BUSINESS DIVESTITURES AND ASSET SALES

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

BUSINESS DIVESTITURES AND ASSET SALES

NOTE 3: BUSINESS DIVESTITURES AND ASSET SALES

Completed Divestitures

The following table presents information regarding business divestitures and asset sales completed by us during fiscal 2021, 2020 and the two quarters ended January 3, 2020. There were no businesses divested during the fiscal year ended June 28, 2019.

(In millions)	Business Segment(1)	Date of Divestiture	Sale Price
Fiscal 2021
Narda-MITEQ business(2)	Aviation Systems	December 6, 2021	$	75
ESSCO business(3)	Aviation Systems	November 26, 2021	55
Electron Devices business(4)	Aviation Systems	October 1, 2021	185
VSE disposal group(5)	Aviation Systems	July 30, 2021	20
CPS business(6)	Aviation Systems	July 2, 2021	398
Military training business(7)	Aviation Systems	July 2, 2021	1,050
			$	1,783
Fiscal 2020
EOTech business(8)	Communication Systems	July 31, 2020	$	42
Applied Kilovolts business(9)	Space & Airborne Systems	May 15, 2020	12
Airport security and automation business(10)	Aviation Systems	May 4, 2020	1,000
			$	1,054
Two quarters ended January 3, 2020
Harris Night Vision(11)	Other non-reportable businesses	September 13, 2019	$	350
Stormscope(12)	Aviation Systems	August 30, 2019	20
			$	370

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(1) Business segment in which the operating results of each divested business were reported through the date of divestiture.

(2) The Narda-MITEQ business manufactured component, satellite communication and radio frequency safety products for both military and commercial markets.

(3) The ESSCO business manufactured metal space frame ground radomes and composite structures.

(4) The Electron Devices and Narda Microwave-West divisions (“Electron Devices business”) manufactured microwave devices for ground-based, airborne and satellite communications and radar.

(5) The Voice Switch Enterprise disposal group (“VSE disposal group”) provided voice over internet protocol systems for air traffic management communications.

(6) The Combat Propulsion Systems and related businesses (“CPS business”) engineered, designed and manufactured engines, transmissions, suspensions and turret drive systems for tracked and wheeled combat vehicle systems.

(7) The military training business provided flight simulation solutions and training services to the U.S. Department of Defense (“DoD”) and foreign military agencies.

(8) The EOTech business manufactured holographic sighting systems, magnified field optics and accessories for military, law enforcement and commercial markets around the world.

(9) The Applied Kilovolts and Analytical Instrumentation business (“Applied Kilovolts business”) manufactured high-voltage power supplies and ion detectors for customers in fields such as biotechnology, materials science, healthcare, forensics, environmental sciences and homeland security.

(10) The Security & Detection Systems and MacDonald Humfrey Automation solutions business (“airport security and automation business”) provided solutions used by the aviation and transportation industries, regulatory and customs authorities, government and law enforcement agencies and commercial and other high-security facilities.

(11) The Harris Night Vision business was a global supplier of high-performance, vision-enhancing products for U.S. and allied military and security forces and commercial customers.

(12) The Stormscope product line (“Stormscope”) provided lightning detection systems for the aviation market.

Assets and Liabilities Held for Sale

The carrying amounts of the assets and liabilities of the VSE disposal group classified as held for sale in our Consolidated Balance Sheet at January 1, 2021 were $35 million and $13 million, respectively. There were no assets or liabilities classified as held for sale at December 31, 2021.

Income Before Income Taxes Attributable to Businesses Divested

The following table presents the amount of income before income taxes attributable to businesses divested in our Consolidated Statement of Income:

	Fiscal Years Ended				Two Quarters Ended		Fiscal Year Ended
(In millions)	December 31, 2021		January 1, 2021		January 3, 2020		June 28, 2019
Electron Devices business	$	44	$	33	$	10	N/A
CPS business	53		62		15		N/A
Military training business	35		84		22		N/A
Airport security and automation business	N/A		*		27		N/A
Harris Night Vision	N/A		N/A		*		27

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*Not material

Business Divestiture-Related Gains (Losses)

The “Business divestiture-related gains (losses)” line item in our Consolidated Statement of Income is comprised of the following pre-tax gains (losses) associated with businesses divested:

	Fiscal Years Ended
(In millions)	December 31, 2021		January 1, 2021
Narda-MITEQ business	$	(9)	$	—
ESSCO business	31		—
Electron Devices business	31		—
VSE disposal group(1)	(29)		(18)
CPS business(2)	(19)		—
Military training business	217		—
EOTech	—		2
Airport security and automation business	—		(23)
Other(3)	(2)		(12)
Total Business divestiture-related gains (losses)	$	220	$	(51)

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(1)During the quarter ended July 3, 2020, upon classifying the VSE disposal group as held for sale, we recorded a non-cash impairment charge of $14 million, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Income for fiscal 2020. We recognized an $18 million non-cash remeasurement loss related to the VSE disposal group during fiscal 2020.

(2)During the quarter ended April 2, 2021, upon classifying the CPS business as held for sale, we recorded a non-cash impairment charge of $62 million, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Income for fiscal 2021. See Note 9: Goodwill in these Notes for additional information.

(3)Reflects adjustments to the gains and losses on completed divestitures not shown above, including for fiscal 2020, $12 million for finalization of purchase price adjustments and recognition of a non-cash adjustment related to working capital, which decreased the $229 million gain initially recognized on the sale of the Harris Night Vision business divested on September 13, 2019.

There were no business divestiture-related gains (losses) during the fiscal year ended June 28, 2019.

Fair Value of Businesses and Goodwill Allocation

For purposes of allocating goodwill to the disposal groups that represented a portion of a reporting unit, we determined the fair value of each disposal group based on the respective negotiated selling price (or estimated net cash proceeds, in the case of no negotiated selling price), and the fair value of the retained businesses of the respective reporting unit based on a combination of market-based valuation techniques, utilizing quoted market prices and comparable publicly reported transactions, and projected discounted cash flows. These fair value determinations are categorized as Level 3 in the fair value hierarchy due to their use of internal projections and unobservable measurement inputs. See Note 1: Significant Accounting Policies in these Notes for additional information regarding the fair value hierarchy and see Note 9: Goodwill in these Notes for additional information regarding the impairment of goodwill related to our business divestitures.