Our organic sales growth for the year was 3%.
Our segment operating margin was an exceptionally strong 11.8%, which increased 40 basis points compared to 2020 with performance more than offsetting mix and COVID-related headwinds.
We grew our transaction adjusted earnings per share by 8% and generated a $3.1 billion of transaction adjusted free cash flow.
Regarding capital deployment, we returned a record $4.7 billion to shareholders through dividends and share repurchases, including a $500 million accelerated share repurchase that we announced in November of 2021.
We strengthened our balance sheet, retiring over $2.2 billion of debt during the year and achieving an increased credit rating in the process.
And we continue to invest in our business with over $1.4 billion in capital expenditures to create new technologies and support franchise programs.
The National Defense Authorization Act contained a $25 billion increase to the defense budget that represents 5% growth compared to fiscal year 2021, which we expect to also be supported in the appropriations bill.
In the NDAA, there is continued support for our major programs, and several of our programs received incremental funding above the President's budget request, including Triton, E-2D F-35, F-18 and G/ATR, among others.
Webb will peer more than 13.5 billion years into the past when the first stars and galaxies were formed, ushering in an exciting new era of space observation and expanding our understanding of the universe.
In the fourth quarter, the space sector received a $3.2 billion award to support Artemis missions IV through VIII.
In the fourth quarter, MS received an accelerated award for F-16 SABR for approximately $200 million, and full year awards of approximately $700 million.
We have now received total contract awards for near 1,000 radars for this program in support of the U.S. Air Force and National Guard, as well as several international customers.
In addition, our network information systems business area within Mission Systems received approximately $1 billion in awards for advanced processing solutions.
Northrop Grumman is a leader in conservation activity with a 44% reduction in greenhouse gas emissions since 2010.
In the fourth quarter, S&P released its Global Corporate Sustainability Assessment scores, and we ranked in the 96 percentile.
As we previewed in prior quarters, the divested IT services business, the equipment sale at AS and four more working days in Q4 2020 represented over $1.6 billion of sales when compared to Q4 2021.
The Q4 decline in AS sales was partially driven by fewer working days and the 2020 equipment sale, and it also included a $93 million unfavorable EAC adjustment on F-35.
Organic sales were down 9% in Q4 and 4% for the full year, driven by the completion of our contract at the Lake City ammunition plant, which generated almost $400 million of sales in 2020.
Mission Systems organic sales were down 3% in the fourth quarter, primarily due to the reduction in working days and up 6% for the full year.
And lastly, Space Systems Q4 and full year organic sales rose by 6% and 24%, respectively.
We continued to ramp significantly on franchise programs, including a $1.1 billion increase on GBSD in 2021.
AS operating margin rate decreased to 8.4% in the quarter and 9.7% for the full year due to the unfavorable EAC adjustment on F-35.
Defense Systems operating margin rate increased 90 basis points to 12.1% in the quarter and 80 basis points to 12% for the full year.
As a result of higher EAC adjustments and business mix changes, operating margin rate grew to 15.9% in the fourth quarter and 15.6% for the full year.
And at Space Systems, operating margin rate was 9.6% in the quarter and 10.6% for the full year.
At the total company level, segment operating margin rate in the fourth quarter was the same as Q4 2020, even with the F-35 charge in 2021.
And it increased 40 basis points for the full year to 11.8%.
Our transaction adjusted earnings per share declined 9% from Q4 2020 to Q4 2021, primarily due to lower sales volume from the factors I described earlier.
Transaction-adjusted earnings per share grew 8% in 2021 due to strong segment performance and lower corporate unallocated costs.
Lower corporate unallocated was driven by two items we've discussed in prior quarters: the $60 million benefit from an insurance settlement related to the former Orbital ATK business, and lower state taxes.
Regarding our pension plans, asset performance was strong again in 2021 at nearly 11%, the third year in a row of double-digit asset returns.
Our FAS discount rate increased 30 basis points to 2.98%.
These factors resulted in a mark-to-market benefit of roughly $2.4 billion in 2021.
In addition, our net pension funding status has improved by over $3 billion and on a PBO basis, is now over 93% funded.
Our CAS prepayment credit is approximately $1.7 billion as of January 1 of this year.
We generated nearly $3.6 billion of operating cash flow and $3.1 billion of transaction-adjusted free cash flow in 2021, in line with our expectations.
In the fourth quarter, we made our final federal and state tax payments associated with the IT services divestiture of almost $200 million.
We also made our first payment of roughly $200 million of deferred payroll taxes from the CARES Act legislation.
At aeronautics, we expect sales in the mid- to high $10 billion range.
As we noted last quarter, we're projecting headwinds in our HALE portfolio, as well as lower sales on JSTARS, F-18 and our restricted business.
Sales on F-35 are expected to be slightly higher in 2021 due to the EAC adjustment we booked in Q4.
We expect an AS margin rate of approximately 10%, which is up 30 basis points year over year.
For Defense Systems, we expect sales to be in the high $5 billion range as this business returns to modest organic growth following the IT services divestiture and the completion of our Lake City contract.
Operating margin rate is expected to remain very strong in the high 11% range.
Mission Systems sales are projected to be in the mid-$10 billion range, up from $10.1 billion of organic sales in 2021, reflecting continued strength in demand for our products.
Operating margin rate is expected in the low 15% range.
Sales are projected in the mid-$11 billion range, up from -- up about $1 billion from 2021 with a margin rate in the low 10% range.
Our total revenue guidance is $36.2 billion to $36.6 billion, representing a range of 2% to 3% organic growth, consistent with the rate we estimated in October 2021.
This growth is enabled by our strong backlog, which stands at over $76 billion, and covers more than two years of annual sales.
The 2021 book-to-bill of 0.9x was lower than our prior expectation due to the AS F-35 award shift to 2022.
More importantly, our three-year trailing average book-to-bill is approximately 1.22, and remains the foundation of our current and future growth.
As COVID-related headwinds that we experienced late in 2021 continue into early 2022, we anticipate that first quarter 2022 sales will be less than 25% of the full year.
We have increased the segment operating margin rate outlook that we provided in October as we now expect a rate roughly consistent with 2021 in the range of 11.7% to 11.9%.
Altogether, we expect transaction adjusted earnings per share to be between $24.50 and $25.10, based on approximately 155 million weighted shares outstanding.
As shown on Slide 11, this includes roughly $2 of year-to-year earnings per share headwinds from lower net pension benefits driven by the reduction in CAS recoveries and higher corporate unallocated expense due to the one-time benefits in 2021.
We project 2022 transaction-adjusted free cash flow of $2.5 billion to $2.8 billion, assuming the R&D tax amortization law is deferred or repealed.
We continue to project about $1 billion of higher cash taxes should current tax law remain in effect.
As I mentioned, our cash tax outlook includes the final payroll tax payment from the CARES Act of approximately $200 million.
The midpoint of our 2022 transaction-adjusted free cash flow guidance is $2.65 billion, and includes roughly $375 million of lower CAS recoveries than 2021.
Speaking of taxes, we're projecting an effective tax rate of approximately 17% going forward, roughly consistent with 2021, excluding the divestiture or mark-to-market pension effects.
With that in mind, our board of directors recently approved an increase in our share repurchase authorization of $2 billion.
And based on our outlook today, we plan on returning at least $1.5 billion to shareholders via share repurchase in 2022.

Summary:
The Q4 decline in AS sales was partially driven by fewer working days and the 2020 equipment sale, and it also included a $93 million unfavorable EAC adjustment on F-35.
At aeronautics, we expect sales in the mid- to high $10 billion range.
We expect an AS margin rate of approximately 10%, which is up 30 basis points year over year.
Mission Systems sales are projected to be in the mid-$10 billion range, up from $10.1 billion of organic sales in 2021, reflecting continued strength in demand for our products.
Sales are projected in the mid-$11 billion range, up from -- up about $1 billion from 2021 with a margin rate in the low 10% range.
Our total revenue guidance is $36.2 billion to $36.6 billion, representing a range of 2% to 3% organic growth, consistent with the rate we estimated in October 2021.
Altogether, we expect transaction adjusted earnings per share to be between $24.50 and $25.10, based on approximately 155 million weighted shares outstanding.