Retirement Benefits (Unaudited)

9 Months Ended

Sep. 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 benefit plans is shown in the following table:

	Three Months Ended September 30												Nine Months Ended September 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			$    390			$    399			$ 24			$ 24
Interest cost		305			304			29			30			915			912			87			90
Expected return on plan assets		(423	)		(380	)		(16	)		(14	)		(1,269	)		(1,140	)		(48	)		(42	)
Amortization of:
Prior service cost (credit)		6			9			(13	)		(13	)		18			27			(39	)		(39	)
Net loss from previous years		41			51			3			5			123			153			9			15
Net periodic benefit cost		$   59			$ 117			$ 11			$ 16			$    177			$    351			$ 33			$ 48
Defined contribution plans cost		$   64			$   77									$    225			$    243

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 nine months ended September 30, 2011, contributions of $572 million have been made to the company’s pension plans, including voluntary pension contributions totaling $500 million, and contributions of $73 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 company-sponsored 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.