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Segment Financial Data | 3 Months Ended
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Mar. 31, 2023
Segment Reporting [Abstract] |
Segment Reporting Disclosure | Note 17: Segment Financial Data Our operations, for the periods presented herein, are classified into four principal segments: Collins, 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 Company recently announced its intention to streamline the structure of its core businesses into three principal business segments: Collins Aerospace, Pratt & Whitney, and Raytheon. The Company plans to implement the reorganization beginning in July 2023. All segment information included in this Form 10-Q is reflective of the existing four segments of Collins, Pratt & Whitney, RIS, and RMD in accordance with the management structure in place as of March 31, 2023. We 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. Over time, we generally expect to recover the related RIS and RMD pension and PRB liabilities through the pricing of our products and services to the U.S. government. Collins and Pratt & Whitney generally record pension and PRB expense on a FAS basis. Acquisition accounting adjustments include the amortization of acquired intangible assets related to acquisitions, the amortization of the property, plant and equipment fair value adjustment acquired through acquisitions, the amortization of customer contractual obligations related to loss making or below market contracts acquired, and goodwill impairment. These adjustments are not considered part of management’s evaluation of segment results. Total sales and operating profit by segment include inter-segment sales which are generally recorded at cost-plus a specified fee or at a negotiated fixed price. These pricing arrangements may result in margins different than what the purchasing segment realizes on the ultimate third-party sale. Results for the quarters ended March 31, 2023 and 2022 are as follows:
| Net Sales |  | Operating Profit |  | Operating Profit Margins
(dollars in millions) | 2023 |  | 2022 |  | 2023 |  | 2022 |  | 2023 |  | 2022
Collins Aerospace | $ | 5,581 |  |  | $ | 4,824 |  |  | $ | 794 |  |  | $ | 440 |  |  | 14.2 | % |  | 9.1 | %
Pratt & Whitney | 5,230 |  |  | 4,529 |  |  | 415 |  |  | 151 |  |  | 7.9 | % |  | 3.3 | %
Raytheon Intelligence & Space | 3,565 |  |  | 3,572 |  |  | 324 |  |  | 378 |  |  | 9.1 | % |  | 10.6 | %
Raytheon Missiles & Defense | 3,671 |  |  | 3,527 |  |  | 328 |  |  | 387 |  |  | 8.9 | % |  | 11.0 | %
Total segment | 18,047 |  |  | 16,452 |  |  | 1,861 |  |  | 1,356 |  |  | 10.3 | % |  | 8.2 | %
Eliminations and other(1) | (833) |  |  | (736) |  |  | 13 |  |  | (34) |  |  |  |  |
Corporate expenses and other unallocated items(2) | — |  |  | — |  |  | (43) |  |  | (136) |  |  |  |  |
FAS/CAS operating adjustment | — |  |  | — |  |  | 314 |  |  | 378 |  |  |  |  |
Acquisition accounting adjustments | — |  |  | — |  |  | (493) |  |  | (484) |  |  |  |  |
Consolidated | $ | 17,214 |  |  | $ | 15,716 |  |  | $ | 1,652 |  |  | $ | 1,080 |  |  | 9.6 | % |  | 6.9 | %
(1) Includes the operating results of certain smaller non-reportable business segments. (2) 2022 included the net expenses related to the U.S. Army’s Lower Tier Air and Missile Defense Sensor (LTAMDS) project. Beginning in 2023, LTAMDS results are included in the RMD segment. We disaggregate our contracts from customers by geographic region based on customer location, by customer and by sales type. Our geographic region 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. Segment sales disaggregated by geographic region for the quarters ended March 31, 2023 and 2022 are as follows:
| 2023 |  | 2022
(dollars in millions) | Collins Aerospace | Pratt & Whitney | Raytheon Intelligence & Space | Raytheon Missiles & Defense | Other | Total |  | Collins Aerospace | Pratt & Whitney | Raytheon Intelligence & Space | Raytheon Missiles & Defense | Other | Total
United States | $ | 2,648 |  | $ | 2,631 |  | $ | 2,806 |  | $ | 2,459 |  | $ | 4 |  | $ | 10,548 |  |  | $ | 2,249 |  | $ | 2,312 |  | $ | 2,866 |  | $ | 2,299 |  | $ | 4 |  | $ | 9,730 |
Europe | 1,458 |  | 1,120 |  | 108 |  | 304 |  | — |  | 2,990 |  |  | 1,314 |  | 879 |  | 107 |  | 272 |  | — |  | 2,572 |
Asia Pacific | 556 |  | 905 |  | 213 |  | 376 |  | — |  | 2,050 |  |  | 497 |  | 873 |  | 163 |  | 324 |  | — |  | 1,857 |
Middle East and North Africa | 156 |  | 110 |  | 36 |  | 461 |  | — |  | 763 |  |  | 112 |  | 78 |  | 81 |  | 558 |  | — |  | 829 |
Other | 345 |  | 463 |  | 31 |  | 24 |  | — |  | 863 |  |  | 293 |  | 387 |  | 36 |  | 12 |  | — |  | 728 |
Consolidated net sales | 5,163 |  | 5,229 |  | 3,194 |  | 3,624 |  | 4 |  | 17,214 |  |  | 4,465 |  | 4,529 |  | 3,253 |  | 3,465 |  | 4 |  | 15,716 |
Inter-segment sales | 418 |  | 1 |  | 371 |  | 47 |  | (837) |  | — |  |  | 359 |  | — |  | 319 |  | 62 |  | (740) |  | — |
Business segment sales | $ | 5,581 |  | $ | 5,230 |  | $ | 3,565 |  | $ | 3,671 |  | $ | (833) |  | $ | 17,214 |  |  | $ | 4,824 |  | $ | 4,529 |  | $ | 3,572 |  | $ | 3,527 |  | $ | (736) |  | $ | 15,716 |
Segment sales disaggregated by type of customer for the quarters ended March 31, 2023 and 2022 are as follows:
| 2023 |  | 2022
(dollars in millions) | Collins Aerospace | Pratt & Whitney | Raytheon Intelligence & Space | Raytheon Missiles & Defense | Other | Total |  | Collins Aerospace | Pratt & Whitney | Raytheon Intelligence & Space | Raytheon Missiles & Defense | Other | Total
Sales to the U.S. government (1) | $ | 1,132 |  | $ | 1,222 |  | $ | 2,742 |  | $ | 2,457 |  | $ | 4 |  | $ | 7,557 |  |  | $ | 1,051 |  | $ | 1,174 |  | $ | 2,812 |  | $ | 2,297 |  | $ | 4 |  | $ | 7,338 |
Foreign military sales through the U.S. government | 53 |  | 332 |  | 161 |  | 716 |  | — |  | 1,262 |  |  | 54 |  | 197 |  | 160 |  | 765 |  | — |  | 1,176 |
Foreign government direct commercial sales | 240 |  | 118 |  | 201 |  | 445 |  | — |  | 1,004 |  |  | 251 |  | 103 |  | 204 |  | 401 |  | — |  | 959 |
Commercial aerospace and other commercial sales | 3,738 |  | 3,557 |  | 90 |  | 6 |  | — |  | 7,391 |  |  | 3,109 |  | 3,055 |  | 77 |  | 2 |  | — |  | 6,243 |
Consolidated net sales | 5,163 |  | 5,229 |  | 3,194 |  | 3,624 |  | 4 |  | 17,214 |  |  | 4,465 |  | 4,529 |  | 3,253 |  | 3,465 |  | 4 |  | 15,716 |
Inter-segment sales | 418 |  | 1 |  | 371 |  | 47 |  | (837) |  | — |  |  | 359 |  | — |  | 319 |  | 62 |  | (740) |  | — |
Business segment sales | $ | 5,581 |  | $ | 5,230 |  | $ | 3,565 |  | $ | 3,671 |  | $ | (833) |  | $ | 17,214 |  |  | $ | 4,824 |  | $ | 4,529 |  | $ | 3,572 |  | $ | 3,527 |  | $ | (736) |  | $ | 15,716 |
(1) Excludes foreign military sales through the U.S. government. Segment sales disaggregated by sales type for the quarters ended March 31, 2023 and 2022 are as follows:
| 2023 |  | 2022
(dollars in millions) | Collins Aerospace | Pratt & Whitney | Raytheon Intelligence & Space | Raytheon Missiles & Defense | Other | Total |  | Collins Aerospace | Pratt & Whitney | Raytheon Intelligence & Space | Raytheon Missiles & Defense | Other | Total
Products | $ | 4,000 |  | $ | 3,052 |  | $ | 2,510 |  | $ | 3,221 |  | $ | 4 |  | $ | 12,787 |  |  | $ | 3,482 |  | $ | 2,633 |  | $ | 2,604 |  | $ | 3,139 |  | $ | 4 |  | $ | 11,862 |
Services | 1,163 |  | 2,177 |  | 684 |  | 403 |  | — |  | 4,427 |  |  | 983 |  | 1,896 |  | 649 |  | 326 |  | — |  | 3,854 |
Consolidated net sales | 5,163 |  | 5,229 |  | 3,194 |  | 3,624 |  | 4 |  | 17,214 |  |  | 4,465 |  | 4,529 |  | 3,253 |  | 3,465 |  | 4 |  | 15,716 |
Inter-segment sales | 418 |  | 1 |  | 371 |  | 47 |  | (837) |  | — |  |  | 359 |  | — |  | 319 |  | 62 |  | (740) |  | — |
Business segment sales | $ | 5,581 |  | $ | 5,230 |  | $ | 3,565 |  | $ | 3,671 |  | $ | (833) |  | $ | 17,214 |  |  | $ | 4,824 |  | $ | 4,529 |  | $ | 3,572 |  | $ | 3,527 |  | $ | (736) |  | $ | 15,716 |
RIS and RMD segment sales disaggregated by contract type for the quarters ended March 31, 2023 and 2022 are as follows:
| 2023 |  | 2022
(dollars in millions) | Raytheon Intelligence & Space | Raytheon Missiles & Defense |  | Raytheon Intelligence & Space | Raytheon Missiles & Defense
Fixed-price | $ | 1,387 |  | $ | 2,095 |  |  | $ | 1,340 |  | $ | 2,075 |
Cost-type | 1,807 |  | 1,529 |  |  | 1,913 |  | 1,390 |
Consolidated net sales | 3,194 |  | 3,624 |  |  | 3,253 |  | 3,465 |
Inter-segment sales | 371 |  | 47 |  |  | 319 |  | 62 |
Business segment sales | $ | 3,565 |  | $ | 3,671 |  |  | $ | 3,572 |  | $ | 3,527 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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