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INFORMATION ON BUSINESS SEGMENTS
 6 Months Ended
Jun. 28, 2020
Segment Reporting [Abstract]  
INFORMATION ON BUSINESS SEGMENTS INFORMATION ON BUSINESS SEGMENTS
We operate in four business segments: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. We organize our business segments based on the nature of products and services offered.
Net sales and operating profit of our business segments exclude intersegment sales, cost of sales, and profit as these activities are eliminated in consolidation. Business segment operating profit includes our share of earnings or losses from equity method investees as the operating activities of the equity method investees are closely aligned with the operations of our business segments.
Business segment operating profit also excludes the FAS/CAS operating adjustment described below, a portion of corporate costs not considered allowable or allocable to contracts with the U.S. Government under the applicable U.S. government cost accounting standards (CAS) or federal acquisition regulations (FAR), and other items not considered part of management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, environmental costs, stock-based compensation expense, retiree benefits, significant severance actions, significant asset impairments, gains or losses from significant divestitures, and other miscellaneous corporate activities.
Excluded items are included in the reconciling item “Unallocated items” between operating profit from our business segments and our consolidated operating profit. See “Note 10 – Other” for a discussion related to certain factors that may impact the comparability of net sales and operating profit of our business segments.
Summary operating results for each of our business segments were as follows (in millions):
 Quarters EndedSix Months Ended
June 28,
2020		June 30,
2019		June 28,
2020		June 30,
2019
Net sales
Aeronautics$6,503  $5,550  $12,872  $11,134  
Missiles and Fire Control2,801  2,411  5,420  4,761  
Rotary and Mission Systems4,039  3,768  7,785  7,530  
Space 2,877  2,698  5,794  5,338  
Total net sales$16,220  $14,427  $31,871  $28,763  
Operating profit
Aeronautics$739  $592  $1,411  $1,177  
Missiles and Fire Control370  327  766  744  
Rotary and Mission Systems 429  347  805  726  
Space 252  288  533  622  
Total business segment operating profit1,790  1,554  3,515  3,269  
Unallocated items
FAS/CAS operating adjustment (a)
469  512  938  1,024  
Stock-based compensation(73) (67) (115) (104) 
Other, net (b)
(100) 9  (130) 102  
Total unallocated items296  454  693  1,022  
Total consolidated operating profit$2,086  $2,008  $4,208  $4,291  
Intersegment sales
Aeronautics$61  $47  $120  $89  
Missiles and Fire Control140  144  276  265  
Rotary and Mission Systems502  461  1,000  960  
Space 105  85  213  153  
Total intersegment sales$808  $737  $1,609  $1,467  
(a)The FAS/CAS operating adjustment represents the difference between the service cost component of financial accounting standards (FAS) pension income (expense) and total pension costs recoverable on U.S. Government contracts as determined in accordance with CAS.
(b)Other, net for the quarter and six months ended June 28, 2020 includes a non-cash impairment charge of $128 million ($96 million, or $0.34 per share, after tax) recognized on our investment in the international equity method investee, Advanced Military Maintenance, Repair and Overhaul Center (AMMROC) that we entered into an agreement to sell in July 2020.
Our total net FAS/CAS pension adjustment for the quarters and six months ended June 28, 2020 and June 30, 2019, including the service and non-service cost components of FAS pension income (expense) for our qualified defined benefit pension plans, were as follows (in millions):
Quarters EndedSix Months Ended
June 28,
2020		June 30,
2019		June 28,
2020		June 30,
2019
Total FAS income (expense) and CAS costs
FAS pension income (expense)$29  $(273) $59  $(546) 
Less: CAS pension cost495  641  989  1,282  
Net FAS/CAS pension adjustment$524  $368  $1,048  $736  
Service and non-service cost reconciliation
FAS pension service cost$(26) $(129) $(51) $(258) 
Less: CAS pension cost495  641  989  1,282  
FAS/CAS operating adjustment469  512  938  1,024  
Non-operating FAS pension income (expense)55  (144) 110  (288) 
Net FAS/CAS pension adjustment$524  $368  $1,048  $736  

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 income (expense) and total CAS pension cost. The non-service FAS pension income (expense) component is included in other non-operating income (expense), net in our consolidated statements of earnings. As a result, to the extent that CAS pension cost exceeds the service cost component of FAS pension income (expense), we have a favorable FAS/CAS operating adjustment.
We expect to have FAS pension income in 2020, compared to FAS pension expense in prior periods. We no longer have service costs for certain of our plans as a result of completing the planned freeze of our salaried pension plans effective January 1, 2020 that was previously announced on July 1, 2014. See “Note 6 – Postretirement Benefit Plans” for additional information regarding the corporation’s FAS pension expense or income and CAS pension cost.
Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):
Quarter Ended June 28, 2020
AeronauticsMFCRMSSpace Total
Net sales
Products$5,474  $2,422  $3,259  $2,417  $13,572  
Services1,029  379  780  460  2,648  
Total net sales$6,503  $2,801  $4,039  $2,877  $16,220  
Net sales by contract type
Fixed-price$4,467  $1,877  $2,639  $483  $9,466  
Cost-reimbursable2,036  924  1,400  2,394  6,754  
Total net sales$6,503  $2,801  $4,039  $2,877  $16,220  
Net sales by customer
U.S. Government$5,352  $2,098  $2,926  $2,533  $12,909  
International (a)
1,132  699  1,011  330  3,172  
U.S. commercial and other19  4  102  14  139  
Total net sales$6,503  $2,801  $4,039  $2,877  $16,220  
Net sales by geographic region
United States$5,371  $2,102  $3,028  $2,547  $13,048  
Asia Pacific353  72  464  16  905  
Europe506  170  170  314  1,160  
Middle East213  442  213  —  868  
Other60  15  164  —  239  
Total net sales$6,503  $2,801  $4,039  $2,877  $16,220  

Six Months Ended June 28, 2020
AeronauticsMFCRMSSpace Total
Net sales
Products$10,929  $4,697  $6,245  $4,867  $26,738  
Services1,943  723  1,540  927  5,133  
Total net sales$12,872  $5,420  $7,785  $5,794  $31,871  
Net sales by contract type
Fixed-price$9,051  $3,595  $5,121  $1,002  $18,769  
Cost-reimbursable3,821  1,825  2,664  4,792  13,102  
Total net sales$12,872  $5,420  $7,785  $5,794  $31,871  
Net sales by customer
U.S. Government$9,385  $4,053  $5,714  $5,016  $24,168  
International (a)
3,453  1,359  1,866  750  7,428  
U.S. commercial and other34  8  205  28  275  
Total net sales$12,872  $5,420  $7,785  $5,794  $31,871  
Net sales by geographic region
United States$9,419  $4,061  $5,919  $5,044  $24,443  
Asia Pacific1,348  147  782  44  2,321  
Europe1,454  338  337  712  2,841  
Middle East541  849  420  (6) 1,804  
Other110  25  327  —  462  
Total net sales$12,872  $5,420  $7,785  $5,794  $31,871  
(a)International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
Quarter Ended June 30, 2019
AeronauticsMFCRMSSpace Total
Net sales
Products$4,740  $1,963  $3,023  $2,277  $12,003  
Services810  448  745  421  2,424  
Total net sales$5,550  $2,411  $3,768  $2,698  $14,427  
Net sales by contract type
Fixed-price$4,040  $1,444  $2,526  $535  $8,545  
Cost-reimbursable1,510  967  1,242  2,163  5,882  
Total net sales$5,550  $2,411  $3,768  $2,698  $14,427  
Net sales by customer
U.S. Government$3,476  $1,900  $2,675  $2,332  $10,383  
International (a)
2,010  475  974  360  3,819  
U.S. commercial and other64  36  119  6  225  
Total net sales$5,550  $2,411  $3,768  $2,698  $14,427  
Net sales by geographic region
United States$3,540  $1,936  $2,794  $2,338  $10,608  
Asia Pacific784  86  418  23  1,311  
Europe847  103  143  328  1,421  
Middle East335  272  247  9  863  
Other44  14  166  —  224  
Total net sales$5,550  $2,411  $3,768  $2,698  $14,427  
Six Months Ended June 30, 2019
AeronauticsMFCRMSSpace Total
Net sales
Products$9,536  $3,879  $6,082  $4,476  $23,973  
Services1,598  882  1,448  862  4,790  
Total net sales$11,134  $4,761  $7,530  $5,338  $28,763  
Net sales by contract type
Fixed-price$8,210  $2,979  $5,145  $1,058  $17,392  
Cost-reimbursable2,924  1,782  2,385  4,280  11,371  
Total net sales$11,134  $4,761  $7,530  $5,338  $28,763  
Net sales by customer
U.S. Government$6,911  $3,533  $5,350  $4,568  $20,362  
International (a)
4,105  1,145  1,969  755  7,974  
U.S. commercial and other118  83  211  15  427  
Total net sales$11,134  $4,761  $7,530  $5,338  $28,763  
Net sales by geographic region
United States$7,029  $3,616  $5,561  $4,583  $20,789  
Asia Pacific1,690  208  748  31  2,677  
Europe1,645  225  341  709  2,920  
Middle East672  685  532  15  1,904  
Other98  27  348  —  473  
Total net sales$11,134  $4,761  $7,530  $5,338  $28,763  
(a)International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
Our Aeronautics business segment includes our largest program, the F-35 Lightning II Joint Strike Fighter, an international multi-role, multi-variant, stealth fighter aircraft. Net sales for the F-35 program represented approximately 28% of our total consolidated net sales for both the quarter and six months ended June 28, 2020 and 26% of our total consolidated net sales for both the quarter and six months ended June 30, 2019.
Total assets for each of our business segments were as follows (in millions):
June 28,
2020		December 31,
2019
Assets
Aeronautics$9,801  $9,109  
Missiles and Fire Control5,257  5,030  
Rotary and Mission Systems18,498  18,751  
Space 6,221  5,844  
Total business segment assets39,777  38,734  
Corporate assets (a)
9,826  8,794  
Total assets$49,603  $47,528  
(a)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.