v3.26.1
BUSINESS SEGMENT INFORMATION
 6 Months Ended
Jul. 03, 2026
Segment Reporting [Abstract]  
BUSINESS SEGMENT INFORMATION
NOTE Q: BUSINESS SEGMENT INFORMATION
Description of Business Segments
We structure our operations primarily around the capabilities we provide, with each segment consisting of similar end products and technologies, and report our financial results in the following three operating segments, which are also our reportable segments or business segments, consistent with the manner in which our chief operating decision maker (“CODM”) manages the business, evaluates performance, and allocates resources. In second quarter 2026, we enhanced our business segment disclosure to clarify the manner in which our CODM evaluates segment performance and allocates resources. Gains and losses, net of impairments, associated with investments in companies with dual-use technologies that accelerate our capabilities, improve go-to-market efforts and are operationally aligned with our business segments are included in the respective segments’ operating income. There were no material changes to the historical results, discussion and presentation of our business segments in the accompanying Condensed Consolidated Financial Statements and the Notes. Our three business segments are:
Space & Mission Systems: Supplies full mission solutions as a prime and subsystem integrator in the space, airborne, maritime, and cyber domains. We provide top-tier capabilities in the design, development, integration, production and sustainment of weapons systems for national security, civil government and international customers in the following business sectors:
Intelligence, Surveillance and Reconnaissance (“ISR”): Airborne passive sensing and targeting, mission systems development, integration and life-cycle management for strategic reconnaissance and air superiority platforms, national command and control, tactical surveillance, electronic attack, agile strike, mobility, and classified platforms.
Space Systems: End-to-end mission solutions to support intelligence, surveillance and reconnaissance; missile defense; positioning, navigation and timing; weather and climate monitoring; and ground-based space surveillance networks.
Maritime: Power, electrical, imaging, communication and sensor systems for naval platforms; autonomous solutions for surface and undersea operations; high-assurance encryption; in-service support; missionization prototyping; and naval integration.
Mission Networks: Integrator of large-scale, highly secure, and resilient mission critical infrastructure and enterprise systems for communications, air traffic surveillance, and enterprise information management.
Airborne Solutions: Integrated and multi-function processors, memory, communication, displays, and other hardened electronics, for airborne and ground platforms.
Intel & Cyber: Situational awareness, optical networks and advanced wireless solutions for classified intelligence and defense customers.
Communications & Spectrum Dominance: Enables warfighters across all domains with solutions critical to mission success even in the most contested environments. We are a leading provider of resilient communication solutions for the DoW and international, federal, and state agency customers in the following business sectors:
Mission Critical Communications: Design, manufacture and sustainment of resilient and interoperable secure communication solutions that includes software defined radios, waveforms, satellite terminals and end-to-end battlefield systems for the warfighter and government agencies.
Spectrum Superiority: Design, manufacture and sustainment of resilient and secure communication solutions that include ISR and tactical data links, software and integrated broadband networks and electronic warfare.
Targeting & Sensor Systems: Multi-domain, multi-spectral electro-optical and infrared sensor systems supporting ISR and target acquisition missions; manufacturing of specialty laser transmitters and filter glass materials; manufacturing of counter unmanned aircraft integrated systems; and specialized mission management software solutions.
Integrated Vision Solutions: Design, manufacture and sustainment of a full suite of helmet-mounted integrated night vision goggles with leading-edge image intensifier tubes, as well as weapon-mounted sights, aiming lasers, and range finders.
Missile Solutions: Provides a comprehensive portfolio of missile technologies spanning the full mission lifecycle, as well as critical space propulsion capabilities to the U.S. Government and its allies, including the DoW, NASA and major aerospace and defense prime contractors in the following business sectors:
Propulsion Systems: Provides propulsion, maneuvering, and control technologies as well as fuzing systems that support missile defense interceptors, strategic deterrence systems, and precision strike weapons; and space propulsion and power systems for national security and space exploration missions.
Advanced Effects: Provides advanced systems that improve missile performance, accuracy, and mission effectiveness across four capability areas including advanced sensing and targeting systems, guidance systems, weapons release systems, and complete weapons systems.
Business Segment Financial Results
The following table presents operating results by business segment and a reconciliation to total income before income taxes:
 Second QuarterYear to Date
(In millions)2026202520262025
 
Revenue
Space & Mission Systems$2,966 $2,770 $5,956 $5,181 
Communications & Spectrum Dominance1,943 1,861 3,798 3,670 
Missile Solutions1,054 925 2,044 1,765 
Intersegment(82)(130)(173)(204)
Segment revenue5,881 5,426 11,625 10,412 
Other(1)
— — — 146 
Total revenue5,881 5,426 11,625 10,558 
Cost of revenue
Space & Mission Systems(2,442)(2,287)(4,881)(4,235)
Communications & Spectrum Dominance(1,177)(1,185)(2,340)(2,342)
Missile Solutions(827)(722)(1,634)(1,378)
Intersegment82 130 173 204 
Segment cost of revenue(4,364)(4,064)(8,682)(7,751)
Other(2)
(15)(27)(39)(122)
Total cost of revenue(4,379)(4,091)(8,721)(7,873)
Other segment items(3)
Space & Mission Systems(234)(194)(472)(419)
Communications & Spectrum Dominance(244)(218)(471)(427)
Missile Solutions(97)(87)(156)(175)
Total other segment items(575)(499)(1,099)(1,021)
Other(2)
15 27 39 (24)
Total other items(560)(472)(1,060)(1,045)
Operating income
Space & Mission Systems290 289 603 527 
Communications & Spectrum Dominance522 458 987 901 
Missile Solutions130 116 254 212 
Segment operating income942 863 1,844 1,640 
Unallocated corporate items and other, net(288)
(292)(538)
(544)
Total operating income654 571 1,306 1,096 
Non-service FAS pension income and other, net185 105 258 189 
Interest expense, net(129)(152)(265)(302)
Income before income taxes$710 $524 $1,299 $983 
______________
(1)Includes other non-reportable businesses, which consists of the CAS disposal group.
(2)Includes corporate headquarters. Additionally, year to date 2025 includes other non-reportable businesses, which consists of the CAS disposal group.
(3)Other segment items include company-funded R&D costs, selling and marketing costs, $39 million of gains and losses, net of impairments, on investments associated with companies developing dual-use technologies that accelerate our capabilities, improve go-to-market efforts and are operationally aligned with our business segments in second quarter and year to date 2026, and other G&A expenses, which includes a portion of capital expenditure and depreciation and amortization costs that are disaggregated by segment under the “Disaggregation of Revenue” heading below in this Note.
Unallocated Corporate Items and Other, Net. Unallocated corporate items include expenses not included in management’s evaluation of segment operating performance, such as amortization of acquisition-related intangibles; acquisition, divestiture and transaction-related expenses; business divestiture-related losses; LHX NeXt implementation costs, and a portion of management and administration, legal, environmental, compensation and retiree benefits, and the FAS/Cost Accounting Standards (“CAS”) operating adjustment.
Other, net includes the operating results of other non-reportable businesses, which consists of the CAS disposal group, eliminations and other. Additionally, includes an adjustment for gains and losses, net of impairments, associated with investments in companies with dual-use technologies that accelerate our capabilities and improve go-to-market efforts to reconcile segment operating income to operating income. Net investment gains are included in the “Non-service FAS pension income and other, net” line item in our Condensed Consolidated Statement of Operations. See the “Investments” section in Note A: Basis of Presentation in these Notes for further information.
Assets
Total assets by business segment were as follows:
(In millions)July 3, 2026January 2, 2026
Space & Mission Systems$14,485 $13,736 
Communications & Spectrum Dominance10,972 10,862 
Missile Solutions7,245 6,605 
Corporate(1)
10,236 9,992 
Total assets$42,938 $41,195 
_______________
(1)Includes intangible assets acquired in connection with business combinations that benefit the entire Company. See the “Intangible Assets” section in Note F: Goodwill and Intangible Assets in these Notes for further information.
Other Financial Information
Other financial information by business segment is summarized below:
Second QuarterYear to Date
(In millions)2026202520262025
Capital expenditures
Space & Mission Systems$33 $28 $62 $63 
Communications & Spectrum Dominance17 20 35 28 
Missile Solutions38 23 71 37 
Corporate20 17 39 19 
Total capital expenditures$108 $88 $207 $147 
Depreciation and amortization
Space & Mission Systems$42 $40 $84 $80 
Communications & Spectrum Dominance21 18 39 35 
Missile Solutions15 18 29 34 
Corporate210 227 418 455 
Total depreciation and amortization$288 $303 $570 $604 
Disaggregation of Revenue
We disaggregate revenue by customer relationship, contract type and geographical region. We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
Second Quarter
20262025
(In millions)SMSCSDMSLSMSCSDMSL
Revenue by customer relationship
Prime contractor$2,177 $1,300 $245 $2,021 $1,204 $245 
Subcontractor767 595 797 721 563 672 
Intersegment22 48 12 28 94 8 
Total segment$2,966 $1,943 $1,054 $2,770 $1,861 $925 
Revenue by contract type
Fixed-price
$2,138 $1,585 $704 $1,957 $1,518 $576 
Cost-type806 310 338 785 249 341 
Intersegment22 48 12 28 94 8 
Total segment$2,966 $1,943 $1,054 $2,770 $1,861 $925 
Revenue by geographical region
United States$2,505 $1,076 $922 $2,380 $1,113 $809 
International439 819 120 362 654 108 
Intersegment22 48 12 28 94 8 
Total segment$2,966 $1,943 $1,054 $2,770 $1,861 $925 
Year to Date
20262025
(In millions)SMSCSDMSLSMSCSDMSL
Other(1)
Revenue by customer relationship
Prime contractor$4,463 $2,492 $495 $3,746 $2,377 $467 $72 
Subcontractor1,448 1,201 1,526 1,381 1,170 1,272 73 
Intersegment45 105 23 54 123 26 1 
Total segment$5,956 $3,798 $2,044 $5,181 $3,670 $1,765 $146 
Revenue by contract type
Fixed-price
$4,048 $3,105 $1,347 $3,615 $3,011 $1,081 $145 
Cost-type1,863 588 674 1,512 536 658 — 
Intersegment45 105 23 54 123 26 1 
Total segment$5,956 $3,798 $2,044 $5,181 $3,670 $1,765 $146 
Revenue by geographical region
United States$5,045 $2,113 $1,796 $4,408 $2,204 $1,604 $61 
International866 1,580 225 719 1,343 135 84 
Intersegment45 105 23 54 123 26 1 
Total segment$5,956 $3,798 $2,044 $5,181 $3,670 $1,765 $146 
_______________
(1)Includes revenue associated with other non-reportable businesses, which consists of the CAS disposal group. These amounts are included to reconcile total revenue.