Looking to the Future: Staying  Aligned With Our Customers • The Space Based Infrared System (SBIRS)  spacecraft, launched in May, will protect our  nation and allies from missile attack with  vastly improved warning capabilities. • We delivered software to the Federal Aviation  Administration to enable GPS technology  in the New York area airspace, the nation’s  second busiest. • Our Juno spacecraft was launched to Jupiter  in August on a mission that will expand  our knowledge of the solar system’s largest  planet. A month later, our two GRAIL  spacecraft were launched to the Moon in  an effort to study the gravitational fi eld of  Earth’s closest neighbor. These and other accomplishments are why  Lockheed Martin has been acknowledged as  an industry leader. In 2011,  Aviation Week &  Space Technology  named us the industry’s Top  Performing Company for an unprecedented  fourth consecutive year, saying that as far as  program performance and cost are concerned,  “Lockheed Martin is the one to beat.’’  Aviation Week’s  recognition speaks volumes  about the 123,000 people of this company who  support our customers, and also give so much to  our communities. For the seventh consecutive  year, in 2011, our employees volunteered more  than one million hours of service to a wide  variety of worthwhile causes. Additionally, we are dedicated to good  stewardship of the environment. For example,  the Carbon Disclosure Project, in its 2011  Global 500 Report, noted Lockheed Martin as  leading the Aerospace and Defense industry in  carbon footprint reduction. With our heightened  awareness of cost and affordability, we’re  working hard to limit waste and conserve  energy because it’s smart business and it’s the  right thing to do for the environment. The work many of our employees engage in  to support our customers at times comes with  great risk. In a tragic reminder of those risks,  two of our colleagues were killed and two  others injured during an April 2011 attack on  a forward operating base in Afghanistan. They  were on a team providing vitally important  surveillance information to U.S. military and  coalition forces, and they were dedicated to the  program, the mission, and the fight for freedom.  Their sacrifice reminds us of the important  work we do every day supporting deployed  forces in the defense of liberty. As a leading global security and aerospace  company, we must maintain a consistent tempo  of performance to sustain our momentum into  2012 and beyond. This is especially critical  given the developments we see on the horizon.  We continue to operate in a tough economy,  which includes a reduction in the Department  of Defense budget by at least $487 billion over  the next decade. We also see shifting priorities  under Secretary Panetta’s new Strategic  Guidance that put greater attention on the  Asia-Pacific region and continued focus on the  Middle East. Our broad portfolio of strong programs gives us  the resilience to weather this budget volatility  and it matches extremely well with the strategic  priorities of our customers under the new  Defense Department Guidance. Increasingly,  our customers will require the capabilities we’re  best equipped to deliver, such as air and naval  power, missile defense, 5th Generation tactical  aircraft, space systems, cyber security, and  support for Special Operations Forces. We are concerned, however, that we still face  the possibility of U.S. budget sequestration in  January 2013. Sequestration would result in an  additional $1.2 trillion in automatic across-the- board cuts evenly divided between defense and  non-defense spending over 10 years. Coupled  IV Lockheed Martin Corporation