Segment Financial Data

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment Reporting Disclosure

Note 17: Segment Financial Data

Our operations, for the periods presented herein, are classified into four principal segments: Collins, 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.

We present a FAS/CAS operating adjustment outside of segment results, which represents the difference between the service cost component of our pension and PRB expense under the Financial Accounting Standards (FAS) requirements of U.S. Generally Accepted Accounting Principles (GAAP) and our pension and PRB expense under U.S. government Cost Accounting

Standards (CAS) primarily related to our RIS and RMD segments. While the ultimate liability for pension and PRB costs under FAS and CAS is similar, the pattern of cost recognition is different. Over time, we generally expect to recover the related RIS and RMD pension and PRB liabilities through the pricing of our products and services to the U.S. government. Collins and Pratt & Whitney generally record pension and PRB expense on a FAS basis.

Acquisition accounting adjustments include the amortization of acquired intangible assets related to acquisitions, the amortization of the property, plant and equipment fair value adjustment acquired through acquisitions and the amortization of customer contractual obligations related to loss making or below market contracts acquired. These adjustments are not considered part of management’s evaluation of segment results.

Total sales and operating profit by segment include inter-segment sales which are generally recorded at cost-plus a specified fee or at a negotiated fixed price. These pricing arrangements may result in margins different than what the purchasing segment realizes on the ultimate third-party sale. Results for the quarters ended June 30, 2022 and 2021 are as follows:

	Net Sales				Operating Profit				Operating Profit Margins
(dollars in millions)	2022		2021		2022		2021		2022		2021
Collins Aerospace Systems	$	5,011	$	4,545	$	546	$	506	10.9	%	11.1	%
Pratt & Whitney	4,969		4,280		302		112		6.1	%	2.6	%
Raytheon Intelligence & Space	3,570		3,805		315		415		8.8	%	10.9	%
Raytheon Missiles & Defense	3,558		3,985		348		532		9.8	%	13.4	%
Total segment	17,108		16,615		1,511		1,565		8.8	%	9.4	%
Eliminations and other(1)	(794)		(735)		(47)		(40)
Corporate expenses and other unallocated items (2)	—		—		(42)		(149)
FAS/CAS operating adjustment	—		—		379		425
Acquisition accounting adjustments	—		—		(448)		(519)
Consolidated	$	16,314	$	15,880	$	1,353	$	1,282	8.3	%	8.1	%

(1)    Includes the operating results of certain smaller non-reportable business segments.

(2)    Includes the net expenses related to the U.S. Army’s Lower Tier Air and Missile Defense Sensor (LTAMDS) project.

Results for the six months ended June 30, 2022 and 2021 are as follows:

	Net Sales				Operating Profit				Operating Profit Margins
(dollars in millions)	2022		2021		2022		2021		2022		2021
Collins Aerospace Systems	$	9,835	$	8,915	$	986	$	820	10.0	%	9.2	%
Pratt & Whitney	9,498		8,310		453		132		4.8	%	1.6	%
Raytheon Intelligence & Space	7,142		7,570		693		803		9.7	%	10.6	%
Raytheon Missiles & Defense	7,085		7,778		735		1,028		10.4	%	13.2	%
Total segment	33,560		32,573		2,867		2,783		8.5	%	8.5	%
Eliminations and other (1)	(1,530)		(1,442)		(81)		(71)
Corporate expenses and other unallocated items (2)	—		—		(178)		(230)
FAS/CAS operating adjustment	—		—		757		848
Acquisition accounting adjustments	—		—		(932)		(1,035)
Consolidated	$	32,030	$	31,131	$	2,433	$	2,295	7.6	%	7.4	%

(1)    Includes the operating results of certain smaller non-reportable business segments.

(2)    Includes the net expenses related to the U.S. Army’s LTAMDS project.

We disaggregate our contracts from customers by geographic region based on customer location, by customer and by sales type. Our geographic region based on customer location uses end user customer location where known or practical to determine, or in instances where the end user customer is not known or not practical to determine, 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.

Segment sales disaggregated by geographic region for the quarters ended June 30, 2022 and 2021 are as follows:

	2022												2021
(dollars in millions)	Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total		Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total
United States	$	2,458	$	2,562	$	2,852	$	2,313	$	—	$	10,185	$	2,323	$	2,139	$	3,020	$	2,385	$	4	$	9,871
Europe	1,270		1,057		103		248		—		2,678		1,062		807		118		325		4		2,316
Asia Pacific	455		825		190		338		—		1,808		470		971		205		356		—		2,002
Middle East and North Africa	119		112		62		576		—		869		115		85		132		835		—		1,167
Canada and All Other	305		413		38		18		—		774		203		278		26		17		—		524
Consolidated net sales	4,607		4,969		3,245		3,493		—		16,314		4,173		4,280		3,501		3,918		8		15,880
Inter-segment sales	404		—		325		65		(794)		—		372		—		304		67		(743)		—
Business segment sales	$	5,011	$	4,969	$	3,570	$	3,558	$	(794)	$	16,314	$	4,545	$	4,280	$	3,805	$	3,985	$	(735)	$	15,880

Segment sales disaggregated by geographic region for the six months ended June 30, 2022 and 2021 are as follows:

	2022												2021
(dollars in millions)	Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total		Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total
United States	$	4,707	$	4,874	$	5,718	$	4,612	$	4	$	19,915	$	4,565	$	4,298	$	5,985	$	4,742	$	11	$	19,601
Europe	2,584		1,936		210		520		—		5,250		2,141		1,433		232		652		5		4,463
Asia Pacific	952		1,698		353		662		—		3,665		875		1,764		409		726		—		3,774
Middle East and North Africa	231		190		143		1,134		—		1,698		210		189		265		1,495		—		2,159
Canada and All Other	598		800		74		30		—		1,502		420		626		55		33		—		1,134
Consolidated net sales	9,072		9,498		6,498		6,958		4		32,030		8,211		8,310		6,946		7,648		16		31,131
Inter-segment sales	763		—		644		127		(1,534)		—		704		—		624		130		(1,458)		—
Business segment sales	$	9,835	$	9,498	$	7,142	$	7,085	$	(1,530)	$	32,030	$	8,915	$	8,310	$	7,570	$	7,778	$	(1,442)	$	31,131

Segment sales disaggregated by type of customer for the quarters ended June 30, 2022 and 2021 are as follows:

	2022												2021
(dollars in millions)	Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total		Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total
U.S. government (1)	$	1,023	$	1,417	$	2,805	$	2,314	$	—	$	7,559	$	1,147	$	1,191	$	2,944	$	2,384	$	4	$	7,670
Foreign military sales through the U.S. government	53		304		149		675		—		1,181		25		397		209		866		—		1,497
Foreign government direct commercial sales	263		116		212		504		—		1,095		301		127		217		668		—		1,313
Commercial aerospace and other commercial	3,268		3,132		79		—		—		6,479		2,700		2,565		131		—		4		5,400
Consolidated net sales	4,607		4,969		3,245		3,493		—		16,314		4,173		4,280		3,501		3,918		8		15,880
Inter-segment sales	404		—		325		65		(794)		—		372		—		304		67		(743)		—
Business segment sales	$	5,011	$	4,969	$	3,570	$	3,558	$	(794)	$	16,314	$	4,545	$	4,280	$	3,805	$	3,985	$	(735)	$	15,880

(1)    Excludes foreign military sales through the U.S. government.

Segment sales disaggregated by type of customer for the six months ended June 30, 2022 and 2021 are as follows:

	2022												2021
(dollars in millions)	Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total		Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total
U.S. government(1)	$	2,074	$	2,591	$	5,617	$	4,611	$	4	$	14,897	$	2,369	$	2,453	$	5,844	$	4,741	$	11	$	15,418
Foreign military sales through the U.S. government	107		501		309		1,440		—		2,357		65		639		417		1,671		—		2,792
Foreign government direct commercial sales	514		219		416		905		—		2,054		546		266		446		1,235		—		2,493
Commercial aerospace and other commercial	6,377		6,187		156		2		—		12,722		5,231		4,952		239		1		5		10,428
Consolidated net sales	9,072		9,498		6,498		6,958		4		32,030		8,211		8,310		6,946		7,648		16		31,131
Inter-segment sales	763		—		644		127		(1,534)		—		704		—		624		130		(1,458)		—
Business segment sales	$	9,835	$	9,498	$	7,142	$	7,085	$	(1,530)	$	32,030	$	8,915	$	8,310	$	7,570	$	7,778	$	(1,442)	$	31,131

(1)    Excludes foreign military sales through the U.S. government.

Segment sales disaggregated by sales type for the quarters ended June 30, 2022 and 2021 are as follows:

	2022												2021
(dollars in millions)	Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total		Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total
Products	$	3,577	$	2,982	$	2,564	$	3,135	$	—	$	12,258	$	3,349	$	2,582	$	2,675	$	3,565	$	8	$	12,179
Services	1,030		1,987		681		358		—		4,056		824		1,698		826		353		—		3,701
Consolidated net sales	4,607		4,969		3,245		3,493		—		16,314		4,173		4,280		3,501		3,918		8		15,880
Inter-segment sales	404		—		325		65		(794)		—		372		—		304		67		(743)		—
Business segment sales	$	5,011	$	4,969	$	3,570	$	3,558	$	(794)	$	16,314	$	4,545	$	4,280	$	3,805	$	3,985	$	(735)	$	15,880

Segment sales disaggregated by sales type for the six months ended June 30, 2022 and 2021 are as follows:

	2022												2021
(dollars in millions)	Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total		Collins Aerospace Systems		Pratt & Whitney		Raytheon Intelligence & Space		Raytheon Missiles & Defense		Other		Total
Products	$	7,059	$	5,615	$	5,168	$	6,274	$	4	$	24,120	$	6,531	$	5,005	$	5,351	$	6,940	$	16	$	23,843
Services	2,013		3,883		1,330		684		—		7,910		1,680		3,305		1,595		708		—		7,288
Consolidated net sales	9,072		9,498		6,498		6,958		4		32,030		8,211		8,310		6,946		7,648		16		31,131
Inter-segment sales	763		—		644		127		(1,534)		—		704		—		624		130		(1,458)		—
Business segment sales	$	9,835	$	9,498	$	7,142	$	7,085	$	(1,530)	$	32,030	$	8,915	$	8,310	$	7,570	$	7,778	$	(1,442)	$	31,131

RIS and RMD segment sales disaggregated by contract type for the quarters ended June 30, 2022 and 2021 are as follows:

	2022				2021
(dollars in millions)	Raytheon Intelligence & Space		Raytheon Missiles & Defense		Raytheon Intelligence & Space		Raytheon Missiles & Defense
Fixed-price	$	1,353	$	2,043	$	1,556	$	2,402
Cost-type	1,892		1,450		1,945		1,516
Consolidated net sales	3,245		3,493		3,501		3,918
Inter-segment sales	325		65		304		67
Business segment sales	$	3,570	$	3,558	$	3,805	$	3,985

RIS and RMD segment sales disaggregated by contract type for the six months ended June 30, 2022 and 2021 are as follows:

	2022				2021
(dollars in millions)	Raytheon Intelligence & Space		Raytheon Missiles & Defense		Raytheon Intelligence & Space		Raytheon Missiles & Defense
Fixed-price	$	2,693	$	4,118	$	3,027	$	4,653
Cost-type	3,805		2,840		3,919		2,995
Consolidated net sales	6,498		6,958		6,946		7,648
Inter-segments sales	644		127		624		130
Business segment sales	$	7,142	$	7,085	$	7,570	$	7,778