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Segment Information
 12 Months Ended
Dec. 31, 2020
Segment Reporting [Abstract]  
Segment Information
16. SEGMENT INFORMATION
The company is aligned in four operating sectors, which also comprise our reportable segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems.
As discussed in Note 1, beginning in the second quarter of 2020, the company no longer considers certain unallowable costs and environmental matters that are principally managed at the corporate office as part of management’s evaluation of segment operating performance. As a result, certain unallowable compensation and other costs, which were previously included in segment operating results, are now reported in Unallocated corporate expense within operating income. In addition, certain accrued and deferred costs, as well as unallowable costs, if any, associated with certain environmental matters that were previously reflected in segment assets and operating results are now reflected in corporate assets and Unallocated corporate expense within operating income. This change to operating income has been applied retrospectively in the amounts below. See Part II, Item 5 in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 for further information regarding the impact of this change on the company’s prior period segment information.
The following table presents sales and operating income by segment:
 Year Ended December 31
$ in millions202020192018
Sales
Aeronautics Systems$12,169 $11,116 $10,293 
Defense Systems7,543 7,495 6,612 
Mission Systems10,080 9,410 8,949 
Space Systems8,744 7,425 5,845 
Intersegment eliminations(1,737)(1,605)(1,604)
Total sales36,799 33,841 30,095 
Operating income
Aeronautics Systems1,206 1,188 1,128 
Defense Systems846 793 697 
Mission Systems1,459 1,408 1,245 
Space Systems893 794 644 
Intersegment eliminations(216)(205)(200)
Total segment operating income4,188 3,978 3,514 
Net FAS (service)/CAS pension adjustment418 465 613 
Unallocated corporate expense(541)(474)(347)
Total operating income$4,065 $3,969 $3,780 
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 FAR and the related 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, advertising 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, as well as certain compensation and other costs.
Disaggregation of Revenue
Sales by Customer TypeYear Ended December 31
202020192018
$ in millions$
%(3)
$
%(3)
$
%(3)
Aeronautics Systems
U.S. government (1)
$10,411 86 %$9,258 83 %$8,732 85 %
International (2)
1,595 13 %1,688 15 %1,402 13 %
Other customers41 — %67 1 %86 1 %
Intersegment sales122 1 %103 1 %73 1 %
Aeronautics Systems sales12,169 100 %11,116 100 %10,293 100 %
Defense Systems
U.S. government (1)
5,103 68 %4,952 66 %4,132 62 %
International (2)
1,317 17 %1,442 19 %1,249 19 %
Other customers395 5 %410 6 %481 7 %
Intersegment sales728 10 %691 9 %750 12 %
Defense Systems sales7,543 100 %7,495 100 %6,612 100 %
Mission Systems
U.S. government (1)
7,279 72 %6,765 72 %6,501 73 %
International (2)
1,945 19 %1,839 19 %1,653 18 %
Other customers77 1 %78 1 %77 1 %
Intersegment sales779 8 %728 8 %718 8 %
Mission Systems sales10,080 100 %9,410 100 %8,949 100 %
Space Systems
U.S. government (1)
8,110 93 %6,959 94 %5,431 93 %
International (2)
331 4 %185 2 %130 2 %
Other customers195 2 %198 3 %221 4 %
Intersegment sales108 1 %83 1 %63 1 %
Space Systems sales8,744 100 %7,425 100 %5,845 100 %
Total
U.S. government (1)
30,903 84 %27,934 83 %24,796 82 %
International (2)
5,188 14 %5,154 15 %4,434 15 %
Other customers708 2 %753 2 %865 3 %
Total Sales$36,799 100 %$33,841 100 %$30,095 100 %
(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 TypeYear Ended December 31
202020192018
$ in millions$
%(1)
$
%(1)
$
%(1)
Aeronautics Systems      
Cost-type$6,142 51 %$5,299 48 %$5,066 50 %
Fixed-price5,905 49 %5,714 52 %5,154 50 %
Intersegment sales122 103 73 
Aeronautics Systems sales12,169 11,116 10,293 
Defense Systems
Cost-type2,345 34 %2,509 37 %2,386 41 %
Fixed-price4,470 66 %4,295 63 %3,476 59 %
Intersegment sales728 691 750 
Defense Systems sales7,543 7,495 6,612 
Mission Systems
Cost-type3,582 39 %3,335 38 %3,099 38 %
Fixed-price5,719 61 %5,347 62 %5,132 62 %
Intersegment sales779 728 718 
Mission Systems sales10,080 9,410 8,949 
Space Systems
Cost-type6,369 74 %5,336 73 %4,453 77 %
Fixed-price2,267 26 %2,006 27 %1,329 23 %
Intersegment sales108 83 63 
Space Systems sales8,744 7,425 5,845 
Total
Cost-type18,438 50 %16,479 49 %15,004 50 %
Fixed-price18,361 50 %17,362 51 %15,091 50 %
Total Sales$36,799 $33,841 $30,095 
(1)Percentages calculated based on external customer sales.
Sales by Geographic RegionYear Ended December 31
202020192018
$ in millions$
%(2)
$
%(2)
$
%(2)
Aeronautics Systems      
United States$10,452 87 %$9,325 85 %$8,818 86 %
Asia/Pacific841 7 %810 7 %677 7 %
Europe574 5 %587 5 %536 5 %
All other (1)
180 1 %291 3 %189 2 %
Intersegment sales122 103 73 
Aeronautics Systems sales12,169 11,116 10,293 
Defense Systems
United States5,498 81 %5,362 79 %4,613 79 %
Asia/Pacific402 6 %369 5 %365 6 %
Europe315 4 %249 4 %204 3 %
All other (1)
600 9 %824 12 %680 12 %
Intersegment sales728 691 750 
Defense Systems sales7,543 7,495 6,612 
Mission Systems
United States7,356 79 %6,843 79 %6,578 80 %
Asia/Pacific707 8 %637 7 %592 7 %
Europe893 9 %850 10 %682 8 %
All other (1)
345 4 %352 4 %379 5 %
Intersegment sales779 728 718 
Mission Systems sales10,080 9,410 8,949 
Space Systems
United States8,305 96 %7,157 98 %5,652 98 %
Asia/Pacific18 — %20 — %32 — %
Europe300 4 %147 2 %92 2 %
All other (1)
13 — %18 — %6 — %
Intersegment sales108 83 63 
Space Systems sales8,744 7,425 5,845 
Total
United States31,611 86 %28,687 85 %25,661 85 %
Asia/Pacific1,968 5 %1,836 6 %1,666 6 %
Europe2,082 6 %1,833 5 %1,514 5 %
All other (1)
1,138 3 %1,485 4 %1,254 4 %
Total Sales$36,799 $33,841 $30,095 
(1)All other is principally comprised of the Middle East.
(2)Percentages calculated based on external customer sales.
Intersegment Sales and Operating Income
Sales between segments are recorded at values that include intercompany operating income for the performing segment based on that segment’s estimated average operating margin rate for external sales. Such intercompany operating income is eliminated in consolidation, so that the company’s total sales and total operating income reflect only those transactions with external customers. See Note 1 for additional information.
The following table presents intersegment sales and operating income before eliminations:
 Year Ended December 31
$ in millions202020192018
 SalesOperating
Income		SalesOperating
Income		SalesOperating
Income
Intersegment sales and operating income
Aeronautics Systems$122 $11 $103 $10 $73 $8 
Defense Systems728 76 691 74 750 74 
Mission Systems779 116 728 113 718 115 
Space Systems108 13 83 8 63 3 
Total$1,737 $216 $1,605 $205 $1,604 $200 
Assets
Substantially all of the company’s operating assets are located in the U.S. The following table presents assets by segment:
December 31
$ in millions20202019
Assets
Aeronautics Systems$8,997 $9,104 
Defense Systems7,352 7,420 
Mission Systems10,029 9,934 
Space Systems10,028 10,595 
Corporate assets(1)
8,063 4,036 
Total assets$44,469 $41,089 
(1)Corporate assets principally consist of cash and cash equivalents, refundable taxes, deferred tax assets, property, plant and equipment, marketable securities and deferred costs associated with certain environmental matters. Beginning in 2020, certain additional environmental matters that were previously reflected in segment assets are now reflected in corporate assets.
Capital Expenditures and Depreciation and Amortization
The following table presents capital expenditures and depreciation and amortization by segment:
Year Ended December 31
$ in millions202020192018202020192018
 Capital Expenditures
Depreciation and Amortization(1)
Aeronautics Systems$540 $528 $657 $238 $224 $190 
Defense Systems78 71 66 48 44 65 
Mission Systems302 229 197 150 133 121 
Space Systems440 352 226 211 189 130 
Corporate60 84 103 358 428 294 
Total$1,420 $1,264 $1,249 $1,005 $1,018 $800 
(1)Corporate amounts include the 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 as they are not considered part of management’s evaluation of segment operating performance.