The 2% increase in second quarter segment revenue reflected higher volume in Avionics, with growth on the F-35 and several other platforms, and in C4ISR from the ramp of the UAE battle management system and U.K. robotics programs, partially offset by contract adjustments in Mission Networks, including the absence of the favorable prior-year adjustment on the ADS-B program. Operating income declined 25% as strong performance on Electronic Warfare (EW) programs and the benefit of higher volume in Avionics were more than offset by the contract adjustments in Mission Networks, higher R&D expenses and unfavorable mix.

New awards continued to strengthen the company's strategic position in Avionics on both domestic and international large platforms. Domestic awards included a $93 million contract for F-35 LRIP 11 release systems and a $48 million, 5-year block buy contract for LRIP 12-14 in support of the F-35 antenna production program. International awards included a $25 million contract for release systems to support Qatar F-15s and a development contract for release systems on the Korean Next Generation Indigenous Fighter with significant follow-on potential.

Space and Intelligence Systems
($ millions)				Second Quarter														First Half
				FY 2018					FY 2017					Change				FY 2018					FY 2017					Change
Revenue				$	465				$	468				(1	)%			$	931				$	921				1	%
Operating income				$	81				$	76				7	%			$	168				$	155				8	%
Operating margin					17.4	%				16.2	%			120bps					18.0	%				16.8	%			120bps

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