Segment Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Information

22. Segment Information

The Company has four reportable segments, which are described in Note 1. The Company evaluates the performance of its operating segments and reportable segments based on their sales and operating income. All corporate expenses are allocated to the Company’s operating segments using an allocation methodology prescribed by U.S. Government regulations for government contractors. Accordingly, all costs and expenses, except for the goodwill impairment charge in 2011 (which was not included in the Company’s segment performance measures), are included in the Company’s measure of segment profitability. Certain Corporate expenses of $10 million and $26 million for the years ended December 31, 2012 and 2011, respectively, that had previously been allocated to the Engility businesses were retained by the Company and were allocated to L-3’s four reportable segments. The tables below present net sales, operating income, depreciation and amortization, capital expenditures and total assets by reportable segment.

	Year Ended December 31,
	2013		2012		2011
	(in millions)
Net Sales
Products
C3ISR	$	1,812	$	2,002	$	2,005
Electronic Systems		4,542		4,745		4,737
P&LS		885		813		751
NSS		71		98		153
Elimination of intercompany sales		(118)		(123)		(94)
Total products sales		7,192		7,535		7,552
Services
C3ISR		1,573		1,610		1,488
Electronic Systems		1,137		1,111		1,037
P&LS		1,826		1,919		1,898
NSS		1,228		1,292		1,465
Elimination of intercompany sales		(327)		(321)		(282)
Total services sales		5,437		5,611		5,606
Consolidated total	$	12,629	$	13,146	$	13,158
Operating Income
C3ISR	$	301	$	364	$	394
Electronic Systems		645		672		719
P&LS		227		236		228
NSS		85		79		101
Segment Total	$	1,258	$	1,351	$	1,442
Impairment charge(1)		—		—		(43)
Consolidated total	$	1,258	$	1,351	$	1,399
Depreciation and amortization
C3ISR	$	45	$	47	$	44
Electronic Systems		141		147		148
P&LS		17		20		19
NSS		11		14		19
Consolidated total	$	214	$	228	$	230
Capital Expenditures
C3ISR	$	74	$	92	$	71
Electronic Systems		86		96		97
P&LS		24		15		13
NSS		5		5		5
Corporate		20		2		1
Consolidated total	$	209	$	210	$	187
Total Assets
C3ISR	$	2,036	$	2,030	$	2,017
Electronic Systems		8,149		8,077		7,559
P&LS		2,015		1,947		1,929
NSS		1,247		1,228		1,317
Corporate		562		509		957
Assets of discontinued operations		—		—		1,729
Consolidated total	$	14,009	$	13,791	$	15,508

⁽¹⁾  Represents a non-cash goodwill impairment charge recorded in the fourth quarter of 2011 due to a decline in the estimated fair value of the Marine Services business, within the Electronic Systems segment.

Corporate assets not allocated to the reportable segments primarily include cash and cash equivalents, corporate office fixed assets, deferred income tax assets and liabilities and deferred debt issue costs. In addition, substantially all of the Company’s assets are located in North America.

The Company’s sales attributable to U.S. and international customers, based on location of the customer, are summarized in the table below.

	Year Ended December 31,
	2013		2012		2011
	(in millions)
U.S.	$	9,815	$	10,698	$	11,068
International:
United Kingdom		449		360		310
Canada		364		314		328
Germany		272		260		246
Australia		218		222		118
South Korea		178		125		93
Saudi Arabia		130		76		41
Italy		107		116		98
Other		1,096		975		856
Total international		2,814		2,448		2,090
Consolidated	$	12,629	$	13,146	$	13,158

Net sales to principal customers are summarized in the table below.

	Year Ended December 31,
	2013		2012		2011
	(in millions)
U.S. Government agencies(1)	$	9,168	$	10,026	$	10,439
Commercial		1,708		1,657		1,527
Allied international governments(1)		1,753		1,463		1,192
Consolidated	$	12,629	$	13,146	$	13,158

⁽¹⁾  Includes sales for which the Company is the prime contractor as well as sales based on the ultimate end customer for which the Company is a subcontractor.