COVER
COVER - shares | 9 Months Ended | |
Sep. 29, 2023 | Oct. 20, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 29, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-3863 | |
Entity Registrant Name | L3HARRIS TECHNOLOGIES, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 34-0276860 | |
Entity Address, Address Line One | 1025 West NASA Boulevard | |
Entity Address, City or Town | Melbourne, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32919 | |
City Area Code | 321 | |
Local Phone Number | 727-9100 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | LHX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 189,540,249 | |
Current Fiscal Year End Date | --12-29 | |
Entity Central Index Key | 0000202058 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenue from product sales and services | $ 4,915 | $ 4,246 | $ 14,079 | $ 12,484 |
Cost of product sales and services | (3,608) | (3,052) | (10,371) | (8,819) |
Engineering, selling and administrative expenses | (828) | (742) | (2,384) | (2,239) |
Sale of asset group and business divestiture-related gains, net | 0 | 0 | 26 | 8 |
Impairment of goodwill and other assets | 0 | (802) | (78) | (802) |
Non-operating income, net | 80 | 99 | 245 | 313 |
Interest expense, net | (159) | (70) | (372) | (205) |
Income (loss) before income taxes | 400 | (321) | 1,145 | 740 |
Income taxes | (18) | 20 | (73) | (96) |
Net income (loss) | 382 | (301) | 1,072 | 644 |
Noncontrolling interests, net of income taxes | 1 | 1 | (3) | 2 |
Net income (loss) attributable to L3Harris Technologies, Inc. | $ 383 | $ (300) | $ 1,069 | $ 646 |
Net income (loss) per common share attributable to L3Harris Technologies, Inc. common shareholders | ||||
Basic (in dollars per share) | $ 2.02 | $ (1.56) | $ 5.64 | $ 3.36 |
Diluted (in dollars per share) | $ 2.02 | $ (1.56) | $ 5.61 | $ 3.33 |
Basic weighted average common shares outstanding (in shares) | 189.3 | 191.3 | 189.6 | 192.2 |
Diluted weighted average common shares outstanding (in shares) | 190.1 | 191.3 | 190.6 | 194 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 382 | $ (301) | $ 1,072 | $ 644 |
Other comprehensive loss: | ||||
Foreign currency translation loss, net of income taxes | (45) | (120) | (10) | (196) |
Net unrealized (loss) income on hedging derivatives, net of income taxes | (3) | (12) | 6 | (14) |
Other comprehensive (loss) income before reclassifications to earnings, net of income taxes | (48) | (132) | (4) | (210) |
Reclassification adjustments for gains included in net income | (10) | (2) | (29) | (10) |
Other comprehensive loss, net of income taxes | (58) | (134) | (33) | (220) |
Total comprehensive income (loss) | 324 | (435) | 1,039 | 424 |
Comprehensive loss (income) attributable to noncontrolling interest | 1 | 1 | (3) | 2 |
Total comprehensive income (loss) attributable to L3Harris Technologies, Inc. | $ 325 | $ (434) | $ 1,036 | $ 426 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Sep. 29, 2023 | Dec. 30, 2022 |
Current assets | ||
Cash and cash equivalents | $ 499 | $ 880 |
Receivables, net of allowances for collection losses of $24 and $40, respectively | 1,381 | 1,251 |
Contract assets | 3,477 | 2,987 |
Inventories | 1,638 | 1,291 |
Income taxes receivable | 43 | 40 |
Other current assets | 463 | 258 |
Assets of business held for sale | 0 | 47 |
Total current assets | 7,501 | 6,754 |
Non-current assets | ||
Property, plant and equipment, net | 2,818 | 2,104 |
Operating lease right-of-use assets | 758 | 756 |
Goodwill | 20,736 | 17,283 |
Other intangible assets, net | 9,050 | 6,001 |
Deferred income taxes | 87 | 73 |
Recoverable environmental remediation costs | 382 | 0 |
Other non-current assets | 961 | 553 |
Total assets | 42,293 | 33,524 |
Current liabilities | ||
Short-term debt | 2,033 | 2 |
Accounts payable | 2,112 | 1,945 |
Contract liabilities | 1,940 | 1,400 |
Compensation and benefits | 461 | 398 |
Other accrued items | 1,190 | 818 |
Income taxes payable | 383 | 376 |
Current portion of long-term debt, net | 363 | 818 |
Liabilities of business held for sale | 0 | 19 |
Total current liabilities | 8,482 | 5,776 |
Non-current liabilities | ||
Defined benefit plans | 404 | 262 |
Operating lease liabilities | 736 | 741 |
Long-term debt, net | 11,140 | 6,225 |
Deferred income taxes | 812 | 719 |
Reserves for environmental remediation costs | 524 | 107 |
Other long-term liabilities | 1,479 | 1,070 |
Total liabilities | 23,577 | 14,900 |
Shareholders’ Equity: | ||
Preferred stock, without par value; 1,000,000 shares authorized; none issued | 0 | 0 |
Common stock, $1.00 par value; 500,000,000 shares authorized; issued and outstanding 189,439,991 and 190,611,458 shares at September 29, 2023 and December 30, 2022, respectively | 189 | 191 |
Other capital | 15,470 | 15,677 |
Retained earnings | 3,278 | 2,943 |
Accumulated other comprehensive loss | (321) | (288) |
Total shareholders’ equity | 18,616 | 18,523 |
Noncontrolling interests | 100 | 101 |
Total equity | 18,716 | 18,624 |
Total liabilities and equity | $ 42,293 | $ 33,524 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Sep. 29, 2023 | Dec. 30, 2022 |
Shareholders’ Equity: | ||
Accounts receivable, allowance for credit loss, current | $ 24 | $ 40 |
Preferred shares, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Common shares, par value (in dollars per share) | $ 1 | $ 1 |
Common shares, authorized (in shares) | 500,000,000 | 500,000,000 |
Common shares, issued (in shares) | 189,439,991 | 190,611,458 |
Common shares, outstanding (in shares) | 189,439,991 | 190,611,458 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | ||
Operating Activities | |||
Net income (loss) | $ 1,072 | $ 644 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of acquisition-related intangibles | 546 | 454 | |
Depreciation and other amortization | 270 | 243 | |
Share-based compensation | 67 | 92 | |
Share-based matching contributions under defined contribution plans | 172 | 161 | |
Pension and other postretirement benefit plan income | (209) | (297) | |
Impairment of goodwill and other assets | 78 | 802 | |
Sale of asset group and business divestiture-related gains, net | (26) | (8) | |
Deferred income taxes | (277) | (454) | |
(Increase) decrease in: | |||
Receivables, net | 53 | (93) | |
Contract assets | (136) | (111) | |
Inventories | (195) | (357) | |
Other current assets | (87) | 26 | |
Increase (decrease) in: | |||
Accounts payable | (18) | 312 | |
Contract liabilities | 202 | (133) | |
Compensation and benefits | (55) | (95) | |
Other accrued items | (27) | 2 | |
Income taxes | 15 | 259 | |
Other operating activities | (138) | (71) | |
Net cash provided by operating activities | 1,307 | 1,376 | |
Investing Activities | |||
Net cash paid for acquired businesses | (6,688) | 0 | |
Additions to property, plant and equipment | (312) | (181) | |
Proceeds from sale of property, plant and equipment, net | 0 | 10 | |
Proceeds from sales of businesses, net | 71 | 5 | |
Proceeds from sale of asset group, net | 0 | 18 | |
Cash used for equity investments | (11) | (47) | |
Other investing activities | 2 | 7 | |
Net cash used in investing activities | (6,938) | (188) | |
Financing Activities | |||
Proceeds from borrowings, net of issuance cost | 7,568 | 5 | |
Repayments of borrowings | (3,159) | (12) | |
Change in commercial paper, net | [1] | 2,031 | 0 |
Proceeds from exercises of employee stock options | 18 | 40 | |
Repurchases of common stock | (518) | (900) | |
Cash dividends | (652) | (650) | |
Tax withholding payments associated with vested share-based awards | (28) | (44) | |
Other financing activities | (6) | (5) | |
Net cash provided by (used in) financing activities | 5,254 | (1,566) | |
Effect of exchange rate changes on cash and cash equivalents | (4) | (34) | |
Net decrease in cash and cash equivalents | (381) | (412) | |
Cash and cash equivalents, beginning of period | 880 | 941 | |
Cash and cash equivalents, end of period | $ 499 | $ 529 | |
[1] (1) See Note H: Debt and Credit Arrangements in the Notes to the Condensed Consolidated Financial Statements. |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions | Total | Common Stock | Other Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests |
Beginning balance at Dec. 31, 2021 | $ 19,319 | $ 194 | $ 16,248 | $ 2,917 | $ (146) | $ 106 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 644 | 646 | (2) | |||
Other comprehensive loss, net of income taxes | (220) | (220) | ||||
Shares issued under stock incentive plans | 40 | 40 | ||||
Shares issued under defined contribution plans | 161 | 1 | 160 | |||
Share-based compensation expense | 92 | 92 | ||||
Tax withholding payments on share-based awards | (44) | (44) | ||||
Repurchases and retirement of common stock | (900) | (4) | (752) | (144) | ||
Cash dividends | (650) | (650) | ||||
Other | (3) | (1) | (2) | |||
Ending balance at Sep. 30, 2022 | 18,439 | 191 | 15,744 | 2,768 | (366) | 102 |
Beginning balance at Jul. 01, 2022 | 19,190 | 192 | 15,814 | 3,312 | (232) | 104 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (301) | (300) | (1) | |||
Other comprehensive loss, net of income taxes | (134) | (134) | ||||
Shares issued under stock incentive plans | 6 | 6 | ||||
Shares issued under defined contribution plans | 48 | 48 | ||||
Share-based compensation expense | 23 | 23 | ||||
Tax withholding payments on share-based awards | (6) | (6) | ||||
Repurchases and retirement of common stock | (171) | (1) | (141) | (29) | ||
Cash dividends | (215) | (215) | ||||
Other | (1) | (1) | ||||
Ending balance at Sep. 30, 2022 | 18,439 | 191 | 15,744 | 2,768 | (366) | 102 |
Beginning balance at Dec. 30, 2022 | 18,624 | 191 | 15,677 | 2,943 | (288) | 101 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 1,072 | 1,069 | 3 | |||
Other comprehensive loss, net of income taxes | (33) | (33) | ||||
Shares issued under stock incentive plans | 18 | 18 | ||||
Shares issued under defined contribution plans | 172 | 1 | 171 | |||
Share-based compensation expense | 67 | 67 | ||||
Tax withholding payments on share-based awards | (28) | (28) | ||||
Repurchases and retirement of common stock | (518) | (3) | (433) | (82) | ||
Cash dividends | (652) | (652) | ||||
Other | (6) | (2) | (4) | |||
Ending balance at Sep. 29, 2023 | 18,716 | 189 | 15,470 | 3,278 | (321) | 100 |
Beginning balance at Jun. 30, 2023 | 18,531 | 189 | 15,391 | 3,111 | (263) | 103 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 382 | 383 | (1) | |||
Other comprehensive loss, net of income taxes | (58) | (58) | ||||
Shares issued under stock incentive plans | 5 | 5 | ||||
Shares issued under defined contribution plans | 51 | 51 | ||||
Share-based compensation expense | 22 | 22 | ||||
Cash dividends | (216) | (216) | ||||
Other | (1) | 1 | (2) | |||
Ending balance at Sep. 29, 2023 | $ 18,716 | $ 189 | $ 15,470 | $ 3,278 | $ (321) | $ 100 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends (in dollars per share) | $ 1.14 | $ 1.12 | $ 3.42 | $ 3.36 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 29, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE A: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying Condensed Consolidated Financial Statements include the accounts of L3Harris Technologies, Inc. and its consolidated subsidiaries. As used in these notes to Condensed Consolidated Financial Statements (these “Notes”), the terms “L3Harris,” “Company,” “we,” “our” and “us” refer to L3Harris Technologies, Inc. and its consolidated subsidiaries. Intracompany transactions and accounts have been eliminated. The accompanying Condensed Consolidated Financial Statements have been prepared by L3Harris in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, such interim financial statements do not include all information and footnotes necessary for a complete presentation of financial condition, results of operations, cash flows and equity in conformity with GAAP for annual financial statements and are not necessarily indicative of the results that may be expected for the full fiscal year or any subsequent period. In the opinion of management, such interim financial statements reflect all adjustments (including normal recurring adjustments) considered necessary for a fair presentation of our financial condition, results of operations, cash flows and equity for the periods presented therein. The balance sheet at December 30, 2022 has been derived from our audited financial statements, but does not include all of the information and footnotes required by GAAP for annual financial statements. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with Part II: Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 30, 2022 (our “Fiscal 2022 Form 10-K”). Business Realignment. Effective for fiscal 2023, which began December 31, 2022, we adjusted our reporting to better align our businesses and transferred our Agile Development Group (“ADG”) business from our Integrated Mission Systems (“IMS”) segment to our Space & Airborne Systems (“SAS”) segment. The historical results, discussion and presentation of our business segments as set forth in the accompanying Condensed Consolidated Financial Statements and these Notes reflect the impact of these changes for all periods presented in order to present segment information on a comparable basis. There is no impact on our previously reported consolidated statements of operations, balance sheets, statements of cash flows or statements of equity resulting from these changes. See Note G: Goodwill and Other Intangible Assets and Note O: Business Segment Information in these Notes for further information. Acquisition of Aerojet Rocketdyne Holdings, Inc. (“AJRD”) and New Business Segment. On July 28, 2023 we completed the acquisition of AJRD. Upon completion of the acquisition, we established a new reportable segment, Aerojet Rocketdyne (“AR”). The operations of AJRD are reported in the newly established AR segment and in our corporate segment. The AR segment consists of missile solutions with technologies for strategic defense, missile defense, and hypersonic and tactical systems, as well as space propulsion and power systems for national security space and exploration missions. See Note B: Acquisitions, Divestitures and Asset Sales and Note O: Business Segment Information in these Notes for further information. Use of Estimates The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying Condensed Consolidated Financial Statements and these Notes and related disclosures. These estimates and assumptions are based on experience and other information available prior to issuance of the accompanying Condensed Consolidated Financial Statements and these Notes. Materially different results can occur as circumstances change and additional information becomes known. Reclassifications The classification of certain prior year amounts have been adjusted in our Condensed Consolidated Financial Statements and these Notes to conform to current year classifications. Accounting Standards Updates In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) 2014-09, Revenue from Contracts with Customers (Topic 606) . The update generally results in an entity recognizing contract assets and contract liabilities at amounts consistent with those recorded by the acquiree immediately before the acquisition date rather than at fair value. The new standard is effective on a prospective basis for fiscal years beginning after December 15, 2022, with early adoption permitted. We adopted the new standard effective December 31, 2022. On January 3, 2023 and July 28, 2023 we completed the acquisitions of Viasat, Inc.’s Tactical Data Links product line (“TDL”) and AJRD, respectively. We applied the provisions of ASU 2021-08 in our purchase accounting for both acquisitions, and adoption of the new standard did not have a material impact on our operating results, financial position, or cash flows. For more information regarding the TDL and AJRD acquisitions, see Note B: Acquisitions, Divestitures and Asset Sales in these Notes. |
ACQUISITIONS, DIVESTITURES AND
ACQUISITIONS, DIVESTITURES AND ASSET SALES | 9 Months Ended |
Sep. 29, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS, DIVESTITURES AND ASSET SALES | NOTE B: ACQUISITIONS, DIVESTITURES AND ASSET SALES Acquisition of Viasat’s TDL On January 3, 2023, we completed the acquisition of TDL for a purchase price of $1.958 billion. The acquisition, which qualified as a business acquisition, enhances our networking capability and provides access to the ubiquitous Link 16 waveform, better positioning us to enable the U.S. Department of Defense (“DoD”) integrated architecture goal in joint all-domain command and control (“JADC2”). On November 22, 2022, we established a $2.25 billion, three-year senior unsecured term loan facility by entering into a Loan Agreement (“Term Loan 2025”) with a syndicate of lenders, in part, to finance the acquisition. See Note H: Debt and Credit Arrangements in these Notes for further information regarding Term Loan 2025. Net assets and results of operations of TDL are reflected in our financial results commencing on January 3, 2023, the acquisition date, and are reported within our Communication Systems (“CS”) segment. We accounted for the acquisition of TDL using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of the acquisition date, with the excess of the consideration transferred over those fair values recorded as goodwill. Our preliminary fair value estimates and assumptions are subject to change as we obtain additional information over the measurement period. As of the acquisition date, the fair value of consideration transferred consisted of the following: (In millions) January 3, 2023 Purchase price $ 1,958 Estimated net working capital and other adjustments 15 Cash consideration paid 1,973 Settlement of preexisting relationship (1) 1 Fair value of consideration transferred $ 1,974 _______________ (1) Prior to the acquisition, we had a preexisting relationship with Viasat’s TDL business in the normal course of business. As of the acquisition date, our CS segment had a receivable from Viasat’s TDL business with a fair value of $1 million that was settled in connection with the acquisition. The following table summarizes the preliminary allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the acquisition date and the measurement period adjustments recorded since the acquisition date through September 29, 2023: January 3, 2023 (In millions) Preliminary Measurement Period Adjustments, Net 1,2 Preliminary Receivables $ 28 $ — $ 28 Contract assets 18 11 29 Inventories 164 (10) 154 Other current assets 9 — 9 Property, plant and equipment 50 — 50 Operating lease right-of-use assets 12 — 12 Goodwill 1,014 103 1,117 Other intangible assets 850 (95) 755 Deferred income taxes 33 3 36 Other non-current assets 6 (1) 5 Total assets acquired $ 2,184 $ 11 $ 2,195 Accounts payable $ 20 $ — $ 20 Contract liabilities 28 — 28 Compensation and benefits 2 — 2 Other accrued items 119 1 120 Operating lease liabilities 10 — 10 Other long-term liabilities 31 10 41 Total liabilities assumed $ 210 $ 11 $ 221 Net assets acquired $ 1,974 $ — $ 1,974 _______________ (1) Fair value adjustments primarily related to refined assumptions in the valuation of customer relationship intangible assets. (2) Assets acquired include $11 million of Contract assets that were reclassified from Inventories to Contract assets to conform TDL’s accounting policies with those of L3Harris, as required under ASC 805. As such, reclassified amounts will not be recognized as revenue in future periods. Our preliminary estimates and assumptions are subject to change as we obtain additional information during the measurement period (up to one year from the acquisition date); therefore, these provisional measurements of the assets acquired and liabilities assumed are subject to change. Intangible Assets. All intangible assets acquired in the TDL acquisition are subject to amortization. The preliminary fair value of identifiable intangible assets acquired as of the acquisition date is as follows: Total Useful Lives (In millions) (In Years) Developed technology $ 349 17 Customer relationships: (1) Backlog 83 2 Government programs 323 16 Total customer relationships 406 Total identifiable intangible assets acquired $ 755 _______________ (1) TDL had backlog and government programs intangible assets that we classified as customer relationships. We determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgment related to estimations. The use of different estimates could produce different results. The fair value of intangible assets is estimated using the relief from royalty method for the acquired developed technology and the multi-period excess earnings method for the acquired customer relationships. Both of these level 3 fair value methods are income-based valuation approaches, which require judgment to estimate appropriate discount rates, royalty rates related to the developed technology intangible assets, revenue growth attributable to the intangible assets and remaining useful lives. The fair value of inventory was estimated using the replacement cost approach and comparative sales method, which require estimates of replacement cost for raw materials and estimates of expected sales price less costs to complete and dispose of the inventory, plus a profit margin for efforts incurred for the work in progress and finished goods. Forward Loss Provision. We have recorded a preliminary forward loss provision of $86 million in connection with certain acquired contracts, which was included in the “Other accrued items” line item in our Condensed Consolidated Balance Sheet . The forward loss provisions will be recognized as a reduction to cost of sales as we incur costs to satisfy the associated performance obligations. There will be no net impact on our Condensed Consolidated Statement of Operations. We recognized $15 million and $29 million for amortization of the forward loss provision during the quarter and three quarters ended September 29, 2023, respectively. Off-market Customer Contracts. We have identified certain contractual obligations with customers with economic returns that are higher or lower than could be realized in market transactions as of the acquisition date and have recorded liabilities for the preliminary acquisition date fair value of the off-market components. The preliminary acquisition date fair value of the off-market components is a net liability of $64 million, consisting of $33 million and $31 million included in the “Other accrued items” and “Other long-term liabilities” line items in our Condensed Consolidated Balance Sheet, respectively, and excludes any amounts already recognized in forward loss provisions (see discussion in the preceding paragraph). We measured the fair value of these components as the amount by which the terms of the contract with the customer deviates from the terms that a market participant could have achieved at the acquisition date. The off-market components of these contracts will be recognized as an increase to revenue as we incur costs to satisfy the associated performance obligations. We recognized $7 million and $22 million for amortization of off-market contract liabilities during the quarter and three quarters ended September 29, 2023, respectively. Future estimated revenue from the amortization of off-market contract liabilities (based on the estimated pattern of cash flows to be incurred to satisfy associated performance obligations) is $11 million in the remainder of 2023, $22 million in 2024 and immaterial amounts thereafter. Goodwill. The $1.117 billion of goodwill recognized is attributable to the assembled workforce, in addition to synergies expected to be realized through integration with existing CS segment businesses and growth opportunities in the space domain. The acquired goodwill is tax deductible. See Note G: Goodwill and Other Intangible Assets in these Notes for further information. Financial Results. The following table includes revenue and income before income taxes of TDL included in our Condensed Consolidated Statement of Operations for the quarter ended September 29, 2023 and for the acquisition date through September 29, 2023 and the comparable periods of calendar year 2022. The comparable period results do not include any integration synergies or accounting conformity adjustments and are not necessarily indicative of our results of operations that actually would have been obtained had the acquisition of TDL been completed for the period presented, or which may be realized in the future. Quarter Ended Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Revenue $ 97 $ 105 $ 261 $ 290 Income before income taxes 38 30 86 55 Acquisition-Related Costs. Acquisition-related costs have been expensed as incurred. In connection with the TDL acquisition, we recorded transaction and integration costs of $10 million and $64 million for the quarter and three quarters ended September 29, 2023, respectively, which were included in the Engineering, selling and administrative expenses line item in our Condensed Consolidated Statement of Operations. Acquisition of AJRD On July 28, 2023 we acquired AJRD, a technology-based engineering and manufacturing company that develops and produces missile solutions with technologies for strategic defense, missile defense, and hypersonic and tactical systems, as well as space propulsion and power systems for national security space and exploration missions. The acquisition provides us access to a new market. We acquired 100 percent of AJRD for a total net purchase price of $4.715 billion. The acquisition was fina nced through the issuance and sale of $3.25 billion aggregate principal amount of new long-term fixed-rate debt and draw down under the 2023 Credit Agreement . See Note H: Debt and Credit Arrangements in these Notes for further information regarding the financing of the AJRD acquisition. Net assets and results of operations of AJRD are reflected in our financial results commencing on July 28, 2023 , the acquisition date, and are reported in our newly created AR segment and corporate headquarters. We accounted for the acquisition of AJRD using the acquisition method of accounting, which required us to measure identifiable assets acquired and liabilities assumed in the acquiree at their fair values as of the acquisition date, with the excess of the consideration transferred over those fair values recorded as goodwill. Our preliminary fair value estimates and assumptions are subject to change as we obtain additional information over the measurement period and our measurement of certain assets and contingencies, such as intangible assets, property, plant and equipment, real estate held for development and leasing, loss contracts, environmental matters and related deferred tax impacts remain preliminary for completion of the related valuations. As of the acquisition date, the fair value of consideration transferred consisted of the following: (In millions) July 28, 2023 Cash consideration paid for AJRD outstanding common stock & equity awards $ 4,748 AJRD debt settled by L3Harris 257 Cash consideration paid 5,005 Less cash acquired (290) Fair value of consideration transferred $ 4,715 The following table summarizes the preliminary allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the acquisition date: (In millions) July 28, 2023 Receivables $ 156 Contract assets 338 Inventories 14 Income taxes receivable 3 Other current assets 114 Property, plant and equipment 574 Operating lease right-of-use assets 51 Goodwill 2,348 Other intangible assets 2,860 Recoverable environmental remediation costs 383 Other non-current assets 175 Total assets acquired $ 7,016 Accounts payable 145 Contract liabilities 310 Compensation and benefits 116 Income taxes payable 6 Current portion of long-term debt, net 1 Other accrued items 278 Defined benefit plans 223 Operating lease liabilities 40 Long-term debt, net 41 Deferred income taxes 398 Reserves for environmental remediation costs 417 Other long-term liabilities 326 Total liabilities assumed $ 2,301 Fair value of consideration transferred $ 4,715 We determined the fair value of assets acquired and liabilities assumed by using available market information and various valuation methods that require judgment related to estimates. Due to the timing of the AJRD acquisition, our accounting for the acquisition remains preliminary. Amounts recorded associated with these assets and liabilities are based on preliminary calculations and estimates. Our preliminary estimates and assumptions are subject to change as we obtain additional information during the measurement period (up to one year from the acquisition date). Any potential adjustments made could be material in relation to the preliminary values presented above. Intangible Assets. All intangible assets acquired in the AJRD acquisition are subject to amortization. The preliminary fair value of identifiable intangible assets acquired as of the acquisition date is as follows: Total Useful Lives (In millions) (In Years) Trade names $ 120 10 - 20 Customer relationships: (1) Backlog 360 3 - 4 Government programs 2,380 15 - 25 Total customer relationships 2,740 Total identifiable intangible assets acquired $ 2,860 _______________ (1) AJRD had backlog and government programs intangible assets that we classified as customer relationships. The fair value of intangible assets is estimated using the relief from royalty method for the acquired trade names and the multi-period excess earnings method for the acquired customer relationships. Both of these level 3 fair value methods are income-based valuation approaches, which require judgment to estimate appropriate discount rates, royalty rates related to the trade names intangible assets, revenue growth attributable to the intangible assets and remaining useful lives. Reserves for Environmental Remediation Costs and Recoverable Environmental Remediation Costs. See Note P: Legal Proceedings and Contingencies in these Notes for additional information. Forward Loss Provision. We have recorded a preliminary forward loss provision of $37 million which was included in ” Other accrued items ” line item in our Condensed Consolidated Balance Sheet. The forward loss provisions will be recognized as a reduction to cost of sales as we incur costs to satisfy the associated performance obligations. There will be no net impact on our Condensed Consolidated Statement of Operations. We recognized $4 million from amortization of the forward loss provision for the acquisition date through September 29, 2023. Off-market Customer Contracts. We have identified certain contractual obligations with customers with economic returns that are higher or lower than could be realized in market transactions as of the acquisition date and have recorded liabilities for the preliminary acquisition date fair value of the off-market components. The preliminary acquisition date fair value of the off-market components is a net liability of $53 million, consisting of $26 million and $27 million included in the “Other accrued items” and “Other long-term liabilities” line items in our Condensed Consolidated Balance Sheet, respectively, and excludes any amounts already recognized in forward loss provisions (see discussion in the preceding paragraph) . We measured the fair value of these components as the amount by which the terms of the contract with the customer deviates from the terms that a market participant could have achieved at the acquisition date. The off-market components of these contracts will be recognized as an increase to revenue as we incur costs to satisfy the associated performance obligations. We recognized $4 million from amortization of off-market contract liabilities during the period from the acquisition date through September 29, 2023 . Goodwill. The $2,348 million of goodwill recognized is attributable to AJRD’s market presence as the provider of advanced propulsion and power systems for nearly every major U.S. space and missile program, the assembled workforce and established operating infrastructure. The acquired goodwill is not tax deductible. See Note G: Goodwill and Other Intangible Assets in these Notes for further information. Financial Results. Revenue and income before income taxes of AJRD included in our Condensed Consolidated Statement of Operations for the acquisition date through September 29, 2023 was $455 million and $56 million, respectively. The following table presents unaudited pro forma financial results of the operations acquired with AJRD. The pro forma results for the three quarters ended September 29, 2023 were prepared as if the acquisition was completed on the first day of our fiscal 2023, December 31, 2022, and include adjustments to remove costs directly attributable to the acquisition, such as transaction-related costs and the impact of purchase price adjustments, and corporate expenses such as pension, interest, and amortization. The pro forma results for the three quarters ended September 30, 2022 were prepared as if the acquisition was completed on the first day of our fiscal 2022, January 1, 2022, and include adjustments to remove corporate expenses such as pension, interest, and amortization. The pro forma results do not include any integration synergies and are not necessarily indicative of our results of operations that actually would have been obtained had the acquisition of AJRD been completed for the period presented, or which may be realized in the future. Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 Revenue $ 1,740 $ 1,589 Income before income taxes 156 180 Acquisition-Related Costs. Acquisition-related costs have been expensed as incurred. In connection with the AJRD acquisition, we recorded transaction and integration costs of $45 million and $67 million for the quarter and three quarters ended September 29, 2023, respectively, which were included in the “Engineering, selling and administrative expenses” line item in our Condensed Consolidated Statement of Operations. Divestiture of Visual Information Solutions (“VIS”) On April 6, 2023, we completed the sale of VIS for a sale price of $70 million and recognized a pre-tax gain of $26 million included in the “Sale of asset group and business divestiture-related gains, net” line item in our Condensed Consolidated Statement of Operations for the quarter and three quarters ended September 29, 2023, respectively. After selling costs and purchase price adjustments, the net cash proceeds for the sale of VIS were $71 million. The operating results of VIS were reported in the SAS segment through the date of divestiture. The carrying amounts of the assets and liabilities of VIS were classified as held for sale in our Condensed Consolidated Balance Sheet as of December 30, 2022. Completed Divestiture and Asset Sale for the Three Quarters Ended September 30, 2022 During the three quarters ended September 30, 2022, we completed one business divestiture and one asset sale from our IMS segment for combined net cash proceeds of $23 million and recognized a pre-tax gain of $8 million associated with the asset sale included in the “Sale of asset group and business divestiture-related gains, net” line item in our Condensed Consolidated Statement of Operations for the quarter and three quarters ended September 30, 2022. Fair Value of Businesses and Goodwill Allocation. For purposes of allocating goodwill to the disposal groups that represent a portion of a reporting unit, we determine the fair value of each disposal group based on the respective negotiated selling price, and the fair value of the retained businesses of the respective reporting unit based on a combination of market-based and income based valuation techniques, utilizing quoted market prices, comparable publicly reported transactions and projected discounted cash flows. These fair value determinations are categorized as Level 3 in the fair value hierarchy due to their use of internal projections and unobservable measurement inputs. See Note G: Goodwill and Other Intangible Assets and Note L: Fair Value Measurements in these Notes for additional information. |
STOCK OPTIONS AND OTHER SHARE-B
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION | NOTE C: STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION At September 29, 2023, we had stock options or other share-based compensation awards outstanding under several employee stock incentive plans (“L3Harris SIPs”). The compensation cost related to our share-based awards that was charged against income for the quarter and three quarters ended September 29, 2023 was $22 million and $67 million, respectively, and $23 million and $92 million for the quarter and three quarters ended September 30, 2022, respectively. Awards granted to participants under L3Harris SIPs and the weighted-average grant-date fair value per share during the three quarters ended September 29, 2023 and September 30, 2022 are as follows: Three Quarters Ended September 29, 2023 Three Quarters Ended September 30, 2022 (In millions, except per share amounts) Shares Weighted-Average Grant-Date Fair Value Shares Weighted-Average Grant-Date Fair Value Stock options granted (1) 0.4 $ 209.88 0.4 $ 231.71 Restricted stock and restricted stock units granted (2) 0.3 $ 200.61 0.3 $ 224.79 Performance share units grants (3) 0.2 $ 223.09 0.2 $ 258.83 _______________ (1) Other than certain stock options granted in connection with new hires, our stock options generally ratably vest in equal amounts over a three-year period. (2) Other than certain restricted stock units granted in connection with new hires, our restricted stock units generally cliff vest after three-years. (3) Our performance share units are subject to performance criteria and generally vest after the three-year performance period. There were no significant grants of stock options, restricted stock units or performance share units to participants under the L3Harris SIPs during the quarters ended September 29, 2023 and September 30, 2022. The aggregate number of shares of our common stock issued under L3Harris SIPs, net of shares withheld for tax purposes, was 0.1 million and 0.5 million for the quarter and three quarters ended September 29, 2023, respectively, and 0.1 million and 0.7 million for the quarter and three quarters ended September 30, 2022, respectively. See Note 15: Stock Options and Other Share-Based Compensation in our Fiscal 2022 Form 10-K for additional information regarding the L3Harris SIPs. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") | 9 Months Ended |
Sep. 29, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") | NOTE D: ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") The components of AOCL are summarized below: (In millions) Foreign currency translation Net unrealized losses on hedging derivatives Unrecognized postretirement obligations Total AOCL Balance at December 30, 2022 $ (237) $ (79) $ 28 $ (288) Other comprehensive (loss) income, before reclassifications to earnings and income taxes (10) 8 — (2) Income taxes — (2) — (2) Other comprehensive (loss) income before reclassifications to earnings, net of income taxes (10) 6 — (4) Losses (gains) reclassified to earnings, before income taxes — 3 (41) (38) Income taxes — (1) 10 9 Losses (gains) reclassified to earnings, net of income taxes (1) — 2 (31) (29) Other comprehensive (loss) income, net of income taxes (10) 8 (31) (33) Balance at September 29, 2023 $ (247) $ (71) $ (3) $ (321) Balance at December 31, 2021 $ (118) $ (89) $ 61 $ (146) Other comprehensive loss, before reclassifications to earnings and income taxes (196) (18) — (214) Income taxes — 4 — 4 Other comprehensive loss before reclassifications to earnings, net of income taxes (196) (14) — (210) Losses (gains) reclassified to earnings, before income taxes — 7 (18) (11) Income taxes — (2) 3 1 Losses (gains) reclassified to earnings, net of income taxes (1) — 5 (15) (10) Other comprehensive loss, net of income taxes (196) (9) (15) (220) Balance at September 30, 2022 $ (314) $ (98) $ 46 $ (366) _______________ (1) Losses (gains) reclassified to earnings are included in the “Revenue from product sales and services,” “Interest expense, net” and “Non-operating income, net ” line items in our Condensed Consolidated Statement of Operations. |
CONTRACT ASSETS AND CONTRACT LI
CONTRACT ASSETS AND CONTRACT LIABILITIES | 9 Months Ended |
Sep. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT ASSETS AND CONTRACT LIABILITIES | NOTE E: CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets include unbilled amounts typically resulting from revenue recognized exceeding amounts billed to customers for contracts utilizing the percentage of completion (“POC”) cost-to-cost revenue recognition method. We bill customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries and, in certain arrangements, the customer may withhold payment of a small portion of the contract price until contract completion. Contract liabilities include advance payments and billings in excess of revenue recognized, including deferred revenue associated with extended product warranties. Contract assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period. Contract assets and contract liabilities are summarized below: (In millions) September 29, 2023 December 30, 2022 Contract assets (1) $ 3,477 $ 2,987 Contract liabilities, current (2) (1,940) (1,400) Contract liabilities, non-current (3) (104) (117) Net contract assets $ 1,433 $ 1,470 _______________ (1) Includes approximately $386 million of AR contract assets at September 29, 2023. (2) Includes approximately $315 million of AR contract liabilities at September 29, 2023. (3) The non-current portion of contract liabilities is included as a component of the “Other long-term liabilities” line item in our Condensed Consolidated Balance Sheet. The components of contract assets are summarized below: (In millions) September 29, 2023 December 30, 2022 Unbilled contract receivables, gross $ 7,126 $ 4,629 Unliquidated progress payments and advances (3,649) (1,642) Contract assets $ 3,477 $ 2,987 Contract assets and liabilities as of September 29, 2023 and December 30, 2022 were impacted primarily by the timing of contractual billing milestones. Revenue recognized related to contract liabilities that were outstanding at the end of the respective prior fiscal year were $223 million and $1.12 billion for the quarter and three quarters ended September 29, 2023, respectively, and $196 million and $967 million for the quarter and three quarters ended September 30, 2022, respectively. NOTE N: BACKLOG Backlog, which is the equivalent of our remaining performance obligations, represents the future revenue we expect to recognize as we perform on our current contracts. Backlog comprises both funded backlog (i.e., firm orders for which funding is authorized and appropriated) and unfunded backlog. Backlog excludes unexercised contract options and potential orders under ordering-type contracts, such as indefinite delivery, indefinite quantity contracts. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 29, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE F: INVENTORIES Inventories are summarized below: (In millions) September 29, 2023 December 30, 2022 Finished products (1) $ 302 $ 181 Work in process 513 396 Materials and supplies 823 714 Inventories (1) $ 1,638 $ 1,291 _______________ (1) Includes approximately $114 million of TDL inventory of which $70 million is included in finished products at September 29, 2023. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE G: GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The assignment of goodwill and changes in the carrying amount of goodwill, by business segment, are as follows: (In millions) SAS IMS CS AR Total Balance at December 30, 2022 $ 5,778 $ 7,709 $ 3,796 $ — $ 17,283 Reallocation of goodwill in business realignment 327 (327) — — — Goodwill from TDL acquisition — — 1,117 — 1,117 Goodwill from AJRD acquisition — — — 2,348 2,348 Goodwill decrease from divestitures (1) (9) — — — (9) Currency translation adjustments (5) 2 — (3) Balance at September 29, 2023 $ 6,091 $ 7,384 $ 4,913 $ 2,348 $ 20,736 _______________ (1) During the three quarters ended September 29, 2023, we assigned an additional $9 million of goodwill to our VIS business and completed the divestiture. We derecognized $39 million of goodwill as part of determining the gain on sale. The assets (including goodwill) of VIS were included in the “Assets of business held for sale” line item in our Condensed Consolidated Balance Sheet at December 30, 2022. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Reallocation of Goodwill in Business Realignment. Effective December 31, 2022, we adjusted our reporting to better align our businesses and transferred our ADG business (a reporting unit) from our IMS segment to our SAS segment (also a reporting unit). In connection with the realignment, we reduced our reporting units from nine to eight as the ADG reporting unit and all $327 million of associated goodwill was absorbed by our existing SAS reporting unit given the economic similarities of the two reporting units. Immediately before the realignment, we performed a qualitative impairment assessment over our SAS reporting unit and a quantitative impairment assessment over our ADG reporting unit. Immediately after the realignment, we performed a quantitative impairment assessment over the SAS reporting unit. We prepared estimates of the fair value of our pre-realignment ADG reporting unit and post-realignment SAS reporting unit based on a combination of market-based valuation techniques, utilizing quoted market prices, comparable publicly reported transactions and an income-based valuation technique using projected discounted cash flows. These assessments indicated no impairment existed either before or after the realignment. Goodwill from TDL Acquisition. In connection with the January 3, 2023 acquisition of TDL, we recorded $1,117 million of goodwill in our Broadband reporting unit within our CS segment. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Goodwill from AJRD Acquisition. In connection with the July 28, 2023 acquisition of AJRD, we recorded $2,348 million of goodwill in our AR segment, which is also the AR reporting unit. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Fiscal 2022 Impairments. During the quarter ended September 30, 2022, we determined that goodwill related to our Broadband, ADG and Electro Optical reporting units was impaired and we recorded non-cash impairment charges of $355 million, $313 million and $134 million, respectively, in the “Impairment of goodwill and other assets” line item in our Condensed Consolidated Statement of Operations. See Note 9: Goodwill in our Fiscal 2022 Form 10-K for further information on our fiscal 2022 goodwill impairments. In conjunction with our 2023 business realignment, certain businesses within our ADG reporting unit were aligned with our Electro Optical and SAS reporting units. As such, fiscal 2022 impairment charges related to ADG and Electro Optical of $367 million and $80 million, are included in our Electro Optical and SAS reporting units, respectively, in our comparative financial results for the quarter and three quarters ended September 30, 2022. Intangible Assets Identifiable intangible assets, net are summarized below: September 29, 2023 December 30, 2022 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (1) Customer relationships $ 9,270 $ 2,658 $ 6,612 $ 6,124 $ 2,189 $ 3,935 Developed technologies 915 435 480 566 366 200 Contract backlog 2 1 1 1 1 — Trade names — divisions 215 61 154 95 53 42 Other 2 2 — 2 2 — Total finite-lived identifiable intangible assets 10,404 3,157 7,247 6,788 2,611 4,177 In-process research and development — — — 21 — 21 Trade names — corporate 1,803 — 1,803 1,803 — 1,803 Total identifiable intangible assets, net $ 12,207 $ 3,157 $ 9,050 $ 8,612 $ 2,611 $ 6,001 _______________ (1) During the three quarters ended September 29, 2023, we completed the divestiture of our VIS business. We derecognized $10 million of intangible assets as part of determining the gain on sale that was assigned during fiscal 2022. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Intangible assets acquired are as follows: TDL Acquisition AJRD Acquisition (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 406 $ 46 $ 360 $ 2,740 $ 37 $ 2,703 Developed technologies 349 15 334 — — — Trade names — divisions — — — 120 1 119 The most significant identifiable intangible asset that is separately recognized for our business combinations is customer relationships. For further description of our accounting policies related to intangible assets acquired in the TDL and AJRD acquisitions, see Note B: Acquisitions, Divestitures and Asset Sales in these Notes, and for our accounting policies related to all other intangible assets, see Note 10: Intangible Assets, Net in our Fiscal 2022 Form 10-K. Amortization expense for identifiable finite-lived intangible assets was $208 million and $546 million for the quarter and three quarters ended September 29, 2023, respectively, and was $151 million and $454 million, for the quarter and three quarters ended September 30, 2022, respectively, which primarily related to assets acquired in connection with business combinations. Future estimated amortization expense for identifiable intangible assets is as follows: (In millions) Year 1 $ 881 Year 2 805 Year 3 724 Year 4 572 Year 5 519 Thereafter 3,746 Total $ 7,247 In-process R&D Impairment. |
DEBT AND CREDIT ARRANGEMENTS
DEBT AND CREDIT ARRANGEMENTS | 9 Months Ended |
Sep. 29, 2023 | |
Debt Disclosure [Abstract] | |
DEBT AND CREDIT ARRANGEMENTS | NOTE H: DEBT AND CREDIT ARRANGEMENTS Long-Term Debt Long-term debt, net is summarized below: (In millions) September 29, 2023 December 30, 2022 Variable-rate debt: Floating rate notes, due March 10, 2023 (“Floating 2023 Notes”) $ — $ 250 Term loan, due November 21, 2025 2,250 — Fixed-rate debt: 3.85% notes, due June 15, 2023 (“3.85% 2023 Notes”) — 800 3.95% notes, due May 28, 2024 350 350 3.832% notes, due April 27, 2025 600 600 7.00% debentures, due January 15, 2026 100 100 3.85% notes, due December 15, 2026 550 550 5.40% notes, due January 15, 2027 (“5.4% 2027 Notes”) 1,250 — 6.35% debentures, due February 1, 2028 26 26 4.40% notes, due June 15, 2028 1,850 1,850 2.90% notes, due December 15, 2029 400 400 1.80% notes, due January 15, 2031 650 650 5.40% notes, due July 31, 2033 (“5.4% 2033 Notes”) 1,500 — 4.854% notes, due April 27, 2035 400 400 6.15% notes, due December 15, 2040 300 300 5.054% notes, due April 27, 2045 500 500 5.60% notes, due July 31, 2053 (“5.6% 2053 Notes”) 500 — Total variable and fixed-rate debt 11,226 6,776 Financing lease obligations and other debt 277 222 Total debt 11,503 6,998 Plus: unamortized bond premium 55 70 Less: unamortized discounts and issuance costs (55) (25) Total debt, net 11,503 7,043 Less: current portion of long-term debt, net (363) (818) Total long-term debt, net $ 11,140 $ 6,225 Long Term Debt Issued Variable Rate Debt. On November 22, 2022, we established a $2.25 billion, three-year senior unsecured term loan facility by entering into Term Loan 2025 with a syndicate of lenders that matures on November 21, 2025. On January 3, 2023, we drew $2.0 billion on Term Loan 2025 and utilized the proceeds to fund the cash consideration paid and a portion of the associated transaction and integration costs related to the TDL acquisition. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for further information on the TDL acquisition. On March 14, 2023, we drew an additional $250 million on Term Loan 2025 and utilized the proceeds to repay our Floating 2023 Notes. At September 29, 2023, we had $2.25 billion outstanding under Term Loan 2025. There were no borrowings outstanding under Term Loan 2025 at December 30, 2022. Borrowings under Term Loan 2025 bear interest at: (i) the sum of the term secured overnight financing rate (“SOFR”) for any tenor comparable to the applicable interest period, plus 0.10%, plus an applicable margin between 1.125% and 1.875% that varies based on ratings of our senior unsecured long-term debt securities (“Senior Debt Ratings”). At September 29, 2023, the interest rate on Term Loan 2025 was 6.7% (6.1% net of the impact of our interest rate cap derivative). See Note 19: Derivative Instruments and Hedging Activities in our Fiscal 2022 Form 10-K for further information on our interest rate cap derivative. Fixed Rate Debt. On July 31, 2023, we closed the issuance and sale of $3.25 billion aggregate principal amount of new long-term fixed-rate debt consisting of the 5.4% 2027 Notes, the 5.4% 2033 Notes and the 5.6% 2053 Notes (collectively, the “AJRD Notes”). The AJRD Notes were used to fund a portion of the purchase price for the AJRD acquisition, which closed on July 28, 2023 , and to pay related fees and expenses. Interest on the 5.4% 2027 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, commencing on January 15, 2024. Interest on the 5.4% 2033 Notes and 5.6% 2053 Notes is payable semi-annually in arrears on January 31 and July 31 of each year, commencing on January 31, 2024. We may redeem the 5.4% 2027 Notes, 5.4% 2033 Notes and 5.6% 2053 Notes prior to January 15, 2027, April 30, 2033 and January 31, 2053, respectively, in whole or in part, at our option, at a redemption price equal to the greater of: (i) the sum of the present values of the remaining scheduled payments of the principal and interest thereon discounted to the redemption date on a semi-annual basis at the “Treasury Rate,” as defined in the AJRD Notes, plus 15 basis points for the 5.4% 2027 Notes and 25 basis points for the 5.4% 2033 Notes and 5.6% 2053 Notes, less interest accrued to the date of redemption; (ii) or 100% of the principal amount of the respective notes plus, in either case, accrued interest and unpaid interest thereon to the redemption date. After April 30, 2033 and January 31, 2053, we may redeem the 5.4% 2033 Notes and the 5.6% 2053 Notes, respectively, at a redemption price equal to 100% of the principal amount being redeemed plus accrued and unpaid interest thereon to the redemption date. Upon a “Change of Control Repurchase Event,” as defined in the AJRD Notes, we may be required to make an offer to repurchase the AJRD Notes at a price equal to 101% of the aggregate principal amount of the notes being repurchased, plus accrued interest on the notes being repurchased to, but not including, the date of repurchase. We incurred the $9 million, $13 million, and $6 million of debt issuance costs for the 5.4% 2027 Notes, 5.4% 2033 Notes and 5.6% 2053 Notes, respectively, which are being amortized using the effective interest rate method over the life of each respective note. Such amortization is included as a component of the “Interest expense, net” line item in our Condensed Consolidated Statement of Operations. There were no issuances of variable and fixed-rate long-term debt during the three quarters ended September 30, 2022. Long-Term Debt Repayments On March 14, 2023, we repaid the entire outstanding $250 million aggregate principal amount of our Floating 2023 Notes through a $250 million draw on Term Loan 2025 as described above under “Long-Term Debt Issued.” The Floating 2023 Notes were classified as “Long-term debt, net” in our Condensed Consolidated Balance Sheet as of December 30, 2022. On June 15, 2023, we repaid the entire outstanding $800 million aggregate principal amount of our 3.85% 2023 Notes through cash on hand and the issuance of commercial paper during the three quarters ended September 29, 2023. There were no repayments of variable and fixed-rate long-term debt during the three quarters ended September 30, 2022. 2023 Credit Agreement On March 10, 2023, we established a $2.4 billion, 364-day senior unsecured revolving credit facility by entering into a 364-Day Credit Agreement (“2023 Credit Agreement”) with a syndicate of lenders. Proceeds of the initial funding of loans under the 2023 Credit Agreement were required to be used to finance a portion of the purchase price for the acquisition of AJRD and for the related fees, taxes, costs and expenses, and subsequent borrowings may be used for working capital purposes. At our election, borrowings under the 2023 Credit Agreement, which are designated in U.S. Dollars, bear interest at the sum of the term SOFR rate or the Base Rate (as defined in the 2023 Credit Agreement), plus an applicable margin. In addition to interest payable on the principal amount of indebtedness outstanding, beginning June 6, 2023, we are required to pay a quarterly unused commitment fee that varies based on our Senior Debt Ratings. The 2023 Credit Agreement also contains representations, warranties, covenants and events of default that are substantially similar to the existing Revolving Credit Agreement, dated as of July 29, 2022 (“2022 Credit Agreement”). The 2023 Credit Agreement matures on December 8, 2023, provided that we may extend the maturity of any loans outstanding under the 2023 Credit Agreement by one year, subject to the satisfaction of certain conditions. On July 28, 2023, we borrowed $2.1 billion under the 2023 Credit Agreement and used the proceeds together with proceeds from the AJRD Notes to fund the AJRD acquisition and to pay related fees and expenses. All borrowings under the 2023 Credit Agreement were repaid using proceeds from commercial paper during the quarter ended September 29, 2023. At September 29, 2023 we had no outstanding borrowings and were in compliance with all covenants under the 2023 Credit Agreement. For additional information regarding the 2023 Credit Agreement, see our Current Report on Form 8-K filed on March 16, 2023. 2022 Credit Agreement On July 29, 2022, we established a $2.0 billion, five-year senior unsecured revolving credit facility (“2022 Credit Facility”) under the 2022 Credit Agreement, with a syndicate of lenders. At September 29, 2023, we had no outstanding borrowings and were in compliance with all covenants under the 2022 Credit Agreement. For a description of the 2022 Credit Agreement and related covenants, see Note 12: Credit Arrangements in our Fiscal 2022 Form 10-K. Commercial Paper Program On March 14, 2023, we established a new commercial paper program (“CP Program”), which replaced our prior $1.0 billion commercial paper program. Under the CP Program, we may issue unsecured commercial paper notes up to a maximum aggregate amount of $3.9 billion, supported by amounts available under the 2022 Credit Agreement and the 2023 Credit Agreement. The commercial paper notes are sold at par less a discount representing an interest factor or, if interest bearing, at par, and the maturities vary but may not exceed 397 days from the date of issue. The commercial paper notes will rank at least pari passu with all other unsecured and unsubordinated indebtedness. At September 29, 2023, we had $2.0 billion in outstanding notes under our CP Program, primarily consisting of amounts used to repay $2.1 billion outstanding under the 2023 Credit Agreement and is included as a component of the “Short-term debt” line item in our Condensed Consolidated Balance Sheet. The outstanding notes have a weighted-average interest rate of 5.50% and mature at various dates, primarily in October 2023. Proceeds from issuance of commercial paper with maturities greater than 90 days were $701 million during the quarter and three quarters ended September 29, 2023. There were no repayments of commercial paper with maturities greater than 90 days during the quarter and three quarters ended September 29, 2023. During the quarter and three quarters ended September 30, 2022, we had no commercial paper borrowings with original maturities more than 90 days from the date of issuance. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | 9 Months Ended |
Sep. 29, 2023 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS | NOTE I: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The following tables provide the components of our net periodic benefit income for our defined benefit plans, including defined benefit pension plans and other postretirement defined benefit plans: Quarter Ended September 29, 2023 Three Quarters Ended September 29, 2023 (In millions) Pension Other Benefits Pension Other Benefits Net periodic benefit income Operating Service cost $ 10 $ — $ 22 $ 1 Non-operating Interest cost 100 3 283 8 Expected return on plan assets (162) (5) (467) (15) Amortization of net actuarial gain (2) (5) (7) (15) Amortization of prior service (credit) cost (7) — (20) 1 Non-service cost periodic benefit income (71) (7) (211) (21) Net periodic benefit income $ (61) $ (7) $ (189) $ (20) Quarter Ended September 30, 2022 Three Quarters Ended September 30, 2022 (In millions) Pension Other Benefits Pension Other Benefits Net periodic benefit income Operating Service cost $ 10 $ 1 $ 32 $ 2 Non-operating Interest cost 55 1 165 5 Expected return on plan assets (156) (5) (468) (16) Amortization of net actuarial loss (gain) 2 (1) 7 (5) Amortization of prior service (credit) cost (7) — (21) 1 Non-service cost periodic benefit income (106) (5) (317) (15) Net periodic benefit income $ (96) $ (4) $ (285) $ (13) The service cost component of net periodic benefit income is included in the “Cost of product sales and services” and “Engineering, selling and administrative expenses” line items in our Condensed Consolidated Statement of Operations. The non-service cost components of net periodic benefit income are included in the “Non-operating income, net” line item in our Condensed Consolidated Statement of Operations. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 29, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE J: EARNINGS PER SHARE Net income per common share attributable to L3Harris common shareholders (“EPS”) is computed by dividing earnings to L3Harris common shareholders less earnings allocated to participating securities, if applicable, by the weighted-average number of common shares outstanding for the period. Net income per diluted common share attributable to L3Harris common shareholders (“diluted EPS”) incorporates potential dilutive common shares, primarily consisting of employee stock options and restricted and performance share unit awards, into the weighted-average number of common shares outstanding. The weighted-average number of common shares outstanding used to compute basic and diluted EPS are as follows: Quarter Ended Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Basic weighted-average common shares outstanding 189.3 191.3 189.6 192.2 Impact of dilutive share-based awards 0.8 — 1.0 1.8 Diluted weighted-average common shares outstanding 190.1 191.3 190.6 194.0 The antidilutive impact excluded from diluted EPS for the quarter ended September 29, 2023 was immaterial. Diluted EPS excludes the antidilutive impact of 2.0 million weighted-average share-based awards outstanding for the three quarters ended September 29, 2023 and 1.9 million and 0.3 million weighted-average share-based awards outstanding for the quarter and three quarters ended September 30, 2022, respectively. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE K: INCOME TAXES Our effective tax rate was 4.5% for the quarter ended September 29, 2023 compared with 6.2% for the quarter ended September 30, 2022. For the quarter ended September 29, 2023, our effective tax rate benefited from the favorable impacts of R&D credits, foreign-derived intangible income (“FDII”) deductions and the resolution of specific audit uncertainties. For the quarter ended September 30, 2022, our effective tax rate benefited from the favorable impact of R&D credits, incremental FDII and the release of a valuation allowance in a foreign jurisdiction resulting from an internal restructuring, partially offset by the unfavorable impact of non-deductible goodwill impairments. Our effective tax rate was 6.4% for the three quarters ended September 29, 2023 compared with 13.0% for the three quarters ended September 30, 2022. For the three quarters ended September 29, 2023, our effective tax rate benefited from the favorable impacts of R&D credits, FDII deductions and the resolution of specific audit uncertainties. For the three quarters ended September 30, 2022, our effective tax rate was favorably impacted by a reduction in the deferred tax liabilities on the outside basis of certain foreign subsidiaries due to an internal restructuring, the favorable impact of excess tax benefits related to equity-based compensation and the items described above in this Note for the quarter ended September 30, 2022. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 29, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE L: FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Entities are required to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value and to utilize a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means. • Level 3 — Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability developed using the best information available in the circumstances. In certain instances, fair value is estimated using quoted market prices obtained from external pricing services. In obtaining such data from the external pricing services, we have evaluated the methodologies used to develop the estimate of fair value in order to assess whether such valuations are representative of fair value, including net asset value (“NAV”). Additionally, in certain circumstances, the NAV reported by an asset manager may be adjusted when sufficient evidence indicates NAV is not representative of fair value. The following table presents assets and liabilities measured at fair value on a recurring basis (at least annually) at September 29, 2023 and December 30, 2022: September 29, 2023 December 30, 2022 (In millions) Total Level 1 Total Level 1 Assets Deferred compensation plan assets: (1) Equity and fixed income securities $ 97 $ 97 $ 64 $ 64 Investments measured at NAV: Corporate-owned life insurance 36 33 Total fair value of deferred compensation plan assets $ 133 $ 97 Liabilities Deferred compensation plan liabilities: (2) Equity securities and mutual funds $ 14 $ 14 $ 8 $ 8 Investments measured at NAV: Common/collective trusts and guaranteed investment contracts 231 192 Total fair value of deferred compensation plan liabilities $ 245 $ 200 _______________ (1) Represents diversified assets held in “rabbi trusts” associated with our non-qualified deferred compensation plans, which we include in the “Other current assets” and “Other non-current assets” line items in our Condensed Consolidated Balance Sheet, and which are measured at fair value. (2) Primarily represents obligations to pay benefits under certain non-qualified deferred compensation plans, which we include in the “Compensation and benefits” and “Other long-term liabilities” line items in our Condensed Consolidated Balance Sheet. Under these plans, participants designate investment options (including stock and fixed-income funds), which serve as the basis for measurement of the notional value of their accounts. The following table presents the carrying amounts and estimated fair values of long-term debt that is not carried at fair value in our Condensed Consolidated Balance Sheet: September 29, 2023 December 30, 2022 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value Term Loan 2025 (1) $ 2,250 $ 2,250 $ — $ — All other long-term debt, net (including current portion) (2) 9,253 8,667 7,043 6,569 Total debt, net $ 11,503 $ 10,917 $ 7,043 $ 6,569 _______________ (1) The carrying value of Term Loan 2025 approximates fair value due to its variable interest rate. (2) The fair value was estimated using a market approach based on quoted market prices for our debt traded in the secondary market. If measured at fair value, it would be categorized in Level 2 of the fair value hierarchy. The fair value of our short-term debt approximates the carrying value due to its short-term nature, with commercial paper classified as level 2 and other short-term debt classified as level 3 within the fair value hierarchy. See Note G: Goodwill and Other Intangible Assets and Note B: Acquisitions, Divestitures and Asset Sales in these Notes and Note 4: Business Divestitures and Asset Sales in our Fiscal 2022 Form 10-K for additional information regarding fair value measurements associated with goodwill. |
CHANGES IN ESTIMATES
CHANGES IN ESTIMATES | 9 Months Ended |
Sep. 29, 2023 | |
Change in Accounting Estimate [Abstract] | |
CHANGES IN ESTIMATES | NOTE M: CHANGES IN ESTIMATES Many of our contracts utilize the POC cost-to-cost method of revenue recognition. A single estimated profit margin is used to recognize profit for each performance obligation over its period of performance. At the outset of each contract, we gauge its complexity and perceived risks and establish an estimated total cost at completion. Due to the long-term nature of many of these contracts, developing these estimates often requires judgment. After establishing the estimated total cost at completion, we follow a standard Estimate at Completion (“EAC”) process in which we review the progress and performance on our ongoing contracts at least quarterly and, in many cases, more frequently. As the contracts progress, we may successfully retire risks or complexities and may add additional risks, and we adjust our estimated total cost at completion. For additional discussion of our revenue recognition policies and our EAC process, see “Critical Accounting Estimates” in Part II: Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2022 Form 10K. Net EAC adjustments had the following impact to earnings for the periods presented: Quarter Ended Three Quarters Ended (In millions, except per share amounts) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Net EAC adjustments, before income taxes (1) $ (10) $ — $ (97) $ 58 Net EAC adjustments, net of income taxes (8) — (73) 44 Net EAC adjustments, net of income taxes, per diluted share (0.04) — (0.38) 0.23 _______________ (1) For the three quarters ended September 29, 2023 excludes charges of $48 million related to impairments of customer contracts that are included in the “Revenue from product sales and services” and “Impairment of goodwill and other assets” line items in our Condensed Consolidated Statement of Operations. |
BACKLOG
BACKLOG | 9 Months Ended |
Sep. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
BACKLOG | NOTE E: CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets include unbilled amounts typically resulting from revenue recognized exceeding amounts billed to customers for contracts utilizing the percentage of completion (“POC”) cost-to-cost revenue recognition method. We bill customers as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals, upon achievement of contractual milestones or upon deliveries and, in certain arrangements, the customer may withhold payment of a small portion of the contract price until contract completion. Contract liabilities include advance payments and billings in excess of revenue recognized, including deferred revenue associated with extended product warranties. Contract assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period. Contract assets and contract liabilities are summarized below: (In millions) September 29, 2023 December 30, 2022 Contract assets (1) $ 3,477 $ 2,987 Contract liabilities, current (2) (1,940) (1,400) Contract liabilities, non-current (3) (104) (117) Net contract assets $ 1,433 $ 1,470 _______________ (1) Includes approximately $386 million of AR contract assets at September 29, 2023. (2) Includes approximately $315 million of AR contract liabilities at September 29, 2023. (3) The non-current portion of contract liabilities is included as a component of the “Other long-term liabilities” line item in our Condensed Consolidated Balance Sheet. The components of contract assets are summarized below: (In millions) September 29, 2023 December 30, 2022 Unbilled contract receivables, gross $ 7,126 $ 4,629 Unliquidated progress payments and advances (3,649) (1,642) Contract assets $ 3,477 $ 2,987 Contract assets and liabilities as of September 29, 2023 and December 30, 2022 were impacted primarily by the timing of contractual billing milestones. Revenue recognized related to contract liabilities that were outstanding at the end of the respective prior fiscal year were $223 million and $1.12 billion for the quarter and three quarters ended September 29, 2023, respectively, and $196 million and $967 million for the quarter and three quarters ended September 30, 2022, respectively. NOTE N: BACKLOG Backlog, which is the equivalent of our remaining performance obligations, represents the future revenue we expect to recognize as we perform on our current contracts. Backlog comprises both funded backlog (i.e., firm orders for which funding is authorized and appropriated) and unfunded backlog. Backlog excludes unexercised contract options and potential orders under ordering-type contracts, such as indefinite delivery, indefinite quantity contracts. |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 9 Months Ended |
Sep. 29, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | NOTE O: 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; integrated electrical and electronic systems for maritime platforms; advanced electro-optical and infrared solutions; fuzing and ordnance systems; commercial aviation products; and commercial pilot training operations; • CS: including tactical communications with global communications solutions; broadband communications; tactical data links; integrated vision solutions; and public safety radios, and system applications and equipment; and • AR: including missile solutions with 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 December 31, 2022, we adjusted our reporting to better align our businesses and transferred our ADG business from our IMS segment to our SAS segment. See Note A: Basis of Presentation and Summary of Significant Accounting Policies in the Notes for further information. Acquisition of TDL. On January 3, 2023, we completed the acquisition of TDL, which is reported within our CS segment. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding our acquisition of TDL. Acquisition of AJRD and New Business Segment. On July 28, 2023, we completed the acquisition of AJRD. Upon completion of the acquisition, we established a new reportable segment, AR. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding our acquisition of AJRD. Business Segment Financial Information Segment revenue, segment operating income (loss) and a reconciliation of segment operating income (loss) to total income (loss) before income taxes are as follows: Quarter Ended Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Revenue from Product Sales and Services SAS $ 1,686 $ 1,593 $ 5,056 $ 4,682 IMS 1,568 1,630 5,003 4,897 CS 1,255 1,068 3,707 3,024 AR 455 ** 455 ** Corporate eliminations (49) (45) (142) (119) Total revenue from product sales and services $ 4,915 $ 4,246 $ 14,079 $ 12,484 Income (loss) before Income Taxes Segment operating income (loss): SAS (1) $ 210 $ 92 $ 565 $ 472 IMS (1) 187 (143) 534 315 CS 282 (97) 873 370 AR 56 ** 56 ** Total segment operating income (loss) 735 (148) 2,028 1,157 Unallocated Items: Unallocated corporate department (expense) income, net (2) 14 18 (27) 33 Amortization of acquisition-related intangibles (3) (208) (151) (546) (454) Additional cost of sales related to the fair value step-up in inventory sold — — (30) — Merger, acquisition, and divestiture related expenses (56) (31) (144) (117) Sale of asset group and business divestiture-related gains, net — — 26 8 Impairment of goodwill and other assets (4) — — (39) — LHX NeXt (5) (33) — (68) — Charges for severance and other termination costs — (29) — (29) Charge related to an additional pre-merger legal contingency — (31) — (31) FAS/CAS operating adjustment (6) 27 22 72 65 Total unallocated items (256) (202) (756) (525) Non-operating income, net 80 99 245 313 Interest expense, net (159) (70) (372) (205) Income (loss) before income taxes $ 400 $ (321) $ 1,145 $ 740 _______________ ** AR is a new 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) For the three quarters ended September 29, 2023, includes non-cash charges for impairment of other assets of $27 million and $12 million for SAS and IMS, respectively, related to restructuring of a customer contract impacting both segments and facility closures in IMS. (2) Includes certain corporate-level expenses that are not included in management’s evaluation of any segment’s operating performance. (3) Includes amortization of identifiable intangible assets acquired in connection with business combinations. Because our acquisitions benefited the entire Company, the amortization of identifiable intangible assets acquired was not allocated to any segment. (4) For the three quarters ended September 29, 2023, includes a $21 million non-cash charge for impairment of intangible assets related to the closure of a facility and an $18 million charge related to an impairment of a customer contract. See Note G: Goodwill and Other Intangible Assets in these Notes for additional information regarding impairment of intangible assets. (5) Costs associated with transforming multiple functions, systems and processes to increase agility and competitiveness, including third-party consulting, workforce optimization and incremental information technology (“IT”) expenses for implementation of new systems. (6) Represents the difference between the service cost component of Financial Accounting Standards (“FAS”) pension and other postretirement benefits (“OPEB”) cost and total U.S. Government Cost Accounting Standards (“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 FAS/CAS operating adjustment table below. 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-operating income, net” line item in our Condensed Consolidated Statement of Operations. See Note I: Pension and Other Postretirement Benefit Plans 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 Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 FAS pension service cost $ (10) $ (11) $ (23) $ (34) Less: CAS pension cost (37) (33) (95) (99) FAS/CAS operating adjustment 27 22 72 65 Non-service FAS pension income 78 111 232 332 FAS/CAS pension adjustment, net $ 105 $ 133 $ 304 $ 397 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 September 29, 2023 September 30, 2022 (In millions) SAS IMS CS AR SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 1,082 $ 962 $ 866 $ 113 $ 1,013 $ 1,089 $ 690 ** Subcontractor 592 585 374 342 565 525 364 ** Intersegment 12 21 15 — 15 16 14 ** Total revenue $ 1,686 $ 1,568 $ 1,255 $ 455 $ 1,593 $ 1,630 $ 1,068 ** Revenue By Contract Type Fixed-price (1) $ 1,040 $ 1,164 $ 1,047 $ 272 $ 939 $ 1,246 $ 899 ** Cost-reimbursable 634 383 193 183 639 368 155 ** Intersegment 12 21 15 — 15 16 14 ** Total revenue $ 1,686 $ 1,568 $ 1,255 $ 455 $ 1,593 $ 1,630 $ 1,068 ** Revenue By Geographical Region United States $ 1,478 $ 1,141 $ 874 $ 443 $ 1,414 $ 1,213 $ 706 ** International 196 406 366 12 164 401 348 ** Intersegment 12 21 15 — 15 16 14 ** Total revenue $ 1,686 $ 1,568 $ 1,255 $ 455 $ 1,593 $ 1,630 $ 1,068 ** Three Quarters Ended September 29, 2023 September 30, 2022 (In millions) SAS IMS CS AR SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 3,176 $ 3,243 $ 2,471 $ 113 $ 2,977 $ 3,210 $ 2,037 ** Subcontractor 1,845 1,694 1,196 342 1,669 1,636 954 ** Intersegment 35 66 40 — 36 51 33 ** Total revenue $ 5,056 $ 5,003 $ 3,707 $ 455 $ 4,682 $ 4,897 $ 3,024 ** Revenue By Contract Type Fixed-price (1) $ 3,161 $ 3,767 $ 3,127 $ 272 $ 2,737 $ 3,716 $ 2,530 ** Cost-reimbursable 1,860 1,170 540 183 1,909 1,130 461 ** Intersegment 35 66 40 — 36 51 33 ** Total revenue $ 5,056 $ 5,003 $ 3,707 $ 455 $ 4,682 $ 4,897 $ 3,024 ** Revenue By Geographical Region United States $ 4,407 $ 3,679 $ 2,499 $ 443 $ 4,136 $ 3,549 $ 1,962 ** International 614 1,258 1,168 12 510 1,297 1,029 ** Intersegment 35 66 40 — 36 51 33 ** Total revenue $ 5,056 $ 5,003 $ 3,707 $ 455 $ 4,682 $ 4,897 $ 3,024 ** _______________ ** AR is a new 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) September 29, 2023 December 30, 2022 Total Assets SAS $ 9,099 $ 8,838 IMS 10,869 10,925 CS 7,184 5,800 AR 4,078 ** Corporate (1) 11,063 7,961 Total Assets $ 42,293 $ 33,524 _______________ ** AR is a new 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) 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 $9.1 billion and $6.0 billion at September 29, 2023 and December 30, 2022, 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. |
LEGAL PROCEEDINGS AND CONTINGEN
LEGAL PROCEEDINGS AND CONTINGENCIES | 9 Months Ended |
Sep. 29, 2023 | |
Legal Proceedings And Contingencies [Abstract] | |
LEGAL PROCEEDINGS AND CONTINGENCIES | NOTE P: LEGAL PROCEEDINGS AND CONTINGENCIES In the ordinary course of business, we are routinely defendants in, parties to or otherwise subject to many pending and threatened legal actions, claims, disputes, arbitration and other legal proceedings incident to our business, arising from or related matters, including but not limited to: product liability; personal injury; patents, trademarks, trade secrets or other intellectual property; labor and employment disputes; commercial or contractual disputes; strategic acquisitions or divestitures; the prior sale or use of former products allegedly containing asbestos or other restricted materials; breach of warranty; and environmental matters. Claimed amounts against us may be substantial, but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitration awards. We accrue contingencies based on a range of possible outcomes. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Gain contingencies, if any, are recognized when they are realized and legal costs generally are expensed when incurred. At September 29, 2023, our accrual for the potential resolution of lawsuits, claims, or proceedings that we consider probable of being decided unfavorably to us was not material. Although it is not feasible to predict the outcome of these matters with certainty, it is reasonably possible that some lawsuits, claims or proceedings may be disposed of or decided unfavorably to us and in excess of the amounts currently accrued. Based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, that are considered probable of being rendered against us in litigation or arbitration in existence at September 29, 2023 are reserved against or would not have a material adverse effect on our financial condition, results of operations, cash flows or equity. Environmental Matters We are subject to numerous U.S. Federal, state, local and international environmental laws and regulatory requirements and are involved from time to time in investigations or litigation of various potential environmental issues. We or companies we have acquired, including AJRD, are responsible, or alleged to be responsible, for environmental investigation and/or remediation of multiple sites, including sites owned by us and third party sites. These sites are in various stages of investigation and/or remediation, and in some cases our liability is considered de minimis. Notices from the U.S. Environmental Protection Agency (“EPA”) or equivalent state or international environmental agencies allege that several sites formerly or currently owned and/or operated by us or companies we have acquired, and other properties or water supplies that may be or have been impacted from those operations, contain disposed or recycled materials or wastes and require environmental investigation and/or remediation. These sites include instances of being identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as the “Superfund Act”), the Resource Conservation Recovery Act and/or equivalent state and international laws, and in some instances, our liability and proportionate share of costs that may be shared among other PRPs have not been determined largely due to uncertainties as to the nature and extent of site conditions and our involvement. In conjunction with the acquisition of AJRD in the quarter ended September 29, 2023 we recognized $469 million of reserves for environmental remediation costs related to approximately 40 environmental matters associated with AJRD’s current and former facilities. The current and non-current portion of the reserves are included as a component of the “Other accrued items” and “Reserves for environmental remediation costs” line items, respectively, in our Condensed Consolidated Balance Sheet. Some of these environmental costs are eligible for future recovery in the pricing of our products and services to the U.S. government and under existing third party agreements. We consider the recovery probable based on U.S. government contracting regulations and existing third party agreements. We recognized $433 million for the recoverable portion of these reserves. The current and non-current portion of the recoverable costs are included as a component of the “Other current assets” and “Recoverable environmental remediation costs” line items, respectively, in in our Condensed Consolidated Balance Sheet. Our preliminary estimates and assumptions are subject to change as we obtain additional information during the measurement period (up to one year from the acquisition date); therefore, these provisional measurements of the assets acquired and liabilities assumed are subject to change. The largest acquired environmental matter is the Sacramento, California site. AJRD is subject to a Partial Consent Decree (“PCD”) related to this site which requires us, among other things, to conduct a Remedial Investigation and Feasibility Study to determine the nature and extent of impacts due to the release of chemicals from the Sacramento, California site, monitor the American River and offsite public water supply wells, operate Groundwater Extraction and Treatment facilities that collect groundwater at the site perimeter, and pay certain government oversight costs. The PCD required a guarantee up to $75 million (in addition to a prior $20 million guarantee) to assure that the Sacramento remediation activities are fully funded. Obligations under the $75 million aggregate guarantee are limited to $10 million in any year. Both the $75 million aggregate guarantee and the $10 million annual limitation are subject to adjustment annually for inflation. As of September 29, 2023, the estimated range of anticipated costs for the Sacramento, California site related to the PCD and other federal and state orders was $239 million to $372 million and the accrued amount was $239 million included as a component of the “Other accrued items” and “Reserves for environmental remediation costs” line item in in our Condensed Consolidated Balance Sheet . |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net income | $ 383 | $ (300) | $ 1,069 | $ 646 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 29, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 29, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | The accompanying Condensed Consolidated Financial Statements include the accounts of L3Harris Technologies, Inc. and its consolidated subsidiaries. As used in these notes to Condensed Consolidated Financial Statements (these “Notes”), the terms “L3Harris,” “Company,” “we,” “our” and “us” refer to L3Harris Technologies, Inc. and its consolidated subsidiaries. Intracompany transactions and accounts have been eliminated. The accompanying Condensed Consolidated Financial Statements have been prepared by L3Harris in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, such interim financial statements do not include all information and footnotes necessary for a complete presentation of financial condition, results of operations, cash flows and equity in conformity with GAAP for annual financial statements and are not necessarily indicative of the results that may be expected for the full fiscal year or any subsequent period. |
Business Realignment | Effective for fiscal 2023, which began December 31, 2022, we adjusted our reporting to better align our businesses and transferred our Agile Development Group (“ADG”) business from our Integrated Mission Systems (“IMS”) segment to our Space & Airborne Systems (“SAS”) segment.The historical results, discussion and presentation of our business segments as set forth in the accompanying Condensed Consolidated Financial Statements and these Notes reflect the impact of these changes for all periods presented in order to present segment information on a comparable basis. There is no impact on our previously reported consolidated statements of operations, balance sheets, statements of cash flows or statements of equity resulting from these changes. |
Acquisition of Aerojet Rocketdyne Holdings, Inc. (“AJRD”) and New Business Segment | Upon completion of the acquisition, we established a new reportable segment, Aerojet Rocketdyne (“AR”). The operations of AJRD are reported in the newly established AR segment and in our corporate segment. |
Use of Estimates | The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying Condensed Consolidated Financial Statements and these Notes and related disclosures. These estimates and assumptions are based on experience and other information available prior to issuance of the accompanying Condensed Consolidated Financial Statements and these Notes. Materially different results can occur as circumstances change and additional information becomes known. |
Accounting Standards Update | In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification (“ASC”) 2014-09, Revenue from Contracts with Customers (Topic 606) |
Earnings Per Share | Net income per common share attributable to L3Harris common shareholders (“EPS”) is computed by dividing earnings to L3Harris common shareholders less earnings allocated to participating securities, if applicable, by the weighted-average number of common shares outstanding for the period. Net income per diluted common share attributable to L3Harris common shareholders (“diluted EPS”) incorporates potential dilutive common shares, primarily consisting of employee stock options and restricted and performance share unit awards, into the weighted-average number of common shares outstanding. |
Fair Value Measurements | Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Entities are required to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value and to utilize a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means. • Level 3 — Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability developed using the best information available in the circumstances. In certain instances, fair value is estimated using quoted market prices obtained from external pricing services. In obtaining such data from the external pricing services, we have evaluated the methodologies used to develop the estimate of fair value in order to assess whether such valuations are representative of fair value, including net asset value (“NAV”). Additionally, in certain circumstances, the NAV reported by an asset manager may be adjusted when sufficient evidence indicates NAV is not representative of fair value. |
ACQUISITIONS, DIVESTITURES AN_2
ACQUISITIONS, DIVESTITURES AND ASSET SALES (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions Consideration Transferred | As of the acquisition date, the fair value of consideration transferred consisted of the following: (In millions) January 3, 2023 Purchase price $ 1,958 Estimated net working capital and other adjustments 15 Cash consideration paid 1,973 Settlement of preexisting relationship (1) 1 Fair value of consideration transferred $ 1,974 _______________ (1) Prior to the acquisition, we had a preexisting relationship with Viasat’s TDL business in the normal course of business. As of the acquisition date, our CS segment had a receivable from Viasat’s TDL business with a fair value of $1 million that was settled in connection with the acquisition. (In millions) July 28, 2023 Cash consideration paid for AJRD outstanding common stock & equity awards $ 4,748 AJRD debt settled by L3Harris 257 Cash consideration paid 5,005 Less cash acquired (290) Fair value of consideration transferred $ 4,715 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the acquisition date and the measurement period adjustments recorded since the acquisition date through September 29, 2023: January 3, 2023 (In millions) Preliminary Measurement Period Adjustments, Net 1,2 Preliminary Receivables $ 28 $ — $ 28 Contract assets 18 11 29 Inventories 164 (10) 154 Other current assets 9 — 9 Property, plant and equipment 50 — 50 Operating lease right-of-use assets 12 — 12 Goodwill 1,014 103 1,117 Other intangible assets 850 (95) 755 Deferred income taxes 33 3 36 Other non-current assets 6 (1) 5 Total assets acquired $ 2,184 $ 11 $ 2,195 Accounts payable $ 20 $ — $ 20 Contract liabilities 28 — 28 Compensation and benefits 2 — 2 Other accrued items 119 1 120 Operating lease liabilities 10 — 10 Other long-term liabilities 31 10 41 Total liabilities assumed $ 210 $ 11 $ 221 Net assets acquired $ 1,974 $ — $ 1,974 _______________ (1) Fair value adjustments primarily related to refined assumptions in the valuation of customer relationship intangible assets. (2) Assets acquired include $11 million of Contract assets that were reclassified from Inventories to Contract assets to conform TDL’s accounting policies with those of L3Harris, as required under ASC 805. As such, reclassified amounts will not be recognized as revenue in future periods. The following table summarizes the preliminary allocation of the fair value of consideration transferred to assets acquired and liabilities assumed as of the acquisition date: (In millions) July 28, 2023 Receivables $ 156 Contract assets 338 Inventories 14 Income taxes receivable 3 Other current assets 114 Property, plant and equipment 574 Operating lease right-of-use assets 51 Goodwill 2,348 Other intangible assets 2,860 Recoverable environmental remediation costs 383 Other non-current assets 175 Total assets acquired $ 7,016 Accounts payable 145 Contract liabilities 310 Compensation and benefits 116 Income taxes payable 6 Current portion of long-term debt, net 1 Other accrued items 278 Defined benefit plans 223 Operating lease liabilities 40 Long-term debt, net 41 Deferred income taxes 398 Reserves for environmental remediation costs 417 Other long-term liabilities 326 Total liabilities assumed $ 2,301 Fair value of consideration transferred $ 4,715 |
Schedule of Identifiable Intangible Assets Acquired | The preliminary fair value of identifiable intangible assets acquired as of the acquisition date is as follows: Total Useful Lives (In millions) (In Years) Developed technology $ 349 17 Customer relationships: (1) Backlog 83 2 Government programs 323 16 Total customer relationships 406 Total identifiable intangible assets acquired $ 755 _______________ (1) TDL had backlog and government programs intangible assets that we classified as customer relationships. Total Useful Lives (In millions) (In Years) Trade names $ 120 10 - 20 Customer relationships: (1) Backlog 360 3 - 4 Government programs 2,380 15 - 25 Total customer relationships 2,740 Total identifiable intangible assets acquired $ 2,860 _______________ (1) AJRD had backlog and government programs intangible assets that we classified as customer relationships. |
Schedule of Pro Forma Results | The following table includes revenue and income before income taxes of TDL included in our Condensed Consolidated Statement of Operations for the quarter ended September 29, 2023 and for the acquisition date through September 29, 2023 and the comparable periods of calendar year 2022. The comparable period results do not include any integration synergies or accounting conformity adjustments and are not necessarily indicative of our results of operations that actually would have been obtained had the acquisition of TDL been completed for the period presented, or which may be realized in the future. Quarter Ended Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Revenue $ 97 $ 105 $ 261 $ 290 Income before income taxes 38 30 86 55 Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 Revenue $ 1,740 $ 1,589 Income before income taxes 156 180 |
STOCK OPTIONS AND OTHER SHARE_2
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Awards Granted, Stock Option and Units | Awards granted to participants under L3Harris SIPs and the weighted-average grant-date fair value per share during the three quarters ended September 29, 2023 and September 30, 2022 are as follows: Three Quarters Ended September 29, 2023 Three Quarters Ended September 30, 2022 (In millions, except per share amounts) Shares Weighted-Average Grant-Date Fair Value Shares Weighted-Average Grant-Date Fair Value Stock options granted (1) 0.4 $ 209.88 0.4 $ 231.71 Restricted stock and restricted stock units granted (2) 0.3 $ 200.61 0.3 $ 224.79 Performance share units grants (3) 0.2 $ 223.09 0.2 $ 258.83 _______________ (1) Other than certain stock options granted in connection with new hires, our stock options generally ratably vest in equal amounts over a three-year period. (2) Other than certain restricted stock units granted in connection with new hires, our restricted stock units generally cliff vest after three-years. (3) Our performance share units are subject to performance criteria and generally vest after the three-year performance period. |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Equity [Abstract] | |
Schedule of Components of AOCI | The components of AOCL are summarized below: (In millions) Foreign currency translation Net unrealized losses on hedging derivatives Unrecognized postretirement obligations Total AOCL Balance at December 30, 2022 $ (237) $ (79) $ 28 $ (288) Other comprehensive (loss) income, before reclassifications to earnings and income taxes (10) 8 — (2) Income taxes — (2) — (2) Other comprehensive (loss) income before reclassifications to earnings, net of income taxes (10) 6 — (4) Losses (gains) reclassified to earnings, before income taxes — 3 (41) (38) Income taxes — (1) 10 9 Losses (gains) reclassified to earnings, net of income taxes (1) — 2 (31) (29) Other comprehensive (loss) income, net of income taxes (10) 8 (31) (33) Balance at September 29, 2023 $ (247) $ (71) $ (3) $ (321) Balance at December 31, 2021 $ (118) $ (89) $ 61 $ (146) Other comprehensive loss, before reclassifications to earnings and income taxes (196) (18) — (214) Income taxes — 4 — 4 Other comprehensive loss before reclassifications to earnings, net of income taxes (196) (14) — (210) Losses (gains) reclassified to earnings, before income taxes — 7 (18) (11) Income taxes — (2) 3 1 Losses (gains) reclassified to earnings, net of income taxes (1) — 5 (15) (10) Other comprehensive loss, net of income taxes (196) (9) (15) (220) Balance at September 30, 2022 $ (314) $ (98) $ 46 $ (366) _______________ (1) Losses (gains) reclassified to earnings are included in the “Revenue from product sales and services,” “Interest expense, net” and “Non-operating income, net ” line items in our Condensed Consolidated Statement of Operations. |
CONTRACT ASSETS AND CONTRACT _2
CONTRACT ASSETS AND CONTRACT LIABILITIES (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets and Contract Liabilities | Contract assets and contract liabilities are summarized below: (In millions) September 29, 2023 December 30, 2022 Contract assets (1) $ 3,477 $ 2,987 Contract liabilities, current (2) (1,940) (1,400) Contract liabilities, non-current (3) (104) (117) Net contract assets $ 1,433 $ 1,470 _______________ (1) Includes approximately $386 million of AR contract assets at September 29, 2023. (2) Includes approximately $315 million of AR contract liabilities at September 29, 2023. (3) The non-current portion of contract liabilities is included as a component of the “Other long-term liabilities” line item in our Condensed Consolidated Balance Sheet. The components of contract assets are summarized below: (In millions) September 29, 2023 December 30, 2022 Unbilled contract receivables, gross $ 7,126 $ 4,629 Unliquidated progress payments and advances (3,649) (1,642) Contract assets $ 3,477 $ 2,987 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are summarized below: (In millions) September 29, 2023 December 30, 2022 Finished products (1) $ 302 $ 181 Work in process 513 396 Materials and supplies 823 714 Inventories (1) $ 1,638 $ 1,291 _______________ (1) Includes approximately $114 million of TDL inventory of which $70 million is included in finished products at September 29, 2023. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amounts of Goodwill | The assignment of goodwill and changes in the carrying amount of goodwill, by business segment, are as follows: (In millions) SAS IMS CS AR Total Balance at December 30, 2022 $ 5,778 $ 7,709 $ 3,796 $ — $ 17,283 Reallocation of goodwill in business realignment 327 (327) — — — Goodwill from TDL acquisition — — 1,117 — 1,117 Goodwill from AJRD acquisition — — — 2,348 2,348 Goodwill decrease from divestitures (1) (9) — — — (9) Currency translation adjustments (5) 2 — (3) Balance at September 29, 2023 $ 6,091 $ 7,384 $ 4,913 $ 2,348 $ 20,736 _______________ (1) During the three quarters ended September 29, 2023, we assigned an additional $9 million of goodwill to our VIS business and completed the divestiture. We derecognized $39 million of goodwill as part of determining the gain on sale. The assets (including goodwill) of VIS were included in the “Assets of business held for sale” line item in our Condensed Consolidated Balance Sheet at December 30, 2022. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for further information. |
Schedule of Indefinite-Lived Intangible Assets | Identifiable intangible assets, net are summarized below: September 29, 2023 December 30, 2022 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (1) Customer relationships $ 9,270 $ 2,658 $ 6,612 $ 6,124 $ 2,189 $ 3,935 Developed technologies 915 435 480 566 366 200 Contract backlog 2 1 1 1 1 — Trade names — divisions 215 61 154 95 53 42 Other 2 2 — 2 2 — Total finite-lived identifiable intangible assets 10,404 3,157 7,247 6,788 2,611 4,177 In-process research and development — — — 21 — 21 Trade names — corporate 1,803 — 1,803 1,803 — 1,803 Total identifiable intangible assets, net $ 12,207 $ 3,157 $ 9,050 $ 8,612 $ 2,611 $ 6,001 _______________ (1) During the three quarters ended September 29, 2023, we completed the divestiture of our VIS business. We derecognized $10 million of intangible assets as part of determining the gain on sale that was assigned during fiscal 2022. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for further information. |
Schedule of Finite-Lived Intangible Assets | Identifiable intangible assets, net are summarized below: September 29, 2023 December 30, 2022 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (1) Customer relationships $ 9,270 $ 2,658 $ 6,612 $ 6,124 $ 2,189 $ 3,935 Developed technologies 915 435 480 566 366 200 Contract backlog 2 1 1 1 1 — Trade names — divisions 215 61 154 95 53 42 Other 2 2 — 2 2 — Total finite-lived identifiable intangible assets 10,404 3,157 7,247 6,788 2,611 4,177 In-process research and development — — — 21 — 21 Trade names — corporate 1,803 — 1,803 1,803 — 1,803 Total identifiable intangible assets, net $ 12,207 $ 3,157 $ 9,050 $ 8,612 $ 2,611 $ 6,001 _______________ (1) During the three quarters ended September 29, 2023, we completed the divestiture of our VIS business. We derecognized $10 million of intangible assets as part of determining the gain on sale that was assigned during fiscal 2022. See Note B: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Intangible assets acquired are as follows: TDL Acquisition AJRD Acquisition (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships $ 406 $ 46 $ 360 $ 2,740 $ 37 $ 2,703 Developed technologies 349 15 334 — — — Trade names — divisions — — — 120 1 119 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future estimated amortization expense for identifiable intangible assets is as follows: (In millions) Year 1 $ 881 Year 2 805 Year 3 724 Year 4 572 Year 5 519 Thereafter 3,746 Total $ 7,247 |
DEBT AND CREDIT ARRANGEMENTS (T
DEBT AND CREDIT ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt, Net | Long-term debt, net is summarized below: (In millions) September 29, 2023 December 30, 2022 Variable-rate debt: Floating rate notes, due March 10, 2023 (“Floating 2023 Notes”) $ — $ 250 Term loan, due November 21, 2025 2,250 — Fixed-rate debt: 3.85% notes, due June 15, 2023 (“3.85% 2023 Notes”) — 800 3.95% notes, due May 28, 2024 350 350 3.832% notes, due April 27, 2025 600 600 7.00% debentures, due January 15, 2026 100 100 3.85% notes, due December 15, 2026 550 550 5.40% notes, due January 15, 2027 (“5.4% 2027 Notes”) 1,250 — 6.35% debentures, due February 1, 2028 26 26 4.40% notes, due June 15, 2028 1,850 1,850 2.90% notes, due December 15, 2029 400 400 1.80% notes, due January 15, 2031 650 650 5.40% notes, due July 31, 2033 (“5.4% 2033 Notes”) 1,500 — 4.854% notes, due April 27, 2035 400 400 6.15% notes, due December 15, 2040 300 300 5.054% notes, due April 27, 2045 500 500 5.60% notes, due July 31, 2053 (“5.6% 2053 Notes”) 500 — Total variable and fixed-rate debt 11,226 6,776 Financing lease obligations and other debt 277 222 Total debt 11,503 6,998 Plus: unamortized bond premium 55 70 Less: unamortized discounts and issuance costs (55) (25) Total debt, net 11,503 7,043 Less: current portion of long-term debt, net (363) (818) Total long-term debt, net $ 11,140 $ 6,225 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Benefit Income | The following tables provide the components of our net periodic benefit income for our defined benefit plans, including defined benefit pension plans and other postretirement defined benefit plans: Quarter Ended September 29, 2023 Three Quarters Ended September 29, 2023 (In millions) Pension Other Benefits Pension Other Benefits Net periodic benefit income Operating Service cost $ 10 $ — $ 22 $ 1 Non-operating Interest cost 100 3 283 8 Expected return on plan assets (162) (5) (467) (15) Amortization of net actuarial gain (2) (5) (7) (15) Amortization of prior service (credit) cost (7) — (20) 1 Non-service cost periodic benefit income (71) (7) (211) (21) Net periodic benefit income $ (61) $ (7) $ (189) $ (20) Quarter Ended September 30, 2022 Three Quarters Ended September 30, 2022 (In millions) Pension Other Benefits Pension Other Benefits Net periodic benefit income Operating Service cost $ 10 $ 1 $ 32 $ 2 Non-operating Interest cost 55 1 165 5 Expected return on plan assets (156) (5) (468) (16) Amortization of net actuarial loss (gain) 2 (1) 7 (5) Amortization of prior service (credit) cost (7) — (21) 1 Non-service cost periodic benefit income (106) (5) (317) (15) Net periodic benefit income $ (96) $ (4) $ (285) $ (13) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The weighted-average number of common shares outstanding used to compute basic and diluted EPS are as follows: Quarter Ended Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Basic weighted-average common shares outstanding 189.3 191.3 189.6 192.2 Impact of dilutive share-based awards 0.8 — 1.0 1.8 Diluted weighted-average common shares outstanding 190.1 191.3 190.6 194.0 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents assets and liabilities measured at fair value on a recurring basis (at least annually) at September 29, 2023 and December 30, 2022: September 29, 2023 December 30, 2022 (In millions) Total Level 1 Total Level 1 Assets Deferred compensation plan assets: (1) Equity and fixed income securities $ 97 $ 97 $ 64 $ 64 Investments measured at NAV: Corporate-owned life insurance 36 33 Total fair value of deferred compensation plan assets $ 133 $ 97 Liabilities Deferred compensation plan liabilities: (2) Equity securities and mutual funds $ 14 $ 14 $ 8 $ 8 Investments measured at NAV: Common/collective trusts and guaranteed investment contracts 231 192 Total fair value of deferred compensation plan liabilities $ 245 $ 200 _______________ (1) Represents diversified assets held in “rabbi trusts” associated with our non-qualified deferred compensation plans, which we include in the “Other current assets” and “Other non-current assets” line items in our Condensed Consolidated Balance Sheet, and which are measured at fair value. (2) Primarily represents obligations to pay benefits under certain non-qualified deferred compensation plans, which we include in the “Compensation and benefits” and “Other long-term liabilities” line items in our Condensed Consolidated Balance Sheet. Under these plans, participants designate investment options (including stock and fixed-income funds), which serve as the basis for measurement of the notional value of their accounts. |
Schedule of Fair Value, Long-term Debt | The following table presents the carrying amounts and estimated fair values of long-term debt that is not carried at fair value in our Condensed Consolidated Balance Sheet: September 29, 2023 December 30, 2022 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value Term Loan 2025 (1) $ 2,250 $ 2,250 $ — $ — All other long-term debt, net (including current portion) (2) 9,253 8,667 7,043 6,569 Total debt, net $ 11,503 $ 10,917 $ 7,043 $ 6,569 _______________ (1) The carrying value of Term Loan 2025 approximates fair value due to its variable interest rate. (2) The fair value was estimated using a market approach based on quoted market prices for our debt traded in the secondary market. If measured at fair value, it would be categorized in Level 2 of the fair value hierarchy. |
CHANGES IN ESTIMATES (Tables)
CHANGES IN ESTIMATES (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Change in Accounting Estimate [Abstract] | |
Schedule of Net Estimated at Completion ("EAC") Adjustments | Net EAC adjustments had the following impact to earnings for the periods presented: Quarter Ended Three Quarters Ended (In millions, except per share amounts) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Net EAC adjustments, before income taxes (1) $ (10) $ — $ (97) $ 58 Net EAC adjustments, net of income taxes (8) — (73) 44 Net EAC adjustments, net of income taxes, per diluted share (0.04) — (0.38) 0.23 _______________ (1) For the three quarters ended September 29, 2023 excludes charges of $48 million related to impairments of customer contracts that are included in the “Revenue from product sales and services” and “Impairment of goodwill and other assets” line items in our Condensed Consolidated Statement of Operations. |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 29, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Selected Financial Information by Business Segments | Segment revenue, segment operating income (loss) and a reconciliation of segment operating income (loss) to total income (loss) before income taxes are as follows: Quarter Ended Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 Revenue from Product Sales and Services SAS $ 1,686 $ 1,593 $ 5,056 $ 4,682 IMS 1,568 1,630 5,003 4,897 CS 1,255 1,068 3,707 3,024 AR 455 ** 455 ** Corporate eliminations (49) (45) (142) (119) Total revenue from product sales and services $ 4,915 $ 4,246 $ 14,079 $ 12,484 Income (loss) before Income Taxes Segment operating income (loss): SAS (1) $ 210 $ 92 $ 565 $ 472 IMS (1) 187 (143) 534 315 CS 282 (97) 873 370 AR 56 ** 56 ** Total segment operating income (loss) 735 (148) 2,028 1,157 Unallocated Items: Unallocated corporate department (expense) income, net (2) 14 18 (27) 33 Amortization of acquisition-related intangibles (3) (208) (151) (546) (454) Additional cost of sales related to the fair value step-up in inventory sold — — (30) — Merger, acquisition, and divestiture related expenses (56) (31) (144) (117) Sale of asset group and business divestiture-related gains, net — — 26 8 Impairment of goodwill and other assets (4) — — (39) — LHX NeXt (5) (33) — (68) — Charges for severance and other termination costs — (29) — (29) Charge related to an additional pre-merger legal contingency — (31) — (31) FAS/CAS operating adjustment (6) 27 22 72 65 Total unallocated items (256) (202) (756) (525) Non-operating income, net 80 99 245 313 Interest expense, net (159) (70) (372) (205) Income (loss) before income taxes $ 400 $ (321) $ 1,145 $ 740 _______________ ** AR is a new 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) For the three quarters ended September 29, 2023, includes non-cash charges for impairment of other assets of $27 million and $12 million for SAS and IMS, respectively, related to restructuring of a customer contract impacting both segments and facility closures in IMS. (2) Includes certain corporate-level expenses that are not included in management’s evaluation of any segment’s operating performance. (3) Includes amortization of identifiable intangible assets acquired in connection with business combinations. Because our acquisitions benefited the entire Company, the amortization of identifiable intangible assets acquired was not allocated to any segment. (4) For the three quarters ended September 29, 2023, includes a $21 million non-cash charge for impairment of intangible assets related to the closure of a facility and an $18 million charge related to an impairment of a customer contract. See Note G: Goodwill and Other Intangible Assets in these Notes for additional information regarding impairment of intangible assets. (5) Costs associated with transforming multiple functions, systems and processes to increase agility and competitiveness, including third-party consulting, workforce optimization and incremental information technology (“IT”) expenses for implementation of new systems. (6) Represents the difference between the service cost component of Financial Accounting Standards (“FAS”) pension and other postretirement benefits (“OPEB”) cost and total U.S. Government Cost Accounting Standards (“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 FAS/CAS operating adjustment table below. The table below is a reconciliation of the FAS/CAS operating adjustment: Quarter Ended Three Quarters Ended (In millions) September 29, 2023 September 30, 2022 September 29, 2023 September 30, 2022 FAS pension service cost $ (10) $ (11) $ (23) $ (34) Less: CAS pension cost (37) (33) (95) (99) FAS/CAS operating adjustment 27 22 72 65 Non-service FAS pension income 78 111 232 332 FAS/CAS pension adjustment, net $ 105 $ 133 $ 304 $ 397 |
Schedule of Disaggregation of Revenue by Segment | 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 September 29, 2023 September 30, 2022 (In millions) SAS IMS CS AR SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 1,082 $ 962 $ 866 $ 113 $ 1,013 $ 1,089 $ 690 ** Subcontractor 592 585 374 342 565 525 364 ** Intersegment 12 21 15 — 15 16 14 ** Total revenue $ 1,686 $ 1,568 $ 1,255 $ 455 $ 1,593 $ 1,630 $ 1,068 ** Revenue By Contract Type Fixed-price (1) $ 1,040 $ 1,164 $ 1,047 $ 272 $ 939 $ 1,246 $ 899 ** Cost-reimbursable 634 383 193 183 639 368 155 ** Intersegment 12 21 15 — 15 16 14 ** Total revenue $ 1,686 $ 1,568 $ 1,255 $ 455 $ 1,593 $ 1,630 $ 1,068 ** Revenue By Geographical Region United States $ 1,478 $ 1,141 $ 874 $ 443 $ 1,414 $ 1,213 $ 706 ** International 196 406 366 12 164 401 348 ** Intersegment 12 21 15 — 15 16 14 ** Total revenue $ 1,686 $ 1,568 $ 1,255 $ 455 $ 1,593 $ 1,630 $ 1,068 ** Three Quarters Ended September 29, 2023 September 30, 2022 (In millions) SAS IMS CS AR SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 3,176 $ 3,243 $ 2,471 $ 113 $ 2,977 $ 3,210 $ 2,037 ** Subcontractor 1,845 1,694 1,196 342 1,669 1,636 954 ** Intersegment 35 66 40 — 36 51 33 ** Total revenue $ 5,056 $ 5,003 $ 3,707 $ 455 $ 4,682 $ 4,897 $ 3,024 ** Revenue By Contract Type Fixed-price (1) $ 3,161 $ 3,767 $ 3,127 $ 272 $ 2,737 $ 3,716 $ 2,530 ** Cost-reimbursable 1,860 1,170 540 183 1,909 1,130 461 ** Intersegment 35 66 40 — 36 51 33 ** Total revenue $ 5,056 $ 5,003 $ 3,707 $ 455 $ 4,682 $ 4,897 $ 3,024 ** Revenue By Geographical Region United States $ 4,407 $ 3,679 $ 2,499 $ 443 $ 4,136 $ 3,549 $ 1,962 ** International 614 1,258 1,168 12 510 1,297 1,029 ** Intersegment 35 66 40 — 36 51 33 ** Total revenue $ 5,056 $ 5,003 $ 3,707 $ 455 $ 4,682 $ 4,897 $ 3,024 ** _______________ ** AR is a new 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. |
Schedule of Total Assets by Segment | Total assets by business segment are as follows: (In millions) September 29, 2023 December 30, 2022 Total Assets SAS $ 9,099 $ 8,838 IMS 10,869 10,925 CS 7,184 5,800 AR 4,078 ** Corporate (1) 11,063 7,961 Total Assets $ 42,293 $ 33,524 _______________ ** AR is a new 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) 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 $9.1 billion and $6.0 billion at September 29, 2023 and December 30, 2022, respectively. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan investments, buildings and equipment, real estate held for development and leasing, as well as any assets of businesses held for sale. |
ACQUISITIONS, DIVESTITURES AN_3
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of TDL - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Jan. 03, 2023 | Nov. 22, 2022 | Sep. 29, 2023 | Sep. 29, 2023 | Sep. 29, 2023 | Dec. 30, 2022 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 20,736 | $ 20,736 | $ 20,736 | $ 17,283 | ||
CS | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 4,913 | 4,913 | 4,913 | $ 3,796 | ||
Secured Debt | Term loan, due November 21, 2025 | ||||||
Business Acquisition [Line Items] | ||||||
Debt instrument term | 3 years | |||||
Secured Debt | Term loan, due November 21, 2025 | Line of Credit | ||||||
Business Acquisition [Line Items] | ||||||
Debt issued | $ 2,250 | 2,250 | 2,250 | 2,250 | ||
Tactical Data Links (TDL) Product Line | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | $ 1,958 | |||||
Provision for loss on customer contracts | 86 | 86 | 86 | |||
Loss provision amortization expense | 15 | 29 | ||||
Total liabilities assumed | 64 | 11 | ||||
Revenue from amortization of off-market contract liability | 7 | 22 | ||||
Future estimated revenue from the amortization of off-market contract liabilities, remainder of fiscal year | 11 | 11 | 11 | |||
Future estimated revenue from the amortization of off-market contract liabilities, year one | 22 | 22 | 22 | |||
Goodwill | $ 1,117 | |||||
Acquisition related costs | 10 | 64 | ||||
Tactical Data Links (TDL) Product Line | CS | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 1,117 | 1,117 | $ 1,117 | |||
Tactical Data Links (TDL) Product Line | Other Accrued Liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Total liabilities assumed | 33 | |||||
Tactical Data Links (TDL) Product Line | Other Noncurrent Liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Total liabilities assumed | $ 31 |
ACQUISITIONS, DIVESTITURES AN_4
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of TDL - Calculation of Consideration Transferred (Details) - Tactical Data Links (TDL) Product Line $ in Millions | Jan. 03, 2023 USD ($) |
Business Acquisition [Line Items] | |
Purchase price | $ 1,958 |
Estimated net working capital and other adjustments | 15 |
Cash consideration paid | 1,973 |
Settlement of preexisting relationship | 1 |
Fair value of consideration transferred | $ 1,974 |
ACQUISITIONS, DIVESTITURES AN_5
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of TDL - Assets Acquired, Liabilities Assumed (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 29, 2023 | Sep. 29, 2023 | Jan. 03, 2023 | Dec. 30, 2022 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Goodwill | $ 20,736 | $ 20,736 | $ 17,283 | |
Tactical Data Links (TDL) Product Line | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Receivables | $ 28 | |||
Contract assets | 29 | |||
Inventories | 154 | |||
Other current assets | 9 | |||
Property, plant and equipment | 50 | |||
Operating lease right-of-use assets | 12 | |||
Goodwill | 1,117 | |||
Other intangible assets | 755 | |||
Deferred income taxes | 36 | |||
Other non-current assets | 5 | |||
Total assets acquired | 2,195 | |||
Accounts payable | 20 | |||
Contract liabilities | 28 | |||
Compensation and benefits | 2 | |||
Other accrued items | 120 | |||
Operating lease liabilities | 10 | |||
Other long-term liabilities | 41 | |||
Total liabilities assumed | 221 | |||
Net assets acquired | 1,974 | |||
Measurement Period Adjustments, Net | ||||
Contract assets | 11 | |||
Inventories | (10) | |||
Goodwill | 103 | |||
Other intangible assets | (95) | |||
Deferred income taxes | 3 | |||
Other non-current assets | (1) | |||
Total assets acquired | 11 | |||
Other accrued items | 1 | |||
Other long-term liabilities | 10 | |||
Total liabilities assumed | $ 64 | 11 | ||
Net assets acquired | $ 0 | |||
Tactical Data Links (TDL) Product Line | Preliminary | ||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||
Receivables | 28 | |||
Contract assets | 18 | |||
Inventories | 164 | |||
Other current assets | 9 | |||
Property, plant and equipment | 50 | |||
Operating lease right-of-use assets | 12 | |||
Goodwill | 1,014 | |||
Other intangible assets | 850 | |||
Deferred income taxes | 33 | |||
Other non-current assets | 6 | |||
Total assets acquired | 2,184 | |||
Accounts payable | 20 | |||
Contract liabilities | 28 | |||
Compensation and benefits | 2 | |||
Other accrued items | 119 | |||
Operating lease liabilities | 10 | |||
Other long-term liabilities | 31 | |||
Total liabilities assumed | 210 | |||
Net assets acquired | $ 1,974 |
ACQUISITIONS, DIVESTITURES AN_6
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of TDL - Identifiable Intangible Assets Acquired (Details) - Tactical Data Links (TDL) Product Line $ in Millions | Jan. 03, 2023 USD ($) |
Business Acquisition [Line Items] | |
Total identifiable intangible assets acquired | $ 755 |
Developed technology | |
Business Acquisition [Line Items] | |
Identifiable finite-lived intangible assets acquired | $ 349 |
Weighted average amortization period | 17 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Identifiable finite-lived intangible assets acquired | $ 406 |
Backlog | |
Business Acquisition [Line Items] | |
Identifiable finite-lived intangible assets acquired | $ 83 |
Weighted average amortization period | 2 years |
Government programs | |
Business Acquisition [Line Items] | |
Identifiable finite-lived intangible assets acquired | $ 323 |
Weighted average amortization period | 16 years |
ACQUISITIONS, DIVESTITURES AN_7
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of TDL - Pro Forma Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 29, 2023 | Sep. 30, 2022 | |
Viasat TDL | |||||
Business Acquisition [Line Items] | |||||
Revenues | $ 105 | $ 290 | |||
Tactical Data Links (TDL) Product Line | |||||
Business Acquisition [Line Items] | |||||
Net revenues from acquiree for the reporting period | $ 97 | $ 261 | |||
Earnings from acquiree for the reporting period | $ 38 | $ 30 | $ 86 | $ 55 |
ACQUISITIONS, DIVESTITURES AN_8
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of AJRD - Narrative (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Jul. 31, 2023 | Jul. 28, 2023 | Sep. 29, 2023 | Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | Dec. 30, 2022 | |
Business Acquisition [Line Items] | ||||||||
Proceeds from issuance of long-term debt | $ 0 | |||||||
Goodwill | $ 20,736,000,000 | $ 20,736,000,000 | $ 20,736,000,000 | $ 17,283,000,000 | ||||
Revenue from product sales and services | 4,915,000,000 | $ 4,246,000,000 | 14,079,000,000 | 12,484,000,000 | ||||
Income (loss) before income taxes | 400,000,000 | $ (321,000,000) | 1,145,000,000 | $ 740,000,000 | ||||
AR | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | 2,348,000,000 | 2,348,000,000 | 2,348,000,000 | $ 0 | ||||
5.4% Notes Due 2027 and 2033 and 5.6% Notes Due 2053 | Fixed-rate debt | ||||||||
Business Acquisition [Line Items] | ||||||||
Proceeds from issuance of long-term debt | $ 3,250,000,000 | |||||||
Aerojet Rocketdyne Holdings, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, percentage of ownership | 100% | |||||||
Business combination, consideration transferred | $ 4,715,000,000 | |||||||
Provision for loss on customer contracts | 37,000,000 | 37,000,000 | 37,000,000 | |||||
Loss provision amortization expense | 4,000,000 | |||||||
Total liabilities assumed | 53,000,000 | |||||||
Revenue from amortization of off-market contract liability | 4,000,000 | |||||||
Goodwill | $ 2,348,000,000 | |||||||
Revenue from product sales and services | 455,000,000 | |||||||
Income (loss) before income taxes | 56,000,000 | |||||||
Acquisition related costs | 45,000,000 | 67,000,000 | ||||||
Aerojet Rocketdyne Holdings, Inc. | AR | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 2,348,000,000 | $ 2,348,000,000 | 2,348,000,000 | |||||
Aerojet Rocketdyne Holdings, Inc. | Other Accrued Liabilities | ||||||||
Business Acquisition [Line Items] | ||||||||
Total liabilities assumed | 26,000,000 | |||||||
Aerojet Rocketdyne Holdings, Inc. | Other Noncurrent Liabilities | ||||||||
Business Acquisition [Line Items] | ||||||||
Total liabilities assumed | $ 27,000,000 |
ACQUISITIONS, DIVESTITURES AN_9
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of AJRD - Calculation of Consideration Transferred (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Jul. 28, 2023 | Sep. 29, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | |||
Fair value of consideration transferred | $ 6,688 | $ 0 | |
Aerojet Rocketdyne Holdings, Inc. | |||
Business Acquisition [Line Items] | |||
Cash consideration paid for AJRD outstanding common stock & equity awards | $ 4,748 | ||
AJRD debt settled by L3Harris | 257 | ||
Cash consideration paid | 5,005 | ||
Less cash acquired | (290) | ||
Fair value of consideration transferred | $ 4,715 |
ACQUISITIONS, DIVESTITURES A_10
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of AJRD - Assets Acquired, Liabilities Assumed (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Jul. 28, 2023 | Dec. 30, 2022 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 20,736 | $ 17,283 | |
Aerojet Rocketdyne Holdings, Inc. | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Receivables | $ 156 | ||
Contract assets | 338 | ||
Inventories | 14 | ||
Income taxes receivable | 3 | ||
Other current assets | 114 | ||
Property, plant and equipment | 574 | ||
Operating lease right-of-use assets | 51 | ||
Goodwill | 2,348 | ||
Other intangible assets | 2,860 | ||
Recoverable environmental remediation costs | 383 | ||
Other non-current assets | 175 | ||
Total assets acquired | 7,016 | ||
Accounts payable | 145 | ||
Contract liabilities | 310 | ||
Compensation and benefits | 116 | ||
Income taxes payable | 6 | ||
Current portion of long-term debt, net | 1 | ||
Other accrued items | 278 | ||
Defined benefit plans | 223 | ||
Operating lease liabilities | 40 | ||
Long-term debt, net | 41 | ||
Deferred income taxes | 398 | ||
Reserves for environmental remediation costs | 417 | ||
Other long-term liabilities | 326 | ||
Total liabilities assumed | 2,301 | ||
Net assets acquired | $ 4,715 |
ACQUISITIONS, DIVESTITURES A_11
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of AJRD - Identifiable Intangible Assets Acquired (Details) - Aerojet Rocketdyne Holdings, Inc. $ in Millions | Jul. 28, 2023 USD ($) |
Business Acquisition [Line Items] | |
Total identifiable intangible assets acquired | $ 2,860 |
Customer relationships | |
Business Acquisition [Line Items] | |
Identifiable finite-lived intangible assets acquired | 2,740 |
Backlog | |
Business Acquisition [Line Items] | |
Identifiable finite-lived intangible assets acquired | $ 360 |
Backlog | Minimum | |
Business Acquisition [Line Items] | |
Weighted average amortization period | 3 years |
Backlog | Maximum | |
Business Acquisition [Line Items] | |
Weighted average amortization period | 4 years |
Government programs | |
Business Acquisition [Line Items] | |
Identifiable finite-lived intangible assets acquired | $ 2,380 |
Government programs | Minimum | |
Business Acquisition [Line Items] | |
Weighted average amortization period | 15 years |
Government programs | Maximum | |
Business Acquisition [Line Items] | |
Weighted average amortization period | 25 years |
Trade names | |
Business Acquisition [Line Items] | |
Identifiable indefinite-lived intangible assets acquired | $ 120 |
Trade names | Minimum | |
Business Acquisition [Line Items] | |
Weighted average amortization period | 10 years |
Trade names | Maximum | |
Business Acquisition [Line Items] | |
Weighted average amortization period | 20 years |
ACQUISITIONS, DIVESTITURES A_12
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of AJRD - Pro Forma Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 29, 2023 | Sep. 30, 2022 | |
Aerojet Rocketdyne Holdings, Inc. | ||
Business Acquisition [Line Items] | ||
Revenue | $ 1,589 | |
Aerojet Rocketdyne Holdings, Inc. | ||
Business Acquisition [Line Items] | ||
Revenue | $ 1,740 | |
Income before income taxes | $ 156 | $ 180 |
ACQUISITIONS, DIVESTITURES A_13
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Divestiture and Asset Sale - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Apr. 06, 2023 | Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Sale of asset group and business divestiture-related gains, net | $ 0 | $ 0 | $ 26 | $ 8 | |
Proceeds from sales of businesses, net | 71 | $ 5 | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Visual Information Solutions (VIS) Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash price on sale of business | $ 70 | 70 | |||
Sale of asset group and business divestiture-related gains, net | $ 26 | ||||
Proceeds from sales of businesses, net | 71 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | IMS Segment Business And Asset | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Sale of asset group and business divestiture-related gains, net | $ 8 | ||||
Proceeds from sales of businesses, net | $ 23 |
STOCK OPTIONS AND OTHER SHARE_3
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Narrative (Details) - L3Harris Shareholder-approved Employee Stock Incentive Plans - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment arrangement, expense | $ 22 | $ 23 | $ 67 | $ 92 |
Common stock issued, net of shares withheld for tax purposes (in shares) | 0.1 | 0.1 | 0.5 | 0.7 |
STOCK OPTIONS AND OTHER SHARE_4
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Summary of Awards Granted (Details) - $ / shares shares in Millions | 9 Months Ended | |
Sep. 29, 2023 | Sep. 30, 2022 | |
Shares | ||
Options granted (in shares) | 0.4 | 0.4 |
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||
Stock options granted (in dollars per share) | $ 209.88 | $ 231.71 |
Restricted Stock and Restricted Stock Units | ||
Shares | ||
Equity instruments other than options granted (in shares) | 0.3 | 0.3 |
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||
Equity instruments other than options granted (in dollars per share) | $ 200.61 | $ 224.79 |
Award vesting period | 3 years | |
Performance Share Units | ||
Shares | ||
Equity instruments other than options granted (in shares) | 0.2 | 0.2 |
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||
Equity instruments other than options granted (in dollars per share) | $ 223.09 | $ 258.83 |
Award vesting period | 3 years | |
Stock Options | ||
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||
Award vesting period | 3 years |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 18,531 | $ 19,190 | $ 18,624 | $ 19,319 |
Other comprehensive (loss) income before reclassifications to earnings, net of income taxes | (48) | (132) | (4) | (210) |
Losses (gains) reclassified to earnings, net of income taxes | (10) | (2) | (29) | (10) |
Other comprehensive loss, net of income taxes | (58) | (134) | (33) | (220) |
Ending balance | 18,716 | 18,439 | 18,716 | 18,439 |
Total AOCL | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (263) | (232) | (288) | (146) |
Other comprehensive (loss) income, before reclassifications to earnings and income taxes | (2) | (214) | ||
Income taxes | (2) | 4 | ||
Other comprehensive (loss) income before reclassifications to earnings, net of income taxes | (4) | (210) | ||
Losses (gains) reclassified to earnings, before income taxes | (38) | (11) | ||
Income taxes | 9 | 1 | ||
Losses (gains) reclassified to earnings, net of income taxes | (29) | (10) | ||
Other comprehensive loss, net of income taxes | (58) | (134) | (33) | (220) |
Ending balance | (321) | (366) | (321) | (366) |
Foreign currency translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (237) | (118) | ||
Other comprehensive (loss) income, before reclassifications to earnings and income taxes | (10) | (196) | ||
Income taxes | 0 | 0 | ||
Other comprehensive (loss) income before reclassifications to earnings, net of income taxes | (10) | (196) | ||
Losses (gains) reclassified to earnings, before income taxes | 0 | 0 | ||
Income taxes | 0 | 0 | ||
Losses (gains) reclassified to earnings, net of income taxes | 0 | 0 | ||
Other comprehensive loss, net of income taxes | (10) | (196) | ||
Ending balance | (247) | (314) | (247) | (314) |
Net unrealized losses on hedging derivatives | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (79) | (89) | ||
Other comprehensive (loss) income, before reclassifications to earnings and income taxes | 8 | (18) | ||
Income taxes | (2) | 4 | ||
Other comprehensive (loss) income before reclassifications to earnings, net of income taxes | 6 | (14) | ||
Losses (gains) reclassified to earnings, before income taxes | 3 | 7 | ||
Income taxes | (1) | (2) | ||
Losses (gains) reclassified to earnings, net of income taxes | 2 | 5 | ||
Other comprehensive loss, net of income taxes | 8 | (9) | ||
Ending balance | (71) | (98) | (71) | (98) |
Unrecognized postretirement obligations | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 28 | 61 | ||
Other comprehensive (loss) income, before reclassifications to earnings and income taxes | 0 | 0 | ||
Income taxes | 0 | 0 | ||
Other comprehensive (loss) income before reclassifications to earnings, net of income taxes | 0 | 0 | ||
Losses (gains) reclassified to earnings, before income taxes | (41) | (18) | ||
Income taxes | 10 | 3 | ||
Losses (gains) reclassified to earnings, net of income taxes | (31) | (15) | ||
Other comprehensive loss, net of income taxes | (31) | (15) | ||
Ending balance | $ (3) | $ 46 | $ (3) | $ 46 |
CONTRACT ASSETS AND CONTRACT _3
CONTRACT ASSETS AND CONTRACT LIABILITIES (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Dec. 30, 2022 |
Business Acquisition [Line Items] | ||
Contract assets | $ 3,477 | $ 2,987 |
Contract liabilities, current | (1,940) | (1,400) |
Contract liabilities, non-current | (104) | (117) |
Net contract assets | 1,433 | 1,470 |
Components of Contract Assets: | ||
Unbilled contract receivables, gross | 7,126 | 4,629 |
Unliquidated progress payments and advances | (3,649) | (1,642) |
Contract assets | 3,477 | $ 2,987 |
Aerojet Rocketdyne Holdings, Inc. | ||
Business Acquisition [Line Items] | ||
Contract assets | 386 | |
Contract liabilities, current | (315) | |
Components of Contract Assets: | ||
Contract assets | $ 386 |
CONTRACT ASSETS AND CONTRACT _4
CONTRACT ASSETS AND CONTRACT LIABILITIES - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Recognized revenue related to contract liabilities outstanding at the end of the year | $ 223 | $ 196 | $ 1,120 | $ 967 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Dec. 30, 2022 |
Inventory [Line Items] | ||
Finished products | $ 302 | $ 181 |
Work in process | 513 | 396 |
Materials and supplies | 823 | 714 |
Inventories | 1,638 | $ 1,291 |
Tactical Data Links (TDL) Product Line | ||
Inventory [Line Items] | ||
Finished products | 70 | |
Inventories | $ 114 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 29, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 17,283 |
Reallocation of goodwill in business realignment | 0 |
Goodwill decrease from divestitures | (9) |
Currency translation adjustments | (3) |
Ending Balance | 20,736 |
Goodwill decrease from divestitures | 9 |
Visual Information Solutions (VIS) Business | |
Goodwill [Roll Forward] | |
Goodwill decrease from divestitures | (39) |
Goodwill decrease from divestitures | 39 |
Disposal group, held-for-sale, not discontinued operations | Visual Information Solutions (VIS) Business | |
Goodwill [Roll Forward] | |
Goodwill decrease from divestitures | (9) |
Goodwill decrease from divestitures | 9 |
SAS | |
Goodwill [Roll Forward] | |
Beginning Balance | 5,778 |
Reallocation of goodwill in business realignment | 327 |
Goodwill decrease from divestitures | (9) |
Currency translation adjustments | (5) |
Ending Balance | 6,091 |
Goodwill decrease from divestitures | 9 |
IMS | |
Goodwill [Roll Forward] | |
Beginning Balance | 7,709 |
Reallocation of goodwill in business realignment | (327) |
Goodwill decrease from divestitures | 0 |
Currency translation adjustments | 2 |
Ending Balance | 7,384 |
Goodwill decrease from divestitures | 0 |
CS | |
Goodwill [Roll Forward] | |
Beginning Balance | 3,796 |
Reallocation of goodwill in business realignment | 0 |
Goodwill from acquisition | 1,117 |
Goodwill decrease from divestitures | 0 |
Currency translation adjustments | |
Ending Balance | 4,913 |
Goodwill decrease from divestitures | 0 |
AR | |
Goodwill [Roll Forward] | |
Beginning Balance | 0 |
Reallocation of goodwill in business realignment | 0 |
Goodwill from acquisition | 2,348 |
Goodwill decrease from divestitures | 0 |
Currency translation adjustments | 0 |
Ending Balance | 2,348 |
Goodwill decrease from divestitures | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 29, 2023 USD ($) | Mar. 31, 2023 unit | Sep. 30, 2022 USD ($) | Sep. 29, 2023 USD ($) unit | Sep. 30, 2022 USD ($) | Dec. 30, 2022 USD ($) | Jul. 28, 2023 USD ($) | Jan. 03, 2023 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | ||||||||
Number of reporting units | unit | 9 | 8 | ||||||
Reallocation of goodwill in business realignment | $ 0 | |||||||
Goodwill | $ 20,736 | 20,736 | $ 17,283 | |||||
Amortization of acquisition-related intangibles | 208 | $ 151 | 546 | $ 454 | ||||
ADG Reporting Unit | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Reallocation of goodwill in business realignment | (367) | (367) | ||||||
Impairment of goodwill | 313 | |||||||
Broadband Communications Reporting Unit | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Impairment of goodwill | 355 | |||||||
Electro Optical Reporting Unit | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Reallocation of goodwill in business realignment | $ (80) | $ (80) | ||||||
Impairment of goodwill | 134 | |||||||
Tactical Data Links (TDL) Product Line | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 1,117 | |||||||
Aerojet Rocketdyne Holdings, Inc. | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | $ 2,348 | |||||||
SAS | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Reallocation of goodwill in business realignment | 327 | |||||||
Goodwill | 6,091 | 6,091 | 5,778 | |||||
CS | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Reallocation of goodwill in business realignment | 0 | |||||||
Goodwill | 4,913 | 4,913 | $ 3,796 | |||||
CS | Tactical Data Links (TDL) Product Line | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Goodwill | 1,117 | 1,117 | ||||||
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | Open Water Power Facility | In-process research and development | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Impairment of intangible assets | $ 21 | $ 21 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of Finite and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Jul. 28, 2023 | Jan. 03, 2023 | Dec. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 10,404 | $ 6,788 | ||
Total intangibles, gross carrying amount | 12,207 | 8,612 | ||
Accumulated Amortization | 3,157 | 2,611 | ||
Net Carrying Amount | 7,247 | 4,177 | ||
Total identifiable intangible assets, net | 9,050 | 6,001 | ||
Disposal group, held-for-sale, not discontinued operations | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangibles reclassified to assets of disposal group | 10 | |||
In-process research and development | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets | 0 | 21 | ||
Trade names | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets | 1,803 | 1,803 | ||
Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 9,270 | 6,124 | ||
Accumulated Amortization | 2,658 | 2,189 | ||
Net Carrying Amount | 6,612 | 3,935 | ||
Customer relationships | Tactical Data Links (TDL) Product Line | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 406 | |||
Accumulated Amortization | 46 | |||
Net Carrying Amount | 360 | |||
Customer relationships | Aerojet Rocketdyne Holdings, Inc. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 2,740 | |||
Accumulated Amortization | 37 | |||
Net Carrying Amount | 2,703 | |||
Developed technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 915 | 566 | ||
Accumulated Amortization | 435 | 366 | ||
Net Carrying Amount | 480 | 200 | ||
Developed technology | Tactical Data Links (TDL) Product Line | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 349 | |||
Accumulated Amortization | 15 | |||
Net Carrying Amount | 334 | |||
Developed technology | Aerojet Rocketdyne Holdings, Inc. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 0 | |||
Accumulated Amortization | 0 | |||
Net Carrying Amount | 0 | |||
Contract backlog | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 2 | 1 | ||
Accumulated Amortization | 1 | 1 | ||
Net Carrying Amount | 1 | 0 | ||
Trade names | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 215 | 95 | ||
Accumulated Amortization | 61 | 53 | ||
Net Carrying Amount | 154 | 42 | ||
Trade names | Tactical Data Links (TDL) Product Line | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 0 | |||
Accumulated Amortization | 0 | |||
Net Carrying Amount | $ 0 | |||
Trade names | Aerojet Rocketdyne Holdings, Inc. | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 120 | |||
Accumulated Amortization | 1 | |||
Net Carrying Amount | $ 119 | |||
Other | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 2 | 2 | ||
Accumulated Amortization | 2 | 2 | ||
Net Carrying Amount | $ 0 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Future Amortization Expense (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Dec. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Year 1 | $ 881 | |
Year 2 | 805 | |
Year 3 | 724 | |
Year 4 | 572 | |
Year 5 | 519 | |
Thereafter | 3,746 | |
Net Carrying Amount | $ 7,247 | $ 4,177 |
DEBT AND CREDIT ARRANGEMENTS -
DEBT AND CREDIT ARRANGEMENTS - Long-term Debt, Net (Details) - USD ($) | Sep. 29, 2023 | Dec. 30, 2022 |
Debt Instrument [Line Items] | ||
Debt | $ 11,226,000,000 | $ 6,776,000,000 |
Financing lease obligations and other debt | 277,000,000 | 222,000,000 |
Total debt | 11,503,000,000 | 6,998,000,000 |
Plus: unamortized bond premium | 55,000,000 | 70,000,000 |
Less: unamortized discounts and issuance costs | (55,000,000) | (25,000,000) |
Total debt, net | 11,503,000,000 | 7,043,000,000 |
Less: current portion of long-term debt, net | (363,000,000) | (818,000,000) |
Total long-term debt, net | 11,140,000,000 | 6,225,000,000 |
Variable-rate debt | Floating rate notes, due March 10, 2023 (“Floating 2023 Notes”) | ||
Debt Instrument [Line Items] | ||
Debt | 0 | 250,000,000 |
Line of Credit | Term loan, due November 21, 2025 | Secured Debt | ||
Debt Instrument [Line Items] | ||
Debt | $ 2,250,000,000 | 0 |
Fixed-rate debt | 3.85% notes, due June 15, 2023 (“3.85% 2023 Notes”) | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 3.85% | |
Debt | $ 0 | 800,000,000 |
Fixed-rate debt | 3.95% notes, due May 28, 2024 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 3.95% | |
Debt | $ 350,000,000 | 350,000,000 |
Fixed-rate debt | 3.832% notes, due April 27, 2025 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 3.832% | |
Debt | $ 600,000,000 | 600,000,000 |
Fixed-rate debt | 7.00% debentures, due January 15, 2026 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 7% | |
Debt | $ 100,000,000 | 100,000,000 |
Fixed-rate debt | 3.85% notes, due December 15, 2026 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 3.85% | |
Debt | $ 550,000,000 | 550,000,000 |
Fixed-rate debt | 5.40% notes, due January 15, 2027 (“5.4% 2027 Notes”) | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 5.40% | |
Debt | $ 1,250,000,000 | 0 |
Fixed-rate debt | 6.35% debentures, due February 1, 2028 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 6.35% | |
Debt | $ 26,000,000 | 26,000,000 |
Fixed-rate debt | 4.40% notes, due June 15, 2028 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 4.40% | |
Debt | $ 1,850,000,000 | 1,850,000,000 |
Fixed-rate debt | 2.90% notes, due December 15, 2029 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 2.90% | |
Debt | $ 400,000,000 | 400,000,000 |
Fixed-rate debt | 1.80% notes, due January 15, 2031 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 1.80% | |
Debt | $ 650,000,000 | 650,000,000 |
Fixed-rate debt | 5.40% notes, due July 31, 2033 (“5.4% 2033 Notes”) | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 5.40% | |
Debt | $ 1,500,000,000 | 0 |
Fixed-rate debt | 4.854% notes, due April 27, 2035 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 4.854% | |
Debt | $ 400,000,000 | 400,000,000 |
Fixed-rate debt | 6.15% notes, due December 15, 2040 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 6.15% | |
Debt | $ 300,000,000 | 300,000,000 |
Fixed-rate debt | 5.054% notes, due April 27, 2045 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 5.054% | |
Debt | $ 500,000,000 | 500,000,000 |
Fixed-rate debt | 5.60% notes, due July 31, 2053 (“5.6% 2053 Notes”) | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 5.60% | |
Debt | $ 500,000,000 | $ 0 |
DEBT AND CREDIT ARRANGEMENTS _2
DEBT AND CREDIT ARRANGEMENTS - Narrative (Details) | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
Jul. 31, 2023 USD ($) | Jun. 15, 2023 USD ($) | Mar. 14, 2023 USD ($) | Mar. 10, 2023 USD ($) | Jan. 03, 2023 USD ($) | Nov. 22, 2022 USD ($) | Jul. 29, 2022 USD ($) | Sep. 29, 2023 USD ($) | Sep. 29, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 29, 2023 USD ($) | Sep. 30, 2022 USD ($) | Mar. 13, 2023 USD ($) | Dec. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from issuance of long-term debt | $ 0 | |||||||||||||
Debt | $ 11,226,000,000 | $ 11,226,000,000 | $ 11,226,000,000 | $ 6,776,000,000 | ||||||||||
Repayments of borrowings | 3,159,000,000 | 12,000,000 | ||||||||||||
Short-term debt | 2,033,000,000 | 2,033,000,000 | 2,033,000,000 | 2,000,000 | ||||||||||
Commercial Paper | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 3,900,000,000 | $ 1,000,000,000 | ||||||||||||
Short-term debt | $ 2,000,000,000 | $ 2,000,000,000 | $ 2,000,000,000 | |||||||||||
Debt, weighted average interest rate | 5.50% | 5.50% | 5.50% | |||||||||||
Repayments of short-term debt | $ 0 | $ 0 | $ 0 | 0 | ||||||||||
Maximum | Commercial Paper | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument term | 397 days | |||||||||||||
Senior Unsecured Debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayments of borrowings | $ 0 | |||||||||||||
Floating rate notes, due March 10, 2023 (“Floating 2023 Notes”) | Senior Unsecured Debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt | $ 0 | 0 | 0 | 250,000,000 | ||||||||||
Repayments of long-term debt | $ 800,000,000 | $ 250,000,000 | ||||||||||||
Term loan, due November 21, 2025 | Secured Debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument term | 3 years | |||||||||||||
Term loan, due November 21, 2025 | Line of Credit | Secured Debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt issued | $ 2,250,000,000 | 2,250,000,000 | 2,250,000,000 | 2,250,000,000 | ||||||||||
Proceeds from issuance of long-term debt | $ 250,000,000 | $ 2,000,000,000 | ||||||||||||
Debt | $ 2,250,000,000 | $ 2,250,000,000 | $ 2,250,000,000 | 0 | ||||||||||
Term loan, due November 21, 2025 | Line of Credit | Secured Debt | Secured Overnight Financing Rate (SOFR) Variable Rate | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread rate | 0.10% | |||||||||||||
Term loan, due November 21, 2025 | Line of Credit | Secured Debt | Senior Debt Ratings | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility, interest rate at period end | 6.70% | 6.70% | 6.70% | |||||||||||
Interest rate percentage, net of impact of interest rate cap derivative | 0.061 | 0.061 | 0.061 | |||||||||||
Term loan, due November 21, 2025 | Line of Credit | Secured Debt | Senior Debt Ratings | Minimum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread rate | 1.125% | |||||||||||||
Term loan, due November 21, 2025 | Line of Credit | Secured Debt | Senior Debt Ratings | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, basis spread rate | 1.875% | |||||||||||||
2023 Credit Agreement | Revolving Credit Facility | Commercial Paper | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from short-term debt | $ 701,000,000 | $ 701,000,000 | ||||||||||||
2023 Credit Agreement | Revolving Credit Facility | Line of Credit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument term | 364 days | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,400,000,000 | |||||||||||||
Proceeds from short-term debt | $ 2,100,000,000 | |||||||||||||
Repayments of lines of credit | $ 2,100,000,000 | |||||||||||||
2023 Credit Agreement | Line of Credit | Revolving Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit | 0 | 0 | 0 | |||||||||||
2022 Credit Agreement | Line of Credit | Revolving Credit Facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument term | 5 years | |||||||||||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000,000 | |||||||||||||
Short-term debt | 0 | 0 | 0 | |||||||||||
5.4% Notes Due 2027 and 2033 and 5.6% Notes Due 2053 | Fixed-rate debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Proceeds from issuance of long-term debt | $ 3,250,000,000 | |||||||||||||
5.4% Notes Due 2027 and 2033 and 5.6% Notes Due 2053 | Fixed-rate debt | Minimum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument redemption price percentage | 100% | |||||||||||||
5.4% Notes Due 2027 and 2033 and 5.6% Notes Due 2053 | Fixed-rate debt | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument redemption price percentage | 101% | |||||||||||||
5.40% notes, due January 15, 2027 (“5.4% 2027 Notes”) | Fixed-rate debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt | 1,250,000,000 | 1,250,000,000 | $ 1,250,000,000 | 0 | ||||||||||
Redemption price, basis spread rate | 0.0015 | |||||||||||||
Debt issuance costs | 9,000,000 | 9,000,000 | $ 9,000,000 | |||||||||||
5.40% notes, due July 31, 2033 (“5.4% 2033 Notes”) | Fixed-rate debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt | 1,500,000,000 | 1,500,000,000 | $ 1,500,000,000 | 0 | ||||||||||
Redemption price, basis spread rate | 0.0025 | |||||||||||||
Debt issuance costs | 13,000,000 | 13,000,000 | $ 13,000,000 | |||||||||||
5.60% notes, due July 31, 2053 (“5.6% 2053 Notes”) | Fixed-rate debt | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt | 500,000,000 | 500,000,000 | $ 500,000,000 | $ 0 | ||||||||||
Redemption price, basis spread rate | 0.0025 | |||||||||||||
Debt issuance costs | $ 6,000,000 | $ 6,000,000 | $ 6,000,000 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Pension | ||||
Operating | ||||
Service cost | $ 10 | $ 10 | $ 22 | $ 32 |
Non-operating | ||||
Interest cost | 100 | 55 | 283 | 165 |
Expected return on plan assets | (162) | (156) | (467) | (468) |
Amortization of net actuarial gain | (2) | 2 | (7) | 7 |
Amortization of prior service (credit) cost | (7) | (7) | (20) | (21) |
Non-service cost periodic benefit income | (71) | (106) | (211) | (317) |
Net periodic benefit income | (61) | (96) | (189) | (285) |
Other Benefits | ||||
Operating | ||||
Service cost | 0 | 1 | 1 | 2 |
Non-operating | ||||
Interest cost | 3 | 1 | 8 | 5 |
Expected return on plan assets | (5) | (5) | (15) | (16) |
Amortization of net actuarial gain | (5) | (1) | (15) | (5) |
Amortization of prior service (credit) cost | 0 | 0 | 1 | 1 |
Non-service cost periodic benefit income | (7) | (5) | (21) | (15) |
Net periodic benefit income | $ (7) | $ (4) | $ (20) | $ (13) |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average common shares outstanding (in shares) | 189.3 | 191.3 | 189.6 | 192.2 |
Impact of dilutive share-based awards (in shares) | 0.8 | 0 | 1 | 1.8 |
Diluted weighted average common shares outstanding (in shares) | 190.1 | 191.3 | 190.6 | 194 |
Weighted average anti-dilutive employee stock options outstanding (in shares) | 0 | 1.9 | 2 | 0.3 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation (percent) | 4.50% | 6.20% | 6.40% | 13% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Dec. 30, 2022 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt (including current portion) | $ 11,503 | $ 7,043 |
Carrying Amount | Term Loan 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt (including current portion) | 2,250 | 0 |
Carrying Amount | Debt, excluding Term Loan 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt (including current portion) | 9,253 | 7,043 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan assets | 133 | 97 |
Fair value of deferred compensation plan liabilities | 245 | 200 |
Fair Value | Valuation, Market Approach | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt (including current portion) | 10,917 | 6,569 |
Fair Value | Valuation, Market Approach | Term Loan 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt (including current portion) | 2,250 | 0 |
Fair Value | Valuation, Market Approach | Debt, excluding Term Loan 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt (including current portion) | 8,667 | 6,569 |
Equity securities and mutual funds | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan liabilities | 14 | 8 |
Equity securities and mutual funds | Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan liabilities | 14 | 8 |
Common/collective trusts and guaranteed investment contracts | Fair Value | Investments Measured at NAV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan liabilities | 231 | 192 |
Equity and fixed income securities | Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan assets | 97 | 64 |
Equity and fixed income securities | Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan assets | 97 | 64 |
Corporate-owned life insurance | Fair Value | Investments Measured at NAV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan assets | $ 36 | $ 33 |
CHANGES IN ESTIMATES (Details)
CHANGES IN ESTIMATES (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Change in Accounting Estimate [Line Items] | ||||
Capitalized contract cost, impairment loss | $ 48 | |||
Revenue recognized from performance obligations satisfied in previous periods | $ 28 | $ 23 | 97 | $ 113 |
Contracts Accounted for under Percentage of Completion | ||||
Change in Accounting Estimate [Line Items] | ||||
Net EAC adjustments, before income taxes | (10) | 0 | (97) | 58 |
Net EAC adjustments, net of income taxes | $ (8) | $ 0 | $ (73) | $ 44 |
Net EAC adjustments, net of income taxes, per diluted share (in dollars per share) | $ (0.04) | $ 0 | $ (0.38) | $ 0.23 |
BACKLOG (Details)
BACKLOG (Details) - USD ($) $ in Billions | Sep. 29, 2023 | Dec. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Backlog | $ 31.8 | $ 22.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-30 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation percentage | 55% | |
Expected timing of satisfaction period | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-28 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Remaining performance obligation percentage | 80% | |
Expected timing of satisfaction period | 1 year |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - Narrative (Details) | 9 Months Ended |
Sep. 29, 2023 segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 4 |
Number of reportable segments | 4 |
BUSINESS SEGMENT INFORMATION _2
BUSINESS SEGMENT INFORMATION - Revenues and Income From Continuing Operations by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Revenue from Product Sales and Services | ||||
Revenue from product sales and services | $ 4,915 | $ 4,246 | $ 14,079 | $ 12,484 |
Unallocated Items: | ||||
Unallocated corporate department (expense) income, net | (828) | (742) | (2,384) | (2,239) |
Amortization of acquisition-related intangibles | (208) | (151) | (546) | (454) |
Sale of asset group and business divestiture-related gains, net | 0 | 0 | 26 | 8 |
Non-operating income, net | 80 | 99 | 245 | 313 |
Interest expense, net | (159) | (70) | (372) | (205) |
Income (loss) before income taxes | 400 | (321) | 1,145 | 740 |
Contract-Based Intangible Assets | ||||
Unallocated Items: | ||||
Impairment of goodwill and other assets | (18) | |||
In-process research and development | Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | Open Water Power Facility | ||||
Unallocated Items: | ||||
Impairment of goodwill and other assets | (21) | (21) | ||
Pension | ||||
Unallocated Items: | ||||
FAS pension service cost | (10) | (10) | (22) | (32) |
Non-service FAS pension income | (71) | (106) | (211) | (317) |
Pension | Plans Under US Government Contracts | ||||
Unallocated Items: | ||||
FAS/CAS operating adjustment | 27 | 22 | 72 | 65 |
FAS pension service cost | (10) | (11) | (23) | (34) |
Less: CAS pension cost | (37) | (33) | (95) | (99) |
FAS/CAS operating adjustment | 27 | 22 | 72 | 65 |
Non-service FAS pension income | 78 | 111 | 232 | 332 |
FAS/CAS pension adjustment, net | 105 | 133 | 304 | 397 |
SAS | ||||
Unallocated Items: | ||||
Other asset impairment charges | (27) | |||
IMS | ||||
Unallocated Items: | ||||
Other asset impairment charges | (12) | |||
Operating segments | ||||
Income (loss) before Income Taxes | ||||
Segment operating income (loss) | 735 | (148) | 2,028 | 1,157 |
Unallocated Items: | ||||
Total unallocated items | 735 | (148) | 2,028 | 1,157 |
Operating segments | SAS | ||||
Revenue from Product Sales and Services | ||||
Revenue from product sales and services | 1,686 | 1,593 | 5,056 | 4,682 |
Income (loss) before Income Taxes | ||||
Segment operating income (loss) | 210 | 92 | 565 | 472 |
Unallocated Items: | ||||
Total unallocated items | 210 | 92 | 565 | 472 |
Operating segments | IMS | ||||
Revenue from Product Sales and Services | ||||
Revenue from product sales and services | 1,568 | 1,630 | 5,003 | 4,897 |
Income (loss) before Income Taxes | ||||
Segment operating income (loss) | 187 | (143) | 534 | 315 |
Unallocated Items: | ||||
Total unallocated items | 187 | (143) | 534 | 315 |
Operating segments | CS | ||||
Revenue from Product Sales and Services | ||||
Revenue from product sales and services | 1,255 | 1,068 | 3,707 | 3,024 |
Income (loss) before Income Taxes | ||||
Segment operating income (loss) | 282 | (97) | 873 | 370 |
Unallocated Items: | ||||
Total unallocated items | 282 | (97) | 873 | 370 |
Operating segments | AR | ||||
Revenue from Product Sales and Services | ||||
Revenue from product sales and services | 455 | 455 | ||
Income (loss) before Income Taxes | ||||
Segment operating income (loss) | 56 | 56 | ||
Unallocated Items: | ||||
Total unallocated items | 56 | 56 | ||
Corporate | ||||
Revenue from Product Sales and Services | ||||
Revenue from product sales and services | (49) | (45) | (142) | (119) |
Income (loss) before Income Taxes | ||||
Segment operating income (loss) | (256) | (202) | (756) | (525) |
Unallocated Items: | ||||
Unallocated corporate department (expense) income, net | 14 | 18 | (27) | 33 |
Amortization of acquisition-related intangibles | (208) | (151) | (546) | (454) |
Additional cost of sales related to the fair value step-up in inventory sold | 0 | 0 | (30) | 0 |
Merger, acquisition, and divestiture related expenses | (56) | (31) | (144) | (117) |
Sale of asset group and business divestiture-related gains, net | 0 | 0 | 26 | 8 |
Impairment of goodwill and other assets | 0 | 0 | (39) | 0 |
LHX NeXt | (33) | 0 | (68) | 0 |
Charges for severance and other termination costs | 0 | (29) | 0 | (29) |
Charge related to an additional pre-merger legal contingency | 0 | (31) | 0 | (31) |
FAS/CAS operating adjustment | 27 | 22 | 72 | 65 |
Total unallocated items | (256) | (202) | (756) | (525) |
FAS/CAS operating adjustment | $ 27 | $ 22 | $ 72 | $ 65 |
BUSINESS SEGMENT INFORMATION _3
BUSINESS SEGMENT INFORMATION - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2023 | Sep. 30, 2022 | Sep. 29, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | $ 4,915 | $ 4,246 | $ 14,079 | $ 12,484 |
SAS | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,478 | 1,414 | 4,407 | 4,136 |
SAS | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 196 | 164 | 614 | 510 |
SAS | Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,040 | 939 | 3,161 | 2,737 |
SAS | Cost-reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 634 | 639 | 1,860 | 1,909 |
SAS | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,686 | 1,593 | 5,056 | 4,682 |
SAS | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 12 | 15 | 35 | 36 |
IMS | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,141 | 1,213 | 3,679 | 3,549 |
IMS | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 406 | 401 | 1,258 | 1,297 |
IMS | Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,164 | 1,246 | 3,767 | 3,716 |
IMS | Cost-reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 383 | 368 | 1,170 | 1,130 |
IMS | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,568 | 1,630 | 5,003 | 4,897 |
IMS | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 21 | 16 | 66 | 51 |
CS | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 874 | 706 | 2,499 | 1,962 |
CS | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 366 | 348 | 1,168 | 1,029 |
CS | Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,047 | 899 | 3,127 | 2,530 |
CS | Cost-reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 193 | 155 | 540 | 461 |
CS | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,255 | 1,068 | 3,707 | 3,024 |
CS | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 15 | 14 | 40 | 33 |
AR | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 443 | 443 | ||
AR | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 12 | 12 | ||
AR | Fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 272 | 272 | ||
AR | Cost-reimbursable | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 183 | 183 | ||
AR | Operating segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 455 | 455 | ||
AR | Intersegment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 0 | 0 | ||
Prime contractor | SAS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 1,082 | 1,013 | 3,176 | 2,977 |
Prime contractor | IMS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 962 | 1,089 | 3,243 | 3,210 |
Prime contractor | CS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 866 | 690 | 2,471 | 2,037 |
Prime contractor | AR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 113 | 113 | ||
Subcontractor | SAS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 592 | 565 | 1,845 | 1,669 |
Subcontractor | IMS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 585 | 525 | 1,694 | 1,636 |
Subcontractor | CS | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | 374 | $ 364 | 1,196 | $ 954 |
Subcontractor | AR | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from product sales and services | $ 342 | $ 342 |
BUSINESS SEGMENT INFORMATION _4
BUSINESS SEGMENT INFORMATION - Total Assets by Segment (Details) - USD ($) $ in Millions | Sep. 29, 2023 | Dec. 30, 2022 |
Segment Reporting Information [Line Items] | ||
Assets | $ 42,293 | $ 33,524 |
Identifiable intangible assets acquired | 9,050 | 6,001 |
Operating segments | SAS | ||
Segment Reporting Information [Line Items] | ||
Assets | 9,099 | 8,838 |
Operating segments | IMS | ||
Segment Reporting Information [Line Items] | ||
Assets | 10,869 | 10,925 |
Operating segments | CS | ||
Segment Reporting Information [Line Items] | ||
Assets | 7,184 | 5,800 |
Operating segments | AR | ||
Segment Reporting Information [Line Items] | ||
Assets | 4,078 | |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Assets | 11,063 | 7,961 |
Identifiable intangible assets acquired | $ 9,100 | $ 6,000 |
LEGAL PROCEEDINGS AND CONTING_2
LEGAL PROCEEDINGS AND CONTINGENCIES (Details) - Various Environmental Matters $ in Millions | Sep. 29, 2023 USD ($) environmentalMatter | Dec. 31, 2002 USD ($) |
Loss Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | $ 469 | |
Number of environmental matters | environmentalMatter | 40 | |
Recoverable environmental remediation costs | $ 433 | |
Sacramento, California Site | ||
Loss Contingencies [Line Items] | ||
Accrual for environmental loss contingencies | 239 | |
Sacramento, California Site | Preliminary | ||
Loss Contingencies [Line Items] | ||
Guarantor obligations, current carrying value | $ 20 | |
Sacramento, California Site | Maximum | ||
Loss Contingencies [Line Items] | ||
Guarantor obligations, current carrying value | 75 | |
Loss contingency, estimate of possible loss | 372 | |
Sacramento, California Site | Minimum | ||
Loss Contingencies [Line Items] | ||
Guarantor obligations, current carrying value | $ 10 | |
Loss contingency, estimate of possible loss | $ 239 |