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BUSINESS SEGMENTS
 12 Months Ended
Jan. 02, 2026
Segment Reporting [Abstract]  
BUSINESS SEGMENTS
NOTE 14: BUSINESS SEGMENTS
We structure our operations primarily around the capabilities we provide and report our financial results in the following four reportable segments:
CS: including software defined communication products and waveforms for domestic and international customers; broadband communications; integrated vision solutions; and public safety radios, system applications and equipment; and
IMS: including multi-mission ISR systems; passive sensing and targeting; electronic attack platforms; autonomy; power and communications; networks; and the CAS disposal group, which includes aviation products and pilot training operations and was divested on March 28, 2025; and
SAS: including satellites and space payloads, sensors and full-mission solutions; classified intelligence and cyber; airborne combat systems; and mission networks for air traffic management operations; and
AR: including missile solutions with propulsion technologies for strategic defense, missile defense, hypersonic, tactical and fuzing systems; and space propulsion and power systems for national security and space exploration missions.
Chief Operating Decision Maker (“CODM”)
Our Chairman and CEO serves as the CODM and is responsible for evaluating business segment performance and allocating resources across the Company. The CODM reviews periodic financial reporting packages that include segment revenues, operating income, and other key operational and financial metrics, and compares historical, actual, and forecasted information to assess segment performance. Segment information is prepared on a basis consistent with the internal reports provided to the CODM.
Business Segment Financial Information
The following table presents operating results by business segment and a reconciliation to total income before income taxes:
Fiscal Year
(In millions)202520242023
Revenue
CS$5,673 $5,459 $5,070 
IMS6,630 6,618 6,446 
SAS6,946 6,869 6,856 
AR2,845 2,580 1,243 
Intersegment(229)(201)(196)
Total revenue21,865 21,325 19,419 
Cost of revenue
CS(3,570)(3,490)(3,217)
IMS(5,188)(5,039)(4,933)
SAS(5,463)(5,430)(5,380)
AR(2,207)(2,008)(977)
Intersegment and corporate188 166 201 
Total cost of revenue(16,240)(15,801)(14,306)
Operating income
CS1,432 1,324 1,229 
IMS812 826 443 
SAS852 812 756 
AR270 307 138 
Segment operating income3,366 3,269 2,566 
Unallocated corporate items(1,256)(1,351)(1,140)
Total operating income2,110 1,918 1,426 
Non-service FAS pension income and other, net419 354 338 
Interest expense, net(597)(675)(543)
Income before income taxes$1,932 $1,597 $1,221 
Unallocated Corporate Items. Unallocated corporate items include income and expenses not included in management’s evaluation of segment operating performance, such as amortization of acquisition-related intangibles; merger, acquisition, and divestiture-related expenses; additional cost of revenue related to the fair value step-up in inventory sold; business divestiture-related losses, net; certain impairment of other assets; and LHX NeXt implementation costs. Additionally, unallocated corporate items include a portion of management and administration, legal, environmental, compensation, retiree benefits, the FAS/CAS operating adjustment, eliminations and other.
LHX NeXt Initiative. LHX NeXt is our initiative to transform multiple functions, systems and processes to increase agility and competitiveness. The LHX NeXt effort includes non-recurring costs for workforce optimization, incremental IT expenses for implementation of new systems, third party consulting and other costs. We completed the LHX NeXt initiative in fiscal 2025.
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 2025
(In millions)CSIMSSASAR
Revenue By Customer Relationship
Prime contractor$4,287 $4,598 $4,307 $650 
Subcontractor
1,324 1,957 2,575 2,167 
Intersegment62 75 64 28 
Total segment$5,673 $6,630 $6,946 $2,845 
Revenue By Contract Type
Fixed-price
$4,825 $5,050 $4,619 $1,850 
Cost-type786 1,505 2,263 967 
Intersegment62 75 64 28 
Total segment$5,673 $6,630 $6,946 $2,845 
Revenue By Geographical Region
United States$3,609 $4,852 $6,045 $2,545 
International(1)
2,002 1,703 837 272 
Intersegment62 75 64 28 
Total segment$5,673 $6,630 $6,946 $2,845 
_______________
(1) Includes revenue 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. No individual foreign country represents more than 5% of our total revenue.

Fiscal 2024
(In millions)CSIMSSASAR
Revenue By Customer Relationship
Prime contractor$3,801 $4,279 $4,307 $664 
Subcontractor
1,589 2,286 2,511 1,888 
Intersegment69 53 51 28 
Total segment$5,459 $6,618 $6,869 $2,580 
Revenue By Contract Type
Fixed-price
$4,566 $5,199 $4,293 $1,568 
Cost-type824 1,366 2,525 984 
Intersegment69 53 51 28 
Total segment$5,459 $6,618 $6,869 $2,580 
Revenue By Geographical Region
United States$3,741 $4,721 $5,971 $2,504 
International(1)
1,649 1,844 847 48 
Intersegment69 53 51 28 
Total segment$5,459 $6,618 $6,869 $2,580 
_______________
(1) Includes revenue 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. No individual foreign country represents more than 5% of our total revenue.
Fiscal 2023
(In millions)CSIMSSASAR
Revenue By Customer Relationship
Prime contractor$3,420 $4,152 $4,252 $294 
Subcontractor
1,597 2,220 2,555 929 
Intersegment53 74 49 20 
Total segment$5,070 $6,446 $6,856 $1,243 
Revenue By Contract Type
Fixed-price
$4,289 $4,869 $4,257 $783 
Cost-type728 1,503 2,550 440 
Intersegment53 74 49 20 
Total segment$5,070 $6,446 $6,856 $1,243 
Revenue By Geographical Region
United States$3,482 $4,646 $5,933 $1,184 
International(1)
1,535 1,726 874 39 
Intersegment53 74 49 20 
Total segment$5,070 $6,446 $6,856 $1,243 
_______________
(1) Includes revenue 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. No individual foreign country represents more than 5% of our total revenue.
Assets
Total assets by business segment were as follows:
(In millions)January 2, 2026January 3, 2025
CS$7,131 $7,060 
IMS9,831 10,389 
SAS8,958 8,705 
AR5,109 4,826 
Corporate(1)
10,166 11,021 
Total assets$41,195 $42,001 
_______________
(1)Includes intangible assets acquired in connection with business combinations that benefit the entire Company. See the “Intangible Assets” section in Note 6: Goodwill and Intangible Assets in these Notes for further information.
Other Financial Information
Other financial information by business segment and geographical operations is summarized below:
Fiscal Year
(In millions)202520242023
Capital Expenditures
CS$70 $50 $39 
IMS74 115 148 
SAS118 140 151 
AR116 52 32 
Corporate46 51 79 
Total capital expenditures$424 $408 $449 
Depreciation and Amortization
CS$53 $56 $54 
IMS70 63 71 
SAS146 130 115 
AR49 50 31 
Corporate906 990 895 
Total depreciation and amortization$1,224 $1,289 $1,166 
Geographical Operations
Long-lived assets
United States$2,503 $2,639 $2,678 
International162 167 184 
The percentage of our revenue that was derived from sales to U.S. Government customers, whether directly or through prime contractors, including foreign military sales funded through the U.S. Government, was 75%, 76% and 76% in fiscal 2025, 2024 and 2023, respectively.