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

9 Months Ended

Sep. 23, 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 September 23, 2016:
Current assets:
Cash and cash equivalents	$	—	$	188	$	—	$	239	$	(16	)	$	411
Billed receivables, net		—		319		277		216		—			812
Contracts in process		—		959		1,053		253		—			2,265
Other current assets		—		273		139		109		—			521
Total current assets		—		1,739		1,469		817		(16	)		4,009
Goodwill		—		2,338		2,973		973		—			6,284
Other assets		—		765		490		263		—			1,518
Investment in and amounts due from consolidated subsidiaries		4,568		5,368		4,433		—		(14,369	)		—
Total assets	$	4,568	$	10,210	$	9,365	$	2,053	$	(14,385	)	$	11,811
Current portion of long-term debt	$	—	$	549	$	—	$	—	$	—		$	549
Current liabilities		—		892		856		469		(16	)		2,201
Amounts due to consolidated subsidiaries		—		—		—		159		(159	)		—
Other long-term liabilities		—		1,419		191		29		—			1,639
Long-term debt		—		2,782		—		—		—			2,782
Total liabilities		—		5,642		1,047		657		(175	)		7,171
L-3 shareholders’ equity		4,568		4,568		8,318		1,396		(14,282	)		4,568
Noncontrolling interests		—		—		—		—		72			72
Total equity		4,568		4,568		8,318		1,396		(14,210	)		4,640
Total liabilities and equity	$	4,568	$	10,210	$	9,365	$	2,053	$	(14,385	)	$	11,811
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 September 23, 2016:
Total net sales	$	—		$	877		$	1,258		$	444		$	(74	)	$	2,505
Total cost of sales		(15	)		(801	)		(1,182	)		(381	)		89			(2,290	)
Operating (loss) income		(15	)		76			76			63			15			215
Interest expense		—			(40	)		—			(1	)		—			(41	)
Interest and other income, net		—			4			—			2			—			6
(Loss) income from continuing operations before income taxes		(15	)		40			76			64			15			180
Benefit (provision) for income taxes		2			(7	)		(12	)		(10	)		(2	)		(29	)
Equity in net income of consolidated subsidiaries		161			115			—			—			(276	)		—
Net income		148			148			64			54			(263	)		151
Net income attributable to noncontrolling interests		—			—			—			—			(3	)		(3	)
Net income attributable to L-3	$	148		$	148		$	64		$	54		$	(266	)	$	148
Comprehensive income attributable to L-3	$	125		$	125		$	64		$	24		$	(213	)	$	125
For the quarter ended September 25, 2015:
Total net sales	$	—		$	873		$	1,334		$	443		$	(86	)	$	2,564
Total cost of sales		(12	)		(793	)		(1,201	)		(381	)		98			(2,289	)
Loss related to business divestitures		—			(8	)		(1	)		—			—			(9	)
Goodwill impairment charges		—			—			(26	)		(9	)		—			(35	)
Operating (loss) income		(12	)		72			106			53			12			231
Interest expense		—			(43	)		—			—			—			(43	)
Interest and other income, net		—			2			—			1			—			3
(Loss) income from continuing operations before income taxes		(12	)		31			106			54			12			191
Benefit (provision) for income taxes		4			(11	)		(30	)		(22	)		(4	)		(63	)
Equity in net loss of consolidated subsidiaries		(291	)		(319	)		—			—			610			—
(Loss) income from continuing operations		(299	)		(299	)		76			32			618			128
Loss from discontinued operations, net of income tax		—			—			(424	)		—			—			(424	)
Net (loss) income		(299	)		(299	)		(348	)		32			618			(296	)
Net income attributable to noncontrolling interests		—			—			—			—			(3	)		(3	)
Net (loss) income attributable to L-3	$	(299	)	$	(299	)	$	(348	)	$	32		$	615		$	(299	)
Comprehensive loss attributable to L-3	$	(351	)	$	(351	)	$	(354	)	$	(25	)	$	730		$	(351	)
Condensed Combining Statements of Operations:
For the year-to-date period ended September 23, 2016:
Total net sales	$	—		$	2,602		$	3,817		$	1,307		$	(204	)	$	7,522
Total cost of sales		(34	)		(2,343	)		(3,545	)		(1,124	)		238			(6,808	)
Operating (loss) income		(34	)		259			272			183			34			714
Interest expense		—			(124	)		—			(1	)		—			(125	)
Interest and other income, net		—			10			—			5			—			15
Debt retirement charge		—			(5	)		—			—			—			(5	)
(Loss) income from continuing operations before income taxes		(34	)		140			272			187			34			599
Benefit (provision) for income taxes		7			(31	)		(59	)		(40	)		(7	)		(130	)
Equity in net income of consolidated subsidiaries		549			413			—			—			(962	)		—
Income from continuing operations		522			522			213			147			(935	)		469
Income from discontinued operations, net of income tax		—			—			63			—			—			63
Net income		522			522			276			147			(935	)		532
Net income attributable to noncontrolling interests		—			—			—			—			(10	)		(10	)
Net income attributable to L-3	$	522		$	522		$	276		$	147		$	(945	)	$	522
Comprehensive income attributable to L-3	$	529		$	529		$	287		$	120		$	(936	)	$	529
For the year-to-date period ended September 25, 2015:
Total net sales	$	—		$	2,548		$	3,849		$	1,423		$	(225	)	$	7,595
Total cost of sales		(35	)		(2,332	)		(3,601	)		(1,252	)		260			(6,960	)
(Loss) gain related to business divestitures		—			(13	)		(29	)		13			—			(29	)
Goodwill impairment charges		—			—			(26	)		(9	)		—			(35	)
Operating (loss) income		(35	)		203			193			175			35			571
Interest expense		—			(123	)		(1	)		—			—			(124	)
Interest and other income, net		—			9			—			2			—			11
(Loss) income from continuing operations before income taxes		(35	)		89			192			177			35			458
Benefit (provision) for income taxes		8			(20	)		(44	)		(41	)		(8	)		(105	)
Equity in net loss of consolidated subsidiaries		(47	)		(143	)		—			—			190			—
(Loss) income from continuing operations		(74	)		(74	)		148			136			217			353
Loss from discontinued operations, net of income tax		—			—			(416	)		—			—			(416	)
Net (loss) income		(74	)		(74	)		(268	)		136			217			(63	)
Net income attributable to noncontrolling interests		—			—			—			—			(11	)		(11	)
Net (loss) income attributable to L-3	$	(74	)	$	(74	)	$	(268	)	$	136		$	206		$	(74	)
Comprehensive (loss) income attributable to L-3	$	(120	)	$	(120	)	$	(273	)	$	62		$	331		$	(120	)

Condensed Combining Statements of Cash Flows

Condensed Combining Statements of Cash Flows
For the year-to-date period ended September 23, 2016:
Operating activities:
Net cash from operating activities	$	492		$	196		$	301		$	159		$	(569	)	$	579
Investing activities:
Business acquisitions, net of cash acquired		—			(27	)		—			—			—			(27	)
Proceeds from sale of businesses, net of closing date cash balances		—			563			—			(2	)		—			561
Investments in L-3 Communications		(52	)		—			—			—			52			—
Other investing activities		—			(27	)		(47	)		(30	)		—			(104	)
Net cash (used in) from investing activities from continuing operations		(52	)		509			(47	)		(32	)		52			430
Financing activities:
Redemption of senior notes		—			(298	)		—			—			—			(298	)
Common stock repurchased		(326	)		—			—			—			—			(326	)
Dividends paid on L-3 Holdings common stock		(166	)		—			—			—			—			(166	)
Dividends paid to L-3 Holdings		—			(492	)		—			—			492			—
Investments from L-3 Holdings		—			52			—			—			(52	)		—
Other financing activities		52			84			(198	)		(50	)		156			44
Net cash used in financing activities from continuing operations		(440	)		(654	)		(198	)		(50	)		596			(746	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(3	)		—			(3	)
Net decrease in cash and cash equivalents of discontinued operations		—			—			(56	)		—			—			(56	)
Net increase in cash		—			51			—			74			79			204
Cash and cash equivalents, beginning of the period		—			137			—			165			(95	)		207
Cash and cash equivalents, end of the period	$	—		$	188		$	—		$	239		$	(16	)	$	411
For the year-to-date period ended September 25, 2015:
Operating activities:
Net cash from operating activities	$	768		$	370		$	282		$	65		$	(888	)	$	597
Investing activities:
Business acquisitions, net of cash acquired		—			(260	)		—			—			—			(260	)
Proceeds from sale of business, net of closing date cash balance		—			4			27			277			—			308
Investments in L-3 Communications		(34	)		—			—			—			34			—
Other investing activities		—			(62	)		(42	)		(26	)		—			(130	)
Net cash (used in) from investing activities from continuing operations		(34	)		(318	)		(15	)		251			34			(82	)
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		—			34			—			—			(34	)		—
Other financing activities		34			491			(322	)		(337	)		167			33
Net cash used in financing activities from continuing operations		(734	)		(243	)		(322	)		(337	)		901			(735	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(14	)		—			(14	)
Net increase in cash and cash equivalents of discontinued operations		—			—			54			—			—			54
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