fire Control | | | | | | 7.8 | | | | | | | | | 2.6 | | | | | | | | | [removed: 2.2] [added: 2.0] | | | | | | | | | [removed: 12.6] [added: 12.4] | | | | | |

| Rotary and Mission Systems | | | | | | [removed: 11.2] [added: 10.8] | | | | | | | | | 4.7 | | | | | | | | | 0.2 | | | | | | | | | [removed: 16.1] [added: 15.7] | | | | | |

We may [added: add,] improve, [removed: replace] [added: replace,] or reduce facilities as considered appropriate to meet the needs of our operations.

| Space | | | | | | 9.3 | | | | | | | | | 3.0 | | | | | | | | | 0.1 | | | | | | | | | 12.4 | | | | | |

| Total | | | | | | 35.8 | | | | | | | | | 14.2 | | | | | | | | | 17.1 | | | | | | | | | 67.1 | | | | | |

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

| Space | | | | | | 9.3 | | | | | | | | | 2.9 | | | | | | | | | 0.9 | | | | | | | | | 13.1 | | | | | |

| Total | | | | | | 36.2 | | | | | | | | | 14.1 | | | | | | | | | 18.0 | | | | | | | | | 68.3 | | | | | |

Our executive officers as of January [removed: 26, 2023] [added: 23, 2024] are listed below, with their ages on that date, positions and offices currently held, and principal occupation and business experience during at least the last five years.

Cahill (age [removed: 57),] [added: 58),] Executive Vice President – Missiles and Fire Control

Ms. Hill has served as Executive Vice President of [added: the] Rotary and Mission Systems (RMS) [added: business segment] since June 2020.

Lavan (age [removed: 63),] [added: 64),] Senior Vice President, General Counsel and Corporate Secretary

Lightfoot, Jr. (age [removed: 59),] [added: 60),] Executive Vice President – Space

Mr. Lightfoot has served as Executive Vice President of [added: the] Space [added: business segment] since January 2022.

He previously served as Vice President, Operations [removed: of] [added: for] the Space business segment from June 2021 to December 2021.

Jesus Malave (age [removed: 54),] [added: 55),] Chief Financial Officer

Edward Paul, III (age [removed: 47),] [added: 48),] Vice President and Controller

Previously, he served as Vice [removed: President] [added: President,] Accounting from March 2015 to [removed: June 2022.][added: July 2023.]

[removed: Scott] [added: Ricciardone] (age [removed: 45),] [added: 48),] Vice [removed: President] [added: President, Treasurer] and [removed: Treasurer][added: Investor Relations]

[removed: Mr. Scott] [added: Ms. Ricciardone] has served as Vice [removed: President and] [added: President,] Treasurer [added: and Investor Relations] since [removed: June 2022.][added: January 1, 2024.]

St. John (age [removed: 56),] [added: 57),] Chief Operating Officer

Prior to that, he served as Executive Vice President of [removed: the Missiles and Fire Control (MFC) business segment] [added: MFC] from January 2018 to August 2019; and as Executive Vice President and Deputy Programs for MFC from June 2017 to January 2018.

Taiclet (age [removed: 62),] [added: 63),] Chairman, President and Chief Executive Officer

Ulmer (age [removed: 58),] [added: 59),] Executive Vice President – Aeronautics

Mr. Ulmer has served as Executive Vice [removed: President,] [added: President for the] Aeronautics [added: business segment] since February 2021.

Maria A.

She previously served as Vice President, Investor Relations from October 2022 to December 2023.

Prior to joining Lockheed Martin in October 2022, she served as Vice President, Finance – FP&A and Global Components for Arrow Electronics from June 2019 to October 2022.

Prior to that, she served as Vice President, Strategy and Investor Relations at Hubbell Incorporated from March 2015 to June 2019.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

Evan T.

Previously, Mr. Scott served as Vice President and Assistant Treasurer from August 2021 to June 2022.

Prior to that, Mr. Scott was Vice President, Finance and Business Operations of the Space business segment from March 2019 to August 2021; and Vice President and Controller of the Missiles and Fire Control business segment from March 2015 to March 2019.

At January [removed: 20, 2023,] [added: 19, 2024,] we had [removed: 23,358] [added: 22,665] holders of record of our common stock, par value $1 per share.

The following graph compares the total return on a cumulative basis through December 31, [removed: 2022,] [added: 2023,] assuming reinvestment of dividends, of $100 invested in Lockheed Martin common stock as of market close on December [removed: 29, 2017] [added: 31, 2018] to the Standard and Poor’s (S&P) 500 Index and the S&P Aerospace & Defense Index.

[removed: ][added: ]

The S&P Aerospace & Defense Index comprises The Boeing Company, General Dynamics Corporation, Howmet Aerospace Inc., Huntington Ingalls Industries, L3Harris Technologies, Inc., Lockheed Martin Corporation, Northrop Grumman Corporation, [removed: Raytheon Technologies] [added: RTX] Corporation, Textron Inc. and Transdigm Group Inc. The stockholder return performance indicated on the graph is not a guarantee of future performance.

There were no sales of unregistered equity securities during the quarter ended December 31, [removed: 2022.][added: 2023.]

The following table provides information about our repurchases of our common stock that is registered pursuant to Section 12 of the Securities Exchange Act of 1934 during the quarter ended December 31, [removed: 2022.][added: 2023.]

For example, November [removed: 28, 2022] [added: 27, 2023] was the first day of our December [removed: 2022] [added: 2023] fiscal month.

On October [removed: 17, 2022,] [added: 6, 2023,] the Board of Directors authorized an increase to the program by [removed: $14.0] [added: $6.0] billion.

The total remaining authorization for future common share repurchases under our share repurchase program was $10.0 billion as of December 31, [removed: 2022.][added: 2023.]

[removed: (d)During] [added: (c)During] the fourth quarter of [removed: 2022,] [added: 2023,] the total number of shares purchased included [removed: 6,215] [added: 7,235] shares that were transferred to us by employees in satisfaction of tax withholding obligations associated with the vesting of restricted stock units.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

| September 25, 2023 – October 29, 2023 | | | | | | 1,265,110 | | | | | | $ | 446.24 | | | | | 1,264,627 | | | | | | $ | 12,459 | |

| October 30, 2023 – November 26, 2023 | | | | | | 2,775,003 | | | | | | $ | 447.82 | | | | | 2,774,470 | | | | | | $ | 11,217 | |

| November 27, 2023 – December 31, 2023 | | | | | | 2,675,777 | | | | | | $ | 446.97 | | | | | 2,669,558 | | | | | | $ | 10,023 | |

| Total (c) | | | | | | 6,715,890 | | | | | | $ | 447.18 | | | | | 6,708,655 | | | | | | | | |

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

| September 26, 2022 – October 30, 2022 (c) | | | | | | 7,225,959 | | | | | | $ | 408.50 | | | | | 7,224,954 | | | | | | $ | 10,023 | |

| October 31, 2022 – November 27, 2022 | | | | | | 961 | | | | | | $ | 474.20 | | | | | — | | | | | | $ | 10,023 | |

| November 28, 2022 – December 31, 2022 | | | | | | 4,249 | | | | | | $ | 482.93 | | | | | — | | | | | | $ | 10,023 | |

| Total (c)(d) | | | | | | 7,231,169 | | | | | | $ | 410.10 | | | | | 7,224,954 | | | | | | | | |

(c)During the fourth quarter of 2022, we entered into an accelerated share repurchase (ASR) agreement to repurchase $4.0 billion of our common stock.

Under the terms of the ASR agreement, we paid $4.0 billion and received an initial delivery of 6,995,147 shares of our common stock.

We expect to receive additional shares upon final settlement, which is expected in March or April 2023.

The total number of shares of common stock to be received under the ASR agreement will be based on an average volume-weighted average price (VWAP) of our common stock during the term of the ASR agreement, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR agreement.

Average Price Paid Per Share in the table above does not include ASR shares.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| *(In millions, except per share data)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | | | | | 2018 | | |

| Operating results | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net sales | | | | | | $ | 65,984 | | | | | $ | 67,044 | | | | | $ | 65,398 | | | | | $ | 59,812 | | | | | $ | 53,762 | |

| Operating profit (a)(b) | | | | | | 8,348 | | | | | | 9,123 | | | | | | 8,644 | | | | | | 8,545 | | | | | | 7,334 | | |

| Net earnings from continuing operations (a)(b)(c)(d)(e)(f)(g)(h) | | | | | | 5,732 | | | | | | 6,315 | | | | | | 6,888 | | | | | | 6,230 | | | | | | 5,046 | | |

| Net loss from discontinued operations | | | | | | — | | | | | | — | | | | | | (55) | | | | | | — | | | | | | — | | |

| Net earnings (a)(b)(c)(d)(e)(f)(g)(h) | | | | | | 5,732 | | | | | | 6,315 | | | | | | 6,833 | | | | | | 6,230 | | | | | | 5,046 | | |

| Earnings from continuing operations per common share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic (a)(b)(c)(d)(e)(f)(g)(h) | | | | | | 21.74 | | | | | | 22.85 | | | | | | 24.60 | | | | | | 22.09 | | | | | | 17.74 | | |

| Diluted (a)(b)(c)(d)(e)(f)(g)(h) | | | | | | 21.66 | | | | | | 22.76 | | | | | | 24.50 | | | | | | 21.95 | | | | | | 17.59 | | |

| Earnings (loss) from discontinued operations per common share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | | | | — | | | | | | — | | | | | | (0.20) | | | | | | — | | | | | | — | | |

| Diluted | | | | | | — | | | | | | — | | | | | | (0.20) | | | | | | — | | | | | | — | | |

| Earnings per common share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic (a)(b)(c)(d)(e)(f)(g)(h) | | | | | | 21.74 | | | | | | 22.85 | | | | | | 24.40 | | | | | | 22.09 | | | | | | 17.74 | | |

| Diluted (a)(b)(c)(d)(e)(f)(g)(h) | | | | | | 21.66 | | | | | | 22.76 | | | | | | 24.30 | | | | | | 21.95 | | | | | | 17.59 | | |

| Cash dividends declared per common share | | | | | | $ | 11.40 | | | | | $ | 10.60 | | | | | $ | 9.80 | | | | | $ | 9.00 | | | | | $ | 8.20 | |

| Balance sheet | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cash, cash equivalents and short-term investments | | | | | | $ | 2,547 | | | | | $ | 3,604 | | | | | $ | 3,160 | | | | | $ | 1,514 | | | | | $ | 772 | |

| Total current assets | | | | | | 20,991 | | | | | | 19,815 | | | | | | 19,378 | | | | | | 17,095 | | | | | | 16,103 | | |

| Goodwill | | | | | | 10,780 | | | | | | 10,813 | | | | | | 10,806 | | | | | | 10,604 | | | | | | 10,769 | | |

| Total assets (i) | | | | | | 52,880 | | | | | | 50,873 | | | | | | 50,710 | | | | | | 47,528 | | | | | | 44,876 | | |

| Total current liabilities | | | | | | 15,887 | | | | | | 13,997 | | | | | | 13,933 | | | | | | 13,972 | | | | | | 14,398 | | |

| Total debt, net | | | | | | 15,547 | | | | | | 11,676 | | | | | | 12,169 | | | | | | 12,654 | | | | | | 14,104 | | |

| Total liabilities (c)(i) | | | | | | 43,614 | | | | | | 39,914 | | | | | | 44,672 | | | | | | 44,357 | | | | | | 43,427 | | |

| Total equity | | | | | | 9,266 | | | | | | 10,959 | | | | | | 6,038 | | | | | | 3,171 | | | | | | 1,449 | | |

| Common shares in stockholders’ equity at year-end | | | | | | 254 | | | | | | 271 | | | | | | 279 | | | | | | 280 | | | | | | 281 | | |

| Cash flow information | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net cash provided by operating activities (b) | | | | | | $ | 7,802 | | | | | $ | 9,221 | | | | | $ | 8,183 | | | | | $ | 7,311 | | | | | $ | 3,138 | |

| Net cash used for investing activities | | | | | | (1,789) | | | | | | (1,161) | | | | | | (2,010) | | | | | | (1,241) | | | | | | (1,075) | | |

| Net cash used for financing activities | | | | | | (7,070) | | | | | | (7,616) | | | | | | (4,527) | | | | | | (5,328) | | | | | | (4,152) | | |

| Backlog | | | | | | $ | 149,998 | | | | | $ | 135,355 | | | | | $ | 147,131 | | | | | $ | 143,981 | | | | | $ | 130,468 | |

(a)Our operating profit and net earnings from continuing operations and earnings per share from continuing operations in 2022 were affected by $100 million ($79 million, or $0.31 per share, after-tax) of certain severance and other charges that relate to actions at our RMS business segment, which include severance costs for reduction of positions and asset impairment charges; severance and restructuring charges of $36 million ($28 million, or $0.10 per share, after-tax) in 2021; severance charges of $27 million ($21 million, or $0.08 per share, after-tax) in 2020; and severance and restructuring charges of $96 million ($76 million, or $0.26 per share, after-tax) in 2018.

See “Note 16 – Severance and Other Charges” included in our Notes to Consolidated Financial Statements for more information.

(b)The impact of our postretirement benefit plans can cause our operating profit, net earnings, cash flows and certain amounts recorded on our consolidated balance sheets to fluctuate.

Accordingly, our net earnings were affected by a FAS/CAS pension adjustment of $738 million in 2022, $668 million in 2021, $2.1 billion in 2020, $1.5 billion in 2019, and $1.0 billion in 2018.

We made no pension contributions in both 2022 and 2021, $1.0 billion in both 2020 and 2019, and $5.0 billion in 2018.

These contributions caused fluctuations in our operating cash flows and cash balance between each of those years.

We have audited the accompanying consolidated balance sheets of Lockheed Martin Corporation (the Corporation) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of earnings, comprehensive income, cash flows and equity for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Corporation at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Corporation’s internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated January [removed: 26, 2023] [added: 23, 2024] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | | | | For the year ended December 31, [removed: 2022,] [added: 2023,] the Corporation recorded net sales of [removed: $66.0] [added: $67.6] billion. As more fully described in Note 1 to the consolidated financial statements, the Corporation generates the majority of its net sales from long-term contracts with its customers whereby substantially all of the Corporation’s revenue is recognized over time using the percentage-of-completion cost-to-cost measure of progress. Under the percentage-of-completion cost-to-cost measure of progress, the Corporation measures progress towards completion based on the ratio of costs incurred to date to the estimated total costs to complete the performance obligation(s) (referred to as the estimate-at-completion analysis). The Corporation estimates profit on these contracts as the difference between total estimated revenues and total estimated cost at completion. The percentage-of-completion cost-to-cost method requires management to make significant estimates and assumptions to estimate contract sales and costs associated with its contracts with customers. At the outset of a long-term contract, the Corporation identifies risks to the achievement of the technical, schedule and cost aspects of the contract. Throughout the contract life cycle, the Corporation monitors and assesses the effects of those risks on its estimates of sales and total costs to complete the contract. Profit booking rates may increase during the performance of the contract if the Corporation successfully retires risks surrounding the technical, schedule and cost aspects of the contract, which would decrease the estimated total costs to complete the contract. Conversely, the profit booking rates may decrease if the estimated total costs to complete the contract increase. Changes to the profit booking rates resulting from changes in estimates could have a material effect on the Corporation’s results of operations. Auditing the Corporation’s estimate-at-completion analyses used in its revenue recognition process was complex due to the judgment involved in evaluating the significant estimates and assumptions made by management in the [removed: creation] [added: initial development] and subsequent updates to the Corporation’s estimate-at-completion analyses. The estimate-at-completion analyses of each contract consider risks surrounding the Corporation’s ability to achieve the technical, [removed: schedule,] [added: schedule] and cost aspects of the contract. | | |

| *Description of the Matter* | | | | | | At December 31, [removed: 2022,] [added: 2023,] the Corporation’s aggregate obligation for its qualified defined benefit pension plans was [removed: $28.7] [added: $29.0] billion and exceeded the gross fair value of the related plan assets of [removed: $23.2] [added: $22.8] billion, resulting in a net unfunded qualified defined benefit pension obligation of [removed: $5.5] [added: $6.2] billion. As explained in Note 11 of the consolidated financial statements, the Corporation remeasures the qualified defined benefit pension assets and obligations at the end of each year or more frequently upon the occurrence of certain events. The amounts are measured using actuarial valuations, which depend on key assumptions such as the discount rate. Auditing the defined benefit pension obligation was complex and required the involvement of specialists as a result of the judgmental nature of the actuarial assumptions such as the discount rate used in the measurement process. The discount rate assumption has a significant effect on the measurement of the projected benefit obligation. | | |

[removed: January 26, 2023][added: | | | | | | | 2023 | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | | | | | | | | | | | | |

| Products | | | | | | $ | [removed: 55,466] [added: 56,265] | | | | | $ | [removed: 56,435] [added: 55,466] | | | | | $ | [removed: 54,928] [added: 56,435] | | | | | | | | | | | | | | | | |

| Services | | | | | | [removed: 10,518] [added: 11,306] | | | | | | [removed: 10,609] [added: 10,518] | | | | | | [removed: 10,470] [added: 10,609] | | | | | | | | | | | | | | | | | |

| Total net sales | | | | | | [removed: 65,984] [added: 67,571] | | | | | | [removed: 67,044] [added: 65,984] | | | | | | [removed: 65,398] [added: 67,044] | | | | | | | | | | | | | | | | | |

| Severance and other charges | | | | | | [removed: (100)] [added: (92)] | | | | | | [removed: (36)] [added: (100)] | | | | | | [removed: (27)] [added: (36)] | | | | | | | | | | | | | | | | | |

| Total cost of sales | | | | | | [removed: (57,697)] [added: (59,092)] | | | | | | [removed: (57,983)] [added: (57,697)] | | | | | | [removed: (56,744)] [added: (57,983)] | | | | | | | | | | | | | | | | | |

| Gross profit | | | | | | [removed: 8,287] [added: 8,479] | | | | | | [removed: 9,061] [added: 8,287] | | | | | | [removed: 8,654] [added: 9,061] | | | | | | | | | | | | | | | | | |

| Other [removed: income (expense),] [added: income,] net | | | | | | [removed: 61] [added: 28] | | | | | | [removed: 62] [added: 61] | | | | | | [removed: (10)] [added: 62] | | | | | | | | | | | | | | | | | |

| Operating profit | | | | | | [removed: 8,348] [added: 8,507] | | | | | | [removed: 9,123] [added: 8,348] | | | | | | [removed: 8,644] [added: 9,123] | | | | | | | | | | | | | | | | | |

| Interest expense | | | | | | [removed: (623)] [added: (916)] | | | | | | [removed: (569)] [added: (623)] | | | | | | [removed: (591)] [added: (569)] | | | | | | | | | | | | | | | | | |

| Non-service FAS pension [removed: (expense)] income [added: (expense)] | | | | | | [removed: (971)] [added: 443] | | | | | | [removed: (1,292)] [added: (971)] | | | | | | [removed: 219] [added: (1,292)] | | | | | | | | | | | | | | | | | |

| Other non-operating [removed: (expense) income,] [added: income (expense),] net | | | | | | [removed: (74)] [added: 64] | | | | | | [removed: 288] [added: (74)] | | | | | | [removed: (37)] [added: 288] | | | | | | | | | | | | | | | | | |

| Earnings [removed: from continuing operations] before income taxes | | | | | | [removed: 6,680] [added: 8,098] | | | | | | [removed: 7,550] [added: 6,680] | | | | | | [removed: 8,235] [added: 7,550] | | | | | | | | | | | | | | | | | |

| Income tax expense | | | | | | [removed: (948)] [added: (1,178)] | | | | | | [removed: (1,235)] [added: (948)] | | | | | | [removed: (1,347)] [added: (1,235)] | | | | | | | | | | | | | | | | | |

| [removed: Net earnings from continuing operations] [added: Net earnings] | | | | | | [removed: 5,732] [added: $] | [added: 6,920] | | | | | [removed: 6,315] [added: $] | [added: 5,732] | | | | | [removed: 6,888] [added: $] | [added: 6,315] | | | | | | | | | | | | | | | | |

| [removed: Net earnings] [added: Net earnings] | | | | | | $ | [removed: 5,732] [added: 6,920] | | | | | $ | [removed: 6,315] [added: 5,732] | | | | | $ | [removed: 6,833 | | | | | | | | | | | | | | |] [added: 6,315] | |

| Earnings [removed: (loss)] per common share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Net earnings | | | | | | $ | [removed: 5,732] [added: 6,920] | | | | | $ | [removed: 6,315] [added: 5,732] | | | | | $ | [removed: 6,833] [added: 6,315] | |

| Other comprehensive [removed: income (loss),] [added: income,] net of tax | | | | | | | | | | | | | | | | | | | | |

| Net actuarial [removed: gain] (loss) [added: gain] recognized due to plan remeasurements, net of tax of [removed: $518] [added: $181] million in [removed: 2022, $925] [added: 2023, $518] million in [removed: 2021] [added: 2022] and [removed: $292] [added: $925] million in [removed: 2020] [added: 2021] | | | | | | [removed: 1,873] [added: (689)] | | | | | | [removed: 3,404] [added: 1,873] | | | | | | [removed: (1,067)] [added: 3,404] | | |

| Amortization of actuarial losses and prior service credits, net of tax of [removed: $18] [added: $40] million in [removed: 2022, $130] [added: 2023, $18] million in [removed: 2021] [added: 2022] and [removed: $119] [added: $130] million in [removed: 2020] [added: 2021] | | | | | | [removed: 69] [added: (149)] | | | | | | [removed: 477] [added: 69] | | | | | | [removed: 440] [added: 477] | | |

| Pension settlement charge, net of tax of $314 million in 2022 and $355 million in 2021 | | | | | | [removed: 1,156] [added: —] | | | | | | [removed: 1,310] [added: 1,156] | | | | | | [removed: —] [added: 1,310] | | |

| Other, net, net of tax of [removed: $2] [added: $6] million in [removed: 2022, $11] [added: 2023, $2] million in [removed: 2021] [added: 2022] and [removed: $5] [added: $11] million in [removed: 2020] [added: 2021] | | | | | | [removed: (115)] [added: 58] | | | | | | [removed: (76)] [added: (115)] | | | | | | [removed: 60] [added: (76)] | | |

| Other comprehensive [removed: income (loss),] [added: income,] net of tax | | | | | | [removed: 2,983] [added: (780)] | | | | | | [removed: 5,115] [added: 2,983] | | | | | | [removed: (567)] [added: 5,115] | | |

| Comprehensive income | | | | | | $ | [removed: 8,715] [added: 6,140] | | | | | $ | [removed: 11,430] [added: 8,715] | | | | | $ | [removed: 6,266] [added: 11,430] | |

| | | | | | | [added: 2023 | | | | | |] 2022 | | | | | | 2021 | | |

| Cash and cash equivalents | | | | | | $ | [removed: 2,547] [added: 1,442] | | | | | $ | [removed: 3,604] [added: 2,547] | |

| Receivables, net | | | | | | [removed: 2,505] [added: 2,132] | | | | | | [removed: 1,963] [added: 2,505] | | |

| Contract assets | | | | | | [removed: 12,318] [added: 13,183] | | | | | | [removed: 10,579] [added: 12,318] | | |

| Inventories | | | | | | [removed: 3,088] [added: 3,132] | | | | | | [removed: 2,981] [added: 3,088] | | |

| Other current assets | | | | | | [removed: 533] [added: 632] | | | | | | [removed: 688] [added: 533] | | |

| Total current assets | | | | | | [removed: 20,991] [added: 20,521] | | | | | | [removed: 19,815] [added: 20,991] | | |

| Property, plant and equipment, net | | | | | | [removed: 7,975] [added: 8,370] | | | | | | [removed: 7,597] [added: 7,975] | | |

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

January 23, 2024

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

| Products | | | | | | (50,206) | | | | | | (49,357) | | | | | | (50,017) | | | | | | | | | | | | | | | | | |

| Services | | | | | | (10,027) | | | | | | (9,252) | | | | | | (9,434) | | | | | | | | | | | | | | | | | |

| Other unallocated, net | | | | | | 1,233 | | | | | | 1,012 | | | | | | 1,504 | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | | | | $ | 27.65 | | | | | $ | 21.74 | | | | | $ | 22.85 | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Diluted | | | | | | $ | 27.55 | | | | | $ | 21.66 | | | | | $ | 22.76 | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

| | | | | | | 2023 | | | | | | 2022 | | |

| Current maturities of long-term debt | | | | | | 168 | | | | | | 118 | | |

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

| Repurchases of common stock | | | (15) | | | (571) | | | | | | (5,414) | | | — | | | | | | (6,000) | | | | | | — | | | | | | (6,000) | | | | | | | | |

| Balance at December 31, 2023 | | | $ | 240 | | $ | — | | | | | $ | 15,398 | | $ | (8,803) | | | | | $ | 6,835 | | | | | $ | — | | | | | $ | 6,835 | | | | | | | |

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

Effective January 1, 2023, we no longer consider amortization expense related to purchased intangible assets when evaluating the operating performance of our business segments.

As a result, intangible asset amortization expense, which was previously included in segment operating profit, is now reported in unallocated corporate expense within total consolidated operating profit.

This change has no impact on our consolidated operating results.

Management believes this updated presentation better aligns with how the business is viewed and managed and will provide better insights into business segment performance.

This change has been applied to the amounts in this Form 10-K, including amounts for 2022 and 2021.

See “Note 3 – Information on Business Segments” for further information regarding the impact of this change on our current and prior period segment operating profit.

Cost-plus-incentive-fee contracts provide for

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

contract for reasons other than our non-performance we would have the right to recover damages which would include, among other potential damages, the right to payment for our work performed to date plus a reasonable profit.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

As of December 31, 2023, cumulative losses remained at approximately $270 million.

However, based on the losses previously recorded, the near completion status of the program, and our current estimate of the sales and costs to complete the

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

| Products | | | | | | (49,577) | | | | | | (50,273) | | | | | | (48,996) | | | | | | | | | | | | | | | | | |

| Services | | | | | | (9,280) | | | | | | (9,463) | | | | | | (9,371) | | | | | | | | | | | | | | | | | |

| Other unallocated, net | | | | | | 1,260 | | | | | | 1,789 | | | | | | 1,650 | | | | | | | | | | | | | | | | | |

| Net loss from discontinued operations | | | | | | — | | | | | | — | | | | | | (55) | | | | | | | | | | | | | | | | | |

| Basic | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Continuing operations | | | | | | $ | 21.74 | | | | | $ | 22.85 | | | | | $ | 24.60 | | | | | | | | | | | | | | | | |

| Discontinued operations | | | | | | — | | | | | | — | | | | | | (0.20) | | | | | | | | | | | | | | | | | |

| Basic earnings per common share | | | | | | $ | 21.74 | | | | | $ | 22.85 | | | | | $ | 24.40 | | | | | | | | | | | | | | | | |

| Diluted | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Continuing operations | | | | | | $ | 21.66 | | | | | $ | 22.76 | | | | | $ | 24.50 | | | | | | | | | | | | | | | | |

| Diluted earnings per common share | | | | | | $ | 21.66 | | | | | $ | 22.76 | | | | | $ | 24.30 | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Equity method investment impairment | | | | | | — | | | | | | — | | | | | | 128 | | |

| Tax resolution related to former IS&GS business | | | | | | — | | | | | | — | | | | | | 55 | | |

| Balance at December 31, 2019 | | | $ | 280 | | $ | — | | | | | $ | 18,401 | | $ | (15,554) | | | | | $ | 3,127 | | | | | $ | 44 | | | | | $ | 3,171 | | | | | | | |

| Repurchases of common stock | | | (3) | | | (256) | | | | | | (841) | | | — | | | | | | (1,100) | | | | | | — | | | | | | (1,100) | | | | | | | | |

| Net decrease in noncontrolling interests in subsidiary | | | — | | | — | | | | | | — | | | — | | | | | | — | | | | | | (21) | | | | | | (21) | | | | | | | | |

On June 30, 2021, the UK Ministry of Defence terminated the contract to operate the UK’s nuclear deterrent program and assumed control of the entity that manages the program (referred to as the renationalization of the Atomic Weapons Establishment (AWE program)).

Accordingly, the AWE program’s ongoing operations, including the entity that manages the program, are no longer included in our financial results as of that date.

Therefore, during 2021, AWE only generated sales of $885 million and operating profit of $18 million, which are included in Space’s financial results for the year ended December 31, 2021.

During the year ended December 31, 2020, AWE generated sales of $1.4 billion and operating profit of $35 million, which are included in Space’s financial results for 2020.

target costs (i.e., incentive based on cost) or reimbursement of costs plus an incentive to exceed stated performance targets (i.e., incentive based on performance).

contract and may affect the profit booking rate.

We recognized net sales from performance obligations satisfied in prior periods of approximately $2.0 billion in both 2022 and 2020, and $2.2 billion in 2021, which primarily relate to changes in profit booking rates that impacted revenue.

We continue to monitor the technical requirements, remaining work, schedule, and estimated costs to complete the program.

During the fourth quarter of 2022, we revised our estimated costs to complete the program by reviewing the design and system integration requirements, remaining work, and schedule and recorded an additional charge of approximately $20 million.

Based on this and the revised schedule, which was agreed to in 2021, cumulative losses were approximately $270 million as of December 31, 2022.

periods if we experience further performance issues, increases in scope, or cost growth.

Interest and penalties were not material during 2022, 2021 or 2020.

Investments with quoted market prices in active markets (Level 1) are recorded at fair value at the

end of each reporting period.

In July 2020, we entered into an agreement to sell our ownership interest in Advanced Military Maintenance, Repair and Overhaul Center (AMMROC) to our joint venture partner for $307 million.

As a result, we adjusted the carrying value of our investment to the selling price of $307 million, which resulted in the recognition of a noncash impairment charge of $128 million ($96 million, or $0.34 per share, after-tax) in our results of operations disclosed in 2020.

Goodwill and Intangible Assets – The assets and liabilities of acquired businesses are recorded under the acquisition method of accounting at their estimated fair values at the date of acquisition.

Goodwill represents costs in excess of fair values assigned to the underlying identifiable net assets of acquired businesses.

Intangible assets from acquired businesses are recognized at fair value on the acquisition date and consist of customer programs, trademarks, customer relationships, technology and other intangible assets.

Customer programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology and trademarks underlying the associated program.

Intangible assets are amortized over a period of expected cash flows used to measure fair value, which typically ranges from five to 20 years.

Such events or changes in circumstances may include a significant deterioration in overall economic conditions, changes in the business climate of our industry, a decline in our market capitalization, operating performance indicators, competition, reorganizations of our business, U.S. Government budget restrictions or the disposal of all or a portion of a reporting unit.

We performed an evaluation of the effectiveness of our disclosure controls and procedures as of December 31, [removed: 2022.][added: 2023.]

Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, [removed: 2022.][added: 2023.]

Our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d‑15(d) of the Exchange Act that occurred during the quarter ended December 31, [removed: 2022] [added: 2023] that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have audited Lockheed Martin Corporation’s internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Lockheed Martin Corporation (the Corporation) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Corporation as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of earnings, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] and the related notes and our report dated January [removed: 26, 2023] [added: 23, 2024] expressed an unqualified opinion thereon.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

January 23, 2024

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

January 26, 2023

None of our directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or adopted or terminated a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarter ended December 31, 2023.

None.

The information concerning directors required by Item 401 of Regulation S-K is included under the [removed: caption “Proposal 1 - Election of Directors”] [added: section titled “Director Nominees”] in our definitive Proxy Statement to be filed pursuant to Regulation 14A within 120 days after the end of the fiscal year to which this report relates (the [removed: 2023] [added: 2024] Proxy Statement), and that information is incorporated by reference in this Annual Report on Form 10-K (Form 10-K).

The information required by Items 407(d)(4) and (d)(5) of Regulation S-K is included [removed: under the captions “Committees of] [added: in] the [removed: Board of Directors”] [added: sections titled “Corporate Governance”] and “Audit Committee Report” in the [removed: 2023] [added: 2024] Proxy Statement, and that information is incorporated by reference in this Form 10-K.

The information required by Item 402 of Regulation S-K is included in the [removed: text and tables under the captions] [added: sections titled] “Executive Compensation” and “Director Compensation” in the [removed: 2023] [added: 2024] Proxy Statement and that information is incorporated by reference in this Form 10-K.

The information required by Item 407(e)(5) of Regulation S-K is included under the caption “Compensation Committee Report” in the [removed: 2023] [added: 2024] Proxy Statement, and that information is incorporated by reference in this Form 10-K.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

The information required by Item 12 related to the security ownership of management and certain beneficial owners is included [removed: under] [added: in] the [removed: heading “Security Ownership of Management and Certain Beneficial Owners”] [added: section titled “Other Information”] in the [removed: 2023] [added: 2024] Proxy Statement, and that information is incorporated by reference in this Annual Report on Form 10-K.

The information is provided as of December 31, [removed: 2022.][added: 2023.]

| Equity compensation plans approved by security holders (1) | | | | | | [removed: 2,297,380] [added: 2,333,795] | | | | | | $ | — | | | | | [removed: 6,761,032] [added: 6,066,491] | | | | | |

| Equity compensation plans not approved by security holders (2) | | | | | | [removed: 545,753] [added: 483,204] | | | | | | — | | | | | | [removed: 2,486,789] [added: 2,503,225] | | | | | |

(1)Column (a) includes, as of December 31, [removed: 2022: 1,587,329] [added: 2023: 1,596,538] shares that have been granted as restricted stock units (RSUs) and [removed: 624,106] [added: 653,580] shares that could be earned pursuant to grants of performance stock units (PSUs) (assuming the maximum number of PSUs are earned and payable at the end of the three-year performance period) under the Lockheed Martin Corporation 2020 Incentive Performance Award Plan (2020 IPA Plan) or predecessor plans and [removed: 85,945] [added: 83,677] stock units payable in stock or cash under the Lockheed Martin Corporation Amended and Restated Directors Equity Plan (Directors Plan) or predecessor plans for non-employee directors.

Column (c) includes, as of December 31, [removed: 2022, 6,391,651] [added: 2023, 5,701,281] shares available for future issuance under the 2020 IPA Plan as options, stock appreciation rights, restricted stock awards, RSUs or PSUs and [removed: 369,381] [added: 365,210] shares available for future issuance under the Directors Plan as stock options and stock units.

| Total | | | | | | 2,816,999 | | | | | | $ | — | | | | | 8,569,716 | | | | | |

| Total | | | | | | 2,843,133 | | | | | | $ | — | | | | | 9,247,821 | | | | | |

The information required by Item 404 and 407(a) of Regulation S-K is included [removed: under] [added: in] the [removed: captions “Corporate Governance - Related Person Transaction Policy,” “Corporate Governance - Certain Relationships and Related Person Transactions of Directors, Executive Officers and 5 Percent Stockholders,” and] [added: section titled] “Corporate [removed: Governance - Director Independence”] [added: Governance”] in the [removed: 2023] [added: 2024] Proxy Statement, and that information is incorporated by reference in this Form 10-K.

The information required by this Item 14 is included [removed: under] [added: in] the [removed: caption “Proposal 4 - Ratification of Appointment of Independent Auditors”] [added: section titled “Audit Matters”] in the [removed: 2023] [added: 2024] Proxy Statement, and that information is incorporated by reference in this Form 10-K.

[Table of Contents](#i4dd86b83b2af4001a0e0d2126a63bade_7)[](#i4dd86b83b2af4001a0e0d2126a63bade_7)

[Table](#i692d08b87629410bb3c9a1eb5b8d3191_7) [o](#i692d08b87629410bb3c9a1eb5b8d3191_7)[f C](#i692d08b87629410bb3c9a1eb5b8d3191_7)[ontents](#i692d08b87629410bb3c9a1eb5b8d3191_7)

| [Consolidated Statements of Earnings – Years ended December 31, [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020](#i692d08b87629410bb3c9a1eb5b8d3191_73)] [added: 2021](#i4dd86b83b2af4001a0e0d2126a63bade_76)] | | | [removed: [63](#i692d08b87629410bb3c9a1eb5b8d3191_73)] [added: [56](#i4dd86b83b2af4001a0e0d2126a63bade_76)] | | |

| [Consolidated Statements of Comprehensive Income – Years ended December [removed: 31, 2022, 2021] [added: 31,](#i4dd86b83b2af4001a0e0d2126a63bade_79) [2023, 2022] and [removed: 2020](#i692d08b87629410bb3c9a1eb5b8d3191_76)] [added: 2021](#i4dd86b83b2af4001a0e0d2126a63bade_76)] | | | [removed: [64](#i692d08b87629410bb3c9a1eb5b8d3191_76)] [added: [57](#i4dd86b83b2af4001a0e0d2126a63bade_79)] | | |

| [Consolidated Balance Sheets – At December 31, [removed: 2022] [added: 2023] and [removed: 2021](#i692d08b87629410bb3c9a1eb5b8d3191_79)] [added: 2022](#i4dd86b83b2af4001a0e0d2126a63bade_82)] | | | [removed: [65](#i692d08b87629410bb3c9a1eb5b8d3191_79)] [added: [58](#i4dd86b83b2af4001a0e0d2126a63bade_82)] | | |

| [Consolidated Statements of Cash Flows – Years ended December [removed: 31, 2022, 2021] [added: 31,](#i4dd86b83b2af4001a0e0d2126a63bade_85) [2023, 2022] and [removed: 2020](#i692d08b87629410bb3c9a1eb5b8d3191_82)] [added: 2021](#i4dd86b83b2af4001a0e0d2126a63bade_76)] | | | [removed: [66](#i692d08b87629410bb3c9a1eb5b8d3191_82)] [added: [59](#i4dd86b83b2af4001a0e0d2126a63bade_85)] | | |

| [Consolidated Statements of Equity – Years ended December [removed: 31, 2022, 2021] [added: 31,](#i4dd86b83b2af4001a0e0d2126a63bade_88) [2023, 2022] and [removed: 2020](#i692d08b87629410bb3c9a1eb5b8d3191_85)] [added: 2021](#i4dd86b83b2af4001a0e0d2126a63bade_76)] | | | [removed: [67](#i692d08b87629410bb3c9a1eb5b8d3191_85)] [added: [60](#i4dd86b83b2af4001a0e0d2126a63bade_88)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i692d08b87629410bb3c9a1eb5b8d3191_88)] [added: Statements](#i4dd86b83b2af4001a0e0d2126a63bade_91)] | | | [removed: [68](#i692d08b87629410bb3c9a1eb5b8d3191_88)] [added: [61](#i4dd86b83b2af4001a0e0d2126a63bade_91)] | | |

| [Report of Independent Registered Public Accounting Firm on the Audited Consolidated Financial [removed: Statements](#i692d08b87629410bb3c9a1eb5b8d3191_70)] [added: Statements](#i4dd86b83b2af4001a0e0d2126a63bade_73)] | | | [removed: [60](#i692d08b87629410bb3c9a1eb5b8d3191_70)] [added: [53](#i4dd86b83b2af4001a0e0d2126a63bade_73)] | | |

| [Report of Independent Registered Public Accounting Firm Regarding Internal Control Over Financial [removed: Reporting](#i692d08b87629410bb3c9a1eb5b8d3191_157)] [added: Reporting](#i4dd86b83b2af4001a0e0d2126a63bade_157)] | | | [removed: [104](#i692d08b87629410bb3c9a1eb5b8d3191_157)] [added: [98](#i4dd86b83b2af4001a0e0d2126a63bade_157)] | | |

| 3.2 | | | | | | [Bylaws of Lockheed Martin Corporation, as amended and restated effective [removed: April 8, 2020] [added: February 22, 2023] (incorporated by reference to Exhibit 3.1 to Lockheed Martin Corporation’s Current Report on Form 8-K filed with the SEC on [removed: April 9, 2020).](http://www.sec.gov/Archives/edgar/data/936468/000093646820000037/lmtbylaws040820.htm)] [added: February 23, 2023).](http://www.sec.gov/Archives/edgar/data/936468/000093646823000017/lmtbylaws02222023.htm)] | | | | | |

| [removed: 10.2] [added: 10.3] | | | | | | [Non-Employee Director Compensation Summary (incorporated by reference to Exhibit 10.3 to Lockheed Martin Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2022).](http://www.sec.gov/Archives/edgar/data/936468/000093646822000120/ex103q32022.htm) | | | | | |

| [removed: 10.3] [added: 10.4] | | | | | | [Lockheed Martin Corporation Directors Deferred Compensation Plan, as amended (incorporated by reference to Exhibit 10.2 to Lockheed Martin Corporation’s [removed: Annual] [added: Quarterly] Report on Form [removed: 10-K] [added: 10-Q] for the [removed: year] [added: quarter] ended [removed: December 31, 2008).](http://www.sec.gov/Archives/edgar/data/936468/000119312509038670/dex102.htm)] [added: September 24, 2023).](http://www.sec.gov/Archives/edgar/data/936468/000093646823000123/ex102q32023.htm)] | | | | | |

| [removed: 10.4] [added: 10.5] | | | | | | [Lockheed Martin Corporation Directors Equity Plan, as amended (incorporated by reference to Exhibit 10.1 to Lockheed Martin Corporation’s Current Report on Form 8-K filed with the SEC on November 2, 2006).](http://www.sec.gov/Archives/edgar/data/936468/000119312506222275/dex101.htm) | | | | | |

| [removed: 10.5] [added: 10.6] | | | | | | [Lockheed Martin Corporation Amended and Restated Directors Equity Plan (incorporated by reference to Exhibit 10.1 to Lockheed Martin Corporation’s Current Report on Form 8-K filed with the SEC on April 26, 2018).](http://www.sec.gov/Archives/edgar/data/936468/000093646818000025/ex1018k042618.htm) | | | | | |

| [removed: 10.6] [added: 10.7] | | | | | | [Form of Indemnification Agreement (incorporated by reference to Exhibit 10.34 to Lockheed Martin Corporation’s Annual Report on Form 10-K for the year ended December 31, 2009).](http://www.sec.gov/Archives/edgar/data/936468/000119312510040520/dex1034.htm) | | | | | |

| [removed: 10.7] [added: 10.8] | | | | | | [Lockheed Martin Corporation Supplemental Savings Plan, as amended and restated effective January 1, 2015 (incorporated by reference to Exhibit 10.4 to Lockheed Martin Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015)](http://www.sec.gov/Archives/edgar/data/936468/000119312515141818/d887742dex104.htm). | | | | | |

| [removed: 10.8] [added: 10.9] | | | | | | [Amendment to Lockheed Martin Corporation Supplemental Savings Plan and Lockheed Martin Corporation Nonqualified Capital Accumulation Program, dated December 18, 2019 (incorporated by reference to Exhibit 10.31 to Lockheed Martin Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019).](http://www.sec.gov/Archives/edgar/data/936468/000093646820000016/ex1031q42019.htm) | | | | | |

| [removed: 10.9] [added: 10.10] | | | | | | [Lockheed Martin Corporation Nonqualified Capital Accumulation Plan, as amended and restated generally effective as of December 18, 2015 (incorporated by reference to Exhibit 10.22 to Lockheed Martin Corporation’s Annual Report on Form 10-K for the year ended December 31, 2015).](http://www.sec.gov/Archives/edgar/data/936468/000119312516476010/d62685dex1022.htm) | | | | | |

| [removed: 10.10] [added: 10.11] | | | | | | [Lockheed Martin Corporation Deferred Management Incentive Compensation Plan, as amended and restated effective January 1, 2020 (incorporated by reference to Exhibit 10.8 to Lockheed Martin Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019).](http://www.sec.gov/Archives/edgar/data/936468/000093646820000016/ex108q42019.htm) | | | | | |

| [removed: 10.11] [added: 10.12] | | | | | | [Amendment No.1 to Lockheed Martin Corporation Deferred Management Incentive Compensation Plan, as amended and restated effective January 1, 2020 (incorporated by reference to Exhibit 10.12 to Lockheed Martin Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020).](https://www.sec.gov/Archives/edgar/data/936468/000093646821000013/ex1012q42020.htm) | | | | | |

| [removed: 10.12] [added: 10.13] | | | | | | [Amendment No. 2 to Lockheed Martin Corporation Deferred Management Incentive Compensation Plan, as amended and restated effective January 1, 2020 (incorporated by reference to Exhibit 10.8 to Lockheed Martin Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 27, [removed: 2022).](https://www.sec.gov/Archives/edgar/data/936468/000093646822000048/ex108q12022.htm)] [added: 2022).](http://www.sec.gov/Archives/edgar/data/936468/000093646822000048/ex108q12022.htm)] | | | | | |

| [removed: 10.13] [added: 10.14] | | | | | | [Amendment No. 3 to Lockheed Martin Corporation Deferred Management Incentive Compensation Plan, as amended and restated generally effective January 1, [removed: 2020.](https://www.sec.gov/Archives/edgar/data/936468/000093646823000009/ex1013q42022.htm)] [added: 2020 (incorporated by reference to Exhibit 10.13 to Lockheed Martin Corporation's Annual Report on Form 10-K for the year ended December 31, 2022).](http://www.sec.gov/Archives/edgar/data/936468/000093646823000009/ex1013q42022.htm)] | | | | | |

| [removed: 10.14] [added: 10.15] | | | | | | [Lockheed Martin Corporation Amended and Restated 2021 Management Incentive Compensation Plan (incorporated by reference to Exhibit [removed: 10.6] [added: 10.5] to Lockheed Martin Corporation’s Quarterly Report on Form 10-Q for the quarter ended March [removed: 27, 2022)](http://www.sec.gov/Archives/edgar/data/936468/000093646822000048/ex106q12022.htm).] [added: 26, 2023).](http://www.sec.gov/Archives/edgar/data/936468/000093646823000051/ex105q12023.htm)] | | | | | |

| [removed: 10.15] [added: 10.28] | | | | | | [Lockheed Martin Corporation [removed: 2011 Incentive Performance Award] [added: Consolidated Supplemental Retirement Benefit] Plan, as amended and restated [removed: January 24, 2019] [added: effective October 5, 2018] (incorporated by reference to Exhibit [removed: 10.13] [added: 10.26] to Lockheed Martin Corporation’s Annual Report on Form 10-K for the year ended December 31, [removed: 2018).](http://www.sec.gov/Archives/edgar/data/936468/000093646819000009/ex1013q42018.htm)] [added: 2018).](http://www.sec.gov/Archives/edgar/data/936468/000093646819000009/ex1026q42018.htm)] | | | | | |

| [removed: 10.16] [added: 10.17] | | | | | | [Form of [removed: 2020] [added: 2021] Annual Restricted Stock Unit Award Agreement under the Lockheed Martin Corporation [removed: 2011] [added: 2020] Incentive Performance Award Plan (incorporated by reference to Exhibit 10.1 to Lockheed Martin Corporation’s Quarterly Report on Form 10-Q for the quarter ended March [removed: 29, 2020).](http://www.sec.gov/Archives/edgar/data/936468/000093646820000056/ex101q12020.htm)] [added: 28, 2021).](http://www.sec.gov/Archives/edgar/data/936468/000093646821000044/ex101q12021.htm)] | | | | | |

| [removed: 10.17] [added: 10.21] | | | | | | [Form of Performance Stock Unit Award Agreement [removed: (2020] [added: (2022] - [removed: 2022] [added: 2024] Performance Period) under the Lockheed Martin Corporation [removed: 2011] [added: 2020] Incentive Performance Award Plan (incorporated by reference to Exhibit 10.2 to Lockheed Martin Corporation’s Quarterly Report on Form 10-Q for the quarter ended March [removed: 29, 2020).](http://www.sec.gov/Archives/edgar/data/936468/000093646820000056/ex102q12020.htm)] [added: 27, 2022).](http://www.sec.gov/Archives/edgar/data/936468/000093646822000048/ex102q12022.htm)] | | | | | |

| [removed: 10.18] [added: 10.22] | | | | | | [Form of Long Term Incentive Performance Award Agreement [removed: (2020] [added: (2022] - [removed: 2022] [added: 2024] Performance Period) under the Lockheed Martin Corporation [removed: 2011] [added: 2020] Incentive Performance Award Plan (incorporated by reference to Exhibit 10.3 to Lockheed Martin Corporation’s Quarterly Report on Form 10-Q for the quarter ended March [removed: 29, 2020).](http://www.sec.gov/Archives/edgar/data/936468/000093646820000056/ex103q12020.htm)] [added: 27, 2022).](http://www.sec.gov/Archives/edgar/data/936468/000093646822000048/ex103q12022.htm)] | | | | | |

| [removed: 10.19] [added: 10.16] | | | | | | [Lockheed Martin Corporation 2020 Incentive Performance Award Plan (incorporated by reference to Exhibit 10.1 to Lockheed Martin Corporation’s Current Report on Form 8-K filed with the SEC on April 23, 2020).](http://www.sec.gov/Archives/edgar/data/936468/000093646820000059/a2020ipap042320.htm) | | | | | |

| 10.20 | | | | | | [Form of [removed: 2020] [added: 2022] Annual Restricted Stock Unit Award Agreement under the Lockheed Martin Corporation 2020 Incentive Performance Award Plan (incorporated by reference to Exhibit [removed: 10.2] [added: 10.1] to Lockheed Martin Corporation’s Quarterly Report on Form 10-Q for the quarter ended [removed: June 28, 2020).](http://www.sec.gov/Archives/edgar/data/936468/000093646820000115/ex102q22020.htm)] [added: March 27, 2022).](http://www.sec.gov/Archives/edgar/data/936468/000093646822000048/ex101q12022.htm)] | | | | | |