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INFORMATION ON BUSINESS SEGMENTS
 3 Months Ended
Mar. 28, 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 Ended
March 28,
2021		March 29,
2020
Net sales
Aeronautics$6,387 $6,369 
Missiles and Fire Control2,749 2,619 
Rotary and Mission Systems4,107 3,746 
Space 3,015 2,917 
Total net sales$16,258 $15,651 
Operating profit
Aeronautics$693 $672 
Missiles and Fire Control396 396 
Rotary and Mission Systems 433 376 
Space 227 281 
Total business segment operating profit1,749 1,725 
Unallocated items
FAS/CAS operating adjustment489 469 
Stock-based compensation(47)(42)
Severance and restructuring charges(36)— 
Other, net 27 (30)
Total unallocated items433 397 
Total consolidated operating profit$2,182 $2,122 
Intersegment sales
Aeronautics$53 $59 
Missiles and Fire Control129 136 
Rotary and Mission Systems478 499 
Space 82 108 
Total intersegment sales$742 $802 
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 and total CAS pension cost. The non-service FAS pension income component is included in other non-operating income, 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, we have a favorable FAS/CAS operating adjustment.
Our total net FAS/CAS pension adjustment for the quarters ended March 28, 2021 and March 29, 2020, including the service and non-service cost components of FAS pension income for our qualified defined benefit pension plans, were as follows (in millions):
Quarters Ended
March 28,
2021		March 29,
2020
Total FAS income and CAS costs
FAS pension income$66 $30 
Less: CAS pension cost516 494 
Net FAS/CAS pension adjustment$582 $524 
Service and non-service cost reconciliation
FAS pension service cost$(27)$(25)
Less: CAS pension cost516 494 
FAS/CAS operating adjustment489 469 
Non-operating FAS pension income93 55 
Net FAS/CAS pension adjustment$582 $524 
Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):
Quarter Ended March 28, 2021
AeronauticsMFCRMSSpace Total
Net sales
Products$5,479 $2,410 $3,300 $2,564 $13,753 
Services908 339 807 451 2,505 
Total net sales$6,387 $2,749 $4,107 $3,015 $16,258 
Net sales by contract type
Fixed-price$4,734 $1,878 $2,677 $614 $9,903 
Cost-reimbursable1,653 871 1,430 2,401 6,355 
Total net sales$6,387 $2,749 $4,107 $3,015 $16,258 
Net sales by customer
U.S. Government$4,273 $2,041 $2,810 $2,551 $11,675 
International (a)
2,099 703 1,220 457 4,479 
U.S. commercial and other15 5 77 7 104 
Total net sales$6,387 $2,749 $4,107 $3,015 $16,258 
Net sales by geographic region
United States$4,288 $2,046 $2,887 $2,558 $11,779 
Asia Pacific893 51 650 2 1,596 
Europe854 182 201 455 1,692 
Middle East284 458 170 — 912 
Other68 12 199 — 279 
Total net sales$6,387 $2,749 $4,107 $3,015 $16,258 


Quarter Ended March 29, 2020
AeronauticsMFCRMSSpace Total
Net sales
Products$5,455 $2,275 $2,986 $2,450 $13,166 
Services914 344 760 467 2,485 
Total net sales$6,369 $2,619 $3,746 $2,917 $15,651 
Net sales by contract type
Fixed-price$4,584 $1,718 $2,482 $519 $9,303 
Cost-reimbursable1,785 901 1,264 2,398 6,348 
Total net sales$6,369 $2,619 $3,746 $2,917 $15,651 
Net sales by customer
U.S. Government$4,033 $1,955 $2,788 $2,483 $11,259 
International (a)
2,321 660 855 420 4,256 
U.S. commercial and other15 4 103 14 136 
Total net sales$6,369 $2,619 $3,746 $2,917 $15,651 
Net sales by geographic region
United States$4,048 $1,959 $2,891 $2,497 $11,395 
Asia Pacific995 75 318 28 1,416 
Europe948 168 167 398 1,681 
Middle East328 407 207 (6)936 
Other50 10 163 — 223 
Total net sales$6,369 $2,619 $3,746 $2,917 $15,651 
(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 27% of our total consolidated net sales for the quarter ended March 28, 2021 and 28% of our total consolidated net sales for the quarter ended March 29, 2020.
Total assets for each of our business segments were as follows (in millions):
March 28,
2021		December 31,
2020
Assets
Aeronautics$10,709 $9,903 
Missiles and Fire Control5,058 4,966 
Rotary and Mission Systems17,885 18,035 
Space 6,850 6,451 
Total business segment assets40,502 39,355 
Corporate assets (a)
10,935 11,355 
Total assets$51,437 $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.