Lockheed Martin (LMT)

Risks

• We depend heavily on contracts with the U.S. Government for a substantial portion of our business. Changes in the U.S. Government’s priorities, or delays or reductions in spending could have a material adverse effect on our business.
• The F-35 program comprises a material portion of our revenue and reductions in funding for this program and risks related to the development, production, sustainment, performance, schedule, cost and requirements of the program could adversely affect our performance.
• We are subject to procurement laws and regulations, including those that enable the U.S. Government to terminate contracts for convenience. Our business and reputation could be adversely affected if we or those we do business with fail to comply with these laws.
• Evolving U.S. Government procurement policies, increased emphasis on cost over performance and rapid acquisition initiatives could adversely affect our business.
• Our profitability and cash flow may vary based on the mix of our contracts and programs, our performance, and our ability to control costs.
• We are routinely subject to audit by our customers on government contracts and the results of those audits could have an adverse effect on our business, reputation and results of operations.
• Increased competition and bid protests in a budget-constrained environment may make it more difficult to maintain our financial performance and customer relationships.
• We are the prime contractor on most of our contracts and if our subcontractors, suppliers or teaming agreement or joint venture partners fail to perform their obligations, our performance and ability to win future business could be harmed.
• Our success depends, in part, on our ability to develop new technologies, products and services and efficiently produce and deliver existing products.
• International sales may pose different economic, regulatory, competition and other risks.
• Geopolitical issues and considerations could have a significant effect on our business.
• U.S. Government sanctions on Turkey could adversely impact our results of operations and cash flows.
• We may be unable to benefit fully from or adequately protect our intellectual property rights or use third-party intellectual property, which could negatively affect our business.
• Our business and financial performance depends on our ability to identify, attract and retain a highly skilled workforce.
• Our efforts to minimize the likelihood and impact of adverse cybersecurity incidents and to protect data and intellectual property may not be successful and our business could be negatively affected by cyber or other security threats or other disruptions.
• If we fail to successfully complete or manage acquisitions, divestitures, equity investments and other transactions, including our proposed acquisition of Aerojet Rocketdyne, or if acquired entities or equity investments fail to perform as expected, our financial results, business and future prospects could be harmed.
• Pension funding and costs are dependent on several economic assumptions which if changed may cause our future earnings and cash flow to fluctuate significantly as well as affect the affordability of our products and services.
• Our estimates and projections may prove to be inaccurate and certain of our assets may be at risk of future impairment.
• Changes in tax laws and regulations or exposure to additional tax liabilities could adversely affect our financial results.
• Our business involves significant risks and uncertainties that may not be covered by indemnity or insurance.
• There can be no assurance that we will continue to increase our dividend or to repurchase shares of our common stock.