Lockheed Martin 2003 Annual Report Download - page 41

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extent they are effective hedges, are recognized in income when
the hedged transaction occurs. To the extent the hedges are inef-
fective, gains and losses on the contracts are recognized currently.
At December 31, 2003, the fair value of forward exchange con-
tracts outstanding, as well as the amounts of gains and losses
recorded during the year then ended, were not material. We do not
hold or issue derivative financial instruments for trading purposes.
CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures that are designed
to ensure that information required to be disclosed in our
periodic filings with the SEC is recorded, processed, summa-
rized and reported within the time periods specified in the SEC’s
rules and forms, and that such information is accumulated and
communicated to our management, including our Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), as
appropriate, to allow for timely decisions regarding required dis-
closure. In designing and evaluating the disclosure controls and
procedures, management recognizes that any controls and proce-
dures, 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-benefit relationship of possible
controls and procedures. Also, we have investments in certain
unconsolidated entities. As we do not control or manage those
entities, our disclosure controls and procedures with respect to
those entities are necessarily substantially more limited than
those we maintain with respect to our consolidated subsidiaries.
At December 31, 2003, we performed an evaluation of the
effectiveness of the design and operation of our disclosure con-
trols and procedures. 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. Based on the evaluation, our management,
including the CEO and CFO, concluded that our disclosure con-
trols and procedures were effective.
There have been no significant changes in our internal con-
trols over financial reporting during the most recently completed
fiscal quarter that materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.
Lockheed Martin Corporation
39