XML 23 R11.htm IDEA: XBRL DOCUMENT v3.21.2
INFORMATION ON BUSINESS SEGMENTS
 6 Months Ended
Jun. 27, 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 EndedSix Months Ended
June 27,
2021		June 28,
2020		June 27,
2021		June 28,
2020
Net sales
Aeronautics$6,666 $6,503 $13,053 $12,872 
Missiles and Fire Control2,944 2,801 5,693 5,420 
Rotary and Mission Systems4,242 4,039 8,349 7,785 
Space 3,177 2,877 6,192 5,794 
Total net sales$17,029 $16,220 $33,287 $31,871 
Operating profit
Aeronautics$572 $739 $1,265 $1,411 
Missiles and Fire Control401 370 797 766 
Rotary and Mission Systems 458 429 891 805 
Space 335 252 562 533 
Total business segment operating profit1,766 1,790 3,515 3,515 
Unallocated items
FAS/CAS operating adjustment489 469 978 938 
Stock-based compensation(80)(73)(127)(115)
Severance and restructuring charges— — (36)— 
Other, net 17 (100)44 (130)
Total unallocated items426 296 859 693 
Total consolidated operating profit$2,192 $2,086 $4,374 $4,208 
Intersegment sales
Aeronautics$52 $61 $105 $120 
Missiles and Fire Control167 140 296 276 
Rotary and Mission Systems448 502 926 1,000 
Space 92 105 174 213 
Total intersegment sales$759 $808 $1,501 $1,609 
Amortization of purchased intangibles
Aeronautics$(1)$— $(1)$— 
Missiles and Fire Control— — (1)(1)
Rotary and Mission Systems(58)(58)(116)(116)
Space(22)(7)(44)(14)
Total amortization of purchased intangibles$(81)$(65)$(162)$(131)
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 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 and six months ended June 27, 2021 and June 28, 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 EndedSix Months Ended
June 27,
2021		June 28,
2020		June 27,
2021		June 28,
2020
Total FAS income and CAS costs
FAS pension income$67 $29 $133 $59 
Less: CAS pension cost516 495 1,032 989 
Net FAS/CAS pension adjustment$583 $524 $1,165 $1,048 
Service and non-service cost reconciliation
FAS pension service cost$(27)$(26)$(54)$(51)
Less: CAS pension cost516 495 1,032 989 
FAS/CAS operating adjustment489 469 978 938 
Non-operating FAS pension income94 55 187 110 
Net FAS/CAS pension adjustment$583 $524 $1,165 $1,048 
Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):
Quarter Ended June 27, 2021
AeronauticsMFCRMSSpace Total
Net sales
Products$5,583 $2,571 $3,369 $2,735 $14,258 
Services1,083 373 873 442 2,771 
Total net sales$6,666 $2,944 $4,242 $3,177 $17,029 
Net sales by contract type
Fixed-price$4,920 $1,991 $2,802 $645 $10,358 
Cost-reimbursable1,746 953 1,440 2,532 6,671 
Total net sales$6,666 $2,944 $4,242 $3,177 $17,029 
Net sales by customer
U.S. Government$4,367 $2,176 $3,063 $2,719 $12,325 
International (a)
2,283 766 1,117 447 4,613 
U.S. commercial and other16 2 62 11 91 
Total net sales$6,666 $2,944 $4,242 $3,177 $17,029 
Net sales by geographic region
United States$4,383 $2,178 $3,125 $2,730 $12,416 
Asia Pacific914 56 534 2 1,506 
Europe944 232 223 444 1,843 
Middle East311 467 177 1 956 
Other114 11 183 — 308 
Total net sales$6,666 $2,944 $4,242 $3,177 $17,029 
Six Months Ended June 27, 2021
AeronauticsMFCRMSSpace Total
Net sales
Products$11,062 $4,981 $6,669 $5,299 $28,011 
Services1,991 712 1,680 893 5,276 
Total net sales$13,053 $5,693 $8,349 $6,192 $33,287 
Net sales by contract type
Fixed-price$9,654 $3,869 $5,479 $1,259 $20,261 
Cost-reimbursable3,399 1,824 2,870 4,933 13,026 
Total net sales$13,053 $5,693 $8,349 $6,192 $33,287 
Net sales by customer
U.S. Government$8,640 $4,217 $5,873 $5,270 $24,000 
International (a)
4,382 1,469 2,337 904 9,092 
U.S. commercial and other31 7 139 18 195 
Total net sales$13,053 $5,693 $8,349 $6,192 $33,287 
Net sales by geographic region
United States$8,671 $4,224 $6,012 $5,288 $24,195 
Asia Pacific1,807 107 1,184 4 3,102 
Europe1,798 414 424 899 3,535 
Middle East595 925 347 1 1,868 
Other182 23 382 — 587 
Total net sales$13,053 $5,693 $8,349 $6,192 $33,287 
(a)International sales include FMS contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
Quarter Ended June 28, 2020
AeronauticsMFCRMSSpace Total
Net sales
Products$5,474 $2,422 $3,259 $2,417 $13,572 
Services1,029 379 780 460 2,648 
Total net sales$6,503 $2,801 $4,039 $2,877 $16,220 
Net sales by contract type
Fixed-price$4,467 $1,877 $2,639 $483 $9,466 
Cost-reimbursable2,036 924 1,400 2,394 6,754 
Total net sales$6,503 $2,801 $4,039 $2,877 $16,220 
Net sales by customer
U.S. Government$5,352 $2,098 $2,926 $2,533 $12,909 
International (a)
1,132 699 1,011 330 3,172 
U.S. commercial and other19 4 102 14 139 
Total net sales$6,503 $2,801 $4,039 $2,877 $16,220 
Net sales by geographic region
United States$5,371 $2,102 $3,028 $2,547 $13,048 
Asia Pacific353 72 464 16 905 
Europe506 170 170 314 1,160 
Middle East213 442 213 — 868 
Other60 15 164 — 239 
Total net sales$6,503 $2,801 $4,039 $2,877 $16,220 
Six Months Ended June 28, 2020
AeronauticsMFCRMSSpace Total
Net sales
Products$10,929 $4,697 $6,245 $4,867 $26,738 
Services1,943 723 1,540 927 5,133 
Total net sales$12,872 $5,420 $7,785 $5,794 $31,871 
Net sales by contract type
Fixed-price$9,051 $3,595 $5,121 $1,002 $18,769 
Cost-reimbursable3,821 1,825 2,664 4,792 13,102 
Total net sales$12,872 $5,420 $7,785 $5,794 $31,871 
Net sales by customer
U.S. Government$9,385 $4,053 $5,714 $5,016 $24,168 
International (a)
3,453 1,359 1,866 750 7,428 
U.S. commercial and other34 8 205 28 275 
Total net sales$12,872 $5,420 $7,785 $5,794 $31,871 
Net sales by geographic region
United States$9,419 $4,061 $5,919 $5,044 $24,443 
Asia Pacific1,348 147 782 44 2,321 
Europe1,454 338 337 712 2,841 
Middle East541 849 420 (6)1,804 
Other110 25 327 — 462 
Total net sales$12,872 $5,420 $7,785 $5,794 $31,871 
(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 both the quarter and six months ended June 27, 2021 and 28% of our total consolidated net sales for both the quarter and six months ended June 28, 2020.
Total assets for each of our business segments were as follows (in millions):
June 27,
2021		December 31,
2020
Assets
Aeronautics$11,810 $9,903 
Missiles and Fire Control4,985 4,966 
Rotary and Mission Systems17,828 18,035 
Space 6,779 6,451 
Total business segment assets41,402 39,355 
Corporate assets (a)
10,697 11,355 
Total assets$52,099 $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.