COVER
COVER - USD ($) | 12 Months Ended | ||
Dec. 29, 2023 | Feb. 09, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 29, 2023 | ||
Current Fiscal Year End Date | --12-29 | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 37,362,290,944 | ||
Entity Common Stock, Shares Outstanding | 190,107,856 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement for the 2024 Annual Meeting of Shareholders scheduled to be held on April 19, 2024, which will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 29, 2023, are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent described therein. | ||
Entity Central Index Key | 0000202058 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY |
AUDIT INFORMATION
AUDIT INFORMATION | 12 Months Ended |
Dec. 29, 2023 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Orlando, Florida |
Auditor Firm ID | 42 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Revenue | |||
Revenue | $ 19,419 | $ 17,062 | $ 17,814 |
Cost of revenue | |||
Cost of revenue | (14,306) | (12,135) | (12,438) |
General and administrative expenses | (3,262) | (3,006) | (3,280) |
Asset group and business divestiture-related gains, net | (51) | 8 | 220 |
Impairment of goodwill and other assets | (374) | (802) | (207) |
Operating income | 1,426 | 1,127 | 2,109 |
Non-service FAS pension income and other, net | 338 | 425 | 439 |
Interest expense, net | (543) | (279) | (265) |
Income from continuing operations before income taxes | 1,221 | 1,273 | 2,283 |
Income taxes | (23) | (212) | (440) |
Income from continuing operations | 1,198 | 1,061 | 1,843 |
Discontinued operations, net of income taxes | 0 | 0 | (1) |
Net income | 1,198 | 1,061 | 1,842 |
Noncontrolling interests, net of income taxes | 29 | 1 | 4 |
Net income attributable to L3Harris Technologies, Inc. | 1,227 | 1,062 | 1,846 |
Amount attributable to L3Harris Technologies, Inc. common shareholders | |||
Income from continuing operations | 1,227 | 1,062 | 1,847 |
Discontinued operations, net of income taxes | 0 | 0 | (1) |
Net income attributable to L3Harris Technologies, Inc. | $ 1,227 | $ 1,062 | $ 1,846 |
Net income per common share attributable to L3Harris Technologies, Inc. common shareholders | |||
Basic (in dollars per share) | $ 6.47 | $ 5.54 | $ 9.17 |
Diluted (in dollars per share) | $ 6.44 | $ 5.49 | $ 9.09 |
Product | |||
Revenue | |||
Revenue | $ 13,694 | $ 12,097 | $ 13,156 |
Cost of revenue | |||
Cost of revenue | (9,711) | (8,355) | (9,007) |
Services | |||
Revenue | |||
Revenue | 5,725 | 4,965 | 4,658 |
Cost of revenue | |||
Cost of revenue | $ (4,595) | $ (3,780) | $ (3,431) |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,198 | $ 1,061 | $ 1,842 |
Other comprehensive income (loss): | |||
Foreign currency translation income (loss), net of income taxes | 36 | (119) | (63) |
Net unrealized income (loss) on hedging derivatives, net of income taxes | 10 | (8) | (3) |
Net unrecognized gains (losses) on postretirement obligations, net of income taxes | 71 | (26) | 758 |
Other comprehensive income (loss), recognized during the period | 117 | (153) | 692 |
Reclassification adjustments for (gains) losses included in net income | (27) | 11 | 1 |
Other comprehensive income (loss), net of income taxes | 90 | (142) | 693 |
Total comprehensive income | 1,288 | 919 | 2,535 |
Comprehensive loss attributable to noncontrolling interest | 29 | 1 | 4 |
Total comprehensive income attributable to L3Harris Technologies, Inc. | $ 1,317 | $ 920 | $ 2,539 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Current assets | ||
Cash and cash equivalents | $ 560 | $ 880 |
Receivables, net | 1,230 | 1,251 |
Contract assets | 3,196 | 2,987 |
Inventories | 1,472 | 1,291 |
Other current assets | 491 | 298 |
Assets of business held for sale | 1,106 | 47 |
Total current assets | 8,055 | 6,754 |
Non-current assets | ||
Property, plant and equipment, net | 2,862 | 2,104 |
Goodwill | 19,979 | 17,283 |
Other intangible assets, net | 8,540 | 6,001 |
Deferred income taxes | 91 | 73 |
Other non-current assets | 2,160 | 1,309 |
Total assets | 41,687 | 33,524 |
Current liabilities | ||
Short-term debt | 1,602 | 2 |
Current portion of long-term debt, net | 363 | 818 |
Accounts payable | 2,106 | 1,945 |
Contract liabilities | 1,900 | 1,400 |
Compensation and benefits | 544 | 398 |
Other accrued items | 1,129 | 818 |
Income taxes payable | 88 | 376 |
Liabilities of business held for sale | 272 | 19 |
Total current liabilities | 8,004 | 5,776 |
Non-current liabilities | ||
Long-term debt, net | 11,160 | 6,225 |
Deferred income taxes | 815 | 719 |
Other long-term liabilities | 2,879 | 2,180 |
Total liabilities | 22,858 | 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 189,808,581 and 190,611,458 shares at December 29, 2023 and December 30, 2022, respectively | 190 | 191 |
Paid-in capital | 15,553 | 15,677 |
Retained earnings | 3,220 | 2,943 |
Accumulated other comprehensive loss | (198) | (288) |
Total shareholders’ equity | 18,765 | 18,523 |
Noncontrolling interests | 64 | 101 |
Total equity | 18,829 | 18,624 |
Total liabilities and equity | $ 41,687 | $ 33,524 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Shareholders’ Equity: | ||
Accounts receivable, allowance for credit loss, current | $ 15 | $ 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) | 189,808,581 | 190,611,458 |
Common shares, outstanding (in shares) | 189,808,581 | 190,611,458 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | ||
Operating Activities | ||||
Net income | $ 1,198 | $ 1,061 | $ 1,842 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Amortization of acquisition-related intangibles | 779 | 605 | 627 | |
Depreciation and other amortization | 387 | 333 | 340 | |
Share-based compensation | 89 | 109 | 129 | |
Share-based matching contributions under defined contribution plans | 231 | 216 | 219 | |
Pension and other postretirement benefit plan income | (275) | (395) | (375) | |
Impairment of goodwill and other assets | 374 | 802 | 244 | |
Asset group and business divestiture-related losses (gains), net | 51 | (8) | (220) | |
Deferred income taxes | (423) | (596) | (114) | |
(Increase) decrease in: | ||||
Receivables, net | 124 | (210) | 217 | |
Contract assets | 62 | 23 | (820) | |
Inventories | (182) | (310) | (68) | |
Other current assets | (55) | 13 | 23 | |
Increase (decrease) in: | ||||
Accounts payable | 87 | 180 | 430 | |
Contract liabilities | 195 | 121 | 178 | |
Compensation and benefits | 38 | (45) | (44) | |
Other accrued items | (88) | (181) | 20 | |
Income taxes | (333) | 499 | 190 | |
Other operating activities | (163) | (59) | (131) | |
Net cash provided by operating activities | 2,096 | 2,158 | 2,687 | |
Investing Activities | ||||
Net cash paid for acquired businesses | (6,688) | 0 | 0 | |
Additions to property, plant and equipment | (449) | (252) | (342) | |
Proceeds from sale of property, plant and equipment, net | 56 | 14 | 7 | |
Proceeds from sales of asset groups and businesses, net | 71 | 23 | 1,729 | |
Other investing activities | (11) | (35) | 0 | |
Net cash (used in) provided by investing activities | (7,021) | (250) | 1,394 | |
Financing Activities | ||||
Proceeds from borrowings, net of issuance cost | 7,568 | 4 | 6 | |
Repayments of borrowings | (3,170) | (14) | (13) | |
Change in commercial paper, net | [1] | 1,599 | 0 | 0 |
Proceeds from exercises of employee stock options | 24 | 57 | 97 | |
Repurchases of common stock | (518) | (1,083) | (3,675) | |
Cash dividends | (868) | (864) | (817) | |
Other financing activities | (41) | (51) | (11) | |
Net cash provided by (used in) financing activities | 4,594 | (1,951) | (4,413) | |
Effect of exchange rate changes on cash and cash equivalents | 11 | (18) | (3) | |
Net decrease in cash and cash equivalents | (320) | (61) | (335) | |
Cash and cash equivalents, beginning of period | 880 | 941 | 1,276 | |
Cash and cash equivalents, end of period | $ 560 | $ 880 | $ 941 | |
[1]See Note 8: Debt and Credit Arrangements in the Notes to the Consolidated Financial Statements. |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions | Total | Common Stock | Paid-in capital | Retained Earnings | Accumulated Other Comprehensive Loss | Non-controlling Interests |
Beginning balance at Jan. 01, 2021 | $ 20,841 | $ 208 | $ 19,008 | $ 2,347 | $ (839) | $ 117 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 1,842 | 1,846 | (4) | |||
Other comprehensive income, net of income taxes | 693 | 693 | ||||
Shares issued under stock incentive plans | 97 | 1 | 96 | |||
Shares issued under defined contribution plans | 219 | 1 | 218 | |||
Share-based compensation expense | 129 | 129 | ||||
Tax withholding payments on share-based awards | (5) | (5) | ||||
Repurchases and retirement of common stock | (3,675) | (17) | (3,199) | (459) | ||
Cash dividends | (817) | (817) | ||||
Other | (5) | 1 | 1 | (7) | ||
Ending balance at Dec. 31, 2021 | 19,319 | 194 | 16,248 | 2,917 | (146) | 106 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 1,061 | 1,062 | (1) | |||
Other comprehensive income, net of income taxes | (142) | (142) | ||||
Shares issued under stock incentive plans | 57 | 1 | 56 | |||
Shares issued under defined contribution plans | 216 | 1 | 215 | |||
Share-based compensation expense | 109 | 109 | ||||
Tax withholding payments on share-based awards | (45) | (45) | ||||
Repurchases and retirement of common stock | (1,083) | (5) | (907) | (171) | ||
Cash dividends | (864) | (864) | ||||
Other | (4) | 1 | (1) | (4) | ||
Ending balance at Dec. 30, 2022 | 18,624 | 191 | 15,677 | 2,943 | (288) | 101 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | 1,198 | 1,227 | (29) | |||
Other comprehensive income, net of income taxes | 90 | 90 | ||||
Shares issued under stock incentive plans | 24 | 1 | 23 | |||
Shares issued under defined contribution plans | 231 | 1 | 230 | |||
Share-based compensation expense | 89 | 89 | ||||
Tax withholding payments on share-based awards | (30) | (30) | ||||
Repurchases and retirement of common stock | (518) | (3) | (433) | (82) | ||
Cash dividends | (868) | (868) | ||||
Other | (11) | (3) | (8) | |||
Ending balance at Dec. 29, 2023 | $ 18,829 | $ 190 | $ 15,553 | $ 3,220 | $ (198) | $ 64 |
CONSOLIDATED STATEMENT OF EQU_2
CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends (in dollars per share) | $ 4.56 | $ 4.48 | $ 4.08 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 29, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 1: SIGNIFICANT ACCOUNTING POLICIES Organization — L3Harris Technologies, Inc., together with its subsidiaries, is the Trusted Disruptor in the defense industry. With customers’ mission-critical needs in mind, we deliver end-to-end technology solutions connecting the space, air, land, sea and cyber domains. We support government customers in more than 100 countries, with our largest customers being various departments and agencies of the U.S. Government and their prime contractors. Our products, systems and services have defense and civil government applications, as well as commercial applications. As of December 29, 2023 we had approximately 50,000 employees. Principles of Consolidation — Our Consolidated Financial Statements include the accounts of L3Harris Technologies, Inc. and its consolidated subsidiaries. As used in these Notes to the Consolidated Financial Statements, the terms “L3Harris,” “Company,” “we,” “our” and “us” refer to L3Harris Technologies, Inc. and its consolidated subsidiaries. Intracompany transactions and accounts have been eliminated. Amounts contained in this Report may not always add to totals due to rounding. Fiscal Year — Our fiscal year ends on the Friday nearest December 31. Fiscal 2023, fiscal 2022 and fiscal 2021 each included 52 weeks. Organizational Structure and Change in Accounting Policy — Effective for fiscal 2023, we adjusted our reporting to better align our businesses and transferred our ADG business from our IMS segment to our SAS segment. On October 1, 2023, we combined our Electronic Warfare sector and the majority of the ADG sector within our SAS segment to create a new sector, Advanced Combat Systems (“ACS”). The remaining portion of the ADG sector was combined with our Space Systems sector within our SAS segment. The historical results, discussion and presentation of our business segments as set forth in the accompanying 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 “Business Segments” section below in this Note and Note 14: Business Segments in these Notes for information regarding our pension presentation and segment structure. Divestitures — See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for information regarding our business divestitures and asset sales in fiscal 2023, 2022 and 2021. 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 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 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 Consolidated Financial Statements and these Notes to conform to current year classifications. Supplemental Cash Flow Information — Non-cash investing and financing activities during fiscal 2023, fiscal 2022 and fiscal 2021 included a $26 million, $20 million and $120 million, respectively, right-of-use (“ROU”) asset we obtained in exchange for a corresponding finance lease liability. These non-cash investing and financing activities are excluded from the “Additions to property, plant and equipment” and “Proceeds from borrowings, net of issuance cost” line items in our Consolidated Statement of Cash Flows. Right-of-use assets for finance leases are included in the “Property, plant and equipment, net” line item and the corresponding finance lease liabilities are included in the “Current portion of long-term debt, net” and “Long-term debt, net” line items in our Consolidated Balance Sheet. Cash and Cash Equivalents — Cash and cash equivalents include cash at banks and temporary cash investments with a maturity of three or fewer months when purchased. These investments include accrued interest and are carried at the lower of cost or market. Fair Value of Financial Instruments — The carrying amounts reflected in our Consolidated Balance Sheet for cash and cash equivalents, accounts receivable, non-current receivables, notes receivable, accounts payable, short-term debt and long-term variable-rate debt approximate their fair values. Fair values for long-term fixed-rate debt are primarily based on quoted market prices for those or similar instruments. See Note 8: Debt and Credit Arrangements in these Notes for additional information regarding fair values for our long-term fixed-rate debt. A discussion of fair values for our derivative financial instruments is included under the caption “Financial Instruments and Risk Management” in this Note. Fair Value Measurements — Fair value is defined as the price that would be received to sell 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 pricing service, 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 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. Accounts Receivable — We record receivables derived from contracts with customers at net realizable value and they generally do not bear interest. This value includes an allowance for estimated uncollectible accounts to reflect any losses anticipated on the accounts receivable balances which is charged to the provision for doubtful accounts. We calculate this allowance at inception based on expected loss over the life of the receivable. We consider historical write-offs by customer, level of past due accounts and economic status of the customers. A receivable is considered delinquent if it is unpaid after the term of the related invoice has expired. Write-offs are recorded at the time a customer receivable is deemed uncollectible. Contract Assets and Liabilities — The timing of revenue recognition, customer billings and cash collections results in accounts receivable, contract assets and contract liabilities at the end of each reporting period. Contract assets include unbilled amounts typically resulting from revenue recognized exceeding amounts billed to customers for contracts utilizing the 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 portion of the contract price until contract completion. Contract liabilities include advance payments and billings in excess of revenue recognized, including deferred revenue. Contract assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period. The non-current portion of contract liabilities is included within the “Other long-term liabilities” line item in our Consolidated Balance Sheet. Contract assets related to amounts withheld by customers until contract completion are not considered a significant financing component of our contracts because the intent is to protect the customers from our failure to satisfactorily complete our performance obligations. Payments received from customers in advance of revenue recognition are not considered a significant financing component of our contracts because they are utilized to pay for contract costs within a one-year period or are requested by us to ensure the customers meet their payment obligations. See Note 3: Contract Assets and Contract Liabilities in these Notes for additional information. Inventories — Inventories are valued at the lower of cost (determined by average and first-in, first-out methods) or net realizable value. We regularly review inventory quantities on hand and record a provision for excess and obsolete inventory primarily based on our estimated forecast of product demand, anticipated end of product life and production requirements. See Note 4: Inventories in these Notes for additional information regarding inventories. Property, Plant and Equipment — Property, plant and equipment are carried on the basis of cost and include software capitalized for internal use. Depreciation of buildings, machinery and equipment is computed by the straight-line and accelerated methods. The estimated useful lives of buildings, including leasehold improvements, generally range between 2 and 45 years. The estimated useful lives of machinery and equipment generally range between 2 and 10 years. Amortization of internal-use software begins when the software is put into service and is based on the expected useful life of the software. The useful lives over which we amortize internal-use software generally range between 2 and 10 years. See Note 5: Property, Plant and Equipment, Net in these Notes for additional information regarding property, plant and equipment. Goodwill — We follow the acquisition method of accounting to record the assets and liabilities of acquired businesses at their estimated fair value at the date of acquisition. We initially record goodwill for the amount the consideration transferred exceeds the acquisition-date fair value of net identifiable assets acquired. We test goodwill for impairment at a level within the Company referred to as the reporting unit, which is our business segment level or one level below the business segment. Goodwill is tested for impairment annually as of the first business day of our fourth fiscal quarter, or under certain circumstances more frequently, such as when events or circumstances indicate there may be impairment. Such events or circumstances may include a significant deterioration in overall economic conditions, changes in the business climate of our industry, a decline in our market capitalization, operating performance indicators, competition, reorganizations of our business or the disposal of all or a portion of a reporting unit. To test goodwill for impairment, we may perform both qualitative and quantitative assessments. If we elect to perform a qualitative assessment for a certain reporting unit, we evaluate events and circumstances impacting the reporting unit to determine the probability that goodwill is impaired. If we perform a quantitative assessment for a certain reporting unit, we calculate the fair value of that reporting unit and compare the fair value to the reporting unit’s net book value. We estimate fair values of our reporting units based on projected cash flows. Values derived from projected cash flows are corroborated through review of revenue and/or earnings multiples applied to the latest twelve months’ revenue and earnings of our reporting units. Projected cash flows are based on our best estimate of future revenues, operating costs and balance sheet metrics reflecting our view of the financial and market conditions of the underlying business; and the resulting cash flows are discounted using an appropriate discount rate that reflects the risk in the forecasted cash flows. Revenue and earnings multiples are based on current multiples of revenues and earnings for similar businesses, and based on revenue and earnings multiples paid for recent acquisitions of similar businesses made in the marketplace. We then assess whether any implied control premium, based on a comparison of fair value based purely on our stock price and outstanding shares with fair value determined by using all of the above-described models, is reasonable. If we determine it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, we measure any impairment loss by comparing the fair value of each reporting unit to its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired, and an impairment loss is recognized in an amount equal to that excess. See Note 13: Acquisitions, Divestitures and Asset Sales and Note 6: Goodwill and Intangible Assets in these Notes for additional information regarding goodwill. Long-Lived Assets, Including Intangible Assets — Long-lived assets, including finite-lived intangible assets, are amortized to expense over their useful lives either according to the underlying economic benefit as reflected by future net cash inflows or on a straight-line basis depending on the nature of the asset. We assess the recoverability of the carrying value of our long-lived assets, including finite-lived intangible assets, whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. We evaluate the recoverability of such assets based on the expectations of undiscounted cash flows from such assets. If the sum of the expected future undiscounted cash flows are less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and the carrying amount. Indefinite-lived intangible assets are not amortized, but are tested annually for impairment, or under certain circumstances more frequently, such as when events and circumstances indicate there may be an impairment. This testing compares the fair value of the asset to its carrying amount, and, when appropriate, the carrying amount of these assets is reduced to its fair value. See Note 5: Property, Plant and Equipment, Net and Note 6: Goodwill and Intangible Assets in these Notes for additional information regarding long-lived assets and intangible assets. Leases — We recognize ROU assets and lease liabilities in our Consolidated Balance Sheet for operating and finance leases under which we are the lessee. As a practical expedient, leases with a term of twelve months or less (including reasonably certain extension periods) and leases with expected lease payments of less than $250 thousand are expensed as incurred. Operating lease assets and finance lease assets are included in the “Other non-current assets” and “Property, plant and equipment, net” line items, respectively, in our Consolidated Balance Sheet. Operating lease liabilities and finance lease liabilities for obligations due within twelve months are included in the “Other accrued items” line item in our Consolidated Balance Sheet. Operating lease liabilities and finance lease liabilities for obligations due longer than twelve months are included in the “Other long-term liabilities” line item in our Consolidated Balance Sheet. ROU assets and lease liabilities are recognized based on the present value of future lease payments, which are primarily base rent. We have some lease payments that are based on an index and changes to the index are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred. Our lease payments also include non-lease components such as real estate taxes and common-area maintenance costs. As a practical expedient, we account for lease and non-lease components as a single component. For certain leases, the non-lease components are variable and are therefore excluded from lease payments to determine the ROU asset. The present value of future lease payments is determined using our incremental borrowing rate at lease commencement over the expected lease term. We use our incremental borrowing rate because our leases do not provide an implicit lease rate. The expected lease term represents the number of years we expect to lease the property, including options to extend or terminate the lease when it is reasonably certain that we will exercise the option. Operating lease expense is recognized as an operating cost on a straight-line basis over the expected lease term in the “Cost of revenue” and “General and administrative expenses” line items in our Consolidated Statement of Operations. For finance leases, the asset is amortized on a straight-line basis over the lease term, and interest on the lease liability is recognized in interest expense. We are a lessor for certain flight simulators and aircraft which meet the criteria for operating lease classification. Lease income associated with these leases was not material in fiscal 2023, 2022 or 2021. See Note 11: Leases in these Notes for additional information regarding leases Income Taxes — We follow the asset and liability method of accounting for income taxes. We record deferred tax assets and liabilities for differences between the tax basis of assets and liabilities and amounts reported in our Consolidated Balance Sheet, as well as operating loss and tax credit carryforwards. We follow very specific and detailed guidelines in each tax jurisdiction regarding the recoverability of any tax assets recorded on the balance sheet and provide necessary valuation allowances as required. We regularly review our deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The implementation of a modified territorial tax system by the Tax Cuts and Jobs Act of 2017 (“TCJA”) subjects us to tax on our Global Intangible Low-Taxed Income (“GILTI”) starting with fiscal 2019. The Financial Accounting Standards Board has permitted companies to make an accounting policy decision to either (1) treat taxes due on future GILTI inclusions in U.S. taxable income as a current-period expense when incurred (“period cost method”) or (2) factor such amounts into the measurement of its deferred taxes (“deferred method”). We have elected to use the period cost method. See Note 7: Income Taxes in these Notes for additional information regarding income taxes. Standard Warranties — We record estimated standard warranty costs in the period that control of the related products transfers to the customer. Factors that affect the estimated cost for warranties include the terms of the contract, the type and complexity of the delivered product, the number of installed units, historical experience and management’s assumptions regarding anticipated rates of warranty claims and cost per claim. Our standard warranties start from the shipment, delivery or customer acceptance date and continue as follows: Segment Average Warranty Period SAS One IMS One CS One AR One year Because our products are manufactured, in many cases, to customer specifications and their acceptance is based on meeting those specifications, we historically have experienced minimal warranty costs. Factors that affect our warranty liability include the number of installed units, historical experience, anticipated delays in delivery of products to end customers, in-country support for international revenues and our assumptions regarding anticipated rates of warranty claims and cost per claim. We assess the adequacy of our recorded warranty liabilities every quarter and make adjustments to the liability as necessary. Restructuring and Other Exit Costs — We record charges for restructuring and other exit activities related to sales or terminations of product lines, closures or relocations of business activities, changes in management structure, and fundamental reorganizations that affect the nature and focus of operations. Such charges include termination benefits, contract termination costs and costs to close or consolidate facilities or relocate employees. We record these charges at their fair value when incurred. In cases where employees are required to render service until they are terminated in order to receive the termination benefits and will be retained beyond the minimum retention period, we record the expense ratably over the future service period. Foreign Currency Translation — The functional currency for most international subsidiaries is the local currency. Assets and liabilities are translated at current rates of exchange and income and expense items are translated at the weighted average exchange rate for the year. The resulting translation adjustments are recorded as a separate component of shareholders’ equity. Stock Options and Other Share-Based Compensation — We measure compensation cost for all share-based payments (including employee stock options) at fair value and recognize cost over the vesting period, with forfeitures recognized as they occur. It is our practice to issue shares when options are exercised. See Note 10: Stock Options and Other Share-Based Compensation in these Notes for additional information regarding share-based compensation. Revenue Recognition — We account for a contract when it has approval and commitment from all parties, the rights and payment terms of the parties can be identified, the contract has commercial substance and the collectability of the consideration, or transaction price, is probable. Our contracts are often subsequently modified to include changes in specifications, requirements or price that may create new or change existing enforceable rights and obligations. We do not account for contract modifications (including unexercised options) or follow-on contracts until they meet the requirements noted above to account for a contract. We categorize revenue and costs for performance obligations to provide tangible goods as “product” and revenue and costs for performance obligations to provide services for which the principal result is not to produce anything tangible as “service.” In instances where a single performance obligation requires us to deliver products and perform services, we derive the product and service categories presented in our financial statements based upon the predominant nature of each performance. In these cases, we classify the revenue and costs from the entire performance obligation based on the nature of the overall promise made to the customer. At the inception of each contract, we evaluate the promised products and services to determine whether the contract should be accounted for as having one or more performance obligations. A performance obligation is a promise to transfer a distinct product or service to a customer and represents the unit of accounting for revenue recognition. A substantial majority of our revenue is derived from long-term development and production contracts involving the design, development, manufacture or modification of defense products and related services according to the customers’ specifications. Due to the highly interdependent and interrelated nature of the underlying products and services and the significant service of integration that we provide, which often result in the delivery of multiple units, we account for these contracts as one performance obligation. For contracts that include both development/production and follow-on support services (for example, operations and maintenance), we generally consider the follow-on services distinct in the context of the contract and account for them as separate performance obligations. Additionally, we also recognize revenue from contracts to provide multiple distinct products to a customer where the products can readily be sold to other customers based on their commercial nature and, accordingly, these products are accounted for as separate performance obligations. Shipping and handling costs incurred after control of a product has transferred to the customer (for example, in free on board shipping arrangements) are treated as fulfillment costs and, therefore, are not accounted for as separate performance obligations. Also, we record taxes collected from customers and remitted to governmental authorities on a net basis in that they are excluded from revenue. As noted above, our contracts are often subsequently modified to include changes in specifications, requirements or price. Depending on the nature of the modification, we consider whether to account for the modification as an adjustment to the existing contract or as a separate contract. Often, the deliverables in our contract modifications are not distinct from the existing contract due to the significant integration and interrelated tasks provided in the context of the contract. Therefore, such modifications are accounted for as if they are part of the existing contract, and we may be required to recognize a cumulative catch-up adjustment to revenue at the date of the contract modification. We determine the transaction price for each contract based on our best estimate of the consideration we expect to receive, which includes assumptions regarding variable consideration, such as award and incentive fees. These variable amounts are generally awarded upon achievement of certain negotiated performance metrics, program milestones or cost targets and can be based upon customer discretion. We include such estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. We estimate variable consideration primarily using the most likely amount method. For contracts with multiple performance obligations, we allocate the transaction price to each performance obligation based on the relative standalone selling price of the product or service underlying each performance obligation. The standalone selling price represents the amount for which we would sell the product or service to a customer on a standalone basis (i.e., not sold as a bundle with any other products or services). Our contracts with the U.S. Government, including foreign military sales contracts, are subject to the FAR and the prices of our contract deliverables are typically based on our estimated or actual costs plus a reasonable profit margin. As a result, the standalone selling prices of the products and services in these contracts are typically equal to the selling prices stated in the contract, thereby eliminating the need to allocate (or reallocate) the transaction price to the multiple performance obligations. In our non-U.S. Government contracts, we also generally use the expected cost plus a reasonable profit margin approach to determine standalone selling price. In addition, we determine standalone selling price for certain contracts that are commercial in nature based on observable selling prices. We recognize revenue for each performance obligation when (or as) the performance obligation is satisfied by transferring control of the promised products or services underlying the performance obligation to the customer. The transfer of control can occur over-time or at a point in time. A significant portion of our business is derived from development and production contracts. Revenue and profit related to development and production contracts are generally recognized over-time, typically using the POC cost-to-cost method of revenue recognition, whereby we measure our progress towards completion of the performance obligation based on the ratio of costs incurred to date to estimated costs at completion under the contract. Because costs incurred represent work performed, we believe this method best depicts the transfer of control of the asset to the customer. Under 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. To a lesser extent, we also recognize revenue from contracts to provide multiple distinct products to a customer that are commercial in nature and can readily be sold to other customers. These performance obligations do not meet any of the three criteria listed below to recognize revenue over-time; therefore, we recognize revenue at a point in time, generally when the products are received and accepted by the customer. Point-in-Time Revenue Recognition. Our performance obligations are satisfied at a point in time unless they meet at least one of the following criteria, in which case they are satisfied over-time: • The customer simultaneously receives and consumes the benefits provided by our performance as we perform; • Our performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced; or • Our performance does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date. Over-Time Revenue Recognition. For U.S. Government development and production contracts, there is generally a continuous transfer of control of the asset to the customer as it is being produced based on FAR clauses in the contract that provide the customer with lien rights to work in process and allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. This also typically applies to our contracts with prime contractors for U.S. Government development and production contracts, when the above-described FAR clauses are flowed down to us by the prime contractors. Our non-U.S. Government development and production contracts, including international direct commercial contracts and U.S. contracts with state and local agencies, utilities, commercial and transportation organizations, often do not include the FAR clauses described above. However, over-time revenue recognition is typically supported either through our performance creating or enhancing an asset that the customer controls as it is created or enhanced or based on other contractual provisions or relevant laws that provide us with an enforceable right to payment for our work performed to date plus a reasonable profit if our customer were permitted to and did terminate the contract for reasons other than our failure to perform as promised. For performance obligations to provide services that are satisfied over-time, we recognize revenue either on a straight-line basis, the POC cost-to-cost method or based on the right-to-invoice method (i.e., based on our right to bill the customer), depending on which method best depicts transfer of control to the customer. Contract Estimates. Under 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. Recognition of profit on a contract requires estimates of the total cost at completion and transaction price and the measurement of progress towards completion. Due to the long-term nature of many of our contracts, developing the estimated total cost at completion and total transaction price often requires judgment. Factors that must be considered in estimating the cost of the work to be completed include the nature and complexity of the work to be performed, subcontractor performance and t |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 29, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 2: EARNINGS PER SHARE We define EPS as income from continuing operations per common share attributable to L3Harris common shareholders divided by either our weighted average number of basic or diluted shares outstanding. Potential dilutive common shares primarily consist of employee stock options and restricted and performance unit awards. The weighted average number of shares outstanding used to compute basic and diluted EPS are as follows: Fiscal Year Ended (In millions, except per share amounts) December 29, 2023 December 30, 2022 December 31, 2021 Basic weighted-average common shares outstanding 189.6 191.8 201.3 Impact of dilutive share-based awards 1.0 1.7 1.9 Diluted weighted-average common shares outstanding 190.6 193.5 203.2 Income from continuing operations per diluted common share excludes the antidilutive impact of 3.7 million, 0.3 million and 0.8 million weighted average share-based awards outstanding in fiscal 2023, 2022 and 2021, respectively. |
CONTRACT ASSETS AND CONTRACT LI
CONTRACT ASSETS AND CONTRACT LIABILITIES | 12 Months Ended |
Dec. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT ASSETS AND CONTRACT LIABILITIES | NOTE 3: CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets and contract liabilities are summarized below: (In millions) December 29, 2023 December 30, 2022 Contract assets (1) $ 3,196 $ 2,987 Contract liabilities, current (2) (1,900) (1,400) Contract liabilities, non-current (3) (94) (117) Net contract assets $ 1,202 $ 1,470 _______________ (1) Includes approximately $385 million of AR contract assets at December 29, 2023. (2) Includes approximately $319 million of AR contract liabilities at December 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 Consolidated Balance Sheet. The components of contract assets are summarized below: (In millions) December 29, 2023 December 30, 2022 Unbilled contract receivables, gross $ 6,649 $ 4,629 Unliquidated progress payments and advances (3,453) (1,642) Contract assets $ 3,196 $ 2,987 Contract assets and liabilities as of December 29, 2023 and December 30, 2022 were impacted primarily by the timing of contractual billing milestones. In fiscal 2023, 2022 and 2021, we recognized $1.25 billion, $1.06 billion and $930 million, respectively, |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 29, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4: INVENTORIES Inventories are summarized below: (In millions) December 29, 2023 December 30, 2022 Finished products $ 217 $ 181 Work in process 427 396 Materials and supplies 828 714 Inventories $ 1,472 $ 1,291 |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 29, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 5: PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, are summarized below: (In millions) December 29, 2023 December 30, 2022 Land $ 184 $ 78 Software capitalized for internal use 716 686 Buildings 1,605 1,251 Machinery and equipment 2,816 2,322 5,321 4,337 Less: accumulated depreciation and amortization (2,459) (2,233) Property, plant and equipment, net (1) $ 2,862 $ 2,104 _______________ (1) Includes approximately $95 million, $275 million and $251 million of AR land, buildings and machinery and equipment, respectively, at December 29, 2023. Depreciation and amortization expense related to property, plant and equipment was $389 million, $342 million and $343 million in fiscal 2023, 2022 and 2021, respectively. There were no impairments of property, plant and equipment in fiscal 2023 or 2022. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 6: GOODWILL AND INTANGIBLE ASSETS The assignment of goodwill and changes in the carrying amount of goodwill, by business segment, for fiscal 2023 and 2022 were as follows: (In millions) SAS IMS CS AR Total Balance at December 31, 2021 $ 5,849 $ 8,187 $ 4,153 ** $ 18,189 Assets of business held for sale (1) (30) — — ** (30) Impairment of goodwill — (447) (355) ** (802) Currency translation adjustments (41) (31) (2) ** (74) Balance at December 30, 2022 5,778 7,709 3,796 ** 17,283 Reallocation of goodwill in business realignment (2) 327 (327) — — — Goodwill from TDL acquisition — — 1,143 — 1,143 Goodwill from AJRD acquisition — — — 2,365 2,365 Goodwill decrease from divestitures (1) (9) — — — (9) Assets of business held for sale (3) — (534) — — (534) Impairment of goodwill — (296) — — (296) Currency translation adjustments 14 12 1 — 27 Balance at December 29, 2023 $ 6,110 $ 6,564 $ 4,940 $ 2,365 $ 19,979 _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the assets, liabilities and operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. (1) During fiscal 2022, we assigned $30 million of goodwill associated with the then pending VIS business divestiture to “Assets of business held for sale ” in our Consolidated Balance Sheet. During fiscal 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. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. (2) In conjunction with our 2023 business realignment discussed below, we reallocated $327 million of goodwill related to the legacy ADG reporting unit, which is net of fiscal 2022 impairment charges of $80 million, to our SAS segment from our IMS segment. (3) During fiscal 2023, we assigned $534 million of goodwill associated with the pending divestiture of the CAS disposal group to “Assets of business held for sale” in our Consolidated Balance Sheet. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. At December 29, 2023 Reallocation of Goodwill in Business Realignment — Fiscal 2023 Effective in fiscal 2023, 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 — Fiscal 2023 We recorded $1,143 million of goodwill in our Broadband reporting unit within our CS segment in connection with the acquisition of TDL. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Goodwill from AJRD Acquisition — Fiscal 2023 We recorded $2,365 million of goodwill in our AR segment, which is also the AR reporting unit in connection with the acquisition of AJRD. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. CAS Disposal Group Pending Divestiture and Impairment — Fiscal 2023 As described in more detail in Note 13: Acquisitions, Divestitures and Asset Sales , on November 27, 2023, we announced that we entered into a definitive agreement to sell our CAS disposal group, which includes both the CTS and Commercial Aviation reporting units. As of November 27, 2023, the fair value less costs to sell the CAS disposal group was $834 million, inclusive of considerations related to noncontrolling interest and accumulated other comprehensive income. In connection with the preparation of our financial statements for the fiscal year ended December 29, 2023, we evaluated the facts and circumstances which impacted the agreed upon selling price of the CAS disposal group and identified interim indicators of impairment within both reporting units subsequent to our annual impairment testing date of October 2, 2023. Specifically, supply chain-related operational challenges which negatively impact cash flows over the short-term forecast period were assessed in combination with our long-term portfolio shaping strategy to dispose of non-core businesses. As a result, we performed quantitative impairment tests for both reporting units as of November 27, 2023, utilizing an income approach aligned to market prices for the two reporting units, as specified in the definitive agreement. As a result of these tests, we determined that the fair value of the CTS reporting unit was above carrying value, while the fair value of the Commercial Avionics reporting unit was below its carrying value, and concluded goodwill related to the Commercial Aviation reporting unit was impaired. Therefore we recorded a non-cash charge for impairment of $296 million associated with the Commercial Aviation reporting unit in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations. Goodwill Impairments — Fiscal 2022 During fiscal 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 Electro Optical and ADG of $367 million and $80 million, are included in our Electro Optical and SAS reporting units, respectively, in our comparative financial results for fiscal 2022. Fiscal 2021 Impairment During fiscal 2021, we determined the criteria to be classified as held for sale were met with respect to the CPS business within our Aviation Systems segment and assigned $174 million of goodwill to the disposal group on a relative fair value basis. In connection with the preparation of our financial statements for fiscal 2021, we concluded that goodwill related to the CPS business was impaired and we recorded a non-cash impairment charge of $62 million, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations for fiscal 2021. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information. Intangible Assets The most significant identifiable intangible asset that is separately recognized for our business combinations is customer relationships. Our customer relationships are established through written customer contracts (i.e., revenue arrangements). The fair value for customer relationships is determined, as of the date of acquisition, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows arising from the follow-on revenues expected from the customer relationships over the estimated lives, including the probability of expected future contract renewals and revenues, less a contributory assets charge, all of which is discounted to present value. Identifiable intangible assets, net, are summarized below: December 29, 2023 December 30, 2022 (In millions) Gross Carrying Accumulated Net Carrying Amount (1) Gross Carrying Accumulated Net Carrying Amount (2) Customer relationships $ 8,892 $ 2,733 $ 6,159 $ 6,124 $ 2,189 $ 3,935 Developed technologies 856 413 443 566 366 200 Trade names — divisions 185 50 135 95 53 42 Other, including contract backlog 4 4 — 3 3 — Total finite-lived identifiable intangible assets 9,937 3,200 6,737 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 $ 11,740 $ 3,200 $ 8,540 $ 8,612 $ 2,611 $ 6,001 _______________ (1) During fiscal 2023, we assigned $263 million of intangible assets associated with the Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding divestitures and businesses held for sale. (2) During fiscal 2022, we assigned $10 million of intangible assets associated with the then pending VIS business divestiture to "Assets of business held for sale" in our Consolidated Balance Sheet. During fiscal 2023, we completed the divestiture of our VIS business. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding divestitures and businesses held for sale. Intangible assets acquired in fiscal 2023 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 $ 62 $ 344 $ 2,720 $ 102 $ 2,618 Developed technologies 349 21 328 — — — Trade names — divisions — — — 120 3 117 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 13: Acquisitions, Divestitures and Asset Sales. Amortization expense for identifiable finite-lived intangible assets was $779 million, $605 million and $627 million in fiscal 2023, 2022 and 2021, respectively, and primarily related to assets acquired in connection with business combinations. Future estimated amortization expense for identifiable intangible assets is as follows: (In millions) 2024 $ 914 2025 791 2026 694 2027 585 2028 513 Thereafter 3,240 Total $ 6,737 In-process R&D Impairment - Fiscal 2023 During fiscal 2023, we closed a facility, which triggered an evaluation of the in-process R&D related to the operations of the closed facility for impairment. As a result we recorded a $21 million non-cash charge for the impairment of in-process R&D intangible assets Fiscal 2021 Impairment During the quarter ended July 2, 2021, we adjusted our Aviation Systems segment reporting to better align our businesses and separated the CTS business from our CAS reporting unit, creating a new reporting unit within the CAS sector of our Aviation Systems segment. Immediately before and after our goodwill assignments, we completed an assessment of any potential goodwill impairment under our former and new reporting unit structure and determined that no impairment existed. To test for potential impairment of the long-lived assets, including identifiable intangible assets and property, plant and equipment, related to CTS, we compared the estimated future cash flows (on an undiscounted basis) to be generated from the use and hypothetical eventual disposition of the asset group to its carrying value and, as a result, we determined the carrying value of the CTS asset group was not recoverable. Next, we prepared an estimate of the fair value of CTS based on a combination of market-based valuation techniques, utilizing quoted market prices, comparable publicly reported transactions and projected discounted cash flows. We compared the fair value of CTS to our carrying value and recorded a $145 million non-cash charge for the impairment of CTS long-lived assets, including $63 million for impairment of identifiable intangible assets |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 7: INCOME TAXES Income Tax Provision The provisions for current and deferred income taxes attributable to continuing operations are as follows: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Current: United States $ 328 $ 633 $ 415 International 50 82 70 State and local 66 98 65 Total current income taxes 444 813 550 Deferred: United States (380) (523) (55) International 10 (61) (34) State and local (51) (17) (21) Total deferred income taxes (421) (601) (110) Total income taxes $ 23 $ 212 $ 440 A reconciliation of the U.S. statutory income tax rate to our effective income tax rate is as follows: Fiscal Year Ended December 29, 2023 December 30, 2022 December 31, 2021 U.S. statutory income tax rate 21.0 % 21.0 % 21.0 % State taxes 1.1 2.2 1.8 International income — — 0.4 Non-deductible goodwill impairment 3.6 14.2 0.6 Research and development tax credit (12.5) (13.0) (5.9) FDII deduction (4.4) (5.1) (1.4) Changes in valuation allowance 0.5 0.1 0.9 Impact of divestitures and reorganizations (8.5) (1.3) 4.1 Equity-based compensation (1) 0.2 (0.2) (1.1) Settlement of tax audits (1.1) (0.7) (1.1) Other items 2.0 (0.5) — Effective income tax rate 1.9 % 16.7 % 19.3 % _______________ (1) Includes non-deductible equity-based compensation and excess tax benefits from equity-based compensation. As of December 29, 2023, we estimate our outside basis difference in foreign subsidiaries that are considered indefinitely reinvested to be approximately $1.5 billion. The outside basis difference is comprised predominantly of purchase accounting adjustments and to a lesser extent, undistributed earnings and other equity adjustments. In the event of a disposition of the foreign subsidiaries or a distribution, we may be subject to incremental U.S. income taxes, subject to an adjustment for foreign tax credits, and withholding taxes or income taxes payable to the foreign jurisdictions. As of December 29, 2023, the determination of the amount of unrecognized deferred tax liability related to the outside basis difference is not practicable. Purchase of Tax Credits under IRA The IRA includes a new transferability provision under Section 6418 of the Internal Revenue Code which permits, in certain circumstances, the sale of federal income tax credits generated from renewable and alternative energy sources. During the year ended December 29, 2023, we entered into a binding agreement to purchase tax credits totaling $51 million for the 2023 tax year for a net purchase price of $0.95 per $1.00 of tax credits, allowing us to reduce our 2023 federal income taxes payable by the amount of credits we expect to claim on our tax returns as a result of our binding agreement. We have recorded a liability to the transferor for the amount owed in the “Other accrued items” line of the Consolidated Balance Sheet. We have recorded an income tax benefit of $2 million for the difference between the amount paid or to be paid to the transferor and the reduction to our taxes payable in the “Income taxes” line of the Consolidated Statement of Operations. Deferred Income Tax Assets (Liabilities) The components of deferred income tax assets (liabilities) were as follows: (In millions) December 29, 2023 December 30, 2022 Deferred tax assets, net: Accruals $ 334 $ 227 Tax loss and credit carryforwards 217 194 Operating lease obligation 243 239 Capitalized research and experimental expenditures 1,125 646 Other 272 372 Valuation allowance (1) (240) (243) Deferred tax assets, net 1,951 1,435 Deferred tax liabilities: Property, plant and equipment (252) (167) Acquired intangibles (2,143) (1,566) Operating lease right-of-use asset (219) (210) Other (61) (138) Deferred tax liabilities (2,675) (2,081) Net deferred tax liabilities $ (724) $ (646) _______________ (1) The valuation allowance has been established to offset certain domestic and foreign deferred tax assets due to uncertainty regarding our ability to realize them in the future. The net change in our valuation allowance in fiscal 2023 and 2022 was a decrease of $3 million and $14 million, respectively. Net deferred tax assets (liabilities) were classified as follows in our Consolidated Balance Sheet: (In millions) December 29, 2023 December 30, 2022 Deferred income tax assets $ 91 $ 73 Deferred income tax liabilities (815) (719) Net deferred tax liabilities $ (724) $ (646) Tax loss and credit carryforwards at December 29, 2023 have expiration dates ranging from less than one year to no expiration date. A significant portion of the carryforwards are either indefinite or begin expiring in 2035. The tax-effected amounts of federal, international and state and local operating loss carryforwards at December 29, 2023 were $5 million, $83 million and $4 million, respectively. The tax-effected amounts of federal, international and state and local capital loss carryforwards were not material at December 29, 2023. There were no international credit carryforwards, and $7 million and $110 million of federal and state and local credit carryforwards, respectively, at December 29, 2023. Income from continuing operations before income taxes of international subsidiaries was $205 million, $95 million and $29 million in fiscal 2023, 2022 and 2021, respectively. We paid $715 million, $309 million and $358 million in income taxes, net of refunds received, in fiscal 2023, 2022 and 2021, respectively. Tax Uncertainties A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Balance at beginning of period $ 613 $ 587 $ 542 Additions based on tax positions taken during current period 99 124 115 Additions based on tax positions taken during prior period 8 4 11 Additions from tax positions related to acquired entities 86 — — Decreases based on tax positions taken during prior period (133) (76) (64) Decreases from lapse in statutes of limitations (11) (6) (15) Decreases from settlements (10) (20) (2) Balance at end of fiscal year $ 652 $ 613 $ 587 As of December 29, 2023, we had $652 million of unrecognized tax benefits, of which $509 million would favorably impact our future tax rates in the event that the tax benefits are eventually recognized. As of December 30, 2022, we had $613 million of unrecognized tax benefits, of which $486 million would favorably impact our future tax rates in the event that the tax benefits are eventually recognized. We recognize accrued interest and penalties related to unrecognized tax benefits as part of our income tax expense. We recognized interest and penalties of $20 million, $12 million and $3 million in fiscal 2023, 2022 and 2021, respectively. We had accrued $80 million for the potential payment of interest and penalties as of December 29, 2023 (and this amount was not included in the $652 million of unrecognized tax benefits balance at December 29, 2023 shown above). We had accrued $59 million for the potential payment of interest and penalties as of December 30, 2022 (and this amount was not included in the $613 million of unrecognized tax benefits balance at December 30, 2022 shown above). We file numerous separate and consolidated income tax returns reporting our financial results and, where appropriate, those of our subsidiaries and affiliates, in the U.S. federal jurisdiction and various state, local and foreign jurisdictions. Pursuant to the Compliance Assurance Process, the Internal Revenue Service (“IRS”) is examining our federal tax returns for fiscal 2017, 2018, 2019, 2020 and 2021 and refund claims related to fiscal 2010 through 2016. Legacy L3’s federal tax returns for calendar years 2017 and 2018 are currently under IRS examination and refund claims related to calendar years 2012, 2013, 2015 and 2016 have been filed with the IRS. In addition, legacy AJRD refund claims related to calendar year 2019 have been filed with the IRS. We are currently under examination or contesting proposed adjustments by various state and international tax authorities for fiscal years ranging from 2013 through 2021. It is reasonably possible that there could be a significant change to our unrecognized tax benefit balance during the course of the next twelve months as these examinations continue, other tax examinations commence or various statutes of limitations expire. An estimate of the range of possible changes is not practicable for the remaining unrecognized tax benefits because of the significant number of jurisdictions in which we do business and the number of open tax periods under various stages of examination. |
DEBT AND CREDIT ARRANGEMENTS
DEBT AND CREDIT ARRANGEMENTS | 12 Months Ended |
Dec. 29, 2023 | |
Debt Disclosure [Abstract] | |
DEBT AND CREDIT ARRANGEMENTS | NOTE 8: DEBT AND CREDIT ARRANGEMENTS Long-Term Debt Long-term debt, net, is summarized below: (In millions) December 29, 2023 December 30, 2022 Variable-rate debt: Floating rate notes, due March 10, 2023 $ — $ 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 (1) 350 350 3.832% notes, due April 27, 2025 (1)(2) 600 600 7.00% debentures, due January 15, 2026 (3) 100 100 3.85% notes, due December 15, 2026 (1) 550 550 5.40% notes, due January 15, 2027 (“5.4% 2027 Notes”) (1)(2) 1,250 — 6.35% debentures, due February 1, 2028 (1) 26 26 4.40% notes, due June 15, 2028 (1)(2) 1,850 1,850 2.90% notes, due December 15, 2029 (1) 400 400 1.80% notes, due January 15, 2031 (1)(2) 650 650 5.40% notes, due July 31, 2033 (“5.4% 2033 Notes”) (1)(2) 1,500 — 4.854% notes, due April 27, 2035 (1)(2) 400 400 6.15% notes, due December 15, 2040 (1)(2) 300 300 5.054% notes, due April 27, 2045 (1)(2) 500 500 5.60% notes, due July 31, 2053 (“5.6% 2053 Notes”) (1)(2) 500 — Total variable and fixed-rate debt 11,226 6,776 Financing lease obligations and other debt 300 222 Long-term debt, including the current portion of long-term debt 11,526 6,998 Plus: unamortized bond premium 51 70 Less: unamortized discounts and issuance costs (54) (25) Long-term debt, including the current portion of long-term debt, net 11,523 7,043 Less: current portion of long-term debt, net (363) (818) Total long-term debt, net $ 11,160 $ 6,225 _______________ (1) We may redeem these notes, in whole or in part, at our option, at a pre-determined redemption price pursuant to their terms prior to the applicable maturity date. (2) Upon change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase these notes at a pre-determined price pursuant to their terms. (3) The debentures are not redeemable prior to maturity. The maturities of long-term debt, including the current portion of long-term debt and excluding financing lease obligations, for the five years following the end of fiscal 2023 and, in total thereafter, are: $355 million in fiscal 2024; $2,855 million in fiscal 2025; $654 million in fiscal 2026; $1,254 million in fiscal 2027; $1,880 million in fiscal 2028; and $4,277 million thereafter. 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. The Term Loan 2025 provides for term loans in up to two separate draws no later than June 30, 2023, with the proceeds to be used: (i) to finance the acquisition of the TDL product line; (ii) to repay all amounts under the Floating 2023 Notes; (iii) to pay the fees, costs and expenses incurred in connection with the foregoing; and (iv) for general corporate purposes in an amount up to $40 million. At L3Harris’ election, borrowings under Term Loan 2025 will bear interest at: (i) the sum of the term Secured Overnight Financing Rate (“SOFR”) rate for any tenor comparable to the applicable interest period, plus 0.10%, plus an applicable margin between 1.125% and 1.875% (initially 1.250%) that varies based on the ratings of our senior unsecured long-term debt securities (“Senior Debt Ratings”); or (ii) the base rate (as described in L3Harris’ Current Report on Form 8-K filed with the SEC on August 4, 2022), plus an applicable margin between 0.125% and 0.875% (initially 0.250%) that varies based on the Senior Debt Ratings. The Term Loan 2025 requires L3Harris to pay a quarterly unused commitment fee commencing on January 17, 2023 at an applicable rate per annum between 0.090% and 0.250% (initially 0.110%) that varies based on the Senior Debt Ratings. We incurred $2 million of debt issuance costs related to the issuance of the Term Loan 2025, which will be amortized over the life of the Term Loan 2025 and will be included as a component of the “Interest expense, net” line item in our Consolidated Statement of Operations. The Term Loan 2025 also contains representations, warranties, covenants and events of default that are substantially similar to those in the 2022 Credit Agreement, as described above in these Notes. L3Harris may prepay amounts borrowed under the Term Loan 2025 at any time, and L3Harris is required to prepay all outstanding term loans ratably from the proceeds of any new indebtedness, subject to certain exceptions set forth in the Term Loan 2025, including with respect to any proceeds received from: (i) the 2022 Credit Agreement, as described above in these Notes; (ii) indebtedness incurred in the ordinary course of business; (iii) indebtedness used to fund any acquisition; (iv) refinancing; (v) commercial paper issuances; (vi) letters of credit; (vii) working capital facilities of foreign subsidiaries; and (viii) other indebtedness in an aggregate principal amount not greater than $500 million. On January 3, 2023, we drew $2 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 13: 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 December 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 the sum of the term 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 our Senior Debt Ratings. At December 29, 2023, the interest rate on Term Loan 2025 was 6.7%. Fixed-Rate Debt. On July 31, 2023, we closed the issuance and sale of 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 $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 straight line method over the life of each respective note. Such amortization is included as a component of the “Interest expense, net” line item in our Consolidated Statement of Operations. There were no issuances of fixed-rate long-term debt during fiscal 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.” As we intended to issue long term debt to repay the Floating 2023 Notes, these notes were classified as “Long-term debt, net” in our Consolidated Balance Sheet at 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 fiscal 2023. There were no repayments of variable and fixed-rate long-term debt during fiscal 2022. Fair Value of Debt The following table presents the carrying amounts and estimated fair values of our long-term debt: December 29, 2023 December 30, 2022 (In millions) Carrying Fair Carrying Fair Term Loan 2025 (1) $ 2,250 $ 2,250 $ — $ — All other long-term debt, net (including current portion) (2) 9,273 9,199 7,043 6,569 Long-term debt, including the current portion of long-term debt, net $ 11,523 $ 11,449 $ 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 our long-term debt in our balance sheet were 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. Interest Paid Total interest paid was $489 million, $296 million and $284 million in fiscal 2023, 2022 and 2021, respectively. 2023 Credit Agreement On March 10, 2023, we established a $2.40 billion, 364-day senior unsecured revolving credit facility by entering into a 364-Day 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 2022 Credit Agreement. The 2023 Credit Agreement matures in March 2024, 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 At December 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. On January 26, 2024, we replaced the 2023 Credit Agreement with a new $1.5 billion, 364-day senior unsecured revolving credit facility maturing no later than January 24, 2025. 2022 Credit Agreement On July 29, 2022, we established a $2.0 billion, five-year senior unsecured revolving credit facility under the 2022 Credit Agreement, with a syndicate of lenders. The 2022 Credit Facility replaced the 2019 Credit Facility and provides for revolving loans, swingline loans and letters of credit, with a sub-limit of $200 million for swingline loans and a sub-limit of $350 million for letters of credit, with the option to request an increase of the maximum amount of commitments up to $3.0 billion. At our election, borrowings in U.S. Dollars under the 2022 Credit Agreement will bear interest either based on the SOFR rate or the Base Rate (each, as defined in the 2022 Credit Agreement), plus an applicable margin. We are also required to pay a quarterly unused commitment fee and letter of credit fees based on our Senior Debt Ratings. The 2022 Credit Facility contains certain affirmative covenants, including, but not limited to: reporting obligations; maintenance of corporate existence and good standing; compliance with laws; maintenance of properties and insurance; payment of taxes; compliance with ERISA and environmental, anti-money laundering, sanctions, export controls, anti-corruption and certain other laws; and visitation and inspection by the administrative agent and the lenders. The 2022 Credit Facility also contains certain negative covenants, including, but not limited to: limiting certain liens on assets; limiting certain mergers, consolidations or sales of assets; and limiting certain investments in unrestricted subsidiaries. The 2022 Credit Facility also requires that L3Harris not permit its ratio of Consolidated Total Indebtedness to Total Capital, each as defined in the 2022 Credit Facility, to be greater than 0.65:1.00. At December 29, 2023, we had no outstanding borrowings and were in compliance with all covenants under the 2022 Credit Facility. Commercial Paper Program On March 14, 2023, we established a new 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 December 29, 2023, we had $1.6 billion in outstanding notes under our CP Program, primarily consisting of amounts Proceeds from issuance of commercial paper with maturities greater than 90 days were $701 million during fiscal 2023. Repayments of commercial paper with maturities greater than 90 days were $184 million during fiscal 2023. During fiscal 2022, we had no commercial paper borrowings with original maturities more than 90 days from the date of issuance. |
RETIREMENT BENEFITS
RETIREMENT BENEFITS | 12 Months Ended |
Dec. 29, 2023 | |
Retirement Benefits [Abstract] | |
RETIREMENT BENEFITS | NOTE 9: RETIREMENT BENEFITS Defined Contribution Plans As of December 29, 2023, we sponsor numerous defined contribution savings plans, which allow our eligible employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. The plans include several match contribution formulas which require us to match a percentage of the employee contributions up to certain limits, generally totaling 6.0% of employee eligible pay. Matching contributions, net of forfeitures, charged to expense were $267 million, $226 million and $230 million in fiscal 2023, 2022 and 2021, respectively. Deferred Compensation Plans We also sponsor certain non-qualified deferred compensation plans. The following table provides the fair value of our deferred compensation plan investments and liabilities by category and by fair value hierarchy level: December 29, 2023 December 30, 2022 (In millions) Total Level 1 Total Level 1 Assets Deferred compensation plan assets: (1) Equity and fixed income securities $ 106 $ 106 $ 64 $ 64 Investments measured at NAV: Corporate-owned life insurance 37 33 Total fair value of deferred compensation plan assets $ 143 $ 97 Liabilities Deferred compensation plan liabilities: (2) Equity securities and mutual funds $ 18 $ 18 $ 8 $ 8 Investments measured at NAV: Common/collective trusts and guaranteed investment contracts 274 192 Total fair value of deferred compensation plan liabilities $ 292 $ 200 _______________ (1) Represents diversified assets held in “rabbi trusts” primarily 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 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 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. Defined Benefit Plans We sponsor numerous defined benefit pension plans for eligible employees. Benefits for most participants under the terms of these plans are based on the employee’s years of service and compensation. We fund these plans as required by statutory regulations and through voluntary contributions. Some of our employees also participate in other postretirement defined benefit plans such as health care and life insurance plans. During fiscal 2023, in connection with the July 28, 2023 acquisition of AJRD, we acquired defined benefit plans with assets valued at $749 million and a PBO of $974 million. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. Additionally, the Aviation Products Pension Plan name was changed to the Consolidated Pension Plan (“CPP”). The CPP is our largest defined benefit pension plan, with assets valued at $7.5 billion and a PBO of $7.5 billion as of December 29, 2023. On December 31, 2023, the qualified pension plans acquired with AJRD were merged into the CPP. During fiscal 2022, we reduced our pension benefit obligations by approximately $64 million by purchasing group annuity policies and transferring approximately $64 million of pension plan assets to an insurance company. There was no gain or loss as a result of this transaction. During fiscal 2021, we reduced our pension benefit obligations by approximately $250 million by purchasing group annuity policies and transferring approximately $250 million of pension plan assets to an insurance company. As a result of the annuity purchases, we recognized a pre-tax loss of $4 million in fiscal 2021, which is included as a component of the “Non-service FAS pension income and other, net” line item in our Consolidated Statement of Operations. We also recognized a pre-tax curtailment gain of $3 million in fiscal 2021 as a result of employee terminations, which is included as a component of the “Non-service FAS pension income and other, net” line item in our Consolidated Statement of Operations. Balance Sheet Information Amounts recognized in our Consolidated Balance Sheet for defined benefit plans reflect the funded status of our plans. The following table provides a summary of the funded status of our defined benefit plans and the presentation of such balances within our Consolidated Balance Sheet: December 29, 2023 December 30, 2022 (In millions) Pension Other Total Pension Other Total Fair value of plan assets $ 8,595 $ 265 $ 8,860 $ 7,411 $ 242 $ 7,653 PBO (8,563) (231) (8,794) (7,494) (228) (7,722) Funded status $ 32 $ 34 $ 66 $ (83) $ 14 $ (69) Consolidated Balance Sheet line item amounts: Assets of business held for sale $ 4 $ — $ 4 $ — $ — $ — Other non-current assets $ 193 $ 96 $ 289 $ 144 $ 66 $ 210 Compensation and benefits (12) (7) (19) (11) (6) (17) Other long-term liabilities (153) (55) (208) (216) (46) (262) A portion of our PBO includes amounts that have not yet been recognized as expense (or reductions of expense) in our results of operations. Such amounts are recorded in the “Accumulated other comprehensive loss” line item in our Consolidated Balance Sheet until they are amortized as a component of net periodic benefit income. The following table provides a summary of pre-tax amounts recorded within Accumulated other comprehensive loss: December 29, 2023 December 30, 2022 (In millions) Pension Other Total Pension Other Total Actuarial loss (gain) $ 162 $ (98) $ 64 $ 243 $ (100) $ 143 Net prior service (credit) cost (157) 4 (153) (183) 5 (178) Total PBO not yet recognized as expense $ 5 $ (94) $ (89) $ 60 $ (95) $ (35) The following table provides a roll-forward of the PBO for our defined benefit plans: December 29, 2023 December 30, 2022 (In millions) Pension Other Total Pension Other Total Change in benefit obligation Benefit obligation at beginning of fiscal year $ 7,494 $ 228 $ 7,722 $ 10,007 $ 348 $ 10,355 Service cost 33 2 35 44 2 46 Interest cost 386 11 397 220 7 227 Actuarial loss (gain) 280 (1) 279 (2,097) (107) (2,204) Benefits paid (1) (568) (23) (591) (626) (22) (648) Expenses paid (34) — (34) (26) — (26) Currency translation adjustment 10 — 10 (28) — (28) Acquisitions (2) 960 14 974 — — — Divestiture — — — (8) — (8) Other 2 — 2 8 — 8 Benefit obligation at end of fiscal year $ 8,563 $ 231 $ 8,794 $ 7,494 $ 228 $ 7,722 _______________ (1) Fiscal 2022 includes approximately $64 million associated with the purchase of group annuity policies. The transaction is reflected in Benefits paid as settlement accounting had not been met. (2) Benefit obligation assumed in the AJRD acquisition. Net defined benefit plan liability is included in our “Other long-term liabilities” and “Compensation and benefits” line items in “Acquisition of AJRD” section of Note 13: Acquisitions, Divestitures and Asset Sales . Actuarial losses in the PBO as of December 29, 2023 were primarily the result of lower discount rates. The following table provides a roll-forward of the assets and the ending funded status of our defined benefit plans: December 29, 2023 December 30, 2022 (In millions) Pension Other Total Pension Other Total Change in plan assets Plan assets at beginning of fiscal year $ 7,411 $ 242 $ 7,653 $ 9,604 $ 320 $ 9,924 Actual return on plan assets 1,004 37 1,041 (1,516) (51) (1,567) Acquisitions (1) 749 — 749 — — — Employer contributions 20 9 29 16 (5) 11 Benefits paid (2) (568) (23) (591) (626) (22) (648) Expenses paid (34) — (34) (26) — (26) Currency translation adjustment 12 — 12 (32) — (32) Divestiture — — — (10) — (10) Other 1 — 1 1 — 1 Plan assets at end of fiscal year $ 8,595 $ 265 $ 8,860 $ 7,411 $ 242 $ 7,653 Funded status at end of fiscal year $ 32 $ 34 $ 66 $ (83) $ 14 $ (69) _______________ (1) Plan assets acquired in the AJRD acquisition. Net defined benefit plan liability is included in “Other long-term liabilities” and “Compensation and benefits” line items in “Acquisition of AJRD” section of Note 13: Acquisitions, Divestitures and Asset Sales . (2) Fiscal 2022 includes approximately $64 million associated with the transfer of plan assets to an insurance company. The transaction is reflected in Benefits paid as settlement accounting had not been met. The accumulated benefit obligation for all defined benefit pension plans was $8.6 billion at December 29, 2023. The following tables provide information for benefit plans with accumulated benefit obligations in excess of plan assets and benefit plans with PBO in excess of plan assets: December 29, 2023 December 30, 2022 (In millions) Pension Other Pension Other Accumulated benefit obligation $ 225 N/A $ 6,698 N/A Fair value of plan assets 60 N/A 6,472 N/A December 29, 2023 December 30, 2022 (In millions) Pension Other Pension Other PBO $ 226 $ 62 $ 6,699 $ 52 Fair value of plan assets 60 — 6,472 — Statement of Operations Information The following table provides the components of net periodic benefit income and other amounts recognized in other comprehensive income in fiscal 2023, 2022 and 2021 as they pertain to our defined benefit plans: Pension Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Net periodic benefit income Operating Service cost $ 33 $ 44 $ 66 Non-operating Interest cost 386 220 188 Expected return on plan assets (633) (624) (621) Amortization of net actuarial (gain) loss (9) 9 30 Amortization of prior service credit (26) (27) (28) Effect of curtailments or settlements — — 1 Non-service cost periodic benefit income (282) (422) (430) Net periodic benefit income $ (249) $ (378) $ (364) Other changes in plan assets and benefit obligations recognized in other comprehensive income Net actuarial (gain) loss $ (90) $ 42 $ (972) Prior service cost — 8 2 Amortization of net actuarial gain (loss) 9 (9) (30) Amortization of prior service credit 26 27 28 Currency translation adjustment — 1 1 Recognized prior service credit — — 4 Recognized net actuarial loss — — (4) Total change recognized in other comprehensive income (55) 69 (971) Total impact from net periodic benefit income and changes in other comprehensive income $ (304) $ (309) $ (1,335) Other Benefits Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Net periodic benefit income Operating Service cost $ 2 $ 2 $ 2 Non-operating Interest cost 11 7 5 Expected return on plan assets (20) (20) (20) Amortization of net actuarial gain (20) (7) — Amortization of prior service cost 1 1 1 Non-service cost periodic benefit income (28) (19) (14) Net periodic benefit income $ (26) $ (17) $ (12) Other changes in plan assets and benefit obligations recognized in other comprehensive income Net actuarial gain $ (18) $ (34) $ (46) Amortization of net actuarial gain 20 7 — Amortization of prior service cost (1) (1) (1) Total change recognized in other comprehensive income 1 (28) (47) Total impact from net periodic benefit income and changes in other comprehensive income $ (25) $ (45) $ (59) Defined Benefit Plan Assumptions The determination of the assumptions related to defined benefit plans are based on the provisions of the applicable accounting pronouncements, review of various market data and discussions with our actuaries. We develop each assumption using relevant Company experience in conjunction with market-related data. Assumptions are reviewed annually and adjusted as appropriate. The following tables provide the weighted-average assumptions used to determine PBO and net periodic benefit income, as they pertain to our defined benefit pension plans: Obligation assumptions as of: December 29, 2023 December 30, 2022 Discount rate 4.91 % 5.18 % Rate of future compensation increase 3.01 % 3.01 % Cash balance interest crediting rate 4.50 % 4.00 % Cost assumptions for fiscal periods ended: December 29, 2023 December 30, 2022 December 31, 2021 Discount rate to determine service cost 5.18 % 2.69 % 2.26 % Discount rate to determine interest cost 5.08 % 2.27 % 1.80 % Expected return on plan assets 7.46 % 7.44 % 7.43 % Rate of future compensation increase 3.01 % 3.01 % 3.01 % Cash balance interest crediting rate 4.00 % 3.50 % 3.50 % Key assumptions for our CPP (our largest defined benefit pension plan with 88% of the total PBO) included a discount rate for obligation assumptions of 4.92%, a cash balance interest crediting rate of 4.50% and expected return on plan assets of 7.50% for fiscal 2023, which is being maintained at 7.50% for fiscal 2024. There is also a frozen pension equity benefit that assumes a 4.25% interest crediting rate. The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit income, as they pertain to our other postretirement defined benefit plans: Obligation assumptions as of: December 29, 2023 December 30, 2022 Discount rate 4.87 % 5.16 % Rate of future compensation increase N/A N/A Cost assumptions for fiscal periods ended: December 29, 2023 December 30, 2022 December 31, 2021 Discount rate to determine service cost 5.26 % 2.91 % 2.49 % Discount rate to determine interest cost 5.06 % 2.06 % 1.42 % Rate of future compensation increase N/A N/A N/A The expected long-term rate of return on plan assets reflects the expected returns for each major asset class in which the plans invest, the weight of each asset class in the strategic allocation, the correlations among asset classes and their expected volatilities. Our expected rate of return on plan assets is estimated by evaluating both historical returns and estimates of future returns. Specifically, the determination of the expected long-term rate of return takes into consideration: (1) the plan’s actual historical annual return on assets over the past 15-, 20- and 25-year time periods, (2) historical broad market returns over long-term timeframes weighted by the plan’s strategic allocation and (3) independent estimates of future long-term asset class returns, weighted by the plan’s strategic allocation. Based on this approach, the long-term expected annual rate of return on assets is estimated at 7.50% for fiscal 2024 for the U.S. defined benefit pension plans. The weighted average long-term expected annual rate of return on assets for all defined benefit pension plans is estimated to be 7.46% for fiscal 2024. In fiscal 2021, we adopted updated mortality tables, which resulted in an increase in the defined benefit plans’ PBO as of December 31, 2021 and a decrease in the estimated net periodic benefit income beginning with fiscal 2022. The assumed composite rate of future increases in the per capita healthcare costs (the healthcare trend rate) is 7.05% for fiscal 2024, decreasing ratably to 4.53% by fiscal 2035. To the extent that actual experience differs from these assumptions, the effect will be accumulated and generally amortized for each plan to the extent required over the estimated future life expectancy or, if applicable, the future working lifetime of the plan’s active participants. Investment Policy The investment strategy for managing defined benefit plan assets is to seek an optimal rate of return relative to an appropriate level of risk. We manage substantially all defined benefit plan assets on a commingled basis in a master investment trust. In making these asset allocation decisions, we take into account recent and expected returns and volatility of returns for each asset class, the expected correlation of returns among the different investments, as well as anticipated funding and cash flows. To enhance returns and mitigate risk, we diversify our investments by strategy, asset class, geography and sector and engage a large number of managers to gain broad exposure to the markets. The following table provides the current strategic target asset allocation ranges by asset category: Target Asset Equity investments 35 % — 55% Fixed income investments 25 % — 35% Alternative investments 12 % — 30% Cash and cash equivalents 0 % — 10% Fair Value of Plan Assets The following is a description of the valuation techniques and inputs used to measure fair value for major categories of investments as reflected in the table that follows such description: • Domestic and international equities, which include common and preferred shares, domestic listed and foreign listed equity securities, open-ended and closed-ended mutual funds, real estate investment trusts and exchange traded funds, are generally valued at the closing price reported on the major market exchanges on which the individual securities are traded at the measurement date. Because these assets are traded predominantly on liquid, widely traded public exchanges, equity securities are categorized as Level 1 assets. • Private equity funds, which include buy-out, mezzanine, venture capital, distressed asset and secondary funds, are typically limited partnership investment structures. Private equity funds are valued using a market approach based on NAV calculated by the funds and are not publicly available. Private equity funds generally have liquidity restrictions that extend for ten • Real estate funds, which include core, core plus, value-add and opportunistic funds, are typically limited partnership investment structures. Real estate funds are valued using a market approach based on NAV calculated by the funds and are not publicly available. Real estate funds generally permit redemption on a quarterly basis with 90 or fewer days-notice. At December 29, 2023, real estate fund investments had no future unfunded commitments related to our defined benefit plans. At December 30, 2022, our defined benefit plans had future unfunded commitments totaling $33 million related to real estate fund investments. • Hedge funds, which include equity long/short, event-driven, fixed-income arbitrage and global macro strategies, are typically limited partnership investment structures. Limited partnership interests in hedge funds are valued using a market approach based on NAV calculated by the funds and are not publicly available. Hedge funds generally permit redemption on a quarterly or more frequent basis with 90 or fewer days notice. At each of December 29, 2023 and December 30, 2022, our defined benefit plans had no future unfunded commitments related to hedge fund investments. • Fixed income investments, which include U.S. Government securities, investment and non-investment-grade corporate bonds and securitized bonds, are generally valued using pricing models that use verifiable, observable market data such as interest rates, benchmark yield curves and credit spreads, bids provided by brokers or dealers or quoted prices of securities with similar characteristics. Fixed income investments are generally categorized as Level 2 assets. Fixed income funds valued at the closing price reported on the major market exchanges on which the individual fund is traded are categorized as Level 1 assets. • Other is comprised of guaranteed insurance contracts valued at book value, which approximates fair value, calculated using the prior-year balance adjusted for investment returns, changes in cash flows, changes in interest rates and corporate owned life insurance policies valued at the accumulated benefit. • Cash and cash equivalents are primarily comprised of short-term money market funds valued at cost, which approximates fair value, or valued at quoted market prices of identical instruments. Cash and currency are categorized as Level 1 assets; cash equivalents, such as money market funds or short-term commingled funds, are categorized as Level 2 assets. • Certain investments that are valued using the NAV per share (or its equivalent) as a practical expedient are not categorized in the fair value hierarchy and are included in the table to permit reconciliation of the fair value hierarchy to the aggregate defined benefit plan assets. The following tables provide the fair value of plan assets held by our defined benefit plans by asset category and by fair value hierarchy level: December 29, 2023 (In millions) Total Level 1 Level 2 Level 3 Asset category Equities: Domestic equities $ 1,294 $ 1,294 $ — $ — International equities 1,138 1,138 — — Real estate investment trusts 214 214 — — Fixed income: Corporate bonds 1,457 — 1,331 126 Government securities 485 — 485 — Securitized assets 164 — 164 — Fixed income funds 137 4 133 — Cash and cash equivalents 545 18 527 — Other 61 — — 61 Total 5,495 $ 2,668 $ 2,640 $ 187 Investments measured at NAV: Equity funds 1,529 Fixed income funds 3 Hedge funds 396 Private equity funds 1,019 Real estate funds 379 Other 2 Total investments measured at NAV 3,328 Receivables, net 37 Total fair value of plan assets $ 8,860 December 30, 2022 (In millions) Total Level 1 Level 2 Level 3 Asset category Equities: Domestic equities $ 1,275 $ 1,275 $ — $ — International equities 1,044 1,002 42 — Real estate investment trusts 192 192 — — Fixed income: Corporate bonds 1,118 — 995 123 Government securities 320 — 320 — Securitized assets 166 — 166 — Fixed income funds 92 4 88 — Cash and cash equivalents 148 22 126 — Total 4,355 $ 2,495 $ 1,737 $ 123 Investments measured at NAV: Equity funds 1,661 Fixed income funds 299 Hedge funds 294 Private equity funds 696 Real estate funds 372 Other 2 Total investments measured at NAV 3,324 Payables, net (26) Total fair value of plan assets $ 7,653 Contributions Funding requirements under IRS rules are a major consideration in making contributions to our postretirement benefit plans. With respect to U.S. qualified pension plans, we intend to contribute annually not less than the required minimum funding thresholds. The Employee Retirement Income Security Act of 1974, as amended by the Pension Protection Act of 2006 and further amended by the Worker, Retiree, and Employer Recovery Act of 2008, the Moving Ahead for Progress in the 21st Century Act (“MAP-21”) and applicable Internal Revenue Code regulations mandate minimum funding thresholds. The Highway and Transportation Funding Act of 2014, the Bipartisan Budget Act of 2015, the American Rescue Plan Act of 2021 and the Infrastructure Investment and Jobs Act further extended the interest rate stabilization provision of MAP-21. As a result of prior voluntary contributions, we made no material contributions to our U.S. qualified defined benefit pension plans in fiscal 2023, 2022, or 2021. We expect to make contributions of approximately $35 million to these plans during fiscal 2024, and may consider voluntary contributions thereafter. Estimated Future Benefit Payments The following table provides the projected timing of payments for benefits earned to date and benefits expected to be earned for future service by current active employees under our defined benefit plans: (In millions) Pension Other Benefits (1) Total Fiscal Years: 2024 $ 672 $ 22 $ 694 2025 670 22 692 2026 665 21 686 2027 660 20 680 2028 649 19 668 2029 — 2033 3,072 84 3,156 _______________ (1) Projected payments for Other Benefits reflect net payments from the Company, which include subsidies that reduce the gross payments by less than 1%. Multi-employer Benefit Plans Certain of our businesses participate in multi-employer defined benefit pension plans. We make cash contributions to these plans under the terms of collective-bargaining agreements that cover union employees based on a fixed rate per hour of service worked by the covered employees. The risks of participating in these multi-employer plans are different from single-employer plans in the following aspects: (1) assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers, (2) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers and (3) if we choose to stop participating in some of our multi-employer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Cash contributed and expenses recorded for our multi-employer plans were not material in fiscal 2023, 2022 or 2021. |
STOCK OPTIONS AND OTHER SHARE-B
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION | NOTE 10: STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION At December 29, 2023, we had options or other share-based compensation outstanding under two Harris shareholder-approved employee stock incentive plans (“SIPs”), the Harris Corporation 2005 Equity Incentive Plan (As Amended and Restated Effective August 27, 2010) and the L3Harris Technologies, Inc. 2015 Equity Incentive Plan (As Amended and Restated Effective August 28, 2020) (the “2015 EIP”), as well as under employee stock incentive plans of L3 assumed by L3Harris (collectively, “L3Harris SIPs”). As part of our long-term incentive compensation program, we have made awards to employees in the form of performance share units, restricted stock units, nonqualified options under the L3Harris SIPs. We have also awarded restricted stock units in the form of deferred units to our non-employee directors. We believe that share-based awards more closely align the interests of participants with those of shareholders. Summary of Share-Based Compensation Expense The following table summarizes the amounts and classification of share-based compensation expense: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Total expense $ 89 $ 109 $ 129 Included in: Cost of product sales and services $ 16 $ 19 $ 14 General and administrative expenses 73 90 115 Income from continuing operations 89 109 129 Tax effect on share-based compensation expense (19) (27) (33) Total share-based compensation expense after-tax $ 70 $ 82 $ 96 As of December 29, 2023, a total of 12.2 million shares of common stock remained available under our 2015 EIP for future issuance (excluding shares to be issued in respect of outstanding options and other share-based awards, and with each full-value award (e.g., restricted stock unit awards and performance share unit awards) counting as 4.6 shares against the total remaining for future issuance). During fiscal 2023, we issued an aggregate of 0.5 million shares of common stock under the terms of our L3Harris SIPs, which is net of shares withheld for tax purposes. Stock Options The following information relates to stock options, including performance stock options, that have been granted under shareholder-approved L3Harris SIPs. Option exercise prices are equal to or greater than the fair market value of our common stock on the date the options are granted, using the closing stock price of our common stock. Options may be exercised for a period of ten years after the date of grant, and options, other than performance stock options, generally become exercisable in installments, which are typically 33.3% one year from the grant date, 33.3% two years from the grant date and 33.3% three years from the grant date. In certain instances, vesting and exercisability are also subject to performance criteria. The fair value as of the grant date of each option award was determined using the Black-Scholes-Merton option-pricing model which uses assumptions noted in the following table. Expected volatility over the expected term of the options is based on implied volatility from traded options on our common stock and the historical volatility of our stock price. The expected term of the options is based on historical observations of our common stock, considering average years to exercise for all options exercised and average years to cancellation for all options canceled, as well as average years remaining for vested outstanding options, which is calculated based on the weighted-average of these three inputs. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. A summary of the assumptions used in determining the fair value of the stock option grants under our L3Harris SIPs is as follows: Fiscal Year Ended December 29, 2023 December 30, 2022 December 31, 2021 Expected dividends 2.17% 2.00% 1.99% Expected volatility 28.60% 29.09% 31.71% Risk-free interest rates 3.48% - 4.27% 1.63% - 4.27% 0.75% Expected term (years) 5.04 5.02 5.05 A summary of stock option activity under our L3Harris SIPs as of December 29, 2023 and changes during fiscal 2023 is as follows: Shares Weighted Weighted Aggregate Stock options outstanding at December 30, 2022 3,306,129 $ 162.56 Granted 366,670 $ 209.88 Exercised (230,702) $ 100.03 Forfeited or expired (191,387) $ 210.31 Stock options outstanding at December 29, 2023 3,250,710 $ 169.53 5.42 $ 140 Stock options exercisable at December 29, 2023 2,669,082 $ 160.11 4.74 $ 138 The weighted-average grant-date fair value per share was $54.63, $53.66 and $42.16 for options granted in fiscal 2023, 2022 and 2021, respectively. The total intrinsic value of options at the time of exercise was $23 million, $56 million and $173 million for options exercised in fiscal 2023, 2022 and 2021, respectively. A summary of the status of our nonvested stock options at December 29, 2023 and changes during fiscal 2023 is as follows: Shares Weighted-Average Nonvested stock options at December 30, 2022 685,718 $ 46.76 Granted 366,670 $ 54.63 Vested/forfeited, net (470,760) $ 43.21 Nonvested stock options at December 29, 2023 581,628 $ 52.72 As of December 29, 2023, there was $19 million of total unrecognized compensation expense related to nonvested stock options granted under our L3Harris SIPs. This expense is expected to be recognized over a weighted-average period of 1.90 years. The total fair value of stock options that vested in fiscal 2023, 2022 and 2021 was $14 million, $42 million and $6 million, respectively. Restricted Stock Unit Awards The following information relates to awards of restricted stock units that have been granted to employees and non-employee directors under our L3Harris SIPs. These awards are not transferable until vested and the restrictions generally lapse upon the achievement of continued employment (or board membership) over a specified time period. The fair value as of the grant date of these awards was based on the closing price of our common stock on the grant date and is amortized to compensation expense over the vesting period. At December 29, 2023, there were 728,052 restricted stock units outstanding which were payable in shares. A summary of the status of these awards at December 29, 2023 and changes during fiscal 2023 is as follows: Units Weighted-Average Restricted stock units outstanding at December 30, 2022 673,495 $ 211.16 Granted 354,657 $ 199.33 Vested (223,855) $ 198.24 Forfeited (76,245) $ 205.77 Restricted stock units outstanding at December 29, 2023 728,052 $ 208.78 As of December 29, 2023, there was $86 million of total unrecognized compensation expense related to these awards under our L3Harris SIPs. This expense is expected to be recognized over a weighted-average period of 1.75 years. The weighted-average grant date price per share or per unit was $199.33, $225.58 and $202.10 for awards granted in fiscal 2023, 2022 and 2021, respectively. The total fair value of these awards was $44 million, $69 million and $19 million for awards that vested in fiscal 2023, 2022 and 2021, respectively. Performance Share Unit Awards The following information relates to awards of performance share units that have been granted to employees under our L3Harris SIPs. At December 29, 2023, all of these awards are subject to performance criteria, such as meeting predetermined operating income or earnings per share, return on invested capital targets and market conditions, such as total shareholder return, for a 3-year performance period. These awards also generally vest after a 3-year performance period. The final determination of the number of shares to be issued in respect of an award is made by our Board or a committee thereof. The fair value as of the grant date of awards with market conditions was determined based on a multifactor Monte Carlo valuation model that simulates our stock price and TSR relative to other companies in the S&P 500, less a discount to reflect the delay in payments of cash dividend-equivalents that are made only upon vesting. The fair value of these awards is amortized to compensation expense over the performance period if achievement of the performance measures is considered probable. A summary of the status of these awards at December 29, 2023 and changes during fiscal 2023 is as follows: Units Weighted-Average Grant Price Per Unit (1) Performance share units outstanding at December 30, 2022 524,343 $ 224.94 Granted 180,118 $ 223.09 Adjustment (1) 14,771 $ 228.29 Vested (182,808) $ 228.29 Forfeited (56,083) $ 236.80 Performance share units outstanding at December 29, 2023 480,341 $ 222.73 ______________ (1) Adjustment for achievement of performance measures. |
LEASES
LEASES | 12 Months Ended |
Dec. 29, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 11: LEASES Our operating and finance leases at December 29, 2023 and December 30, 2022 primarily consisted of real estate leases for office space, warehouses, manufacturing, research and development facilities, telecommunication tower space and land and equipment leases. The components of lease costs are as follows: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Operating lease cost $ 163 $ 151 $ 172 Short-term and equipment lease cost 23 21 20 Variable lease cost 26 25 20 Other, net (1) 11 6 3 Total lease cost $ 223 $ 203 $ 215 ______________ (1) Consists of finance lease amortization and interest costs as well as sublease income. See “Leases” section in Note 1: Significant Accounting Policies in these Notes for the line items in our Consolidated Statement of Operations where our lease costs are presented. Lease Impairment — Fiscal 2021 As discussed in more detail in Note 6: Goodwill and Intangible Assets in these Notes, during the quarter ended July 2, 2021, we tested the CTS reporting unit for potential impairment of the long-lived assets, including identifiable assets and property, plant and equipment, and recorded a $145 million non-cash charge for the impairment of CTS long-lived assets, including $19 million for impairment of ROU assets, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations for fiscal 2022. Balance Sheet Information Supplemental operating and finance lease balance sheet information at December 29, 2023 and December 30, 2022 is as follows: (In millions) December 29, 2023 December 30, 2022 Operating Leases Other non-current assets $ 743 $ 756 Other accrued items 120 121 Other long-term liabilities 705 741 Total operating lease liabilities $ 825 $ 862 Finance Leases Property, plant and equipment $ 243 $ 170 Accumulated amortization (25) (15) Property, plant and equipment, net $ 218 $ 155 Current portion of long-term debt, net $ 8 $ 5 Long-term debt, net 243 165 Total finance lease liabilities $ 251 $ 170 Supplemental Lease Information Other supplemental lease information for fiscal 2023 and 2022 is as follows: Fiscal Year Ended (In millions, except lease term and discount rate) December 29, 2023 December 30, 2022 Cash paid for amounts included in the measurement of lease liabilities Net cash provided by operating activities - operating lease payments $ 159 $ 148 Net cash provided by operating activities - finance lease interest payments 7 5 Net cash provided by financing activities - finance lease obligation payments 6 4 Assets obtained in exchange for new lease obligations ROU assets obtained with operating leases $ 144 $ 123 Property, plant and equipment obtained with finance leases 68 20 Weighted average remaining lease term (in years) Operating leases 8.3 9.3 Finance leases 17.7 21.3 Weighted average discount rate Operating leases 3.9 % 3.5 % Finance leases 4.3 % 3.4 % Payments under non-cancelable operating and finance leases at December 29, 2023 were as follows: (In millions) Operating Leases Finance Leases 2024 $ 163 $ 19 2025 142 41 2026 110 18 2027 103 17 2028 97 18 Thereafter 345 233 Total future lease payments required (1) 960 346 Less: imputed interest 135 95 Total $ 825 $ 251 _______________ (1) On December 29, 2023, we had additional future payments on leases of $307 million that had not yet commenced. These leases will commence between 2024 and 2025, and have lease terms of 4 years to 15 years. |
LEASES | NOTE 11: LEASES Our operating and finance leases at December 29, 2023 and December 30, 2022 primarily consisted of real estate leases for office space, warehouses, manufacturing, research and development facilities, telecommunication tower space and land and equipment leases. The components of lease costs are as follows: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Operating lease cost $ 163 $ 151 $ 172 Short-term and equipment lease cost 23 21 20 Variable lease cost 26 25 20 Other, net (1) 11 6 3 Total lease cost $ 223 $ 203 $ 215 ______________ (1) Consists of finance lease amortization and interest costs as well as sublease income. See “Leases” section in Note 1: Significant Accounting Policies in these Notes for the line items in our Consolidated Statement of Operations where our lease costs are presented. Lease Impairment — Fiscal 2021 As discussed in more detail in Note 6: Goodwill and Intangible Assets in these Notes, during the quarter ended July 2, 2021, we tested the CTS reporting unit for potential impairment of the long-lived assets, including identifiable assets and property, plant and equipment, and recorded a $145 million non-cash charge for the impairment of CTS long-lived assets, including $19 million for impairment of ROU assets, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations for fiscal 2022. Balance Sheet Information Supplemental operating and finance lease balance sheet information at December 29, 2023 and December 30, 2022 is as follows: (In millions) December 29, 2023 December 30, 2022 Operating Leases Other non-current assets $ 743 $ 756 Other accrued items 120 121 Other long-term liabilities 705 741 Total operating lease liabilities $ 825 $ 862 Finance Leases Property, plant and equipment $ 243 $ 170 Accumulated amortization (25) (15) Property, plant and equipment, net $ 218 $ 155 Current portion of long-term debt, net $ 8 $ 5 Long-term debt, net 243 165 Total finance lease liabilities $ 251 $ 170 Supplemental Lease Information Other supplemental lease information for fiscal 2023 and 2022 is as follows: Fiscal Year Ended (In millions, except lease term and discount rate) December 29, 2023 December 30, 2022 Cash paid for amounts included in the measurement of lease liabilities Net cash provided by operating activities - operating lease payments $ 159 $ 148 Net cash provided by operating activities - finance lease interest payments 7 5 Net cash provided by financing activities - finance lease obligation payments 6 4 Assets obtained in exchange for new lease obligations ROU assets obtained with operating leases $ 144 $ 123 Property, plant and equipment obtained with finance leases 68 20 Weighted average remaining lease term (in years) Operating leases 8.3 9.3 Finance leases 17.7 21.3 Weighted average discount rate Operating leases 3.9 % 3.5 % Finance leases 4.3 % 3.4 % Payments under non-cancelable operating and finance leases at December 29, 2023 were as follows: (In millions) Operating Leases Finance Leases 2024 $ 163 $ 19 2025 142 41 2026 110 18 2027 103 17 2028 97 18 Thereafter 345 233 Total future lease payments required (1) 960 346 Less: imputed interest 135 95 Total $ 825 $ 251 _______________ (1) On December 29, 2023, we had additional future payments on leases of $307 million that had not yet commenced. These leases will commence between 2024 and 2025, and have lease terms of 4 years to 15 years. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") | 12 Months Ended |
Dec. 29, 2023 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") | NOTE 12: 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 income, before reclassifications to earnings and income taxes 36 14 95 145 Income taxes — (4) (24) (28) Other comprehensive income before reclassifications to earnings, net of income taxes 36 10 71 117 Losses (gains) reclassified to earnings, before income taxes (1) — 5 (41) (36) Income taxes — (1) 10 9 Losses (gains) reclassified to earnings, net of income taxes — 4 (31) (27) Other comprehensive income, net of income taxes 36 14 40 90 Balance at December 29, 2023 $ (201) $ (65) $ 68 $ (198) Balance at December 31, 2021 $ (118) $ (89) $ 61 $ (146) Other comprehensive loss, before reclassifications to earnings and income taxes (124) (10) (33) (167) Income taxes 5 2 7 14 Other comprehensive loss before reclassifications to earnings, net of income taxes (119) (8) (26) (153) Losses (gains) reclassified to earnings, before income taxes (1) — 22 (9) 13 Income taxes — (4) 2 (2) Losses (gains) reclassified to earnings, net of income taxes — 18 (7) 11 Other comprehensive (loss) income, net of income taxes (119) 10 (33) (142) Balance at December 30, 2022 $ (237) $ (79) $ 28 $ (288) Balance at January 1, 2021 $ (58) $ (80) $ (701) $ (839) Other comprehensive (loss) income, before reclassifications to earnings and income taxes (63) (4) 1,013 946 Income taxes — 1 (255) (254) Other comprehensive (loss) income before reclassifications to earnings, net of income taxes (63) (3) 758 692 Losses (gains) reclassified to earnings, before income taxes (1) 3 (8) 6 1 Income taxes — 2 (2) — Losses (gains) reclassified to earnings, net of income taxes 3 (6) 4 1 Other comprehensive (loss) income, net of income taxes (60) (9) 762 693 Balance at December 31, 2021 $ (118) $ (89) $ 61 $ (146) _______________ (1) Losses (gains) reclassified to earnings are included in the “Revenue”, “Asset group and business divestiture-related (losses) gains, net,” “Interest expense, net” and “Non-service FAS pension income and other, net” line items in our Consolidated Statement of Operations. |
ACQUISITIONS, DIVESTITURES AND
ACQUISITIONS, DIVESTITURES AND ASSET SALES | 12 Months Ended |
Dec. 29, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS, DIVESTITURES AND ASSET SALES | NOTE 13: 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 million. The acquisition enhances our networking capability and provides access to the ubiquitous Link 16 waveform, better positioning us to enable the DoD integrated architecture goal in JADC2. On November 22, 2022, we established Term Loan 2025 with a syndicate of lenders, in part, to finance the acquisition. See Note 8: 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 CS segment, with the exception of acquired intangible assets, which are recorded in our corporate headquarters. 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. 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. Our preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as we obtained additional information during the measurement period. We completed our accounting for the acquisition during the fiscal year ended December 29, 2023. 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 adjustments recognized during the measurement period: (In millions) Preliminary as of January 3, 2023 Measurement Period Adjustments, Net (1),(2) Adjusted as of December 29, 2023 Receivables $ 28 $ — $ 28 Contract assets 18 11 29 Inventories 164 (18) 146 Other current assets 9 — 9 Property, plant and equipment 50 (1) 49 Goodwill 1,014 129 1,143 Other intangible assets 850 (95) 755 Deferred income taxes 33 2 35 Other non-current assets 18 (1) 17 Total assets acquired $ 2,184 $ 27 $ 2,211 Accounts payable $ 20 $ — $ 20 Contract liabilities 28 — 28 Compensation and benefits 2 — 2 Other accrued items 119 17 136 Other long-term liabilities 41 10 51 Total liabilities assumed $ 210 $ 27 $ 237 Net assets acquired $ 1,974 $ — $ 1,974 _______________ (1) Fair value adjustments during the fiscal year ended December 29, 2023 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. Intangible Assets. All intangible assets acquired in the TDL acquisition are subject to amortization. The fair value and weighted-average amortization period of identifiable intangible assets acquired as of the acquisition date is as follows: Total Useful Lives (In millions) (In Years) Customer relationships: (1) Backlog $ 83 2 Government programs 323 16 Total customer relationships 406 Developed technology 349 17 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 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 revenue 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 $36 million for amortization of the forward loss provision during the fiscal year ended December 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 acquisition date fair value of the off-market components. The acquisition date fair value of the off-market components is a net liability of $64 million, consisting of $28 million and $36 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 $28 million for amortization of off-market contract liabilities during the fiscal year ended December 29, 2023. 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 $21 million in 2024 and immaterial amounts thereafter. Goodwill. The $1,143 million 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 6: Goodwill and 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 Consolidated Statement of Operations for the acquisition date through December 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. Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 Revenue $ 365 $ 358 Income before income taxes 131 68 Acquisition-Related Costs. Acquisition-related costs have been expensed as incurred. 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 million. nced through the issuance and sale of the AJRD Notes and draw down under the 2023 Credit Agreement. Note 8: 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 and are reported in our newly created AR segment and corporate headquarters. Corporate headquarters include net assets and results of operations associated with AJRD’s real estate operations and acquired intangible assets. 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 and the measurement period adjustments recorded since the acquisition date through December 29, 2023: (In millions) Preliminary Measurement Period Adjustments, Net (1) Preliminary Adjusted as of December 29, 2023 Receivables $ 156 $ — $ 156 Contract assets 338 (40) 298 Inventories 14 — 14 Other current assets 117 29 146 Property, plant and equipment 574 28 602 Goodwill 2,348 17 2,365 Other intangible assets 2,860 (20) 2,840 Other non-current assets 609 89 698 Total assets acquired $ 7,016 $ 103 $ 7,119 Current portion of long-term debt, net 1 — 1 Accounts payable $ 145 $ — $ 145 Contract liabilities 310 15 325 Compensation and benefits 116 1 117 Income taxes payable 6 (1) 5 Other accrued items 278 22 300 Long-term debt, net 41 — 41 Deferred income taxes 398 120 518 Other long-term liabilities 1,006 (54) 952 Total liabilities assumed $ 2,301 $ 103 $ 2,404 Fair value of consideration transferred $ 4,715 $ — $ 4,715 _______________ (1) Fair value adjustments during the fiscal year ended December 29, 2023 primarily related to EAC updates, refinements to the environmental liability and associated recoverable, as well as an update to the deferred tax liability which was offset by the release of a portion of the uncertain tax position previously booked by AJRD. 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. 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 and weighted-average amortization period of identifiable intangible assets acquired as of the acquisition date is as follows: Total Useful Lives (In millions) (In Years) Customer relationships: (1) Backlog $ 350 3 Government programs 2,370 15 - 20 Total customer relationships 2,720 Trade names 120 15 Total identifiable intangible assets acquired $ 2,840 _______________ (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. Forward Loss Provision. We have recorded a preliminary forward loss provision of $62 million which was included in ” Other accrued items ” line item in our Consolidated Balance Sheet . The forward loss provisions will be recognized as a reduction to cost of revenue as we incur costs to satisfy the associated performance obligations. There will be no net impact on our Consolidated Statement of Operations. We recognized $8 million from amortization of the forward loss provision for the acquisition date through December 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 $95 million, consisting of $37 million and $58 million included in the “Other accrued items” and “Other long-term liabilities” line items in our 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 $14 million from amortization of off-market contract liabilities during the period from the acquisition date through December 29, 2023 . Goodwill. The $2,365 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 6: Goodwill and Intangible Assets in these Notes for further information. Financial Results. Revenue and income before income taxes of AJRD included in our Consolidated Statement of Operations for the acquisition date through December 29, 2023 was $1,052 million and $122 million, respectively. The following table presents unaudited pro forma financial results of the operations acquired with AJRD. The pro forma results for fiscal year ended December 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 fiscal year ended December 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. Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 Revenue $ 2,337 $ 2,238 Income before income taxes 266 234 Acquisition-Related Costs. Acquisition-related costs have been expensed as incurred. Completed Divestiture of VIS — Fiscal 2023 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 “Asset group and business divestiture-related (losses) gains, net” line item in our Consolidated Statement of Operations for the fiscal year ended December 29, 2023. 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 Consolidated Balance Sheet as of December 30, 2022. Pending Divestiture of CAS Disposal Group — Fiscal 2023 On November 27, 2023, we announced that we entered into a definitive agreement to sell our CAS disposal group for a cash purchase price of $700 million, with additional contingent consideration of up to $100 million, subject to customary purchase price adjustments and closing conditions as set forth in the agreement. As of November 27, 2023, the fair value less costs to sell of the CAS disposal group is $834 million, inclusive of consideration related to noncontrolling interest and accumulated other comprehensive income. We recognized a pre-tax loss of $77 million included in the “Asset group and business divestiture-related (losses) gains, net” line item in our Consolidated Statement of Operations for the fiscal year ended December 29, 2023. CAS, which is part of our IMS segment, provides integrated aircraft avionics, pilot training and data analytics services for the commercial aviation industry. The transaction is expected to close in 2024. In connection with the preparation of our financial statements for the fiscal year ended December 29, 2023, we concluded that goodwill related to the CAS disposal group was impaired and we recorded a non-cash impairment charge of $296 million, which is included in the Impairment of goodwill and other assets. See Note 6: Goodwill and Intangible Assets in these Notes for additional information. The carrying amounts of the assets and liabilities of the CAS business classified as held for sale in our Consolidated Balance Sheet as of December 29, 2023 were as follows: (In millions) December 29, 2023 Receivables, net $ 80 Contract assets 43 Inventories 145 Other current assets 33 Property, plant and equipment, net 41 Goodwill 534 Other intangible assets, net 263 Other non-current assets 44 Valuation allowance (77) Total assets held for sale $ 1,106 Accounts payable $ 111 Contract liabilities 48 Compensation and benefits 11 Other accrued items 38 Other long-term liabilities 64 Total liabilities held for sale $ 272 Completed Divestitures and Asset Sales — Fiscal 2022 During the fiscal 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 “Asset group and business divestiture-related (losses) gains, net” line item in our Consolidated Statement of Operations for fiscal 2022. Completed Divestitures and Asset Sales — Fiscal 2021 The following table presents information regarding business divestitures completed during fiscal 2021, all of which were reported under our “Other non-reportable businesses” segment through the date of divestiture, which was formerly our Aviation Systems segment: (In millions) Date of Divestiture Sale Price Net Cash Proceeds (1) Narda-MITEQ business (2) December 6, 2021 $ 75 $ 76 ESSCO business (3) November 26, 2021 55 53 Electron Devices business (4) October 1, 2021 185 173 Voice Switch Enterprise disposal group (“VSE disposal group”) (5) July 30, 2021 20 19 Combat Propulsion Systems and related businesses (“CPS business”) (6) July 2, 2021 398 347 Military training business (7) July 2, 2021 1,050 1,059 $ 1,783 $ 1,727 _______________ (1) Net cash proceeds after selling costs and purchase price adjustments. (2) The Narda-MITEQ business manufactured component, Satellite Communication (“SATCOM”) and radio frequency safety products for both military and commercial markets. (3) The ESSCO business manufactured metal space frame ground radomes and composite structures. (4) The Electron Devices and Narda Microwave-West divisions (“Electron Devices business”) manufactured microwave devices for ground-based, airborne and SATCOM and radar. (5) The VSE disposal group provided voice over internet protocol systems for air traffic management communications. (6) The CPS business engineered, designed and manufactured engines, transmissions, suspensions and turret drive systems for tracked and wheeled combat vehicle systems. (7) The military training business provided flight simulation solutions and training services to the DoD and foreign military agencies. Income Before Income Taxes Attributable to Businesses Divested Income before income taxes attributable to the CAS disposal group was $53 million, $63 million and $18 million in fiscal 2023, 2022 and 2021, respectively. There was no significant income before income taxes attributable to businesses divested or held for sale during fiscal 2022. In fiscal 2021, we had the following significant income before income taxes attributable to businesses divested in our Consolidated Statement of Operations: Fiscal Year Ended (In millions) December 31, 2021 Electron Devices business $ 44 CPS business 53 Military training business 35 Asset Sales and Business Divestiture-Related Gains (Losses), net In fiscal 2023 we recognized a pre-tax loss of $77 million in connection with the pending sale of our CAS disposal group and a pre-tax gain of $26 million in connection with the sale of VIS. In fiscal 2022, there were no significant asset group sales or business divestiture-related gains or losses. In fiscal 2021, we had the following pre-tax gains (losses) associated with businesses divested, which are included in the “Asset group and business divestiture-related (losses) gains, net” line item in our Consolidated Statement of Operations: Fiscal Year Ended (In millions) December 31, 2021 Narda-MITEQ business $ (9) ESSCO business 31 Electron Devices business 31 VSE disposal group (29) CPS business (1) (19) Military training business 217 Other (2) (2) Total Business divestiture-related gains (losses), net $ 220 _______________ (1) During the quarter ended April 2, 2021, upon classifying the CPS business as held for sale, we recorded a non-cash impairment charge of $62 million, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations for fiscal 2021. See Note 6: Goodwill and Intangible Assets in these Notes for additional information. (2) Reflects adjustments to the gains and losses on completed divestitures not shown within the table. 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 1: Significant Accounting Policies in these Notes for additional information regarding the fair value hierarchy and see Note 6: Goodwill and Intangible Assets in these Notes for additional information regarding the impairment of goodwill related to our business divestitures. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Dec. 29, 2023 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 14: BUSINESS SEGMENTS Business Segment Financial Information The following table presents revenue and operating income by segment: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Revenue SAS $ 6,856 $ 6,384 $ 6,315 IMS 6,630 6,626 6,733 CS 5,070 4,217 4,287 AR 1,052 ** ** Other non-reportable businesses — — 683 Corporate eliminations (189) (165) (204) Total revenue $ 19,419 $ 17,062 $ 17,814 Operating Income SAS $ 756 $ 665 $ 782 IMS 459 494 845 CS 1,229 667 1,043 AR 122 ** ** Other non-reportable businesses — — 104 Total segment 2,566 1,826 2,774 Total unallocated corporate expense (1,140) (699) (665) Total operating income $ 1,426 $ 1,127 $ 2,109 _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. Unallocated Corporate Expense Total unallocated corporate expense includes corporate items such as a portion of management and administration, legal, environmental, compensation, retiree benefits, other corporate expenses and eliminations and the FAS/CAS operating adjustment. Total unallocated corporate expense also includes the portion of corporate costs not included in management’s evaluation of segment operating performance, such as amortization of acquisition-related intangibles; additional cost of revenue related to the fair value step-up in inventory sold; merger, acquisition, and divestiture-related expenses; asset group and business divestiture-related (losses) gains, net; impairment of goodwill and other assets; gain on sale of property, plant and equipment; LHX NeXt implementation costs; and other items. LHX NeXt implementation costs. LHX NeXt is our initiative to transform multiple functions, systems and processes to increase agility and competitiveness. The LHX NeXt effort is expected to continue for the next three years with one-time costs for workforce optimization, incremental IT expenses for implementation of new systems, third party consulting and other costs. In connection with our LHX NeXt program restructuring activities, we recorded charges of $25 million during fiscal 2023, included as a component of the “General and administrative expenses” line item in our Consolidated Statement of Operations. At December 29, 2023 we had remaining liabilities of $4 million which we expect will be paid in the next twelve months. Our liabilities for restructuring are included in the “Compensation and benefits” line item in our Consolidated Balance Sheet. FAS/CAS Pension Operating Adjustment The table below is a reconciliation of the FAS/CAS operating adjustment: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 FAS pension service cost $ (35) $ (46) $ (68) Less: CAS pension cost (145) (141) (191) FAS/CAS operating adjustment 110 95 123 Non-service FAS pension income (1) 310 441 445 FAS/CAS pension adjustment, net (2) $ 420 $ 536 $ 568 _______________ (1) Non-service FAS pension income is included as component of the “Non-service FAS pension income and other, net” line item in our Consolidated Statement of Operations. (2) FAS/CAS pension adjustment, net excludes net settlement and curtailment losses recognized in fiscal 2021. See Note 9: Retirement Benefits in these Notes for additional information on net settlements and curtailments. See “Business Segments” in Note 1: Significant Accounting Policies in these Notes for additional information regarding our FAS/CAS operating adjustment accounting policy. Disaggregation of Revenue We disaggregate revenue for all four business segments by customer relationship, contract type and geographical region. We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Fiscal Year Ended December 29, 2023 (In millions) SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 4,252 $ 4,196 $ 3,420 $ 250 Subcontractor 2,555 2,347 1,597 802 Intersegment 49 87 53 — Total segment $ 6,856 $ 6,630 $ 5,070 $ 1,052 Revenue By Contract Type Fixed-price (1) $ 4,257 $ 5,020 $ 4,289 $ 632 Cost-reimbursable 2,550 1,523 728 420 Intersegment 49 87 53 — Total segment $ 6,856 $ 6,630 $ 5,070 $ 1,052 Revenue By Geographical Region United States $ 5,933 $ 4,816 $ 3,482 $ 1,015 International 874 1,727 1,535 37 Intersegment 49 87 53 — Total segment $ 6,856 $ 6,630 $ 5,070 $ 1,052 _______________ (1) Includes revenue derived from time-and-materials contracts. Fiscal Year Ended December 30, 2022 (In millions) SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 4,005 $ 4,301 $ 2,829 ** Subcontractor 2,330 2,254 1,343 ** Intersegment 49 71 45 ** Total segment $ 6,384 $ 6,626 $ 4,217 $ — Revenue By Contract Type Fixed-price (1) $ 3,811 $ 5,060 $ 3,552 ** Cost-reimbursable 2,524 1,495 620 ** Intersegment 49 71 45 ** Total segment $ 6,384 $ 6,626 $ 4,217 $ — Revenue By Geographical Region United States $ 5,623 $ 4,796 $ 2,735 ** International 712 1,759 1,437 ** Intersegment 49 71 45 ** Total segment $ 6,384 $ 6,626 $ 4,217 $ — _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. (1) Includes revenue derived from time-and-materials contracts. Fiscal Year Ended December 31, 2021 (In millions) SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 3,942 $ 4,474 $ 2,886 ** Subcontractor 2,331 2,187 1,347 ** Intersegment 42 72 54 ** Total segment $ 6,315 $ 6,733 $ 4,287 $ — Revenue By Contract Type Fixed-price (1) $ 3,781 $ 5,231 $ 3,631 ** Cost-reimbursable 2,492 1,430 602 ** Intersegment 42 72 54 ** Total segment $ 6,315 $ 6,733 $ 4,287 $ — Revenue By Geographical Region United States $ 5,569 $ 4,782 $ 3,001 ** International 704 1,879 1,232 ** Intersegment 42 72 54 ** Total segment $ 6,315 $ 6,733 $ 4,287 $ — _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. (1) Includes revenue derived from time-and-materials contracts. Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Geographical Information for Operations Revenue from U.S. operations $ 17,537 $ 15,373 $ 16,234 Revenue from international operations 1,882 1,689 1,580 Our products are produced principally in the U.S. with international revenue derived primarily from exports. No revenue earned from any individual foreign country exceeded 5% of our total revenue in fiscal 2023, 2022 and 2021 . Revenue from U.S. Government customers, including foreign military sales funded through the U.S. Government, whether directly or through prime contractors, by all segments as a percentage of total revenue were 76%, 74% and 75% in fiscal 2023, 2022 and 2021 , respectively. Revenue from services in fiscal 2023 was 28%, 38%, 19% and 29% of total revenue in our SAS, IMS, CS and AR segments, respectively. Revenue from products and services where the end consumer is located outside the U.S., including foreign military sales funded through the U.S. Government, whether directly or through prime contractors, was $4.2 billion (21% of our revenue), $3.9 billion (23% of our revenue) and $3.9 billion (22% of our revenue) in fiscal 2023 , 2022 and 2021, respectively. Export revenue and revenue from international operations in fiscal 2023 was principally from the EMEA and APAC regions and Canada. Assets by Business Segment Total assets by business segment are as follows: (In millions) December 29, 2023 December 30, 2022 Total Assets SAS $ 9,085 $ 8,838 IMS 10,631 10,925 CS 7,084 5,800 AR 4,208 ** Corporate (1) 10,679 7,961 Total Assets $ 41,687 $ 33,524 _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of assets, liabilities and operations assumed in the AJRD acquisition. 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 $8.5 billion and $6.0 billion at December 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 that we acquired with AJRD, as well as any assets of businesses held for sale. Other selected financial information by business segment and geographical area is summarized below: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Capital Expenditures SAS $ 151 $ 133 $ 155 IMS 149 45 69 CS 39 36 56 AR 31 ** ** Other non-reportable businesses — — 4 Corporate 79 38 58 Total Capital Expenditures $ 449 $ 252 $ 342 Depreciation and Amortization SAS $ 115 $ 112 $ 109 IMS 73 76 92 CS 54 47 49 AR 29 ** ** Other non-reportable businesses — — 8 Corporate 895 703 709 Total Depreciation and Amortization $ 1,166 $ 938 $ 967 Geographical Information for Operations Long-lived assets of U.S. operations $ 2,678 $ 1,896 $ 1,870 Long-lived assets of international operations 184 208 231 _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. In addition to depreciation and amortization expense related to property, plant and equipment, “Depreciation and Amortization” in the table above also includes $777 million, $596 million and $624 million of amortization related to identifiable intangible assets, debt premium, debt discount, debt issuance costs and other items in fiscal 2023, 2022 and 2021, respectively. |
LEGAL PROCEEDINGS, COMMITMENTS
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 29, 2023 | |
Legal Proceedings And Contingencies [Abstract] | |
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES | NOTE 15: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES From time to time, as a normal incident of the nature and kind of businesses in which we are or were engaged, various claims or charges are asserted and litigation or arbitration is commenced by or against us arising from or related to matters, including but not limited to: product liability; personal injury; patents, trademarks, trade secrets or other intellectual property; labor and employee 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; or 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 arbitral awards. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated (for example, we recorded an additional $31 million charge related to a pre-merger legal contingency during the quarter ended September 30, 2022). Gain contingencies, if any, are recognized when they are realized and legal costs generally are expensed when incurred. At December 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. Tax Audits Our tax filings are subject to audit by taxing authorities in jurisdictions where we conduct or conducted business. These audits may result in assessments of additional taxes that are subsequently resolved with the authorities or ultimately through legal proceedings. We believe we have adequately accrued for any ultimate amounts that are likely to result from these audits; however, final assessments, if any, could be different from the amounts recorded in our Consolidated Financial Statements. Additional information regarding audits and examinations by taxing authorities of our tax filings is set forth in Note 7: Income Taxes in these Notes. U.S. Government Business We are engaged in supplying products and services to various departments and agencies of the U.S. Government. We are therefore dependent on Congressional appropriations and administrative allotment of funds and may be affected by changes in U.S. Government policies. U.S. Government development and production contracts typically involve long lead times for design and development, are subject to significant changes in contract scheduling and may be unilaterally modified or canceled by the U.S. Government. Often these contracts call for successful design and production of complex and technologically advanced products or systems. We may participate in supplying products and services to the U.S. Government as either a prime contractor or as a subcontractor to a prime contractor. Disputes may arise between the prime contractor and the U.S. Government or between the prime contractor and its subcontractors and may result in litigation or arbitration between the contracting parties. Generally, U.S. Government contracts are subject to procurement laws and regulations, including the FAR, which outline uniform policies and procedures for acquiring products and services by the U.S. Government, and specific agency acquisition regulations that implement or supplement the FAR, such as the Defense Federal Acquisition Regulation Supplement. As a U.S. Government contractor, our contract costs are audited and reviewed on a continuing basis by the Defense Contract Audit Agency (“DCAA”). The DCAA also reviews the adequacy of, and a U.S. Government contractor’s compliance with, the contractor’s business systems and policies, including the contractor’s property, estimating, compensation and management information systems. In addition to these routine audits, from time to time, we may, either individually or in conjunction with other U.S. Government contractors, be the subject of audits and investigations by other agencies of the U.S. Government. These audits and investigations are conducted to determine if our performance and administration of our U.S. Government contracts are compliant with applicable contractual requirements and procurement and other applicable federal laws and regulations, including ITAR and FCPA. These investigations may be conducted with or without our knowledge or cooperation. We are unable to predict the outcome of such investigations or to estimate the amounts of resulting claims or other actions that could be instituted against us or our officers or employees. Under present U.S. Government procurement laws and regulations, if indicted or adjudged in violation of procurement or other federal laws, a contractor, such as us, or one or more of our operating divisions or subdivisions, could be subject to fines, penalties, repayments, or compensatory or treble damages. U.S. Government regulations also provide that certain findings against a contractor may lead to suspension or debarment from eligibility for awards of new U.S. Government contracts for a period of time to be determined by the U.S. Government. Suspension or debarment would have a material adverse effect on us because of our reliance on U.S. Government contracts. In addition, our export privileges could be suspended or revoked, which also would have a material adverse effect on us. For further discussion of risks relating to U.S. Government contracts, see “Item 1A. Risk Factors” of this Report. International As an international company, we are, from time to time, the subject of investigations relating to our international operations, including under U.S. export control laws (such as ITAR), the FCPA and other similar U.S. and international laws. Commercial Commitments We have entered into commercial commitments in the normal course of business including surety bonds, standby letter of credit agreements and other arrangements with financial institutions and customers primarily relating to the guarantee of future performance on certain contracts to provide products and services to customers or to obtain insurance policies with our insurance carriers. At December 29, 2023, we had commercial commitments on outstanding surety bonds, standby letters of credit and other arrangements, as follows: (In millions) Commercial Commitment Total Commitments expiring within Surety bonds used for: Performance $ 536 $ 396 Total surety bonds 536 396 Standby letters of credit used for: Advance payments 304 120 Performance 347 137 Financial 72 68 Total standby letters of credit 723 325 Total commitments $ 1,259 $ 721 The surety bonds and standby letters of credit used for performance are primarily related to our Public Safety business sector. As is customary in bidding for and completing network infrastructure projects for public safety systems, contractors are required to procure surety bonds and/or standby letters of credit for bids, performance, warranty and other purposes (collectively, “Performance Bonds”). Such Performance Bonds normally have maturities of up to three years and are standard in the industry as a way to provide customers a mechanism to seek redress if a contractor does not satisfy performance requirements under a contract. Typically, a customer is permitted to draw on a Performance Bond if we do not fulfill all terms of a project contract. In such an event, we would be obligated to reimburse the financial institution that issued the Performance Bond for the amounts paid. It has been rare for our Public Safety business sector to have a Performance Bond drawn upon. In addition, pursuant to the terms under which we procure Performance Bonds, if our credit ratings are lowered to below “investment grade,” we may be required to provide collateral to support a portion of the outstanding amount of Performance Bonds. Such a downgrade could increase the cost of the issuance of Performance Bonds and could make it more difficult to procure Performance Bonds, which would adversely impact our ability to compete for contract awards. Such collateral requirements could also result in less liquidity for other operational needs or corporate purposes. In addition, any future disruptions, uncertainty or volatility in financial and insurance markets could also adversely affect our ability to obtain Performance Bonds and may result in higher funding costs. 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, As of December 29, 2023, we were named, and continue to be named, as a potentially responsible party at 113 sites where future liabilities could exist. These sites included 14 sites owned by us, 72 sites associated with our former and current locations or operations and 27 hazardous waste treatment, storage or disposal facility sites not owned by us that contain hazardous substances allegedly attributable to us from past operations. Based on an assessment of relevant factors, we estimated that our liability under applicable environmental statutes and regulations for identified sites was $613 million. The current portion of our estimated environmental liability The largest environmental matter is the Sacramento, California site. In addition to issued federal and state orders to clean up groundwater, soil and soil vapor, we are subject to a Partial Consent Decree (“PCD”) related to this site which requires us, among other things, to conduct a Remedial Investigation and Feasibility Studies 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 December 29, 2023, the estimated range of anticipated costs for the Sacramento, California site related to the PCD and other federal and state orders was $266 million to $399 million and the accrued amount was $266 million included as a component of the “Other accrued items” and “Other long-term liabilities” line item in our Consolidated Balance Sheet. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 1,227 | $ 1,062 | $ 1,846 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 12 Months Ended |
Dec. 29, 2023 shares | Dec. 29, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | We require all executive officers and directors to effect purchase and sale transactions in L3Harris securities pursuant to a trading plan (each, a “10b5-1 Plan”) intended to satisfy the requirements of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”). We limit executive officers to a single 10b5-1 Plan in effect at any time, subject to limited exceptions in accordance with Rule 10b5-1. In addition, our stock ownership guidelines require executive officers to maintain ownership of L3Harris securities (excluding stock options and unearned performance share units) with a value equal to a multiple of their annual salary. Each executive officer identified in the table below is expected to hold securities considerably in excess of L3Harris’ stock ownership guidelines following the sale of the maximum number of shares contemplated. The following table includes the material terms (other than with respect to the price) of each 10b5-1 Plan adopted or terminated by our executive officers and directors during the quarter ended December 29, 2023: Name and title Date of adoption of 10b5-1 Plan (1) Scheduled expiration date of 10b5-1 Plan (2) Aggregate number of shares of common stock to be purchased or sold (3) Christopher E. Kubasik Chair and CEO December 14, 2023 April 8, 2024 Up to 46,528 shares underlying options expiring in 2025 Scott T. Mikuen Senior Vice President, General Counsel and Secretary December 14, 2023 March 18, 2024 Up to 6,392 shares William H. Swanson Director December 13, 2023 May 1, 2024 2,500 shares Edward J. Zoiss President, SAS November 8, 2023 July 26, 2024 Up to 7,217 shares _______________ (1) Transactions under each Rule 10b5-1 Plan commence no earlier than 90 days after adoption, or such later date as required by Rule 10b5-1. (2) Each Rule 10b5-1 Plan may expire on such earlier date as all transactions are completed. (3) Each Rule 10b5-1 Plan provides for shares to be sold on multiple predetermined dates. | |
Rule 10b5-1 Arrangement Adopted | true | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Christopher E. Kubasik [Member] | ||
Trading Arrangements, by Individual | ||
Name | Christopher E. Kubasik | |
Title | Chair and CEO | |
Adoption Date | December 14, 2023 | |
Arrangement Duration | 113 days | |
Aggregate Available | 46,528 | 46,528 |
Scott T. Mikuen [Member] | ||
Trading Arrangements, by Individual | ||
Name | Scott T. Mikuen | |
Title | Senior Vice President, General Counsel and Secretary | |
Adoption Date | December 14, 2023 | |
Arrangement Duration | 95 days | |
Aggregate Available | 6,392 | 6,392 |
William H. Swanson [Member] | ||
Trading Arrangements, by Individual | ||
Name | William H. Swanson | |
Title | Director | |
Adoption Date | December 13, 2023 | |
Arrangement Duration | 140 days | |
Aggregate Available | 2,500 | 2,500 |
Edward J. Zoiss [Member] | ||
Trading Arrangements, by Individual | ||
Name | Edward J. Zoiss | |
Title | President, SAS | |
Adoption Date | November 8, 2023 | |
Arrangement Duration | 261 days | |
Aggregate Available | 7,217 | 7,217 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 29, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation — Our Consolidated Financial Statements include the accounts of L3Harris Technologies, Inc. and its consolidated subsidiaries. As used in these Notes to the Consolidated Financial Statements, the terms “L3Harris,” “Company,” “we,” “our” and “us” refer to L3Harris Technologies, Inc. and its consolidated subsidiaries. Intracompany transactions and accounts have been eliminated. Amounts contained in this Report may not always add to totals due to rounding. |
Fiscal Year | Fiscal Year |
Organizational Structure and Change in Accounting Policy | Organizational Structure and Change in Accounting Policy — Effective for fiscal 2023, we adjusted our reporting to better align our businesses and transferred our ADG business from our IMS segment to our SAS segment. On October 1, 2023, we combined our Electronic Warfare sector and the majority of the ADG sector within our SAS segment to create a new sector, Advanced Combat Systems (“ACS”). The remaining portion of the ADG sector was combined with our Space Systems sector within our SAS segment. |
Use of Estimates | 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 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 Consolidated Financial Statements and these Notes. Materially different results can occur as circumstances change and additional information becomes known. |
Reclassifications | Reclassifications — The classification of certain prior year amounts have been adjusted in our Consolidated Financial Statements and these Notes to conform to current year classifications. |
Cash and Cash Equivalents | Cash and Cash Equivalents — Cash and cash equivalents include cash at banks and temporary cash investments with a maturity of three or fewer months when purchased. These investments include accrued interest and are carried at the lower of cost or market. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Fair Value Measurements | Fair Value Measurements — Fair value is defined as the price that would be received to sell 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 pricing service, 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 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. |
Accounts Receivable | Accounts Receivable — We record receivables derived from contracts with customers at net realizable value and they generally do not bear interest. This value includes an allowance for estimated uncollectible accounts to reflect any losses anticipated on the accounts receivable balances which is charged to the provision for doubtful accounts. We calculate this allowance at inception based on expected loss over the life of the receivable. We consider historical write-offs by customer, level of past due accounts and economic status of the customers. A receivable is considered delinquent if it is unpaid after the term of the related invoice has expired. Write-offs are recorded at the time a customer receivable is deemed uncollectible. |
Contract Assets and Liabilities, Revenue Recognition, Bill-and-Hold Arrangements and Backlog | Contract Assets and Liabilities — The timing of revenue recognition, customer billings and cash collections results in accounts receivable, contract assets and contract liabilities at the end of each reporting period. Contract assets include unbilled amounts typically resulting from revenue recognized exceeding amounts billed to customers for contracts utilizing the 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 portion of the contract price until contract completion. Contract liabilities include advance payments and billings in excess of revenue recognized, including deferred revenue. Contract assets and liabilities are reported on a contract-by-contract basis at the end of each reporting period. The non-current portion of contract liabilities is included within the “Other long-term liabilities” line item in our Consolidated Balance Sheet. Revenue Recognition — We account for a contract when it has approval and commitment from all parties, the rights and payment terms of the parties can be identified, the contract has commercial substance and the collectability of the consideration, or transaction price, is probable. Our contracts are often subsequently modified to include changes in specifications, requirements or price that may create new or change existing enforceable rights and obligations. We do not account for contract modifications (including unexercised options) or follow-on contracts until they meet the requirements noted above to account for a contract. We categorize revenue and costs for performance obligations to provide tangible goods as “product” and revenue and costs for performance obligations to provide services for which the principal result is not to produce anything tangible as “service.” In instances where a single performance obligation requires us to deliver products and perform services, we derive the product and service categories presented in our financial statements based upon the predominant nature of each performance. In these cases, we classify the revenue and costs from the entire performance obligation based on the nature of the overall promise made to the customer. At the inception of each contract, we evaluate the promised products and services to determine whether the contract should be accounted for as having one or more performance obligations. A performance obligation is a promise to transfer a distinct product or service to a customer and represents the unit of accounting for revenue recognition. A substantial majority of our revenue is derived from long-term development and production contracts involving the design, development, manufacture or modification of defense products and related services according to the customers’ specifications. Due to the highly interdependent and interrelated nature of the underlying products and services and the significant service of integration that we provide, which often result in the delivery of multiple units, we account for these contracts as one performance obligation. For contracts that include both development/production and follow-on support services (for example, operations and maintenance), we generally consider the follow-on services distinct in the context of the contract and account for them as separate performance obligations. Additionally, we also recognize revenue from contracts to provide multiple distinct products to a customer where the products can readily be sold to other customers based on their commercial nature and, accordingly, these products are accounted for as separate performance obligations. Shipping and handling costs incurred after control of a product has transferred to the customer (for example, in free on board shipping arrangements) are treated as fulfillment costs and, therefore, are not accounted for as separate performance obligations. Also, we record taxes collected from customers and remitted to governmental authorities on a net basis in that they are excluded from revenue. As noted above, our contracts are often subsequently modified to include changes in specifications, requirements or price. Depending on the nature of the modification, we consider whether to account for the modification as an adjustment to the existing contract or as a separate contract. Often, the deliverables in our contract modifications are not distinct from the existing contract due to the significant integration and interrelated tasks provided in the context of the contract. Therefore, such modifications are accounted for as if they are part of the existing contract, and we may be required to recognize a cumulative catch-up adjustment to revenue at the date of the contract modification. We determine the transaction price for each contract based on our best estimate of the consideration we expect to receive, which includes assumptions regarding variable consideration, such as award and incentive fees. These variable amounts are generally awarded upon achievement of certain negotiated performance metrics, program milestones or cost targets and can be based upon customer discretion. We include such estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. We estimate variable consideration primarily using the most likely amount method. For contracts with multiple performance obligations, we allocate the transaction price to each performance obligation based on the relative standalone selling price of the product or service underlying each performance obligation. The standalone selling price represents the amount for which we would sell the product or service to a customer on a standalone basis (i.e., not sold as a bundle with any other products or services). Our contracts with the U.S. Government, including foreign military sales contracts, are subject to the FAR and the prices of our contract deliverables are typically based on our estimated or actual costs plus a reasonable profit margin. As a result, the standalone selling prices of the products and services in these contracts are typically equal to the selling prices stated in the contract, thereby eliminating the need to allocate (or reallocate) the transaction price to the multiple performance obligations. In our non-U.S. Government contracts, we also generally use the expected cost plus a reasonable profit margin approach to determine standalone selling price. In addition, we determine standalone selling price for certain contracts that are commercial in nature based on observable selling prices. We recognize revenue for each performance obligation when (or as) the performance obligation is satisfied by transferring control of the promised products or services underlying the performance obligation to the customer. The transfer of control can occur over-time or at a point in time. A significant portion of our business is derived from development and production contracts. Revenue and profit related to development and production contracts are generally recognized over-time, typically using the POC cost-to-cost method of revenue recognition, whereby we measure our progress towards completion of the performance obligation based on the ratio of costs incurred to date to estimated costs at completion under the contract. Because costs incurred represent work performed, we believe this method best depicts the transfer of control of the asset to the customer. Under 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. To a lesser extent, we also recognize revenue from contracts to provide multiple distinct products to a customer that are commercial in nature and can readily be sold to other customers. These performance obligations do not meet any of the three criteria listed below to recognize revenue over-time; therefore, we recognize revenue at a point in time, generally when the products are received and accepted by the customer. Point-in-Time Revenue Recognition. Our performance obligations are satisfied at a point in time unless they meet at least one of the following criteria, in which case they are satisfied over-time: • The customer simultaneously receives and consumes the benefits provided by our performance as we perform; • Our performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced; or • Our performance does not create an asset with an alternative use to us and we have an enforceable right to payment for performance completed to date. Over-Time Revenue Recognition. For U.S. Government development and production contracts, there is generally a continuous transfer of control of the asset to the customer as it is being produced based on FAR clauses in the contract that provide the customer with lien rights to work in process and allow the customer to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. This also typically applies to our contracts with prime contractors for U.S. Government development and production contracts, when the above-described FAR clauses are flowed down to us by the prime contractors. Our non-U.S. Government development and production contracts, including international direct commercial contracts and U.S. contracts with state and local agencies, utilities, commercial and transportation organizations, often do not include the FAR clauses described above. However, over-time revenue recognition is typically supported either through our performance creating or enhancing an asset that the customer controls as it is created or enhanced or based on other contractual provisions or relevant laws that provide us with an enforceable right to payment for our work performed to date plus a reasonable profit if our customer were permitted to and did terminate the contract for reasons other than our failure to perform as promised. For performance obligations to provide services that are satisfied over-time, we recognize revenue either on a straight-line basis, the POC cost-to-cost method or based on the right-to-invoice method (i.e., based on our right to bill the customer), depending on which method best depicts transfer of control to the customer. Contract Estimates. Under 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. Recognition of profit on a contract requires estimates of the total cost at completion and transaction price and the measurement of progress towards completion. Due to the long-term nature of many of our contracts, developing the estimated total cost at completion and total transaction price often requires judgment. Factors that must be considered in estimating the cost of the work to be completed include the nature and complexity of the work to be performed, subcontractor performance and the risk and impact of delayed performance. Factors that must be considered in estimating the total transaction price include contractual cost or performance incentives (such as incentive fees, award fees and penalties) and other forms of variable consideration, as well as our historical experience and our expectation for performance on the contract. At the outset of each contract, we gauge its complexity and perceived risks and establish an estimated total cost at completion in line with these expectations. We follow a standard EAC process in which we review the progress and performance on our ongoing contracts at least quarterly and, in many cases, more frequently. If we successfully retire risks associated with the technical, schedule and cost aspects of a contract, we may lower our estimated total cost at completion commensurate with the retirement of these risks. Conversely, if we are not successful in retiring these risks, we may increase our estimated total cost at completion. Additionally, as the contract progresses, our estimates of total transaction price may increase or decrease if, for example, we receive award fees that are higher or lower than expected. When changes in estimated total costs at completion or in estimated total transaction price are determined, the related impact on operating income is recognized on a cumulative basis. Cumulative EAC adjustments represent the cumulative effect of the changes on current and periods; revenue and operating margins in future periods are recognized as if the revised estimates had been used since contract inception. Any anticipated losses on these contracts are fully recognized in the period in which the losses become evident. Bill-and-Hold Arrangements. For certain contracts, the finished product may temporarily be stored at our location under a bill-and-hold arrangement. Revenue is recognized on bill-and-hold arrangements at the point in time when the customer obtains control of the product and all of the following criteria have been met: the arrangement is substantive (for example, the customer has requested the arrangement); the product is identified separately as belonging to the customer; the product is ready for physical transfer to the customer; and we do not have the ability to use the product or direct it to another customer. In determining when the customer obtains control of the product, we consider certain indicators, including whether we have a present right to payment from the customer, whether title and/or significant risks and rewards of ownership have transferred to the customer and whether customer acceptance has been received (in the case of arrangements with customer acceptance provisions). 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 IDIQ contracts. At December 29, 2023, our ending backlog was $32.7 billion, of which $22.0 billion was funded backlog. We expect to recognize approximately 40% of the revenue associated with this backlog by the end of 2024 and approximately 65% by the end of 2025, with the remainder to be recognized thereafter. At December 30, 2022, our ending backlog was $22.3 billion, of which $16.2 billion was funded backlog. |
Inventories | Inventories |
Property, Plant and Equipment | Property, Plant and Equipment |
Goodwill | Goodwill — We follow the acquisition method of accounting to record the assets and liabilities of acquired businesses at their estimated fair value at the date of acquisition. We initially record goodwill for the amount the consideration transferred exceeds the acquisition-date fair value of net identifiable assets acquired. We test goodwill for impairment at a level within the Company referred to as the reporting unit, which is our business segment level or one level below the business segment. Goodwill is tested for impairment annually as of the first business day of our fourth fiscal quarter, or under certain circumstances more frequently, such as when events or circumstances indicate there may be impairment. Such events or circumstances may include a significant deterioration in overall economic conditions, changes in the business climate of our industry, a decline in our market capitalization, operating performance indicators, competition, reorganizations of our business or the disposal of all or a portion of a reporting unit. To test goodwill for impairment, we may perform both qualitative and quantitative assessments. If we elect to perform a qualitative assessment for a certain reporting unit, we evaluate events and circumstances impacting the reporting unit to determine the probability that goodwill is impaired. If we perform a quantitative assessment for a certain reporting unit, we calculate the fair value of that reporting unit and compare the fair value to the reporting unit’s net book value. We estimate fair values of our reporting units based on projected cash flows. Values derived from projected cash flows are corroborated through review of revenue and/or earnings multiples applied to the latest twelve months’ revenue and earnings of our reporting units. Projected cash flows are based on our best estimate of future revenues, operating costs and balance sheet metrics reflecting our view of the financial and market conditions of the underlying business; and the resulting cash flows are discounted using an appropriate discount rate that reflects the risk in the forecasted cash flows. Revenue and earnings multiples are based on current multiples of revenues and earnings for similar businesses, and based on revenue and earnings multiples paid for recent acquisitions of similar businesses made in the marketplace. We then assess whether any implied control premium, based on a comparison of fair value based purely on our stock price and outstanding shares with fair value determined by using all of the above-described models, is reasonable. |
Long-Lived Assets, Including Intangible Assets | Long-Lived Assets, Including Intangible Assets — Long-lived assets, including finite-lived intangible assets, are amortized to expense over their useful lives either according to the underlying economic benefit as reflected by future net cash inflows or on a straight-line basis depending on the nature of the asset. |
Leases | Leases — We recognize ROU assets and lease liabilities in our Consolidated Balance Sheet for operating and finance leases under which we are the lessee. As a practical expedient, leases with a term of twelve months or less (including reasonably certain extension periods) and leases with expected lease payments of less than $250 thousand are expensed as incurred. Operating lease assets and finance lease assets are included in the “Other non-current assets” and “Property, plant and equipment, net” line items, respectively, in our Consolidated Balance Sheet. Operating lease liabilities and finance lease liabilities for obligations due within twelve months are included in the “Other accrued items” line item in our Consolidated Balance Sheet. Operating lease liabilities and finance lease liabilities for obligations due longer than twelve months are included in the “Other long-term liabilities” line item in our Consolidated Balance Sheet. ROU assets and lease liabilities are recognized based on the present value of future lease payments, which are primarily base rent. We have some lease payments that are based on an index and changes to the index are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred. Our lease payments also include non-lease components such as real estate taxes and common-area maintenance costs. As a practical expedient, we account for lease and non-lease components as a single component. For certain leases, the non-lease components are variable and are therefore excluded from lease payments to determine the ROU asset. The present value of future lease payments is determined using our incremental borrowing rate at lease commencement over the expected lease term. We use our incremental borrowing rate because our leases do not provide an implicit lease rate. The expected lease term represents the number of years we expect to lease the property, including options to extend or terminate the lease when it is reasonably certain that we will exercise the option. |
Income Taxes | Income Taxes — We follow the asset and liability method of accounting for income taxes. We record deferred tax assets and liabilities for differences between the tax basis of assets and liabilities and amounts reported in our Consolidated Balance Sheet, as well as operating loss and tax credit carryforwards. We follow very specific and detailed guidelines in each tax jurisdiction regarding the recoverability of any tax assets recorded on the balance sheet and provide necessary valuation allowances as required. We regularly review our deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The implementation of a modified territorial tax system by the Tax Cuts and Jobs Act of 2017 (“TCJA”) subjects us to tax on our Global Intangible Low-Taxed Income (“GILTI”) starting with fiscal 2019. The Financial Accounting Standards Board has permitted companies to make an accounting policy decision to either (1) treat taxes due on future GILTI inclusions in U.S. taxable income as a current-period expense when incurred (“period cost method”) or (2) factor such amounts into the measurement of its deferred taxes (“deferred method”). We have elected to use the period cost method. |
Standard Warranties | Standard Warranties — We record estimated standard warranty costs in the period that control of the related products transfers to the customer. Factors that affect the estimated cost for warranties include the terms of the contract, the type and complexity of the delivered product, the number of installed units, historical experience and management’s assumptions regarding anticipated rates of warranty claims and cost per claim. Our standard warranties start from the shipment, delivery or customer acceptance date and continue as follows: Segment Average Warranty Period SAS One IMS One CS One AR One year Because our products are manufactured, in many cases, to customer specifications and their acceptance is based on meeting those specifications, we historically have experienced minimal warranty costs. Factors that affect our warranty liability include the number of installed units, historical experience, anticipated delays in delivery of products to end customers, in-country support for international revenues and our assumptions regarding anticipated rates of warranty claims and cost per claim. We assess the adequacy of our recorded warranty liabilities every quarter and make adjustments to the liability as necessary. |
Restructuring and Other Exit Costs | Restructuring and Other Exit Costs — We record charges for restructuring and other exit activities related to sales or terminations of product lines, closures or relocations of business activities, changes in management structure, and fundamental reorganizations that affect the nature and focus of operations. Such charges include termination benefits, contract termination costs and costs to close or consolidate facilities or relocate employees. We record these charges at their fair value when incurred. In cases where employees are required to render service until they are terminated in order to receive the termination benefits and will be retained beyond the minimum retention period, we record the expense ratably over the future service period. |
Foreign Currency Translation | Foreign Currency Translation |
Stock Options and Other Share-Based Compensation | Stock Options and Other Share-Based Compensation Stock Options The following information relates to stock options, including performance stock options, that have been granted under shareholder-approved L3Harris SIPs. Option exercise prices are equal to or greater than the fair market value of our common stock on the date the options are granted, using the closing stock price of our common stock. Options may be exercised for a period of ten years after the date of grant, and options, other than performance stock options, generally become exercisable in installments, which are typically 33.3% one year from the grant date, 33.3% two years from the grant date and 33.3% three years from the grant date. In certain instances, vesting and exercisability are also subject to performance criteria. The fair value as of the grant date of each option award was determined using the Black-Scholes-Merton option-pricing model which uses assumptions noted in the following table. Expected volatility over the expected term of the options is based on implied volatility from traded options on our common stock and the historical volatility of our stock price. The expected term of the options is based on historical observations of our common stock, considering average years to exercise for all options exercised and average years to cancellation for all options canceled, as well as average years remaining for vested outstanding options, which is calculated based on the weighted-average of these three inputs. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Restricted Stock Unit Awards The following information relates to awards of restricted stock units that have been granted to employees and non-employee directors under our L3Harris SIPs. These awards are not transferable until vested and the restrictions generally lapse upon the achievement of continued employment (or board membership) over a specified time period. Performance Share Unit Awards The following information relates to awards of performance share units that have been granted to employees under our L3Harris SIPs. At December 29, 2023, all of these awards are subject to performance criteria, such as meeting predetermined operating income or earnings per share, return on invested capital targets and market conditions, such as total shareholder return, for a 3-year performance period. These awards also generally vest after a 3-year performance period. The final determination of the number of shares to be issued in respect of an award is made by our Board or a committee thereof. |
Retirement Benefits | Retirement Benefits — We sponsor various pension and other postretirement defined benefit plans. Accordingly, the funded or unfunded position of each defined benefit plan is recorded in our Consolidated Balance Sheet. Actuarial gains and losses and prior service costs or credits that have not yet been recognized through income are recorded in the “Accumulated other comprehensive loss” line item within equity in our Consolidated Balance Sheet, net of taxes, until they are amortized as a component of net periodic benefit income. The determination of benefit obligations and the recognition of expenses related to defined benefit plans are dependent on various assumptions. The major assumptions primarily relate to discount rates, long-term expected rates of return on plan assets, the rate of future compensation increases, mortality, termination and health care cost trend rates. We develop each assumption using relevant Company experience in conjunction with market-related data. Actuarial assumptions are reviewed annually with third-party consultants and adjusted as appropriate. For the recognition of net periodic benefit income, the calculation of the long-term expected return on plan assets is generally derived using a market-related value of plan assets based on yearly average asset values at the measurement date over the last five years, to be phased in over five years. Actual results that differ from our assumptions are accumulated and generally amortized for each plan to the extent required over the estimated future life expectancy or, if applicable, the future working lifetime of the plan’s active participants. The fair value of plan assets is determined based on market prices or estimated fair value at the measurement date. The measurement date for valuing defined benefit plan assets and obligations is the end of the month closest to our fiscal year end. We record the service cost component of net periodic benefit income in the “Cost of revenue” and “General and administrative expenses” line items in our Consolidated Statement of Operations. The non-service cost components of net periodic benefit income are included in the “Non-service FAS pension income and other, net” line item in our Consolidated Statement of Operations. |
Environmental Expenditures | Environmental Expenditures — We generally capitalize environmental expenditures that increase the life or efficiency of property or that reduce or prevent environmental contamination. We accrue environmental expenses resulting from existing conditions that relate to past or current operations. Our accruals for environmental expenses are recorded on a site-by-site basis when it is probable a liability has been incurred and the amount of the liability can be reasonably estimated, based on current law and existing technologies available to us. Our accruals for environmental expenses represent the best estimates related to the investigation and remediation of environmental media such as water, soil, soil vapor, air and structures, as well as related legal fees, and are reviewed periodically, at least annually at the year-end balance sheet date, and updated for progress of investigation and remediation efforts and changes in facts and legal circumstances. If the timing and amount of future cash payments for environmental liabilities are fixed or reliably determinable, we generally discount such cash flows in estimating our accrual. The relevant factors we considered in estimating our potential liabilities under applicable environmental statutes and regulations included some or all of the following as to each site: incomplete information regarding particular sites and other potentially responsible parties; uncertainty regarding the extent of investigation or remediation; our share, if any, of liability for such conditions; the selection of alternative remedial approaches; changes in environmental standards and regulatory requirements; probable insurance proceeds; cost-sharing agreements with other parties; and potential indemnification from successor and predecessor owners of these sites. We do not believe that any uncertainties regarding these relevant factors will materially affect our potential liability under applicable environmental statutes and regulations. We believe the total amount accrued is appropriate based on existing facts and circumstances, although we note the total amount accrued may increase or decrease in future years. |
Financial Guarantees and Commercial Commitments | Financial Guarantees and Commercial Commitments — Financial guarantees are contingent commitments issued to guarantee the performance of a customer to a third party in borrowing arrangements, such as commercial paper issuances, bond financings and similar transactions. |
Financial Instruments and Risk Management | Financial Instruments and Risk Management — In the normal course of business, we are exposed to global market risks, including the effect of changes in foreign currency exchange rates and changes in interest rates. We use derivative instruments to manage our exposure to such risks and formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking hedge transactions. To manage our exposure to currency risk and market fluctuation risk associated with anticipated cash flows that are probable of occurring in the future, we implement cash flow hedges across our business segments. More specifically, we use foreign currency forward contracts and options to hedge off-balance sheet future foreign currency commitments, including purchase commitments to suppliers, future committed sales to customers and intersegment transactions. Notional amounts are used to measure the volume of foreign currency forward contracts and do not represent exposure to foreign currency losses. At December 29, 2023, we had open foreign currency forward contracts with an aggregate notional amount of $223 million, hedging certain forecasted transactions denominated in U.S. Dollars, Canadian Dollars and Australian Dollars. At December 30, 2022, we had open foreign currency forward contracts with an aggregate notional amount of $275 million, hedging certain forecasted transactions denominated in Canadian Dollars, U.S. Dollars, British Pounds and Euros. We may also enter into derivative instruments that are not designated as hedges and do not qualify for hedge accounting. We recognize all derivatives in our Consolidated Balance Sheet at fair value. These financial instruments are marked-to-market using forward prices and fair value quotes with the offset to other comprehensive income (loss) and are categorized in Level 2 of the fair value hierarchy. The cash flow impact of our derivatives is included in the same category in our Consolidated Statement of Cash Flows as the cash flows of the related hedged items. We do not hold or issue derivatives for speculative trading purposes. Derivatives that are not hedges are adjusted to fair value through income. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of assets, liabilities or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Gains and losses in accumulated other comprehensive loss are reclassified to earnings when the related hedged item is recognized in earnings. |
Income From Continuing Operations Per Share | Income From Continuing Operations Per Common Share — For all periods presented in our Consolidated Financial Statements and these Notes, income from continuing operations per share (“EPS”) is computed using the two-class method. The two-class method of computing EPS is an earnings allocation formula that determines EPS for common stock and any participating securities according to dividends paid and participation rights in undistributed earnings. Under the two-class method, income from continuing operations per common share is computed by dividing the sum of earnings distributed to common shareholders and undistributed earnings allocated to common shareholders by the weighted-average number of common shares outstanding for the period. Income from continuing operations per diluted common share (“diluted EPS”) is computed using the more dilutive of the two-class method or the treasury stock method. In applying the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted-average shares outstanding during the period. |
Business Segments | Business Segments — We evaluate our business segment’s based on its operating income or loss. Intersegment revenues are generally transferred at cost to the buying segment, and the sourcing segment recognizes a profit that is eliminated. The “Corporate eliminations” line item in Note 14: Business Segments in these Notes represents the elimination of intersegment revenues. Corporate expenses are primarily allocated to our business segments using an allocation methodology prescribed by U.S. Government regulations for government contractors. The “Unallocated corporate department (expense) income, net” line item in Note 14: Business Segments in these Notes represents the portion of corporate expenses that are not included in management’s evaluation of segment operating performance or elimination of intersegment profits. In accordance with CAS, we allocate a portion of pension and OPEB plan costs to our U.S. Government contracts. However, our 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 Note 14: Business Segments in these Notes represents the difference between the service cost component of FAS pension and OPEB cost and total CAS pension and OPEB cost. The non-service cost components of FAS pension and OPEB income or expense are included as component of the “ Non-service FAS pension income and other, net ” line item in our Consolidated Statement of Operations. The non-service cost components of net periodic pension and postretirement benefit income includes interest cost, expected return on plan assets, amortization of net actuarial gain or loss and effect of curtailments or settlements under our pension and postretirement benefit plans. See Note 9: Retirement Benefits in these Notes for more information on the composition of non-service cost components of FAS pension and OPEB income and expense. |
Research and Development | Research and Development — Company-funded R&D costs are expensed as incurred and are included in the “General and administrative expenses” line item in our Consolidated Statement of Operations. These costs were $480 million, $603 million and $692 million in fiscal 2023, 2022, and 2021, respectively. Customer-funded R&D costs are incurred pursuant to contractual arrangements, principally U.S. Government-sponsored contracts requiring us to provide a product or service meeting certain defined performance or other specifications (such as designs), and such contractual arrangements are accounted for principally by the POC cost-to-cost revenue recognition method. Customer-funded R&D is included in the “ Revenue ” and “ Cost of revenue ” line items in our Consolidated Statement of Operations. |
Accounting Changes or Recent Accounting Pronouncements | Accounting Changes or Recent Accounting Pronouncements |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Average Warranty Period by Segment | Our standard warranties start from the shipment, delivery or customer acceptance date and continue as follows: Segment Average Warranty Period SAS One IMS One CS One AR One year |
Schedule of Net Estimated at Completion ("EAC") Adjustments | Net EAC adjustments had the following impact to earnings for the periods presented: Fiscal Year Ended (In millions, except per share amounts) December 29, 2023 December 30, 2022 December 31, 2021 Net EAC adjustments, before income taxes $ (85) $ 36 $ 304 Net EAC adjustments, net of income taxes (63) 27 228 Net EAC adjustments, net of income taxes, per diluted share (0.33) 0.14 1.12 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The weighted average number of shares outstanding used to compute basic and diluted EPS are as follows: Fiscal Year Ended (In millions, except per share amounts) December 29, 2023 December 30, 2022 December 31, 2021 Basic weighted-average common shares outstanding 189.6 191.8 201.3 Impact of dilutive share-based awards 1.0 1.7 1.9 Diluted weighted-average common shares outstanding 190.6 193.5 203.2 |
CONTRACT ASSETS AND CONTRACT _2
CONTRACT ASSETS AND CONTRACT LIABILITIES (Tables) | 12 Months Ended |
Dec. 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) December 29, 2023 December 30, 2022 Contract assets (1) $ 3,196 $ 2,987 Contract liabilities, current (2) (1,900) (1,400) Contract liabilities, non-current (3) (94) (117) Net contract assets $ 1,202 $ 1,470 _______________ (1) Includes approximately $385 million of AR contract assets at December 29, 2023. (2) Includes approximately $319 million of AR contract liabilities at December 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 Consolidated Balance Sheet. The components of contract assets are summarized below: (In millions) December 29, 2023 December 30, 2022 Unbilled contract receivables, gross $ 6,649 $ 4,629 Unliquidated progress payments and advances (3,453) (1,642) Contract assets $ 3,196 $ 2,987 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are summarized below: (In millions) December 29, 2023 December 30, 2022 Finished products $ 217 $ 181 Work in process 427 396 Materials and supplies 828 714 Inventories $ 1,472 $ 1,291 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net, are summarized below: (In millions) December 29, 2023 December 30, 2022 Land $ 184 $ 78 Software capitalized for internal use 716 686 Buildings 1,605 1,251 Machinery and equipment 2,816 2,322 5,321 4,337 Less: accumulated depreciation and amortization (2,459) (2,233) Property, plant and equipment, net (1) $ 2,862 $ 2,104 _______________ (1) Includes approximately $95 million, $275 million and $251 million of AR land, buildings and machinery and equipment, respectively, at December 29, 2023. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 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, for fiscal 2023 and 2022 were as follows: (In millions) SAS IMS CS AR Total Balance at December 31, 2021 $ 5,849 $ 8,187 $ 4,153 ** $ 18,189 Assets of business held for sale (1) (30) — — ** (30) Impairment of goodwill — (447) (355) ** (802) Currency translation adjustments (41) (31) (2) ** (74) Balance at December 30, 2022 5,778 7,709 3,796 ** 17,283 Reallocation of goodwill in business realignment (2) 327 (327) — — — Goodwill from TDL acquisition — — 1,143 — 1,143 Goodwill from AJRD acquisition — — — 2,365 2,365 Goodwill decrease from divestitures (1) (9) — — — (9) Assets of business held for sale (3) — (534) — — (534) Impairment of goodwill — (296) — — (296) Currency translation adjustments 14 12 1 — 27 Balance at December 29, 2023 $ 6,110 $ 6,564 $ 4,940 $ 2,365 $ 19,979 _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the assets, liabilities and operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. (1) During fiscal 2022, we assigned $30 million of goodwill associated with the then pending VIS business divestiture to “Assets of business held for sale ” in our Consolidated Balance Sheet. During fiscal 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. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. (2) In conjunction with our 2023 business realignment discussed below, we reallocated $327 million of goodwill related to the legacy ADG reporting unit, which is net of fiscal 2022 impairment charges of $80 million, to our SAS segment from our IMS segment. (3) During fiscal 2023, we assigned $534 million of goodwill associated with the pending divestiture of the CAS disposal group to “Assets of business held for sale” in our Consolidated Balance Sheet. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for further information. |
Schedule of Indefinite-Lived Intangible Assets | Identifiable intangible assets, net, are summarized below: December 29, 2023 December 30, 2022 (In millions) Gross Carrying Accumulated Net Carrying Amount (1) Gross Carrying Accumulated Net Carrying Amount (2) Customer relationships $ 8,892 $ 2,733 $ 6,159 $ 6,124 $ 2,189 $ 3,935 Developed technologies 856 413 443 566 366 200 Trade names — divisions 185 50 135 95 53 42 Other, including contract backlog 4 4 — 3 3 — Total finite-lived identifiable intangible assets 9,937 3,200 6,737 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 $ 11,740 $ 3,200 $ 8,540 $ 8,612 $ 2,611 $ 6,001 _______________ (1) During fiscal 2023, we assigned $263 million of intangible assets associated with the Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding divestitures and businesses held for sale. (2) During fiscal 2022, we assigned $10 million of intangible assets associated with the then pending VIS business divestiture to "Assets of business held for sale" in our Consolidated Balance Sheet. During fiscal 2023, we completed the divestiture of our VIS business. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding divestitures and businesses held for sale. |
Schedule of Finite-Lived Intangible Assets | Identifiable intangible assets, net, are summarized below: December 29, 2023 December 30, 2022 (In millions) Gross Carrying Accumulated Net Carrying Amount (1) Gross Carrying Accumulated Net Carrying Amount (2) Customer relationships $ 8,892 $ 2,733 $ 6,159 $ 6,124 $ 2,189 $ 3,935 Developed technologies 856 413 443 566 366 200 Trade names — divisions 185 50 135 95 53 42 Other, including contract backlog 4 4 — 3 3 — Total finite-lived identifiable intangible assets 9,937 3,200 6,737 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 $ 11,740 $ 3,200 $ 8,540 $ 8,612 $ 2,611 $ 6,001 _______________ (1) During fiscal 2023, we assigned $263 million of intangible assets associated with the Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding divestitures and businesses held for sale. (2) During fiscal 2022, we assigned $10 million of intangible assets associated with the then pending VIS business divestiture to "Assets of business held for sale" in our Consolidated Balance Sheet. During fiscal 2023, we completed the divestiture of our VIS business. See Note 13: Acquisitions, Divestitures and Asset Sales in these Notes for additional information regarding divestitures and businesses held for sale. Intangible assets acquired in fiscal 2023 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 $ 62 $ 344 $ 2,720 $ 102 $ 2,618 Developed technologies 349 21 328 — — — Trade names — divisions — — — 120 3 117 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future estimated amortization expense for identifiable intangible assets is as follows: (In millions) 2024 $ 914 2025 791 2026 694 2027 585 2028 513 Thereafter 3,240 Total $ 6,737 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision For Income Tax | The provisions for current and deferred income taxes attributable to continuing operations are as follows: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Current: United States $ 328 $ 633 $ 415 International 50 82 70 State and local 66 98 65 Total current income taxes 444 813 550 Deferred: United States (380) (523) (55) International 10 (61) (34) State and local (51) (17) (21) Total deferred income taxes (421) (601) (110) Total income taxes $ 23 $ 212 $ 440 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. statutory income tax rate to our effective income tax rate is as follows: Fiscal Year Ended December 29, 2023 December 30, 2022 December 31, 2021 U.S. statutory income tax rate 21.0 % 21.0 % 21.0 % State taxes 1.1 2.2 1.8 International income — — 0.4 Non-deductible goodwill impairment 3.6 14.2 0.6 Research and development tax credit (12.5) (13.0) (5.9) FDII deduction (4.4) (5.1) (1.4) Changes in valuation allowance 0.5 0.1 0.9 Impact of divestitures and reorganizations (8.5) (1.3) 4.1 Equity-based compensation (1) 0.2 (0.2) (1.1) Settlement of tax audits (1.1) (0.7) (1.1) Other items 2.0 (0.5) — Effective income tax rate 1.9 % 16.7 % 19.3 % _______________ (1) |
Schedule of Deferred Tax Assets, Net of Valuation Allowance | The components of deferred income tax assets (liabilities) were as follows: (In millions) December 29, 2023 December 30, 2022 Deferred tax assets, net: Accruals $ 334 $ 227 Tax loss and credit carryforwards 217 194 Operating lease obligation 243 239 Capitalized research and experimental expenditures 1,125 646 Other 272 372 Valuation allowance (1) (240) (243) Deferred tax assets, net 1,951 1,435 Deferred tax liabilities: Property, plant and equipment (252) (167) Acquired intangibles (2,143) (1,566) Operating lease right-of-use asset (219) (210) Other (61) (138) Deferred tax liabilities (2,675) (2,081) Net deferred tax liabilities $ (724) $ (646) _______________ (1) The valuation allowance has been established to offset certain domestic and foreign deferred tax assets due to uncertainty regarding our ability to realize them in the future. The net change in our valuation allowance in fiscal 2023 and 2022 was a decrease of $3 million and $14 million, respectively. Net deferred tax assets (liabilities) were classified as follows in our Consolidated Balance Sheet: (In millions) December 29, 2023 December 30, 2022 Deferred income tax assets $ 91 $ 73 Deferred income tax liabilities (815) (719) Net deferred tax liabilities $ (724) $ (646) |
Schedule of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Balance at beginning of period $ 613 $ 587 $ 542 Additions based on tax positions taken during current period 99 124 115 Additions based on tax positions taken during prior period 8 4 11 Additions from tax positions related to acquired entities 86 — — Decreases based on tax positions taken during prior period (133) (76) (64) Decreases from lapse in statutes of limitations (11) (6) (15) Decreases from settlements (10) (20) (2) Balance at end of fiscal year $ 652 $ 613 $ 587 |
DEBT AND CREDIT ARRANGEMENTS (T
DEBT AND CREDIT ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt, Net | Long-term debt, net, is summarized below: (In millions) December 29, 2023 December 30, 2022 Variable-rate debt: Floating rate notes, due March 10, 2023 $ — $ 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 (1) 350 350 3.832% notes, due April 27, 2025 (1)(2) 600 600 7.00% debentures, due January 15, 2026 (3) 100 100 3.85% notes, due December 15, 2026 (1) 550 550 5.40% notes, due January 15, 2027 (“5.4% 2027 Notes”) (1)(2) 1,250 — 6.35% debentures, due February 1, 2028 (1) 26 26 4.40% notes, due June 15, 2028 (1)(2) 1,850 1,850 2.90% notes, due December 15, 2029 (1) 400 400 1.80% notes, due January 15, 2031 (1)(2) 650 650 5.40% notes, due July 31, 2033 (“5.4% 2033 Notes”) (1)(2) 1,500 — 4.854% notes, due April 27, 2035 (1)(2) 400 400 6.15% notes, due December 15, 2040 (1)(2) 300 300 5.054% notes, due April 27, 2045 (1)(2) 500 500 5.60% notes, due July 31, 2053 (“5.6% 2053 Notes”) (1)(2) 500 — Total variable and fixed-rate debt 11,226 6,776 Financing lease obligations and other debt 300 222 Long-term debt, including the current portion of long-term debt 11,526 6,998 Plus: unamortized bond premium 51 70 Less: unamortized discounts and issuance costs (54) (25) Long-term debt, including the current portion of long-term debt, net 11,523 7,043 Less: current portion of long-term debt, net (363) (818) Total long-term debt, net $ 11,160 $ 6,225 _______________ (1) We may redeem these notes, in whole or in part, at our option, at a pre-determined redemption price pursuant to their terms prior to the applicable maturity date. (2) Upon change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase these notes at a pre-determined price pursuant to their terms. (3) The debentures are not redeemable prior to maturity. |
Schedule of Estimated Fair Values of Long-term Debt | The following table presents the carrying amounts and estimated fair values of our long-term debt: December 29, 2023 December 30, 2022 (In millions) Carrying Fair Carrying Fair Term Loan 2025 (1) $ 2,250 $ 2,250 $ — $ — All other long-term debt, net (including current portion) (2) 9,273 9,199 7,043 6,569 Long-term debt, including the current portion of long-term debt, net $ 11,523 $ 11,449 $ 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 our long-term debt in our balance sheet were measured at fair value, it would be categorized in Level 2 of the fair value hierarchy. |
RETIREMENT BENEFITS (Tables)
RETIREMENT BENEFITS (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Fair Value of Deferred Compensation Plan Investments and Liabilities by Category and Fair Value Hierarchy Level | The following table provides the fair value of our deferred compensation plan investments and liabilities by category and by fair value hierarchy level: December 29, 2023 December 30, 2022 (In millions) Total Level 1 Total Level 1 Assets Deferred compensation plan assets: (1) Equity and fixed income securities $ 106 $ 106 $ 64 $ 64 Investments measured at NAV: Corporate-owned life insurance 37 33 Total fair value of deferred compensation plan assets $ 143 $ 97 Liabilities Deferred compensation plan liabilities: (2) Equity securities and mutual funds $ 18 $ 18 $ 8 $ 8 Investments measured at NAV: Common/collective trusts and guaranteed investment contracts 274 192 Total fair value of deferred compensation plan liabilities $ 292 $ 200 _______________ (1) Represents diversified assets held in “rabbi trusts” primarily 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 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 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 Funded Status of Defined Benefit Plans and Balance Sheet Information | The following table provides a summary of the funded status of our defined benefit plans and the presentation of such balances within our Consolidated Balance Sheet: December 29, 2023 December 30, 2022 (In millions) Pension Other Total Pension Other Total Fair value of plan assets $ 8,595 $ 265 $ 8,860 $ 7,411 $ 242 $ 7,653 PBO (8,563) (231) (8,794) (7,494) (228) (7,722) Funded status $ 32 $ 34 $ 66 $ (83) $ 14 $ (69) Consolidated Balance Sheet line item amounts: Assets of business held for sale $ 4 $ — $ 4 $ — $ — $ — Other non-current assets $ 193 $ 96 $ 289 $ 144 $ 66 $ 210 Compensation and benefits (12) (7) (19) (11) (6) (17) Other long-term liabilities (153) (55) (208) (216) (46) (262) |
Schedule of Pre-tax Amounts Recognized in Other Comprehensive Income (Loss) | The following table provides a summary of pre-tax amounts recorded within Accumulated other comprehensive loss: December 29, 2023 December 30, 2022 (In millions) Pension Other Total Pension Other Total Actuarial loss (gain) $ 162 $ (98) $ 64 $ 243 $ (100) $ 143 Net prior service (credit) cost (157) 4 (153) (183) 5 (178) Total PBO not yet recognized as expense $ 5 $ (94) $ (89) $ 60 $ (95) $ (35) |
Schedule of Roll-forward of Projected Benefit Obligation | The following table provides a roll-forward of the PBO for our defined benefit plans: December 29, 2023 December 30, 2022 (In millions) Pension Other Total Pension Other Total Change in benefit obligation Benefit obligation at beginning of fiscal year $ 7,494 $ 228 $ 7,722 $ 10,007 $ 348 $ 10,355 Service cost 33 2 35 44 2 46 Interest cost 386 11 397 220 7 227 Actuarial loss (gain) 280 (1) 279 (2,097) (107) (2,204) Benefits paid (1) (568) (23) (591) (626) (22) (648) Expenses paid (34) — (34) (26) — (26) Currency translation adjustment 10 — 10 (28) — (28) Acquisitions (2) 960 14 974 — — — Divestiture — — — (8) — (8) Other 2 — 2 8 — 8 Benefit obligation at end of fiscal year $ 8,563 $ 231 $ 8,794 $ 7,494 $ 228 $ 7,722 _______________ (1) Fiscal 2022 includes approximately $64 million associated with the purchase of group annuity policies. The transaction is reflected in Benefits paid as settlement accounting had not been met. (2) Benefit obligation assumed in the AJRD acquisition. Net defined benefit plan liability is included in our “Other long-term liabilities” and “Compensation and benefits” line items in “Acquisition of AJRD” section of Note 13: Acquisitions, Divestitures and Asset Sales |
Schedule of Roll-forward of Plan Assets | The following table provides a roll-forward of the assets and the ending funded status of our defined benefit plans: December 29, 2023 December 30, 2022 (In millions) Pension Other Total Pension Other Total Change in plan assets Plan assets at beginning of fiscal year $ 7,411 $ 242 $ 7,653 $ 9,604 $ 320 $ 9,924 Actual return on plan assets 1,004 37 1,041 (1,516) (51) (1,567) Acquisitions (1) 749 — 749 — — — Employer contributions 20 9 29 16 (5) 11 Benefits paid (2) (568) (23) (591) (626) (22) (648) Expenses paid (34) — (34) (26) — (26) Currency translation adjustment 12 — 12 (32) — (32) Divestiture — — — (10) — (10) Other 1 — 1 1 — 1 Plan assets at end of fiscal year $ 8,595 $ 265 $ 8,860 $ 7,411 $ 242 $ 7,653 Funded status at end of fiscal year $ 32 $ 34 $ 66 $ (83) $ 14 $ (69) _______________ (1) Plan assets acquired in the AJRD acquisition. Net defined benefit plan liability is included in “Other long-term liabilities” and “Compensation and benefits” line items in “Acquisition of AJRD” section of Note 13: Acquisitions, Divestitures and Asset Sales . (2) Fiscal 2022 includes approximately $64 million associated with the transfer of plan assets to an insurance company. The transaction is reflected in Benefits paid as settlement accounting had not been met. |
Schedule of Accumulated Benefit Obligations | The following tables provide information for benefit plans with accumulated benefit obligations in excess of plan assets and benefit plans with PBO in excess of plan assets: December 29, 2023 December 30, 2022 (In millions) Pension Other Pension Other Accumulated benefit obligation $ 225 N/A $ 6,698 N/A Fair value of plan assets 60 N/A 6,472 N/A December 29, 2023 December 30, 2022 (In millions) Pension Other Pension Other PBO $ 226 $ 62 $ 6,699 $ 52 Fair value of plan assets 60 — 6,472 — |
Schedule of Components of Net Benefit Income | The following table provides the components of net periodic benefit income and other amounts recognized in other comprehensive income in fiscal 2023, 2022 and 2021 as they pertain to our defined benefit plans: Pension Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Net periodic benefit income Operating Service cost $ 33 $ 44 $ 66 Non-operating Interest cost 386 220 188 Expected return on plan assets (633) (624) (621) Amortization of net actuarial (gain) loss (9) 9 30 Amortization of prior service credit (26) (27) (28) Effect of curtailments or settlements — — 1 Non-service cost periodic benefit income (282) (422) (430) Net periodic benefit income $ (249) $ (378) $ (364) Other changes in plan assets and benefit obligations recognized in other comprehensive income Net actuarial (gain) loss $ (90) $ 42 $ (972) Prior service cost — 8 2 Amortization of net actuarial gain (loss) 9 (9) (30) Amortization of prior service credit 26 27 28 Currency translation adjustment — 1 1 Recognized prior service credit — — 4 Recognized net actuarial loss — — (4) Total change recognized in other comprehensive income (55) 69 (971) Total impact from net periodic benefit income and changes in other comprehensive income $ (304) $ (309) $ (1,335) Other Benefits Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Net periodic benefit income Operating Service cost $ 2 $ 2 $ 2 Non-operating Interest cost 11 7 5 Expected return on plan assets (20) (20) (20) Amortization of net actuarial gain (20) (7) — Amortization of prior service cost 1 1 1 Non-service cost periodic benefit income (28) (19) (14) Net periodic benefit income $ (26) $ (17) $ (12) Other changes in plan assets and benefit obligations recognized in other comprehensive income Net actuarial gain $ (18) $ (34) $ (46) Amortization of net actuarial gain 20 7 — Amortization of prior service cost (1) (1) (1) Total change recognized in other comprehensive income 1 (28) (47) Total impact from net periodic benefit income and changes in other comprehensive income $ (25) $ (45) $ (59) |
Schedule of Weighted-average Assumptions Used | The following tables provide the weighted-average assumptions used to determine PBO and net periodic benefit income, as they pertain to our defined benefit pension plans: Obligation assumptions as of: December 29, 2023 December 30, 2022 Discount rate 4.91 % 5.18 % Rate of future compensation increase 3.01 % 3.01 % Cash balance interest crediting rate 4.50 % 4.00 % Cost assumptions for fiscal periods ended: December 29, 2023 December 30, 2022 December 31, 2021 Discount rate to determine service cost 5.18 % 2.69 % 2.26 % Discount rate to determine interest cost 5.08 % 2.27 % 1.80 % Expected return on plan assets 7.46 % 7.44 % 7.43 % Rate of future compensation increase 3.01 % 3.01 % 3.01 % Cash balance interest crediting rate 4.00 % 3.50 % 3.50 % The following table provides the weighted-average assumptions used to determine projected benefit obligations and net periodic benefit income, as they pertain to our other postretirement defined benefit plans: Obligation assumptions as of: December 29, 2023 December 30, 2022 Discount rate 4.87 % 5.16 % Rate of future compensation increase N/A N/A Cost assumptions for fiscal periods ended: December 29, 2023 December 30, 2022 December 31, 2021 Discount rate to determine service cost 5.26 % 2.91 % 2.49 % Discount rate to determine interest cost 5.06 % 2.06 % 1.42 % Rate of future compensation increase N/A N/A N/A |
Schedule of Strategic Target Assets Allocation and Fair Value of Plan Assets | The following table provides the current strategic target asset allocation ranges by asset category: Target Asset Equity investments 35 % — 55% Fixed income investments 25 % — 35% Alternative investments 12 % — 30% Cash and cash equivalents 0 % — 10% The following tables provide the fair value of plan assets held by our defined benefit plans by asset category and by fair value hierarchy level: December 29, 2023 (In millions) Total Level 1 Level 2 Level 3 Asset category Equities: Domestic equities $ 1,294 $ 1,294 $ — $ — International equities 1,138 1,138 — — Real estate investment trusts 214 214 — — Fixed income: Corporate bonds 1,457 — 1,331 126 Government securities 485 — 485 — Securitized assets 164 — 164 — Fixed income funds 137 4 133 — Cash and cash equivalents 545 18 527 — Other 61 — — 61 Total 5,495 $ 2,668 $ 2,640 $ 187 Investments measured at NAV: Equity funds 1,529 Fixed income funds 3 Hedge funds 396 Private equity funds 1,019 Real estate funds 379 Other 2 Total investments measured at NAV 3,328 Receivables, net 37 Total fair value of plan assets $ 8,860 December 30, 2022 (In millions) Total Level 1 Level 2 Level 3 Asset category Equities: Domestic equities $ 1,275 $ 1,275 $ — $ — International equities 1,044 1,002 42 — Real estate investment trusts 192 192 — — Fixed income: Corporate bonds 1,118 — 995 123 Government securities 320 — 320 — Securitized assets 166 — 166 — Fixed income funds 92 4 88 — Cash and cash equivalents 148 22 126 — Total 4,355 $ 2,495 $ 1,737 $ 123 Investments measured at NAV: Equity funds 1,661 Fixed income funds 299 Hedge funds 294 Private equity funds 696 Real estate funds 372 Other 2 Total investments measured at NAV 3,324 Payables, net (26) Total fair value of plan assets $ 7,653 |
Schedule of Expected Benefit Payments | The following table provides the projected timing of payments for benefits earned to date and benefits expected to be earned for future service by current active employees under our defined benefit plans: (In millions) Pension Other Benefits (1) Total Fiscal Years: 2024 $ 672 $ 22 $ 694 2025 670 22 692 2026 665 21 686 2027 660 20 680 2028 649 19 668 2029 — 2033 3,072 84 3,156 _______________ (1) Projected payments for Other Benefits reflect net payments from the Company, which include subsidies that reduce the gross payments by less than 1%. |
STOCK OPTIONS AND OTHER SHARE_2
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Classification of Share-based Compensation Expense | The following table summarizes the amounts and classification of share-based compensation expense: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Total expense $ 89 $ 109 $ 129 Included in: Cost of product sales and services $ 16 $ 19 $ 14 General and administrative expenses 73 90 115 Income from continuing operations 89 109 129 Tax effect on share-based compensation expense (19) (27) (33) Total share-based compensation expense after-tax $ 70 $ 82 $ 96 |
Schedule of Assumptions Used In Calculating Fair Value of Stock Option Grants | A summary of the assumptions used in determining the fair value of the stock option grants under our L3Harris SIPs is as follows: Fiscal Year Ended December 29, 2023 December 30, 2022 December 31, 2021 Expected dividends 2.17% 2.00% 1.99% Expected volatility 28.60% 29.09% 31.71% Risk-free interest rates 3.48% - 4.27% 1.63% - 4.27% 0.75% Expected term (years) 5.04 5.02 5.05 |
Schedule of Stock Option Activity | A summary of stock option activity under our L3Harris SIPs as of December 29, 2023 and changes during fiscal 2023 is as follows: Shares Weighted Weighted Aggregate Stock options outstanding at December 30, 2022 3,306,129 $ 162.56 Granted 366,670 $ 209.88 Exercised (230,702) $ 100.03 Forfeited or expired (191,387) $ 210.31 Stock options outstanding at December 29, 2023 3,250,710 $ 169.53 5.42 $ 140 Stock options exercisable at December 29, 2023 2,669,082 $ 160.11 4.74 $ 138 |
Schedule of Nonvested Stock Options Activity | A summary of the status of our nonvested stock options at December 29, 2023 and changes during fiscal 2023 is as follows: Shares Weighted-Average Nonvested stock options at December 30, 2022 685,718 $ 46.76 Granted 366,670 $ 54.63 Vested/forfeited, net (470,760) $ 43.21 Nonvested stock options at December 29, 2023 581,628 $ 52.72 |
Schedule of Restricted Stock Units Activity | A summary of the status of these awards at December 29, 2023 and changes during fiscal 2023 is as follows: Units Weighted-Average Restricted stock units outstanding at December 30, 2022 673,495 $ 211.16 Granted 354,657 $ 199.33 Vested (223,855) $ 198.24 Forfeited (76,245) $ 205.77 Restricted stock units outstanding at December 29, 2023 728,052 $ 208.78 |
Schedule of Performance Shares Activity | A summary of the status of these awards at December 29, 2023 and changes during fiscal 2023 is as follows: Units Weighted-Average Grant Price Per Unit (1) Performance share units outstanding at December 30, 2022 524,343 $ 224.94 Granted 180,118 $ 223.09 Adjustment (1) 14,771 $ 228.29 Vested (182,808) $ 228.29 Forfeited (56,083) $ 236.80 Performance share units outstanding at December 29, 2023 480,341 $ 222.73 ______________ (1) Adjustment for achievement of performance measures. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Leases [Abstract] | |
Schedule of Lease Expense and Supplemental Lease Information | The components of lease costs are as follows: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Operating lease cost $ 163 $ 151 $ 172 Short-term and equipment lease cost 23 21 20 Variable lease cost 26 25 20 Other, net (1) 11 6 3 Total lease cost $ 223 $ 203 $ 215 ______________ (1) Consists of finance lease amortization and interest costs as well as sublease income. Other supplemental lease information for fiscal 2023 and 2022 is as follows: Fiscal Year Ended (In millions, except lease term and discount rate) December 29, 2023 December 30, 2022 Cash paid for amounts included in the measurement of lease liabilities Net cash provided by operating activities - operating lease payments $ 159 $ 148 Net cash provided by operating activities - finance lease interest payments 7 5 Net cash provided by financing activities - finance lease obligation payments 6 4 Assets obtained in exchange for new lease obligations ROU assets obtained with operating leases $ 144 $ 123 Property, plant and equipment obtained with finance leases 68 20 Weighted average remaining lease term (in years) Operating leases 8.3 9.3 Finance leases 17.7 21.3 Weighted average discount rate Operating leases 3.9 % 3.5 % Finance leases 4.3 % 3.4 % |
Schedule of Supplemental Balance Sheet Information | Supplemental operating and finance lease balance sheet information at December 29, 2023 and December 30, 2022 is as follows: (In millions) December 29, 2023 December 30, 2022 Operating Leases Other non-current assets $ 743 $ 756 Other accrued items 120 121 Other long-term liabilities 705 741 Total operating lease liabilities $ 825 $ 862 Finance Leases Property, plant and equipment $ 243 $ 170 Accumulated amortization (25) (15) Property, plant and equipment, net $ 218 $ 155 Current portion of long-term debt, net $ 8 $ 5 Long-term debt, net 243 165 Total finance lease liabilities $ 251 $ 170 Supplemental Lease Information |
Schedule of Future Lease Payments Under Non-cancelable Operating Leases | Payments under non-cancelable operating and finance leases at December 29, 2023 were as follows: (In millions) Operating Leases Finance Leases 2024 $ 163 $ 19 2025 142 41 2026 110 18 2027 103 17 2028 97 18 Thereafter 345 233 Total future lease payments required (1) 960 346 Less: imputed interest 135 95 Total $ 825 $ 251 _______________ (1) On December 29, 2023, we had additional future payments on leases of $307 million that had not yet commenced. These leases will commence between 2024 and 2025, and have lease terms of 4 years to 15 years. |
Schedule of Future Lease Payments Under Non-cancelable Finance Leases | Payments under non-cancelable operating and finance leases at December 29, 2023 were as follows: (In millions) Operating Leases Finance Leases 2024 $ 163 $ 19 2025 142 41 2026 110 18 2027 103 17 2028 97 18 Thereafter 345 233 Total future lease payments required (1) 960 346 Less: imputed interest 135 95 Total $ 825 $ 251 _______________ (1) On December 29, 2023, we had additional future payments on leases of $307 million that had not yet commenced. These leases will commence between 2024 and 2025, and have lease terms of 4 years to 15 years. |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Equity [Abstract] | |
Schedule of Components of 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 income, before reclassifications to earnings and income taxes 36 14 95 145 Income taxes — (4) (24) (28) Other comprehensive income before reclassifications to earnings, net of income taxes 36 10 71 117 Losses (gains) reclassified to earnings, before income taxes (1) — 5 (41) (36) Income taxes — (1) 10 9 Losses (gains) reclassified to earnings, net of income taxes — 4 (31) (27) Other comprehensive income, net of income taxes 36 14 40 90 Balance at December 29, 2023 $ (201) $ (65) $ 68 $ (198) Balance at December 31, 2021 $ (118) $ (89) $ 61 $ (146) Other comprehensive loss, before reclassifications to earnings and income taxes (124) (10) (33) (167) Income taxes 5 2 7 14 Other comprehensive loss before reclassifications to earnings, net of income taxes (119) (8) (26) (153) Losses (gains) reclassified to earnings, before income taxes (1) — 22 (9) 13 Income taxes — (4) 2 (2) Losses (gains) reclassified to earnings, net of income taxes — 18 (7) 11 Other comprehensive (loss) income, net of income taxes (119) 10 (33) (142) Balance at December 30, 2022 $ (237) $ (79) $ 28 $ (288) Balance at January 1, 2021 $ (58) $ (80) $ (701) $ (839) Other comprehensive (loss) income, before reclassifications to earnings and income taxes (63) (4) 1,013 946 Income taxes — 1 (255) (254) Other comprehensive (loss) income before reclassifications to earnings, net of income taxes (63) (3) 758 692 Losses (gains) reclassified to earnings, before income taxes (1) 3 (8) 6 1 Income taxes — 2 (2) — Losses (gains) reclassified to earnings, net of income taxes 3 (6) 4 1 Other comprehensive (loss) income, net of income taxes (60) (9) 762 693 Balance at December 31, 2021 $ (118) $ (89) $ 61 $ (146) _______________ (1) Losses (gains) reclassified to earnings are included in the “Revenue”, “Asset group and business divestiture-related (losses) gains, net,” “Interest expense, net” and “Non-service FAS pension income and other, net” line items in our Consolidated Statement of Operations. |
ACQUISITIONS, DIVESTITURES AN_2
ACQUISITIONS, DIVESTITURES AND ASSET SALES (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Calculation of 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 |
Consideration Paid for 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 adjustments recognized during the measurement period: (In millions) Preliminary as of January 3, 2023 Measurement Period Adjustments, Net (1),(2) Adjusted as of December 29, 2023 Receivables $ 28 $ — $ 28 Contract assets 18 11 29 Inventories 164 (18) 146 Other current assets 9 — 9 Property, plant and equipment 50 (1) 49 Goodwill 1,014 129 1,143 Other intangible assets 850 (95) 755 Deferred income taxes 33 2 35 Other non-current assets 18 (1) 17 Total assets acquired $ 2,184 $ 27 $ 2,211 Accounts payable $ 20 $ — $ 20 Contract liabilities 28 — 28 Compensation and benefits 2 — 2 Other accrued items 119 17 136 Other long-term liabilities 41 10 51 Total liabilities assumed $ 210 $ 27 $ 237 Net assets acquired $ 1,974 $ — $ 1,974 _______________ (1) Fair value adjustments during the fiscal year ended December 29, 2023 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 and the measurement period adjustments recorded since the acquisition date through December 29, 2023: (In millions) Preliminary Measurement Period Adjustments, Net (1) Preliminary Adjusted as of December 29, 2023 Receivables $ 156 $ — $ 156 Contract assets 338 (40) 298 Inventories 14 — 14 Other current assets 117 29 146 Property, plant and equipment 574 28 602 Goodwill 2,348 17 2,365 Other intangible assets 2,860 (20) 2,840 Other non-current assets 609 89 698 Total assets acquired $ 7,016 $ 103 $ 7,119 Current portion of long-term debt, net 1 — 1 Accounts payable $ 145 $ — $ 145 Contract liabilities 310 15 325 Compensation and benefits 116 1 117 Income taxes payable 6 (1) 5 Other accrued items 278 22 300 Long-term debt, net 41 — 41 Deferred income taxes 398 120 518 Other long-term liabilities 1,006 (54) 952 Total liabilities assumed $ 2,301 $ 103 $ 2,404 Fair value of consideration transferred $ 4,715 $ — $ 4,715 _______________ (1) Fair value adjustments during the fiscal year ended December 29, 2023 primarily related to EAC updates, refinements to the environmental liability and associated recoverable, as well as an update to the deferred tax liability which was offset by the release of a portion of the uncertain tax position previously booked by AJRD. The carrying amounts of the assets and liabilities of the CAS business classified as held for sale in our Consolidated Balance Sheet as of December 29, 2023 were as follows: (In millions) December 29, 2023 Receivables, net $ 80 Contract assets 43 Inventories 145 Other current assets 33 Property, plant and equipment, net 41 Goodwill 534 Other intangible assets, net 263 Other non-current assets 44 Valuation allowance (77) Total assets held for sale $ 1,106 Accounts payable $ 111 Contract liabilities 48 Compensation and benefits 11 Other accrued items 38 Other long-term liabilities 64 Total liabilities held for sale $ 272 |
Schedule of Identifiable Intangible Assets Acquired | The fair value and weighted-average amortization period of identifiable intangible assets acquired as of the acquisition date is as follows: Total Useful Lives (In millions) (In Years) Customer relationships: (1) Backlog $ 83 2 Government programs 323 16 Total customer relationships 406 Developed technology 349 17 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) Customer relationships: (1) Backlog $ 350 3 Government programs 2,370 15 - 20 Total customer relationships 2,720 Trade names 120 15 Total identifiable intangible assets acquired $ 2,840 _______________ (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 Consolidated Statement of Operations for the acquisition date through December 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. Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 Revenue $ 365 $ 358 Income before income taxes 131 68 Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 Revenue $ 2,337 $ 2,238 Income before income taxes 266 234 |
Schedule of Business Divestitures and Asset Sales | The following table presents information regarding business divestitures completed during fiscal 2021, all of which were reported under our “Other non-reportable businesses” segment through the date of divestiture, which was formerly our Aviation Systems segment: (In millions) Date of Divestiture Sale Price Net Cash Proceeds (1) Narda-MITEQ business (2) December 6, 2021 $ 75 $ 76 ESSCO business (3) November 26, 2021 55 53 Electron Devices business (4) October 1, 2021 185 173 Voice Switch Enterprise disposal group (“VSE disposal group”) (5) July 30, 2021 20 19 Combat Propulsion Systems and related businesses (“CPS business”) (6) July 2, 2021 398 347 Military training business (7) July 2, 2021 1,050 1,059 $ 1,783 $ 1,727 _______________ (1) Net cash proceeds after selling costs and purchase price adjustments. (2) The Narda-MITEQ business manufactured component, Satellite Communication (“SATCOM”) and radio frequency safety products for both military and commercial markets. (3) The ESSCO business manufactured metal space frame ground radomes and composite structures. (4) The Electron Devices and Narda Microwave-West divisions (“Electron Devices business”) manufactured microwave devices for ground-based, airborne and SATCOM and radar. (5) The VSE disposal group provided voice over internet protocol systems for air traffic management communications. (6) The CPS business engineered, designed and manufactured engines, transmissions, suspensions and turret drive systems for tracked and wheeled combat vehicle systems. (7) The military training business provided flight simulation solutions and training services to the DoD and foreign military agencies. In fiscal 2021, we had the following significant income before income taxes attributable to businesses divested in our Consolidated Statement of Operations: Fiscal Year Ended (In millions) December 31, 2021 Electron Devices business $ 44 CPS business 53 Military training business 35 Fiscal Year Ended (In millions) December 31, 2021 Narda-MITEQ business $ (9) ESSCO business 31 Electron Devices business 31 VSE disposal group (29) CPS business (1) (19) Military training business 217 Other (2) (2) Total Business divestiture-related gains (losses), net $ 220 _______________ (1) During the quarter ended April 2, 2021, upon classifying the CPS business as held for sale, we recorded a non-cash impairment charge of $62 million, which is included in the “Impairment of goodwill and other assets” line item in our Consolidated Statement of Operations for fiscal 2021. See Note 6: Goodwill and Intangible Assets in these Notes for additional information. (2) Reflects adjustments to the gains and losses on completed divestitures not shown within the table. |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Selected Financial Information by Business Segments | The following table presents revenue and operating income by segment: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Revenue SAS $ 6,856 $ 6,384 $ 6,315 IMS 6,630 6,626 6,733 CS 5,070 4,217 4,287 AR 1,052 ** ** Other non-reportable businesses — — 683 Corporate eliminations (189) (165) (204) Total revenue $ 19,419 $ 17,062 $ 17,814 Operating Income SAS $ 756 $ 665 $ 782 IMS 459 494 845 CS 1,229 667 1,043 AR 122 ** ** Other non-reportable businesses — — 104 Total segment 2,566 1,826 2,774 Total unallocated corporate expense (1,140) (699) (665) Total operating income $ 1,426 $ 1,127 $ 2,109 _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. The table below is a reconciliation of the FAS/CAS operating adjustment: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 FAS pension service cost $ (35) $ (46) $ (68) Less: CAS pension cost (145) (141) (191) FAS/CAS operating adjustment 110 95 123 Non-service FAS pension income (1) 310 441 445 FAS/CAS pension adjustment, net (2) $ 420 $ 536 $ 568 _______________ (1) Non-service FAS pension income is included as component of the “Non-service FAS pension income and other, net” line item in our Consolidated Statement of Operations. (2) FAS/CAS pension adjustment, net excludes net settlement and curtailment losses recognized in fiscal 2021. See Note 9: Retirement Benefits in these Notes for additional information on net settlements and curtailments. Other selected financial information by business segment and geographical area is summarized below: Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Capital Expenditures SAS $ 151 $ 133 $ 155 IMS 149 45 69 CS 39 36 56 AR 31 ** ** Other non-reportable businesses — — 4 Corporate 79 38 58 Total Capital Expenditures $ 449 $ 252 $ 342 Depreciation and Amortization SAS $ 115 $ 112 $ 109 IMS 73 76 92 CS 54 47 49 AR 29 ** ** Other non-reportable businesses — — 8 Corporate 895 703 709 Total Depreciation and Amortization $ 1,166 $ 938 $ 967 Geographical Information for Operations Long-lived assets of U.S. operations $ 2,678 $ 1,896 $ 1,870 Long-lived assets of international operations 184 208 231 _______________ ** |
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. Fiscal Year Ended December 29, 2023 (In millions) SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 4,252 $ 4,196 $ 3,420 $ 250 Subcontractor 2,555 2,347 1,597 802 Intersegment 49 87 53 — Total segment $ 6,856 $ 6,630 $ 5,070 $ 1,052 Revenue By Contract Type Fixed-price (1) $ 4,257 $ 5,020 $ 4,289 $ 632 Cost-reimbursable 2,550 1,523 728 420 Intersegment 49 87 53 — Total segment $ 6,856 $ 6,630 $ 5,070 $ 1,052 Revenue By Geographical Region United States $ 5,933 $ 4,816 $ 3,482 $ 1,015 International 874 1,727 1,535 37 Intersegment 49 87 53 — Total segment $ 6,856 $ 6,630 $ 5,070 $ 1,052 _______________ (1) Includes revenue derived from time-and-materials contracts. Fiscal Year Ended December 30, 2022 (In millions) SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 4,005 $ 4,301 $ 2,829 ** Subcontractor 2,330 2,254 1,343 ** Intersegment 49 71 45 ** Total segment $ 6,384 $ 6,626 $ 4,217 $ — Revenue By Contract Type Fixed-price (1) $ 3,811 $ 5,060 $ 3,552 ** Cost-reimbursable 2,524 1,495 620 ** Intersegment 49 71 45 ** Total segment $ 6,384 $ 6,626 $ 4,217 $ — Revenue By Geographical Region United States $ 5,623 $ 4,796 $ 2,735 ** International 712 1,759 1,437 ** Intersegment 49 71 45 ** Total segment $ 6,384 $ 6,626 $ 4,217 $ — _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. (1) Includes revenue derived from time-and-materials contracts. Fiscal Year Ended December 31, 2021 (In millions) SAS IMS CS AR Revenue By Customer Relationship Prime contractor $ 3,942 $ 4,474 $ 2,886 ** Subcontractor 2,331 2,187 1,347 ** Intersegment 42 72 54 ** Total segment $ 6,315 $ 6,733 $ 4,287 $ — Revenue By Contract Type Fixed-price (1) $ 3,781 $ 5,231 $ 3,631 ** Cost-reimbursable 2,492 1,430 602 ** Intersegment 42 72 54 ** Total segment $ 6,315 $ 6,733 $ 4,287 $ — Revenue By Geographical Region United States $ 5,569 $ 4,782 $ 3,001 ** International 704 1,879 1,232 ** Intersegment 42 72 54 ** Total segment $ 6,315 $ 6,733 $ 4,287 $ — _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of the operations assumed in the AJRD acquisition. As such, there is no comparable prior year information. (1) Includes revenue derived from time-and-materials contracts. Fiscal Year Ended (In millions) December 29, 2023 December 30, 2022 December 31, 2021 Geographical Information for Operations Revenue from U.S. operations $ 17,537 $ 15,373 $ 16,234 Revenue from international operations 1,882 1,689 1,580 |
Schedule of Total Assets by Segment | Total assets by business segment are as follows: (In millions) December 29, 2023 December 30, 2022 Total Assets SAS $ 9,085 $ 8,838 IMS 10,631 10,925 CS 7,084 5,800 AR 4,208 ** Corporate (1) 10,679 7,961 Total Assets $ 41,687 $ 33,524 _______________ ** AR is a new reportable segment established in the quarter ended September 29, 2023 which consists of assets, liabilities and operations assumed in the AJRD acquisition. 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 $8.5 billion and $6.0 billion at December 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 that we acquired with AJRD, as well as any assets of businesses held for sale. |
LEGAL PROCEEDINGS, COMMITMENT_2
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 29, 2023 | |
Legal Proceedings And Contingencies [Abstract] | |
Schedule of Commercial Commitments | At December 29, 2023, we had commercial commitments on outstanding surety bonds, standby letters of credit and other arrangements, as follows: (In millions) Commercial Commitment Total Commitments expiring within Surety bonds used for: Performance $ 536 $ 396 Total surety bonds 536 396 Standby letters of credit used for: Advance payments 304 120 Performance 347 137 Financial 72 68 Total standby letters of credit 723 325 Total commitments $ 1,259 $ 721 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) employee in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 USD ($) employee country | Dec. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Business Combination, Separately Recognized Transactions [Line Items] | |||
Number of countries in which entity operates (more than) | country | 100 | ||
Number of employees | employee | 50 | ||
Right-of-use asset obtained in exchange for lease liabilities excluding PPE | $ 26 | ||
Property, plant and equipment obtained with finance leases | $ 68 | $ 20 | $ 120 |
Internal use software, useful life minimum | 2 years | ||
Internal use software, useful life maximum | 10 years | ||
Revenue recognized from performance obligations satisfied in previous periods | $ 118 | 110 | 402 |
Backlog | 32,700 | 22,300 | |
Remaining performance obligation, funded backlog | 22,000 | 16,200 | |
Research and development costs | $ 480 | 603 | $ 692 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-30 | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Remaining performance obligation percentage | 40% | ||
Revenue, remaining performance obligation, two-year percentage | 0.65 | ||
Expected timing of satisfaction period | 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-04 | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Remaining performance obligation percentage | 25% | ||
Expected timing of satisfaction period | 1 year | ||
Foreign currency forward contracts | Cash Flow Hedges | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Derivative notional amount | $ 223 | $ 275 | |
Surety Bond | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Guarantor obligations, carrying value | 536 | ||
Standby Letters of Credit | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Guarantor obligations, carrying value | $ 723 | ||
Maximum | Buildings | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Property, plant and equipment, useful life | 45 years | ||
Maximum | Machinery and equipment | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Property, plant and equipment, useful life | 10 years | ||
Minimum | Buildings | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Property, plant and equipment, useful life | 2 years | ||
Minimum | Machinery and equipment | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Property, plant and equipment, useful life | 2 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Average Warranty Period by Segment (Details) | 12 Months Ended |
Dec. 29, 2023 | |
SAS | Minimum | |
Warranty Period [Line Items] | |
Average Warranty Period | 1 year |
SAS | Maximum | |
Warranty Period [Line Items] | |
Average Warranty Period | 3 years |
IMS | Minimum | |
Warranty Period [Line Items] | |
Average Warranty Period | 1 year |
IMS | Maximum | |
Warranty Period [Line Items] | |
Average Warranty Period | 3 years |
CS | Minimum | |
Warranty Period [Line Items] | |
Average Warranty Period | 1 year |
CS | Maximum | |
Warranty Period [Line Items] | |
Average Warranty Period | 5 years |
AR | |
Warranty Period [Line Items] | |
Average Warranty Period | 1 year |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Net Estimated at Completion ("EAC") Adjustments (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Change in Accounting Estimate [Line Items] | |||
Net EAC adjustments, before income taxes | $ 1,426 | $ 1,127 | $ 2,109 |
Contracts Accounted for under Percentage of Completion | |||
Change in Accounting Estimate [Line Items] | |||
Net EAC adjustments, before income taxes | (85) | 36 | 304 |
Net EAC adjustments, net of income taxes | $ (63) | $ 27 | $ 228 |
Net EAC adjustments, net of income taxes, per diluted share (in dollars per share) | $ (0.33) | $ 0.14 | $ 1.12 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Basic weighted average common shares outstanding (in shares) | 189.6 | 191.8 | 201.3 |
Impact of dilutive share-based awards (in shares) | 1 | 1.7 | 1.9 |
Diluted weighted average common shares outstanding (in shares) | 190.6 | 193.5 | 203.2 |
Weighted average anti-dilutive employee stock options outstanding (in shares) | 3.7 | 0.3 | 0.8 |
CONTRACT ASSETS AND CONTRACT _3
CONTRACT ASSETS AND CONTRACT LIABILITIES (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Capitalized Contract Cost [Line Items] | ||
Contract assets | $ 3,196 | $ 2,987 |
Contract liabilities, current | (1,900) | (1,400) |
Contract liabilities, non-current | (94) | (117) |
Net contract assets | 1,202 | 1,470 |
Components of Contract Assets: | ||
Unbilled contract receivables, gross | 6,649 | 4,629 |
Unliquidated progress payments and advances | (3,453) | (1,642) |
Contract assets | 3,196 | $ 2,987 |
AR | ||
Capitalized Contract Cost [Line Items] | ||
Contract assets | 385 | |
Contract liabilities, current | (319) | |
Components of Contract Assets: | ||
Contract assets | $ 385 |
CONTRACT ASSETS AND CONTRACT _4
CONTRACT ASSETS AND CONTRACT LIABILITIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Recognized revenue related to contract liabilities outstanding at the end of the year | $ 1,250 | $ 1,060 | $ 930 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Inventory Disclosure [Abstract] | ||
Finished product | $ 217 | $ 181 |
Work in process | 427 | 396 |
Materials and supplies | 828 | 714 |
Inventories | $ 1,472 | $ 1,291 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance lease right of use assets | $ 5,321 | $ 4,337 |
Less: accumulated depreciation and amortization | (2,459) | (2,233) |
Property, plant and equipment, net | 2,862 | 2,104 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance lease right of use assets | 184 | 78 |
Land | AR | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance lease right of use assets | 95 | |
Software capitalized for internal use | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance lease right of use assets | 716 | 686 |
Software capitalized for internal use | AR | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance lease right of use assets | 275 | |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance lease right of use assets | 1,605 | 1,251 |
Buildings | AR | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance lease right of use assets | 251 | |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment and finance lease right of use assets | $ 2,816 | $ 2,322 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense related to property, plant and equipment | $ 389 | $ 342 | $ 343 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2023 | Dec. 30, 2022 | |
Goodwill [Roll Forward] | ||
Beginning Balance | $ 17,283 | $ 18,189 |
Reallocation of goodwill in business realignment | 0 | |
Assets of business held for sale | (9) | (30) |
Impairment of goodwill | 296 | 802 |
Currency translation adjustments | 27 | (74) |
Ending Balance | 19,979 | 17,283 |
Goodwill decrease from divestitures | 9 | 30 |
VIS Business | ||
Goodwill [Roll Forward] | ||
Assets of business held for sale | (39) | |
Goodwill decrease from divestitures | 39 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Goodwill [Roll Forward] | ||
Disposal group, including discontinued operation, goodwill | 30 | |
Disposal Group, Held-for-sale, Not Discontinued Operations | VIS Business | ||
Goodwill [Roll Forward] | ||
Assets of business held for sale | (9) | |
Goodwill decrease from divestitures | 9 | |
SAS | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 5,778 | 5,849 |
Reallocation of goodwill in business realignment | 327 | |
Assets of business held for sale | (9) | (30) |
Impairment of goodwill | 0 | 0 |
Currency translation adjustments | 14 | (41) |
Ending Balance | 6,110 | 5,778 |
Goodwill decrease from divestitures | 9 | 30 |
Goodwill, impaired, accumulated impairment loss | 80 | 80 |
IMS | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 7,709 | 8,187 |
Reallocation of goodwill in business realignment | (327) | |
Assets of business held for sale | (534) | 0 |
Impairment of goodwill | 296 | 447 |
Currency translation adjustments | 12 | (31) |
Ending Balance | 6,564 | 7,709 |
Goodwill decrease from divestitures | 534 | 0 |
Goodwill, impaired, accumulated impairment loss | 1,126 | 830 |
CS | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 3,796 | 4,153 |
Reallocation of goodwill in business realignment | 0 | |
Goodwill from acquisition | 1,143 | |
Assets of business held for sale | 0 | |
Impairment of goodwill | 0 | 355 |
Currency translation adjustments | 1 | (2) |
Ending Balance | 4,940 | 3,796 |
Goodwill decrease from divestitures | 0 | |
Goodwill, impaired, accumulated impairment loss | 355 | $ 355 |
AR | ||
Goodwill [Roll Forward] | ||
Reallocation of goodwill in business realignment | 0 | |
Goodwill from acquisition | 2,365 | |
Impairment of goodwill | 0 | |
Currency translation adjustments | 0 | |
Ending Balance | $ 2,365 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Nov. 27, 2023 USD ($) unit | Apr. 02, 2021 USD ($) | Dec. 29, 2023 USD ($) unit | Dec. 30, 2022 USD ($) unit | Dec. 31, 2021 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||
Number of reporting units | unit | 2 | 8 | 9 | ||
Reallocation of goodwill in business realignment | $ 0 | ||||
Number of reporting units absorbed into one unit | unit | 2 | ||||
Goodwill | 19,979 | $ 17,283 | $ 18,189 | ||
Goodwill impairment | 296 | 802 | |||
Amortization of acquisition-related intangibles | $ 779 | 605 | $ 627 | ||
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset Impairment Charges | ||||
Impairment, Long-Lived Asset, Held-for-Use, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset Impairment Charges | ||||
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Asset Impairment Charges | ||||
ADG Reporting Unit | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Reallocation of goodwill in business realignment | (80) | ||||
Goodwill impairment | 313 | ||||
Broadband Communications Reporting Unit | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | 355 | ||||
Electro Optical Reporting Unit | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Reallocation of goodwill in business realignment | (367) | ||||
Goodwill impairment | 134 | ||||
TDL | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 1,143 | ||||
AR | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 2,365 | ||||
CAS business | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 534 | ||||
SAS | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Accumulated goodwill impairment loss | 80 | 80 | |||
Reallocation of goodwill in business realignment | 327 | ||||
Goodwill | 6,110 | 5,778 | $ 5,849 | ||
Goodwill impairment | 0 | 0 | |||
CS | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Accumulated goodwill impairment loss | 355 | 355 | |||
Reallocation of goodwill in business realignment | 0 | ||||
Goodwill from acquisitions | 1,143 | ||||
Goodwill | 4,940 | 3,796 | 4,153 | ||
Goodwill impairment | 0 | 355 | |||
Aviation Systems | CTS | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of long-lived assets | 145 | 145 | |||
Impairment of intangible assets | 63 | ||||
IMS | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Accumulated goodwill impairment loss | 1,126 | 830 | |||
Reallocation of goodwill in business realignment | (327) | ||||
Goodwill | 6,564 | 7,709 | 8,187 | ||
Goodwill impairment | 296 | 447 | |||
IMS | Commercial Aviation Reporting Unit | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | 296 | ||||
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 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cash price on sale of business | $ 700 | ||||
Disposal group, including discontinued operation, goodwill | $ 30 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | CAS business | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cash price on sale of business | $ 834 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | CPS business | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | $ 62 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | CPS business | Aviation Systems | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | 62 | ||||
Disposal group, including discontinued operation, goodwill | $ 174 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Finite and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Jul. 28, 2023 | Jan. 03, 2023 | Dec. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | $ 9,937 | $ 6,788 | ||
Total intangibles, gross carrying amount | 11,740 | 8,612 | ||
Accumulated Amortization | 3,200 | 2,611 | ||
Total | 6,737 | 4,177 | ||
Total identifiable intangible assets, net | 8,540 | 6,001 | ||
In-process research and development | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangibles | 0 | 21 | ||
Trade names — corporate | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangibles | 1,803 | 1,803 | ||
TDL | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Other intangible assets | 755 | $ 755 | ||
AR | ||||
Indefinite-Lived Intangible Assets [Line Items] | ||||
Other intangible assets | 2,840 | $ 2,840 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Intangibles reclassified to assets of disposal group | 10 | |||
Customer relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 8,892 | 6,124 | ||
Accumulated Amortization | 2,733 | 2,189 | ||
Total | 6,159 | 3,935 | ||
Customer relationships | TDL | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 406 | |||
Accumulated Amortization | 62 | |||
Total | 344 | |||
Customer relationships | AR | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 2,720 | |||
Accumulated Amortization | 102 | |||
Total | 2,618 | |||
Developed technologies | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 856 | 566 | ||
Accumulated Amortization | 413 | 366 | ||
Total | 443 | 200 | ||
Developed technologies | TDL | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 349 | |||
Accumulated Amortization | 21 | |||
Total | 328 | |||
Developed technologies | AR | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 0 | |||
Accumulated Amortization | 0 | |||
Total | 0 | |||
Trade names — corporate | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 185 | 95 | ||
Accumulated Amortization | 50 | 53 | ||
Total | 135 | 42 | ||
Trade names — corporate | TDL | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 0 | |||
Accumulated Amortization | 0 | |||
Total | $ 0 | |||
Trade names — corporate | AR | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 120 | |||
Accumulated Amortization | 3 | |||
Total | $ 117 | |||
Other, including contract backlog | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Gross Carrying Amount | 4 | 3 | ||
Accumulated Amortization | 4 | 3 | ||
Total | $ 0 | $ 0 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Future Amortization Expense (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 914 | |
2025 | 791 | |
2026 | 694 | |
2027 | 585 | |
2028 | 513 | |
Thereafter | 3,240 | |
Total | $ 6,737 | $ 4,177 |
INCOME TAXES - Provision for Cu
INCOME TAXES - Provision for Current and Deferred Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Current: | |||
United States | $ 328 | $ 633 | $ 415 |
International | 50 | 82 | 70 |
State and local | 66 | 98 | 65 |
Current income taxes | 444 | 813 | 550 |
Deferred: | |||
United States | (380) | (523) | (55) |
International | 10 | (61) | (34) |
State and local | (51) | (17) | (21) |
Total deferred income taxes | (421) | (601) | (110) |
Total income taxes | $ 23 | $ 212 | $ 440 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Income Tax Rates (Details) | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. statutory income tax rate | 21% | 21% | 21% |
State taxes | 1.10% | 2.20% | 1.80% |
International income | 0% | 0% | 0.40% |
Non-deductible goodwill impairment | 3.60% | 14.20% | 0.60% |
Research and development tax credit | (12.50%) | (13.00%) | (5.90%) |
FDII deduction | (4.40%) | (5.10%) | (1.40%) |
Changes in valuation allowance | 0.50% | 0.10% | 0.90% |
Impact of divestitures and reorganizations | (8.50%) | (1.30%) | 4.10% |
Equity-based compensation | 0.20% | (0.20%) | (1.10%) |
Settlement of tax audits | (1.10%) | (0.70%) | (1.10%) |
Other items | 2% | (0.50%) | 0% |
Effective income tax rate | 1.90% | 16.70% | 19.30% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 12 Months Ended | |||
Dec. 29, 2023 USD ($) | Dec. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 01, 2021 USD ($) | |
Income Tax Contingency [Line Items] | ||||
Outside basis difference in foreign subsidiaries that are considered indefinitely reinvested | $ 1,500,000,000 | |||
Tax Credits Purchased under IRA | $ 51,000,000 | |||
Purchase price ratio per tax credit | 0.95 | |||
Income tax rate reconciliation, purchase of tax credits | $ 2,000,000 | |||
Tax loss and credit carryforwards, expiration period (less than) | 1 year | |||
Income from continuing operations before income taxes of international subsidiaries | $ 205,000,000 | $ 95,000,000 | $ 29,000,000 | |
Income taxes paid, net of (refunds) received | 715,000,000 | 309,000,000 | 358,000,000 | |
Unrecognized tax benefits | 652,000,000 | 613,000,000 | 587,000,000 | $ 542,000,000 |
Unrecognized tax benefits that would favorably impact future tax rates | 509,000,000 | 486,000,000 | ||
Interest and penalties recognized related to unrecognized tax benefits | 20,000,000 | 12,000,000 | $ 3,000,000 | |
Accrued interest and penalties related to unrecognized tax benefits | 80,000,000 | $ 59,000,000 | ||
Federal | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 5,000,000 | |||
Tax credit carryforwards | 7,000,000 | |||
International | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 83,000,000 | |||
Tax credit carryforwards | 0 | |||
State and Local | ||||
Income Tax Contingency [Line Items] | ||||
Operating loss carryforwards | 4,000,000 | |||
Tax credit carryforwards | $ 110,000,000 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Income Tax Assets (Liabilities) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2023 | Dec. 30, 2022 | |
Deferred tax assets, net: | ||
Accruals | $ 334 | $ 227 |
Tax loss and credit carryforwards | 217 | 194 |
Operating lease obligation | 243 | 239 |
Capitalized research and experimental expenditures | 1,125 | 646 |
Other | 272 | 372 |
Valuation allowance | (240) | (243) |
Deferred tax assets, net | 1,951 | 1,435 |
Deferred tax liabilities: | ||
Property, plant and equipment | (252) | (167) |
Acquired intangibles | (2,143) | (1,566) |
Operating lease right-of-use asset | (219) | (210) |
Other | (61) | (138) |
Deferred tax liabilities | (2,675) | (2,081) |
Net deferred tax liabilities | (724) | (646) |
Net decrease in valuation allowance | $ 3 | $ 14 |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets, Net of Valuation Allowance (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Income Tax Disclosure [Abstract] | ||
Deferred income tax assets | $ 91 | $ 73 |
Deferred income tax liabilities | (815) | (719) |
Net deferred tax liabilities | $ (724) | $ (646) |
INCOME TAXES - Reconciliation_2
INCOME TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of period | $ 613 | $ 587 | $ 542 |
Additions based on tax positions taken during current period | 99 | 124 | 115 |
Additions based on tax positions taken during prior period | 8 | 4 | 11 |
Additions from tax positions related to acquired entities | 86 | 0 | 0 |
Decreases based on tax positions taken during prior period | (133) | (76) | (64) |
Decreases from lapse in statutes of limitations | (11) | (6) | (15) |
Decreases from settlements | (10) | (20) | (2) |
Balance at end of fiscal year | $ 652 | $ 613 | $ 587 |
DEBT AND CREDIT ARRANGEMENTS -
DEBT AND CREDIT ARRANGEMENTS - Long-term Debt, Net (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Debt Instrument [Line Items] | ||
Total variable and fixed-rate debt | $ 11,226 | $ 6,776 |
Financing lease obligations and other debt | 300 | 222 |
Long-term debt, including the current portion of long-term debt | 11,526 | 6,998 |
Plus: unamortized bond premium | 51 | 70 |
Less: unamortized discounts and issuance costs | (54) | (25) |
Long-term debt, including the current portion of long-term debt, net | 11,523 | 7,043 |
Less: current portion of long-term debt, net | (363) | (818) |
Total long-term debt, net | 11,160 | 6,225 |
Variable-rate debt | Floating rates notes 2023 | ||
Debt Instrument [Line Items] | ||
Total variable and fixed-rate debt | 0 | 250 |
Variable-rate debt | Term loan, due November 21, 2025 | ||
Debt Instrument [Line Items] | ||
Total variable and fixed-rate debt | $ 2,250 | 0 |
Fixed-rate debt | 3.850% Senior Notes due June 15, 2023 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 3.85% | |
Total variable and fixed-rate debt | $ 0 | 800 |
Fixed-rate debt | 3.950% Senior Notes due May 28 2024 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 3.95% | |
Total variable and fixed-rate debt | $ 350 | 350 |
Fixed-rate debt | 3.832% Notes due April 27, 2025 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 3.832% | |
Total variable and fixed-rate debt | $ 600 | 600 |
Fixed-rate debt | 7.00% debentures, due January 15, 2026 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 7% | |
Total variable and fixed-rate debt | $ 100 | 100 |
Fixed-rate debt | 3.850% Senior Notes due December 15, 2026 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 3.85% | |
Total variable and fixed-rate debt | $ 550 | 550 |
Fixed-rate debt | 5.40% notes, due January 15, 2027 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 5.40% | |
Total variable and fixed-rate debt | $ 1,250 | 0 |
Fixed-rate debt | 6.35% debentures, due February 1, 2028 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 6.35% | |
Total variable and fixed-rate debt | $ 26 | 26 |
Fixed-rate debt | 4.40% Notes due June 15, 2028 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 4.40% | |
Total variable and fixed-rate debt | $ 1,850 | 1,850 |
Fixed-rate debt | 2.90% Notes due December 15, 2029 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 2.90% | |
Total variable and fixed-rate debt | $ 400 | 400 |
Fixed-rate debt | 1.80% Notes due January 15, 2031 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 1.80% | |
Total variable and fixed-rate debt | $ 650 | 650 |
Fixed-rate debt | 5.40% Notes, due July 31, 2033 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 5.40% | |
Total variable and fixed-rate debt | $ 1,500 | 0 |
Fixed-rate debt | 4.854% Notes due April 27, 2035 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 4.854% | |
Total variable and fixed-rate debt | $ 400 | 400 |
Fixed-rate debt | 6.15% Notes due December 15, 2040 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 6.15% | |
Total variable and fixed-rate debt | $ 300 | 300 |
Fixed-rate debt | 5.054% Notes due April 27, 2045 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 5.054% | |
Total variable and fixed-rate debt | $ 500 | 500 |
Fixed-rate debt | 5.60% Notes, due July 31, 2053 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 5.60% | |
Total variable and fixed-rate debt | $ 500 | $ 0 |
DEBT AND CREDIT ARRANGEMENTS _2
DEBT AND CREDIT ARRANGEMENTS - Long-term Debt Narrative (Details) $ in Millions | Dec. 29, 2023 USD ($) |
Debt Disclosure [Abstract] | |
Long-term debt, maturities, repayments of principal in year one | $ 355 |
Long-term debt, maturities, repayments of principal in year two | 2,855 |
Long-term debt, maturities, repayments of principal in year three | 654 |
Long-term debt, maturities, repayments of principal in year four | 1,254 |
Long-term debt, maturities, repayments of principal in year five | 1,880 |
Long-term debt, maturities, repayments of principal in after year five | $ 4,277 |
DEBT AND CREDIT ARRANGEMENTS _3
DEBT AND CREDIT ARRANGEMENTS - Long-Term Debt Issued and Fixed Rate Debt - Narrative (Details) | 12 Months Ended | |||||
Jul. 31, 2023 | Mar. 14, 2023 USD ($) | Jan. 03, 2023 USD ($) | Nov. 22, 2022 USD ($) | Dec. 29, 2023 USD ($) | Dec. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt instrument term | 3 years | |||||
Proceeds from issuance of long-term debt | $ 0 | |||||
Debt principal amount | $ 11,226,000,000 | 6,776,000,000 | ||||
Line of Credit | Term loan, due November 21, 2025 | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Debt issued | $ 2,250,000,000 | $ 2,250,000,000 | ||||
Unused capacity, commitment fee percentage | 0.11% | |||||
Debt issuance costs | $ 2,000,000 | |||||
Debt instrument, covenant, other indebtedness threshold | $ 500,000,000 | |||||
Proceeds from issuance of long-term debt | $ 250,000,000 | $ 2,000,000,000 | ||||
Debt principal amount | $ 0 | |||||
Line of Credit | Term loan, due November 21, 2025 | Minimum | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity, commitment fee percentage | 0.09% | |||||
Line of Credit | Term loan, due November 21, 2025 | Maximum | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Payments of general corporate expenses | $ 40,000,000 | |||||
Unused capacity, commitment fee percentage | 0.25% | |||||
Line of Credit | Secured Overnight Financing Rate (SOFR) | Term loan, due November 21, 2025 | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate margin | 0.10% | |||||
Line of Credit | Senior Debt Ratings | Term loan, due November 21, 2025 | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate margin | 1.25% | |||||
Line of credit facility, interest rate at period end | 6.70% | |||||
Line of Credit | Senior Debt Ratings | Term loan, due November 21, 2025 | Minimum | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate margin | 1.125% | |||||
Line of Credit | Senior Debt Ratings | Term loan, due November 21, 2025 | Maximum | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate margin | 1.875% | |||||
Line of Credit | Base Rate | Term loan, due November 21, 2025 | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate margin | 0.25% | |||||
Line of Credit | Base Rate | Term loan, due November 21, 2025 | Minimum | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate margin | 0.125% | |||||
Line of Credit | Base Rate | Term loan, due November 21, 2025 | Maximum | Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate margin | 0.875% | |||||
Fixed-rate debt | Senior Notes Due January 15, 2027, 5.40% | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs | $ 9,000,000 | |||||
Debt instrument, redemption price, basis spread rate | 0.0015 | |||||
Fixed-rate debt | Notes Due 2033, 5.40% | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs | $ 13,000,000 | |||||
Debt instrument, redemption price, basis spread rate | 0.0025 | |||||
Fixed-rate debt | Senior Notes Due July 31, 2053, 5.60% | ||||||
Debt Instrument [Line Items] | ||||||
Debt issuance costs | $ 6,000,000 | |||||
Debt instrument, redemption price, basis spread rate | 0.0025 | |||||
Fixed-rate debt | Notes Due 2027, 5.4% and 2033, 5.4% and Note Due 2053, 5.6% | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redemption price percentage | 100% | |||||
Fixed-rate debt | Notes Due 2027, 5.4% and 2033, 5.4% and Note Due 2053, 5.6% | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument redemption price percentage | 10,100% |
DEBT AND CREDIT ARRANGEMENTS _4
DEBT AND CREDIT ARRANGEMENTS - Long-Term Debt Repayments - Narrative (Details) - USD ($) | 12 Months Ended | |||
Jun. 15, 2023 | Mar. 14, 2023 | Jan. 03, 2023 | Dec. 30, 2022 | |
Line of Credit Facility [Line Items] | ||||
Proceeds from issuance of long-term debt | $ 0 | |||
Repayment of debt | $ 0 | |||
Floating rates notes 2020 | Variable-rate debt | ||||
Line of Credit Facility [Line Items] | ||||
Extinguishment of debt, amount | $ 250,000,000 | |||
Term loan, due November 21, 2025 | Line of Credit | Secured Debt | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from issuance of long-term debt | $ 250,000,000 | $ 2,000,000,000 | ||
3.850% Senior Notes due June 15, 2023 | ||||
Line of Credit Facility [Line Items] | ||||
Extinguishment of debt, amount | $ 800,000,000 |
DEBT AND CREDIT ARRANGEMENTS _5
DEBT AND CREDIT ARRANGEMENTS - Fair Value of Long-Term Debt Schedule (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Carrying Amount | ||
Debt Instrument [Line Items] | ||
Long-term debt, including the current portion of long-term debt, net | $ 11,523 | $ 7,043 |
Carrying Amount | Term loan, due November 21, 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, including the current portion of long-term debt, net | 2,250 | 0 |
Carrying Amount | Debt, Excluding Term Loan 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, including the current portion of long-term debt, net | 9,273 | 7,043 |
Fair Value | Valuation, Market Approach | ||
Debt Instrument [Line Items] | ||
Long-term debt, including the current portion of long-term debt, net | 11,449 | 6,569 |
Fair Value | Valuation, Market Approach | Term loan, due November 21, 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, including the current portion of long-term debt, net | 2,250 | 0 |
Fair Value | Valuation, Market Approach | Debt, Excluding Term Loan 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt, including the current portion of long-term debt, net | $ 9,199 | $ 6,569 |
DEBT AND CREDIT ARRANGEMENTS _6
DEBT AND CREDIT ARRANGEMENTS - Interest Paid (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Interest paid | $ 489 | $ 296 | $ 284 |
DEBT AND CREDIT ARRANGEMENTS _7
DEBT AND CREDIT ARRANGEMENTS - 2023 and 2022 Credit Agreement (Details) - USD ($) | Jan. 26, 2024 | Jul. 28, 2023 | Mar. 10, 2023 | Nov. 22, 2022 | Jul. 29, 2022 | Dec. 29, 2023 | Dec. 30, 2022 |
Line of Credit Facility [Line Items] | |||||||
Debt instrument term | 3 years | ||||||
Short-term debt | $ 1,602,000,000 | $ 2,000,000 | |||||
Revolving Credit Facility | Credit Agreement 2023 | Line of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit, current | 0 | ||||||
Revolving Credit Facility | Credit Agreement 2023 | Line of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 2,400,000,000 | ||||||
Debt instrument term | 364 days | ||||||
Debt instrument, maturity extension term | 1 year | ||||||
Proceeds from short-term debt | $ 2,100,000,000 | ||||||
Revolving Credit Facility | Credit Agreement 2023 | Line of Credit | Subsequent Event | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument term | 364 days | ||||||
Revolving Credit Facility | Credit Agreement 2022 | Line of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 2,000,000,000 | ||||||
Debt instrument term | 5 years | ||||||
Line of credit facility, maximum borrowing capacity, amount of credit extensions | $ 3,000,000,000 | ||||||
Debt instrument, covenant, consolidated indebtedness to capital ratio | 65% | ||||||
Short-term debt | $ 0 | ||||||
Revolving Credit Facility | Credit Agreement 2022 | Bridge Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 200,000,000 | ||||||
Revolving Credit Facility | Credit Agreement 2022 | Letter of Credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | ||||||
Revolving Credit Facility | Credit Agreement 2024 | Line of Credit | Subsequent Event | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 1,500,000,000 |
DEBT AND CREDIT ARRANGEMENTS _8
DEBT AND CREDIT ARRANGEMENTS - Commercial Paper Program (Details) - USD ($) | 12 Months Ended | ||||||
Jul. 28, 2023 | Mar. 14, 2023 | Mar. 10, 2023 | Nov. 22, 2022 | Dec. 29, 2023 | Dec. 30, 2022 | Mar. 13, 2023 | |
Line of Credit Facility [Line Items] | |||||||
Debt instrument term | 3 years | ||||||
Short-term debt | $ 1,602,000,000 | $ 2,000,000 | |||||
Commercial Paper | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 3,900,000,000 | $ 1,000,000,000 | |||||
Short-term debt | $ 1,600,000,000 | ||||||
Debt, weighted average interest rate | 5.95% | ||||||
Repayments of short-term debt | $ 184,000,000 | $ 0 | |||||
Commercial Paper | Revolving Credit Facility | Credit Agreement 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Proceeds from short-term debt | 701,000,000 | ||||||
Commercial Paper | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument term | 397 days | ||||||
Line of Credit | Revolving Credit Facility | Credit Agreement 2023 | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility, maximum borrowing capacity | $ 2,400,000,000 | ||||||
Debt instrument term | 364 days | ||||||
Repayments of lines of credit | $ 2,100,000,000 | ||||||
Proceeds from short-term debt | $ 2,100,000,000 |
RETIREMENT BENEFITS - Narrative
RETIREMENT BENEFITS - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Jan. 03, 2025 | Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2035 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Percentage match of the employee contribution | 6% | ||||
Matching contributions charged to expense | $ 267,000,000 | $ 226,000,000 | $ 230,000,000 | ||
Fair value of plan assets | 8,860,000,000 | 7,653,000,000 | 9,924,000,000 | ||
Projected benefit obligation | 8,794,000,000 | 7,722,000,000 | 10,355,000,000 | ||
Pre-tax curtailment gain as result of employee terminations | 3,000,000 | ||||
Accumulated benefit obligation for all defined benefit pension plans | $ 8,600,000,000 | ||||
Private equity funds, liquidity restrictions term | 10 years | ||||
Required employer contributions in fiscal 2024 and beyond | $ 35,000,000 | ||||
Salaried Pension Plan | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Fair value of plan assets | 7,500,000,000 | ||||
Projected benefit obligation | 7,500,000,000 | ||||
Pension | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Fair value of plan assets | 8,595,000,000 | 7,411,000,000 | 9,604,000,000 | ||
Projected benefit obligation | $ 8,563,000,000 | 7,494,000,000 | 10,007,000,000 | ||
Reduction in pension benefit obligations for plan assets transferred to annuity | $ 64,000,000 | 250,000,000 | |||
Reduction in pension plan assets transferred to annuity | 250,000,000 | ||||
Pre-tax loss on pension plan settlements | $ 4,000,000 | ||||
Discount rate | 4.91% | 5.18% | |||
Cash balance interest crediting rate | 4.50% | 4% | |||
Expected return on plan assets rate | 7.46% | 7.44% | 7.43% | ||
Pension | Salaried Pension Plan | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Percentage of total projected benefit obligation | 88% | ||||
Discount rate | 4.92% | ||||
Cash balance interest crediting rate | 4.50% | ||||
Expected return on plan assets rate | 7.50% | ||||
Frozen Equity Pension Plan | Salaried Pension Plan | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Cash balance interest crediting rate | 4.25% | ||||
Forecast | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Ultimate per capita cost of healthcare assumed (percent) | 7.05% | 4.53% | |||
Forecast | United States | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Expected return on plan assets rate | 7.50% | ||||
Forecast | Pension | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Expected return on plan assets rate | 7.46% | ||||
Forecast | Pension | Salaried Pension Plan | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Expected return on plan assets rate | 7.50% | ||||
AR | Salaried Pension Plan | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Fair value of plan assets | $ 749,000,000 | ||||
Projected benefit obligation | 974,000,000 | ||||
Private equity funds | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Defined benefit plans, future unfunded commitments on NAV equity funds investments | 550,000,000 | $ 568,000,000 | |||
Real estate funds | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Defined benefit plans, future unfunded commitments on NAV equity funds investments | $ 0 | 33,000,000 | |||
Minimum redemption notice period permitted on NAV equity funds investments | 90 days | ||||
Alternative investments | |||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||||
Defined benefit plans, future unfunded commitments on NAV equity funds investments | $ 0 | $ 0 | |||
Minimum redemption notice period permitted on NAV equity funds investments | 90 days |
RETIREMENT BENEFITS - Fair Valu
RETIREMENT BENEFITS - Fair Value of Deferred Compensation Plans (Details) - Fair Value - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan assets | $ 143 | $ 97 |
Fair value of deferred compensation plan liabilities | 292 | 200 |
Equity securities and mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan liabilities | 18 | 8 |
Equity securities and mutual funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan liabilities | 18 | 8 |
Common/collective trusts and guaranteed investment contracts | Investments Measured at NAV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan liabilities | 274 | 192 |
Equity and fixed income securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan assets | 106 | 64 |
Equity and fixed income securities | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan assets | 106 | 64 |
Corporate-owned life insurance | Investments Measured at NAV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of deferred compensation plan assets | $ 37 | $ 33 |
RETIREMENT BENEFITS - Funded St
RETIREMENT BENEFITS - Funded Status of Plan and Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 8,860 | $ 7,653 | $ 9,924 |
PBO | (8,794) | (7,722) | (10,355) |
Funded status | 66 | (69) | |
Consolidated Balance Sheet line item amounts: | |||
Assets of business held for sale | 1,106 | 47 | |
Assets of business held for sale | |||
Consolidated Balance Sheet line item amounts: | |||
Assets of business held for sale | 4 | 0 | |
Other non-current assets | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan assets | 289 | 210 | |
Compensation and benefits | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan liabilities, current | (19) | (17) | |
Other long-term liabilities | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan liabilities, noncurrent | (208) | (262) | |
Pension | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 8,595 | 7,411 | 9,604 |
PBO | (8,563) | (7,494) | (10,007) |
Funded status | 32 | (83) | |
Pension | Assets of business held for sale | |||
Consolidated Balance Sheet line item amounts: | |||
Assets of business held for sale | 4 | 0 | |
Pension | Other non-current assets | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan assets | 193 | 144 | |
Pension | Compensation and benefits | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan liabilities, current | (12) | (11) | |
Pension | Other long-term liabilities | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan liabilities, noncurrent | (153) | (216) | |
Other Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 265 | 242 | 320 |
PBO | (231) | (228) | $ (348) |
Funded status | 34 | 14 | |
Other Benefits | Assets of business held for sale | |||
Consolidated Balance Sheet line item amounts: | |||
Assets of business held for sale | 0 | 0 | |
Other Benefits | Other non-current assets | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan assets | 96 | 66 | |
Other Benefits | Compensation and benefits | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan liabilities, current | (7) | (6) | |
Other Benefits | Other long-term liabilities | |||
Consolidated Balance Sheet line item amounts: | |||
Defined benefit plan liabilities, noncurrent | $ (55) | $ (46) |
RETIREMENT BENEFITS - Pre-tax A
RETIREMENT BENEFITS - Pre-tax Amounts Recorded in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Actuarial loss (gain) | $ 64 | $ 143 |
Net prior service (credit) cost | (153) | (178) |
Total PBO not yet recognized as expense | (89) | (35) |
Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actuarial loss (gain) | 162 | 243 |
Net prior service (credit) cost | (157) | (183) |
Total PBO not yet recognized as expense | 5 | 60 |
Other Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Actuarial loss (gain) | (98) | (100) |
Net prior service (credit) cost | 4 | 5 |
Total PBO not yet recognized as expense | $ (94) | $ (95) |
RETIREMENT BENEFITS - Roll Forw
RETIREMENT BENEFITS - Roll Forward of Projected Benefit Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Change in benefit obligation | |||
Benefit obligation at beginning of fiscal year | $ 7,722 | $ 10,355 | |
Service cost | 35 | 46 | |
Interest cost | 397 | 227 | |
Actuarial loss (gain) | 279 | (2,204) | |
Benefits paid | (591) | (648) | |
Expenses paid | (34) | (26) | |
Currency translation adjustment | 10 | (28) | |
Acquisitions | 974 | 0 | |
Divestiture | 0 | (8) | |
Other | 2 | 8 | |
Benefit obligation at end of fiscal year | 8,794 | 7,722 | $ 10,355 |
Pension | |||
Change in benefit obligation | |||
Benefit obligation at beginning of fiscal year | 7,494 | 10,007 | |
Service cost | 33 | 44 | 66 |
Interest cost | 386 | 220 | 188 |
Actuarial loss (gain) | 280 | (2,097) | |
Benefits paid | (568) | (626) | |
Expenses paid | (34) | (26) | |
Currency translation adjustment | 10 | (28) | |
Acquisitions | 960 | 0 | |
Divestiture | 0 | (8) | |
Other | 2 | 8 | |
Benefit obligation at end of fiscal year | 8,563 | 7,494 | 10,007 |
Reduction in pension benefit obligations for plan assets transferred to annuity | 64 | 250 | |
Other Benefits | |||
Change in benefit obligation | |||
Benefit obligation at beginning of fiscal year | 228 | 348 | |
Service cost | 2 | 2 | 2 |
Interest cost | 11 | 7 | 5 |
Actuarial loss (gain) | (1) | (107) | |
Benefits paid | (23) | (22) | |
Expenses paid | 0 | 0 | |
Currency translation adjustment | 0 | 0 | |
Acquisitions | 14 | 0 | |
Divestiture | 0 | 0 | |
Other | 0 | 0 | |
Benefit obligation at end of fiscal year | $ 231 | $ 228 | $ 348 |
RETIREMENT BENEFITS - Roll Fo_2
RETIREMENT BENEFITS - Roll Forward of Plan Assets and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2023 | Dec. 30, 2022 | |
Change in plan assets | ||
Plan assets at beginning of fiscal year | $ 7,653 | $ 9,924 |
Actual return on plan assets | 1,041 | (1,567) |
Acquisitions | 749 | 0 |
Employer contributions | 29 | 11 |
Benefits paid | (591) | (648) |
Expenses paid | (34) | (26) |
Currency translation adjustment | 12 | (32) |
Divestiture | 0 | (10) |
Other | 1 | 1 |
Plan assets at end of fiscal year | 8,860 | 7,653 |
Funded status | 66 | (69) |
Pension | ||
Change in plan assets | ||
Plan assets at beginning of fiscal year | 7,411 | 9,604 |
Actual return on plan assets | 1,004 | (1,516) |
Acquisitions | 749 | 0 |
Employer contributions | 20 | 16 |
Benefits paid | (568) | (626) |
Expenses paid | (34) | (26) |
Currency translation adjustment | 12 | (32) |
Divestiture | 0 | (10) |
Other | 1 | 1 |
Plan assets at end of fiscal year | 8,595 | 7,411 |
Funded status | 32 | (83) |
Other Benefits | ||
Change in plan assets | ||
Plan assets at beginning of fiscal year | 242 | 320 |
Actual return on plan assets | 37 | (51) |
Acquisitions | 0 | 0 |
Employer contributions | 9 | (5) |
Benefits paid | (23) | (22) |
Expenses paid | 0 | 0 |
Currency translation adjustment | 0 | 0 |
Divestiture | 0 | 0 |
Other | 0 | 0 |
Plan assets at end of fiscal year | 265 | 242 |
Funded status | $ 34 | $ 14 |
RETIREMENT BENEFITS - Accumulat
RETIREMENT BENEFITS - Accumulated Benefit Obligations in Excess of Plan Assets (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Accumulated benefit obligation | $ 225 | $ 6,698 |
Fair value of plan assets | 60 | 6,472 |
PBO | 226 | 6,699 |
Fair value of plan assets | 60 | 6,472 |
Other Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
PBO | 62 | 52 |
Fair value of plan assets | $ 0 | $ 0 |
RETIREMENT BENEFITS - Statement
RETIREMENT BENEFITS - Statement of Operations Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Operating | |||
Service cost | $ 35 | $ 46 | |
Non-operating | |||
Interest cost | 397 | 227 | |
Pension | |||
Operating | |||
Service cost | 33 | 44 | $ 66 |
Non-operating | |||
Interest cost | 386 | 220 | 188 |
Expected return on plan assets | (633) | (624) | (621) |
Amortization of net actuarial (gain) loss | (9) | 9 | 30 |
Amortization of prior service credit | (26) | (27) | (28) |
Effect of curtailments or settlements | 0 | 0 | 1 |
Non-service cost periodic benefit income | (282) | (422) | (430) |
Net periodic benefit income | (249) | (378) | (364) |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | |||
Net actuarial gain | (90) | 42 | (972) |
Prior service cost | 0 | 8 | 2 |
Amortization of net actuarial gain (loss) | 9 | (9) | (30) |
Amortization of prior service credit | 26 | 27 | 28 |
Currency translation adjustment | 0 | 1 | 1 |
Recognized prior service credit | 0 | 0 | 4 |
Recognized net actuarial loss | 0 | 0 | (4) |
Total change recognized in other comprehensive income | (55) | 69 | (971) |
Total impact from net periodic benefit income and changes in other comprehensive income | (304) | (309) | (1,335) |
Other Benefits | |||
Operating | |||
Service cost | 2 | 2 | 2 |
Non-operating | |||
Interest cost | 11 | 7 | 5 |
Expected return on plan assets | (20) | (20) | (20) |
Amortization of net actuarial (gain) loss | (20) | (7) | 0 |
Amortization of prior service credit | 1 | 1 | 1 |
Non-service cost periodic benefit income | (28) | (19) | (14) |
Net periodic benefit income | (26) | (17) | (12) |
Other changes in plan assets and benefit obligations recognized in other comprehensive income | |||
Net actuarial gain | (18) | (34) | (46) |
Prior service cost | 20 | 7 | 0 |
Amortization of net actuarial gain (loss) | (1) | (1) | (1) |
Total change recognized in other comprehensive income | 1 | (28) | (47) |
Total impact from net periodic benefit income and changes in other comprehensive income | $ (25) | $ (45) | $ (59) |
RETIREMENT BENEFITS - Assumptio
RETIREMENT BENEFITS - Assumptions Used to Determine Projected Benefits and Periodic Costs (Details) | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Pension | |||
Obligation assumptions as of: | |||
Discount rate | 4.91% | 5.18% | |
Rate of future compensation increase | 3.01% | 3.01% | |
Cash balance interest crediting rate | 4.50% | 4% | |
Cost assumptions for fiscal periods ended: | |||
Discount rate to determine service cost | 5.18% | 2.69% | 2.26% |
Discount rate to determine interest cost | 5.08% | 2.27% | 1.80% |
Expected return on plan assets | 7.46% | 7.44% | 7.43% |
Rate of future compensation increase | 3.01% | 3.01% | 3.01% |
Cash balance interest crediting rate | 4% | 3.50% | 3.50% |
Other Benefits | |||
Obligation assumptions as of: | |||
Discount rate | 4.87% | 5.16% | |
Cost assumptions for fiscal periods ended: | |||
Discount rate to determine service cost | 5.26% | 2.91% | 2.49% |
Discount rate to determine interest cost | 5.06% | 2.06% | 1.42% |
RETIREMENT BENEFITS - Strategic
RETIREMENT BENEFITS - Strategic Target Asset Allocation (Details) | Dec. 29, 2023 |
Minimum | Equity investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 35% |
Minimum | Fixed income investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 25% |
Minimum | Alternative investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 12% |
Minimum | Cash and cash equivalents | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 0% |
Maximum | Equity investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 55% |
Maximum | Fixed income investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 35% |
Maximum | Alternative investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 30% |
Maximum | Cash and cash equivalents | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Asset Allocation | 10% |
RETIREMENT BENEFITS - Reconcili
RETIREMENT BENEFITS - Reconciliation of Defined Benefit Plan Asset Balances (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 8,860 | $ 7,653 | $ 9,924 |
Total investments measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 3,328 | 3,324 | |
Total | Total | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 5,495 | 4,355 | |
Total | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2,668 | 2,495 | |
Total | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2,640 | 1,737 | |
Total | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 187 | 123 | |
Domestic equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,294 | 1,275 | |
Domestic equities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,294 | 1,275 | |
Domestic equities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Domestic equities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
International equities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,138 | 1,044 | |
International equities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,138 | 1,002 | |
International equities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 42 | |
International equities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Real estate investment trusts | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 214 | 192 | |
Real estate investment trusts | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 214 | 192 | |
Real estate investment trusts | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Real estate investment trusts | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,457 | 1,118 | |
Corporate bonds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Corporate bonds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,331 | 995 | |
Corporate bonds | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 126 | 123 | |
Government securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 485 | 320 | |
Government securities | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Government securities | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 485 | 320 | |
Government securities | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Securitized assets | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 164 | 166 | |
Securitized assets | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Securitized assets | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 164 | 166 | |
Securitized assets | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 137 | 92 | |
Fixed income funds | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 4 | 4 | |
Fixed income funds | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 133 | 88 | |
Fixed income funds | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 545 | 148 | |
Cash and cash equivalents | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 18 | 22 | |
Cash and cash equivalents | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 527 | 126 | |
Cash and cash equivalents | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 61 | ||
Other | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | ||
Other | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | ||
Other | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 61 | ||
Equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1,529 | $ 1,661 | |
Investments measured at NAV: | Total investments measured at NAV | Total investments measured at NAV | |
Fixed income funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 3 | $ 299 | |
Investments measured at NAV: | Total investments measured at NAV | Total investments measured at NAV | |
Hedge funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 396 | $ 294 | |
Investments measured at NAV: | Total investments measured at NAV | Total investments measured at NAV | |
Private equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 1,019 | $ 696 | |
Investments measured at NAV: | Total investments measured at NAV | Total investments measured at NAV | |
Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 379 | $ 372 | |
Investments measured at NAV: | Total investments measured at NAV | Total investments measured at NAV | |
Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 2 | $ 2 | |
Investments measured at NAV: | Total investments measured at NAV | Total investments measured at NAV | |
Receivables (Payables), net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 37 | $ (26) |
RETIREMENT BENEFITS - Estimated
RETIREMENT BENEFITS - Estimated Future Benefit Payments (Details) $ in Millions | Dec. 29, 2023 USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2024 | $ 694 |
2025 | 692 |
2026 | 686 |
2027 | 680 |
2028 | 668 |
2029 — 2033 | 3,156 |
Pension | |
Defined Benefit Plan Disclosure [Line Items] | |
2024 | 672 |
2025 | 670 |
2026 | 665 |
2027 | 660 |
2028 | 649 |
2029 — 2033 | 3,072 |
Other Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2024 | 22 |
2025 | 22 |
2026 | 21 |
2027 | 20 |
2028 | 19 |
2029 — 2033 | $ 84 |
Expected future benefit percentage of gross payments, excluding subsidiaries | 1% |
STOCK OPTIONS AND OTHER SHARE_3
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Narrative (Details) | 12 Months Ended | ||
Dec. 29, 2023 USD ($) plan $ / shares shares | Dec. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shareholder-approved employee stock incentive plans | plan | 2 | ||
Common stock issued, net of shares withheld for tax purposes (in shares) | shares | 500,000 | ||
Percent of options exercisable with in one year from grant date | 33.30% | ||
Percent of options exercisable with in two year from grant date | 33.30% | ||
Percent of options exercisable with in three year from grant date | 33.30% | ||
Weighted-average grant-date fair value of options (in dollars per share) | $ / shares | $ 54.63 | $ 53.66 | $ 42.16 |
Total intrinsic value of options exercised | $ 23,000,000 | $ 56,000,000 | $ 173,000,000 |
Unrecognized compensation expense on options | 19,000,000 | ||
Fair value of vested stock options | $ 14,000,000 | $ 42,000,000 | $ 6,000,000 |
2015 EIP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares of common stock remaining available for future issuance (in shares) | shares | 12,200,000 | ||
Number of shares of counted against available for issuance per each awarded unit (in shares) | shares | 4.6 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period | 10 years | ||
Period for recognition on unrecognized compensation expense on awards | 1 year 10 months 24 days | ||
Performance Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period | 3 years | ||
Period for recognition on unrecognized compensation expense on awards | 1 year 6 months 21 days | ||
Restricted stock and restricted stock units outstanding (in shares) | shares | 480,341 | 524,343 | |
Unrecognized compensation costs of awards | $ 35,000,000 | ||
Weighed-average grant date price of awards granted (in dollars per share) | $ / shares | $ 223.09 | $ 258.83 | $ 201.32 |
Grant date fair value of awards vested | $ 42,000,000 | $ 41,000,000 | $ 0 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Period for recognition on unrecognized compensation expense on awards | 1 year 9 months | ||
Restricted stock and restricted stock units outstanding (in shares) | shares | 728,052 | 673,495 | |
Unrecognized compensation costs of awards | $ 86,000,000 | ||
Weighed-average grant date price of awards granted (in dollars per share) | $ / shares | $ 199.33 | $ 225.58 | $ 202.10 |
Grant date fair value of awards vested | $ 44,000,000 | $ 69,000,000 | $ 19,000,000 |
STOCK OPTIONS AND OTHER SHARE_4
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Total expense | $ 89 | $ 109 | $ 129 |
Tax effect on share-based compensation expense | (19) | (27) | (33) |
Total share-based compensation expense after-tax | 70 | 82 | 96 |
Cost of product sales and services | |||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Total expense | 16 | 19 | 14 |
General and administrative expenses | |||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Total expense | 73 | 90 | 115 |
Income from continuing operations | |||
Share-based Payment Arrangement, Noncash Expense [Abstract] | |||
Total expense | $ 89 | $ 109 | $ 129 |
STOCK OPTIONS AND OTHER SHARE_5
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Significant Fair Value Assumptions (Details) | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Expected dividends | 2.17% | 2% | 1.99% |
Expected volatility | 28.60% | 29.09% | 31.71% |
Risk-free interest rates | 3.48% | 1.63% | |
Risk-free interest rates | 4.27% | 4.27% | |
Risk-free interest rates | 0.75% | ||
Expected term (years) | 5 years 14 days | 5 years 7 days | 5 years 18 days |
STOCK OPTIONS AND OTHER SHARE_6
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Stock Options Activity (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 29, 2023 USD ($) $ / shares shares | |
Shares | |
Stock options outstanding, beginning balance (in shares) | shares | 3,306,129 |
Granted (in shares) | shares | 366,670 |
Exercised (in shares) | shares | (230,702) |
Forfeited or expired (in shares) | shares | (191,387) |
Stock options outstanding, ending balance (in shares) | shares | 3,250,710 |
Stock options exercisable December 29, 2023 (in shares) | shares | 2,669,082 |
Weighted Average Exercise Price Per Share | |
Stock options outstanding. beginning balance (in dollars per share) | $ / shares | $ 162.56 |
Granted (in dollars per share) | $ / shares | 209.88 |
Exercised (in dollars per share) | $ / shares | 100.03 |
Forfeited or expired (in dollars per share) | $ / shares | 210.31 |
Stock options outstanding, ending balance (in dollars per share) | $ / shares | 169.53 |
Stock options exercisable, weighted average exercise price per share (in dollars per share) | $ / shares | $ 160.11 |
Weighted Average Remaining Contractual Term (In years) | |
Stock options outstanding, weighted average remaining contractual term | 5 years 5 months 1 day |
Stock options exercisable, weighted average remaining contractual term | 4 years 8 months 26 days |
Aggregate Intrinsic Value (In millions) | |
Stock options outstanding, aggregate intrinsic value | $ | $ 140 |
Stock options exercisable, aggregate intrinsic value | $ | $ 138 |
STOCK OPTIONS AND OTHER SHARE_7
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Nonvested Stock Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Shares | |||
Nonvested stock options, beginning balance (in shares) | 685,718 | ||
Granted (in shares) | 366,670 | ||
Vested (in shares) | (470,760) | ||
Nonvested stock options, ending balance (in shares) | 581,628 | 685,718 | |
Weighted-Average Grant-Date Fair Value Per Share | |||
Nonvested stock options, beginning balance (in dollars per share) | $ 46.76 | ||
Granted (in dollars per share) | 54.63 | $ 53.66 | $ 42.16 |
Vested (in dollars per share) | 43.21 | ||
Nonvested stock options, ending balance (in dollars per share) | $ 52.72 | $ 46.76 |
STOCK OPTIONS AND OTHER SHARE_8
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Restricted Stock and Restricted Stock Unit Awards Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Units | |||
Outstanding, beginning balance (in shares) | 673,495 | ||
Granted (in shares) | 354,657 | ||
Vested (in shares) | (223,855) | ||
Forfeited (in shares) | (76,245) | ||
Outstanding, ending balance (in shares) | 728,052 | 673,495 | |
Weighted-Average Grant Price Per Unit | |||
Outstanding, beginning balance (in dollars per share) | $ 211.16 | ||
Granted (in dollars per share) | 199.33 | $ 225.58 | $ 202.10 |
Vested (in dollars per share) | 198.24 | ||
Forfeited (in dollars per share) | 205.77 | ||
Outstanding, ending balance (in dollars per share) | $ 208.78 | $ 211.16 |
STOCK OPTIONS AND OTHER SHARE_9
STOCK OPTIONS AND OTHER SHARE-BASED COMPENSATION - Performance Shares Unit Awards Activity (Details) - Performance Share Units - $ / shares | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Units | |||
Outstanding, beginning balance (in shares) | 524,343 | ||
Granted (in shares) | 180,118 | ||
Adjustment (in shares) | 14,771 | ||
Vested (in shares) | (182,808) | ||
Forfeited (in shares) | (56,083) | ||
Outstanding, ending balance (in shares) | 480,341 | 524,343 | |
Weighted-Average Grant Price Per Unit | |||
Outstanding, beginning balance (in dollars per share) | $ 224.94 | ||
Granted (in dollars per share) | 223.09 | $ 258.83 | $ 201.32 |
Adjustment (in dollars per share) | 228.29 | ||
Vested (in dollars per share) | 228.29 | ||
Forfeited (in dollars per share) | 236.80 | ||
Outstanding, ending balance (in dollars per share) | $ 222.73 | $ 224.94 |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease cost | $ 163 | $ 151 | $ 172 |
Short-term and equipment lease cost | 23 | 21 | 20 |
Variable lease cost | 26 | 25 | 20 |
Other, net | 11 | 6 | 3 |
Total lease cost | $ 223 | $ 203 | $ 215 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - CTS - USD ($) $ in Millions | 12 Months Ended | |
Dec. 30, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Impairment charge for ROU asset | $ 19 | |
Aviation Systems | ||
Lessee, Lease, Description [Line Items] | ||
Impairment of long-lived assets | $ 145 | $ 145 |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Operating Leases | ||
Other non-current assets | $ 743 | $ 756 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Other accrued items | $ 120 | $ 121 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other Accrued Liabilities, Current | Other Accrued Liabilities, Current |
Other long-term liabilities | $ 705 | $ 741 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | Other Liabilities, Noncurrent |
Total operating lease liabilities | $ 825 | $ 862 |
Finance Leases | ||
Property, plant and equipment | 243 | 170 |
Accumulated amortization | (25) | (15) |
Property, plant and equipment, net | 218 | 155 |
Current portion of long-term debt, net | $ 8 | $ 5 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of long-term debt, net | Current portion of long-term debt, net |
Long-term debt, net | $ 243 | $ 165 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-Term Debt and Lease Obligation | Long-Term Debt and Lease Obligation |
Financing lease obligations and other debt | $ 251 | $ 170 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Net cash provided by operating activities - operating lease payments | $ 159 | $ 148 | |
Net cash provided by operating activities - finance lease interest payments | 7 | 5 | |
Net cash provided by financing activities - finance lease obligation payments | 6 | 4 | |
Assets obtained in exchange for new lease obligations | |||
ROU assets obtained with operating leases | 144 | 123 | |
Property, plant and equipment obtained with finance leases | $ 68 | $ 20 | $ 120 |
Weighted average remaining lease term (in years) | |||
Operating leases | 8 years 3 months 18 days | 9 years 3 months 18 days | |
Finance leases | 17 years 8 months 12 days | 21 years 3 months 18 days | |
Weighted average discount rate | |||
Operating leases | 3.90% | 3.50% | |
Finance leases | 4.30% | 3.40% |
LEASES - Future Lease Payments
LEASES - Future Lease Payments Under Non-cancelable Operating and Finance Leases (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Operating Leases | ||
2024 | $ 163 | |
2025 | 142 | |
2026 | 110 | |
2027 | 103 | |
2028 | 97 | |
Thereafter | 345 | |
Total future lease payments required | 960 | |
Less: imputed interest | 135 | |
Total | 825 | $ 862 |
Finance Leases | ||
2024 | 19 | |
2025 | 41 | |
2026 | 18 | |
2027 | 17 | |
2028 | 18 | |
Thereafter | 233 | |
Total future lease payments required | 346 | |
Less: imputed interest | 95 | |
Financing lease obligations and other debt | 251 | $ 170 |
Lessee, Lease, Description [Line Items] | ||
Future lease payments for leases not yet commenced | $ 307 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for lease commitments not yet commenced | 4 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Term of contract for lease commitments not yet commenced | 15 years |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS ("AOCL") (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 18,624 | $ 19,319 | $ 20,841 |
Other comprehensive income before reclassifications to earnings, net of income taxes | 117 | (153) | 692 |
Losses (gains) reclassified to earnings, net of income taxes | (27) | 11 | 1 |
Other comprehensive income, net of income taxes | 90 | (142) | 693 |
Ending balance | 18,829 | 18,624 | 19,319 |
Foreign currency translation | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (237) | (118) | (58) |
Other comprehensive income, before reclassifications to earnings and income taxes | 36 | (124) | (63) |
Income taxes | 0 | 5 | 0 |
Other comprehensive income before reclassifications to earnings, net of income taxes | 36 | (119) | (63) |
Losses (gains) reclassified to earnings | 0 | 0 | 3 |
Income taxes | 0 | 0 | 0 |
Losses (gains) reclassified to earnings, net of income taxes | 0 | 0 | 3 |
Other comprehensive income, net of income taxes | 36 | (119) | (60) |
Ending balance | (201) | (237) | (118) |
Net unrealized losses on hedging derivatives | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (79) | (89) | (80) |
Other comprehensive income, before reclassifications to earnings and income taxes | 14 | (10) | (4) |
Income taxes | (4) | 2 | 1 |
Other comprehensive income before reclassifications to earnings, net of income taxes | 10 | (8) | (3) |
Losses (gains) reclassified to earnings | 5 | 22 | (8) |
Income taxes | (1) | (4) | 2 |
Losses (gains) reclassified to earnings, net of income taxes | 4 | 18 | (6) |
Other comprehensive income, net of income taxes | 14 | 10 | (9) |
Ending balance | (65) | (79) | (89) |
Unrecognized postretirement obligations | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 28 | 61 | (701) |
Other comprehensive income, before reclassifications to earnings and income taxes | 95 | (33) | 1,013 |
Income taxes | (24) | 7 | (255) |
Other comprehensive income before reclassifications to earnings, net of income taxes | 71 | (26) | 758 |
Losses (gains) reclassified to earnings | (41) | (9) | 6 |
Income taxes | 10 | 2 | (2) |
Losses (gains) reclassified to earnings, net of income taxes | (31) | (7) | 4 |
Other comprehensive income, net of income taxes | 40 | (33) | 762 |
Ending balance | 68 | 28 | 61 |
Total AOCL | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | (288) | (146) | (839) |
Other comprehensive income, before reclassifications to earnings and income taxes | 145 | (167) | 946 |
Income taxes | (28) | 14 | (254) |
Other comprehensive income before reclassifications to earnings, net of income taxes | 117 | (153) | 692 |
Losses (gains) reclassified to earnings | (36) | 13 | 1 |
Income taxes | 9 | (2) | 0 |
Losses (gains) reclassified to earnings, net of income taxes | (27) | 11 | 1 |
Other comprehensive income, net of income taxes | 90 | (142) | 693 |
Ending balance | $ (198) | $ (288) | $ (146) |
ACQUISITIONS, DIVESTITURES AN_3
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of TDL - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 03, 2023 | Dec. 29, 2023 | Dec. 29, 2023 | |
Business Acquisition [Line Items] | |||
Acquisition related costs | $ 83 | ||
CS | |||
Business Acquisition [Line Items] | |||
Goodwill from acquisitions | 1,143 | ||
TDL | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 1,958 | ||
Provision for loss on customer contracts | $ 86 | 86 | |
Loss provision amortization expense | 36 | ||
Total liabilities assumed | 27 | 64 | |
Revenue from amortization of off-market contract liability | 28 | 28 | |
Future estimated revenue from the amortization of off-market contract liabilities, year one | $ 21 | 21 | |
Acquisition related costs | 78 | ||
TDL | Other Accrued Liabilities | |||
Business Acquisition [Line Items] | |||
Total liabilities assumed | 28 | ||
TDL | Other long-term liabilities | |||
Business Acquisition [Line Items] | |||
Total liabilities assumed | $ 36 |
ACQUISITIONS, DIVESTITURES AN_4
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of TDL - Calculation of Consideration Transferred (Details) - TDL $ 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 | 12 Months Ended | ||||
Dec. 29, 2023 | Dec. 29, 2023 | Jan. 03, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 19,979 | $ 19,979 | $ 17,283 | $ 18,189 | |
TDL | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Receivables | 28 | 28 | |||
Contract assets | 29 | 29 | |||
Inventories | 146 | 146 | |||
Other current assets | 9 | 9 | |||
Property, plant and equipment | 49 | 49 | |||
Goodwill | 1,143 | 1,143 | |||
Other intangible assets | 755 | 755 | $ 755 | ||
Deferred income taxes | 35 | 35 | |||
Other non-current assets | 17 | 17 | |||
Total assets acquired | 2,211 | 2,211 | |||
Accounts payable | 20 | 20 | |||
Contract liabilities | 28 | 28 | |||
Compensation and benefits | 2 | 2 | |||
Other accrued items | 136 | 136 | |||
Other long-term liabilities | 51 | 51 | |||
Total liabilities assumed | 237 | 237 | |||
Net assets acquired | 1,974 | 1,974 | |||
Measurement period adjustment | |||||
Contract assets | 11 | ||||
Inventories | (18) | ||||
Property, plant and equipment | (1) | ||||
Goodwill | 129 | ||||
Other intangible assets | (95) | ||||
Deferred income taxes | 2 | ||||
Other non-current assets | (1) | ||||
Total assets acquired | 27 | ||||
Other accrued items | 17 | ||||
Other long-term liabilities | 10 | ||||
Total liabilities assumed | $ 64 | 27 | |||
Net assets acquired | $ 0 | ||||
TDL | As Previously Reported | |||||
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 | ||||
Goodwill | 1,014 | ||||
Other intangible assets | 850 | ||||
Deferred income taxes | 33 | ||||
Other non-current assets | 18 | ||||
Total assets acquired | 2,184 | ||||
Accounts payable | 20 | ||||
Contract liabilities | 28 | ||||
Compensation and benefits | 2 | ||||
Other accrued items | 119 | ||||
Other long-term liabilities | 41 | ||||
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) - TDL - USD ($) $ in Millions | Jan. 03, 2023 | Dec. 29, 2023 |
Business Acquisition [Line Items] | ||
Total identifiable intangible assets acquired | $ 755 | $ 755 |
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 | |
Developed technologies | ||
Business Acquisition [Line Items] | ||
Identifiable finite-lived intangible assets acquired | $ 349 | |
Weighted average amortization period | 17 years |
ACQUISITIONS, DIVESTITURES AN_7
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of TDL - Pro Forma Information (Details) - TDL - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2023 | Dec. 30, 2022 | |
Business Acquisition [Line Items] | ||
Revenue | $ 365 | $ 358 |
Income before income taxes | $ 131 | $ 68 |
ACQUISITIONS, DIVESTITURES AN_8
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of AJRD - Narrative (Details) - USD ($) $ in Millions | 5 Months Ended | 12 Months Ended | ||||
Jul. 28, 2023 | Dec. 29, 2023 | Dec. 29, 2023 | Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 19,979 | $ 19,979 | $ 19,979 | $ 17,283 | $ 18,189 | |
Revenue from product sales and services | 19,419 | 17,062 | 17,814 | |||
Income (loss) before income taxes | 1,221 | $ 1,273 | $ 2,283 | |||
Acquisition related costs | 83 | |||||
AR | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, percentage of ownership | 10,000% | |||||
Business combination, consideration transferred | $ 4,715 | |||||
Provision for loss on customer contracts | 62 | 62 | 62 | |||
Loss provision amortization expense | 8 | |||||
Total liabilities assumed | 103 | 95 | ||||
Revenue from amortization of off-market contract liability | 14 | 14 | 14 | |||
Goodwill | $ 2,365 | 2,365 | 2,365 | |||
Revenue from product sales and services | 1,052 | |||||
Income (loss) before income taxes | $ 122 | |||||
AR | Other Accrued Liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Total liabilities assumed | 37 | |||||
AR | Other long-term liabilities | ||||||
Business Acquisition [Line Items] | ||||||
Total liabilities assumed | $ 58 |
ACQUISITIONS, DIVESTITURES AN_9
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of AJRD - Calculation of Consideration Transferred (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jul. 28, 2023 | Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Fair value of consideration transferred | $ 6,688 | $ 0 | $ 0 | |
AR | ||||
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 | 5 Months Ended | 12 Months Ended | |||
Dec. 29, 2023 | Dec. 29, 2023 | Jul. 28, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Goodwill | $ 19,979 | $ 19,979 | $ 17,283 | $ 18,189 | |
AR | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Receivables | 156 | 156 | |||
Contract assets | 298 | 298 | |||
Inventories | 14 | 14 | |||
Other current assets | 146 | 146 | |||
Property, plant and equipment | 602 | 602 | |||
Goodwill | 2,365 | 2,365 | |||
Other intangible assets | 2,840 | 2,840 | $ 2,840 | ||
Other non-current assets | 698 | 698 | |||
Total assets acquired | 7,119 | 7,119 | |||
Current portion of long-term debt, net | 1 | 1 | |||
Accounts payable | 145 | 145 | |||
Contract liabilities | 325 | 325 | |||
Compensation and benefits | 117 | 117 | |||
Income taxes payable | 5 | 5 | |||
Other accrued items | 300 | 300 | |||
Long-term debt, net | 41 | 41 | |||
Deferred income taxes | 518 | 518 | |||
Other long-term liabilities | 952 | 952 | |||
Total liabilities assumed | 2,404 | 2,404 | |||
Net assets acquired | 4,715 | 4,715 | |||
Measurement period adjustment | |||||
Contract assets | (40) | ||||
Other current assets | 29 | ||||
Property, plant and equipment | 28 | ||||
Goodwill | 17 | ||||
Other intangible assets | (20) | ||||
Other non-current assets | 89 | ||||
Total assets acquired | 103 | ||||
Contract liabilities | 15 | ||||
Compensation and benefits | 1 | ||||
Income taxes payable | (1) | ||||
Other accrued items | 22 | ||||
Deferred income taxes | 120 | ||||
Other long-term liabilities | (54) | ||||
Total liabilities assumed | 103 | $ 95 | |||
Fair value of consideration transferred | $ 0 | ||||
AR | AS REPORTED | |||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||||
Receivables | 156 | ||||
Contract assets | 338 | ||||
Inventories | 14 | ||||
Other current assets | 117 | ||||
Property, plant and equipment | 574 | ||||
Goodwill | 2,348 | ||||
Other intangible assets | 2,860 | ||||
Other non-current assets | 609 | ||||
Total assets acquired | 7,016 | ||||
Current portion of long-term debt, net | 1 | ||||
Accounts payable | 145 | ||||
Contract liabilities | 310 | ||||
Compensation and benefits | 116 | ||||
Income taxes payable | 6 | ||||
Other accrued items | 278 | ||||
Long-term debt, net | 41 | ||||
Deferred income taxes | 398 | ||||
Other long-term liabilities | 1,006 | ||||
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) - USD ($) $ in Millions | Jul. 28, 2023 | Dec. 29, 2023 | Dec. 30, 2022 |
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 9,937 | $ 6,788 | |
AR | |||
Business Acquisition [Line Items] | |||
Total identifiable intangible assets acquired | $ 2,840 | 2,840 | |
Customer relationships | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | 8,892 | 6,124 | |
Customer relationships | AR | |||
Business Acquisition [Line Items] | |||
Identifiable finite-lived intangible assets acquired | 2,720 | ||
Gross Carrying Amount | 2,720 | ||
Backlog | AR | |||
Business Acquisition [Line Items] | |||
Identifiable finite-lived intangible assets acquired | $ 350 | ||
Weighted average amortization period | 3 years | ||
Government programs | AR | |||
Business Acquisition [Line Items] | |||
Identifiable finite-lived intangible assets acquired | $ 2,370 | ||
Government programs | AR | Minimum | |||
Business Acquisition [Line Items] | |||
Weighted average amortization period | 15 years | ||
Government programs | AR | Maximum | |||
Business Acquisition [Line Items] | |||
Weighted average amortization period | 20 years | ||
Trade names — divisions | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 185 | $ 95 | |
Trade names — divisions | AR | |||
Business Acquisition [Line Items] | |||
Gross Carrying Amount | $ 120 | ||
Trade names — divisions | AR | |||
Business Acquisition [Line Items] | |||
Weighted average amortization period | 15 years |
ACQUISITIONS, DIVESTITURES A_12
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Acquisition of AJRD - Pro Forma Information (Details) - AR - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2023 | Dec. 30, 2022 | |
Business Acquisition [Line Items] | ||
Revenue from product sales and services — pro forma | $ 2,337 | $ 2,238 |
Income before income taxes | $ 266 | $ 234 |
ACQUISITIONS, DIVESTITURES A_13
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Divestures Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Apr. 06, 2023 | Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | Nov. 27, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset group and business divestiture-related gains, net | $ (51) | $ 8 | $ 220 | ||
Proceeds from sales of businesses, net | 71 | 23 | 1,729 | ||
Additional contingent consideration | $ 100 | ||||
Impairment of goodwill | (296) | (802) | |||
IMS | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Impairment of goodwill | (296) | (447) | |||
CAS business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset group and business divestiture-related gains, net | (77) | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash price on sale of business | 1,783 | ||||
Net income (loss) before income taxes of disposal group | 53 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | CAS business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net income (loss) before income taxes of disposal group | 63 | $ 18 | |||
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] | |||||
Asset group and business divestiture-related gains, net | 8 | ||||
Proceeds from sales of businesses, net | $ 23 | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | VIS Business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash price on sale of business | $ 70 | ||||
Asset group and business divestiture-related gains, net | $ 26 | ||||
Proceeds from sales of businesses, net | $ 71 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash price on sale of business | 700 | ||||
Disposal Group, Held-for-sale, Not Discontinued Operations | CAS business | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash price on sale of business | $ 834 |
ACQUISITIONS, DIVESTITURES A_14
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Divesture of CAS - Assets Acquired, Liabilities Assumed (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Goodwill | $ 19,979 | $ 17,283 | $ 18,189 |
CAS business | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Receivables, net | 80 | ||
Contract assets | 43 | ||
Inventories | 145 | ||
Other current assets | 33 | ||
Property, plant and equipment | 41 | ||
Goodwill | 534 | ||
Other intangible assets | 263 | ||
Other non-current assets | 44 | ||
Valuation allowance | (77) | ||
Total assets acquired | 1,106 | ||
Accounts payable | 111 | ||
Contract liabilities | 48 | ||
Compensation and benefits | 11 | ||
Other accrued items | 38 | ||
Other long-term liabilities | 64 | ||
Total liabilities assumed | $ 272 |
ACQUISITIONS, DIVESTITURES A_15
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Sale Price and Net Cash Proceeds of Completed Divestitures (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations $ in Millions | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash price on sale of business | $ 1,783 |
Net Cash Proceeds | 1,727 |
Narda-MITEQ business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash price on sale of business | 75 |
Net Cash Proceeds | 76 |
ESSCO business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash price on sale of business | 55 |
Net Cash Proceeds | 53 |
Electron Devices business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash price on sale of business | 185 |
Net Cash Proceeds | 173 |
VSE disposal group | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash price on sale of business | 20 |
Net Cash Proceeds | 19 |
CPS business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash price on sale of business | 398 |
Net Cash Proceeds | 347 |
Military training business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Cash price on sale of business | 1,050 |
Net Cash Proceeds | $ 1,059 |
ACQUISITIONS, DIVESTITURES A_16
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Income Before Income Taxes of Held for Sale or Divested Businesses (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2023 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income (loss) before income taxes of disposal group | $ 53 | |
Electron Devices business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income (loss) before income taxes of disposal group | $ 44 | |
CPS business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income (loss) before income taxes of disposal group | 53 | |
Military training business | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net income (loss) before income taxes of disposal group | $ 35 |
ACQUISITIONS, DIVESTITURES A_17
ACQUISITIONS, DIVESTITURES AND ASSET SALES - Business Divestiture-Related Gain (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Apr. 02, 2021 | Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Goodwill impairment | $ 296 | $ 802 | ||
Held-for-sale or Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total Business divestiture-related gains (losses), net | $ 220 | |||
Held-for-sale or Disposed of by Sale | Narda-MITEQ business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total Business divestiture-related gains (losses), net | (9) | |||
Held-for-sale or Disposed of by Sale | ESSCO business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total Business divestiture-related gains (losses), net | 31 | |||
Held-for-sale or Disposed of by Sale | Electron Devices business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total Business divestiture-related gains (losses), net | 31 | |||
Held-for-sale or Disposed of by Sale | VSE disposal group | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total Business divestiture-related gains (losses), net | (29) | |||
Held-for-sale or Disposed of by Sale | CPS business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total Business divestiture-related gains (losses), net | (19) | |||
Held-for-sale or Disposed of by Sale | Military training business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total Business divestiture-related gains (losses), net | 217 | |||
Held-for-sale or Disposed of by Sale | Other | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Total Business divestiture-related gains (losses), net | $ (2) | |||
Disposal Group, Held-for-sale, Not Discontinued Operations | CPS business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Goodwill impairment | $ 62 |
BUSINESS SEGMENTS - Narrative (
BUSINESS SEGMENTS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Restructuring and related activities, term | 3 years | ||
Revenue | $ 19,419 | $ 17,062 | $ 17,814 |
Amortization of intangible assets, debt premium, debt discount and debt issuance costs | 777 | 596 | 624 |
LHX NeXt program | |||
Segment Reporting Information [Line Items] | |||
Restructuring charges | 25 | ||
Restructuring liabilities | 4 | ||
International | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,882 | 1,689 | 1,580 |
AR | International | |||
Segment Reporting Information [Line Items] | |||
Revenue | 37 | ||
SAS | International | |||
Segment Reporting Information [Line Items] | |||
Revenue | 874 | 712 | 704 |
IMS | International | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,727 | 1,759 | 1,879 |
CS | International | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 1,535 | $ 1,437 | $ 1,232 |
Revenue from Contract with Customer Benchmark | Government Contracts Concentration Risk | U.S. Government | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 76% | 74% | 75% |
Revenue from Contract with Customer, Segment Benchmark | Product Concentration Risk | AR | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 29% | ||
Revenue from Contract with Customer, Segment Benchmark | Product Concentration Risk | SAS | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 28% | ||
Revenue from Contract with Customer, Segment Benchmark | Product Concentration Risk | IMS | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 38% | ||
Revenue from Contract with Customer, Segment Benchmark | Product Concentration Risk | CS | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 19% | ||
Revenue from Contract with Customer, Product and Service Benchmark | Geographic Concentration Risk | International | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 21% | 23% | 22% |
Revenue | $ 4,200 | $ 3,900 | $ 3,900 |
BUSINESS SEGMENTS - Revenues an
BUSINESS SEGMENTS - Revenues and Income From Continuing Operations by Segment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 19,419 | $ 17,062 | $ 17,814 |
Operating income | 1,426 | 1,127 | 2,109 |
FAS pension service cost | (35) | (46) | |
Pension Plan | |||
Segment Reporting Information [Line Items] | |||
FAS pension service cost | (33) | (44) | (66) |
Non-service FAS pension income | (282) | (422) | (430) |
Plans Under US Government Contracts | Pension Plan | |||
Segment Reporting Information [Line Items] | |||
FAS pension service cost | (35) | (46) | (68) |
Less: CAS pension cost | (145) | (141) | (191) |
FAS/CAS operating adjustment | 110 | 95 | 123 |
Non-service FAS pension income | 310 | 441 | 445 |
FAS/CAS pension adjustment, net | 420 | 536 | 568 |
Corporate non-segment | |||
Segment Reporting Information [Line Items] | |||
Revenue | (189) | (165) | (204) |
Operating income | (1,140) | (699) | (665) |
Operating segments | |||
Segment Reporting Information [Line Items] | |||
Operating income | 2,566 | 1,826 | 2,774 |
Operating segments | SAS | |||
Segment Reporting Information [Line Items] | |||
Revenue | 6,856 | 6,384 | 6,315 |
Operating income | 756 | 665 | 782 |
Operating segments | IMS | |||
Segment Reporting Information [Line Items] | |||
Revenue | 6,630 | 6,626 | 6,733 |
Operating income | 459 | 494 | 845 |
Operating segments | CS | |||
Segment Reporting Information [Line Items] | |||
Revenue | 5,070 | 4,217 | 4,287 |
Operating income | 1,229 | 667 | 1,043 |
Operating segments | AR | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,052 | 0 | 0 |
Operating income | 122 | ||
Operating segments | Other non-reportable businesses | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | 683 |
Operating income | $ 0 | $ 0 | $ 104 |
BUSINESS SEGMENTS - Disaggregat
BUSINESS SEGMENTS - Disaggregation of Revenue (Details) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 USD ($) segment | Dec. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | segment | 4 | ||
Number of reportable segments | segment | 4 | ||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 19,419 | $ 17,062 | $ 17,814 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 17,537 | 15,373 | 16,234 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,882 | 1,689 | 1,580 |
SAS | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 5,933 | 5,623 | 5,569 |
SAS | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 874 | 712 | 704 |
SAS | Fixed-price | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 4,257 | 3,811 | 3,781 |
SAS | Cost-reimbursable | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,550 | 2,524 | 2,492 |
SAS | Prime contractor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 4,252 | 4,005 | 3,942 |
SAS | Subcontractor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,555 | 2,330 | 2,331 |
SAS | Intersegment | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 49 | 49 | 42 |
SAS | Operating segments | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 6,856 | 6,384 | 6,315 |
IMS | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 4,816 | 4,796 | 4,782 |
IMS | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,727 | 1,759 | 1,879 |
IMS | Fixed-price | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 5,020 | 5,060 | 5,231 |
IMS | Cost-reimbursable | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,523 | 1,495 | 1,430 |
IMS | Prime contractor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 4,196 | 4,301 | 4,474 |
IMS | Subcontractor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,347 | 2,254 | 2,187 |
IMS | Intersegment | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 87 | 71 | 72 |
IMS | Operating segments | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 6,630 | 6,626 | 6,733 |
CS | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 3,482 | 2,735 | 3,001 |
CS | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,535 | 1,437 | 1,232 |
CS | Fixed-price | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 4,289 | 3,552 | 3,631 |
CS | Cost-reimbursable | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 728 | 620 | 602 |
CS | Prime contractor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 3,420 | 2,829 | 2,886 |
CS | Subcontractor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,597 | 1,343 | 1,347 |
CS | Intersegment | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 53 | 45 | 54 |
CS | Operating segments | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 5,070 | 4,217 | 4,287 |
AR | United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,015 | ||
AR | International | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 37 | ||
AR | Fixed-price | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 632 | ||
AR | Cost-reimbursable | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 420 | ||
AR | Prime contractor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 250 | ||
AR | Subcontractor | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 802 | ||
AR | Intersegment | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 0 | ||
AR | Operating segments | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 1,052 | $ 0 | $ 0 |
BUSINESS SEGMENTS - Total Asset
BUSINESS SEGMENTS - Total Assets by Segment (Details) - USD ($) $ in Millions | Dec. 29, 2023 | Dec. 30, 2022 |
Segment Reporting Information [Line Items] | ||
Assets | $ 41,687 | $ 33,524 |
Identifiable intangible assets acquired | 8,540 | 6,001 |
Operating segments | SAS | ||
Segment Reporting Information [Line Items] | ||
Assets | 9,085 | 8,838 |
Operating segments | IMS | ||
Segment Reporting Information [Line Items] | ||
Assets | 10,631 | 10,925 |
Operating segments | CS | ||
Segment Reporting Information [Line Items] | ||
Assets | 7,084 | 5,800 |
Operating segments | AR | ||
Segment Reporting Information [Line Items] | ||
Assets | 4,208 | |
Corporate non-segment | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 10,679 | $ 7,961 |
BUSINESS SEGMENTS - Geographic
BUSINESS SEGMENTS - Geographic Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2023 | Dec. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Capital Expenditures | $ 449 | $ 252 | $ 342 |
Depreciation and Amortization | 1,166 | 938 | 967 |
U.S. operations | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 2,678 | 1,896 | 1,870 |
International operations | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets | 184 | 208 | 231 |
Operating segments | SAS | |||
Segment Reporting Information [Line Items] | |||
Capital Expenditures | 151 | 133 | 155 |
Depreciation and Amortization | 115 | 112 | 109 |
Operating segments | IMS | |||
Segment Reporting Information [Line Items] | |||
Capital Expenditures | 149 | 45 | 69 |
Depreciation and Amortization | 73 | 76 | 92 |
Operating segments | CS | |||
Segment Reporting Information [Line Items] | |||
Capital Expenditures | 39 | 36 | 56 |
Depreciation and Amortization | 54 | 47 | 49 |
Operating segments | AR | |||
Segment Reporting Information [Line Items] | |||
Capital Expenditures | 31 | ||
Depreciation and Amortization | 29 | ||
Operating segments | Other non-reportable businesses | |||
Segment Reporting Information [Line Items] | |||
Capital Expenditures | 0 | 0 | 4 |
Depreciation and Amortization | 0 | 0 | 8 |
Corporate non-segment | |||
Segment Reporting Information [Line Items] | |||
Capital Expenditures | 79 | 38 | 58 |
Depreciation and Amortization | $ 895 | $ 703 | $ 709 |
LEGAL PROCEEDINGS, COMMITMENT_3
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES - Narrative (Details) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 USD ($) | Dec. 29, 2023 USD ($) site | |
Other Commitments [Line Items] | ||
Charge related to an additional pre-merger legal contingency | $ 31 | |
Number of sites with future environmental liabilities | site | 113 | |
Number of sites owned | site | 14 | |
Number of sites associated with former locations or current operation locations | site | 72 | |
Number of treatment or disposal sites not owned | site | 27 | |
Environmental Loss Contingency, Statement of Financial Position [Extensible Enumeration] | Other Accrued Liabilities, Current, Other Liabilities, Noncurrent | |
Performance | ||
Other Commitments [Line Items] | ||
Performance bonds maturity term | 3 years | |
Various Environmental Matters | ||
Other Commitments [Line Items] | ||
Accrual for environmental loss contingencies | $ 613 | |
Recoverable environmental remediation costs | 432 | |
Various Environmental Matters | Sacramento California | ||
Other Commitments [Line Items] | ||
Accrual for environmental loss contingencies | 266 | |
Various Environmental Matters | Maximum | Sacramento California | ||
Other Commitments [Line Items] | ||
Loss contingency, estimate of possible loss | 399 | |
Various Environmental Matters | Minimum | Sacramento California | ||
Other Commitments [Line Items] | ||
Guarantor obligations, annual limit | 10 | |
Loss contingency, estimate of possible loss | 266 | |
Various Environmental Matters One | Sacramento California | ||
Other Commitments [Line Items] | ||
Guarantor obligations, carrying value | 20 | |
Various Environmental Matters Two | Maximum | Sacramento California | ||
Other Commitments [Line Items] | ||
Guarantor obligations, carrying value | $ 75 |
LEGAL PROCEEDINGS, COMMITMENT_4
LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES - Commercial Commitments (Details) $ in Millions | Dec. 29, 2023 USD ($) |
Other Commitments [Line Items] | |
Commercial Commitment Total | $ 1,259 |
Commitments expiring within 1 Year | 721 |
Surety Bond | |
Other Commitments [Line Items] | |
Commercial Commitment Total | 536 |
Commitments expiring within 1 Year | 396 |
Performance | |
Other Commitments [Line Items] | |
Commercial Commitment Total | 536 |
Commitments expiring within 1 Year | 396 |
Standby Letters of Credit | |
Other Commitments [Line Items] | |
Commercial Commitment Total | 723 |
Commitments expiring within 1 Year | 325 |
Advance payments | |
Other Commitments [Line Items] | |
Commercial Commitment Total | 304 |
Commitments expiring within 1 Year | 120 |
Performance | |
Other Commitments [Line Items] | |
Commercial Commitment Total | 347 |
Commitments expiring within 1 Year | 137 |
Financial | |
Other Commitments [Line Items] | |
Commercial Commitment Total | 72 |
Commitments expiring within 1 Year | $ 68 |