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BUSINESS SEGMENT INFORMATION (Tables) | 6 Months Ended
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Jun. 30, 2023
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 before income taxes are as follows:
| Quarter Ended |  | Two Quarters Ended
(In millions) | June 30, 2023 |  | July 1, 2022 |  | June 30, 2023 |  | July 1, 2022
Revenue from Product Sales and Services |  |  |  |  |  |  |
IMS | $ | 1,735 |  |  | $ | 1,608 |  |  | $ | 3,435 |  |  | $ | 3,267 |
SAS | 1,715 |  |  | 1,572 |  |  | 3,370 |  |  | 3,089 |
CS | 1,289 |  |  | 993 |  |  | 2,452 |  |  | 1,956 |
Corporate eliminations | (46) |  |  | (38) |  |  | (93) |  |  | (74) |
Total revenue from product sales and services | $ | 4,693 |  |  | $ | 4,135 |  |  | 9,164 |  |  | $ | 8,238 |
Income before Income Taxes |  |  |  |  |  |  |
Segment operating income: |  |  |  |  |  |  |
IMS(1) | $ | 162 |  |  | $ | 207 |  |  | $ | 347 |  |  | $ | 458 |
SAS(1) | 168 |  |  | 203 |  |  | 355 |  |  | 380 |
CS | 325 |  |  | 238 |  |  | 591 |  |  | 467 |
Total segment operating income | 655 |  |  | 648 |  |  | 1,293 |  |  | 1,305 |
Unallocated Items: |  |  |  |  |  |  |
Unallocated corporate department (expense) income, net(2) | (35) |  |  | 19 |  |  | (41) |  |  | 15 |
Amortization of acquisition-related intangibles(3) | (173) |  |  | (151) |  |  | (338) |  |  | (303) |
Additional cost of sales related to the fair value step-up in inventory sold | (15) |  |  | — |  |  | (30) |  |  | — |
L3Harris merger-related integration expenses | — |  |  | (26) |  |  | — |  |  | (50) |
Acquisition-related transaction and integration expenses | (36) |  |  | — |  |  | (76) |  |  | — |
Pre-acquisition and other divestiture-related expenses | (2) |  |  | (35) |  |  | (12) |  |  | (36) |
Business divestiture-related gains, net | 26 |  |  | — |  |  | 26 |  |  | — |
Gain on sale of asset group | — |  |  | 8 |  |  | — |  |  | 8 |
Impairment of other assets(4) | (21) |  |  | — |  |  | (39) |  |  | — |
LHX NeXt(5) | (22) |  |  | — |  |  | (35) |  |  | — |
FAS/CAS operating adjustment(6) | 23 |  |  | 21 |  |  | 45 |  |  | 43 |
Total unallocated items | (255) |  |  | (164) |  |  | (500) |  |  | (323) |
Non-operating income, net | 83 |  |  | 108 |  |  | 165 |  |  | 214 |
Interest expense, net | (111) |  |  | (67) |  |  | (213) |  |  | (135) |
Income before income taxes | $ | 372 |  |  | $ | 525 |  |  | $ | 745 |  |  | $ | 1,061 |
_______________ (1)For the quarter ended June 30, 2023, includes non-cash charges for impairment of other assets of $12 million and $27 million for IMS and SAS, respectively, related to facility closures and restructuring of a customer contract impacting both segments. (2)Includes certain corporate-level expenses that are not included in management’s evaluation of any segment’s operating performance. (3)Includes amortization of identifiable intangible assets acquired in connection with business combinations. Because our acquisitions benefited the entire Company, the amortization of identifiable intangible assets acquired was not allocated to any segment. (4)Includes a $21 million non-cash charge for impairment of intangible assets related to the closure of a facility during the quarter and two quarters ended June 30, 2023. See Note G: Goodwill and Other Intangible Assets in these Notes for additional information. Additionally, includes $18 million charge related to an impairment of a customer contract during the two quarters ended June 30, 2023. (5)Costs associated with transforming multiple functions, systems and processes to increase agility and competitiveness, including third-party consulting, workforce optimization and incremental IT expenses for implementation of new systems. (6)Represents the difference between the service cost component of Financial Accounting Standards ("FAS") pension and other postretirement benefits (“OPEB”) cost and total U.S. Government Cost Accounting Standards (“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 FAS/CAS operating adjustment table below. The table below is a reconciliation of the FAS/CAS operating adjustment:
| Quarter Ended |  | Two Quarters Ended
(In millions) | June 30, 2023 |  | July 1, 2022 |  | June 30, 2023 |  | July 1, 2022
FAS pension service cost | $ | (7) |  |  | $ | (12) |  |  | $ | (13) |  |  | $ | (23) |
Less: CAS pension cost | (30) |  |  | (33) |  |  | (58) |  |  | (66) |
FAS/CAS operating adjustment | 23 |  |  | 21 |  |  | 45 |  |  | 43 |
Non-service FAS pension income | 77 |  |  | 111 |  |  | 154 |  |  | 221 |
FAS/CAS pension adjustment, net | $ | 100 |  |  | $ | 132 |  |  | $ | 199 |  |  | $ | 264 |
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
| June 30, 2023 |  | July 1, 2022
(In millions) | IMS |  | SAS |  | CS |  | IMS |  | SAS |  | CS
Revenue By Customer Relationship |  |  |  |  |  |  |  |  |  |  |
Prime contractor | $ | 1,127 |  |  | $ | 1,084 |  |  | $ | 798 |  |  | $ | 1,035 |  |  | $ | 987 |  |  | $ | 691 |
Subcontractor | 584 |  |  | 621 |  |  | 479 |  |  | 554 |  |  | 574 |  |  | 294 |
Intersegment | 24 |  |  | 10 |  |  | 12 |  |  | 19 |  |  | 11 |  |  | 8 |
Total revenue | $ | 1,735 |  |  | $ | 1,715 |  |  | $ | 1,289 |  |  | $ | 1,608 |  |  | $ | 1,572 |  |  | $ | 993 |
Revenue By Contract Type |  |  |  |  |  |  |  |  |  |  |
Fixed-price(1) | $ | 1,317 |  |  | $ | 1,099 |  |  | $ | 1,102 |  |  | $ | 1,209 |  |  | $ | 918 |  |  | $ | 834 |
Cost-reimbursable | 394 |  |  | 606 |  |  | 175 |  |  | 380 |  |  | 643 |  |  | 151 |
Intersegment | 24 |  |  | 10 |  |  | 12 |  |  | 19 |  |  | 11 |  |  | 8 |
Total revenue | $ | 1,735 |  |  | $ | 1,715 |  |  | $ | 1,289 |  |  | $ | 1,608 |  |  | $ | 1,572 |  |  | $ | 993 |
Revenue By Geographical Region |  |  |  |  |  |  |  |  |  |  |
United States | $ | 1,281 |  |  | $ | 1,475 |  |  | $ | 834 |  |  | $ | 1,154 |  |  | $ | 1,380 |  |  | $ | 631 |
International | 430 |  |  | 230 |  |  | 443 |  |  | 435 |  |  | 181 |  |  | 354 |
Intersegment | 24 |  |  | 10 |  |  | 12 |  |  | 19 |  |  | 11 |  |  | 8 |
Total revenue | $ | 1,735 |  |  | $ | 1,715 |  |  | $ | 1,289 |  |  | $ | 1,608 |  |  | $ | 1,572 |  |  | $ | 993 |
| Two Quarters Ended
| June 30, 2023 |  | July 1, 2022
(In millions) | IMS |  | SAS |  | CS |  | IMS |  | SAS |  | CS
Revenue By Customer Relationship |  |  |  |  |  |  |  |  |  |  |
Prime contractor | $ | 2,281 |  |  | $ | 2,094 |  |  | $ | 1,605 |  |  | $ | 2,121 |  |  | $ | 1,964 |  |  | $ | 1,347 |
Subcontractor | 1,109 |  |  | 1,253 |  |  | 822 |  |  | 1,111 |  |  | 1,104 |  |  | 590 |
Intersegment | 45 |  |  | 23 |  |  | 25 |  |  | 35 |  |  | 21 |  |  | 19 |
Total revenue | $ | 3,435 |  |  | $ | 3,370 |  |  | $ | 2,452 |  |  | $ | 3,267 |  |  | $ | 3,089 |  |  | $ | 1,956 |
Revenue By Contract Type |  |  |  |  |  |  |  |  |  |  |
Fixed-price(1) | $ | 2,603 |  |  | $ | 2,121 |  |  | $ | 2,080 |  |  | $ | 2,470 |  |  | $ | 1,798 |  |  | $ | 1,631 |
Cost-reimbursable | 787 |  |  | 1,226 |  |  | 347 |  |  | 762 |  |  | 1,270 |  |  | 306 |
Intersegment | 45 |  |  | 23 |  |  | 25 |  |  | 35 |  |  | 21 |  |  | 19 |
Total revenue | $ | 3,435 |  |  | $ | 3,370 |  |  | $ | 2,452 |  |  | $ | 3,267 |  |  | $ | 3,089 |  |  | $ | 1,956 |
Revenue By Geographical Region |  |  |  |  |  |  |  |  |  |  |
United States | $ | 2,538 |  |  | $ | 2,929 |  |  | $ | 1,625 |  |  | $ | 2,336 |  |  | $ | 2,722 |  |  | $ | 1,256 |
International | 852 |  |  | 418 |  |  | 802 |  |  | 896 |  |  | 346 |  |  | 681 |
Intersegment | 45 |  |  | 23 |  |  | 25 |  |  | 35 |  |  | 21 |  |  | 19 |
Total revenue | $ | 3,435 |  |  | $ | 3,370 |  |  | $ | 2,452 |  |  | $ | 3,267 |  |  | $ | 3,089 |  |  | $ | 1,956 |
_______________ (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) | June 30, 2023 |  | December 30, 2022
Total Assets |  |  |
IMS | $ | 11,030 |  |  | $ | 10,925 |
SAS | 9,181 |  |  | 8,838 |
CS | 7,129 |  |  | 5,800 |
Corporate(1) | 8,022 |  |  | 7,961 |
Total Assets | $ | 35,362 |  |  | $ | 33,524 |
_______________ (1)Identifiable intangible assets acquired in connection with business combinations were recorded as corporate assets because they benefited the entire Company. Identifiable intangible asset balances recorded as corporate assets were $6.4 billion and $6.0 billion at June 30, 2023 and December 30, 2022, 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 businesses held for sale.

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