Segment Information (Unaudited)

6 Months Ended

Jun. 30, 2011

SEGMENT INFORMATION [Abstract]

6. SEGMENT INFORMATION

6.   SEGMENT INFORMATION

The company is aligned into four reportable segments: Aerospace Systems, Electronic Systems, Information Systems, and Technical Services.

The following table presents segment sales and service revenues for the three and six months ended June 30, 2011, and 2010:

	Three Months Ended						Six Months Ended
	June 30						June 30
$ in millions	2011			2010			2011			2010
Sales and service revenues
Aerospace Systems	$	2,592		$	2,842		$	5,328		$	5,538
Electronic Systems		1,791			1,984			3,599			3,866
Information Systems		2,031			2,123			4,056			4,187
Technical Services		656			801			1,344			1,564
Intersegment eliminations		(510	)		(495	)		(1,033	)		(986	)
Total sales and service revenues	$	6,560		$	7,255		$	13,294		$	14,169

The following table presents segment operating income reconciled to total operating income for the three and six months ended June 30, 2011 and 2010:

	Three Months Ended						Six Months Ended
	June 30						June 30
$ in millions	2011			2010			2011			2010
Operating income
Aerospace Systems	$	331		$	335		$	632		$	631
Electronic Systems		284			264			521			490
Information Systems		189			205			383			388
Technical Services		51			52			105			101
Intersegment eliminations		(71	)		(65	)		(136	)		(113	)
Total segment operating income		784			791			1,505			1,497
Non-segment factors affecting operating income
Unallocated corporate expenses		(38	)		(40	)		(48	)		(65	)
Net pension adjustment		99			1			202			3
Royalty income adjustment		(4	)		(2	)		(7	)		(6	)
Total operating income	$	841		$	750		$	1,652		$	1,429

Unallocated Corporate Expenses – Unallocated corporate expenses generally include the portion of corporate expenses not considered allowable or allocable under applicable United States (U.S.) Government Cost Accounting Standards (CAS) regulations and the Federal Acquisition Regulation, and therefore not allocated to the segments. Such costs consist of management and administration, legal, environmental, certain compensation costs, retiree benefits, and other expenses.

Net Pension Adjustment – The net pension adjustment reflects the difference between pension expense determined in accordance with GAAP and pension expense allocated to the operating segments determined in accordance with CAS. The increase in net pension adjustment for the three and six months ended June 30, 2011, as compared to the same periods in 2010, is primarily due to improved return on plan assets in 2010.

Royalty Income Adjustment – Royalty income is included in segment operating income and reclassified to other income for financial reporting purposes.