Lockheed Martin 2004 Annual Report Download - page 40

safeguarded and transactions are properly executed and
recorded. Our disclosure controls and procedures are also
designed to ensure that information is accumulated and com-
municated to our management, including our Chief Executive
Officer (CEO) and Chief Financial Officer (CFO), as appropri-
ate, to allow timely decisions regarding required disclosure. In
designing and evaluating such controls and procedures, we rec-
ognize that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance
of achieving the desired control objectives, and management
necessarily is required to use its judgment in evaluating the cost
to benefit relationship of possible controls and procedures.
Also, we have investments in certain unconsolidated entities. As
we do not control or manage these entities, our controls and
procedures with respect to those entities are necessarily sub-
stantially more limited than those we maintain with respect to
our consolidated subsidiaries.
We routinely review our system of internal control over
financial reporting and make changes to our processes and sys-
tems to improve controls and increase efficiency, while ensur-
ing that we maintain an effective internal control environment.
Changes may include such activities as implementing new,
more efficient systems, consolidating the activities of two or
more business units, and migrating certain processes to our
Shared Services centers. In addition, when we acquire new
businesses, we review the controls and procedures of the
acquired business as part of our integration activities.
We performed an evaluation of the effectiveness of our dis-
closure controls and procedures, including internal control over
financial reporting, as of December 31, 2004. The evaluation
was performed with the participation of senior management of
each business segment and key Corporate functions, and under
the supervision of the CEO and CFO.
During 2004, we devoted significant effort to comply with
the rules on internal control over financial reporting issued pur-
suant to the Sarbanes-Oxley Act. This effort expanded upon our
long-standing practice of acknowledging management’s
responsibility for the establishment and effective operation of
internal control through performing self-assessment and moni-
toring procedures. Based on this work and other evaluation pro-
cedures, our management, including the CEO and CFO,
concluded that our disclosure controls and procedures, includ-
ing our internal control over financial reporting, were effective
as of December 31, 2004. Management’s report on financial
statements and internal control over financial reporting appears
on page 39. In addition, both our assessment and the effective-
ness of internal control over financial reporting were audited by
our independent auditors. Their unqualified report appears on
page 40.
There were no changes in our internal control over finan-
cial reporting during the most recently completed fiscal quarter
that materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Lockheed Martin Corporation
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
December 31, 2004
38