- Diluted earnings per share (EPS)
from continuing operations of $2.07
- Net sales increased 13% to $2.7
billion
- Net cash from operating activities
from continuing operations of $85 million
- Book-to-bill ratio of 0.98x on
funded orders of $2.6 billion
- Increased 2017 financial
guidance
L3 Technologies, Inc. (NYSE:LLL) today reported diluted EPS from
continuing operations of $2.07 for the quarter ended March 31, 2017
(2017 first quarter), as compared to diluted EPS from continuing
operations for the quarter ended March 25, 2016 (2016 first
quarter) of $2.08. Net sales of $2,669 million for the 2017 first
quarter increased by 13% compared to the 2016 first quarter.
“We are pleased with our first quarter results, which reflect a
13% increase in net sales, primarily organic, and gains in funded
orders,” said Michael T. Strianese, L3’s Chairman and Chief
Executive Officer. “All of our segments are performing well and the
recently realigned Electronic and Sensor Systems segments have
sharpened our market focus, positioning L3 to anticipate and
respond more quickly to evolving customer needs. We are confident
that our disciplined approach to growth will contribute to the
value we deliver to our customers and shareholders as we continue
through 2017.”
As previously announced on January 25, 2017, the company
realigned its Electronic Systems segment effective March 1, 2017.
The Electronic Systems segment was separated into two segments
named: (1) Electronic Systems and (2) Sensor Systems. Accordingly,
the company’s structure consists of the following four segments:
Electronic Systems, Aerospace Systems, Communication Systems and
Sensor Systems. The company has reported its segment results for
all periods presented under the realigned business segments.
L3 Consolidated Results
The table below provides L3’s selected financial data, excluding
discontinued operations.
First Quarter Ended (in
millions, except per share data) March 31, March
25, Increase/
2017 2016 (decrease) Net sales
$
2,669 $ 2,353 13 % Operating income
$ 253 $
252 - % Operating margin
9.5 % 10.7 % (120) bpts Interest
expense and other
$ (37) $ (37) - % Effective income
tax rate
22.2 % 22.3 % (10) bpts Net income from continuing
operations attributable to L3
$ 164 $ 164 - % Diluted
earnings per share from continuing operations
$ 2.07
$ 2.08 - % Diluted weighted average common shares outstanding
79.3 79.0 - % Net cash from operating activities from
continuing operations
$ 85 $ 112 (24) % Less: Capital
expenditures, net of dispositions
(41) (28) 46 % Free cash
flow(1)
$ 44 $ 84 (48) %
__________________
(1) Free cash flow is defined as net
cash from operating activities from continuing operations less net
capital expenditures (capital expenditures less
cash
proceeds from dispositions of property, plant and equipment). Free
cash flow represents cash generated after paying for interest on
borrowings, income
taxes,
pension benefit contributions, capital expenditures and changes in
working capital, but before repaying principal amount of
outstanding debt, paying cash
dividends on common stock,
repurchasing shares of our common stock, investing cash to acquire
businesses and making other strategic investments. Thus, a key
assumption underlying free cash
flow is that the company will be able to refinance its existing
debt. Because of this assumption, free cash flow is not a
measure
that
should be relied upon to represent the residual cash flow available
for discretionary expenditures. The company believes free cash flow
is a useful measure
for
investors because it portrays the company's ability to generate
cash from operations for purposes such as repaying debt, returning
cash to shareholders and
funding acquisitions. The
company uses free cash flow as a performance measure in evaluating
management.
First Quarter Results of Operations: For the 2017 first quarter,
consolidated net sales of $2,669 million increased $316 million, or
13%, compared to the 2016 first quarter. Organic sales(1) increased
by $270 million, or 11%, to $2,618 million for the 2017 first
quarter. Organic sales exclude $51 million of sales increases
related to business acquisitions and $5 million of sales declines
related to business divestitures. For the 2017 first quarter,
organic sales to the U.S. Government increased $218 million, or
13%, to $1,950 million and organic sales to international and
commercial customers increased $52 million, or 8%, to $668
million.
Due to the calendarization of the Company’s fiscal quarter end
dates, the 2017 first quarter had 7% more business days compared to
the 2016 first quarter. The extra days in the 2017 first quarter
will reverse in the 2017 fourth quarter.
Operating income for the 2017 first quarter increased by $1
million compared to the 2016 first quarter. Operating income as a
percentage of sales (operating margin) decreased by 120 basis
points to 9.5% for the 2017 first quarter, compared to 10.7% for
the 2016 first quarter. The decrease in operating margin was driven
primarily by lower favorable contract performance adjustments,
primarily at Aerospace Systems and higher severance and
restructuring costs, primarily at Communication Systems. See the
reportable segment results below for additional discussion of sales
and operating margin trends.
__________________
(1)
Organic sales represent net sales
excluding the sales impact of acquisitions and divestitures. Sales
increases related to acquired businesses are sales from
acquisitions that are included in L3’s actual results for less than
12 months. Sales declines related to business divestitures are
sales from divestitures that are included in L3’s actual results
for the 12 months prior to the divestitures. The company believes
organic sales is a useful measure for investors because it provides
period-to-period comparisons of the company’s ongoing operational
and financial performance.
The effective tax rate for the 2017 first quarter decreased to
22.2% from 22.3%, primarily due to the benefit from the release of
a valuation allowance for capital losses, offset by a higher income
tax rate on foreign earnings.
Diluted EPS from continuing operations was $2.07 for the 2017
first quarter compared to $2.08 for the 2016 first quarter. Diluted
weighted average common shares outstanding for the 2017 first
quarter increased slightly compared to the 2016 first quarter due
to changes in the dilutive impact of common share equivalents,
primarily caused by a higher L3 stock price.
Orders: Funded orders for the 2017 first quarter increased 1% to
$2,624 million compared to $2,591 million for the 2016 first
quarter. The book-to-bill ratio was 0.98x for the 2017 first
quarter. Funded backlog decreased 0.5% to $8,855 million at March
31, 2017, compared to $8,896 million at December 31, 2016.
Cash Flow: Net cash from operating activities was $85 million
for the 2017 first quarter, a decrease of $27 million, compared to
$112 million for the 2016 first quarter. The decrease in net cash
from operating activities was driven primarily by higher uses of
cash for working capital compared to the 2016 first quarter.
Capital expenditures, net of dispositions, were $41 million for the
first quarter, compared to $28 million for the 2016 first quarter.
The Company paid dividends of $61 million during the 2017 first
quarter compared to $58 million during the 2016 first quarter. The
Company did not repurchase any of its common stock during the 2017
first quarter. Repurchases of the Company’s common stock during the
2016 first quarter totaled $198 million.
Reportable Segment Results
The company has four reportable segments. The company evaluates
the performance of its segments based on their sales, operating
income and operating margin. Corporate expenses are allocated to
the company’s operating segments using an allocation methodology
prescribed by U.S. Government regulations for government
contractors. Accordingly, segment results include all costs and
expenses, except for goodwill impairment charges and certain other
items that are excluded by management for purposes of evaluating
the performance of the company’s business segments.
Electronic Systems First
Quarter Ended ($ in millions) March 31, March 25,
Increase/
2017 2016 (decrease) Net sales
$ 737
$ 593 24.3 % Operating income
$ 91 $ 85 7.1 %
Operating margin
12.3 % 14.3 %
(200) bpts
Electronic Systems net sales for the 2017 first quarter
increased by $144 million, or 24%, compared to the 2016 first
quarter. Organic sales increased by $101 million, or 17%, compared
to the 2016 first quarter. Organic sales exclude $48 million of
sales increases related to business acquisitions and $5 million of
sales declines related to business divestitures. Organic sales
increased by: (1) $68 million for Precision Engagement and Training
primarily due to increased deliveries of fuzing and ordnance
products for U.S. Army and U.S. Air Force (USAF) weapon systems,
guidance and control products for the U.S. Army Paladin weapon
system and higher volume on simulation and training devices, (2)
$22 million for Aviation Products primarily due to deliveries of
aviation recorders and traffic and collision avoidance systems for
commercial airline customers and higher volume of overhaul and
repair services for cockpit displays and aviation recorders for the
U.S. military and (3) $11 million for Power & Propulsion
primarily due to higher volume on the U.S. Navy (USN) guided
destroyer modernization program and ship board integrated and
monitoring systems for a foreign navy customer.
Electronic Systems operating income for the 2017 first quarter
increased by $6 million, or 7%, compared to the 2016 first quarter.
Operating margin decreased by 200 basis points to 12.3%. Operating
margin decreased by: (1) 150 basis points due to net gains and
losses related to business divestitures in the first quarters of
2016 and 2017, (2) 130 basis points for lower favorable contract
performance adjustments across several business areas and (3) 70
basis points due to lower margins related to acquisitions and
higher severance expense of $3 million. These decreases were
partially offset by 150 basis points primarily due to higher sales
volume.
Aerospace Systems First
Quarter Ended ($ in millions) March 31, March 25,
Increase/
2017 2016 (decrease) Net sales
$
1,045 $ 1,005 4.0 % Operating income
$ 69 $
106 (34.9) % Operating margin
6.6 %
10.5 % (390) bpts
Aerospace Systems net sales for the 2017 first quarter increased
by $40 million, or 4%, compared to the 2016 first quarter. Sales
increased $60 million for Vertex Aerospace and $17 million for ISR
Systems. These increases were partially offset by lower sales of
$37 million for Aircraft Systems. Sales increased for Vertex
Aerospace primarily due to higher volume for: (1) the U.S. Army
C-12 contract, (2) the new USAF KC-10 contractor logistics support
contract, (3) USN and USAF training aircraft and (4) aviation
support for the U.S. Army rotary wing training aircraft at Fort
Rucker. At ISR Systems, higher volume for special mission aircraft
and large ISR aircraft systems for the U.S. Government was
partially offset by lower volume for large ISR aircraft systems for
foreign military customers as contracts near completion and small
ISR aircraft fleet management services on a completed USAF
contract. Sales decreased for Aircraft Systems primarily due to
lower volume for international aircraft modifications and reduced
deliveries for aircraft cabin assemblies as contracts near
completion.
Aerospace Systems operating income for the 2017 first quarter
decreased by $37 million, or 35%, compared to the 2016 first
quarter. Operating margin decreased by 390 basis points to 6.6%.
Operating margin decreased by: (1) 230 basis points due to lower
favorable contract performance adjustments, primarily at ISR
Systems, (2) 90 basis points due to a higher than planned price
adjustment in the 2016 first quarter in ISR Systems that did not
recur and (3) 70 basis points due to sales mix changes.
Communication Systems
First Quarter Ended
($ in millions) March 31, March 25,
Increase/
2017 2016 (decrease) Net sales
$ 537
$ 471 14.0 % Operating income
$ 43 $ 51 (15.7) %
Operating margin
8.0 % 10.8 % (280)
bpts
Communication Systems net sales for the 2017 first quarter
increased by $66 million, or 14%, compared to the 2016 first
quarter. The increase was primarily driven by Broadband
Communication Systems due to increased volume and deliveries of
secure networked communication systems to the U.S. Department of
Defense (DoD) and deliveries of tactical communication terminals to
the U.S. military.
Communication Systems operating income for the 2017 first
quarter decreased by $8 million, or 16%, compared to the 2016 first
quarter. Operating margin decreased by 280 basis points to 8.0%.
Operating margin decreased by: (1) 170 basis points due to higher
severance and restructuring expenses of $9 million, primarily in
Space & Power Systems related to the previously announced
consolidation of the Company’s traveling-wave tube businesses and
(2) 110 basis points primarily due to sales mix changes at
Broadband Communication Systems.
Sensor Systems
First Quarter Ended
($ in millions) March 31, March 25,
2017 2016 Increase Net sales
$ 350 $ 284 23.2
% Operating income
$ 50 $ 10 400.0 % Operating margin
14.3 % 3.5 % 1,080 bpts
Sensor Systems net sales for the 2017 first quarter increased by
$66 million, or 23%, compared to the 2016 first quarter. Organic
sales increased by $64 million, or 23%, compared to the 2016 first
quarter. Organic sales exclude $2 million of sales increases
related to business acquisitions. Organic sales increased by: (1)
$29 million for Integrated Sensor Systems primarily due to
increased deliveries of airborne turret systems to foreign military
customers and higher volume for space electronics and infrared
detection products, (2) $20 million for Warrior Systems primarily
driven by $13 million of lower return allowances and deliveries of
specialized night vision equipment to the Australian Defence Force
and (3) $15 million primarily for Advanced Programs due to
increased task order volume on U.S. Government contracts.
Sensor Systems operating income for the 2017 first quarter
increased by $40 million compared to the 2016 first quarter.
Operating margin increased to 14.3%. Operating margin increased by:
(1) 440 basis points due to lower return allowances, (2) 340 basis
points primarily for improved contract performance at Ocean Systems
and (3) 300 basis points due to higher sales volume primarily at
Integrated Sensor Systems.
Financial Guidance
Based on information known as of today, the company has updated
its consolidated and segment financial guidance for the year ending
December 31, 2017, previously provided on January 26, 2017, as
presented in the tables below. All financial guidance amounts are
estimates subject to change in the future, including as a result of
matters discussed under the “Forward-Looking Statements” cautionary
language beginning on page 7. The company undertakes no duty to
update its guidance.
Consolidated 2017 Financial Guidance ($ in
millions, except per share data)
Prior Guidance
Current
Guidance
(January 26,
2017)
Net sales $10,750 to $10,950 $10,625 to $10,825 Operating margin
10.3% 10.3% Interest expense and other(1) $158 $158 Effective tax
rate 27.0% 27.2% Minority interest expense(2) $15 $15 Diluted
shares 79.8 79.3 Diluted EPS $8.50 to $8.70 $8.40 to $8.60
Net cash from operating activities $1,085 $1,085 Capital
expenditures, net of dispositions of property, plant and equipment
(220) (220) Free cash flow
$865 $865
__________________
(1) Interest expense and other is
comprised of: (i) interest expense of $172 million and (ii)
interest and other income, net, of $14 million.
(2) Minority interest expense represents
net income from continuing operations attributable to
non-controlling interests.
Segment 2017 Financial Guidance ($ in
millions)
Current
Guidance
Prior Guidance
(January 26,
2017)
Net
Sales:
Electronic Systems $3,000 to $3,100 $2,950 to $3,050 Aerospace
Systems $4,050 to $4,150 $4,025 to $4,125 Communication Systems
$2,075 to $2,175 $2,075 to $2,175 Sensor Systems $1,525 to $1,625
$1,475 to $1,575
Operating
Margins:
Electronic Systems 13.2% to 13.4% 13.2% to 13.4% Aerospace Systems
6.9% to 7.1% 6.9% to 7.1% Communication Systems 10.5% to 10.7%
10.5% to 10.7% Sensor Systems 12.7% to 12.9% 12.6% to 12.8%
The revisions to our Current Guidance compared to our Prior
Guidance primarily include:
- An increase in estimated sales for
Electronic and Aerospace Systems primarily related to higher
expected DoD sales; and
- An increase in estimated sales and
operating margin for Sensor Systems primarily related to higher
expected international sales.
The current guidance for 2017 excludes: (i) any potential
non-cash goodwill impairment charges for which the information is
presently unknown, (ii) potential adverse results related to
litigation contingencies and (iii) other items such as gains or
losses related to potential business divestitures and the impact of
potential acquisitions.
Additional financial information regarding the 2017 first
quarter results and the 2017 financial guidance is available on the
company’s website at www.L3T.com.
Conference Call
In conjunction with this release, L3 will host a conference call
today, Thursday, April 27, 2017 at 11:00 a.m. ET that will be
simultaneously broadcast over the Internet. Michael T. Strianese,
Chairman and Chief Executive Officer, Christopher E. Kubasik,
President and Chief Operating Officer, and Ralph G. D’Ambrosio,
Senior Vice President and Chief Financial Officer, will host the
call.
Listeners can access the conference call live at the following
website address:
http://www.L3T.com
Please allow 15 minutes prior to the call to visit this site to
download and install any necessary audio software. The archived
version of the call may be accessed at the site or by dialing (800)
585-8367/ passcode: 99275451 (for domestic callers) or (404)
537-3406/passcode: 99275451 (for international callers) beginning
approximately two hours after the call ends and will be available
until the company’s next quarterly earnings release.
Headquartered in New York City, L3 Technologies employs
approximately 38,000 people worldwide and is a leading provider of
a broad range of communication, electronic and sensor systems used
on military, homeland security and commercial platforms. L3 is also
a prime contractor in aerospace systems, security and detection
systems and pilot training.
To learn more about L3, please visit the company’s website at
www.L3T.com. L3 uses its website as a channel of distribution of
material company information. Financial and other material
information regarding L3 is routinely posted on the company’s
website and is readily accessible.
Forward-Looking Statements
Certain of the matters discussed in this press release,
including information regarding the company’s 2017 financial
guidance are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements
other than historical facts, may be forward-looking statements,
such as “may,” “will,” “should,” “likely,” “projects,” “financial
guidance,” ‘‘expects,’’ ‘‘anticipates,’’ ‘‘intends,’’ ‘‘plans,’’
‘‘believes,’’ ‘‘estimates,’’ and similar expressions are used to
identify forward-looking statements. The Company cautions investors
that these statements are subject to risks and uncertainties many
of which are difficult to predict and generally beyond the
Company’s control that could cause actual results to differ
materially from those expressed in, or implied or projected by, the
forward-looking information and statements. Some of the factors
that could cause actual results to differ include, but are not
limited to, the following: our dependence on the defense industry;
backlog processing and program slips resulting from delayed awards
and/or funding from the Department of Defense (DoD) and other major
customers; the U.S. Government fiscal situation; changes in DoD
budget levels and spending priorities; U.S. Government failure to
raise the debt ceiling; our reliance on contracts with a limited
number of customers and the possibility of termination of
government contracts by unilateral government action or for failure
to perform; the extensive legal and regulatory requirements
surrounding many of our contracts; our ability to retain our
existing business and related contracts; our ability to
successfully compete for and win new business, or, identify,
acquire and integrate additional businesses; our ability to
maintain and improve our operating margin; the availability of
government funding and changes in customer requirements for our
products and services; the outcome of litigation matters (see Notes
to our annual report on Form 10-K and quarterly reports on Form
10-Q); results of audits by U.S. Government agencies and of ongoing
governmental investigations; our significant amount of debt and the
restrictions contained in our debt agreements and actions taken by
rating agencies that could result in a downgrade of our debt; our
ability to continue to recruit, retain and train our employees;
actual future interest rates, volatility and other assumptions used
in the determination of pension benefits and equity based
compensation, as well as the market performance of benefit plan
assets; our collective bargaining agreements; our ability to
successfully negotiate contracts with labor unions and our ability
to favorably resolve labor disputes should they arise; the
business, economic and political conditions in the markets in which
we operate; global economic uncertainty; the risk that our
commercial aviation products and services businesses are affected
by a downturn in global demand for air travel or a reduction in
commercial aircraft OEM (Original Equipment Manufacturer)
production rates; the DoD’s Better Buying Power and other
efficiency initiatives; events beyond our control such as acts of
terrorism; our ability to perform contracts on schedule; our
international operations including currency risks and compliance
with foreign laws; our extensive use of fixed-price type revenue
arrangements; the rapid change of technology and high level of
competition in which our businesses participate; risks relating to
technology and data security; our introduction of new products into
commercial markets or our investments in civil and commercial
products or companies; the impact on our business of improper
conduct by our employees, agents or business partners; goodwill
impairments and the fair values of our assets; and ultimate
resolution of contingent matters, claims and investigations
relating to acquired businesses, and the impact on the final
purchase price allocations.
Our forward-looking statements speak only as of the date of this
press release or as of the date they were made, and we undertake no
obligation to update forward-looking statements. For a more
detailed discussion of these factors, also see the information
under the captions “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in our
most recent report on Form 10-K for the year ended December 31,
2016 and any material updates to these factors contained in any of
our future filings.
As for the forward-looking statements that relate to future
financial results and other projections, actual results will be
different due to the inherent uncertainties of estimates, forecasts
and projections and may be better or worse than projected and such
differences could be material. Given these uncertainties, you
should not place any reliance on these forward-looking
statements.
– Financial Tables Follow –
Table
A
L3 TECHNOLOGIES, INC. UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in
millions, except per share data) First Quarter
Ended(a)
March
31,
March 25,
2017 2016
Net sales $ 2,669 $ 2,353
Cost of sales (2,416 ) (2,101 )
Operating income 253 252
Interest expense
(42 ) (41 )
Interest and other income, net
5 4
Income from continuing
operations before income taxes 216 215
Provision for
income taxes (48 ) (48 )
Income
from continuing operations 168 167
Income from
discontinued operations, net of income taxes (b)
- 63
Net income 168 230
Net income attributable to noncontrolling interests
(4 ) (3 )
Net income attributable to L3
$ 164 $ 227
Basic earnings
per share attributable to L3’s common shareholders:
Continuing operations $ 2.11 $ 2.11
Discontinued operations - 0.81
Basic earnings per share $ 2.11
$ 2.92
Diluted earnings per share attributable to
L3’s common shareholders: Continuing operations $
2.07 $ 2.08
Discontinued operations -
0.79
Diluted earnings per share
$ 2.07 $ 2.87
L3’s weighted
average common shares outstanding: Basic
77.7 77.8
Diluted
79.3 79.0
__________________
(a)
It is the company’s established practice
to close its books for the quarters ending March, June and
September on the Friday preceding the end of the calendar quarter.
The interim financial statements and tables of financial
information included herein have been prepared and are labeled
based on that convention. The company closes its annual books on
December 31 regardless of what day it falls on.
(b)
Income from discontinued operations, net
of income taxes for the quarterly period ended March 25, 2016,
includes an after-tax gain of $64 million on the sale of the
National Security Solutions business.
Table
B
L3
TECHNOLOGIES, INC. UNAUDITED SELECT FINANCIAL DATA
(in millions) First Quarter Ended
March
31,
March 25,
2017 2016
Segment operating
data
Net sales: Electronic Systems $
737 $ 593
Aerospace Systems 1,045 1,005
Communication Systems 537 471
Sensor Systems
350 284
Total $ 2,669 $
2,353
Operating income:
Electronic Systems $ 91 $ 85
Aerospace
Systems 69 106
Communication Systems 43 51
Sensor Systems 50 10
Total
$ 253 $ 252
Operating margin:
Electronic Systems 12.3 % 14.3 %
Aerospace
Systems 6.6 % 10.5 %
Communication Systems
8.0 % 10.8 %
Sensor Systems 14.3
% 3.5 %
Total 9.5 % 10.7 %
Depreciation and amortization: Electronic Systems
$ 18 $ 14
Aerospace Systems 13 13
Communication Systems 12 12
Sensor Systems
11 11
Total $ 54 $ 50
Funded order
data
Electronic Systems $ 903 $ 668
Aerospace
Systems 883 1,183
Communication Systems
456 451
Sensor Systems 382 289
Total $ 2,624 $ 2,591
March 31,
December 31,
2017 2016
Period end
data
Funded backlog $ 8,855 $ 8,896
Table
C
L3 TECHNOLOGIES, INC. UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS (in
millions)
March
31,
December 31,
2017 2016
ASSETS Cash and cash
equivalents $ 230 $ 363
Billed receivables,
net 802 731
Contracts in process 2,254
2,055
Inventories 353 330
Other current assets
233 218
Total current assets
3,872 3,697
Property, plant and equipment, net
1,123 1,121
Goodwill 6,679 6,560
Identifiable intangible assets 242 238
Other
assets 248 249
Total assets
$ 12,164 $ 11,865
LIABILITIES AND
EQUITY Accounts payable, trade $
427 $ 299
Accrued employment costs 449 516
Accrued expenses 390 375
Advance payments and
billings in excess of costs incurred 489 492
Income
taxes payable 30 22
Other current liabilities
444 431
Total current liabilities
2,229 2,135
Pension and postretirement
benefits 1,184 1,177
Deferred income taxes
258 236
Other liabilities 365 368
Long-term
debt 3,326 3,325
Total liabilities
7,362 7,241
Shareholders’ equity
4,731 4,553
Noncontrolling interests 71
71
Total equity 4,802 4,624
Total liabilities and equity $ 12,164 $ 11,865
Table
D
L3 TECHNOLOGIES, INC. UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (in
millions) First Quarter Ended
March
31,
March 25,
2017 2016
Operating activities Net
income $ 168 $ 230
Less: Income from
discontinued operations, net of tax -
(63 )
Income from continuing operations 168
167
Depreciation of property, plant and equipment 41
40
Amortization of intangibles and other assets 13 10
Deferred income tax provision 17 12
Stock-based
employee compensation expense 14 6
Contributions to
employee savings plans in L3’s common stock 36 30
Amortization of pension and postretirement benefit plans net
loss and prior service cost 15 12
Amortization of
bond discounts and deferred debt issue costs (included in interest
expense) 1 2
Other non-cash items 4 1
Changes in operating assets and liabilities, excluding amounts
from acquisitions and divestitures and discontinued
operations: Billed receivables (67 ) (32 )
Contracts in process (205 ) (148 )
Inventories (11 ) (19 )
Other assets
1 4
Accounts payable, trade 124 115
Accrued
employment costs (76 ) (46 )
Accrued
expenses 21 16
Advance payments and billings in
excess of costs incurred (7 ) (64 )
Income
taxes 15 20
Other current liabilities (3
) (6 )
Pension and postretirement benefits 7
(1 )
All other operating activities (23
) (7 )
Net cash from operating activities from
continuing operations
85 112
Investing
activities
Business acquisitions, net of cash acquired (139
) (27 )
Proceeds from the sale of businesses, net of
closing date cash balances 16 576
Capital
expenditures (42 ) (35 )
Dispositions of
property, plant and equipment 1 7
Other investing
activities 5 9
Net cash
(used in) from investing activities from continuing operations
(159 ) 530
Financing
activities
Borrowings under revolving credit facility 664 217
Repayments of borrowings under revolving credit facility
(664 ) (217 )
Common stock repurchased
- (198 )
Dividends paid on L3’s common stock
(61 ) (58 )
Proceeds from exercise of stock
options 12 14
Proceeds from employee stock purchase
plan 8 8
Repurchases of common stock to satisfy tax
withholding obligations (18 ) (20 )
Other
financing activities (4 ) (5 )
Net cash used in financing activities from continuing
operations (63 ) (259 )
Effect
of foreign currency exchange rate changes on cash and cash
equivalents 4 -
Net cash used in operating activities
from discontinued operations: - (56 )
Net (decrease)
increase in cash and cash equivalents (133 ) 327
Cash and cash equivalents, beginning of the period
363 207
Cash and cash equivalents,
end of the period $ 230 $ 534
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L3 Technologies, Inc. (NYSE:LLL)
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From Sep 2023 to Sep 2024