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Item 1. Financial Statements

2024-07-23 compared with 2024-04-23 · 239 added, 114 removed, 551 unchanged (39% of the section changed)

3 unchanged sentences

in millions, except per share data)

Quarters Ended

2024 March 26,

Quarters Ended Six Months Ended

2024 June 25,

2023 June 30,

2024 June 25,

Products $ 15,109 $ 13,758 $ 29,305 $ 26,284

4 unchanged sentences

Services ( 2,582 ) ( 2,642 ) ( 5,185 ) ( 4,926 )

Impairment and severance charges ( 87 ) — ( 87 ) —

Other unallocated, net 197 277 482 632

1 unchanged sentence

Gross profit 2,130 2,090 4,123 4,136

Other income (expense), net 36 ( 9 )

Other income, net 18 45 54 36

Operating profit 2,148 2,135 4,177 4,172

1 unchanged sentence

Non-service FAS pension income 15 111 31 221

Other non-operating income, net 45 49

Other non-operating income (expense), net 46 ( 17 ) 91 32

Earnings before income taxes 1,948 2,006 3,783 4,000

8 unchanged sentences

Consolidated Statements of Comprehensive Income

Quarters Ended

2024 March 26,

Quarters Ended Six Months Ended

2024 June 25,

2023 June 30,

2024 June 25,

Net earnings $ 1,641 $ 1,681 $ 3,186 $ 3,370

1 unchanged sentence

Postretirement benefit plans

Amortization of actuarial losses and prior service credits, net of tax of $ 5 million in 2024 and $ 10 million in 2023

Other, net, net of tax of $ 0 million in 2024 and $ 4 million in 2023

Amortization of actuarial losses and prior service credits, net of tax of $ 5 million and $ 10 million in 2024 and $ 10 million and $ 20 million in 2023

19 ( 37 ) 38 ( 74 )

Other comprehensive (loss), net of tax ( 8 ) ( 63 )

Other, net, net of tax of $ 8 million in 2024 and $ 4 million and $ 8 million in 2023

23 44 ( 4 ) 18

Other comprehensive income (loss), net of tax 42 7 34 ( 56 )

Comprehensive income $ 1,683 $ 1,688 $ 3,220 $ 3,314

39 unchanged sentences

Consolidated Statements of Cash Flows

Quarters Ended

2024 March 26,

Six Months Ended

2024 June 25,

Operating activities

4 unchanged sentences

Deferred income taxes ( 145 ) ( 234 )

Impairment and severance charges 87 —

Changes in assets and liabilities

14 unchanged sentences

Issuance of long-term debt, net of related costs 1,980 1,975

Repayments of long-term debt ( 168 ) —

Repurchases of common stock ( 1,850 ) ( 1,250 )

1 unchanged sentence

Other, net ( 116 ) ( 128 )

Net cash provided by (used for) financing activities 85 ( 1,412 )

Net cash used for financing activities ( 1,686 ) ( 945 )

Net change in cash and cash equivalents 1,081 1,126

4 unchanged sentences

Consolidated Statements of Equity

For the Quarters Ended June 30, 2024 and June 25, 2023

Stock Additional

2 unchanged sentences

Comprehensive

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

Balance at March 31, 2024 $ 239 $ — $ 15,222 $ ( 8,811 ) $ 6,650

Net earnings — — 1,641 — 1,641

Other comprehensive income, net of tax — — — 42 42

— — — ( 8 ) ( 8 )

Dividends declared — — ( 1,514 ) — ( 1,514 )

1 unchanged sentence

Stock-based awards, ESOP activity and other — 206 — — 206

Balance at June 30, 2024 $ 237 $ — $ 14,707 $ ( 8,769 ) $ 6,175

Balance at March 26, 2023 $ 254 $ — $ 17,478 $ ( 8,086 ) $ 9,646

Net earnings — — 1,681 — 1,681

Other comprehensive income, net of tax — — — 7 7

Dividends declared — — ( 1,523 ) — ( 1,523 )

Repurchases of common stock ( 3 ) ( 179 ) ( 568 ) — ( 750 )

Stock-based awards, ESOP activity and other — 179 — — 179

Balance at June 25, 2023 $ 251 $ — $ 17,068 $ ( 8,079 ) $ 9,240

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Lockheed Martin Corporation

Consolidated Statements of Equity

For the Six Months Ended June 30, 2024 and June 25, 2023

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

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

1 unchanged sentence

Other comprehensive income, net of tax

Dividends declared — — ( 2,277 ) — ( 2,277 )

Repurchases of common stock ( 4 ) ( 246 ) ( 1,600 ) — ( 1,850 )

Stock-based awards, ESOP activity and other

1 246 — — 247

Balance at June 30 2024 $ 237 $ — $ 14,707 $ ( 8,769 ) $ 6,175

Balance at December 31, 2022 $ 254 $ 92 $ 16,943 $ ( 8,023 ) $ 9,266

Net earnings — — 3,370 — 3,370

Other comprehensive income, net of tax

— — — ( 56 ) ( 56 )

Dividends declared — — ( 2,291 ) — ( 2,291 )

1 unchanged sentence

Stock-based awards, ESOP activity and other

Balance at March 26, 2023 $ 254 $ — $ 17,478 $ ( 8,086 ) $ 9,646

1 200 — — 201

Balance at June 25 2023 $ 251 $ — $ 17,068 $ ( 8,079 ) $ 9,240

The accompanying notes are an integral part of these unaudited consolidated financial statements.

19 unchanged sentences

We eliminate intercompany balances and transactions in consolidation.

We close our books and records on the last Sunday of the interim calendar quarter, which was on March 31 for the first quarter of 2024 and March 26 for the first quarter of 2023, to align our financial closing with our business processes.

We close our books and records on the last Sunday of the interim calendar quarter, which was on June 30 for the second quarter of 2024 and June 25 for the second quarter of 2023, to align our financial closing with our business processes.

The consolidated financial statements and tables of financial information included herein are labeled based on that convention.

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The weighted average number of shares outstanding used to compute earnings per common share were as follows (in millions):

Quarters Ended

2024 March 26,

Quarters Ended Six Months Ended

2024 June 25,

2023 June 30,

2024 June 25,

Weighted average common shares outstanding for basic computations 238.9 252.8 239.8 253.7

Weighted average dilutive effect of equity awards

0.7 0.8 0.8 0.9

Weighted average common shares outstanding for diluted computations

239.6 253.6 240.6 254.6

We compute basic and diluted earnings per common share by dividing net earnings by the respective weighted average number of common shares outstanding for the periods presented.

Our calculation of diluted earnings per common share also includes the dilutive effects for the assumed vesting of outstanding restricted stock units (RSUs) and performance stock units (PSUs) based on the treasury stock method.

There were no significant anti-dilutive equity awards during the quarters ended March 31, 2024 and March 26, 2023.

There were no significant anti-dilutive equity awards during the quarters and six months ended June 30, 2024 and June 25, 2023.

Basic and diluted weighted average common shares outstanding decreased in 2024 compared to 2023 due to share repurchases.

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Summary operating results for each of our business segments were as follows (in millions):

Quarters Ended

2024 March 26,

Quarters Ended Six Months Ended

2024 June 25,

2023 June 30,

2024 June 25,

Aeronautics $ 7,277 $ 6,875 $ 14,122 $ 13,144

11 unchanged sentences

FAS/CAS pension operating adjustment 406 416 812 831

Impairment and severance charges (a)

( 87 ) — ( 87 ) —

Intangible asset amortization expense ( 61 ) ( 62 ) ( 122 ) ( 124 )

6 unchanged sentences

Rotary and Mission Systems 574 505 1,160 994

Space 99 92 206 178

Total intersegment sales $ 944 $ 827 $ 1,909 $ 1,601

(a) Impairment and severance charges of $ 87 million ($ 69 million, or $ 0.29 per share, after-tax) include trademark and fixed asset impairments as well as severance c osts.

See “Note 10 - Other” below for additional information.

Unallocated Items

1 unchanged sentence

Government under the applicable U.S.

Government cost accounting standards (CAS) or federal acquisition regulations (FAR), and other items not considered part of management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, stock-based compensation expense, changes in the fair value of assets and liabilities for deferred compensation plans, retiree benefits, significant severance charges, significant asset impairments, gains or

Government cost accounting standards (CAS) or federal acquisition regulations (FAR), and other items not considered part of

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

losses from divestitures, intangible asset amortization expense, and other miscellaneous corporate activities.

management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, stock-based compensation expense, changes in the fair value of assets and liabilities for deferred compensation plans, retiree benefits, significant severance charges, significant asset impairments, gains or losses from divestitures, intangible asset amortization expense, and other miscellaneous corporate activities.

Excluded items are included in the reconciling item “Unallocated items” between operating profit from our business segments and our consolidated operating profit.

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The operating portion of the total FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension income (expense) and total CAS pension cost.

The non-service FAS pension income (expense) components are included in non-service FAS pension income (expense) in our consolidated statements of earnings.

The non-service FAS pension income components are included in non-service FAS pension income in our consolidated statements of earnings.

As a result, to the extent that CAS pension cost exceeds the service cost component of FAS pension income (expense) we have a favorable FAS/CAS pension operating adjustment.

3 unchanged sentences

Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):

Quarters Ended March 31, 2024

Quarter Ended June 30, 2024

Aeronautics MFC RMS Space Total

19 unchanged sentences

Total net sales $ 7,277 $ 3,102 $ 4,548 $ 3,195 $ 18,122

Quarter Ended March 26, 2023

Six Months Ended June 30, 2024

Aeronautics MFC RMS Space Total

19 unchanged sentences

Total net sales $ 14,122 $ 6,095 $ 8,636 $ 6,464 $ 35,317

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

Quarter Ended June 25, 2023

Aeronautics MFC RMS Space Total

Products $ 5,645 $ 2,412 $ 3,041 $ 2,660 $ 13,758

Services 1,230 343 856 506 2,935

Total net sales $ 6,875 $ 2,755 $ 3,897 $ 3,166 $ 16,693

Net sales by contract type

Fixed-price $ 4,656 $ 1,863 $ 2,451 $ 799 $ 9,769

Cost-reimbursable 2,219 892 1,446 2,367 6,924

Total net sales $ 6,875 $ 2,755 $ 3,897 $ 3,166 $ 16,693

Net sales by customer

Government $ 4,621 $ 1,911 $ 2,754 $ 3,121 $ 12,407

International (a)

2,169 841 1,075 41 4,126

commercial and other 85 3 68 4 160

Total net sales $ 6,875 $ 2,755 $ 3,897 $ 3,166 $ 16,693

Net sales by geographic region

United States $ 4,706 $ 1,914 $ 2,822 $ 3,125 $ 12,567

Europe 1,146 174 212 24 1,556

Asia Pacific 690 215 554 16 1,475

Middle East 226 411 155 1 793

Other 107 41 154 — 302

Total net sales $ 6,875 $ 2,755 $ 3,897 $ 3,166 $ 16,693

Six Months Ended June 25, 2023

Aeronautics MFC RMS Space Total

Products $ 10,801 $ 4,501 $ 5,833 $ 5,149 $ 26,284

Services 2,343 642 1,574 976 5,535

Total net sales $ 13,144 $ 5,143 $ 7,407 $ 6,125 $ 31,819

Net sales by contract type

Fixed-price $ 8,968 $ 3,481 $ 4,659 $ 1,563 $ 18,671

Cost-reimbursable 4,176 1,662 2,748 4,562 13,148

Total net sales $ 13,144 $ 5,143 $ 7,407 $ 6,125 $ 31,819

Net sales by customer

Government $ 8,738 $ 3,492 $ 5,177 $ 6,029 $ 23,436

International (a)

4,283 1,646 2,095 86 8,110

commercial and other 123 5 135 10 273

Total net sales $ 13,144 $ 5,143 $ 7,407 $ 6,125 $ 31,819

Net sales by geographic region

United States $ 8,861 $ 3,497 $ 5,312 $ 6,039 $ 23,709

Europe 2,276 385 437 47 3,145

Asia Pacific 1,365 317 992 38 2,712

Middle East 451 866 341 1 1,659

Other 191 78 325 — 594

Total net sales $ 13,144 $ 5,143 $ 7,407 $ 6,125 $ 31,819

(a) International sales include foreign military sales (FMS) contracted through the U.S.

Government and direct commercial sales to international governments and other international customers.

Our Aeronautics business segment includes our largest program, the F-35 Lightning II, an international multi-role, multi-variant, stealth fighter aircraft.

Net sales for the F-35 program represented approximately 26 % and 25 % of our total

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

Our Aeronautics business segment includes our largest program, the F-35 Lightning II, an international multi-role, multi-variant, stealth fighter aircraft.

Net sales for the F-35 program represented approximately 25 % of our total consolidated net sales for the quarter ended March 31, 2024 and 26 % of our total consolidated net sales for the quarter ended March 26, 2023.

consolidated net sales for the quarter and six months ended June 30, 2024 and 26 % of our total consolidated net sales for both the quarter and six months ended June 25, 2023.

Total assets for each of our business segments were as follows (in millions):

15 unchanged sentences

Contract liabilities 9,181 9,190

Contract assets increased $ 867 million during the quarter ended March 31, 2024, due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the quarter ended March 31, 2024 for which we have not yet billed our customers.

There were no significant credit or impairment losses related to our contract assets during the quarters ended March 31, 2024 and March 26, 2023.

Contract liabilities decreased $ 445 million during the quarter ended March 31, 2024, primarily due to revenue recognized in excess of payments received on these performance obligations.

During the quarter ended March 31, 2024, we recognized $ 2.4 billion of our contract liabilities at December 31, 2023 as revenue.

During the quarter ended March 26, 2023, we recognized $ 2.2 billion of our contract liabilities at December 31, 2022 as revenue.

Contract assets increased $ 724 million during the six months ended June 30, 2024, due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the six months ended June 30, 2024 for which we have not yet billed our customers.

There were no significant credit or impairment losses related to our contract assets during the quarters and six months ended June 30, 2024 and June 25, 2023.

Contract liabilities decreased $ 9 million during the six months ended June 30, 2024, primarily due to revenue recognized in excess of payments received on these performance obligations.

During the quarter and six months ended June 30, 2024, we recognized $ 1.7 billion and $ 4.1 billion of our contract liabilities at December 31, 2023 as revenue.

During the quarter and six months ended June 25, 2023, we recognized $ 1.1 billion and $ 3.3 billion of our contract liabilities at December 31, 2022 as revenue.

Lockheed Martin Corporation

11 unchanged sentences

All other pre-contract costs, including start-up costs, are expensed as incurred.

As of March 31, 2024 and December 31, 2023, $ 1.1 billion and $ 989 million of pre-contract costs (primarily the F-35 program and classified contracts at our Aeronautics business segment) were included in inventories.

As of June 30, 2024 and December 31, 2023, $ 1.2 billion and $ 989 million of pre-contract costs (primarily the F-35 program and classified contracts at our Aeronautics business segment) were included in inventories.

Lockheed Martin Corporation

2 unchanged sentences

The pretax FAS income related to our qualified defined benefit pension plans and retiree medical and life insurance plans consisted of the following (in millions):

Quarters Ended

2024 March 26,

Quarters Ended Six Months Ended

2023 June 30,

Qualified defined benefit pension plans

19 unchanged sentences

and the non-service components of our FAS income for our retiree medical and life insurance plans as part of the other non-operating income, net account on our consolidated statements of earnings.

The amortization of net actuarial losses or gains and prior service credits or costs in the table above, along with similar costs related to our other postretirement benefit plans ($ 4 million for the quarter ended March 31, 2024 and $ 3 million for the quarter ended March 26, 2023) were reclassified from accumulated other comprehensive loss (AOCL) and recorded as a component of FAS income for the periods presented.

These costs totaled $ 24 million, ($ 19 million, net of tax) during the quarter ended March 31, 2024, and $( 47 ) million ($( 37 ) million, net of tax) during the quarter ended March 26, 2023.

The amortization of net actuarial losses or gains and prior service credits or costs in the table above, along with similar costs related to our other postretirement benefit plans ($ 4 million and $ 8 million for the quarter and six months ended June 30, 2024 and $ 4 million and $ 7 million for the quarter and six months ended June 25, 2023) were reclassified from accumulated other comprehensive loss (AOCL) and recorded as a component of FAS income for the periods presented.

These costs totaled $ 24 million ($ 19 million, net of tax) and $ 48 million, ($ 38 million, net of tax) during the quarter and six months ended June 30, 2024, and $( 47 ) million ($( 37 ) million, net of tax) and $( 94 ) million ($( 74 ) million, net of tax) during the quarter and six months ended June 25, 2023.

Funding Requirements

The required funding of our qualified defined benefit pension plans is determined in accordance with the Employee Retirement Income Security Act of 1974 (ERISA), as amended, along with consideration of CAS and Internal Revenue Code rules.

We made no contributions to our qualified defined benefit pension plans during the quarters ended March 31, 2024 and March 26, 2023.

We made no contributions to our qualified defined benefit pension plans during the quarters and six months ended June 30, 2024 and June 25, 2023.

Lockheed Martin Corporation

12 unchanged sentences

Sikorsky Aircraft Corp., et al.

As a result of our acquisition of Sikorsky Aircraft Corporation (Sikorsky), we assumed the defense of and any potential liability for two civil False Claims Act lawsuits pending in the U.S.

As a result of our acquisition of Sikorsky Aircraft Corporation (Sikorsky) in 2015, we assumed the defense of and any potential liability for two civil False Claims Act lawsuits pending in the U.S.

District Court for the Eastern District of Wisconsin.

5 unchanged sentences

In November 2017, the Court consolidated the cases into a single action for discovery and trial.

Government alleges that Sikorsky and two of its wholly-owned subsidiaries, Derco and SSSI, violated the civil False Claims Act and the Truth in Negotiations Act in connection with a contract the U.S.

Government alleged that Sikorsky and two of its wholly-owned subsidiaries, Derco and SSSI, violated the civil False Claims Act and the Truth in Negotiations Act in connection with a contract the U.S.

Navy awarded to SSSI in June 2006 to support the Navy’s T-34 and T-44 fixed-wing turboprop training aircraft.

SSSI subcontracted with Derco, primarily to procure and manage spare parts for the training aircraft.

Government contends that SSSI overbilled the Navy on the contract as the result of Derco’s use of prohibited cost-plus-percentage-of-cost (CPPC) pricing to add profit and overhead costs as a percentage of the price of the spare parts that Derco procured and then sold to SSSI.

Government also alleges that Derco’s claims to SSSI, SSSI’s claims to the Navy, and SSSI’s yearly Certificates of Final Indirect Costs from 2006 through 2012 were false and that SSSI submitted inaccurate cost or pricing data in violation of the Truth in Negotiations Act for a sole-sourced, follow-on “bridge” contract.

Government’s complaints assert common law claims for breach of contract and unjust enrichment.

Government contended that SSSI overbilled the Navy on the contract as the result of Derco’s use of prohibited cost-plus-percentage-of-cost (CPPC) pricing to add profit and overhead costs as a percentage of the price of the spare parts that Derco procured and then sold to SSSI.

Government also alleged that Derco’s claims to SSSI, SSSI’s claims to the Navy, and SSSI’s yearly Certificates of Final Indirect Costs from 2006 through 2012 were false and that SSSI submitted inaccurate cost or pricing data in violation of the Truth in Negotiations Act for a sole-sourced, follow-on “bridge” contract.

Government’s complaints asserted common law claims for breach of contract and unjust enrichment.

On November 29, 2021, the District Court granted the U.S.

2 unchanged sentences

Trial on the U.S.

Government’s remaining claims is scheduled for May 6, 2024.

We believe that we have legal and factual defenses to the U.S.

Government’s remaining claims.

Government seeks damages of approximately $ 52 million, subject to trebling, plus statutory penalties.

Although we continue to evaluate our liability and exposure, we do not currently believe that it is probable that we will incur a material loss.

If, contrary to our expectations, the U.S.

Government prevails on the remaining issues in this matter and proves damages at or near $ 52 million and is successful in having such damages trebled, the outcome could have an adverse effect on our results of operations in the period in which a liability is recognized and on our cash flows for the period in which any damages are paid.

Government’s remaining claims was scheduled for May 6, 2024 before being stayed pending negotiation of a settlement agreement.

On June 21, 2024, SSSI and Derco settled with the U.S.

Government and relator to avoid the delay, uncertainty, inconvenience and expense of further protracted litigation.

Under the terms of the settlement, we paid $ 70 million to the U.S.

Government with no admission of liability or finding of wrongdoing, resulting in an immaterial charge to earnings in the quarter ending June 30, 2024 for the portion of the settlement payment in excess of the previously estimated liability.

The alleged conduct at issue in the lawsuit occurred between 2006 and 2012, prior to our acquisition of Sikorsky.

The case was dismissed on July 3, 2024, as a result of the settlement agreement.

Lockheed Martin Corporation

25 unchanged sentences

Government contracts, in our cost of sales at the time the liability is established or adjusted.

At March 31, 2024 and December 31, 2023, the aggregate amount of liabilities recorded relative to environmental matters was $ 677 million and $ 680 million, most of which are recorded in other noncurrent liabilities on our consolidated balance sheets.

We have recorded assets for the portion of environmental costs that are probable of future recovery totaling $ 611 million and $ 613 million at March 31, 2024 and December 31, 2023, most of which are recorded in other noncurrent assets on our consolidated balance sheets.

At June 30, 2024 and December 31, 2023, the aggregate amount of liabilities recorded relative to environmental matters was $ 687 million and $ 680 million, most of which are recorded in other noncurrent liabilities on our consolidated balance sheets.

We have recorded assets for the portion of environmental costs that are probable of future recovery totaling $ 620 million and $ 613 million at June 30, 2024 and December 31, 2023, most of which are recorded in other noncurrent assets on our consolidated balance sheets.

Environmental remediation activities usually span many years, which makes estimating liabilities a matter of judgment because of uncertainties with respect to assessing the extent of the contamination as well as such factors as changing remediation technologies and changing regulatory environmental standards.

7 unchanged sentences

We also pursue claims for recovery of costs incurred or for contribution to site remediation costs against other PRPs, including the U.S.

Government, and are conducting remediation activities under various consent decrees, orders, and agreements relating to soil, groundwater, sediment, or surface water contamination at certain sites of former or current

Government, and are conducting remediation activities under various consent decrees, orders, and

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

agreements relating to soil, groundwater, sediment, or surface water contamination at certain sites of former or current operations.

Under agreements related to certain sites in California, New York, United States Virgin Islands and Washington, the U.S.

11 unchanged sentences

Letters of credit and surety bonds generally are available for draw down in the event we do not perform.

We had total outstanding letters of credit and surety bonds aggregating $ 2.7 billion and $ 2.9 billion at March 31, 2024 and December 31, 2023.

We had total outstanding letters of credit and surety bonds aggregating $ 2.8 billion and $ 2.9 billion at June 30, 2024 and December 31, 2023.

Additionally, we may guarantee the contractual performance of third parties such as joint venture partners.

At March 31, 2024 and December 31, 2023, third-party guarantees totaled $ 364 million and $ 1.0 billion, of which approximately 29 % and 75 % related to guarantees of contractual performance of joint ventures to which we currently are or previously were a party.

At June 30, 2024 and December 31, 2023, third-party guarantees totaled $ 347 million and $ 1.0 billion, of which approximately 26 % and 75 % related to guarantees of contractual performance of joint ventures to which we currently are or previously were a party.

These amounts represent our estimate of the maximum amounts we would expect to incur upon the contractual non-performance of the joint venture, joint venture partners or divested businesses.

2 unchanged sentences

In determining our exposures, we evaluate the reputation, performance on contractual obligations, technical capabilities and credit quality of our current and former joint venture partners and the transferee under novation agreements all of which include a guarantee as required by the FAR.

At March 31, 2024 and December 31, 2023, there were no material amounts recorded in our financial statements related to third-party guarantees or novation agreements.

At June 30, 2024 and December 31, 2023, there were no material amounts recorded in our financial statements related to third-party guarantees or novation agreements.

Other Contingencies

On April 22, 2024, the Armed Services Board of Contract Appeals (ASBCA) sustained our appeal associated with a contract to modernize and install new engines in C-5 Galaxy aircraft.

The ASBCA ruled that we are entitled to $ 132 million for impacts due to excessive “over and above” work performed under the contract plus interest on the amount since the date of our claim in October 2018.

We have not recognized the impacts resulting from the ASBCA decision through June 30, 2024, given the matter may be appealed by the Government until August 21, 2024, and the uncertain grounds for any potential appeal.

Independent of this matter and as a U.S.

Government contractor, we are subject to various audits and investigations by the U.S.

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Suspension or debarment could have a material adverse effect on us because of our dependence on contracts with the U.S.

Government investigations often take years to complete and many result in no adverse action against us.

Government investigations often take years to complete and

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

many result in no adverse action against us.

We also provide products and services to customers outside of the U.S., which are subject to U.S.

2 unchanged sentences

Government regulations also may be audited or investigated.

In the normal course of business, we provide warranties to our customers associated with certain product sales.

Additionally, in the normal course of business, we provide warranties to our customers associated with certain product sales.

We record estimated warranty costs in the period in which the related products are delivered.

The warranty liability is generally based on the number of months of warranty coverage remaining for the products delivered and the average historical

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

monthly warranty payments.

The warranty liability is generally based on the number of months of warranty coverage remaining for the products delivered and the average historical monthly warranty payments.

Warranty obligations incurred in connection with long-term production contracts are accounted for within the contract estimates at completion.

1 unchanged sentence

Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following (in millions):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3

9 unchanged sentences

The fair values of derivative instruments, which consist of foreign currency forward contracts, including embedded derivatives, and interest rate swap contracts, are primarily determined based on the present value of future cash flows using model-derived valuations that use observable inputs such as interest rates, credit spreads and foreign currency exchange rates.

We also make investments in early-stage companies that we believe are advancing or developing new technologies applicable to our business.

Investments that have quoted market prices in active markets (Level 1) are recorded at fair value and reflected in other securities while certain investments are categorized as Level 3 when valuations using observable inputs are unavailable.

See “Note 10 - Other - Investments” for more information.

We use derivative instruments principally to reduce our exposure to market risks from changes in foreign currency exchange rates and interest rates.

We do not enter into or hold derivative instruments for speculative trading purposes.

We transact business globally and are subject to risks associated with changing foreign currency exchange rates.

We enter into foreign currency hedges such as forward and option contracts that change in value as foreign currency exchange rates change.

Our most significant foreign currency exposures relate to the British pound sterling, the euro, the Canadian dollar, the Australian dollar, the Norwegian kroner and the Polish zloty.

We do not enter into or hold derivative instruments for speculative trading purposes.

These contracts hedge forecasted foreign currency transactions in order to minimize fluctuations in our earnings and cash flows associated with changes in foreign currency exchange rates.

We designate foreign currency hedges as cash flow hedges.

We enter into foreign currency hedges such as forward and option contracts that change in value as foreign currency exchange rates change.

Our most significant foreign currency exposures relate to the British pound sterling, the euro, the Canadian dollar, the Australian dollar, the Norwegian kroner and the Polish zloty.

We also are exposed to the impact of interest rate changes primarily through our borrowing activities.

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Notes to Consolidated Financial Statements (unaudited) (continued)

The aggregate notional amount of our outstanding interest rate swaps was $ 1.3 billion at both March 31, 2024 and December 31, 2023.

The aggregate notional amount of our outstanding foreign currency hedges was $ 6.2 billion and $ 6.5 billion at March 31, 2024 and December 31, 2023.

The fair values of our outstanding interest rate swaps and foreign currency hedges at March 31, 2024 and December 31, 2023 were not significant.

Derivative instruments did not have a material impact on net earnings and comprehensive income during the quarters ended March 31, 2024 and March 26, 2023.

The aggregate notional amount of our outstanding interest rate swaps was $ 1.3 billion at both June 30, 2024 and December 31, 2023.

The aggregate notional amount of our outstanding foreign currency hedges was $ 6.1 billion and $ 6.5 billion at June 30, 2024 and December 31, 2023.

The fair values of our outstanding interest rate swaps and foreign currency hedges at June 30, 2024 and December 31, 2023 were not significant.

Derivative instruments did not have a material impact on net earnings and comprehensive income during the quarters and six months ended June 30, 2024 and June 25, 2023.

The impact of derivative instruments on our consolidated statements of cash flows is included in net cash provided by operating activities.

Substantially all of our derivatives are designated for hedge accounting.

We also make investments in early-stage companies that we believe are advancing or developing new technologies applicable to our business.

See “Note 10 - Other - Investments” for more information.

In addition to the financial instruments listed in the table above, we hold other financial instruments, including cash and cash equivalents, receivables, accounts payable and debt.

The carrying amounts for cash and cash equivalents, receivables and accounts payable approximated their fair values.

The estimated fair value of our outstanding debt was $ 19.9 billion and $ 18.5 billion at March 31, 2024 and December 31, 2023.

The outstanding principal amount of debt, including short-term and long-term debt, was $ 20.7 billion and $ 18.7 billion at March 31, 2024 and December 31, 2023, excluding $ 1.3 billion of unamortized discounts and issuance costs at both March 31, 2024 and December 31, 2023.

The estimated fair value of our outstanding debt was $ 19.3 billion and $ 18.5 billion at June 30, 2024 and December 31, 2023.

The outstanding principal amount of debt, including short-term and long-term debt, was $ 20.6 billion and $ 18.7 billion at June 30, 2024 and December 31, 2023, excluding $ 1.3 billion of unamortized discounts and issuance costs at both June 30, 2024 and December 31, 2023.

The estimated fair values of our outstanding debt were determined based on the present value of future cash flows using model-derived valuations that use observable inputs such as interest rates and credit spreads (Level 2).

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Repurchases of Common Stock

During the quarter ended March 31, 2024, we repurchased 2.3 million shares of our common stock for $ 1.0 billion in open market purchases.

The total remaining authorization for future common stock repurchases under our share repurchase program was $ 9.0 billion as of March 31, 2024.

During the six months ended June 30, 2024, we repurchased 4.2 million shares of our common stock for $ 1.9 billion in open market purchases.

The total remaining authorization for future common stock repurchases under our share repurchase program was $ 8.2 billion as of June 30, 2024.

As we repurchase our common shares, we reduce common stock for the $ 1 of par value of the shares repurchased, with the excess purchase price over par value recorded as a reduction of additional paid-in capital.

If additional paid-in capital is reduced to zero, we record the remainder of the excess purchase price over par value as a reduction of retained earnings.

We declared cash dividends totaling $ 763 million ($ 3.15 per share) during the quarter ended March 31, 2024.

We paid cash dividends of $ 1.5 billion ($ 6.30 per share) during the six months ended June 30, 2024.

Additionally, we declared a third quarter 2024 dividend totaling approximately $ 751 million ($ 3.15 per share), which will be paid in September 2024 .

The total amount of dividends declared may differ from the total amount of dividends paid during a period due to the timing of dividend-equivalents paid on RSUs and PSUs.

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Total other comprehensive income (loss) 38 ( 4 ) 34

Balance at March 31, 2024 $ ( 8,685 ) $ ( 126 ) $ ( 8,811 )

Balance at June 30, 2024 $ ( 8,666 ) $ ( 103 ) $ ( 8,769 )

Balance at December 31, 2022 $ ( 7,866 ) $ ( 157 ) $ ( 8,023 )

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( 132 ) — ( 132 )

Other — 13 13

Total reclassified from AOCL ( 74 ) 13 ( 61 )

Total other comprehensive income (loss) ( 74 ) 18 ( 56 )

Balance at March 26, 2023 $ ( 7,903 ) $ ( 183 ) $ ( 8,086 )

Balance at June 25, 2023 $ ( 7,940 ) $ ( 139 ) $ ( 8,079 )

(a) Reclassifications from AOCL related to postretirement benefit plans were recorded as a component of FAS income for each period presented.

These amounts include $ 19 million and $( 37 ) million, net of tax, for the quarters ended June 30, 2024 and June 25, 2023, which are comprised of the amortization of net actuarial losses of $ 47 million and $ 29 million for the quarters ended June 30, 2024 and June 25, 2023, and the amortization of net prior service credits of $ 28 million and $ 66 million for the quarters ended June 30, 2024 and June 25, 2023.

See “Note 6 - Postretirement Benefit Plans”.

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All of the estimates are subject to change during the performance of the contract and may affect the profit booking rate.

When estimates of total costs to be incurred on a contract exceed total estimates of the transaction price, a provision for the entire loss is determined at the contract level and is recorded in the period in which the loss is evident, which we refer to as a reach-forward loss.

When estimates of total costs to be incurred on a contract exceed total estimates of the transaction price, a

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

provision for the entire loss is determined at the contract level and is recorded in the period in which the loss is evident, which we refer to as a reach-forward loss.

Comparability of our segment sales, operating profit and operating margin may be impacted favorably or unfavorably by changes in profit booking rates on our contracts.

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and losses on sales of certain assets.

Our consolidated net profit booking rate adjustments increased sales by $ 272 million during the quarter ended March 31, 2024 and $ 433 million during the quarter ended March 26, 2023.

These adjustments increased segment operating profit by approximately $ 195 million ($ 154 million, or $ 0.64 per share, after tax) during the quarter ended March 31, 2024, and $ 415 million ($ 328 million, or $ 1.28 per share, after tax) during the quarter ended March 26, 2023.

The impact to 2024 segment operating profit includes a reach-forward loss of $ 100 million recognized on a classified program at our MFC business segment described below.

Our consolidated net profit booking rate adjustments increased sales by $ 383 million and $ 655 million during the quarter and six months ended June 30, 2024 and $ 359 million and $ 792 million during the quarter and six months ended June 25, 2023.

These adjustments increased segment operating profit by approximately $ 420 million ($ 332 million, or $ 1.39 per share, after tax) and $ 615 million ($ 486 million, or $ 2.02 per share, after tax) during the quarter and six months ended June 30, 2024, and $ 365 million ($ 288 million, or $ 1.14 per share, after tax) and $ 780 million ($ 616 million, or $ 2.42 per share, after tax) during the quarter and six months ended June 25, 2023.

During the three months ended March 31, 2024, we recognized a reach-forward loss of $ 100 million on a classified program at our MFC business segment described below.

During the three months ended June 25, 2023, we recognized a favorable profit adjustment of $ 65 million on an international surveillance and control program due to the positive resolution of a contractual matter, and a reach-forward loss of $ 100 million on the Canadian Maritime Helicopter Program (CMHP) as a result of increased costs and lower than planned revenues described below.

We have various development programs for new and upgraded products, services, and related technologies which have complex design and technical challenges.

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In such cases, the associated financial risks are primarily in reduced fees, lower profit rates, or program cancellation if cost, schedule, or technical performance issues arise.

However, some of our existing development programs are contracted on a fixed-price basis or include cost-type contracting for the development phase with fixed-price production options and our customers are increasingly implementing procurement policies such as these that shift risk to contractors.

However, some of our existing development programs are contracted on a fixed-price basis or include cost-type contracting for the development phase with fixed-price production options and our customers still continue to implement procurement strategies such as these that shift risk to contractors.

Competitively bid programs with fixed-price development work or fixed-price production options increase the risk of a reach-forward loss upon contract award and during the period of contract performance.

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Any such losses are recorded in the period in which the loss is evident.

We have experienced performance issues on a classified fixed-price incentive fee contract that involves highly complex design and systems integration at our Aeronautics business segment and have periodically recognized reach-forward losses.

As of March 31, 2024, we recognized additional losses of $ 20 million related to technical challenges that have resulted in schedule delays and higher than anticipated costs bringing cumulative losses to approximately $ 290 million.

We will continue to monitor the technical requirements and our performance, the remaining work and any future changes in scope or schedule, and estimated costs to complete the program and may have to record additional losses in future periods if we experience further performance issues, increases in scope, or cost growth, which could be material to our financial results.

In addition, we and our industry team will continue to incur advanced procurement costs (also referred to as pre-contract costs) in order to enhance our ability to achieve the schedule and certain milestones.

We will monitor the recoverability of pre-contract costs, which could be impacted by the customer’s decision regarding future phases of the program.

We are responsible for a program to design, develop and construct a ground-based radar at our RMS business segment.

The program previously experienced performance issues for which we have periodically recognized reach-forward losses.

During the first quarter of 2024, we delivered and the customer accepted the radar, which retired the

We have experienced performance issues on a classified fixed-price incentive fee contract at our Aeronautics business segment.

Phases within the contract involve highly complex design and systems integration and we have periodically recognized reach-forward losses.

During the second quarter of 2024, we recognized losses of $ 45 million related to higher than anticipated costs to maintain program objectives, increasing the cumulative losses to approximately $ 335 million.

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

technical risk on the production scope at less than anticipated cost.

As a result, we reduced the cumulative losses on the program by $ 20 million to approximately $ 260 million as of March 31, 2024 and determined that additional losses will not be incurred as the production scope of work is winding down.

material to our financial results.

Additionally, we will continue to assess the likelihood of losses for future phases.

We will be required to recognize additional losses for such phases if they are probable and such loss becomes evident.

Lastly, we and our industry team will continue to incur advanced procurement costs (also referred to as pre-contract costs) in order to enhance our ability to achieve the schedule and certain milestones.

We will monitor the recoverability of pre-contract costs, which could be impacted by the customer’s decision regarding future phases of the program.

We have contracted with the Canadian Government for the Canadian Maritime Helicopter Program (CMHP) at our RMS business segment that provides for design, development, and production of CH-148 aircraft (the Original Equipment contract), which is a military variant of the S-92 helicopter, and for logistical support to the fleet (the In Service Support contract) over an extended time period.

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Future sales and recovery of costs under the program are highly dependent upon achieving a certain number of flight hours, which are not entirely in our control and dependent on aircraft availability and performance, the availability of Canadian government resources, and potential restructured contract terms and conditions to better align with the current needs of the Canadian government and allow for cost recovery.

As of March 31, 2024, cumulative losses remained at approximately $ 100 million.

Future performance issues, lower than forecast flight hours, or changes in our estimates due to the outcome of any restructuring discussions may further affect our ability to recover our costs, including recovery of the contract assets recognized on the balance sheet and our assessment of the reach-forward loss, which could be material to our operating results.

As of June 30, 2024, cumulative losses remained at approximately $ 100 million.

Future performance issues, lower than forecast flight hours, or changes in our estimates due to the outcome of restructuring discussions may further affect our ability to recover our costs, including recovery of the contract assets recognized on the balance sheet and our assessment of the reach-forward loss, which could be material to our operating results.

We also have a number of contracts with Türkish industry for the Türkish Utility Helicopter Program (TUHP), which anticipates co-production with Türkish industry for production of T70 helicopters for use in Türkiye, as well as the related provision of Türkish goods and services under buy-back or offset obligations, to include the future sales of helicopters built in Türkiye for sale globally.

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Government imposed certain sanctions on Türkish entities and persons that have affected our ability to perform under the TUHP contracts and we have provided force majeure notices under the affected contracts.

As of March 31, 2024, cumulative losses related to development work for the program remained insignificant and the program remains in a contract liability position on the balance sheet.

As of June 30, 2024, cumulative losses related to development work for the program remained insignificant and the program remains in a contract liability position on the balance sheet.

The TUHP contracts may be negotiated to be restructured or terminated, either in whole or in part and as a result, we could be at risk of recording significant reach-forward losses in future periods.

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The options for additional phases may be exercised over the next several years and if performed we expect they would each be at a loss.

During the first quarter of 2024, we updated our assessment of the likelihood that the options may be exercised and concluded it was probable that an option would be exercised based on progress made on the program and discussions with the customer.

During the first quarter of 2024, we concluded it was probable that an option would be exercised based on progress made on the program and discussions with the customer.

Accordingly, in the first quarter of 2024 we recognized a reach forward loss of approximately $ 100 million, bringing the cumulative losses recognized on the program to approximately $ 150 million, including charges for precontract costs recognized in prior periods.

During the second quarter of 2024, there were no significant changes to the previously recognized losses.

We will continue to assess the likelihood that additional options will be exercised, utilizing factors such as our performance, future requirements of the program, discussions with the customer and suppliers, customer funding, experience with other customer programs, among other factors.

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The potential total loss across the additional options is up to approximately $ 1.3 billion.

The ultimate amount of additional loss recognized, if any, will depend on how many of the additional options are exercised or become probable of being exercised.

The ultimate amount of additional loss recognized, if any, will depend on how many of the additional options are exercised or become probable of being exercised and performance on those options.

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

Backlog (i.e., unfulfilled or remaining performance obligations) represents the sales we expect to recognize for our products and services for which control has not yet transferred to the customer.

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The estimated consideration is determined at the outset of the contract and is continuously reviewed throughout the contract period.

In determining the estimated consideration, we consider the risks related to the technical, schedule and cost

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

impacts to complete the contract and an estimate of any variable consideration.

In determining the estimated consideration, we consider the risks related to the technical, schedule and cost impacts to complete the contract and an estimate of any variable consideration.

Periodically, we review these risks and may increase or decrease backlog accordingly.

As the risks on such contracts are successfully retired, the estimated consideration from customers may be reduced, resulting in a reduction of backlog without a corresponding recognition of sales.

As of March 31, 2024, our ending backlog was $ 159.4 billion.

As of June 30, 2024, our ending backlog was $ 158.3 billion.

We expect to recognize approximately 36 % of our backlog over the next 12 months and approximately 60 % over the next 24 months as revenue with the remainder recognized thereafter.

Our effective income tax rates were 15.8 % and 15.3 % for the quarters ended March 31, 2024 and March 26, 2023.

The rates for all periods benefited from research and development tax credits, tax deductions for foreign derived intangible income, dividends paid to our defined contribution plans with an employee stock ownership plan feature and employee equity awards.

Our effective income tax rates were 15.8 % for the quarter and six months ended June 30, 2024 and 16.2 % and 15.8 % for the quarter and six months ended June 25, 2023.

The rates for all periods benefited from research and development tax credits, tax deductions for foreign derived intangible income and dividends paid to our defined contribution plans with an employee stock ownership plan feature.

We make investments in companies that we believe are advancing or developing new technologies applicable to our business.

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Most of these investments are in equity securities without readily determinable fair values (privately held securities), which are measured initially at cost and are then adjusted to fair value only if there is an observable price change or reduced for impairment, if applicable.

The carrying amounts of the investments were $ 597 million and $ 581 million at March 31, 2024 and December 31, 2023.

Due to changes in fair value and/or sales of investments, we recorded net gains of $ 5 million ($ 4 million, or $ 0.02 per share, after-tax) during the quarter ended March 31, 2024 and net gains of $ 29 million ($ 22 million, or $ 0.09 per share, after-tax) during the quarter ended March 26, 2023.

These gains are reflected in the other non-operating income, net account on our consolidated statements of earnings.

The carrying amounts of the investments were $ 604 million and $ 581 million at June 30, 2024 and December 31, 2023.

Due to changes in fair value and/or sales of investments, we recorded net gains of $ 9 million ($ 7 million, or $ 0.03 per share, after-tax) and $ 14 million ($ 11 million, or $ 0.04 per share, after-tax) during the quarter and six months ended June 30, 2024 and net losses of $ 40 million ($ 30 million, or $ 0.12 per share, after-tax) and $ 11 million ($ 8 million, or $ 0.03 per share, after-tax) during the quarter and six months ended June 25, 2023.

These gains or losses are reflected in the other non-operating income (expense), net account on our consolidated statements of earnings.

Debt Issuance

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Net proceeds of $ 1.98 billion were received from the offering after deducting pricing discounts and debt issuance costs, which are being amortized and recorded as interest expense over the term of the Notes.

We will pay interest on the Notes semi-annually in arrears on February 15 and August 15 of each year with the first payment to be made on August 15, 2024.

We may, at our option, redeem the Notes of any series in whole or in part at any time and from time to time at a redemption price equal to the greater of 100 % of the principal amount of the Notes to be redeemed or an applicable make-whole amount, plus accrued and unpaid interest to the date of redemption.

The Notes rank equally in right of payment with all of our existing unsecured and unsubordinated indebtedness.

Impairment and Severance Charges

During the second quarter of 2024, we recorded charges totaling $ 87 million ($ 69 million, or $ 0.29 per share, after-tax) for trademark and fixed asset impairments as well as severance costs resulting from the strategic review of our Sikorsky business during the second quarter of 2024 due, in part, to the impacts of the U.S.

Army announcement to cancel the Future Attack Reconnaissance Aircraft (FARA) program at the conclusion of fiscal year 2024, for which our Sikorsky business was competing.

Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

NOTE 11 - RECENT ACCOUNTING PRONOUNCEMENTS

In March 2024, the SEC issued a final rule under SEC Release Nos.

33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors, that will require us to provide climate-related disclosures in our annual reports and registration statements beginning with our annual report for the year ending December 31, 2025.

The rule requires disclosure of material climate-related risks, our governance and risk management of climate-related risks and any material climate-related targets or goals, greenhouse gas emissions as well as disclosure of the financial statement effects, such as costs and losses resulting from severe weather events and other natural conditions.

In April 2024, the SEC released an order staying this final rule pending judicial review of all the petitions challenging the rule.

We are in the process of analyzing the impact of the rules on our disclosures.

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM).

The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

We expect this ASU to impact only our disclosures with no impacts to our results of operations, cash flows and financial condition.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid.

2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all periods presented.

We expect this ASU to impact only our disclosures with no impacts to our results of operations, cash flows, and financial condition.

Report of Independent Registered Public Accounting Firm

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Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidated balance sheet of Lockheed Martin Corporation (the Company) as of March 31, 2024, the related consolidated statements of earnings, comprehensive income, cash flows and equity for the quarters ended March 31, 2024 and March 26, 2023, and the related notes (collectively referred to as the “consolidated interim financial statements”) .

We have reviewed the accompanying consolidated balance sheet of Lockheed Martin Corporation (the Company) as of June 30, 2024, the related consolidated statements of earnings, comprehensive income and equity for the quarters and six months ended June 30, 2024 and June 25, 2023, and consolidated statements of cash flows for the six months ended June 30, 2024 and June 25, 2023, and the related notes (collectively referred to as the “consolidated interim financial statements”) .

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial statements for them to be in conformity with U.S.

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Tysons, Virginia

April 23, 2024

July 23, 2024

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-Q

Item 1. Financial Statements