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

6 Months Ended

Jun. 26, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed Combining Balance Sheets

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 June 26, 2015:
Current assets:
Cash and cash equivalents	$	—	$	197	$	3	$	164	$	(11	)	$	353
Billed receivables, net		—		295		296		229		—			820
Contracts in process		—		887		1,189		346		—			2,422
Other current assets		—		411		166		131		—			708
Total current assets		—		1,790		1,654		870		(11	)		4,303
Goodwill		—		2,319		4,268		1,062		—			7,649
Other assets		—		839		563		279		—			1,681
Investment in and amounts due from consolidated subsidiaries		5,197		6,886		4,306		—		(16,389	)		—
Total assets	$	5,197	$	11,834	$	10,791	$	2,211	$	(16,400	)	$	13,633
Current liabilities	$	—	$	936	$	979	$	513	$	(11	)	$	2,417
Amounts due to consolidated subsidiaries		—		—		—		29		(29	)		—
Other long-term liabilities		—		1,761		204		39		—			2,004
Long-term debt		—		3,940		—		—		—			3,940
Total liabilities		—		6,637		1,183		581		(40	)		8,361
L-3 shareholders’ equity		5,197		5,197		9,608		1,630		(16,435	)		5,197
Noncontrolling interests		—		—		—		—		75			75
Total equity		5,197		5,197		9,608		1,630		(16,360	)		5,272
Total liabilities and equity	$	5,197	$	11,834	$	10,791	$	2,211	$	(16,400	)	$	13,633
At December 31, 2014:
Current assets:
Cash and cash equivalents	$	—	$	361	$	1	$	142	$	(62	)	$	442
Billed receivables, net		—		320		329		203		—			852
Contracts in process		—		867		1,144		284		—			2,295
Other current assets		—		365		141		95		—			601
Assets held for sale		—		—		52		495		—			547
Total current assets		—		1,913		1,667		1,219		(62	)		4,737
Goodwill		—		2,308		4,280		913		—			7,501
Other assets		—		817		576		205		—			1,598
Investment in and amounts due from consolidated subsidiaries		5,285		6,855		4,157		—		(16,297	)		—
Total assets	$	5,285	$	11,893	$	10,680	$	2,337	$	(16,359	)	$	13,836
Current liabilities	$	—	$	878	$	1,017	$	455	$	(62	)	$	2,288
Liabilities held for sale		—		—		10		227		—			237
Amounts due to consolidated subsidiaries		—		—		—		333		(333	)		—
Other long-term liabilities		—		1,791		190		31		—			2,012
Long-term debt		—		3,939		—		—		—			3,939
Total liabilities		—		6,608		1,217		1,046		(395	)		8,476
L-3 shareholders’ equity		5,285		5,285		9,463		1,291		(16,039	)		5,285
Noncontrolling interests		—		—		—		—		75			75
Total equity		5,285		5,285		9,463		1,291		(15,964	)		5,360
Total liabilities and equity	$	5,285	$	11,893	$	10,680	$	2,337	$	(16,359	)	$	13,836

Condensed Combining Statements of Operations

Condensed Combining Statements of Operations:
For the quarter ended June 26, 2015:
Total net sales	$	—		$	878		$	1,490		$	501		$	(76	)	$	2,793
Total cost of sales		(11	)		(805	)		(1,465	)		(435	)		87			(2,629	)
(Loss) gain related to business divestitures		—			(5	)		(25	)		32			—			2
Operating (loss) income		(11	)		68			—			98			11			166
Interest expense		—			(47	)		(1	)		—			—			(48	)
Interest and other income, net		—			4			—			1			—			5
(Loss) income before income taxes		(11	)		25			(1	)		99			11			123
Benefit (provision) for income taxes		—			—			15			(14	)		—			1
Equity in net income of consolidated subsidiaries		131			95			—			—			(226	)		—
Net income		120			120			14			85			(215	)		124
Net income attributable to noncontrolling interests		—			—			—			—			(4	)		(4	)
Net income attributable to L-3	$	120		$	120		$	14		$	85		$	(219	)	$	120
Comprehensive income attributable to L-3	$	205		$	205		$	18		$	157		$	(380	)	$	205
For the quarter ended June 27, 2014:
Total net sales	$	—		$	883		$	1,655		$	555		$	(74	)	$	3,019
Total cost of sales		(14	)		(798	)		(1,552	)		(504	)		88			(2,780	)
Operating (loss) income		(14	)		85			103			51			14			239
Interest expense		3			(38	)		—			(1	)		(3	)		(39	)
Interest and other income, net		—			3			—			1			—			4
(Loss) income before income taxes		(11	)		50			103			51			11			204
Benefit (provision) for income taxes		3			(18	)		(31	)		(14	)		(3	)		(63	)
Equity in net income of consolidated subsidiaries		145			105			—			—			(250	)		—
Net income		137			137			72			37			(242	)		141
Net income attributable to noncontrolling interests		—			—			—			—			(4	)		(4	)
Net income attributable to L-3	$	137		$	137		$	72		$	37		$	(246	)	$	137
Comprehensive income attributable to L-3	$	169		$	169		$	79		$	60		$	(308	)	$	169
Condensed Combining Statements of Operations:
For the first half ended June 26, 2015:
Total net sales	$	—		$	1,666		$	2,990		$	993		$	(143	)	$	5,506
Total cost of sales		(24	)		(1,523	)		(2,853	)		(887	)		167			(5,120	)
(Loss) gain related to business divestitures		—			(5	)		(28	)		13			—			(20	)
Operating (loss) income		(24	)		138			109			119			24			366
Interest expense		—			(91	)		(1	)		—			—			(92	)
Interest and other income, net		—			7			—			1			—			8
(Loss) income before income taxes		(24	)		54			108			120			24			282
Benefit (provision) for income taxes		4			(9	)		(19	)		(21	)		(4	)		(49	)
Equity in net income of consolidated subsidiaries		245			180			—			—			(425	)		—
Net income		225			225			89			99			(405	)		233
Net income attributable to noncontrolling interests		—			—			—			—			(8	)		(8	)
Net income attributable to L-3	$	225		$	225		$	89		$	99		$	(413	)	$	225
Comprehensive income attributable to L-3	$	231		$	231		$	90		$	82		$	(403	)	$	231
For the first half ended June 27, 2014:
Total net sales	$	—		$	1,746		$	3,280		$	1,098		$	(148	)	$	5,976
Total cost of sales		(29	)		(1,567	)		(3,033	)		(999	)		177			(5,451	)
Operating (loss) income		(29	)		179			247			99			29			525
Interest expense		(2	)		(81	)		—			(1	)		2			(82	)
Interest and other income, net		—			8			—			1			—			9
(Loss) income before income taxes		(31	)		106			247			99			31			452
Benefit (provision) for income taxes		9			(33	)		(76	)		(30	)		(9	)		(139	)
Equity in net income of consolidated subsidiaries		329			234			—			—			(563	)		—
Net income		307			307			171			69			(541	)		313
Net income attributable to noncontrolling interests		—			—			—			—			(6	)		(6	)
Net income attributable to L-3	$	307		$	307		$	171		$	69		$	(547	)	$	307
Comprehensive income attributable to L-3	$	321		$	321		$	175		$	75		$	(571	)	$	321

Condensed Combining Statements of Cash Flows

Condensed Combining Statements of Cash Flows
For the first half ended June 26, 2015:
Operating activities:
Net cash from (used in) operating activities	$	457		$	273		$	144		$	(18	)	$	(542	)	$	314
Investing activities:
Business acquisitions, net of cash acquired		—			(260	)		—			—			—			(260	)
Proceeds from sale of businesses, net of closing date cash balances		—			—			28			276			—			304
Investments in L-3 Communications		(23	)		—			—			—			23			—
Other investing activities		—			(46	)		(25	)		(8	)		—			(79	)
Net cash (used in) from investing activities		(23	)		(306	)		3			268			23			(35	)
Financing activities:
Common stock repurchased		(346	)		—			—			—			—			(346	)
Dividends paid on L-3 Holdings common stock		(111	)		—			—			—			—			(111	)
Dividends paid to L-3 Holdings		—			(457	)		—			—			457			—
Investments from L-3 Holdings		—			23			—			—			(23	)		—
Other financing activities		23			303			(146	)		(280	)		136			36
Net cash used in financing activities		(434	)		(131	)		(146	)		(280	)		570			(421	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(8	)		—			(8	)
Change in cash balance in assets held for sale		—			—			1			60			—			61
Net (decrease) increase in cash		—			(164	)		2			22			51			(89	)
Cash and cash equivalents, beginning of the period		—			361			1			142			(62	)		442
Cash and cash equivalents, end of the period	$	—		$	197		$	3		$	164		$	(11	)	$	353
For the first half ended June 27, 2014:
Operating activities:
Net cash from operating activities	$	1,375		$	107		$	152		$	3		$	(1,422	)	$	215
Investing activities:
Business acquisitions, net of cash acquired		—			(57	)		—			—			—			(57	)
Investments in L-3 Communications		(77	)		—			—			—			77			—
Other investing activities		—			(25	)		(24	)		(11	)		—			(60	)
Net cash used in investing activities		(77	)		(82	)		(24	)		(11	)		77			(117	)
Financing activities:
Proceeds from sale of Senior Notes		—			996			—			—			—			996
Retirement of CODES		(935	)		—			—			—			—			(935	)
Common stock repurchased		(333	)		—			—			—			—			(333	)
Dividends paid on L-3 Holdings common stock		(107	)		—			—			—			—			(107	)
Dividends paid to L-3 Holdings		—			(1,375	)		—			—			1,375			—
Investments from L-3 Holdings		—			77			—			—			(77	)		—
Other financing activities		77			111			(126	)		(40	)		58			80
Net cash used in financing activities		(1,298	)		(191	)		(126	)		(40	)		1,356			(299	)
Net (decrease) increase in cash		—			(166	)		2			(48	)		11			(201	)
Cash and cash equivalents, beginning of the period		—			258			—			261			(19	)		500
Cash and cash equivalents, end of the period	$	—		$	92		$	2		$	213		$	(8	)	$	299