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v3.22.2.2

BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended
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Sep. 30, 2022
Segment Reporting [Abstract] |
Schedule of Selected Financial Information by Business Segments | Segment revenue, segment operating income and a reconciliation of segment operating income to total income from continuing operations before income taxes are as follows:
| Quarter Ended |  | Three Quarters Ended
(In millions) | September 30, 2022 |  | October 1, 2021 |  | September 30, 2022 |  | October 1, 2021
Revenue |  |  |  |  |  |  |
Integrated Mission Systems | $ | 1,710 |  |  | $ | 1,649 |  |  | $ | 5,104 |  |  | $ | 5,192 |
Space & Airborne Systems | 1,502 |  |  | 1,494 |  |  | 4,450 |  |  | 4,464 |
Communication Systems | 1,068 |  |  | 1,030 |  |  | 3,024 |  |  | 3,269 |
Other non-reportable businesses | — |  |  | 95 |  |  | — |  |  | 661 |
Corporate eliminations | (34) |  |  | (39) |  |  | (94) |  |  | (122) |
Total revenue | $ | 4,246 |  |  | $ | 4,229 |  |  | 12,484 |  |  | $ | 13,464 |
(Loss) Income from Continuing Operations before Income Taxes
Segment Operating (Loss) Income: |  |  |  |  |  |  |
Integrated Mission Systems | $ | (225) |  |  | $ | 232 |  |  | $ | 247 |  |  | $ | 608 |
Space & Airborne Systems | 172 |  |  | 187 |  |  | 539 |  |  | 583 |
Communication Systems | (97) |  |  | 258 |  |  | 370 |  |  | 804 |
Other non-reportable businesses | — |  |  | 7 |  |  | — |  |  | 100 |
| (150) |  |  | 684 |  |  | 1,156 |  |  | 2,095 |
Unallocated Items: |  |  |  |  |  |  |
Unallocated corporate department income (expense), net(1) | 20 |  |  | (1) |  |  | 34 |  |  | (55) |
L3Harris Merger-related transaction, integration and other expenses and losses | (21) |  |  | (35) |  |  | (72) |  |  | (79) |
Amortization of acquisition-related intangibles(2) | (151) |  |  | (155) |  |  | (454) |  |  | (475) |
Business divestiture-related gains, net | — |  |  | 27 |  |  | — |  |  | 192 |
Charges for severance and other termination costs | (29) |  |  | — |  |  | (29) |  |  | — |
Charge related to an additional pre-merger legal contingency | (31) |  |  | — |  |  | (31) |  |  | — |
Impairment of goodwill and other assets | — |  |  | — |  |  | — |  |  | (125) |
Gain on sale of asset group | — |  |  | — |  |  | 8 |  |  | — |
Acquisition and other divestiture-related expenses | (10) |  |  | (8) |  |  | (45) |  |  | (64) |
FAS/CAS operating adjustment(3) | 22 |  |  | 30 |  |  | 65 |  |  | 90 |
| (200) |  |  | (142) |  |  | (524) |  |  | (516) |
Non-operating income, net | 99 |  |  | 111 |  |  | 313 |  |  | 314 |
Net interest expense | (70) |  |  | (67) |  |  | (205) |  |  | (198) |
(Loss) income from continuing operations before income taxes | $ | (321) |  |  | $ | 586 |  |  | $ | 740 |  |  | $ | 1,695 |
_______________ (1)For the quarter ended September 30, 2022, $11 million of income from greenhouse gas (“GHG”) emission reduction projects and $10 million of income from our deferred compensation plans. For the three quarters ended September 30, 2022, $20 million of income from our deferred compensation plans and $11 million of income from GHG emission reduction projects. For the three quarters ended October 1, 2021, includes a $15 million accrual for a value added tax obligation and $9 million of loss related to our deferred compensation plans. (2)Includes amortization of identifiable intangible assets acquired as a result of the all-stock merger between Harris Corporation and L3 Technologies, Inc. (the “L3Harris Merger”) and the acquisition of Exelis Inc. (“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)Represents the difference between the service cost component of FAS pension and OPEB income and total CAS pension and OPEB cost and replaces the “Pension adjustment” line item previously presented, which included the non-service components of FAS pension and OPEB income. See Net FAS/CAS operating adjustment table below. The table below is a reconciliation of the FAS/CAS operating adjustment:
| Quarter Ended |  | Three Quarters Ended
(In millions) | September 30, 2022 |  | October 1, 2021 |  | September 30, 2022 |  | October 1, 2021
FAS pension service cost | $ | (11) |  |  | $ | (17) |  |  | $ | (34) |  |  | $ | (54) |
Less: CAS pension cost | (33) |  |  | (47) |  |  | (99) |  |  | (144) |
FAS/CAS operating adjustment | 22 |  |  | 30 |  |  | 65 |  |  | 90 |
Non-service FAS pension income | 111 |  |  | 104 |  |  | 332 |  |  | 329 |
FAS/CAS pension adjustment, net(1) | $ | 133 |  |  | $ | 134 |  |  | $ | 397 |  |  | $ | 419 |
_______________ (1)FAS/CAS pension adjustment, net excludes net settlement and curtailment losses recognized in fiscal 2021.
Schedule of Disaggregation of Revenue by Segment | Disaggregation of Revenue We disaggregate revenue for all three 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.
| Quarter Ended |  |
(In millions) | September 30, 2022 |  | October 1, 2021 |  |  |  |
| Integrated Mission Systems |  | Space & Airborne Systems |  | Communication Systems |  | Integrated Mission Systems |  | Space & Airborne Systems |  | Communication Systems |  |  |  |
Revenue By Customer Relationship |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prime contractor | $ | 1,138 |  |  | $ | 963 |  |  | $ | 690 |  |  | $ | 1,080 |  |  | $ | 939 |  |  | $ | 681 |  |  |  |  |
Subcontractor | 558 |  |  | 533 |  |  | 364 |  |  | 555 |  |  | 551 |  |  | 334 |  |  |  |  |
Intersegment | 14 |  |  | 6 |  |  | 14 |  |  | 14 |  |  | 4 |  |  | 15 |  |  |  |  |
| $ | 1,710 |  |  | $ | 1,502 |  |  | $ | 1,068 |  |  | $ | 1,649 |  |  | $ | 1,494 |  |  | $ | 1,030 |  |  |  |  |
Revenue By Contract Type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-price(1) | $ | 1,270 |  |  | $ | 914 |  |  | $ | 899 |  |  | $ | 1,224 |  |  | $ | 907 |  |  | $ | 871 |  |  |  |  |
Cost-reimbursable | 426 |  |  | 582 |  |  | 155 |  |  | 411 |  |  | 583 |  |  | 144 |  |  |  |  |
Intersegment | 14 |  |  | 6 |  |  | 14 |  |  | 14 |  |  | 4 |  |  | 15 |  |  |  |  |
| $ | 1,710 |  |  | $ | 1,502 |  |  | $ | 1,068 |  |  | $ | 1,649 |  |  | $ | 1,494 |  |  | $ | 1,030 |  |  |  |  |
Revenue By Geographical Region |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States | $ | 1,295 |  |  | $ | 1,332 |  |  | $ | 706 |  |  | $ | 1,276 |  |  | $ | 1,326 |  |  | $ | 719 |  |  |  |  |
International | 401 |  |  | 164 |  |  | 348 |  |  | 359 |  |  | 164 |  |  | 296 |  |  |  |  |
Intersegment | 14 |  |  | 6 |  |  | 14 |  |  | 14 |  |  | 4 |  |  | 15 |  |  |  |  |
| $ | 1,710 |  |  | $ | 1,502 |  |  | $ | 1,068 |  |  | $ | 1,649 |  |  | $ | 1,494 |  |  | $ | 1,030 |  |  |  |  |
| Three Quarters Ended
(In millions) | September 30, 2022 |  | October 1, 2021
| Integrated Mission Systems |  | Space & Airborne Systems |  | Communication Systems |  | Integrated Mission Systems |  | Space & Airborne Systems |  | Communication Systems
Revenue By Customer Relationship |  |  |  |  |  |  |  |  |  |  |
Prime contractor | $ | 3,351 |  |  | $ | 2,835 |  |  | $ | 2,037 |  |  | $ | 3,454 |  |  | $ | 2,736 |  |  | $ | 2,193 |
Subcontractor | 1,709 |  |  | 1,597 |  |  | 954 |  |  | 1,699 |  |  | 1,720 |  |  | 1,036 |
Intersegment | 44 |  |  | 18 |  |  | 33 |  |  | 39 |  |  | 8 |  |  | 40 |
| $ | 5,104 |  |  | $ | 4,450 |  |  | $ | 3,024 |  |  | $ | 5,192 |  |  | $ | 4,464 |  |  | $ | 3,269 |
Revenue By Contract Type |  |  |  |  |  |  |  |  |  |  |
Fixed-price(1) | $ | 3,777 |  |  | $ | 2,675 |  |  | $ | 2,530 |  |  | $ | 3,868 |  |  | $ | 2,762 |  |  | $ | 2,765 |
Cost-reimbursable | 1,283 |  |  | 1,757 |  |  | 461 |  |  | 1,285 |  |  | 1,694 |  |  | 464 |
Intersegment | 44 |  |  | 18 |  |  | 33 |  |  | 39 |  |  | 8 |  |  | 40 |
| $ | 5,104 |  |  | $ | 4,450 |  |  | $ | 3,024 |  |  | $ | 5,192 |  |  | $ | 4,464 |  |  | $ | 3,269 |
Revenue By Geographical Region |  |  |  |  |  |  |  |  |  |  |
United States | $ | 3,763 |  |  | $ | 3,922 |  |  | $ | 1,962 |  |  | $ | 3,833 |  |  | $ | 3,916 |  |  | $ | 2,337 |
International | 1,297 |  |  | 510 |  |  | 1,029 |  |  | 1,320 |  |  | 540 |  |  | 892 |
Intersegment | 44 |  |  | 18 |  |  | 33 |  |  | 39 |  |  | 8 |  |  | 40 |
| $ | 5,104 |  |  | $ | 4,450 |  |  | $ | 3,024 |  |  | $ | 5,192 |  |  | $ | 4,464 |  |  | $ | 3,269 |
__________ (1)Includes revenue derived from time-and-materials contracts.
Schedule of Total Assets by Segment | Total assets by business segment are as follows:
(In millions) | September 30, 2022 |  | December 31, 2021
Total Assets |  |  |
Integrated Mission Systems | $ | 11,357 |  |  | $ | 11,830 |
Space & Airborne Systems | 8,349 |  |  | 8,151 |
Communication Systems | 5,844 |  |  | 6,035 |
Other non-reportable businesses | — |  |  | 3 |
Corporate(1) | 7,831 |  |  | 8,690 |
| $ | 33,381 |  |  | $ | 34,709 |
_______________ (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 $6.1 billion and $6.6 billion at September 30, 2022 and December 31, 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.

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