Segment Information

3 Months Ended

Mar. 29, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

The KGS reportable segment is comprised of an aggregation of Kratos’ Government Solutions operating segments, including our electronic products, satellite communications, modular systems and defense and rocket support operating segments.

The new US reportable segment consists of our unmanned aerial, ground, seaborne and command, control and communications system business. The KGS and US segments provide products, solutions and services for mission critical national security priorities. KGS and US customers primarily include national security related agencies, the DoD, intelligence agencies and classified agencies, and to a lesser degree, international government agencies and domestic and international commercial customers. The PSS segment designs, engineers, deploys, operates and integrates into command and control infrastructure security and surveillance solutions for homeland security, public safety, critical infrastructure, government and commercial customers. PSS customers are in the critical infrastructure, power generation, power transport, nuclear energy, financial, IT, healthcare, education, transportation and petro-chemical industries, as well as certain government and military customers.

The Company organizes its reportable segments based on the nature of the products, solutions and services offered. Transactions between segments are generally negotiated and accounted for under terms and conditions similar to other government and commercial contracts. This presentation is consistent with the Company's operating structure. In the following table, prior year financial information has been recast to conform to the current reportable segments, and total operating income of the reportable business segments is reconciled to the corresponding consolidated amount. The reconciling item “corporate activities” includes costs for certain stock-based compensation programs (including stock-based compensation costs for stock options, employee stock purchase plan 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 segments, and other miscellaneous corporate activities.

 Revenues, depreciation and amortization, and operating income (loss) generated by the Company’s reportable segments for the three month periods ended March 30, 2014 and March 29, 2015 are as follows (in millions):

	Three Months Ended
	March 30, 2014			March 29, 2015
Revenues:
Kratos Government Solutions
Service revenues	$	51.7		$	49.8
Product sales	79.8			82.7
Total Kratos Government Solutions	131.5			132.5
Public Safety & Security
Service revenues	48.9			37.6
Product sales	—			—
Total Public Safety & Security	48.9			37.6
Unmanned Systems
Service revenues	—			—
Product sales	19.7			12.4
Total Unmanned Systems	19.7			12.4
Total revenues	$	200.1		$	182.5
Depreciation & amortization:
Kratos Government Solutions	$	7.6		$	6.8
Public Safety & Security	0.5			0.1
Unmanned Systems	1.5			1.6
Total depreciation and amortization	$	9.6		$	8.5
Operating income (loss):
Kratos Government Solutions	$	5.9		$	4.7
Public Safety & Security	1.0			0.1
Unmanned Systems	(1.8		)	(4.1		)
Unallocated corporate expense, net	(1.8		)	(2.2		)
Total operating income (loss)	$	3.3		$	(1.5	)