MELBOURNE, Fla., May 3, 2011 /PRNewswire/ -- Harris Corporation
(NYSE: HRS) reported revenue in the third quarter of fiscal 2011 of
$1.41 billion, a 6 percent increase
compared with $1.33 billion in the
prior-year quarter. GAAP net income in the third quarter of
fiscal 2011 was $140 million, or
$1.09 per diluted share, compared
with $166 million, or $1.26 per diluted share, in the prior-year
quarter. Non-GAAP net income in the third quarter of fiscal
2011 was $149 million, or
$1.16 per diluted share, compared
with $170 million, or $1.29 per diluted share, in the prior-year
quarter. Both revenue and net income in the prior-year
quarter benefited significantly from large shipments of tactical
radios to equip MRAP (Mine Resistant Ambush Protected) vehicles for
Afghanistan and the resulting
favorable product mix. Orders in the third quarter were
$1.55 billion and exceeded revenue.
Orders in the prior-year quarter were $1.45 billion. Non-GAAP net income excludes
acquisition-related costs in both quarters. A reconciliation
of GAAP to non-GAAP financial measures is provided in Tables 5
through 8, along with the accompanying notes.
“Harris continued to deliver solid results in the fiscal third
quarter, in spite of slowing U.S. Government spending and a
difficult comparison to the prior-year third quarter.
Operating margins continued to be strong in both the RF
Communications and Government Communications Systems segments,”
said Howard L. Lance, chairman,
president and chief executive officer.
“Our new Integrated Network Solutions segment is well positioned
to deliver future revenue growth and margin expansion as we expand
into attractive commercial markets including healthcare, energy,
new media, cloud computing, and IT services. We are taking
our proven products and capabilities to markets where advanced
communications and information technologies are in high demand.
Despite some headwinds, we remain confident that we will
enter fiscal 2012 with good momentum and deliver continued growth
in revenue and earnings.”
RF Communications
Revenue for the RF Communications segment in the third quarter
was $550 million compared with
$551 million in the prior year.
Revenue included $431 million
in Tactical Communications and $119
million in Public Safety and Professional Communications.
Revenue was flat for both businesses compared with the
prior-year quarter. Revenue in Tactical Communications was
driven by strengthening international market shipments, which
comprised half of Tactical Communications revenue in the quarter.
Deliveries to the U.S. Department of Defense for radios to
equip MRAP vehicles declined by $206
million compared with the prior-year quarter.
Excluding MRAP, shipments to the U.S. Department of Defense
in the third quarter increased significantly compared with the
prior year as a result of Falcon III product line adoption.
Operating income for the RF Communications segment was
$179 million in the third quarter
compared with $205 million in the
prior year. In the prior-year quarter, non-GAAP operating
income was $208 million, excluding
acquisition-related costs, and benefited from large shipments of
tactical radios to equip MRAP vehicles.
Third quarter orders for the RF Communications segment totaled
$722 million, including $351 million in Tactical Communications and
$371 million in Public Safety and
Professional Communications. At the end of the third quarter,
total backlog for RF Communications was $1.70 billion, including $981 million in Tactical Communications and
$715 million in Public Safety and
Professional Communications.
Orders in Tactical Communications reflected strong demand from
the U.S. Department of Defense for a variety of communications
systems, including $70 million to
deliver encryption devices and support services for use in the
Force XXI Battle Command Brigade and Below−Blue Force Tracking
system; two orders totaling $40
million from the U.S. Army for Falcon II® high frequency
vehicular radio systems; and $23
million from the U.S. Air Force to supply Falcon III®
RF-310M multiband handheld radios in a repeater configuration to
extend the network.
Tactical Communications orders in the international market
included $29 million from a country
in Asia to provide in-country
battle management software, networking modules, wide-area
high-capacity line-of-sight radios, and engineering training and
maintenance to support the next phase of an integrated C4ISR
system; $22 million from a country in
Asia for Falcon III RF-7800S
Secure Personal Radios in support of a multi-year infantry soldier
modernization program; $19 million
from a country in Southeast Asia
for Falcon III and Falcon II tactical radios and related equipment
to provide command and control; and other significant orders from
Australia, Afghanistan, and another international
government customer.
New orders in Public Safety and Professional Communications
included $291 million to design and
build Alberta, Canada’s First
Responders Radio Communications System (AFRRCS) that will provide
public safety communications for the 256,000 square-mile province
and $15 million from Dane County, Wisconsin to upgrade the county’s
public safety communication system.
Government Communications Systems
Third quarter revenue for the Government Communications Systems
segment was $431 million compared
with $427 million in the prior year.
Operating income was $60
million in the third quarter compared with $58 million in the prior year. Operating
margin was a very strong 13.9 percent in the third quarter.
Year-over-year revenue increased on the Geostationary
Operational Environmental Satellite – Series R (GOES-R) Ground and
Antenna Segment weather programs for the National Oceanic and
Atmospheric Administration (NOAA) and the F-35 Lightning II fighter
aircraft program for the U.S. Department of Defense. Revenue
on several classified programs declined as a result of slower U.S.
Government spending. Revenue also declined $24 million, as expected, on the Field Data
Collection Automation (FDCA) program for the 2010 U.S. Census.
Major awards during the quarter in the Government Communications
Systems segment included a three-year contract from Boeing Space
and Intelligence Systems to build Ka-band antennas for three
Inmarsat-5 satellites, a three-year contract from Boeing Space and
Intelligence Systems for a 22-meter deployable L-band reflector to
support military and civil communications in Mexico, and a $15
million follow-on delivery order from the U.S. Air Force for
telemetry modules that provide missile data and command destruct
capability for the AIM-120 Advanced Medium-Range Air-to-Air Missile
(AMRAAM). After the close of the quarter, Harris received an
$11 million contract from the
National Geospatial-Intelligence Agency for Adjusted Metric Support
Data/Digital Point Positioning Data Base (AMSD/DPPDB) used for
targeting purposes and Controlled Image Base (CIB) used for mission
planning systems.
Integrated Network Solutions
Revenue for the Integrated Network Solutions segment was
$463 million in the third quarter
compared with $376 million in the
prior year. Organic revenue was flat in the quarter compared
with the prior year after adjusting for acquisitions.
Broadcast Communications continued to show improvement with
strong year-over-year revenue growth of 9 percent. As
expected, Harris CapRock Communications revenue on a pro forma
basis was flat with the prior year. Harris IT Services
revenue was negatively impacted by slower U.S. Government spending.
Operating income for the Integrated Network Solutions segment
was $21 million in the third quarter
compared with $28 million in the
prior year. Non-GAAP operating income, which excludes
acquisition-related costs, was $32
million in the third quarter compared with $29 million in the prior year. Non-GAAP
operating income benefited from acquisitions as well as improved
performance in Broadcast Communications, and was partially offset
by accelerated investments in the new Cyber Integrated Solutions
business and lower pricing on the IT Services contract extension
for the Navy Marine Corps Intranet (NMCI) program.
Harris recently completed several important acquisitions in the
Integrated Network Solutions segment, which will help to drive
future revenue growth and increased earnings. On April 4, 2011, the company acquired the Global
Connectivity Services business of Schlumberger, a leading provider
of satellite and terrestrial communications services for the
worldwide energy market. During the third quarter, Harris
acquired the infrastructure assets of Core180’s government
business. These businesses have been combined with previously
acquired CapRock Communications and the Harris Maritime
Communications Services business to form Harris CapRock
Communications – the leading provider of managed satellite and
terrestrial communication services for the energy, government and
maritime markets.
On April 4, 2011, Harris also
completed the acquisition of Carefx Corporation, a leading provider
of interoperability workflow solutions for government and
commercial healthcare providers. The acquisition will leverage the
healthcare interoperability workflow products offered by Carefx and
the broader scale of enterprise intelligence solutions and services
already provided by Harris.
Wins in the quarter in the Integrated Network Solutions segment
included 14 task orders on the DISN Satellite Transmission Services
– Global (DSTS-G) and Future Commercial SATCOM Acquisition (FCSA)
contracts with a potential value of $150
million to provide C, Ku, and X-band space segment capacity,
monitoring and control, teleport services, and operations and
maintenance to customers operating in Asia, Europe,
the U.S. and all major ocean regions; and a $15 million option year extension from the U.S.
Department of Veterans Affairs for healthcare imaging software and
systems engineering services for the VistA imaging application.
Harris also received a $10
million order from the Virtual Computing Environment Company
(VCE) for trusted enterprise cloud services. This followed
the announcement of a strategic alliance between Harris, EMC and
VCE to develop and market trusted cloud solutions.
Earnings Guidance
The company reiterated its previous guidance for non-GAAP net
income for fiscal 2011 in the range of $4.80
to $4.90 per diluted share ($4.56 to
$4.66 per diluted share on a GAAP basis). Fiscal 2011
non-GAAP earnings guidance excludes acquisition-related costs.
Fiscal 2011 revenue is now expected to be approximately
$5.9 billion, which represents a
year-over-year increase of about 13 percent compared with the prior
year.
The company also reiterated its previous guidance for non-GAAP
net income for fiscal 2012 in the range of $5.10 to $5.20 per diluted share ($4.94 to $5.04 per diluted share on a GAAP
basis). Fiscal 2012 non-GAAP earnings guidance excludes
acquisition-related costs. Fiscal 2012 revenue is now
expected to be in a range from $6.3 to $6.5
billion, which represents a year-over-year increase of about
7 to 10 percent compared with fiscal 2011.
Harris will host a conference call today, May 3, at 4:30 p.m.
Eastern Time (ET) to discuss its third quarter fiscal 2011
financial results. The dial-in numbers for the teleconference
are (866) 713-8307 (U.S.) and (617) 597-5307 (International), using
participant code 80384861. Please allow at least 10 minutes
prior to the scheduled start time to connect to the teleconference.
Participants are encouraged to listen via webcast, which will
be broadcast live at www.harris.com/conference-call. A
recording of the call will be available on the Harris website
beginning at 7 p.m. ET on
May 3.
About Harris Corporation
Harris is an international communications and information
technology company serving government and commercial markets in
more than 150 countries. Headquartered in Melbourne, Florida, the company has
approximately $6 billion of annual
revenue and more than 16,000 employees — including nearly 7,000
engineers and scientists. Harris is dedicated to developing
best-in-class assured communications® products, systems, and
services. Additional information about Harris Corporation is
available at www.harris.com.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures within
the meaning of Regulation G promulgated by the SEC, including net
income and net income per diluted share for the third quarter of
fiscal 2011 and the third quarter of fiscal 2010, in each case
excluding acquisition-related costs; operating income for the RF
Communications segment for the third quarter of fiscal 2010,
excluding charges for acquisition-related costs; organic revenue
growth for the Integrated Network Solutions segment for the third
quarter of fiscal 2011, adjusting for the impact of acquisitions;
operating income for the Integrated Network Solutions segment for
the third quarter of fiscal 2011 and the third quarter of fiscal
2010, in each case excluding acquisition-related costs; and
guidance for fiscal 2011 and fiscal 2012 net income per diluted
share, in each case excluding acquisition-related costs.
Harris management believes that these non-GAAP financial
measures, when considered together with the GAAP financial
measures, provide information that is useful to investors in
understanding period-over-period operating results separate and
apart from items that may, or could, have a disproportionately
positive or negative impact on results in any particular period.
Management also believes that these non-GAAP financial
measures enhance the ability of investors to analyze Harris
business trends and to understand Harris performance. In
addition, Harris may utilize non-GAAP financial measures as a guide
in its forecasting, budgeting, and long-term planning process and
to measure operating performance for some management compensation
purposes. Any analysis of non-GAAP financial measures should
be used only in conjunction with results presented in accordance
with GAAP.
Forward-Looking Statements
Statements in this press release that are not historical facts
are forward-looking statements that reflect management's current
expectations, assumptions, and estimates of future performance and
economic conditions. Such statements are made in reliance
upon the safe harbor provisions of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements in this release include but are
not limited to: earnings and revenue guidance for fiscal 2011 and
fiscal 2012; potential contract opportunities and awards; the
potential value of contract awards; expected benefits of the
acquisition of the Schlumberger Global Connectivity Services
business, the infrastructure assets of Core180’s government
business, and Carefx Corporation; expected benefit from investments
in energy, cyber, healthcare and international; and statements
regarding outlook, including expected revenue and orders. The
company cautions investors that any forward-looking statements are
subject to risks and uncertainties that may cause actual results
and future trends to differ materially from those matters expressed
in or implied by such forward-looking statements. The
company's consolidated results and the forward-looking statements
could be affected by many factors, including but not limited to:
the loss of our relationship with the U.S. government or a shift in
U.S. government funding; potential changes in U.S. government or
customer priorities; risks inherent with large long-term
fixed-price contracts, particularly the ability to contain cost
overruns; financial and government and regulatory risks relating to
international sales and operations; our ability to continue to
develop new products that achieve market acceptance; the
consequences of future geo-political events; strategic acquisitions
and the risks and uncertainties related thereto, including our
ability to manage and integrate acquired businesses; performance of
our subcontractors and suppliers; potential claims that we are
infringing the intellectual property rights of third parties; the
successful resolution of patent infringement claims and the
ultimate outcome of other contingencies, litigation and legal
matters; risks inherent in developing new technologies; changes in
our effective tax rate; the potential impact of natural disasters
or other disruptions on our operations; the potential impact of a
security breach, through cyber attack or otherwise, or other
significant disruptions of our IT networks and systems or those we
operate for customers; the potential impact of satellite bandwidth
constraints on our managed satellite communications services;
changes in future business conditions that could cause business
investments and/or recorded goodwill to become impaired; and the
recession in the United States and
general downturn in the global economy. Further information
relating to factors that may impact the company's results and
forward-looking statements are disclosed in the company's filings
with the SEC. The forward-looking statements contained in
this release are made as of the date of this release, and the
company disclaims any intention or obligation, other than imposed
by law, to update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
|
|
Table
1
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Three
Quarters Ended
|
|
|
|
|
April
1,
|
|
April
2,
|
|
April
1,
|
|
April
2,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions, except per share amounts)
|
|
Revenue from product sales and
services
|
$
|
1,413.3
|
|
$
|
1,329.5
|
|
$
|
4,257.2
|
|
$
|
3,750.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales and
services
|
|
(896.3)
|
|
|
(820.0)
|
|
|
(2,717.9)
|
|
|
(2,410.7)
|
|
Engineering, selling and
administrative expenses
|
|
(285.6)
|
|
|
(245.0)
|
|
|
(796.0)
|
|
|
(672.8)
|
|
Non-operating loss
|
|
(0.3)
|
|
|
(0.5)
|
|
|
(1.6)
|
|
|
(1.0)
|
|
Interest income
|
|
1.3
|
|
|
0.4
|
|
|
2.3
|
|
|
1.1
|
|
Interest expense
|
|
(26.0)
|
|
|
(18.1)
|
|
|
(64.2)
|
|
|
(54.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
206.4
|
|
|
246.3
|
|
|
679.8
|
|
|
612.3
|
|
Income taxes
|
|
(67.2)
|
|
|
(80.1)
|
|
|
(225.6)
|
|
|
(202.1)
|
|
Net income
|
|
139.2
|
|
|
166.2
|
|
|
454.2
|
|
|
410.2
|
|
Noncontrolling interests, net of
income taxes
|
|
0.3
|
|
|
-
|
|
|
0.3
|
|
|
-
|
|
Net income attributable to
Harris Corporation
|
$
|
139.5
|
|
$
|
166.2
|
|
$
|
454.5
|
|
$
|
410.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share
attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harris Corporation common
shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.10
|
|
$
|
1.27
|
|
$
|
3.57
|
|
$
|
3.13
|
|
|
Diluted
|
$
|
1.09
|
|
$
|
1.26
|
|
$
|
3.54
|
|
$
|
3.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per common
share
|
$
|
0.25
|
|
$
|
0.22
|
|
$
|
0.75
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares
outstanding
|
|
125.0
|
|
|
128.8
|
|
|
125.9
|
|
|
129.8
|
|
Diluted weighted average shares
outstanding
|
|
126.0
|
|
|
130.0
|
|
|
126.9
|
|
|
130.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
2
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
BUSINESS
SEGMENT INFORMATION
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Three
Quarters Ended
|
|
|
|
|
April
1,
|
|
April
2,
|
|
April
1,
|
|
April
2,
|
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RF Communications
|
$
|
550.0
|
|
$
|
550.7
|
|
$
|
1,661.2
|
|
$
|
1,437.3
|
|
|
Government Communications
Systems
|
|
431.2
|
|
|
426.9
|
|
|
1,277.0
|
|
|
1,297.6
|
|
|
Integrated Network
Solutions
|
|
462.9
|
|
|
375.8
|
|
|
1,400.4
|
|
|
1,080.5
|
|
|
Corporate
eliminations
|
|
(30.8)
|
|
|
(23.9)
|
|
|
(81.4)
|
|
|
(65.2)
|
|
|
|
|
$
|
1,413.3
|
|
$
|
1,329.5
|
|
$
|
4,257.2
|
|
$
|
3,750.2
|
|
Income Before Income
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RF Communications
|
$
|
178.5
|
|
$
|
204.7
|
|
$
|
596.3
|
|
$
|
487.3
|
|
|
|
Government Communications
Systems
|
|
59.8
|
|
|
58.4
|
|
|
163.8
|
|
|
167.1
|
|
|
|
Integrated Network
Solutions
|
|
20.7
|
|
|
28.3
|
|
|
67.8
|
|
|
90.6
|
|
|
Unallocated corporate
expense
|
|
(19.8)
|
|
|
(23.0)
|
|
|
(67.5)
|
|
|
(67.0)
|
|
|
Corporate
eliminations
|
|
(7.8)
|
|
|
(3.9)
|
|
|
(17.1)
|
|
|
(11.3)
|
|
|
Non-operating loss
|
|
(0.3)
|
|
|
(0.5)
|
|
|
(1.6)
|
|
|
(1.0)
|
|
|
Net interest expense
|
|
(24.7)
|
|
|
(17.7)
|
|
|
(61.9)
|
|
|
(53.4)
|
|
|
|
|
$
|
206.4
|
|
$
|
246.3
|
|
$
|
679.8
|
|
$
|
612.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
3
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Quarters Ended
|
|
|
|
|
|
April
1,
|
|
April
2,
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
|
$
|
454.2
|
|
$
|
410.2
|
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
148.5
|
|
|
121.0
|
|
|
|
Share-based
compensation
|
|
36.5
|
|
|
28.8
|
|
|
|
Non-current deferred income
taxes
|
|
17.5
|
|
|
(0.6)
|
|
|
|
(Increase) decrease
in:
|
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
(19.6)
|
|
|
119.7
|
|
|
|
|
Inventories
|
|
(44.6)
|
|
|
(46.9)
|
|
|
|
Increase (decrease)
in:
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
|
(22.8)
|
|
|
(65.2)
|
|
|
|
|
Advance payments and unearned
income
|
|
45.6
|
|
|
38.9
|
|
|
|
|
Income taxes
|
|
(32.2)
|
|
|
24.5
|
|
|
|
Other
|
|
(26.3)
|
|
|
4.9
|
|
Net cash provided by operating
activities
|
|
556.8
|
|
|
635.3
|
|
|
|
|
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Cash paid for acquired
businesses
|
|
(548.4)
|
|
|
(40.2)
|
|
|
Cash paid for cost-method
investment
|
|
(10.0)
|
|
|
-
|
|
|
Additions of property, plant and
equipment
|
|
(186.1)
|
|
|
(129.9)
|
|
|
Additions of capitalized
software
|
|
(10.1)
|
|
|
(6.3)
|
|
Net cash used in investing
activities
|
|
(754.6)
|
|
|
(176.4)
|
|
|
|
|
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Proceeds from
borrowings
|
|
855.7
|
|
|
-
|
|
|
Repayments of
borrowings
|
|
(0.6)
|
|
|
(106.6)
|
|
|
Proceeds from exercises of
employee stock options
|
|
19.2
|
|
|
12.1
|
|
|
Repurchases of common
stock
|
|
(156.0)
|
|
|
(155.7)
|
|
|
Cash dividends
|
|
(95.7)
|
|
|
(86.4)
|
|
Net cash provided by (used in)
financing activities
|
|
622.6
|
|
|
(336.6)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash and cash equivalents
|
|
5.1
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash
equivalents
|
|
429.9
|
|
|
124.5
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents,
beginning of year
|
|
455.2
|
|
|
281.2
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end
of quarter
|
$
|
885.1
|
|
$
|
405.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
4
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
1,
|
|
July
2,
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
885.1
|
|
$
|
455.2
|
|
|
Receivables
|
|
796.9
|
|
|
736.0
|
|
|
Inventories
|
|
693.9
|
|
|
615.3
|
|
|
Income taxes
receivable
|
|
29.9
|
|
|
15.3
|
|
|
Current deferred income
taxes
|
|
156.5
|
|
|
145.3
|
|
|
Other current assets
|
|
70.7
|
|
|
37.5
|
|
|
Property, plant and
equipment
|
|
758.8
|
|
|
609.7
|
|
|
Goodwill
|
|
1,963.4
|
|
|
1,576.2
|
|
|
Intangible assets
|
|
416.0
|
|
|
297.8
|
|
|
Non-current deferred income
taxes
|
|
43.5
|
|
|
107.7
|
|
|
Other non-current
assets
|
|
214.6
|
|
|
147.6
|
|
|
|
|
|
$
|
6,029.3
|
|
$
|
4,743.6
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
$
|
180.0
|
|
$
|
30.0
|
|
|
Accounts payable
|
|
382.6
|
|
|
329.4
|
|
|
Compensation and
benefits
|
|
221.9
|
|
|
239.7
|
|
|
Other accrued items
|
|
295.5
|
|
|
267.5
|
|
|
Advance payments and unearned
income
|
|
223.5
|
|
|
175.6
|
|
|
Income taxes payable
|
|
-
|
|
|
8.9
|
|
|
Current portion of long-term
debt
|
|
6.6
|
|
|
0.7
|
|
|
Long-term debt
|
|
1,886.8
|
|
|
1,176.6
|
|
|
Long-term contract
liability
|
|
123.7
|
|
|
132.4
|
|
|
Other long-term
liabilities
|
|
212.6
|
|
|
192.7
|
|
|
Equity
|
|
2,496.1
|
|
|
2,190.1
|
|
|
$
|
6,029.3
|
|
$
|
4,743.6
|
|
|
|
|
|
|
|
|
|
|
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES AND REGULATION G DISCLOSURE
|
|
|
To supplement our condensed consolidated financial statements
presented in accordance with U.S. generally accepted accounting
principles (GAAP), we provide additional measures of segments'
operating income; cost of product sales and services; engineering,
selling and administrative expenses; income before income taxes;
income taxes; net income; net income attributable to Harris
Corporation; and net income per diluted common share attributable
to Harris Corporation common shareholders adjusted to exclude
certain costs, charges, expenses and losses. Harris management
believes that these non-GAAP financial measures, when considered
together with the GAAP financial measures, provide information that
is useful to investors in understanding period-over-period
operating results separate and apart from items that may, or could,
have a disproportionately positive or negative impact on results in
any particular period. Harris management also believes that these
non-GAAP financial measures enhance the ability of investors to
analyze Harris' business trends and to understand Harris'
performance. In addition, Harris may utilize non-GAAP financial
measures as a guide in its forecasting, budgeting, and long-term
planning process and to measure operating performance for some
management compensation purposes. Any analysis of non-GAAP
financial measures should be used only in conjunction with results
presented in accordance with GAAP. A reconciliation of these
non-GAAP financial measures with the most directly comparable
financial measures calculated in accordance with GAAP follows:
|
|
Table
5
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
|
|
Condensed
Consolidated Statement of Income
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
|
|
|
April 1,
2011
|
|
April 2,
2010
|
|
|
|
|
As
Reported
|
|
Adjustment
|
|
Non-GAAP
|
|
As
Reported
|
|
Adjustment
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions, except per share amounts)
|
|
Revenue from product sales and
services
|
$
|
1,413.3
|
|
$
|
-
|
|
$
|
1,413.3
|
|
$
|
1,329.5
|
|
$
|
-
|
|
$
|
1,329.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales and
services (A)
|
|
(896.3)
|
|
|
-
|
|
|
(896.3)
|
|
|
(820.0)
|
|
|
1.0
|
|
|
(819.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering, selling and
administrative expenses (B)
|
|
(285.6)
|
|
|
10.8
|
|
|
(274.8)
|
|
|
(245.0)
|
|
|
4.3
|
|
|
(240.7)
|
|
Non-operating loss
|
|
(0.3)
|
|
|
-
|
|
|
(0.3)
|
|
|
(0.5)
|
|
|
-
|
|
|
(0.5)
|
|
Interest income
|
|
1.3
|
|
|
-
|
|
|
1.3
|
|
|
0.4
|
|
|
-
|
|
|
0.4
|
|
Interest expense
|
|
(26.0)
|
|
|
-
|
|
|
(26.0)
|
|
|
(18.1)
|
|
|
-
|
|
|
(18.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
206.4
|
|
|
10.8
|
|
|
217.2
|
|
|
246.3
|
|
|
5.3
|
|
|
251.6
|
|
Income taxes (C)
|
|
(67.2)
|
|
|
(1.7)
|
|
|
(68.9)
|
|
|
(80.1)
|
|
|
(2.0)
|
|
|
(82.1)
|
|
Net income
|
|
139.2
|
|
|
9.1
|
|
|
148.3
|
|
|
166.2
|
|
|
3.3
|
|
|
169.5
|
|
Noncontrolling interests, net of
income taxes
|
|
0.3
|
|
|
-
|
|
|
0.3
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Net income attributable to
Harris Corporation
|
$
|
139.5
|
|
$
|
9.1
|
|
$
|
148.6
|
|
$
|
166.2
|
|
$
|
3.3
|
|
$
|
169.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted common share attributable
to Harris Corporation common shareholders
|
$
|
1.09
|
|
$
|
0.07
|
|
$
|
1.16
|
|
$
|
1.26
|
|
$
|
0.03
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Quarters Ended
|
|
Three
Quarters Ended
|
|
|
|
April 1,
2011
|
|
April 2,
2010
|
|
|
|
As
Reported
|
|
Adjustment
|
|
Non-GAAP
|
|
As
Reported
|
|
Adjustment
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions, except per share amounts)
|
|
Revenue from product sales and
services
|
$
|
4,257.2
|
|
$
|
-
|
|
$
|
4,257.2
|
|
$
|
3,750.2
|
|
$
|
-
|
|
$
|
3,750.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales and
services (A)
|
|
(2,717.9)
|
|
|
-
|
|
|
(2,717.9)
|
|
|
(2,410.7)
|
|
|
5.0
|
|
|
(2,405.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering, selling and
administrative expenses (B)
|
|
(796.0)
|
|
|
17.0
|
|
|
(779.0)
|
|
|
(672.8)
|
|
|
11.0
|
|
|
(661.8)
|
|
Non-operating loss
|
|
(1.6)
|
|
|
-
|
|
|
(1.6)
|
|
|
(1.0)
|
|
|
-
|
|
|
(1.0)
|
|
Interest income
|
|
2.3
|
|
|
-
|
|
|
2.3
|
|
|
1.1
|
|
|
-
|
|
|
1.1
|
|
Interest expense
|
|
(64.2)
|
|
|
-
|
|
|
(64.2)
|
|
|
(54.5)
|
|
|
-
|
|
|
(54.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
679.8
|
|
|
17.0
|
|
|
696.8
|
|
|
612.3
|
|
|
16.0
|
|
|
628.3
|
|
Income taxes (C)
|
|
(225.6)
|
|
|
(2.9)
|
|
|
(228.5)
|
|
|
(202.1)
|
|
|
(5.9)
|
|
|
(208.0)
|
|
Net income
|
|
454.2
|
|
|
14.1
|
|
|
468.3
|
|
|
410.2
|
|
|
10.1
|
|
|
420.3
|
|
Noncontrolling interests, net of
income taxes
|
|
0.3
|
|
|
-
|
|
|
0.3
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Net income attributable to
Harris Corporation
|
$
|
454.5
|
|
$
|
14.1
|
|
$
|
468.6
|
|
$
|
410.2
|
|
$
|
10.1
|
|
$
|
420.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted common share attributable
to Harris Corporation common shareholders
|
$
|
3.54
|
|
$
|
0.11
|
|
$
|
3.65
|
|
$
|
3.11
|
|
$
|
0.07
|
|
$
|
3.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
6
HARRIS
CORPORATION
FY '11 Third
Quarter Summary
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
Business
Segment Information
(Unaudited)
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
|
|
|
|
April 1,
2011
|
|
April 2,
2010
|
|
|
|
|
|
As
Reported
|
|
Adjustment
|
|
Non-GAAP
|
|
As
Reported
|
|
Adjustment
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RF Communications
|
|
$
|
550.0
|
|
$
|
-
|
|
$
|
550.0
|
|
$
|
550.7
|
|
$
|
-
|
|
$
|
550.7
|
|
|
Government Communications
Systems
|
|
|
431.2
|
|
|
-
|
|
|
431.2
|
|
|
426.9
|
|
|
-
|
|
|
426.9
|
|
|
Integrated Network
Solutions
|
|
|
462.9
|
|
|
-
|
|
|
462.9
|
|
|
375.8
|
|
|
-
|
|
|
375.8
|
|
|
Corporate
eliminations
|
|
|
(30.8)
|
|
|
-
|
|
|
(30.8)
|
|
|
(23.9)
|
|
|
-
|
|
|
(23.9)
|
|
|
|
|
|
$
|
1,413.3
|
|
$
|
-
|
|
$
|
1,413.3
|
|
$
|
1,329.5
|
|
$
|
-
|
|
$
|
1,329.5
|
|
Income Before Income
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RF Communications (D)
|
|
$
|
178.5
|
|
$
|
-
|
|
$
|
178.5
|
|
$
|
204.7
|
|
$
|
3.7
|
|
$
|
208.4
|
|
|
|
Government Communications
Systems (E)
|
|
|
59.8
|
|
|
-
|
|
|
59.8
|
|
|
58.4
|
|
|
0.8
|
|
|
59.2
|
|
|
|
Integrated Network Solutions
(F)
|
|
|
20.7
|
|
|
10.8
|
|
|
31.5
|
|
|
28.3
|
|
|
0.8
|
|
|
29.1
|
|
|
Unallocated corporate
expense
|
|
|
(19.8)
|
|
|
-
|
|
|
(19.8)
|
|
|
(23.0)
|
|
|
-
|
|
|
(23.0)
|
|
|
Corporate
eliminations
|
|
|
(7.8)
|
|
|
-
|
|
|
(7.8)
|
|
|
(3.9)
|
|
|
-
|
|
|
(3.9)
|
|
|
Non-operating loss
|
|
|
(0.3)
|
|
|
-
|
|
|
(0.3)
|
|
|
(0.5)
|
|
|
-
|
|
|
(0.5)
|
|
|
Net interest expense
|
|
|
(24.7)
|
|
|
-
|
|
|
(24.7)
|
|
|
(17.7)
|
|
|
-
|
|
|
(17.7)
|
|
|
|
|
|
$
|
206.4
|
|
$
|
10.8
|
|
$
|
217.2
|
|
$
|
246.3
|
|
$
|
5.3
|
|
$
|
251.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Quarters Ended
|
|
Three
Quarters Ended
|
|
|
|
|
|
April 1,
2011
|
|
April 2,
2010
|
|
|
|
|
|
As
Reported
|
|
Adjustment
|
|
Non-GAAP
|
|
As
Reported
|
|
Adjustment
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In
millions)
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RF Communications
|
|
$
|
1,661.2
|
|
$
|
-
|
|
$
|
1,661.2
|
|
$
|
1,437.3
|
|
$
|
-
|
|
$
|
1,437.3
|
|
|
Government Communications
Systems
|
|
|
1,277.0
|
|
|
-
|
|
|
1,277.0
|
|
|
1,297.6
|
|
|
-
|
|
|
1,297.6
|
|
|
Integrated Network
Solutions
|
|
|
1,400.4
|
|
|
-
|
|
|
1,400.4
|
|
|
1,080.5
|
|
|
-
|
|
|
1,080.5
|
|
|
Corporate
eliminations
|
|
|
(81.4)
|
|
|
-
|
|
|
(81.4)
|
|
|
(65.2)
|
|
|
-
|
|
|
(65.2)
|
|
|
|
|
|
$
|
4,257.2
|
|
$
|
-
|
|
$
|
4,257.2
|
|
$
|
3,750.2
|
|
$
|
-
|
|
$
|
3,750.2
|
|
Income Before Income
Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating
Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RF Communications (D)
|
|
$
|
596.3
|
|
$
|
-
|
|
$
|
596.3
|
|
$
|
487.3
|
|
$
|
12.9
|
|
$
|
500.2
|
|
|
|
Government Communications
Systems (E)
|
|
|
163.8
|
|
|
-
|
|
|
163.8
|
|
|
167.1
|
|
|
2.2
|
|
|
169.3
|
|
|
|
Integrated Network Solutions
(F)
|
|
|
67.8
|
|
|
17.0
|
|
|
84.8
|
|
|
90.6
|
|
|
0.9
|
|
|
91.5
|
|
|
Unallocated corporate
expense
|
|
|
(67.5)
|
|
|
-
|
|
|
(67.5)
|
|
|
(67.0)
|
|
|
-
|
|
|
(67.0)
|
|
|
Corporate
eliminations
|
|
|
(17.1)
|
|
|
-
|
|
|
(17.1)
|
|
|
(11.3)
|
|
|
-
|
|
|
(11.3)
|
|
|
Non-operating loss
|
|
|
(1.6)
|
|
|
-
|
|
|
(1.6)
|
|
|
(1.0)
|
|
|
-
|
|
|
(1.0)
|
|
|
Net interest expense
|
|
|
(61.9)
|
|
|
-
|
|
|
(61.9)
|
|
|
(53.4)
|
|
|
-
|
|
|
(53.4)
|
|
|
|
|
|
$
|
679.8
|
|
$
|
17.0
|
|
$
|
696.8
|
|
$
|
612.3
|
|
$
|
16.0
|
|
$
|
628.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
7
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
Reconciliation of FY '11 and FY
'12 GAAP Net Income per Diluted Share Guidance
|
|
to FY '11
and FY '12 Non-GAAP Net Income per Diluted Share
Guidance
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Fiscal
Year
|
|
|
|
2011
|
|
2012
|
|
|
|
(Guidance)
|
|
(Guidance)
|
|
GAAP net income per diluted
common share
|
$4.56 to
$4.66
|
|
$4.94 to
$5.04
|
|
Charges associated with
acquisitions (G)
|
.24
|
|
.16
|
|
Non-GAAP net income per diluted
common share
|
$4.80 to
$4.90
|
|
$5.10 to
$5.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table
8
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
Integrated
Network Solutions Segment Organic Revenue Growth
Calculation
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
|
|
|
April
1,
|
|
April
2,
|
|
Percent
|
|
|
|
2011
|
|
2010
|
|
Change
|
|
|
|
(In
millions)
|
|
|
|
GAAP revenue
|
$
|
462.9
|
|
$
|
375.8
|
|
23.2%
|
|
Impact of acquisition of CapRock
Communications (H)
|
|
-
|
|
|
92.2
|
|
|
|
Organic revenue
|
$
|
462.9
|
|
$
|
468.0
|
|
-1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
HARRIS
CORPORATION
|
|
FY '11 Third
Quarter Summary
|
|
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
Notes to tables 5 through
8:
|
|
|
Note A – Adjustments to cost of product sales and
services for the quarter ended April 2,
2010 are due to integration costs associated with our
acquisition of the Tyco Electronics Wireless Systems business
("Wireless Systems") ($1.0 million).
Adjustments to cost of product sales and services for the three
quarters ended April 2, 2010 are due
to integration costs and the impact of a step up in inventory
associated with our acquisition of Wireless Systems ($5.0 million).
Note B – Adjustments to engineering, selling and
administrative expenses for the quarter ended April 1, 2011 of $10.8
million and for the three quarters ended April 1, 2011 of $17.0
million are due to integration and other costs associated
with our acquisitions of CapRock Communications ("CapRock"), the
Global Connectivity Services business of the Schlumberger group
("Schlumberger GCS") and the infrastructure assets of the
government business of Core180, Inc. ("Core180 Infrastructure").
Adjustments to engineering, selling and administrative expenses for
the quarter ended April 2, 2010 are
due to integration costs associated with our acquisitions of
Wireless Systems ($2.7 million),
Crucial Security, Inc. ("Crucial") ($0.6
million), the Air Traffic Control business unit of SolaCom
Technologies Inc. ("SolaCom ATC") ($0.2
million) and Patriot Technologies, LLC ("Patriot")
($0.8 million). Adjustments to
engineering, selling and administrative expenses for the three
quarters ended April 2, 2010 are due
to integration costs associated with our acquisitions of Wireless
Systems ($7.9 million), Crucial
($1.4 million), SolaCom ATC
($0.8 million) and Patriot
($0.9 million).
Note C – Adjustments to our income taxes are based on the
applicable tax rate in the jurisdiction to which the item
applies.
Note D – Adjustments to our RF Communications segment
operating income for the quarter ended April
2, 2010 are due to integration costs associated with our
acquisition of Wireless Systems ($3.7
million). Adjustments to our RF Communications segment
operating income for the three quarters ended April 2, 2010 are due to integration costs and
the impact of a step up in inventory associated with our
acquisition of Wireless Systems ($12.9
million).
Note E – Adjustments to our Government Communications
Systems segment operating income for the quarter ended April 2, 2010 are due to integration costs
associated with our acquisitions of Crucial ($0.6 million) and SolaCom ATC ($0.2 million). Adjustments to our Government
Communications Systems segment operating income for the three
quarters ended April 2, 2010 are due
to integration costs associated with our acquisitions of Crucial
($1.4 million) and SolaCom ATC
($0.8 million).
Note F – Adjustments to our Integrated Network Solutions
segment operating income for the quarter ended April 1, 2011 of $10.8
million and for the three quarters ended April 1, 2011 of $17.0
million are due to integration and other costs associated
with our acquisitions of CapRock, Schlumberger GCS and Core180
Infrastructure. Adjustments to our Integrated Network Solutions
segment operating income for the quarter ended April 2, 2010 of $0.8
million and for the three quarters ended April 2, 2010 of $0.9
million are due to integration costs associated with our
acquisition of Patriot.
Note G – Adjustment for estimated pre-tax charges of
$40 million ($.24 per diluted share) for fiscal 2011 and
$29 million ($.16 per diluted share) for fiscal 2012 related
to integration and other costs associated with our acquisitions of
CapRock, Schlumberger GCS, Core180 Infrastructure and Carefx
Corporation.
Note H – Adjustment related to the revenue of CapRock for
the quarter ended April 2, 2010.
SOURCE Harris Corporation