Segment Information (Unaudited)

6 Months Ended

Jun. 30, 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 June 30						Six Months Ended June 30
$ in millions	2015			2014			2015			2014
Sales
Aerospace Systems	$	2,512		$	2,502		$	5,010		$	4,922
Electronic Systems	1,683			1,744			3,364			3,388
Information Systems	1,485			1,562			3,059			3,139
Technical Services	720			732			1,490			1,429
Intersegment eliminations	(504		)	(501		)	(1,070		)	(991		)
Total sales	5,896			6,039			11,853			11,887
Operating income
Aerospace Systems	322			290			637			614
Electronic Systems	265			291			512			559
Information Systems	150			153			316			315
Technical Services	67			68			135			136
Intersegment eliminations	(62		)	(60		)	(123		)	(125		)
Total segment operating income	742			742			1,477			1,499
Reconciliation to total operating income:
Net FAS/CAS pension adjustment	81			110			164			220
Unallocated corporate expenses	(9		)	(31		)	(47		)	(53		)
Other	(1		)	(1		)	(1		)	(1		)
Total operating income	$	813		$	820		$	1,593		$	1,665

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 for the three and six months ended June 30, 2015, as compared to the same periods in 2014, 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 or 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.The decrease in unallocated corporate expenses for the three months ended June 30, 2015, as compared to the same period in 2014, is principally due to a reduction in reserves for overhead costs. Unallocated corporate expenses for the six months ended June 30, 2015, were comparable to the same period in 2014.