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v3.20.2

Business Segment Information (Tables) | 6 Months Ended
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Jul. 03, 2020
Segment Reporting [Abstract] |
Schedule of Revenue and Reconciliation of Income From Continuing Operations Before Taxes by Segment | Segment revenue, segment operating income (loss) and a reconciliation of segment operating income to total income from continuing operations before income taxes are as follows:
| Quarter Ended |  |  |  | Two Quarters Ended |  |
| July 3, 2020 |  | June 28, 2019 |  | July 3, 2020 |  | June 28, 2019
| (In millions) |  |  |  |  |  |
Revenue |  |  |  |  |  |  |
Integrated Mission Systems | $ | 1,331 |  |  | $ | 11 |  |  | $ | 2,701 |  |  | $ | 25 |
Space and Airborne Systems | 1,249 |  |  | 1,019 |  |  | 2,441 |  |  | 1,975 |
Communication Systems | 1,112 |  |  | 609 |  |  | 2,206 |  |  | 1,189 |
Aviation Systems | 800 |  |  | 186 |  |  | 1,811 |  |  | 330 |
Other non-reportable business segments(1) | — |  |  | 44 |  |  | — |  |  | 79 |
Corporate eliminations | (47) |  |  | (4) |  |  | (88) |  |  | (5) |
| $ | 4,445 |  |  | $ | 1,865 |  |  | $ | 9,071 |  |  | $ | 3,593 |
Income From Continuing Operations Before Income Taxes |  |  |  |  |  |  |
Segment Operating Income (Loss): |  |  |  |  |  |  |
Integrated Mission Systems | $ | 224 |  |  | $ | 3 |  |  | $ | 425 |  |  | $ | 6 |
Space and Airborne Systems | 235 |  |  | 195 |  |  | 456 |  |  | 369 |
Communication Systems | 265 |  |  | 176 |  |  | 515 |  |  | 343 |
Aviation Systems | 31 |  |  | 19 |  |  | (146) |  |  | 36 |
Other non-reportable business segments(1) | — |  |  | 8 |  |  | — |  |  | 14 |
Unallocated corporate expenses(2) | (116) |  |  | (1) |  |  | (149) |  |  | (1) |
L3Harris Merger-related transaction and integration expenses | (37) |  |  | (36) |  |  | (68) |  |  | (52) |
Amortization of acquisition-related intangibles(3) | (208) |  |  | (25) |  |  | (353) |  |  | (50) |
Pension adjustment | (98) |  |  | (46) |  |  | (195) |  |  | (93) |
Non-operating income | 105 |  |  | 48 |  |  | 200 |  |  | 94 |
Net interest expense | (65) |  |  | (39) |  |  | (128) |  |  | (81) |
Total | $ | 336 |  |  | $ | 302 |  |  | $ | 557 |  |  | $ | 585 |
_______________ (1)Includes the operating results of the Harris Night Vision business prior to the divestiture on September 13, 2019. See Note C — Business Divestitures and Assets Sales in these Notes for more information. (2)Unallocated corporate expenses for the quarter and two quarters ended July 3, 2020 includes: (i) $16 million and $31 million, respectively, of additional cost of sales related to the fair value step-up in inventory sold (see Note B — Business Combination in these Notes for more information); (ii) $58 million and $61 million, respectively, of divestiture-related expenses, including a $26 million loss on sale of business, a $14 million non-cash remeasurement loss on a potential divestiture, a $12 million non-cash adjustment to the gain on sale of business and other items; (iii) a $14 million non-cash goodwill impairment charge related to a potential divestiture; and (iv) $7 million of L3Harris integration-related restructuring charges. Unallocated corporate expenses for the two quarters ended July 3, 2020 also includes a $5 million non-cash goodwill impairment charge related to the divestiture of the Applied Kilovolts and Analytical Instrumentation business. (3)Includes $183 million and $303 million of amortization of identifiable intangible assets acquired as a result of the L3Harris Merger for the quarter and two quarters ended July 3, 2020, respectively. Also includes $25 million and $50 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis Inc. for the quarters and two quarters ended June 28, 2019, respectively. Because the L3Harris Merger and the acquisition of Exelis Inc. benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired was not allocated to any segment.
Schedule of Disaggregation of Revenue by Segment | Disaggregation of Revenue All four segments disaggregate revenue by customer relationship, contract type and geographical region. We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Integrated Mission Systems: Integrated Mission Systems revenue is primarily derived from U.S. Government development and production contracts and is generally recognized over time using the POC cost-to-cost revenue recognition method.
| Quarter Ended |  |  |  | Two Quarters Ended |  |
| July 3, 2020 |  | June 28, 2019 |  | July 3, 2020 |  | June 28, 2019
| (In millions) |  |  |  |  |  |
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 858 |  |  | $ | 4 |  |  | $ | 1,807 |  |  | $ | 12 |
Subcontractor | 473 |  |  | 7 |  |  | 894 |  |  | 13 |
| $ | 1,331 |  |  | $ | 11 |  |  | $ | 2,701 |  |  | $ | 25 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 998 |  |  | $ | 11 |  |  | $ | 2,023 |  |  | $ | 25 |
Cost-reimbursable | 333 |  |  | — |  |  | 678 |  |  | — |
| $ | 1,331 |  |  | $ | 11 |  |  | $ | 2,701 |  |  | $ | 25 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 1,038 |  |  | $ | 6 |  |  | $ | 2,143 |  |  | $ | 15 |
International | 293 |  |  | 5 |  |  | 558 |  |  | 10 |
| $ | 1,331 |  |  | $ | 11 |  |  | $ | 2,701 |  |  | $ | 25 |
_______________ (1) Includes revenue derived from time-and-materials contracts. Space and Airborne Systems: Space and Airborne Systems revenue is primarily derived from U.S. Government development and production contracts and is generally recognized over time using the POC cost-to-cost revenue recognition method.
| Quarter Ended |  |  |  | Two Quarters Ended |  |
| July 3, 2020 |  | June 28, 2019 |  | July 3, 2020 |  | June 28, 2019
| (In millions) |  |  |  |  |  |
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 674 |  |  | $ | 590 |  |  | $ | 1,332 |  |  | $ | 1,162 |
Subcontractor | 575 |  |  | 429 |  |  | 1,109 |  |  | 813 |
| $ | 1,249 |  |  | $ | 1,019 |  |  | $ | 2,441 |  |  | $ | 1,975 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 702 |  |  | $ | 601 |  |  | $ | 1,372 |  |  | $ | 1,132 |
Cost-reimbursable | 547 |  |  | 418 |  |  | 1,069 |  |  | 843 |
| $ | 1,249 |  |  | $ | 1,019 |  |  | $ | 2,441 |  |  | $ | 1,975 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 1,054 |  |  | $ | 886 |  |  | $ | 2,057 |  |  | $ | 1,732 |
International | 195 |  |  | 133 |  |  | 384 |  |  | 243 |
| $ | 1,249 |  |  | $ | 1,019 |  |  | $ | 2,441 |  |  | $ | 1,975 |
_______________ (1) Includes revenue derived from time-and-materials contracts. Communication Systems: Communication Systems revenue is primarily derived from fixed-price contracts and is generally recognized at the point in time when products are received and accepted by the customer for standard products offered to multiple customers and over time for customer-specific products, systems, and services.
| Quarter Ended |  |  |  | Two Quarters Ended |  |
| July 3, 2020 |  | June 28, 2019 |  | July 3, 2020 |  | June 28, 2019
| (In millions) |  |  |  |  |  |
Revenue By Customer Relationship(1) |  |  |  |  |  |  |
Prime contractor | $ | 749 |  |  |  |  | $ | 1,489 |  |  |
Subcontractor | 363 |  |  |  |  | 717 |  |  |
| $ | 1,112 |  |  |  |  | $ | 2,206 |  |  |
Revenue By Contract Type(1) |  |  |  |  |  |  |
Fixed-price(2) | $ | 951 |  |  |  |  | $ | 1,869 |  |  |
Cost-reimbursable | 161 |  |  |  |  | 337 |  |  |
| $ | 1,112 |  |  |  |  | $ | 2,206 |  |  |
Revenue by Geographical Region |  |  |  |  |  |  |
United States | $ | 844 |  |  | $ | 355 |  |  | $ | 1,678 |  |  | $ | 702 |
International | 268 |  |  | 254 |  |  | 528 |  |  | 487 |
| $ | 1,112 |  |  | $ | 609 |  |  | $ | 2,206 |  |  | $ | 1,189 |
______________ (1) Prior to the L3Harris Merger, Communication Systems did not recognize significant revenue for customer-specific products and systems, and currently, such customer arrangements primarily exist at operating businesses acquired in connection with the L3Harris Merger. The “Revenue by Customer Relationship” and “Revenue by Contract Type” disaggregation categories were added beginning in the Fiscal Transition Period to best depict how the nature, amount, timing and uncertainty of revenue and cash flows from these types of customer arrangements are affected by economic factors. (2) Includes revenue derived from time-and-materials contracts. Aviation Systems: Aviation Systems revenue is primarily derived from fixed-price contracts and is generally recognized at the point in time when products are received and accepted by the customer for standard products offered to multiple customers and over time for customer-specific products, systems, and services.
| Quarter Ended |  |  |  | Two Quarters Ended |  |
| July 3, 2020 |  | June 28, 2019 |  | July 3, 2020 |  | June 28, 2019
| (In millions) |  |  |  |  |  |
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 514 |  |  | $ | 180 |  |  | $ | 1,178 |  |  | $ | 320 |
Subcontractor | 286 |  |  | 6 |  |  | 633 |  |  | 10 |
| $ | 800 |  |  | $ | 186 |  |  | $ | 1,811 |  |  | $ | 330 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 627 |  |  | $ | 164 |  |  | $ | 1,468 |  |  | $ | 286 |
Cost-reimbursable | 173 |  |  | 22 |  |  | 343 |  |  | 44 |
| $ | 800 |  |  | $ | 186 |  |  | $ | 1,811 |  |  | $ | 330 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 696 |  |  | $ | 178 |  |  | $ | 1,445 |  |  | $ | 321 |
International | 104 |  |  | 8 |  |  | 366 |  |  | 9 |
| $ | 800 |  |  | $ | 186 |  |  | $ | 1,811 |  |  | $ | 330 |
______________ (1) Includes revenue derived from time-and-materials contracts.
Schedule of Total Assets by Business Segment | Total assets by business segment are summarized below:
| July 3, 2020 |  | January 3, 2020
| (In millions) |  |
Total Assets |  |  |
Integrated Mission Systems | $ | 8,675 |  |  | $ | 7,896 |
Space and Airborne Systems | 6,899 |  |  | 6,829 |
Communication Systems | 5,719 |  |  | 5,930 |
Aviation Systems | 5,269 |  |  | 7,569 |
Corporate(1) | 11,290 |  |  | 10,112 |
| $ | 37,852 |  |  | $ | 38,336 |
_______________ (1)Identifiable intangible assets acquired in connection with the L3Harris Merger in the quarter ended September 27, 2019 and our acquisition of Exelis Inc. in fiscal 2015 were recorded as Corporate assets because they benefited the entire Company as opposed to any individual segment. Identifiable intangible asset balances recorded as Corporate assets were approximately $8.3 billion and $8.5 billion at July 3, 2020 and January 3, 2020, respectively. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan investments, buildings and equipment, as well as any assets and liabilities from discontinued operations and divestitures. See Note C — Business Divestitures and Assets Sales in these Notes for additional information.

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