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Information on Business Segments
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Information on Business Segments Information on Business Segments
Overview
We operate in four business segments: Aeronautics, MFC, RMS and Space. We organize our business segments based on the nature of products and services offered. Following is a brief description of the activities of our business segments:

•Aeronautics – Engaged in the research, design, development, manufacture, integration, sustainment, support and upgrade of advanced military aircraft, including combat and air mobility aircraft, unmanned air vehicles and related technologies.
•Missiles and Fire Control – Provides air and missile defense systems; tactical missiles and precision strike weapon systems; logistics; fire control systems; mission operations support, readiness, engineering support and integration services; ground vehicles; and energy management solutions.
•Rotary and Mission Systems – Designs, manufactures, services and supports various military and commercial helicopters, sea- and land-based missile defense systems, radar systems, laser systems, sea- and air-based mission and combat systems, command and control mission solutions, cyber solutions, simulation and training solutions, and services and supports surface ships.
•Space – Engaged in the research and design, development, engineering and production of satellites, space transportation systems, and strategic, advanced strike, and defensive systems. Space provides network-enabled situational awareness and integrates complex space and ground global systems to help our customers gather, analyze and securely distribute critical intelligence data. Space is also responsible for various classified systems and services in support of vital national security systems. Operating profit for our Space business segment also includes our share of earnings for our 50% ownership interest in ULA, which provides expendable launch services to the U.S. Government and commercial customers. Our investment in ULA totaled $551 million and $567 million at December 31, 2024 and 2023.
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. Our Chief Executive Officer (CEO) and Chief Operating Officer (COO) serve as our Chief Operating Decision Makers (CODMs) and are responsible for reviewing segment performance and making decisions regarding resource allocation. Our CODMs evaluate each segment’s performance based on metrics such as net sales, operating profit, and other key financial indicators, guiding strategic decisions to align with company-wide goals. 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
Sales, cost of sales and operating profit for each of our business segments were as follows (in millions):
202420232022
Net sales
Aeronautics$28,618 $27,474 $26,987 
Missiles and Fire Control12,682 11,253 11,317 
Rotary and Mission Systems17,264 16,239 16,148 
Space12,479 12,605 11,532 
Total net sales$71,043 $67,571 $65,984 
Cost of sales
Aeronautics$26,093 $24,649 $24,110 
Missiles and Fire Control12,277 9,712 9,676 
Rotary and Mission Systems15,391 14,399 14,258 
Space11,308 11,473 10,565 
Total cost of sales$65,069 $60,233 $58,609 
Operating profit
Aeronautics$2,523 $2,825 $2,867 
Missiles and Fire Control413 1,541 1,637 
Rotary and Mission Systems1,921 1,865 1,906 
Space1,226 1,158 1,057 
Total business segment operating profit6,083 7,389 7,467 
Unallocated items
FAS/CAS pension operating adjustment1,624 1,660 1,709 
Intangible asset amortization expense(247)(247)(248)
Impairment and severance charges (a)
(87)(92)(100)
Other, net (360)(203)(480)
Total unallocated, net930 1,118 881 
Total consolidated operating profit$7,013 $8,507 $8,348 
(a)See “Note 16 – Impairment and Severance Charges” included in our Notes to Consolidated Financial Statements for additional information.

Unallocated Items
Business segment operating profit excludes the FAS/CAS pension operating adjustment discussed below, a portion of corporate costs not considered allowable or allocable to contracts with the U.S. Government under the applicable CAS or 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, 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 1 – Organization and Significant Accounting Policies” (under the
caption “Use of Estimates”) 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 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 segments’ 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. The non-service FAS pension income components are included in non-service FAS pension income 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 (expense), we have a favorable FAS/CAS pension operating adjustment.
Intersegment Sales
Sales between our business segments are excluded from our consolidated and segment operating results as these activities are eliminated in consolidation. Intersegment sales for each of our business segments were as follows (in millions):
202420232022
Intersegment sales
Aeronautics$377 $303 $249 
Missiles and Fire Control804 688 627 
Rotary and Mission Systems2,320 2,125 1,930 
Space 392 358 381 
Total intersegment sales$3,893 $3,474 $3,187 
Disaggregation of Net Sales
Net sales by products and services, contract type, customer category and geographic region for each of our business segments were as follows (in millions):
2024
AeronauticsMFCRMSSpace Total
Net sales
Products$23,598 $11,275 $14,005 $10,399 $59,277 
Services5,020 1,407 3,259 2,080 11,766 
Total net sales$28,618 $12,682 $17,264 $12,479 $71,043 
Net sales by contract type
Fixed-price$19,603 $8,774 $10,870 $3,481 $42,728 
Cost-reimbursable9,015 3,908 6,394 8,998 28,315 
Total net sales$28,618 $12,682 $17,264 $12,479 $71,043 
Net sales by customer
U.S. Government$19,314 $9,043 $11,469 $12,218 $52,044 
International (a)
9,182 3,629 5,463 241 18,515 
U.S. commercial and other122 10 332 20 484 
Total net sales$28,618 $12,682 $17,264 $12,479 $71,043 
Net sales by geographic region
United States$19,436 $9,053 $11,801 $12,238 $52,528 
Europe5,071 1,327 1,243 75 7,716 
Asia Pacific2,763 763 2,556 159 6,241 
Middle East808 1,473 787 7 3,075 
Other540 66 877 — 1,483 
Total net sales$28,618 $12,682 $17,264 $12,479 $71,043 
2023
AeronauticsMFCRMSSpace Total
Net sales
Products$22,758 $9,919 $12,913 $10,675 $56,265 
Services4,716 1,334 3,326 1,930 11,306 
Total net sales$27,474 $11,253 $16,239 $12,605 $67,571 
Net sales by contract type
Fixed-price$18,664 $7,661 $10,403 $3,276 $40,004 
Cost-reimbursable8,810 3,592 5,836 9,329 27,567 
Total net sales$27,474 $11,253 $16,239 $12,605 $67,571 
Net sales by customer
U.S. Government$18,311 $7,769 $10,961 $12,382 $49,423 
International (a)
9,034 3,473 4,983 154 17,644 
U.S. commercial and other129 11 295 69 504 
Total net sales$27,474 $11,253 $16,239 $12,605 $67,571 
Net sales by geographic region
United States$18,440 $7,780 $11,256 $12,451 $49,927 
Europe4,898 786 1,265 62 7,011 
Asia Pacific2,800 687 2,275 89 5,851 
Middle East987 1,844 721 2 3,554 
Other349 156 722 1 1,228 
Total net sales$27,474 $11,253 $16,239 $12,605 $67,571 
2022
AeronauticsMFCRMSSpace Total
Net sales
Products$22,870 $10,048 $12,811 $9,737 $55,466 
Services4,117 1,269 3,337 1,795 10,518 
Total net sales$26,987 $11,317 $16,148 $11,532 $65,984 
Net sales by contract type
Fixed-price$19,431 $8,014 $10,460 $3,064 $40,969 
Cost-reimbursable7,556 3,303 5,688 8,468 25,015 
Total net sales$26,987 $11,317 $16,148 $11,532 $65,984 
Net sales by customer
U.S. Government$18,026 $7,814 $11,331 $11,344 $48,515 
International (a)
8,811 3,496 4,470 154 16,931 
U.S. commercial and other150 7 347 34 538 
Total net sales$26,987 $11,317 $16,148 $11,532 $65,984 
Net sales by geographic region
United States$18,176 $7,821 $11,678 $11,378 $49,053 
Europe4,303 1,020 857 87 6,267 
Asia Pacific2,970 461 1,994 54 5,479 
Middle East1,103 1,858 823 12 3,796 
Other435 157 796 1 1,389 
Total net sales$26,987 $11,317 $16,148 $11,532 $65,984 
(a)International sales include FMS contracted through the U.S. Government, direct commercial sales with international governments and commercial and other sales to 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 26% of our consolidated net sales during both 2024 and 2023 and 27% during 2022.
Capital Expenditures and PP&E Depreciation and Software Amortization
202420232022
Capital expenditures
Aeronautics$593 $535 $461 
Missiles and Fire Control265 252 253 
Rotary and Mission Systems230 220 266 
Space366 455 391 
Total business segment capital expenditures1,454 1,462 1,371 
Corporate activities231 229 299 
Total capital expenditures$1,685 $1,691 $1,670 
PP&E depreciation and software amortization
Aeronautics$452 $416 $383 
Missiles and Fire Control183 175 160 
Rotary and Mission Systems227 220 245 
Space 270 221 201 
Total business segment depreciation and amortization1,132 1,032 989 
Corporate activities (a)
427 398 415 
Total depreciation and amortization $1,559 $1,430 $1,404 
(a)Includes amortization of purchased intangibles.
Assets
Total assets for each of our business segments were as follows (in millions):
20242023
Assets
Aeronautics$13,223 $13,167 
Missiles and Fire Control5,952 5,703 
Rotary and Mission Systems17,025 17,521 
Space 7,388 6,560 
Total business segment assets43,588 42,951 
Corporate assets (a)
12,029 9,505 
Total assets$55,617 $52,456 
(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.