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Business Segment Information (Tables) | 9 Months Ended
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Oct. 02, 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 |  | Three Quarters Ended
(In millions) | October 2, 2020 |  | September 27, 2019 |  | October 2, 2020 |  | September 27, 2019
Revenue |  |  |  |  |  |  |
Integrated Mission Systems | $ | 1,372 |  |  | $ | 1,292 |  |  | $ | 4,073 |  |  | $ | 1,317 |
Space and Airborne Systems | 1,249 |  |  | 1,173 |  |  | 3,690 |  |  | 3,148 |
Communication Systems | 1,094 |  |  | 1,032 |  |  | 3,300 |  |  | 2,221 |
Aviation Systems | 792 |  |  | 948 |  |  | 2,603 |  |  | 1,278 |
Other non-reportable business segments(1) | — |  |  | 23 |  |  | — |  |  | 102 |
Corporate eliminations | (44) |  |  | (37) |  |  | (132) |  |  | (42) |
Total revenue | $ | 4,463 |  |  | $ | 4,431 |  |  | $ | 13,534 |  |  | $ | 8,024 |
Income From Continuing Operations Before Income Taxes |  |  |  |  |  |
Segment Operating Income (Loss): |  |  |  |  |  |  |
Integrated Mission Systems | $ | 213 |  |  | $ | 176 |  |  | $ | 638 |  |  | $ | 182 |
Space and Airborne Systems | 231 |  |  | 230 |  |  | 687 |  |  | 599 |
Communication Systems | 273 |  |  | 234 |  |  | 788 |  |  | 577 |
Aviation Systems | 100 |  |  | 127 |  |  | (46) |  |  | 163 |
Other non-reportable business segments(1) | — |  |  | — |  |  | — |  |  | 14 |
Unallocated corporate expenses(2) | (23) |  |  | (93) |  |  | (113) |  |  | (94) |
L3Harris Merger-related transaction, integration and restructuring expenses | (27) |  |  | (170) |  |  | (95) |  |  | (222) |
L3Harris Merger-related restructuring charges | — |  |  | (111) |  |  | (7) |  |  | (111) |
Amortization of acquisition-related intangibles(3) | (176) |  |  | (123) |  |  | (529) |  |  | (173) |
Business divestiture-related (losses) gains | (10) |  |  | 229 |  |  | (62) |  |  | 229 |
Pension adjustment | (97) |  |  | (80) |  |  | (292) |  |  | (173) |
Non-operating income | 96 |  |  | 79 |  |  | 296 |  |  | 173 |
Net interest expense | (62) |  |  | (58) |  |  | (190) |  |  | (139) |
Total income from continuing operations before income taxes | $ | 518 |  |  | $ | 440 |  |  | $ | 1,075 |  |  | $ | 1,025 |
_______________ (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)For the quarter ended October 2, 2020, includes $2 million of divestiture-related expenses, and for the three quarters ended October 2, 2020, includes (i) $31 million 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) a $14 million non-cash goodwill impairment charge related to a potential divestiture; (iii) $11 million of divestiture-related expenses; and (iv) a $5 million non-cash goodwill impairment charge related to the divestiture of the Applied Kilovolts and Analytical Instrumentation business. For the quarter and three quarters ended September 27, 2019, includes (i) $92 million of additional cost of sales related to the fair value step-up in inventory sold; (ii) a $12 million gain on the sale of an asset group; and (iii) a $12 million non-cash cumulative adjustment to lease expense. (3)Includes $151 million and $454 million for the quarter and three quarters ended October 2, 2020, respectively, and $98 million for the quarter and three quarters ended September 27, 2019 of amortization of identifiable intangible assets acquired as a result of the L3Harris Merger. Also includes $25 million and $75 million, respectively, for the quarters and three quarters ended October 2, 2020 and September 27, 2019, of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis Inc. in fiscal 2015. 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 We disaggregate revenue for all four business segments 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 |  | Three Quarters Ended
(In millions) | October 2, 2020 |  | September 27, 2019 |  | October 2, 2020 |  | September 27, 2019
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 910 |  |  | $ | 882 |  |  | $ | 2,717 |  |  | $ | 894 |
Subcontractor | 462 |  |  | 410 |  |  | 1,356 |  |  | 423 |
| $ | 1,372 |  |  | $ | 1,292 |  |  | $ | 4,073 |  |  | $ | 1,317 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 1,041 |  |  | $ | 1,010 |  |  | $ | 3,064 |  |  | $ | 1,035 |
Cost-reimbursable | 331 |  |  | 282 |  |  | 1,009 |  |  | 282 |
| $ | 1,372 |  |  | $ | 1,292 |  |  | $ | 4,073 |  |  | $ | 1,317 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 1,097 |  |  | $ | 1,071 |  |  | $ | 3,240 |  |  | $ | 1,086 |
International | 275 |  |  | 221 |  |  | 833 |  |  | 231 |
| $ | 1,372 |  |  | $ | 1,292 |  |  | $ | 4,073 |  |  | $ | 1,317 |
_______________ (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 |  | Three Quarters Ended
(In millions) | October 2, 2020 |  | September 27, 2019 |  | October 2, 2020 |  | September 27, 2019
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 674 |  |  | $ | 705 |  |  | $ | 2,006 |  |  | $ | 1,867 |
Subcontractor | 575 |  |  | 468 |  |  | 1,684 |  |  | 1,281 |
| $ | 1,249 |  |  | $ | 1,173 |  |  | $ | 3,690 |  |  | $ | 3,148 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 703 |  |  | $ | 702 |  |  | $ | 2,075 |  |  | $ | 1,834 |
Cost-reimbursable | 546 |  |  | 471 |  |  | 1,615 |  |  | 1,314 |
| $ | 1,249 |  |  | $ | 1,173 |  |  | $ | 3,690 |  |  | $ | 3,148 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 1,067 |  |  | $ | 1,018 |  |  | $ | 3,124 |  |  | $ | 2,750 |
International | 182 |  |  | 155 |  |  | 566 |  |  | 398 |
| $ | 1,249 |  |  | $ | 1,173 |  |  | $ | 3,690 |  |  | $ | 3,148 |
_______________ (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 |  | Three Quarters Ended
(In millions) | October 2, 2020 |  | September 27, 2019 |  | October 2, 2020 |  | September 27, 2019
Revenue By Customer Relationship(1) |  |  |  |  |  |  |
Prime contractor | $ | 759 |  |  | $ | 679 |  |  | $ | 2,248 |  |  |
Subcontractor | 335 |  |  | 353 |  |  | 1,052 |  |  |
| $ | 1,094 |  |  | $ | 1,032 |  |  | $ | 3,300 |  |  |
Revenue By Contract Type(1) |  |  |  |  |  |  |
Fixed-price(2) | $ | 935 |  |  | $ | 875 |  |  | $ | 2,804 |  |  |
Cost-reimbursable | 159 |  |  | 157 |  | 496 |  |  |
| $ | 1,094 |  |  | $ | 1,032 |  |  | $ | 3,300 |  |  |
Revenue by Geographical Region |  |  |  |  |  |  |
United States | $ | 749 |  |  | $ | 721 |  |  | $ | 2,427 |  |  | $ | 1,423 |
International | 345 |  |  | 311 |  |  | 873 |  |  | 798 |
| $ | 1,094 |  |  | $ | 1,032 |  |  | $ | 3,300 |  |  | $ | 2,221 |
_______________ (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 |  | Three Quarters Ended
(In millions) | October 2, 2020 |  | September 27, 2019 |  | October 2, 2020 |  | September 27, 2019
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 511 |  |  | $ | 584 |  |  | $ | 1,689 |  |  | $ | 904 |
Subcontractor | 281 |  |  | 364 |  |  | 914 |  |  | 374 |
| $ | 792 |  |  | $ | 948 |  |  | $ | 2,603 |  |  | $ | 1,278 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 646 |  |  | $ | 784 |  |  | $ | 2,114 |  |  | $ | 1,070 |
Cost-reimbursable | 146 |  |  | 164 |  |  | 489 |  |  | 208 |
| $ | 792 |  |  | $ | 948 |  |  | $ | 2,603 |  |  | $ | 1,278 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 687 |  |  | $ | 724 |  |  | $ | 2,132 |  |  | $ | 1,045 |
International | 105 |  |  | 224 |  |  | 471 |  |  | 233 |
| $ | 792 |  |  | $ | 948 |  |  | $ | 2,603 |  |  | $ | 1,278 |
_______________ (1)Includes revenue derived from time-and-materials contracts.
Schedule of Total Assets by Business Segment | Total assets by business segment are summarized below:
(In millions) | October 2, 2020 |  | January 3, 2020
Total Assets |  |  |
Integrated Mission Systems | $ | 8,752 |  |  | $ | 7,888 |
Space and Airborne Systems | 6,902 |  |  | 6,837 |
Communication Systems | 5,643 |  |  | 5,930 |
Aviation Systems | 5,231 |  |  | 7,569 |
Corporate(1) | 10,617 |  |  | 10,112 |
Total Assets | $ | 37,145 |  |  | $ | 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 $8.2 billion and $8.5 billion at October 2, 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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