Segment Information (Unaudited)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION

The company is aligned into four segments: Aerospace Systems, Electronic Systems, Information Systems and Technical Services. The company, from time to time, acquires or disposes of businesses and realigns contracts, programs or business areas among and within our segments. Portfolio shaping and internal realignments are designed to more fully leverage existing capabilities and enhance development and delivery of products and services.

The following table presents sales and operating income by segment:

	Three Months Ended March 31
$ in millions	2015			2014
Sales
Aerospace Systems	$	2,498		$	2,420
Electronic Systems	1,681			1,644
Information Systems	1,574			1,577
Technical Services	770			697
Intersegment eliminations	(566		)	(490		)
Total sales	5,957			5,848
Operating income
Aerospace Systems	315			324
Electronic Systems	247			268
Information Systems	166			162
Technical Services	68			68
Intersegment eliminations	(61		)	(65		)
Total segment operating income	735			757
Reconciliation to total operating income:
Net FAS/CAS pension adjustment	83			110
Unallocated corporate expenses	(38		)	(22		)
Total operating income	$	780		$	845

Net FAS/CAS Pension Adjustment

The net FAS (GAAP Financial Accounting Standards)/CAS (U.S. Government Cost Accounting Standards) pension adjustment reflects the difference between pension expense charged to contracts and included as cost in segment operating income and pension expense determined in accordance with GAAP. The decrease in net FAS/CAS pension adjustment is principally due to an increase in FAS expense, as a result of changes in our FAS discount rate and mortality assumptions as of December 31, 2014. The increase in FAS expense was partially offset by higher CAS expense resulting from updated mortality assumptions.

Unallocated Corporate Expenses

Unallocated corporate expenses include the portion of corporate expenses not considered allowable or allocable under applicable CAS regulations and the Federal Acquisition Regulation, and are therefore not allocated to the segments. Such costs consist of a portion of management and administration, legal, environmental, compensation costs, retiree benefits, and certain unallowable costs such as lobbying activities, among others. Unallocated corporate expenses increased for the three months ended March 31, 2015 due to higher deferred state taxes resulting from the company's $500 million discretionary pension contribution in the quarter.