Lockheed Martin 2007 Annual Report Download - page 23

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Strategic & Defensive Missile Systems
Our Strategic & Defensive Missile Systems business has been the sole supplier of strategic fleet ballistic missiles to the
U.S. Navy since the program’s inception in 1955. The Trident II D5 is the latest generation of submarine launched ballistic
missiles, following the highly successful Polaris, Poseidon C3, and Trident I C4 programs. The Trident II D5 began initial
production in 1988 and has achieved a mission-success track record of 120 consecutive successful test launches. The Trident
II D5 is the only intercontinental ballistic missile in production in the United States.
We are integrally involved with several missile defense programs. Under the Targets and Countermeasures Program, we
manage the overall missile defense targets hardware and software portfolio for the MDA, providing realistic test
environments for the system being developed by the MDA to defend against all classes of ballistic missiles. We are the prime
contractor for the MDA’s Multiple Kill Vehicles (MKV) payload system. In the event of an enemy launch, a single
interceptor equipped with the MKV payload system is designed to destroy the enemy lethal reentry vehicle along with any
countermeasures deployed to confuse the missile defense system. We are part of the industry team that is developing the
Airborne Laser to detect, track and destroy hostile ballistic missiles in the vulnerable boost phase of flight. We provide the
beam control fire control system, which is designed to accurately point and focus the high-energy laser beam. In 2007, the
beam control fire control system successfully completed a series of flight tests.
Space Transportation Systems
Our Space Transportation Systems business provides human space flight systems.
We lead an industry team supporting NASA in the design, test, build, integration and operational capability of the Orion
Crew Exploration Vehicle. Orion is an advanced crew capsule design utilizing state-of-the-art technology, and is planned to
succeed the Space Shuttle in transporting a new generation of human explorers to and from the International Space Station,
the Moon and eventually Mars and beyond.
We also manufacture the NASA Space Shuttle external tank. The tank is the only major non-reusable element of the
Space Shuttle. One tank is used for each launch. Our existing contract for the external tanks will continue through the final
Space Shuttle flight, currently scheduled for 2010.
Our Space Transportation Systems business also includes a 50% ownership interest in two joint ventures. United Space
Alliance, LLC (USA) is responsible for the day-to-day operation and management of the Space Shuttle fleet for NASA. USA
also performs the modification, testing and checkout operations required to prepare Space Shuttles for launch. United Launch
Alliance, LLC (ULA) performs the engineering, production, test and launch operations associated with U.S. Government
launches of the Atlas and Delta families of launch vehicles. We continue to market commercial Atlas launch services.
Competition
U.S. Government purchases of satellite systems, strategic missiles and space transportation systems are characterized by
major competitions governed by DoD or NASA procurement regulations. While the evaluation criteria for selection vary
from competition to competition, they are generally characterized by the customer’s best value determination, which includes
several important elements, such as price, technical capability, schedule and past performance. We compete worldwide for
sales of satellites and commercial launch services against several competitors.
Based on current projected DoD, NASA and other government spending profiles and budget priorities, we believe we
are well-positioned to compete for government satellites, strategic and defensive missile systems and space transportation
systems programs. Future competitions for government systems include initiatives for transformational communications,
global positioning, and planetary exploration and science.
Commercial demand for geo-stationary telecommunications satellites has been flat and manufacturing remains in an
overcapacity situation. This has created significant price and competitive pressures. For further discussion of competitive
factors in the sales of commercial satellites, see Management’s Discussion & Analysis – “U.S. Government –
Non-Department of Defense Business” beginning on page 34 of this Form 10-K.
Patents
We routinely apply for, and own a substantial number of, U.S. and foreign patents related to the products and services
our business segments provide. In addition to owning a large portfolio of intellectual property, we also license intellectual
property to and from third parties. The U.S. Government has licenses in our patents that are developed in performance of
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