Acquisitions and Divestitures (Tables)

12 Months Ended

Dec. 31, 2016

Net Sales and Income Before Income Taxes for L-3 MacDonald Humfrey, Micreo, Aerosim and ATM

Net sales and income before income taxes for L3 MacDonald Humfrey, Micreo, Aerosim and ATM, included in L3’s consolidated statement of operations for the year ended December 31, 2016, are presented in the table below.

	Year Ended December 31, 2016
	(in millions)
Net sales	$	37
Income before income taxes	$	7

Components of Loss of Business Divestitures, Related Sales Proceeds Received and Sales Included in Continuing Operations

The adjustments recorded by the Company related to the business divestitures are included in the loss related to business divestitures caption on the audited consolidated statements of operations and discussed below. Additionally, these adjustments, the proceeds received, and net sales included in continuing operations related to the Company’s business divestitures, are summarized in the table below.

	Year Ended December 31, 2015
	Loss Related to Business Divestiture			Proceeds Received		Net Sales
	(in millions)
MSI divestiture	$	(17	)	$	318	$	185
BSI divestiture		(4	)		26		7
Tinsley Product Line divestiture		(8	)		4		9
Klein divestiture		(2	)		10		8
Total	$	(31	)	$	358	$	209

Net Sales and Income Before Income Taxes for MSI, BSI, Tinsley Product Line and Klein

Net sales and income (loss) before income taxes for MSI, BSI, the Tinsley Product Line and Klein, included in L3’s consolidated statements of operations, are presented in the table below on an aggregate basis, and are included in income from continuing operations for all periods presented.

	Year Ended December 31,
	2015		2014
	(in millions)
Net sales	$	209	$	596
Income before income taxes	$	—	$	27

Unaudited Pro Forma Statements of Operations Data

The following unaudited pro forma Statements of Operations data present the combined results of the Company and its business acquisitions completed during the years ended December 31, 2016 and 2015 assuming that the business acquisitions completed during 2016 and 2015 had occurred on January 1, 2015 and January 1, 2014, respectively. The unaudited pro forma Statements of Operations data below includes adjustment for additional amortization expense related to acquired intangible assets, depreciation and estimated reduction to interest income assuming the 2016 and 2015 acquisitions had occurred on January 1, 2015 and January 1, 2014, respectively.

	Year Ended December 31,
	2016		2015
	(in millions, except per share data)
Pro forma net sales	$	10,655	$	10,700
Pro forma income from continuing operations attributable to L3	$	660	$	307
Pro forma net income (loss) attributable to L3	$	723	$	(215	)
Pro forma diluted earnings per share from continuing operations	$	8.38	$	3.74
Pro forma diluted earnings (loss) per share	$	9.18	$	(2.63	)

NSS [Member]

Statement of Operations Data Classified as Discontinued Operations

The table below presents the statements of operations data for NSS, which was previously a reportable segment and has been classified as a discontinued operation and includes allocated interest expense for debt not directly attributable or related to L3’s other operations. Interest expense was allocated in accordance with the accounting standards for discontinued operations and was based on the ratio of NSS’s net assets to the sum of: (1) total L3 consolidated net assets and (2) L3 consolidated total debt.

	Year Ended December 31,
	2016			2015			2014
	(in millions)
Net sales	$	86		$	1,088		$	1,138
Cost of sales		(92	)		(1,040	)		(1,065	)
Gain related to business divestiture(1)		64			—			—
Goodwill impairment charges		—			(571	)		—
Operating income (loss) from discontinued operations		58			(523	)		73
Interest expense allocated to discontinued operations		—			(20	)		(20	)
Income (loss) from discontinued operations before income taxes		58			(543	)		53
Income tax benefit (expense)		5			21			(21	)
Income (loss) from discontinued operations, net of income taxes	$	63		$	(522	)	$	32

⁽¹⁾ The year ended December 31, 2016 includes a gain of $64 million (before and after income taxes) on the sale of the NSS business.

Major Classes of Assets and Liabilities Included as Discontinued Operations/Held For Sale

The major classes of assets and liabilities included in discontinued operations related to NSS are presented in the table below.

	December 31, 2015
	(in millions)
Assets
Current assets	$	201
Property, plant and equipment, net		25
Goodwill(1)		390
Other assets		48
Total assets of discontinued operations	$	664
Liabilities
Accounts payable, trade	$	48
Other current liabilities		78
Current liabilities		126
Long-term liabilities		94
Total liabilities of discontinued operations	$	220

⁽¹⁾ The goodwill balance at December 31, 2015 is based on an allocation of the goodwill attributable to the NSS reporting unit to discontinued operations based on the relative fair value of the NSS business retained by L3 and NSS business sold.