SEGMENT INFORMATION

The company is aligned in four operating sectors, which also comprise our reportable segments: Aerospace Systems, Innovation Systems, Mission Systems and Technology Services.

The following table presents sales and operating income by segment:



	Three Months Ended March 31
$ in millions	2019			2018
Sales
Aerospace Systems	$	3,496		$	3,280
Innovation Systems	1,438			—
Mission Systems	2,886			2,883
Technology Services	977			1,144
Intersegment eliminations	(608		)	(572		)
Total sales	8,189			6,735
Operating income
Aerospace Systems	382			341
Innovation Systems	167			—
Mission Systems	383			371
Technology Services	102			122
Intersegment eliminations	(67		)	(72		)
Total segment operating income	967			762
Net FAS (service)/CAS pension adjustment	108			127
Unallocated corporate expense	(139		)	(41		)
Total operating income	$	936		$	848

Net FAS (Service)/CAS Pension Adjustment

For financial statement purposes, we account for our employee pension plans in accordance with FAS. However, the cost of these plans is charged to our contracts in accordance with the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS). The net FAS (service)/CAS pension adjustment reflects the difference between CAS pension expense included as cost in segment operating income and the service cost component of FAS expense included in total operating income.

Unallocated Corporate Expense

Unallocated corporate expense includes the portion of corporate costs not considered allowable or allocable under applicable CAS or FAR, and therefore not allocated to the segments, such as a portion of management and administration, legal, environmental, compensation, retiree benefits and other corporate unallowable costs. Unallocated corporate expense also includes costs not considered part of management’s evaluation of segment operating performance, such as amortization of purchased intangible assets and the additional depreciation expense related to the step-up in fair value of property, plant and equipment acquired through business combinations.

Disaggregation of Revenue



Sales by Customer Type	Three Months Ended March 31
	2019				2018
$ in millions	$		%⁽³⁾		$		%⁽³⁾
Aerospace Systems
U.S. government ⁽¹⁾	$	3,022	86	%	$	2,908	89	%
International ⁽²⁾	394		11	%	271		8	%
Other customers	34		1	%	42		1	%
Intersegment sales	46		2	%	59		2	%
Aerospace Systems sales	3,496		100	%	3,280		100	%
Innovation Systems
U.S. government ⁽¹⁾	1,015		71	%	—		—
International ⁽²⁾	247		17	%	—		—
Other customers	114		8	%	—		—
Intersegment sales	62		4	%	—		—
Innovation Systems sales	1,438		100	%	—		—
Mission Systems
U.S. government ⁽¹⁾	2,167		75	%	2,190		76	%
International ⁽²⁾	367		13	%	379		13	%
Other customers	34		1	%	30		1	%
Intersegment sales	318		11	%	284		10	%
Mission Systems sales	2,886		100	%	2,883		100	%
Technology Services
U.S. government ⁽¹⁾	553		57	%	602		53	%
International ⁽²⁾	209		21	%	220		19	%
Other customers	33		3	%	93		8	%
Intersegment sales	182		19	%	229		20	%
Technology Services sales	977		100	%	1,144		100	%
Total
U.S. government ⁽¹⁾	6,757		83	%	5,700		85	%
International ⁽²⁾	1,217		15	%	870		13	%
Other customers	215		2	%	165		2	%
Total Sales	$	8,189	100	%	$	6,735	100	%


⁽¹⁾	Sales to the U.S. government include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is the U.S. government. Each of the company's segments derives substantial revenue from the U.S. government.

⁽²⁾ International sales include sales from contracts for which we are the prime contractor, as well as those for which we are a subcontractor and the ultimate customer is an international customer. These sales include foreign military sales contracted through the U.S. government.

⁽³⁾ Percentages calculated based on total segment sales.



Sales by Contract Type	Three Months Ended March 31
	2019				2018
$ in millions	$		%⁽¹⁾		$		%⁽¹⁾
Aerospace Systems
Cost-type	$	2,002	58	%	$	1,902	59	%
Fixed-price	1,448		42	%	1,319		41	%
Intersegment sales	46				59
Aerospace Systems sales	3,496				3,280
Innovation Systems
Cost-type	408		30	%	—		—
Fixed-price	968		70	%	—		—
Intersegment sales	62				—
Innovation Systems sales	1,438				—
Mission Systems
Cost-type	1,274		50	%	1,279		49	%
Fixed-price	1,294		50	%	1,320		51	%
Intersegment sales	318				284
Mission Systems sales	2,886				2,883
Technology Services
Cost-type	392		49	%	437		48	%
Fixed-price	403		51	%	478		52	%
Intersegment sales	182				229
Technology Services sales	977				1,144
Total
Cost-type	4,076		50	%	3,618		54	%
Fixed-price	4,113		50	%	3,117		46	%
Total Sales	$	8,189			$	6,735


⁽¹⁾	Percentages calculated based on external customer sales.



Sales by Geographic Region	Three Months Ended March 31
	2019				2018
$ in millions	$		%⁽²⁾		$		%⁽²⁾
Aerospace Systems
United States	$	3,056	89	%	$	2,950	92	%
Asia/Pacific	239		7	%	129		4	%
All other ⁽¹⁾	155		4	%	142		4	%
Intersegment sales	46				59
Aerospace Systems sales	3,496				3,280
Innovation Systems
United States	1,129		82	%	—		—
Asia/Pacific	45		3	%	—		—
All other ⁽¹⁾	202		15	%	—		—
Intersegment sales	62				—
Innovation Systems sales	1,438				—
Mission Systems
United States	2,201		86	%	2,220		85	%
Asia/Pacific	146		5	%	153		6	%
All other ⁽¹⁾	221		9	%	226		9	%
Intersegment sales	318				284
Mission Systems sales	2,886				2,883
Technology Services
United States	586		74	%	695		76	%
Asia/Pacific	38		4	%	32		3	%
All other ⁽¹⁾	171		22	%	188		21	%
Intersegment sales	182				229
Technology Services sales	977				1,144
Total
United States	6,972		85	%	5,865		87	%
Asia/Pacific	468		6	%	314		5	%
All other ⁽¹⁾	749		9	%	556		8	%
Total Sales	$	8,189			$	6,735


⁽¹⁾	All other is principally comprised of Europe and the Middle East.


⁽²⁾	Percentages calculated based on external customer sales.