XML 56 R33.htm IDEA: XBRL DOCUMENT
v3.20.4

BUSINESS SEGMENTS | 12 Months Ended
--- | ---
Jan. 01, 2021
Segment Reporting [Abstract] |
BUSINESS SEGMENTS | NOTE 25: BUSINESS SEGMENTS We structure our operations primarily around the products, systems and services we sell and the markets we serve, and we report the financial results of our continuing operations in the following four operating segments, which are also our reportable segments and are referred to as our business segments: •Integrated Mission Systems, including multi-mission ISR and communication systems; integrated electrical and electronic systems for maritime platforms; and advanced electro-optical and infrared solutions; •Space and Airborne Systems, including space payloads, sensors and full-mission solutions; classified intelligence and cyber defense; mission avionics; and electronic warfare; •Communication Systems, including tactical communications; broadband communications; integrated vision solutions; and public safety; and •Aviation Systems, including defense aviation; commercial aviation products; commercial and military pilot training; and mission networks for air traffic management. During the first quarter of fiscal 2020, we adjusted our segment reporting to better align our businesses and transferred two businesses between our Integrated Mission Systems and Space and Airborne Systems segments. The historical results, discussion and presentation of our business segments as set forth in our Consolidated Financial Statements and these Notes reflect the impact of these adjustments to our segment reporting for all periods presented in order to present the segment information on a comparable basis. There is no impact on our previously reported consolidated statements of income, balance sheets, statements of cash flows or statements of equity resulting from these adjustments. As described in more detail in Note 3: Business Divestitures and Asset Sales and elsewhere in these Notes, during the Fiscal Transition Period and fiscal 2020, we completed the following business divestitures: •The divestiture of the Harris Night Vision business, completed on September 13, 2019, the results of which are included in “Other non-reportable business segments” through the date of divestiture; •The divestiture of the airport security and automation business, completed on May 4, 2020, the results of which are reported as part of our Aviation Systems segment through the date of divestiture; •The divestiture of the Applied Kilovolts and Analytical Instrumentation business, completed on May 15, 2020, the results of which are reported as part of our Space and Airborne Systems segment through the date of divestiture; and •The divestiture of the EOTech business, completed on July 31, 2020, the results of which are reported as part of our Communication Systems segment through the date of divestiture. Segment revenue, segment operating income and a reconciliation of segment operating income to total income from continuing operations before income taxes are as follows:
| Fiscal Year Ended |  | Two Quarters Ended |  | Fiscal Years Ended
(In millions) | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019 |  | June 29, 2018
Revenue |  |  |  |  |  |  |
Integrated Mission Systems | $ | 5,538 |  |  | $ | 2,758 |  |  | $ | 52 |  |  | $ | 55 |
Space and Airborne Systems | 4,946 |  |  | 2,377 |  |  | 3,711 |  |  | 3,294 |
Communication Systems | 4,443 |  |  | 2,151 |  |  | 2,208 |  |  | 2,015 |
Aviation Systems | 3,448 |  |  | 2,038 |  |  | 672 |  |  | 668 |
Other non-reportable business segments(1) | — |  |  | 23 |  |  | 165 |  |  | 148 |
Corporate eliminations | (181) |  |  | (84) |  |  | (7) |  |  | (12) |
| $ | 18,194 |  |  | $ | 9,263 |  |  | $ | 6,801 |  |  | $ | 6,168 |
Income from Continuing Operations before Income Taxes
Segment Operating Income: |  |  |  |  |  |  |
Integrated Mission Systems | $ | 847 |  |  | $ | 371 |  |  | $ | 10 |  |  | $ | 9 |
Space and Airborne Systems | 932 |  |  | 447 |  |  | 696 |  |  | 626 |
Communication Systems | 1,084 |  |  | 493 |  |  | 637 |  |  | 561 |
Aviation Systems | (177) |  |  | 289 |  |  | 76 |  |  | 54 |
Other non-reportable business segments(1) | — |  |  | — |  |  | 27 |  |  | 20 |
Unallocated corporate expenses and corporate eliminations(2) | (109) |  |  | (139) |  |  | (2) |  |  | (65) |
L3Harris Merger-related transaction, integration and other expenses and losses | (130) |  |  | (273) |  |  | (65) |  |  | — |
L3Harris Merger-related restructuring costs | (10) |  |  | (117) |  |  | — |  |  | — |
Amortization of acquisition-related intangibles(3) | (709) |  |  | (289) |  |  | (101) |  |  | (101) |
Impairment of identifiable intangible assets | (113) |  |  | — |  |  | — |  |  | — |
Business divestiture-related (losses) gains | (51) |  |  | 229 |  |  | — |  |  | — |
Pension adjustment | (389) |  |  | (172) |  |  | (186) |  |  | (184) |
Non-operating income | 401 |  |  | 192 |  |  | 188 |  |  | 156 |
Net interest expense | (254) |  |  | (123) |  |  | (167) |  |  | (168) |
Total income from continuing operations before income taxes | $ | 1,322 |  |  | $ | 908 |  |  | $ | 1,113 |  |  | $ | 908 |
_______________ (1)Includes the operating results of the Harris Night Vision business prior to the date of divestiture on September 13, 2019. See Note 3: Business Divestitures and Asset Sales in these Notes for more information. (2)For fiscal 2020 includes: (i) $31 million of additional cost of sales related to the fair value step-up in inventory sold (see Note 5: Business Combination in these Notes for more information); (ii) a $22 million gain on sale of property, plant and equipment; (iii) a $14 million non-cash goodwill impairment charge related to a potential divestiture, (iv) $13 million of divestiture-related expenses; (v) a $5 million non-cash goodwill impairment charge related to the divestiture of the Applied Kilovolts and Analytical Instrumentation business; and (vi) a $2 million non-cash cumulative adjustment to lease expense. For the two quarters ended January 3, 2020 includes: (i) $142 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 $10 million non-cash cumulative adjustment to lease expense. For fiscal 2018 includes: (i) $47 million of charges related to our decision to transition and exit a commercial air-to-ground LTE radio communications line of business and other items; (ii) a $12 million non-cash adjustment for deferred compensation; and (iii) $5 million of Exelis acquisition-related and other charges. (3)Includes $609 million and $239 million of amortization of identifiable intangible assets acquired as a result of the L3Harris Merger for fiscal 2020 and the two quarters ended January 3, 2020, respectively; and $100 million, $50 million, $101 million and $101 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis for fiscal 2020, the two quarters ended January 3, 2020, and fiscal 2019 and 2018, respectively. Because the L3Harris Merger and the acquisition of Exelis benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired was not allocated to any 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.
| Fiscal Year Ended |  | Two Quarters Ended |  | Fiscal Years Ended
(In millions) | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019 |  | June 29, 2018
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 3,718 |  |  | $ | 1,892 |  |  | $ | 27 |  |  | $ | 26 |
Subcontractor | 1,820 |  |  | 866 |  |  | 25 |  |  | 29 |
| $ | 5,538 |  |  | $ | 2,758 |  |  | $ | 52 |  |  | $ | 55 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 4,179 |  |  | $ | 2,121 |  |  | $ | 52 |  |  | $ | 54 |
Cost-reimbursable | 1,359 |  |  | 637 |  |  | — |  |  | 1 |
| $ | 5,538 |  |  | $ | 2,758 |  |  | $ | 52 |  |  | $ | 55 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 4,389 |  |  | $ | 2,146 |  |  | $ | 30 |  |  | $ | 40 |
International | 1,149 |  |  | 612 |  |  | 22 |  |  | 15 |
| $ | 5,538 |  |  | $ | 2,758 |  |  | $ | 52 |  |  | $ | 55 |
_______________ (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.
| Fiscal Year Ended |  | Two Quarters Ended |  | Fiscal Years Ended
(In millions) | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019 |  | June 29, 2018
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 2,684 |  |  | $ | 1,348 |  |  | $ | 2,244 |  |  | $ | 2,152 |
Subcontractor | 2,262 |  |  | 1,029 |  |  | 1,467 |  |  | 1,142 |
| $ | 4,946 |  |  | $ | 2,377 |  |  | $ | 3,711 |  |  | $ | 3,294 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 2,838 |  |  | $ | 1,384 |  |  | $ | 2,093 |  |  | $ | 1,625 |
Cost-reimbursable | 2,108 |  |  | 993 |  |  | 1,618 |  |  | 1,669 |
| $ | 4,946 |  |  | $ | 2,377 |  |  | $ | 3,711 |  |  | $ | 3,294 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 4,195 |  |  | $ | 2,043 |  |  | $ | 3,255 |  |  | $ | 2,936 |
International | 751 |  |  | 334 |  |  | 456 |  |  | 358 |
| $ | 4,946 |  |  | $ | 2,377 |  |  | $ | 3,711 |  |  | $ | 3,294 |
_______________ (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.
| Fiscal Year Ended |  | Two Quarters Ended |  | Fiscal Years Ended
(In millions) | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019 |  | June 29, 2018
Revenue By Customer Relationship(1) |  |  |  |  |  |  |
Prime contractor | $ | 3,102 |  |  | $ | 1,406 |  |  |  |  |
Subcontractor | 1,341 |  |  | 745 |  |  |  |  |
| $ | 4,443 |  |  | $ | 2,151 |  |  |  |  |
Revenue By Contract Type(1) |  |  |  |  |  |  |
Fixed-price(2) | $ | 3,805 |  |  | $ | 1,849 |  |  |  |  |
Cost-reimbursable | 638 |  |  | 302 |  |  |  |  |
| $ | 4,443 |  |  | $ | 2,151 |  |  |  |  |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 3,204 |  |  | $ | 1,518 |  |  | $ | 1,281 |  |  | $ | 1,031 |
International | 1,239 |  |  | 633 |  |  | 927 |  |  | 984 |
| $ | 4,443 |  |  | $ | 2,151 |  |  | $ | 2,208 |  |  | $ | 2,015 |
_______________ (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.
| Fiscal Year Ended |  | Two Quarters Ended |  | Fiscal Years Ended
(In millions) | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019 |  | June 29, 2018
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 2,258 |  |  | $ | 1,246 |  |  | $ | 654 |  |  | $ | 656 |
Subcontractor | 1,190 |  |  | 792 |  |  | 18 |  |  | 12 |
| $ | 3,448 |  |  | $ | 2,038 |  |  | $ | 672 |  |  | $ | 668 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 2,809 |  |  | $ | 1,688 |  |  | $ | 587 |  |  | $ | 582 |
Cost-reimbursable | 639 |  |  | 350 |  |  | 85 |  |  | 86 |
| $ | 3,448 |  |  | $ | 2,038 |  |  | $ | 672 |  |  | $ | 668 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 2,843 |  |  | $ | 1,514 |  |  | $ | 644 |  |  | $ | 627 |
International | 605 |  |  | 524 |  |  | 28 |  |  | 41 |
| $ | 3,448 |  |  | $ | 2,038 |  |  | $ | 672 |  |  | $ | 668 |
______________ (1)Includes revenue derived from time-and-materials contracts. Total assets by business segment is as follows:
(In millions) | January 1, 2021 |  | January 3, 2020 |  |
Total Assets |  |  |  |  |
Integrated Mission Systems | $ | 8,906 |  |  | $ | 7,888 |  |  |
Space and Airborne Systems | 6,943 |  |  | 6,837 |  |  |
Communication Systems | 5,746 |  |  | 5,930 |  |  |
Aviation Systems | 5,026 |  |  | 7,569 |  |  |
Corporate(1) | 10,339 |  |  | 10,112 |  |  |
| $ | 36,960 |  |  | $ | 38,336 |  |  |
_______________ (1)Identifiable intangible assets acquired in connection with the L3Harris Merger in the two quarters ended January 3, 2020 and our acquisition of Exelis 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 $7.9 billion and $8.5 billion at January 1, 2021 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 of discontinued operations and divestitures. See Note 3: Business Divestitures and Asset Sales in these Notes for additional information. Other selected financial information by business segment and geographical area is summarized below:
| Fiscal Year Ended |  | Two Quarters Ended |  | Fiscal Years Ended
(In millions) | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019 |  | June 29, 2018
Capital Expenditures |  |  |  |  |  |  |
Integrated Mission Systems | $ | 67 |  |  | $ | 29 |  |  | $ | 1 |  |  | $ | 1 |
Space and Airborne Systems | 92 |  |  | 36 |  |  | 48 |  |  | 49 |
Communication Systems | 58 |  |  | 22 |  |  | 29 |  |  | 25 |
Aviation Systems | 87 |  |  | 64 |  |  | 54 |  |  | 37 |
Other non-reportable business segments(1) | — |  |  | — |  |  | 6 |  |  | 4 |
Corporate | 64 |  |  | 22 |  |  | 23 |  |  | 20 |
| $ | 368 |  |  | $ | 173 |  |  | $ | 161 |  |  | $ | 136 |
Depreciation and Amortization |  |  |  |  |  |  |
Integrated Mission Systems | $ | 70 |  |  | $ | 37 |  |  | $ | 2 |  |  | $ | 2 |
Space and Airborne Systems | 66 |  |  | 31 |  |  | 50 |  |  | 54 |
Communication Systems | 61 |  |  | 32 |  |  | 49 |  |  | 54 |
Aviation Systems | 103 |  |  | 53 |  |  | 29 |  |  | 22 |
Other non-reportable business segments(1) | — |  |  | — |  |  | 3 |  |  | 5 |
Corporate | 732 |  |  | 289 |  |  | 125 |  |  | 122 |
| $ | 1,032 |  |  | $ | 442 |  |  | $ | 258 |  |  | $ | 259 |
Geographical Information for Continuing Operations |  |  |  |  |  |  |
U.S. operations: |  |  |  |  |  |  |
Revenue | $ | 16,998 |  |  | $ | 8,485 |  |  | $ | 6,530 |  |  | $ | 5,854 |
Long-lived assets(2) | $ | 1,949 |  |  | $ | 1,865 |  |  | $ | 866 |  |  | $ | 892 |
International operations: |  |  |  |  |  |  |
Revenue | $ | 1,196 |  |  | $ | 778 |  |  | $ | 271 |  |  | $ | 314 |
Long-lived assets(2) | $ | 153 |  |  | $ | 252 |  |  | $ | 28 |  |  | $ | 8 |
_______________ (1)Includes capital expenditures and depreciation and amortization of the Harris Night Vision business prior to the date of divestiture on September 13, 2019. See Note 3: Business Divestitures and Asset Sales in these Notes for more information. (2)Long-lived assets are net fixed assets attributed to the respective geographic regions. In addition to depreciation and amortization expense related to property, plant and equipment, “Depreciation and Amortization” in the table above also includes $714 million $285 million, $120 million and $116 million of amortization related to identifiable intangible assets, debt premium, debt discount, debt issuance costs and other items in fiscal 2020, the two quarters ended January 3, 2020, and fiscal 2019 and 2018, respectively. Our products and systems are produced principally in the U.S. with international revenue derived primarily from exports. No revenue earned from any individual foreign country exceeded 5 percent of our total revenue in fiscal 2020, the two quarters ended January 3, 2020, or fiscal 2019 or 2018. Sales made to U.S. Government customers, including foreign military sales funded through the U.S. Government, whether directly or through prime contractors, by all segments as a percentage of total revenue were 78 percent, 73 percent, 77 percent and 75 percent in fiscal 2020, the two quarters ended January 3, 2020, and fiscal 2019 and 2018, respectively. Revenue from services in fiscal 2020 was 34 percent, 16 percent, 15 percent and 38 percent of total revenue in our Integrated Mission Systems, Space and Airborne Systems, Communication Systems and Aviation Systems segments, respectively. Revenue from products and services where the end consumer is located outside the U.S., including foreign military sales through the U.S. Government, was $3.7 billion (20 percent of our revenue), $2.0 billion (21 percent of our revenue), $1.5 billion (22 percent of our revenue) and $1.4 billion (23 percent of our revenue) in fiscal 2020, the two quarters ended January 3, 2020, and fiscal 2019 and 2018, respectively. Export revenue and revenue from international operations in fiscal 2020 was principally from the EMEA (Europe, Middle East and Africa) and APAC (Asia-Pacific) regions and Canada.

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration