Net sales of $17.2 billion Net earnings of $1.5 billion, or $6.39 per share Cash from operations of $1.6 billion and free cash flow of $1.3 billion $1.8 billion of cash returned to shareholders through dividends and share repurchases Reaffirms 2024 financial outlook BETHESDA, Md., April 23, 2024 /PRNewswire/ -- Lockheed Martin Corporation [NYSE: LMT] today reported first quarter 2024 net sales of $17.2 billion, compared to $15.1 billion in the first quarter of 2023. Net earnings in the first quarter of 2024 were $1.5 billion, or $6.39 per share, compared to $1.7 billion or $6.61 per share, in the first quarter of 2023. Cash from operations was $1.6 billion in both the first quarters of 2024 and 2023. Free cash flow was $1.3 billion in both the first quarters of 2024 and 2023. First quarter 2024 results included 13 weeks compared to 12 weeks for first quarter 2023. "Our strong start to 2024 demonstrates our continued success designing, developing and delivering 21st Century Security solutions in support of integrated deterrence for customers around the world. These first quarter results reinforce our confidence in our ability to achieve the full year financial expectations we set in January," said Lockheed Martin Chairman, President and CEO Jim Taiclet. "First quarter sales increased significantly year-over-year and we generated robust free cash flow of nearly $1.3 billion, while taking assertive actions to further strengthen production capacity. In addition, we continued our disciplined and dynamic capital deployment by investing over $700 million into R&D and capital projects and returned significant capital to shareholders through dividends and share repurchases as we remain committed to delivering meaningful free cash flow per share growth over the long-term. "Our $159 billion backlog includes several large National Security Space awards in the quarter and attests to the breadth of our portfolio, depth of our technical expertise, and understanding of our customers' needs. These capabilities uniquely position us to lead the realization of joint all domain operations, including reliable battle management and command and control systems integrated across multiple domains, military services, and allied forces. We remain exceptionally focused on the execution of the F-35 program, working with our customers and suppliers to implement TR-3 capabilities, and are encouraged by the progress towards delivery of the first TR-3 configured aircraft. The innovation and open architecture solutions across our portfolio enable customers worldwide to stay prepared and agile amidst an ever-changing threat environment." Adjusted earnings before income taxes, net earnings and diluted EPS The table below shows the impact to earnings before income taxes, net earnings and diluted earnings per share (EPS) for certain non-operational items: (in millions, except per share data) Quarters Ended March 31, 2024 March 26, 2023 Earnings BeforeIncome Taxes Net Earnings DilutedEPS EarningsBeforeIncomeTaxes Net Earnings DilutedEPS As Reported (GAAP) $     1,835 $     1,545 $       6.39 $     1,994 $     1,689 $       6.61 Mark-to-market investment gains1 (18) (14) (0.06) (58) (44) (0.18) As Adjusted (Non-GAAP)2 $     1,817 $     1,531 $       6.33 $     1,936 $     1,645 $       6.43 1 Includes changes in valuations of the company's net assets and liabilities for deferred compensation plans and early-stage companyinvestments. 2 See the "Use of Non-GAAP Financial Measures" section of this news release for more information.   Summary Financial Results The following table presents the company's summary financial results. (in millions, except per share data) Quarters Ended March 31, 2024 March 26, 2023 Net sales $           17,195 $           15,126 Business segment operating profit1 $             1,745 $             1,682 Unallocated items   FAS/CAS operating adjustment 406 415   Intangible asset amortization expense (61) (62)   Other, net (61) 2 Total unallocated items 284 355 Consolidated operating profit $             2,029 $             2,037 Net earnings $             1,545 $             1,689 Diluted earnings per share $               6.39 $               6.61 Cash from operations2 $             1,635 $             1,564 Capital expenditures (378) (294) Free cash flow1,2 $             1,257 $             1,270 1 Business segment operating profit and free cash flow are non-GAAP measures. See the "Use of Non-GAAP Financial Measures" section of this news release for more information. 2 See the "Cash Flows and Capital Deployment Activities" section of this news release for more information.   2024 Financial Outlook The following table and other sections of this news release contain forward-looking statements, which are based on the company's current expectations. Actual results may differ materially from those projected. It is the company's practice not to incorporate adjustments into its financial outlook for proposed or potential acquisitions, divestitures, ventures, pension risk transfer transactions, financing transactions, changes in law, or new accounting standards until such items have been consummated, enacted or adopted. For additional factors that may impact the company's actual results, refer to the "Forward-Looking Statements" section in this news release. (in millions, except per share data) 2024 Outlook1 Net sales $68,500 - $70,000 Business segment operating profit2 $7,175- $7,375 Total FAS/CAS pension adjustment3 ~$1,685 Diluted earnings per share4 $25.65 - $26.35 Cash from operations $7,750 - $8,050 Capital expenditures ~$1,750 Free cash flow2 $6,000 - $6,300 1 The company's current 2024 financial outlook does not include any future gains or losses related to changes in valuations of the company'snet assets and liabilities for deferred compensation plans or early-stage company investments. The company's financial outlook reflects nosignificant reduction in customer budgets or changes in priorities, continued support and funding of the company's programs, and a statutory tax rate of 21%. In addition, the outlook includes known impacts from inflationary pressures and labor and supply chain challenges at the time of this news release and experienced to date. 2 Business segment operating profit and free cash flow are non-GAAP measures. See the "Use of Non-GAAP Financial Measures" section of this news release for more information. 3 The total FAS/CAS pension adjustment is presented as a single amount and includes total expected U.S. Government cost accountingstandards (CAS) pension cost of approximately $1.7 billion. Total expected financial accounting standards (FAS) pension income is notsignificant. For additional detail regarding the pension amounts reported in operating and non-operating results, refer to the supplemental tableincluded at the end of this news release. 4 Although the company typically does not update its outlook for proposed changes in law, the above includes the effect of Notice 2023-63confirming that certain expenditures incurred in the performance of cost-type contracts are not subject to capitalization. The company believes incorporating the clarification from the Notice more accurately reflects its expectations because the Notice describes the tax treatment of certain expenditures in accordance with the company's analysis of the Internal Revenue Code.   Cash Flows and Capital Deployment Activities Cash from operations in the first quarter of 2024 was $1.6 billion and capital expenditures were $378 million, resulting in free cash flow of $1.3 billion. The operating and free cash flows for the first quarter of 2024 were comparable to the same period in 2023. The company's cash activities in the quarter ended March 31, 2024, included the following: paying cash dividends of $780 million; paying $1.0 billion to repurchase 2.3 million shares; and receiving net proceeds of $2 billion from a debt issuance of senior unsecured notes, consisting of $650 million aggregate principal amount of 4.50% Notes due 2029, $600 million aggregate principal amount of 4.80% Notes due 2034 and $750 million aggregate principal amount of 5.20% Notes due 2064. Segment Results The company operates in four business segments organized based on the nature of products and services offered: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. The following table presents summary operating results of the company's business segments and reconciles these amounts to the company's consolidated financial results. (in millions) Quarters Ended March 31, 2024 March 26, 2023 Net sales Aeronautics $            6,845 $            6,269 Missiles and Fire Control 2,993 2,388 Rotary and Mission Systems 4,088 3,510 Space 3,269 2,959 Total net sales $          17,195 $          15,126 Operating profit Aeronautics $               679 $               675 Missiles and Fire Control 311 377 Rotary and Mission Systems 430 350 Space 325 280 Total business segment operating     profit 1,745 1,682 Unallocated items FAS/CAS operating adjustment 406 415 Intangible asset amortization    expense (61) (62) Other, net (61) 2 Total unallocated items 284 355 Total consolidated operating profit $            2,029 $            2,037 Net sales and operating profit of the company's business segments exclude intersegment sales, cost of sales, and profit as these activities are eliminated in consolidation and not included in management's evaluation of performance of each segment. Business segment operating profit includes the company's 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 the company's business segments. 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 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, intangible asset amortization expense, and other miscellaneous corporate activities. Excluded items are included in the reconciling item "Unallocated items" between operating profit from the company's business segments and its consolidated operating profit. Changes in net sales and operating profit generally are expressed in terms of volume, contract mix, and/or performance (referred to as profit adjustments). Changes in volume refer to increases or decreases in sales or operating profit resulting from varying production activity levels, deliveries or service levels on ...