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Business Segments
3 Months Ended
Sep. 30, 2011
Business Segments [Abstract] 
Business Segments

Note M Business Segments

 

We structure our operations primarily around the products and services we sell and the markets we serve, and we report the financial results of our operations in the following three reportable operating or business segments — RF Communications, Integrated Network Solutions and Government Communications Systems. Our RF Communications segment is a global supplier of secure tactical radio communications and embedded high-grade encryption solutions for military, government and commercial organizations and also of secure communications systems and equipment for public safety, utility and transportation markets. Our Integrated Network Solutions segment provides mission-critical end-to-end information technology (“IT”) services; managed satellite and terrestrial communications solutions; standards-based healthcare interoperability and image management solutions; cyber integrated and cloud application hosting solutions; and digital media management solutions to support government, energy, healthcare, enterprise and broadcast customers. Our Government Communications Systems segment conducts advanced research and produces, integrates and supports highly reliable, net-centric communications and information technology that solve the mission-critical challenges of our civilian, defense and intelligence government customers, primarily the U.S. Government. Each business segment is comprised of multiple program areas and product and service lines that aggregate into such business segment.

 

The accounting policies of our business segments are the same as those described in Note 1: “Significant Accounting Policies” in our Fiscal 2011 Form 10-K. We evaluate each segment's performance based on its “operating income (loss),” which we define as profit or loss from operations before income taxes excluding interest income and expense, royalties and related intellectual property expenses, equity income and gains or losses from securities and other investments. Intersegment sales are generally transferred at cost to the buying segment and the sourcing segment recognizes a profit that is eliminated. The “Corporate eliminations” line item in the tables below represents the elimination of intersegment sales and their related profits. The “Unallocated corporate expense” line item in the tables below represents the portion of corporate expenses not allocated to our business segments.

 

Total assets by business segment are summarized below:

 September 30, July 1,
 2011 2011
      
 (In millions)
Total Assets     
RF Communications$ 1,393.1 $ 1,378.7
Integrated Network Solutions  3,094.1   3,068.7
Government Communications Systems  959.8   956.4
Corporate  684.0   769.0
 $ 6,131.0 $ 6,172.8

Segment revenue, segment operating income and a reconciliation of segment operating income to total income before income taxes follow:

  Quarter Ended
  September 30, October 1,
  2011 2010
       
  (In millions)
Revenue     
RF Communications$ 497.1 $ 566.5
Integrated Network Solutions  554.2   441.6
Government Communications Systems  443.7   424.1
Corporate eliminations  (34.7)   (26.8)
  $ 1,460.3 $ 1,405.4
Income Before Income Taxes     
Segment Operating Income:     
 RF Communications$ 154.0 $ 228.5
 Integrated Network Solutions (1)  9.2   26.6
 Government Communications Systems  63.1   44.6
Unallocated corporate expense  (18.6)   (25.7)
Corporate eliminations  (5.0)   (4.9)
Non-operating income (loss) (2)  0.7   (0.4)
Net interest expense  (27.1)   (17.2)
  $ 176.3 $ 251.5
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(1)       The operating income in our Integrated Network Solutions segment in the quarter ended September 30, 2011 included charges of $9.6 million for integration and other costs associated with our acquisitions of CapRock Holdings, Inc. and its subsidiaries, including CapRock Communications, Inc. (collectively, CapRock”), Schlumberger GCS, the terrestrial network infrastructure assets of the government business of Core180, Inc. (the Core180 Infrastructure”) and Carefx. The operating income in our Integrated Network Solutions segment in the quarter ended October 1, 2010 included charges of $2.0 million for integration and other costs associated with our acquisition of CapRock. Additionally, operating income in our Integrated Network Solutions segment included $15.7 million of expected losses from our new cyber and healthcare initiatives during the quarter ended September 30, 2011.

(2)       “Non-operating income (loss)” includes equity investment income (loss), royalties and related intellectual property expenses, gains and losses on sales of investments and securities available-for-sale, and impairments of investments and securities available-for-sale.