BUSINESS SEGMENT INFORMATION (Tables)

3 Months Ended

Apr. 01, 2022

Schedule of Selected Financial Information by Business Segments

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
(In millions)	April 1, 2022		April 2, 2021

Revenue
Integrated Mission Systems	$	1,721	$	1,751
Space & Airborne Systems	1,450		1,460
Communication Systems	963		1,112
Other non-reportable businesses	—		284
Corporate eliminations	(31)		(40)
Total revenue	$	4,103	$	4,567

Income from Continuing Operations before Income Taxes
Segment Operating Income:
Integrated Mission Systems	$	255	$	234
Space & Airborne Systems	172		192
Communication Systems	229		270
Other non-reportable businesses	—		52
	656		748
Unallocated Items:
Unallocated corporate department expense, net(1)	(7)		(33)
L3Harris Merger-related transaction, integration and other expenses and losses	(20)		(21)
Amortization of acquisition-related intangibles(2)	(152)		(164)
Business divestiture-related losses	—		(15)
Impairment of goodwill and other assets	—		(62)
Other items	(1)		(7)
FAS/CAS pension adjustment(3)	22		30
	(158)		(272)
Non-operating income	106		117
Net interest expense	(68)		(66)
Income from continuing operations before income taxes	$	536	$	527

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(1)For the quarter ended April 2, 2021, includes a $15 million accrual for a value added tax obligation.

(2)Includes amortization of identifiable intangible assets acquired as a result of the all-stock merger between Harris Corporation and L3 Technologies, Inc. (the “L3Harris Merger”) and the acquisition of Exelis Inc. (“Exelis”). Because the L3Harris Merger and the acquisition of Exelis benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired was not allocated to any segment.

(3)Represents the difference between the service cost component of FAS pension and OPEB income and total CAS pension and OPEB cost and replaces the “Pension adjustment” line item previously presented, which included the non-service components of FAS pension and OPEB income. See Net FAS/CAS pension adjustment table below.

The table below is a reconciliation of the FAS/CAS pension adjustment:



	Quarter Ended
(In millions)	April 1, 2022		April 2, 2021

FAS pension service cost	$	(11)	$	(18)
Less: CAS pension cost	(33)		(48)
FAS/CAS pension adjustment	22		30
Non-service FAS pension income	110		111


Net FAS/CAS pension adjustment(1)	$	132	$	141

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(1)Net FAS/CAS pension adjustment excludes net settlement and curtailment losses recognized in fiscal 2021.

Schedule of Disaggregation of Revenue by Segment

Disaggregation of Revenue

We disaggregate revenue for all three business segments by customer relationship, contract type and geographical region. We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.


	Quarter Ended
(In millions)	April 1, 2022						April 2, 2021
	Integrated Mission Systems		Space & Airborne Systems		Communication Systems		Integrated Mission Systems		Space & Airborne Systems		Communication Systems

Revenue By Customer Relationship
Prime contractor	$	1,131	$	931	$	656	$	1,189	$	876	$	728
Subcontractor	574		513		296		550		581		373
Intersegment	16		6		11		12		3		11
	$	1,721	$	1,450	$	963	$	1,751	$	1,460	$	1,112
Revenue By Contract Type
Fixed-price(1)	$	1,277	$	863	$	797	$	1,294	$	914	$	940
Cost-reimbursable	428		581		155		445		543		161
Intersegment	16		6		11		12		3		11
	$	1,721	$	1,450	$	963	$	1,751	$	1,460	$	1,112
Revenue By Geographical Region
United States	$	1,244	$	1,279	$	625	$	1,275	$	1,274	$	832
International	461		165		327		464		183		269
Intersegment	16		6		11		12		3		11
	$	1,721	$	1,450	$	963	$	1,751	$	1,460	$	1,112

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(1)Includes revenue derived from time-and-materials contracts.

Schedule of Total Assets by Segment

Total assets by business segment are as follows:


(In millions)	April 1, 2022		December 31, 2021

Total Assets
Integrated Mission Systems	$	11,811	$	11,830
Space & Airborne Systems	8,573		8,151
Communication Systems	6,083		6,035
Other non-reportable businesses	—		3
Corporate(1)	7,977		8,690
	$	34,444	$	34,709

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(1)Identifiable intangible assets acquired in connection with the L3Harris Merger in the two quarters ended January 3, 2020 and our acquisition of Exelis in fiscal 2015 were recorded as Corporate assets because they benefited the entire Company as opposed to any individual segment. Identifiable intangible asset balances recorded as Corporate assets were $6.5 billion and $6.6 billion at April 1, 2022 and December 31, 2021, respectively. Corporate assets also

consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan investments, buildings and equipment, as well as any assets of discontinued operations and divestitures.