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Condensed Combining Financial Information of L3 and Its Subsidiaries
 3 Months Ended
Mar. 30, 2018
Condensed Financial Information of Parent Company Only Disclosure [Abstract]  
Condensed Combining Financial Information of L3 and Its Subsidiaries
. Condensed Combining Financial Information of L3 and Its Subsidiaries
The debt of L3, including the Senior Notes and borrowings under amounts drawn against the Credit Facility, are guaranteed, on a joint and several, full and unconditional basis, by certain of its domestic subsidiaries (the Guarantor Subsidiaries). See Note 9 to the audited consolidated financial statements for the year ended December 31, 2017, included in the Company’s Annual Report on Form 10-K for additional information. The foreign subsidiaries and certain domestic subsidiaries of L3 (the Non-Guarantor Subsidiaries) do not guarantee the debt of L3. None of the debt of L3 has been issued by its subsidiaries.
Under the terms of the indentures governing the Senior Notes, the guarantees of the Senior Notes will automatically and unconditionally be released and discharged: (1) upon the release of all guarantees of all other outstanding indebtedness of L3 or (2) upon the determination that such guarantor is no longer a “domestic subsidiary.” In addition, the guarantees of the Senior Notes will be automatically and unconditionally released and discharged in the event of a sale or other disposition of all of the assets of any guarantor, by way of merger, consolidation or otherwise, or a sale of all of the capital stock of such guarantor. There are no restrictions on the payment of dividends from the Guarantor Subsidiaries to L3.
The following unaudited condensed combining financial information presents the results of operations, financial position and cash flows of: (1) L3 excluding its consolidated subsidiaries (the Parent), (2) the Guarantor Subsidiaries, (3) the Non-Guarantor Subsidiaries and (4) the eliminations to arrive at the information for L3 on a consolidated basis.
 
L3
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated L3
 
(in millions)
Condensed Combining Balance Sheets:
 
 
 
 
 
 
 
 
 
At March 30, 2018
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
158

 
$
19

 
$
215

 
$
(18
)
 
$
374

Billed receivables, net
230

 
301

 
267

 
—

 
798

Contract assets
574

 
740

 
185

 
—

 
1,499

Inventories
428

 
348

 
218

 
—

 
994

Prepaid expenses and other current assets
160

 
160

 
72

 
—

 
392

Assets held for sale
—

 
136

 
—

 
—

 
136

Assets of discontinued operations
—

 
287

 
—

 
—

 
287

Total current assets
1,550


1,991


957


(18
)

4,480

Goodwill
2,269

 
2,827

 
1,536

 
—

 
6,632

Other assets
699

 
713

 
349

 
—

 
1,761

Investment in and amounts due from consolidated subsidiaries
5,844

 
4,425

 
—

 
(10,269
)
 
—

Total assets
$
10,362


$
9,956


$
2,842


$
(10,287
)

$
12,873

Current liabilities
$
796

 
$
817

 
$
567

 
$
(18
)
 
$
2,162

Liabilities held for sale
—

 
19

 
—

 
—

 
19

Liabilities of discontinued operations
—

 
154

 
—

 
—

 
154

Amounts due to consolidated subsidiaries
—

 
—

 
395

 
(395
)
 
—

Other long-term liabilities
982

 
759

 
146

 
—

 
1,887

Long-term debt
3,331

 
—

 
—

 
—

 
3,331

Total liabilities
5,109


1,749


1,108


(413
)

7,553

L3 shareholders’ equity
5,253

 
8,207

 
1,734

 
(9,941
)
 
5,253

Noncontrolling interests
—

 
—

 
—

 
67

 
67

Total equity
5,253


8,207


1,734


(9,874
)

5,320

Total liabilities and equity
$
10,362


$
9,956


$
2,842


$
(10,287
)

$
12,873


 
L3
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated L3
 
(in millions)
At December 31, 2017
 

 
 

 
 

 
 

 
 

Current assets:
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
$
432

 
$
14

 
$
287

 
$
(71
)
 
$
662

Billed receivables, net
266

 
232

 
225

 
—

 
723

Contracts in process
706

 
891

 
336

 
—

 
1,933

Prepaid expenses and other current assets
330

 
231

 
128

 
—

 
689

Assets held for sale
—

 
118

 
17

 
—

 
135

Assets of discontinued operations
—

 
306

 
—

 
—

 
306

Total current assets
1,734


1,792


993


(71
)

4,448

Goodwill
2,269

 
2,635

 
1,711

 
—

 
6,615

Other assets
658

 
556

 
452

 
—

 
1,666

Investment in and amounts due from consolidated subsidiaries
5,572

 
5,287

 
—

 
(10,859
)
 
—

Total assets
$
10,233


$
10,270


$
3,156


$
(10,930
)

$
12,729

Current liabilities
$
811

 
$
800

 
$
596

 
$
(71
)
 
$
2,136

Liabilities held for sale
—

 
16

 
1

 
—

 
17

Liabilities of discontinued operations
—

 
226

 
—

 
—

 
226

Amounts due to consolidated subsidiaries
—

 
—

 
348

 
(348
)
 
—

Other long-term liabilities
1,009

 
714

 
146

 
—

 
1,869

Long-term debt
3,330

 
—

 
—

 
—

 
3,330

Total liabilities
5,150


1,756


1,091


(419
)

7,578

L3 shareholders’ equity
5,083

 
8,514

 
2,065

 
(10,579
)
 
5,083

Noncontrolling interests
—

 
—

 
—

 
68

 
68

Total equity
5,083


8,514


2,065


(10,511
)

5,151

Total liabilities and equity
$
10,233


$
10,270


$
3,156


$
(10,930
)

$
12,729



 
L3
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated L3
 
(in millions)
Condensed Combining Statements of Operations:
 

 
 

 
 

 
 

 
 

For the quarter ended March 30, 2018:
 

 
 

 
 

 
 

 
 

Total net sales
$
807

 
$
1,239

 
$
422

 
$
(97
)
 
$
2,371

Total operating costs and expenses
(722
)
 
(1,155
)
 
(340
)
 
97

 
(2,120
)
Operating income
85


84


82


—


251

Interest expense
(41
)
 
—

 
—

 
—

 
(41
)
Interest and other income, net
5

 
—

 
1

 
—

 
6

Income from continuing operations before income taxes
49


84


83


—


216

Provision for income taxes
(6
)
 
(9
)
 
(9
)
 
—

 
(24
)
Equity in net income of consolidated subsidiaries
160

 
—

 
—

 
(160
)
 
—

Income from continuing operations
203


75


74


(160
)

192

Income from discontinued operations, net of income taxes
—

 
16

 
—

 
—

 
16

Net income
203


91


74


(160
)

208

Net income attributable to noncontrolling interests
—

 
—

 
—

 
(5
)
 
(5
)
Net income attributable to L3
$
203


$
91


$
74


$
(165
)

$
203

Comprehensive income attributable to L3
$
249

 
$
92

 
$
107

 
$
(199
)
 
$
249

 
 
 
 
 
 
 
 
 
 
For the quarter ended March 31, 2017:
 
 
 
 
 
 
 
 
 
Total net sales
$
850

 
$
1,176

 
$
373

 
$
(78
)
 
$
2,321

Total operating costs and expenses
(772
)
 
(1,077
)
 
(313
)
 
78

 
(2,084
)
Operating income
78


99


60


—


237

Interest expense
(42
)
 
—

 
—

 
—

 
(42
)
Interest and other income, net
3

 
—

 
1

 
—

 
4

Income from continuing operations before income taxes
39


99


61


—


199

Provision for income taxes
(8
)
 
(21
)
 
(13
)
 
—

 
(42
)
Equity in net income of consolidated subsidiaries
133

 
—

 
—

 
(133
)
 
—

Income from continuing operations
164

 
78

 
48

 
(133
)
 
157

Income from discontinued operations, net of income taxes
—

 
11

 
—

 
—

 
11

Net income
164


89


48


(133
)

168

Net income attributable to noncontrolling interests
—

 
—

 
—

 
(4
)
 
(4
)
Net income attributable to L3
$
164


$
89


$
48


$
(137
)

$
164

Comprehensive income attributable to L3
$
192

 
$
89

 
$
68

 
$
(157
)
 
$
192

 
L3
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated L3
 
(in millions)
Condensed Combining Statements of Cash Flows
 

 
 

 
 

 
 

 
 

For the quarterly period ended March 30, 2018:
 

 
 

 
 

 
 

 
 

Operating activities:
 

 
 

 
 

 
 

 
 

Net cash from (used in) operating activities from continuing operations
$
198

 
$
(204
)
 
$
(24
)
 
$
(5
)
 
$
(35
)
Investing activities:
 
 
 
 
 
 
 
 
 
Other investing activities
(62
)
 
(17
)
 
(4
)
 
—

 
(83
)
Net cash used in investing activities from continuing operations
(62
)
 
(17
)
 
(4
)
 
—

 
(83
)
Financing activities:
 
 
 
 
 
 
 
 
 
Common stock repurchased
(119
)
 
—

 
—

 
—

 
(119
)
Dividends paid
(65
)
 
—

 
—

 
—

 
(65
)
Other financing activities
(226
)
 
256

 
(50
)
 
58

 
38

Net cash (used in) from financing activities from continuing operations
(410
)
 
256

 
(50
)
 
58

 
(146
)
Effect of foreign currency exchange rate changes on cash
—

 
—

 
6

 
—

 
6

Net decrease in cash and cash equivalents of discontinued operations
—

 
(30
)
 
—

 
—

 
(30
)
Net (decrease) increase in cash
(274
)
 
5

 
(72
)
 
53

 
(288
)
Cash and cash equivalents, beginning of the period
432

 
14

 
287

 
(71
)
 
662

Cash and cash equivalents, end of the period
$
158

 
$
19

 
$
215

 
$
(18
)
 
$
374

For the quarterly period ended March 31, 2017:
 

 
 

 
 

 
 

 
 

Operating activities:
 

 
 

 
 

 
 

 
 

Net cash from (used in) operating activities from continuing operations
$
131

 
$
(71
)
 
$
67

 
$
(41
)
 
$
86

Investing activities:
 
 
 
 
 
 
 
 
 
Business acquisitions, net of cash acquired
(139
)
 
—

 
—

 
—

 
(139
)
Proceeds from sale of businesses, net of closing date cash balances
15

 
—

 
1

 
—

 
16

Other investing activities
(16
)
 
(16
)
 
(3
)
 
—

 
(35
)
Net cash used in investing activities from continuing operations
(140
)
 
(16
)
 
(2
)
 
—

 
(158
)
Financing activities:
 
 
 
 
 
 
 
 
 
Dividends paid
(61
)
 
—

 
—

 
—

 
(61
)
Other financing activities
(164
)
 
89

 
(80
)
 
153

 
(2
)
Net cash (used in) from financing activities from continuing operations
(225
)
 
89

 
(80
)
 
153

 
(63
)
Effect of foreign currency exchange rate changes on cash
—

 
—

 
4

 
—

 
4

Net decrease in cash and cash equivalents of discontinued operations
—

 
(2
)
 
—

 
—

 
(2
)
Net decrease in cash
(234
)
 
—

 
(11
)
 
112

 
(133
)
Cash and cash equivalents, beginning of the period
291

 
1

 
207

 
(136
)
 
363

Cash and cash equivalents, end of the period
$
57

 
$
1

 
$
196

 
$
(24
)
 
$
230