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INFORMATION ON BUSINESS SEGMENTS
 6 Months Ended
Jun. 26, 2022
Segment Reporting [Abstract]  
INFORMATION ON BUSINESS SEGMENTS INFORMATION ON BUSINESS SEGMENTS
Overview
We operate in four business segments: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. We organize our business segments based on the nature of products and services offered.
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 not included in management’s evaluation of performance of each segment. 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
Summary operating results for each of our business segments were as follows (in millions):
 Quarters EndedSix Months Ended
June 26,
2022		June 27,
2021		June 26,
2022		June 27,
2021
Net sales
Aeronautics$5,862 $6,666 $12,263 $13,053 
Missiles and Fire Control2,747 2,944 5,199 5,693 
Rotary and Mission Systems4,012 4,242 7,564 8,349 
Space 2,825 3,177 5,384 6,192 
Total net sales$15,446 $17,029 $30,410 $33,287 
Operating profit
Aeronautics$612 $572 $1,291 $1,265 
Missiles and Fire Control418 401 802 797 
Rotary and Mission Systems 403 458 751 891 
Space 268 335 513 562 
Total business segment operating profit1,701 1,766 3,357 3,515 
Unallocated items
FAS/CAS pension operating adjustment425 489 851 978 
Severance and restructuring charges— — — (36)
Other, net (163)(63)(312)(83)
Total unallocated items262 426 539 859 
Total consolidated operating profit$1,963 $2,192 $3,896 $4,374 
Intersegment sales
Aeronautics$58 $52 $118 $105 
Missiles and Fire Control161 167 317 296 
Rotary and Mission Systems453 448 908 926 
Space 99 92 182 174 
Total intersegment sales$771 $759 $1,525 $1,501 
Amortization of purchased intangibles
Aeronautics$(1)$(1)$(1)$(1)
Missiles and Fire Control— — (1)(1)
Rotary and Mission Systems(58)(58)(116)(116)
Space(3)(22)(6)(44)
Total amortization of purchased intangibles$(62)$(81)$(124)$(162)
Unallocated Items
Business segment operating profit excludes the FAS/CAS pension operating adjustment described below, a portion of corporate costs not considered allowable or allocable to contracts with the U.S. Government under the applicable U.S. Government cost accounting standards (CAS) or federal acquisition regulations (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, environmental costs, changes in the fair value of strategic investments in companies made by our Lockheed Martin Ventures Fund, stock-based compensation expense, changes in the fair value of investments held in a trust for deferred compensation plans, retiree benefits, significant severance actions, significant asset impairments, gains or losses from divestitures, 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 10 - Other” 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
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 segment’s net sales and cost of sales. Our consolidated financial statements must present pension and other postretirement benefit plan income calculated in accordance with FAS requirements under U.S. GAAP. The operating portion of the net FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension (expense) income and total CAS pension cost. The non-service FAS pension (expense) income components are included in non-service FAS pension (expense) 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 (expense) income, we have a favorable FAS/CAS pension operating adjustment.
The total FAS/CAS pension adjustment for the quarters and six months ended June 26, 2022 and June 27, 2021, including the service and non-service cost components of FAS pension (expense) income for our qualified defined benefit pension plans, were as follows (in millions):
Quarters EndedSix Months Ended
June 26,
2022		June 27,
2021		June 26,
2022		June 27,
2021
Total FAS (expense) income and CAS cost
Total FAS pension (expense) income$(1,355)$67 $(1,239)$133 
Less: CAS pension cost449 516 899 1,032 
Total FAS/CAS pension adjustment$(906)$583 $(340)$1,165 
Service and non-service cost reconciliation
FAS pension service cost$(24)$(27)$(48)$(54)
Less: CAS pension cost449 516 899 1,032 
Total FAS/CAS pension operating adjustment425 489 851 978 
Non-service FAS pension (expense) income(1,331)94 (1,191)187 
Total FAS/CAS pension adjustment$(906)$583 $(340)$1,165 
The decrease in the total FAS/CAS pension adjustment during the quarter and six months ended June 26, 2022 as compared to 2021 was principally driven by a noncash, non-operating pension settlement charge of $1.5 billion ($1.2 billion, or $4.33 per share, after-tax) recognized in connection with the transfer of $4.3 billion of our gross defined benefit pension obligations and related plan assets to an insurance company on June 24, 2022. See “Note 6 - Postretirement Benefit Plans”.
Disaggregation of Net Sales
Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):
Quarter Ended June 26, 2022
AeronauticsMFCRMSSpace Total
Net sales
Products$4,804 $2,444 $3,150 $2,363 $12,761 
Services1,058 303 862 462 2,685 
Total net sales$5,862 $2,747 $4,012 $2,825 $15,446 
Net sales by contract type
Fixed-price$3,916 $1,943 $2,589 $753 $9,201 
Cost-reimbursable1,946 804 1,423 2,072 6,245 
Total net sales$5,862 $2,747 $4,012 $2,825 $15,446 
Net sales by customer
U.S. Government$3,963 $1,924 $2,785 $2,786 $11,458 
International (a)
1,868 823 1,129 29 3,849 
U.S. commercial and other31 — 98 10 139 
Total net sales$5,862 $2,747 $4,012 $2,825 $15,446 
Net sales by geographic region
United States$3,994 $1,924 $2,883 $2,796 $11,597 
Europe845 262 178 20 1,305 
Asia Pacific705 107 553 6 1,371 
Middle East222 417 201 3 843 
Other96 37 197 — 330 
Total net sales$5,862 $2,747 $4,012 $2,825 $15,446 
Six Months Ended June 26, 2022
AeronauticsMFCRMSSpace Total
Net sales
Products$10,221 $4,617 $5,938 $4,479 $25,255 
Services2,042 582 1,626 905 5,155 
Total net sales$12,263 $5,199 $7,564 $5,384 $30,410 
Net sales by contract type
Fixed-price$8,602 $3,656 $4,807 $1,390 $18,455 
Cost-reimbursable3,661 1,543 2,757 3,994 11,955 
Total net sales$12,263 $5,199 $7,564 $5,384 $30,410 
Net sales by customer
U.S. Government$8,176 $3,519 $5,296 $5,302 $22,293 
International (a)
4,018 1,675 2,100 63 7,856 
U.S. commercial and other69 5 168 19 261 
Total net sales$12,263 $5,199 $7,564 $5,384 $30,410 
Net sales by geographic region
United States$8,245 $3,524 $5,464 $5,321 $22,554 
Europe1,868 518 365 44 2,795 
Asia Pacific1,426 213 985 13 2,637 
Middle East484 882 377 6 1,749 
Other240 62 373 — 675 
Total net sales$12,263 $5,199 $7,564 $5,384 $30,410 
Quarter Ended June 27, 2021
AeronauticsMFCRMSSpace Total
Net sales
Products$5,583 $2,571 $3,369 $2,735 $14,258 
Services1,083 373 873 442 2,771 
Total net sales$6,666 $2,944 $4,242 $3,177 $17,029 
Net sales by contract type
Fixed-price$4,920 $1,991 $2,802 $645 $10,358 
Cost-reimbursable1,746 953 1,440 2,532 6,671 
Total net sales$6,666 $2,944 $4,242 $3,177 $17,029 
Net sales by customer
U.S. Government$4,367 $2,176 $3,063 $2,719 $12,325 
International (a)
2,283 766 1,117 447 4,613 
U.S. commercial and other16 2 62 11 91 
Total net sales$6,666 $2,944 $4,242 $3,177 $17,029 
Net sales by geographic region
United States$4,383 $2,178 $3,125 $2,730 $12,416 
Europe944 232 223 444 1,843 
Asia Pacific914 56 534 2 1,506 
Middle East311 467 177 1 956 
Other114 11 183 — 308 
Total net sales$6,666 $2,944 $4,242 $3,177 $17,029 
Six Months Ended June 27, 2021
AeronauticsMFCRMSSpace Total
Net sales
Products$11,062 $4,981 $6,669 $5,299 $28,011 
Services1,991 712 1,680 893 5,276 
Total net sales$13,053 $5,693 $8,349 $6,192 $33,287 
Net sales by contract type
Fixed-price$9,654 $3,869 $5,479 $1,259 $20,261 
Cost-reimbursable3,399 1,824 2,870 4,933 13,026 
Total net sales$13,053 $5,693 $8,349 $6,192 $33,287 
Net sales by customer
U.S. Government$8,640 $4,217 $5,873 $5,270 $24,000 
International (a)
4,382 1,469 2,337 904 9,092 
U.S. commercial and other31 7 139 18 195 
Total net sales$13,053 $5,693 $8,349 $6,192 $33,287 
Net sales by geographic region
United States$8,671 $4,224 $6,012 $5,288 $24,195 
Europe1,798 414 424 899 3,535 
Asia Pacific1,807 107 1,184 4 3,102 
Middle East595 925 347 1 1,868 
Other182 23 382 — 587 
Total net sales$13,053 $5,693 $8,349 $6,192 $33,287 
(a)International sales include foreign military sales (FMS) contracted through the U.S. Government and direct commercial sales to international governments and other 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 23% and 26% of our total consolidated net sales for the quarter and six months ended June 26, 2022 and 27% of our total consolidated net sales for both the quarter and six months ended June 27, 2021.
Assets
Total assets for each of our business segments were as follows (in millions):
June 26,
2022		December 31,
2021
Assets
Aeronautics$12,168 $10,756 
Missiles and Fire Control5,795 5,243 
Rotary and Mission Systems18,092 17,664 
Space 6,527 6,199 
Total business segment assets42,582 39,862 
Corporate assets (a)
9,176 11,011 
Total assets$51,758 $50,873 
(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, investments held in a separate trust and investments held in the Lockheed Martin Ventures Fund.