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

3 Months Ended

Mar. 25, 2016

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 March 25, 2016:
Current assets:
Cash and cash equivalents	$	—	$	349	$	3	$	189	$	(7	)	$	534
Billed receivables, net		—		276		256		247		—			779
Contracts in process		—		925		1,030		271		—			2,226
Other current assets		—		279		134		111		—			524
Total current assets		—		1,829		1,423		818		(7	)		4,063
Goodwill		—		2,339		2,974		993		—			6,306
Other assets		—		784		500		258		—			1,542
Investment in and amounts due from consolidated subsidiaries		4,378		5,393		4,312		—		(14,083	)		—
Total assets	$	4,378	$	10,345	$	9,209	$	2,069	$	(14,090	)	$	11,911
Current portion of long-term debt	$	—	$	499	$	—	$	—	$	—		$	499
Current liabilities		—		913		818		456		(7	)		2,180
Amounts due to consolidated subsidiaries		—		—		—		247		(247	)		—
Other long-term liabilities		—		1,428		195		31		—			1,654
Long-term debt		—		3,127		—		—		—			3,127
Total liabilities		—		5,967		1,013		734		(254	)		7,460
L-3 shareholders’ equity		4,378		4,378		8,196		1,335		(13,909	)		4,378
Noncontrolling interests		—		—		—		—		73			73
Total equity		4,378		4,378		8,196		1,335		(13,836	)		4,451
Total liabilities and equity	$	4,378	$	10,345	$	9,209	$	2,069	$	(14,090	)	$	11,911
At December 31, 2015:
Current assets:
Cash and cash equivalents	$	—	$	137	$	—	$	165	$	(95	)	$	207
Billed receivables, net		—		278		297		171		—			746
Contracts in process		—		872		958		251		—			2,081
Other current assets		—		288		137		109		—			534
Assets of discontinued operations		—		—		664		—		—			664
Total current assets		—		1,575		2,056		696		(95	)		4,232
Goodwill		—		2,318		2,973		990		—			6,281
Other assets		—		798		496		260		—			1,554
Investment in and amounts due from consolidated subsidiaries		4,355		5,609		3,739		111		(13,814	)		—
Total assets	$	4,355	$	10,300	$	9,264	$	2,057	$	(13,909	)	$	12,067
Current portion of long-term debt	$	—	$	499	$	—	$	—	$	—		$	499
Current liabilities		—		911		899		445		(95	)		2,160
Liabilities of discontinued operations		—		—		220		—		—			220
Other long-term liabilities		—		1,410		195		29		—			1,634
Long-term debt		—		3,125		—		—		—			3,125
Total liabilities		—		5,945		1,314		474		(95	)		7,638
L-3 shareholders’ equity		4,355		4,355		7,950		1,583		(13,888	)		4,355
Noncontrolling interests		—		—		—		—		74			74
Total equity		4,355		4,355		7,950		1,583		(13,814	)		4,429
Total liabilities and equity	$	4,355	$	10,300	$	9,264	$	2,057	$	(13,909	)	$	12,067

Condensed Combining Statements of Operations

Condensed Combining Statements of Operations:
For the quarter ended March 25, 2016:
Total net sales	$	—		$	822		$	1,185		$	409		$	(63	)	$	2,353
Total cost of sales		(6	)		(739	)		(1,068	)		(357	)		69			(2,101	)
Operating (loss) income		(6	)		83			117			52			6			252
Interest expense		—			(41	)		—			—			—			(41	)
Interest and other income, net		—			3			—			1			—			4
(Loss) income from continuing operations before income taxes		(6	)		45			117			53			6			215
Benefit (provision) for income taxes		1			(10	)		(26	)		(12	)		(1	)		(48	)
Equity in net income of consolidated subsidiaries		232			192			—			—			(424	)		—
Income from continuing operations		227			227			91			41			(419	)		167
Income from discontinued operations, net of income tax		—			—			63			—			—			63
Net income		227			227			154			41			(419	)		230
Net income attributable to noncontrolling interests		—			—			—			—			(3	)		(3	)
Net income attributable to L-3	$	227		$	227		$	154		$	41		$	(422	)	$	227
Comprehensive income attributable to L-3	$	243		$	243		$	162		$	41		$	(446	)	$	243
Condensed Combining Statements of Operations:
For the quarter ended March 27, 2015:
Total net sales	$	—		$	796		$	1,272		$	486		$	(66	)	$	2,488
Total cost of sales		(13	)		(729	)		(1,172	)		(444	)		79			(2,279	)
Loss related to business divestitures		—			—			(3	)		(19	)		—			(22	)
Operating (loss) income		(13	)		67			97			23			13			187
Interest expense		—			(39	)		—			—			—			(39	)
Interest and other income, net		—			3			—			—			—			3
(Loss) income from continuing operations before income taxes		(13	)		31			97			23			13			151
Benefit (provision) for income taxes		4			(10	)		(29	)		(7	)		(4	)		(46	)
Equity in net income of consolidated subsidiaries		114			84			—			—			(198	)		—
Income from continuing operations		105			105			68			16			(189	)		105
Income from discontinued operations, net of income tax		—			—			4			—			—			4
Net income		105			105			72			16			(189	)		109
Net income attributable to noncontrolling interests		—			—			—			—			(4	)		(4	)
Net income attributable to L-3	$	105		$	105		$	72		$	16			(193	)	$	105
Comprehensive income (loss) attributable to L-3	$	26		$	26		$	69		$	(73	)	$	(22	)	$	26

Condensed Combining Statements of Cash Flows

Condensed Combining Statements of Cash Flows
For the quarter ended March 25, 2016:
Operating activities:
Net cash from (used in) operating activities	$	256		$	46		$	117		$	(32	)	$	(275	)	$	112
Investing activities:
Business acquisitions, net of cash acquired		—			(27	)		—			—			—			(27	)
Proceeds from sale of businesses, net of closing date cash balances		—			576			—			—			—			576
Investments in L-3 Communications		(1	)		—			—			—			1			—
Other investing activities		—			3			(12	)		(10	)		—			(19	)
Net cash (used in) from investing activities from continuing operations		(1	)		552			(12	)		(10	)		1			530
Financing activities:
Common stock repurchased		(198	)		—			—			—			—			(198	)
Dividends paid on L-3 Holdings common stock		(58	)		—			—			—			—			(58	)
Dividends paid to L-3 Holdings		—			(256	)		—			—			256			—
Investments from L-3 Holdings		—			1			—			—			(1	)		—
Other financing activities		1			(131	)		(46	)		66			107			(3	)
Net cash (used in) from financing activities from continuing operations		(255	)		(386	)		(46	)		66			362			(259	)
Net decrease in cash and cash equivalents of discontinued operations		—			—			(56	)		—			—			(56	)
Net increase in cash		—			212			3			24			88			327
Cash and cash equivalents, beginning of the period		—			137			—			165			(95	)		207
Cash and cash equivalents, end of the period	$	—		$	349		$	3		$	189		$	(7	)	$	534
For the quarter ended March 27, 2015:
Operating activities:
Net cash from operating activities	$	158		$	107		$	4		$	1		$	(158	)	$	112
Investing activities:
Business acquisitions, net of cash acquired		—			(41	)		—			—			—			(41	)
Investments in L-3 Communications		(13	)		—			—			—			13			—
Other investing activities		—			(19	)		(5	)		(9	)		—			(33	)
Net cash used in investing activities from continuing operations		(13	)		(60	)		(5	)		(9	)		13			(74	)
Financing activities:
Common stock repurchased		(100	)		—			—			—			—			(100	)
Dividends paid on L-3 Holdings common stock		(58	)		—			—			—			—			(58	)
Dividends paid to L-3 Holdings		—			(158	)		—			—			158			—
Investments from L-3 Holdings		—			13			—			—			(13	)		—
Other financing activities		13			(53	)		4			(7	)		51			8
Net cash (used in) from financing activities from continuing operations		(145	)		(198	)		4			(7	)		196			(150	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(11	)		—			(11	)
Net decrease in cash and cash equivalents of discontinued operations		—			—			(3	)		—			—			(3	)
Change in cash balance in assets held for sale		—			—			1			—			—			1
Net (decrease) increase in cash		—			(151	)		1			(26	)		51			(125	)
Cash and cash equivalents, beginning of the period		—			361			1			142			(62	)		442
Cash and cash equivalents, end of the period	$	—		$	210		$	2		$	116		$	(11	)	$	317