Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries

3 Months Ended

Mar. 30, 2012

Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries [Abstract]

Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries

22.  Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries

L-3 Communications is a wholly-owned subsidiary of L-3 Holdings. The debt of L-3 Communications, including the Senior Notes, Senior Subordinated Notes and borrowings under amounts drawn against the Amended and Restated Revolving Credit Facility are guaranteed, on a joint and several, full and unconditional basis, by certain of its domestic subsidiaries (the “Guarantor Subsidiaries”). The debt of L-3 Holdings, including the CODES are guaranteed on a joint and several, full and unconditional basis, by L-3 Communications and certain of its domestic subsidiaries. See Note 10 to the audited consolidated financial statements for the year ended December 31, 2011, included in the Company’s Annual Report on Form 10-K. The foreign subsidiaries and certain domestic subsidiaries of L-3 Communications (the “Non-Guarantor Subsidiaries”) do not guarantee the debt of L-3 Communications or L-3 Holdings. None of the debt of L-3 Communications has been issued by its subsidiaries. There are no restrictions on the payment of dividends from the Guarantor Subsidiaries to L-3 Communications.

Under the terms of the indentures governing the Senior Notes and Senior Subordinated Notes, the guarantees of the Senior Notes and the Senior Subordinated Notes will automatically and unconditionally be released and discharged: (1) upon the release of all guarantees of all other outstanding indebtedness of L-3 Communications Corporation and, in the case of the Senior Subordinated Notes, its restricted subsidiaries, or (2) upon the determination that such guarantor is no longer a “domestic subsidiary,” in the case of the Senior Notes, or upon the designation of such guarantor as an “unrestricted subsidiary,” in the case of the Senior Subordinated Notes. In addition, the guarantees of the Senior Notes and the Senior Subordinated Notes will automatically and unconditionally be 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 or other disposition of all of the capital stock of such guarantor (provided that, in the case of the Senior Subordinated Notes, in the event of a sale or other disposition of all of the assets of any guarantor, the net proceeds of such sale or disposition are applied in accordance with any applicable provisions of the senior subordinated indenture). In addition, under the terms of the indenture governing the CODES, the guarantees of the CODES will automatically and unconditionally be released and discharged upon: (1) the release of all guarantees of all other outstanding indebtedness of L-3 Holdings or any of its subsidiaries (other than a foreign subsidiary), (2) the designation of such guarantor as an “excluded subsidiary”, or (3) the sale or other disposition of all of the assets of any guarantor, by way of merger or consolidation, or a sale or other disposition of all of the capital stock of such guarantor.

The following unaudited condensed combining financial information presents the results of operations, financial position and cash flows of: (1) L-3 Holdings, excluding L-3 Communications and its consolidated subsidiaries (the “Parent”), (2) L-3 Communications, excluding its consolidated subsidiaries, (3) the Guarantor Subsidiaries, (4) the Non-Guarantor Subsidiaries, and (5) the eliminations to arrive at the information for L-3 on a consolidated basis.

	L-3 Holdings (Parent)		L-3 Communications		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Balance Sheets:
At March 30, 2012:
Current assets:
Cash and cash equivalents	$	—	$	284	$	8	$	221	$	(20	)	$	493
Billed receivables, net		—		322		698		248		—			1,268
Contracts in process		—		899		1,588		339		—			2,826
Other current assets		—		287		152		211		—			650
Total current assets		—		1,792		2,446		1,019		(20	)		5,237
Goodwill		—		1,892		5,655		1,312		—			8,859
Other assets		—		673		717		213		—			1,603
Investment in and amounts due from consolidated subsidiaries		7,438		9,015		2,981		—		(19,434	)		—
Total assets	$	7,438	$	13,372	$	11,799	$	2,544	$	(19,454	)	$	15,699
Current liabilities	$	—	$	883	$	1,293	$	612	$	(20	)	$	2,768
Amounts due to consolidated subsidiaries		—		—		—		285		(285	)		—
Other long-term liabilities		—		1,614		242		112		—			1,968
Long-term debt		689		4,126		—		—		(689	)		4,126
Total liabilities		689		6,623		1,535		1,009		(994	)		8,862
L-3 shareholders’ equity		6,749		6,749		10,264		1,535		(18,548	)		6,749
Noncontrolling interests		—		—		—		—		88			88
Total equity		6,749		6,749		10,264		1,535		(18,460	)		6,837
Total liabilities and equity	$	7,438	$	13,372	$	11,799	$	2,544	$	(19,454	)	$	15,699
At December 31, 2011:
Current assets:
Cash and cash equivalents	$	—	$	644	$	2	$	229	$	(111	)	$	764
Billed receivables, net		—		377		639		224		—			1,240
Contracts in process		—		866		1,463		300		—			2,629
Other current assets		—		281		135		195		—			611
Total current assets		—		2,168		2,239		948		(111	)		5,244
Goodwill		—		1,892		5,598		1,207		—			8,697
Other assets		—		678		685		193		—			1,556
Investment in and amounts due from consolidated subsidiaries		7,324		8,510		3,014		—		(18,848	)		—
Total assets	$	7,324	$	13,248	$	11,536	$	2,348	$	(18,959	)	$	15,497
Current liabilities	$	—	$	865	$	1,352	$	584	$	(111	)	$	2,690
Amounts due to consolidated subsidiaries		—		—		—		229		(229	)		—
Other long-term liabilities		—		1,623		234		101		—			1,958
Long-term debt		689		4,125		—		—		(689	)		4,125
Total liabilities		689		6,613		1,586		914		(1,029	)		8,773
L-3 shareholders’ equity		6,635		6,635		9,950		1,434		(18,019	)		6,635
Noncontrolling interests		—		—		—		—		89			89
Total equity		6,635		6,635		9,950		1,434		(17,930	)		6,724
Total liabilities and equity	$	7,324	$	13,248	$	11,536	$	2,348	$	(18,959	)	$	15,497

	L-3 Holdings (Parent)			L-3 Communications		Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Statements of Operations:
For the quarter ended March 30, 2012:
Total net sales	$	—		$	887	$	2,162		$	616	$	(77	)	$	3,588
Total cost of sales		14			811		1,965			532		(91	)		3,231
Operating (loss) income		(14	)		76		197			84		14			357
Interest and other income, net		—			3		—			1		—			4
Interest expense		5			52		—			—		(5	)		52
(Loss) income before income taxes		(19	)		27		197			85		19			309
(Benefit) provision for income taxes		(7	)		10		67			29		7			106
Equity in net income of consolidated subsidiaries		213			184		—			—		(397	)		—
Net income		201			201		130			56		(385	)		203
Net income attributable to noncontrolling interests		—			—		—			—		2			2
Net income attributable to L-3	$	201		$	201	$	130		$	56	$	(387	)	$	201
Comprehensive income attributable to L-3	$	244		$	244	$	132		$	85	$	(461	)	$	244
For the quarter ended April 1, 2011:
Total net sales	$	—		$	852	$	2,235		$	600	$	(86	)	$	3,601
Total cost of sales		15			746		2,024			528		(102	)		3,211
Operating (loss) income		(15	)		106		211			72		16			390
Interest and other income (expense), net		—			31		(2	)		1		(28	)		2
Interest expense		7			62		27			1		(34	)		63
Debt retirement charge		—			18		—			—		—			18
(Loss) income before income taxes		(22	)		57		182			72		22			311
(Benefit) provision for income taxes		(7	)		19		61			24		7			104
Equity in net income of consolidated subsidiaries		219			166		—			—		(385	)		—
Net income		204			204		121			48		(370	)		207
Net income attributable to noncontrolling interests		—			—		—			—		3			3
Net income attributable to L-3	$	204		$	204	$	121		$	48	$	(373	)	$	204
Comprehensive income attributable to L-3	$	265		$	265	$	120		$	99	$	(484	)	$	265

	L-3 Holdings (Parent)			L-3 Communications			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Statements of Cash Flows:
For the quarter ended March 30, 2012:
Operating activities:
Net cash from operating activities	$	187		$	67		$	77		$	33		$	(227	)	$	137
Investing activities:
Business acquisitions, net of cash acquired		—			(205	)		—			—			—			(205	)
Investments in L-3 Communications		(13	)		—			—			—			13			—
Other investing activities		—			(16	)		(10	)		(3	)		—			(29	)
Net cash used in investing activities		(13	)		(221	)		(10	)		(3	)		13			(234	)
Financing activities:
Common stock repurchased		(138	)		—			—			—			—			(138	)
Dividends paid on L-3 Holdings common stock		(49	)		—			—			—			—			(49	)
Dividends paid to L-3 Holdings		—			(187	)		—			—			187			—
Investments from L-3 Holdings		—			13			—			—			(13	)		—
Other financing activities		13			(32	)		(61	)		(43	)		131			8
Net cash used in financing activities		(174	)		(206	)		(61	)		(43	)		305			(179	)
Effect of foreign currency exchange rate changes on cash		—			—			—			5			—			5
Net (decrease) increase in cash		—			(360	)		6			(8	)		91			(271	)
Cash and cash equivalents, beginning of the period		—			644			2			229			(111	)		764
Cash and cash equivalents, end of the period	$	—		$	284		$	8		$	221		$	(20	)	$	493
For the quarter ended April 1, 2011:
Operating activities:
Net cash from operating activities	$	265		$	54		$	181		$	27		$	(307	)	$	220
Investing activities:
Investments in L-3 Communications		(16	)		—			—			—			16			—
Other investing activities		—			(18	)		(12	)		(4	)		—			(34	)
Net cash used in investing activities		(16	)		(18	)		(12	)		(4	)		16			(34	)
Financing activities:
Proceeds from sale of senior notes		—			646			—			—			—			646
Redemption of senior subordinated notes		(11	)		(650	)		—			—			—			(661	)
Common stock repurchased		(205	)		—			—			—			—			(205	)
Dividends paid on L-3 Holdings common stock		(49	)		—			—			—			—			(49	)
Dividends paid to L-3 Holdings		—			(265	)		—			—			265			—
Investments from L-3 Holdings		—			16			—			—			(16	)		—
Other financing activities		16			131			(167	)		(78	)		110			12
Net cash used in financing activities		(249	)		(122	)		(167	)		(78	)		359			(257	)
Effect of foreign currency exchange rate changes on cash		—			—			—			12			—			12
Net (decrease) increase in cash		—			(86	)		2			(43	)		68			(59	)
Cash and cash equivalents, beginning of the period		—			257			3			482			(135	)		607
Cash and cash equivalents, end of the period	$	—		$	171		$	5		$	439		$	(67	)	$	548