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Postretirement Benefit Plans
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Postretirement Benefit Plans Postretirement Benefit Plans
Plan Descriptions
Many of our employees and retirees participate in various postretirement benefit plans including defined benefit pension plans, retiree medical and life insurance plans, defined contribution retirement savings plans, and other postemployment plans. Substantially all of our postretirement benefit obligations relate to U.S. based defined benefit pension plans and retiree medical and life insurance plans. The majority of our U.S. defined benefit pension plans provide for benefits within limits imposed by federal tax law (referred to as qualified plans). However, certain of our U.S. defined benefit pension plans provide for benefits in excess of qualified plan limits imposed by federal tax law (referred to as nonqualified plans).

Salaried employees hired after December 31, 2005 are not eligible to participate in our qualified defined benefit pension plans, but are eligible to participate in a qualified defined contribution plan and other retirement savings plans for which they may qualify. They also have the ability to participate in our retiree medical plans, but we do not subsidize the cost of their participation in those plans as we do with employees hired before January 1, 2006. Over the last few years, we have negotiated similar changes with various labor organizations such that new union represented employees do not participate in our defined benefit pension plans. Our defined benefit pension plans for salaried employees were fully frozen effective January 1, 2020, at which time such employees no longer earn additional benefits under the defined benefit pension plans and were transitioned to a defined contribution retirement savings plan.
We continue to take actions to mitigate the effect of our defined benefit pension plans on our financial results by reducing the volatility and size of our net pension obligations. During the fourth quarter of 2023, a voluntary offering was made to certain former employees who had not yet commenced receiving their vested benefit payments. Total settlement payments of $414 million for approximately 6,500 participants were made from the defined benefit pension trust with a similar corresponding reduction in benefit obligation. During the second quarter of 2022, we purchased group annuity contracts to transfer $4.3 billion of gross defined benefit pension obligations and related plan assets to an insurance company for approximately 13,600 U.S. retirees and beneficiaries. In connection with this transaction, we recognized a noncash, non-operating pension settlement charge of $1.5 billion for the affected plans in the quarter ended June 26, 2022, which represents the accelerated recognition of actuarial losses that were included in the accumulated other comprehensive loss (AOCL) account within stockholders’ equity. Similarly, during the third quarter of 2021, we purchased group annuity contracts to transfer $4.9 billion of gross defined benefit pension obligations and related plan assets to an insurance company for approximately 18,000 U.S. retirees and beneficiaries, and in connection recognized a noncash pension settlement charge of $1.7 billion.
Qualified Defined Benefit Pension Plans and Retiree Medical and Life Insurance Plans
FAS Income (Expense)
The pretax FAS income (expense) related to our qualified defined benefit pension plans and retiree medical and life insurance plans included the following (in millions):
 Qualified Defined
Benefit Pension Plans 		Retiree Medical and
Life Insurance Plans
202320222021202320222021
Operating:
Service cost$(65)$(87)$(106)$(5)$(9)$(13)
Non-operating:
Interest cost(1,459)(1,289)(1,220)(68)(49)(53)
Expected return on plan assets1,722 1,854 2,146 103 136 141 
Recognized net actuarial (losses) gains(168)(425)(902)31 46 — 
Amortization of prior service credits (costs) 348 359 349 (10)(27)(37)
Settlement charge— (1,470)(1,665)— — — 
Non-service FAS income (expense) 443 (971)(1,292)56 106 51 
Total FAS income (expense) $378 $(1,058)$(1,398)$51 $97 $38 
We record the service cost component of FAS income (expense) for our qualified defined benefit pension plans and retiree medical and life insurance plans in the cost of sales accounts; the non-service components of our FAS income (expense) for our qualified defined benefit pension plans in the non-service FAS pension income (expense) account; and the non-service components of our FAS income (expense) for our retiree medical and life insurance plans as part of the other non-operating income (expense), net account on our consolidated statements of earnings.

Funded Status

The following table provides a reconciliation of benefit obligations, plan assets and net (unfunded) funded status of our qualified defined benefit pension plans and our retiree medical and life insurance plans (in millions):
 Qualified Defined 
Benefit Pension Plans		Retiree Medical and
Life Insurance Plans
2023202220232022
Change in benefit obligation
Beginning balance (a)
$28,698 $43,447 $1,359 $1,839 
Service cost65 87 5 9 
Interest cost1,459 1,289 68 49 
Actuarial losses (gains) (b)
731 (10,270)27 (396)
Settlements (c)
(414)(4,309)— — 
Plan amendments6 186 1 1 
Benefits paid
(1,586)(1,732)(192)(207)
Medicare Part D subsidy— — 1 3 
Participants’ contributions— — 59 61 
Ending balance (a)
$28,959 $28,698 $1,328 $1,359 
Change in plan assets
Beginning balance at fair value$23,228 $35,192 $1,656 $2,169 
Actual return on plan assets (d)
1,572 (5,923)190 (381)
Settlements (c)
(414)(4,309)— — 
Benefits paid
(1,586)(1,732)(192)(207)
Company contributions— — 1 11 
Medicare Part D subsidy— — 1 3 
Participants’ contributions— — 59 61 
Ending balance at fair value$22,800 $23,228 $1,715 $1,656 
(Unfunded) funded status of the plans$(6,159)$(5,470)$387 $297 
(a)Benefit obligation balances represent the projected benefit obligation for our qualified defined benefit pension plans, which is approximately equal to accumulated benefit obligation, and accumulated benefit obligation for our retiree medical and life insurance plans.
(b)Actuarial losses for our qualified defined benefit pension plans in 2023 primarily reflect a decrease in the discount rate from 5.25% at December 31, 2022 to 5.00% at December 31, 2023, which increased benefit obligations by approximately $765 million. Actuarial losses for our retiree medical and life insurance plans in 2023 reflect a decrease in the discount rate from 5.25% at December 31, 2022 to 5.00% at December 31, 2023. Actuarial gains for our qualified defined benefit pension plans in 2022 primarily reflect an increase in the discount rate from 2.875% at December 31, 2021 to 5.25% at December 31, 2022, which decreased benefit obligations by $10.2 billion. Actuarial gains for our retiree medical and life insurance plans in 2022 reflect an increase in the discount rate from 2.750% at December 31, 2021 to 5.25% at December 31, 2022, which decreased benefit obligations by $335 million.
(c)Qualified defined benefit pension plans settlements in 2023 include $414 million in the form of lump-sum settlement payments to former employees who had not commenced receiving their vested benefit payments. The settlement payments had no impact on year 2023 FAS pension income. Qualified defined benefit pension plan settlements in 2022 represent the transfer of gross defined benefit pension obligations and related plan assets to insurance companies pursuant to group annuity contracts purchased in the second quarter of 2022 as described above.
(d)Actual return on plan assets for our qualified defined benefit pension plans was approximately 7% in 2023 and (18)% in 2022.

We are required to recognize the net funded status of each postretirement benefit plan on a standalone basis as either an asset or a liability on our consolidated balance sheet. The funded status is measured as the difference between the fair value of each plan’s assets and the benefit obligation. Each year we measure the fair value of each plan’s assets and benefit obligation on December 31, consistent with our fiscal year end. The fair value of each plan’s benefit obligation reflects assumptions in effect
as of the measurement date as described below. For certain of our qualified defined benefit pension plans and retiree medical and life insurance plans the plan assets may exceed the benefit obligation, for which we recognize the net amount as an asset on our consolidated balance sheet. Conversely, for most of our qualified defined benefit pension plans the benefit obligation exceeds plan assets, for which we recognize the net amount as a liability on our consolidated balance sheet.

The following table provides amounts recognized on our consolidated balance sheets related to our qualified defined benefit pension plans and our retiree medical and life insurance plans (in millions):
 Qualified Defined 
Benefit Pension Plans		Retiree Medical and
Life Insurance Plans
2023202220232022
Other noncurrent assets$3 $2 $387 $297 
Accrued pension liabilities(6,162)(5,472)— — 
Net (unfunded) funded status of the plans$(6,159)$(5,470)$387 $297 
Differences between the actual return and expected return on plan assets during the year, and changes in the benefit obligation for our qualified defined benefit pension plans and retiree medical and life insurance plans due to changes in the annual valuation assumptions, generate actuarial gains or losses. Additionally, the benefit obligation for our qualified defined benefit pension plans and retiree medical and life insurance plans may increase or decrease as a result of plan amendments that affect the benefits to plan participants related to service for periods prior to the effective date of the amendment, which generates prior service costs or credits. Actuarial gains or losses, and prior service costs or credits, are initially deferred in accumulated other comprehensive loss and subsequently amortized for each plan into income or (expense) on a straight-line basis either over the average remaining life expectancy of plan participants or over the average remaining service period of plan participants, subject to certain thresholds.

The following table provides the amount of actuarial gains or losses, and prior service costs or credits, recognized in accumulated other comprehensive loss related to qualified defined benefit pension plans and retiree medical and life insurance plans at December 31 (in millions):
 Qualified Defined 
Benefit Pension Plans		Retiree Medical and
Life Insurance Plans
2023202220232022
Accumulated other comprehensive (loss) pre-tax related to:
Net actuarial (losses) gains$(10,999)$(10,287)$416 $387 
Prior service (costs) credits(15)339 (2)(10)
Total
$(11,014)$(9,948)$414 $377 
Estimated tax2,339 2,117 (87)(79)
Net amount recognized in accumulated other comprehensive (loss)$(8,675)$(7,831)$327 $298 
The following table provides the changes recognized in accumulated other comprehensive loss, net of tax, for actuarial gains or losses and prior service costs or credits due to differences between the actual return and expected return on plan assets and changes in the fair value of the benefit obligation recognized in connection with our annual remeasurement and the amortization during the year for our qualified defined benefit pension plans, retiree medical and life insurance plans, and certain other plans (in millions):
 Incurred but Not Yet
Recognized in
FAS Expense		Recognition of
Previously
Deferred Amounts
202320222021202320222021
Actuarial gains and (losses)
Qualified defined benefit pension plans$(698)$1,952 $2,987 $(133)$(1,490)$(2,019)
Retiree medical and life insurance plans47 (95)342 25 36 — 
Other plans(33)165 76 (8)(39)(24)
 (684)2,022 3,405 (116)(1,493)(2,043)
Net prior service credit and (cost)
Qualified defined benefit pension plans(5)(146)(1)274 283 274 
Retiree medical and life insurance plans(1)(1)— (8)(22)(29)
Other plans1 (2)— (1)7 11 
 (5)(149)(1)265 268 256 
Total$(689)$1,873 $3,404 $149 $(1,225)$(1,787)
Assumptions Used to Determine Benefit Obligations and FAS (Expense) Income

We measure the fair value of each plan’s assets and benefit obligation on December 31, consistent with our fiscal year end. Benefit obligations as of the end of each year reflect assumptions in effect as of those dates. Expense is based on assumptions in effect at the end of the preceding year or from the most recent interim remeasurement. The assumptions used to determine the benefit obligations at December 31 of each year and FAS expense for each subsequent year were as follows:
 Qualified Defined Benefit
Pension Plans		Retiree Medical and
Life Insurance Plans
202320222021202320222021
Weighted average discount rate (a)
5.000 %5.250 %2.875 %5.000 %5.250 %2.750 %
Expected long-term rate of return on assets (a)
6.50 %6.50 %6.50 %6.50 %6.50 %6.50 %
Health care trend rate assumed for next year8.00 %7.25 %7.50 %
Ultimate health care trend rate4.50 %4.50 %4.50 %
Year ultimate health care trend rate is reached   203820342034
(a)A pension discount rate of 4.75% was used for the applicable plans following the transaction and remeasurement recognized in the second quarter of 2022.

The long-term rate of return assumption represents the expected long-term rate of earnings on the funds invested, or to be invested, to provide for the benefits included in the benefit obligations. That assumption is based on several factors including historical market index returns, the anticipated long-term allocation of plan assets, the historical return data for the trust funds, plan expenses and the potential to outperform market index returns. The actual investment return for our qualified defined benefit plans during 2023 was approximately 7.00%.
Plan Assets
Our wholly-owned subsidiary, Lockheed Martin Investment Management Company (LMIMCo), has the fiduciary responsibility for making investment decisions related to the assets of our postretirement benefit plans. LMIMCo’s investment objectives for the assets of these plans are (1) to minimize the net present value of expected funding contributions; (2) to ensure there is a high probability that each plan meets or exceeds our actuarial long-term rate of return assumptions; and (3) to diversify assets to minimize the risk of large losses. The nature and duration of benefit obligations, along with assumptions concerning asset class returns and return correlations, are considered when determining an appropriate asset allocation to achieve the investment objectives. Investment policies and strategies governing the assets of the plans are designed to achieve investment objectives within prudent risk parameters. Risk management practices include the use of external investment managers; the maintenance of a portfolio diversified by asset class, investment approach and security holdings; and the maintenance of sufficient liquidity to meet benefit obligations as they come due.
LMIMCo’s investment policies require that asset allocations of postretirement benefit plans be maintained within the following approximate ranges:
Asset ClassAsset Allocation
Ranges
Cash and cash equivalents
0-20%
Global Equity
15-65%
Fixed income
10-60%
Alternative investments:
Private equity funds
5-25%
Real estate funds
5-15%
Hedge funds
0-20%
Commodities
0-10%
The following table presents the fair value of the assets of our qualified defined benefit pension plans and retiree medical and life insurance plans by asset category and their level within the fair value hierarchy (see “Note 1 – Organization and Significant Accounting Policies - Investments” for definition of these levels), which we are required to disclose even though these assets are not separately recorded on our consolidated balance sheet. Certain investments are measured at their Net Asset Value (NAV) per share because such investments do not have readily determinable fair values and, therefore, are not required to be categorized in the fair value hierarchy. Assets measured at NAV have been included in the table below to permit reconciliation of the fair value hierarchy to amounts presented in the funded status table above.
 December 31, 2023December 31, 2022
(in millions)
TotalLevel 1Level 2Level 3TotalLevel 1Level 2Level 3
Investments measured at fair value
Cash and cash equivalents (a)
$1,789 $1,789 $— $— $1,952 $1,952 $— $— 
Equity (a):
U.S. equity securities2,802 2,715 8 79 3,162 3,060 6 96 
International equity securities1,875 1,853 — 22 2,298 2,245 17 36 
Commingled equity funds423 163 260 — 459 183 276 — 
Fixed income (a):
Corporate debt securities4,510 — 4,495 15 4,491 — 4,272 219 
U.S. Government securities2,376 — 2,376 — 2,219 — 2,219 — 
U.S. Government-sponsored enterprise securities
1,120 — 1,120 — 572 — 572 — 
Interest rate swaps, net(1,284)(1,284)(1,165)— (1,165)— 
Other fixed income investments (b)
1,949 63 725 1,161 1,980 81 680 1,219 
Total$15,560 $6,583 $7,700 $1,277 $15,968 $7,521 $6,877 $1,570 
Investments measured at NAV
Commingled equity funds— — 
Other fixed income investments826 730 
Private equity funds4,951 4,703 
Real estate funds3,267 3,383 
Hedge funds847    689    
Total investments measured at NAV
9,891    9,505    
Loan, net (c)
(497)(497)
(Payables) Receivables, net(439)   (92)   
Total$24,515    $24,884    
(a)Cash and cash equivalents, equity securities and fixed income securities include derivative assets and liabilities with fair values that were not material as of December 31, 2023 and 2022. LMIMCo’s investment policies restrict the use of derivatives to either establish long or short exposures for purposes consistent with applicable investment mandate guidelines or to hedge risks to the extent of a plan’s current exposure to such risks. Most derivative transactions are settled on a daily basis.
(b)Level 3 investments include $1.1 billion at both December 31, 2023 and at December 31, 2022 related to buy-in contracts.
(c)The Lockheed Martin Corporation Master Retirement Trust (MRT) obtained a loan from a third-party financial institution, collateralized by private equity investments, to invest in fixed income securities.

Changes in the fair value of plan assets categorized as Level 3 during 2023 and 2022 were not significant.
Cash equivalents are mostly comprised of short-term money-market instruments and are valued at cost, which approximates fair value.
U.S. equity securities and international equity securities categorized as Level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year. For U.S. equity securities and international equity securities not traded on an active exchange, or if the closing price is not available, the trustee obtains indicative quotes from a pricing vendor, broker or investment manager. These securities are categorized as Level 2 if the custodian obtains corroborated quotes from a pricing vendor or categorized as Level 3 if the custodian obtains uncorroborated quotes from a broker or investment manager.
Commingled equity funds categorized as Level 1 are traded on active national and international exchanges and are valued at their closing prices on the last trading day of the year. For commingled equity funds not traded on an active exchange, or if the closing price is not available, the trustee obtains indicative quotes from a pricing vendor, broker or investment manager. These securities are categorized as Level 2 if the custodian obtains corroborated quotes from a pricing vendor.
Fixed income investments categorized as Level 1 are publicly exchange-traded. Fixed income investments, including interest rate swaps, categorized as Level 2 are valued by the trustee using pricing models that use verifiable observable market data (e.g., interest rates and yield curves observable at commonly quoted intervals and credit spreads), bids provided by brokers or dealers or quoted prices of securities with similar characteristics. Fixed income investments are categorized as Level 3 when valuations using observable inputs are unavailable. The trustee typically obtains pricing based on indicative quotes or bid evaluations from vendors, brokers or the investment manager. In addition, certain other fixed income investments categorized as Level 3 are valued using a discounted cash flow approach. Significant inputs include projected annuity payments and the discount rate applied to those payments.
Certain commingled equity and fixed income funds, consisting of underlying equity and fixed income securities, respectively, are valued using the NAV practical expedient. The NAV valuations are based on the underlying investments and typically redeemable within 90 days. The NAV is the total value of the fund divided by the number of the fund’s shares outstanding.
Private equity funds consist of partnerships and similar vehicles. The NAV is based on valuation models of the underlying securities, which includes unobservable inputs that cannot be corroborated using verifiable observable market data. These funds typically have terms between eight and 12 years.

Real estate funds consist of partnerships and similar vehicles, for which the NAV is based on valuation models and periodic appraisals. These funds typically have terms between eight and 10 years.
Hedge funds generally consist of separate accounts and commingled funds, for which the NAV is generally based on the valuation of the underlying investments. Redemptions in hedge funds generally range from a minimum of one month to several months.
Contributions and Expected Benefit Payments
The required funding of our qualified defined benefit pension plans is determined in accordance with ERISA, as amended, and in a manner consistent with CAS and Internal Revenue Code rules. We made no contributions to our qualified defined benefit pension plans in 2023 and do not plan to make contributions to our qualified defined benefit pension plans in 2024.
The following table presents estimated future benefit payments as of December 31, 2023 (in millions):
202420252026202720282029– 2033
Qualified defined benefit pension plans$1,790 $1,860 $1,920 $1,970 $2,000 $10,020 
Retiree medical and life insurance plans130 130 120 120 110 500 
We maintain various trusts to fund the obligations of our qualified defined benefit pension plans and retiree medical and life insurance plans. We expect the estimated future benefit payments will be paid using assets in the trusts established for the plans.
Nonqualified Defined Benefit Pension Plans and Other Postemployment Plans
We sponsor nonqualified defined benefit pension plans to provide benefits in excess of qualified plan limits imposed by federal tax law. The gross benefit obligation for these plans was $1.0 billion as of both December 31, 2023 and 2022, most of which was recorded in the other noncurrent liabilities account on our consolidated balance sheet. We have set aside certain assets totaling $615 million and $595 million as of December 31, 2023 and 2022 in a separate trust that we expect to use to pay the benefit obligations under our nonqualified defined benefit pension plans, most of which were recorded in the other noncurrent assets account on our consolidated balance sheet. We record the gross assets on our consolidated balance sheet, rather than netting such assets with the benefit obligation for our nonqualified defined benefit pension plans, because the assets held are diversified and legally the assets may be used to settle other obligations or claims (although that is not our intent). Actuarial losses and unrecognized prior service credits related to our nonqualified defined benefit pension plans that were recorded in accumulated other comprehensive loss, pretax, totaled $347 million and $331 million at December 31, 2023 and 2022. We recognized pretax pension expense of $64 million in 2023, $81 million in 2022 and $56 million in 2021 related to our nonqualified defined benefit pension plans. The assumptions used to determine the benefit obligations and FAS expense for our
nonqualified defined benefit pension plans are similar to the assumptions for our qualified defined benefit pension plans described above.
We also sponsor other postemployment and foreign benefit plans, which are accounted for similar to defined benefit pension plans. The benefit obligations, assets, expense, and amounts recorded in accumulated other comprehensive loss for other postemployment and foreign benefit plans were not material to our results of operations, financial position or cash flows.
Defined Contribution Retirement Savings Plans
We maintain a number of defined contribution retirement savings plans, most with 401(k) features, that cover substantially all of our employees. Under the provisions of these plans, employees can make contributions on a before-tax and after-tax basis to investment funds to save for retirement. For most plans, we make employer contributions to the employee accounts that comprise of a company non-elective contribution and a matching contribution. Company matching contributions are automatically invested in an Employee Stock Ownership Plan (ESOP) fund, which primarily invests in shares of our common stock. Plan participants can transfer from the ESOP fund into any investment option provided by the respective plan. Our contributions to defined contribution retirement savings plans were $1.2 billion in 2023 and $1.1 billion in both 2022 and 2021. Our defined contribution retirement savings plans held 26.6 million and 27.4 million shares of our common stock at December 31, 2023 and 2022.