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INFORMATION ON BUSINESS SEGMENTS
 6 Months Ended
Jun. 25, 2023
Segment Reporting [Abstract]  
INFORMATION ON BUSINESS SEGMENTS INFORMATION ON BUSINESS SEGMENTS
Overview
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.
Selected Financial Data by Business Segment
Net sales and operating profit of our business segments exclude intersegment sales, cost of sales and profit as these activities are eliminated in consolidation and thus are not included in management’s evaluation of performance of each segment. 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.
Summary Operating Results
As discussed in “Note 1 - Basis of Presentation”, effective January 1, 2023, we no longer consider amortization expense related to purchased intangible assets when evaluating the operating performance of our business segments. As a result, intangible asset amortization expense, which was previously included in segment operating profit, is now reported in unallocated items within total consolidated operating profit.
This change has been applied to the amounts below, including the amounts for 2022. Sales and operating profit for each of our business segments were as follows (in millions):
 Quarters EndedSix Months Ended
June 25,
2023		June 26,
2022		June 25,
2023		June 26,
2022
Net sales
Aeronautics$6,875 $5,862 $13,144 $12,263 
Missiles and Fire Control2,755 2,747 5,143 5,199 
Rotary and Mission Systems3,897 4,012 7,407 7,564 
Space 3,166 2,825 6,125 5,384 
Total net sales$16,693 $15,446 $31,819 $30,410 
Operating profit
Aeronautics$718 $613 $1,393 $1,292 
Missiles and Fire Control371 418 748 803 
Rotary and Mission Systems 454 461 804 867 
Space 312 271 592 519 
Total business segment operating profit1,855 1,763 3,537 3,481 
Unallocated items
FAS/CAS pension operating adjustment416 425 831 851 
Intangible asset amortization expense(62)(62)(124)(124)
Other, net (74)(163)(72)(312)
Total unallocated items280 200 635 415 
Total consolidated operating profit$2,135 $1,963 $4,172 $3,896 
Intersegment sales
Aeronautics$71 $58 $124 $118 
Missiles and Fire Control159 161 305 317 
Rotary and Mission Systems505 453 994 908 
Space 92 99 178 182 
Total intersegment sales$827 $771 $1,601 $1,525 
Unallocated Items
Business segment operating profit 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, changes in the fair value of assets and liabilities for deferred compensation plans, retiree benefits, significant severance charges, significant asset impairments, gains or losses from divestitures, intangible asset amortization expense, 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.
FAS/CAS Pension Operating Adjustment
Our business segments’ results of operations include pension expense only as calculated under U.S. Government Cost Accounting Standards (CAS), which we refer to as CAS pension cost. 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 pension and other postretirement benefit plan income calculated in accordance with Financial Accounting Standards (FAS) requirements under U.S. GAAP. The operating portion of the total FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension income (expense) and total CAS pension cost. 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 pension operating adjustment.
Disaggregation of Net Sales

Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):
Quarter Ended June 25, 2023
AeronauticsMFCRMSSpace Total
Net sales
Products$5,645 $2,412 $3,041 $2,660 $13,758 
Services1,230 343 856 506 2,935 
Total net sales$6,875 $2,755 $3,897 $3,166 $16,693 
Net sales by contract type
Fixed-price$4,656 $1,863 $2,451 $799 $9,769 
Cost-reimbursable2,219 892 1,446 2,367 6,924 
Total net sales$6,875 $2,755 $3,897 $3,166 $16,693 
Net sales by customer
U.S. Government$4,621 $1,911 $2,754 $3,121 $12,407 
International (a)
2,169 841 1,075 41 4,126 
U.S. commercial and other85 3 68 4 160 
Total net sales$6,875 $2,755 $3,897 $3,166 $16,693 
Net sales by geographic region
United States$4,706 $1,914 $2,822 $3,125 $12,567 
Europe1,146 174 212 24 1,556 
Asia Pacific690 215 554 16 1,475 
Middle East226 411 155 1 793 
Other107 41 154 — 302 
Total net sales$6,875 $2,755 $3,897 $3,166 $16,693 
Six Months Ended June 25, 2023
AeronauticsMFCRMSSpace Total
Net sales
Products$10,801 $4,501 $5,833 $5,149 $26,284 
Services2,343 642 1,574 976 5,535 
Total net sales$13,144 $5,143 $7,407 $6,125 $31,819 
Net sales by contract type
Fixed-price$8,968 $3,481 $4,659 $1,563 $18,671 
Cost-reimbursable4,176 1,662 2,748 4,562 13,148 
Total net sales$13,144 $5,143 $7,407 $6,125 $31,819 
Net sales by customer
U.S. Government$8,738 $3,492 $5,177 $6,029 $23,436 
International (a)
4,283 1,646 2,095 86 8,110 
U.S. commercial and other123 5 135 10 273 
Total net sales$13,144 $5,143 $7,407 $6,125 $31,819 
Net sales by geographic region
United States$8,861 $3,497 $5,312 $6,039 $23,709 
Europe2,276 385 437 47 3,145 
Asia Pacific1,365 317 992 38 2,712 
Middle East451 866 341 1 1,659 
Other191 78 325 — 594 
Total net sales$13,144 $5,143 $7,407 $6,125 $31,819 
Quarter Ended June 26, 2022
AeronauticsMFCRMSSpace Total
Net sales
Products$4,804 $2,444 $3,150 $2,363 $12,761 
Services1,058 303 862 462 2,685 
Total net sales$5,862 $2,747 $4,012 $2,825 $15,446 
Net sales by contract type
Fixed-price$3,916 $1,943 $2,589 $753 $9,201 
Cost-reimbursable1,946 804 1,423 2,072 6,245 
Total net sales$5,862 $2,747 $4,012 $2,825 $15,446 
Net sales by customer
U.S. Government$3,963 $1,924 $2,785 $2,786 $11,458 
International (a)
1,868 823 1,129 29 3,849 
U.S. commercial and other31 — 98 10 139 
Total net sales$5,862 $2,747 $4,012 $2,825 $15,446 
Net sales by geographic region
United States$3,994 $1,924 $2,883 $2,796 $11,597 
Europe845 262 178 20 1,305 
Asia Pacific705 107 553 6 1,371 
Middle East222 417 201 3 843 
Other96 37 197 — 330 
Total net sales$5,862 $2,747 $4,012 $2,825 $15,446 
Six Months Ended June 26, 2022
AeronauticsMFCRMSSpace Total
Net sales
Products$10,221 $4,617 $5,938 $4,479 $25,255 
Services2,042 582 1,626 905 5,155 
Total net sales$12,263 $5,199 $7,564 $5,384 $30,410 
Net sales by contract type
Fixed-price$8,602 $3,656 $4,807 $1,390 $18,455 
Cost-reimbursable3,661 1,543 2,757 3,994 11,955 
Total net sales$12,263 $5,199 $7,564 $5,384 $30,410 
Net sales by customer
U.S. Government$8,176 $3,519 $5,296 $5,302 $22,293 
International (a)
4,018 1,675 2,100 63 7,856 
U.S. commercial and other69 5 168 19 261 
Total net sales$12,263 $5,199 $7,564 $5,384 $30,410 
Net sales by geographic region
United States$8,245 $3,524 $5,464 $5,321 $22,554 
Europe1,868 518 365 44 2,795 
Asia Pacific1,426 213 985 13 2,637 
Middle East484 882 377 6 1,749 
Other240 62 373 — 675 
Total net sales$12,263 $5,199 $7,564 $5,384 $30,410 
(a)International sales include foreign military sales (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, an international multi-role, multi-variant, stealth fighter aircraft. Net sales for the F-35 program represented approximately 26% of our total consolidated net sales for both the quarter and six months ended June 25, 2023 and 23% and 26% of our total consolidated net sales for the quarter and six months ended June 26, 2022.
Assets
Total assets for each of our business segments were as follows (in millions):
June 25,
2023		December 31,
2022
Assets
Aeronautics$13,426 $12,055 
Missiles and Fire Control5,777 5,788 
Rotary and Mission Systems18,175 17,988 
Space 6,640 6,351 
Total business segment assets44,018 42,182 
Corporate assets (a)
12,960 10,698 
Total assets$56,978 $52,880 
(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, property, plant and equipment used in our corporate operations, assets held in a trust for deferred compensation plans, and other marketable investments.