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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Intersegment operating income in 2005, 2004, and 2003, respectively, were $7 million, $10 million, and $11 million for
Integrated Defense Systems, $4 million, $3 million, and $4 million for Intelligence and Information Systems, $2 million,
$1 million, and $1 million for Missile Systems, $35 million, $36 million, and $25 million for Network Centric Systems,
$46 million, $41 million, and $39 million for Space and Airborne Systems, $51 million, $47 million, and $53 million for
Technical Services. Aircraft operating income does not include profit on intersegment aircraft sales to Flight Options
until the underlying aircraft has been sold by Flight Options.
The following table reconciles operating income to income from continuing operations before taxes:
2005 2004 2003
Operating income $1,687 $1,388 $1,316
Non-operating expense, net (247) (809) (554)
Income from continuing operations before taxes $1,440 579 762
Free Cash Flow (In millions) 2005 2004 2003
Integrated Defense Systems $ 338 $ 399 $ 318
Intelligence and Information Systems 169 169 90
Missile Systems 274 285 244
Network Centric Systems 371 234 99
Space and Airborne Systems 267 237 365
Technical Services 114 58 118
Aircraft 73 234 330
Other 52 8 100
Corporate 475 24 377
Total $2,133 $1,648 $2,041
Corporate free cash flow includes the difference between amounts charged to the segments for interest and taxes on an
intercompany basis and the amounts actually paid by the Company. Also included in Corporate free cash flow in 2004
was a $210 million payment in connection with the settlement of a securities class action lawsuit described in Note L,
Commitments and Contingencies.
The following table reconciles total segment free cash flow to net cash provided by operating activities from continuing
operations:
(In millions) 2005 2004 2003
Free cash flow $2,133 $1,648 $2,041
Plus: Expenditures for property, plant, and equipment 338 363 428
Capitalized expenditures for internal use software 75 103 98
Net cash provided by operating activities from continuing operations $2,546 $2,114 $2,567
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