XML 38 R23.htm IDEA: XBRL DOCUMENT v3.23.1
Segment Financial Data
 3 Months Ended
Mar. 31, 2023
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. The Company recently announced its intention to streamline the structure of its core businesses into three principal business segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Company plans to implement the reorganization beginning in July 2023. All segment information included in this Form 10-Q is reflective of the existing four segments of Collins, Pratt & Whitney, RIS, and RMD in accordance with the management structure in place as of March 31, 2023.
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, the amortization of customer contractual obligations related to loss making or below market contracts acquired, and goodwill impairment. 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 March 31, 2023 and 2022 are as follows:
Net SalesOperating ProfitOperating Profit Margins
(dollars in millions)202320222023202220232022
Collins Aerospace$5,581 $4,824 $794 $440 14.2 %9.1 %
Pratt & Whitney5,230 4,529 415 151 7.9 %3.3 %
Raytheon Intelligence & Space3,565 3,572 324 378 9.1 %10.6 %
Raytheon Missiles & Defense3,671 3,527 328 387 8.9 %11.0 %
Total segment18,047 16,452 1,861 1,356 10.3 %8.2 %
Eliminations and other(1)
(833)(736)13 (34)
Corporate expenses and other unallocated items(2)
— — (43)(136)
FAS/CAS operating adjustment— — 314 378 
Acquisition accounting adjustments— — (493)(484)
Consolidated$17,214 $15,716 $1,652 $1,080 9.6 %6.9 %
(1)    Includes the operating results of certain smaller non-reportable business segments.
(2)    2022 included the net expenses related to the U.S. Army’s Lower Tier Air and Missile Defense Sensor (LTAMDS) project. Beginning in 2023, LTAMDS results are included in the RMD segment.
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 March 31, 2023 and 2022 are as follows:
20232022
(dollars in millions)Collins AerospacePratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins AerospacePratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
United States$2,648 $2,631 $2,806 $2,459 $4 $10,548 $2,249 $2,312 $2,866 $2,299 $4 $9,730 
Europe1,458 1,120 108 304 — 2,990 1,314 879 107 272 — 2,572 
Asia Pacific556 905 213 376 — 2,050 497 873 163 324 — 1,857 
Middle East and North Africa156 110 36 461 — 763 112 78 81 558 — 829 
Other345 463 31 24 — 863 293 387 36 12 — 728 
Consolidated net sales5,163 5,229 3,194 3,624 4 17,214 4,465 4,529 3,253 3,465 4 15,716 
Inter-segment sales418 1 371 47 (837)— 359 — 319 62 (740)— 
Business segment sales$5,581 $5,230 $3,565 $3,671 $(833)$17,214 $4,824 $4,529 $3,572 $3,527 $(736)$15,716 
Segment sales disaggregated by type of customer for the quarters ended March 31, 2023 and 2022 are as follows:
20232022
(dollars in millions)Collins AerospacePratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace Pratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
Sales to the U.S. government (1)
$1,132 $1,222 $2,742 $2,457 $4 $7,557 $1,051 $1,174 $2,812 $2,297 $4 $7,338 
Foreign military sales through the U.S. government53 332 161 716 — 1,262 54 197 160 765 — 1,176 
Foreign government direct commercial sales240 118 201 445 — 1,004 251 103 204 401 — 959 
Commercial aerospace and other commercial sales3,738 3,557 90 6 — 7,391 3,109 3,055 77 2 — 6,243 
Consolidated net sales5,163 5,229 3,194 3,624 4 17,214 4,465 4,529 3,253 3,465 4 15,716 
Inter-segment sales418 1 371 47 (837)— 359 — 319 62 (740)— 
Business segment sales$5,581 $5,230 $3,565 $3,671 $(833)$17,214 $4,824 $4,529 $3,572 $3,527 $(736)$15,716 
(1)    Excludes foreign military sales through the U.S. government.
Segment sales disaggregated by sales type for the quarters ended March 31, 2023 and 2022 are as follows:
20232022
(dollars in millions)Collins AerospacePratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins AerospacePratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
Products$4,000 $3,052 $2,510 $3,221 $4 $12,787 $3,482 $2,633 $2,604 $3,139 $4 $11,862 
Services1,163 2,177 684 403 — 4,427 983 1,896 649 326 — 3,854 
Consolidated net sales5,163 5,229 3,194 3,624 4 17,214 4,465 4,529 3,253 3,465 4 15,716 
Inter-segment sales418 1 371 47 (837)— 359 — 319 62 (740)— 
Business segment sales$5,581 $5,230 $3,565 $3,671 $(833)$17,214 $4,824 $4,529 $3,572 $3,527 $(736)$15,716 
RIS and RMD segment sales disaggregated by contract type for the quarters ended March 31, 2023 and 2022 are as follows:
20232022
(dollars in millions)Raytheon Intelligence & SpaceRaytheon Missiles & DefenseRaytheon Intelligence & SpaceRaytheon Missiles & Defense
Fixed-price$1,387 $2,095 $1,340 $2,075 
Cost-type1,807 1,529 1,913 1,390 
Consolidated net sales3,194 3,624 3,253 3,465 
Inter-segment sales371 47 319 62 
Business segment sales$3,565 $3,671 $3,572 $3,527