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Business Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2019

Segment financial results were as follows:



Total Net Sales (in millions)	2019			2018			2017
Integrated Defense Systems	$	6,927		$	6,180		$	5,804
Intelligence, Information and Services	7,151			6,722			6,177
Missile Systems	8,726			8,298			7,787
Space and Airborne Systems	7,427			6,748			6,430
Forcepoint	658			634			608
Eliminations	(1,712		)	(1,514		)	(1,423		)
Total business segment sales	29,177			27,068			25,383
Acquisition Accounting Adjustments	(1		)	(10		)	(35		)
Total	$	29,176		$	27,058		$	25,348



Intersegment Sales (in millions)	2019		2018		2017
Integrated Defense Systems	$	87	$	65	$	64
Intelligence, Information and Services	700		666		666
Missile Systems	210		161		132
Space and Airborne Systems	686		596		540
Forcepoint	29		26		21
Total	$	1,712	$	1,514	$	1,423



Operating Income (in millions)	2019			2018			2017
Integrated Defense Systems	$	1,111		$	1,023		$	935
Intelligence, Information and Services⁽¹⁾	658			538			455
Missile Systems	959			973			1,010
Space and Airborne Systems	991			884			862
Forcepoint	8			5			33
Eliminations	(184		)	(170		)	(148		)
Total business segment operating income	3,543			3,253			3,147
Acquisition Accounting Adjustments	(112		)	(126		)	(160		)
FAS/CAS Operating Adjustment	1,454			1,428			1,303
Corporate and Reclassification⁽¹⁾⁽²⁾	(111		)	(17		)	(59		)
Total	$	4,774		$	4,538		$	4,231

(1)

In the third quarter of 2019, the Company revalued an investment in equity securities of a non-publicly traded company due to the availability of updated pricing data from a recent transaction and recognized a non-cash gain of $14 million. The gain is included in IIS’s operating income in 2019 as it is part of management’s evaluation of the segment’s performance and reclassified to other (income) expense, net on our consolidated statements of operations for financial reporting purposes as the gain is not related to our core operations. No amounts were recorded in 2018 or 2017.


(2)	In the fourth quarter of 2019, we were selected by the U.S. Army for the Lower Tier Air and Missile Defense Sensor (LTAMDS). The net expenses related to the LTAMDS project of $13 million in 2019 are included in Corporate operating income as they are not included in management’s evaluation of business segment results. No amounts were recorded in 2018 or 2017.



Intersegment Operating Income (in millions)	2019		2018		2017
Integrated Defense Systems	$	8	$	6	$	5
Intelligence, Information and Services	68		68		64
Missile Systems	20		15		13
Space and Airborne Systems	67		60		51
Forcepoint	21		21		15
Total	$	184	$	170	$	148

Components of FAS/CAS Operating Adjustment

The pension and PRB components of the FAS/CAS Operating Adjustment were as follows:



(In millions)	2019		2018		2017
FAS/CAS Pension Operating Adjustment	$	1,439	$	1,415	$	1,291
FAS/CAS PRB Operating Adjustment	15		13		12
FAS/CAS Operating Adjustment	$	1,454	$	1,428	$	1,303

Schedules of Capital Expenditures and Depreciation and Amortization



Capital Expenditures (in millions)	2019		2018		2017
Integrated Defense Systems	$	309	$	242	$	200
Intelligence, Information and Services	50		46		22
Missile Systems	232		337		221
Space and Airborne Systems	304		136		158
Forcepoint	17		13		14
Corporate	28		24		19
Total⁽¹⁾	$	940	$	798	$	634


(1)	Total capital expenditures may not agree to our consolidated statements of cash flows due to non-cash transactions.



Depreciation and Amortization (in millions)	2019		2018		2017
Integrated Defense Systems	$	118	$	98	$	98
Intelligence, Information and Services	49		51		50
Missile Systems	129		98		84
Space and Airborne Systems	132		140		132
Forcepoint	14		17		17
Acquisition Accounting Adjustments	111		116		125
Corporate	52		48		44
Total	$	605	$	568	$	550

Components of Identifiable Assets



Total Assets (in millions)	2019		2018⁽²⁾
Integrated Defense Systems⁽¹⁾	$	5,103	$	4,826
Intelligence, Information and Services⁽¹⁾	4,291		4,238
Missile Systems⁽¹⁾	8,408		8,229
Space and Airborne Systems⁽¹⁾	6,979		6,740
Forcepoint⁽¹⁾	2,424		2,529
Corporate	7,361		6,108
Total	$	34,566	$	32,670


(1)	Total assets includes intangible assets. Related amortization expense is included in Acquisition Accounting Adjustments.

(2)

Amounts have been recast to reflect the adoption of ASU 2016-02, Leases (Topic 842). Operating lease right-of-use assets are all recorded at Corporate.

Schedule of Property Plant and Equipment, Net, by Geographic Areas



Property, Plant and Equipment, Net, by Geographic Area (in millions)	2019		2018
United States	$	3,251	$	2,751
All other (principally Europe)	102		89
Total	$	3,353	$	2,840

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by geographic location, customer-type and contract-type for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below.



	2019
Disaggregation of Total Net Sales (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government⁽¹⁾
Fixed-price contracts	$	897	$	1,035	$	3,175	$	2,696	$	179	$	—		$	7,982
Cost-type contracts	1,854		4,461		2,986		2,812		16		—			12,129
Direct commercial sales and other U.S. sales
Fixed-price contracts	6		122		33		121		175		—			457
Cost-type contracts	—		22		—		3		1		—			26
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	174		245		487		163		—		—			1,069
Cost-type contracts	70		37		58		33		—		—			198
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	719		181		169		238		67		—			1,374
Cost-type contracts	78		—		2		—		—		—			80
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	740		12		594		322		—		—			1,668
Cost-type contracts	290		21		11		84		—		—			406
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	1,221		39		592		43		34		—			1,929
Cost-type contracts	—		—		92		—		—		—			92
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	555		1		138		68		—		—			762
Cost-type contracts	50		—		37		8		—		—			95
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	176		230		139		150		156		—			851
Cost-type contracts	10		45		3		—		—		—			58
Total net sales	6,840		6,451		8,516		6,741		628		—			29,176
Intersegment sales	87		700		210		686		29		(1,712		)	—
Acquisition Accounting Adjustments	—		—		—		—		1		(1		)	—
Reconciliation to business segment sales	$	6,927	$	7,151	$	8,726	$	7,427	$	658	$	(1,713	)	$	29,176


(1)	Excludes foreign military sales through the U.S. government.



	2019
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	2,757	$	5,640	$	6,194	$	5,632	$	371	$	20,594
Asia/Pacific	1,041		463		716		434		67		2,721
Middle East and North Africa	2,251		72		1,289		449		34		4,095
All other (principally Europe)	791		276		317		226		156		1,766
Total net sales	$	6,840	$	6,451	$	8,516	$	6,741	$	628	$	29,176



	2019
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government⁽¹⁾	$	2,751	$	5,496	$	6,161	$	5,508	$	195	$	20,111
U.S. direct commercial sales and other U.S. sales	6		144		33		124		176		483
Foreign military sales through the U.S. government	1,879		316		1,325		678		—		4,198
Foreign direct commercial sales and other foreign sales⁽¹⁾	2,204		495		997		431		257		4,384
Total net sales	$	6,840	$	6,451	$	8,516	$	6,741	$	628	$	29,176


(1)	Excludes foreign military sales through the U.S. government.



	2019
Total Net Sales by Contract-Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	4,488	$	1,865	$	5,327	$	3,801	$	611	$	16,092
Cost-type contracts	2,352		4,586		3,189		2,940		17		13,084
Total net sales	$	6,840	$	6,451	$	8,516	$	6,741	$	628	$	29,176



	2018
Disaggregation of Total Net Sales (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government⁽¹⁾
Fixed-price contracts	$	818	$	1,008	$	2,953	$	2,480	$	118	$	—		$	7,377
Cost-type contracts	1,706		4,110		2,675		2,565		14		—			11,070
Direct commercial sales and other U.S. sales
Fixed-price contracts	5		118		41		111		209		—			484
Cost-type contracts	1		18		—		3		—		—			22
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	189		243		450		152		—		—			1,034
Cost-type contracts	79		45		61		22		—		—			207
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	711		198		173		211		70		—			1,363
Cost-type contracts	117		—		1		1		—		—			119
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	849		20		452		237		—		—			1,558
Cost-type contracts	170		5		23		69		—		—			267
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	1,137		15		785		95		33		—			2,065
Cost-type contracts	—		—		96		—		—		—			96
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	151		2		124		56		—		—			333
Cost-type contracts	27		—		70		6		—		—			103
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	145		230		231		144		154		—			904
Cost-type contracts	10		44		2		—		—		—			56
Total net sales	6,115		6,056		8,137		6,152		598		—			27,058
Intersegment sales	65		666		161		596		26		(1,514		)	—
Acquisition Accounting Adjustments	—		—		—		—		10		(10		)	—
Reconciliation to business segment sales	$	6,180	$	6,722	$	8,298	$	6,748	$	634	$	(1,524	)	$	27,058


(1)	Excludes foreign military sales through the U.S. government.



	2018
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	2,530	$	5,254	$	5,669	$	5,159	$	341	$	18,953
Asia/Pacific	1,096		486		685		386		70		2,723
Middle East and North Africa	2,156		40		1,356		401		33		3,986
All other (principally Europe)	333		276		427		206		154		1,396
Total net sales	$	6,115	$	6,056	$	8,137	$	6,152	$	598	$	27,058



	2018
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government⁽¹⁾	$	2,524	$	5,118	$	5,628	$	5,045	$	132	$	18,447
U.S. direct commercial sales and other U.S. sales	6		136		41		114		209		506
Foreign military sales through the U.S. government	1,465		315		1,180		542		—		3,502
Foreign direct commercial sales and other foreign sales⁽¹⁾	2,120		487		1,288		451		257		4,603
Total net sales	$	6,115	$	6,056	$	8,137	$	6,152	$	598	$	27,058


(1)	Excludes foreign military sales through the U.S. government.



	2018
Total Net Sales by Contract-Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	4,005	$	1,834	$	5,209	$	3,486	$	584	$	15,118
Cost-type contracts	2,110		4,222		2,928		2,666		14		11,940
Total net sales	$	6,115	$	6,056	$	8,137	$	6,152	$	598	$	27,058



	2017
Disaggregation of Total Net Sales (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Other			Total
United States
Sales to the U.S. government⁽¹⁾
Fixed-price contracts	$	812	$	1,090	$	2,914	$	2,233	$	111	$	—		$	7,160
Cost-type contracts	1,507		3,576		1,991		2,614		12		—			9,700
Direct commercial sales and other U.S. sales
Fixed-price contracts	6		130		1		51		202		—			390
Cost-type contracts	1		9		—		2		1		—			13
Asia/Pacific
Foreign military sales through the U.S. government
Fixed-price contracts	167		181		410		113		—		—			871
Cost-type contracts	138		51		64		9		—		—			262
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	596		193		309		284		59		—			1,441
Cost-type contracts	145		—		1		1		—		—			147
Middle East and North Africa
Foreign military sales through the U.S. government
Fixed-price contracts	1,066		18		371		191		—		—			1,646
Cost-type contracts	154		1		22		30		—		—			207
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	979		18		1,013		175		25		—			2,210
Cost-type contracts	—		—		—		—		—		—			—
All other (principally Europe)
Foreign military sales through the U.S. government
Fixed-price contracts	7		3		157		51		—		—			218
Cost-type contracts	22		2		78		5		—		—			107
Direct commercial sales and other foreign sales⁽¹⁾
Fixed-price contracts	128		209		320		131		142		—			930
Cost-type contracts	12		30		4		—		—		—			46
Total net sales	5,740		5,511		7,655		5,890		552		—			25,348
Intersegment sales	64		666		132		540		21		(1,423		)	—
Acquisition Accounting Adjustments	—		—		—		—		35		(35		)	—
Reconciliation to business segment sales	$	5,804	$	6,177	$	7,787	$	6,430	$	608	$	(1,458	)	$	25,348


(1)	Excludes foreign military sales through the U.S. government.



	2017
Total Net Sales by Geographic Area (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
United States	$	2,326	$	4,805	$	4,906	$	4,900	$	326	$	17,263
Asia/Pacific	1,046		425		784		407		59		2,721
Middle East and North Africa	2,199		37		1,406		396		25		4,063
All other (principally Europe)	169		244		559		187		142		1,301
Total net sales	$	5,740	$	5,511	$	7,655	$	5,890	$	552	$	25,348



	2017
Total Net Sales by Major Customer (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Sales to the U.S. government⁽¹⁾	$	2,319	$	4,666	$	4,905	$	4,847	$	123	$	16,860
U.S. direct commercial sales and other U.S. sales	7		139		1		53		203		403
Foreign military sales through the U.S. government	1,554		256		1,102		399		—		3,311
Foreign direct commercial sales and other foreign sales⁽¹⁾	1,860		450		1,647		591		226		4,774
Total net sales	$	5,740	$	5,511	$	7,655	$	5,890	$	552	$	25,348


(1)	Excludes foreign military sales through the U.S. government.



	2017
Total Net Sales by Contract-Type (in millions)	Integrated Defense Systems		Intelligence, Information and Services		Missile Systems		Space and Airborne Systems		Forcepoint		Total
Fixed-price contracts	$	3,761	$	1,842	$	5,495	$	3,229	$	539	$	14,866
Cost-type contracts	1,979		3,669		2,160		2,661		13		10,482
Total net sales	$	5,740	$	5,511	$	7,655	$	5,890	$	552	$	25,348