展示99.1
決算発表l3ハリステクノロジーズは2024年第3四半期の好業績を報告します。
2024年のガイダンスを増やします
ハイライト*
•72億ドルの受注；ブック・ツー・ビル率は1.4倍
•売上高は53億ドルで、8%増加し、そのうち5%は有機的に増加しました。
•営業利益率は9.4％です。調整後のセグメント営業利益率は15.7％です。
•希薄化後epsは$2.10で、非GAAP希薄化後epsは$3.34です
•2024年の売上高見通し範囲が211億ドルから213億ドルに引き上げられました。
•2024年の調整後セグメント営業利益率の見通しは約15.5%に引き上げられました
•2024年の非照会希薄化後epsの見通し範囲が12.95ドルから13.15ドルに増加しました
2024年10月24日、フロリダ州メルボルン — L3ハリス テクノロジーズ（nyse: LHX）は2024年第3四半期の希薄化後epsが$2.10で、2023年第3四半期から4%増の$53億の2024年第3四半期の売上高で報告し、8%増加しました。2024年第3四半期の非GAAP基準希薄化後epsは$3.34で、2023年第3四半期から5%増加しました。非GAAP基準結果の調整は、ページから始まる表で詳細に説明されています。 11.
「私たちは強力な第3四半期の成績を達成しました。1.4倍の優れたブック・トゥ・ビル、堅調な有機的成長、そして2023年のインベスターデイで発表された財務フレームワークに向けた進展を続けながら、マージンの改善も続けています。これらの結果は、私たちの信頼できるディスラプター戦略が機能しており、お客様、株主、従業員に価値をもたらしていることを再確認しています」と、Christopher E. Kubasik会長兼最高経営責任者は述べています。
Kubasikは、"私たちはLHX NeXtイニシアチブで大きな進歩を遂げており、2024年の節約目標である$40000万を超えることを期待しています。その結果、2024年の節約目標を少なくとも$60000万に更新し、10億ドルの全体目標に1年早く到達する見通しです。パイプラインには、10億ドルの目標を超える追加の節約機会があります。これにより、我々は2026年のセグメント運営利益率を少なくとも16％に達成する自信があります。"
*調整後セグメント営業利益率、非GAAP希薄化後eps、オーガニック売上高は、ページ17で定義された非GAAP財務指標です。調整後セグメント営業利益率ガイダンスおよび非GAAP希薄化後epsガイダンスの調整に関する詳細な調整表は提供されていません。詳細については、ページ2の注釈とページ7の非GAAP財務指標を参照してください。
ページ1
2024年の財務結果とガイダンスの要約*
| 第三四半期 | 年度累計 | 2024年の見通し | |||||||||||||||||||||||||||||||||||||||||||||
| （単位:百万ドル、1株あたりのデータを除く） | 2024 | 2023 | 変化 | 2024 | 2023 | 変化 | |||||||||||||||||||||||||||||||||||||||||
| 売上高（有機売上高については表4を参照） | |||||||||||||||||||||||||||||||||||||||||||||||
| Space & Airborne Systems | $ | 1,683 | $ | 1,686 | $ | 5,141 | $ | 5,056 | |||||||||||||||||||||||||||||||||||||||
| 統合ミッションシステム | 1,671 | 1,568 | 5,069 | 5,003 | |||||||||||||||||||||||||||||||||||||||||||
| 通信システム | 1,382 | 1,255 | 4,022 | 3,707 | |||||||||||||||||||||||||||||||||||||||||||
| エアロジェット・ロケットダイン | 596 | 455 | 1,719 | 455 | |||||||||||||||||||||||||||||||||||||||||||
| 企業間取り消し | (40) | (49) | (149) | (142) | |||||||||||||||||||||||||||||||||||||||||||
| 売上高 | $ | 5,292 | $ | 4,915 | 8 | % | $ | 15,802 | $ | 14,079 | 12 | % | 211億ドル- 21.3億ドル （前回: 210億ドル- 21.3億ドル） | ||||||||||||||||||||||||||||||||||
| 営業利益 | |||||||||||||||||||||||||||||||||||||||||||||||
| 宇宙と航空システム | $ | 195 | $ | 210 | $ | 626 | $ | 565 | |||||||||||||||||||||||||||||||||||||||
| 統合ミッションシステム | 204 | 187 | 600 | 534 | |||||||||||||||||||||||||||||||||||||||||||
| 通信システム | 359 | 282 | 998 | 873 | |||||||||||||||||||||||||||||||||||||||||||
| エアロジェット・ロケットダイン | 75 | 56 | 222 | 56 | |||||||||||||||||||||||||||||||||||||||||||
| 企業配分されていない項目 | (338) | (256) | (1,097) | (756) | |||||||||||||||||||||||||||||||||||||||||||
| 営業利益 | $ | 495 | $ | 479 | 3 | % | $ | 1,349 | $ | 1,272 | 6 | % | |||||||||||||||||||||||||||||||||||
未割り当て項目（表5を参照） | 338 | 256 | 1,097 | 795 | |||||||||||||||||||||||||||||||||||||||||||
| 調整後のセグメント営業利益 | $ | 833 | $ | 735 | 13 | % | $ | 2,446 | $ | 2,067 | 18 | % | |||||||||||||||||||||||||||||||||||
| — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| マージン | |||||||||||||||||||||||||||||||||||||||||||||||
| 営業利益率 | 9.4 | % | 9.7 | % | 8.5 | % | 9.0 | % | |||||||||||||||||||||||||||||||||||||||
| 調整後のセグメント営業利益率 | 15.7 | % | 15.0 | % | 70 bps | 15.5 | % | 14.7 | % | 35.5 | ~15.5% （前回：15.2％ - 15.4％） | ||||||||||||||||||||||||||||||||||||
| 税率 | |||||||||||||||||||||||||||||||||||||||||||||||
| 効果的税率（GAAP） | 6.0 | % | 4.5 | % | 4.9 | % | 6.4 | % | |||||||||||||||||||||||||||||||||||||||
| 非GAAPの実効税率 | 12.9 | % | 12.9 | % | 13.0 | % | 13.2 | % | |||||||||||||||||||||||||||||||||||||||
| EPS | |||||||||||||||||||||||||||||||||||||||||||||||
| 希薄化後eps | $ | 2.10 | $ | 2.02 | 4 | % | $ | 5.50 | $ | 5.61 | (2 | %) | |||||||||||||||||||||||||||||||||||
| 非GAAP希薄化後EPS | $ | 3.34 | $ | 3.19 | 5 | % | $ | 9.63 | $ | 9.01 | 7 | % | $12.95 - $13.15 (前回: $12.85 - $13.15) | ||||||||||||||||||||||||||||||||||
年金調整後の非GAAP希薄化後eps | $ | 2.94 | $ | 2.71 | 8 | % | $ | 8.44 | $ | 7.62 | 11 | % | |||||||||||||||||||||||||||||||||||
| キャッシュフロー | |||||||||||||||||||||||||||||||||||||||||||||||
| オペレーティングキャッシュフロー $7,750 - $8,050 | $ | 780 | $ | 543 | 44 | % | $ | 1,430 | $ | 1,307 | 9 | % | |||||||||||||||||||||||||||||||||||
| 調整後フリーキャッシュフロー | $ | 728 | $ | 617 | 18 | % | $ | 1,286 | $ | 1,273 | 1 | % | ~$2.2B | ||||||||||||||||||||||||||||||||||
売上高: 第三四半期の売上高は、主にアクイジションによるエアロジェット ロケットダイン（AR）の取得による8%の増加と、引き続き我々のコミュニケーション システム（CS）部門の堅調な需要による弾力的な通信製品とナイトビジョンデバイスへの5%の総オーガニック成長により、主に増加しました。オーガニック成長は、当社の統合ミッション システム（IMS）部門においても、航空機ミッショナイゼーションのボリューム増加、宇宙および弾薬プログラムに関連する先進エレクトロニクスの増加、および商業航空ビジネスにおけるボリューム増加もあり、その売却はクロージングを待っています。
調整後のセグメント運営利益およびマージン、非GAAP収益に対する有効税率、希薄化後非GAAP eps、年金調整後非GAAP希薄化後eps、有機的売上高、および調整後のフリーキャッシュフローは、ページ17で定義された非GAAP財務指標です。前向きなベースでのGAAPへの調整後セグメント運営利益およびマージン、非GAAP収益に対する有効税率、非GAAP希薄化後epsおよび調整後フリーキャッシュフローの調整の調整は、GAAPからの除外アイテムの利用可能性の欠如により、合理的な努力なしに利用できません。この情報の確実な重要性、その変動性が将来のGAAP結果に重要な影響を及ぼす可能性はアドレスできません。詳細についてはページ7の非GAAP財務指標を参照してください。
ページ 2
営業利益率：
米国会計原則第3四半期の営業利益率は、主に未割り当ての項目の増加によるもので、商用航空ソリューション事業の売却に伴う評価引当金の増加や非認定退職計画 pass 存債務の公正価値の増加に起因して、30ベーシスポイント減少して9.4%となりました。これはセグメントのパフォーマンスの改善とARからの全四半期の貢献に部分的に相殺されました。
調整後セグメントの営業利益率：LHX NeXtのコスト削減による堅調な貢献、CSセグメントにおける取引量の増加と好調な構成による好調な業績、IMSセグメントのプログラムパフォーマンスの向上により、70bps拡大して15.7％になりました。これは、2023年にプラスの影響を与えた非定期ライセンス販売がなかったことと、当社のSASセグメントにおける機密宇宙開発プログラムへの課題によって一部相殺されました。
希薄化後EPS：
米国会計原則第三四半期の希薄化後epsは、運営収益の増加と低いFAS/CAS運営調整により4%増の2.10ドルとなりましたが、これは高い利子費用に部分的に相殺されました。
非GAAP調整後セグメントの運営利益が上昇し、これにより部分的に相殺されたことにより、5%増の$3.34に上昇しました。より高い利息費は含まれています。
調整後の非GAAP年金調整後のセグメント運営収益の増加により8%増の2.94ドルになりましたが、高い金利負担により一部相殺されました。当社のEPSの最良の経済指標であると考えています。それは、主にFAS/CAS運用調整を含まないセグメントの運用パフォーマンスを反映しているためです。
希薄化後epsにおけるGAAPと非GAAPの最大の違いは、買収関連の無形資産の償却とLHX NeXtの実装コストに起因しています。
キャッシュフロー：
営業活動からの現金流入当期純利益の成長とAJRD取得に関連する取引コストの減少により、第3四半期の営業キャッシュフローは440万ドル増の78000万ドルに増加しましたが、それを一部相殺する形で運転資本のタイミングによる減少があります。
調整後フリーキャッシュフロー当期純利益の伸びや資本支出の減少によって、$72800万に18%増加しましたが、運転資本のタイミングによる部分的な相殺があります。
PAGE 3
SEGMENT RESULTS AND GUIDANCE*
SAS
| Third Quarter | Year to Date | 2024 Guidance | |||||||||||||||||||||||||||||||||||||||||||||
| ($ millions) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 1,683 | $ | 1,686 | —% | $ | 5,141 | $ | 5,056 | 2% | ~$7,000 | ||||||||||||||||||||||||||||||||||||
| Operating margin | 11.6 | % | 12.5 | % | (90) bps | 12.2 | % | 11.2 | % | 100 bps | low 12% | ||||||||||||||||||||||||||||||||||||
Revenue: Third quarter revenue was flat, reflecting the divestiture of the antenna business in the second quarter. Excluding the divestiture impact, organic revenue increased 2%, primarily from growth of classified programs in Intel and Cyber, and increased volume in our FAA mission-critical safety of flight networks business. Organic revenue was partially offset by lower F-35 related volumes as TR-3 development ramps down in our Airborne Combat Systems business. Growth was also impacted by challenges on classified development programs, LHX NeXt cost savings and the absence of a non-recurring license sale that positively impacted 2023.
Operating Margin: Third quarter operating margin decreased 90 bps, primarily due to the absence of an $18 million non-recurring license sale that positively impacted 2023 and challenges on classified development programs, partially offset by growth in Intel and Cyber and FAA mission-critical safety of flight networks businesses, and LHX NeXt cost savings.
IMS
| Third Quarter | Year to Date | 2024 Guidance | |||||||||||||||||||||||||||||||||||||||||||||
| ($ millions) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 1,671 | $ | 1,568 | 7% | $ | 5,069 | $ | 5,003 | 1% | $6,600 - $6,700 (Prior: $6,500 - $6,700) | ||||||||||||||||||||||||||||||||||||
| Operating margin | 12.2 | % | 11.9 | % | 30 bps | 11.8 | % | 10.7 | % | 110 bps | mid - high 11% (Prior: mid 11%) | ||||||||||||||||||||||||||||||||||||
Revenue: Third quarter revenue increased primarily from higher aircraft missionization volumes, increased advanced electronics demand for space and munitions programs, and higher volumes in our Commercial Aviation Solutions business, the divestiture of which is pending closure.
Operating Margin: Third quarter operating margin increased 30 bps, primarily from improved program performance across the segment, LHX NeXt cost savings and higher volume and favorable mix in Commercial Aviation Solutions, partially offset by unfavorable mix impact in our aircraft missionization business.
*Organic revenue is a non-GAAP financial measure defined on page 17.
PAGE 4
CS
| Third Quarter | Year to Date | 2024 Guidance | |||||||||||||||||||||||||||||||||||||||||||||
| ($ millions) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 1,382 | $ | 1,255 | 10% | $ | 4,022 | $ | 3,707 | 8% | ~$5,400 (Prior: $5,300 - $5,400) | ||||||||||||||||||||||||||||||||||||
| Operating margin | 26.0 | % | 22.5 | % | 350 bps | 24.8 | % | 23.6 | % | 120 bps | mid - high 24% (Prior: mid 24%) | ||||||||||||||||||||||||||||||||||||
Revenue: Third quarter revenue increased 10%, primarily driven by robust demand for our resilient communication equipment, related waveforms, and night vision devices. Growth for software defined tactical radios was especially strong across international markets, in particular from NATO countries, reflecting demand for our superior capabilities for critical battlefield communications equipment and waveforms.
Operating Margin: Third quarter operating margin increased 350 bps as a result of strong performance from higher volumes, favorable high margin international mix, proprietary waveform license sales, and LHX NeXt cost savings.
AR
| Third Quarter | Year to Date | 2024 Guidance | |||||||||||||||||||||||||||||||||||||||||||||
| ($ millions) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 596 | $ | 455 | 31% | $ | 1,719 | $ | 455 | 278% | $2,400 - $2,500 | ||||||||||||||||||||||||||||||||||||
| Operating margin | 12.6 | % | 12.3 | % | 60 bps | 12.9 | % | 12.3 | % | 60 bps | mid 12% (Prior: high 11%) | ||||||||||||||||||||||||||||||||||||
Revenue and Operating Margin: Third quarter results are attributed to program execution across both sectors, Missile Solutions and Space Propulsion and Power Systems, reflecting a full quarter of contribution for 2024 and a partial quarter for 2023, from the July 28, 2023 acquisition date. Operating margins include the positive impact of amortization related to purchase price adjustments.
PAGE 5
SUPPLEMENTAL INFORMATION*
| 2024 | 2023 | ||||||||||||||||||||||
| Other Information | Current | Prior | Actuals | ||||||||||||||||||||
| FAS/CAS operating adjustment | ~$30 million | ~$30 million | $110 million | ||||||||||||||||||||
| Non-service FAS pension income | ~$310 million | ~$310 million | $310 million | ||||||||||||||||||||
| Net interest expense | ~$660 million | ~$660 million | $543 million | ||||||||||||||||||||
| Effective tax rate on GAAP income | 1.9% | ||||||||||||||||||||||
| Effective tax rate on non-GAAP income | 13.0% - 13.5% | 13.0% - 13.5% | 13.0% | ||||||||||||||||||||
| Average diluted shares | Flat | Flat | 190.6 | ||||||||||||||||||||
| Capital expenditures | ~2% sales | ~2% sales | 2% sales | ||||||||||||||||||||
*Effective tax rate on non-GAAP income is a non-GAAP financial measure defined on page 17. A reconciliation of effective tax rate on non-GAAP income guidance is not available. See Non-GAAP Financial Measures on page 7 for more information.
PAGE 6
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of federal securities laws made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples include, but are not limited to: potential divestitures and their timing; 2024 guidance; 2026 financial framework; anticipated LHX NeXt initiative costs and savings targets and 2026 margins; supplemental information for 2024; projection of other financial items; and assumptions underlying any of the foregoing. Investors should not place undue reliance on forward-looking statements, which reflect management’s current expectations, estimates, projections, assumptions and information currently available to management, and are not guarantees of future performance or actual results. Important risks that could cause our results to differ materially from those expressed in or implied by these forward-looking statements or from our historical results include, but are not limited to, risks arising from: competitive markets; U.S. Government spending priorities; changes in contract mix; inflation; unilateral contract action by the U.S. Government; uncertain economic conditions; future geo-political events; supply chain disruptions; impacts of LHX NeXt; indebtedness; defined benefit plan liabilities and returns; interest rates and other market factors; changes in effective tax rate or additional tax exposures; pending and contemplated divestitures.These and other important risks that could impact forward-looking statements are described more fully in the "Risk Factors" in our Form 10-K for fiscal 2023 filed with the SEC. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section, and we have no duty to and disclaim 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 developments or otherwise.
Non-GAAP Financial Measures
Management believes the adjustments to non-GAAP Financial Measures ("NGFMs") in the tables beginning on page 11 are useful to investors because the excluded costs do not reflect our ongoing operating performance. Such adjustments, considered together with the unadjusted GAAP financial measures, provide information that management believes is useful to investors to understand period-over-period operating results separate from items that management believes may disproportionately impact operating results in any particular period; however there is no guarantee that items excluded from NGFMs will not reoccur in future periods. Management also believes that NGFMs enhance the ability of investors to analyze business trends, understand performance and evaluate our initiatives to drive improved financial performance. Management utilizes NGFMs to guide forecasting and long-term planning and for compensation purposes. NGFMs should be considered in addition to, and not as a substitute for, financial measures presented in accordance with GAAP. A reconciliation of forward-looking NGFMs to GAAP is not available without unreasonable effort because of inherent difficulty in forecasting and quantifying comparable GAAP measures and applicable adjustments and other amounts necessary for a reconciliation because of potentially high variability, complexity and low visibility of applicable adjustments and other unusual amounts that could disproportionately impact future GAAP results, such as the impact of the acquisition of AR, LHX NeXt, potential divestitures and their timing, and the extent of tax deductibility.
Conference Call and Webcast
L3Harris Technologies will host a call tomorrow, October 25, 2024, at 8:30 a.m. Eastern Time (ET). Participants are encouraged to listen via webcast, which will be broadcast live at L3Harris.com/investors. The dial-in numbers for the teleconference are (U.S.) 800-274-8461 and (International) 203-518-9814, and participants will be directed to an operator. A recording of the call will be available on the L3Harris website, beginning at approximately 12 p.m. ET on October 25, 2024.
Investor Relations Contact: Daniel Gittsovich, 321-724-3170 investorrelations@l3harris.com | Media Relations Contact: Sara Banda, 321-306-8927 media@l3harris.com | ||||
PAGE 7
Table 1 - Condensed Consolidated Statement of Operations (Unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions, except per share amounts) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Revenue | $ | 5,292 | $ | 4,915 | $ | 15,802 | $ | 14,079 | |||||||||||||||
| Cost of revenue | (3,873) | (3,608) | (11,675) | (10,419) | |||||||||||||||||||
| General and administrative expenses | (924) | (828) | (2,778) | (2,388) | |||||||||||||||||||
| Operating income | 495 | 479 | 1,349 | 1,272 | |||||||||||||||||||
| Non-service FAS pension income and other, net | 101 | 80 | 275 | 245 | |||||||||||||||||||
| Interest expense, net | (166) | (159) | (514) | (372) | |||||||||||||||||||
| Income before income taxes | 430 | 400 | 1,110 | 1,145 | |||||||||||||||||||
| Income taxes | (26) | (18) | (54) | (73) | |||||||||||||||||||
| Net income | 404 | 382 | 1,056 | 1,072 | |||||||||||||||||||
| Noncontrolling interests, net of income taxes | (4) | 1 | (7) | (3) | |||||||||||||||||||
| Net income attributable to L3Harris Technologies, Inc. | $ | 400 | $ | 383 | $ | 1,049 | $ | 1,069 | |||||||||||||||
| Net income per common share attributable to L3Harris Technologies, Inc. common shareholders | |||||||||||||||||||||||
| Basic | $ | 2.11 | $ | 2.02 | $ | 5.53 | $ | 5.64 | |||||||||||||||
| Diluted | $ | 2.10 | $ | 2.02 | $ | 5.50 | $ | 5.61 | |||||||||||||||
| Basic weighted-average common shares outstanding | 189.6 | 189.3 | 189.7 | 189.6 | |||||||||||||||||||
| Diluted weighted-average common shares outstanding | 190.5 | 190.1 | 190.7 | 190.6 | |||||||||||||||||||
PAGE 8
Table 2 - Consolidated Statement of Cash Flow (Unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Operating Activities | |||||||||||||||||||||||
| Net income | $ | 404 | $ | 382 | $ | 1,056 | $ | 1,072 | |||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||||||||
| Depreciation and amortization | 324 | 310 | 963 | 816 | |||||||||||||||||||
| Share-based compensation | 23 | 22 | 76 | 67 | |||||||||||||||||||
| Pension and other postretirement benefit plan income | (72) | (68) | (215) | (209) | |||||||||||||||||||
| Share-based matching contributions under defined contribution plans | 57 | 51 | 199 | 172 | |||||||||||||||||||
| Deferred income taxes | 467 | (34) | 220 | (277) | |||||||||||||||||||
| (Increase) decrease in: | |||||||||||||||||||||||
| Receivables, net | 188 | 158 | 163 | 53 | |||||||||||||||||||
| Contract assets | (207) | 36 | (372) | (136) | |||||||||||||||||||
| Inventories, net | 40 | (80) | 46 | (195) | |||||||||||||||||||
| Other current assets | (6) | (15) | (32) | (87) | |||||||||||||||||||
| Increase (decrease) in: | |||||||||||||||||||||||
| Accounts payable | 155 | (41) | (45) | (18) | |||||||||||||||||||
| Contract liabilities | (12) | (18) | (150) | 202 | |||||||||||||||||||
| Compensation and benefits | (44) | (45) | (145) | (55) | |||||||||||||||||||
| Other current liabilities | (26) | (24) | 59 | (27) | |||||||||||||||||||
| Income taxes | (469) | 5 | (258) | 15 | |||||||||||||||||||
| Other operating activities | (42) | (96) | (135) | (86) | |||||||||||||||||||
| Net cash provided by operating activities | 780 | 543 | 1,430 | 1,307 | |||||||||||||||||||
| Investing Activities | |||||||||||||||||||||||
| Net cash paid for acquired businesses | — | (4,715) | — | (6,688) | |||||||||||||||||||
| Additions to property, plant and equipment | (78) | (148) | (290) | (312) | |||||||||||||||||||
| Proceeds from sales of businesses, net | — | — | 158 | 71 | |||||||||||||||||||
| Other investing activities | (15) | (1) | (19) | (9) | |||||||||||||||||||
| Net cash used in investing activities | (93) | (4,864) | (151) | (6,938) | |||||||||||||||||||
| Financing Activities | |||||||||||||||||||||||
| Proceeds from borrowings, net of issuance cost | 585 | 5,319 | 2,826 | 7,568 | |||||||||||||||||||
| Repayments of borrowings | (2) | (2,099) | (2,609) | (3,159) | |||||||||||||||||||
| Change in commercial paper, maturities under 90 days, net | (404) | 806 | 93 | 1,330 | |||||||||||||||||||
| Proceeds from commercial paper, maturities over 90 days | — | 646 | 688 | 701 | |||||||||||||||||||
| Repayments of commercial paper, maturities over 90 days | (520) | — | (1,205) | — | |||||||||||||||||||
| Proceeds from exercises of employee stock options | 48 | 5 | 111 | 18 | |||||||||||||||||||
| Repurchases of common stock | (190) | — | (512) | (518) | |||||||||||||||||||
| Dividends paid | (220) | (216) | (665) | (652) | |||||||||||||||||||
| Other financing activities | (6) | (1) | (36) | (34) | |||||||||||||||||||
| Net cash (used in) provided by financing activities | (709) | 4,460 | (1,309) | 5,254 | |||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 14 | (6) | 9 | (4) | |||||||||||||||||||
| Net decrease in cash and cash equivalents | (8) | 133 | (21) | (381) | |||||||||||||||||||
| Cash and cash equivalents, beginning of period | 547 | 366 | 560 | 880 | |||||||||||||||||||
| Cash and cash equivalents, end of period | $ | 539 | $ | 499 | $ | 539 | $ | 499 | |||||||||||||||
PAGE 9
Table 3 - Condensed Consolidated Balance Sheet (Unaudited)
| (In millions) | September 27, 2024 | December 29, 2023 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | 539 | $ | 560 | |||||||
| Receivables, net | 1,042 | 1,230 | |||||||||
| Contract assets | 3,401 | 3,196 | |||||||||
| Inventories, net | 1,399 | 1,472 | |||||||||
| Income taxes receivable | 329 | 61 | |||||||||
| Other current assets | 462 | 430 | |||||||||
| Assets of business held for sale | 1,130 | 1,106 | |||||||||
| Total current assets | 8,302 | 8,055 | |||||||||
| Non-current assets | |||||||||||
| Property, plant and equipment, net | 2,795 | 2,862 | |||||||||
| Goodwill | 20,433 | 19,979 | |||||||||
| Intangible assets, net | 7,874 | 8,540 | |||||||||
| Deferred income taxes | 119 | 91 | |||||||||
| Other non-current assets | 2,366 | 2,160 | |||||||||
| Total assets | $ | 41,889 | $ | 41,687 | |||||||
| Liabilities and equity | |||||||||||
| Current liabilities | |||||||||||
| Short-term debt | $ | 1,177 | $ | 1,602 | |||||||
| Current portion of long-term debt, net | 640 | 363 | |||||||||
| Accounts payable | 2,049 | 2,106 | |||||||||
| Contract liabilities | 1,878 | 1,900 | |||||||||
| Compensation and benefits | 402 | 544 | |||||||||
| Income taxes payable | 35 | 88 | |||||||||
| Other current liabilities | 1,549 | 1,129 | |||||||||
| Liabilities of business held for sale | 243 | 272 | |||||||||
| Total current liabilities | 7,973 | 8,004 | |||||||||
| Non-current liabilities | |||||||||||
| Long-term debt, net | 11,093 | 11,160 | |||||||||
| Deferred income taxes | 885 | 815 | |||||||||
| Other long-term liabilities | 2,876 | 2,879 | |||||||||
| Total liabilities | 22,827 | 22,858 | |||||||||
| Total equity | 19,062 | 18,829 | |||||||||
| Total liabilities and equity | $ | 41,889 | $ | 41,687 | |||||||
PAGE 10
Reconciliation of Non-GAAP Financial Measures
Table 4 - Organic Revenue (Unaudited)
| Third Quarter | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| (In millions) | GAAP | Adjustments1 | Organic | GAAP | Adjustments2 | Organic | |||||||||||||||||||||||||||||
| SAS | $ | 1,683 | $ | — | $ | 1,683 | $ | 1,686 | $ | (42) | $ | 1,644 | |||||||||||||||||||||||
| IMS | 1,671 | — | 1,671 | 1,568 | — | 1,568 | |||||||||||||||||||||||||||||
| CS | 1,382 | — | 1,382 | 1,255 | — | 1,255 | |||||||||||||||||||||||||||||
| AR | 596 | (159) | 437 | 455 | — | 455 | |||||||||||||||||||||||||||||
| Corporate eliminations | (40) | — | (40) | (49) | — | (49) | |||||||||||||||||||||||||||||
| Revenue | $ | 5,292 | $ | (159) | $ | 5,133 | $ | 4,915 | $ | (42) | $ | 4,873 | |||||||||||||||||||||||
| Year to Date | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| (In millions) | GAAP | Adjustments1 | Organic | GAAP | Adjustments2 | Organic | |||||||||||||||||||||||||||||
SAS | $ | 5,141 | $ | — | $ | 5,141 | $ | 5,056 | $ | (70) | $ | 4,986 | |||||||||||||||||||||||
IMS | 5,069 | — | 5,069 | 5,003 | — | 5,003 | |||||||||||||||||||||||||||||
CS | 4,022 | — | 4,022 | 3,707 | — | 3,707 | |||||||||||||||||||||||||||||
AR | 1,719 | (1,282) | 437 | 455 | — | 455 | |||||||||||||||||||||||||||||
| Corporate eliminations | (149) | — | (149) | (142) | — | (142) | |||||||||||||||||||||||||||||
| Revenue | $ | 15,802 | $ | (1,282) | $ | 14,520 | $ | 14,079 | $ | (70) | $ | 14,009 | |||||||||||||||||||||||
1Adjustment to exclude amounts attributable to each acquired business through the date of acquisition. | |||||||||||||||||||||||||||||||||||
2Adjustment to exclude amounts attributable to each divested business. | |||||||||||||||||||||||||||||||||||
PAGE 11
Table 5 - Operating Income and Margin and Adjusted Segment Operating Income and Margin (Unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Revenue (A) | $ | 5,292 | $ | 4,915 | $ | 15,802 | $ | 14,079 | |||||||||||||||
| Operating income (B) | $ | 495 | $ | 479 | $ | 1,349 | $ | 1,272 | |||||||||||||||
Corporate items add back1 | 33 | (41) | 86 | (45) | |||||||||||||||||||
| Significant and/or non-recurring items: | |||||||||||||||||||||||
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold2 | 210 | 208 | 642 | 576 | |||||||||||||||||||
Merger, acquisition, and divestiture-related expenses2 | 25 | 56 | 86 | 144 | |||||||||||||||||||
Business divestiture-related losses, net and impairment of goodwill and other assets2 | 29 | — | 67 | 52 | |||||||||||||||||||
LHX NeXt implementation costs2 | 41 | 33 | 216 | 68 | |||||||||||||||||||
| Total significant and/or non-recurring items | 305 | 297 | 1,011 | 840 | |||||||||||||||||||
| Unallocated items | 338 | 256 | 1,097 | 795 | |||||||||||||||||||
| Adjusted segment operating income (C) | $ | 833 | $ | 735 | $ | 2,446 | $ | 2,067 | |||||||||||||||
| Margins | |||||||||||||||||||||||
| Operating margin (B)/(A) | 9.4 | % | 9.7 | % | 8.5 | % | 9.0 | % | |||||||||||||||
| Adjusted segment operating margin (C)/(A) | 15.7 | % | 15.0 | % | 15.5 | % | 14.7 | % | |||||||||||||||
1Corporate items add back includes unallocated corporate department expense of $40M and $106M for the third quarter and year to date 2024, respectively, and unallocated corporate department income of $14M for the third quarter 2023 and unallocated corporate department expense of $27M for year to date 2023. Additionally, includes the FAS/CAS operating adjustment of $7M and $20M for the third quarter and year to date 2024, respectively, and $27M and $72M for the third quarter and year to date 2023, respectively. The FAS/CAS operating adjustment represents the difference between the service cost component of Financial Accounting Standards (“FAS”) pension and Other Postretirement Benefits (“OPEB”) income or expense and total U.S. Government Cost Accounting Standards (“CAS”) pension and OPEB cost. | |||||||||||||||||||||||
2Refer to Key Terms and Non-GAAP Definitions on page 17. | |||||||||||||||||||||||
PAGE 12
Table 6 - Effective Tax Rate on Non-GAAP Income (unaudited)
| Third Quarter | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| (In millions) | Earnings Before Tax | Tax Expense (Benefit) | Effective Tax Rate | Earnings Before Tax | Tax Expense | Effective Tax Rate | |||||||||||||||||||||||||||||
| Income before income taxes | $ | 430 | $ | 26 | 6.0 | % | $ | 400 | $ | 18 | 4.5 | % | |||||||||||||||||||||||
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold1 | 210 | 52 | 208 | 53 | |||||||||||||||||||||||||||||||
Merger, acquisition, and divestiture-related expenses1 | 25 | 5 | 56 | 8 | |||||||||||||||||||||||||||||||
Business divestiture-related losses, net and impairment of goodwill and other assets1 | 29 | (6) | — | 3 | |||||||||||||||||||||||||||||||
LHX NeXt implementation costs1 | 41 | 18 | 33 | 8 | |||||||||||||||||||||||||||||||
| Non-GAAP income before income taxes | $ | 735 | $ | 95 | 12.9 | % | $ | 697 | $ | 90 | 12.9 | % | |||||||||||||||||||||||
| Year to Date | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||||||||||||||
| (In millions) | Earnings Before Tax | Tax Expense (Benefit) | Effective Tax Rate | Earnings Before Tax | Tax Expense | Effective Tax Rate | |||||||||||||||||||||||||||||
| Income before income taxes | $ | 1,110 | $ | 54 | 4.9 | % | $ | 1,145 | $ | 73 | 6.4 | % | |||||||||||||||||||||||
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold1 | 642 | 159 | 576 | 137 | |||||||||||||||||||||||||||||||
Merger, acquisition, and divestiture-related expenses1 | 86 | 16 | 144 | 26 | |||||||||||||||||||||||||||||||
Business divestiture-related losses, net and impairment of goodwill and other assets1 | 67 | (8) | 52 | 9 | |||||||||||||||||||||||||||||||
LHX NeXt implementation costs1 | 216 | 54 | 68 | 17 | |||||||||||||||||||||||||||||||
| Non-GAAP income before income taxes | $ | 2,121 | $ | 275 | 13.0 | % | $ | 1,985 | $ | 262 | 13.2 | % | |||||||||||||||||||||||
1Refer to Key Terms and Non-GAAP Definitions on page 17. | |||||||||||||||||||||||||||||||||||
PAGE 13
Table 7 - Non-GAAP Diluted EPS (unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions, except per share data) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Diluted weighted-average common shares outstanding | 190.5 | 190.1 | 190.7 | 190.6 | |||||||||||||||||||
| Diluted EPS | $ | 2.10 | $ | 2.02 | $ | 5.50 | $ | 5.61 | |||||||||||||||
| Significant and/or non-recurring items included in diluted EPS above: | |||||||||||||||||||||||
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold1 | 1.10 | 1.09 | 3.37 | 3.02 | |||||||||||||||||||
Merger, acquisition, and divestiture-related expenses1 | 0.13 | 0.29 | 0.45 | 0.76 | |||||||||||||||||||
Business divestiture-related losses, net and impairment of goodwill and other assets1 | 0.15 | — | 0.35 | 0.27 | |||||||||||||||||||
LHX NeXt implementation costs1 | 0.22 | 0.17 | 1.13 | 0.36 | |||||||||||||||||||
| Income taxes on above adjustments | (0.36) | (0.38) | (1.17) | (1.01) | |||||||||||||||||||
| Non-GAAP diluted EPS | $ | 3.34 | $ | 3.19 | $ | 9.63 | $ | 9.01 | |||||||||||||||
1Refer to Key Terms and Non-GAAP Definitions on page 17. | |||||||||||||||||||||||
PAGE 14
Table 8 - Adjusted Free Cash Flow (unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Net cash provided by operating activities | $ | 780 | $ | 543 | $ | 1,430 | $ | 1,307 | |||||||||||||||
| Additions to property, plant and equipment | (78) | (148) | (290) | (312) | |||||||||||||||||||
| Free cash flow | 702 | 395 | 1,140 | 995 | |||||||||||||||||||
Cash used for merger, acquisition and severance1,2 | 26 | 222 | 146 | 278 | |||||||||||||||||||
| Adjusted free cash flow | $ | 728 | $ | 617 | $ | 1,286 | $ | 1,273 | |||||||||||||||
1Refer to Key Terms and Non-GAAP Definitions on page 17. 22023 amounts reclassified to include cash paid for severance. | |||||||||||||||||||||||
PAGE 15
Table 9 - Pension Adjusted Non-GAAP Diluted EPS (unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Non-GAAP diluted EPS1 | $ | 3.34 | $ | 3.19 | $ | 9.63 | $ | 9.01 | |||||||||||||||
| Per share impact of: | |||||||||||||||||||||||
FAS/CAS operating adjustment2 | 0.03 | 0.12 | 0.09 | 0.33 | |||||||||||||||||||
Non-service FAS pension income2 | 0.37 | 0.36 | 1.10 | 1.06 | |||||||||||||||||||
| Pension adjusted non-GAAP diluted EPS | $ | 2.94 | $ | 2.71 | $ | 8.44 | $ | 7.62 | |||||||||||||||
1Reconciled in Table 7. 2Net of tax effect. | |||||||||||||||||||||||
PAGE 16
Key Terms and Non-GAAP Definitions
| Description | Definition | ||||
| Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold | Amortization of identifiable intangible assets acquired in connection with business combinations. Additional cost of revenue related to the fair value step-up in inventory is the difference between the balance sheet value of inventory from the acquiree and the acquisition date fair value. | ||||
| Merger, acquisition, and divestiture-related expenses | Transaction and integration expenses associated with Tactical Data Links and AR acquisitions; external costs related to pursuing acquisition and divestiture portfolio optimization; non-transaction costs related to divestitures; and salaries of employees in roles dedicated to planned divestiture and acquisition activity. | ||||
| Business divestiture-related losses, net and impairment of goodwill and other assets | In 2023, includes a gain on sale of our Visual Information Solutions business, impairment of contract assets and other assets related to the restructuring of a customer contract and impairment of in-process research and development associated with a facility closure. In 2024, includes valuation allowance increase related to the pending sale of our Commercial Aviation Solutions business (QTD and YTD) and impairment of goodwill and loss on sale recognized in connection with the sale of our antenna and related businesses (YTD). | ||||
| LHX NeXt implementation costs | Costs related to the LHX NeXt initiative are expected to continue through 2025 and are expected to include workforce optimization costs and incremental IT expenses for implementation of new systems, third-party consulting expenses and other related costs, including costs related to personnel dedicated to this project. | ||||
| LHX NeXt cost savings | Represents annual gross run rate savings driven by the LHX NeXt transformation initiative. It is an operational measure that includes savings from initiatives related to labor and function optimization, direct and indirect procurement, and infrastructure expected to recur on an ongoing basis. | ||||
| Orders | Total value of funded and unfunded contract awards received from the U.S. Government and other customers, including incremental funding and adjustments to previous awards, excluding unexercised contract options and potential orders under ordering-type contracts, such as indefinite delivery, indefinite quantity (IDIQ) contracts. | ||||
| Organic revenue* | Excludes the impact of completed divestitures and first year revenue associated with acquisitions and is reconciled in Table 4. | ||||
| Adjusted segment operating income and margin* | On a consolidated basis represents operating income and margin, excluding the FAS/CAS operating adjustment, corporate unallocated items and items reconciled in Table 5. | ||||
| Non-GAAP diluted EPS* | Represents EPS (net income per diluted common share attributable to L3Harris Technologies, Inc. common shareholders) adjusted for items reconciled in Table 7. | ||||
| Pension adjusted non-GAAP diluted EPS* | Represents Non-GAAP diluted EPS, described above, adjusted for the after tax per share impact of the FAS/CAS operating adjustment and Non-service FAS pension income reconciled in Table 9. | ||||
| Adjusted Free Cash Flow* | Net cash provided by operating activities less capital expenditures, cash used for merger, acquisition, and severance reconciled in Table 8. | ||||
| Cash used for merger, acquisition, and severance* | Cash related to merger and acquisition expenses (described above) and severance costs included in LHX NeXt implementation costs. | ||||
| Non-GAAP income before income taxes* | Represents income before income taxes adjusted for items reconciled in Table 6. | ||||
| Effective tax rate on non-GAAP income* | Represents the effective tax rate (tax expense as a percentage of income before income taxes) adjusted for the tax effect of items reconciled in Table 6. | ||||
_____
*Refer to Non-GAAP Financial Measures on page 7 for more information.
PAGE 17