Business Segment Information (Tables)

9 Months Ended

Mar. 29, 2019

Segment Reporting [Abstract]

Schedule of Segment Revenue and Reconciliation of Segment Income to Total Income From Continuing Operations Before Taxes

Segment revenue, segment operating income and a reconciliation of segment operating income to total income from continuing operations before income taxes are as follows:

	Quarter Ended						Three Quarters Ended
	March 29, 2019			March 30, 2018			March 29, 2019			March 30, 2018
	(In millions)
Revenue
Communication Systems	$	568		$	479		$	1,577		$	1,377
Electronic Systems	649			606			1,855			1,729
Space and Intelligence Systems	514			482			1,515			1,410
Corporate eliminations	(3		)	(5		)	(11		)	(9		)
	$	1,728		$	1,562		$	4,936		$	4,507
Income From Continuing Operations Before Income Taxes
Segment Operating Income:
Communication Systems	$	172		$	144		$	474		$	404
Electronic Systems	123			108			355			314
Space and Intelligence Systems	87			83			265			250
Unallocated corporate expense and corporate eliminations(1)	(56		)	(86		)	(155		)	(182		)
Pension adjustment	(47		)	(46		)	(140		)	(138		)
Non-operating income	46			46			140			136
Net interest expense	(42		)	(41		)	(128		)	(123		)
	$	283		$	208		$	811		$	661

_______________

(1)

Unallocated corporate expense and corporate eliminations included: (i) $16 million and $29 million of L3 Technologies, Inc. (“L3”) merger-related transaction and integration costs for the quarter and three quarters ended March 29, 2019, respectively; (ii) $45 million of charges related to our decision to transition and exit a commercial air-to-ground long term evolution (“LTE”) radio communications line of business in the quarter and three quarters ended March 30, 2018; (iii) a $12 million adjustment for deferred compensation in the three quarters ended March 30, 2018; and (iv) $25 million and $76 million of expense in the quarter and three quarters ended March 29, 2019, respectively, compared with $25 million and $75 million of expense in the quarter and three quarters ended March 30, 2018, respectively, for amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis. Because the acquisition of Exelis benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired in the Exelis acquisition was recorded as unallocated corporate expense. Corporate eliminations of intersegment profits were not material in the quarter or three quarters ended March 29, 2019 or the quarter or three quarters ended March 30, 2018.

Schedule of Disaggregation of Revenue by Segment

Disaggregation of Revenue

Communication Systems: Communication Systems operates principally on a “commercial” market-driven business model through which the business segment provides ready-to-ship commercial off-the-shelf products to customers in the U.S. and internationally. Communication Systems revenue is primarily derived from fixed-price contracts and is generally recognized at the point in time when the product is received and accepted by the customer. We disaggregate Communication Systems revenue by geographical region, as we believe this category best depicts how the nature, amount, timing and uncertainty of Communication Systems revenue and cash flows are affected by economic factors:

	Quarter Ended				Three Quarters Ended
	March 29, 2019		March 30, 2018		March 29, 2019		March 30, 2018
	(In millions)
Revenue By Geographical Region
United States	$	324	$	232	$	882	$	716
International	244		247		695		661
	$	568	$	479	$	1,577	$	1,377

Electronic Systems: Electronic Systems revenue is primarily derived from U.S. Government development and production contracts and is generally recognized over time using the POC cost-to-cost method. We disaggregate Electronic Systems revenue by customer relationship, contract type and geographical region. We believe these categories best depict how the nature, amount, timing and uncertainty of Electronic Systems revenue and cash flows are affected by economic factors:

	Quarter Ended				Three Quarters Ended
	March 29, 2019		March 30, 2018		March 29, 2019		March 30, 2018
	(In millions)
Revenue By Customer Relationship
Prime contractor	$	402	$	426	$	1,195	$	1,234
Subcontractor	247		180		660		495
	$	649	$	606	$	1,855	$	1,729
Revenue By Contract Type
Fixed-price(1)	$	515	$	491	$	1,501	$	1,376
Cost-reimbursable	134		115		354		353
	$	649	$	606	$	1,855	$	1,729
Revenue By Geographical Region
United States	$	539	$	491	$	1,503	$	1,381
International	110		115		352		348
	$	649	$	606	$	1,855	$	1,729

_______________

(1) Includes revenue derived from time-and-materials contracts.

Space and Intelligence Systems: Space and Intelligence Systems revenue is primarily derived from U.S. Government development and production contracts and is generally recognized over time using the POC cost-to-cost method. We disaggregate Space and Intelligence Systems revenue by customer relationship, contract type and geographical region. We believe these categories best depict how the nature, amount, timing and uncertainty of Space and Intelligence Systems revenue and cash flows are affected by economic factors:

	Quarter Ended				Three Quarters Ended
	March 29, 2019		March 30, 2018		March 29, 2019		March 30, 2018
	(In millions)
Revenue By Customer Relationship
Prime contractor	$	355	$	353	$	1,069	$	1,016
Subcontractor	159		129		446		394
	$	514	$	482	$	1,515	$	1,410
Revenue By Contract Type
Fixed-price(1)	$	173	$	140	$	533	$	383
Cost-reimbursable	341		342		982		1,027
	$	514	$	482	$	1,515	$	1,410
Revenue By Geographical Region
United States	$	504	$	466	$	1,480	$	1,364
International	10		16		35		46
	$	514	$	482	$	1,515	$	1,410

_______________

(1)

Includes revenue derived from time-and-materials contracts.

Schedule of Total Segment Assets Reconciliation

Total assets by business segment are summarized below:

	March 29, 2019		June 29, 2018
	(In millions)
Total Assets
Communication Systems	$	1,562	$	1,567
Electronic Systems	4,251		4,174
Space and Intelligence Systems	2,216		2,193
Corporate(1)	1,763		1,917
	$	9,792	$	9,851

_______________

(1)

Identifiable intangible assets acquired in connection with our acquisition of Exelis in the fourth quarter of fiscal 2015 were recorded as Corporate assets because they benefited the entire Company as opposed to any individual segment. Exelis identifiable intangible asset balances recorded as Corporate assets were $898 million and $974 million at March 29, 2019 and June 29, 2018, respectively. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan assets and buildings and equipment.