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BUSINESS SEGMENTS | 12 Months Ended
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Dec. 31, 2021
Segment Reporting [Abstract] |
BUSINESS SEGMENTS | NOTE 24: BUSINESS SEGMENTS We structure our operations primarily around the products, systems and services we sell and the markets we serve, and in fiscal 2021 we reported the financial results of our continuing operations in the following four operating segments, which were 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 (“EO/IR”) solutions; •Space & 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; and public safety radios; global communications solutions and •Aviation Systems, including defense aviation; commercial aviation products; commercial 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 & 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. Effective January 1, 2022, we have streamlined our business segments from four business segments to three business segments. As a result of the segment reorganization, the Aviation Systems segment was eliminated as a business segment effective for the beginning of fiscal 2022. See Note 27: Subsequent Events for further information relating to our fiscal 2022 segment reorganization. See Note 3: Business Divestitures and Asset Sales and elsewhere in these Notes for information relating to businesses divested in fiscal 2021, fiscal 2020 and the two quarters ended January 3, 2020. 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:
| Fiscal Years Ended |  | Two Quarters Ended |  | Fiscal Year Ended
(In millions) | December 31, 2021 |  | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019
Revenue |  |  |  |  |  |  |
Integrated Mission Systems | $ | 5,839 |  |  | $ | 5,538 |  |  | $ | 2,758 |  |  | $ | 52 |
Space & Airborne Systems | 5,093 |  |  | 4,946 |  |  | 2,377 |  |  | 3,711 |
Communication Systems | 4,287 |  |  | 4,443 |  |  | 2,151 |  |  | 2,208 |
Aviation Systems | 2,783 |  |  | 3,448 |  |  | 2,038 |  |  | 672 |
Other non-reportable businesses(1) | — |  |  | — |  |  | 23 |  |  | 165 |
Corporate eliminations | (188) |  |  | (181) |  |  | (84) |  |  | (7) |
Total Revenue | $ | 17,814 |  |  | $ | 18,194 |  |  | $ | 9,263 |  |  | $ | 6,801 |
Income from Continuing Operations before Income Taxes
Segment Operating Income (Loss): |  |  |  |  |  |  |
Integrated Mission Systems | $ | 950 |  |  | $ | 847 |  |  | $ | 371 |  |  | $ | 10 |
Space & Airborne Systems | 970 |  |  | 932 |  |  | 447 |  |  | 696 |
Communication Systems | 1,092 |  |  | 1,084 |  |  | 493 |  |  | 637 |
Aviation Systems | 330 |  |  | (177) |  |  | 289 |  |  | 76 |
Other non-reportable businesses(1) | — |  |  | — |  |  | — |  |  | 27 |
| 3,342 |  |  | 2,686 |  |  | 1,600 |  |  | 1,446 |
Unallocated Items: |  |  |  |  |  |  |
Unallocated corporate department expense, net | (57) |  |  | (69) |  |  | 3 |  |  | (2) |
L3Harris Merger-related transaction, integration and other expenses and losses | (128) |  |  | (140) |  |  | (390) |  |  | (65) |
Amortization of acquisition-related intangibles(2) | (627) |  |  | (709) |  |  | (289) |  |  | (101) |
Additional cost of sales related to fair value step-up in inventory sold | — |  |  | (31) |  |  | (142) |  |  | — |
Business divestiture-related gains (losses) | 220 |  |  | (51) |  |  | 229 |  |  | — |
Impairment of goodwill and other assets(3) | (125) |  |  | (132) |  |  | — |  |  | — |
Other items | (71) |  |  | 10 |  |  | — |  |  | — |
| (788) |  |  | (1,122) |  |  | (589) |  |  | (168) |
Pension adjustment | (445) |  |  | (389) |  |  | (172) |  |  | (186) |
Non-operating income | 439 |  |  | 401 |  |  | 192 |  |  | 188 |
Net interest expense | (265) |  |  | (254) |  |  | (123) |  |  | (167) |
Total income from continuing operations before income taxes | $ | 2,283 |  |  | $ | 1,322 |  |  | $ | 908 |  |  | $ | 1,113 |
_______________ (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)Includes amortization of identifiable intangible assets acquired as a result of the L3Harris Merger and the acquisition of Exelis. 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. (3)For fiscal 2021 includes: (i) a $62 million non-cash goodwill impairment charge related to our CPS business and (ii) a $63 million non-cash intangible asset impairment charge related to our CTS reporting unit. For fiscal 2020 includes: (i) a $113 million non-cash intangible asset impairment charge related to our CAS reporting unit and (ii) a $14 million non-cash goodwill impairment charge related to the then-potential divestiture of VSE disposal group, as well as a $5 million non-cash goodwill impairment charge related to the divestiture of the Applied Kilovolts business. See Note 9: Goodwill and Note 10: Intangible Assets in these Notes for additional information. 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.
| Fiscal Years Ended |  | Two Quarters Ended |  | Fiscal Year Ended
(In millions) | December 31, 2021 |  | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 4,044 |  |  | $ | 3,721 |  |  | $ | 1,893 |  |  | $ | 27 |
Subcontractor | 1,727 |  |  | 1,764 |  |  | 847 |  |  | 25 |
Intersegment | 68 |  |  | 53 |  |  | 18 |  |  | — |
| $ | 5,839 |  |  | $ | 5,538 |  |  | $ | 2,758 |  |  | $ | 52 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 4,467 |  |  | $ | 4,172 |  |  | $ | 2,115 |  |  | $ | 52 |
Cost-reimbursable | 1,304 |  |  | 1,313 |  |  | 625 |  |  | — |
Intersegment | 68 |  |  | 53 |  |  | 18 |  |  | — |
| $ | 5,839 |  |  | $ | 5,538 |  |  | $ | 2,758 |  |  | $ | 52 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 4,115 |  |  | $ | 4,338 |  |  | $ | 2,120 |  |  | $ | 30 |
International | 1,656 |  |  | 1,147 |  |  | 620 |  |  | 22 |
Intersegment | 68 |  |  | 53 |  |  | 18 |  |  | — |
| $ | 5,839 |  |  | $ | 5,538 |  |  | $ | 2,758 |  |  | $ | 52 |
_______________ (1)Includes revenue derived from time-and-materials contracts. Space & Airborne Systems: Space & 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.
| Fiscal Years Ended |  | Two Quarters Ended |  | Fiscal Year Ended
(In millions) | December 31, 2021 |  | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 2,925 |  |  | $ | 2,684 |  |  | $ | 1,349 |  |  | $ | 2,244 |
Subcontractor | 2,157 |  |  | 2,247 |  |  | 1,023 |  |  | 1,439 |
Intersegment | 11 |  |  | 15 |  |  | 5 |  |  | 28 |
| $ | 5,093 |  |  | $ | 4,946 |  |  | $ | 2,377 |  |  | $ | 3,711 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 2,921 |  |  | $ | 2,834 |  |  | $ | 1,380 |  |  | $ | 2,066 |
Cost-reimbursable | 2,161 |  |  | 2,097 |  |  | 992 |  |  | 1,617 |
Intersegment | 11 |  |  | 15 |  |  | 5 |  |  | 28 |
| $ | 5,093 |  |  | $ | 4,946 |  |  | $ | 2,377 |  |  | $ | 3,711 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 4,417 |  |  | $ | 4,180 |  |  | $ | 2,038 |  |  | $ | 3,252 |
International | 665 |  |  | 751 |  |  | 334 |  |  | 431 |
Intersegment | 11 |  |  | 15 |  |  | 5 |  |  | 28 |
| $ | 5,093 |  |  | $ | 4,946 |  |  | $ | 2,377 |  |  | $ | 3,711 |
_______________ (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.
| Fiscal Years Ended |  | Two Quarters Ended |  | Fiscal Year Ended
(In millions) | December 31, 2021 |  | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019
Revenue By Customer Relationship(1) |  |  |  |  |  |  |
Prime contractor | $ | 2,886 |  |  | $ | 3,102 |  |  | $ | 1,406 |  |  |
Subcontractor | 1,347 |  |  | 1,304 |  |  | 729 |  |  |
Intersegment | 54 |  |  | 37 |  |  | 16 |  |  |
| $ | 4,287 |  |  | $ | 4,443 |  |  | $ | 2,151 |  |  |
Revenue By Contract Type(1) |  |  |  |  |  |  |
Fixed-price(2) | $ | 3,631 |  |  | $ | 3,784 |  |  | $ | 1,840 |  |  |
Cost-reimbursable | 602 |  |  | 622 |  |  | 295 |  |  |
Intersegment | 54 |  |  | 37 |  |  | 16 |  |  |
| $ | 4,287 |  |  | $ | 4,443 |  |  | $ | 2,151 |  |  |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 3,001 |  |  | $ | 3,181 |  |  | $ | 1,507 |  |  | $ | 1,280 |
International | 1,232 |  |  | 1,225 |  |  | 628 |  |  | 927 |
Intersegment | 54 |  |  | 37 |  |  | 16 |  |  | 1 |
| $ | 4,287 |  |  | $ | 4,443 |  |  | $ | 2,151 |  |  | $ | 2,208 |
_______________ (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 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.
| Fiscal Years Ended |  | Two Quarters Ended |  | Fiscal Year Ended
(In millions) | December 31, 2021 |  | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019
Revenue By Customer Relationship |  |  |  |  |  |  |
Prime contractor | $ | 1,808 |  |  | $ | 2,258 |  |  | $ | 1,245 |  |  | $ | 654 |
Subcontractor | 920 |  |  | 1,114 |  |  | 748 |  |  | 14 |
Intersegment | 55 |  |  | 76 |  |  | 45 |  |  | 4 |
| $ | 2,783 |  |  | $ | 3,448 |  |  | $ | 2,038 |  |  | $ | 672 |
Revenue By Contract Type |  |  |  |  |  |  |
Fixed-price(1) | $ | 2,199 |  |  | $ | 2,750 |  |  | $ | 1,664 |  |  | $ | 583 |
Cost-reimbursable | 529 |  |  | 622 |  |  | 329 |  |  | 85 |
Intersegment | 55 |  |  | 76 |  |  | 45 |  |  | 4 |
| $ | 2,783 |  |  | $ | 3,448 |  |  | $ | 2,038 |  |  | $ | 672 |
Revenue By Geographical Region |  |  |  |  |  |  |
United States | $ | 2,329 |  |  | $ | 2,769 |  |  | $ | 1,472 |  |  | $ | 640 |
International | 399 |  |  | 603 |  |  | 521 |  |  | 28 |
Intersegment | 55 |  |  | 76 |  |  | 45 |  |  | 4 |
| $ | 2,783 |  |  | $ | 3,448 |  |  | $ | 2,038 |  |  | $ | 672 |
______________ (1)Includes revenue derived from time-and-materials contracts. Total assets by business segment are as follows:
(In millions) | December 31, 2021 |  | January 1, 2021 |  |
Total Assets |  |  |  |  |
Integrated Mission Systems | $ | 9,269 |  |  | $ | 8,906 |  |  |
Space & Airborne Systems | 7,190 |  |  | 6,943 |  |  |
Communication Systems | 6,035 |  |  | 5,746 |  |  |
Aviation Systems | 3,531 |  |  | 5,026 |  |  |
Corporate(1) | 8,684 |  |  | 10,339 |  |  |
| $ | 34,709 |  |  | $ | 36,960 |  |  |
_______________ (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 $6.6 billion and $7.9 billion at December 31, 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 of discontinued operations and divestitures. Other selected financial information by business segment and geographical area is summarized below:
| Fiscal Years Ended |  | Two Quarters Ended |  | Fiscal Year Ended
(In millions) | December 31, 2021 |  | January 1, 2021 |  | January 3, 2020 |  | June 28, 2019
Capital Expenditures |  |  |  |  |  |  |
Integrated Mission Systems | $ | 64 |  |  | $ | 67 |  |  | $ | 29 |  |  | $ | 1 |
Space & Airborne Systems | 101 |  |  | 92 |  |  | 36 |  |  | 48 |
Communication Systems | 56 |  |  | 58 |  |  | 22 |  |  | 29 |
Aviation Systems | 63 |  |  | 87 |  |  | 64 |  |  | 54 |
Other non-reportable businesses(1) | — |  |  | — |  |  | — |  |  | 6 |
Corporate | 58 |  |  | 64 |  |  | 22 |  |  | 23 |
| $ | 342 |  |  | $ | 368 |  |  | $ | 173 |  |  | $ | 161 |
Depreciation and Amortization |  |  |  |  |  |  |
Integrated Mission Systems | $ | 74 |  |  | $ | 70 |  |  | $ | 37 |  |  | $ | 2 |
Space & Airborne Systems | 69 |  |  | 66 |  |  | 31 |  |  | 50 |
Communication Systems | 49 |  |  | 61 |  |  | 32 |  |  | 49 |
Aviation Systems | 66 |  |  | 103 |  |  | 53 |  |  | 29 |
Other non-reportable businesses(1) | — |  |  | — |  |  | — |  |  | 3 |
Corporate | 709 |  |  | 732 |  |  | 289 |  |  | 125 |
| $ | 967 |  |  | $ | 1,032 |  |  | $ | 442 |  |  | $ | 258 |
Geographical Information for Continuing Operations |  |  |  |  |  |  |
U.S. operations: |  |  |  |  |  |  |
Revenue | $ | 16,234 |  |  | $ | 16,998 |  |  | $ | 8,485 |  |  | $ | 6,530 |
Long-lived assets(2) | $ | 1,870 |  |  | $ | 1,949 |  |  | $ | 1,865 |  |  | $ | 866 |
International operations: |  |  |  |  |  |  |
Revenue | $ | 1,580 |  |  | $ | 1,196 |  |  | $ | 778 |  |  | $ | 271 |
Long-lived assets(2) | $ | 231 |  |  | $ | 153 |  |  | $ | 252 |  |  | $ | 28 |
_______________ (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 $624 million, $714 million, $285 million and $120 million of amortization related to identifiable intangible assets, debt premium, debt discount, debt issuance costs and other items in fiscal 2021, fiscal 2020, the two quarters ended January 3, 2020 and fiscal 2019, 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 2021 or 2020, the two quarters ended January 3, 2020, or fiscal 2019. 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 75 percent, 78 percent, 73 percent and 77 percent in fiscal 2021, fiscal 2020, the two quarters ended January 3, 2020 and fiscal 2019, respectively. Revenue from services in fiscal 2021 was 36 percent, 16 percent, 16 percent and 40 percent of total revenue in our Integrated Mission Systems, Space & 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 $3.9 billion (22 percent of our revenue), $3.7 billion (20 percent of our revenue), $2.0 billion (21 percent of our revenue) and $1.5 billion (22 percent of our revenue) in fiscal 2021, fiscal 2020, the two quarters ended January 3, 2020 and fiscal 2019, respectively. Export revenue and revenue from international operations in fiscal 2021 was principally from the EMEA (Europe, Middle East and Africa) and APAC (Asia-Pacific) regions and Canada.

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- 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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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
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