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Segment Financial Data
 3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block] Segment Financial Data
Our operations, for the periods presented herein, are classified into four principal segments: Collins Aerospace, 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 results of RIS and RMD reflect the period subsequent to the completion of the Raytheon Merger on April 3, 2020.
As previously announced, effective January 1, 2021, we reorganized certain product areas of our Raytheon Intelligence & Space (RIS) and Raytheon Missiles & Defense (RMD) businesses to more efficiently leverage our capabilities. The amounts and presentation of our business segments, including intersegment activity, set forth in this Form 10-Q reflect this reorganization. The reorganization does not impact our previously reported consolidated balance sheets, statements of operations or statements of cash flows.
As a result of the Raytheon Merger, we now 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. We generally expect to recover the related RIS and RMD pension and PRB liabilities over time through the pricing of our products and services to the U.S. government. Because the Collins Aerospace and Pratt & Whitney segments generally record pension and PRB expense on a FAS basis, historical results were not impacted by this change in segment reporting.
Total sales and operating profit by segment include inter-segment sales which are generally recorded at prices approximating those that the selling entity is able to obtain on external sales for our Collins Aerospace and Pratt & Whitney segments, and at
cost-plus a specified fee, which may differ from what the selling entity would be able to obtain on sales to external customers, for our RIS and RMD segments. Results for the quarters ended March 31, 2021 and 2020 are as follows:
Net SalesOperating ProfitOperating Profit Margins
(dollars in millions)202120202021202020212020
Collins Aerospace Systems$4,370 $6,438 $314 $1,246 7.2 %19.4 %
Pratt & Whitney4,030 5,353 20 475 0.5 %8.9 %
Raytheon Intelligence & Space3,765 — 388 — 10.3 %— %
Raytheon Missiles & Defense3,793 — 496 — 13.1 %— %
Total segment15,958 11,791 1,218 1,721 7.6 %14.6 %
Eliminations and other(1)
(707)(431)(31)(25)
Corporate expenses and other unallocated items (2)
— — (81)(130)
FAS/CAS operating adjustment— — 423 — 
Acquisition accounting adjustments— — (516)(271)
Consolidated$15,251 $11,360 $1,013 $1,295 6.6 %11.4 %
(1)    Includes the operating results of certain smaller non-reportable business segments.
(2)    The net expenses related to the U.S. Army’s Lower Tier Air and Missile Defense Sensor (LTAMDS) project of $58 million in the quarter ended March 31, 2021 are included in Corporate operating profit as they are not included in management’s evaluation of business segment results. No amounts were recorded in the quarter ended March 31, 2020.
We disaggregate our contracts from customers by geographic location based on customer location, by customer and by sales type. Our geographic location 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. Historical results have been recast to reflect the presentation of this disaggregation.
Segment sales disaggregated by geographic region for the quarters ended March 31, 2021 and 2020 are as follows:
20212020
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
United States$2,242 $2,159 $2,965 $2,357 $7 $9,730 $3,144 $2,355 $— $— $5 $5,504 
Asia Pacific405 793 204 370 — 1,772 604 1,421 — — — 2,025 
Middle East and North Africa95 104 133 660 — 992 143 172 — — — 315 
Europe1,079 626 114 327 1 2,147 1,745 1,017 — — — 2,762 
Canada and All Other217 348 29 16 — 610 372 382 — — — 754 
Consolidated net sales4,038 4,030 3,445 3,730 8 15,251 6,008 5,347 — — 5 11,360 
Inter-segment sales332 — 320 63 (715)— 430 6 — — (436)— 
Business segment sales$4,370 $4,030 $3,765 $3,793 $(707)$15,251 $6,438 $5,353 $— $— $(431)$11,360 
Segment sales disaggregated by customer for the quarters ended March 31, 2021 and 2020 are as follows:
20212020
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
U.S. government (1)
$1,222 $1,262 $2,900 $2,357 $7 $7,748 $1,289 $1,239 $— $— $— $2,528 
Foreign military sales through the U.S. government40 242 208 805 — 1,295 55 271 — — — 326 
Foreign government direct commercial sales245 139 229 567 — 1,180 225 138 — — — 363 
Commercial aerospace and other commercial2,531 2,387 108 1 1 5,028 4,439 3,699 — — 5 8,143 
Consolidated net sales4,038 4,030 3,445 3,730 8 15,251 6,008 5,347 — — 5 11,360 
Inter-segment sales332 — 320 63 (715)— 430 6 — — (436)— 
Business segment sales$4,370 $4,030 $3,765 $3,793 $(707)$15,251 $6,438 $5,353 $— $— $(431)$11,360 
(1)    Excludes foreign military sales through the U.S. government.
Segment sales disaggregated by sales type for the quarters ended March 31, 2021 and 2020 are as follows:
20212020
(dollars in millions)Collins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotalCollins Aerospace SystemsPratt & WhitneyRaytheon Intelligence & SpaceRaytheon Missiles & DefenseOtherTotal
Product $3,182 $2,423 $2,676 $3,375 $8 $11,664 $4,905 $3,255 $— $— $5 $8,165 
Service 856 1,607 769 355 — 3,587 1,103 2,092 — — — 3,195 
Consolidated net sales4,038 4,030 3,445 3,730 8 15,251 6,008 5,347 — — 5 11,360 
Inter-segment sales332 — 320 63 (715)— 430 6 — — (436)— 
Business segment sales$4,370 $4,030 $3,765 $3,793 $(707)$15,251 $6,438 $5,353 $— $— $(431)$11,360 
RIS and RMD segment sales disaggregated by contract type for the quarter ended March 31, 2021 are as follows:
2021
(dollars in millions)Raytheon Intelligence & SpaceRaytheon Missiles & Defense
Fixed-price$1,471 $2,251 
Cost-type1,974 1,479 
Consolidated net sales$3,445 $3,730