L3HARRIS TECHNOLOGIES, INC. /DE/LHX
L3HARRIS TECHNOLOGIES, INC. /DE/ Segments Disclosure
NOTE 14: BUSINESS SEGMENTS
We structure our operations primarily around the capabilities we provide and report our financial results in the following four reportable segments:
CS: including software defined communication products and waveforms for domestic and international customers; broadband communications; integrated vision solutions; and public safety radios, system applications and equipment; and
IMS: including multi-mission ISR systems; passive sensing and targeting; electronic attack platforms; autonomy; power and communications; networks; and the CAS disposal group, which includes aviation products and pilot training operations and was divested on March 28, 2025; and
SAS: including satellites and space payloads, sensors and full-mission solutions; classified intelligence and cyber; airborne combat systems; and mission networks for air traffic management operations; and
AR: including missile solutions with propulsion technologies for strategic defense, missile defense, hypersonic, tactical and fuzing systems; and space propulsion and power systems for national security and space exploration missions.
Chief Operating Decision Maker (“CODM”)
Our Chairman and CEO serves as the CODM and is responsible for evaluating business segment performance and allocating resources across the Company. The CODM reviews periodic financial reporting packages that include segment revenues, operating income, and other key operational and financial metrics, and compares historical, actual, and forecasted information to assess segment performance. Segment information is prepared on a basis consistent with the internal reports provided to the CODM.
Business Segment Financial Information
The following table presents operating results by business segment and a reconciliation to total income before income taxes:
| Fiscal Year | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Revenue | |||||||||||||||||
| CS | $ | 5,673 | $ | 5,459 | $ | 5,070 | |||||||||||
| IMS | 6,630 | 6,618 | 6,446 | ||||||||||||||
| SAS | 6,946 | 6,869 | 6,856 | ||||||||||||||
| AR | 2,845 | 2,580 | 1,243 | ||||||||||||||
| Intersegment | (229) | (201) | (196) | ||||||||||||||
| Total revenue | 21,865 | 21,325 | 19,419 | ||||||||||||||
| Cost of revenue | |||||||||||||||||
| CS | (3,570) | (3,490) | (3,217) | ||||||||||||||
| IMS | (5,188) | (5,039) | (4,933) | ||||||||||||||
| SAS | (5,463) | (5,430) | (5,380) | ||||||||||||||
| AR | (2,207) | (2,008) | (977) | ||||||||||||||
| Intersegment and corporate | 188 | 166 | 201 | ||||||||||||||
| Total cost of revenue | (16,240) | (15,801) | (14,306) | ||||||||||||||
| Operating income | |||||||||||||||||
| CS | 1,432 | 1,324 | 1,229 | ||||||||||||||
| IMS | 812 | 826 | 443 | ||||||||||||||
| SAS | 852 | 812 | 756 | ||||||||||||||
| AR | 270 | 307 | 138 | ||||||||||||||
| Segment operating income | 3,366 | 3,269 | 2,566 | ||||||||||||||
| Unallocated corporate items | (1,256) | (1,351) | (1,140) | ||||||||||||||
| Total operating income | 2,110 | 1,918 | 1,426 | ||||||||||||||
| Non-service FAS pension income and other, net | 419 | 354 | 338 | ||||||||||||||
| Interest expense, net | (597) | (675) | (543) | ||||||||||||||
| Income before income taxes | $ | 1,932 | $ | 1,597 | $ | 1,221 | |||||||||||
Unallocated Corporate Items. Unallocated corporate items include income and expenses not included in management’s evaluation of segment operating performance, such as amortization of acquisition-related intangibles; merger, acquisition, and divestiture-related expenses; additional cost of revenue related to the fair value step-up in inventory sold; business divestiture-related losses, net; certain impairment of other assets; and LHX NeXt implementation costs. Additionally, unallocated corporate items include a portion of management and administration, legal, environmental, compensation, retiree benefits, the FAS/CAS operating adjustment, eliminations and other.
LHX NeXt Initiative. LHX NeXt is our initiative to transform multiple functions, systems and processes to increase agility and competitiveness. The LHX NeXt effort includes non-recurring costs for workforce optimization, incremental IT expenses for implementation of new systems, third party consulting and other costs. We completed the LHX NeXt initiative in fiscal 2025.
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 2025 | |||||||||||||||||||||||
| (In millions) | CS | IMS | SAS | AR | |||||||||||||||||||
| Revenue By Customer Relationship | |||||||||||||||||||||||
| Prime contractor | $ | 4,287 | $ | 4,598 | $ | 4,307 | $ | 650 | |||||||||||||||
Subcontractor | 1,324 | 1,957 | 2,575 | 2,167 | |||||||||||||||||||
| Intersegment | 62 | 75 | 64 | 28 | |||||||||||||||||||
| Total segment | $ | 5,673 | $ | 6,630 | $ | 6,946 | $ | 2,845 | |||||||||||||||
| Revenue By Contract Type | |||||||||||||||||||||||
Fixed-price | $ | 4,825 | $ | 5,050 | $ | 4,619 | $ | 1,850 | |||||||||||||||
| Cost-type | 786 | 1,505 | 2,263 | 967 | |||||||||||||||||||
| Intersegment | 62 | 75 | 64 | 28 | |||||||||||||||||||
| Total segment | $ | 5,673 | $ | 6,630 | $ | 6,946 | $ | 2,845 | |||||||||||||||
| Revenue By Geographical Region | |||||||||||||||||||||||
| United States | $ | 3,609 | $ | 4,852 | $ | 6,045 | $ | 2,545 | |||||||||||||||
International(1) | 2,002 | 1,703 | 837 | 272 | |||||||||||||||||||
| Intersegment | 62 | 75 | 64 | 28 | |||||||||||||||||||
| Total segment | $ | 5,673 | $ | 6,630 | $ | 6,946 | $ | 2,845 | |||||||||||||||
_______________
(1) Includes revenue 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. No individual foreign country represents more than 5% of our total revenue.
| Fiscal 2024 | |||||||||||||||||||||||
| (In millions) | CS | IMS | SAS | AR | |||||||||||||||||||
| Revenue By Customer Relationship | |||||||||||||||||||||||
| Prime contractor | $ | 3,801 | $ | 4,279 | $ | 4,307 | $ | 664 | |||||||||||||||
Subcontractor | 1,589 | 2,286 | 2,511 | 1,888 | |||||||||||||||||||
| Intersegment | 69 | 53 | 51 | 28 | |||||||||||||||||||
| Total segment | $ | 5,459 | $ | 6,618 | $ | 6,869 | $ | 2,580 | |||||||||||||||
| Revenue By Contract Type | |||||||||||||||||||||||
Fixed-price | $ | 4,566 | $ | 5,199 | $ | 4,293 | $ | 1,568 | |||||||||||||||
| Cost-type | 824 | 1,366 | 2,525 | 984 | |||||||||||||||||||
| Intersegment | 69 | 53 | 51 | 28 | |||||||||||||||||||
| Total segment | $ | 5,459 | $ | 6,618 | $ | 6,869 | $ | 2,580 | |||||||||||||||
| Revenue By Geographical Region | |||||||||||||||||||||||
| United States | $ | 3,741 | $ | 4,721 | $ | 5,971 | $ | 2,504 | |||||||||||||||
International(1) | 1,649 | 1,844 | 847 | 48 | |||||||||||||||||||
| Intersegment | 69 | 53 | 51 | 28 | |||||||||||||||||||
| Total segment | $ | 5,459 | $ | 6,618 | $ | 6,869 | $ | 2,580 | |||||||||||||||
_______________
(1) Includes revenue 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. No individual foreign country represents more than 5% of our total revenue.
| Fiscal 2023 | |||||||||||||||||||||||
| (In millions) | CS | IMS | SAS | AR | |||||||||||||||||||
| Revenue By Customer Relationship | |||||||||||||||||||||||
| Prime contractor | $ | 3,420 | $ | 4,152 | $ | 4,252 | $ | 294 | |||||||||||||||
Subcontractor | 1,597 | 2,220 | 2,555 | 929 | |||||||||||||||||||
| Intersegment | 53 | 74 | 49 | 20 | |||||||||||||||||||
| Total segment | $ | 5,070 | $ | 6,446 | $ | 6,856 | $ | 1,243 | |||||||||||||||
| Revenue By Contract Type | |||||||||||||||||||||||
Fixed-price | $ | 4,289 | $ | 4,869 | $ | 4,257 | $ | 783 | |||||||||||||||
| Cost-type | 728 | 1,503 | 2,550 | 440 | |||||||||||||||||||
| Intersegment | 53 | 74 | 49 | 20 | |||||||||||||||||||
| Total segment | $ | 5,070 | $ | 6,446 | $ | 6,856 | $ | 1,243 | |||||||||||||||
| Revenue By Geographical Region | |||||||||||||||||||||||
| United States | $ | 3,482 | $ | 4,646 | $ | 5,933 | $ | 1,184 | |||||||||||||||
International(1) | 1,535 | 1,726 | 874 | 39 | |||||||||||||||||||
| Intersegment | 53 | 74 | 49 | 20 | |||||||||||||||||||
| Total segment | $ | 5,070 | $ | 6,446 | $ | 6,856 | $ | 1,243 | |||||||||||||||
_______________
(1) Includes revenue 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. No individual foreign country represents more than 5% of our total revenue.
Assets
Total assets by business segment were as follows:
| (In millions) | January 2, 2026 | January 3, 2025 | |||||||||
| CS | $ | 7,131 | $ | 7,060 | |||||||
| IMS | 9,831 | 10,389 | |||||||||
| SAS | 8,958 | 8,705 | |||||||||
| AR | 5,109 | 4,826 | |||||||||
Corporate(1) | 10,166 | 11,021 | |||||||||
| Total assets | $ | 41,195 | $ | 42,001 | |||||||
_______________
(1)Includes intangible assets acquired in connection with business combinations that benefit the entire Company. See the “Intangible Assets” section in Note 6: Goodwill and Intangible Assets in these Notes for further information.
Other Financial Information
Other financial information by business segment and geographical operations is summarized below:
The percentage of our revenue that was derived from sales to U.S. Government customers, whether directly or through prime contractors, including foreign military sales funded through the U.S. Government, was 75%, 76% and 76% in fiscal 2025, 2024 and 2023, respectively.| Fiscal Year | |||||||||||||||||
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Capital Expenditures | |||||||||||||||||
| CS | $ | 70 | $ | 50 | $ | 39 | |||||||||||
| IMS | 74 | 115 | 148 | ||||||||||||||
| SAS | 118 | 140 | 151 | ||||||||||||||
| AR | 116 | 52 | 32 | ||||||||||||||
| Corporate | 46 | 51 | 79 | ||||||||||||||
| Total capital expenditures | $ | 424 | $ | 408 | $ | 449 | |||||||||||
| Depreciation and Amortization | |||||||||||||||||
| CS | $ | 53 | $ | 56 | $ | 54 | |||||||||||
| IMS | 70 | 63 | 71 | ||||||||||||||
| SAS | 146 | 130 | 115 | ||||||||||||||
| AR | 49 | 50 | 31 | ||||||||||||||
| Corporate | 906 | 990 | 895 | ||||||||||||||
| Total depreciation and amortization | $ | 1,224 | $ | 1,289 | $ | 1,166 | |||||||||||
Geographical Operations | |||||||||||||||||
| Long-lived assets | |||||||||||||||||
| United States | $ | 2,503 | $ | 2,639 | $ | 2,678 | |||||||||||
| International | 162 | 167 | 184 | ||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 12, 2026 | Showing above |
| 2025 | Feb 14, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 24, 2023 | |
| 2021 | Mar 1, 2021 | |
| 2019 | Aug 22, 2019 | |
| 2018 | Aug 27, 2018 | |
| 2017 | Aug 29, 2017 | |
| 2016 | Aug 29, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.