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BUSINESS SEGMENT INFORMATION
 3 Months Ended
Apr. 03, 2026
Segment Reporting [Abstract]  
BUSINESS SEGMENT INFORMATION
NOTE O: BUSINESS SEGMENT INFORMATION
Description of Business Segments
We structure our operations primarily around the capabilities we provide and report our financial results in the following three operating segments, which are also our reportable segments or business segments, consistent with the manner in which our chief operating decision maker manages the business, evaluates performance, and allocates resources:
SMS: Supplies full mission solutions as a prime and subsystem integrator in the space, airborne, maritime, and cyber domains. We provide top-tier capabilities in the design, development, integration, production and sustainment of weapons systems for national security, civil government and international customers in the following business sectors:
Intelligence, Surveillance and Reconnaissance (“ISR”): Airborne passive sensing and targeting, mission systems development, integration and life-cycle management for strategic reconnaissance and air superiority platforms, national command and control, tactical surveillance, electronic attack, agile strike, mobility, and classified platforms.
Space Systems: End-to-end mission solutions to support intelligence, surveillance and reconnaissance; missile defense; positioning, navigation and timing; weather and climate monitoring; and ground-based space surveillance networks.
Maritime: Power, electrical, imaging, communication and sensor systems for naval platforms; autonomous solutions for surface and undersea operations; high-assurance encryption; in-service support; missionization prototyping; and naval integration.
Mission Networks: Integrator of large-scale, highly secure, and resilient mission critical infrastructure and enterprise systems for communications, air traffic surveillance, and enterprise information management.
Airborne Solutions: Integrated and multi-function processors, memory, communication, displays, and other hardened electronics, for airborne and ground platforms.
Intel & Cyber: Situational awareness, optical networks and advanced wireless solutions for classified intelligence and defense customers.
CSD: Enables warfighters across all domains with solutions critical to mission success even in the most contested environments. We are a leading provider of resilient communication solutions for the DoW and international, federal, and state agency customers in the following business sectors:
Mission Critical Communications: Design, manufacture and sustainment of resilient and interoperable secure communication solutions that includes software defined radios, waveforms, satellite terminals and end-to-end battlefield systems for the warfighter and government agencies.
Spectrum Superiority: Design, manufacture and sustainment of resilient and secure communication solutions that include ISR and tactical data links, software and integrated broadband networks and electronic warfare.
Targeting & Sensor Systems (“TSS”): Multi-domain, multi-spectral electro-optical and infrared sensor systems supporting ISR and target acquisition missions; manufacturing of specialty laser transmitters and filter glass materials; and manufacturing of counter unmanned aircraft integrated systems, and specialized mission management software solutions.
Integrated Vision Solutions: Design, manufacture and sustainment of a full suite of helmet-mounted integrated night vision goggles with leading-edge image intensifier tubes, as well as weapon-mounted sights, aiming lasers, and range finders.
MSL: Provides a comprehensive portfolio of missile technologies spanning the full mission lifecycle, as well as critical space propulsion capabilities to the U.S. Government and its allies, including the DoW, NASA and major aerospace and defense prime contractors in the following business sectors:
Missile Solutions: Provides propulsion, maneuvering, and control technologies as well as fuzing systems that support missile defense interceptors, strategic deterrence systems, and precision strike weapons.
Advanced Effects: Provides advanced systems that improve missile performance, accuracy, and mission effectiveness across four capability areas including advanced sensing and targeting systems, guidance systems, weapons release systems, and complete weapons systems.
Space Propulsion and Power Systems (“SPPS”): Premier propulsion and power systems for national security, space and exploration missions.
Business Segment Financial Results
The following table presents operating results by business segment and a reconciliation to total income before income taxes:
 First Quarter
(In millions)20262025
 
Revenue
SMS$2,990 $2,411 
CSD1,855 1,809 
MSL990 840 
Intersegment(91)(74)
Segment revenue5,744 4,986 
Other(1)
— 146 
Total revenue5,744 5,132 
Cost of revenue
SMS(2,439)(1,948)
CSD(1,163)(1,157)
MSL(807)(656)
Intersegment91 
74 
Segment cost of revenue(4,318)(3,687)
Other(2)
(24)(95)
Total cost of revenue(4,342)(3,782)
Operating income
SMS313 238 
CSD465 443 
MSL124 96 
Segment operating income902 777 
Unallocated corporate items and other, net(250)
(252)
Total operating income652 525 
Non-service FAS pension income and other, net73 
84 
Interest expense, net(136)(150)
Income before income taxes$589 $459 
_______________
(1)Includes other non-reportable businesses, which consists of the CAS disposal group, corporate headquarters, and eliminations.
(2)Includes corporate headquarters. Additionally, first quarter 2025 includes other non-reportable businesses, which consists of the CAS disposal group.

Unallocated Corporate Items and Other, Net. Unallocated corporate items and other, net include expenses not included in management’s evaluation of segment operating performance, such as amortization of acquisition-related intangibles; acquisition, divestiture and transaction-related expenses; business divestiture-related losses; LHX NeXt implementation costs, and a portion of management and administration, legal, environmental, compensation and retiree benefits, and the FAS/Cost Accounting Standards (“CAS”) operating adjustment. Additionally, includes the operating results of other non-reportable businesses, which consists of the CAS disposal group, eliminations and other.
Assets
Total assets by business segment were as follows:
(In millions)April 3, 2026January 2, 2026
SMS$14,264 $13,736 
CSD10,932 10,862 
MSL6,748 6,605 
Corporate(1)
9,436 9,992 
Total assets$41,380 $41,195 
_______________
(1)Includes intangible assets acquired in connection with business combinations that benefit the entire Company. See the “Intangible Assets” section in Note E: Goodwill and Intangible Assets in these Notes for further information.
Other Financial Information
Other financial information by business segment is summarized below:
First Quarter
(In millions)20262025
Capital expenditures
SMS$29 $35 
CSD18 8 
MSL33 14 
Corporate19 2 
Total capital expenditures$99 $59 
Depreciation and amortization
SMS$42 $40 
CSD18 17 
MSL14 16 
Corporate208 228 
Total depreciation and amortization$282 $301 
Disaggregation of Revenue
We disaggregate revenue 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.
First Quarter
20262025
(In millions)SMSCSDMSLSMSCSDMSL
Other(1)
Revenue by customer relationship
Prime contractor$2,286 $1,192 $250 $1,725 $1,173 $222 $72 
Subcontractor681 606 729 660 607 600 73 
Intersegment23 57 11 26 29 18 1 
Total segment$2,990 $1,855 $990 $2,411 $1,809 $840 $146 
Revenue by contract type
Fixed-price
$1,910 $1,520 $643 $1,658 $1,493 $505 $145 
Cost-type1,057 278 336 727 287 317 — 
Intersegment23 57 11 26 29 18 1 
Total segment$2,990 $1,855 $990 $2,411 $1,809 $840 $146 
Revenue by geographical region
United States$2,540 $1,037 $874 $2,028 $1,091 $795 $61 
International427 761 105 357 689 27 84 
Intersegment23 57 11 26 29 18 1 
Total segment$2,990 $1,855 $990 $2,411 $1,809 $840 $146 
_______________
(1)Includes revenue associated with other non-reportable businesses, which consists of the CAS disposal group. These amounts are included to reconcile total revenue.