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Business Segment Information
 9 Months Ended
Oct. 01, 2021
Segment Reporting [Abstract]  
Business Segment Information
Note S — Business Segment Information
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 intelligence, surveillance and reconnaissance (“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; avionics; and electronic warfare;
•Communication Systems, including tactical communications; broadband communications; integrated vision solutions; public safety radios, system applications and equipment; and global communications solutions; and
•Aviation Systems, including defense aviation; commercial aviation products; commercial pilot training; and mission networks for air traffic management.
See Note B — Business Divestitures in these Notes for information relating to businesses divested or classified as held for sale in fiscal 2020 and 2021.
The accounting policies of our business segments are the same as those described in Note 1: “Significant Accounting Policies” in the Notes to Consolidated Financial Statements in our Fiscal 2020 Form 10-K. We evaluate each business segment’s performance based on its operating income or loss, which we define as profit or loss from operations before income taxes, including pension income and excluding interest income and expense, royalties and related intellectual property expenses, equity method investment income or loss and gains or losses from securities and other investments. Intersegment sales are generally transferred at cost to the buying segment, and the sourcing segment recognizes a profit that is eliminated. The “Corporate eliminations” line item in the table below represents the elimination of intersegment sales. Corporate expenses are primarily allocated to our business segments using an allocation methodology prescribed by U.S. Government regulations
for government contractors. The unallocated items in the table below represent the portion of corporate expenses not allocated to our business segments and elimination of intersegment profits. The “Pension adjustment” line item in the table below represents the reconciliation of the non-service components of net periodic pension and postretirement benefit costs, which are a component of segment operating income but are included in the “Non-operating income” line item in our Condensed Consolidated Statement of Income (Unaudited). The non-service components of net periodic pension and postretirement benefit costs include interest cost, expected return on plan assets, amortization of net actuarial gain or loss, and effect of curtailments or settlements.
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 EndedThree Quarters Ended
(In millions)October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Revenue
Integrated Mission Systems$1,336 $1,372 $4,281 $4,073 
Space and Airborne Systems1,284 1,249 3,807 3,690 
Communication Systems1,030 1,094 3,269 3,300 
Aviation Systems625 792 2,248 2,603 
Corporate eliminations(46)(44)(141)(132)
Total revenue$4,229 $4,463 $13,464 $13,534 
Income From Continuing Operations Before Income Taxes
Segment Operating Income (Loss):
Integrated Mission Systems$222 $213 $691 $638 
Space and Airborne Systems242 231 735 687 
Communication Systems271 273 839 788 
Aviation Systems90 100 253 (46)
825 817 2,518 2,067 
Unallocated Items:
L3Harris Merger-related integration expenses(34)(27)(75)(95)
Amortization of acquisition-related intangibles(1)
(155)(176)(475)(529)
Additional cost of sales related to fair value step-up in
inventory sold		— — — (31)
Business divestiture-related gains (losses)27 (10)192 (62)
Other items(8)(2)(61)(19)
Impairment of goodwill and other assets— — (125)(19)
Unallocated corporate department expense(2)(21)(59)(51)
(172)(236)(603)(806)
Pension adjustment(111)(97)(336)(292)
Non-operating income, net111 96 314 296 
Interest expense, net(67)(62)(198)(190)
Total income from continuing operations before income taxes$586 $518 $1,695 $1,075 
_______________
(1)Includes amortization of identifiable intangible assets acquired as a result of the L3Harris Merger and the acquisition of Exelis Inc., which benefited the entire Company as opposed to any individual segment; therefore, 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 was primarily derived from U.S. Government development and production contracts and was generally recognized over time using the POC cost-to-cost revenue recognition method.
 Quarter EndedThree Quarters Ended
(In millions)October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Revenue By Customer Relationship
Prime contractor$906 $908 $2,933 $2,715 
Subcontractor414 452 1,303 1,321 
Intersegment16 12 45 37 
$1,336 $1,372 $4,281 $4,073 
Revenue By Contract Type
Fixed-price(1)
$988 $1,039 $3,227 $3,060 
Cost-reimbursable332 321 1,009 976 
Intersegment16 12 45 37 
$1,336 $1,372 $4,281 $4,073 
Revenue By Geographical Region
United States$1,016 $1,086 $3,070 $3,205 
International304 274 1,166 831 
Intersegment16 12 45 37 
$1,336 $1,372 $4,281 $4,073 
_______________
(1)Includes revenue derived from time-and-materials contracts.
Space and Airborne Systems: Space and Airborne Systems revenue was primarily derived from U.S. Government development and production contracts and was generally recognized over time using the POC cost-to-cost revenue recognition method.
Quarter EndedThree Quarters Ended
(In millions)October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Revenue By Customer Relationship
Prime contractor$753 $674 $2,169 $2,006 
Subcontractor527 570 1,630 1,673 
Intersegment4 5 8 11 
$1,284 $1,249 $3,807 $3,690 
Revenue By Contract Type
Fixed-price(1)
$717 $702 $2,172 $2,072 
Cost-reimbursable563 542 1,627 1,607 
Intersegment4 5 8 11 
$1,284 $1,249 $3,807 $3,690 
Revenue By Geographical Region
United States$1,122 $1,064 $3,284 $3,114 
International158 180 515 565 
Intersegment4 5 8 11 
$1,284 $1,249 $3,807 $3,690 
_______________
(1)Includes revenue derived from time-and-materials contracts.
Communication Systems: Communication Systems revenue was primarily derived from fixed-price contracts and was generally recognized at the point in time when products were received and accepted by the customer for standard products offered to multiple customers and over time for customer-specific products, systems and services.
 Quarter EndedThree Quarters Ended
(In millions)October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Revenue By Customer Relationship
Prime contractor$681 $760 $2,193 $2,249 
Subcontractor334 325 1,036 1,024 
Intersegment15 9 40 27 
$1,030 $1,094 $3,269 $3,300 
Revenue By Contract Type
Fixed-price(1)
$871 $931 $2,765 $2,790 
Cost-reimbursable144 154 464 483 
Intersegment15 9 40 27 
$1,030 $1,094 $3,269 $3,300 
Revenue By Geographical Region
United States$719 $745 $2,337 $2,410 
International296 340 892 863 
Intersegment15 9 40 27 
$1,030 $1,094 $3,269 $3,300 
_______________
(1)Includes revenue derived from time-and-materials contracts.
Aviation Systems: Aviation Systems revenue was primarily derived from fixed-price contracts and was generally recognized at the point in time when products were received and accepted by the customer for standard products offered to multiple customers and over time for customer-specific products, systems and services.
Quarter EndedThree Quarters Ended
(In millions)October 1, 2021October 2, 2020October 1, 2021October 2, 2020
Revenue By Customer Relationship
Prime contractor$383 $511 $1,439 $1,688 
Subcontractor231 263 761 858 
Intersegment11 18 48 57 
$625 $792 $2,248 $2,603 
Revenue By Contract Type
Fixed-price(1)
$506 $630 $1,786 $2,069 
Cost-reimbursable108 144 414 477 
Intersegment11 18 48 57 
$625 $792 $2,248 $2,603 
Revenue By Geographical Region
United States$530 $669 $1,891 $2,076 
International84 105 309 470 
Intersegment11 18 48 57 
$625 $792 $2,248 $2,603 
_______________
(1)Includes revenue derived from time-and-materials contracts.
Total assets by business segment are summarized below:
(In millions)October 1, 2021January 1, 2021
Total Assets
Integrated Mission Systems$9,157 $8,906 
Space and Airborne Systems7,149 6,943 
Communication Systems5,990 5,746 
Aviation Systems3,712 5,026 
Corporate(1)
9,010 10,339 
Total Assets$35,018 $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 $6.8 billion and $7.9 billion at October 1, 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.