What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-01-23 compared with 2023-01-26 · 3 added, 77 removed, 36 unchanged (69% of the section changed)

4 unchanged sentences

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

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, Raytheon Technologies Corporation, Textron Inc.

and Transdigm Group Inc.

2 unchanged sentences

Securities and Exchange Commission or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act), and should not be deemed to be incorporated by reference into any of our prior or subsequent filings under the Securities Act of 1933 or the Exchange Act.

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Purchases of Equity Securities

8 unchanged sentences

(in millions)

September 26, 2022 – October 30, 2022 (c)

September 25, 2023 – October 29, 2023

1,265,110 $ 446.24 1,264,627 $ 12,459

14 unchanged sentences

The program does not have an expiration date.

(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.

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

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

These purchases were made pursuant to a separate authorization by our Board of Directors and are not included within the share repurchase program described above.

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Selected Financial Data

(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.

See “Critical Accounting Policies - Postretirement Benefit Plans” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information.

(c) Net earnings include a noncash, non-operating pension settlement charge of $1.5 billion ($1.2 billion, or $4.33 per share, after-tax) in 2022, and $1.7 billion ($1.3 billion, or $4.72 per share, after-tax) in 2021, related to the purchase of group annuity contracts to transfer $4.3 billion and $4.9 billion of gross pension obligations and related plan assets to an insurance company.

(d) Net earnings in 2022 and 2021 include net losses of $114 million ($86 million, or 0.33 per share, after-tax) and net gains of $265 million ($199 million, or $0.72 per share, after-tax) due to changes in the fair value of certain mark-to-market investments.

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(e) We recognized net losses of $176 million ($132 million, or $0.50 per share, after-tax) in 2022 and net gains of $42 million ($32 million, or $0.11 per share, after-tax) in 2021, $98 million ($74 million, or $0.26 per share, after-tax) in 2020, and $20 million ($15 million, or $0.05 per share, after-tax) in 2019, and net losses of $11 million ($8 million, or $0.03 per share, after-tax) in 2018 due to changes in the fair value of investments and liabilities for deferred compensation plans.

(f) For the years ended December 31, 2020 and 2018, operating profit includes noncash asset impairment charges of $128 million ($96 million, or $0.34 per share, after-tax) and $110 million ($83 million, or $0.29 per share, after-tax) related to our equity method investee, Advanced Military Maintenance, Repair and Overhaul Center LLC (AMMROC).

See “Note 1 – Organization and Significant Accounting Policies” included in our Notes to Consolidated Financial Statements for more information.

(g) In 2019, we recorded previously deferred noncash gains of $51 million ($38 million, or $0.13 per share, after-tax) related to properties sold in 2015 as a result of completing our remaining obligations.

(h) Net earnings for the year ended December 31, 2019 include benefits of $127 million ($0.45 per share) for additional tax deductions for the prior year, primarily attributable to foreign derived intangible income treatment based on proposed tax regulations released on March 4, 2019 and a change in our tax accounting method.

Net earnings for the year ended December 31, 2018 include benefits of $146 million ($0.51 per share) for additional tax deductions for the prior year, primarily attributable to true-ups to the net one-time charges related to the Tax Cuts and Jobs Act enacted on December 22, 2017 and our change in tax accounting method.

(i) Effective January 1, 2019, we adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842).

Upon adoption, we recorded right-of-use operating lease assets of $1.0 billion and operating lease liabilities of $1.1 billion, approximately $855 million of which were classified as noncurrent.

There was no impact to our consolidated statements of earnings or cash flows as a result of adopting this standard.

Prior periods were not restated for the adoption of ASU 2016-02.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity