Overcoming Today's Acquisition Management Challenges

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 Aeronautics Space Systems Information Systems & Global Services Electronic Systems

4. 2007 Sales by Business Area Aeronautics $12.3B Electronic Systems $11.2B 27% 29% 24% 20% Information Systems & Global Services $10.2B Space Systems $8.2B Total Sales - $41.9B

5. 2007 Sales by Customer Civil Government/ Homeland Security/ Intelligence and Other Defense 27% 58% 15% International Air Force 23% Navy/USMC 23% Army 9% Other DoD 3% Total Sales - $41.9B

6. 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 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

8. Domestic Evolution

9. Over $6B International Sales in 2007 More than 300 Partnerships Global Products for Global Markets Our Global Presence

10. Domestic / International Comparison 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)