Lockheed Martin 2005 Annual Report Download - page 43
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LockheedMartinCorporation
MANAGEMENT’SREPORTONTHEFINANCIALSTATEMENTSAND
INTERNALCONTROLOVERFINANCIALREPORTING
ThemanagementofLockheedMartinisresponsiblefortheconsolidatedfinancialstatementsandallrelatedfinancialinfor-
mationcontainedinthisAnnualReportonForm10-K.Theconsolidatedfinancialstatements,whichincludeamountsbasedon
estimatesandjudgments,havebeenpreparedinaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates.
Managementbelievestheconsolidatedfinancialstatementsfairlypresent,inallmaterialrespects,thefinancialcondition,results
ofoperationsandcashflowsoftheCorporation.TheconsolidatedfinancialstatementshavebeenauditedbyErnst&YoungLLP,
anindependentregisteredpublicaccountingfirm,asstatedintheirreportincludedherein.
The managementofLockheedMartinis alsoresponsibleforestablishingandmaintainingan adequate systemofinternal
controloverfinancialreportingoftheCorporation(asdefinedbytheSecuritiesExchangeActof1934).Thissystemisdesigned
toprovidereasonableassurance,basedonanappropriatecost-benefitrelationship,thatassetsaresafeguardedandtransactionsare
properlyexecutedand recorded. Anenvironmentthatprovidesforan appropriate levelofcontrolconsciousnessis maintained
throughacomprehensiveprogramofmanagementtestingtoidentifyandcorrectdeficiencies,examinationsbyinternalauditors
and auditsbythe Defense Contract AuditAgencyforcompliance withfederalgovernmentrules and regulationsapplicableto
contractswiththeU.S.Government.
Management conducted an evaluation of the effectiveness of the Corporation’s system of internal control over financial
reportingbasedontheframeworkinInternalControl–IntegratedFrameworkissuedbytheCommitteeofSponsoringOrganizations
oftheTreadwayCommission.Basedonthisevaluation,managementconcludedthattheCorporation’ssystemofinternalcontrol
overfinancialreportingwaseffectiveasofDecember31,2005.Management’sassessmenthasbeenauditedbyErnst&Young
LLP,asstatedintheirreportincludedherein.
EssentialtotheCorporation’sinternalcontrolsystemismanagement’sdedicationtothehigheststandardsofintegrity,ethics
and social responsibility. To support these standards, management has issued the Code of Ethics and Business Conduct (the
Code).TheCodeprovidesforahelplinethatemployeescanusetoconfidentiallyoranonymouslycommunicatetotheCorporation’s
ethicsofficecomplaintsorconcernsaboutaccounting,internalcontrolorauditingmatters.Thesemattersareforwardeddirectly
totheAuditCommitteeoftheCorporation’sBoardofDirectors.
TheAuditCommittee,whichiscomposedoffivedirectorswhoarenotmembersofmanagement,hasoversightresponsibility
fortheCorporation’sfinancialreportingprocessandtheauditsoftheconsolidatedfinancialstatementsandinternalcontrolover
financial reporting. Both the independent auditors and the internal auditors meet periodically with members of the Audit
Committee,withorwithoutmanagementrepresentativespresent.TheAuditCommitteerecommended,andtheBoardofDirectors
approved,thattheauditedconsolidatedfinancialstatementsbeincludedintheCorporation’sAnnualReportonForm10-Kfor
filingwiththeSecuritiesandExchangeCommission.
ROBERTJ.STEVENS CHRISTOPHERE.KUBASIK
Chairman,PresidentandChief ExecutiveVicePresidentandChief
ExecutiveOfficer FinancialOfficer