XML 41 R24.htm IDEA: XBRL DOCUMENT v3.24.1.u1
BUSINESS SEGMENT INFORMATION
 3 Months Ended
Mar. 29, 2024
Segment Reporting [Abstract]  
BUSINESS SEGMENT INFORMATION
NOTE P: BUSINESS SEGMENT INFORMATION
We structure our operations primarily around the products, systems and services we sell and the markets we serve and report our financial results in the following four reportable segments:
•SAS: including space payloads, sensors and full-mission solutions; classified intelligence and cyber; avionics; electronic warfare; and mission networks for air traffic management operations;
•IMS: including multi-mission intelligence, surveillance and reconnaissance (“ISR”) systems; passive sensing and targeting; electronic attack; autonomy; power and communications; networks; sensors; and the CAS Disposal Group, which includes aviation products and pilot training operations, see Note O: Acquisitions and Divestitures;
•CS: including tactical communications with global communications solutions; broadband communications; integrated vision solutions; and public safety radios, and system applications and equipment; and
•AR: including missile solutions with propulsion technologies for strategic defense, missile defense, and hypersonic and tactical systems; and space propulsion and power systems for national security space and exploration missions.
Business Realignment
Effective for fiscal 2024, to better align our businesses, we adjusted our SAS and IMS segments.
SAS. We combined our Advanced Combat Systems and Mission Avionics sectors into the Airborne Combat Systems (“ACS”) sector, as described below.
•ACS: Sensors, processors, hardened electronics, release systems, displays and antennas for aircraft platforms, threat warning, countermeasures and launched efforts for airborne, ground and maritime platforms.
IMS. We split our EO sector into two sectors, as described below, and transferred one business from EO to our Maritime sector.
•GOS: passive sensing and targeting and laser imaging and sensor systems.
•DE: fuzing, navigation and range-testing solutions and space communications and avionics.
Business Segment Financial Information
Segment revenue, segment operating income and a reconciliation of segment operating income to total income before income taxes are as follows:
Quarter Ended
(In millions)March 29, 2024March 31, 2023
Revenue
SAS$1,751 $1,655 
IMS1,669 1,700 
CS1,294 1,163 
AR542 **
Corporate eliminations(45)(47)
Total revenue$5,211 $4,471 
Income before Income Taxes
Operating income:
SAS
$216 $187 
IMS
190 185 
CS310 266 
AR72 **
Total segment 788 638 
Total unallocated corporate expenses(410)(245)
Total operating income378 393 
Non-service FAS pension income and other, net88 82 
Interest expense, net(176)(102)
Income before income taxes$290 $373 
_______________
**    AR is a reportable segment established during the quarter ended September 29, 2023, which consists of operations of AJRD. As such, there is no comparable prior year information.
Unallocated Corporate Expenses
Total unallocated corporate expenses include corporate items such as a portion of management and administration, legal, environmental, compensation, retiree benefits, other corporate expenses and eliminations and the FAS/Cost Accounting Standards (“CAS”) operating adjustment. Total unallocated corporate expenses also
include the portion of corporate costs not included in management’s evaluation of segment operating performance, such as amortization of acquisition-related intangibles; additional cost of revenue related to the fair value step-up in inventory sold; merger, acquisition, and divestiture-related expenses; asset group and business divestiture-related (losses) gains, net; impairment of goodwill and other assets; gain on sale of property, plant and equipment; LHX NeXt implementation costs; and other items.
FAS/CAS Pension Operating Adjustment
In accordance with CAS, we allocate a portion of pension and OPEB plan costs to our U.S. Government contracts. However, our Condensed Consolidated Financial Statements require pension and OPEB plan income or expense to be calculated in accordance with FAS requirements under GAAP. The “FAS/CAS operating adjustment” line item in the table below represents the difference between the service cost component of FAS pension and OPEB cost and total CAS pension and OPEB cost. The non-service cost components of FAS pension and OPEB income or expense are included as component of the “Non-service FAS pension income and other, net” line item in our Condensed Consolidated Statement of Operations. See Note H: Retirement Benefits in these Notes for more information on the composition of non-service cost components of FAS pension and OPEB income and expense.
The table below is a reconciliation of the FAS/CAS operating adjustment:
Quarter Ended
(In millions)March 29, 2024March 31, 2023
FAS pension service cost$(8)$(6)
Less: CAS pension cost(15)(28)
FAS/CAS operating adjustment7 22 
Non-service FAS pension income80 77 
FAS/CAS pension adjustment, net$87 $99 
Disaggregation of Revenue
We disaggregate revenue for all four 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
March 29, 2024March 31, 2023
(In millions)SASIMSCSARSASIMSCSAR
Revenue By Customer Relationship
Prime contractor$1,108 $1,066 $913 $153 $1,010 $1,154 $807 **
Subcontractor628 587 367 389 632 525 343 **
Intersegment15 16 14 — 13 21 13 **
Total segment$1,751 $1,669 $1,294 $542 $1,655 $1,700 $1,163 **
Revenue By Contract Type
Fixed-price(1)
$1,108 $1,278 $1,065 $302 $1,022 $1,286 $978 **
Cost-reimbursable628 375 215 240 620 393 172 **
Intersegment15 16 14 — 13 21 13 **
Total segment$1,751 $1,669 $1,294 $542 $1,655 $1,700 $1,163 **
Revenue By Geographical Region
United States$1,507 $1,203 $925 $527 $1,454 $1,257 $791 **
International229 450 355 15 188 422 359 **
Intersegment15 16 14 — 13 21 13 **
Total segment$1,751 $1,669 $1,294 $542 $1,655 $1,700 $1,163 **
_______________
**    AR is a reportable segment established during the quarter ended September 29, 2023, which consists of operations of AJRD. As such, there is no comparable prior year information.
(1)Includes revenue derived from time-and-materials contracts.
Assets by Business Segment
Total assets by business segment are as follows:
(In millions)March 29, 2024December 29, 2023
SAS$9,111 $9,085 
IMS10,876 10,631 
CS7,019 7,084 
AR4,295 4,208 
Corporate(1)
10,515 10,679 
Total Assets$41,816 $41,687 
_______________
(1)Identifiable intangible assets acquired in connection with business combinations were recorded as corporate assets because they benefited the entire Company. Identifiable intangible asset balances recorded as corporate assets were $8.3 billion and $8.5 billion at March 29, 2024 and December 29, 2023, respectively. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan investments, buildings and equipment, real estate held for development and leasing, as well as any assets of businesses held for sale.