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RESTRUCTURING AND OTHER EXIT COSTS | 12 Months Ended
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Jan. 01, 2021
Restructuring and Related Activities [Abstract] |
RESTRUCTURING AND OTHER EXIT COSTS | NOTE 4: RESTRUCTURING AND OTHER EXIT COSTS We record charges for restructuring and other exit activities related to sales or terminations of product lines, closures or relocations of business activities, changes in management structure, and fundamental reorganizations that affect the nature and focus of operations. Such charges include termination benefits, contract termination costs and costs to consolidate facilities or relocate employees. We record these charges at their fair value when incurred. In cases where employees are required to render service until they are terminated in order to receive the termination benefits and will be retained beyond the minimum retention period, we record the expense ratably over the future service period. These charges are included as a component of the “Engineering, selling and administrative expenses” line item in our Consolidated Statement of Income. L3Harris Merger-Related Restructuring Costs. We recorded restructuring charges of $10 million during fiscal 2020 and $117 million during the two quarters ended January 3, 2020 in connection with the L3Harris Merger. We had liabilities of $26 million and $58 million at January 1, 2021 and January 3, 2020, respectively, associated with these restructuring activities. We expect that the majority of the remaining liabilities as of January 1, 2021 will be paid in the next twelve months. During the quarter ended January 3, 2020, we finalized our plan to close L3’s former headquarters offices located at 600 Third Avenue in New York City. On December 3, 2019, we entered into an amended lease agreement with the landlord, which reduced the number of leased floors from six to five effective October 1, 2020 through the expiration of the lease on October 31, 2031. We recorded a $2 million lease modification and a $46 million impairment charge for ROU and other assets in connection with the modification of the lease. These charges are included in the “Engineering, selling and administrative expenses” and “Impairment of goodwill and other assets” line items in our Consolidated Statement of Income for the two quarters ended January 3, 2020. During 2020 we exited the facility and executed agreements to sublease three floors to multiple tenants and plan to sublease the remaining floors. We evaluated the lease for further impairment as commercial real estate conditions in New York City deteriorated due to COVID, but determined no further impairment was necessary. COVID Restructuring Costs. During fiscal 2020, we recorded $15 million of restructuring charges, including workforce reductions and other exit costs within our Aviation Systems segment associated with the COVID-related downturn in our commercial aviation businesses and its impact on global air traffic and customer operations. In addition, during fiscal 2020, we recorded $1 million of restructuring charges for workforce reductions in our Communication Systems segment associated with the COVID impact to local and state government customers of our Public Safety business sector. At January 1, 2021, we had liabilities of $8 million associated with COVID-related restructuring actions, of which substantially all will be paid in the next twelve months. Other Restructuring and Exit Costs. In fiscal 2018, we recorded $5 million for integration and other costs in connection with our acquisition of Exelis Inc., which we acquired in fiscal 2015 (“Exelis”). At January 1, 2021, we had liabilities of $5 million associated with these integration activities and previous restructuring actions, which represent lease obligations associated with exited facilities with remaining terms of three years or less. In fiscal 2018, we also recorded $45 million of charges in connection with our decision to transition and exit a commercial line of business that had been developing an air-to-ground radio access network for the business aviation market based on the Long Term Evolution (“LTE”) standard operating in the unlicensed spectrum The liability associated with this exit activity was paid in fiscal 2019. Our liabilities for restructuring and other exit costs are included in the “Compensation and benefits,” “Other accrued items” and “Other long-term liabilities” line items in our Consolidated Balance Sheet. Changes to our restructuring and other exit costs liabilities in fiscal 2020 and the two quarters ended January 3, 2020 were as follows:
(In millions) | Employee severance-related costs |  | Facilities consolidation and other exit costs(1) |  | Total
Balance at June 28, 2019 | $ | — |  |  | $ | 16 |  |  | $ | 16 |
Additional provisions | 117 |  |  | — |  |  | 117 |
Payments | (62) |  |  | (1) |  |  | (63) |
Other | 3 |  |  | (8) |  |  | (5) |
Balance at January 3, 2020 | 58 |  |  | 7 |  |  | 65 |
Additional provisions | 26 |  |  | — |  |  | 26 |
Payments | (52) |  |  | (2) |  |  | (54) |
Other | 2 |  |  | — |  |  | 2 |
Balance at January 1, 2021 | $ | 34 |  |  | $ | 5 |  |  | $ | 39 |
_______________ (1)Excludes our operating lease liability related to L3’s former headquarter offices.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -URI http://asc.fasb.org/topic&trid=2175745 + Details
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