Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 27, 2022 | Apr. 15, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 27, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-11437 | |
Entity Registrant Name | LOCKHEED MARTIN CORPORATION | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-1893632 | |
Entity Address, Address Line One | 6801 Rockledge Drive, | |
Entity Address, City or Town | Bethesda, | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20817 | |
City Area Code | 301 | |
Local Phone Number | 897-6000 | |
Title of 12(b) Security | Common Stock, $1 par value | |
Trading Symbol | LMT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 266,106,974 | |
Entity Central Index Key | 0000936468 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Net sales | ||
Total net sales | $ 14,964 | $ 16,258 |
Cost of sales | ||
Total cost of sales | (13,055) | (14,072) |
Severance and restructuring charges | 0 | (36) |
Gross profit | 1,909 | 2,186 |
Other income (expense), net | 24 | (4) |
Operating profit | 1,933 | 2,182 |
Interest expense | (135) | (140) |
Non-service FAS pension income | 140 | 93 |
Other non-operating income, net | 123 | 76 |
Earnings before income taxes | 2,061 | 2,211 |
Income tax expense | (328) | (374) |
Net earnings | $ 1,733 | $ 1,837 |
Earnings per common share | ||
Basic (in dollars per share) | $ 6.46 | $ 6.58 |
Diluted (in dollars per share) | 6.44 | 6.56 |
Cash dividends paid per common share (in dollars per share) | $ 2.80 | $ 2.60 |
Products | ||
Net sales | ||
Total net sales | $ 12,494 | $ 13,753 |
Cost of sales | ||
Total cost of sales | (11,161) | (12,281) |
Services | ||
Net sales | ||
Total net sales | 2,470 | 2,505 |
Cost of sales | ||
Total cost of sales | (2,175) | (2,230) |
Other unallocated, net | ||
Cost of sales | ||
Total cost of sales | $ 281 | $ 475 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net earnings | $ 1,733 | $ 1,837 |
Other comprehensive income, net of tax | ||
Amortization of previously deferred postretirement benefit plan costs | 48 | 140 |
Other, net | (21) | (27) |
Other comprehensive income, net of tax | 27 | 113 |
Comprehensive income | $ 1,760 | $ 1,950 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 27, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 1,883 | $ 3,604 |
Receivables, net | 2,527 | 1,963 |
Contract assets | 12,130 | 10,579 |
Inventories | 3,144 | 2,981 |
Other current assets | 706 | 688 |
Total current assets | 20,390 | 19,815 |
Property, plant and equipment, net | 7,561 | 7,597 |
Goodwill | 10,811 | 10,813 |
Intangible assets, net | 2,644 | 2,706 |
Deferred income taxes | 2,688 | 2,290 |
Other noncurrent assets | 7,416 | 7,652 |
Total assets | 51,510 | 50,873 |
Current liabilities | ||
Accounts payable | 2,599 | 780 |
Salaries, benefits and payroll taxes | 2,671 | 3,108 |
Contract liabilities | 7,902 | 8,107 |
Current maturities of long-term debt | 500 | 6 |
Other current liabilities | 2,375 | 1,996 |
Total current liabilities | 16,047 | 13,997 |
Long-term debt, net | 11,145 | 11,670 |
Accrued pension liabilities | 8,143 | 8,319 |
Other noncurrent liabilities | 6,173 | 5,928 |
Total liabilities | 41,508 | 39,914 |
Stockholders’ equity | ||
Common stock, $1 par value per share | 265 | 271 |
Additional paid-in capital | 0 | 94 |
Retained earnings | 20,716 | 21,600 |
Accumulated other comprehensive loss | (10,979) | (11,006) |
Total stockholders’ equity | 10,002 | 10,959 |
Total liabilities and equity | $ 51,510 | $ 50,873 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 27, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Operating activities | ||
Net earnings | $ 1,733 | $ 1,837 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation and amortization | 329 | 336 |
Stock-based compensation | 54 | 47 |
Deferred income taxes | (411) | 63 |
Severance and restructuring charges | 0 | 36 |
Changes in assets and liabilities | ||
Receivables, net | (564) | (236) |
Contract assets | (1,551) | (1,363) |
Inventories | (163) | 289 |
Accounts payable | 1,829 | 1,023 |
Contract liabilities | (205) | (290) |
Income taxes | 697 | 301 |
Qualified defined benefit pension plans | (116) | (66) |
Other, net | (222) | (229) |
Net cash provided by operating activities | 1,410 | 1,748 |
Investing activities | ||
Capital expenditures | (268) | (281) |
Other, net | 17 | 112 |
Net cash used for investing activities | (251) | (169) |
Financing activities | ||
Repurchases of common stock | (2,000) | (1,000) |
Dividends paid | (767) | (739) |
Other, net | (113) | (67) |
Net cash used for financing activities | (2,880) | (1,806) |
Net change in cash and cash equivalents | (1,721) | (227) |
Cash and cash equivalents at beginning of period | 3,604 | 3,160 |
Cash and cash equivalents at end of period | $ 1,883 | $ 2,933 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | Noncontrolling Interests in Subsidiary |
Beginning Balance at Dec. 31, 2020 | $ 6,038 | $ 279 | $ 221 | $ 21,636 | $ (16,121) | $ 6,015 | $ 23 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 1,837 | 1,837 | 1,837 | ||||
Other comprehensive income, net of tax | 113 | 113 | 113 | ||||
Dividends declared | (725) | (725) | (725) | ||||
Repurchases of common stock | (1,000) | (2) | (227) | (771) | (1,000) | ||
Stock-based awards, ESOP activity and other | 72 | 1 | 71 | 72 | |||
Net decrease in noncontrolling interests in subsidiary | (2) | (2) | |||||
Ending Balance at Mar. 28, 2021 | 6,333 | 278 | 65 | 21,977 | (16,008) | 6,312 | 21 |
Beginning Balance at Dec. 31, 2021 | 10,959 | 271 | 94 | 21,600 | (11,006) | 10,959 | 0 |
Increase (Decrease) in Stockholders' Equity | |||||||
Net earnings | 1,733 | 1,733 | 1,733 | ||||
Other comprehensive income, net of tax | 27 | 27 | 27 | ||||
Dividends declared | (749) | (749) | (749) | ||||
Repurchases of common stock | (2,000) | (6) | (126) | (1,868) | (2,000) | ||
Stock-based awards, ESOP activity and other | 32 | 32 | 32 | ||||
Net decrease in noncontrolling interests in subsidiary | 0 | ||||||
Ending Balance at Mar. 27, 2022 | $ 10,002 | $ 265 | $ 0 | $ 20,716 | $ (10,979) | $ 10,002 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION We prepared these consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information, the instructions to Form 10-Q and Article 10 of U.S. Securities and Exchange Commission (SEC) Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, these consolidated financial statements reflect all adjustments that are of a normal recurring nature necessary for a fair presentation of our results of operations, financial condition, and cash flows for the interim periods presented. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base these estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Our actual results may differ materially from these estimates. Significant estimates inherent in the preparation of our consolidated financial statements include, but are not limited to, accounting for sales and cost recognition; postretirement benefit plans; environmental liabilities and assets for the portion of environmental costs that are probable of future recovery; evaluation of goodwill, intangible assets, investments and other assets for impairment; income taxes including deferred tax assets; fair value measurements; and contingencies. The consolidated financial statements include the accounts of subsidiaries we control and variable interest entities if we are the primary beneficiary. We eliminate intercompany balances and transactions in consolidation. We close our books and records on the last Sunday of the interim calendar quarter 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. This practice only affects interim periods as our fiscal year ends on December 31. The results of operations for the interim periods presented are not necessarily indicative of results to be expected for the full year or future periods. Unless otherwise noted, we present all per share amounts cited in these consolidated financial statements on a “per diluted share” basis. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 (2021 Form 10-K). |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 3 Months Ended |
Mar. 27, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | EARNINGS PER COMMON SHARE The weighted average number of shares outstanding used to compute earnings per common share were as follows (in millions): Quarters Ended March 27, March 28, Weighted average common shares outstanding for basic computations 268.3 279.0 Weighted average dilutive effect of equity awards 0.9 1.0 Weighted average common shares outstanding for diluted computations 269.2 280.0 |
INFORMATION ON BUSINESS SEGMENT
INFORMATION ON BUSINESS SEGMENTS | 3 Months Ended |
Mar. 27, 2022 | |
Segment Reporting [Abstract] | |
INFORMATION ON BUSINESS SEGMENTS | INFORMATION ON BUSINESS SEGMENTS Overview We operate in four business segments: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. We organize our business segments based on the nature of products and services offered. Selected Financial Data by Business Segment Net sales and operating profit of our business segments exclude intersegment sales, cost of sales, and profit as these activities are eliminated in consolidation and thus not included in management’s evaluation of performance of each segment. Business segment operating profit includes our share of earnings or losses from equity method investees as the operating activities of the equity method investees are closely aligned with the operations of our business segments. Summary operating results for each of our business segments were as follows (in millions): Quarters Ended March 27, March 28, Net sales Aeronautics $ 6,401 $ 6,387 Missiles and Fire Control 2,452 2,749 Rotary and Mission Systems 3,552 4,107 Space 2,559 3,015 Total net sales $ 14,964 $ 16,258 Operating profit Aeronautics $ 679 $ 693 Missiles and Fire Control 384 396 Rotary and Mission Systems 348 433 Space 245 227 Total business segment operating profit 1,656 1,749 Unallocated items FAS/CAS pension operating adjustment 426 489 Severance and restructuring charges — (36) Other, net (149) (20) Total unallocated items 277 433 Total consolidated operating profit $ 1,933 $ 2,182 Intersegment sales Aeronautics $ 60 $ 53 Missiles and Fire Control 156 129 Rotary and Mission Systems 455 478 Space 83 82 Total intersegment sales $ 754 $ 742 Amortization of purchased intangibles Aeronautics $ — $ — Missiles and Fire Control (1) (1) Rotary and Mission Systems (58) (58) Space (3) (22) Total amortization of purchased intangibles $ (62) $ (81) Unallocated Items Business segment operating profit also excludes the FAS/CAS pension operating adjustment, a portion of corporate costs not considered allowable or allocable to contracts with the U.S. 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, environmental costs, stock-based compensation expense, retiree benefits, significant severance actions, significant asset impairments, gains or losses from divestitures, and other miscellaneous corporate activities. Excluded items are included in the reconciling item “Unallocated items” between operating profit from our business segments and our consolidated operating profit. See “Note 10 - Other” for a discussion related to certain factors that may impact the comparability of net sales and operating profit of our business segments. FAS/CAS Pension Adjustment We recover CAS pension and other postretirement benefit plan cost through the pricing of our products and services on U.S. Government contracts and, therefore, recognize CAS pension cost in each of our business segment’s net sales and cost of sales. Our consolidated financial statements must present FAS pension and other postretirement benefit plan income calculated in accordance with FAS requirements under U.S. GAAP. The operating portion of the net FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension (expense) income and total CAS pension cost. The non-service FAS pension (expense) income components are included in non-service FAS pension (expense) 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 (expense) income, we have a favorable FAS/CAS pension operating adjustment. Total FAS/CAS pension adjustment for the quarters ended March 27, 2022 and March 28, 2021, including the service and non-service cost components of FAS pension (expense) income for our qualified defined benefit pension plans, were as follows (in millions): Quarters Ended March 27, March 28, Total FAS income and CAS cost Total FAS pension income $ 116 $ 66 Less: CAS pension cost 450 516 Total FAS/CAS pension adjustment $ 566 $ 582 Service and non-service cost reconciliation FAS pension service cost $ (24) $ (27) Less: CAS pension cost 450 516 Total FAS/CAS pension operating adjustment 426 489 Non-service FAS pension income 140 93 Total FAS/CAS pension adjustment $ 566 $ 582 Net sales by products and services, contract type, customer, and geographic region were as follows (in millions): Quarter Ended March 27, 2022 Aeronautics MFC RMS Space Total Net sales Products $ 5,417 $ 2,173 $ 2,788 $ 2,116 $ 12,494 Services 984 279 764 443 2,470 Total net sales $ 6,401 $ 2,452 $ 3,552 $ 2,559 $ 14,964 Net sales by contract type Fixed-price $ 4,686 $ 1,713 $ 2,218 $ 637 $ 9,254 Cost-reimbursable 1,715 739 1,334 1,922 5,710 Total net sales $ 6,401 $ 2,452 $ 3,552 $ 2,559 $ 14,964 Net sales by customer U.S. Government $ 4,213 $ 1,595 $ 2,511 $ 2,516 $ 10,835 International (a) 2,150 852 971 34 4,007 U.S. commercial and other 38 5 70 9 122 Total net sales $ 6,401 $ 2,452 $ 3,552 $ 2,559 $ 14,964 Net sales by geographic region United States $ 4,251 $ 1,600 $ 2,581 $ 2,525 $ 10,957 Europe 1,023 256 187 24 1,490 Asia Pacific 721 106 432 7 1,266 Middle East 262 465 176 3 906 Other 144 25 176 — 345 Total net sales $ 6,401 $ 2,452 $ 3,552 $ 2,559 $ 14,964 Quarter Ended March 28, 2021 Aeronautics MFC RMS Space Total Net sales Products $ 5,479 $ 2,410 $ 3,300 $ 2,564 $ 13,753 Services 908 339 807 451 2,505 Total net sales $ 6,387 $ 2,749 $ 4,107 $ 3,015 $ 16,258 Net sales by contract type Fixed-price $ 4,734 $ 1,878 $ 2,677 $ 614 $ 9,903 Cost-reimbursable 1,653 871 1,430 2,401 6,355 Total net sales $ 6,387 $ 2,749 $ 4,107 $ 3,015 $ 16,258 Net sales by customer U.S. Government $ 4,273 $ 2,041 $ 2,810 $ 2,551 $ 11,675 International (a) 2,099 703 1,220 457 4,479 U.S. commercial and other 15 5 77 7 104 Total net sales $ 6,387 $ 2,749 $ 4,107 $ 3,015 $ 16,258 Net sales by geographic region United States $ 4,288 $ 2,046 $ 2,887 $ 2,558 $ 11,779 Europe 854 182 201 455 1,692 Asia Pacific 893 51 650 2 1,596 Middle East 284 458 170 — 912 Other 68 12 199 — 279 Total net sales $ 6,387 $ 2,749 $ 4,107 $ 3,015 $ 16,258 (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 Joint Strike Fighter, an international multi-role, multi-variant, stealth fighter aircraft. Net sales for the F-35 program represented approximately 29% of our total consolidated net sales for the quarter ended March 27, 2022 and 27% of our total consolidated net sales for the quarter ended March 28, 2021. Total assets for each of our business segments were as follows (in millions): March 27, December 31, Assets Aeronautics $ 12,232 $ 10,756 Missiles and Fire Control 5,410 5,243 Rotary and Mission Systems 17,569 17,664 Space 6,315 6,199 Total business segment assets 41,526 39,862 Corporate assets (a) 9,984 11,011 Total assets $ 51,510 $ 50,873 (a) Corporate assets primarily include cash and cash equivalents, deferred income taxes, assets for the portion of environmental costs that are probable of future recovery, investments held in a separate trust and investments held in Lockheed Martin Ventures Fund. |
CONTRACT ASSETS AND LIABILITIES
CONTRACT ASSETS AND LIABILITIES | 3 Months Ended |
Mar. 27, 2022 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT ASSETS AND LIABILITIES | CONTRACT ASSETS AND LIABILITIES Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract assets and contract liabilities were as follows (in millions): March 27, December 31, Contract assets $ 12,130 $ 10,579 Contract liabilities 7,902 8,107 Contract assets increased $1.6 billion during the quarter ended March 27, 2022, due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the quarter ended March 27, 2022 for which we have not yet billed our customers (primarily on the F-35 program at Aeronautics). There were no significant credit or impairment losses related to our contract assets during the quarters ended March 27, 2022 and March 28, 2021. Contract liabilities decreased $205 million during the quarter ended March 27, 2022, primarily due to revenue recognized in excess of payments received on these performance obligations. During the quarter ended March 27, 2022, we recognized $2.1 billion of our contract liabilities at December 31, 2021 as revenue. During the quarter ended March 28, 2021, we recognized $2.3 billion of our contract liabilities at December 31, 2020 as revenue. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 27, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following (in millions): March 27, December 31, Materials, spares and supplies $ 630 $ 624 Work-in-process 2,312 2,163 Finished goods 202 194 Total inventories $ 3,144 $ 2,981 Costs incurred to fulfill a contract in advance of the contract being awarded are included in inventories as work-in-process if we determine that those costs relate directly to a contract or to an anticipated contract that we can specifically |
POSTRETIREMENT BENEFIT PLANS
POSTRETIREMENT BENEFIT PLANS | 3 Months Ended |
Mar. 27, 2022 | |
Retirement Benefits [Abstract] | |
POSTRETIREMENT BENEFIT PLANS | POSTRETIREMENT BENEFIT PLANS The pretax FAS (expense) income related to our qualified defined benefit pension plans and retiree medical and life insurance plans consisted of the following (in millions): Quarters Ended March 27, March 28, Qualified defined benefit pension plans Operating: Service cost $ (24) $ (27) Non-operating: Interest cost (302) (311) Expected return on plan assets 502 569 Recognized net actuarial losses (150) (252) Amortization of prior service credits 90 87 Non-service FAS pension income 140 93 Total FAS pension income $ 116 $ 66 Retiree medical and life insurance plans Operating: Service cost $ (2) $ (3) Non-operating: Interest cost (12) (13) Expected return on plan assets 34 35 Recognized net actuarial gains 11 — Amortization of prior service costs (7) (9) Non-service FAS retiree medical and life income 26 13 Total FAS retiree medical and life income $ 24 $ 10 We record the service cost component of FAS (expense) income for our qualified defined benefit plans and retiree medical and life insurance plans in the cost of sales accounts on our consolidated statement of earnings; the non-service components of our FAS (expense) income for our qualified defined benefit pension plans in the non-service FAS pension income account on our consolidated statement of earnings; and the non-service components of our FAS (expense) 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 recognized net actuarial losses or gains and amortization of prior service credits or costs in the table above, along with similar costs related to our other postretirement benefit plans ($5 million for the quarter ended March 27, 2022 and $4 million for the quarter ended March 28, 2021) were reclassified from accumulated other comprehensive loss (AOCL) and recorded as a component of FAS income for the periods presented. These costs totaled $61 million ($48 million, net of tax) during the quarter ended March 27, 2022, and $178 million ($140 million, net of tax) during the quarter ended March 28, 2021 and were recorded on our consolidated statements of comprehensive income as an increase to other comprehensive income. 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 |
LEGAL PROCEEDINGS AND CONTINGEN
LEGAL PROCEEDINGS AND CONTINGENCIES | 3 Months Ended |
Mar. 27, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
LEGAL PROCEEDINGS AND CONTINGENCIES | LEGAL PROCEEDINGS AND CONTINGENCIES We are a party to litigation and other proceedings that arise in the ordinary course of our business, including matters arising under provisions relating to the protection of the environment, and are subject to contingencies related to certain businesses we previously owned. These types of matters could result in fines, penalties, cost reimbursements or contributions, compensatory or treble damages or non-monetary sanctions or relief. We believe the probability is remote that the outcome of each of these matters, including the legal proceedings described below, will have a material adverse effect on the corporation as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on our net earnings and cash flows in any particular interim reporting period. Among the factors that we consider in this assessment are the nature of existing legal proceedings and claims, the asserted or possible damages or loss contingency (if estimable), the progress of the case, existing law and precedent, the opinions or views of legal counsel and other advisers, our experience in similar cases and the experience of other companies, the facts available to us at the time of assessment and how we intend to respond to the proceeding or claim. Our assessment of these factors may change over time as individual proceedings or claims progress. Although we cannot predict the outcome of legal or other proceedings with certainty, where there is at least a reasonable possibility that a loss may have been incurred, GAAP requires us to disclose an estimate of the reasonably possible loss or range of loss or make a statement that such an estimate cannot be made. We follow a thorough process in which we seek to estimate the reasonably possible loss or range of loss, and only if we are unable to make such an estimate do we conclude and disclose that an estimate cannot be made. Accordingly, unless otherwise indicated below in our discussion of legal proceedings, a reasonably possible loss or range of loss associated with any individual legal proceeding cannot be estimated. Legal Proceedings United States of America, ex rel. Patzer; Cimma v. 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. District Court for the Eastern District of Wisconsin. In October 2014, the U.S. Government filed a complaint in intervention in the first suit, which was brought by qui tam relator Mary Patzer, a former Derco Aerospace (Derco) employee. In May 2017, the U.S. Government filed a complaint in intervention in a second suit, which was brought by qui tam relator Peter Cimma, a former Sikorsky Support Services, Inc. (SSSI) employee. In November 2017, the Court consolidated the cases into a single action for discovery and trial. The U.S. 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. 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. The U.S. 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. The U.S. 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. The U.S. Government’s complaints assert common law claims for breach of contract and unjust enrichment. On November 29, 2021, the District Court granted the U.S. Government’s motion for partial summary judgment, finding that the Derco-SSSI agreement was a CPPC contract. We believe that we have legal and factual defenses to the U.S. Government’s remaining claims. The U.S. 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. Lockheed Martin v. Metropolitan Transportation Authority On April 24, 2009, we filed a declaratory judgment action against the New York Metropolitan Transportation Authority and its Capital Construction Company (collectively, the MTA) asking the U.S. District Court for the Southern District of New York to find that the MTA is in material breach of our agreement based on the MTA’s failure to provide access to sites where work must be performed and the customer-furnished equipment necessary to complete the contract. The MTA filed an answer and counterclaim alleging that we breached the contract and subsequently terminated the contract for alleged default. The primary damages sought by the MTA are the costs to complete the contract and potential re-procurement costs. While we are unable to estimate the cost of another contractor to complete the contract and the costs of re-procurement, we note that our contract with the MTA had a total value of $323 million, of which $241 million was paid to us, and that the MTA is seeking damages of approximately $190 million. We dispute the MTA’s allegations and are defending against them. Additionally, following an investigation, our sureties on a performance bond related to this matter, who were represented by independent counsel, concluded that the MTA’s termination of the contract was improper. Finally, our declaratory judgment action was later amended to include claims for monetary damages against the MTA of approximately $95 million. This matter was taken under submission by the District Court in December 2014, after a five-week bench trial and the filing of post-trial pleadings by the parties. We continue to await a decision from the District Court. Although this matter relates to our former Information Systems & Global Solutions (IS&GS) business, we retained responsibility for the litigation when we divested IS&GS in 2016. Environmental Matters We are involved in proceedings and potential proceedings relating to soil, sediment, surface water, and groundwater contamination, disposal of hazardous substances, and other environmental matters at several of our current or former facilities, facilities for which we may have contractual responsibility, and at third-party sites where we have been designated as a potentially responsible party (PRP). A substantial portion of environmental costs will be included in our net sales and cost of sales in future periods pursuant to U.S. Government regulations. At the time a liability is recorded for future environmental costs, we record assets for estimated future recovery considered probable through the pricing of products and services to agencies of the U.S. Government, regardless of the contract form (e.g., cost-reimbursable, fixed-price). We continually evaluate the recoverability of our assets for the portion of environmental costs that are probable of future recovery by assessing, among other factors, U.S. Government regulations, our U.S. Government business base and contract mix, our history of receiving reimbursement of such costs, and efforts by some U.S. Government representatives to limit such reimbursement. We include the portions of those environmental costs expected to be allocated to our non-U.S. Government contracts, or determined not to be recoverable under U.S. Government contracts, in our cost of sales at the time the liability is established or adjusted. At March 27, 2022 and December 31, 2021, the aggregate amount of liabilities recorded relative to environmental matters was $729 million and $742 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 $632 million and $645 million at March 27, 2022 and December 31, 2021, 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. We are monitoring or investigating a number of former and present operating facilities for potential future remediation. We perform quarterly reviews of the status of our environmental remediation sites and the related liabilities and receivables. Additionally, in our quarterly reviews, we consider these and other factors in estimating the timing and amount of any future costs that may be required for remediation activities, and we record a liability when it is probable that a loss has occurred or will occur for a particular site and the loss can be reasonably estimated. The amount of liability recorded is based on our estimate of the costs to be incurred for remediation for that site. We do not discount the recorded liabilities, as the amount and timing of future cash payments are not fixed or cannot be reliably determined. We cannot reasonably determine the extent of our financial exposure in all cases as, although a loss may be probable or reasonably possible, in some cases it is not possible at this time to estimate the reasonably possible loss or range of loss. We project costs and recovery of costs over approximately 20 years. 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 operations. Under agreements related to certain sites in California, New York, United States Virgin Islands and Washington, the U.S. Government and/or a private party reimburses us an amount equal to a percentage, specific to each site, of expenditures for certain remediation activities in their capacity as PRPs under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). In addition to the proceedings and potential proceedings discussed above, potential new regulations of perchlorate and hexavalent chromium at the federal and state level could adversely affect us. The California State Water Resources Control Board, a branch of the California Environmental Protection Agency, recently announced its proposed maximum contaminant level for hexavalent chromium in drinking water of 10 parts per billion (ppb) after such standard was previously challenged as being too high. We expect that a 10 ppb standard, if adopted, would have minimal impact on Lockheed Martin’s liability at its remediation sites in California. The U.S. Environmental Protection Agency (EPA) is considering whether to regulate hexavalent chromium at the federal level. In June 2020, the EPA decided not to regulate perchlorate in drinking water at the federal level and confirmed this decision in April 2022 after the original decision was challenged. Despite the EPA’s decision, the California State Water Resources Control Board continues to reevaluate its existing drinking water standard of 6 ppb for perchlorate. If substantially lower standards are adopted for perchlorate (in California) or for hexavalent chromium (at the federal level), we expect a material increase in our estimates for environmental liabilities and the related assets for the portion of the increased costs that are probable of future recovery in the pricing of our products and services for the U.S. Government. The amount that would be allocable to our non-U.S. Government contracts or that is determined not to be recoverable under U.S. Government contracts would be expensed, which may have a material effect on our earnings in any particular interim reporting period. We also are evaluating the potential impact of existing and contemplated legal requirements addressing a class of chemicals known generally as per- and polyfluoroalkyl substances (PFAS). PFAS have been used ubiquitously, such as in fire-fighting foams, manufacturing processes, and stain- and stick-resistant products (e.g., Teflon, stain-resistant fabrics). Because we have used products and processes over the years containing some of those compounds, they likely exist as contaminants at many of our environmental remediation sites. Governmental authorities have announced plans, and in some instances have begun, to regulate certain of these compounds at extremely low concentrations in drinking water, which could lead to increased cleanup costs at many of our environmental remediation sites. Letters of Credit, Surety Bonds and Third-Party Guarantees We have entered into standby letters of credit and surety bonds issued on our behalf by financial institutions, and we have directly issued guarantees to third parties primarily relating to advances received from customers and the guarantee of future performance on certain contracts. Letters of credit and surety bonds generally are available for draw down in the event we do not perform. In some cases, we may guarantee the contractual performance of third parties such as joint venture partners. We had total outstanding letters of credit, surety bonds and third-party guarantees aggregating $3.5 billion and $3.6 billion at March 27, 2022 and December 31, 2021. Third-party guarantees do not include guarantees issued on behalf of subsidiaries and other consolidated entities. At March 27, 2022 and December 31, 2021, third-party guarantees totaled $829 million and $838 million, of which approximately 69% 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. Generally, we also have cross-indemnities in place that may enable us to recover amounts that may be paid on behalf of a joint venture partner. 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 27, 2022 and December 31, 2021, there were no material amounts recorded in our financial statements related to third-party guarantees or novation agreements. Other As a U.S. Government contractor, we are subject to various audits and investigations by the U.S. Government to determine whether our operations are being conducted in accordance with applicable regulatory requirements. U.S. Government investigations of us, whether relating to government contracts or conducted for other reasons, could result in administrative, civil, or criminal liabilities, including repayments, fines or penalties being imposed upon us, suspension, proposed debarment, debarment from eligibility for future U.S. Government contracting, or suspension of export privileges. Suspension or debarment could have a material adverse effect on us because of our dependence on contracts with the U.S. Government. U.S. Government investigations often take years to complete and 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. and foreign laws and regulations and foreign procurement policies and practices. Our compliance with local regulations or applicable U.S. 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. We record estimated warranty costs in the period in which the related products are delivered. The warranty liability recorded at each balance sheet date is based generally 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. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 27, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following (in millions): March 27, 2022 December 31, 2021 Total Level 1 Level 2 Total Level 1 Level 2 Assets Mutual funds $ 1,327 $ 1,327 $ — $ 1,434 $ 1,434 $ — U.S. Government securities 102 — 102 121 — 121 Other securities 769 588 181 684 492 192 Derivatives 9 — 9 15 — 15 Liabilities Derivatives 74 — 74 60 — 60 Assets measured at NAV (a) Other commingled funds 20 20 (a) Net Asset Value (NAV) is the total value of the fund divided by the number of the fund’s shares outstanding. Substantially all assets measured at fair value, other than derivatives, represent investments held in a separate trust to fund certain of our non-qualified deferred compensation plans and are recorded in other noncurrent assets on our consolidated balance sheets. The fair values of mutual funds and certain other securities are determined by reference to the quoted market price per unit in active markets multiplied by the number of units held without consideration of transaction costs. The fair values of U.S. Government and certain other securities are determined using pricing models that use observable inputs (e.g., interest rates and yield curves observable at commonly quoted intervals), bids provided by brokers or dealers or quoted prices of securities with similar characteristics. 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 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. These contracts hedge forecasted foreign currency transactions in order to mitigate 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 also are exposed to the impact of interest rate changes primarily through our borrowing activities. For fixed rate borrowings, we may use variable interest rate swaps, effectively converting fixed rate borrowings to variable rate borrowings in order to hedge changes in the fair value of the debt. These swaps are designated as fair value hedges. For variable rate borrowings, we may use fixed interest rate swaps, effectively converting variable rate borrowings to fixed rate borrowings in order to mitigate the impact of interest rate changes on earnings. These swaps are designated as cash flow hedges. We also may enter into derivative instruments that are not designated as hedges and do not qualify for hedge accounting, which are intended to mitigate certain economic exposures. The aggregate notional amount of our outstanding interest rate swaps was $500 million at both March 27, 2022 and December 31, 2021. The aggregate notional amount of our outstanding foreign currency hedges was $5.9 billion and $4.0 billion at March 27, 2022 and December 31, 2021. The fair values of our outstanding interest rate swaps and foreign currency hedges at March 27, 2022 and December 31, 2021 were not significant. Derivative instruments did not have a material impact on net earnings and comprehensive income during the quarters ended March 27, 2022 and March 28, 2021. 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 hold investments in public companies, primarily as a result of certain companies in which Lockheed Martin Ventures invested going public. These investments have quoted market prices in active markets (Level 1) and are recorded at fair value at the end of each reporting period and reflected in other securities in the table above. See “Note 10 - Other - Lockheed Martin Ventures Fund” for more information on Lockheed Martin Ventures investments. 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 $13.7 billion and $15.4 billion at March 27, 2022 and December 31, 2021. The outstanding principal amount of debt was $12.8 billion at both March 27, 2022 and December 31, 2021, excluding $1.2 billion and $1.1 billion of unamortized discounts and issuance costs at March 27, 2022 and December 31, 2021. 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). |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 27, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Repurchases of Common Stock During the quarter ended March 27, 2022, we entered into an accelerated share repurchase (ASR) agreement to purchase $2.0 billion of our common stock pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934. Under the terms of the ASR agreement, we paid $2.0 billion and received an initial delivery of 4.1 million shares of our common stock. Subsequent to our first quarter 2022, upon final settlement of the ASR agreement on April 14, 2022, we received an additional 0.6 million shares of our common stock for no additional consideration. In addition, as previously disclosed, in January 2022, we received an additional 2.2 million shares of our common stock for no additional consideration upon final settlement of the ASR we entered into in the fourth quarter of 2021. The total remaining authorization for future common share repurchases under our share repurchase program was $1.9 billion as of March 27, 2022. 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. Dividends We declared cash dividends totaling $749 million ($2.80 per share) during the quarter ended March 27, 2022. The total amount 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. These dividend-equivalents are accrued during the vesting period and are paid upon the vesting of the RSUs and PSUs, which primarily occurs in the first quarter each year. Accumulated Other Comprehensive Loss Changes in the balance of AOCL, net of tax, consisted of the following (in millions): Postretirement Other, net AOCL Balance at December 31, 2021 $ (10,964) $ (42) $ (11,006) Other comprehensive income (loss) before reclassifications — (22) (22) Amounts reclassified from AOCL Recognition of net actuarial losses (a) 115 — 115 Amortization of net prior service credits (a) (67) — (67) Other — 1 1 Total reclassified from AOCL 48 1 49 Total other comprehensive income (loss) 48 (21) 27 Balance at March 27, 2022 $ (10,916) $ (63) $ (10,979) Balance at December 31, 2020 $ (16,155) $ 34 $ (16,121) Other comprehensive income (loss) before reclassifications — (26) (26) Amounts reclassified from AOCL Recognition of net actuarial losses (a) 204 — 204 Amortization of net prior service credits (a) (64) — (64) Other — (1) (1) Total reclassified from AOCL 140 (1) 139 Total other comprehensive income (loss) 140 (27) 113 Balance at March 28, 2021 $ (16,015) $ 7 $ (16,008) |
OTHER
OTHER | 3 Months Ended |
Mar. 27, 2022 | |
Accounting Policies [Abstract] | |
OTHER | OTHER Changes in Estimates Significant estimates and assumptions are made in estimating contract sales and costs, including the profit booking rate. At the outset of a long-term contract, we identify and monitor risks to the achievement of the technical, schedule and cost aspects of the contract, as well as variable consideration, and assess the effects of those risks on our estimates of sales and total costs to complete the contract. The estimates consider the technical requirements (e.g., a newly-developed product versus a mature product), the schedule and associated tasks (e.g., the number and type of milestone events), and costs (e.g., material, labor, subcontractor, overhead, general and administrative and the estimated costs to fulfill our industrial cooperation agreements, sometimes referred to as offset or localization agreements, required under certain contracts with international customers). The initial profit booking rate of each contract considers risks surrounding the ability to achieve the technical requirements, schedule and costs in the initial estimated total costs to complete the contract. Profit booking rates may increase during the performance of the contract if we successfully retire risks surrounding the technical, schedule and cost aspects of the contract, which decreases the estimated total costs to complete the contract or may increase the variable consideration we expect to receive on the contract. Conversely, our profit booking rates may decrease if the estimated total costs to complete the contract increase or our estimates of variable consideration we expect to receive decrease. 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 determined. In addition, 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 for which we recognize revenue over time using the percentage-of-completion cost-to-cost method to measure progress towards completion. Increases in the profit booking rates, typically referred to as favorable profit adjustments, usually relate to revisions in the estimated total costs to fulfill the performance obligations that reflect improved conditions on a particular contract. Conversely, conditions on a particular contract may deteriorate, resulting in an increase in the estimated total costs to fulfill the performance obligations and a reduction in the profit booking rate and are typically referred to as unfavorable profit adjustments. Increases or decreases in profit booking rates are recognized in the current period and reflect the inception-to-date effect of such changes. Segment operating profit and margin may also be impacted favorably or unfavorably by other items, which may or may not impact sales. Favorable items may include the positive resolution of contractual matters, cost recoveries on severance and restructuring charges, insurance recoveries and gains on sales of assets. Unfavorable items may include the adverse resolution of contractual matters; restructuring charges, except for significant severance actions, which are excluded from segment oper ating results; reserves for disputes; certain asset impairments; and losses on sales of certain assets. Our consolidated net adjustments not related to volume, including net profit booking rate adjustments and other matters, increased segment operating profit by approximately $405 million during the quarter ended March 27, 2022 and $495 million during the quarter ended March 28, 2021. These adjustments increased net earnings by approximately $320 million ($1.19 per share) during the quarter ended March 27, 2022 and $391 million ($1.40 per share) during the quarter ended March 28, 2021. We recognized net sales from performance obligations satisfied in prior periods of approximately $416 million during the quarter ended March 27, 2022, and $492 million during the quarter ended March 28, 2021, which primarily relate to changes in profit booking rates that impacted revenue. 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. As of March 27, 2022, cumulative losses remained at approximately $225 million. We will continue to monitor our performance, any future changes in scope, 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 operating results. In addition, we and our industry team will incur advanced procurement costs (also referred to as precontract costs) in order to enhance our ability to achieve the revised schedule and certain milestones. We will monitor the recoverability of precontract 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 has experienced performance issues for which we have periodically accrued reserves. As of March 27, 2022, cumulative losses remained at approximately $280 million. We will continue to monitor our performance, any future changes in scope, 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. However, based on the losses previously recorded and our current estimate of the sales and costs to complete the program, at this time we do not anticipate that additional losses, if any, would be material to our operating results or financial condition. We have a program, EADGE-T, to design, integrate and install an air missile defense command, control, communications, computers - intelligence (C4I) system for an international customer that has experienced performance issues and for which we have periodically accrued reserves at our RMS business segment. We last recorded a charge and accrued reserves for this program in 2017. As of March 27, 2022, cumulative losses remained at approximately $260 million. We continue to monitor program requirements and our performance. At this time, we do not anticipate additional charges that would be material to our operating results or financial condition. Backlog 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. Our backlog includes both funded (firm orders for our products and services for which funding has been both authorized and appropriated by the customer) and unfunded (firm orders for which funding has not been appropriated) amounts. We do not include unexercised options or potential orders under indefinite-delivery, indefinite-quantity agreements in our backlog. For our cost-reimbursable and fixed-priced-incentive contracts, the estimated consideration we expect to receive pursuant to the terms of the contract may exceed the contractual award amount. 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 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 27, 2022, our ending backlog was $134.2 billion. We expect to recognize approximately 38% of our backlog over the next 12 months and approximately 61% over the next 24 months as revenue with the remainder recognized thereafter. Lockheed Martin Ventures Fund Through our Lockheed Martin Ventures Fund, we make strategic investments in companies that we believe are advancing or developing new technologies applicable to our business. These investments may be in the form of common or preferred stock, warrants, convertible debt securities or investments in funds. Most of the investments are in equity securities without readily determinable fair values, 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. Investments with quoted market prices in active markets (Level 1) are recorded at fair value at the end of each reporting period. The carrying amounts of investments held in our Lockheed Martin Ventures Fund were $575 million and $465 million at March 27, 2022 and December 31, 2021. During the quarters ended March 27, 2022 and March 28, 2021, we recorded net gains of $103 million ($77 million, or $0.29 per share, after-tax) and $68 million ($51 million, or $0.18 per share, after-tax) due to changes in fair value and/or sales of investments which are reflected in the other non-operating income, net account on our consolidated statements of earnings. Income Taxes Our effective income tax rate was 15.9% and 16.9% for the quarters ended March 27, 2022 and March 28, 2021. The rate for the first quarter of 2022 is lower due to increased tax deductions for employee equity awards and foreign derived intangible income compared to the first quarter of 2021. The rates for both periods benefited from the research and development tax credit and dividends paid to our defined contribution plans with an employee stock ownership plan feature. Severance and Restructuring Charges During the first quarter of 2021, we recorded severance and restructuring charges of $36 million ($28 million, or $0.10 per share, after-tax) related to workforce reductions and facility exit costs within our RMS business segment. These actions were taken to consolidate certain operations in order to improve the efficiency of RMS’ manufacturing operations and affordability of its products and services. Employees terminated as part of these actions were to receive lump-sum severance payments upon separation primarily based on years of service. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 27, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In 2017, the United Kingdom’s Financial Conduct Authority (FCA) announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (LIBOR), which have been widely used as reference rates for various securities and financial contracts, including loans, debt and derivatives. This announcement indicates that the continuation of LIBOR on the current basis is not guaranteed after 2021. Subsequently in March 2021, the FCA announced some USD LIBOR tenors (overnight, 1 month, 3 month, 6 month and 12 month) will continue to be published until June 30, 2023. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate (SOFR) for USD LIBOR. Currently, our credit facility and certain of our derivative instruments reference LIBOR-based rates. Our credit facility contains provisions specifying alternative interest rate calculations to be employed when LIBOR ceases to be available as a benchmark and we have adhered to the ISDA 2020 IBOR Fallbacks Protocol, which will govern our derivatives upon the final cessation of USD LIBOR. ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , as amended, helps limit the accounting impact from contract modifications, including hedging relationships, due to the transition from LIBOR to alternative reference rates that are completed by December 31, 2022. We do not expect a significant impact to our financial results, financial position or cash flows from the transition from LIBOR to alternative reference interest rates, but we will continue to monitor the impact of this transition until it is completed. Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606) . The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We adopted the new standard effective January 1, 2022. The adoption of the new standard did not have an impact to our financial results, financial position, or cash flows. Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) , Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information about the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. We adopted the new standard effective January 1, 2022. The financial impact of our government assistance transactions within the scope of this standard are currently not material for disclosure. |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 3 Months Ended |
Mar. 27, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
EARNINGS PER COMMON SHARE | 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 27, 2022 and March 28, 2021. Basic and diluted weighted average common shares outstanding have decreased in 2022 and 2021 due to share repurchases. |
INVENTORIES | Costs incurred to fulfill a contract in advance of the contract being awarded are included in inventories as work-in-process if we determine that those costs relate directly to a contract or to an anticipated contract that we can specifically identify and contract award is probable, the costs generate or enhance resources that will be used in satisfying performance obligations, and the costs are recoverable (referred to as pre-contract costs). Pre-contract costs that are initially capitalized in inventory are generally recognized as cost of sales consistent with the transfer of products and services to the customer upon the receipt of the anticipated contract. All other pre-contract costs, including start-up costs, are expensed as incurred. |
RECENT ACCOUNTING PRONOUNCEMENTS | Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting In 2017, the United Kingdom’s Financial Conduct Authority (FCA) announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (LIBOR), which have been widely used as reference rates for various securities and financial contracts, including loans, debt and derivatives. This announcement indicates that the continuation of LIBOR on the current basis is not guaranteed after 2021. Subsequently in March 2021, the FCA announced some USD LIBOR tenors (overnight, 1 month, 3 month, 6 month and 12 month) will continue to be published until June 30, 2023. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate (SOFR) for USD LIBOR. Currently, our credit facility and certain of our derivative instruments reference LIBOR-based rates. Our credit facility contains provisions specifying alternative interest rate calculations to be employed when LIBOR ceases to be available as a benchmark and we have adhered to the ISDA 2020 IBOR Fallbacks Protocol, which will govern our derivatives upon the final cessation of USD LIBOR. ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting , as amended, helps limit the accounting impact from contract modifications, including hedging relationships, due to the transition from LIBOR to alternative reference rates that are completed by December 31, 2022. We do not expect a significant impact to our financial results, financial position or cash flows from the transition from LIBOR to alternative reference interest rates, but we will continue to monitor the impact of this transition until it is completed. Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 2014-09, Revenue from Contracts with Customers (Topic 606) . The update will generally result in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We adopted the new standard effective January 1, 2022. The adoption of the new standard did not have an impact to our financial results, financial position, or cash flows. Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) , Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government assistance transactions for annual reporting periods. The disclosures include information about the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. We adopted the new standard effective January 1, 2022. The financial impact of our government assistance transactions within the scope of this standard are currently not material for disclosure. |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Shares Outstanding Used to Compute Earnings Per Common Share | The weighted average number of shares outstanding used to compute earnings per common share were as follows (in millions): Quarters Ended March 27, March 28, Weighted average common shares outstanding for basic computations 268.3 279.0 Weighted average dilutive effect of equity awards 0.9 1.0 Weighted average common shares outstanding for diluted computations 269.2 280.0 |
INFORMATION ON BUSINESS SEGME_2
INFORMATION ON BUSINESS SEGMENTS (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Segment Reporting [Abstract] | |
Summary of Operating Results and Total Assets for Each Business Segment | Summary operating results for each of our business segments were as follows (in millions): Quarters Ended March 27, March 28, Net sales Aeronautics $ 6,401 $ 6,387 Missiles and Fire Control 2,452 2,749 Rotary and Mission Systems 3,552 4,107 Space 2,559 3,015 Total net sales $ 14,964 $ 16,258 Operating profit Aeronautics $ 679 $ 693 Missiles and Fire Control 384 396 Rotary and Mission Systems 348 433 Space 245 227 Total business segment operating profit 1,656 1,749 Unallocated items FAS/CAS pension operating adjustment 426 489 Severance and restructuring charges — (36) Other, net (149) (20) Total unallocated items 277 433 Total consolidated operating profit $ 1,933 $ 2,182 Intersegment sales Aeronautics $ 60 $ 53 Missiles and Fire Control 156 129 Rotary and Mission Systems 455 478 Space 83 82 Total intersegment sales $ 754 $ 742 Amortization of purchased intangibles Aeronautics $ — $ — Missiles and Fire Control (1) (1) Rotary and Mission Systems (58) (58) Space (3) (22) Total amortization of purchased intangibles $ (62) $ (81) Total FAS/CAS pension adjustment for the quarters ended March 27, 2022 and March 28, 2021, including the service and non-service cost components of FAS pension (expense) income for our qualified defined benefit pension plans, were as follows (in millions): Quarters Ended March 27, March 28, Total FAS income and CAS cost Total FAS pension income $ 116 $ 66 Less: CAS pension cost 450 516 Total FAS/CAS pension adjustment $ 566 $ 582 Service and non-service cost reconciliation FAS pension service cost $ (24) $ (27) Less: CAS pension cost 450 516 Total FAS/CAS pension operating adjustment 426 489 Non-service FAS pension income 140 93 Total FAS/CAS pension adjustment $ 566 $ 582 Net sales by products and services, contract type, customer, and geographic region were as follows (in millions): Quarter Ended March 27, 2022 Aeronautics MFC RMS Space Total Net sales Products $ 5,417 $ 2,173 $ 2,788 $ 2,116 $ 12,494 Services 984 279 764 443 2,470 Total net sales $ 6,401 $ 2,452 $ 3,552 $ 2,559 $ 14,964 Net sales by contract type Fixed-price $ 4,686 $ 1,713 $ 2,218 $ 637 $ 9,254 Cost-reimbursable 1,715 739 1,334 1,922 5,710 Total net sales $ 6,401 $ 2,452 $ 3,552 $ 2,559 $ 14,964 Net sales by customer U.S. Government $ 4,213 $ 1,595 $ 2,511 $ 2,516 $ 10,835 International (a) 2,150 852 971 34 4,007 U.S. commercial and other 38 5 70 9 122 Total net sales $ 6,401 $ 2,452 $ 3,552 $ 2,559 $ 14,964 Net sales by geographic region United States $ 4,251 $ 1,600 $ 2,581 $ 2,525 $ 10,957 Europe 1,023 256 187 24 1,490 Asia Pacific 721 106 432 7 1,266 Middle East 262 465 176 3 906 Other 144 25 176 — 345 Total net sales $ 6,401 $ 2,452 $ 3,552 $ 2,559 $ 14,964 Quarter Ended March 28, 2021 Aeronautics MFC RMS Space Total Net sales Products $ 5,479 $ 2,410 $ 3,300 $ 2,564 $ 13,753 Services 908 339 807 451 2,505 Total net sales $ 6,387 $ 2,749 $ 4,107 $ 3,015 $ 16,258 Net sales by contract type Fixed-price $ 4,734 $ 1,878 $ 2,677 $ 614 $ 9,903 Cost-reimbursable 1,653 871 1,430 2,401 6,355 Total net sales $ 6,387 $ 2,749 $ 4,107 $ 3,015 $ 16,258 Net sales by customer U.S. Government $ 4,273 $ 2,041 $ 2,810 $ 2,551 $ 11,675 International (a) 2,099 703 1,220 457 4,479 U.S. commercial and other 15 5 77 7 104 Total net sales $ 6,387 $ 2,749 $ 4,107 $ 3,015 $ 16,258 Net sales by geographic region United States $ 4,288 $ 2,046 $ 2,887 $ 2,558 $ 11,779 Europe 854 182 201 455 1,692 Asia Pacific 893 51 650 2 1,596 Middle East 284 458 170 — 912 Other 68 12 199 — 279 Total net sales $ 6,387 $ 2,749 $ 4,107 $ 3,015 $ 16,258 (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. Total assets for each of our business segments were as follows (in millions): March 27, December 31, Assets Aeronautics $ 12,232 $ 10,756 Missiles and Fire Control 5,410 5,243 Rotary and Mission Systems 17,569 17,664 Space 6,315 6,199 Total business segment assets 41,526 39,862 Corporate assets (a) 9,984 11,011 Total assets $ 51,510 $ 50,873 (a) Corporate assets primarily include cash and cash equivalents, deferred income taxes, assets for the portion of environmental costs that are probable of future recovery, investments held in a separate trust and investments held in Lockheed Martin Ventures Fund. |
CONTRACT ASSETS AND LIABILITI_2
CONTRACT ASSETS AND LIABILITIES (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Contract Assets and Liabilities | Contract assets and contract liabilities were as follows (in millions): March 27, December 31, Contract assets $ 12,130 $ 10,579 Contract liabilities 7,902 8,107 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories consisted of the following (in millions): March 27, December 31, Materials, spares and supplies $ 630 $ 624 Work-in-process 2,312 2,163 Finished goods 202 194 Total inventories $ 3,144 $ 2,981 |
POSTRETIREMENT BENEFIT PLANS (T
POSTRETIREMENT BENEFIT PLANS (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Pretax Net Periodic Benefit Cost | The pretax FAS (expense) income related to our qualified defined benefit pension plans and retiree medical and life insurance plans consisted of the following (in millions): Quarters Ended March 27, March 28, Qualified defined benefit pension plans Operating: Service cost $ (24) $ (27) Non-operating: Interest cost (302) (311) Expected return on plan assets 502 569 Recognized net actuarial losses (150) (252) Amortization of prior service credits 90 87 Non-service FAS pension income 140 93 Total FAS pension income $ 116 $ 66 Retiree medical and life insurance plans Operating: Service cost $ (2) $ (3) Non-operating: Interest cost (12) (13) Expected return on plan assets 34 35 Recognized net actuarial gains 11 — Amortization of prior service costs (7) (9) Non-service FAS retiree medical and life income 26 13 Total FAS retiree medical and life income $ 24 $ 10 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured and Recorded at Fair Value | Assets and liabilities measured and recorded at fair value on a recurring basis consisted of the following (in millions): March 27, 2022 December 31, 2021 Total Level 1 Level 2 Total Level 1 Level 2 Assets Mutual funds $ 1,327 $ 1,327 $ — $ 1,434 $ 1,434 $ — U.S. Government securities 102 — 102 121 — 121 Other securities 769 588 181 684 492 192 Derivatives 9 — 9 15 — 15 Liabilities Derivatives 74 — 74 60 — 60 Assets measured at NAV (a) Other commingled funds 20 20 (a) Net Asset Value (NAV) is the total value of the fund divided by the number of the fund’s shares outstanding. |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Equity [Abstract] | |
Schedule of Changes in the Balance of AOCL, Net of Tax | Changes in the balance of AOCL, net of tax, consisted of the following (in millions): Postretirement Other, net AOCL Balance at December 31, 2021 $ (10,964) $ (42) $ (11,006) Other comprehensive income (loss) before reclassifications — (22) (22) Amounts reclassified from AOCL Recognition of net actuarial losses (a) 115 — 115 Amortization of net prior service credits (a) (67) — (67) Other — 1 1 Total reclassified from AOCL 48 1 49 Total other comprehensive income (loss) 48 (21) 27 Balance at March 27, 2022 $ (10,916) $ (63) $ (10,979) Balance at December 31, 2020 $ (16,155) $ 34 $ (16,121) Other comprehensive income (loss) before reclassifications — (26) (26) Amounts reclassified from AOCL Recognition of net actuarial losses (a) 204 — 204 Amortization of net prior service credits (a) (64) — (64) Other — (1) (1) Total reclassified from AOCL 140 (1) 139 Total other comprehensive income (loss) 140 (27) 113 Balance at March 28, 2021 $ (16,015) $ 7 $ (16,008) |
EARNINGS PER COMMON SHARE - Sch
EARNINGS PER COMMON SHARE - Schedule of Weighted Average Shares Outstanding Used to Compute Earnings Per Common Share (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Earnings Per Share [Abstract] | ||
Weighted average common shares outstanding for basic computations (in shares) | 268.3 | 279 |
Weighted average dilutive effect of equity awards (in shares) | 0.9 | 1 |
Weighted average common shares outstanding for diluted computations (in shares) | 269.2 | 280 |
EARNINGS PER COMMON SHARE - Nar
EARNINGS PER COMMON SHARE - Narrative (Details) - shares | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Earnings Per Share [Abstract] | ||
Significant anti-dilutive equity awards (in shares) | 0 | 0 |
INFORMATION ON BUSINESS SEGME_3
INFORMATION ON BUSINESS SEGMENTS - Narrative (Details) - segment | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Segment Reporting [Abstract] | ||
Number of business segments | 4 | |
Product Concentration Risk | Sales Revenue, Net | F-35 Program | Aeronautics | ||
Segment Reporting Information [Line Items] | ||
Net sales for the F-35 program representing total consolidated net sales (as a percent) | 29.00% | 27.00% |
INFORMATION ON BUSINESS SEGME_4
INFORMATION ON BUSINESS SEGMENTS - Summary of Operating Results For Each Business Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Net sales | ||
Total net sales | $ 14,964 | $ 16,258 |
Operating profit | ||
Total operating profit | 1,933 | 2,182 |
Unallocated items | ||
Severance and restructuring charges | 0 | 36 |
Aeronautics | ||
Net sales | ||
Total net sales | 6,401 | 6,387 |
Missiles and Fire Control | ||
Net sales | ||
Total net sales | 2,452 | 2,749 |
Rotary and Mission Systems | ||
Net sales | ||
Total net sales | 3,552 | 4,107 |
Space | ||
Net sales | ||
Total net sales | 2,559 | 3,015 |
Business Segments | ||
Net sales | ||
Total net sales | 14,964 | 16,258 |
Amortization of purchased intangibles | (62) | (81) |
Operating profit | ||
Total operating profit | 1,656 | 1,749 |
Business Segments | Aeronautics | ||
Net sales | ||
Total net sales | 6,401 | 6,387 |
Amortization of purchased intangibles | 0 | 0 |
Operating profit | ||
Total operating profit | 679 | 693 |
Business Segments | Missiles and Fire Control | ||
Net sales | ||
Total net sales | 2,452 | 2,749 |
Amortization of purchased intangibles | (1) | (1) |
Operating profit | ||
Total operating profit | 384 | 396 |
Business Segments | Rotary and Mission Systems | ||
Net sales | ||
Total net sales | 3,552 | 4,107 |
Amortization of purchased intangibles | (58) | (58) |
Operating profit | ||
Total operating profit | 348 | 433 |
Business Segments | Space | ||
Net sales | ||
Total net sales | 2,559 | 3,015 |
Amortization of purchased intangibles | (3) | (22) |
Operating profit | ||
Total operating profit | 245 | 227 |
Unallocated items | ||
Unallocated items | ||
FAS/CAS pension operating adjustment | 426 | 489 |
Severance and restructuring charges | 0 | (36) |
Other, net | (149) | (20) |
Total unallocated items | 277 | 433 |
Intersegment sales | ||
Net sales | ||
Total net sales | 754 | 742 |
Intersegment sales | Aeronautics | ||
Net sales | ||
Total net sales | 60 | 53 |
Intersegment sales | Missiles and Fire Control | ||
Net sales | ||
Total net sales | 156 | 129 |
Intersegment sales | Rotary and Mission Systems | ||
Net sales | ||
Total net sales | 455 | 478 |
Intersegment sales | Space | ||
Net sales | ||
Total net sales | $ 83 | $ 82 |
INFORMATION ON BUSINESS SEGME_5
INFORMATION ON BUSINESS SEGMENTS - FAS/CAS Pension Adjustment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Segment Reporting Information [Line Items] | ||
Non-service FAS pension income | $ 140 | $ 93 |
Total FAS/CAS pension adjustment | 566 | 582 |
Unallocated items | ||
Segment Reporting Information [Line Items] | ||
Less: CAS pension cost | 450 | 516 |
FAS pension service cost | (24) | (27) |
FAS/CAS pension operating adjustment | 426 | 489 |
Qualified defined benefit pension plans | ||
Segment Reporting Information [Line Items] | ||
Total FAS pension income | (116) | (66) |
FAS pension service cost | (24) | (27) |
Qualified defined benefit pension plans | Qualified Plan | ||
Segment Reporting Information [Line Items] | ||
Total FAS pension income | $ 116 | $ 66 |
INFORMATION ON BUSINESS SEGME_6
INFORMATION ON BUSINESS SEGMENTS - Income Statement Information For Each Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Net sales | ||
Net sales | $ 14,964 | $ 16,258 |
United States | ||
Net sales | ||
Net sales | 10,957 | 11,779 |
Europe | ||
Net sales | ||
Net sales | 1,490 | 1,692 |
Asia Pacific | ||
Net sales | ||
Net sales | 1,266 | 1,596 |
Middle East | ||
Net sales | ||
Net sales | 906 | 912 |
Other | ||
Net sales | ||
Net sales | 345 | 279 |
U.S. Government | ||
Net sales | ||
Net sales | 10,835 | 11,675 |
International | ||
Net sales | ||
Net sales | 4,007 | 4,479 |
U.S. commercial and other | ||
Net sales | ||
Net sales | 122 | 104 |
Fixed-price | ||
Net sales | ||
Net sales | 9,254 | 9,903 |
Cost-reimbursable | ||
Net sales | ||
Net sales | 5,710 | 6,355 |
Products | ||
Net sales | ||
Net sales | 12,494 | 13,753 |
Services | ||
Net sales | ||
Net sales | 2,470 | 2,505 |
Aeronautics | ||
Net sales | ||
Net sales | 6,401 | 6,387 |
Aeronautics | United States | ||
Net sales | ||
Net sales | 4,251 | 4,288 |
Aeronautics | Europe | ||
Net sales | ||
Net sales | 1,023 | 854 |
Aeronautics | Asia Pacific | ||
Net sales | ||
Net sales | 721 | 893 |
Aeronautics | Middle East | ||
Net sales | ||
Net sales | 262 | 284 |
Aeronautics | Other | ||
Net sales | ||
Net sales | 144 | 68 |
Aeronautics | U.S. Government | ||
Net sales | ||
Net sales | 4,213 | 4,273 |
Aeronautics | International | ||
Net sales | ||
Net sales | 2,150 | 2,099 |
Aeronautics | U.S. commercial and other | ||
Net sales | ||
Net sales | 38 | 15 |
Aeronautics | Fixed-price | ||
Net sales | ||
Net sales | 4,686 | 4,734 |
Aeronautics | Cost-reimbursable | ||
Net sales | ||
Net sales | 1,715 | 1,653 |
Aeronautics | Products | ||
Net sales | ||
Net sales | 5,417 | 5,479 |
Aeronautics | Services | ||
Net sales | ||
Net sales | 984 | 908 |
MFC | ||
Net sales | ||
Net sales | 2,452 | 2,749 |
MFC | United States | ||
Net sales | ||
Net sales | 1,600 | 2,046 |
MFC | Europe | ||
Net sales | ||
Net sales | 256 | 182 |
MFC | Asia Pacific | ||
Net sales | ||
Net sales | 106 | 51 |
MFC | Middle East | ||
Net sales | ||
Net sales | 465 | 458 |
MFC | Other | ||
Net sales | ||
Net sales | 25 | 12 |
MFC | U.S. Government | ||
Net sales | ||
Net sales | 1,595 | 2,041 |
MFC | International | ||
Net sales | ||
Net sales | 852 | 703 |
MFC | U.S. commercial and other | ||
Net sales | ||
Net sales | 5 | 5 |
MFC | Fixed-price | ||
Net sales | ||
Net sales | 1,713 | 1,878 |
MFC | Cost-reimbursable | ||
Net sales | ||
Net sales | 739 | 871 |
MFC | Products | ||
Net sales | ||
Net sales | 2,173 | 2,410 |
MFC | Services | ||
Net sales | ||
Net sales | 279 | 339 |
RMS | ||
Net sales | ||
Net sales | 3,552 | 4,107 |
RMS | United States | ||
Net sales | ||
Net sales | 2,581 | 2,887 |
RMS | Europe | ||
Net sales | ||
Net sales | 187 | 201 |
RMS | Asia Pacific | ||
Net sales | ||
Net sales | 432 | 650 |
RMS | Middle East | ||
Net sales | ||
Net sales | 176 | 170 |
RMS | Other | ||
Net sales | ||
Net sales | 176 | 199 |
RMS | U.S. Government | ||
Net sales | ||
Net sales | 2,511 | 2,810 |
RMS | International | ||
Net sales | ||
Net sales | 971 | 1,220 |
RMS | U.S. commercial and other | ||
Net sales | ||
Net sales | 70 | 77 |
RMS | Fixed-price | ||
Net sales | ||
Net sales | 2,218 | 2,677 |
RMS | Cost-reimbursable | ||
Net sales | ||
Net sales | 1,334 | 1,430 |
RMS | Products | ||
Net sales | ||
Net sales | 2,788 | 3,300 |
RMS | Services | ||
Net sales | ||
Net sales | 764 | 807 |
Space | ||
Net sales | ||
Net sales | 2,559 | 3,015 |
Space | United States | ||
Net sales | ||
Net sales | 2,525 | 2,558 |
Space | Europe | ||
Net sales | ||
Net sales | 24 | 455 |
Space | Asia Pacific | ||
Net sales | ||
Net sales | 7 | 2 |
Space | Middle East | ||
Net sales | ||
Net sales | 3 | 0 |
Space | Other | ||
Net sales | ||
Net sales | 0 | 0 |
Space | U.S. Government | ||
Net sales | ||
Net sales | 2,516 | 2,551 |
Space | International | ||
Net sales | ||
Net sales | 34 | 457 |
Space | U.S. commercial and other | ||
Net sales | ||
Net sales | 9 | 7 |
Space | Fixed-price | ||
Net sales | ||
Net sales | 637 | 614 |
Space | Cost-reimbursable | ||
Net sales | ||
Net sales | 1,922 | 2,401 |
Space | Products | ||
Net sales | ||
Net sales | 2,116 | 2,564 |
Space | Services | ||
Net sales | ||
Net sales | $ 443 | $ 451 |
INFORMATION ON BUSINESS SEGME_7
INFORMATION ON BUSINESS SEGMENTS - Total Assets For Each Business Segment (Details) - USD ($) $ in Millions | Mar. 27, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 51,510 | $ 50,873 |
Business Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 41,526 | 39,862 |
Business Segments | Aeronautics | ||
Segment Reporting Information [Line Items] | ||
Total assets | 12,232 | 10,756 |
Business Segments | Missiles and Fire Control | ||
Segment Reporting Information [Line Items] | ||
Total assets | 5,410 | 5,243 |
Business Segments | Rotary and Mission Systems | ||
Segment Reporting Information [Line Items] | ||
Total assets | 17,569 | 17,664 |
Business Segments | Space | ||
Segment Reporting Information [Line Items] | ||
Total assets | 6,315 | 6,199 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 9,984 | $ 11,011 |
CONTRACT ASSETS AND LIABILITI_3
CONTRACT ASSETS AND LIABILITIES (Details) - USD ($) $ in Millions | Mar. 27, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 12,130 | $ 10,579 |
Contract liabilities | $ 7,902 | $ 8,107 |
CONTRACT ASSETS AND LIABILITI_4
CONTRACT ASSETS AND LIABILITIES - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Increase in contract assets | $ 1,551,000,000 | $ 1,363,000,000 |
Impairment loss | 0 | 0 |
Decrease in contract liabilities | (205,000,000) | (290,000,000) |
Liability, revenue recognized | $ 2,100,000,000 | $ 2,300,000,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Mar. 27, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Materials, spares and supplies | $ 630 | $ 624 |
Work-in-process | 2,312 | 2,163 |
Finished goods | 202 | 194 |
Total inventories | 3,144 | 2,981 |
Capitalized contract cost | $ 749 | $ 634 |
POSTRETIREMENT BENEFIT PLANS -
POSTRETIREMENT BENEFIT PLANS - Schedule of Pretax Net Periodic Benefit Cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Qualified defined benefit pension plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ (24) | $ (27) |
Interest cost | (302) | (311) |
Expected return on plan assets | 502 | 569 |
Recognized net actuarial losses | (150) | (252) |
Amortization of prior service credits | 90 | 87 |
Non-service FAS retiree medical and life income | 140 | 93 |
Total FAS retiree medical and life income | 116 | 66 |
Retiree medical and life insurance plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | (2) | (3) |
Interest cost | (12) | (13) |
Expected return on plan assets | 34 | 35 |
Recognized net actuarial losses | 11 | 0 |
Amortization of prior service credits | (7) | (9) |
Non-service FAS retiree medical and life income | 26 | 13 |
Total FAS retiree medical and life income | $ 24 | $ 10 |
POSTRETIREMENT BENEFIT PLANS _2
POSTRETIREMENT BENEFIT PLANS - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Recognition of previously deferred postretirement benefit plan amounts, before tax | $ 61,000,000 | $ 178,000,000 |
Recognition of previously deferred postretirement benefit plan amounts, net of tax | 48,000,000 | 140,000,000 |
Retiree medical and life insurance plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Recognition of previously deferred postretirement benefit plan amounts, before tax | 5,000,000 | 4,000,000 |
Qualified defined benefit pension plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Material contributions to qualified defined benefit pension plans | $ 0 | $ 0 |
LEGAL PROCEEDINGS AND CONTING_2
LEGAL PROCEEDINGS AND CONTINGENCIES (Details) $ in Millions | Apr. 24, 2009USD ($) | Dec. 31, 2014 | Jun. 30, 2006subsidiary | Mar. 27, 2022USD ($) | Dec. 31, 2021USD ($) | May 31, 2017lawsuit |
Loss Contingencies [Line Items] | ||||||
Damages sought by plaintiff | $ 52 | |||||
Liabilities recorded relative to environmental matters | 729 | $ 742 | ||||
Environmental costs eligible for future recovery | $ 632 | 645 | ||||
Period over which costs and recovery of costs is projected | 20 years | |||||
Outstanding letters of credit, surety bonds, and third-party guarantees | $ 3,500 | 3,600 | ||||
Third-party guarantees | $ 829 | $ 838 | ||||
Guarantees of contractual performance of joint ventures (as a percent) | 69.00% | |||||
N.Y. Metropolitan Transportation Authority | ||||||
Loss Contingencies [Line Items] | ||||||
Damages sought by plaintiff | $ 190 | |||||
Contract value | 323 | |||||
Contract payments received to date | 241 | |||||
Claims for monetary damages against the plaintiff | $ 95 | |||||
Period of bench trial | 35 days | |||||
Sikorsky Aircraft Corporation | ||||||
Loss Contingencies [Line Items] | ||||||
Number of pending claims | lawsuit | 2 | |||||
Number of entities involved in litigation | subsidiary | 2 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Assets and Liabilities Measured and Recorded at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 27, 2022 | Dec. 31, 2021 |
Assets | ||
Derivatives | $ 9 | $ 15 |
Liabilities | ||
Derivatives | 74 | 60 |
Mutual funds | ||
Assets | ||
Fair Value of Investments | 1,327 | 1,434 |
U.S. Government securities | ||
Assets | ||
Fair Value of Investments | 102 | 121 |
Other securities | ||
Assets | ||
Fair Value of Investments | 769 | 684 |
Level 1 | ||
Assets | ||
Derivatives | 0 | 0 |
Liabilities | ||
Derivatives | 0 | 0 |
Level 1 | Mutual funds | ||
Assets | ||
Fair Value of Investments | 1,327 | 1,434 |
Level 1 | U.S. Government securities | ||
Assets | ||
Fair Value of Investments | 0 | 0 |
Level 1 | Other securities | ||
Assets | ||
Fair Value of Investments | 588 | 492 |
Level 2 | ||
Assets | ||
Derivatives | 9 | 15 |
Liabilities | ||
Derivatives | 74 | 60 |
Level 2 | Mutual funds | ||
Assets | ||
Fair Value of Investments | 0 | 0 |
Level 2 | U.S. Government securities | ||
Assets | ||
Fair Value of Investments | 102 | 121 |
Level 2 | Other securities | ||
Assets | ||
Fair Value of Investments | 181 | 192 |
NAV | Other commingled funds | ||
Liabilities | ||
Assets measured at NAV | $ 20 | $ 20 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | Mar. 27, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Outstanding principal amount | $ 12,800,000,000 | $ 12,800,000,000 |
Unamortized discounts and issuance costs | 1,200,000,000 | 1,100,000,000 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Estimated fair value of outstanding debt | 13,700,000,000 | 15,400,000,000 |
Designated as Hedges | Interest Rate Swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate notional amount of outstanding interest rate swaps | 500,000,000 | 500,000,000 |
Designated as Hedges | Foreign Currency Hedges | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Aggregate notional amount of outstanding interest rate swaps | $ 5,900,000,000 | $ 4,000,000,000 |
STOCKHOLDERS' EQUITY - Repurcha
STOCKHOLDERS' EQUITY - Repurchases of Common Stock (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Apr. 14, 2022 | Jan. 31, 2022 | Mar. 27, 2022 | Mar. 28, 2021 | Dec. 31, 2021 |
Shareholders Equity [Line Items] | |||||
Reduction to stockholders' equity due to repurchases of common stock | $ 2,000 | $ 1,000 | |||
Cash paid for repurchases of common stock | 2,000 | $ 1,000 | |||
Total remaining authorization for future common share repurchases | $ 1,900 | ||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | |||
Rule 10b-1 | |||||
Shareholders Equity [Line Items] | |||||
Reduction to stockholders' equity due to repurchases of common stock | $ 2,000 | ||||
Accelerated Share Repurchase Agreement | |||||
Shareholders Equity [Line Items] | |||||
Cash paid for repurchases of common stock | $ 2,000 | ||||
Shares repurchased during period (in shares) | 2.2 | 4.1 | |||
Accelerated Share Repurchase Agreement | Subsequent Event | |||||
Shareholders Equity [Line Items] | |||||
Shares repurchased during period (in shares) | 0.6 |
STOCKHOLDERS' EQUITY - Dividend
STOCKHOLDERS' EQUITY - Dividends (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Equity [Abstract] | ||
Cash dividends paid and unpaid, amount | $ 749 | $ 725 |
Cash dividends declared (in dollars per share) | $ 2.80 |
STOCKHOLDERS' EQUITY - Schedule
STOCKHOLDERS' EQUITY - Schedule of Changes in the Balance of AOCL, Net of Tax (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Beginning Balance | $ 10,959 | $ 6,038 |
Other comprehensive income (loss) before reclassifications | (22) | (26) |
Total reclassified from AOCL | 49 | 139 |
Other comprehensive income, net of tax | 27 | 113 |
Ending Balance | 10,002 | 6,333 |
Postretirement Benefit Plans | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Beginning Balance | (10,964) | (16,155) |
Other comprehensive income (loss) before reclassifications | 0 | 0 |
Total reclassified from AOCL | 48 | 140 |
Other comprehensive income, net of tax | 48 | 140 |
Ending Balance | (10,916) | (16,015) |
Other, net | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Beginning Balance | (42) | 34 |
Other comprehensive income (loss) before reclassifications | (22) | (26) |
Total reclassified from AOCL | 1 | (1) |
Other comprehensive income, net of tax | (21) | (27) |
Ending Balance | (63) | 7 |
AOCL | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Beginning Balance | (11,006) | (16,121) |
Other comprehensive income, net of tax | 27 | 113 |
Ending Balance | (10,979) | (16,008) |
Recognition of net actuarial losses | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Total reclassified from AOCL | 115 | 204 |
Amortization of net prior service credits | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Total reclassified from AOCL | (67) | (64) |
Other | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||
Total reclassified from AOCL | $ 1 | $ (1) |
OTHER - Changes in Estimates (D
OTHER - Changes in Estimates (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Change in Accounting Estimate [Line Items] | ||
Performance obligation satisfied in previous period | $ 416 | $ 492 |
Classified Fixed-Price Incentive Fee Contract | Aeronautics | ||
Change in Accounting Estimate [Line Items] | ||
Performance growth costs | 225 | |
Classified Fixed-Price Incentive Fee Contract | Rotary and Mission Systems | ||
Change in Accounting Estimate [Line Items] | ||
Cumulative losses on development | 280 | |
EADGE-T | ||
Change in Accounting Estimate [Line Items] | ||
Cumulative losses on development | 260 | |
Contracts Accounted for under Percentage of Completion | ||
Change in Accounting Estimate [Line Items] | ||
Increase in operating profit due to profit rate adjustments | 405 | 495 |
Increase in net earnings due to profit rate adjustments | $ 320 | $ 391 |
Increase in diluted earnings per common share due to profit rate adjustments (in dollars per share) | $ 1.19 | $ 1.40 |
OTHER - Backlog (Details)
OTHER - Backlog (Details) $ in Billions | Mar. 27, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation | $ 134.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 38.00% |
Expected time of satisfaction | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 61.00% |
Expected time of satisfaction | 24 months |
OTHER - Lockheed Martin Venture
OTHER - Lockheed Martin Ventures Fund (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 27, 2022 | Mar. 28, 2021 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | |||
Carrying amount of investments held in lockheed martin venture fund | $ 575 | $ 465 | |
Realized gain reflected in other non-operating income | 103 | $ 68 | |
Realized gain recognized for changes in fair value, net of tax | $ 77 | $ 51 | |
Realized gain recognized for changes in fair value, net of tax (in dollars per share) | $ 0.29 | $ 0.18 |
OTHER - Income Taxes (Details)
OTHER - Income Taxes (Details) | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Accounting Policies [Abstract] | ||
Effective income tax rate | 15.90% | 16.90% |
OTHER - Severance and Restructu
OTHER - Severance and Restructuring Charges (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Accounting Policies [Abstract] | ||
Severance and restructuring charges | $ 0 | $ 36 |
Severance and restructuring charges, after-tax | $ 28 | |
Severance and restructuring charges, after-tax (in dollars per share) | $ 0.10 |