1. Today’s Challenges in Acquisition Management
Marcy Palus
VP, Contracts, Electronic Systems

2. Understanding the Challenges
Environment
Who We Are
2007 Sales by Business Area
2007 Sales by Customer
Domestic Evolution
International Growth
Domestic / International Comparison
Demographics Complicate the Challenges

3. Lockheed Martin Business Areas
Space Systems
Aeronautics
Information Systems & Global Services
Electronic Systems
Our Four Business Areas

4. Information Systems & Global Services
2007 Sales by Business Area
Electronic
Systems
$11.2B
Aeronautics
$12.3B
27%
29%
24%
Information Systems & Global Services
$10.2B
20%
Delivering Disciplined Performance
In today’s competitive global marketplace, there is no substitute for meeting commitments and expectations – whether that’s operational or financial performance. Disciplined Performance means striving to be the partner of choice, supplier of choice, and employer of choice.
We have a well-balanced portfolio of businesses that enables us to help our customers meet their most challenging goals… In defense and security … In delivering vital government services to the public…
Space Systems $8.2B
Total Sales - $41.9B

5. Civil Government/ Homeland Security/ Intelligence and Other
2007 Sales by Customer
Civil Government/ Homeland Security/
Intelligence and Other
Defense
27%
58%
15%
Defense = $24,302 Million
Civil Government /HLS/Intelligence = $11,313 Million
International = Direct Foreign Sales + FMS + Commercial Export = $6,285 Million
Lockheed Martin typically accounts for about 19 percent of global defense exports and about 40 percent of all U.S. defense exports.
International
Air Force
23%
Navy/USMC
23%
Army 9%
Other DoD 3%
Total Sales - $41.9B

6. We Never Forget Who We’re Working For 
Our Customers
Departments of
Defense
Homeland Security
Commerce
Energy
Health & Human Services
Housing & Urban Development
Justice
State
Transportation
NASA
Social Security Administration
Environmental Protection Agency
U.S. Postal Service
Intelligence Communities
Foreign Governments
Defense/Intelligence
The U.S. Armed Services and those of allied nations apply cutting-edge technologies to address their mission-critical requirements. Servicemen and women serving the cause of freedom must have assets in space, the air, on land and at sea as well as the technologies that provide them a seamless integrated picture of the battlespace.
Homeland Security
The United States must secure a homeland with 429 commercial airports; more than 4,000 miles of coastline, 300 seaports and 7,500 miles of land borders; as well as six million shipping containers that cross points of entry into our country a year.
Government Information Technology & Services
As a leader in E-Government solutions, Lockheed Martin applies extensive Information Technology (IT) capability across the breadth of more than a dozen federal agencies that serve the American people. Lockheed Martin’s affinity with vital institutions has made this Corporation a valued and trusted partner.
We Never Forget Who We’re Working For 

7. Did You Know? Missiles & Fire Control Produced the 5,000th GMLRS
Delivered the 20,000th Hellfire missile
Exceeded 30,000 Javelin missile deliveries
Achieved 212 consecutive months of ahead-of-schedule ATACMS deliveries
Systems Integration - Owego
Surpassed 5,200 test miles on two JLTV prototypes
Exceeded 700 flight test hours on VH-71 test aircraft
Converted 120th A-10 to the A-10C Precision Engagement configuration
Maritime Systems & Sensors
Shipped 55,000 aircraft tires to Air Force, Army, Navy and Marine Corps since Sept 2007
Delivered 6,000th AN/UYQ-70 console to the Navy
Aegis Firsts:
Operational Use (Satellite shootdown)
Dual ballistic missile intercept in exo-atmosphere
Simulation, Training & Support
Trained 2,300 Special Operations Forces during 1Q08 under the ATARS II program
Delivered 55th convoy trainer
Trained 50,000 warfighters on convoy trainers during 2007
Delivered 6,000th AN/UYQ-70 console to the Navy – The AN/UYQ-70 program is the first fully implemented standard combat computer system resource using a state-of-the-art open system architecture. This flexible, tactical workstation is configured using high performance COTS modules housed in militarized enclosures. The Q-70 can be installed in airborne, surface and submarine platforms to fulfill multiple combat system tasks.
Delivered 55th Convoy Trainer
Missile Intercept by a Japanese navy ship supporting MDA – On Dec a medium-range ballistic missile target was fired from the U.S. Navy’s Pacific Missile Range Facility on Kauai, Hawaii. JS Kongo responded by tracking it and launching an SM-3 missile. It destroyed the missile about 100 miles above the ocean, achieving a first for Japan and the 12th successful intercept overall for the SM-3 ABM program.

8. Domestic Evolution Before After Progress Payments Performance Based
Rights in Tech Data
Evaluated
Low Cost
Best Value
Small Business Comprehensive Plan
Single Plan
OCI
Greater Probability Through M&A Activity
Customer
Develop New Systems
No Offset Adm. Costs
Partner
NDI – COTS
Now Recognized

9. Our Global Presence Over $6B International Sales in 2007
More than 300 Partnerships
Global Products for Global Markets
Lockheed Martin serves customers around the globe. With 2007 international sales greater than $6B and over 300 partnerships worldwide, LM develops global products for global markets. About 30,000 of LM’s 140,000 employees (20%) are working on international programs and international business represents about 15% of annual revenues.
Shown here:
HIMARS
HC-144A (EADS CASA)
Apache Longbow
T-50
Battlefield Management Center (top right)
C-130J
Presidential Helicopter VH-71
Aegis
UK Merlin Helicopter

10. Domestic / International Comparison
Payment – Never an Issue
Government Financed
Financial Instrument
Vs Open Account
Private Financing
Intellectual Property
US-Developed
Background is Issue
Export Restrictions
Warranty
Shorter Duration
More Restrictive
Cost Type
No Development – Mature Product
Familiar Regulation
Uncharted Waters
Offsets Can Complicate The Transaction

11. Prospectively Graying of Population Work Life Balance
Dual Income Families
Travel
Work Hours
Experience Without Moving
Empowerment – Rolling Back Reform

12. Actions Improved Training Geographic Rotation
Executive Counsels for High Potentials
Guidebooks for Problematic Terms
Mentoring
Executive Roundtables
Full Spectrum Leadership

13. Building a Better Workforce
Recognized as “Employer of Choice” and Industry “Diversity Leader”
“Top Corporations for Multicultural Business” (Diversity Business)
“Ideal Employers” (Universum Undergraduate Survey)
“Best Places to Work” (Woman Engineer)
“Best Leadership Development Programs” (Fortune)
“Best Places to Launch a Career” (Business Week)
“Most Admired Employers” (Black Engineer)
Employer of Choice:
DiversityBusiness online voting named LM a top corporation for multicultural business opportunities for the sixth straight year in 2007.
LM was picked number one “ideal employer” in the 2006 Universum Undergraduate Survey of engineering and science students.
Woman Engineer Magazine 2005 survey rated LM #1 best to work for.
Business Week Magazine in 2007 listed LM as #9 (and only A&D industry) in their “Best Places to Launch a Career” ratings.
Career Communications Group (US Black Engineer, Hispanic Engineer, and Women of Color magazines) listed LM number two in their Fall 2006 “Most Admired Employers” list.
The Black Collegian awarded LM Number 4 of Top 100 Employers in 2006.
Training Magazine “Training Top 125” list April LM number 11, praised as a “champion of systems engineering.” in promoting employee development.
Minority Engineer Magazine listed LM as its number 5 company in 2005.
Workforce Diversity Reader Preference Survey in October 2006 ranked LM first for engineering and information technology professionals.
Chief Executive Magazine and Hay Group consulting firm included LM in its 2006 “Top Best Companies for Leaders.”
IntelligenceCareers.com in 2007 lists LM as the number one company for defense industry professionals with clearances.
Fortune Magazine lists LM as #13 corporation with best leadership development.
Military Spouse Magazine in 2007 listed LM #9 “Top Ten Military Spouse Friendly.”