Lockheed Martin 2005 Annual Report Download - page 44

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   
Board฀of฀Directors฀and฀Stockholders
Lockheed฀Martin฀Corporation
We฀have฀audited฀management’s฀assessment,฀included฀in฀the฀accompanying฀Management’s฀Report฀on฀the฀Financial฀Statements฀
and฀ Internal฀ Control฀ Over฀ Financial฀ Reporting,฀ that฀ Lockheed฀ Martin฀ Corporation฀ maintained฀ effective฀ internal฀ control฀ over฀
financial฀reporting฀as฀of฀December฀31,฀2005,฀based฀on฀criteria฀established฀in฀Internal฀Control–Integrated฀Framework฀issued฀by฀the฀
Committee฀of฀Sponsoring฀Organizations฀of฀the฀Treadway฀Commission฀(the฀COSO฀criteria).฀Lockheed฀Martin฀Corporation’s฀man-
agement฀is฀responsible฀for฀maintaining฀effective฀internal฀control฀over฀financial฀reporting฀and฀for฀its฀assessment฀of฀the฀effective-
ness฀of฀internal฀control฀over฀financial฀reporting.฀Our฀responsibility฀is฀to฀express฀an฀opinion฀on฀management’s฀assessment฀and฀an฀
opinion฀on฀the฀effectiveness฀of฀the฀Corporation’s฀internal฀control฀over฀financial฀reporting฀based฀on฀our฀audit.
We฀ conducted฀ our฀ audit฀ in฀ accordance฀ with฀ the฀ standards฀ of฀ the฀ Public฀ Company฀ Accounting฀ Oversight฀ Board฀ (United฀
States).฀Those฀standards฀require฀that฀we฀plan฀and฀perform฀the฀audit฀to฀obtain฀reasonable฀assurance฀about฀whether฀effective฀inter-
nal฀ control฀over฀financial฀reporting฀was฀maintained฀in฀all฀material฀respects.฀Our฀audit฀included฀obtaining฀an฀understanding฀of฀
internal฀control฀over฀financial฀reporting,฀evaluating฀management’s฀assessment,฀testing฀and฀ evaluating฀the฀design฀and฀ operating฀
effectiveness฀ of฀ internal฀ control,฀ and฀ performing฀ such฀ other฀ procedures฀ as฀ we฀ considered฀ necessary฀ in฀ the฀ circumstances.฀฀
We฀believe฀that฀our฀audit฀provides฀a฀reasonable฀basis฀for฀our฀opinion.
A฀company’s฀internal฀control฀over฀ financial฀reporting฀is฀a฀process฀designed฀to฀provide฀reasonable฀assurance฀regarding฀the฀
reliability฀of฀financial฀reporting฀and฀the฀preparation฀of฀financial฀statements฀for฀external฀purposes฀in฀accordance฀with฀generally฀
accepted฀accounting฀principles.฀A฀company’s฀internal฀control฀over฀financial฀reporting฀includes฀those฀policies฀and฀procedures฀that฀
(1)฀pertain฀to฀the฀maintenance฀of฀records฀that,฀in฀reasonable฀detail,฀accurately฀and฀fairly฀reflect฀the฀transactions฀and฀dispositions฀
of฀the฀assets฀of฀the฀company;฀(2)฀provide฀reasonable฀assurance฀that฀transactions฀are฀recorded฀as฀necessary฀to฀permit฀preparation฀
of฀financial฀statements฀ in฀accordance฀with฀generally฀accepted฀accounting฀ principles,฀and฀ that฀receipts฀ and฀expenditures฀of฀the฀
company฀are฀being฀made฀only฀in฀accordance฀with฀authorizations฀of฀management฀and฀directors฀of฀the฀company;฀and฀(3)฀provide฀
reasonable฀assurance฀regarding฀prevention฀or฀timely฀detection฀of฀unauthorized฀acquisition,฀use,฀or฀disposition฀of฀the฀company’s฀
assets฀that฀could฀have฀a฀material฀effect฀on฀the฀financial฀statements.
Because฀of฀its฀inherent฀limitations,฀internal฀control฀over฀financial฀reporting฀may฀not฀prevent฀or฀detect฀misstatements.฀Also,฀
projections฀ of฀ any฀ evaluation฀ of฀ effectiveness฀ to฀ future฀ periods฀ are฀ subject฀ to฀ the฀ risk฀ that฀ controls฀ may฀ become฀ inadequate฀
because฀of฀changes฀in฀conditions,฀or฀that฀the฀degree฀of฀compliance฀with฀the฀policies฀or฀procedures฀may฀deteriorate.
In฀our฀opinion,฀management’s฀assessment฀that฀Lockheed฀Martin฀Corporation฀maintained฀effective฀internal฀control฀over฀finan-
cial฀reporting฀as฀of฀December฀31,฀2005,฀is฀fairly฀stated,฀in฀all฀material฀respects,฀based฀on฀the฀COSO฀criteria.฀Also,฀in฀our฀opinion,฀
Lockheed฀ Martin฀ Corporation฀ maintained,฀ in฀ all฀ material฀ respects,฀ effective฀ internal฀ control฀ over฀ financial฀ reporting฀ as฀ of฀
December฀31,฀2005,฀based฀on฀the฀COSO฀criteria.
We฀also฀have฀audited,฀in฀accordance฀with฀the฀standards฀of฀the฀Public฀Company฀Accounting฀Oversight฀Board฀(United฀States),฀
the฀consolidated฀balance฀sheets฀of฀Lockheed฀Martin฀Corporation฀and฀subsidiaries฀as฀of฀December฀31,฀2005฀and฀2004,฀and฀the฀
related฀consolidated฀statements฀of฀earnings,฀stockholders’฀equity,฀and฀cash฀flows฀for฀each฀of฀the฀three฀years฀in฀the฀period฀ended฀
December฀ 31,฀ 2005฀ of฀ Lockheed฀ Martin฀ Corporation฀ and฀ our฀ report฀ dated฀ February฀ 22,฀ 2006฀ expressed฀ an฀ unqualified฀
opinion฀thereon.
฀ /s/฀Ernst฀&฀Young฀LLP
฀ ERNST฀&฀YOUNG฀LLP
Baltimore,฀Maryland
February฀22,฀2006
Lockheed฀Martin฀Corporation
REPORT฀OF฀ERNST฀&฀YOUNG฀LLP,฀INDEPENDENT฀REGISTERED฀PUBLIC฀
ACCOUNTING฀FIRM,฀REGARDING฀INTERNAL฀CONTROL฀OVER฀FINANCIAL฀REPORTING