The single most-misread number in a big defense contractor's annual report is backlog, and Lockheed Martin's newly filed 2020 Form 10-K gives us a clean example: the company reports year-end backlog of roughly $147.1 billion, against full-year net sales near $65 billion. A number more than twice annual revenue tends to get quoted as if it were money in hand. It is not.
Backlog, as the filing itself defines it, is the aggregate value of remaining performance obligations — orders the company has won and contracted for but has not yet delivered. Follow the appropriation, as we say on this desk: a contract has to be both awarded and funded before the work it represents turns into sales. Backlog is the promise; revenue is the delivery.
That distinction matters because backlog converts to revenue only as Lockheed actually performs the work — building an aircraft, delivering a satellite, completing a missile lot. A program can sit in backlog for years. This is why a defense prime's backlog is best read as a measure of demand visibility and production runway, not as a near-term earnings figure.
The company organizes its disclosure by segment, and each segment carries its own backlog. The Space segment — which builds satellites, strategic and missile-defense systems, and space transportation hardware — is one of four. Reading backlog at the segment level tells you where the booked work is concentrated and which businesses have the longest visibility into future sales.
One useful habit when reading any prime's backlog: ask whether the work is funded. Government programs are often authorized in full but appropriated in annual increments, so a portion of backlog depends on future congressional funding. The 10-K is the primary record here; we surfaced it via EdgarBeast, with the filing itself on sec.gov.
The takeaway for a generalist reader: a backlog figure larger than revenue is normal and healthy for a defense prime, because it reflects multi-year programs. But it is a pipeline, not a bank balance. The document says exactly that — it just says it in the language of performance obligations.