What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-01-28 compared with 2024-01-23 · 46 added, 76 removed, 241 unchanged (34% of the section changed)

We are a global security and aerospace company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.

We are a global aerospace and defense company principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.

We also provide a broad range of management, engineering, technical, scientific, logistics, system integration and cybersecurity services.

2 unchanged sentences

and international customers with products and services that have defense, civil and commercial applications, with our principal customers being agencies of the U.S.

We operate in a complex and evolving global security environment.

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

Our vision for 21st Century Security is to accelerate the adoption of advanced networking and leading-edge technologies into our national defense enterprise, while enhancing the performance and value of our platforms and products for our customers.

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 defense forces more agile, adaptive and unpredictable.

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

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 (Aeronautics);

Our 21st Century Security ® vision is to accelerate the adoption of advanced networking and other leading-edge technologies into the American defense enterprise, while enhancing the performance and value of our platforms and products for our customers.

The aim of 21st Century Security is to integrate and continuously upgrade new and existing systems across all domains with advanced, open-architecture networking and operational technologies that make defense forces more agile, adaptive and unpredictable, enabling overmatch and strengthening deterrence today and into the future.

21st Century Security guides our strategy and investments.

As our growth pillars continue to evolve, we are focusing on advancing all-domain mission solutions through investments in digital technologies such as Artificial Intelligence (AI)/Machine Learning (ML), Autonomy and Crewed/Uncrewed Teaming, Generative Design and other technologies and capabilities enabling Combined Joint All-Domain Command and Control (CJADC2).

Innovations in these areas will expand capability, improve interoperability, increase demand for our multi-domain solutions and drive efficient conversion of backlog into growth across our portfolio.

We have well established programs across our business segments that continue to experience growth, including F-35 sustainment activity (Aeronautics);

increased Patriot Advanced Capability-3 (PAC-3) production rates and increased demand for High Mobility Artillery Rocket System (HIMARS ® ) and Guided Multiple Launch Rocket Systems (GMLRS) (Missiles and Fire Control);

radar surveillance systems and CH-53K King Stallion heavy lift helicopter (Rotary and Mission Systems);

and the modernization and enhancements to the Trident II D5 Fleet Ballistic Missile (FBM) (Space).

We are engaged in significant classified development programs and pending successful achievement of the objectives within those programs, we expect to begin the transition from development to production over the next few years.

We are currently performing on multiple hypersonics programs and following the successful completion of ongoing testing and evaluation activity, multiple programs are expected to enter early production phases through 2026.

Finally, we are always in pursuit of new program awards to develop future platforms that enable us to continue to place security capability into the market and expand our global reach.

Key to enabling success of our strategy is developing differentiating technologies, forging strategic partnerships, including with commercial companies, executing on our multi-year business transformation initiative to enhance our digital infrastructure and increase efficiencies and collaboration throughout our business and maintaining fiscal discipline.

and the modernization of and enhancements to the Trident II D5 Fleet Ballistic Missile (FBM) (Space).

Additionally, our teams continue to transform our products and rapidly innovate for the future, developing 6th generation air dominance technologies within Skunk Works ® , demonstrating autonomous capabilities with the X-62A (F-16) and optionally piloted BLACK HAWK ® , creating new Joint All-Domain Operating systems with Defense of Guam and AIR 6500 in Australia, establishing small-to-medium satellite capabilities to support proliferated space constellations and advancing hypersonic capabilities.

Finally, we are always in pursuit of new program awards to develop future platforms that enable us to continue to strengthen our national defense and advance deterrence and global security.

Keys to enabling success of our strategy include developing and investing in differentiating technologies, forging strategic partnerships, including with commercial companies, executing on our multi-year business transformation initiative to enhance our digital infrastructure and increase efficiencies and collaboration throughout our business and maintaining fiscal discipline.

Underpinning our ability to execute our strategy is our talent and culture.

16 unchanged sentences

Development is focused on modernization of F-35’s capability and addressing emerging threats.

Sustainment provides logistics

and training support for the aircraft delivered to F-35 customers.

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

6 unchanged sentences

MFC provides air and missile defense systems;

tactical missiles and air-to-ground precision strike weapon systems;

tactical missiles and precision strike weapon systems;

fire control systems;

mission operations support, readiness, engineering support and integration services;

manned and unmanned ground vehicles;

ground vehicles;

and energy management solutions.

35 unchanged sentences

Rotary and Mission Systems

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

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

RMS also has contracts with the U.S.

2 unchanged sentences

• Sikorsky helicopter programs such as those related to the Black Hawk, Seahawk ® and CH-53K King Stallion heavy lift helicopters, which are in service with U.S.

and foreign governments, the Combat Rescue Helicopter (CRH) utilized by the U.S.

and foreign governments, the Combat Rescue Helicopter (CRH) utilized by the

Air Force, and the VH-92A helicopter for the U.S.

Marine One transport mission.

Marine One transport mission, Presidential helicopter, of which we made the final aircraft delivery under the program in 2024.

• 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)

programs to provide surface combatant ships for the U.S.

Navy and international customers and are also a sea and land-based element of the U.S.

missile defense system, and the Littoral Combat Ship (LCS), Multi-Mission Surface Combatant (MMSC), and Canadian Surface Combatant (CSC) 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.

18 unchanged sentences

Navy to design, develop and build hypersonic strike weapons.

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

• The Transport Layer programs, small satellite capabilities to support proliferated space constellations and early warning communications for the Space Development Agency.

Intellectual Property

10 unchanged sentences

Research and Development

We conduct research and development (R&D) activities using our own funds (referred to as company-funded R&D or independent research and development (IR&D)) and under contractual arrangements with our customers (referred to as customer-funded R&D) to enhance existing products and services and to develop future technologies.

We conduct research and development (R&D) activities using our own funds (referred to as company-funded or independent R&D (IR&D)) and under contractual arrangements with our customers (referred to as customer-funded R&D) to enhance existing products and services and to develop future technologies.

R&D costs include basic research, applied research, concept formulation studies, design, development, and related test activities.

2 unchanged sentences

Some of our products require relatively scarce raw materials, such as rare earth minerals.

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

the services that are provided to our customers under the terms of most of our contracts.

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.

Other important materials and components, on which certain of our products rely, include aluminum, titanium, specialty steel, 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 the services that are provided to our customers under the terms of most of our contracts.

Although long-term agreements have historically helped enable a continued supply of these materials, 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 are working with U.S.

Government, customers and suppliers on phase-in of regulatory requirements for transitioning the supply chains for rare earth minerals and magnets to secure and compliant sources.

The current availability of sources of supply meeting regulatory requirements and the ability to ensure compliance down to the mining level within the timeframes required by the regulations are challenges we continue to work with our multi-tier supplier base.

At the same time, we are focused on minimizing the impact of these supply chain challenges on our programs.

However, many of the challenges are industry wide or caused by geopolitical events and general economic conditions that are outside of our control.

These supplier disruptions have resulted in delays and increased costs and have adversely affected our program performance and operating results.

3 unchanged sentences

Various factors, however, can affect the distribution of our sales between accounting periods, including the timing of government awards, the availability of government funding, product deliveries and customer acceptance.

Human Capital Resources

Human Capital

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

Our human capital management strategy, which we refer to as our people strategy, is tightly aligned with our business needs and technology strategy.

During 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 processes.

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.

We use a variety of human capital measures in managing our business, including:

workforce demographics and metrics in relation to representation, attrition, hiring, promotions and leadership;

and talent management metrics, including retention rates of top talent.

Workforce Demographics

Our human capital management strategy, which we refer to as our people strategy, tightly aligns to our business needs and technology strategy and focused in 2024 on continuing to accelerate the transformation of our technology for workforce management through investments in upgraded systems and processes, increasing our ability to meet the quickly changing needs of our business, and maintaining a working environment and culture that is supportive of all employees and reflects our core value of “Respect Others.” We structure our people strategy and its implementation to comply with the laws and regulations to which we are subject as a federal government contractor.

As of December 31, 2024, we had a highly skilled workforce made up of approximately 121,000 employees, including approximately 70,000 engineers, scientists and information technology professionals.

4 unchanged sentences

This has continued to be the case in 2024.

Diversity and Inclusion

Diversity and inclusion is a business imperative for us, as we believe that it is key to our future success.

We have focused our diversity and inclusion initiatives on employee recruitment, including active engagement and 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 Business Resource Groups.

Our Business Resource Groups are voluntary, employee-led groups that are open to all employees while being aligned to demographic categories that we annually report on to the U.S.

Government, including race/ethnicity, gender, disability and veteran status.

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.

The Business Resource Groups foster a diverse and inclusive workplace aligned with our organizational mission, values, goals and business practices and drive awareness and change within our organization.

Through these and other focused efforts, 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, veteran representation 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, 2023):

People of Color (a)

People with Disabilities (a)

Overall 23% 32% 21% 12%

Executives (b)

25% 17% 21% 13%

(a) Based on employees who self-identify.

Includes only U.S.

employees and expatriates except for data relating to women, which also includes local country nationals.

Excludes casual workers, interns/co-ops and employees of certain subsidiaries and joint ventures.

(b) Executive is defined as director-level (one level below vice president) or higher.

Talent Acquisition, Retention and Development

We strive to hire, develop and retain the top talent in the industry.

During 2023, we hired nearly 15,000 employees.

During 2024, we hired nearly 9,200 employees and we hired 3,900 college hires and interns during the 2023-24 academic year.

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

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

In addition to efforts focused on recruitment, we also monitor employee attrition across a broad array of categories and segments of the population, including with respect to diversity and top talent.

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 strategy and assess employee’s intent to stay.

We seek to access the broadest possible pool of talent to enable us to meet our hiring needs, and we work to expand Lockheed Martin’s brand awareness and positioning as a best place to work.

Employee satisfaction is essential to attracting and retaining top talent, and we regularly conduct employee engagement surveys to gauge employee satisfaction and to understand the effectiveness of our people strategy and assess employees’ intent to stay.

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

We have a hybrid workforce model that encourages flexible working arrangements for employees and teams who can meet our customer commitments remotely, which has helped recruit and retain talent.

We have a hybrid workforce model that enables flexible working arrangements for employees and teams who can meet our customer commitments remotely, which has helped recruit and retain talent.

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

We believe this employee development makes us more competitive and also assists with leadership succession planning throughout the corporation.

We believe this employee development makes us more competitive and assists with leadership succession planning throughout the company.

In addition to efforts focused on recruitment and retention, we also monitor employee attrition across our employee population and take action based on the insights we gain from that monitoring process.

Employee Safety and Health

2 unchanged sentences

For information on the risks related to our human capital resources, see Item 1A – Risk Factors.

We compete with many different companies in the defense and aerospace industry.

We compete with many different companies both within and outside of the defense and aerospace industry.

The Boeing Company, General Dynamics, L3Harris Technologies, Northrop Grumman, and RTX Corporation are some of our primary competitors.

1 unchanged sentence

Government procurement awards).

We often collaborate with our competitors through teaming arrangements in efforts to provide our customers with the best mix of capabilities to address specific requirements.

We often collaborate with our competitors through teaming arrangements in efforts to provide our customers with the best mix of capabilities to address specific requirements, such as our recently announced strategic teaming agreement with General Dynamics to produce solid rocket motors, enhancing security and resilience in a critical domestic supply chain.

Additionally, a company competing to be a prime contractor may, upon ultimate award of the contract to another competitor, serve as a subcontractor to the ultimate prime contracting company.

18 unchanged sentences

and its industrial cooperation programs designed to enhance local industry are important factors in determining the outcome of a competition.

It is common for international customers to require contractors to comply with their industrial cooperation regulations, sometimes referred to as offset requirements, and we have entered into foreign offset agreements as part of securing

some international business.

For more information concerning our international business, see “International Business” in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 1A – Risk Factors.

Technological advances in such areas as additive manufacturing, data analytics, digital engineering, artificial intelligence, advanced materials, autonomy and robotics, and new business models such as commercial access to space, are enabling new factors of competition for both traditional and non-traditional competitors.

For more information on the risks related to new technologies, see Item 1A - Risk Factors.

Regulatory Matters

49 unchanged sentences

As a result of these environmental protection laws, we are involved in environmental remediation at some of our current and former facilities and at third-party-owned sites where we have been designated a potentially responsible party as a result of our prior activities and those of our predecessor companies.

Although the extent of our financial exposure cannot in all cases be reasonably estimated, the costs of environmental compliance have not had, and we do not expect that these costs will have, a material adverse effect on our earnings, financial position and cash flow, primarily because substantially all of our environmental costs are allowable in establishing the price of our products and services under our contracts with the U.S.

Although the extent of our financial exposure cannot in all cases be reasonably estimated, the costs of environmental compliance have not had, and we do not expect that these costs will have, a material adverse effect on our financial condition or results of operations, primarily because substantially all of our environmental costs are allowable in establishing the price of our products and services under our contracts with the U.S.

For information regarding these matters, including current estimates of the amounts that we believe are required for remediation or cleanup to the extent that they are probable and estimable, see “Critical Accounting Policies – Environmental Matters” in Management’s Discussion and Analysis of Financial Condition and Results of Operations and “Note 14 – Legal Proceedings, Commitments and Contingencies” included in our Notes to Consolidated Financial Statements.

4 unchanged sentences

States, have adopted or proposed laws related to climate and sustainability reporting.

These and future laws, regulations or policies in response to concerns over GHG emissions such as carbon taxes, mandatory reporting and disclosure obligations, including environmental requirements for certain federal contractors and subcontractors and the SEC’s proposed climate-related disclosure rule, and changes in procurement policies, including the use of environmental goals in proposal evaluation, could significantly increase our operational and compliance burdens and costs.

These and future laws, regulations or policies in response to concerns over GHG emissions such as carbon taxes, mandatory reporting and disclosure obligations, including environmental requirements for certain federal contractors and subcontractors, and changes in procurement policies, including the use of environmental goals in proposal evaluation, could significantly increase our operational and compliance burdens and costs.

We monitor developments in climate change-related regulation for their potential effect on us and also have a comprehensive sustainability program that seeks to mitigate our impact on the environment, including targets to reduce our GHG emissions.

1 unchanged sentence

Other Applicable Regulations

Our businesses and operations are subject to both U.S.

Our business and operations are subject to both 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.

16 unchanged sentences

These statements are not guarantees of future performance and are subject to risks and uncertainties.

Statements and assumptions with respect to future sales, income and cash flows, growth, program performance, the outcome of litigation, anticipated pension cost and funding, environmental remediation cost estimates, planned acquisitions or dispositions of assets, or the anticipated consequences are examples of forward-looking statements.

Statements and assumptions with respect to future sales, income and cash flows, growth, program performance, the outcome of litigation, anticipated pension costs and funding, environmental remediation cost estimates, planned acquisitions or dispositions of assets, future regulatory, economic or geopolitical changes, or the anticipated consequences thereof are examples of forward-looking statements.

Numerous factors, including the risk factors described in the following section, could cause our actual results to differ materially from those expressed in our forward-looking statements.

3 unchanged sentences

Except where required by applicable law, we expressly disclaim a duty to provide updates to forward-looking statements after the date of this Form 10-K to reflect subsequent events, changed circumstances, changes in expectations, or the estimates and assumptions associated with them.

The forward-looking statements in this Form 10-K are intended to be subject to the safe harbor protection provided by the federal securities laws.

The forward-looking statements in this Form 10-K are intended to be subject to the safe harbor protections provided by the federal securities laws.

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 1. Business