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Information on Business Segments (Tables)

12 Months Ended

Dec. 31, 2019

Summary Of Financial Information For Each Business Segment

Summary operating results for each of our business segments were as follows (in millions):



	2019			2018			2017
Net sales
Aeronautics	$	23,693		$	21,242		$	19,410
Missiles and Fire Control	10,131			8,462			7,282
Rotary and Mission Systems	15,128			14,250			13,663
Space	10,860			9,808			9,605
Total net sales	$	59,812		$	53,762		$	49,960
Operating profit
Aeronautics	$	2,521		$	2,272		$	2,176
Missiles and Fire Control	1,441			1,248			1,034
Rotary and Mission Systems	1,421			1,302			902
Space	1,191			1,055			980
Total business segment operating profit	6,574			5,877			5,092
Unallocated items
FAS/CAS operating adjustment ^(a)	2,049			1,803			1,613
Stock-based compensation	(189		)	(173		)	(158		)
Severance and restructuring charges ^(b)	—			(96		)	—
Other, net ^(c)	111			(77		)	197
Total unallocated, net	1,971			1,457			1,652
Total consolidated operating profit	$	8,545		$	7,334		$	6,744


^(a)	The FAS/CAS operating adjustment represents the difference between the service cost component of FAS pension expense and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS. For a detail of the FAS/CAS operating adjustment and the total net FAS/CAS pension adjustment, see the table below.


^(b)	See “Note 15 – Severance and Restructuring Charges” for information on charges related to certain severance actions at our business segments. Severance and restructuring charges for initiatives that are not significant are included in business segment operating profit.

^(c)

Other, net in 2019 includes a previously deferred non-cash gain of $51 million related to properties sold in 2015 as a result of completing our remaining obligations and a gain of $34 million for the sale of its Distributed Energy Solutions business. Other, net in 2018 includes a non-cash asset impairment charge of $110 million related to our equity method investee, AMMROC (see “Note 1 – Significant Accounting Policies”). Other, net in 2017 includes a previously deferred non-cash gain of $198 million related to properties sold in 2015 as a result of completing our remaining obligations (see “Note 7 – Property, Plant and Equipment, net”) and a $64 million charge, which represents our portion of a non-cash asset impairment charge recorded by AMMROC. (see “Note 1 – Significant Accounting Policies”).

Total net FAS/CAS pension adjustments, including the service and non-service cost components of FAS pension expense, were as follows (in millions):



	2019			2018			2017
Total FAS expense and CAS costs
FAS pension expense	$	(1,093	)	$	(1,431	)	$	(1,372	)
Less: CAS pension cost	2,565			2,433			2,248
Net FAS/CAS pension adjustment	$	1,472		$	1,002		$	876

Service and non-service cost reconciliation
FAS pension service cost	(516		)	(630		)	(635		)
Less: CAS pension cost	2,565			2,433			2,248
FAS/CAS operating adjustment	2,049			1,803			1,613
Non-operating FAS pension expense ^(a)	(577		)	(801		)	(737		)
Net FAS/CAS pension adjustment	$	1,472		$	1,002		$	876

^(a)

We record the non-service cost components of net periodic benefit cost as part of other non-operating expense, net in the consolidated statement of earnings. The non-service cost components in the table above relate only to our qualified defined benefit pension plans. We incurred total non-service costs for our qualified defined benefit pension plans in the table above, along with similar costs for our other postretirement benefit plans of $116 million, $67 million, and $109 million for the years ended 2019, 2018 and 2017.

We recover CAS pension and other postretirement benefit plan cost through the pricing of our products and services on U.S. Government contracts and, therefore, recognize CAS cost in each of our business segment’s net sales and cost of sales. Our consolidated financial statements must present FAS pension and other postretirement benefit plan expense calculated in accordance with FAS requirements under U.S. GAAP. The operating portion of the net FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension expense and total CAS pension cost. The non-service FAS pension cost component is included in other non-operating expense, net in our consolidated statements of earnings. The net FAS/CAS pension adjustment increases or decreases CAS pension cost to equal total FAS pension expense (both service and non-service).



	2019		2018		2017
Intersegment sales
Aeronautics	$	217	$	120	$	122
Missiles and Fire Control	515		423		355
Rotary and Mission Systems ^(a)	1,872		1,759		1,801
Space	352		237		111
Total intersegment sales	$	2,956	$	2,539	$	2,389
Depreciation and amortization
Aeronautics	$	318	$	304	$	311
Missiles and Fire Control	124		105		99
Rotary and Mission Systems	464		458		468
Space	213		229		245
Total business segment depreciation and amortization	1,119		1,096		1,123
Corporate activities	70		65		72
Total depreciation and amortization	$	1,189	$	1,161	$	1,195
Capital expenditures
Aeronautics	$	526	$	460	$	371
Missiles and Fire Control	300		244		156
Rotary and Mission Systems	272		255		308
Space	258		255		179
Total business segment capital expenditures	1,356		1,214		1,014
Corporate activities	128		64		163
Total capital expenditures	$	1,484	$	1,278	$	1,177


^(a)	During 2019 a program within our RMS business segment, which primarily performed work for our Aeronautics business segment, was realigned under Aeronautics. The 2018 and 2017 RMS intersegment sales have been adjusted to reflect the current program structure.

Net Sales by Type

Net sales by total products and services, contract type, customer category and geographic region for each of our business segments were as follows (in millions):



	2019
	Aeronautics		MFC		RMS		Space		Total
Net sales
Products	$	20,319	$	8,424	$	12,206	$	9,104	$	50,053
Services	3,374		1,707		2,922		1,756		9,759
Total net sales	$	23,693	$	10,131	$	15,128	$	10,860	$	59,812
Net sales by contract type
Fixed-price	$	17,239	$	6,449	$	10,382	$	2,135	$	36,205
Cost-reimbursable	6,454		3,682		4,746		8,725		23,607
Total net sales	$	23,693	$	10,131	$	15,128	$	10,860	$	59,812
Net sales by customer
U.S. Government	$	14,776	$	7,524	$	10,803	$	9,322	$	42,425
International ^(a)	8,733		2,465		3,822		1,511		16,531
U.S. commercial and other	184		142		503		27		856
Total net sales	$	23,693	$	10,131	$	15,128	$	10,860	$	59,812
Net sales by geographic region
United States	$	14,960	$	7,666	$	11,306	$	9,349	$	43,281
Asia Pacific	3,882		420		1,451		73		5,826
Europe	3,224		516		769		1,419		5,928
Middle East	1,465		1,481		979		19		3,944
Other	162		48		623		—		833
Total net sales	$	23,693	$	10,131	$	15,128	$	10,860	$	59,812


^(a)	International sales include foreign military sales contracted through the U.S. Government, direct commercial sales with international governments and commercial and other sales to international customers.



	2018
	Aeronautics		MFC		RMS		Space		Total
Net sales
Products	$	18,207	$	6,945	$	11,714	$	8,139	$	45,005
Services	3,035		1,517		2,536		1,669		8,757
Total net sales	$	21,242	$	8,462	$	14,250	$	9,808	$	53,762
Net sales by contract type
Fixed-price	$	15,719	$	5,653	$	9,975	$	1,892	$	33,239
Cost-reimbursable	5,523		2,809		4,275		7,916		20,523
Total net sales	$	21,242	$	8,462	$	14,250	$	9,808	$	53,762
Net sales by customer
U.S. Government	$	13,321	$	6,088	$	10,083	$	8,224	$	37,716
International ^(a)	7,735		2,190		3,693		1,538		15,156
U.S. commercial and other	186		184		474		46		890
Total net sales	$	21,242	$	8,462	$	14,250	$	9,808	$	53,762
Net sales by geographic region
United States	$	13,507	$	6,272	$	10,557	$	8,270	$	38,606
Asia Pacific	3,335		427		1,433		85		5,280
Europe	2,837		321		829		1,416		5,403
Middle East	1,380		1,404		781		37		3,602
Other	183		38		650		—		871
Total net sales	$	21,242	$	8,462	$	14,250	$	9,808	$	53,762


^(a)	International sales include foreign military sales contracted through the U.S. Government, direct commercial sales with international governments and commercial and other sales to international customers.



	2017
	Aeronautics		MFC		RMS		Space		Total
Net sales
Products	$	16,981	$	5,940	$	11,398	$	8,183	$	42,502
Services	2,429		1,342		2,265		1,422		7,458
Total net sales	$	19,410	$	7,282	$	13,663	$	9,605	$	49,960
Net sales by contract type
Fixed-price	$	13,828	$	5,102	$	10,059	$	2,058	$	31,047
Cost-reimbursable	5,582		2,180		3,604		7,547		18,913
Total net sales	$	19,410	$	7,282	$	13,663	$	9,605	$	49,960
Net sales by customer
U.S. Government	$	12,609	$	4,467	$	9,715	$	8,088	$	34,879
International ^(a)	6,641		2,672		3,575		1,446		14,334
U.S. commercial and other	160		143		373		71		747
Total net sales	$	19,410	$	7,282	$	13,663	$	9,605	$	49,960
Net sales by geographic region
United States	$	12,769	$	4,610	$	10,088	$	8,159	$	35,626
Asia Pacific	2,823		516		1,344		92		4,775
Europe	2,331		305		927		1,270		4,833
Middle East	1,316		1,798		572		81		3,767
Other	171		53		732		3		959
Total net sales	$	19,410	$	7,282	$	13,663	$	9,605	$	49,960

^(a)

International sales include foreign military sales contracted through the U.S. Government, direct commercial sales with international governments and commercial and other sales to international customers.

Total assets for each of our business segments were as follows (in millions):



	2019		2018
Assets ^(a)
Aeronautics	$	9,109	$	8,435
Missiles and Fire Control	5,030		5,017
Rotary and Mission Systems	18,751		18,333
Space	5,844		5,445
Total business segment assets	38,734		37,230
Corporate assets ^(b)	8,794		7,646
Total assets	$	47,528	$	44,876


^(a)	We have no long-lived assets with material carrying values located in foreign countries.

^(b)

Corporate assets primarily include cash and cash equivalents, deferred income taxes, assets for the portion of environmental costs that are probable of future recovery and investments held in a separate trust.