Segment Information

9 Months Ended

Sep. 29, 2013

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company operates in two principal business segments: Kratos Government Solutions and Public Safety & Security. The Company organizes its business segments based on the nature of the services offered. In the following table, total operating income of the business segments is reconciled to the corresponding consolidated amount. The reconciling item “Unallocated corporate expense, net” includes costs for certain stock-based compensation programs (including stock-based compensation costs for stock options, employee stock purchase plan shares and restricted stock units), the effects of items not considered part of management’s evaluation of segment operating performance, merger and acquisition expenses, corporate costs not allocated to the operating segments, and other miscellaneous corporate activities. Transactions between segments are generally negotiated and accounted for under terms and conditions similar to other government and commercial contracts.

Revenues, depreciation and amortization, and operating income generated by the Company’s current reporting segments for the three and nine month periods ended September 30, 2012 and September 29, 2013 are as follows (in millions):

	Three Months Ended						Nine Months Ended
	September 30, 2012			September 29, 2013			September 30, 2012			September 29, 2013
Revenues:
Kratos Government Solutions
Service revenues	$	72.8		$	57.0		$	202.4		$	180.9
Product sales	150.7			117.6			365.8			379.9
Total Kratos Government Solutions	223.5			174.6			568.2			560.8
Public Safety & Security
Service revenues	52.8			51.8			137.4			154.1
Product sales	—			—			—			—
Total Public Safety & Security	52.8			51.8			137.4			154.1
Total revenues	$	276.3		$	226.4		$	705.6		$	714.9
Depreciation & amortization:
Kratos Government Solutions	$	15.7		$	12.1		$	39.9		$	38.0
Public Safety & Security	0.9			0.8			2.6			2.7
Total depreciation and amortization	$	16.6		$	12.9		$	42.5		$	40.7
Operating income:
Kratos Government Solutions	$	14.0		$	6.4		$	32.4		$	23.8
Public Safety & Security	3.3			1.8			7.3			5.7
Unallocated corporate expense, net	(3.2		)	(2.1		)	(9.1		)	(3.1		)
Total operating income	$	14.1		$	6.1		$	30.6		$	26.4