Lockheed Martin Corp. (NYSE:LMT) | Materials & Supply

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Key Raw Materials and Components + Supply



Aspects of Lockheed Martin's business require relatively scarce raw materials. the company historically has been successful in obtaining the raw materials and other supplies needed in Lockheed Martin's manufacturing processes. The company seeks to manage raw materials supply risk through long-term contracts and by maintaining a stock of key materials in inventory.

Aluminum and titanium are important raw materials used in certain of Lockheed Martin's Aeronautics and Space Systems programs. Long-term agreements have helped enable a continued supply of aluminum and titanium. Carbon fiber is an important ingredient in the composite material that is used in Lockheed Martin's Aeronautics programs, such as the F-35. Nicalon fiber also is a key material used on the F-22 aircraft (aircraft no longer in production). One type of carbon fiber and the nicalon fiber that the company uses currently are only available from single-source suppliers. Aluminum lithium, which the company uses for F-16 structural components, also is currently only available from limited sources.

The company has been advised by some suppliers that pricing and the timing of availability of materials in some commodities markets can fluctuate widely. These fluctuations may negatively affect price and the availability of certain materials, including titanium. While Lockheed Martin does not anticipate material problems regarding the supply of raw materials and has taken appropriate measures to mitigate these variations, if key materials become unavailable or if pricing fluctuates widely in the future, it could result in delay of one or more of Lockheed Martin's programs, increased costs, or reduced award fees.

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