Condensed Combining Financial Information of L3 and Its Subsidiaries (Tables)

3 Months Ended

Mar. 30, 2018

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Combining Balance Sheets

The following unaudited condensed combining financial information presents the results of operations, financial position and cash flows of: (1) L3 excluding its consolidated subsidiaries (the Parent), (2) the Guarantor Subsidiaries, (3) the Non-Guarantor Subsidiaries and (4) the eliminations to arrive at the information for L3 on a consolidated basis.

	L3		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated L3
	(in millions)
Condensed Combining Balance Sheets:
At March 30, 2018
Current assets:
Cash and cash equivalents	$	158	$	19	$	215	$	(18	)	$	374
Billed receivables, net	230		301		267		—			798
Contract assets	574		740		185		—			1,499
Inventories	428		348		218		—			994
Prepaid expenses and other current assets	160		160		72		—			392
Assets held for sale	—		136		—		—			136
Assets of discontinued operations	—		287		—		—			287
Total current assets	1,550		1,991		957		(18		)	4,480
Goodwill	2,269		2,827		1,536		—			6,632
Other assets	699		713		349		—			1,761
Investment in and amounts due from consolidated subsidiaries	5,844		4,425		—		(10,269		)	—
Total assets	$	10,362	$	9,956	$	2,842	$	(10,287	)	$	12,873
Current liabilities	$	796	$	817	$	567	$	(18	)	$	2,162
Liabilities held for sale	—		19		—		—			19
Liabilities of discontinued operations	—		154		—		—			154
Amounts due to consolidated subsidiaries	—		—		395		(395		)	—
Other long-term liabilities	982		759		146		—			1,887
Long-term debt	3,331		—		—		—			3,331
Total liabilities	5,109		1,749		1,108		(413		)	7,553
L3 shareholders’ equity	5,253		8,207		1,734		(9,941		)	5,253
Noncontrolling interests	—		—		—		67			67
Total equity	5,253		8,207		1,734		(9,874		)	5,320
Total liabilities and equity	$	10,362	$	9,956	$	2,842	$	(10,287	)	$	12,873

	L3		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated L3
	(in millions)
At December 31, 2017
Current assets:
Cash and cash equivalents	$	432	$	14	$	287	$	(71	)	$	662
Billed receivables, net	266		232		225		—			723
Contracts in process	706		891		336		—			1,933
Prepaid expenses and other current assets	330		231		128		—			689
Assets held for sale	—		118		17		—			135
Assets of discontinued operations	—		306		—		—			306
Total current assets	1,734		1,792		993		(71		)	4,448
Goodwill	2,269		2,635		1,711		—			6,615
Other assets	658		556		452		—			1,666
Investment in and amounts due from consolidated subsidiaries	5,572		5,287		—		(10,859		)	—
Total assets	$	10,233	$	10,270	$	3,156	$	(10,930	)	$	12,729
Current liabilities	$	811	$	800	$	596	$	(71	)	$	2,136
Liabilities held for sale	—		16		1		—			17
Liabilities of discontinued operations	—		226		—		—			226
Amounts due to consolidated subsidiaries	—		—		348		(348		)	—
Other long-term liabilities	1,009		714		146		—			1,869
Long-term debt	3,330		—		—		—			3,330
Total liabilities	5,150		1,756		1,091		(419		)	7,578
L3 shareholders’ equity	5,083		8,514		2,065		(10,579		)	5,083
Noncontrolling interests	—		—		—		68			68
Total equity	5,083		8,514		2,065		(10,511		)	5,151
Total liabilities and equity	$	10,233	$	10,270	$	3,156	$	(10,930	)	$	12,729

Condensed Combining Statements of Operations

	L3			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated L3
	(in millions)
Condensed Combining Statements of Operations:
For the quarter ended March 30, 2018:
Total net sales	$	807		$	1,239		$	422		$	(97	)	$	2,371
Total operating costs and expenses	(722		)	(1,155		)	(340		)	97			(2,120		)
Operating income	85			84			82			—			251
Interest expense	(41		)	—			—			—			(41		)
Interest and other income, net	5			—			1			—			6
Income from continuing operations before income taxes	49			84			83			—			216
Provision for income taxes	(6		)	(9		)	(9		)	—			(24		)
Equity in net income of consolidated subsidiaries	160			—			—			(160		)	—
Income from continuing operations	203			75			74			(160		)	192
Income from discontinued operations, net of income taxes	—			16			—			—			16
Net income	203			91			74			(160		)	208
Net income attributable to noncontrolling interests	—			—			—			(5		)	(5		)
Net income attributable to L3	$	203		$	91		$	74		$	(165	)	$	203
Comprehensive income attributable to L3	$	249		$	92		$	107		$	(199	)	$	249
For the quarter ended March 31, 2017:
Total net sales	$	850		$	1,176		$	373		$	(78	)	$	2,321
Total operating costs and expenses	(772		)	(1,077		)	(313		)	78			(2,084		)
Operating income	78			99			60			—			237
Interest expense	(42		)	—			—			—			(42		)
Interest and other income, net	3			—			1			—			4
Income from continuing operations before income taxes	39			99			61			—			199
Provision for income taxes	(8		)	(21		)	(13		)	—			(42		)
Equity in net income of consolidated subsidiaries	133			—			—			(133		)	—
Income from continuing operations	164			78			48			(133		)	157
Income from discontinued operations, net of income taxes	—			11			—			—			11
Net income	164			89			48			(133		)	168
Net income attributable to noncontrolling interests	—			—			—			(4		)	(4		)
Net income attributable to L3	$	164		$	89		$	48		$	(137	)	$	164
Comprehensive income attributable to L3	$	192		$	89		$	68		$	(157	)	$	192

Condensed Combining Statements of Cash Flows

	L3			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated L3
	(in millions)
Condensed Combining Statements of Cash Flows
For the quarterly period ended March 30, 2018:
Operating activities:
Net cash from (used in) operating activities from continuing operations	$	198		$	(204	)	$	(24	)	$	(5	)	$	(35	)
Investing activities:
Other investing activities	(62		)	(17		)	(4		)	—			(83		)
Net cash used in investing activities from continuing operations	(62		)	(17		)	(4		)	—			(83		)
Financing activities:
Common stock repurchased	(119		)	—			—			—			(119		)
Dividends paid	(65		)	—			—			—			(65		)
Other financing activities	(226		)	256			(50		)	58			38
Net cash (used in) from financing activities from continuing operations	(410		)	256			(50		)	58			(146		)
Effect of foreign currency exchange rate changes on cash	—			—			6			—			6
Net decrease in cash and cash equivalents of discontinued operations	—			(30		)	—			—			(30		)
Net (decrease) increase in cash	(274		)	5			(72		)	53			(288		)
Cash and cash equivalents, beginning of the period	432			14			287			(71		)	662
Cash and cash equivalents, end of the period	$	158		$	19		$	215		$	(18	)	$	374

For the quarterly period ended March 31, 2017:
Operating activities:
Net cash from (used in) operating activities from continuing operations	$	131		$	(71	)	$	67		$	(41	)	$	86
Investing activities:
Business acquisitions, net of cash acquired	(139		)	—			—			—			(139		)
Proceeds from sale of businesses, net of closing date cash balances	15			—			1			—			16
Other investing activities	(16		)	(16		)	(3		)	—			(35		)
Net cash used in investing activities from continuing operations	(140		)	(16		)	(2		)	—			(158		)
Financing activities:
Dividends paid	(61		)	—			—			—			(61		)
Other financing activities	(164		)	89			(80		)	153			(2		)
Net cash (used in) from financing activities from continuing operations	(225		)	89			(80		)	153			(63		)
Effect of foreign currency exchange rate changes on cash	—			—			4			—			4
Net decrease in cash and cash equivalents of discontinued operations	—			(2		)	—			—			(2		)
Net decrease in cash	(234		)	—			(11		)	112			(133		)
Cash and cash equivalents, beginning of the period	291			1			207			(136		)	363
Cash and cash equivalents, end of the period	$	57		$	1		$	196		$	(24	)	$	230