Lockheed Martin 2008 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2008 Lockheed Martin annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 118

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Management’s Report on the Financial Statements and
Internal Control Over Financial Reporting
The management of Lockheed Martin is responsible for the consolidated financial statements and all related financial
information contained in this Annual Report on Form 10-K. The consolidated financial statements, which include amounts
based on estimates and judgments, have been prepared in accordance with accounting principles generally accepted in the
United States. Management believes the consolidated financial statements fairly present, in all material respects, the financial
condition, results of operations and cash flows of the Corporation. The consolidated financial statements have been audited
by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report included herein.
The management of Lockheed Martin is also responsible for establishing and maintaining an adequate system of
internal control over financial reporting of the Corporation (as defined by the Securities Exchange Act of 1934). This system
is designed to provide reasonable assurance, based on an appropriate cost-benefit relationship, that assets are safeguarded and
transactions are properly executed and recorded. An environment that provides for an appropriate level of control
consciousness is maintained through a comprehensive program of management testing to identify and correct deficiencies,
examinations by internal auditors, and audits by the Defense Contract Audit Agency for compliance with federal government
rules and regulations applicable to contracts with the U.S. Government.
Management conducted an evaluation of the effectiveness of the Corporation’s system of internal control over financial
reporting based on the framework in Internal Control – Integrated Framework, issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Corporation’s system
of internal control over financial reporting was effective as of December 31, 2008. Ernst & Young LLP also assessed the
effectiveness of the Corporation’s internal control over financial reporting for the year ended December 31, 2008, as stated in
their report included herein.
Essential to the Corporation’s internal control system is management’s dedication to the highest standards of integrity,
ethics and social responsibility. To support these standards, management has issued Setting the Standard, our Code of Ethics
and Business Conduct (the Code). The Code provides for a telephone help line that employees can use to confidentially or
anonymously communicate to the Corporation’s ethics office complaints or concerns about accounting, internal control or
auditing matters. These matters are forwarded directly to the Audit Committee of the Corporation’s Board of Directors.
The Audit Committee, which is composed of six directors who are not members of management, has oversight
responsibility for the Corporation’s financial reporting process and the audits of the consolidated financial statements and
internal control over financial reporting. Both the independent auditors and the internal auditors meet periodically with
members of the Audit Committee, with or without management representatives present. The Audit Committee recommended,
and the Board of Directors approved, that the audited consolidated financial statements be included in the Corporation’s
Annual Report on Form 10-K for filing with the Securities and Exchange Commission.
ROBERT J. STEVENS BRUCE L. TANNER
Chairman, President and Chief Executive Officer Executive Vice President and Chief Financial Officer
60