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INFORMATION ON BUSINESS SEGMENTS
 6 Months Ended
Jun. 30, 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 EndedSix Months Ended
June 30,
2024		June 25,
2023		June 30,
2024		June 25,
2023
Net sales
Aeronautics$7,277 $6,875 $14,122 $13,144 
Missiles and Fire Control3,102 2,755 6,095 5,143 
Rotary and Mission Systems4,548 3,897 8,636 7,407 
Space 3,195 3,166 6,464 6,125 
Total net sales$18,122 $16,693 $35,317 $31,819 
Operating profit
Aeronautics$751 $718 $1,430 $1,393 
Missiles and Fire Control450 371 761 748 
Rotary and Mission Systems 495 454 925 804 
Space 346 312 671 592 
Total business segment operating profit2,042 1,855 3,787 3,537 
Unallocated items
FAS/CAS pension operating adjustment406 416 812 831 
Impairment and severance charges (a)
(87)— (87)— 
Intangible asset amortization expense(61)(62)(122)(124)
Other, net (152)(74)(213)(72)
Total unallocated items106 280 390 635 
Total consolidated operating profit$2,148 $2,135 $4,177 $4,172 
Intersegment sales
Aeronautics$67 $71 $137 $124 
Missiles and Fire Control204 159 406 305 
Rotary and Mission Systems574 505 1,160 994 
Space 99 92 206 178 
Total intersegment sales$944 $827 $1,909 $1,601 
(a)Impairment and severance charges of $87 million ($69 million, or $0.29 per share, after-tax) include trademark and fixed asset impairments as well as severance costs. See “Note 10 - Other” below for additional information.
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 components are included in non-service FAS pension 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 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):
Quarter Ended June 30, 2024
AeronauticsMFCRMSSpace Total
Net sales
Products$5,971 $2,742 $3,705 $2,691 $15,109 
Services1,306 360 843 504 3,013 
Total net sales$7,277 $3,102 $4,548 $3,195 $18,122 
Net sales by contract type
Fixed-price$4,945 $2,124 $2,812 $925 $10,806 
Cost-reimbursable2,332 978 1,736 2,270 7,316 
Total net sales$7,277 $3,102 $4,548 $3,195 $18,122 
Net sales by customer
U.S. Government$4,941 $2,241 $2,999 $3,107 $13,288 
International (a)
2,297 856 1,470 45 4,668 
U.S. commercial and other39 5 79 43 166 
Total net sales$7,277 $3,102 $4,548 $3,195 $18,122 
Net sales by geographic region
United States$4,980 $2,246 $3,078 $3,150 $13,454 
Europe1,270 209 282 19 1,780 
Asia Pacific685 180 750 25 1,640 
Middle East194 450 200 1 845 
Other148 17 238 — 403 
Total net sales$7,277 $3,102 $4,548 $3,195 $18,122 
Six Months Ended June 30, 2024
AeronauticsMFCRMSSpace Total
Net sales
Products$11,563 $5,406 $6,946 $5,390 $29,305 
Services2,559 689 1,690 1,074 6,012 
Total net sales$14,122 $6,095 $8,636 $6,464 $35,317 
Net sales by contract type
Fixed-price$9,529 $4,120 $5,289 $1,825 $20,763 
Cost-reimbursable4,593 1,975 3,347 4,639 14,554 
Total net sales$14,122 $6,095 $8,636 $6,464 $35,317 
Net sales by customer
U.S. Government$9,607 $4,408 $5,839 $6,269 $26,123 
International (a)
4,449 1,680 2,632 113 8,874 
U.S. commercial and other66 7 165 82 320 
Total net sales$14,122 $6,095 $8,636 $6,464 $35,317 
Net sales by geographic region
United States$9,673 $4,415 $6,004 $6,351 $26,443 
Europe2,481 454 551 37 3,523 
Asia Pacific1,321 367 1,290 71 3,049 
Middle East397 820 362 5 1,584 
Other250 39 429 — 718 
Total net sales$14,122 $6,095 $8,636 $6,464 $35,317 
Quarter Ended June 25, 2023
AeronauticsMFCRMSSpace Total
Net sales
Products$5,645 $2,412 $3,041 $2,660 $13,758 
Services1,230 343 856 506 2,935 
Total net sales$6,875 $2,755 $3,897 $3,166 $16,693 
Net sales by contract type
Fixed-price$4,656 $1,863 $2,451 $799 $9,769 
Cost-reimbursable2,219 892 1,446 2,367 6,924 
Total net sales$6,875 $2,755 $3,897 $3,166 $16,693 
Net sales by customer
U.S. Government$4,621 $1,911 $2,754 $3,121 $12,407 
International (a)
2,169 841 1,075 41 4,126 
U.S. commercial and other85 3 68 4 160 
Total net sales$6,875 $2,755 $3,897 $3,166 $16,693 
Net sales by geographic region
United States$4,706 $1,914 $2,822 $3,125 $12,567 
Europe1,146 174 212 24 1,556 
Asia Pacific690 215 554 16 1,475 
Middle East226 411 155 1 793 
Other107 41 154 — 302 
Total net sales$6,875 $2,755 $3,897 $3,166 $16,693 
Six Months Ended June 25, 2023
AeronauticsMFCRMSSpace Total
Net sales
Products$10,801 $4,501 $5,833 $5,149 $26,284 
Services2,343 642 1,574 976 5,535 
Total net sales$13,144 $5,143 $7,407 $6,125 $31,819 
Net sales by contract type
Fixed-price$8,968 $3,481 $4,659 $1,563 $18,671 
Cost-reimbursable4,176 1,662 2,748 4,562 13,148 
Total net sales$13,144 $5,143 $7,407 $6,125 $31,819 
Net sales by customer
U.S. Government$8,738 $3,492 $5,177 $6,029 $23,436 
International (a)
4,283 1,646 2,095 86 8,110 
U.S. commercial and other123 5 135 10 273 
Total net sales$13,144 $5,143 $7,407 $6,125 $31,819 
Net sales by geographic region
United States$8,861 $3,497 $5,312 $6,039 $23,709 
Europe2,276 385 437 47 3,145 
Asia Pacific1,365 317 992 38 2,712 
Middle East451 866 341 1 1,659 
Other191 78 325 — 594 
Total net sales$13,144 $5,143 $7,407 $6,125 $31,819 
(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 26% and 25% of our total
consolidated net sales for the quarter and six months ended June 30, 2024 and 26% of our total consolidated net sales for both the quarter and six months ended June 25, 2023.
Assets
Total assets for each of our business segments were as follows (in millions):
June 30,
2024		December 31,
2023
Assets
Aeronautics$13,913 $13,167 
Missiles and Fire Control5,938 5,703 
Rotary and Mission Systems17,612 17,521 
Space 6,717 6,560 
Total business segment assets44,180 42,951 
Corporate assets (a)
10,896 9,505 
Total assets$55,076 $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.