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Segment Financial Data
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block] Segment Financial Data
Our operations, effective as of the date of the Raytheon Merger, are classified into four principal segments: Collins Aerospace, Pratt & Whitney, RIS and RMD. The segments are generally based on the management structure of the businesses and the grouping of similar operating companies, where each management organization has general operating autonomy over diversified products and services. The results of RIS and RMD reflect the period subsequent to the completion of the Raytheon Merger on April 3, 2020. See “Note 20: Segment Financial Data” within the Notes to the Consolidated Financial Statements in our 2019 Annual Report for a description of the Collins Aerospace and Pratt & Whitney segments.
Raytheon Intelligence & Space is a leading developer and provider of integrated sensor and communication systems for advanced missions, including space-enabled information and multi-domain intelligence solutions, as well as electronic warfare solutions, advanced training and logistic services, and cyber and software solutions to intelligence, defense, federal and commercial customers worldwide.
Raytheon Missiles & Defense is a leading designer, developer, integrator and producer of missile and combat systems for the armed forces of the U.S. and allied nations and a leader in integrated air and missile defense, large land- and sea-based radar solutions, command, control, communications, computers, cyber and intelligence solutions, naval combat and ship electronic and sensing systems, and undersea sensing and effects solutions.
In conjunction with the Raytheon Merger, we revised our measurement of segment performance to reflect how management now reviews and evaluates operating performance. Under the new segment performance measurement, certain acquisition accounting adjustments are now excluded from segments’ results in order to better represent the ongoing operational performance of those segments. In addition, the majority of Corporate expenses are now allocated to the segments, excluding certain items that remain at Corporate because they are not included in management’s review of the segments’ results. Historical results, discussion and presentation of our business segments reflect the impact of these adjustments for all periods
presented. Also as a result of the Raytheon Merger, we now present a FAS/CAS operating adjustment outside of segment results, which represents the difference between our service cost component of our pension and PRB expense under the Financial Accounting Standards (FAS) requirements of U.S. GAAP and our pension and PRB expense under U.S. government Cost Accounting Standards (CAS) primarily related to our RIS and RMD segments. Because the Collins Aerospace and Pratt & Whitney segments generally record pension and PRB expense on a FAS basis, historical results were not impacted by this change in segment reporting.
Recast segment sales and operating profit, reflecting the performance measurement changes described above, were as follows:
Total Net SalesQuarter EndedTwelve Months Ended
(dollars in millions)March 31, 2020December 31, 2019September 30, 2019June 30, 2019March 31, 2019December 31, 2019
Collins Aerospace Systems$6,438  $6,444  $6,495  $6,576  $6,513  $26,028  
Pratt & Whitney5,353  5,645  5,285  5,154  4,818  $20,902  
Raytheon Intelligence & Space—  —  —  —  —  —  —  
Raytheon Missiles & Defense—  —  —  —  —  —  —  
Total segment11,791  12,089  11,780  11,730  11,331  $46,930  
Eliminations and other(431) (395) (407) (401) (378) (1,581) 
Consolidated$11,360  $11,694  $11,373  $11,329  $10,953  $45,349  

Operating ProfitQuarter EndedTwelve Months Ended
(dollars in millions)March 31, 2020December 31, 2019September 30, 2019June 30, 2019March 31, 2019December 31, 2019
Collins Aerospace Systems$1,246  $1,009  $1,259  $1,276  $964  $4,508  
Pratt & Whitney475  354  520  449  478  1,801  
Raytheon Intelligence & Space—  —  —  —  —  —  —  
Raytheon Missiles & Defense—  —  —  —  —  —  —  
Total segment1,721  1,363  1,779  1,725  1,442  6,309  
Eliminations and other(25) (25) (46) (42) (27) (140) 
Corporate expenses and other unallocated items(130) (151) (83) (87) (46) (367) 
FAS/CAS operating adjustment—  —  —  —  —  —  
Acquisition accounting adjustments(271) (231) (220) (210) (227) $(888) 
Consolidated$1,295  $956  $1,430  $1,386  $1,142  $4,914  
Total sales and operating profit by segment include inter-segment sales which are generally recorded at prices approximating those that the selling entity is able to obtain on external sales for our Collins Aerospace and Pratt & Whitney segments, and at cost-plus a specified fee, which may differ from what the selling entity would be able to obtain on sales to external customers, for our RIS and RMD segments. Results for the quarters ended June 30, 2020 and 2019 are as follows:
Net SalesOperating ProfitsOperating Profit Margins
(dollars in millions)202020192020201920202019
Collins Aerospace Systems$4,202  $6,576  $(317) $1,276  (7.5)%19.4 %
Pratt & Whitney3,487  5,154  (457) 449  (13.1)%8.7 %
Raytheon Intelligence & Space3,314  —  311  —  9.4 %— %
Raytheon Missiles & Defense3,590  —  397  —  11.1 %— %
Total segment14,593  11,730  (66) 1,725  (0.5)%14.7 %
Eliminations and other(1)
(532) (401) (28) (42) 
Corporate expenses and other unallocated items (2)
—  —  (277) (87) 
FAS/CAS operating adjustment—  —  356  —  
Acquisition accounting adjustments—  —  (3,745) (210) 
Consolidated$14,061  $11,329  $(3,760) $1,386  (26.7)%12.2 %
(1) Includes the operating results of certain smaller non-reportable business segments, including Forcepoint, LLC, which was acquired as part of the Raytheon Merger.
(2) The net expenses related to the U.S. Army’s Lower Tier Air and Missile Defense Sensor (LTAMDS) project of $35 million in the three months ended June 30, 2020 are included in Corporate operating profit as they are not included in management’s evaluation of business segment results. No amounts were recorded in the quarter ended June 30, 2019.
Results for the six months ended June 30, 2020 and 2019 are as follows:
Net SalesOperating ProfitsOperating Profit Margins
(dollars in millions)202020192020201920202019
Collins Aerospace Systems$10,640  $13,089  $929  $2,240  8.7 %17.1 %
Pratt & Whitney8,840  9,972  18  927  0.2 %9.3 %
Raytheon Intelligence & Space3,314  —  311  —  9.4 %— %
Raytheon Missiles & Defense3,590  —  397  —  11.1 %— %
Total segment26,384  23,061  1,655  3,167  6.3 %13.7 %
Eliminations and other (1)
(963) (779) (53) (69) 
Corporate expenses and other unallocated items (2)
—  —  (407) (133) 
FAS/CAS operating adjustment—  —  356  —  
Acquisition accounting adjustments—  —  (4,016) (437) 
Consolidated$25,421  $22,282  $(2,465) $2,528  (9.7)%11.3 %
(1) Includes the operating results of certain smaller non-reportable business segments, including Forcepoint, LLC, which was acquired as part of the Raytheon Merger.
(2) The net expenses related to the U.S. Army’s LTAMDS project of $35 million in the six months ended June 30, 2020 are included in Corporate operating profit as they are not included in management’s evaluation of business segment results. No amounts were recorded in the six months ended June 30, 2019.
Total assets by segment are as follows:
Total Assets
(dollars in millions)June 30, 2020December 31, 2019
Collins Aerospace Systems(1)
$70,791  $74,049  
Pratt & Whitney(1)
31,749  31,170  
Raytheon Intelligence & Space(1)
20,137  —  
Raytheon Missiles & Defense(1)
29,681  —  
Total segment152,358  105,219  
Corporate and other9,024  2,573  
Assets related to discontinued operations135  31,823  
Consolidated$161,517  $139,615  
(1) Total assets include acquired intangible assets and property, plant and equipment fair value adjustment. Related amortization expense is included in Acquisition accounting adjustments.
We disaggregate our contracts from customers by geographic location, by customer and by sales type. Our geographic location is based on customer location, utilizing end user customer location where known or practical. In instances in which determining the end user customer is not known or practical, we utilize ship to location as the customer location. In addition, for our RIS and RMD segments, we disaggregate our contracts from customers by contract type. We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Historical results have been recast to reflect the presentation of this disaggregation.
Segment sales disaggregated by geographic region for the quarters ended June 30, 2020 and 2019 are as follows:
20202019
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
United States$2,505  $1,892  $2,565  $2,150  $49  $9,161  $3,233  $2,076  $—  $—  $2  $5,311  
Asia Pacific388  787  195  351  13  1,734  606  1,277  —  —  —  1,883  
Middle East and North Africa99  122  122  720  8  1,071  184  198  —  —  —  382  
Europe787  512  102  291  66  1,758  1,795  1,181  —  —  —  2,976  
Canada and All Other114  177  24  14  8  337  356  421  —  —  —  777  
Consolidated net sales3,893  3,490  3,008  3,526  144  14,061  6,174  5,153  —  —  2  11,329  
Inter-segment sales309  (3) 306  64  (676) —  402  1  —  —  (403) —  
Business segment sales$4,202  $3,487  $3,314  $3,590  $(532) $14,061  $6,576  $5,154  $—  $—  $(401) $11,329  
Segment sales disaggregated by geographic region for the six months ended June 30, 2020 and 2019 are as follows:
20202019
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
United States$5,649  $4,247  $2,565  $2,150  $47  $14,658  $6,321  $4,093  $—  $—  $6  $10,420  
Asia Pacific992  2,208  195  351  13  3,759  1,178  2,478  —  —  —  3,656  
Middle East and North Africa242  294  122  720  8  1,386  368  396  —  —  —  764  
Europe2,532  1,529  102  291  66  4,520  3,679  2,173  —  —  5,852  
Canada and All Other486  559  24  14  15  1,098  756  834  —  —  —  1,590  
Consolidated net sales9,901  8,837  3,008  3,526  149  25,421  12,302  9,974  —  —  6  22,282  
Inter-segment sales739  3  306  64  (1,112) —  787  (2) —  —  (785) —  
Business segment sales$10,640  $8,840  $3,314  $3,590  $(963) $25,421  $13,089  $9,972  $—  $—  $(779) $22,282  
Segment sales disaggregated by customer for the quarters ended June 30, 2020 and 2019 are as follows:
20202019
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
U.S. government(1)
$1,353  $1,283  $2,497  $2,141  $54  $7,328  $1,286  $1,148  $—  $—  $—  $2,434  
Foreign military sales through the U.S. government77  281  202  782  —  1,342  75  315  —  —  —  390  
Foreign government direct commercial sales204  122  209  569  —  1,104  248  134  —  —  —  382  
Commercial aerospace and other commercial2,259  1,804  100  34  90  4,287  4,565  3,556  —  —  2  8,123  
Consolidated net sales3,893  3,490  3,008  3,526  144  14,061  6,174  5,153  —  —  2  11,329  
Inter-segment sales309  (3) 306  64  (676) —  402  1  —  —  (403) —  
Business segment sales$4,202  $3,487  $3,314  $3,590  $(532) $14,061  $6,576  $5,154  $—  $—  $(401) $11,329  
(1) Excludes foreign military sales through the U.S. government.
Segment sales disaggregated by customer for the six months ended June 30, 2020 and 2019 are as follows:
20202019
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
U.S. government(1)
$2,642  $2,522  $2,497  $2,141  $54  $9,856  $2,312  $2,152  $—  $—  $—  $4,464  
Foreign military sales through the U.S. government132  552  202  782  —  1,668  126  566  —  —  —  692  
Foreign government direct commercial sales429  260  209  569  —  1,467  483  284  —  —  —  767  
Commercial aerospace and other commercial6,698  5,503  100  34  95  12,430  9,381  6,972  —  —  6  16,359  
Consolidated net sales9,901  8,837  3,008  3,526  149  25,421  12,302  9,974  —  —  6  22,282  
Inter-segment sales739  3  306  64  (1,112) —  787  (2) —  —  (785) —  
Business segment sales$10,640  $8,840  $3,314  $3,590  $(963) $25,421  $13,089  $9,972  $—  $—  $(779) $22,282  
(1) Excludes foreign military sales through the U.S. government.
Segment sales disaggregated by sales type for the quarters ended June 30, 2020 and 2019 are as follows:
20202019
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
Product $3,190  $1,888  $2,333  $3,232  $125  $10,768  $5,076  $3,310  $—  $—  $2  $8,388  
Service 703  1,602  675  294  19  3,293  1,098  1,843  —  —  —  2,941  
Consolidated net sales$3,893  $3,490  $3,008  $3,526  $144  $14,061  $6,174  $5,153  $—  $—  $2  $11,329  
Inter-segment sales309  (3) 306  64  (676) —  402  1  —  —  (403) —  
Business segment sales$4,202  $3,487  $3,314  $3,590  $(532) $14,061  $6,576  $5,154  $—  $—  $(401) $11,329  
Segment sales disaggregated by sales type for the six months ended June 30, 2020 and 2019 are as follows:
20202019
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
Product $8,094  $5,143  $2,333  $3,232  $130  $18,932  $10,132  $6,286  $—  $—  $6  $16,424  
Service 1,807  3,694  675  294  19  6,489  2,170  3,688  —  —  —  5,858  
Consolidated net sales$9,901  $8,837  $3,008  $3,526  $149  $25,421  $12,302  $9,974  $—  $—  $6  $22,282  
Inter-segment sales739  3  306  64  (1,112) —  787  (2) —  —  (785) —  
Business segment sales$10,640  $8,840  $3,314  $3,590  $(963) $25,421  $13,089  $9,972  $—  $—  $(779) $22,282  
RIS and RMD segment sales disaggregated by contract type for the quarter and six months ended June 30, 2020 are as follows:
Quarter Ended June 30, 2020Six Months Ended June 30, 2020
(dollars in millions)Raytheon Intelligence & SpaceRaytheon Missiles & DefenseTotalRaytheon Intelligence & SpaceRaytheon Missiles & DefenseTotal
Fixed-price$1,203  $2,178  $3,381  $1,203  $2,178  $3,381  
Cost-type1,805  1,348  3,153  1,805  1,348  3,153