0000202058false00002020582024-07-252024-07-25

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 25, 2024
L3HARRIS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
1-386334-0276860
(State or other jurisdiction
 of incorporation)		(Commission
 File Number)		(I.R.S. Employer
 Identification No.)
1025 West NASA Boulevard
Melbourne,Florida 32919
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (321) 727-9100
No change
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $1.00 per shareLHXNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐







Item 2.02 Results of Operations and Financial Condition.

On July 25, 2024, L3Harris Technologies, Inc. released its second quarter financial results in an earnings release.

The earnings release announcing the release of the second quarter financial results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. The information contained in this Current Report on Form 8-K that is furnished under Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such a filing, except as shall be expressly set forth by specific reference.     


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

                        EXHIBIT INDEX
     The following exhibits are provided herewith:




SIGNATURE
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
L3HARRIS TECHNOLOGIES, INC.
  
By:/s/ Kenneth L. Bedingfield
Name:Kenneth L. Bedingfield
Title:Senior Vice President and Chief Financial Officer
Date: July 25, 2024


Exhibit 99.1
l3harris_logoxregxrgb.jpg                        Earnings Release

L3Harris Technologies Reports Strong Second Quarter 2024 Results,
Increases 2024 Guidance


•Orders1 of $5.2 billion; book-to-bill of 1.0x
•Revenue of $5.3 billion, up 13%
•Operating margin of 9.0%; adjusted segment operating margin1 of 15.6%
•Diluted earnings per share (EPS) of $1.92; non-GAAP EPS1 of $3.24
•2024 revenue guidance range increases from $20.8B - $21.3B to $21.0B - $21.3B
•2024 adjusted segment operating margin1 guidance increases from >15% to 15.2% - 15.4%*
•2024 Non-GAAP EPS guidance range increases from $12.70 - $13.05 to $12.85 - $13.15*

MELBOURNE, Fla., July 25, 2024 — L3Harris Technologies (NYSE: LHX) reported second quarter 2024 diluted EPS of $1.92, on second quarter revenue of $5.3 billion. Second quarter 2024 non-GAAP diluted EPS1 was $3.24, as compared to non-GAAP diluted EPS1 of $2.97 for the second quarter of 2023, a 9% increase. A reconciliation of non-GAAP results are detailed in tables beginning on page 11.

"We delivered another strong quarter of financial results with improved margins, reflecting our commitment to operational excellence and a relentless focus on execution that delivers value to our customers and shareholders," said Christopher E. Kubasik, Chair and CEO.

Kubasik added, "As we celebrate the five year anniversary of the L3 and Harris merger, I'm proud of the progress we've made as the industry's Trusted Disruptor. Our first half results reflect progress toward achieving our 2026 financial framework. We are raising our revenue, margin and EPS guidance for the year, underscoring the tangible results of our LHX NeXt initiative, which is focused on streamlining our operations and enhancing our efficiency while transforming the company."








* A reconciliation is not available. See the note on page 2 and Non-GAAP Financial Measures on page 6 for more information.
PAGE 1
1Key terms and Non-GAAP measures - see definitions at the end of this earnings release

SUMMARY FINANCIAL RESULTS AND 2024 GUIDANCE
Second Quarter
Year to Date2024 Guidance*
($ millions, except per share data)20242023Change20242023Change
Revenue
Space & Airborne Systems$1,707$1,715$3,458$3,370
Integrated Mission Systems1,729 1,735 3,398 3,435 
Communication Systems1,346 1,289 2,640 2,452 
Aerojet Rocketdyne581—1,123 — 
Corporate eliminations(64)(46)(109)(93)
Revenue$5,299$4,69313 %$10,510$9,16415 %
$21.0B - $21.3B
(Prior: $20.8B - 21.3B)
Operating income
Space & Airborne Systems$215$16828 %$431$35521 %
Integrated Mission Systems20616227 %39634714 %
Communication Systems3293251 %6395918 %
Aerojet Rocketdyne75—n/a147—n/a
Unallocated items(349)(255)(759)(500)
Operating income$476$40019 %$854$7938 %
Operating margin9.0 %8.5 %50 bps8.1 %8.7 %(60) bps
Adjusted segment operating income1
$825$69419%$1,613$1,33221 %
Adjusted segment operating margin1
15.6 %14.8 %80 bps15.3 %14.5 %80 bps
15.2% - 15.4%
(Prior: > 15%)
Effective tax rate (GAAP)5.9 %5.6 %30 bps4.1 %7.4 %(330) bps
Effective tax rate (non-GAAP1)
12.9 %13.3 %(40) bps13.0 %13.4 %(40) bps
EPS$1.92$1.835 %$3.40$3.60(6 %)
Non-GAAP EPS1
$3.24$2.979 %$6.30$5.828 %
$12.85 - $13.15
(Prior: $12.70 - $13.05)
Cash from operations$754$41482 %$650$764(15 %)
Adjusted free cash flow1
$714$342109 %$558$657(15 %)~2.2B
*When we provide our expectation for adjusted segment operating margin, effective tax rate on non-GAAP income, non-GAAP EPS and adjusted free cash flow on a forward-looking basis, a reconciliation of these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort due to the unavailability of items for exclusion from the GAAP measure. We are unable to address the probable significance of this information, the variability of which may have a significant impact on future GAAP results. See Non-GAAP Financial Measures on page 6 for more information.

Revenue: Second quarter revenue increased 13%, primarily driven by the acquisition of Aerojet Rocketdyne (AR) and 1% total organic growth from increased demand for tactical and broadband communication products in our Communication Systems (CS) segment. Growth was also driven by continued demand in Space Systems and classified Intel & Cyber programs within the Space & Airborne Systems (SAS) Segment. This growth was offset by lower volumes in our Airborne Combat Systems business. In the Integrated Mission Systems (IMS) segment, growth in Maritime programs was offset by lower volumes associated with our Commercial Aviation business, the divestiture of which is pending closure.








* A reconciliation is not available. See the note on page 2 and Non-GAAP Financial Measures on page 6 for more information.

PAGE 2
1Key terms and Non-GAAP measures - see definitions at the end of this earnings release

Operating Margin:
GAAP: Second quarter operating margin increased 50 bps to 9.0% driven by improved operational performance, partially offset by the impact of increased corporate unallocated items, including intangible amortization from mergers and acquisitions and LHX NeXt implementation costs.

Adjusted segment operating margin1: Expanded 80 bps to 15.6% due to improved operational and program performance across the SAS, IMS and CS segments, including LHX NeXt driven cost savings.

EPS:
GAAP: Second quarter EPS increased 5% to $1.92 due to an increase in operating income, partially offset by the impact of intangible amortization from mergers and acquisitions, LHX NeXt implementation costs and higher interest expense.

Non-GAAP1: Increased 9% to $3.24 driven by higher adjusted segment operating income1, partially offset by higher interest expense.

The largest differences between GAAP and Non-GAAP EPS are attributable to intangible amortization and LHX NeXt implementation costs.

Cash Flows:
Cash from Operations: Second quarter cash from operations was $754 million driven by net income growth and improved working capital performance.

Adjusted free cash flow1: Delivered $714 million in adjusted free cash flow1 driven by net income growth, improved working capital performance and adjustments for acquisitions and severance related costs.

SEGMENT RESULTS AND GUIDANCE:
SAS
Second Quarter
Year to Date2024 Guidance*
($ millions)20242023Change20242023Change
Revenue$1,707$1,715—%$3,458$3,3703%~$7,000
Operating margin12.6 %9.8 %280 bps12.5 %10.5 %200 bps
low 12%*
(Prior ~12%)
Revenue: Second quarter revenue was flat year-over-year, resulting from continued growth in Space Systems and classified program growth in Intel and Cyber, which was offset by lower volumes in our Airborne Combat Systems business and lower revenues from the divestiture of the antenna business. Excluding this divestiture, organic revenue increased 1%.

Operating Margin: Second quarter operating margin increased 280 bps largely due to the absence of a non-cash charge that impacted 2023, improved operational and program performance, including the impact of the LHX NeXt cost savings initiative.
* A reconciliation is not available. See the note on page 2 and Non-GAAP Financial Measures on page 6 for more information.
PAGE 3
1Key terms and Non-GAAP measures - see definitions at the end of this earnings release

IMS
Second Quarter
Year to Date2024 Guidance*
($ millions)20242023Change20242023Change
Revenue$1,729$1,735—%$3,398$3,435(1)%
$6,500 - $6,700
(Prior $6,400 - $6,600)
Operating margin11.9%9.3%260 bps11.7%10.1%160 bps
mid 11%*
(Prior low-mid 11%)
Revenue: Second quarter revenue was flat, as higher volumes on Maritime programs were offset by lower volume in our Commercial Aviation business.

Operating Margin: Second quarter operating margin increased 260 bps from improved program performance, including the impact of LHX NeXt cost savings.


CS
Second Quarter
Year to Date2024 Guidance*
($ millions)20242023Change20242023Change
Revenue$1,346$1,2894%$2,640$2,4528%$5,300 - 5,400
Operating margin24.4 %25.2 %(80) bps24.2 %24.1 %10 bps
mid 24%*
(Prior low-mid 24%)
Revenue: Second quarter revenue increased 4%, primarily from higher volumes in Broadband Communications and increased Department of Defense (DoD) sales in Tactical Communications.

Operating Margin: Second quarter operating margin decreased 80 bps primarily from higher domestic tactical radio mix and timing of software sales, partially offset by LHX NeXt cost savings and the favorable impact of legal settlements.




AR
Second Quarter
Year to Date2024 Guidance*
($ millions)20242023Change20242023Change
Revenue$581$— $1,123$— $2,400 - $2,500
Operating margin12.9 %— %13.1 %— %high 11%*
Revenue and Operating Margin: Second quarter results are attributed to program execution across Missile Solutions and Space Propulsion and Power Systems.







* A reconciliation is not available. See the note on page 2 and Non-GAAP Financial Measures on page 6 for more information.


PAGE 4
1Key terms and Non-GAAP measures - see definitions at the end of this earnings release

SUPPLEMENTAL INFORMATION:


2024*2023
Other InformationCurrentPriorActuals
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~$650 million$543 million
Effective tax rate on GAAP income1.9%
Effective tax rate on non-GAAP income1
13.0% - 13.5%13.0% - 13.5%13.0%
Average diluted sharesFlatFlat - up slightly190.6
Capital expenditures~2% sales~2% sales2% sales


Ad Hoc Business Review Committee: The company entered into a Cooperation Agreement in December 2023 requiring, among other items, the formation of an Ad Hoc Business Review Committee (BRC) to independently review the company’s execution toward shareholder value creation opportunities. Earlier this month, the BRC provided its recommendations and informed the full Board of Directors that it had completed its review. With the work now complete, the Ad Hoc BRC has been dissolved per its charter.


























* A reconciliation is not available. See the note on page 2 and Non-GAAP Financial Measures on page 6 for more information.
PAGE 5
1Key terms and Non-GAAP measures - see definitions at the end of this earnings release

Non-GAAP Financial Measures
This earnings release contains Non-GAAP Financial Measures ("NGFMs") (as listed on page 16) within the meaning of Regulation G promulgated by the Securities and Exchange Commission (SEC). Management believes excluding the adjustments listed on page 16 for the purposes of calculating certain NGFMs is useful to investors because these costs do not reflect our ongoing operating performance; however there is no guarantee that items excluded from NGFMs will not reoccur in future periods. These adjustments, when considered together with the unadjusted GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. Management also believes that these adjustments to our NGFMs enhance the ability of investors to analyze L3Harris business trends, to understand L3Harris performance and to evaluate our initiatives to drive improved financial performance. We utilize NGFMs as guides in forecasting, budgeting and long-term planning processes and to measure operating performance for compensation purposes. NGFMs should be considered in addition to, and not as a substitute for, financial measures presented in accordance with GAAP. See “Reconciliation of Non-GAAP Financial Measures” beginning on page 11 for detail on the adjustments to our NGFMs. We also provide our expectation of forward-looking NGFMs. A reconciliation of forward-looking NGFMs to comparable GAAP measures is not available without unreasonable effort because of inherent difficulty in forecasting and quantifying the comparable GAAP measures and the applicable adjustments and other amounts that would be necessary for such a reconciliation, including due to potentially high variability, complexity and low visibility as to the applicable adjustments and other amounts which could have an unpredictable and potentially disproportionate impact on future GAAP results, such as the impact of Aerojet Rocketdyne, costs associated with LHX NeXt, potential divestitures and their timing, other unusual gains and losses and extent of tax deductibility.
Conference Call and Webcast
L3Harris Technologies will host a call tomorrow, July 26, 2024, at 8:30 a.m. Eastern Time (ET).
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. Participants are encouraged to listen via webcast, which will be broadcast live at L3Harris.com/investors. A recording of the call will be available on the L3Harris website, beginning at approximately 12 p.m. ET on July 26, 2024.
About L3Harris Technologies
L3Harris Technologies is the Trusted Disruptor in the defense industry. With customers’ mission-critical needs always in mind, our employees deliver end-to-end technology solutions connecting the space, air, land, sea and cyber domains in the interest of national security. Visit L3Harris.com for more information.

Investor Relations Contact:
Daniel Gittsovich, 321-724-3170
investorrelations@l3harris.com
Media Relations Contact:
Sara Banda, 321-306-8927
media@l3harris.com



PAGE 6


Forward-Looking Statements
Statements in this earnings 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 earnings release 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 their impacts; supplemental financial information for 2024; and other statements regarding the business outlook and financial performance guidance 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, including but not limited to: competitive markets and U.S. Government spending priorities; changes in the mix of fixed-price, cost-plus and time-and-material type contracts and the impact of a significant increase in or sustained period of increased inflation; the termination, impact of regulations, failure to fund, or negative audit findings for U.S. Government contracts; uncertain economic conditions; the consequences of future geo-political events; the impact of government investigations; the risks of doing business internationally; disruptions to our supply chain; the attraction and retention of key employees; the ability to develop new products and services and technologies that achieve market acceptance; natural disasters or other significant business disruptions; inability to achieve the expected results of LHX NeXt; indebtedness and ability to make payments on, repay or service indebtedness; unfunded defined benefit plans liability; the level of returns on defined benefit plan assets, changes in interest rates and other market factors; changes in effective tax rate or additional tax exposures; the ability to obtain export licenses or make sales to foreign governments; unforeseen environmental issues; the outcome of litigation or arbitration; potential claims related to infringement of intellectual property rights or environmental remediation or other contingencies; expanded operations, including related to handling of dangerous materials; risks related to other strategic transactions, including pending and contemplated divestitures. 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 earnings release are made as of the date of this earnings 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 earnings release are cautioned not to place undue reliance on forward-looking statements.

PAGE 7


Table 1 - Condensed Consolidated Statement of Operations (Unaudited)
Quarter EndedYear to Date
(In millions, except per share amounts)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Revenue$5,299 $4,693 $10,510 $9,164 
Cost of revenue(3,939)(3,506)(7,802)(6,811)
General and administrative expenses(884)(787)(1,854)(1,560)
Operating income476 400 854 793 
Non-service FAS pension income and other, net86 83 174 165 
Interest expense, net(172)(111)(348)(213)
Income before income taxes390 372 680 745 
Income taxes(23)(21)(28)(55)
Net income367 351 652 690 
Noncontrolling interests, net of income taxes(1)(2)(3)(4)
Net income attributable to L3Harris Technologies, Inc.$366 $349 $649 $686 
Net income per common share attributable to L3Harris Technologies, Inc. common shareholders
Basic$1.93 $1.84 $3.42 $3.61 
Diluted$1.92 $1.83 $3.40 $3.60 
Basic weighted average common shares outstanding189.7 189.2 189.8 189.7 
Diluted weighted average common shares outstanding190.6 190.1 190.8 190.7 

























PAGE 8


Table 2 - Consolidated Statement of Cash Flow (Unaudited)
Quarter EndedYear to Date
(In millions)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Operating Activities
Net income$367 $351 $652 $690 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization319 256 639 506 
Share-based compensation27 22 53 45 
Share-based matching contributions under defined contribution plans72 64 142 121 
Pension and other postretirement benefit plan income(71)(70)(143)(141)
Deferred income taxes(136)(128)(247)(243)
(Increase) decrease in:
Receivables, net(32)(153)(25)(105)
Contract assets175 110 (165)(159)
Inventories27 (13)6 (99)
Other current assets(36)(27)(26)(67)
Increase (decrease) in:
Accounts payable(209)(67)(200)23 
Contract liabilities14 123 (138)220 
Compensation and benefits69 105 (101)(10)
Other accrued items103 (66)85 (3)
Income taxes108 (120)211 10 
Other operating activities(43)27 (93)(24)
Net cash provided by operating activities754 414 650 764 
Investing Activities
Net cash paid for acquired businesses— — — (1,973)
Additions to property, plant and equipment(97)(93)(212)(164)
Proceeds from sales of asset groups and businesses, net158 71 158 71 
Other investing activities(3)(4)(4)(8)
Net cash provided by (used in) investing activities58 (26)(58)(2,074)
Financing Activities
Proceeds from borrowings, net of issuance cost4 1 2,241 2,249 
Repayments of borrowings(357)(805)(2,607)(1,060)
Change in commercial paper, maturities under 90 days, net171 524 497 524 
Proceeds from commercial paper, maturities over 90 days208 55 688 55 
Repayments of commercial paper, maturities over 90 days(480)— (685)— 
Repurchases of common stock(89)(122)(322)(518)
Dividends paid(221)(216)(445)(436)
Other financing activities20 (4)33 (20)
Net cash (used in) provided by financing activities(744)(567)(600)794 
Effect of exchange rate changes on cash and cash equivalents2 — (5)2 
Net increase (decrease) in cash and cash equivalents70 (179)(13)(514)
Cash and cash equivalents, beginning of period477 545 560 880 
Cash and cash equivalents, end of period$547 $366 $547 $366 
PAGE 9



Table 3 - Condensed Consolidated Balance Sheet (Unaudited)
(In millions)June 28, 2024December 29, 2023
Assets
Current assets
Cash and cash equivalents$547 $560 
Receivables, net1,230 1,230 
Contract assets3,209 3,196 
Inventories1,432 1,472 
Other current assets502 491 
Assets of business held for sale1,127 1,106 
Total current assets8,047 8,055 
Non-current assets
Property, plant and equipment, net2,800 2,862 
Goodwill20,367 19,979 
Other intangible assets, net8,080 8,540 
Deferred income taxes134 91 
Other non-current assets2,229 2,160 
Total assets$41,657 $41,687 
Liabilities and equity
Current liabilities
Short-term debt$2,102 $1,602 
Current portion of long-term debt, net617 363 
Accounts payable1,896 2,106 
Contract liabilities1,889 1,900 
Compensation and benefits445 544 
Other accrued items1,515 1,129 
Income taxes payable274 88 
Liabilities of business held for sale 243 272 
Total current liabilities8,981 8,004 
Non-current liabilities
Long-term debt, net10,533 11,160 
Deferred income taxes443 815 
Other long-term liabilities2,796 2,879 
Total liabilities22,753 22,858 
Total equity18,904 18,829 
Total liabilities and equity$41,657 $41,687 
PAGE 10



Reconciliation of Non-GAAP Financial Measures
Table 4 - Organic Revenue (Unaudited)
Quarter Ended
June 28, 2024June 30, 2023
(In millions)GAAP
Adjustments1
Organic
GAAP
Adjustments2
Organic
SAS$1,707 $— $1,707 $1,715 $(19)$1,696 
IMS1,729 — 1,729 1,735 — 1,735 
CS1,346 — 1,346 1,289 — 1,289 
AR581 (581)— — — — 
Corporate eliminations(64)— (64)(46)— (46)
Revenue$5,299 $(581)$4,718 $4,693 $(19)$4,674 
Year to Date
June 28, 2024June 30, 2023
(In millions)GAAP
Adjustments1
OrganicGAAP
Adjustments2
Organic
SAS
$3,458 $— $3,458 $3,370 $(28)$3,342 
IMS
3,398 — 3,398 3,435 — 3,435 
CS
2,640 — 2,640 2,452 — 2,452 
AR
1,123 (1,123)— — — — 
Corporate eliminations(109)— (109)(93)— (93)
Revenue$10,510 $(1,123)$9,387 $9,164 $(28)$9,136 
1Adjustment to exclude amounts attributable to each acquired business.
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)
Quarter EndedYear to Date
(In millions)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Revenue (A)$5,299 $4,693 $10,510 $9,164 
Operating income (B)$476 $400 $854 $793 
Corporate items add back1
27 12 53 (4)
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
215 188 432 368 
Merger, acquisition, and divestiture-related expenses2
21 38 61 88 
Asset group and business divestiture-related losses, net and impairment of goodwill and other assets2
38 34 38 52 
LHX NeXt implementation costs2
48 22 175 35 
Total significant and/or non-recurring items322 282 706 543 
Adjusted segment operating income (C)$825 $694 $1,613 $1,332 
Margins
Operating margin (B)/(A)9.0 %8.5 %8.1 %8.7 %
Adjusted segment operating margin (C)/(A)15.6 %14.8 %15.3 %14.5 %
1Corporate items add back includes unallocated corporate department expense, net of $33M and $66M for the quarter and two quarters ended June 28, 2024, respectively, and $35M and $41M for the quarter and two quarters ended June 30, 2023, respectively, and the FAS/CAS operating adjustment of $6M and $13M for the quarter and two quarters ended June 28, 2024, respectively, and $23M and $45M for the quarter and two quarters ended June 30, 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 Non-GAAP Financial Measures on page 16.
PAGE 12


Table 6 - Effective Tax Rate on Non-GAAP Income

Quarter Ended
June 28, 2024
June 30, 2023
(In millions)Earnings Before TaxTax ExpenseEffective Tax RateEarnings Before TaxTax ExpenseEffective Tax Rate
Income before income taxes$390 $23 5.9 %$372 $21 5.6 %
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold215 51 188 42 
Merger, acquisition, and divestiture-related expenses1
21 7 38 13 
Asset group and business divestiture-related losses, net and impairment of goodwill and other assets1
38 1 34 6 
LHX NeXt implementation costs1
48 10 22 5 
Non-GAAP income before income taxes1
$712 $92 12.9 %$654 $87 13.3 %
Year to Date
June 28, 2024June 30, 2023
(In millions)Earnings Before TaxTax Expense
(Benefit) 		Effective Tax RateEarnings Before TaxTax ExpenseEffective Tax Rate
Income before income taxes$680 $28 4.1 %$745 $55 7.4 %
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold432 116 368 84 
Merger, acquisition, and divestiture-related expenses1
61 16 88 23 
Asset group and business divestiture-related losses, net and impairment of goodwill and other assets1
38 (2)52 1 
LHX NeXt implementation costs1
175 22 35 9 
Non-GAAP income before income taxes1
$1,386 $180 13.0 %$1,288 $172 13.4 %
1Refer to Non-GAAP Financial Measures on page 16.



PAGE 13


Table 7 - Non-GAAP EPS (unaudited)
Quarter EndedYear to Date
(In millions)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Diluted weighted average common shares outstanding190.6 190.1 190.8 190.7 
EPS$1.92 $1.83 $3.40 $3.60 
Significant and/or non-recurring items included in EPS above1:
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory sold1.13 0.99 2.26 1.93 
Merger, acquisition, and divestiture-related expenses0.11 0.20 0.32 0.46 
Asset group and business divestiture-related losses, net and impairment of goodwill and other assets0.20 0.18 0.20 0.27 
LHX NeXt implementation costs0.25 0.12 0.92 0.18 
Income taxes on above adjustments(0.37)(0.35)(0.80)(0.62)
Non-GAAP EPS1
$3.24 $2.97 $6.30 $5.82 
    
1Refer to Non-GAAP Financial Measures on page 16.
PAGE 14


Table 8 - Adjusted Free Cash Flow
Quarter EndedYear to Date
(In millions)June 28, 2024June 30, 2023June 28, 2024June 30, 2023
Net cash provided by operating activities$754 $414 $650 $764 
Additions to property, plant and equipment(97)(93)(212)(164)
Free cash flow657 321 438 600 
Cash used for merger, acquisition and severance1,2
57 20 120 56 
Adjusted free cash flow1
$714 $341 $558 $656 
1Refer to Non-GAAP Financial Measures on page 16.
2The quarter and two quarters ended June 28, 2024 amounts are reclassified to include cash paid for severance.




































PAGE 15



Key Terms and Non-GAAP Definitions
DescriptionDefinition
Amortization of acquisition-related intangibles and additional cost of revenue related to the fair value step-up in inventory soldConsists of amortization of identifiable intangible assets acquired in connection with business combinations. Amortization charges are recorded over the estimated useful life of the related acquired intangible asset, and thus are generally recorded over multiple years.
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 expensesTransaction and integration expenses associated with TDL and AR acquisitions. Also, includes external costs related to pursuing acquisition and divestiture portfolio optimization, non-transaction costs related to divestitures and salaries of employees in roles established for and dedicated to planned divestiture and acquisition activity.
Asset group and 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 loss on sale and impairment of goodwill recognized in connection with the sale of our antenna and related businesses and a loss associated with the pending divestiture of our Commercial Aviation Solutions business.
LHX NeXt implementation costs
Costs associated with reducing costs and transforming the Company and its systems and processes to increase agility and competitiveness. Costs related to the LHX NeXt initiative are expected to continue through 2025, and are expected to include workforce optimization costs ($1M in 2Q24 and $65M in 2Q24 YTD) 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 ($47M in 2Q24 and $110M in 2Q24 YTD), totaling $400M. We expect gross run-rate savings of $1B exiting year 3.


OrdersRepresents the total value of funded and unfunded contract awards received from the U.S. Government, plus the total value of funded and unfunded contract awards received from customers other than the U.S. Government. This includes incremental funding and adjustments to previous awards, and excludes unexercised contract options and potential orders under ordering-type contracts, such as indefinite delivery, indefinite quantity (IDIQ) contracts.
Organic revenue
Organic revenue excludes the impact of completed divestitures and first year revenue associated with acquisitions; refer to non-GAAP financial measure (NGFM) reconciliations in the tables accompanying this earnings release and to the disclosures in the non-GAAP section of this earnings release for more information. Organic revenue is reconciled in table 4.
Adjusted segment operating income and margin
Adjusted segment operating income and margin on a consolidated basis represents operating income and margin (GAAP measures) excluding the FAS/CAS operating adjustment; corporate unallocated items; amortization of acquisition-related intangibles; additional cost of revenue related to the fair value step-up in inventory sold; merger, acquisition, and divestiture-related expenses; asset group and business divestiture-related losses (gains), net, impairment of goodwill and other assets; and LHX NeXt implementation costs. Refer to the disclosures in the non-GAAP financial measures section of this earnings release for more information. Adjusted segment operating income and margin is reconciled in table 5.
Non-GAAP EPS
Non-GAAP EPS represents EPS (net income per diluted common share attributable to L3Harris Technologies, Inc. common shareholders, a GAAP measure) adjusted for amortization of acquisition-related intangibles; additional cost of revenue related to the fair value step-up in inventory sold; merger, acquisition, and divestiture-related expenses; asset group and business divestiture-related losses (gains), net, impairment of goodwill and other assets; and LHX NeXt implementation costs. Refer to the disclosures in the non-GAAP financial measures section of this earnings release for more information. Non-GAAP EPS is reconciled in table 7.
Adjusted Free Cash Flow (FCF)
Adjusted FCF represents net cash provided by operating activities (a GAAP measure) less capital expenditures (additions to property, plant and equipment less proceeds from sale of property, plant and equipment, net), cash used for merger, acquisition, and severance. Adjusted FCF is reconciled in table 8.
Cash used for merger, acquisition, and severanceCash related to merger and acquisition expenses as discussed in the "merger, acquisition, and divestiture-related expenses" heading above and cash related to severance costs included in our LHX NeXt implementation costs.
Non-GAAP income before income taxesNon-GAAP income before income taxes represents income before income taxes, a GAAP measure, adjusted for amortization of acquisition-related intangibles; additional cost of revenue related to the fair value step-up in inventory sold; merger, acquisition, and divestiture-related expenses; asset group and business divestiture-related losses (gains), net, impairment of goodwill and other assets; and LHX NeXt implementation costs. Refer to the disclosures in the non-GAAP financial measures section of this earnings release for more information.
Effective tax rate on non-GAAP income
Effective tax rate on non-GAAP income represents the effective tax rate (tax expense as a percentage of income before income taxes, a GAAP measure) adjusted for the tax effect associated with amortization of acquisition-related intangibles; additional cost of revenue related to the fair value step-up in inventory sold; merger, acquisition, and divestiture-related expenses; asset group and business divestiture-related losses (gains), net, impairment of goodwill and other assets; and LHX NeXt implementation costs. Refer to the disclosures in the non-GAAP financial measures section of this earnings release for more information. Non-GAAP effective tax rate is reconciled in table 6.
PAGE 16

v3.24.2
Cover Page
Jul. 25, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 25, 2024
Entity Registrant Name L3HARRIS TECHNOLOGIES, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 1-3863
Entity Tax Identification Number 34-0276860
Entity Address, Address Line One 1025 West NASA Boulevard
Entity Address, City or Town Melbourne,
Entity Address, State or Province FL
Entity Address, Postal Zip Code 32919
City Area Code 321
Local Phone Number 727-9100
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $1.00 per share
Trading Symbol LHX
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000202058
Amendment Flag false
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