Business Segment Information

Sales and earnings of the Company's operating segments are summarized as follows:



	Three Months Ended
	December 31
(in millions)	2017			2016
Sales:
Interior Systems	$	656		$	—
Commercial Systems	608			549
Government Systems	573			475
Information Management Services	174			169
Total sales	$	2,011		$	1,193

Segment operating earnings:
Interior Systems	$	94		$	—
Commercial Systems	139			125
Government Systems	109			96
Information Management Services	29			30
Total segment operating earnings	371			251

Interest expense ⁽¹⁾	(64		)	(20		)
Stock-based compensation	(9		)	(6		)
General corporate, net	(14		)	(11		)
Transaction and integration costs ⁽¹⁾	(27		)	(11		)
Income before income taxes	257			203
Income tax benefit (expense)	23			(58		)
Net income	$	280		$	145

⁽¹⁾During the three months ended December 31, 2017, the Company incurred $17 million of transaction and integration costs related to the B/E Aerospace acquisition and $10 million of transaction costs related to the proposed acquisition of Rockwell Collins by UTC. During the three months ended December 31, 2016, the Company incurred $11 million of transaction and integration costs related to the B/E Aerospace acquisition. During this period, the Company also incurred $3 million of bridge facility fees related to the B/E Aerospace acquisition, which are included in Interest expense. Therefore, total transaction, integration and financing costs during this period were $14 million.

The Company evaluates performance and allocates resources based upon, among other considerations, segment operating earnings. The Company's definition of segment operating earnings excludes income taxes, stock-based compensation, unallocated general corporate expenses, interest expense, transaction and integration costs, restructuring and asset impairment charges and other special items as identified by management from time to time. Intersegment sales are not material and have been eliminated.

The following table summarizes sales by category for the three months ended December 31, 2017 and 2016:



	Three Months Ended
	December 31
(in millions)	2017		2016
Interior Systems sales categories:
Interior products and services	$	356	$	—
Aircraft seating	300		—
Interior Systems sales	656		—

Commercial Systems sales categories:
Air transport aviation electronics	380		329
Business and regional aviation electronics	228		220
Commercial Systems sales	608		549

Government Systems sales categories:
Avionics	333		319
Communication and navigation	240		156
Government Systems sales	573		475

Information Management Services sales	174		169

Total sales	$	2,011	$	1,193

The Interior Systems interior products and services and aircraft seating sales categories are delineated based on the nature of underlying products. The Commercial Systems air transport and business and regional aviation electronics sales categories are delineated based on the difference in underlying customer base, size of aircraft and markets served. For the three months ended December 31, 2017 and 2016, sales for air transport aviation electronics include revenue from wide-body in-flight entertainment products and services of $4 million and $6 million, respectively. The Government Systems avionics and communication and navigation sales categories are delineated based upon underlying product technologies.

Beginning in 2018, two of the acquired B/E Aerospace product lines previously included in the Interior products and services sales category within Interior Systems are now being reported in the Communication and navigation sales category in Government Systems (see Note 1).