- 3Q20 revenue
- $4.5 billion, up 0.7% versus prior year
- Up 4.4% on an organic1 basis; funded book-to-bill of
1.02
- 3Q20 margin and earnings
- Net income margin of 9.6%; adjusted earnings before interest
and taxes (EBIT)2 margin of 17.9%
- GAAP earnings per share from continuing operations (EPS) of
$1.99, up 4.7%
- Non-GAAP EPS2 of $2.84, up 10%
- 3Q20 cash flow
- Operating cash flow of $757 million; adjusted free cash flow
(FCF)2 of $726 million
- Narrowed revenue and increased EBIT margin, EPS and adjusted
FCF2 guidance for 2020
L3Harris Technologies, Inc. (NYSE:LHX) reported third quarter
2020 revenue of $4.5 billion, up 0.7% versus prior year, and up
4.4% on an organic1 basis. GAAP net income was $430 million, down
1.1% versus prior year. Adjusted EBIT2 was $798 million, up 4.2%
versus prior year, and margin expanded 60 basis points (bps) to
17.9%. GAAP EPS was $1.99, up 4.7%, and non-GAAP EPS2 was $2.84, up
10% versus prior year.
“The L3Harris team delivered a strong quarter that demonstrated
integration progress, portfolio resiliency and the perseverance of
our employees,” said William M. Brown, Chairman and Chief Executive
Officer. “Our on-going execution puts us in a position to deliver
on an improved outlook for the year, which we'll build on over the
medium term.”
Summary Financial Results
Third Quarter
($ millions, except per share data)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
4,463
$
4,431
0.7%
Net income
$
430
$
435
(1.1%)
Net income margin
9.6
%
9.8
%
(20)bps
EPS
$
1.99
$
1.90
4.7%
(Non-GAAP to non-GAAP comparison)2
Revenue
$
4,463
$
4,431
0.7%
Adjusted EBIT
$
798
$
766
4.2%
Adjusted EBIT margin
17.9
%
17.3
%
60bps
EPS
$
2.84
$
2.58
10%
Year-To-Date
($ millions, except per share data)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
13,534
$
8,024
69%
Net income
$
902
$
946
(4.7%)
Net income margin
6.7
%
11.8
%
(510)bps
EPS
$
4.27
$
6.13
(30%)
(GAAP to pro forma comparison)3
Revenue
$
13,534
$
13,265
2.0%
Net income
$
902
$
1,251
(28%)
Net income margin
6.7
%
9.4
%
(270)bps
EPS
$
4.27
$
5.48
(22%)
(Non-GAAP to adjusted pro forma
comparison) 2,3
Revenue
$
13,534
$
13,265
2.0%
Adjusted EBIT
$
2,416
$
2,204
9.6%
Adjusted EBIT margin
17.9
%
16.6
%
130bps
EPS
$
8.47
$
7.41
14%
Revenue for the quarter increased 0.7% versus prior-year GAAP as
3.3% growth in core U.S. and international businesses was offset by
the divestiture of the airport security and automation business and
COVID-19-related impacts, mainly for commercial-related sales.
Organic revenue increased 4.4% for the quarter as 7.4% growth in
core U.S. and international businesses, excluding commercial
aviation and Public Safety, more than offset the anticipated
decline from the pandemic. At the segment level, revenue growth was
driven by Integrated Mission Systems, Space and Airborne Systems
and Communication Systems, partially offset by a decline in
Aviation Systems due to COVID-19-related impacts.
GAAP EPS for the quarter increased 4.7% versus prior year driven
by operational excellence, integration benefits, a decrease in
integration costs and lower share count, partially offset by
impacts from the pandemic, higher investments and amortization of
merger-related intangibles, as well as the absence of a prior-year
benefit from the gain on the sale of the Harris Night Vision
business. Third quarter non-GAAP EPS increased 10% versus prior
year driven by the favorable factors noted above, partially offset
by the impacts of the pandemic and higher investments. Net income
margin contracted 20 bps and adjusted EBIT margin expanded 60 bps
to 17.9% versus prior year.
Segment Results
Integrated Mission Systems
Third Quarter
($ millions)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
1,372
$
1,292
6.2%
Operating income
$
213
$
176
21%
Operating margin
15.5
%
13.6
%
190bps
Year-To-Date
($ millions)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
4,073
$
1,317
n/m
Operating income
$
638
$
182
n/m
Operating margin
15.7
%
13.8
%
190bps
(GAAP to pro forma comparison)
Revenue
$
4,073
$
3,894
4.6%
Operating income
$
638
$
503
27%
Operating margin
15.7
%
12.9
%
280bps
n/m: Not meaningful
Third quarter revenue increased 6.2% from strong growth in
Maritime from a ramp in manned and classified platforms, and in ISR
driven by aircraft missionization demand, partially offset by a
moderate decline in Electro Optical due to program timing. Third
quarter operating income increased 21% to $213 million, and
operating margin expanded 190 bps to 15.5% versus prior year,
driven by operational excellence and integration benefits,
partially offset by higher investments.
Segment funded book-to-bill was 1.08 for the quarter and 1.22
year-to-date.
Orders strength in ISR continued with several international
awards totaling $123 million, including an award to provide ISR
capabilities on three King Air 350ER aircraft for the Canadian
Department of National Defence (DND) and an order to deliver a
missionized Gulfstream G550 aircraft to the Royal Australian Air
Force (RAAF).
In Electro Optical, sensor demand remained strong with a $37
million sole-source IDIQ award for thermal sight systems and
equipment in support of the U.S. Marine Corps Assault Amphibious
Vehicle. The company also reinforced its international position
with a $54 million order for WESCAM airborne turrets from a
European customer.
In Maritime, the company's investment in unmanned capabilities
led to a $35 million award from the U.S. Navy as the prime system
integrator for the Medium Unmanned Surface Vehicle (MUSV) program,
which with options could reach $281 million. The company was also
awarded a multi-million-dollar contract by Fincantieri Marinette
Marine to provide subsystems and system integration for the U.S.
Navy's FFG(X) program, with a total potential that could exceed
$300 million.
Space and Airborne Systems
Third Quarter
($ millions)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
1,249
$
1,173
6.5%
Operating income
$
231
$
230
0.4%
Operating margin
18.5
%
19.6
%
(110)bps
Year-To-Date
($ millions)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
3,690
$
3,148
17%
Operating income
$
687
$
599
15%
Operating margin
18.6
%
19.0
%
(40)bps
(GAAP to pro forma comparison)
Revenue
$
3,690
$
3,485
5.9%
Operating income
$
687
$
656
4.7%
Operating margin
18.6
%
18.8
%
(20)bps
Third quarter revenue increased 6.5% versus prior-year GAAP and
6.8% on an organic basis, primarily due to a ramp on the F-35
platform in Mission Avionics and classified growth in Intel and
Cyber, partially offset by program timing in Space and Electronic
Warfare. Third quarter operating income was flat at $231 million
and operating margin contracted 110 bps versus prior year to 18.5%
as integration benefits and operational excellence were more than
offset by program mix.
Segment funded book-to-bill was 1.04 for the quarter and 1.05
year-to-date.
Order momentum in Space continued with several key awards,
including a $119 million contract for the Ground-Based Electro
Optical Deep Space Surveillance (GEODSS) system upgrade from the
U.S. Space and Missile Systems Center, bringing total
awards-to-date on the MOSSAIC program to over $200 million. In
addition, the company was awarded a multi-million-dollar
sole-source award for a classified imaging satellite, extending
L3Harris' responsive space franchise. The company also won two key
revenue synergy opportunities including a $194 million competitive,
multi-award contract with a multi-million-dollar initial order from
the Space Development Agency (SDA) to develop and integrate
multiple end-to-end satellite systems for the tracking layer of the
National Defense Space Architecture, and a $22 million contract to
develop next-generation modeling and simulation technologies for
the Defense Advanced Research Projects Agency's (DARPA) Secure
Advanced Framework for Simulation and Modeling (SAFE-SiM)
program.
Within Mission Avionics, L3Harris booked $255 million in orders
for F-35 avionics and modernization components, increasing total
orders for the year to more than $650 million on the platform. The
company also received a multi-million-dollar contract for the
initial production lot of the modernized open mission systems
processor for the F/A-18 and EA-18G, a key element of the
platforms' Block upgrades with significant follow-on
opportunity.
In Electronic Warfare, the company was awarded a $104 million
contract from the U.S. Navy to supply the next production lot of
the Integrated Defensive Electronic Countermeasures (IDECM) jammer
system for the F/A-18 aircraft, increasing the inception-to-date
IDECM development and production awards to more than $2
billion.
Communication Systems
Third Quarter
($ millions)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
1,094
$
1,032
6.0%
Operating income
$
273
$
234
17%
Operating margin
25.0
%
22.7
%
230bps
Year-To-Date
($ millions)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
3,300
$
2,221
49%
Operating income
$
788
$
577
37%
Operating margin
23.9
%
26.0
%
(210)bps
(GAAP to pro forma comparison)
Revenue
$
3,300
$
3,159
4.5%
Operating income
$
788
$
699
13%
Operating margin
23.9
%
22.1
%
180bps
(Non-GAAP to pro forma comparison)4
Revenue
$
3,300
$
3,159
4.5%
Operating income
$
789
$
699
13%
Operating margin
23.9
%
22.1
%
180bps
Third quarter revenue increased 6.0% versus prior-year GAAP and
6.7% on an organic basis from growth in Tactical Communications,
primarily due to strong demand in the Middle East, Europe and Asia
Pacific, as well as the continued ramp in U.S. DoD modernization
that also benefited Integrated Vision Systems, partially offset by
expected lower demand within Public Safety due to COVID-19. Third
quarter operating income increased 17% to $273 million and
operating margin expanded 230 bps to 25.0% versus prior year from
operational excellence, integration benefits and cost
management.
Segment funded book-to-bill was 0.99 for the quarter and 0.94
year-to-date.
DoD tactical radio modernization order momentum continued in the
third quarter with an $82 million award from the U.S. Special
Operations Command (SOCOM) for the initial full-rate production
order of its new Falcon IV® AN/PRC-167 radios, under the $255
million Next Generation Tactical Communications (NGTC)
multi-channel manpack IDIQ. The company also experienced solid
international tactical radio demand, including a $46 million order
for Falcon III® products from a country in the Middle East,
supporting the company's installed base and furthering its
international leadership.
In addition, building on the successful execution of the UAE
Emirates Land Tactical Systems (ELTS) program, the company
strengthened its position in integrated networked systems with the
award of a multi-million-dollar contract from the Bahrain Defense
Forces to provide a C4I system as part of a battlefield management
solution.
In Integrated Vision Solutions, the company received an initial
multi-million-dollar order from the U.S. Army for the Enhanced
Night Vision Goggle – Binocular (ENVG-B) Program of Record, which
has a total award value of $442 million, a key milestone in a
multi-year modernization opportunity.
Aviation Systems
Third Quarter
($ millions)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
792
$
948
(16%)
Operating income
$
100
$
127
(21%)
Operating margin
12.6
%
13.4
%
(80)bps
(Non-GAAP to non-GAAP comparison)5
Revenue
$
792
$
948
(16%)
Operating income
$
103
$
127
(19%)
Operating margin
13.0
%
13.4
%
(40)bps
Year-To-Date
($ millions)
2020
2019
Change
(GAAP to GAAP comparison)
Revenue
$
2,603
$
1,278
n/m
Operating income
$
(46)
$
163
n/m
Operating margin
(1.8)
%
12.8
%
(1,460)bps
(GAAP to pro forma comparison)
Revenue
$
2,603
$
2,827
(7.9%)
Operating income
$
(46)
$
341
(113%)
Operating margin
(1.8)
%
12.1
%
(1,390)bps
(Non-GAAP to pro forma comparison)5
Revenue
$
2,603
$
2,827
(7.9%)
Operating income
$
350
$
341
2.6%
Operating margin
13.4
%
12.1
%
130bps
n/m: Not meaningful
Third quarter revenue decreased 16% versus prior-year GAAP and
4.1% on an organic basis, driven by COVID-19-related impacts in the
commercial aviation business, which declined consistent with
expectations. This decline was partially offset by growth in
Defense Aviation Products, from a ramp in fuzing and ordnance
systems, and Mission Networks. Third quarter GAAP and non-GAAP
operating income decreased 21% and 19% to $100 million and $103
million, respectively, due to COVID-19-related impacts and the
divestiture of the airport security and automation business. GAAP
and non-GAAP operating margin contracted 80 bps and 40 bps to 12.6%
and 13.0%, respectively, as integration benefits, operational
efficiencies and cost management were more than offset by
COVID-19-related headwinds.
Segment funded book-to-bill was 0.94 for the quarter and 1.08
year-to-date.
In Defense Aviation Products, demand for combat propulsion
systems remained strong, including a $94 million sole-source
contract from the Defense Logistics Agency (DLA) in support of the
M88A2 HERCULES Recovery Vehicle and a $54 million competitive award
from a country in Europe as a powerpack systems integrator. The
company also received a $33 million sole-source follow-on order to
provide flight and range test instrumentation support for the
Trident II D5LE flight test program.
Cash and Capital Deployment
Third Quarter
Year-To-Date
($ millions)
2020
2019
Change
2020
2019
Change
Operating cash flow
$
757
$
81
$
676
$
2,092
$
797
$
1,295
Adjusted free cash flow
$
726
$
618
$
108
$
2,044
$
1,264
$
780
In the third quarter of fiscal 2020, L3Harris generated $726
million in adjusted free cash flow and returned $1,329 million to
shareholders through $1,150 million in share repurchases and $179
million in dividends.
L3Harris also completed the divestiture of its EOTech business
in the quarter. Aggregate proceeds from divestitures total $1,055
million year-to-date.
Guidance
L3Harris updates 2020 guidance as follows:
- Revenue
- ~$18.4 billion, up organically ~4.0% on a pro forma6
basis(narrowed to mid-point of previous range of $18.2 - $18.6
billion, up 3% - 5%)
- Margin and earnings
- GAAP net income margin of ~7.4% (increased from previous
guidance of 7.1%+)
- Adjusted EBIT margin of ~17.75% (increased from previous
guidance of 17.5%+)
- GAAP EPS of ~ $6.44 (increased from previous guidance of $6.03
- $6.43)
- Non-GAAP EPS of ~$11.55 (increased to upper end of previous
guidance of $11.15 - $11.55)
- Cash flow and capital deployment
- Operating cash flow and adjusted free cash flow of $2.82 -
$2.87 billion and $2.65 - $2.70 billion, respectively (expanded to
upper end of previous ranges of $2.8 - $2.9 billion and $2.6 - $2.7
billion, respectively)
- ~$2.2 billion in share repurchases, inclusive of proceeds from
divestitures announced year-to-date (increased from previous
guidance of ~$1.7 billion)
COVID-19
As communicated in connection with the company’s prior releases
of quarterly financial results for 2020, the ongoing COVID-19
pandemic and attempts to contain it, such as mandatory closures,
“shelter-in-place” orders and travel and quarantine restrictions,
have caused significant disruptions and adverse effects on the U.S.
and global economies, such as impacts to supply chains, customer
demand, international trade and capital markets. L3Harris' response
has involved increasing its focus on keeping its employees safe
while striving to maintain continuity of operations, meet customer
commitments and support suppliers. For example, the company
instituted work-from-home (for employees who are able to work
remotely) and social distancing arrangements; canceled travel and
external events; procured personal protective equipment for
employees; implemented health screening procedures at all
facilities; staggered work shifts, redesigned work stations,
implemented stringent cleaning protocols and initiated more
detailed safety precautions and protocols for on-site work, such as
daily health assessments and mandatory face coverings, which
currently remain in effect. The company has also maintained an
active dialog with key suppliers and developed plans to mitigate
supply chain risks. The company has allowed certain essential
business travel to resume, and continues to expect to utilize a
phased approach based on local conditions for transitioning
employees from work-from-home arrangements to on-site work. The
U.S. Government response to the COVID-19 pandemic has included
identifying the Defense Industrial Base as a Critical
Infrastructure Sector and enhancing cash flow and liquidity for the
Defense Industrial Base, such as by increasing progress payments
and accelerating contract awards. As a part of the Defense
Industrial Base, these actions have enabled the company to keep its
U.S. production facilities largely operational in support of
national security commitments to U.S. Government customers and to
accelerate payments to small business suppliers, which it expects
to continue while the U.S. Government’s responsive actions remain
in effect.
Although the company believes that the large percentage of its
revenue, earnings and cash flow that is derived from sales to the
U.S. Government, whether directly or through prime contractors,
will be relatively predictable, in part due to the responsive
actions taken by the U.S. Government described above, the company's
commercial, international and public safety businesses are at a
higher risk of adverse impacts related to the COVID-19 pandemic.
For example, the severe decline in global air traffic from travel
restrictions and the resulting downturn in the commercial aviation
market and its impact on customer operations has significantly
reduced demand for flight training, flight simulators and
commercial avionics products in the company's Aviation Systems
segment’s Commercial Aviation Solutions sector. As a result, the
company temporarily closed some of its flight training facilities,
initiated restructuring and other actions to align its resources
with the outlook for the commercial aviation market (including
workforce reduction and facility consolidation) and also has
recognized $397 million of charges for impairment of goodwill and
other assets and other COVID-19-related impacts in the first three
quarters of 2020.
The company’s updated 2020 guidance reflects the company’s
current expectations and assumptions regarding disruptions and
other impacts related to the COVID-19 pandemic and associated
containment actions, including on the U.S. and global economies.
These assumptions continue to include a measured assessment of the
downturn in the commercial aerospace business and in demand for
public safety solutions, as well as additional potential risks from
facility shutdowns, supply chain disruptions and international
activity weakness. The company’s current expectations and
assumptions could change, which could negatively affect the
company’s outlook. The extent of these disruptions and impacts,
including on the company's ability to perform under U.S. Government
contracts and other contracts within agreed timeframes and
ultimately on its results of operations and cash flows, will depend
on future developments, including the severity and duration of the
pandemic and associated containment and mitigation actions taken by
the U.S. Government, state and local government officials and
international governments, and consequences thereof, and global air
traffic demand and governmental subsidies to airlines, all of which
are uncertain and unpredictable, could exacerbate other risks
described in the company’s filings with the SEC and could
materially adversely impact the company’s financial condition,
results of operations and cash flows.
Conference Call and Webcast
L3Harris will host a conference call today, October 30, 2020, at
8:00 a.m. Eastern Time (ET) to discuss third quarter 2020 financial
results. The dial-in numbers for the teleconference are (U.S.)
877-407-6184 and (International) 201-389-0877, and participants
will be directed to an operator. Please allow at least 10 minutes
before the scheduled start time to connect to the teleconference.
Participants are encouraged to listen via live webcast and view
management’s supporting slide presentation at
https://www.l3harris.com/investors. A recording of the call will be
available on the L3Harris website beginning at approximately 12
p.m. ET on October 30, 2020.
About L3Harris Technologies
L3Harris Technologies is an agile global aerospace and defense
technology innovator, delivering end-to-end solutions that meet
customers’ mission-critical needs. The company provides advanced
defense and commercial technologies across air, land, sea, space
and cyber domains. L3Harris has approximately $18 billion in annual
revenue and 48,000 employees, with customers in more than 100
countries. L3Harris.com.
Non-GAAP and Pro Forma Financial Measures
This press release contains non-GAAP financial measures within
the meaning of Regulation G promulgated by the Securities and
Exchange Commission (“SEC”), including earnings per diluted share
from continuing operations (“EPS”) for the third quarters and first
three quarters of 2020 and 2019; adjusted earnings before interest
and taxes (“EBIT”) and adjusted EBIT margin for the third quarters
and first three quarters of 2020 and 2019; adjusted free cash flow
for the third quarters and first three quarters of 2020 and 2019;
organic revenue growth for the third quarter of 2020 for the
company and the Communication Systems, Space and Airborne Systems
and Aviation Systems segments; organic revenue growth for the third
quarter of 2020 for the company, excluding Commercial Aviation
Solutions and Public Safety and Professional Communications
sectors; segment operating income and margin for the first three
quarters of 2020 for the Communication Systems segment and for the
third quarter and first three quarters of 2020 for the Aviation
Systems segment; and expected EPS, adjusted EBIT margin, adjusted
free cash flow and organic revenue growth for full-year 2020; in
each case, adjusted for certain costs, charges, expenses, losses or
other amounts as set forth in the reconciliations of non-GAAP
financial measures included in the financial statement tables
accompanying this press release. A “non-GAAP financial measure” is
generally defined as a numerical measure of a company’s historical
or future performance that excludes or includes amounts, or is
subject to adjustments, so as to be different from the most
directly comparable measure calculated and presented in accordance
with generally accepted accounting principles (“GAAP”). L3Harris
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. L3Harris management
also believes that these non-GAAP financial measures enhance the
ability of investors to analyze L3Harris business trends and to
understand L3Harris performance. In addition, L3Harris may utilize
non-GAAP financial measures as guides in forecasting, budgeting and
long-term planning processes and to measure operating performance
for some management compensation purposes. Non-GAAP financial
measures should be considered in addition to, and not as a
substitute for, or superior to, financial measures presented in
accordance with GAAP.
This press release also contains pro forma financial measures
for the first three quarters of 2019 or full-year 2019, which
combine the applicable actual GAAP result for the third quarter or
second half of 2019, as applicable (which occurred following the
L3Harris Merger), with the corresponding results for the first two
quarters of 2019 (preceding the L3Harris Merger) in the pro forma
condensed combined income statement information (prepared in a
manner consistent with Article 11 of Regulation S-X) included in
the company’s Current Report on Form 8-K filed with the SEC on May
4, 2020. Adjusted pro forma financial measures are included among
the non-GAAP financial measures described in the preceding
paragraph and refer to the applicable prior-year pro forma
financial measure as adjusted for certain costs, charges, expenses,
losses or other amounts as set forth in the reconciliations of
non-GAAP financial measures included in the financial statement
tables accompanying this press release.
Attachments: Financial statements (10 tables)
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 on 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 press release include but are
not limited to: revenue, earnings per share, operating cash flow,
adjusted free cash flow, net income and adjusted EBIT margin and
share repurchase guidance for 2020; statements regarding being in a
position to deliver on an improved outlook for 2020 and building on
it over the medium term; statements regarding expected, potential
or contingent impacts or actual, potential or contingent plans or
expectations related to the COVID-19 pandemic; program, contract
and order opportunities and awards and the value or potential value
and timing thereof; and other statements regarding outlook or that
are not historical facts. 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,
future trends and forward-looking statements could be affected by
many factors, risks and uncertainties, including but not limited
to: actual impacts related to the COVID-19 pandemic; risks related
to disruption of management time from ongoing business operations
due to the combination of L3 and Harris; risks related to the
inability to realize benefits or to implement integration plans and
other consequences associated with the combination; the risk that
any announcements relating to the combination could have adverse
effects on the market price of the company’s stock; the risk that
the combination could have an adverse effect on the company’s
ability to retain customers and retain and hire key personnel and
maintain relationships with suppliers and customers, including the
U.S. Government and other governments, and on its operating results
and businesses generally; the loss of the company’s relationship
with the U.S. Government or a change or reduction in U.S.
Government funding; potential changes in U.S. Government or
customer priorities and requirements (including potential deferrals
of awards, terminations, reductions of expenditures, changes to
respond to the priorities of Congress and the Administration,
budgetary constraints, debt ceiling implications, sequestration,
and cost-cutting initiatives); a security breach, through cyber
attack or otherwise, or other significant disruptions of the
company’s IT networks and systems or those the company operates for
customers; the level of returns on defined benefit plan assets and
changes in interest rates; risks inherent with large long-term
fixed-price contracts, particularly the ability to contain cost
overruns; changes in estimates used in accounting for the company’s
programs; financial and government and regulatory risks relating to
international sales and operations; effects of any non-compliance
with laws; the company’s ability to continue to develop new
products that achieve market acceptance; the consequences of
uncertain economic conditions and future geo-political events;
strategic transactions, including mergers, acquisitions,
divestitures, spin-offs and the risks and uncertainties related
thereto, including the company’s ability to manage and integrate
acquired businesses and realize expected benefits, the potential
disruption to relationships with employees, suppliers and
customers, including the U.S. Government, and to the company’s
business generally, and potential tax, indemnification and other
liabilities and exposures; performance of the company’s
subcontractors and suppliers; potential claims related to
infringement of intellectual property rights or environmental
remediation or other contingencies, litigation and legal matters
and the ultimate outcome thereof; downturns in global demand for
air travel and other economic factors impacting our commercial
aviation products, systems and services business; risks inherent in
developing new and complex technologies and/or that may not be
covered adequately by insurance or indemnity; changes in the
company’s effective tax rate; significant indebtedness and unfunded
pension liability and potential downgrades in the company’s credit
ratings; unforeseen environmental matters; natural disasters or
other disruptions affecting the company’s operations; changes in
future business or other market conditions that could cause
business investments and/or recorded goodwill or other long-term
assets to become impaired and the company’s ability to attract and
retain key employees, maintain reasonable relationships with
unionized employees and manage escalating costs of providing
employee health care. Further information relating to these and
other factors that may impact the company's results, future trends
and forward-looking statements are disclosed in the company's
filings with the SEC. The forward-looking statements contained in
this press release are made as of the date of this press 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. Persons reading this press release are cautioned not to
place undue reliance on forward-looking statements.
_____________________________________________________________________________________________________
1In this release, organic revenue growth
excludes revenue attributable to each divested business for the
portion of the prior-year period equivalent to the portion of the
current-year period following the date the business was divested;
refer to non-GAAP financial measure (NGFM) reconciliations in the
tables accompanying this press release.
2Adjusted EBIT, adjusted EBIT margin,
non-GAAP EPS and adjusted free cash flow (FCF) are NGFMs; refer to
NGFM reconciliations in the tables accompanying this press release
for applicable adjustments and/or exclusions and to the disclosures
in the “Non-GAAP and Pro Forma Financial Measures” section of this
press release for more information.
3In year-to-date comparisons in this
release, "pro forma" refers to the applicable result for
year-to-date 2019, which combines the actual GAAP result for the
third quarter of 2019 with the corresponding results for the first
and second quarters of 2019 in the pro forma condensed combined
income statement information (prepared in a manner consistent with
Article 11 of Regulation S-X) included in L3Harris' Current Report
on Form 8-K filed on May 4, 2020; and “adjusted pro forma" refers
to such combined results as adjusted for certain items indicated in
the NGFM reconciliations in the tables accompanying this press
release.
4Excludes COVID-19-related charges; refer
to NGFM reconciliations in the tables accompanying this press
release.
5Excludes COVID-19-related charges; refer
to NGFM reconciliations in the tables accompanying this press
release.
6"Pro forma" refers to actual GAAP revenue
for the second half of 2019 combined with revenue for the first and
second quarters of 2019 in the pro forma condensed combined income
statement information (prepared in a manner consistent with Article
11 of Regulation S-X) included in L3Harris' Current Report on Form
8-K filed on May 4, 2020.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201030005276/en/
Investor Relations Contact: Rajeev Lalwani, 321-727-9383
rajeev.lalwani@l3harris.com
Media Relations Contact: Jim Burke, 321-727-9131
jim.burke@l3harris.com
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