01—Abstract
Summary
Summary of the 8-K filed January 14, 2022. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- L3Harris is restructuring its business into three reportable segments: Integrated Mission Solutions, Space & Airborne Systems, and Communication Systems, down from four.
- The Aviation Systems segment has been eliminated, with its operations absorbed into the other three segments.
- A change in accounting policy for pension and Other Postretirement Benefit (OPEB) costs will be effective for fiscal year 2022.
- Under the new policy, segment results will only include U.S. Government Cost Accounting Standards (CAS) pension and OPEB costs.
- Financial Accounting Standards (FAS) pension and OPEB income/expense will be reported outside of segment operating results.
- Reclassified historical segment data for prior periods is being provided as supplemental information to allow for comparable analysis.
- These changes are designed to better align segment reporting with industry peers and do not impact previously reported consolidated financial statements.
03—Questions
Frequently Asked Questions
What are the new business segments for L3Harris?
Effective January 1, 2022, L3Harris operates under three business segments: Integrated Mission Solutions, Space & Airborne Systems, and Communication Systems.
Why did L3Harris reorganize its business segments?
The company streamlined its business segments from four to three to simplify its structure and better align its segment reporting with industry peers. The former Aviation Systems segment's operations have been integrated into the remaining segments.
How will the accounting for pension and OPEB costs change?
Starting fiscal year 2022, L3Harris will only include pension and OPEB costs recognized under U.S. Government Cost Accounting Standards (CAS) within segment operating results. Costs recognized under Financial Accounting Standards (FAS) will be reported separately, outside of segment results.
Will these changes affect L3Harris's previously reported financial results?
No, the segment reorganization and the change in accounting policy for pension and OPEB costs do not impact L3Harris's previously reported consolidated statements of income, balance sheets, statements of cash flows, or statements of comprehensive income and shareholders' equity.
04—Continue