BUSINESS SEGMENTS

12 Months Ended

Jan. 03, 2025

Segment Reporting [Abstract]

BUSINESS SEGMENTS

NOTE 14: BUSINESS SEGMENTS

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 satellite space payloads, sensors and full-mission solutions; classified intelligence and cyber;

airborne combat systems; and mission networks for air traffic management operations; and

IMS: including multi-mission ISR systems; passive sensing and targeting; electronic attack platforms; autonomy;

power and communications; networks; sensors; and the CAS disposal group, which includes aviation products and

pilot training operations; and

CS: including tactical communications with global communications solutions; broadband communications;

integrated vision solutions; and public safety radios, 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.

Chief Operating Decision Maker (“CODM”)

Our CODM is Christopher E. Kubasik, Chair and CEO. Each of our business segments are regularly reviewed by

the CODM through periodic financial reporting packages to assess the segments performance, allocate resources

and regularly communicate with segment management, who are part of the CODM’s executive staff.

Business Segment Financial Information

The following tables present revenue, expenses and operating income by segment:

	Fiscal Year Ended January 3, 2025
(In millions)	SAS	IMS	CS	AR	Other(1)	Total
Revenue	$6,869	$6,842	$5,459	$2,347	$(192)	$21,325
Cost of Revenue	(5,430)	(5,237)	(3,490)	(1,802)	158	(15,801)
Other Segment Costs(2)	(627)	(767)	(645)	(251)	34	(2,256)
Unallocated corporate department expense						(1,350)
Operating income	$812	$838	$1,324	$294	$—	$1,918
Non-service FAS pension income and other, net						354
Interest expense, net						(675)
Income before income taxes						$1,597

	Fiscal Year Ended December 29, 2023
(In millions)	SAS	IMS	CS	AR	Other(1)	Total
Revenue	$6,856	$6,630	$5,070	$1,052	$(189)	$19,419
Cost of Revenue	(5,380)	(5,086)	(3,217)	(817)	194	(14,306)
Other Segment Costs(2)	(720)	(1,085)	(624)	(113)	(5)	(2,547)
Unallocated corporate department expense						(1,140)
Operating income	$756	$459	$1,229	$122	$—	$1,426
Non-service FAS pension income and other, net						338
Interest expense, net						(543)
Income before income taxes						$1,221

	Fiscal Year Ended December 30, 2022
(In millions)	SAS	IMS	CS	AR	Other(1)	Total
Revenue	$6,384	$6,626	$4,217	**	$(165)	$17,062
Cost of revenue	(4,810)	(4,893)	(2,598)	**	166	(12,135)
Other Segment Costs(2)	(909)	(1,239)	(952)	**	(1)	(3,101)
Unallocated corporate department expense						(699)
Operating income	$665	$494	$667	**	$—	$1,127
Non-service FAS pension income and other, net						425
Interest expense, net						(279)
Income before income taxes						$1,273

_______________

**  Our AR segment was established in the quarter ended September 29, 2023 in connection with the AJRD acquisition. As such, there is no fiscal

2022 information.

(1)  Includes corporate headquarters and intersegment eliminations

(2)  Other segment costs include Impairment of goodwill and other assets, company-funded R&D costs, selling and marketing costs, and other

G&A expenses, which includes a portion of capital expenditure and depreciation and amortization costs that are disaggregated by segment

under the “Disaggregation of Revenue” heading below in this Note.

Unallocated Corporate Expense. Total unallocated corporate expense includes corporate items such as a

portion of management and administration, legal, environmental, compensation, retiree benefits, other corporate

expenses and eliminations and the FAS/CAS operating adjustment. Total unallocated corporate expense also

includes 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 and related impairment of goodwill; impairment of other assets; LHX NeXt implementation costs;

and other items.

LHX NeXt Initiative. LHX NeXt is our initiative to transform multiple functions, systems and processes to increase

agility and competitiveness. The LHX NeXt effort is expected to continue for the next two years with one-time costs

for workforce optimization, incremental IT expenses for implementation of new systems, third party consulting and

other costs.

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. 

	Fiscal Year Ended
	January 3, 2025
(In millions)	SAS	IMS	CS	AR
Revenue By Customer Relationship
Prime contractor	$4,307	$4,341	$3,801	$602
Subcontractor(1)	2,511	2,429	1,589	1,745
Intersegment	51	72	69	—
Total segment	$6,869	$6,842	$5,459	$2,347
Revenue By Contract Type
Fixed-price(2)	$4,293	$5,378	$4,566	$1,389
Cost-reimbursable	2,525	1,392	824	958
Intersegment	51	72	69	—
Total segment	$6,869	$6,842	$5,459	$2,347
Revenue By Geographical Region
United States	$5,971	$4,926	$3,741	$2,299
International	847	1,844	1,649	48
Intersegment	51	72	69	—
Total segment	$6,869	$6,842	$5,459	$2,347

_______________

(1)Our subcontractor revenues includes products and services to contractors whose customers are the end user.

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

	Fiscal Year Ended
	December 29, 2023
(In millions)	SAS	IMS	CS	AR
Revenue By Customer Relationship
Prime contractor	$4,252	$4,196	$3,420	$250
Subcontractor(1)	2,555	2,347	1,597	802
Intersegment	49	87	53	—
Total segment	$6,856	$6,630	$5,070	$1,052
Revenue By Contract Type
Fixed-price(2)	$4,257	$5,020	$4,289	$632
Cost-reimbursable	2,550	1,523	728	420
Intersegment	49	87	53	—
Total segment	$6,856	$6,630	$5,070	$1,052
Revenue By Geographical Region
United States	$5,933	$4,816	$3,482	$1,015
International	874	1,727	1,535	37
Intersegment	49	87	53	—
Total segment	$6,856	$6,630	$5,070	$1,052

_______________

(1)Our subcontractor revenues includes products and services to contractors whose customers are the end user.

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

	Fiscal Year Ended
	December 30, 2022
(In millions)	SAS	IMS	CS	AR
Revenue By Customer Relationship
Prime contractor	$4,005	$4,301	$2,829	**
Subcontractor(1)	2,330	2,254	1,343	**
Intersegment	49	71	45	**
Total segment	$6,384	$6,626	$4,217	$—
Revenue By Contract Type
Fixed-price(2)	$3,811	$5,060	$3,552	**
Cost-reimbursable	2,524	1,495	620	**
Intersegment	49	71	45	**
Total segment	$6,384	$6,626	$4,217	$—
Revenue By Geographical Region
United States	$5,623	$4,796	$2,735	**
International	712	1,759	1,437	**
Intersegment	49	71	45	**
Total segment	$6,384	$6,626	$4,217	$—

_______________

**Our AR segment was established in the quarter ended September 29, 2023 in connection with the AJRD acquisition. As such, there is no

fiscal 2022 information.

(1)Our subcontractor revenues includes products and services to contractors whose customers are the end user.

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

	Fiscal Year Ended
(In millions)	January 3, 2025	December 29, 2023	December 30, 2022
Geographical Information for Operations
Revenue from U.S. operations	$19,614	$17,537	$15,373
Revenue from international operations	1,711	1,882	1,689

Our products are produced principally in the U.S. with international revenue derived primarily from exports. No

revenue earned from any individual foreign country exceeded 5% of our total revenue in fiscal 2024, 2023 and

2022.

Revenue from U.S. Government customers, including foreign military sales funded through the U.S. Government,

whether directly or through prime contractors, by all segments as a percentage of total revenue were 76%, 76% and

74% in fiscal 2024, 2023 and 2022, respectively. Revenue from services in fiscal 2024 was 30%, 37%, 16% and

33% of total revenue in our SAS, IMS, CS and AR segments, respectively.

Revenue from products and services where the end consumer is located outside the U.S., including foreign

military sales funded through the U.S. Government, whether directly or through prime contractors, was $4,388

million (21% of our revenue), $4,173 million (21% of our revenue) and $3,908 million (23% of our revenue) in fiscal

2024, 2023 and 2022, respectively. Export revenue and revenue from international operations in fiscal 2024 was

principally from the EMEA and APAC regions and Canada.

Other selected financial information by business segment and geographical area is summarized below:

	Fiscal Year Ended
(In millions)	January 3, 2025	December 29, 2023	December 30, 2022
Capital Expenditures
SAS	$140	$151	$133
IMS	118	149	45
CS	50	39	36
AR	49	31	**
Corporate	51	79	38
Total capital expenditures	$408	$449	$252
Depreciation and Amortization
SAS	$130	$115	$112
IMS	65	73	76
CS	56	54	47
AR	48	29	**
Corporate	990	895	703
Total depreciation and amortization	$1,289	$1,166	$938
Geographical Information for Operations
Long-lived assets of U.S. operations	$2,639	$2,678	$1,896
Long-lived assets of international operations	167	184	208

_______________

**Our AR segment was established in the quarter ended September 29, 2023 in connection with the AJRD acquisition. As such, there is no

fiscal 2022 information.

In addition to depreciation and amortization expense related to property, plant and equipment, “Depreciation

and Amortization” in the table above also includes $860 million, $777 million and $596 million of amortization

related to intangible assets, debt premium, debt discount, debt issuance costs and other items in fiscal 2024, 2023

and 2022, respectively.

Assets by Business Segment

Total assets by business segment are as follows:

(In millions)	January 3, 2025	December 29, 2023
Total Assets
SAS	$8,705	$9,085
IMS	10,749	10,631
CS	7,060	7,084
AR	4,466	4,208
Corporate(1)	11,021	10,679
Total Assets	$42,001	$41,687

_______________

(1)Identifiable intangible assets acquired in connection with business combinations were recorded as corporate assets because they benefit

the entire Company. Intangible asset balances recorded as corporate assets were $7,639 million and $8,540 million at January 3, 2025 and

December 29, 2023, respectively. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred

compensation plan assets, buildings and equipment, real estate held for development and leasing, investments, as well as any assets of

businesses held for sale.