XML 65 R50.htm IDEA: XBRL DOCUMENT v3.20.2
Business Segment Information (Tables)
 6 Months Ended
Jul. 03, 2020
Segment Reporting [Abstract]  
Schedule of Revenue and Reconciliation of Income From Continuing Operations Before Taxes by Segment
Segment revenue, segment operating income (loss) and a reconciliation of segment operating income to total income from continuing operations before income taxes are as follows:
 Quarter EndedTwo Quarters Ended
 July 3, 2020June 28, 2019July 3, 2020June 28, 2019
 (In millions)
Revenue
Integrated Mission Systems$1,331  $11  $2,701  $25  
Space and Airborne Systems1,249  1,019  2,441  1,975  
Communication Systems1,112  609  2,206  1,189  
Aviation Systems800  186  1,811  330  
Other non-reportable business segments(1)
—  44  —  79  
Corporate eliminations(47) (4) (88) (5) 
$4,445  $1,865  $9,071  $3,593  
Income From Continuing Operations Before Income Taxes
Segment Operating Income (Loss):
Integrated Mission Systems$224  $3  $425  $6  
Space and Airborne Systems235  195  456  369  
Communication Systems265  176  515  343  
Aviation Systems31  19  (146) 36  
Other non-reportable business segments(1)
—  8  —  14  
Unallocated corporate expenses(2)
(116) (1) (149) (1) 
L3Harris Merger-related transaction and integration expenses(37) (36) (68) (52) 
Amortization of acquisition-related intangibles(3)
(208) (25) (353) (50) 
Pension adjustment(98) (46) (195) (93) 
Non-operating income105  48  200  94  
Net interest expense(65) (39) (128) (81) 
Total$336  $302  $557  $585  
_______________ 
(1)Includes the operating results of the Harris Night Vision business prior to the divestiture on September 13, 2019. See Note C — Business Divestitures and Assets Sales in these Notes for more information.
(2)Unallocated corporate expenses for the quarter and two quarters ended July 3, 2020 includes: (i) $16 million and $31 million, respectively, of additional cost of sales related to the fair value step-up in inventory sold (see Note B — Business Combination in these Notes for more information); (ii) $58 million and $61 million, respectively, of divestiture-related expenses, including a $26 million loss on sale of business, a $14 million non-cash remeasurement loss on a potential divestiture, a $12 million non-cash adjustment to the gain on sale of business and other items; (iii) a $14 million non-cash goodwill impairment charge related to a potential divestiture; and (iv) $7 million of L3Harris integration-related restructuring charges. Unallocated corporate expenses for the two quarters ended July 3, 2020 also includes a $5 million non-cash goodwill impairment charge related to the divestiture of the Applied Kilovolts and Analytical Instrumentation business.
(3)Includes $183 million and $303 million of amortization of identifiable intangible assets acquired as a result of the L3Harris Merger for the quarter and two quarters ended July 3, 2020, respectively. Also includes $25 million and $50 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis Inc. for the quarters and two quarters ended June 28, 2019, respectively. Because the L3Harris Merger and the acquisition of Exelis Inc. benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired was not allocated to any segment.
Schedule of Disaggregation of Revenue by Segment
Disaggregation of Revenue
All four segments disaggregate revenue by customer relationship, contract type and geographical region. We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
Integrated Mission Systems: Integrated Mission 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 revenue recognition method.
 Quarter EndedTwo Quarters Ended
 July 3, 2020June 28, 2019July 3, 2020June 28, 2019
(In millions)
Revenue By Customer Relationship
Prime contractor$858  $4  $1,807  $12  
Subcontractor473  7  894  13  
$1,331  $11  $2,701  $25  
Revenue By Contract Type
Fixed-price(1)
$998  $11  $2,023  $25  
Cost-reimbursable333  —  678  —  
$1,331  $11  $2,701  $25  
Revenue By Geographical Region
United States$1,038  $6  $2,143  $15  
International293  5  558  10  
$1,331  $11  $2,701  $25  
_______________
(1) Includes revenue derived from time-and-materials contracts.
Space and Airborne Systems: Space and Airborne 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 revenue recognition method.
Quarter EndedTwo Quarters Ended
July 3, 2020June 28, 2019July 3, 2020June 28, 2019
(In millions)
Revenue By Customer Relationship
Prime contractor$674  $590  $1,332  $1,162  
Subcontractor575  429  1,109  813  
$1,249  $1,019  $2,441  $1,975  
Revenue By Contract Type
Fixed-price(1)
$702  $601  $1,372  $1,132  
Cost-reimbursable547  418  1,069  843  
$1,249  $1,019  $2,441  $1,975  
Revenue By Geographical Region
United States$1,054  $886  $2,057  $1,732  
International195  133  384  243  
$1,249  $1,019  $2,441  $1,975  
_______________
(1) Includes revenue derived from time-and-materials contracts.
Communication Systems: Communication Systems revenue is primarily derived from fixed-price contracts and is generally recognized at the point in time when products are received and accepted by the customer for standard products offered to multiple customers and over time for customer-specific products, systems, and services.
 Quarter EndedTwo Quarters Ended
 July 3, 2020June 28, 2019July 3, 2020June 28, 2019
(In millions)
Revenue By Customer Relationship(1)
Prime contractor$749  $1,489  
Subcontractor363  717  
$1,112  $2,206  
Revenue By Contract Type(1)
Fixed-price(2)
$951  $1,869  
Cost-reimbursable161  337  
$1,112  $2,206  
Revenue by Geographical Region
United States$844  $355  $1,678  $702  
International268  254  528  487  
$1,112  $609  $2,206  $1,189  
______________
(1) Prior to the L3Harris Merger, Communication Systems did not recognize significant revenue for customer-specific products and systems, and currently, such customer arrangements primarily exist at operating businesses acquired in connection with the L3Harris Merger. The “Revenue by Customer Relationship” and “Revenue by Contract Type” disaggregation categories were added beginning in the Fiscal Transition Period to best depict how the nature, amount, timing and uncertainty of revenue and cash flows from these types of customer arrangements are affected by economic factors.
(2) Includes revenue derived from time-and-materials contracts.
Aviation Systems: Aviation Systems revenue is primarily derived from fixed-price contracts and is generally recognized at the point in time when products are received and accepted by the customer for standard products offered to multiple customers and over time for customer-specific products, systems, and services.
Quarter EndedTwo Quarters Ended
July 3, 2020June 28, 2019July 3, 2020June 28, 2019
(In millions)
Revenue By Customer Relationship
Prime contractor$514  $180  $1,178  $320  
Subcontractor286  6  633  10  
$800  $186  $1,811  $330  
Revenue By Contract Type
Fixed-price(1)
$627  $164  $1,468  $286  
Cost-reimbursable173  22  343  44  
$800  $186  $1,811  $330  
Revenue By Geographical Region
United States$696  $178  $1,445  $321  
International104  8  366  9  
$800  $186  $1,811  $330  
______________
(1) Includes revenue derived from time-and-materials contracts.
Schedule of Total Assets by Business Segment
Total assets by business segment are summarized below:
July 3, 2020January 3, 2020
 (In millions)
Total Assets
Integrated Mission Systems$8,675  $7,896  
Space and Airborne Systems6,899  6,829  
Communication Systems5,719  5,930  
Aviation Systems5,269  7,569  
Corporate(1)
11,290  10,112  
$37,852  $38,336  
_______________
(1)Identifiable intangible assets acquired in connection with the L3Harris Merger in the quarter ended September 27, 2019 and our acquisition of Exelis Inc. in fiscal 2015 were recorded as Corporate assets because they benefited the entire Company as opposed to any individual segment. Identifiable intangible asset balances recorded as Corporate assets were approximately $8.3 billion and $8.5 billion at July 3, 2020 and January 3, 2020, respectively. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan investments, buildings and equipment, as well as any assets and liabilities from discontinued operations and divestitures. See Note C — Business Divestitures and Assets Sales in these Notes for additional information.