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Business Segment Information (Tables)

3 Months Ended

Apr. 02, 2021

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
(In millions)			April 2, 2021						April 3, 2020
Revenue
Integrated Mission Systems			$	1,451					$	1,370
Space and Airborne Systems			1,236						1,192
Communication Systems			1,112						1,094
Aviation Systems			814						1,011
Corporate eliminations			(46)						(41)
Total revenue			$	4,567					$	4,626
Income From Continuing Operations Before Income Taxes
Segment Operating Income (Loss):
Integrated Mission Systems			$	240					$	201
Space and Airborne Systems			240						221
Communication Systems			281						250
Aviation Systems			128						(177)
Unallocated corporate expenses(1)			(40)						(25)
L3Harris Merger-related integration and restructuring expenses			(21)						(31)
Amortization of acquisition-related intangibles(2)			(164)						(145)
Business divestiture-related losses			(15)						(3)
Impairment of goodwill and other assets			(62)						(5)
Pension adjustment			(111)						(97)
Non-operating income			117						95
Net interest expense			(66)						(63)
Total income from continuing operations before income taxes			$	527					$	221

_______________

(1)For the quarter ended April 2, 2021, includes $7 million of divestiture-related expenses and a $15 million accrual for a value added tax obligation. For the quarter ended April 3, 2020, includes $15 million of additional cost of sales related to the fair value step-up in inventory sold.

(2)For the quarters ended April 2, 2021 and April 3, 2020, respectively, includes $140 million and $120 million of amortization of identifiable intangible assets acquired as a result of the L3Harris Merger and $24 million and $25 million of amortization of identifiable intangible assets acquired as a result of

our acquisition of Exelis Inc. 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
(In millions)															April 2, 2021						April 3, 2020
Revenue By Customer Relationship
Prime contractor															$	1,006					$	949
Subcontractor															445						421
															$	1,451					$	1,370
Revenue By Contract Type
Fixed-price(1)															$	1,093					$	1,025
Cost-reimbursable															358						345
															$	1,451					$	1,370
Revenue By Geographical Region
United States															$	1,033					$	1,105
International															418						265
															$	1,451					$	1,370

_______________

(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
(In millions)															April 2, 2021						April 3, 2020
Revenue By Customer Relationship
Prime contractor															$	683					$	658
Subcontractor															553						534
															$	1,236					$	1,192
Revenue By Contract Type
Fixed-price(1)															$	716					$	670
Cost-reimbursable															520						522
															$	1,236					$	1,192
Revenue By Geographical Region
United States															$	1,062					$	1,003
International															174						189
															$	1,236					$	1,192

_______________

(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
(In millions)															April 2, 2021						April 3, 2020
Revenue By Customer Relationship
Prime contractor															$	729					$	740
Subcontractor															383						354
															$	1,112					$	1,094
Revenue By Contract Type
Fixed-price(1)															$	946					$	918
Cost-reimbursable															166						176
															$	1,112					$	1,094
Revenue by Geographical Region
United States															$	841					$	834
International															271						260
															$	1,112					$	1,094

_______________

(1)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
(In millions)															April 2, 2021						April 3, 2020
Revenue By Customer Relationship
Prime contractor															$	536					$	664
Subcontractor															278						347
															$	814					$	1,011
Revenue By Contract Type
Fixed-price(1)															$	652					$	841
Cost-reimbursable															162						170
															$	814					$	1,011
Revenue By Geographical Region
United States															$	699					$	749
International															115						262
															$	814					$	1,011

_______________

(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)			April 2, 2021						January 1, 2021
Total Assets
Integrated Mission Systems			$	9,080					$	8,906
Space and Airborne Systems			6,996						6,943
Communication Systems			5,720						5,746
Aviation Systems			5,436						5,026
Corporate(1)			9,358						10,339
Total Assets			$	36,590					$	36,960

_______________

(1)Identifiable intangible assets acquired in connection with the L3Harris Merger on June 29, 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 $7.3 billion and $7.9 billion at April 2, 2021 and January 1, 2021, 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 B — Business Divestitures in these Notes for additional information.

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