Business Segments (Tables)

6 Months Ended

Dec. 29, 2017

Segment Reporting [Abstract]

Total Segment Revenue and Operating Income Reconciliation

Total assets by business segment are summarized below:

	December 29, 2017		June 30, 2017
	(In millions)
Total Assets
Communication Systems	$	1,541	$	1,534
Electronic Systems	4,137		4,094
Space and Intelligence Systems	2,155		2,117
Corporate (1)	2,023		2,345
	$	9,856	$	10,090

(1) Identifiable intangible assets acquired in connection with our acquisition of Exelis in the fourth quarter of fiscal 2015 were recorded as Corporate assets because they benefit the entire Company as opposed to any individual segment. Exelis identifiable intangible asset balances recorded as Corporate assets were approximately $1 billion as of December 29, 2017 and June 30, 2017. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan assets and buildings and equipment.

Segment revenue, segment operating income and a reconciliation of segment operating income to total income from continuing operations before income taxes are as follows:

	Quarter Ended						Two Quarters Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
	(In millions)
Revenue
Communication Systems	$	489		$	413		$	899		$	843
Electronic Systems	584			570			1,124			1,107
Space and Intelligence Systems	465			468			931			921
Corporate eliminations	(3		)	(2		)	(6		)	(2		)
	$	1,535		$	1,449		$	2,948		$	2,869
Income From Continuing Operations Before Income Taxes
Segment Operating Income:(1)
Communication Systems	$	144		$	121		$	262		$	239
Electronic Systems	101			134			210			245
Space and Intelligence Systems	81			76			168			155
Unallocated corporate expense(2)	(55		)	(53		)	(96		)	(114		)
Corporate eliminations, net	1			(1		)	—			(2		)
Non-operating income (loss)	(2		)	1			(2		)	2
Net interest expense	(41		)	(43		)	(82		)	(87		)
	$	229		$	235		$	460		$	438

(1) Segment operating income for the quarter and two quarters ended December 30, 2016 included stranded costs and Financial Accounting Standards (“FAS”) pension income previously reported as part of our former Critical Networks segment but now re-allocated to our remaining three segments.

(2) Unallocated corporate expense included (i) a $12 million adjustment for deferred compensation in the quarter and two quarters ended December 29, 2017, (ii) $13 million and $30 million of Exelis acquisition-related charges in the quarter and two quarters ended December 30, 2016, respectively, and (iii) $25 million and $50 million of expense in the quarter and two quarters ended December 29, 2017, respectively, compared with $28 million and $55 million of expense in the quarter and two quarters ended December 30, 2016, respectively, for amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis. Because the acquisition of Exelis benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired in the Exelis acquisition was recorded as unallocated corporate expense.

Total Assets by Segment

Total assets by business segment are summarized below:

	December 29, 2017		June 30, 2017
	(In millions)
Total Assets
Communication Systems	$	1,541	$	1,534
Electronic Systems	4,137		4,094
Space and Intelligence Systems	2,155		2,117
Corporate (1)	2,023		2,345
	$	9,856	$	10,090

(1) Identifiable intangible assets acquired in connection with our acquisition of Exelis in the fourth quarter of fiscal 2015 were recorded as Corporate assets because they benefit the entire Company as opposed to any individual segment. Exelis identifiable intangible asset balances recorded as Corporate assets were approximately $1 billion as of December 29, 2017 and June 30, 2017. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan assets and buildings and equipment.

Segment revenue, segment operating income and a reconciliation of segment operating income to total income from continuing operations before income taxes are as follows:

	Quarter Ended						Two Quarters Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
	(In millions)
Revenue
Communication Systems	$	489		$	413		$	899		$	843
Electronic Systems	584			570			1,124			1,107
Space and Intelligence Systems	465			468			931			921
Corporate eliminations	(3		)	(2		)	(6		)	(2		)
	$	1,535		$	1,449		$	2,948		$	2,869
Income From Continuing Operations Before Income Taxes
Segment Operating Income:(1)
Communication Systems	$	144		$	121		$	262		$	239
Electronic Systems	101			134			210			245
Space and Intelligence Systems	81			76			168			155
Unallocated corporate expense(2)	(55		)	(53		)	(96		)	(114		)
Corporate eliminations, net	1			(1		)	—			(2		)
Non-operating income (loss)	(2		)	1			(2		)	2
Net interest expense	(41		)	(43		)	(82		)	(87		)
	$	229		$	235		$	460		$	438

(1) Segment operating income for the quarter and two quarters ended December 30, 2016 included stranded costs and Financial Accounting Standards (“FAS”) pension income previously reported as part of our former Critical Networks segment but now re-allocated to our remaining three segments.

(2) Unallocated corporate expense included (i) a $12 million adjustment for deferred compensation in the quarter and two quarters ended December 29, 2017, (ii) $13 million and $30 million of Exelis acquisition-related charges in the quarter and two quarters ended December 30, 2016, respectively, and (iii) $25 million and $50 million of expense in the quarter and two quarters ended December 29, 2017, respectively, compared with $28 million and $55 million of expense in the quarter and two quarters ended December 30, 2016, respectively, for amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis. Because the acquisition of Exelis benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired in the Exelis acquisition was recorded as unallocated corporate expense.