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BUSINESS SEGMENT INFORMATION | 3 Months Ended
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Mar. 29, 2024
Segment Reporting [Abstract] |
BUSINESS SEGMENT INFORMATION | NOTE P: BUSINESS SEGMENT INFORMATION We structure our operations primarily around the products, systems and services we sell and the markets we serve and report our financial results in the following four reportable segments: •SAS: including space payloads, sensors and full-mission solutions; classified intelligence and cyber; avionics; electronic warfare; and mission networks for air traffic management operations; •IMS: including multi-mission intelligence, surveillance and reconnaissance (“ISR”) systems; passive sensing and targeti ng; electronic attack; autonomy; power and communications; networks; sensors; and the CAS Disposal Group, which includes aviation products and pilot training operations, see Note O: Acquisitions and Divestitures; •CS: including tactical communications with global communications solutions; broadband communications; integrated vision solutions; and public safety radios, and system applications and equipment; and •AR: including missile solutions with propulsion technologies for strategic defense, missile defense, and hypersonic and tactical systems; and space propulsion and power systems for national security space and exploration missions. Business Realignment Effective for fiscal 2024, to better align our businesses, we adjusted our SAS and IMS segments. SAS. We combined our Advanced Combat Systems and Mission Avionics sectors into the Airborne Combat Systems (“ACS”) sector, as described below. •ACS: Sensors, processors, hardened electronics, release systems, displays and antennas for aircraft platforms, threat warning, countermeasures and launched efforts for airborne, ground and maritime platforms. IMS. We split our EO sector into two sectors, as described below, and transferred one business from EO to our Maritime sector. •GOS: passive sensing and targeting and laser imaging and sensor systems. •DE: fuzing, navigation and range-testing solutions and space communications and avionics. Business Segment Financial Information Segment revenue, segment operating income and a reconciliation of segment operating income to total income before income taxes are as follows:
|  |  | Quarter Ended
(In millions) |  |  |  |  | March 29, 2024 |  | March 31, 2023
Revenue |  |  |  |  |  |  |
SAS |  |  |  |  | $ | 1,751 |  |  | $ | 1,655 |
IMS |  |  |  |  | 1,669 |  |  | 1,700 |
CS |  |  |  |  | 1,294 |  |  | 1,163 |
AR |  |  |  |  | 542 |  |  | **
Corporate eliminations |  |  |  |  | (45) |  |  | (47) |
Total revenue |  |  |  |  | $ | 5,211 |  |  | $ | 4,471 |
Income before Income Taxes |  |  |  |  |  |  |
Operating income: |  |  |  |  |  |  |
SAS |  |  |  |  | $ | 216 |  |  | $ | 187 |
IMS |  |  |  |  | 190 |  |  | 185 |
CS |  |  |  |  | 310 |  |  | 266 |
AR |  |  |  |  | 72 |  |  | **
Total segment |  |  |  |  | 788 |  |  | 638 |
Total unallocated corporate expenses |  |  |  |  | (410) |  |  | (245) |
Total operating income |  |  |  |  | 378 |  |  | 393 |
Non-service FAS pension income and other, net |  |  |  |  | 88 |  |  | 82 |
Interest expense, net |  |  |  |  | (176) |  |  | (102) |
Income before income taxes |  |  |  |  | $ | 290 |  |  | $ | 373 |
_______________ ** AR is a reportable segment established during the quarter ended September 29, 2023, which consists of operations of AJRD. As such, there is no comparable prior year information. Unallocated Corporate Expenses Total unallocated corporate expenses include corporate items such as a portion of management and administration, legal, environmental, compensation, retiree benefits, other corporate expenses and eliminations and the FAS/Cost Accounting Standards (“CAS”) operating adjustment. Total unallocated corporate expenses also include the portion of corporate costs not included in management’s evaluation of segment operating performance, such as amortization of acquisition-related intangibles; additional cost of revenue related to the fair value step-up in inventory sold; merger, acquisition, and divestiture-related expenses; asset group and business divestiture-related (losses) gains, net; impairment of goodwill and other assets; gain on sale of property, plant and equipment; LHX NeXt implementation costs; and other items. FAS/CAS Pension Operating Adjustment In accordance with CAS, we allocate a portion of pension and OPEB plan costs to our U.S. Government contracts. However, our Condensed Consolidated Financial Statements require pension and OPEB plan income or expense to be calculated in accordance with FAS requirements under GAAP. The “FAS/CAS operating adjustment” line item in the table below represents the difference between the service cost component of FAS pension and OPEB cost and total CAS pension and OPEB cost. The non-service cost components of FAS pension and OPEB income or expense are included as component of the “Non-service FAS pension income and other, net” line item in our Condensed Consolidated Statement of Operations. See Note H: Retirement Benefits in these Notes for more information on the composition of non-service cost components of FAS pension and OPEB income and expense. The table below is a reconciliation of the FAS/CAS operating adjustment:
|  |  | Quarter Ended
(In millions) |  |  |  |  | March 29, 2024 |  | March 31, 2023
FAS pension service cost |  |  |  |  | $ | (8) |  |  | $ | (6) |
Less: CAS pension cost |  |  |  |  | (15) |  |  | (28) |
FAS/CAS operating adjustment |  |  |  |  | 7 |  |  | 22 |
Non-service FAS pension income |  |  |  |  | 80 |  |  | 77 |
FAS/CAS pension adjustment, net |  |  |  |  | $ | 87 |  |  | $ | 99 |
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.
| Quarter Ended
| March 29, 2024 |  | March 31, 2023
(In millions) | SAS |  | IMS |  | CS |  | AR |  | SAS |  | IMS |  | CS |  | AR
Revenue By Customer Relationship
Prime contractor | $ | 1,108 |  |  | $ | 1,066 |  |  | $ | 913 |  |  | $ | 153 |  |  | $ | 1,010 |  |  | $ | 1,154 |  |  | $ | 807 |  |  | **
Subcontractor | 628 |  |  | 587 |  |  | 367 |  |  | 389 |  |  | 632 |  |  | 525 |  |  | 343 |  |  | **
Intersegment | 15 |  |  | 16 |  |  | 14 |  |  | — |  |  | 13 |  |  | 21 |  |  | 13 |  |  | **
Total segment | $ | 1,751 |  |  | $ | 1,669 |  |  | $ | 1,294 |  |  | $ | 542 |  |  | $ | 1,655 |  |  | $ | 1,700 |  |  | $ | 1,163 |  |  | **
Revenue By Contract Type
Fixed-price(1) | $ | 1,108 |  |  | $ | 1,278 |  |  | $ | 1,065 |  |  | $ | 302 |  |  | $ | 1,022 |  |  | $ | 1,286 |  |  | $ | 978 |  |  | **
Cost-reimbursable | 628 |  |  | 375 |  |  | 215 |  |  | 240 |  |  | 620 |  |  | 393 |  |  | 172 |  |  | **
Intersegment | 15 |  |  | 16 |  |  | 14 |  |  | — |  |  | 13 |  |  | 21 |  |  | 13 |  |  | **
Total segment | $ | 1,751 |  |  | $ | 1,669 |  |  | $ | 1,294 |  |  | $ | 542 |  |  | $ | 1,655 |  |  | $ | 1,700 |  |  | $ | 1,163 |  |  | **
Revenue By Geographical Region
United States | $ | 1,507 |  |  | $ | 1,203 |  |  | $ | 925 |  |  | $ | 527 |  |  | $ | 1,454 |  |  | $ | 1,257 |  |  | $ | 791 |  |  | **
International | 229 |  |  | 450 |  |  | 355 |  |  | 15 |  |  | 188 |  |  | 422 |  |  | 359 |  |  | **
Intersegment | 15 |  |  | 16 |  |  | 14 |  |  | — |  |  | 13 |  |  | 21 |  |  | 13 |  |  | **
Total segment | $ | 1,751 |  |  | $ | 1,669 |  |  | $ | 1,294 |  |  | $ | 542 |  |  | $ | 1,655 |  |  | $ | 1,700 |  |  | $ | 1,163 |  |  | **
_______________ ** AR is a reportable segment established during the quarter ended September 29, 2023, which consists of operations of AJRD. As such, there is no comparable prior year information. (1)Includes revenue derived from time-and-materials contracts. Assets by Business Segment Total assets by business segment are as follows:
(In millions) | March 29, 2024 |  | December 29, 2023
SAS | $ | 9,111 |  |  | $ | 9,085 |
IMS | 10,876 |  |  | 10,631 |
CS | 7,019 |  |  | 7,084 |
AR | 4,295 |  |  | 4,208 |
Corporate(1) | 10,515 |  |  | 10,679 |
Total Assets | $ | 41,816 |  |  | $ | 41,687 |
_______________ (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 $8.3 billion and $8.5 billion at March 29, 2024 and December 29, 2023, respectively. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan investments, buildings and equipment, real estate held for development and leasing, as well as any assets of businesses held for sale.

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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 -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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