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Segment Information
 12 Months Ended
Dec. 31, 2022
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.
The following table presents sales and operating income by segment:
 Year Ended December 31
$ in millions202220212020
Sales
Aeronautics Systems$10,531 $11,259 $12,169 
Defense Systems5,579 5,776 7,543 
Mission Systems10,396 10,134 10,080 
Space Systems12,275 10,608 8,744 
Intersegment eliminations(2,179)(2,110)(1,737)
Total sales36,602 35,667 36,799 
Operating income
Aeronautics Systems1,116 1,093 1,206 
Defense Systems664 696 846 
Mission Systems1,618 1,579 1,459 
Space Systems1,158 1,121 893 
Intersegment eliminations(303)(272)(216)
Total segment operating income4,253 4,217 4,188 
FAS/CAS operating adjustment(200)130 418 
Unallocated corporate (expense) income(452)1,304 (541)
Total operating income$3,601 $5,651 $4,065 
FAS/CAS Operating 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 applicable FAR and CAS requirements. The FAS/CAS operating adjustment, previously referred to as 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) Income
Unallocated corporate (expense) income includes the portion of corporate costs not considered allowable or allocable under the applicable FAR and CAS requirements, and therefore not allocated to the segments, such as changes in deferred state income taxes and a portion of management and administration, legal, environmental, compensation, retiree benefits, advertising and other corporate unallowable costs. Unallocated corporate (expense) income 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.
During the first quarter of 2021, the $2.0 billion pre-tax gain on the sale of our IT services business and $192 million of unallowable state taxes and transaction costs associated with the divestiture were recorded in Unallocated corporate (expense) income.
Disaggregation of Revenue
Sales by Customer TypeYear Ended December 31
202220212020
$ in millions$
%(3)
$
%(3)
$
%(3)
Aeronautics Systems
U.S. government (1)
$8,930 85 %$9,631 85 %$10,411 86 %
International (2)
1,344 13 %1,421 13 %1,595 13 %
Other customers18 — %18 — %41 — %
Intersegment sales239 2 %189 2 %122 1 %
Aeronautics Systems sales10,531 100 %11,259 100 %12,169 100 %
Defense Systems
U.S. government (1)
3,344 61 %3,595 62 %5,103 68 %
International (2)
1,358 24 %1,317 23 %1,317 17 %
Other customers71 1 %75 1 %395 5 %
Intersegment sales806 14 %789 14 %728 10 %
Defense Systems sales5,579 100 %5,776 100 %7,543 100 %
Mission Systems
U.S. government (1)
7,471 72 %7,223 71 %7,279 72 %
International (2)
1,809 17 %1,846 18 %1,945 19 %
Other customers101 1 %72 1 %77 1 %
Intersegment sales1,015 10 %993 10 %779 8 %
Mission Systems sales10,396 100 %10,134 100 %10,080 100 %
Space Systems
U.S. government (1)
11,578 94 %9,885 93 %8,110 93 %
International (2)
337 3 %398 4 %331 4 %
Other customers241 2 %186 2 %195 2 %
Intersegment sales119 1 %139 1 %108 1 %
Space Systems sales12,275 100 %10,608 100 %8,744 100 %
Total
U.S. government (1)
31,323 86 %30,334 85 %30,903 84 %
International (2)
4,848 13 %4,982 14 %5,188 14 %
Other customers431 1 %351 1 %708 2 %
Total Sales$36,602 100 %$35,667 100 %$36,799 100 %
(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
202220212020
$ in millions$
%(1)
$
%(1)
$
%(1)
Aeronautics Systems      
Cost-type$5,013 49 %$5,419 49 %$6,142 51 %
Fixed-price5,279 51 %5,651 51 %5,905 49 %
Intersegment sales239 189 122 
Aeronautics Systems sales10,531 11,259 12,169 
Defense Systems
Cost-type1,497 31 %1,739 35 %2,345 34 %
Fixed-price3,276 69 %3,248 65 %4,470 66 %
Intersegment sales806 789 728 
Defense Systems sales5,579 5,776 7,543 
Mission Systems
Cost-type3,622 39 %3,139 34 %3,582 39 %
Fixed-price5,759 61 %6,002 66 %5,719 61 %
Intersegment sales1,015 993 779 
Mission Systems sales10,396 10,134 10,080 
Space Systems
Cost-type8,579 71 %7,731 74 %6,369 74 %
Fixed-price3,577 29 %2,738 26 %2,267 26 %
Intersegment sales119 139 108 
Space Systems sales12,275 10,608 8,744 
Total
Cost-type18,711 51 %18,028 51 %18,438 50 %
Fixed-price17,891 49 %17,639 49 %18,361 50 %
Total Sales$36,602 $35,667 $36,799 
(1)Percentages calculated based on external customer sales.
Sales by Geographic RegionYear Ended December 31
202220212020
$ in millions$
%(2)
$
%(2)
$
%(2)
Aeronautics Systems      
United States$8,948 87 %$9,649 87 %$10,452 87 %
Asia/Pacific708 7 %896 8 %841 7 %
Europe585 6 %461 4 %574 5 %
All other (1)
51 — %64 1 %180 1 %
Intersegment sales239 189 122 
Aeronautics Systems sales10,531 11,259 12,169 
Defense Systems
United States3,415 71 %3,670 74 %5,498 81 %
Asia/Pacific454 10 %465 9 %402 6 %
Europe477 10 %314 6 %315 4 %
All other (1)
427 9 %538 11 %600 9 %
Intersegment sales806 789 728 
Defense Systems sales5,579 5,776 7,543 
Mission Systems
United States7,572 81 %7,295 80 %7,356 79 %
Asia/Pacific531 6 %518 6 %707 8 %
Europe977 10 %1,004 10 %893 9 %
All other (1)
301 3 %324 4 %345 4 %
Intersegment sales1,015 993 779 
Mission Systems sales10,396 10,134 10,080 
Space Systems
United States11,819 97 %10,071 96 %8,305 96 %
Asia/Pacific109 1 %60 1 %18 — %
Europe213 2 %328 3 %300 4 %
All other (1)
15 — %10 — %13 — %
Intersegment sales119 139 108 
Space Systems sales12,275 10,608 8,744 
Total
United States31,754 87 %30,685 86 %31,611 86 %
Asia/Pacific1,802 5 %1,939 5 %1,968 5 %
Europe2,252 6 %2,107 6 %2,082 6 %
All other (1)
794 2 %936 3 %1,138 3 %
Total Sales$36,602 $35,667 $36,799 
(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 millions202220212020
 SalesOperating
Income		SalesOperating
Income		SalesOperating
Income
Intersegment sales and operating income
Aeronautics Systems$239 $27 $189 $19 $122 $11 
Defense Systems806 95 789 89 728 76 
Mission Systems1,015 167 993 150 779 116 
Space Systems119 14 139 14 108 13 
Total$2,179 $303 $2,110 $272 $1,737 $216 
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 millions20222021
Assets
Aeronautics Systems$9,701 $9,423 
Defense Systems6,163 5,911 
Mission Systems10,120 9,869 
Space Systems11,540 10,760 
Corporate assets(1)
6,231 6,616 
Total assets$43,755 $42,579 
(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.
Capital Expenditures and Depreciation and Amortization
The following table presents capital expenditures and depreciation and amortization by segment:
Year Ended December 31
$ in millions202220212020202220212020
 Capital Expenditures
Depreciation and Amortization(2)
Aeronautics Systems$490 $465 $540 $322 $266 $282 
Defense Systems110 133 78 101 91 108 
Mission Systems248 236 302 242 233 209 
Space Systems529 530 440 396 344 291 
Corporate(1)
58 51 60 281 305 377 
Total$1,435 $1,415 $1,420 $1,342 $1,239 $1,267 
(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.
(2)Beginning in 2022, depreciation and amortization amounts include the amortization expense related to the company’s right-of-use assets. Prior year amounts have been recast to conform to current year presentation. This change in presentation had no impact on depreciation and amortization expense in the consolidated statements of earnings and comprehensive income.