SEGMENT INFORMATION | SEGMENT INFORMATION The company is aligned in four operating sectors, which also comprise our reportable segments: Aerospace Systems, Innovation Systems, Mission Systems and Technology Services. The following table presents sales and operating income by segment: Three Months Ended September 30 Nine Months Ended September 30 $ in millions 2019 2018 2019 2018 Sales Aerospace Systems $ 3,458 $ 3,282 $ 10,344 $ 9,899 Innovation Systems 1,584 1,415 4,520 1,815 Mission Systems 3,029 2,911 9,043 8,668 Technology Services 1,067 1,040 3,088 3,232 Intersegment eliminations (663 ) (563 ) (1,875 ) (1,675 ) Total sales 8,475 8,085 25,120 21,939 Operating income Aerospace Systems 324 376 1,067 1,074 Innovation Systems 164 161 500 200 Mission Systems 398 399 1,189 1,122 Technology Services 136 111 351 328 Intersegment eliminations (82 ) (68 ) (222 ) (204 ) Total segment operating income 940 979 2,885 2,520 Net FAS (service)/CAS pension adjustment 131 176 346 440 Unallocated corporate (expense) income (120 ) 17 (398 ) (123 ) Total operating income $ 951 $ 1,172 $ 2,833 $ 2,837 Net FAS (Service)/CAS Pension 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 the Federal Acquisition Regulation (FAR) and the related U.S. Government Cost Accounting Standards (CAS). 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 includes the portion of corporate costs not considered allowable or allocable under applicable CAS or FAR, and therefore not allocated to the segments, such as a portion of management and administration, legal, environmental, compensation, retiree benefits and other corporate unallowable costs. Unallocated corporate expense 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. Disaggregation of Revenue Sales by Customer Type Three Months Ended September 30 Nine Months Ended September 30 2019 2018 2019 2018 $ in millions $ % (3) $ % (3) $ % (3) $ % (3) Aerospace Systems U.S. government (1) $ 3,014 87 % $ 2,926 89 % $ 8,954 87 % $ 8,633 87 % International (2) 353 10 % 270 8 % 1,137 11 % 990 10 % Other customers 36 1 % 44 2 % 100 1 % 124 1 % Intersegment sales 55 2 % 42 1 % 153 1 % 152 2 % Aerospace Systems sales 3,458 100 % 3,282 100 % 10,344 100 % 9,899 100 % Innovation Systems U.S. government (1) 1,163 74 % 972 69 % 3,239 72 % 1,237 68 % International (2) 228 14 % 272 19 % 702 16 % 364 20 % Other customers 99 6 % 134 9 % 331 7 % 164 9 % Intersegment sales 94 6 % 37 3 % 248 5 % 50 3 % Innovation Systems sales 1,584 100 % 1,415 100 % 4,520 100 % 1,815 100 % Mission Systems U.S. government (1) 2,260 75 % 2,232 77 % 6,775 75 % 6,577 76 % International (2) 416 14 % 374 12 % 1,242 14 % 1,144 13 % Other customers 32 1 % 25 1 % 105 1 % 89 1 % Intersegment sales 321 10 % 280 10 % 921 10 % 858 10 % Mission Systems sales 3,029 100 % 2,911 100 % 9,043 100 % 8,668 100 % Technology Services U.S. government (1) 629 59 % 581 56 % 1,799 58 % 1,780 55 % International (2) 208 19 % 183 17 % 642 21 % 596 18 % Other customers 37 4 % 72 7 % 94 3 % 241 8 % Intersegment sales 193 18 % 204 20 % 553 18 % 615 19 % Technology Services sales 1,067 100 % 1,040 100 % 3,088 100 % 3,232 100 % Total U.S. government (1) 7,066 83 % 6,711 83 % 20,767 83 % 18,227 83 % International (2) 1,205 14 % 1,099 14 % 3,723 15 % 3,094 14 % Other customers 204 3 % 275 3 % 630 2 % 618 3 % Total Sales $ 8,475 100 % $ 8,085 100 % $ 25,120 100 % $ 21,939 100 % (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 2019 2018 2019 2018 $ in millions $ % (1) $ % (1) $ % (1) $ % (1) Aerospace Systems Cost-type $ 1,995 59 % $ 1,953 60 % $ 5,976 59 % $ 5,789 59 % Fixed-price 1,408 41 % 1,287 40 % 4,215 41 % 3,958 41 % Intersegment sales 55 42 153 152 Aerospace Systems sales 3,458 3,282 10,344 9,899 Innovation Systems Cost-type 419 28 % 373 27 % 1,232 29 % 472 27 % Fixed-price 1,071 72 % 1,005 73 % 3,040 71 % 1,293 73 % Intersegment sales 94 37 248 50 Innovation Systems sales 1,584 1,415 4,520 1,815 Mission Systems Cost-type 1,264 47 % 1,259 48 % 3,854 47 % 3,745 48 % Fixed-price 1,444 53 % 1,372 52 % 4,268 53 % 4,065 52 % Intersegment sales 321 280 921 858 Mission Systems sales 3,029 2,911 9,043 8,668 Technology Services Cost-type 398 46 % 373 45 % 1,202 47 % 1,195 46 % Fixed-price 476 54 % 463 55 % 1,333 53 % 1,422 54 % Intersegment sales 193 204 553 615 Technology Services sales 1,067 1,040 3,088 3,232 Total Cost-type 4,076 48 % 3,958 49 % 12,264 49 % 11,201 51 % Fixed-price 4,399 52 % 4,127 51 % 12,856 51 % 10,738 49 % Total Sales $ 8,475 $ 8,085 $ 25,120 $ 21,939 (1) Percentages calculated based on external customer sales. Sales by Geographic Region Three Months Ended September 30 Nine Months Ended September 30 2019 2018 2019 2018 $ in millions $ % (2) $ % (2) $ % (2) $ % (2) Aerospace Systems United States $ 3,050 90 % $ 2,970 92 % $ 9,054 89 % $ 8,757 90 % Asia/Pacific 173 5 % 121 4 % 632 6 % 499 5 % All other (1) 180 5 % 149 4 % 505 5 % 491 5 % Intersegment sales 55 42 153 152 Aerospace Systems sales 3,458 3,282 10,344 9,899 Innovation Systems United States 1,262 85 % 1,105 80 % 3,570 84 % 1,401 79 % Asia/Pacific 30 2 % 72 5 % 123 3 % 96 6 % All other (1) 198 13 % 201 15 % 579 13 % 268 15 % Intersegment sales 94 37 248 50 Innovation Systems sales 1,584 1,415 4,520 1,815 Mission Systems United States 2,292 85 % 2,253 86 % 6,880 85 % 6,666 85 % Asia/Pacific 143 5 % 208 8 % 443 5 % 521 7 % All other (1) 273 10 % 170 6 % 799 10 % 623 8 % Intersegment sales 321 280 921 858 Mission Systems sales 3,029 2,911 9,043 8,668 Technology Services United States 666 76 % 653 78 % 1,893 75 % 2,021 77 % Asia/Pacific 44 5 % 45 5 % 144 6 % 113 4 % All other (1) 164 19 % 138 17 % 498 19 % 483 19 % Intersegment sales 193 204 553 615 Technology Services sales 1,067 1,040 3,088 3,232 Total United States 7,270 86 % 6,981 86 % 21,397 85 % 18,845 86 % Asia/Pacific 390 5 % 446 6 % 1,342 5 % 1,229 6 % All other (1) 815 9 % 658 8 % 2,381 10 % 1,865 8 % Total Sales $ 8,475 $ 8,085 $ 25,120 $ 21,939 (1) All other is principally comprised of Europe and the Middle East. (2) Percentages calculated based on external customer sales. |