SEGMENT INFORMATION | SEGMENT INFORMATION The following table presents sales and operating income by segment: Three Months Ended September 30 Nine Months Ended September 30 $ in millions 2022 2021 2022 2021 Sales Aeronautics Systems $ 2,537 $ 2,725 $ 7,774 $ 8,628 Defense Systems 1,345 1,409 3,922 4,398 Mission Systems 2,456 2,436 7,469 7,613 Space Systems 3,163 2,681 8,997 7,950 Intersegment eliminations (530) (531) (1,593) (1,561) Total sales 8,971 8,720 26,569 27,028 Operating income Aeronautics Systems 262 265 827 873 Defense Systems 158 175 481 529 Mission Systems 368 372 1,166 1,177 Space Systems 290 288 861 865 Intersegment eliminations (71) (65) (218) (197) Total segment operating income 1,007 1,035 3,117 3,247 FAS/CAS operating adjustment (55) 61 (152) 98 Unallocated corporate (expense) income (108) (53) (270) 1,564 Total operating income $ 844 $ 1,043 $ 2,695 $ 4,909 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 Federal Acquisition Regulation (FAR) and U.S. Government Cost Accounting Standards (CAS) requirements. The FAS/CAS operating 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 Type Three Months Ended September 30 Nine Months Ended September 30 2022 2021 2022 2021 $ in millions $ % (3) $ % (3) $ % (3) $ % (3) Aeronautics Systems U.S. government (1) $ 2,138 85 % $ 2,312 85 % $ 6,564 85 % $ 7,366 85 % International (2) 341 13 % 360 13 % 1,012 13 % 1,110 13 % Other customers — — % 5 — % 17 — % 15 — % Intersegment sales 58 2 % 48 2 % 181 2 % 137 2 % Aeronautics Systems sales 2,537 100 % 2,725 100 % 7,774 100 % 8,628 100 % Defense Systems U.S. government (1) 820 62 % 877 62 % 2,369 61 % 2,749 63 % International (2) 312 23 % 316 22 % 933 24 % 1,002 23 % Other customers 19 1 % 10 1 % 53 1 % 61 1 % Intersegment sales 194 14 % 206 15 % 567 14 % 586 13 % Defense Systems sales 1,345 100 % 1,409 100 % 3,922 100 % 4,398 100 % Mission Systems U.S. government (1) 1,729 71 % 1,756 72 % 5,325 72 % 5,491 71 % International (2) 452 18 % 417 17 % 1,300 17 % 1,338 18 % Other customers 25 1 % 19 1 % 89 1 % 49 1 % Intersegment sales 250 10 % 244 10 % 755 10 % 735 10 % Mission Systems sales 2,456 100 % 2,436 100 % 7,469 100 % 7,613 100 % Space Systems U.S. government (1) 2,967 94 % 2,507 94 % 8,473 94 % 7,401 93 % International (2) 105 3 % 92 3 % 261 3 % 301 4 % Other customers 63 2 % 49 2 % 173 2 % 145 2 % Intersegment sales 28 1 % 33 1 % 90 1 % 103 1 % Space Systems sales 3,163 100 % 2,681 100 % 8,997 100 % 7,950 100 % Total U.S. government (1) 7,654 86 % 7,452 85 % 22,731 86 % 23,007 85 % International (2) 1,210 13 % 1,185 14 % 3,506 13 % 3,751 14 % Other customers 107 1 % 83 1 % 332 1 % 270 1 % Total Sales $ 8,971 100 % $ 8,720 100 % $ 26,569 100 % $ 27,028 100 % (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 Type Three Months Ended September 30 Nine Months Ended September 30 2022 2021 2022 2021 $ in millions $ % (1) $ % (1) $ % (1) $ % (1) Aeronautics Systems Cost-type $ 1,185 48 % $ 1,358 51 % $ 3,678 48 % $ 4,110 48 % Fixed-price 1,294 52 % 1,319 49 % 3,915 52 % 4,381 52 % Intersegment sales 58 48 181 137 Aeronautics Systems sales 2,537 2,725 7,774 8,628 Defense Systems Cost-type 366 32 % 433 36 % 1,075 32 % 1,376 36 % Fixed-price 785 68 % 770 64 % 2,280 68 % 2,436 64 % Intersegment sales 194 206 567 586 Defense Systems sales 1,345 1,409 3,922 4,398 Mission Systems Cost-type 881 40 % 746 34 % 2,591 39 % 2,419 35 % Fixed-price 1,325 60 % 1,446 66 % 4,123 61 % 4,459 65 % Intersegment sales 250 244 755 735 Mission Systems sales 2,456 2,436 7,469 7,613 Space Systems Cost-type 2,192 70 % 1,931 73 % 6,271 70 % 5,800 74 % Fixed-price 943 30 % 717 27 % 2,636 30 % 2,047 26 % Intersegment sales 28 33 90 103 Space Systems sales 3,163 2,681 8,997 7,950 Total Cost-type 4,624 52 % 4,468 51 % 13,615 51 % 13,705 51 % Fixed-price 4,347 48 % 4,252 49 % 12,954 49 % 13,323 49 % Total Sales $ 8,971 $ 8,720 $ 26,569 $ 27,028 (1) Percentages calculated based on external customer sales. Sales by Geographic Region Three Months Ended September 30 Nine Months Ended September 30 2022 2021 2022 2021 $ in millions $ % (2) $ % (2) $ % (2) $ % (2) Aeronautics Systems United States $ 2,138 85 % $ 2,317 87 % $ 6,581 87 % $ 7,381 86 % Asia/Pacific 165 7 % 239 9 % 560 7 % 722 9 % Europe 163 7 % 108 4 % 413 5 % 335 4 % All other (1) 13 1 % 13 — % 39 1 % 53 1 % Intersegment sales 58 48 181 137 Aeronautics Systems sales 2,537 2,725 7,774 8,628 Defense Systems United States 839 72 % 887 74 % 2,422 72 % 2,810 74 % Asia/Pacific 112 10 % 107 9 % 340 10 % 336 9 % Europe 101 9 % 78 6 % 297 9 % 233 6 % All other (1) 99 9 % 131 11 % 296 9 % 433 11 % Intersegment sales 194 206 567 586 Defense Systems sales 1,345 1,409 3,922 4,398 Mission Systems United States 1,754 79 % 1,775 81 % 5,414 81 % 5,540 81 % Asia/Pacific 159 7 % 114 5 % 435 6 % 372 5 % Europe 210 10 % 233 11 % 654 10 % 744 11 % All other (1) 83 4 % 70 3 % 211 3 % 222 3 % Intersegment sales 250 244 755 735 Mission Systems sales 2,456 2,436 7,469 7,613 Space Systems United States 3,030 97 % 2,556 97 % 8,646 97 % 7,546 97 % Asia/Pacific 33 1 % 10 — % 86 1 % 39 — % Europe 69 2 % 79 3 % 165 2 % 256 3 % All other (1) 3 — % 3 — % 10 — % 6 — % Intersegment sales 28 33 90 103 Space Systems sales 3,163 2,681 8,997 7,950 Total United States 7,761 87 % 7,535 87 % 23,063 87 % 23,277 86 % Asia/Pacific 469 5 % 470 5 % 1,421 5 % 1,469 5 % Europe 543 6 % 498 6 % 1,529 6 % 1,568 6 % All other (1) 198 2 % 217 2 % 556 2 % 714 3 % Total Sales $ 8,971 $ 8,720 $ 26,569 $ 27,028 (1) All other is principally comprised of the Middle East. (2) Percentages calculated based on external customer sales. |