Fellow Shareholders:

Extraordinary performance of Lockheed Martin's products and solutions throughout the year demonstrated why we are the trusted defense technology innovator for America and its allies. When it mattered most, we delivered the capabilities our soldiers, sailors, marines, airmen, and guardians needed to deter wider conflict, protect citizens and ensure a sustained military advantage in an increasingly complex global security environment.

2025 Combat-Proven Performance

During Operation Midnight Hammer, pilots flying the F-35 Lightning II and the F-22 Raptor stealth fighters provided the air dominance required for bombers to reach Iran's hardened nuclear sites.¹ Then and in missions since, our platforms operated essentially undetected in highly defended and contested airspace, underscoring the value of advanced stealth, superior electronic warfare and resilient broadband communications technologies.

Our systems were also integral to 100% effectively protecting American troops. When Iran retaliated with a salvo of ballistic missiles targeting U.S. forces stationed at Al Udeid Air Base in Qatar, Patriot missiles successfully intercepted the incoming threats.² This engagement occurred in a region also supported by THAAD and Aegis. Together, these systems form a multiple-layered defense shield protecting U.S. strategic assets and allied nations in the Middle East.

A clear display of American military might, this operation validated our customers' vision for modern deterrence and demonstrated what our four business areas Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space can deliver as one integrated company with unmatched integration, reliability and scale.

Unprecedented Demand

This performance has translated into unprecedented demand for Lockheed Martin's technology. We finished 2025 with a record backlog of nearly $194 billion, representing more than two-and-a-half years of sales. We were awarded $10.9 billion for CH-53K helicopters, $9.8 billion for Patriot Missile Segment Enhancement (PAC-3 MSE) missiles—the largest contracts in RMS and MFC history, respectively-$9.5 billion for JASSM and LRASM missiles, lots 18 and 19 for F-35 fighters, and contracts for critical capabilities in our Space business area, including the Next Generation Interceptor and the Fleet Ballistic Missile program. Elevated demand continued in 2026 with Lockheed Martin reaching landmark, seven-year agreements with the Department of War to triple PAC-3 MSE missile production and to quadruple THAAD production.

These wins reflect our customers' unwavering confidence in Lockheed Martin's ability to deliver, and we will meet the moment. We are maintaining sharp focus on operational execution-holding ourselves accountable for cost, quality and schedule, while strengthening supply chain resilience and expanding production capacity.

This focus helped us deliver solid financial results in 2025, summarized below.

Investing and Innovating

Lockheed Martin is significantly increasing our investments while maintaining our historical practice of using a disciplined and dynamic approach to capital allocation. Every investment decision is guided by our mission to provide decisive capability to our customers, and by our focus on growing the business and delivering shareholder value in 2026 and beyond.

• Air Dominance: We are accelerating upgrades to the F-35 through Block 4 enhancements; advancing concepts informed by sixth-generation development; improving sensors, electronic warfare and data links; and integrating autonomous systems such as drone wingmen. In 2025, an F-22 pilot controlled an autonomous drone from the cockpit for the first time, demonstrating that the future of air dominance is here today.
• Homeland Defense: Lockheed Martin is ready to help make the promise of the Golden Dome for America a reality. We are investing in our production capacity for our proven land-, sea- and space-based systems, as well as command and control technology. In December, the Space Force announced operational acceptance of the Long-Range Discrimination Radar, making this system officially available for ballistic missile defense. These systems can not only play an integral role in a Golden Dome architecture, but also in allied homeland defense systems-an important growth area for Lockheed Martin.
• Transformation: Our strategic investments over many years have positioned Lockheed Martin to succeed under the Department of War's acquisition transformation framework. For example, we developed autonomous systems like the U-Hawk, Vectis and the Common Multi-Mission Truck ahead of formal requirements and with internal investment. We also continue to partner with leading tech companies—including Meta, IBM, NVIDIA, Verizon and others—to integrate cutting-edge commercial offerings into our defense platforms, enabling us to deliver more advanced solutions faster and more affordably.

Equally important, we recognize that we must evolve to help our customers transform. Through our 1LMX initiative, we are driving enterprise-wide modernization-adopting advanced digital tools, harnessing artificial intelligence, improving speed and affordability, and enhancing our ability to deliver best-value solutions at the pace required to stay ahead of the threat landscape. We made significant progress on 1LMX in 2025, enabling MFC to launch the first release of our new enterprise resource planning and manufacturing execution systems in January 2026. This major milestone streamlines our operations, optimizes our business systems and positions us to deploy additional 1LMX capabilities across the corporation.

Strategic Execution in 2026

In 2026, Lockheed Martin will continue to execute along our strategic lines of effort, driving relentless focus on operational performance to ensure our customers have the tools they need when they need them and to position the company for future growth opportunities by:

• Accelerating digital technology across the defense enterprise through commercial partnerships, targeted investments and in-house innovation.
• Increasing the resilience of the defense industrial base through close collaboration with our customers and Congress on acquisition transformation and anti-fragility measures.
• Advancing American and allied interoperability by expanding our international operations through strategic co-production agreements that strengthen U.S. and allied manufacturing, increase efficiency and ultimately deliver greater capability than any of us could achieve alone.

We made significant progress on all of these priorities this year, thanks to the dedication of our skilled and committed workforce and the support of you, our shareholders. Thank you for your continued investment and confidence in Lockheed Martin. Together, we will continue to advance modern deterrence and help secure a safer, more stable world.

James D. Taiclet
Chairman, President and Chief Executive Officer