BUSINESS COMBINATION (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Calculation of Consideration Transferred

Our calculation of consideration transferred is as follows:


(In millions, except exchange ratio and per share amounts)	June 29, 2019

Outstanding shares of L3 common stock as of June 28, 2019	79.63
L3 restricted stock unit awards settled in shares of L3Harris common stock	0.41
L3 performance unit awards settled in shares of L3Harris common stock	0.04
	80.08
Exchange Ratio	1.30
Shares of L3Harris common stock issued for L3 outstanding common stock	104.10
Price per share of L3Harris common stock as of June 28, 2019	$	189.13
Fair value of L3Harris common stock issued for L3 outstanding common stock	$	19,689
Fair value of replacement restricted stock units attributable to merger consideration	10
Fair value of L3Harris stock options issued to replace L3 outstanding stock options	101
Withholding tax liability incurred for converted L3 share-based awards	45
Fair value of replacement award consideration	156
Fair value of total consideration	19,845
Less: cash acquired	(1,195)
Total net consideration transferred	$	18,650

Schedule of Preliminary Measurement of Assets Acquired, Liabilities Assumed and Non Controlling Interest

Our preliminary fair value estimates and assumptions to measure the assets acquired, liabilities assumed and noncontrolling interests in L3 were subject to change as we obtained additional information during the measurement period. We completed our accounting for the L3Harris Merger during the quarter ended July 3, 2020. The following table summarizes the initial fair value amounts recognized during the quarter ended September 27, 2019 for each major class of assets acquired or liabilities assumed and noncontrolling interests, as well as adjustments during the measurement period:


(In millions)	Preliminary Fair Value as of September 27, 2019		Measurement Period Adjustments		Adjusted Fair Value as of July 3, 2020

Receivables	$	849	$	(20)	$	829
Contract assets	1,708		(57)		1,651
Inventories	1,056		(73)		983
Other current assets	517		(16)		501
Property, plant and equipment	1,176		43		1,219
Operating lease right-of-use assets	704		108		812
Goodwill	15,423		(841)		14,582
Other intangible assets	6,768		1,690		8,458
Other non-current assets	327		(13)		314
Total assets acquired	$	28,528	$	821	$	29,349

Accounts payable	$	898	$	(13)	$	885
Contract liabilities	722		4		726
Other current liabilities	772		301		1,073
Operating lease liabilities	715		45		760
Defined benefit plans	1,411		—		1,411
Long-term debt, net	3,548		—		3,548
Other long-term liabilities	1,661		480		2,141
Total liabilities assumed	9,727		817		10,544
Net assets acquired	18,801		4		18,805
Noncontrolling interests	(151)		(4)		(155)
Total net consideration transferred	$	18,650	$	—	$	18,650

Schedule of Identifiable Intangible Assets Acquired

The following table provides further detail of the fair value and weighted-average amortization period of identified intangible assets acquired by major intangible asset class:


	Weighted Average Amortization Period	Total

	(In years)	(In millions)
Identifiable intangible assets acquired:
Customer relationships — government	14	$	5,082
Customer relationships — commercial	15	860
Contract backlog	3	19
Trade names — divisions	9	123
Developed technologies	7	550
Total identifiable intangible assets subject to amortization	13	6,634
Trade names — corporate	indefinite	1,803
In-process research and development	N/A	21
Total identifiable intangible assets		$	8,458

Schedule Merger-related Charges

L3Harris Merger-related charges were as follows:


	Fiscal Years Ended				Two Quarters Ended		Fiscal Year Ended
(In millions)	December 31, 2021		January 1, 2021		January 3, 2020		June 28, 2019

Equity award acceleration charges, recognized upon change in control	$	—	$	—	$	70	$	—
Transaction costs, recognized as incurred	—		—		83		31
Additional cost of sales related to the fair value step-up in inventory sold	—		31		142		—
Restructuring charges, recognized as incurred	—		10		117		—
Facility consolidation costs	—		—		48		—
Integration costs, recognized as incurred	128		130		72		34
Total L3Harris Merger-related charges	$	128	$	171	$	532	$	65

Schedule of Pro Forma Results

The following unaudited consolidated pro forma results of operations for the four quarters ended January 3, 2020 combines reported results for the two quarters ended January 3, 2020 with the pro forma results for the two quarters ended June 28, 2019. The pro forma results for the two quarters ended June 28, 2019 were prepared on a pro forma basis, as if the L3Harris Merger had been completed on June 30, 2018, the first day of Harris’ fiscal 2019, after including any post-merger adjustments directly attributable to the L3Harris Merger, such as the sale of the Harris Night Vision business, and after including the impact of adjustments such as amortization of identifiable intangible assets, as well as the related income tax effects. This pro forma presentation does not include any impact of transaction synergies. The pro forma results are not necessarily indicative of our results of operations that actually would have been obtained had the L3Harris Merger been completed on the assumed date or for the period presented, or which may be realized in the future.


	Four Quarters Ended		Two Quarters Ended
(In millions)	January 3, 2020		December 28, 2018

Revenue from product sales and services — as reported	$	12,856	$	3,208
Revenue from product sales and services — pro forma	18,097		8,404
Income from continuing operations — as reported	1,347		441
Income from continuing operations — pro forma	1,652		760