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INFORMATION ON BUSINESS SEGMENTS
 3 Months Ended
Mar. 31, 2024
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 thus are 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 for each of our business segments were as follows (in millions):
 Quarters Ended
March 31,
2024		March 26,
2023
Net sales
Aeronautics$6,845 $6,269 
Missiles and Fire Control2,993 2,388 
Rotary and Mission Systems4,088 3,510 
Space 3,269 2,959 
Total net sales$17,195 $15,126 
Operating profit
Aeronautics$679 $675 
Missiles and Fire Control311 377 
Rotary and Mission Systems 430 350 
Space 325 280 
Total business segment operating profit1,745 1,682 
Unallocated items
FAS/CAS pension operating adjustment406 415 
Intangible asset amortization expense(61)(62)
Other, net (61)2 
Total unallocated items284 355 
Total consolidated operating profit$2,029 $2,037 
Intersegment sales
Aeronautics$70 $53 
Missiles and Fire Control202 146 
Rotary and Mission Systems586 489 
Space 107 86 
Total intersegment sales$965 $774 
Unallocated Items
Business segment operating profit excludes the FAS/CAS pension operating adjustment, 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, stock-based compensation expense, changes in the fair value of assets and liabilities for deferred compensation plans, retiree benefits, significant severance charges, significant asset impairments, gains or
losses from divestitures, intangible asset amortization expense, 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
Our business segments’ results of operations include pension expense only as calculated under U.S. Government Cost Accounting Standards (CAS), which we refer to as CAS pension cost. 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 Financial Accounting Standards (FAS) requirements under U.S. GAAP. The operating portion of the total FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension income (expense) and total CAS pension cost. The non-service FAS pension income (expense) components are included in non-service FAS pension income (expense) in our consolidated statements of earnings. As a result, to the extent that CAS pension cost exceeds the service cost component of FAS pension income (expense) we have a favorable FAS/CAS pension operating adjustment.
Disaggregation of Net Sales
Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):
Quarters Ended March 31, 2024
AeronauticsMFCRMSSpace Total
Net sales
Products$5,592 $2,664 $3,241 $2,699 $14,196 
Services1,253 329 847 570 2,999 
Total net sales$6,845 $2,993 $4,088 $3,269 $17,195 
Net sales by contract type
Fixed-price$4,584 $1,996 $2,477 $900 $9,957 
Cost-reimbursable2,261 997 1,611 2,369 7,238 
Total net sales$6,845 $2,993 $4,088 $3,269 $17,195 
Net sales by customer
U.S. Government$4,666 $2,167 $2,840 $3,162 $12,835 
International (a)
2,152 824 1,162 68 4,206 
U.S. commercial and other27 2 86 39 154 
Total net sales$6,845 $2,993 $4,088 $3,269 $17,195 
Net sales by geographic region
United States$4,693 $2,169 $2,926 $3,201 $12,989 
Europe1,211 245 269 18 1,743 
Asia Pacific636 187 540 46 1,409 
Middle East203 370 162 4 739 
Other102 22 191 — 315 
Total net sales$6,845 $2,993 $4,088 $3,269 $17,195 
Quarter Ended March 26, 2023
AeronauticsMFCRMSSpace Total
Net sales
Products$5,156 $2,089 $2,792 $2,489 $12,526 
Services1,113 299 718 470 2,600 
Total net sales$6,269 $2,388 $3,510 $2,959 $15,126 
Net sales by contract type
Fixed-price$4,312 $1,618 $2,208 $764 $8,902 
Cost-reimbursable1,957 770 1,302 2,195 6,224 
Total net sales$6,269 $2,388 $3,510 $2,959 $15,126 
Net sales by customer
U.S. Government$4,117 $1,581 $2,423 $2,908 $11,029 
International (a)
2,114 805 1,020 45 3,984 
U.S. commercial and other38 2 67 6 113 
Total net sales$6,269 $2,388 $3,510 $2,959 $15,126 
Net sales by geographic region
United States$4,155 $1,583 $2,490 $2,914 $11,142 
Europe1,130 211 225 23 1,589 
Asia Pacific675 102 438 22 1,237 
Middle East225 455 186 — 866 
Other84 37 171 — 292 
Total net sales$6,269 $2,388 $3,510 $2,959 $15,126 
(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, an international multi-role, multi-variant, stealth fighter aircraft. Net sales for the F-35 program represented approximately 25% of our total consolidated net sales for the quarter ended March 31, 2024 and 26% of our total consolidated net sales for the quarter ended March 26, 2023.
Assets
Total assets for each of our business segments were as follows (in millions):
March 31,
2024		December 31,
2023
Assets
Aeronautics$13,695 $13,167 
Missiles and Fire Control5,786 5,703 
Rotary and Mission Systems17,454 17,521 
Space 6,862 6,560 
Total business segment assets43,797 42,951 
Corporate assets (a)
11,166 9,505 
Total assets$54,963 $52,456 
(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, property, plant and equipment used in our corporate operations, assets held in a trust for deferred compensation plans, and investments in early-stage companies.