LOCKHEED MARTIN CORP [LMT] Filings

10-Q 1 lmt-20240630.htm 10-Q lmt-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number: 1-11437

LOCKHEED MARTIN CORPORATION

(Exact name of registrant as specified in its charter)

Maryland

52-1893632

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer Identification No.)

6801 Rockledge Drive,

Bethesda,

Maryland

20817

(Address of principal executive offices)

(Zip Code)

(301) 897-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $1 par value	LMT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non–accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b–2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non–accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 238,358,003 shares of our common stock, $1 par value per share, outstanding as of July 19, 2024.

Table of Contents

Lockheed Martin Corporation

Form 10-Q

For the Quarterly Period Ended June 30, 2024

Table of Contents


			Page

PART I. FINANCIAL INFORMATION

	ITEM 1.	Financial Statements (Unaudited)

		Consolidated Statements of Earnings for the Quarters and Six Months Ended June 30, 2024 and June 25, 2023	3

		Consolidated Statements of Comprehensive Income for the Quarters and Six Months Ended June 30, 2024 and June 25, 2023	4

		Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	5

		Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and June 25, 2023	6

		Consolidated Statements of Equity for the Quarters Ended June 30, 2024 and June 25, 2023	7

		Consolidated Statements of Equity for the Six Months Ended June 30, 2024 and June 25, 2023	8

		Notes to Consolidated Financial Statements	9

		Report of Independent Registered Public Accounting Firm	27

	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

	ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	45

	ITEM 4.	Controls and Procedures	45

PART II. OTHER INFORMATION

	ITEM 1.	Legal Proceedings	46

	ITEM 1A.	Risk Factors	47

	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

	ITEM 5.	Other Information	48

	ITEM 6.	Exhibits	48

SIGNATURE			49

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

Lockheed Martin Corporation

Consolidated Statements of Earnings

(unaudited; in millions, except per share data)



	Quarters Ended				Six Months Ended
	June 30, 2024		June 25, 2023		June 30, 2024		June 25, 2023
Net sales
Products	$	15,109	$	13,758	$	29,305	$	26,284
Services	3,013		2,935		6,012		5,535
Total net sales	18,122		16,693		35,317		31,819
Cost of sales
Products	(13,520)		(12,238)		(26,404)		(23,389)
Services	(2,582)		(2,642)		(5,185)		(4,926)
Impairment and severance charges	(87)		—		(87)		—
Other unallocated, net	197		277		482		632
Total cost of sales	(15,992)		(14,603)		(31,194)		(27,683)
Gross profit	2,130		2,090		4,123		4,136
Other income, net	18		45		54		36
Operating profit	2,148		2,135		4,177		4,172
Interest expense	(261)		(223)		(516)		(425)
Non-service FAS pension income	15		111		31		221


Other non-operating income (expense), net	46		(17)		91		32
Earnings before income taxes	1,948		2,006		3,783		4,000
Income tax expense	(307)		(325)		(597)		(630)


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

Earnings per common share
Basic	$	6.87	$	6.65	$	13.29	$	13.28



Diluted	$	6.85	$	6.63	$	13.24	$	13.24




Cash dividends paid per common share	$	3.15	$	3.00	$	6.30	$	6.00

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

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Lockheed Martin Corporation

Consolidated Statements of Comprehensive Income

(unaudited; in millions)



	Quarters Ended				Six Months Ended
	June 30, 2024		June 25, 2023		June 30, 2024		June 25, 2023
Net earnings	$	1,641	$	1,681	$	3,186	$	3,370
Other comprehensive income, net of tax
Postretirement benefit plans

Amortization of actuarial losses and prior service credits, net of tax of $5 million and $10 million in 2024 and $10 million and $20 million in 2023	19		(37)		38		(74)

Other, net, net of tax of $8 million in 2024 and $4 million and $8 million in 2023	23		44		(4)		18
Other comprehensive income (loss), net of tax	42		7		34		(56)
Comprehensive income	$	1,683	$	1,688	$	3,220	$	3,314

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

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Lockheed Martin Corporation

Consolidated Balance Sheets

(in millions, except par value)


	June 30, 2024		December 31, 2023
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	2,523	$	1,442
Receivables, net	2,930		2,132
Contract assets	13,907		13,183
Inventories	3,097		3,132
Other current assets	510		632
Total current assets	22,967		20,521
Property, plant and equipment, net	8,394		8,370
Goodwill	10,787		10,799
Intangible assets, net	2,040		2,212
Deferred income taxes	3,080		2,953
Other noncurrent assets	7,808		7,601
Total assets	$	55,076	$	52,456
Liabilities and equity
Current liabilities
Accounts payable	$	3,282	$	2,312
Salaries, benefits and payroll taxes	2,871		3,133
Contract liabilities	9,181		9,190
Current maturities of long-term debt	142		168
Other current liabilities	3,017		2,134
Total current liabilities	18,493		16,937
Long-term debt, net	19,115		17,291
Accrued pension liabilities	6,105		6,162
Other noncurrent liabilities	5,188		5,231
Total liabilities	48,901		45,621
Stockholders’ equity
Common stock, $1 par value per share	237		240
Additional paid-in capital	—		—
Retained earnings	14,707		15,398
Accumulated other comprehensive loss	(8,769)		(8,803)
Total stockholders’ equity	6,175		6,835


Total liabilities and equity	$	55,076	$	52,456

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

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Lockheed Martin Corporation

Consolidated Statements of Cash Flows

(unaudited; in millions)


	Six Months Ended
	June 30, 2024		June 25, 2023
Operating activities
Net earnings	$	3,186	$	3,370
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation and amortization	710		659
Stock-based compensation	154		146


Deferred income taxes	(145)		(234)

Impairment and severance charges	87		—

Changes in assets and liabilities
Receivables, net	(798)		(922)
Contract assets	(724)		(690)
Inventories	35		(410)
Accounts payable	1,052		1,397
Contract liabilities	(9)		(304)
Income taxes	21		(46)
Qualified defined benefit pension plans	(1)		(189)
Other, net	(57)		(113)
Net cash provided by operating activities	3,511		2,664
Investing activities
Capital expenditures	(748)		(623)
Other, net	4		30
Net cash used for investing activities	(744)		(593)
Financing activities
Issuance of long-term debt, net of related costs	1,980		1,975
Repayments of long-term debt	(168)		—
Repurchases of common stock	(1,850)		(1,250)
Dividends paid	(1,532)		(1,542)
Other, net	(116)		(128)
Net cash used for financing activities	(1,686)		(945)
Net change in cash and cash equivalents	1,081		1,126
Cash and cash equivalents at beginning of period	1,442		2,547
Cash and cash equivalents at end of period	$	2,523	$	3,673

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

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Lockheed Martin Corporation

Consolidated Statements of Equity

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

(unaudited; in millions)



	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
Balance at March 31, 2024	$	239	$	—	$	15,222	$	(8,811)		$	6,650
Net earnings	—		—		1,641		—			1,641
Other comprehensive income, net of tax	—		—		—		42			42
Dividends declared	—		—		(1,514)		—			(1,514)
Repurchases of common stock	(2)		(206)		(642)		—			(850)
Stock-based awards, ESOP activity and other	—		206		—		—			206
Balance at June 30, 2024	$	237	$	—	$	14,707	$	(8,769)		$	6,175

Balance at March 26, 2023	$	254	$	—	$	17,478	$	(8,086)		$	9,646
Net earnings	—		—		1,681		—			1,681
Other comprehensive income, net of tax	—		—		—		7			7
Dividends declared	—		—		(1,523)		—			(1,523)
Repurchases of common stock	(3)		(179)		(568)		—			(750)
Stock-based awards, ESOP activity and other	—		179		—		—			179


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

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

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Lockheed Martin Corporation

Consolidated Statements of Equity

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

(unaudited; in millions)



	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Equity
Balance at December 31, 2023	$	240	$	—	$	15,398	$	(8,803)		$	6,835
Net earnings	—		—		3,186		—			3,186
Other comprehensive income, net of tax	—		—		—		34			34
Dividends declared	—		—		(2,277)		—			(2,277)
Repurchases of common stock	(4)		(246)		(1,600)		—			(1,850)
Stock-based awards, ESOP activity and other	1		246		—		—			247
Balance at June 30 2024	$	237	$	—	$	14,707	$	(8,769)		$	6,175

Balance at December 31, 2022	$	254	$	92	$	16,943	$	(8,023)		$	9,266
Net earnings	—		—		3,370		—			3,370
Other comprehensive income, net of tax	—		—		—		(56)			(56)
Dividends declared	—		—		(2,291)		—			(2,291)
Repurchases of common stock	(4)		(292)		(954)		—			(1,250)
Stock-based awards, ESOP activity and other	1		200		—		—			201

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

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

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Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited)

NOTE 1 - 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, which was on June 30 for the second quarter of 2024 and June 25 for the second quarter of 2023, to align our financial closing with our business processes. The consolidated financial statements and tables of financial information included herein are labeled based on that convention. 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, 2023 (2023 Form 10-K).

NOTE 2 - 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		Six Months Ended
	June 30, 2024	June 25, 2023	June 30, 2024	June 25, 2023
Weighted average common shares outstanding for basic computations	238.9	252.8	239.8	253.7
Weighted average dilutive effect of equity awards	0.7	0.8	0.8	0.9
Weighted average common shares outstanding for diluted computations	239.6	253.6	240.6	254.6

We compute basic and diluted earnings per common share by dividing net earnings by the respective weighted average number of common shares outstanding for the periods presented. Our calculation of diluted earnings per common share also includes the dilutive effects for the assumed vesting of outstanding restricted stock units (RSUs) and performance stock units (PSUs) based on the treasury stock method. There were no significant anti-dilutive equity awards during the quarters and six months ended June 30, 2024 and June 25, 2023. Basic and diluted weighted average common shares outstanding decreased in 2024 compared to 2023 due to share repurchases. See “Note 9 - Stockholders’ Equity” for more information.

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Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

NOTE 3 - 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 are 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				Six Months Ended
	June 30, 2024		June 25, 2023		June 30, 2024		June 25, 2023
Net sales
Aeronautics	$	7,277	$	6,875	$	14,122	$	13,144
Missiles and Fire Control	3,102		2,755		6,095		5,143
Rotary and Mission Systems	4,548		3,897		8,636		7,407
Space	3,195		3,166		6,464		6,125
Total net sales	$	18,122	$	16,693	$	35,317	$	31,819
Operating profit
Aeronautics	$	751	$	718	$	1,430	$	1,393
Missiles and Fire Control	450		371		761		748
Rotary and Mission Systems	495		454		925		804
Space	346		312		671		592
Total business segment operating profit	2,042		1,855		3,787		3,537
Unallocated items
FAS/CAS pension operating adjustment	406		416		812		831
Impairment and severance charges (a)	(87)		—		(87)		—
Intangible asset amortization expense	(61)		(62)		(122)		(124)
Other, net	(152)		(74)		(213)		(72)
Total unallocated items	106		280		390		635
Total consolidated operating profit	$	2,148	$	2,135	$	4,177	$	4,172
Intersegment sales
Aeronautics	$	67	$	71	$	137	$	124
Missiles and Fire Control	204		159		406		305
Rotary and Mission Systems	574		505		1,160		994
Space	99		92		206		178
Total intersegment sales	$	944	$	827	$	1,909	$	1,601

(a)Impairment and severance charges of $87 million ($69 million, or $0.29 per share, after-tax) include trademark and fixed asset impairments as well as severance costs. See “Note 10 - Other” below for additional information.

Unallocated Items

Business segment operating profit 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

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Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, stock-based compensation expense, changes in the fair value of assets and liabilities for deferred compensation plans, retiree benefits, significant severance charges, significant asset impairments, gains or losses from divestitures, intangible asset amortization expense, and other miscellaneous corporate activities. Excluded items are included in the reconciling item “Unallocated items” between operating profit from our business segments and our consolidated operating profit. 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 Operating Adjustment

Our business segments’ results of operations include pension expense only as calculated under U.S. Government Cost Accounting Standards (CAS), which we refer to as CAS pension cost. 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 pension and other postretirement benefit plan income calculated in accordance with Financial Accounting Standards (FAS) requirements under U.S. GAAP. The operating portion of the total FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension income (expense) and total CAS pension cost. The non-service FAS pension income components are included in non-service FAS pension income in our consolidated statements of earnings. As a result, to the extent that CAS pension cost exceeds the service cost component of FAS pension income (expense) we have a favorable FAS/CAS pension operating adjustment.

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Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

Disaggregation of Net Sales

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


	Quarter Ended June 30, 2024
	Aeronautics		MFC		RMS		Space		Total
Net sales
Products	$	5,971	$	2,742	$	3,705	$	2,691	$	15,109
Services	1,306		360		843		504		3,013
Total net sales	$	7,277	$	3,102	$	4,548	$	3,195	$	18,122
Net sales by contract type
Fixed-price	$	4,945	$	2,124	$	2,812	$	925	$	10,806
Cost-reimbursable	2,332		978		1,736		2,270		7,316
Total net sales	$	7,277	$	3,102	$	4,548	$	3,195	$	18,122
Net sales by customer
U.S. Government	$	4,941	$	2,241	$	2,999	$	3,107	$	13,288
International (a)	2,297		856		1,470		45		4,668
U.S. commercial and other	39		5		79		43		166
Total net sales	$	7,277	$	3,102	$	4,548	$	3,195	$	18,122
Net sales by geographic region
United States	$	4,980	$	2,246	$	3,078	$	3,150	$	13,454
Europe	1,270		209		282		19		1,780
Asia Pacific	685		180		750		25		1,640
Middle East	194		450		200		1		845
Other	148		17		238		—		403
Total net sales	$	7,277	$	3,102	$	4,548	$	3,195	$	18,122


	Six Months Ended June 30, 2024
	Aeronautics		MFC		RMS		Space		Total
Net sales
Products	$	11,563	$	5,406	$	6,946	$	5,390	$	29,305
Services	2,559		689		1,690		1,074		6,012
Total net sales	$	14,122	$	6,095	$	8,636	$	6,464	$	35,317
Net sales by contract type
Fixed-price	$	9,529	$	4,120	$	5,289	$	1,825	$	20,763
Cost-reimbursable	4,593		1,975		3,347		4,639		14,554
Total net sales	$	14,122	$	6,095	$	8,636	$	6,464	$	35,317
Net sales by customer
U.S. Government	$	9,607	$	4,408	$	5,839	$	6,269	$	26,123
International (a)	4,449		1,680		2,632		113		8,874
U.S. commercial and other	66		7		165		82		320
Total net sales	$	14,122	$	6,095	$	8,636	$	6,464	$	35,317
Net sales by geographic region
United States	$	9,673	$	4,415	$	6,004	$	6,351	$	26,443
Europe	2,481		454		551		37		3,523
Asia Pacific	1,321		367		1,290		71		3,049
Middle East	397		820		362		5		1,584
Other	250		39		429		—		718
Total net sales	$	14,122	$	6,095	$	8,636	$	6,464	$	35,317

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Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)


	Quarter Ended June 25, 2023
	Aeronautics		MFC		RMS		Space		Total
Net sales
Products	$	5,645	$	2,412	$	3,041	$	2,660	$	13,758
Services	1,230		343		856		506		2,935
Total net sales	$	6,875	$	2,755	$	3,897	$	3,166	$	16,693
Net sales by contract type
Fixed-price	$	4,656	$	1,863	$	2,451	$	799	$	9,769
Cost-reimbursable	2,219		892		1,446		2,367		6,924
Total net sales	$	6,875	$	2,755	$	3,897	$	3,166	$	16,693
Net sales by customer
U.S. Government	$	4,621	$	1,911	$	2,754	$	3,121	$	12,407
International (a)	2,169		841		1,075		41		4,126
U.S. commercial and other	85		3		68		4		160
Total net sales	$	6,875	$	2,755	$	3,897	$	3,166	$	16,693
Net sales by geographic region
United States	$	4,706	$	1,914	$	2,822	$	3,125	$	12,567
Europe	1,146		174		212		24		1,556
Asia Pacific	690		215		554		16		1,475
Middle East	226		411		155		1		793
Other	107		41		154		—		302
Total net sales	$	6,875	$	2,755	$	3,897	$	3,166	$	16,693


	Six Months Ended June 25, 2023
	Aeronautics		MFC		RMS		Space		Total
Net sales
Products	$	10,801	$	4,501	$	5,833	$	5,149	$	26,284
Services	2,343		642		1,574		976		5,535
Total net sales	$	13,144	$	5,143	$	7,407	$	6,125	$	31,819
Net sales by contract type
Fixed-price	$	8,968	$	3,481	$	4,659	$	1,563	$	18,671
Cost-reimbursable	4,176		1,662		2,748		4,562		13,148
Total net sales	$	13,144	$	5,143	$	7,407	$	6,125	$	31,819
Net sales by customer
U.S. Government	$	8,738	$	3,492	$	5,177	$	6,029	$	23,436
International (a)	4,283		1,646		2,095		86		8,110
U.S. commercial and other	123		5		135		10		273
Total net sales	$	13,144	$	5,143	$	7,407	$	6,125	$	31,819
Net sales by geographic region
United States	$	8,861	$	3,497	$	5,312	$	6,039	$	23,709
Europe	2,276		385		437		47		3,145
Asia Pacific	1,365		317		992		38		2,712
Middle East	451		866		341		1		1,659
Other	191		78		325		—		594
Total net sales	$	13,144	$	5,143	$	7,407	$	6,125	$	31,819

(a)International sales include foreign military sales (FMS) contracted through the U.S. Government and direct commercial sales to international governments and other international customers.

Our Aeronautics business segment includes our largest program, the F-35 Lightning II, an international multi-role, multi-variant, stealth fighter aircraft. Net sales for the F-35 program represented approximately 26% and 25% of our total

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Lockheed Martin Corporation

Notes to Consolidated Financial Statements (unaudited) (continued)

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

Assets

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


	June 30, 2024		December 31, 2023
Assets
Aeronautics	$	13,913	$	13,167
Missiles and Fire Control	5,938		5,703
Rotary and Mission Systems	17,612		17,521
Space	6,717		6,560
Total business segment assets	44,180		42,951
Corporate assets (a)	10,896		9,505
Total assets	$	55,076	$	52,456

(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, property, plant and equipment used in our corporate operations, assets held in a trust for deferred compensation plans, and investments in early-stage companies.

NOTE 4 - 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):


	June 30, 2024		December 31, 2023
Contract assets	$	13,907	$	13,183
Contract liabilities	9,181		9,190

Contract assets increased $724 million during the six months ended June 30, 2024, due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the six months ended June 30, 2024 for which we have not yet billed our customers. There were no significant credit or impairment losses related to our contract assets during the quarters and six months ended June 30, 2024 and June 25, 2023.

Contract liabilities decreased $9 million during the six months ended June 30, 2024, primarily due to revenue recognized in excess of payments received on these performance obligations. During the quarter and six months ended June 30, 2024, we recognized $1.7 billion and $4.1 billion of our contract liabilities at December 31, 2023 as revenue. During the quarter and six months ended June 25, 2023, we recognized $1.1 billion and $3.3 billion of our contract liabilities at December 31, 2022 as revenue.

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Lockheed Martin Corporation

Notes to Consolidated Fin