Summary
L3Harris Technologies, Inc. (LHX) filed an 8-K on January 13, 2022, disclosing a significant reorganization of its business segments, effective January 1, 2022. The company has streamlined its four existing segments into three: Integrated Mission Solutions, Space & Airborne Systems, and Communication Systems. This reorganization involved integrating the former Aviation Systems segment's operations into the remaining segments. Additionally, LHX is updating its accounting policy for pension and other postretirement plan (OPEB) income or expense. For fiscal year 2022, segment operating results will only include pension and OPEB costs recognized under U.S. Government Cost Accounting Standards (CAS), which are allowable under government contracts. Financial Accounting Standards (FAS) pension and OPEB income/expense will be presented outside of segment operating results. These changes, while impacting segment reporting, do not alter previously reported consolidated financial statements. The filing also notes the availability of supplemental, unaudited historical business segment information reclassified to reflect these changes.
Key Highlights
- 1L3Harris is restructuring its business into three reportable segments: Integrated Mission Solutions, Space & Airborne Systems, and Communication Systems, down from four.
- 2The Aviation Systems segment has been eliminated, with its operations absorbed into the other three segments.
- 3A change in accounting policy for pension and Other Postretirement Benefit (OPEB) costs will be effective for fiscal year 2022.
- 4Under the new policy, segment results will only include U.S. Government Cost Accounting Standards (CAS) pension and OPEB costs.
- 5Financial Accounting Standards (FAS) pension and OPEB income/expense will be reported outside of segment operating results.
- 6Reclassified historical segment data for prior periods is being provided as supplemental information to allow for comparable analysis.
- 7These changes are designed to better align segment reporting with industry peers and do not impact previously reported consolidated financial statements.