Lockheed Martin 2007 Annual Report Download - page 31

Most of the laws governing environmental matters include criminal provisions. If we were convicted of a violation of
the Federal Clean Air Act or the Clean Water Act, our facility or facilities involved in the violation would be placed by EPA
on the “Excluded Parties List” maintained by the General Services Administration. The listing would continue until the EPA
concluded that the cause of the violation had been cured. Listed facilities cannot be used in performing any U.S. Government
contract awarded to us during any period of listing by the EPA.
We have incurred and will likely continue to incur liabilities under various federal and state statutes for the cleanup of
pollutants previously released into the environment. The extent of our financial exposure cannot in all cases be reasonably
estimated at this time. Among the variables management must assess in evaluating costs associated with these cases and
remediation sites generally are changing cost estimates, continually evolving governmental environmental standards and cost
allowability issues. For information regarding these matters, including current estimates of the amounts that we believe are
required for remediation or cleanup to the extent estimable, see “Environmental Matters” in Management’s Discussion and
Analysis beginning on page 39 and Note 14 – Legal Proceedings, Commitments and Contingencies on page 89 of this
Form 10-K.
Unanticipated changes in our tax provisions or exposure to additional income tax liabilities could affect our
profitability.
Our business operates in many locations under government jurisdictions that impose income taxes. Changes in domestic
or foreign income tax laws and regulations, or their interpretation, could result in higher or lower income tax rates assessed
or changes in the taxability of certain revenues or the deductibility of certain expenses, thereby affecting our income tax
expense and profitability. In addition, audits by income tax authorities could result in unanticipated increases in our income
tax expense.
We are involved in a number of legal proceedings. We cannot predict the outcome of litigation and other
contingencies with certainty.
Our business may be adversely affected by the outcome of legal proceedings and other contingencies (including
environmental remediation costs) that cannot be predicted with certainty. As required by GAAP in the U.S., we estimate
material loss contingencies and establish reserves based on our assessment of contingencies where liability is deemed
probable and reasonably estimable in light of the facts and circumstances known to us at a particular point in time.
Subsequent developments in legal proceedings may affect our assessment and estimates of the loss contingency recorded as a
liability or as a reserve against assets in our financial statements. For a description of our current legal proceedings, see
Item 3 – Legal Proceedings beginning on page 25 and Note 14 – Legal Proceedings, Commitments and Contingencies
beginning on page 87 of this Form 10-K.
In order to be successful, we must attract and retain key employees.
Our business has a continuing need to attract large numbers of skilled personnel, including personnel holding security
clearances, to support the growth of the enterprise and to replace individuals who have terminated employment due to
retirement or for other reasons. To the extent that the demand for qualified personnel exceeds supply, as has been the case in
recent years, we could experience higher labor, recruiting or training costs in order to attract and retain such employees, or
could experience difficulties in performing under our contracts if our needs for such employees were unmet.
Historically, where employees are covered by collective bargaining agreements with various unions, we have been
successful in negotiating renewals to expiring agreements without any material disruption of operating activities. This does
not assure, however, that we will be successful in our efforts to negotiate renewals of our existing collective bargaining
agreements when they expire. If we were unsuccessful in those efforts, there is the potential that we could incur unanticipated
delays or expenses in the programs affected by any resulting work stoppages.
Our forward-looking statements and projections may prove to be inaccurate.
Our actual financial results likely will be different from those projected due to the inherent nature of projections and
may be better or worse than projected. Given these uncertainties, you should not rely on forward-looking statements. The
forward-looking statements contained in this Form 10-K speak only as of the date of this Form 10-K. We expressly disclaim
a duty to provide updates to forward-looking statements after the date of this Form 10-K to reflect the occurrence of
subsequent events, changed circumstances, changes in our expectations, or the estimates and assumptions associated with
them. The forward-looking statements in this Form 10-K are intended to be subject to the safe harbor protection provided by
the federal securities laws.
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