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

9 Months Ended

Sep. 25, 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 September 25, 2015:
Current assets:
Cash and cash equivalents	$	—	$	170	$	1	$	167	$	(15	)	$	323
Billed receivables, net		—		260		318		218		—			796
Contracts in process		—		938		1,197		348		—			2,483
Other current assets		—		413		163		117		—			693
Total current assets		—		1,781		1,679		850		(15	)		4,295
Goodwill		—		2,317		3,777		1,018		—			7,112
Other assets		—		800		552		277		—			1,629
Investment in and amounts due from consolidated subsidiaries		4,584		6,294		4,475		—		(15,353	)		—
Total assets	$	4,584	$	11,192	$	10,483	$	2,145	$	(15,368	)	$	13,036
Current liabilities	$	—	$	931	$	1,044	$	504	$	(15	)	$	2,464
Amounts due to consolidated subsidiaries		—		—		—		16		(16	)		—
Other long-term liabilities		—		1,737		203		33		—			1,973
Long-term debt		—		3,940		—		—		—			3,940
Total liabilities		—		6,608		1,247		553		(31	)		8,377
L-3 shareholders’ equity		4,584		4,584		9,236		1,592		(15,412	)		4,584
Noncontrolling interests		—		—		—		—		75			75
Total equity		4,584		4,584		9,236		1,592		(15,337	)		4,659
Total liabilities and equity	$	4,584	$	11,192	$	10,483	$	2,145	$	(15,368	)	$	13,036
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 September 25, 2015:
Total net sales	$	—		$	873		$	1,584		$	449		$	(89	)	$	2,817
Total cost of sales		(12	)		(790	)		(1,442	)		(388	)		101			(2,531	)
Loss related to business divestitures		—			(8	)		(1	)		—			—			(9	)
Impairment charge		—			—			(491	)		—			—			(491	)
Operating (loss) income		(12	)		75			(350	)		61			12			(214	)
Interest expense		—			(47	)		—			—			—			(47	)
Interest and other income, net		—			2			—			1			—			3
(Loss) income before income taxes		(12	)		30			(350	)		62			12			(258	)
Benefit (provision) for income taxes		7			(10	)		(14	)		(14	)		(7	)		(38	)
Equity in net loss of consolidated subsidiaries		(294	)		(319	)		—			—			613			—
Net (loss) income		(299	)		(299	)		(364	)		48			618			(296	)
Net income attributable to noncontrolling interests		—			—			—			—			(3	)		(3	)
Net (loss) income attributable to L-3	$	(299	)	$	(299	)	$	(364	)	$	48		$	615		$	(299	)
Comprehensive loss attributable to L-3	$	(351	)	$	(351	)	$	(370	)	$	(9	)	$	730		$	(351	)
For the quarter ended September 26, 2014:
Total net sales	$	—		$	860		$	1,628		$	525		$	(73	)	$	2,940
Total cost of sales		(10	)		(787	)		(1,500	)		(469	)		83			(2,683	)
Operating (loss) income		(10	)		73			128			56			10			257
Interest expense		—			(46	)		(2	)		1			—			(47	)
Interest and other income, net		—			4			—			1			—			5
(Loss) income before income taxes		(10	)		31			126			58			10			215
Benefit (provision) for income taxes		3			(8	)		(34	)		(16	)		(3	)		(58	)
Equity in net income of consolidated subsidiaries		161			131			—			—			(292	)		—
Net income		154			154			92			42			(285	)		157
Net income attributable to noncontrolling interests		—			—			—			—			(3	)		(3	)
Net income attributable to L-3	$	154		$	154		$	92		$	42		$	(288	)	$	154
Comprehensive income (loss) attributable to L-3	$	90		$	90		$	89		$	(22	)	$	(157	)	$	90
Condensed Combining Statements of Operations:
For the year-to-date period ended September 25, 2015:
Total net sales	$	—		$	2,539		$	4,574		$	1,442		$	(232	)	$	8,323
Total cost of sales		(36	)		(2,313	)		(4,295	)		(1,275	)		268			(7,651	)
(Loss) gain related to business divestitures		—			(13	)		(29	)		13			—			(29	)
Impairment charge		—			—			(491	)		—			—			(491	)
Operating (loss) income		(36	)		213			(241	)		180			36			152
Interest expense		—			(138	)		(1	)		—			—			(139	)
Interest and other income, net		—			9			—			2			—			11
(Loss) income before income taxes		(36	)		84			(242	)		182			36			24
Benefit (provision) for income taxes		11			(19	)		(33	)		(35	)		(11	)		(87	)
Equity in net loss of consolidated subsidiaries		(49	)		(139	)		—			—			188			—
Net (loss) income		(74	)		(74	)		(275	)		147			213			(63	)
Net income attributable to noncontrolling interests		—			—			—			—			(11	)		(11	)
Net (loss) income attributable to L-3	$	(74	)	$	(74	)	$	(275	)	$	147		$	202		$	(74	)
Comprehensive (loss) income attributable to L-3	$	(120	)	$	(120	)	$	(280	)	$	73		$	327		$	(120	)
For the year-to-date period ended September 26, 2014:
Total net sales	$	—		$	2,606		$	4,908		$	1,623		$	(221	)	$	8,916
Total cost of sales		(39	)		(2,354	)		(4,533	)		(1,468	)		260			(8,134	)
Operating (loss) income		(39	)		252			375			155			39			782
Interest expense		(2	)		(127	)		(2	)		—			2			(129	)
Interest and other income, net		—			12			—			2			—			14
(Loss) income before income taxes		(41	)		137			373			157			41			667
Benefit (provision) for income taxes		12			(41	)		(110	)		(46	)		(12	)		(197	)
Equity in net income of consolidated subsidiaries		490			365			—			—			(855	)		—
Net income		461			461			263			111			(826	)		470
Net income attributable to noncontrolling interests		—			—			—			—			(9	)		(9	)
Net income attributable to L-3	$	461		$	461		$	263		$	111		$	(835	)	$	461
Comprehensive income attributable to L-3	$	411		$	411		$	264		$	53		$	(728	)	$	411

Condensed Combining Statements of Cash Flows

Condensed Combining Statements of Cash Flows
For the year-to-date period ended September 25, 2015:
Operating activities:
Net cash from operating activities	$	768		$	337		$	348		$	66		$	(888	)	$	631
Investing activities:
Business acquisitions, net of cash acquired		—			(260	)		—			—			—			(260	)
Proceeds from sale of businesses, net of closing date cash balances		—			4			27			277			—			308
Investments in L-3 Communications		(33	)		—			—			—			33			—
Other investing activities		—			(63	)		(45	)		(26	)		—			(134	)
Net cash (used in) from investing activities		(33	)		(319	)		(18	)		251			33			(86	)
Financing activities:
Common stock repurchased		(605	)		—			—			—			—			(605	)
Dividends paid on L-3 Holdings common stock		(163	)		—			—			—			—			(163	)
Dividends paid to L-3 Holdings		—			(768	)		—			—			768			—
Investments from L-3 Holdings		—			33			—			—			(33	)		—
Other financing activities		33			526			(331	)		(338	)		167			57
Net cash used in financing activities		(735	)		(209	)		(331	)		(338	)		902			(711	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(14	)		—			(14	)
Change in cash balance in assets held for sale		—			—			1			60			—			61
Net (decrease) increase in cash		—			(191	)		—			25			47			(119	)
Cash and cash equivalents, beginning of the period		—			361			1			142			(62	)		442
Cash and cash equivalents, end of the period	$	—		$	170		$	1		$	167		$	(15	)	$	323
For the year-to-date period ended September 26, 2014:
Operating activities:
Net cash from operating activities	$	1,506		$	201		$	382		$	69		$	(1,553	)	$	605
Investing activities:
Business acquisitions, net of cash acquired		—			(57	)		—			—			—			(57	)
Investments in L-3 Communications		(87	)		—			—			—			87			—
Other investing activities		—			(37	)		(52	)		(16	)		—			(105	)
Net cash used in investing activities		(87	)		(94	)		(52	)		(16	)		87			(162	)
Financing activities:
Proceeds from sale of Senior Notes		—			996			—			—			—			996
Retirement of CODES		(935	)		—			—			—			—			(935	)
Common stock repurchased		(413	)		—			—			—			—			(413	)
Dividends paid on L-3 Holdings common stock		(158	)		—			—			—			—			(158	)
Dividends paid to L-3 Holdings		—			(1,506	)		—			—			1,506			—
Investments from L-3 Holdings		—			87			—			—			(87	)		—
Other financing activities		87			388			(329	)		(66	)		4			84
Net cash used in financing activities		(1,419	)		(35	)		(329	)		(66	)		1,423			(426	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(9	)		—			(9	)
Net increase (decrease) in cash		—			72			1			(22	)		(43	)		8
Cash and cash equivalents, beginning of the period		—			258			—			261			(19	)		500
Cash and cash equivalents, end of the period	$	—		$	330		$	1		$	239		$	(62	)	$	508