附录99.1
收益发布l3harris technologies公布2024年第三季度业绩强劲，
提高2024年指引
精华要点*
•订单达到72亿美元；订书比为1.4倍
•营业收入为53亿美元，增长8％，其中有5％来自有机增长
•9.4%的营业利润率；调整后部门营业利润率为15.7%
•摊薄后每股收益为2.10美元；非依据通用会计准则的摊薄后每股收益为3.34美元
•2024年营业收入预测区间提高至211亿至213亿美元
•2024调整后分段营业利润率指引增加至约15.5%
•2024年非通用朗豪坡后每股收益指引区间提高至12.95 - 13.15美元
2024年10月24日，佛罗里达州墨尔本。 — L3哈里斯 L3哈里斯科技（纽交所代号：LHX）报告2024年第三季度每股收益为2.10美元，比2023年第三季度增加4％，营业收入为53亿美元，比2024年第三季度增加8％。 2024年第三季度非GAAP摊薄后每股收益为3.34美元，较2023年第三季度增加5％。 非GAAP结果的调解详见开始于第页的表格。 11.
「我们传递了强劲的第三季度业绩，以1.4倍的优异订单转换率、稳健的有机增长，同时在持续改善利润的过程中，朝著我们在2023年投资者日宣布的财务架构取得进展。这些结果重申我们的可信破坏性策略正在发挥作用，为我们的客户、股东和员工带来价值，」库巴西克（Christopher E. Kubasik）主席兼首席执行官说。
Kubasik补充说：「我们在LHX NeXt计划上取得了令人印象深刻的进展，预计将超过2024年的节省成本目标40000万美元。因此，我们将我们2024年的节省目标更新为至少60000万美元，并且预期能在提前一年达到每年10亿美元的总目标。我们的产品管线提供了额外的节省机会，以超过10亿美元的目标。所有这一切让我们有信心在2026年交付至少16％的业务部门运营利润。」
*有机营业收入、调整后部门营业利润率和非依照普通会计原则计算的每股收益为定义于第17页的非依照普通会计原则计算的财务指标。调整后部门营业利润率指引和非依照普通会计原则计算的每股收益指引之调和并不提供。更多资讯请参见第2页的附注和第7页的非依照普通会计原则计算的财务指标。
第1页
2024财务结果总结和指引*
| 第三季 | 截至目前为止的年度 | 2024年度指引 | |||||||||||||||||||||||||||||||||||||||||||||
| （以百万美元为单位，每股数据除外） | 2024 | 2023 | 变化 | 2024 | 2023 | 变化 | |||||||||||||||||||||||||||||||||||||||||
| 营业收入（参见表4有关有机营业收入） | |||||||||||||||||||||||||||||||||||||||||||||||
| 空间与航空系统 | $ | 1,683 | $ | 1,686 | $ | 5,141 | $ | 5,056 | |||||||||||||||||||||||||||||||||||||||
| 整合任务系统 | 1,671 | 1,568 | 5,069 | 5,003 | |||||||||||||||||||||||||||||||||||||||||||
| 通讯系统 | 1,382 | 1,255 | 4,022 | 3,707 | |||||||||||||||||||||||||||||||||||||||||||
| Aerojet Rocketdyne | 596 | 455 | 1,719 | 455 | |||||||||||||||||||||||||||||||||||||||||||
| 企业消除 | (40) | (49) | (149) | (142) | |||||||||||||||||||||||||||||||||||||||||||
| 营业收入 | $ | 5,292 | $ | 4,915 | 8 | % | $ | 15,802 | $ | 14,079 | 12 | % | 211亿- 21.3B美元 (之前: 210亿- 21.3B美元) | ||||||||||||||||||||||||||||||||||
| 营收 | |||||||||||||||||||||||||||||||||||||||||||||||
| 太空与空中系统 | $ | 195 | $ | 210 | $ | 626 | $ | 565 | |||||||||||||||||||||||||||||||||||||||
| 整合式任务系统 | 204 | 187 | 600 | 534 | |||||||||||||||||||||||||||||||||||||||||||
| 通讯系统 | 359 | 282 | 998 | 873 | |||||||||||||||||||||||||||||||||||||||||||
| Aerojet Rocketdyne | 75 | 56 | 222 | 56 | |||||||||||||||||||||||||||||||||||||||||||
| 企业未分配事项 | (338) | (256) | (1,097) | (756) | |||||||||||||||||||||||||||||||||||||||||||
| 营收 | $ | 495 | $ | 479 | 3 | % | $ | 1,349 | $ | 1,272 | 6 | % | |||||||||||||||||||||||||||||||||||
未分配事项（见表5） | 338 | 256 | 1,097 | 795 | |||||||||||||||||||||||||||||||||||||||||||
| 调整后部门营业收入 | $ | 833 | $ | 735 | 13 | % | $ | 2,446 | $ | 2,067 | 18 | % | |||||||||||||||||||||||||||||||||||
| — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| 保证金 | |||||||||||||||||||||||||||||||||||||||||||||||
| 营业利润率 | 9.4 | % | 9.7 | % | 8.5 | % | 9.0 | % | |||||||||||||||||||||||||||||||||||||||
| 调整后分部营业利润率 | 15.7 | % | 15.0 | % | 70 基点 | 15.5 | % | 14.7 | % | 80 基本点 | ~15.5% (先前：15.2％-15.4％) | ||||||||||||||||||||||||||||||||||||
| 税率 | |||||||||||||||||||||||||||||||||||||||||||||||
| 有效税率（依照GAAP） | 6.0 | % | 4.5 | % | 4.9 | % | 6.4 | % | |||||||||||||||||||||||||||||||||||||||
| 有效税率（非依照GAAP） | 12.9 | % | 12.9 | % | 13.0 | % | 13.2 | % | |||||||||||||||||||||||||||||||||||||||
| 每股收益 | |||||||||||||||||||||||||||||||||||||||||||||||
| 摊薄后每股收益 | $ | 2.10 | $ | 2.02 | 4 | % | $ | 5.50 | $ | 5.61 | (2 | %) | |||||||||||||||||||||||||||||||||||
| 非通用稀释每股收益 | $ | 3.34 | $ | 3.19 | 5 | % | $ | 9.63 | $ | 9.01 | 7 | % | $12.95 - $13.15 （先前：$12.85 - $13.15） | ||||||||||||||||||||||||||||||||||
根据退休金调整的非依照GAAP摊薄后每股收益 | $ | 2.94 | $ | 2.71 | 8 | % | $ | 8.44 | $ | 7.62 | 11 | % | |||||||||||||||||||||||||||||||||||
| 现金流量 | |||||||||||||||||||||||||||||||||||||||||||||||
| 来自经营活动的现金 | $ | 780 | $ | 543 | 44 | % | $ | 1,430 | $ | 1,307 | 9 | % | |||||||||||||||||||||||||||||||||||
| 自由现金流 | $ | 728 | $ | 617 | 18 | % | $ | 1,286 | $ | 1,273 | 1 | % | ~$2.2B | ||||||||||||||||||||||||||||||||||
营业收入: 第三季营业收入增加8%，主要是由于收购Aerojet Rocketdyne (AR)带来的影响，以及5%的有机增长，主要来自持续强劲的需求，我们坚韧的通讯产品和夜视装置在通讯系统(CS)部门的有机增长也受到集成任务系统(IMS)部门的驱动，较高的飞机任务卷装量，与太空和弹药计划相关的先进电子增加，以及商业航空业务的增加。该业务正在进行出售交割。
* 调整后的部门营业收入和毛利率、非遵循GAAP准则的所得税率、非遵循GAAP准则的摊薄后每股收益、退休金调整后的非遵循GAAP准则的摊薄后每股收益、有机营业收入和调整后的自由现金流均为在第17页定义的非遵循GAAP财务指标。调整后的部门营业收入和毛利率、非遵循GAAP准则的所得税率、非遵循GAAP准则的摊薄后每股收益以及调整后的自由现金流的前瞻性对GAAP的调和未经不合理努力难以获得，因为缺失需要从GAAP措施中排除的项目。我们无法针对这些信息的可能重要性进行评估，其变动可能对未来的GAAP结果产生重大影响。更多信息请参见第7页的非遵循GAAP财务指标。
第2页
营业利润率：
GAAP第三季营业利润率下降30个基本点至9.4%，主要受未分配项目增加的影响，包括与待售的商业航空解决方案业务相关的估值准备金增加，以及非合格养老计划负债公允价值增加。部分抵消了分部表现的改善以及来自AR的整个季度贡献。
经调整的区段营业利润：LHX NeXT 成本节省成本、更高的数量和优惠组合的强劲表现，以及 IMS 领域的计划表现提高，增加 70 个基点至 15.7%，以及改善 IMS 部门的计划表现。这一点是由于没有一次性授权销售，这对 2023 年产生积极影响，以及我们 SAS 部门都对分类太空发展计划的挑战进行了部分抵消。
摊薄后每股收益:
GAAP第三季度的每股收益摊薄后增加了4％至2.10美元，主要是由于营业收入增加和较低的FAS/CAS营运调整，部分抵销了较高的利息支出。
非美国通用会计准则由较高的调整部门营业收入推动，部分抵销了较高的利息支出，上涨5％至3.34美元。
退休金调整后的非GAAP增长8％至2.94美元，主要受到调整后分段营业收入的增加驱动，部分抵消了较高的利息支出。我们认为这代表我们每股收益的最佳经济衡量标准，因为它反映了我们各个部门的运营绩效，而无需考虑退休金会计的非现金影响，主要是FAS/CAS营运调整。
按照GAAP和非GAAP摊薄后每股收益之间最大的差异来自合并相关无形资产的摊销和LHX NeXt实施成本。
现金流量：
来自营运的现金流量第三季营业现金流增加了44%，达78000万美元，主要是由于净利润增长和与AJRD收购相关的交易成本降低，部分抵销了营运资本的时机。
自由现金流因净利润增长和资本支出减少推动，上升了18%至7,2800万美元，部分抵消了营运资金周期的时间差。
PAGE 3
SEGMENT RESULTS AND GUIDANCE*
SAS
| Third Quarter | Year to Date | 2024 Guidance | |||||||||||||||||||||||||||||||||||||||||||||
| ($ 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