Segment Information | 15. SEGMENT INFORMATION The company is aligned in four operating sectors, which also comprise our reportable segments: Aeronautics Systems, Defense Systems, Mission Systems and Space Systems. We generally organize our segments based on the nature of products and services offered. The company’s chief operating decision maker (“CODM”) is the Chair, Chief Executive Officer and President The following table presents sales, operating costs and expenses, and operating income by segment: Year Ended December 31 $ in millions 2024 2023 2022 Aeronautics Systems Sales $ 12,030 $ 10,786 $ 10,531 Operating costs and expenses: Product 8,248 8,942 7,161 Service 2,382 2,099 2,042 Intersegment 218 218 212 Aeronautics Systems operating income (loss) 1,182 (473) 1,116 Defense Systems Sales 8,560 8,289 7,629 Operating costs and expenses: Product 5,304 4,819 4,163 Service 1,641 1,959 1,985 Intersegment 749 682 700 Defense Systems operating income 866 829 781 Mission Systems Sales 11,399 10,895 10,396 Operating costs and expenses: Product 7,000 6,669 6,291 Service 1,805 1,730 1,639 Intersegment 996 887 848 Mission Systems operating income 1,598 1,609 1,618 Space Systems Sales 11,731 11,873 10,570 Operating costs and expenses: Product 8,711 8,844 7,664 Service 1,398 1,468 1,404 Intersegment 368 431 424 Space Systems operating income 1,254 1,130 1,078 Intersegment profit eliminations (356) (335) (340) Total segment operating income 4,544 2,760 4,253 FAS/CAS operating adjustment 40 (82) (200) Unallocated corporate expense (214) (141) (452) Total operating income $ 4,370 $ 2,537 $ 3,601 Other (expense) income Interest expense (621) (545) (506) Non-operating FAS pension benefit 656 530 1,505 Mark-to-market pension and OPB benefit (expense) 443 (422) 1,232 Other, net 168 246 4 Earnings before income taxes $ 5,016 $ 2,346 $ 5,836 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 FAR and 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 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 PP&E acquired through business combinations, as well as certain compensation and other costs. Disaggregation of Revenue Sales by Customer Type Year Ended December 31 2024 2023 2022 $ in millions $ % (3) $ % (3) $ % (3) Aeronautics Systems U.S. government (1) $ 10,087 86 % $ 9,132 87 % $ 8,930 87 % International (2) 1,678 14 % 1,379 13 % 1,344 13 % Other customers 22 — % 35 — % 18 — % Intersegment sales 243 240 239 Aeronautics Systems sales 12,030 100 % 10,786 100 % 10,531 100 % Defense Systems U.S. government (1) 6,333 82 % 5,946 79 % 5,406 79 % International (2) 1,301 17 % 1,491 20 % 1,358 20 % Other customers 71 1 % 76 1 % 71 1 % Intersegment sales 855 776 794 Defense Systems sales 8,560 100 % 8,289 100 % 7,629 100 % Mission Systems U.S. government (1) 8,322 81 % 7,999 81 % 7,471 80 % International (2) 1,809 18 % 1,757 18 % 1,809 19 % Other customers 91 1 % 85 1 % 101 1 % Intersegment sales 1,177 1,054 1,015 Mission Systems sales 11,399 100 % 10,895 100 % 10,396 100 % Space Systems U.S. government (1) 10,694 94 % 10,805 95 % 9,516 95 % International (2) 212 2 % 278 2 % 337 3 % Other customers 413 4 % 307 3 % 241 2 % Intersegment sales 412 483 476 Space Systems sales 11,731 100 % 11,873 100 % 10,570 100 % Total U.S. government (1) 35,436 87 % 33,882 86 % 31,323 86 % International (2) 5,000 12 % 4,905 13 % 4,848 13 % Other customers 597 1 % 503 1 % 431 1 % Total Sales $ 41,033 100 % $ 39,290 100 % $ 36,602 100 % (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 a substantial percentage of its 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 external customer sales. Sales by Contract Type Year Ended December 31 2024 2023 2022 $ in millions $ % (1) $ % (1) $ % (1) Aeronautics Systems Cost-type $ 5,373 46 % $ 5,235 50 % $ 5,013 49 % Fixed-price 6,414 54 % 5,311 50 % 5,279 51 % Intersegment sales 243 240 239 Aeronautics Systems sales 12,030 10,786 10,531 Defense Systems Cost-type 4,002 52 % 3,991 53 % 3,516 51 % Fixed-price 3,703 48 % 3,522 47 % 3,319 49 % Intersegment sales 855 776 794 Defense Systems sales 8,560 8,289 7,629 Mission Systems Cost-type 4,589 45 % 4,116 42 % 3,622 39 % Fixed-price 5,633 55 % 5,725 58 % 5,759 61 % Intersegment sales 1,177 1,054 1,015 Mission Systems sales 11,399 10,895 10,396 Space Systems Cost-type 7,000 62 % 7,637 67 % 6,560 65 % Fixed-price 4,319 38 % 3,753 33 % 3,534 35 % Intersegment sales 412 483 476 Space Systems sales 11,731 11,873 10,570 Total Cost-type 20,964 51 % 20,979 53 % 18,711 51 % Fixed-price 20,069 49 % 18,311 47 % 17,891 49 % Total Sales $ 41,033 $ 39,290 $ 36,602 (1) Percentages calculated based on external customer sales. Sales by Geographic Region Year Ended December 31 2024 2023 2022 $ in millions $ % (3) $ % (3) $ % (3) Aeronautics Systems United States (1) $ 10,109 86 % $ 9,167 87 % $ 8,948 87 % Asia/Pacific 694 6 % 607 6 % 708 7 % Europe 947 8 % 736 7 % 585 6 % Other geographic regions (2) 37 — % 36 — % 51 — % Intersegment sales 243 240 239 Aeronautics Systems sales 12,030 10,786 10,531 Defense Systems United States (1) 6,404 83 % 6,022 80 % 5,477 80 % Asia/Pacific 344 4 % 419 6 % 454 7 % Europe 766 10 % 601 8 % 477 7 % Other geographic regions (2) 191 3 % 471 6 % 427 6 % Intersegment sales 855 776 794 Defense Systems sales 8,560 8,289 7,629 Mission Systems United States (1) 8,413 82 % 8,084 82 % 7,572 81 % Asia/Pacific 472 5 % 460 5 % 531 6 % Europe 990 10 % 959 10 % 977 10 % Other geographic regions (2) 347 3 % 338 3 % 301 3 % Intersegment sales 1,177 1,054 1,015 Mission Systems sales 11,399 10,895 10,396 Space Systems United States (1) 11,107 98 % 11,112 98 % 9,757 97 % Asia/Pacific 42 1 % 82 1 % 109 1 % Europe 134 1 % 159 1 % 213 2 % Other geographic regions (2) 36 — % 37 — % 15 — % Intersegment sales 412 483 476 Space Systems sales 11,731 11,873 10,570 Total United States (1) 36,033 88 % 34,385 88 % 31,754 87 % Asia/Pacific 1,552 4 % 1,568 4 % 1,802 5 % Europe 2,837 7 % 2,455 6 % 2,252 6 % Other geographic regions (2) 611 1 % 882 2 % 794 2 % Total Sales $ 41,033 $ 39,290 $ 36,602 (1) No country other than the United States represents greater than 10% of total company sales. (2) Other geographic regions are principally comprised of the Middle East. (3) Percentages calculated based on external customer sales. Segment Sales The following table presents sales for each of our reportable segments and total intersegment eliminations: Year Ended December 31 $ in millions 2024 2023 2022 Sales Aeronautics Systems $ 12,030 $ 10,786 $ 10,531 Defense Systems 8,560 8,289 7,629 Mission Systems 11,399 10,895 10,396 Space Systems 11,731 11,873 10,570 Intersegment eliminations (2,687) (2,553) (2,524) Total sales $ 41,033 $ 39,290 $ 36,602 Intersegment Sales and Operating Income Sales between segments are recorded at values that include intercompany operating income for the performing segment based on that segment’s estimated average operating margin rate for external sales. Such intercompany operating income is eliminated in consolidation, so that the company’s total sales and total operating income reflect only those transactions with external customers. See Note 1 for additional information. The following table presents intersegment sales and operating income: Year Ended December 31 $ in millions 2024 2023 2022 Sales Operating Sales Operating Sales Operating Intersegment sales and operating income Aeronautics Systems $ 243 $ 25 $ 240 $ 22 $ 239 $ 27 Defense Systems 855 106 776 94 794 94 Mission Systems 1,177 181 1,054 167 1,015 167 Space Systems 412 44 483 52 476 52 Total $ 2,687 $ 356 $ 2,553 $ 335 $ 2,524 $ 340 Capital Expenditures and Depreciation and Amortization The following table presents capital expenditures and depreciation and amortization for each of our reportable segments and for Corporate: Year Ended December 31 $ in millions 2024 2023 2022 2024 2023 2022 Capital Expenditures Depreciation and Amortization Aeronautics Systems $ 596 $ 504 $ 490 $ 380 $ 384 $ 322 Defense Systems 139 164 166 180 184 174 Mission Systems 314 288 248 255 246 242 Space Systems 652 745 473 362 370 323 Corporate (1) 66 74 58 193 154 281 Total $ 1,767 $ 1,775 $ 1,435 $ 1,370 $ 1,338 $ 1,342 (1) Corporate amounts include the amortization of purchased intangible assets and the additional depreciation expense related to the step-up in fair value of PP&E acquired through business combinations as they are not considered part of management’s evaluation of segment operating performance. Assets Our CODM does not use assets by segment to evaluate segment performance or allocate resources. Therefore, we do not disclose assets by segment. |