Financial Analysis

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 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

NOTE 10: SHARE-BASED COMPENSATION As of January 2, 2026, we had stock options and other share-based compensation outstanding under our 2024 Equity Incentive Plan and predecessor plans (collectively, the L3Harris SIPs). As part of our long-term incentive compensation program, we have made awards to employees in the form of RSUs, PSUs and non-qualified stock options under the L3Harris SIPs. We have also awarded RSUs in the form of deferred units to our non-employee directors. We believe that share-based awards more closely align the interests of participants with those of shareholders. Share-based compensation expense was $113 million, $97 million and $89 million for fiscal 2025, 2024 and 2023, respectively. The related tax benefit for share-based compensation expense was $28 million, $20 million, and $19 million for fiscal 2025, 2024, and 2023, respectively. Share-Based Compensation Awards As of January 2, 2026, a total of 19.6 million shares of common stock remained available under our L3Harris SIPs for future issuance (excluding shares to be issued in respect of outstanding stock options, with each full-value award (e.g., RSUs and PSUs) counting as 3.8 shares against the total remaining for future issuance). During fiscal 2025, we issued an aggregate of 1.1 million shares of common stock under the terms of our L3Harris SIPs, which is net of shares withheld for tax purposes. RSUs. RSUs granted under our L3Harris SIPs are not transferable until vested and the restrictions gene …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

NOTE 7: INCOME TAXES U.S. Federal Tax Reform On July 4, 2025, the OBBBA was enacted, introducing amendments to the U.S. federal income tax code, including permanent reinstatement of immediate expensing for domestic research expenditures, a reduction in the benefit of the R&D tax credit, restoration of full expensing for qualified machinery, equipment and other short-lived assets, and several modifications to existing international tax provisions. Certain provisions are effective for fiscal 2025 and are recognized in the Consolidated Financial Statements and these Notes. Certain other provisions are effective in future fiscal years. Income Tax Provision Our provisions for current and deferred income taxes are as follows: Fiscal Year (In millions) 2025 2024 2023 Current: United States $ (10) $ (166) $ 328 International 77 72 50 State and local 53 5 66 Total current income taxes 120 (89) 444 Deferred: United States 166 244 (380) International (14) (34) 10 State and local 54 (36) (51) Total deferred income taxes 206 174 (421) Income taxes $ 326 $ 85 $ 23 The components of our income before income taxes included in our Consolidated Statement of Operations are as follows: Fiscal Year (In millions) 2025 2024 2023 United States $ 1,677 $ 1,406 $ 1,016 International 255 191 205 Income before income taxes $ 1,932 $ 1,597 $ 1,221 A reconciliation of the U.S. statutory income tax rate to our effective income tax rate is as follows: Fiscal Year (In millions) 2025 U.S. federal statutor …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 15: LEGAL PROCEEDINGS, COMMITMENTS AND CONTINGENCIES Legal Proceedings In the ordinary course of business, we are routinely defendants in, parties to or otherwise subject to many pending and threatened legal actions, claims, disputes, arbitrations and other legal proceedings incident to our business, arising from or related to matters, including but not limited to: product liability; personal injury; patents, trademarks, trade secrets or other intellectual property; labor and employment disputes; commercial or contractual disputes; strategic acquisitions or divestitures; the prior sale or use of former products allegedly containing asbestos or other restricted materials; breach of warranty; or environmental matters. Claimed amounts against us may be substantial, but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitral awards. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Gain contingencies, if any, are recognized when they are realized and legal costs generally are expensed when incurred. At January 2, 2026, our accrual for the potential resolution of lawsuits, claims or proceedings that we consider probable of being decided unfavorably to us was not material. We cannot at this time estimate the reasonably possible loss or range of loss in excess of our accrual due to the inherent uncertainties and speculative nature …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

NOTE 11: LEASES Our operating and finance leases primarily consist of real estate leases for office space, warehouses, manufacturing, R&D facilities, telecommunication tower space and land and equipment leases. Lease Costs. Components of lease costs included in our Consolidated Statement of Operations are as follows: Fiscal Year (In millions) 2025 2024 2023 Operating lease cost $ 172 $ 164 $ 163 Other, net (1) 75 75 60 Total lease cost $ 247 $ 239 $ 223 ______________ (1) Includes short-term and equipment lease costs, variable lease costs, finance lease amortization, interest costs and sublease income. Balance Sheet. ROU assets and lease liabilities included in our Consolidated Balance Sheet are as follows: January 2, 2026 January 3, 2025 (In millions) Operating Finance Operating Finance ROU assets $ 717 $ 192 $ 684 $ 202 Current lease liabilities 132 10 150 32 Non-current lease liabilities 653 221 650 206 Total lease liabilities $ 785 $ 231 $ 800 $ 238 Supplemental Lease Information. Other supplemental lease information is as follows: Fiscal Year (In millions) 2025 2024 Net cash provided by operating activities - operating lease payments $ 178 $ 182 ROU assets obtained in exchange for new operating lease obligations 215 96 Fiscal Year 2025 2024 Operating Finance Operating Finance Weighted average remaining lease term 7.51 years 17.66 years 7.59 years 16.41 years Weighted average discount rate 4.84 % 4.23 % 3.72 % 4.43 % Maturities of operating and finance lease liabiliti …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

NOTE 8: DEBT AND CREDIT ARRANGEMENTS Long-Term Debt Long-term debt is summarized below: (In millions) January 2, 2026 January 3, 2025 Fixed-rate debt: (1) 3.832% notes, due April 2025(3.832% 2025 Notes) (2)(3) $ $ 600 7.00% debentures, due January 2026 (4) 100 100 3.85% notes, due December 2026 (2) 550 550 5.40% notes, due January 2027 (2)(3)(5) 1,250 1,250 6.35% debentures, due February 2028 (2) 26 26 4.40% notes, due June 2028 (2)(3) 1,850 1,850 5.05% notes, due June 2029 (5.05% 2029 Notes) (2)(3)(6) 750 750 2.90% notes, due December 2029 (2) 400 400 1.80% notes, due January 2031 (2)(3) 650 650 5.25% notes, due June 2031 (5.25% 2031 Notes) (2)(3)(6) 750 750 5.40% notes, due July 2033 (2)(3)(5) 1,500 1,500 5.35% notes, due June 2034 (5.35% 2034 Notes) (2)(3)(6) 750 750 4.854% notes, due April 2035 (2)(3) 400 400 6.15% notes, due December 2040 (2)(3) 300 300 5.054% notes, due April 2045 (2)(3) 500 500 5.60% notes, due July 2053 (2)(3)(5) 500 500 5.50% notes, due August 2054 (5.50% 2054 Notes) (2)(3) 600 600 Fixed-rate debt 10,876 11,476 Finance lease obligations and other 283 288 Unamortized discounts and issuance costs, net of bond premium (43) (43) Total long-term debt 11,116 11,721 Less: current portion (7) 673 640 Long-term debt, net of current portion $ 10,443 $ 11,081 _______________ (1) All fixed-rate notes and debentures rank equally in right of payment. (2) We may redeem these notes, in whole or in part, at our option, at a pre-determined redemption price pursuant to …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09) which requires disaggregated income tax disclosures on an annual basis, including information on our effective income tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and may be applied prospectively or retrospectively. We adopted this standard in fiscal 2025 and applied the provisions prospectively to our income tax disclosures. See Note 7: Income Taxes in these Notes for further information. The adoption of ASU 2023-09 did not have any impact on our operating results, financial position, or cash flows. In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03) which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses included in each expense caption on the face of the income statement at interim and annual reporting periods. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

NOTE 9: RETIREMENT BENEFITS Defined Contribution Plans We sponsor numerous defined contribution savings plans, which allow our eligible employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. The plans include several match contribution formulas which require us to match a percentage of the employee contributions up to certain limits, generally totaling 6.0% of employee eligible pay. Matching contributions, net of forfeitures, charged to expense were $265 million, $276 million and $267 million in fiscal 2025, 2024 and 2023, respectively. Deferred Compensation Plans We also sponsor certain non-qualified deferred compensation plans which are measured at fair value on a recurring basis in our Consolidated Balance Sheet. Deferred compensation plan assets represent diversified assets held in rabbi trusts, which include marketable equity and fixed income securities (Level 1) and corporate-owned life insurance (COLI) contracts measured at NAV. Liabilities represent participant balances in marketable equity securities (Level 1) and common/collective trusts (CCTs) and guaranteed investment contracts (GICs) measured at NAV based on participant designed investment options. The following table summarizes our deferred compensation plan assets and liabilities: January 2, 2026 January 3, 2025 (In millions) Total Level 1 Total Level 1 Assets Equity and fixed income securities $ 255 $ 255 $ 219 $ 219 COLI, measured at NAV 38 41 Defer …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 3: CONTRACT ASSETS AND LIABILITIES Contract assets and liabilities are summarized below: (In millions) January 2, 2026 January 3, 2025 Contract assets $ 3,566 $ 3,230 Contract liabilities, current (2,262) (2,142) Contract liabilities, non-current (1) (108) (91) Net contract assets $ 1,196 $ 997 _______________ (1) Included as a component of the Other non-current liabilities line item in our Consolidated Balance Sheet. Contract assets and liabilities as of January 2, 2026 and January 3, 2025 were primarily impacted by the timing of contractual billing milestones. In fiscal 2025, 2024 and 2023, we recognized revenue of $1,683 million, $1,433 million and $1,247 million, respectively, related to contract liabilities that were outstanding at the end of the respective prior fiscal year. …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

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, an …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 16: SUBSEQUENT EVENTS Segment Reorganization Beginning fiscal 2026, we streamlined our business segments from four business segments to three business segments, more closely aligning common capabilities and business models. We will report our financial results in the following three reportable segments: Space & Mission Systems (SMS) Communication & Spectrum Dominance (CSD) Missile Solutions (MSL) SMS will integrate satellite and payload capabilities, including missile warning and defense, with maritime, air special missions, and other global defense and civil government programs. CSD will combine all our capabilities in resilient communications and electronic warfare, while MSL will unite propulsion, hypersonics and other advanced missile technologies. The historical results of businesses divested in fiscal 2025 or prior will be reported in the other non-reportable business line in the Companys segment reporting. DoW Strategic Investment On January 13, 2026, we announced a strategic investment by the DoW in connection with our MSL business. Pursuant to the terms of the proposed transaction, the DoW has agreed to be the anchor investor through a $1.0 billion convertible preferred security. This security is anticipated to automatically convert into common equity upon the completion of an IPO of the MSL business. We currently intend to pursue an IPO of the MSL business in the second half of 2026, subject to prevailing market conditions, receipt of required regulator …

SubsequentEventsTextBlock · excerpt; the full note is in the filing

Assets Total assets by business segment were as follows: (In millions) July 3, 2026 January 2, 2026 Space & Mission Systems $ 14,485 $ 13,736 Communications & Spectrum Dominance 10,972 10,862 Missile Solutions 7,245 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 Quarter Year to Date (In millions) 2026 2025 2026 2025 Capital expenditures Space & Mission Systems $ 33 $ 28 $ 62 $ 63 Communications & Spectrum Dominance 17 20 35 28 Missile Solutions 38 23 71 37 Corporate 20 17 39 19 Total capital expenditures $ 108 $ 88 $ 207 $ 147 Depreciation and amortization Space & Mission Systems $ 42 $ 40 $ 84 $ 80 Communications & Spectrum Dominance 21 18 39 35 Missile Solutions 15 18 29 34 Corporate 210 227 418 455 Total depreciation and amortization $ 288 $ 303 $ 570 $ 604 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 2026 2025 (In millions) SMS CSD MSL SMS CSD MSL Revenue by customer relationship Prime …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

NOTE K: SHARE-BASED COMPENSATION As of July 3, 2026, we had stock options and other share-based compensation awards outstanding under our 2024 Equity Incentive Plan and predecessor plans (collectively, the L3Harris SIPs). Awards granted to participants under the L3Harris SIPs and the weighted-average grant-date fair value per share or unit were as follows: Year to Date 2026 2025 (In thousands, except per share/unit amounts) Shares or Units Weighted-Average Grant-Date Fair Value Per Share or Unit Shares or Units Weighted-Average Grant-Date Fair Value Per Share or Unit Stock options (1) 221 $ 91.53 388 $ 49.20 RSUs (2) 96 $ 340.28 229 $ 210.15 PSUs (3) 114 $ 418.67 185 $ 217.67 _______________ (1) Other than certain stock options granted in connection with new hires, our stock options generally vest ratably in equal amounts over a three-year period. (2) The majority of our RSUs, including those granted annually to executives under our long-term incentive plan, cliff vest after three years. (3) Our PSUs are subject to performance criteria and generally vest after the three-year performance period. The aggregate number of shares of our common stock issued under the L3Harris SIPs, net of shares withheld for tax purposes, was 0.1 million and 0.5 million for second quarter and year to date 2026, respectively, and 0.2 million and 0.4 million for second quarter and year to date 2025, respectively. Share-based compensation expense was $28 million and $49 million for second quarter and …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

NOTE H: FAIR VALUE MEASUREMENTS We measure certain assets and liabilities at fair value on a recurring basis utilizing a three-level fair value hierarchy that prioritizes inputs based on market observability: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than quoted prices included within Level 1, including: quoted prices for similar assets or liabilities in active or inactive markets; quoted prices for identical assets or liabilities in inactive markets; and inputs derived from or corroborated by observable market data. Level 3 Unobservable inputs with little or no market activity that are significant to the fair value of the assets or liabilities and reflect our assumptions about market participants pricing, using the best available information. We utilize observable inputs whenever available. In certain instances, fair value is estimated using quoted market prices from external pricing services. We assess the methodologies of these services to ensure valuations reflect fair value, including net asset value (NAV). The NAV reported by an asset manager may be adjusted when sufficient evidence indicates NAV is not representative of fair value. For fair value information related to our embedded derivative and warrant liabilities, long-term debt and deferred compensation plan assets and liabilities, see Note B: Strategic Investment in Subsidiary, Note I: Debt and Credit Arrangements and Note J: Retirement Benefits , …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

NOTE F: GOODWILL AND INTANGIBLE ASSETS Goodwill Changes in the carrying amount of goodwill, by business segment, were as follows: (In millions) SMS CSD MSL Total Balance as of January 2, 2026 (1) $ 9,005 $ 7,712 $ 3,293 $ 20,010 Currency translation adjustments (9) (5) (14) Balance as of July 3, 2026 $ 8,996 $ 7,707 $ 3,293 $ 19,996 _______________ (1) Balances reflect impact of segment reorganization, as discussed in Note A: Basis of Presentation in these Notes. Information on the reallocation of goodwill in connection with the reorganization can be found under the Reallocation of Goodwill in Segment Reorganization heading in Note E: Goodwill and Intangible Assets in our Form 10-Q for first quarter 2026 , which is incorporated herein by reference. As of both July 3, 2026 and January 2, 2026, accumulated goodwill impairment losses were $120 million, $431 million, and $337 million in our Space and Mission Systems, Communications and Spectrum Dominance, and Missile Solutions segments, respectively. Intangible Assets Intangible assets, net are summarized below: July 3, 2026 January 2, 2026 (In millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships (1) $ 8,316 $ (4,337) $ 3,979 $ 8,329 $ (4,031) $ 4,298 Developed technologies (1) 847 (570) 277 849 (544) 305 Trade names (1) 174 (79) 95 175 (75) 100 Program investment (2) 386 386 Other 4 (4) 6 (3) 3 Total finite-lived int …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE G: INCOME TAXES Tax Legislation Update The Organisation for Economic Cooperation and Development (OECD) established a 15% global minimum tax applicable to multinational companies, which has been adopted by a majority of countries in which we operate and may subject us to this tax. In January 2026, the OECD issued additional guidance that is expected to reduce the global minimum tax burden on U.S. based multinationals. We are actively monitoring the legislative adoption of this guidance in relevant jurisdictions and will continue to evaluate its applicability to our operations and refine our estimates of the effective tax rate and cash tax impacts as new legislation is enacted. There was no impact on our effective tax rate in second quarter 2026. Effective Tax Rate (ETR) ETR was as follows: Second Quarter Year to Date (In millions) 2026 2025 2026 2025 Income tax expense $ (110) $ (66) $ (187) $ (139) ETR 15.5 % 12.6 % 14.4 % 14.1 % Second quarter 2026 and 2025 ETR both benefited from favorable impacts of research and development (R&D) credits, tax deductions for foreign derived intangible income (FDII) and the favorable resolution of audit uncertainties. Second quarter 2026 ETR increased primarily due to larger second quarter 2025 favorable audit settlements, partially offset by unfavorable impacts from the Commercial Aviation Solutions (CAS disposal group) divestiture and establishment of a state valuation allowance for R&D credit carryforwards. Year to date 2026 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE R: LEGAL PROCEEDINGS AND CONTINGENCIES In the ordinary course of business, we are routinely defendants in, parties to or otherwise subject to many pending and threatened legal actions, claims, disputes, arbitrations and other legal proceedings incident to our business, arising from or related to matters, including but not limited to: product liability; personal injury; patents, trademarks, trade secrets or other intellectual property; labor and employment disputes; commercial or contractual disputes; strategic acquisitions or divestitures; the prior sale or use of former products allegedly containing asbestos or other restricted materials; breach of warranty; or environmental matters. Claimed amounts against us may be substantial, but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitral awards. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Gain contingencies, if any, are recognized when they are realized and legal costs generally are expensed when incurred. As of July 3, 2026, our accrual for the potential resolution of lawsuits, claims or proceedings that we consider probable of being decided unfavorably to us was not material. We cannot at this time estimate the reasonably possible loss or range of loss in excess of our accrual due to the inherent uncertainties and speculative nature of contested proceedings. Altho …

LegalMattersAndContingenciesTextBlock · excerpt; the full note is in the filing

NOTE I: DEBT AND CREDIT ARRANGEMENTS Long-Term Debt Long-term debt is summarized below: (In millions) July 3, 2026 January 2, 2026 Fixed-rate debt (1) $ 10,776 $ 10,876 Finance lease obligations and other 267 283 Unamortized discounts and issuance costs, net of bond premium (44) (43) Total long-term debt 10,999 11,116 Less: Current portion of long-term debt (2) 1,815 673 Long-term debt, net $ 9,184 $ 10,443 _______________ (1) See Note 8: Debt and Credit Arrangements in our Fiscal 2025 Form 10-K for information on our fixed-rate debt. (2) As of July 3, 2026, includes the $550 million 3.85% notes, due December 2026 (3.85% 2026 Notes) and $1,250 million 5.40% notes, due January 2027 (5.40% 2027 Notes). As of January 2, 2026, includes the $100 million 7.00% debentures, due January 2026 (7.00% 2026 Debentures) and $550 million 3.85% 2026 Notes. Repayments. On January 14, 2026, we repaid the entire outstanding $100 million 7.00% 2026 Debentures with cash on hand. Fair Value. As of July 3, 2026 and January 2, 2026, the estimated fair value of long-term debt was $11.0 billion and $11.2 billion, respectively. These values were estimated using a market approach based on quoted market prices for our debt in the secondary market and would be classified as Level 2 in the fair value hierarchy. See Note H: Fair Value Measurements in these Notes for further information on fair value. Credit Agreements Five-Year Credit Facility. On February 18, 2025, we established a $2.5 billion, five-year …

LongTermDebtTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Pronouncements Accounting pronouncements issued during second quarter 2026, but not yet adopted, are under evaluation for their potential impact on our operating results, financial position, or cash flows. For information on accounting pronouncements issued prior to fiscal 2026, see Note 1: Significant Accounting Policies in our Fiscal 2025 Form 10-K.

NewAccountingPronouncementsPolicyPolicyTextBlock

NOTE J: RETIREMENT BENEFITS Deferred Compensation Plans We sponsor certain non-qualified deferred compensation plans which are measured at fair value on a recurring basis in our Condensed Consolidated Balance Sheet. Deferred compensation plan assets represent diversified assets held in rabbi trusts, which include marketable equity and fixed income securities and corporate-owned life insurance (COLI) contracts. Liabilities represent participant balances in marketable equity securities and common/collective trusts (CCTs) and guaranteed investment contracts (GICs) based on participant designed investment options. The following table summarizes our deferred compensation plan assets and liabilities and classifications within the fair value hierarchy: July 3, 2026 January 2, 2026 (In millions) Total Level 1 Total Level 1 Assets Equity and fixed income securities $ 279 $ 279 $ 255 $ 255 COLI, measured at NAV 40 38 Deferred compensation plan assets (1) $ 319 $ 293 Liabilities Equity securities $ 15 $ 15 $ 15 $ 15 CCTs and GICs, measured at NAV 453 431 Deferred compensation plan liabilities (2) $ 468 $ 446 _______________ (1) Included in the Other current assets and Other non-current assets line items in our Condensed Consolidated Balance Sheet. (2) Included in the Compensation and benefits and Other non-current liabilities line items in our Condensed Consolidated Balance Sheet. See Note H: Fair Value Measurements in these Notes for further information on fair value. Defined Benefit P …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE D: CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets represent unbilled receivables for revenue recognized in advance of billings, primarily under the percentage-of-completion (POC) cost-to-cost method. Contract liabilities consist of advance payments and billings in excess of revenue recognized. Contract assets and liabilities are reported net on a contract-by-contract basis. Contract assets and contract liabilities are summarized below: (In millions) July 3, 2026 January 2, 2026 Contract assets $ 3,674 $ 3,566 Contract liabilities (2,936) (2,262) Contract liabilities, non-current (1) (83) (108) Net contract assets $ 655 $ 1,196 _______________ (1) Included as a component of the Other non-current liabilities line item in our Condensed Consolidated Balance Sheet. During second quarter and year to date 2026, we recognized revenue of $481 million and $1,342 million, respectively, related to contract liabilities that were outstanding as of January 2, 2026. During second quarter and year to date 2025, we recognized revenue of $517 million and $1,215 million, respectively, related to contract liabilities that were outstanding as of January 3, 2025. NOTE O: CONTRACTUAL BACKLOG Contractual backlog, which is the equivalent of our remaining performance obligations, represents the future revenue we expect to recognize as we perform on our current contracts. Contractual backlog comprises both funded backlog (i.e., firm orders for which funding is authorized and appropriated) …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

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 cu …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE L: MEZZANINE EQUITY The following table summarizes the activity in mezzanine equity: Second Quarter Year to Date (In millions, except for shares and per share amounts) 2026 2025 2026 2025 Beginning balance $ $ $ $ Issuance of 10,000 Subsidiary Series A Preferred Stock, $0.0001 par value; $100,000 stated value (1) 954 954 Subsidiary preferred stock deemed dividend 14 14 Ending balance $ 968 $ $ 968 $ _______________ (1) The Subsidiary Series A Preferred Stock was issued with an initial face value of $1.0 billion, recorded at the fair value of $1,070 million, net of $27 million of transaction costs and an $89 million deferred tax liability. See Note B: Strategic Investment in Subsidiary in these Notes for further information. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing