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INFORMATION ON BUSINESS SEGMENTS
 9 Months Ended
Sep. 26, 2021
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 pension operating adjustment, 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 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 11 - 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 EndedNine Months Ended
September 26,
2021		September 27,
2020		September 26,
2021		September 27,
2020
Net sales
Aeronautics$6,568 $6,680 $19,621 $19,552 
Missiles and Fire Control2,781 2,971 8,474 8,391 
Rotary and Mission Systems3,980 3,998 12,329 11,783 
Space 2,699 2,846 8,891 8,640 
Total net sales$16,028 $16,495 $49,315 $48,366 
Operating profit
Aeronautics$714 $705 $1,979 $2,116 
Missiles and Fire Control413 405 1,210 1,171 
Rotary and Mission Systems 459 404 1,350 1,209 
Space 264 248 826 781 
Total business segment operating profit1,850 1,762 5,365 5,277 
Unallocated items
FAS/CAS operating adjustment491 469 1,469 1,407 
Stock-based compensation(62)(67)(189)(182)
Severance and restructuring charges— — (36)— 
Other, net 15 (17)59 (147)
Total unallocated items444 385 1,303 1,078 
Total consolidated operating profit$2,294 $2,147 $6,668 $6,355 
Intersegment sales
Aeronautics$60 $59 $165 $179 
Missiles and Fire Control153 129 449 405 
Rotary and Mission Systems455 438 1,381 1,438 
Space 95 83 269 296 
Total intersegment sales$763 $709 $2,264 $2,318 
Amortization of purchased intangibles
Aeronautics$— $— $(1)$— 
Missiles and Fire Control(1)(1)(2)(2)
Rotary and Mission Systems(58)(58)(174)(174)
Space(2)(7)(46)(21)
Total amortization of purchased intangibles$(61)$(66)$(223)$(197)
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 pension 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 income 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) income and total CAS pension cost. The non-service FAS pension (expense) income components are included in non-service FAS pension (expense) income in our consolidated statements of earnings. As a result, to the extent that CAS pension cost exceeds the service cost component of FAS pension (expense) income, we have a favorable FAS/CAS operating adjustment.
Our total net FAS/CAS pension adjustment for the quarters and nine months ended September 26, 2021 and September 27, 2020, including the service and non-service cost components of FAS pension (expense) income for our qualified defined benefit pension plans, were as follows (in millions):
Quarters EndedNine Months Ended
September 26,
2021		September 27,
2020		September 26,
2021		September 27,
2020
Total FAS (expense) income and CAS costs
FAS pension (expense) income$(1,598)$29 $(1,465)$88 
Less: CAS pension cost517 494 1,549 1,483 
Net FAS/CAS pension adjustment$(1,081)$523 $84 $1,571 
Service and non-service cost reconciliation
FAS pension service cost$(26)$(25)$(80)$(76)
Less: CAS pension cost517 494 1,549 1,483 
FAS/CAS operating adjustment491 469 1,469 1,407 
Non-service FAS pension (expense) income(1,572)54 (1,385)164 
Net FAS/CAS pension adjustment$(1,081)$523 $84 $1,571 
The decrease in the net FAS/CAS pension adjustment during the quarter and nine months ended September 26, 2021 as compared to 2020 was principally driven by a noncash, non-operating pension settlement charge of $1.7 billion ($1.3 billion, or $4.72 per share, after-tax recognized in connection with the transfer of $4.9 billion of our gross defined benefit pension obligations and related plan assets to an insurance company on August 3, 2021. See “Note 7 -Postretirement Benefit Plans”.
Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):
Quarter Ended September 26, 2021
AeronauticsMFCRMSSpace Total
Net sales
Products$5,573 $2,429 $3,201 $2,272 $13,475 
Services995 352 779 427 2,553 
Total net sales$6,568 $2,781 $3,980 $2,699 $16,028 
Net sales by contract type
Fixed-price$4,819 $1,900 $2,617 $631 $9,967 
Cost-reimbursable1,749 881 1,363 2,068 6,061 
Total net sales$6,568 $2,781 $3,980 $2,699 $16,028 
Net sales by customer
U.S. Government$4,312 $1,938 $2,838 $2,671 $11,759 
International (a)
2,229 847 1,047 22 4,145 
U.S. commercial and other27 (4)95 6 124 
Total net sales$6,568 $2,781 $3,980 $2,699 $16,028 
Net sales by geographic region
United States$4,339 $1,934 $2,933 $2,677 $11,883 
Asia Pacific890 81 409 (14)1,366 
Europe910 226 213 32 1,381 
Middle East360 527 246 4 1,137 
Other69 13 179 — 261 
Total net sales$6,568 $2,781 $3,980 $2,699 $16,028 
Nine Months Ended September 26, 2021
AeronauticsMFCRMSSpace Total
Net sales
Products$16,635 $7,410 $9,870 $7,571 $41,486 
Services2,986 1,064 2,459 1,320 7,829 
Total net sales$19,621 $8,474 $12,329 $8,891 $49,315 
Net sales by contract type
Fixed-price$14,473 $5,769 $8,096 $1,890 $30,228 
Cost-reimbursable5,148 2,705 4,233 7,001 19,087 
Total net sales$19,621 $8,474 $12,329 $8,891 $49,315 
Net sales by customer
U.S. Government$12,952 $6,155 $8,711 $7,941 $35,759 
International (a)
6,611 2,316 3,384 926 13,237 
U.S. commercial and other58 3 234 24 319 
Total net sales$19,621 $8,474 $12,329 $8,891 $49,315 
Net sales by geographic region
United States$13,010 $6,158 $8,945 $7,965 $36,078 
Asia Pacific2,697 188 1,593 (10)4,468 
Europe2,708 640 637 931 4,916 
Middle East955 1,452 593 5 3,005 
Other251 36 561 — 848 
Total net sales$19,621 $8,474 $12,329 $8,891 $49,315 
(a)International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
Quarter Ended September 27, 2020
AeronauticsMFCRMSSpace Total
Net sales
Products$5,742 $2,614 $3,120 $2,393 $13,869 
Services938 357 878 453 2,626 
Total net sales$6,680 $2,971 $3,998 $2,846 $16,495 
Net sales by contract type
Fixed-price$4,718 $2,034 $2,666 $516 $9,934 
Cost-reimbursable1,962 937 1,332 2,330 6,561 
Total net sales$6,680 $2,971 $3,998 $2,846 $16,495 
Net sales by customer
U.S. Government$3,930 $2,206 $2,971 $2,463 $11,570 
International (a)
2,729 764 914 381 4,788 
U.S. commercial and other21 1 113 2 137 
Total net sales$6,680 $2,971 $3,998 $2,846 $16,495 
Net sales by geographic region
United States$3,951 $2,207 $3,084 $2,465 $11,707 
Asia Pacific1,099 70 383 21 1,573 
Europe1,141 208 191 360 1,900 
Middle East440 475 206 — 1,121 
Other49 11 134 — 194 
Total net sales$6,680 $2,971 $3,998 $2,846 $16,495 
Nine Months Ended September 27, 2020
AeronauticsMFCRMSSpace Total
Net sales
Products$16,671 $7,311 $9,365 $7,260 $40,607 
Services2,881 1,080 2,418 1,380 7,759 
Total net sales$19,552 $8,391 $11,783 $8,640 $48,366 
Net sales by contract type
Fixed-price$13,769 $5,629 $7,787 $1,518 $28,703 
Cost-reimbursable5,783 2,762 3,996 7,122 19,663 
Total net sales$19,552 $8,391 $11,783 $8,640 $48,366 
Net sales by customer
U.S. Government$13,315 $6,259 $8,685 $7,479 $35,738 
International (a)
6,182 2,123 2,780 1,131 12,216 
U.S. commercial and other55 9 318 30 412 
Total net sales$19,552 $8,391 $11,783 $8,640 $48,366 
Net sales by geographic region
United States$13,370 $6,268 $9,003 $7,509 $36,150 
Asia Pacific2,447 217 1,165 65 3,894 
Europe2,595 546 528 1,072 4,741 
Middle East981 1,324 626 (6)2,925 
Other159 36 461 — 656 
Total net sales$19,552 $8,391 $11,783 $8,640 $48,366 
(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% and 27% of our total consolidated net sales for the quarter and nine months ended September 26, 2021 and 28% of our total consolidated net sales for both the quarter and nine months ended September 27, 2020.
Total assets for each of our business segments were as follows (in millions):
September 26,
2021		December 31,
2020
Assets
Aeronautics$12,369 $9,903 
Missiles and Fire Control5,056 4,966 
Rotary and Mission Systems17,807 18,035 
Space 6,551 6,451 
Total business segment assets41,783 39,355 
Corporate assets (a)
10,060 11,355 
Total assets$51,843 $50,710 
(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.