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Business Segments
 12 Months Ended
Jan. 03, 2025
Segment Reporting [Abstract]  
Business Segments
Note 20—Business Segments
Our operations and reportable segments are organized around the customers and markets we serve. We define our reportable segments based on the way the CODM, currently the Chief Executive Officer, manages the operations for purposes of allocating resources and assessing performance. The CODM considers segment revenue and operating income to assist with the evaluation of strategic business decisions, including potential acquisitions or divestitures, whether to invest in certain products or services, share repurchases and the declaration of dividends.
Beginning in fiscal 2024, we realigned our business to report in six operating segments, which are aggregated into four reportable segments in accordance with the criteria established under ASC 280: National Security & Digital, Health & Civil, Commercial & International and Defense Systems. Our reportable segments are focused on specific, defined capability sets that we bring to our customers. Additionally, we separately present the unallocated costs associated with corporate functions as Corporate. As a result of this change, prior year segment results have been recast to reflect the current reportable segment structure.
Our National Security & Digital business provides leading-edge and technologically advanced services, solutions and products, as well as mission software capabilities for defense and intelligence customers in the areas of cyber, logistics, security operations and decision analytics. We also deliver IT operations and digital transformation programs across all U.S. federal government customers. Our advanced capabilities include the delivery of technology-enabled services, mission software capabilities and IT modernization services. Our capabilities allow us to provide innovative technology solutions in software development, engineering & design, modeling & simulation, analytics, cyber security, intelligence analysis, linguistics and mission operations.
Our Health & Civil business provides services and solutions to federal and commercial customers in the areas of public health, care coordination, life and environmental sciences and transportation. We are dedicated to delivering effective and affordable solutions that are responsible for the health and well-being of people, including service members and veterans. Our core capabilities include health information management services, managed health services, systems and infrastructure modernization, and life sciences research and development. We help customers achieve their missions and take on the connected world with data-driven insights, improved efficiencies and technological advantages.
Our Commercial & International business delivers a portfolio of products, services, and solutions aimed at securing national assets, modernizing energy and critical infrastructure, and enhancing mission outcomes. Our key customers include Investor-Owned Utilities, government agencies in the United Kingdom and Australia, the Transportation Security Administration, U.S. Customs & Border Protection, as well as airports and ports and borders authorities. We offer a broad range of capabilities, including design and engineering services, security products and solutions, digital modernization, mission software, logistics, and airborne solutions.
Our Defense Systems business addresses threats facing our nation by rapidly prototyping and delivering advanced hardware, software, and integrated systems solutions for the U.S. Department of Defense, Army, Navy, Air Force, Space Force, Marine Corps, United States Special Operations Command, NASA, Defense Advanced Research Projects Agency, intelligence agencies, and international customers. We are heavily engaged in the top defense Research Development Test and Evaluation priorities that are driven by critical evolving threat-driven needs. Defense Systems provides services in the air, land, sea, space and cyberspace environments. The Defense Systems business is dedicated to delivering cost-effective solutions in the space, airborne, land, maritime and cyber domains and supporting critical missions worldwide.
Corporate includes the operations of various corporate activities, certain corporate expense items that are not reimbursed by our U.S. government customers and certain other expense items excluded from a reportable segment’s performance.
The following table summarizes business segment information for the periods presented:
 Year Ended January 3, 2025
(in millions)National Security & DigitalHealth & CivilCommercial & InternationalDefense SystemsTotal
Revenues$7,365 $5,015 $2,252 $2,030 $16,662 
Less:
Direct labor1,934 951 407 407 3,699 
Amortization of intangible assets23 27 30 67 147 
Other segment expense4,688 2,942 1,711 1,462 10,803 
Segment operating income$720 $1,095 $104 $94 $2,013 
Corporate expense
186 
Total operating income$1,827 
 Year Ended December 29, 2023
(in millions)National Security & DigitalHealth & CivilCommercial & InternationalDefense SystemsTotal
Revenues$7,196 $4,238 $2,126 $1,878 $15,438 
Less:
Direct labor1,838 894 386 378 3,496 
Amortization of intangible assets47 40 37 78 202 
Other segment expense4,639 2,730 2,263 1,357 10,989 
Segment operating income (loss)$672 $574 $(560)$65 $751 
Corporate expense
130 
Total operating income$621 
 Year Ended December 30, 2022
(in millions)
National Security & Digital
Health & CivilCommercial & InternationalDefense SystemsTotal
Revenues$6,745 $3,945 $1,900 $1,806 $14,396 
Less:
Direct labor1,699 825 322 368 3,214 
Amortization of intangible assets57 48 35 89 229 
Other segment expense4,383 2,624 1,412 1,338 9,757 
Segment operating income$606 $448 $131 $11 $1,196 
Corporate expense
108 
Total operating income$1,088 
The statement of operations performance measures used to evaluate segment performance are revenues and operating income. As a result, “Interest expense, net,” “Other income (expense), net,” and “Income tax expense,” as reported in the consolidated financial statements are not allocated to our segments.
Other segment expenses include direct program costs such as materials and subcontractor expenses, as well as allocable indirect costs such as depreciation and Corporate compensation expenses, but excludes direct labor which is separately presented above. The Health & Civil and Defense Systems segments also include equity earnings of non-consolidated subsidiaries within operating income.
Under U.S. government Cost Accounting Standards, indirect costs including depreciation expense are collected in indirect cost pools, which are then collectively allocated out to the reportable segments based on a representative causal or beneficial relationship of the costs in the pool to the costs in the base. While depreciation expense is a component of the allocated costs, the allocation process precludes depreciation expense from being specifically identified by the individual reportable segments. For this reason, depreciation expense by reportable segment has not been reported above.
Asset information by segment is not a key measure of performance used by the CODM.
We generated approximately 87% of our total revenues in both fiscal 2024 and 2023, and 86% in fiscal 2022 from contracts with the U.S. government, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. government. Revenues under contracts with the DoD and U.S. Intelligence Community, including subcontracts under which the DoD or the U.S. Intelligence Community is the ultimate purchaser, represented approximately 48% of our total revenues for fiscal 2024 and 49% of total revenues for fiscal 2023 and 44% of total revenues for fiscal 2022.
Revenues generated by entities outside of the United States were approximately 8% in both fiscal 2024 and 2022, and 9% in fiscal 2023. As such, additional financial information by geographic location is not presented.