Note 7 – Property, Plant and Equipment, net Note 8 – Income Taxes Work-in-process inventories at December 31, 2011 and 2010 included general and administrative costs of $592 million and $518 million. During 2011, 2010, and 2009, general and administrative costs incurred and recorded in inventories totaled $2.3 billion, $2.3 billion, and $2.4 billion, and general and administrative costs charged to cost of sales from inventories totaled $2.2 billion, $2.4 billion, and $2.1 billion. Property, plant and equipment consisted of the following components: Our provision for federal and foreign income tax expense for continuing operations consisted of the following components: State income taxes are included in our operations as general and administrative costs and, under U.S. Government regulations, are allowable in establishing prices for the products and services we sell to the U.S. Government. Therefore, a substantial portion of state income taxes is included in our net sales and cost of sales. As a result, the impact of certain transactions on our operating profit and of other matters disclosed in these financial statements is disclosed net of state income taxes. Our total net state income tax expense was $149 million for 2011, $168 million for 2010 (including state income taxes related to the sale of EIG), and $144 million for 2009. The amount of net interest and penalties recognized as a component of income tax expense during 2011, 2010, and 2009, as well as the amount of interest and penalties accrued at December 31, 2011 and 2010, was not material. 65 (In millions) 2011 2010 Work-in-process, primarily related to long-term contracts and programs in progress $ 7,129 $ 6,508 Less: customer advances and progress payments (5,425) (4,788) 1,704 1,720 Other inventories 777 643 Total inventories, net $ 2,481 $ 2,363 (In millions) 2011 2010 Land $ 98 $ 111 Buildings 5,159 5,005 Machinery and equipment 6,408 6,172 Construction in progress 805 670 12,470 11,958 Less: accumulated depreciation and amortization (7,859) (7,404) Total property, plant and equipment, net $ 4,611 $ 4,554 (In millions) 2011 2010 2009 Federal income taxes: Current $912 $ 600 $ 677 Deferred 9 561 557 Total federal income taxes 921 1,161 1,234 Foreign income taxes: Current 38 8 (4) Deferred 5 (5) (15) Total foreign income taxes 43 3 (19) Income tax expense $964 $1,164 $1,215 Note 6 – Inventories, net Inventories consisted of the following components: