Retirement Benefits (Unaudited)

6 Months Ended

Jun. 30, 2011

RETIREMENT BENEFITS [Abstract]

12. RETIREMENT BENEFITS

12.   RETIREMENT BENEFITS

The cost of the company’s pension plans and post-retirement medical and life benefits plans is shown in the following table:

	Three Months Ended June 30												Six Months Ended June 30
	Pension						Medical and						Pension						Medical and
	Benefits						Life Benefits						Benefits						Life Benefits
$ in millions	2011			2010			2011			2010			2011			2010			2011			2010
Components of Net Periodic Benefit Cost
Service cost	$	130		$	133		$	8		$	8		$	260		$	266		$	16		$	16
Interest cost		305			304			29			30			610			608			58			60
Expected return on plan assets		(423	)		(380	)		(16	)		(14	)		(846	)		(760	)		(32	)		(28	)
Amortization of:
Prior service cost (credit)		6			9			(13	)		(13	)		12			18			(26	)		(26	)
Net loss from previous years		41			51			3			5			82			102			6			10
Net periodic benefit cost	$	59		$	117		$	11		$	16		$	118		$	234		$	22		$	32
Defined contribution plans cost	$	76		$	86								$	161		$	166

Employer Contributions – The company’s required minimum funding in 2011 for its pension plans and its medical and life benefit plans are approximately $59 million and $124 million, respectively. For the six months ended June 30, 2011, contributions of $550 million have been made to the company’s pension plans, including voluntary pension contribution totaling $500 million, and $40 million have been made to the company’s post-retirement medical and life benefit plans.

Defined Contribution Plans – The company also sponsors 401(k) defined contribution plans in which most employees are eligible to participate, including certain bargaining unit employees. Company contributions for most plans are based on a cash-matching of employee contributions up to 4 percent of compensation. In addition to the 401(k) defined contribution benefit plan, non-represented employees hired after June 30, 2008, are eligible to participate in a defined contribution program in lieu of a defined benefit pension plan.

Spin-off of Shipbuilding Business – As a result of the previously mentioned spin-off of HII discussed in Note 5, the company transferred certain pension and other post-retirement benefit plans related exclusively to Shipbuilding employees and the Shipbuilding portion of Northrop Grumman pension and other post-retirement benefit plans that included Shipbuilding employees. A re-measurement of plan assets and liabilities was performed for those plans that included both Shipbuilding and Northrop Grumman employees as of March 31, 2011, the effective date of the spin-off. The effect of this re-measurement on the company’s consolidated financial position, results of operations and cash flows was not material.