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Business Segments
 3 Months Ended
Apr. 03, 2026
Segment Reporting [Abstract]  
Business Segments
Note 9–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 chief operating decision maker ("CODM"), currently our Chief Executive Officer, manages operations for the 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 2026, we realigned our business to report in five operating segments, which are aggregated into four reportable segments in accordance with the criteria established under ASC 280: Intelligence & Digital, Health, Homeland and Defense. Our reportable segments are focused on specific, defined capability sets that we bring to our customers. Additionally, we separately present the unallocable 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 Intelligence & Digital business delivers mission-focused capabilities to the U.S. federal government and the U.S. Intelligence Community. The business integrates intelligence tradecraft, full-spectrum cyber capabilities, and advanced technical solutions at scale to improve decision-making across large, distributed mission networks and classified environments. We conduct technological research and development, software engineering, modeling and simulation, advanced analytics, network modernization, artificial intelligence development, and IT service management, modernizing critical systems and enabling resilient, high-performing mission operations.
Our Health business delivers services and solutions to federal and commercial customers in areas of public health, care coordination, and life and environmental sciences. Our offerings include IT infrastructure modernization, software development, research and implementation, response to hazardous material incidents, mission software solutions and wellness exams.
Our Homeland business serves five markets: air traffic, airports and borders, security equipment, commercial energy engineering and international. We provide safety critical software for the automation of air traffic both domestically and internationally. Additionally, we provide protection of the borders and airports through software and logistics programs. We provide security equipment for various end users. Internationally, we support defense and other government customers with software development programs, data analytics, information technology and intelligence operations.
Our Defense business develops and produces advanced space, aerial, surface, and sub-surface manned and un-manned defense systems. Our offerings include manufacturing, prototyping, weapons development, analytics and other advanced defense services.
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:
Three Months Ended April 3, 2026
(in millions)Intelligence & DigitalHealthHomelandDefenseTotal
Revenues$1,513 $1,188 $816 $883 $4,400 
Less:
Direct labor400 200 178 224 1,002 
Amortization of intangible assets8 4 7 11 30 
Other segment expense959 700 598 586 2,843 
Segment operating income$146 $284 $33 $62 $525 
Corporate expense17 
Total operating income$508 
Three Months Ended April 4, 2025
(in millions)Intelligence & DigitalHealthHomelandDefenseTotal
Revenues$1,408 $1,188 $770 $879 $4,245 
Less:
Direct labor
383 206 162 208 959 
Amortization of intangible assets5 6 7 12 30 
Other segment expense888 688 540 585 2,701 
Segment operating income
$132 $288 $61 $74 $555 
Corporate expense
25 
Total operating income$530 
The statement of operations performance measures used to evaluate segment performance are revenues and operating income. As a result, "Interest expense, net," "Other expense, net" and "Income tax expense" as reported in the condensed consolidated statements of operations are not allocated to our segments.
Other segment expenses include direct program costs such as material 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 and Defense 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 to the reportable segments based on a representative causal or beneficial relationship of the costs in the pool to the costs in the base. As such, depreciation expense is not separately disclosed on the condensed consolidated statements of operations.
Asset information by segment is not a key measure of performance used by the CODM.