BUSINESS SEGMENT INFORMATION (Tables)

9 Months Ended

Oct. 03, 2025

Schedule of Selected Financial Information by Business Segments

The following table presents operating results by business segment and a reconciliation to total income before income taxes:


	Third Quarter				Year to Date
(In millions)	2025		2024		2025		2024

Revenue
CS	$	1,462	$	1,382	$	4,190	$	4,022
IMS	1,700		1,608		4,914		4,906
SAS	1,809		1,683		5,207		5,141
AR	755		669		2,082		1,886
Other(1)	(67)		(50)		(176)		(153)
Total revenue	5,659		5,292		16,217		15,802
Cost of revenue
CS	$	(911)	$	(858)	$	(2,637)	$	(2,571)
IMS	(1,308)		(1,203)		(3,808)		(3,743)
SAS	(1,425)		(1,325)		(4,112)		(4,020)
AR	(589)		(535)		(1,627)		(1,466)
Other(1)	68		48		146		125
Total cost of revenue	(4,165)		(3,873)		(12,038)		(11,675)
Other segment costs(2)
CS	$	(169)	$	(165)	$	(490)	$	(453)
IMS	(188)		(201)		(485)		(574)
SAS	(166)		(163)		(481)		(495)
AR	(70)		(58)		(190)		(186)
Other(1)	(1)		2		30		28
Total other segment costs(3)	(594)		(585)		(1,616)		(1,680)
Operating income
CS	$	382	$	359	$	1,063	$	998
IMS	204		204		621		589
SAS	218		195		614		626
AR	96		76		265		234
Unallocated corporate items	(279)		(339)		(846)		(1,098)
Total operating income	621		495		1,717		1,349
Non-service FAS pension income and other, net	98		101		287		275
Interest expense, net	(152)		(166)		(454)		(514)
Income before income taxes	$	567	$	430	$	1,550	$	1,110

_____________

(1) Includes corporate headquarters and intersegment eliminations.

(2) Other segment costs consist of company-funded R&D costs, selling and marketing costs and other General and Administrative (“G&A”) expenses, which include a portion of depreciation and amortization expenses that are disclosed by segment under the “Other Financial Information” heading below in this Note.

(3) Includes gains recognized in connection with the monetization of certain legacy end-of-life assets.

Schedule of Disaggregation of Revenue by Segment

The following table presents capital expenditures and depreciation and amortization by business segment:


	Third Quarter				Year to Date
(In millions)	2025		2024		2025		2024

Capital Expenditures
CS	$	19	$	9	$	40	$	27
IMS	16		25		51		93
SAS	31		23		74		107
AR	33		11		62		26
Corporate	20		10		39		37
Total capital expenditures	$	119	$	78	$	266	$	290

Depreciation and Amortization
CS	$	13	$	14	$	39	$	42
IMS	20		15		52		46
SAS	40		35		106		92
AR	12		14		37		37
Corporate	224		246		679		746
Total depreciation and amortization	$	309	$	324	$	913	$	963

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.


	Third Quarter
	2025								2024
(In millions)	CS		IMS		SAS		AR		CS		IMS		SAS		AR

Revenue By Customer Relationship
Prime contractor	$	1,127	$	1,220	$	1,114	$	173	$	977	$	1,036	$	1,008	$	164
Subcontractor	317		459		675		574		388		557		663		499
Intersegment	18		21		20		8		17		15		12		6
Total segment	$	1,462	$	1,700	$	1,809	$	755	$	1,382	$	1,608	$	1,683	$	669

Revenue By Contract Type
Fixed-price	$	1,231	$	1,192	$	1,203	$	490	$	1,146	$	1,196	$	1,012	$	423
Cost-type	213		487		586		257		219		397		659		240
Intersegment	18		21		20		8		17		15		12		6
Total segment	$	1,462	$	1,700	$	1,809	$	755	$	1,382	$	1,608	$	1,683	$	669

Revenue By Geographical Region
United States	$	948	$	1,290	$	1,572	$	619	$	975	$	1,150	$	1,484	$	651
International	496		389		217		128		390		443		187		12
Intersegment	18		21		20		8		17		15		12		6
Total segment	$	1,462	$	1,700	$	1,809	$	755	$	1,382	$	1,608	$	1,683	$	669



	Year to Date
	2025								2024
(In millions)	CS		IMS		SAS		AR		CS		IMS		SAS		AR

Revenue By Customer Relationship
Prime contractor	$	3,154	$	3,440	$	3,230	$	473	$	2,805	$	3,176	$	3,192	$	495
Subcontractor	989		1,418		1,927		1,586		1,164		1,691		1,909		1,370
Intersegment	47		56		50		23		53		39		40		21
Total segment	$	4,190	$	4,914	$	5,207	$	2,082	$	4,022	$	4,906	$	5,141	$	1,886

Revenue By Contract Type
Fixed-price	$	3,550	$	3,695	$	3,392	$	1,332	$	3,329	$	3,745	$	3,192	$	1,138
Cost-type	593		1,163		1,765		727		640		1,122		1,909		727
Intersegment	47		56		50		23		53		39		40		21
Total segment	$	4,190	$	4,914	$	5,207	$	2,082	$	4,022	$	4,906	$	5,141	$	1,886

Revenue By Geographical Region
United States	$	2,695	$	3,671	$	4,515	$	1,825	$	2,786	$	3,537	$	4,479	$	1,828
International	1,448		1,187		642		234		1,183		1,330		622		37
Intersegment	47		56		50		23		53		39		40		21
Total segment	$	4,190	$	4,914	$	5,207	$	2,082	$	4,022	$	4,906	$	5,141	$	1,886

Schedule of Total Assets by Segment

Total assets by business segment were as follows:


(In millions)	October 3, 2025		January 3, 2025

CS	$	7,186	$	7,060
IMS	9,741		10,389
SAS	9,117		8,705
AR	4,811		4,826
Corporate(1)	10,159		11,021
Total assets	$	41,014	$	42,001

_______________

(1)Includes intangible assets acquired in connection with business combinations that benefit the entire Company of $7,072 million and $7,639 million as of October 3, 2025 and January 3, 2025, respectively.

L3HARRIS TECHNOLOGIES, INC. /DE/ 10-Q