01/18/2022 | Press release | Distributed by Public on 01/18/2022 05:35
Fiscal Transition Period | Fiscal 2020 | Fiscal 2021 | ||||||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||||||||
(In millions) | 9/27/2019 | 1/3/2020 | 4/3/2020 | 7/3/2020 | 10/2/2020 | 1/1/2021 | 4/2/2021 | 7/2/2021 | 10/1/2021 | |||||||||
Revenue | ||||||||||||||||||
Integrated Mission Systems | $ | 1,636 | $ | 1,885 | $ | 1,747 | $ | 1,615 | $ | 1,667 | $ | 1,764 | $ | 1,751 | $ | 1,792 | $ | 1,649 |
Space & Airborne Systems | 1,383 | 1,423 | 1,406 | 1,469 | 1,471 | 1,477 | 1,460 | 1,510 | 1,494 | |||||||||
Communication Systems | 1,024 | 1,105 | 1,080 | 1,093 | 1,086 | 1,143 | 1,112 | 1,127 | 1,030 | |||||||||
Other non-reportable businesses (A) | 424 | 469 | 431 | 315 | 280 | 321 | 284 | 282 | 95 | |||||||||
Corporate eliminations | (36) | (50) | (38) | (47) | (41) | (45) | (40) | (43) | (39) | |||||||||
$ | 4,431 | $ | 4,832 | $ | 4,626 | $ | 4,445 | $ | 4,463 | $ | 4,660 | $ | 4,567 | $ | 4,668 | $ | 4,229 | |
Net Income | ||||||||||||||||||
Segment Operating Income (Loss): | ||||||||||||||||||
Integrated Mission Systems (B) | $ | 193 | $ | 228 | $ | (96) | $ | 148 | $ | 207 | $ | (54) | $ | 234 | $ | 142 | $ | 232 |
Space & Airborne Systems (B) | 186 | 174 | 174 | 192 | 189 | 207 | 192 | 204 | 187 | |||||||||
Communication Systems (B) | 226 | 247 | 239 | 249 | 261 | 286 | 270 | 276 | 258 | |||||||||
Other non-reportable businesses (A)(B) | 37 | 46 | 47 | 35 | 29 | 49 | 52 | 41 | 7 | |||||||||
642 | 695 | 364 | 624 | 686 | 488 | 748 | 663 | 684 | ||||||||||
% of total revenue | 14.5 | % | 14.4 | % | 7.9 | % | 14.0 | % | 15.4 | % | 10.5 | % | 16.4 | % | 14.2 | % | 16.2 | % |
Unallocated Items: | ||||||||||||||||||
Unallocated corporate department expense, net | (1) | 2 | (10) | (21) | (21) | (18) | (33) | (24) | (2) | |||||||||
L3Harris Merger-related integration and transaction expenses (C) | (281) | (61) | (31) | (44) | (27) | (38) | (21) | (20) | (34) | |||||||||
Amortization of acquisition-related intangibles | (123) | (166) | (145) | (208) | (176) | (180) | (164) | (156) | (155) | |||||||||
Additional cost of sales related to fair value step-up in inventory sold | (92) | (50) | (15) | (16) | - | - | - | - | - | |||||||||
Business divestiture-related gains (losses) | 229 | - | (3) | (49) | (10) | 11 | (15) | 180 | 27 | |||||||||
Asset disposal gains | 12 | - | - | - | - | 22 | - | - | - | |||||||||
Impairment of goodwill and other assets | - | (46) | (5) | (14) | - | (113) | (62) | (63) | - | |||||||||
Other items | (12) | - | - | (9) | (2) | - | (7) | (49) | (8) | |||||||||
FAS/CAS operating adjustment (D) | 45 | 46 | 34 | 33 | 34 | 34 | 30 | 30 | 30 | |||||||||
(223) | (275) | (175) | (328) | (202) | (282) | (272) | (102) | (142) | ||||||||||
Non-operating income, net | 79 | 113 | 95 | 105 | 96 | 105 | 117 | 86 | 111 | |||||||||
Income from continuing operations before interest and income taxes ("EBIT") | 498 | 533 | 284 | 401 | 580 | 311 | 593 | 647 | 653 | |||||||||
% of total revenue | 11.2 | % | 11.0 | % | 6.1 | % | 9.0 | % | 13.0 | % | 6.7 | % | 13.0 | % | 13.9 | % | 15.4 | % |
Interest expense, net | (58) | (65) | (63) | (65) | (62) | (64) | (66) | (65) | (67) | |||||||||
Income taxes | (5) | (68) | (26) | (58) | (87) | (63) | (60) | (169) | (107) | |||||||||
Income from continuing operations | 435 | 400 | 195 | 278 | 431 | 184 | 467 | 413 | 479 | |||||||||
Discontinued operations, net of income taxes | - | (1) | (1) | - | (1) | - | (1) | - | - | |||||||||
Net income | 435 | 399 | 194 | 278 | 430 | 184 | 466 | 413 | 479 | |||||||||
% of total revenue | 9.8 | % | 8.3 | % | 4.2 | % | 6.3 | % | 9.6 | % | 3.9 | % | 10.2 | % | 8.8 | % | 11.3 | % |
Note A - Includes the results of divested businesses through the date of divestiture.
Note B - Adjusted to remove FAS pension and OPEB income and to include CAS pension and OPEB cost.
Note C - Includes change in control charges.
Note D - Represents the difference between the service cost component of FAS pension and OPEB income and total CAS pension and OPEB cost and replaces the "Pension adjustment" line item previously presented, which included the non-service cost components of FAS pension and OPEB income.
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Fiscal Transition Period | Fiscal 2020 | Fiscal 2021 | ||||||||||||||||
Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||||||||
(In millions) | 9/27/2019 | 1/3/2020 | 4/3/2020 | 7/3/2020 | 10/2/2020 | 1/1/2021 | 4/2/2021 | 7/2/2021 | 10/1/2021 | |||||||||
Revenue | ||||||||||||||||||
Integrated Mission Systems | $ | 1,636 | $ | 1,885 | $ | 1,747 | $ | 1,615 | $ | 1,667 | $ | 1,764 | $ | 1,751 | $ | 1,792 | $ | 1,649 |
Space & Airborne Systems | 1,383 | 1,423 | 1,406 | 1,469 | 1,471 | 1,477 | 1,460 | 1,510 | 1,494 | |||||||||
Communication Systems | 1,024 | 1,105 | 1,080 | 1,093 | 1,086 | 1,143 | 1,112 | 1,127 | 1,030 | |||||||||
Other non-reportable businesses (A) | 424 | 469 | 431 | 315 | 280 | 321 | 284 | 282 | 95 | |||||||||
Corporate eliminations | (36) | (50) | (38) | (47) | (41) | (45) | (40) | (43) | (39) | |||||||||
$ | 4,431 | $ | 4,832 | $ | 4,626 | $ | 4,445 | $ | 4,463 | $ | 4,660 | $ | 4,567 | $ | 4,668 | $ | 4,229 | |
Net Income*** | ||||||||||||||||||
Segment Operating Income***: | ||||||||||||||||||
Integrated Mission Systems***(B)(C) | $ | 193 | $ | 228 | $ | 229 | $ | 217 | $ | 210 | $ | 203 | $ | 234 | $ | 224 | $ | 232 |
Space & Airborne Systems (B) | 186 | 174 | 174 | 192 | 189 | 207 | 192 | 204 | 187 | |||||||||
Communication Systems (B) | 226 | 247 | 239 | 249 | 261 | 286 | 270 | 276 | 258 | |||||||||
Other non-reportable businesses (A)(B) | 37 | 46 | 47 | 35 | 29 | 49 | 52 | 41 | 7 | |||||||||
642 | 695 | 689 | 693 | 689 | 745 | 748 | 745 | 684 | ||||||||||
% of total revenue*** | 14.5 | % | 14.4 | % | 14.9 | % | 15.6 | % | 15.4 | % | 16.0 | % | 16.4 | % | 16.0 | % | 16.2 | % |
Unallocated Items***(D): | ||||||||||||||||||
Unallocated corporate department expense | (1) | 2 | (10) | (21) | (21) | (18) | (33) | (24) | (2) | |||||||||
FAS/CAS operating adjustment (E) | 45 | 46 | 34 | 33 | 34 | 34 | 30 | 30 | 30 | |||||||||
44 | 48 | 24 | 12 | 13 | 16 | (3) | 6 | 28 | ||||||||||
Non-operating income, net***(F) | 80 | 92 | 95 | 105 | 96 | 103 | 117 | 118 | 118 | |||||||||
Adjusted EBIT*** | 766 | 835 | 808 | 810 | 798 | 864 | 862 | 869 | 830 | |||||||||
% of total revenue*** | 17.3 | % | 17.3 | % | 17.5 | % | 18.2 | % | 17.9 | % | 18.5 | % | 18.9 | % | 18.6 | % | 19.6 | % |
Interest expense, net | (58) | (65) | (63) | (65) | (62) | (64) | (66) | (65) | (67) | |||||||||
Income taxes***(G) | (121) | (130) | (127) | (126) | (125) | (136) | (133) | (132) | (116) | |||||||||
Income from continuing operations*** | 587 | 640 | 618 | 619 | 611 | 664 | 663 | 672 | 647 | |||||||||
Discontinued operations, net of income taxes | - | (1) | (1) | - | (1) | - | (1) | - | - | |||||||||
Net income*** | 587 | 639 | 617 | 619 | 610 | 664 | 662 | 672 | 647 | |||||||||
% of total revenue*** | 13.2 | % | 13.2 | % | 13.3 | % | 13.9 | % | 13.7 | % | 14.2 | % | 14.5 | % | 14.4 | % | 15.3 | % |
***Non-GAAP financial measure; refer to the notes below for reconciliations.
Note A - Includes the results of divested businesses through the date of divestiture.
Note B - Adjusted to remove FAS pension and OPEB income and to include CAS pension and OPEB cost.
Note C - Adjusted to exclude (1) impairment charges totaling $634 million and $82 million for fiscal years 2020 and 2021, respectively, related to goodwill and other assets and (2) restructuring charges and other items totaling $20 million for fiscal year 2020.
Note D - Adjusted to exclude (1) L3Harris Merger-related integration, transaction and other expenses and losses totaling $342 million, $140 million and $75 million for the fiscal transition period, fiscal 2020 and first three quarters of fiscal 2021, respectively; (2) amortization of acquisition-related intangibles totaling $289 million, $709 million and $475 million for the fiscal transition period, fiscal 2020 and first three quarters of fiscal 2021, respectively; (3) additional cost of sales related to the fair value step-up of inventory sold totaling $142 million and $31 million for the fiscal transition period and fiscal 2020, respectively; (4) net business divestiture-related gains of $229 million and $192 million for the fiscal transition period and first three quarters of fiscal 2021 and a net business divestiture-related loss of $51 million in fiscal 2020; (5) asset disposal gains totaling $12 million and $22 million for the fiscal transition period and fiscal 2020, respectively; (6) charges for the impairment of goodwill and other assets totaling $46 million, $132 million and $125 million for the fiscal transition period, fiscal 2020 and first three quarters of fiscal 2021, respectively; and (7) other items totaling $12 million, $11 million and $64 million for the fiscal transition period, fiscal 2020 and first three quarters of fiscal 2021, respectively. Refer to the corresponding line item within "Unallocated items" in Table 1 for quarterly amounts for each adjustment.
Note E - Represents the difference between the service cost component of FAS pension and other postretirement benefit plan income and total CAS pension and other postretirement benefit plan cost and replaces the "Pension adjustment" line item previously presented, which included the non-service cost components of FAS pension and other postretirement benefit plan income.
Note F - Adjusted to exclude (1) a pension plan curtailment gain and other items totaling $22 million for the fiscal transition period and pension plan settlement losses totaling $4 million for fiscal 2021; (2) a $2 million debt extinguishment loss for the fiscal transition period and a debt extinguishment gain of $2 million for fiscal 2020; and (3) a $35 million charge for the impairment of an investment in an unconsolidated subsidiary for fiscal 2021.
Note G - Adjusted for the tax effect of above adjustments.
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