☐
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☑
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from June 29, 2019 to January 3, 2020
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Delaware
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34-0276860
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1025 West NASA Boulevard
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Melbourne,
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Florida
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32919
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(Address of principal executive offices)
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(Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, par value $1.00 per share
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LHX
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New York Stock Exchange
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Large accelerated filer
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þ
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page No.
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Part I:
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Information about our Executive Officers
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Part II:
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Part III:
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Part IV:
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ITEM 16. Form 10-KT Summary
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Signatures
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ITEM 1.
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BUSINESS.
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•
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Integrated Mission Systems, including multi-mission intelligence, surveillance and reconnaissance (“ISR”) and communication systems; integrated electrical and electronic systems for maritime platforms; and advanced electro-optical and infrared (“EO/IR”) solutions;
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•
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Space and Airborne Systems, including space payloads, sensors and full-mission solutions; classified intelligence and cyber defense; avionics; and electronic warfare;
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Communication Systems, including tactical communications; broadband communications; integrated vision solutions; and public safety; and
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Aviation Systems, including defense aviation products; security, detection and other commercial aviation products; commercial and military pilot training; and mission networks for air traffic management (“ATM”).
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75 percent was derived from sales to U.S. Government customers, including foreign military sales funded through the U.S. Government, whether directly or through prime contractors;
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69 percent was derived from contracts under which we are the prime contractor;
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17 percent was derived from products and services for which the end consumer is located outside the U.S.; and
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8 percent and 44 percent was derived from this segment’s largest and ten largest programs, respectively.
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System Engineering and Sustainment Integrator (“SENSOR”), a program to maintain and modernize radar installations and provide engineering support and sustainment for ground-based systems for the USAF:
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Geostationary Operational Environmental Satellite - Series R (“GOES-R”), a program to design, develop and build systems to measure, understand and monitor weather and environmental trends for the U.S. National Oceanic and Atmospheric Administration; and
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GPS III, a program to modernize the GPS satellite system for the USAF.
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Our advanced integrated defense electronic warfare systems (“AIDEWS”) that provide integrated and podded self-protection and jamming;
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Our integrated defensive electronic countermeasures (“IDECM”) system for the F/A-18;
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Our counter-radio controlled improvised explosive device technology that protects ground forces in asymmetrical combat environments; and
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Our land-based surveillance radar that provides three-dimensional radar capability for airborne defensive
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88 percent was derived from sales to U.S. Government customers, including foreign military sales funded through the U.S. Government, whether directly or through prime contractors;
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57 percent was derived from contracts under which we are the prime contractor;
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14 percent was derived from products and services for which the end consumer is located outside the U.S.; and
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5 percent and 35 percent was derived from this segment’s largest and ten largest programs, respectively.
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Our 2-channel handheld radio, the AN/PRC-163, for the U.S. Special Operations Command (“SOCOM”) Special Operations Forces Tactical Communications (“STC”) program and the U.S. Army 2-Channel Leader Radio program;
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Our multi-channel manpack radio, the AN/PRC-158;
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Our wideband high frequency (“HF”) manpack radios, the AN/PRC-160; and
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Our multiband manpack radio, the AN/PRC-117G, for which we have been providing Mobile User Objective System (“MUOS”) waveform software upgrades to enable connectivity to DoD’s next-generation MUOS satellite system.
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We design, build, supply and maintain wireless communications systems, including digital trunked, statewide, multi-agency systems for public safety communications and large, wide-area and multi-state land mobile radio (“LMR”) and radio frequency (“RF”) systems for some of the largest utility companies in the U.S.
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We offer a full range of single-band LMR terminals, as well as multiband radios that include a handheld radio and a full-spectrum mobile radio for vehicles.
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69 percent was derived from sales to U.S. Government customers, including foreign military sales funded through the U.S. Government, whether directly or through prime contractors;
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65 percent was derived from contracts under which we are the prime contractor; and
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29 percent was derived from products and services for which the end consumer is located outside the U.S.
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59 percent was derived from sales to U.S. Government customers, including foreign military sales funded through the U.S. Government, whether directly or through prime contractors;
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61 percent was derived from contracts under which we are the prime contractor; and
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26 percent was derived from products and services for which the end consumer is located outside the U.S.
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ITEM 1A.
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RISK FACTORS.
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The U.S. Government could reduce or delay its spending on, or reprioritize its spending away from, the government programs in which we participate;
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U.S. Government spending could be impacted by alternate arrangements to sequestration, which increases the uncertainty as to, and the difficulty in predicting, U.S. Government spending priorities and levels; and
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We may experience declines in revenue, profitability and cash flows as a result of reduced or delayed orders or payments or other factors caused by economic difficulties of our customers and prospective customers, including U.S. Federal, state and local governments.
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Disrupt the proper functioning of these networks and systems and, therefore, our operations and/or those of certain of our customers;
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Result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours, our customers or our employees, including trade secrets, which could be used to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes;
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Compromise national security and other sensitive government functions;
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Require significant management attention and resources to remedy the damages that result;
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Result in costs which exceed our insurance coverage and/or indemnification arrangements;
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Subject us to claims for contract breach, damages, credits, penalties or termination; and
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Damage our reputation with our customers (particularly agencies of the U.S. Government) and the general public.
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Currency exchange controls, fluctuations of currency and currency revaluations;
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The laws, regulations and policies of foreign governments relating to investments and operations, as well as U.S. laws affecting the activities of U.S. companies abroad, including the Foreign Corrupt Practices Act (“FCPA”);
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Import and export licensing requirements and regulations, including ITAR, as well as unforeseen changes in export controls and other trade regulations;
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Changes in regulatory requirements, including business or operating license requirements, imposition of tariffs or embargoes;
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Uncertainties and restrictions concerning the availability of funding, credit or guarantees;
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Risk of non-payment or delayed payment by foreign governments;
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Contractual obligations to non-U.S. customers may include specific in-country purchases, investments, manufacturing agreements or financial or other support arrangements or obligations, known as offset obligations, that may extend over several years, may require teaming with local companies and may result in significant penalties if not satisfied;
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The complexity and necessity of using, and disruptions involving our, international dealers, distributors, sales representatives and consultants;
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The difficulties of managing a geographically dispersed organization and culturally diverse workforces, including compliance with local laws and practices;
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Difficulties associated with repatriating cash generated or held abroad in a tax-efficient manner and changes in tax laws;
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Uncertainties as to local laws and enforcement of contract and intellectual property rights and occasional requirements for onerous contract terms;
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Rapid changes in government, economic and political policies, political or civil unrest, acts of terrorism or the threat of international boycotts or U.S. anti-boycott legislation; and
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Increased risk of an incident resulting in damage or destruction to our facilities or products or resulting in injury or loss of life to our employees, subcontractors or other third parties.
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Identify market needs and growth opportunities;
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Identify emerging technological trends in our current and target markets;
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Identify additional uses for our existing technology to address customer needs;
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Develop and maintain competitive products, systems, services and technologies;
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Enhance our offerings by adding innovative hardware, software or other features that differentiate our products, systems, services and technologies from those of our competitors;
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Develop, manufacture and bring to market cost-effective offerings quickly;
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Enhance product designs for export and releasability to international markets; and
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Effectively structure our businesses to reflect the competitive environment, including through the use of joint ventures, collaborative agreements and other forms of alliances.
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Difficulty in identifying and evaluating potential mergers and acquisitions, including the risk that our due diligence does not identify or fully assess valuation issues, potential liabilities or other merger or acquisition risks;
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Difficulty and expense in integrating newly merged or acquired businesses and operations, including combining product and service offerings, and in entering into new markets in which we are not experienced, in an efficient and cost-effective manner while maintaining adequate standards, controls and procedures, and the risk that we encounter significant unanticipated costs or other problems associated with integration;
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Difficulty and expense in consolidating and rationalizing IT infrastructure, which may include multiple legacy systems from various mergers and acquisitions and integrating software code;
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Challenges in achieving strategic objectives, cost savings and other benefits expected from mergers and acquisitions;
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Risk that our markets do not evolve as anticipated and that the strategic mergers, acquisitions and divestitures do not prove to be those needed to be successful in those markets;
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Risk that we assume or retain, or that companies we have merged with or acquired have assumed or retained or otherwise become subject to, significant liabilities that exceed the limitations of any applicable indemnification provisions or the financial resources of any indemnifying parties;
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Risk that indemnification related to businesses divested or spun off that we may be required to provide or otherwise bear may be significant and could negatively impact our business;
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Risk that mergers, acquisitions, divestitures, spin offs and other strategic transactions, including the L3Harris Merger, fail to qualify for the intended tax treatment for U.S. Federal income tax purposes, such as a tax-free reorganization in the case of the L3Harris Merger;
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Risk that we are not able to complete strategic divestitures on satisfactory terms and conditions, including non-competition arrangements applicable to certain of our business lines, or within expected timeframes;
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Potential loss of key employees or customers of the businesses merged with or acquired or to be divested; and
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Risk of diverting the attention of senior management from our existing operations.
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The jurisdictions in which profits are determined to be earned and taxed;
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Adjustments to estimated taxes upon finalization of various tax returns;
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Increases in expenses not fully deductible for tax purposes, including write-offs of acquired in-process R&D and impairment of goodwill or other long-term assets in connection with mergers or acquisitions;
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Changes in available tax credits;
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Changes in share-based compensation expense;
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Changes in the valuation of our deferred tax assets and liabilities;
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Changes in domestic or international tax laws or the interpretation of such tax laws; and
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The resolution of issues arising from tax audits with various tax authorities.
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the diversion of management’s attention to integration matters;
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difficulties in achieving anticipated cost savings, synergies, business opportunities and growth prospects from the combination;
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difficulties in the integration of operations and systems;
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conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the companies;
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difficulties in the assimilation of employees;
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difficulties in managing the expanded operations of a significantly larger and more complex company;
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difficulties in establishing effective uniform controls, systems, procedures and policies for the combined company;
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challenges in keeping existing customers and obtaining new customers;
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challenges in attracting and retaining key personnel; and
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coordinating a geographically dispersed organization.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS.
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ITEM 2.
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PROPERTIES.
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Segment
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Approximate
Total Sq. Ft.
Owned
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Approximate
Total Sq. Ft.
Leased
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Approximate
Total
Sq. Ft.
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(In millions)
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Integrated Mission Systems
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2.2
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6.7
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8.9
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Space and Airborne Systems
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5.0
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2.4
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7.4
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Communication Systems
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1.6
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1.6
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3.2
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Aviation Systems
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2.4
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4.0
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6.4
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Corporate
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0.4
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0.4
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0.8
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Total
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11.6
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15.1
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26.7
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ITEM 3.
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LEGAL PROCEEDINGS.
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ITEM 4.
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MINE SAFETY DISCLOSURES.
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Name and Age
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Position Currently Held and Past Business Experience
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William M. Brown, 57
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Chairman and Chief Executive Officer since June 29, 2019. Chairman, President and Chief Executive Officer from April 2014 to June 2019. President and Chief Executive Officer from November 2011 to April 2014. Formerly with United Technologies Corporation (“UTC”), as Senior Vice President, Corporate Strategy and Development from April 2011 to October 2011; as President of UTC’s Fire & Security division from 2006 to 2011; and in U.S. and international roles at UTC’s Carrier Corporation from 2000 to 2006, including President of the Carrier Asia Pacific Operations; and as Director, Corporate Strategy and Business Development from 1997 to 2000. Before joining UTC in 1997, Mr. Brown worked for McKinsey & Company as a senior engagement manager, and prior to that, at Air Products and Chemicals, Inc. as a project engineer.
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Todd W. Gautier, 56
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President, Aviation Systems since June 29, 2019. Served with L3 as Senior Vice President and President of Electronic Systems Segment from March 2017 to June 2019; as President of Precision Engagement and Training Sector from January 2014 to March 2017; as President of Precision Engagement Sector from January 2010 to January 2014; and as Vice President of Business Development and Strategy for the Sensors and Simulation Group from January 2005 to January 2010. Before joining L3 in 2001, Mr. Gautier served in the U.S. Navy for 15 years as a Strike/Fighter Pilot; was Vice President of Navy Operations for BGI, LLC; and worked for United Airlines as a flight crew member.
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James P. Girard, 43
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Vice President and Chief Human Resources Officer since June 29, 2019. Vice President, Human Resources from July 2015 to June 2019. Vice President, Human Resources - Government Communications Systems from May 2014 to June 2015. Before joining L3Harris in May 2014, Mr. Girard worked for UTC, as Vice President, Human Resources at Sikorsky Aircraft from February 2014 to April 2014; as Director, Talent Resources from November 2011 to January 2014; as Vice President, Human Resources at UTC’s Global Fire Products from June 2010 to October 2011; and served in various Human Resources roles from 1995 to 2010.
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Christopher E. Kubasik, 58
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Vice Chairman, President and Chief Operating Officer since June 29, 2019. Served with L3, as Chairman, Chief Executive Officer and President from May 2018 to June 2019; as Chief Executive Officer and President from January 2018 to May 2018; and as President and Chief Operating Officer from October 2015 to December 2017. Before joining L3 in October 2015, Mr. Kubasik worked for Seabury Advisory Group as President and Chief Executive Officer from March 2014 to October 2015; for Ackuity Advisors, Inc., as President and Chief Executive Officer from January 2013 to March 2014; and for Lockheed Martin Corporation, where he held various senior executive and finance roles from 1999 to 2012, including Vice Chairman, President and Chief Operating Officer from 2010 to 2012. Prior to that, he worked for Ernst & Young LLP, including as a partner from 1996 to 1999.
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Jesus “Jay” Malave Jr., 51
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Senior Vice President and Chief Financial Officer since June 29, 2019. Before joining L3Harris, Mr. Malave worked at UTC, as Vice President and Chief Financial Officer of UTC’s Carrier Corporation from April 2018 to June 2019; as Chief Financial Officer of UTC’s Aerospace Systems from January 2015 to April 2018; as Head of Investor Relations from June 2012 to December 2014; as Vice President, Financial Planning and Treasury at Hamilton Sundstrand, with responsibility for planning the integration of Goodrich Corporation from May 2011 to June 2012; as Director of Investor Relations from June 2009 to May 2011; and prior to that, in other roles of increasing responsibility in financial planning and analysis, treasury and accounting.
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Dana A. Mehnert, 57
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President, Communication Systems since September 2018. Senior Vice President, Chief Global Business Development Officer from July 2015 to September 2018. Group President, RF Communications from May 2009 to July 2015. President, RF Communications from July 2006 to May 2009. Mr. Mehnert joined L3Harris in 1984.
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Scott T. Mikuen, 58
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Senior Vice President, General Counsel and Secretary since February 2013. Vice President, General Counsel and Secretary from October 2010 to February 2013. Vice President, Associate General Counsel and Secretary from October 2004 to October 2010. Vice President — Counsel, Corporate and Commercial Operations and Assistant Secretary from November 2000 to October 2004. Mr. Mikuen joined L3Harris in 1996 as Finance Counsel.
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Sean J. Stackley, 62
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President, Integrated Mission Systems since June 29, 2019. Served with L3 as Senior Vice President and President of Communications & Networked Systems Segment from September 2018 to June 2019; and as Corporate Vice President, Strategic Advance Programs and Technologies from January 2018 to September 2018. Before joining L3 in January 2018, (Hon.) Mr. Stackley spent four decades in public service, including a 27-year career with the U.S. Navy, where he most recently was Acting Secretary of the Navy from January 2017 to July 2017 and Secretary of the Navy for Research, Development and Acquisition from 2008 to 2017.
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Todd A. Taylor, 47
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Vice President, Principal Accounting Officer since May 2015. Vice President from April 2015 to May 2015. Formerly with Molex, Inc., as Vice President, Chief Accounting Officer and Corporate Controller from September 2012 to April 2015; as Director of Finance and Corporate Controller from September 2010 to September 2012; and as Director of Accounting from June 2008 to September 2010; Before joining Molex, Mr. Taylor worked for PricewaterhouseCoopers as Internal Audit Advisory Director from March 2003 to June 2008; for Wells Fargo as Internal Controls Manager from September 1999 to February 2003; and for RSM McGladrey.
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Edward J. Zoiss, 55
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President, Space and Airborne Systems since June 29, 2019. President, Electronic Systems from July 2015 to June 2019. Vice President and General Manager, Defense Programs, Government Communications Systems from June 2013 to July 2015. Vice President, C4ISR Electronics, Government Communications Systems from June 2012 to June 2013; Vice President, Advanced Programs and Technology, Government Communications Systems from July 2010 to June 2012. Mr. Zoiss joined L3Harris in 1995.
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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L3HARRIS PERIOD END
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June 27,
2014 |
July 3,
2015 |
July 1,
2016 |
June 30,
2017 |
June 29,
2018 |
June 28,
2019 |
January 3,
2020 |
||||||||||||||
L3Harris Technologies, Inc.
|
$
|
100
|
|
$
|
105
|
|
$
|
114
|
|
$
|
154
|
|
$
|
208
|
|
$
|
276
|
|
$
|
310
|
|
S&P 500
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$
|
100
|
|
$
|
108
|
|
$
|
112
|
|
$
|
132
|
|
$
|
151
|
|
$
|
166
|
|
$
|
185
|
|
S&P 500 Aerospace & Defense
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$
|
100
|
|
$
|
108
|
|
$
|
122
|
|
$
|
156
|
|
$
|
196
|
|
$
|
217
|
|
$
|
237
|
|
Period*
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Total number of
shares purchased
|
|
Average price
paid per share
|
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Total number of
shares purchased as part of publicly
announced plans or programs(1)
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Maximum
approximate
dollar value
of shares that may
yet be purchased
under the plans
or programs(1)
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||||||
Month No. 1
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||||||
(September 28, 2019-October 25, 2019)
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|
|
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||||||
Repurchase program(1)
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580,000
|
|
|
$
|
205.39
|
|
|
580,000
|
|
|
|
$3,130,775,855
|
|
Employee transactions(2)
|
4,373
|
|
|
$
|
206.63
|
|
|
—
|
|
|
—
|
|
|
Month No. 2
|
|
|
|
|
|
|
|
||||||
(October 26, 2019-November 29, 2019)
|
|
|
|
|
|
|
|
||||||
Repurchase program(1)
|
2,535,640
|
|
|
$
|
198.10
|
|
|
2,535,640
|
|
|
|
$2,628,454,481
|
|
Employee transactions(2)
|
9,312
|
|
|
$
|
202.12
|
|
|
—
|
|
|
—
|
|
|
Month No. 3
|
|
|
|
|
|
|
|
||||||
(November 30, 2019-January 3, 2020)
|
|
|
|
|
|
|
|
||||||
Repurchase program(1)
|
658,028
|
|
|
$
|
195.04
|
|
|
658,028
|
|
|
|
$2,500,113,105
|
|
Employee transactions(2)
|
19,324
|
|
|
$
|
205.42
|
|
|
—
|
|
|
—
|
|
|
Total
|
3,806,677
|
|
|
|
|
3,773,668
|
|
|
|
$2,500,113,105
|
|
*
|
Periods represent our fiscal months.
|
(1)
|
On July 1, 2019, we announced that our Board of Directors approved a new $4 billion share repurchase authorization (our “2019 Repurchase Program”) replacing our prior share repurchase programs and authorizing us to repurchase up to $4 billion in shares of our common stock through open market purchases, private transactions, transactions structured through investment banking institutions or any combination thereof. As of January 3, 2020, $2,500,113,105 (as reflected in the table above) was the approximate dollar amount of our common stock that could still be purchased under the 2019 Repurchase Program.
|
(2)
|
Represents a combination of (a) shares of our common stock delivered to us in satisfaction of the tax withholding obligation of holders of performance units, restricted units or restricted shares that vested during the quarter and (b) performance units, restricted units or restricted shares returned to us upon retirement or employment termination of employees. Our equity incentive plans provide that the value of shares delivered to us to pay the exercise price of options or to cover tax withholding obligations shall be the closing price of our common stock on the date the relevant transaction occurs.
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ITEM 6.
|
SELECTED FINANCIAL DATA.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||||||||||
|
January, 3
2020(2)
|
|
June 28, 2019(3)
|
|
June 29, 2018(4)
|
|
June 30, 2017(5)
|
|
July 1, 2016(6)(8)
|
|
July 3, 2015(7)(8)
|
||||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||||||||
Results of Operations:(1)
|
|||||||||||||||||||||||
Revenue from product sales and services
|
$
|
9,263
|
|
|
$
|
6,801
|
|
|
$
|
6,168
|
|
|
$
|
5,897
|
|
|
$
|
5,992
|
|
|
$
|
3,885
|
|
Cost of product sales and services
|
6,726
|
|
|
4,467
|
|
|
4,066
|
|
|
3,854
|
|
|
3,832
|
|
|
2,304
|
|
||||||
Interest expense
|
135
|
|
|
169
|
|
|
170
|
|
|
172
|
|
|
183
|
|
|
130
|
|
||||||
Income from continuing operations before income taxes
|
908
|
|
|
1,113
|
|
|
908
|
|
|
889
|
|
|
884
|
|
|
396
|
|
||||||
Income taxes
|
73
|
|
|
160
|
|
|
206
|
|
|
261
|
|
|
273
|
|
|
109
|
|
||||||
Income from continuing operations
|
835
|
|
|
953
|
|
|
702
|
|
|
628
|
|
|
611
|
|
|
287
|
|
||||||
Discontinued operations, net of income taxes
|
(1
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(85
|
)
|
|
(287
|
)
|
|
47
|
|
||||||
Net income
|
834
|
|
|
949
|
|
|
699
|
|
|
543
|
|
|
324
|
|
|
334
|
|
||||||
Noncontrolling interests, net of income taxes
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income attributable to L3Harris Technologies, Inc.
|
822
|
|
|
949
|
|
|
699
|
|
|
543
|
|
|
324
|
|
|
334
|
|
||||||
Average shares outstanding (diluted)
|
223.7
|
|
|
120.5
|
|
|
121.1
|
|
|
124.3
|
|
|
125.0
|
|
|
106.8
|
|
||||||
Per Share Data (Diluted) Attributable to L3Harris Technologies, Inc. Common Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income from continuing operations
|
$
|
3.68
|
|
|
$
|
7.89
|
|
|
$
|
5.78
|
|
|
$
|
5.04
|
|
|
$
|
4.87
|
|
|
$
|
2.67
|
|
Income (loss) from discontinued operations, net of income taxes
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.02
|
)
|
|
(0.68
|
)
|
|
(2.28
|
)
|
|
0.44
|
|
||||||
Net income
|
3.67
|
|
|
7.86
|
|
|
5.76
|
|
|
4.36
|
|
|
2.59
|
|
|
3.11
|
|
||||||
Cash dividends
|
1.50
|
|
|
2.74
|
|
|
2.28
|
|
|
2.12
|
|
|
2.00
|
|
|
1.88
|
|
||||||
Financial Position at Fiscal Period-End:
|
|||||||||||||||||||||||
Net working capital(9)
|
$
|
2,303
|
|
|
$
|
310
|
|
|
$
|
374
|
|
|
$
|
105
|
|
|
$
|
643
|
|
|
$
|
909
|
|
Property, plant and equipment
|
2,117
|
|
|
894
|
|
|
900
|
|
|
904
|
|
|
924
|
|
|
1,031
|
|
||||||
Long-term debt, net
|
6,694
|
|
|
2,763
|
|
|
3,408
|
|
|
3,396
|
|
|
4,120
|
|
|
5,053
|
|
||||||
Total assets
|
38,336
|
|
|
10,117
|
|
|
9,851
|
|
|
10,112
|
|
|
12,009
|
|
|
13,127
|
|
||||||
Equity
|
22,744
|
|
|
3,363
|
|
|
3,278
|
|
|
2,903
|
|
|
3,057
|
|
|
3,402
|
|
||||||
Book value per share
|
104.22
|
|
|
28.37
|
|
|
27.71
|
|
|
24.27
|
|
|
24.53
|
|
|
27.51
|
|
(1)
|
Includes the operating results of L3 businesses after the L3Harris Merger on June 29, 2019.
|
(2)
|
Results for the two quarters ended January 3, 2020 included: (i) $390 million of L3Harris Merger-related transaction and integration expenses and losses; (ii) $289 million of amortization of acquisition-related intangibles, including $239 million of amortization of identifiable intangible assets acquired as a result of the L3Harris Merger and $50 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis; (iii) a $229 million gain on the sale of the Harris Night Vision business; (iv) $142 million of additional cost of sales related to the fair value step-up in inventory sold; (v) a $23 million gain on pension plain curtailment; (vi) a $12 million gain on the sale of an asset group; (vii) a $10 million non-cash cumulative adjustment to lease expense; and (viii) $3 million of losses and other costs related to debt refinancing. The net after-tax impact from these two quarters ended January 3, 2020 items was $392 million or $1.75 per diluted common share.
|
(3)
|
Results for fiscal 2019 included: (i) $101 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis and (ii) $65 million of L3Harris Merger-related transaction and integration costs. The net after-tax impact from these fiscal 2019 items was $128 million or $1.06 per diluted common share.
|
(4)
|
Results for fiscal 2018 included: (i) $101 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis; (ii) $47 million of charges related to our decision to transition and exit a commercial air-to-ground Long Term Evolution (“LTE”) radio communications line of business and other items; (iii) $27 million of losses and other costs related to debt refinancing; (iv) $20 million of charges related to non-cash adjustments for deferred compensation and the impact of tax reform; and (v) a $5 million charge related to consolidation of certain Exelis facilities initiated in fiscal 2017. The net after-tax impact from these fiscal 2018 items was $145 million or $1.20 per diluted common share.
|
(5)
|
Results for fiscal 2017 included: (i) $109 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis and (ii) a $58 million charge for Exelis acquisition-related and other items. The net after-tax impact from these fiscal 2017 items was $124 million or $1.00 per diluted common share.
|
(6)
|
Results for fiscal 2016 included: (i) $121 million for integration and other costs associated with our acquisition of Exelis in the fourth quarter of fiscal 2015, including $11 million for amortization of a step-up in inventory; (ii) $109 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis; (iii) a net liability reduction of $101 million for certain post-employment benefit plans; (iii) $33 million of charges for restructuring and other items; and (iv) a $10 million net gain on the sale of our aerostructures business. The net after-tax impact from these fiscal 2016 items was $108 million or $0.86 per diluted common share.
|
(7)
|
Results for fiscal 2015 included results of Exelis following the close of the acquisition on May 29, 2015 and a $205 million after-tax ($1.91 per diluted share) charge for transaction, financing, integration, restructuring and other costs, primarily related to our acquisition of Exelis.
|
(8)
|
Historical financial information for fiscal 2016 and 2015 has not been updated for our adoption of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), as amended (“ASC 606”), and ASU 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (“ASU 2017-07”) on a retrospective basis, and consequently, the selected financial data for such fiscal years in this Item are not necessarily comparable to fiscal 2019, 2018 and 2017 in this Item.
|
(9)
|
Net working capital increased in the two quarters ended January 3, 2020 compared with fiscal 2019 primarily due to net working capital of L3 businesses recognized in connection with the L3Harris Merger on June 29, 2019. Net working capital decreased in fiscal 2017 compared with fiscal 2016 primarily due to a $172 million increase in current portion of long-term debt and a $161 million decrease associated with net working capital of discontinued operations.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
•
|
Business Considerations — a general description of our business; the value drivers of our business; Fiscal Transition Period results of operations and liquidity and capital resources key indicators; and industry-wide opportunities, challenges and risks that are relevant to us in defense, government and commercial markets.
|
•
|
Operations Review — an analysis of our consolidated results of operations and of the results in each of our business segments, to the extent the segment operating results are helpful to an understanding of our business as a whole, for the periods presented in our financial statements.
|
•
|
Liquidity, Capital Resources and Financial Strategies — an analysis of cash flows, funding of pension plans, common stock repurchases, dividends, capital structure and resources, contractual obligations, off-balance sheet arrangements, commercial commitments, financial risk management, impact of foreign exchange and impact of inflation.
|
•
|
Critical Accounting Policies and Estimates — a discussion of accounting policies and estimates that require the most judgment and a discussion of accounting pronouncements that have been issued but not yet implemented by us and their potential impact on our financial condition, results of operations and cash flows.
|
•
|
Forward-Looking Statements and Factors that May Affect Future Results — cautionary information about forward-looking statements and a description of certain risks and uncertainties that could cause our actual results to differ materially from our historical results or our current expectations or projections.
|
•
|
Integrated Mission Systems, including multi-mission ISR and communication systems; integrated electrical and electronic systems for maritime platforms; and advanced EO/IR solutions;
|
•
|
Space and Airborne Systems, including space payloads, sensors and full-mission solutions; classified intelligence and cyber defense; avionics; and electronic warfare;
|
•
|
Communication Systems, including tactical communications; broadband communications; integrated vision solutions; and public safety; and
|
•
|
Aviation Systems, including defense aviation products; security, detection and other commercial aviation products; commercial and military pilot training; and mission networks for ATM.
|
•
|
$142 million of additional cost of sales related to the fair value step-up in inventory sold;
|
•
|
$117 million of costs for workforce reductions, including severance and other employee-related exit costs;
|
•
|
$83 million of transaction costs, recognized as incurred;
|
•
|
$72 million of integration costs, recognized as incurred;
|
•
|
$70 million of equity award acceleration charges, recognized upon the change in control; and
|
•
|
$48 million of impairment and other losses related to operating lease right-of-use assets.
|
•
|
Executing seamless integration of L3 and Harris, including achieving at least $500 million in gross cost synergies from the L3Harris Merger by the end of 2021;
|
•
|
Driving flawless execution and margin expansion through our e3 (excellence everywhere every day) operational excellence program;
|
•
|
Growing revenue through investments in differentiated technology and innovation;
|
•
|
Reshaping our portfolio to focus on high margin, high growth businesses; and
|
•
|
Maximizing cash flow with shareholder friendly capital deployment.
|
•
|
Revenue increased 189 percent to $9.3 billion in the two quarters ended January 3, 2020 from $3.2 billion in the two quarters ended December 28, 2018;
|
•
|
Income from continuing operations attributable to L3Harris common shareholders increased 87 percent to $823 million in the two quarters ended January 3, 2020 from $441 million in the two quarters ended December 28, 2018;
|
•
|
Income from continuing operations attributable to L3Harris common shareholders as a percentage of revenue decreased to 9 percent in the two quarters ended January 3, 2020 from 14 percent in the two quarters ended December 28, 2018; and
|
•
|
Income from continuing operations per diluted common share attributable to L3Harris common shareholders increased 1 percent to $3.68 in the two quarters ended January 3, 2020 from $3.66 in the two quarters ended December 28, 2018, reflecting the increase in income from continuing operations as noted above, partially offset by higher diluted common shares outstanding due to additional shares issued in connection with the L3Harris Merger during the two quarters ended January 3, 2020.
|
•
|
Revenue increased 10 percent to $9.3 billion in the two quarters ended January 3, 2020 from $8.4 billion in the two quarters ended December 28, 2018;
|
•
|
Income from continuing operations attributable to L3Harris common shareholders increased 10 percent to $823 million in the two quarters ended January 3, 2020 from $748 million in the two quarters ended December 28, 2018;
|
•
|
Income from continuing operations attributable to L3Harris common shareholders as a percentage of revenue in the two quarters ended January 3, 2020 was comparable with the two quarters ended December 28, 2018 at 9 percent; and
|
•
|
Income from continuing operations per diluted common share attributable to L3Harris common shareholders increased 13 percent to $3.68 in the two quarters ended January 3, 2020 from $3.27 in the two quarters ended December 28, 2018, reflecting both the increase in income from continuing operations as noted above and fewer diluted common shares outstanding due to repurchases of shares of common stock under our repurchase program during the two quarters ended January 3, 2020.
|
•
|
Net cash provided by operating activities increased to $939 million in the two quarters ended January 3, 2020 from $469 million in the two quarters ended December 28, 2018;
|
•
|
Return on invested capital (defined as after-tax operating income from continuing operations divided by the two-point average of invested capital at the beginning and end of the period, where invested capital equals equity plus debt, less cash and cash equivalents) decreased to 4 percent in the two quarters ended January 3, 2020 from 6 percent in the two quarters ended December 28, 2018;
|
•
|
Return on average equity (defined as income from continuing operations divided by the two-point average of equity at the beginning and end of the fiscal period) decreased to 6 percent in the two quarters ended January 3, 2020 from 13 percent in the two quarters ended December 28, 2018;
|
•
|
Our consolidated total indebtedness to total capital ratio at January 3, 2020 was 24 percent, compared with our 65 percent covenant limitation under our senior unsecured revolving credit facility; and
|
•
|
Our net unfunded defined benefit pension plan liability increased $577 million in the two quarters ended January 3, 2020 to $1.7 billion at January 3, 2020 compared with $1.2 billion at June 28, 2019, primarily due to the addition of L3’s pension plans assumed in connection with the L3Harris Merger.
|
|
Two Quarters Ended
|
||||||||||||||||
|
January 3,
2020 |
|
December 28,
2018 |
|
Percent
Increase/ (Decrease) |
|
December 28,
2018 |
|
Percent
Increase/ (Decrease) |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
As Reported
|
|
Pro Forma
|
||||||||||||||
|
(Dollars in millions, except per share amounts)
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||||
Integrated Mission Systems
|
$
|
2,774
|
|
|
$
|
23
|
|
|
*
|
|
|
$
|
2,517
|
|
|
10
|
%
|
Space and Airborne Systems
|
2,360
|
|
|
1,741
|
|
|
36
|
%
|
|
2,039
|
|
|
16
|
%
|
|||
Communication Systems
|
2,151
|
|
|
1,018
|
|
|
111
|
%
|
|
1,949
|
|
|
10
|
%
|
|||
Aviation Systems
|
2,038
|
|
|
342
|
|
|
*
|
|
|
1,970
|
|
|
3
|
%
|
|||
Other non-reportable business segments
|
23
|
|
|
86
|
|
|
(73
|
)%
|
|
12
|
|
|
92
|
%
|
|||
Corporate eliminations
|
(83
|
)
|
|
(2
|
)
|
|
*
|
|
|
(83
|
)
|
|
—
|
|
|||
Total revenue
|
9,263
|
|
|
3,208
|
|
|
189
|
%
|
|
8,404
|
|
|
10
|
%
|
|||
Total cost of product sales and services
|
(6,726
|
)
|
|
(2,105
|
)
|
|
220
|
%
|
|
(5,939
|
)
|
|
13
|
%
|
|||
% of total revenue
|
73
|
%
|
|
66
|
%
|
|
|
|
71
|
%
|
|
|
|||||
Gross margin
|
2,537
|
|
|
1,103
|
|
|
130
|
%
|
|
2,465
|
|
|
3
|
%
|
|||
% of total revenue
|
27
|
%
|
|
34
|
%
|
|
|
|
29
|
%
|
|
|
|||||
Engineering, selling and administrative expenses
|
(1,927
|
)
|
|
(583
|
)
|
|
231
|
%
|
|
(1,598
|
)
|
|
21
|
%
|
|||
% of total revenue
|
21
|
%
|
|
18
|
%
|
|
|
|
19
|
%
|
|
|
|||||
Gain (loss) on sales of businesses
|
229
|
|
|
—
|
|
|
*
|
|
|
(6
|
)
|
|
*
|
|
|||
Non-operating income
|
192
|
|
|
94
|
|
|
104
|
%
|
|
122
|
|
|
57
|
%
|
|||
Net interest expense
|
(123
|
)
|
|
(86
|
)
|
|
43
|
%
|
|
(143
|
)
|
|
(14
|
)%
|
|||
Income from continuing operations before income taxes
|
908
|
|
|
528
|
|
|
72
|
%
|
|
840
|
|
|
8
|
%
|
|||
Income taxes
|
(73
|
)
|
|
(87
|
)
|
|
(16
|
)%
|
|
(80
|
)
|
|
(9
|
)%
|
|||
Effective tax rate
|
8
|
%
|
|
16
|
%
|
|
|
|
10
|
%
|
|
|
|||||
Income from continuing operations
|
835
|
|
|
441
|
|
|
89
|
%
|
|
760
|
|
|
10
|
%
|
|||
Noncontrolling interests, net of income taxes
|
(12
|
)
|
|
—
|
|
|
*
|
|
|
(12
|
)
|
|
—
|
|
|||
Income from continuing operations attributable to L3Harris common shareholders
|
$
|
823
|
|
|
$
|
441
|
|
|
87
|
%
|
|
$
|
748
|
|
|
10
|
%
|
% of total revenue
|
9
|
%
|
|
14
|
%
|
|
|
|
9
|
%
|
|
|
|||||
Income from continuing operations per diluted common share attributable to L3Harris common shareholders
|
$
|
3.68
|
|
|
$
|
3.66
|
|
|
1
|
%
|
|
$
|
3.27
|
|
|
13
|
%
|
*
|
Not meaningful
|
|
Fiscal Years Ended
|
||||||||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
Percent
Increase/ (Decrease) |
|
June 30, 2017
|
|
Percent
Increase/ (Decrease) |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
As Reported
|
||||||||||||||||
|
(Dollars in millions, except per share amounts)
|
||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Integrated Mission Systems
|
$
|
48
|
|
|
$
|
45
|
|
|
7
|
%
|
|
$
|
38
|
|
|
18
|
%
|
Space and Airborne Systems
|
3,715
|
|
|
3,304
|
|
|
12
|
%
|
|
3,156
|
|
|
5
|
%
|
|||
Communication Systems
|
2,208
|
|
|
2,015
|
|
|
10
|
%
|
|
1,891
|
|
|
7
|
%
|
|||
Aviation Systems
|
672
|
|
|
668
|
|
|
1
|
%
|
|
697
|
|
|
(4
|
)%
|
|||
Other non-reportable business segments
|
165
|
|
|
148
|
|
|
11
|
%
|
|
121
|
|
|
22
|
%
|
|||
Corporate eliminations
|
(7
|
)
|
|
(12
|
)
|
|
(42
|
)%
|
|
(6
|
)
|
|
100
|
%
|
|||
Total revenue
|
6,801
|
|
|
6,168
|
|
|
10
|
%
|
|
5,897
|
|
|
5
|
%
|
|||
Total cost of product sales and services
|
(4,467
|
)
|
|
(4,066
|
)
|
|
10
|
%
|
|
(3,854
|
)
|
|
6
|
%
|
|||
% of total revenue
|
66
|
%
|
|
66
|
%
|
|
|
|
65
|
%
|
|
|
|||||
Gross margin
|
2,334
|
|
|
2,102
|
|
|
11
|
%
|
|
2,043
|
|
|
3
|
%
|
|||
% of total revenue
|
34
|
%
|
|
34
|
%
|
|
|
|
35
|
%
|
|
|
|||||
Engineering, selling and administrative expenses
|
(1,242
|
)
|
|
(1,182
|
)
|
|
5
|
%
|
|
(1,150
|
)
|
|
3
|
%
|
|||
% of total revenue
|
18
|
%
|
|
19
|
%
|
|
|
|
20
|
%
|
|
|
|||||
Non-operating income
|
188
|
|
|
156
|
|
|
21
|
%
|
|
166
|
|
|
(6
|
)%
|
|||
Net interest expense
|
(167
|
)
|
|
(168
|
)
|
|
(1
|
)%
|
|
(170
|
)
|
|
(1
|
)%
|
|||
Income from continuing operations before income taxes
|
1,113
|
|
|
908
|
|
|
23
|
%
|
|
889
|
|
|
2
|
%
|
|||
Income taxes
|
(160
|
)
|
|
(206
|
)
|
|
(22
|
)%
|
|
(261
|
)
|
|
(21
|
)%
|
|||
Effective tax rate
|
14
|
%
|
|
23
|
%
|
|
|
|
29
|
%
|
|
|
|||||
Income from continuing operations
|
953
|
|
|
702
|
|
|
36
|
%
|
|
628
|
|
|
12
|
%
|
|||
Noncontrolling interests, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|||
Income from continuing operations attributable to L3Harris common shareholders
|
$
|
953
|
|
|
$
|
702
|
|
|
36
|
%
|
|
$
|
628
|
|
|
12
|
%
|
% of total revenue
|
14
|
%
|
|
11
|
%
|
|
|
|
11
|
%
|
|
|
|||||
Income from continuing operations per diluted common share attributable to L3Harris common shareholders
|
$
|
7.89
|
|
|
$
|
5.78
|
|
|
37
|
%
|
|
$
|
5.04
|
|
|
15
|
%
|
•
|
Excess tax benefits related to equity-based compensation;
|
•
|
The ability to utilize capital loss carryforwards with a full valuation allowance against capital gains generated from the Harris Night Vision business divestiture; and
|
•
|
The release of reserves for uncertain tax positions due to statute of limitations expirations.
|
•
|
A reduction in the deferred tax liability maintained on the basis differences related to the unremitted foreign earnings;
|
•
|
The favorable impact of excess tax benefits related to equity-based compensation; and
|
•
|
An increase in the R&D credit; partially offset by
|
•
|
An unfavorable impact of the differences in U.S. generally accepted accounting principles (“GAAP”) and tax accounting related to investments.
|
•
|
Legislative changes from the Tax Cuts and Jobs Act which became applicable to Harris during fiscal 2019, such as: (i) a reduction in our U.S. statutory corporate income tax rate from the blended rate of 28.1% in fiscal 2018 to a flat 21% rate in fiscal 2019; (ii) the recent clarification that foreign military sales qualify for the foreign derived intangible income deduction; (iii) tax planning to allow for the utilization of foreign tax credits that were previously valued; and (iv) the loss of the U.S. domestic manufacturing deduction;
|
•
|
The favorable impact of excess tax benefits related to equity-based compensation; and
|
•
|
Additional research credits claimed on our prior year tax returns.
|
•
|
The enactment of a lower U.S. statutory corporate income tax rate in fiscal 2018;
|
•
|
Additional research credits claimed on our fiscal 2017 tax return compared with our recorded estimates at the end of fiscal 2017; and
|
•
|
The favorable impact of releasing provisions for uncertain tax positions.
|
•
|
The favorable impact of excess tax benefits related to equity-based compensation;
|
•
|
Several differences between U.S. GAAP and tax accounting related to investments; and
|
•
|
Additional deductions and additional research credits claimed on our fiscal 2016 tax return compared with our recorded estimates at the end of fiscal 2016.
|
•
|
Excess tax benefits related to equity-based compensation;
|
•
|
The ability to utilize capital loss carryforwards with a full valuation allowance against capital gains generated from the Harris Night Vision business divestiture; and
|
•
|
The release of reserves for uncertain tax positions due to statute of limitations expirations.
|
Unaudited Pro Forma Condensed Combined Statement of Income
|
|||||||||||||||||
For the Two Quarters Ended December 28, 2018
|
|||||||||||||||||
|
Historical
Harris |
|
Historical
L3 |
|
Pro Forma
Adjustments |
|
Note
References |
|
Pro Forma
Combined |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||
Revenue from product sales and services
|
$
|
3,208
|
|
|
$
|
5,290
|
|
|
$
|
(8
|
)
|
|
a
|
|
$
|
8,404
|
|
|
|
|
|
|
(86
|
)
|
|
b
|
|
|
|||||||
Cost of product sales and services
|
(2,105
|
)
|
|
(3,887
|
)
|
|
8
|
|
|
a
|
|
(5,939
|
)
|
||||
|
|
|
|
|
60
|
|
|
b
|
|
|
|||||||
|
|
|
|
|
(15
|
)
|
|
c
|
|
|
|||||||
Engineering, selling and administrative expenses
|
(583
|
)
|
|
(821
|
)
|
|
18
|
|
|
d
|
|
(1,598
|
)
|
||||
|
|
|
|
|
13
|
|
|
b
|
|
|
|||||||
|
|
|
|
|
(197
|
)
|
|
c
|
|
|
|||||||
|
|
|
|
|
(4
|
)
|
|
e
|
|
|
|||||||
|
|
|
|
|
4
|
|
|
f
|
|
|
|||||||
|
|
|
|
|
(28
|
)
|
|
j
|
|
|
|||||||
Loss on sales of businesses
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
j
|
|
(6
|
)
|
||||
Loss on sale of Crestview Aerospace and TCS businesses
|
—
|
|
|
(6
|
)
|
|
6
|
|
|
j
|
|
—
|
|
||||
Merger, acquisition and divestiture related expenses
|
—
|
|
|
(28
|
)
|
|
28
|
|
|
j
|
|
—
|
|
||||
Non-operating income
|
94
|
|
|
—
|
|
|
32
|
|
|
g
|
|
122
|
|
||||
|
|
|
|
|
(4
|
)
|
|
j
|
|
|
|||||||
Interest and other income, net
|
—
|
|
|
23
|
|
|
(23
|
)
|
|
j
|
|
—
|
|
||||
Debt retirement charges
|
—
|
|
|
(21
|
)
|
|
21
|
|
|
j
|
|
—
|
|
||||
Interest income
|
1
|
|
|
—
|
|
|
6
|
|
|
j
|
|
7
|
|
||||
Interest expense
|
(87
|
)
|
|
(79
|
)
|
|
1
|
|
|
h
|
|
(150
|
)
|
||||
|
|
|
|
|
15
|
|
|
i
|
|
|
|||||||
Income from continuing operations before income taxes
|
528
|
|
|
471
|
|
|
(159
|
)
|
|
|
|
840
|
|
||||
Income taxes
|
(87
|
)
|
|
(31
|
)
|
|
38
|
|
|
k
|
|
(80
|
)
|
||||
Income from continuing operations
|
441
|
|
|
440
|
|
|
(121
|
)
|
|
|
|
760
|
|
||||
Income from continuing operations attributable to noncontrolling interests
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
|
|
(12
|
)
|
||||
Income from continuing operations attributable to common shareholders
|
$
|
441
|
|
|
$
|
428
|
|
|
$
|
(121
|
)
|
|
|
|
$
|
748
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations per basic common share attributable to common shareholders
|
$
|
3.74
|
|
|
|
|
|
|
|
|
$
|
3.37
|
|
||||
Income from continuing operations per diluted common share attributable to common shareholders
|
$
|
3.66
|
|
|
|
|
|
|
|
|
$
|
3.33
|
|
||||
Basic weighted average common shares outstanding
|
117.8
|
|
|
|
|
104.1
|
|
|
l
|
|
221.9
|
|
|||||
Diluted weighted average common shares outstanding
|
120.3
|
|
|
|
|
104.6
|
|
|
l
|
|
224.9
|
|
a.
|
Reflects the elimination of intercompany balances and transactions between L3 and Harris.
|
b.
|
Reflects the sale of the Harris Night Vision business.
|
c.
|
Reflects the net increase in amortization expense related to the fair value of acquired finite-lived identifiable intangible assets and the elimination of historical amortization expense recognized by L3 for the two quarters ended December 28, 2018. Assumptions and details are as follows:
|
|
Weighted Average Amortization Period
|
|
Fair Value
|
|
Two Quarters Ended December 28, 2018
|
||||
|
|
|
|
|
|
||||
|
(In years)
|
|
(In millions)
|
||||||
Identifiable Intangible Assets Acquired:
|
|
|
|
|
|
||||
Customer relationships (Government)
|
15
|
|
$
|
4,677
|
|
|
$
|
175
|
|
Customer relationships (Commercial)
|
15
|
|
643
|
|
|
14
|
|
||
Trade names — Divisions
|
9
|
|
123
|
|
|
8
|
|
||
Adjustment to engineering, selling and administrative expenses
|
|
|
|
|
197
|
|
|||
Developed technology
|
7
|
|
562
|
|
|
42
|
|
||
Less: L3 historical amortization
|
|
|
|
|
(27
|
)
|
|||
Adjustment to cost of product sales and services
|
|
|
|
|
15
|
|
|||
Total net adjustment to amortization expense
|
|
|
|
|
$
|
212
|
|
d.
|
Represents the elimination of $18 million of transaction costs, of which $9 million were included in merger, acquisition and divestiture related expenses in L3’s historical statement of operations for the two quarters ended December 28, 2018 and $9 million were included in engineering, selling and administrative expenses in Harris’ historical Condensed Consolidated Statement of Income for the two quarters ended December 28, 2018.
|
e.
|
In connection with the L3Harris Merger, on October 12, 2018, each company entered into a letter of agreement with its chief executive officer, to outline the terms of each such person’s role and compensation arrangements following the merger. Amounts shown reflect the increase in compensation expense as a result of these modified arrangements.
|
f.
|
Reflects the impact of change-in-control payments under certain post-retirement and share-based and deferred compensation arrangements.
|
g.
|
Reflects the elimination of amortization of net actuarial losses from accumulated comprehensive loss related to L3’s postretirement benefit plans as part of purchase accounting.
|
h.
|
Reflects the elimination of amortization of deferred debt issuance costs as part of purchase accounting.
|
i.
|
Reflects amortization of the increase to L3’s long-term debt based on a $172 million fair value adjustment.
|
j.
|
Certain amounts from L3’s historical statement of operations data were reclassified to conform their presentation to that of Harris. These reclassifications include:
|
1.
|
Merger, acquisition and divestiture related expenses of $28 million for the two quarters ended December 28, 2018 were reclassified to engineering, selling and administrative expenses.
|
2.
|
Loss on sale of the Crestview Aerospace and TCS businesses of $6 million for the two quarters ended December 28, 2018 was reclassified to loss on sales of businesses.
|
3.
|
Interest and other income, net of $23 million, of which $6 million was reclassified to interest income and $17 million was reclassified to non-operating income for the two quarters ended December 28, 2018.
|
4.
|
Debt retirement charges of $21 million for the two quarters ended December 28, 2018 was reclassified to non-operating income
|
k.
|
Represents the income tax impact of the pro forma adjustments, using the blended worldwide tax rates for L3, in the case of pro forma adjustments to L3’s historical results, and the federal and state statutory tax rates for Harris, in the case of pro forma adjustments to Harris’ historical results. As a result, the combined statutory tax rate used to tax-effect the pro forma adjustments was approximately 10 percent for the two quarters ended December 28, 2018. This tax rate does not represent the combined company’s effective tax rate, which will include other tax charges and benefits, and does not take into account any historical or possible future tax events that may impact the combined company following the consummation of the L3Harris Merger.
|
l.
|
Increase in common stock due to shares of L3Harris common stock issued for L3 common stock, L3 restricted stock units and L3 performance stock units. Diluted shares also include the dilutive impact of L3Harris stock options issued for L3 stock options calculated using the treasury stock method.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||||||||||||||
|
January 3,
2020 |
|
December 28,
2018 |
|
Percent
Increase/ (Decrease) |
|
June 28,
2019 |
|
June 29,
2018 |
|
Percent
Increase/ (Decrease) |
|
June 30,
2017 |
|
Percent
Increase/ (Decrease) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||||||
Revenue
|
$
|
2,774
|
|
|
$
|
23
|
|
|
*
|
|
$
|
48
|
|
|
$
|
45
|
|
|
7
|
%
|
|
$
|
38
|
|
|
18
|
%
|
Operating income
|
$
|
377
|
|
|
$
|
3
|
|
|
*
|
|
$
|
9
|
|
|
$
|
7
|
|
|
29
|
%
|
|
$
|
7
|
|
|
—
|
%
|
% of revenue
|
14
|
%
|
|
13
|
%
|
|
|
|
19
|
%
|
|
16
|
%
|
|
|
|
18
|
%
|
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
|||||||||||||||||||||||||
|
January 3,
2020 |
|
December 28,
2018 |
|
Percent
Increase/ (Decrease) |
|
June 28,
2019 |
|
June 29,
2018 |
|
Percent
Increase/ (Decrease) |
|
June 30,
2017 |
|
Percent
Increase/ (Decrease) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||||||
Revenue
|
$
|
2,360
|
|
|
$
|
1,741
|
|
|
36
|
%
|
|
$
|
3,715
|
|
|
$
|
3,304
|
|
|
12
|
%
|
|
$
|
3,156
|
|
|
5
|
%
|
Operating income
|
$
|
442
|
|
|
$
|
328
|
|
|
35
|
%
|
|
$
|
697
|
|
|
$
|
628
|
|
|
11
|
%
|
|
$
|
559
|
|
|
12
|
%
|
% of revenue
|
19
|
%
|
|
19
|
%
|
|
|
|
19
|
%
|
|
19
|
%
|
|
|
|
18
|
%
|
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
|||||||||||||||||||||||||
|
January 3,
2020 |
|
December 28,
2018 |
|
Percent
Increase/ (Decrease) |
|
June 28,
2019 |
|
June 29,
2018 |
|
Percent
Increase/ (Decrease) |
|
June 30,
2017 |
|
Percent
Increase/ (Decrease) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||||||
Revenue
|
$
|
2,151
|
|
|
$
|
1,018
|
|
|
111
|
%
|
|
$
|
2,208
|
|
|
$
|
2,015
|
|
|
10
|
%
|
|
$
|
1,891
|
|
|
7
|
%
|
Operating income
|
$
|
493
|
|
|
$
|
294
|
|
|
68
|
%
|
|
$
|
637
|
|
|
$
|
561
|
|
|
14
|
%
|
|
$
|
522
|
|
|
7
|
%
|
% of revenue
|
23
|
%
|
|
29
|
%
|
|
|
|
29
|
%
|
|
28
|
%
|
|
|
|
28
|
%
|
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
|||||||||||||||||||||||||
|
January 3,
2020 |
|
December 28,
2018 |
|
Percent
Increase/ (Decrease) |
|
June 28,
2019 |
|
June 29,
2018 |
|
Percent
Increase/ (Decrease) |
|
June 30,
2017 |
|
Percent
Increase/ (Decrease) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||||||||||
Revenue
|
$
|
2,038
|
|
|
$
|
342
|
|
|
496
|
%
|
|
$
|
672
|
|
|
$
|
668
|
|
|
1
|
%
|
|
$
|
697
|
|
|
(4
|
%)
|
Operating income
|
$
|
289
|
|
|
$
|
40
|
|
|
623
|
%
|
|
$
|
76
|
|
|
$
|
54
|
|
|
41
|
%
|
|
$
|
131
|
|
|
(59
|
%)
|
% of revenue
|
14
|
%
|
|
12
|
%
|
|
|
|
11
|
%
|
|
8
|
%
|
|
|
|
19
|
%
|
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||||||
|
January 3, 2020
|
|
December 28, 2018
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||
Net cash provided by operating activities
|
$
|
939
|
|
|
$
|
469
|
|
|
$
|
1,185
|
|
|
$
|
751
|
|
|
$
|
569
|
|
Net cash provided by (used in) investing activities
|
1,320
|
|
|
(67
|
)
|
|
(159
|
)
|
|
(141
|
)
|
|
870
|
|
|||||
Net cash used in financing activities
|
(1,971
|
)
|
|
(342
|
)
|
|
(781
|
)
|
|
(805
|
)
|
|
(1,438
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
6
|
|
|
(5
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
294
|
|
|
55
|
|
|
242
|
|
|
(196
|
)
|
|
(3
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
530
|
|
|
288
|
|
|
288
|
|
|
484
|
|
|
487
|
|
|||||
Cash and cash equivalents, end of period
|
$
|
824
|
|
|
$
|
343
|
|
|
$
|
530
|
|
|
$
|
288
|
|
|
$
|
484
|
|
•
|
$1,130 million of net cash acquired in the L3Harris Merger;
|
•
|
$939 million of net cash provided by operating activities;
|
•
|
$343 million of net proceeds from sale of business; and
|
•
|
$109 million of proceeds from exercises of employee stock options; partially offset by
|
•
|
$1,500 million used to repurchase shares of our common stock;
|
•
|
$337 million used to pay cash dividends;
|
•
|
$173 million used for net additions of property, plant and equipment;
|
•
|
$109 million used for net repayments of borrowings, including $400 million in proceeds from the issuance of our 2.900% notes due December 15, 2029, $400 million used for our optional redemption of our 2.7% Notes due April 27, 2020 and $100 million used for repayment of short-term debt;
|
•
|
$86 million used for tax withholding payments associated with vested share-based awards; and
|
•
|
$38 million used in other financing activities.
|
•
|
$1,185 million of net cash provided by operating activities; and
|
•
|
$50 million of proceeds from exercises of employee stock options; partially offset by
|
•
|
$325 million used to pay cash dividends;
|
•
|
$281 million used for net repayments of borrowings, including repayment at maturity of the entire outstanding $300 million aggregate principal amount of our Floating Rate Notes due February 27, 2019;
|
•
|
$200 million used to repurchase shares of our common stock;
|
•
|
$161 million used for net additions of property, plant and equipment; and
|
•
|
$24 million used for tax withholding payments associated with vested share-based awards.
|
|
|
|
|
Payment Due by Period
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Total
|
|
Less than 1 Year
|
|
Years
1 - 3
|
|
Years
3 - 5
|
|
More than
5 Years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
(In millions)
|
||||||||||||||||||
Long-term debt
|
$
|
6,825
|
|
|
$
|
257
|
|
|
$
|
662
|
|
|
$
|
1,156
|
|
|
$
|
4,750
|
|
|
Purchase obligations (1)
|
3,395
|
|
|
2,818
|
|
|
528
|
|
|
40
|
|
|
9
|
|
||||||
Operating lease commitments
|
1,058
|
|
|
162
|
|
|
257
|
|
|
189
|
|
|
450
|
|
||||||
Interest on long-term debt
|
2,603
|
|
|
273
|
|
|
496
|
|
|
441
|
|
|
1,393
|
|
||||||
Minimum pension contributions (2)
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total(3)
|
$
|
13,886
|
|
|
$
|
3,515
|
|
|
$
|
1,943
|
|
|
$
|
1,826
|
|
|
$
|
6,602
|
|
(1)
|
The purchase obligations of $3.4 billion included $568 million of purchase obligations related to cost-plus type contracts where our costs are fully reimbursable.
|
(2)
|
Amount includes fiscal 2020 minimum contributions to non-U.S. pension plans. Contributions beyond fiscal 2020 have not been determined. During the two quarters ended January 3, 2020, we contributed $328 million to our qualified pension plans, including voluntary contributions of $302 million to our U.S. qualified defined benefit pension plans. During fiscal 2018 and 2017, we also made voluntary contributions of $700 million to our U.S. qualified defined benefit pension plans. As a result, we currently do not anticipate making any contributions to our U.S. qualified defined benefit pension plans and only minor contributions to non-U.S. pension plans during fiscal 2020.
|
(3)
|
The above table does not include unrecognized tax benefits of $438 million.
|
•
|
Any obligation under certain guarantee contracts;
|
•
|
A retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets;
|
•
|
Any obligation, including a contingent obligation, under certain derivative instruments; and
|
•
|
Any obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material to, the registrant, where such entity provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or R&D services with the registrant.
|
|
|
|
Expiration of Commitments
|
||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
Year 2
|
|
Year 3
|
|
After 3 years
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Surety bonds used for:
|
|
|
|
|
|
|
|
|
|
||||||||||
Performance
|
$
|
539
|
|
|
$
|
395
|
|
|
$
|
16
|
|
|
$
|
10
|
|
|
$
|
118
|
|
Standby letters of credit used for:
|
|
|
|
|
|
|
|
|
|
||||||||||
Down payments
|
271
|
|
|
155
|
|
|
65
|
|
|
40
|
|
|
11
|
|
|||||
Performance
|
345
|
|
|
171
|
|
|
55
|
|
|
47
|
|
|
72
|
|
|||||
Warranty
|
77
|
|
|
59
|
|
|
17
|
|
|
—
|
|
|
1
|
|
|||||
|
693
|
|
|
385
|
|
|
137
|
|
|
87
|
|
|
84
|
|
|||||
Total commitments
|
$
|
1,232
|
|
|
$
|
780
|
|
|
$
|
153
|
|
|
$
|
97
|
|
|
$
|
202
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Favorable adjustments
|
$
|
303
|
|
|
$
|
138
|
|
|
$
|
127
|
|
|
$
|
117
|
|
Unfavorable adjustments
|
(166
|
)
|
|
(121
|
)
|
|
(146
|
)
|
|
(118
|
)
|
||||
Net operating income adjustments
|
$
|
137
|
|
|
$
|
17
|
|
|
$
|
(19
|
)
|
|
$
|
(1
|
)
|
Obligation assumptions as of:
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
Discount rate
|
3.14%
|
|
3.35%
|
|
4.05%
|
Rate of future compensation increase
|
2.80%
|
|
2.76%
|
|
2.76%
|
|
|
|
|
|
|
Cost assumptions for fiscal periods ended:
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
Discount rate to determine service cost
|
3.11%
|
|
3.89%
|
|
3.48%
|
Discount rate to determine interest cost
|
2.94%
|
|
3.75%
|
|
3.28%
|
Expected return on plan assets
|
7.68%
|
|
7.66%
|
|
7.66%
|
Rate of future compensation increase
|
2.97%
|
|
2.76%
|
|
2.76%
|
|
Increase/(Decrease)
in Pension Expense |
||||||
|
25 Basis
Point Increase |
|
25 Basis
Point Decrease |
||||
|
|
|
|
||||
|
(In millions)
|
||||||
Long-term rate of return on assets used to determine net periodic benefit cost
|
$
|
(19.4
|
)
|
|
$
|
19.5
|
|
Discount rate used to determine net periodic benefit cost
|
$
|
7.4
|
|
|
$
|
(7.7
|
)
|
•
|
We depend on U.S. Government customers for a significant portion of our revenue, and the loss of these relationships, a reduction in U.S. Government funding or a change in U.S. Government spending priorities could have an adverse impact on our business, financial condition, results of operations and cash flows.
|
•
|
We depend significantly on U.S. Government contracts, which often are only partially funded, subject to immediate termination, and heavily regulated and audited. The termination or failure to fund, or negative audit findings for, one or more of these contracts could have an adverse impact on our business, financial condition, results of operations and cash flows.
|
•
|
The U.S. Government’s budget deficit and the national debt, as well as any inability of the U.S. Government to complete its budget process for any government fiscal year and consequently having to shut down or operate on funding levels equivalent to its prior fiscal year pursuant to a “continuing resolution,” could have an adverse impact on our business, financial condition, results of operations and cash flows.
|
•
|
We could be negatively impacted by a security breach, through cyber attack, cyber intrusion, insider threats or otherwise, or other significant disruption of our IT networks and related systems or of those we operate for certain of our customers.
|
•
|
Our ability to successfully manage ongoing business and organizational changes could impact our business results.
|
•
|
Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts. In particular, our fixed-price contracts could subject us to losses in the event of cost overruns or a significant increase in inflation.
|
•
|
We use estimates in accounting for many of our programs, and changes in our estimates could adversely affect our future financial results.
|
•
|
We derive a significant portion of our revenue from international operations and are subject to the risks of doing business internationally, including fluctuations in currency exchange rates.
|
•
|
The level of returns on defined benefit plan assets, changes in interest rates and other factors could affect our financial condition, results of operations and cash flows in future periods.
|
•
|
We may not be successful in obtaining the necessary export licenses to conduct certain operations abroad, and Congress may prevent proposed sales to certain foreign governments.
|
•
|
Disputes with our subcontractors or the inability of our subcontractors to perform, or our key suppliers to timely deliver our components, parts or services, could cause our products, systems or services to be produced or delivered in an untimely or unsatisfactory manner.
|
•
|
Our reputation and ability to do business may be impacted by the improper conduct of our employees, agents or business partners.
|
•
|
Our future success will depend on our ability to develop new products, systems, services and technologies that achieve market acceptance in our current and future markets.
|
•
|
We participate in markets that are often subject to uncertain economic conditions, which makes it difficult to estimate growth in our markets and, as a result, future income and expenditures.
|
•
|
We cannot predict the consequences of future geo-political events, but they may adversely affect the markets in which we operate, our ability to insure against risks, our operations or our profitability.
|
•
|
Strategic transactions, including mergers, acquisitions and divestitures, involve significant risks and uncertainties that could adversely affect our business, financial condition, results of operations and cash flows.
|
•
|
The outcome of litigation or arbitration in which we are involved from time to time is unpredictable, and an adverse decision in any such matter could have a material adverse effect on our financial condition, results of operations and cash flows.
|
•
|
We are subject to government investigations, which could have a material adverse effect on our business, financial condition, results of operations, cash flows and future prospects.
|
•
|
Third parties have claimed in the past and may claim in the future that we are infringing directly or indirectly upon their intellectual property rights, and third parties may infringe upon our intellectual property rights.
|
•
|
Our commercial aviation products, systems and services business is affected by global demand and economic factors that could negatively impact our financial results.
|
•
|
We face certain significant risk exposures and potential liabilities that may not be covered adequately by insurance or indemnity.
|
•
|
Changes in our effective tax rate may have an adverse effect on our results of operations.
|
•
|
Our level of indebtedness and our ability to make payments on or service our indebtedness and our unfunded defined benefit plans liability may adversely affect our financial and operating activities or our ability to incur additional debt.
|
•
|
A downgrade in our credit ratings could materially adversely affect our business.
|
•
|
Unforeseen environmental issues could have a material adverse effect on our business, financial condition, results of operations and cash flows.
|
•
|
We have significant operations in locations that could be materially and adversely impacted in the event of a natural disaster or other significant disruption.
|
•
|
Changes in future business or other market conditions could cause business investments and/or recorded goodwill or other long-term assets to become impaired, resulting in substantial losses and write-downs that would adversely affect our results of operations.
|
•
|
We must attract and retain key employees, and any failure to do so could seriously harm us.
|
•
|
Some of our workforce is represented by labor unions, so our business could be harmed in the event of a prolonged work stoppage.
|
•
|
We may fail to realize all of the anticipated benefits of the L3Harris Merger or those benefits may take longer to realize than expected. We may also encounter significant difficulties in integrating the businesses.
|
•
|
Certain business uncertainties arising from the L3Harris Merger could adversely affect our businesses and operations.
|
•
|
We have incurred and will incur direct and indirect costs as a result of the L3Harris Merger.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
|
|
Page
|
Consolidated Statement of Income — Two Quarters ended January 3, 2020 and Fiscal Years ended June 28, 2019; June 29, 2018; and June 30, 2017
|
|
Consolidated Statement of Comprehensive Income — Two Quarters ended January 3, 2020 and Fiscal Years ended June 28, 2019; June 29, 2018; and June 30, 2017
|
|
Consolidated Balance Sheet — January 3, 2020, June 28, 2019 and June 29, 2018
|
|
Consolidated Statement of Cash Flows — Two Quarters ended January 3, 2020 and Fiscal Years ended June 28, 2019; June 29, 2018; and June 30, 2017
|
|
Consolidated Statement of Equity — Two Quarters ended January 3, 2020 and Fiscal Years ended June 28, 2019; June 29, 2018; and June 30, 2017
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Revenue from product sales and services
|
|
|
|
|
|
|
|
||||||||
Revenue from product sales
|
$
|
6,908
|
|
|
$
|
5,638
|
|
|
$
|
5,038
|
|
|
$
|
4,667
|
|
Revenue from services
|
2,355
|
|
|
1,163
|
|
|
1,130
|
|
|
1,230
|
|
||||
|
9,263
|
|
|
6,801
|
|
|
6,168
|
|
|
5,897
|
|
||||
Cost of product sales and services
|
|
|
|
|
|
|
|
||||||||
Cost of product sales
|
(4,996
|
)
|
|
(3,615
|
)
|
|
(3,239
|
)
|
|
(3,058
|
)
|
||||
Cost of services
|
(1,730
|
)
|
|
(852
|
)
|
|
(827
|
)
|
|
(796
|
)
|
||||
|
(6,726
|
)
|
|
(4,467
|
)
|
|
(4,066
|
)
|
|
(3,854
|
)
|
||||
Engineering, selling and administrative expenses
|
(1,927
|
)
|
|
(1,242
|
)
|
|
(1,182
|
)
|
|
(1,150
|
)
|
||||
Gain on sale of business
|
229
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Non-operating income
|
192
|
|
|
188
|
|
|
156
|
|
|
166
|
|
||||
Interest income
|
12
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||
Interest expense
|
(135
|
)
|
|
(169
|
)
|
|
(170
|
)
|
|
(172
|
)
|
||||
Income from continuing operations before income taxes
|
908
|
|
|
1,113
|
|
|
908
|
|
|
889
|
|
||||
Income taxes
|
(73
|
)
|
|
(160
|
)
|
|
(206
|
)
|
|
(261
|
)
|
||||
Income from continuing operations
|
835
|
|
|
953
|
|
|
702
|
|
|
628
|
|
||||
Discontinued operations, net of income taxes
|
(1
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(85
|
)
|
||||
Net income
|
834
|
|
|
949
|
|
|
699
|
|
|
543
|
|
||||
Noncontrolling interests, net of income taxes
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to L3Harris Technologies, Inc.
|
$
|
822
|
|
|
$
|
949
|
|
|
$
|
699
|
|
|
$
|
543
|
|
|
|
|
|
|
|
|
|
||||||||
Amount attributable to L3Harris Technologies, Inc. common shareholders
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
$
|
823
|
|
|
$
|
953
|
|
|
$
|
702
|
|
|
$
|
628
|
|
Discontinued operations, net of income taxes
|
(1
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(85
|
)
|
||||
Net income
|
$
|
822
|
|
|
$
|
949
|
|
|
$
|
699
|
|
|
$
|
543
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to L3Harris Technologies, Inc. common shareholders
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
3.72
|
|
|
$
|
8.06
|
|
|
$
|
5.90
|
|
|
$
|
5.11
|
|
Discontinued operations
|
—
|
|
|
(0.03
|
)
|
|
(0.02
|
)
|
|
(0.69
|
)
|
||||
|
$
|
3.72
|
|
|
$
|
8.03
|
|
|
$
|
5.88
|
|
|
$
|
4.42
|
|
Diluted
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
3.68
|
|
|
$
|
7.89
|
|
|
$
|
5.78
|
|
|
$
|
5.04
|
|
Discontinued operations
|
(0.01
|
)
|
|
(0.03
|
)
|
|
(0.02
|
)
|
|
(0.68
|
)
|
||||
|
$
|
3.67
|
|
|
$
|
7.86
|
|
|
$
|
5.76
|
|
|
$
|
4.36
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
(In millions)
|
||||||||||||||
Net income
|
$
|
834
|
|
|
$
|
949
|
|
|
$
|
699
|
|
|
$
|
543
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation gain (loss), net of income taxes
|
25
|
|
|
(7
|
)
|
|
15
|
|
|
(34
|
)
|
||||
Net unrealized gain (loss) on hedging derivatives, net of income taxes
|
(17
|
)
|
|
(18
|
)
|
|
1
|
|
|
1
|
|
||||
Net unrecognized gain (loss) on postretirement obligations, net of income taxes
|
178
|
|
|
(480
|
)
|
|
93
|
|
|
200
|
|
||||
Other comprehensive income (loss), net of income taxes
|
186
|
|
|
(505
|
)
|
|
109
|
|
|
167
|
|
||||
Total comprehensive income
|
1,020
|
|
|
444
|
|
|
808
|
|
|
710
|
|
||||
Comprehensive income attributable to noncontrolling interests
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total comprehensive income attributable to L3Harris Technologies, Inc.
|
$
|
1,008
|
|
|
$
|
444
|
|
|
$
|
808
|
|
|
$
|
710
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions, except shares)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Current Assets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
824
|
|
|
$
|
530
|
|
|
$
|
288
|
|
Receivables
|
1,216
|
|
|
457
|
|
|
466
|
|
|||
Contract assets
|
2,459
|
|
|
807
|
|
|
782
|
|
|||
Inventories
|
1,219
|
|
|
360
|
|
|
411
|
|
|||
Income taxes receivable
|
202
|
|
|
191
|
|
|
174
|
|
|||
Other current assets
|
392
|
|
|
100
|
|
|
103
|
|
|||
Assets of disposal group held for sale
|
—
|
|
|
133
|
|
|
—
|
|
|||
Total current assets
|
6,312
|
|
|
2,578
|
|
|
2,224
|
|
|||
Non-current Assets
|
|
|
|
|
|
||||||
Property, plant and equipment
|
2,117
|
|
|
894
|
|
|
900
|
|
|||
Operating lease right-of-use assets
|
837
|
|
|
—
|
|
|
—
|
|
|||
Goodwill
|
20,001
|
|
|
5,340
|
|
|
5,372
|
|
|||
Other intangible assets
|
8,458
|
|
|
870
|
|
|
989
|
|
|||
Deferred income taxes
|
102
|
|
|
173
|
|
|
119
|
|
|||
Other non-current assets
|
509
|
|
|
262
|
|
|
247
|
|
|||
Total non-current assets
|
32,024
|
|
|
7,539
|
|
|
7,627
|
|
|||
|
$
|
38,336
|
|
|
$
|
10,117
|
|
|
$
|
9,851
|
|
Liabilities and Equity
|
|
|
|
|
|
||||||
Current Liabilities
|
|
|
|
|
|
||||||
Short-term debt
|
$
|
3
|
|
|
$
|
103
|
|
|
$
|
78
|
|
Accounts payable
|
1,261
|
|
|
525
|
|
|
622
|
|
|||
Contract liabilities
|
1,214
|
|
|
496
|
|
|
372
|
|
|||
Compensation and benefits
|
460
|
|
|
161
|
|
|
142
|
|
|||
Other accrued items
|
790
|
|
|
283
|
|
|
317
|
|
|||
Income taxes payable
|
24
|
|
|
8
|
|
|
15
|
|
|||
Current portion of long-term debt, net
|
257
|
|
|
656
|
|
|
304
|
|
|||
Liabilities of disposal group held for sale
|
—
|
|
|
36
|
|
|
—
|
|
|||
Total current liabilities
|
4,009
|
|
|
2,268
|
|
|
1,850
|
|
|||
Non-current Liabilities
|
|
|
|
|
|
||||||
Defined benefit plans
|
1,819
|
|
|
1,174
|
|
|
714
|
|
|||
Operating lease liabilities
|
781
|
|
|
—
|
|
|
—
|
|
|||
Long-term debt, net
|
6,694
|
|
|
2,763
|
|
|
3,408
|
|
|||
Deferred income taxes
|
1,481
|
|
|
12
|
|
|
79
|
|
|||
Other long-term liabilities
|
808
|
|
|
537
|
|
|
522
|
|
|||
Total non-current liabilities
|
11,583
|
|
|
4,486
|
|
|
4,723
|
|
|||
Equity
|
|
|
|
|
|
||||||
Shareholders’ Equity:
|
|
|
|
|
|
||||||
Preferred stock, without par value; 1,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, $1.00 par value; 500,000,000 shares authorized; issued and outstanding 218,226,614, 118,552,599 and 118,280,120 shares at January 3, 2020, June 28, 2019 and June 29, 2018, respectively
|
218
|
|
|
119
|
|
|
118
|
|
|||
Other capital
|
20,694
|
|
|
1,778
|
|
|
1,714
|
|
|||
Retained earnings
|
2,183
|
|
|
2,173
|
|
|
1,648
|
|
|||
Accumulated other comprehensive loss
|
(508
|
)
|
|
(707
|
)
|
|
(202
|
)
|
|||
Total shareholders’ equity
|
22,587
|
|
|
3,363
|
|
|
3,278
|
|
|||
Noncontrolling interests
|
157
|
|
|
—
|
|
|
—
|
|
|||
Total equity
|
22,744
|
|
|
3,363
|
|
|
3,278
|
|
|||
|
$
|
38,336
|
|
|
$
|
10,117
|
|
|
$
|
9,851
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Operating Activities
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
834
|
|
|
$
|
949
|
|
|
$
|
699
|
|
|
$
|
543
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
442
|
|
|
258
|
|
|
259
|
|
|
311
|
|
||||
Share-based compensation
|
227
|
|
|
141
|
|
|
82
|
|
|
42
|
|
||||
Qualified pension plan contributions
|
(328
|
)
|
|
(1
|
)
|
|
(301
|
)
|
|
(589
|
)
|
||||
Pension and other postretirement benefit plan income
|
(129
|
)
|
|
(150
|
)
|
|
(144
|
)
|
|
(105
|
)
|
||||
Gain on pension plan curtailment
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Impairment of goodwill and other assets
|
46
|
|
|
—
|
|
|
—
|
|
|
240
|
|
||||
(Gain) loss on sale of businesses, net
|
(229
|
)
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
Gain on sale of asset group
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Loss on extinguishment of debt
|
2
|
|
|
—
|
|
|
24
|
|
|
—
|
|
||||
Deferred income taxes
|
—
|
|
|
44
|
|
|
320
|
|
|
86
|
|
||||
(Increase) decrease in:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
74
|
|
|
(9
|
)
|
|
(101
|
)
|
|
24
|
|
||||
Contract assets
|
15
|
|
|
(25
|
)
|
|
(76
|
)
|
|
156
|
|
||||
Inventories
|
158
|
|
|
(1
|
)
|
|
(19
|
)
|
|
(32
|
)
|
||||
Increase (decrease) in:
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
(148
|
)
|
|
(84
|
)
|
|
82
|
|
|
18
|
|
||||
Contract liabilities
|
—
|
|
|
124
|
|
|
81
|
|
|
(31
|
)
|
||||
Compensation and benefits
|
(28
|
)
|
|
19
|
|
|
2
|
|
|
(37
|
)
|
||||
Other accrued items
|
(128
|
)
|
|
(78
|
)
|
|
(38
|
)
|
|
(76
|
)
|
||||
Income taxes
|
47
|
|
|
(23
|
)
|
|
(117
|
)
|
|
26
|
|
||||
Other
|
119
|
|
|
21
|
|
|
(2
|
)
|
|
(21
|
)
|
||||
Net cash provided by operating activities
|
939
|
|
|
1,185
|
|
|
751
|
|
|
569
|
|
||||
Investing Activities
|
|
|
|
|
|
|
|
||||||||
Net cash acquired in L3Harris Merger
|
1,130
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net additions of property, plant and equipment
|
(173
|
)
|
|
(161
|
)
|
|
(136
|
)
|
|
(119
|
)
|
||||
Proceeds from sales of businesses, net
|
343
|
|
|
—
|
|
|
—
|
|
|
1,014
|
|
||||
Adjustment to proceeds from sale of business
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(25
|
)
|
||||
Proceeds from sale of asset group
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other investing activities
|
—
|
|
|
2
|
|
|
(3
|
)
|
|
—
|
|
||||
Net cash provided by (used in) investing activities
|
1,320
|
|
|
(159
|
)
|
|
(141
|
)
|
|
870
|
|
||||
Financing Activities
|
|
|
|
|
|
|
|
||||||||
Net proceeds from borrowings
|
396
|
|
|
27
|
|
|
1,387
|
|
|
85
|
|
||||
Repayments of borrowings
|
(505
|
)
|
|
(308
|
)
|
|
(1,658
|
)
|
|
(584
|
)
|
||||
Proceeds from exercises of employee stock options
|
109
|
|
|
50
|
|
|
34
|
|
|
54
|
|
||||
Repurchases of common stock
|
(1,500
|
)
|
|
(200
|
)
|
|
(272
|
)
|
|
(710
|
)
|
||||
Cash dividends
|
(337
|
)
|
|
(325
|
)
|
|
(272
|
)
|
|
(262
|
)
|
||||
Distributions to noncontrolling interests
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Tax withholding payments associated with vested share-based awards
|
(86
|
)
|
|
(24
|
)
|
|
(17
|
)
|
|
(21
|
)
|
||||
Other financing activities
|
(38
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
—
|
|
||||
Net cash used in financing activities
|
(1,971
|
)
|
|
(781
|
)
|
|
(805
|
)
|
|
(1,438
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
6
|
|
|
(3
|
)
|
|
(1
|
)
|
|
(4
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
294
|
|
|
242
|
|
|
(196
|
)
|
|
(3
|
)
|
||||
Cash and cash equivalents, beginning of period
|
530
|
|
|
288
|
|
|
484
|
|
|
487
|
|
||||
Cash and cash equivalents, end of period
|
$
|
824
|
|
|
$
|
530
|
|
|
$
|
288
|
|
|
$
|
484
|
|
|
Common
Stock
|
|
Other
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions, except per share amounts)
|
||||||||||||||||||||||
Balance at July 1, 2016 — As Reported
|
$
|
125
|
|
|
$
|
2,096
|
|
|
$
|
1,330
|
|
|
$
|
(495
|
)
|
|
$
|
1
|
|
|
$
|
3,057
|
|
Cumulative effect of adopting ASC 606
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
543
|
|
|
—
|
|
|
—
|
|
|
543
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
|
—
|
|
|
167
|
|
||||||
Net accumulated foreign currency loss reclassified to earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
||||||
Shares issued under stock incentive plans
|
1
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54
|
|
||||||
Share-based compensation expense
|
—
|
|
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||||
Repurchases and retirement of common stock
|
(6
|
)
|
|
(410
|
)
|
|
(278
|
)
|
|
—
|
|
|
—
|
|
|
(694
|
)
|
||||||
Forward contract component of accelerated share repurchase
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
||||||
Cash dividends ($2.12 per share)
|
—
|
|
|
—
|
|
|
(262
|
)
|
|
—
|
|
|
—
|
|
|
(262
|
)
|
||||||
Other activity related to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Balance at June 30, 2017
|
120
|
|
|
1,741
|
|
|
1,318
|
|
|
(276
|
)
|
|
—
|
|
|
2,903
|
|
||||||
Reclassifications due to adoption of accounting standards updates
|
—
|
|
|
—
|
|
|
35
|
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
699
|
|
|
—
|
|
|
—
|
|
|
699
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
|
—
|
|
|
109
|
|
||||||
Shares issued under stock incentive plans
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33
|
|
||||||
Shares issued under defined contribution plans
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||||
Share-based compensation expense
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
49
|
|
||||||
Repurchases and retirement of common stock
|
(2
|
)
|
|
(178
|
)
|
|
(132
|
)
|
|
—
|
|
|
—
|
|
|
(312
|
)
|
||||||
Forward contract component of accelerated share repurchase
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||||
Cash dividends ($2.28 per share)
|
—
|
|
|
—
|
|
|
(272
|
)
|
|
—
|
|
|
—
|
|
|
(272
|
)
|
||||||
Balance at June 29, 2018
|
118
|
|
|
1,714
|
|
|
1,648
|
|
|
(202
|
)
|
|
—
|
|
|
3,278
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
949
|
|
|
—
|
|
|
—
|
|
|
949
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(505
|
)
|
|
—
|
|
|
(505
|
)
|
||||||
Shares issued under stock incentive plans
|
1
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||||
Shares issued under defined contribution plans
|
1
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||||
Share-based compensation expense
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
||||||
Repurchases and retirement of common stock
|
(1
|
)
|
|
(124
|
)
|
|
(99
|
)
|
|
—
|
|
|
—
|
|
|
(224
|
)
|
||||||
Cash dividends ($2.74 per share)
|
—
|
|
|
—
|
|
|
(325
|
)
|
|
—
|
|
|
—
|
|
|
(325
|
)
|
||||||
Balance at June 28, 2019
|
119
|
|
|
1,778
|
|
|
2,173
|
|
|
(707
|
)
|
|
—
|
|
|
3,363
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
822
|
|
|
—
|
|
|
12
|
|
|
834
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
186
|
|
|
—
|
|
|
186
|
|
||||||
Shares issued for L3Harris Merger
|
104
|
|
|
19,696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,800
|
|
||||||
Equity issuance costs
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Net loss from postretirement obligations and hedging derivatives reclassified to earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
||||||
Shares issued under stock incentive plans
|
2
|
|
|
107
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109
|
|
||||||
Shares issued under defined contribution plans
|
—
|
|
|
101
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||||
Share-based compensation expense
|
—
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122
|
|
||||||
Repurchases and retirement of common stock
|
(7
|
)
|
|
(1,104
|
)
|
|
(475
|
)
|
|
—
|
|
|
—
|
|
|
(1,586
|
)
|
||||||
Cash dividends ($1.50 per share)
|
—
|
|
|
—
|
|
|
(337
|
)
|
|
—
|
|
|
—
|
|
|
(337
|
)
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(10
|
)
|
||||||
Fair value of noncontrolling interest recognized in purchase accounting
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
155
|
|
|
155
|
|
||||||
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Balance at January 3, 2020
|
$
|
218
|
|
|
$
|
20,694
|
|
|
$
|
2,183
|
|
|
$
|
(508
|
)
|
|
$
|
157
|
|
|
$
|
22,744
|
|
•
|
Level 1 — Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 — Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means.
|
•
|
Level 3 — Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities, and reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability developed using the best information available in the circumstances.
|
Segment
|
|
Average Warranty Period
|
Integrated Mission Systems
|
|
One to three years
|
Space and Airborne Systems
|
|
One to three years
|
Communication Systems
|
|
One to five years
|
Aviation Systems
|
|
One to two years
|
•
|
The customer simultaneously receives and consumes the benefits provided by our performance as we perform;
|
•
|
Our performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created or enhanced; or
|
•
|
Our performance does not create an asset with an alternative use to us, and we have an enforceable right to payment for performance completed to date.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Net EAC adjustments, before income taxes
|
$
|
137
|
|
|
$
|
17
|
|
|
$
|
(19
|
)
|
|
$
|
(1
|
)
|
Net EAC adjustments, net of income taxes
|
$
|
103
|
|
|
$
|
13
|
|
|
$
|
(13
|
)
|
|
$
|
(1
|
)
|
Net EAC adjustments, net of income taxes, per diluted share
|
$
|
0.46
|
|
|
$
|
0.10
|
|
|
$
|
(0.11
|
)
|
|
$
|
(0.01
|
)
|
|
June 28, 2019
|
||
|
|
||
|
(In millions)
|
||
Receivables
|
$
|
18
|
|
Inventories
|
52
|
|
|
Property, plant and equipment
|
29
|
|
|
Goodwill
|
30
|
|
|
Other intangible assets
|
4
|
|
|
Assets of disposal group held for sale
|
$
|
133
|
|
|
|
||
Accounts payable
|
$
|
13
|
|
Contract liabilities
|
1
|
|
|
Compensation and benefits
|
3
|
|
|
Other accrued items
|
3
|
|
|
Defined benefit plans
|
16
|
|
|
Liabilities of disposal group held for sale
|
$
|
36
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenue from product sales and services
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,039
|
|
Cost of product sales and services
|
—
|
|
|
—
|
|
|
—
|
|
|
(885
|
)
|
||||
Engineering, selling and administrative expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
||||
Impairment of goodwill and other assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(240
|
)
|
||||
Non-operating loss, net(1)
|
(1
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
(7
|
)
|
||||
Loss before income taxes
|
(1
|
)
|
|
(5
|
)
|
|
(8
|
)
|
|
(184
|
)
|
||||
Loss on sale of discontinued operations, net(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||
Income tax benefit
|
—
|
|
|
1
|
|
|
5
|
|
|
110
|
|
||||
Discontinued operations, net of income taxes
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
$
|
(3
|
)
|
|
$
|
(85
|
)
|
(1)
|
“Non-operating loss, net” included a loss of $2 million in fiscal 2017 related to our former broadcast communications business (“Broadcast Communications”), which was divested in fiscal 2013.
|
(2)
|
“Loss on sale of discontinued operations, net” in fiscal 2017 included a $3 million decrease to the loss on the sale of Broadcast Communications.
|
|
Fiscal Year Ended
|
||
|
June 30, 2017
|
||
|
|
||
|
(In millions)
|
||
Depreciation and amortization
|
$
|
39
|
|
Capital expenditures
|
4
|
|
|
Significant non-cash items:
|
|
||
Impairment of goodwill and other assets
|
(240
|
)
|
|
Loss on sale of discontinued operations, net
|
(11
|
)
|
|
Fiscal Years Ended
|
||||||||||
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Revenue from product sales and services
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
895
|
|
Cost of product sales and services
|
—
|
|
|
—
|
|
|
(777
|
)
|
|||
Engineering, selling and administrative expenses
|
—
|
|
|
—
|
|
|
(68
|
)
|
|||
Impairment of goodwill and other assets
|
—
|
|
|
—
|
|
|
(240
|
)
|
|||
Non-operating loss
|
(1
|
)
|
|
(4
|
)
|
|
(9
|
)
|
|||
Loss before income taxes
|
(1
|
)
|
|
(4
|
)
|
|
(199
|
)
|
|||
Loss on sale of discontinued operations, net
|
—
|
|
|
—
|
|
|
(28
|
)
|
|||
Income tax benefit
|
—
|
|
|
5
|
|
|
69
|
|
|||
Discontinued operations, net of income taxes
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(158
|
)
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenue from product sales and services
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
144
|
|
Cost of product sales and services
|
—
|
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
||||
Engineering, selling and administrative expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
||||
Non-operating income (loss)
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
4
|
|
||||
Income (loss) before income taxes
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
17
|
|
||||
Gain on sale of discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
Income tax benefit
|
—
|
|
|
1
|
|
|
—
|
|
|
41
|
|
||||
Discontinued operations, net of income taxes
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
72
|
|
|
Employee severance-related costs
|
|
Facilities consolidation and other exit costs(1)
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Balance at June 30, 2017
|
$
|
12
|
|
|
$
|
31
|
|
|
$
|
43
|
|
Additional provisions
|
1
|
|
|
50
|
|
|
51
|
|
|||
Payments
|
(9
|
)
|
|
(38
|
)
|
|
(47
|
)
|
|||
Other
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Balance at June 29, 2018
|
2
|
|
|
43
|
|
|
45
|
|
|||
Payments
|
(2
|
)
|
|
(27
|
)
|
|
(29
|
)
|
|||
Balance at June 28, 2019
|
—
|
|
|
16
|
|
|
16
|
|
|||
Additional provisions
|
117
|
|
|
—
|
|
|
117
|
|
|||
Payments
|
(62
|
)
|
|
(1
|
)
|
|
(63
|
)
|
|||
Other
|
3
|
|
|
(8
|
)
|
|
(5
|
)
|
|||
Balance at January 3, 2020
|
$
|
58
|
|
|
$
|
7
|
|
|
$
|
65
|
|
(1)
|
Excludes our operating lease liability related to L3’s former headquarter offices.
|
(In millions, except exchange ratio and per share amounts)
|
June 29, 2019
|
||
|
|
||
Outstanding shares of L3 common stock as of June 28, 2019
|
79.63
|
|
|
L3 restricted stock unit awards settled in shares of L3Harris common stock
|
0.41
|
|
|
L3 performance unit awards settled in shares of L3Harris common stock
|
0.04
|
|
|
|
80.08
|
|
|
Exchange Ratio
|
1.30
|
|
|
Shares of L3Harris common stock issued for L3 outstanding common stock
|
104.10
|
|
|
Price per share of L3Harris common stock as of June 28, 2019
|
$
|
189.13
|
|
Fair value of L3Harris common stock issued for L3 outstanding common stock
|
$
|
19,689
|
|
Fair value of replacement RSUs attributable to merger consideration
|
10
|
|
|
Fair value of L3Harris stock options issued for L3 outstanding stock options
|
101
|
|
|
Withholding tax liability incurred for converted L3 share-based awards
|
45
|
|
|
Fair value of replacement award consideration
|
156
|
|
|
Fair value of total consideration
|
19,845
|
|
|
Less cash acquired
|
(1,195
|
)
|
|
Total net consideration transferred
|
$
|
18,650
|
|
|
Preliminary
Fair Value
|
|
Measurement Period Adjustments
|
|
Adjusted
Fair Value
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Receivables
|
$
|
849
|
|
|
$
|
(15
|
)
|
|
$
|
834
|
|
Contract assets
|
1,708
|
|
|
(41
|
)
|
|
1,667
|
|
|||
Inventories
|
1,056
|
|
|
(37
|
)
|
|
1,019
|
|
|||
Other current assets
|
517
|
|
|
(20
|
)
|
|
497
|
|
|||
Property, plant and equipment
|
1,176
|
|
|
39
|
|
|
1,215
|
|
|||
Operating lease right-of-use assets
|
704
|
|
|
—
|
|
|
704
|
|
|||
Goodwill
|
15,423
|
|
|
(774
|
)
|
|
14,649
|
|
|||
Other intangible assets
|
6,768
|
|
|
1,109
|
|
|
7,877
|
|
|||
Other non-current assets
|
327
|
|
|
(6
|
)
|
|
321
|
|
|||
Total assets acquired
|
$
|
28,528
|
|
|
$
|
255
|
|
|
$
|
28,783
|
|
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
898
|
|
|
$
|
(14
|
)
|
|
$
|
884
|
|
Contract liabilities
|
722
|
|
|
(4
|
)
|
|
718
|
|
|||
Other current liabilities
|
772
|
|
|
60
|
|
|
832
|
|
|||
Operating lease liabilities
|
715
|
|
|
—
|
|
|
715
|
|
|||
Defined benefit plans
|
1,411
|
|
|
—
|
|
|
1,411
|
|
|||
Long-term debt, net
|
3,548
|
|
|
—
|
|
|
3,548
|
|
|||
Other long-term liabilities
|
1,661
|
|
|
209
|
|
|
1,870
|
|
|||
Total liabilities assumed
|
9,727
|
|
|
251
|
|
|
9,978
|
|
|||
Net assets acquired
|
18,801
|
|
|
4
|
|
|
18,805
|
|
|||
Noncontrolling interests
|
(151
|
)
|
|
(4
|
)
|
|
(155
|
)
|
|||
Total net consideration transferred
|
$
|
18,650
|
|
|
$
|
—
|
|
|
$
|
18,650
|
|
|
Weighted Average Amortization Period
|
|
Total
|
||
|
|
|
|
||
|
(In years)
|
|
(In millions)
|
||
Identifiable intangible assets acquired:
|
|
|
|
||
Customer relationships (Government)
|
15
|
|
$
|
4,677
|
|
Customer relationships (Commercial)
|
15
|
|
643
|
|
|
Trade names — Divisions
|
9
|
|
123
|
|
|
Developed technology
|
7
|
|
562
|
|
|
Total identifiable intangible assets subject to amortization
|
14
|
|
6,005
|
|
|
Trade names — Corporate
|
indefinite
|
|
1,803
|
|
|
In-process research and development
|
n/a
|
|
69
|
|
|
Total identifiable intangible assets
|
|
|
$
|
7,877
|
|
•
|
$142 million of additional cost of sales related to the fair value step-up in inventory sold;
|
•
|
$117 million of costs for workforce reductions, including severance and other employee-related exit costs;
|
•
|
$83 million of transaction costs, recognized as incurred;
|
•
|
$72 million of integration costs, recognized as incurred;
|
•
|
$70 million of equity award acceleration charges, recognized upon change in control; and
|
•
|
$48 million of facility consolidation costs.
|
|
Two Quarters Ended
|
||
|
December 28, 2018
|
||
|
|
||
|
(In millions)
|
||
Revenue from product sales and services — as reported
|
$
|
3,208
|
|
Revenue from product sales and services — pro forma
|
$
|
8,404
|
|
Income from continuing operations — as reported
|
$
|
441
|
|
Income from continuing operations — pro forma
|
$
|
760
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Accounts receivable
|
$
|
1,228
|
|
|
$
|
459
|
|
|
$
|
468
|
|
Less allowances for collection losses
|
(12
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
|
$
|
1,216
|
|
|
$
|
457
|
|
|
$
|
466
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Contract assets
|
$
|
2,459
|
|
|
$
|
807
|
|
|
$
|
782
|
|
Contract liabilities, current
|
(1,214
|
)
|
|
(496
|
)
|
|
(372
|
)
|
|||
Contract liabilities, noncurrent(1)
|
(87
|
)
|
|
(42
|
)
|
|
(35
|
)
|
|||
Net contract assets
|
$
|
1,158
|
|
|
$
|
269
|
|
|
$
|
375
|
|
(1)
|
The non-current portion of contract liabilities is included as a component of the “Other long-term liabilities” line item in our Consolidated Balance Sheet.
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Unbilled contract receivables, gross
|
$
|
3,690
|
|
|
$
|
916
|
|
|
$
|
881
|
|
Progress payments
|
(1,231
|
)
|
|
(109
|
)
|
|
(99
|
)
|
|||
|
$
|
2,459
|
|
|
$
|
807
|
|
|
$
|
782
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Finished products
|
$
|
216
|
|
|
$
|
77
|
|
|
$
|
91
|
|
Work in process
|
386
|
|
|
90
|
|
|
121
|
|
|||
Raw materials and supplies
|
617
|
|
|
193
|
|
|
199
|
|
|||
|
$
|
1,219
|
|
|
$
|
360
|
|
|
$
|
411
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Land
|
$
|
90
|
|
|
$
|
40
|
|
|
$
|
43
|
|
Software capitalized for internal use
|
287
|
|
|
187
|
|
|
171
|
|
|||
Buildings
|
1,073
|
|
|
631
|
|
|
620
|
|
|||
Machinery and equipment
|
2,194
|
|
|
1,429
|
|
|
1,349
|
|
|||
|
3,644
|
|
|
2,287
|
|
|
2,183
|
|
|||
Less accumulated depreciation and amortization
|
(1,527
|
)
|
|
(1,393
|
)
|
|
(1,283
|
)
|
|||
|
$
|
2,117
|
|
|
$
|
894
|
|
|
$
|
900
|
|
|
Integrated Mission Systems
|
|
Space and Airborne Systems
|
|
Communication Systems
|
|
Aviation Systems
|
|
Other non-reportable business segments
|
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Balance at June 30, 2017
|
$
|
64
|
|
|
$
|
3,733
|
|
|
$
|
927
|
|
|
$
|
612
|
|
|
$
|
30
|
|
|
$
|
5,366
|
|
Currency translation adjustments
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Balance at June 29, 2018
|
64
|
|
|
3,739
|
|
|
927
|
|
|
612
|
|
|
30
|
|
|
5,372
|
|
||||||
Currency translation adjustments
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Decrease from reclassification to assets of disposal group held for sale(1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(30
|
)
|
||||||
Balance at June 28, 2019
|
64
|
|
|
3,737
|
|
|
927
|
|
|
612
|
|
|
—
|
|
|
5,340
|
|
||||||
Goodwill acquired
|
5,704
|
|
|
1,390
|
|
|
3,316
|
|
|
4,239
|
|
|
—
|
|
|
14,649
|
|
||||||
Currency translation adjustments
|
1
|
|
|
4
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
12
|
|
||||||
Balance at January 3, 2020
|
$
|
5,768
|
|
|
$
|
5,131
|
|
|
$
|
4,243
|
|
|
$
|
4,859
|
|
|
$
|
—
|
|
|
$
|
20,001
|
|
(1)
|
In the fourth quarter of fiscal 2019, in connection with our then-pending divestiture of the Harris Night Vision business, which was reported as part of our former Communication Systems segment, we assigned $30 million of goodwill to the Harris Night Vision business on a relative fair value basis, because the divestiture of the Harris Night Vision business represented the disposal of a portion of a reporting unit. The Harris Night Vision business’ assets, including assigned goodwill, are presented as “Assets of disposal group held for sale” in our Consolidated Balance Sheet as of June 28, 2019. We completed the sale of the Harris Night Vision business on September 13, 2019. As a result, the goodwill assigned to the Harris Night Vision business was not allocated to any of our new business segments, and, consequently, it is included in “Other non-reportable business segments” in the table above. See Note 3: Divestitures, Asset Sales and Discontinued Operations in these Notes for additional information regarding the sale of the Harris Night Vision business.
|
|
January 3, 2020
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Customer relationships
|
$
|
6,518
|
|
|
$
|
653
|
|
|
$
|
5,865
|
|
Developed technologies
|
768
|
|
|
183
|
|
|
585
|
|
|||
Trade names
|
165
|
|
|
35
|
|
|
130
|
|
|||
Other
|
10
|
|
|
4
|
|
|
6
|
|
|||
Total intangible assets subject to amortization
|
7,461
|
|
|
875
|
|
|
6,586
|
|
|||
IPR&D
|
69
|
|
|
—
|
|
|
69
|
|
|||
L3 trade name
|
1,803
|
|
|
—
|
|
|
1,803
|
|
|||
Total intangible assets
|
$
|
9,333
|
|
|
$
|
875
|
|
|
$
|
8,458
|
|
|
|
|
|
|
|
||||||
|
June 28, 2019
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Customer relationships
|
$
|
1,203
|
|
|
$
|
419
|
|
|
$
|
784
|
|
Developed technologies
|
206
|
|
|
136
|
|
|
70
|
|
|||
Trade names
|
42
|
|
|
26
|
|
|
16
|
|
|||
Other
|
2
|
|
|
2
|
|
|
—
|
|
|||
Total intangible assets
|
$
|
1,453
|
|
|
$
|
583
|
|
|
$
|
870
|
|
|
|
|
|
|
|
||||||
|
June 29, 2018
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Customer relationships
|
$
|
1,206
|
|
|
$
|
327
|
|
|
$
|
879
|
|
Developed technologies
|
208
|
|
|
119
|
|
|
89
|
|
|||
Trade names
|
43
|
|
|
22
|
|
|
21
|
|
|||
Other
|
2
|
|
|
2
|
|
|
—
|
|
|||
Total intangible assets
|
$
|
1,459
|
|
|
$
|
470
|
|
|
$
|
989
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Balance at the beginning of the period
|
$
|
25
|
|
|
$
|
24
|
|
|
$
|
26
|
|
Acquisitions during the period
|
83
|
|
|
—
|
|
|
—
|
|
|||
Accruals for product warranties issued during the period
|
23
|
|
|
16
|
|
|
13
|
|
|||
Settlements made during the period
|
(23
|
)
|
|
(11
|
)
|
|
(14
|
)
|
|||
Other, including adjustments for divestitures and foreign currency translation
|
4
|
|
|
(4
|
)
|
|
(1
|
)
|
|||
Balance at the end of the period
|
$
|
112
|
|
|
$
|
25
|
|
|
$
|
24
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Variable-rate debt:
|
|
|
|
|
|
||||||
Floating rate notes, due February 27, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
300
|
|
Floating rate notes, due April 30, 2020
|
250
|
|
|
250
|
|
|
250
|
|
|||
Total variable-rate debt
|
250
|
|
|
250
|
|
|
550
|
|
|||
Fixed-rate debt:
|
|
|
|
|
|
||||||
2.7% notes, due April 27, 2020
|
—
|
|
|
400
|
|
|
400
|
|
|||
4.95% notes, due February 15, 2021
|
650
|
|
|
—
|
|
|
—
|
|
|||
3.85% notes, due June 15, 2023
|
800
|
|
|
—
|
|
|
—
|
|
|||
3.95% notes, due May 28, 2024
|
350
|
|
|
—
|
|
|
—
|
|
|||
3.832% notes, due April 27, 2025
|
600
|
|
|
600
|
|
|
600
|
|
|||
7.0% debentures, due January 15, 2026
|
100
|
|
|
100
|
|
|
100
|
|
|||
3.85% notes, due December 15, 2026
|
550
|
|
|
—
|
|
|
—
|
|
|||
6.35% debentures, due February 1, 2028
|
26
|
|
|
26
|
|
|
26
|
|
|||
4.40% notes, due June 15, 2028
|
1,850
|
|
|
850
|
|
|
850
|
|
|||
2.900% notes, due December 15, 2029
|
400
|
|
|
—
|
|
|
—
|
|
|||
4.854% notes, due April 27, 2035
|
400
|
|
|
400
|
|
|
400
|
|
|||
6.15% notes, due December 15, 2040
|
300
|
|
|
300
|
|
|
300
|
|
|||
5.054% notes, due April 27, 2045
|
500
|
|
|
500
|
|
|
500
|
|
|||
Other
|
49
|
|
|
17
|
|
|
14
|
|
|||
Total fixed-rate debt
|
6,575
|
|
|
3,193
|
|
|
3,190
|
|
|||
Total debt
|
6,825
|
|
|
3,443
|
|
|
3,740
|
|
|||
Plus: unamortized bond premium
|
154
|
|
|
—
|
|
|
—
|
|
|||
Less: unamortized discounts and issuance costs
|
(28
|
)
|
|
(24
|
)
|
|
(28
|
)
|
|||
Total debt, net
|
6,951
|
|
|
3,419
|
|
|
3,712
|
|
|||
Less: current portion of long-term debt, net
|
(257
|
)
|
|
(656
|
)
|
|
(304
|
)
|
|||
Total long-term debt, net
|
$
|
6,694
|
|
|
$
|
2,763
|
|
|
$
|
3,408
|
|
|
Aggregate Principal
Amount of L3 Notes
(prior to debt
exchange)
|
|
Aggregate Principal
Amount of
New L3Harris Notes
Issued
|
|
Aggregate Principal
Amount of
Remaining L3 Notes
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
4.95% notes due February 15, 2021 (“4.95% 2021 Notes”)
|
$
|
650
|
|
|
$
|
501
|
|
|
$
|
149
|
|
3.85% notes due June 15, 2023 (“3.85% 2023 Notes”)
|
800
|
|
|
741
|
|
|
59
|
|
|||
3.95% notes due May 28, 2024 (“3.95% 2024 Notes”)
|
350
|
|
|
326
|
|
|
24
|
|
|||
3.85% notes due December 15, 2026 (“3.85% 2026 Notes”)
|
550
|
|
|
535
|
|
|
15
|
|
|||
4.40% notes due June 15, 2028 (“4.40% 2028 Notes”)
|
1,000
|
|
|
918
|
|
|
82
|
|
|||
Total
|
$
|
3,350
|
|
|
$
|
3,021
|
|
|
$
|
329
|
|
•
|
$600 million in aggregate principal amount of 3.832% notes due April 27, 2025 (the “2025 Notes”),
|
•
|
$400 million in aggregate principal amount of 4.854% notes due April 27, 2035 (the “2035 Notes”), and
|
•
|
$500 million in aggregate principal amount of 5.054% notes due April 27, 2045 (the “2045 Notes” and collectively with the 2025 Notes and 2035 Notes, the “Exelis Notes”).
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
(In millions)
|
||||||||||||||||||||||
Long-term debt (including current portion)(1)
|
$
|
6,951
|
|
|
$
|
7,536
|
|
|
$
|
3,419
|
|
|
$
|
3,802
|
|
|
$
|
3,712
|
|
|
$
|
3,848
|
|
(1)
|
The fair value was estimated using a market approach based on quoted market prices for our debt traded in the secondary market. If our long-term debt in our balance sheet were measured at fair value, it would be categorized in Level 2 of the fair value hierarchy.
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||||||||||||
|
Total
|
|
Level 1
|
|
Total
|
|
Level 1
|
|
Total
|
|
Level 1
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred compensation plan assets:(1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity and fixed income securities(2)
|
$
|
58
|
|
|
$
|
58
|
|
|
$
|
99
|
|
|
$
|
99
|
|
|
$
|
109
|
|
|
$
|
109
|
|
Investments measured at NAV:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate-owned life insurance
|
29
|
|
|
|
|
28
|
|
|
|
|
27
|
|
|
|
|||||||||
Total fair value of deferred compensation plan assets
|
$
|
87
|
|
|
|
|
$
|
127
|
|
|
|
|
$
|
136
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred compensation plan liabilities:(3)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities and mutual funds
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
25
|
|
|
$
|
25
|
|
|
$
|
38
|
|
|
$
|
38
|
|
Investments measured at NAV:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Common/collective trusts and guaranteed investment contracts
|
69
|
|
|
|
|
132
|
|
|
|
|
111
|
|
|
|
|||||||||
Total fair value of deferred compensation plan liabilities
|
$
|
71
|
|
|
|
|
$
|
157
|
|
|
|
|
$
|
149
|
|
|
|
(1)
|
Represents diversified assets held in a “rabbi trust” associated with our non-qualified deferred compensation plans, which we include in the “Other current
|
(2)
|
We have reclassified certain prior-year amounts to conform with current period classifications. Reclassifications include certain equity and fixed income funds that were previously included under “Investments Measured at NAV” and are now reflected in “Equity and fixed income securities” under “Level 1.”
|
(3)
|
Primarily represents obligations to pay benefits under certain non-qualified deferred compensation plans, which we include in the “Compensation and
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||||||||||||
|
Pension
|
|
Other
Benefits
|
|
Pension
|
|
Other
Benefits |
|
Pension
|
|
Other
Benefits |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Fair value of plan assets
|
$
|
8,618
|
|
|
$
|
274
|
|
|
$
|
4,958
|
|
|
$
|
201
|
|
|
$
|
5,098
|
|
|
$
|
207
|
|
Projected benefit obligation
|
(10,268
|
)
|
|
(369
|
)
|
|
(6,123
|
)
|
|
(221
|
)
|
|
(5,774
|
)
|
|
(233
|
)
|
||||||
Funded status
|
$
|
(1,650
|
)
|
|
$
|
(95
|
)
|
|
$
|
(1,165
|
)
|
|
$
|
(20
|
)
|
|
$
|
(676
|
)
|
|
$
|
(26
|
)
|
Consolidated Balance Sheet line item amounts:
|
|||||||||||||||||||||||
Other non-current assets
|
$
|
91
|
|
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
Compensation and benefits
|
(10
|
)
|
|
(8
|
)
|
|
(7
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Liabilities of disposal group held for sale
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Defined benefit plans
|
(1,731
|
)
|
|
(88
|
)
|
|
(1,154
|
)
|
|
(20
|
)
|
|
(689
|
)
|
|
(25
|
)
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||||||||||||
|
Pension
|
|
Other
Benefits
|
|
Pension
|
|
Other
Benefits
|
|
Pension
|
|
Other
Benefits
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Net actuarial loss (gain)
|
$
|
819
|
|
|
$
|
(34
|
)
|
|
$
|
781
|
|
|
$
|
(36
|
)
|
|
$
|
156
|
|
|
$
|
(46
|
)
|
Net prior service cost (credit)
|
(282
|
)
|
|
(1
|
)
|
|
6
|
|
|
(1
|
)
|
|
4
|
|
|
(1
|
)
|
||||||
|
$
|
537
|
|
|
$
|
(35
|
)
|
|
$
|
787
|
|
|
$
|
(37
|
)
|
|
$
|
160
|
|
|
$
|
(47
|
)
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||||||||||||
|
Pension
|
|
Other
Benefits
|
|
Pension
|
|
Other
Benefits
|
|
Pension
|
|
Other
Benefits
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation at beginning of fiscal year
|
$
|
6,123
|
|
|
$
|
221
|
|
|
$
|
5,774
|
|
|
$
|
233
|
|
|
$
|
6,140
|
|
|
$
|
265
|
|
Benefit obligation assumed in L3Harris Merger
|
4,474
|
|
|
156
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Service cost
|
42
|
|
|
1
|
|
|
36
|
|
|
—
|
|
|
39
|
|
|
1
|
|
||||||
Interest cost
|
149
|
|
|
5
|
|
|
209
|
|
|
8
|
|
|
195
|
|
|
7
|
|
||||||
Actuarial loss (gain)
|
301
|
|
|
7
|
|
|
514
|
|
|
(1
|
)
|
|
(169
|
)
|
|
(22
|
)
|
||||||
Amendments
|
(292
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||||
Benefits paid
|
(342
|
)
|
|
(21
|
)
|
|
(381
|
)
|
|
(19
|
)
|
|
(402
|
)
|
|
(18
|
)
|
||||||
Settlements
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Expenses paid
|
(43
|
)
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
||||||
Curtailments
|
(35
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency exchange rate changes
|
3
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||
Plan participants' contributions
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Divestiture
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Benefit obligation at end of fiscal year
|
$
|
10,268
|
|
|
$
|
369
|
|
|
$
|
6,123
|
|
|
$
|
221
|
|
|
$
|
5,774
|
|
|
$
|
233
|
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||||||||||||||
|
Pension
|
|
Other
Benefits
|
|
Pension
|
|
Other
Benefits
|
|
Pension
|
|
Other
Benefits
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Plan assets at beginning of fiscal year
|
$
|
4,958
|
|
|
$
|
201
|
|
|
$
|
5,098
|
|
|
$
|
207
|
|
|
$
|
4,921
|
|
|
$
|
212
|
|
Plan assets acquired in L3Harris Merger
|
3,183
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Actual return on plan assets
|
548
|
|
|
18
|
|
|
271
|
|
|
11
|
|
|
307
|
|
|
14
|
|
||||||
Employer contributions
|
406
|
|
|
8
|
|
|
3
|
|
|
2
|
|
|
303
|
|
|
(1
|
)
|
||||||
Benefits paid
|
(342
|
)
|
|
(21
|
)
|
|
(381
|
)
|
|
(19
|
)
|
|
(402
|
)
|
|
(18
|
)
|
||||||
Settlements
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Expenses paid
|
(43
|
)
|
|
—
|
|
|
(30
|
)
|
|
—
|
|
|
(35
|
)
|
|
—
|
|
||||||
Foreign currency exchange rate changes
|
4
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
4
|
|
|
—
|
|
||||||
Plan participants' contributions
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Divestiture
|
(92
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Plan assets at end of fiscal year
|
$
|
8,618
|
|
|
$
|
274
|
|
|
$
|
4,958
|
|
|
$
|
201
|
|
|
$
|
5,098
|
|
|
$
|
207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Funded status at end of fiscal year
|
$
|
(1,650
|
)
|
|
$
|
(95
|
)
|
|
$
|
(1,165
|
)
|
|
$
|
(20
|
)
|
|
$
|
(676
|
)
|
|
$
|
(26
|
)
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Projected benefit obligation
|
$
|
9,670
|
|
|
$
|
6,041
|
|
|
$
|
5,694
|
|
Accumulated benefit obligation
|
9,656
|
|
|
6,041
|
|
|
5,694
|
|
|||
Fair value of plan assets
|
7,931
|
|
|
4,864
|
|
|
5,004
|
|
|
Pension
|
||||||||||||||
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Net periodic benefit income
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
42
|
|
|
$
|
36
|
|
|
$
|
39
|
|
|
$
|
58
|
|
Interest cost
|
149
|
|
|
209
|
|
|
195
|
|
|
184
|
|
||||
Expected return on plan assets
|
(314
|
)
|
|
(382
|
)
|
|
(369
|
)
|
|
(340
|
)
|
||||
Amortization of net actuarial loss (gain)
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Amortization of prior service credit
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Effect of curtailments or settlements(1)
|
(18
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit income
|
$
|
(145
|
)
|
|
$
|
(136
|
)
|
|
$
|
(135
|
)
|
|
$
|
(97
|
)
|
Other changes in plan assets and benefit obligations recognized in other comprehensive loss
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss (gain)
|
$
|
55
|
|
|
$
|
625
|
|
|
$
|
(106
|
)
|
|
$
|
(284
|
)
|
Prior service (credit) cost
|
(292
|
)
|
|
3
|
|
|
2
|
|
|
—
|
|
||||
Amortization of net actuarial gain (loss)
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Amortization of prior service credit (cost)
|
5
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized net loss due to divestiture
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total change recognized in other comprehensive loss
|
(250
|
)
|
|
627
|
|
|
(104
|
)
|
|
(285
|
)
|
||||
Total impact from net periodic benefit cost and changes in other comprehensive loss
|
$
|
(395
|
)
|
|
$
|
491
|
|
|
$
|
(239
|
)
|
|
$
|
(382
|
)
|
(1)
|
Effective January 1, 2020, for certain acquired L3 U.S. defined benefit pension plans, benefit accruals were frozen and replaced with a 1% cash balance benefit formula for certain employees who were not considered highly compensated on December 31, 2018. During the two quarters ended January 3, 2020, we recognized a $23 million curtailment gain as a result of this change, and a $5 million settlement loss resulting from the payout of the liabilities of a non-qualified benefit plan due to the change in control provisions.
|
|
Other Benefits
|
||||||||||||||
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Net periodic benefit income
|
|
|
|
|
|
|
|
||||||||
Service cost
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Interest cost
|
5
|
|
|
8
|
|
|
7
|
|
|
8
|
|
||||
Expected return on plan assets
|
(10
|
)
|
|
(16
|
)
|
|
(16
|
)
|
|
(17
|
)
|
||||
Amortization of net actuarial loss (gain)
|
(3
|
)
|
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
||||
Net periodic benefit income
|
$
|
(7
|
)
|
|
$
|
(14
|
)
|
|
$
|
(9
|
)
|
|
$
|
(8
|
)
|
Other changes in plan assets and benefit obligations recognized in other comprehensive loss
|
|
|
|
|
|
|
|
||||||||
Net actuarial loss (gain)
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
(20
|
)
|
|
$
|
(38
|
)
|
Amortization of net actuarial gain (loss)
|
3
|
|
|
6
|
|
|
1
|
|
|
—
|
|
||||
Total change recognized in other comprehensive loss
|
2
|
|
|
10
|
|
|
(19
|
)
|
|
(38
|
)
|
||||
Total impact from net periodic benefit cost and changes in other comprehensive loss
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
|
$
|
(28
|
)
|
|
$
|
(46
|
)
|
|
Pension
|
|
Other
Benefits |
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Net actuarial (gain) loss
|
$
|
10
|
|
|
$
|
(3
|
)
|
|
$
|
7
|
|
Prior service cost
|
(28
|
)
|
|
—
|
|
|
(28
|
)
|
|||
|
$
|
(18
|
)
|
|
$
|
(3
|
)
|
|
$
|
(21
|
)
|
Obligation assumptions as of:
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
|
||||
Discount rate
|
3.14
|
%
|
|
3.35
|
%
|
|
4.05
|
%
|
|
|
|
Rate of future compensation increase
|
2.80
|
%
|
|
2.76
|
%
|
|
2.76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost assumptions for fiscal periods ended:
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||
Discount rate to determine service cost
|
3.11
|
%
|
|
3.89
|
%
|
|
3.48
|
%
|
|
3.80
|
%
|
Discount rate to determine interest cost
|
2.94
|
%
|
|
3.75
|
%
|
|
3.28
|
%
|
|
2.94
|
%
|
Expected return on plan assets
|
7.68
|
%
|
|
7.66
|
%
|
|
7.66
|
%
|
|
7.65
|
%
|
Rate of future compensation increase
|
2.97
|
%
|
|
2.76
|
%
|
|
2.76
|
%
|
|
2.75
|
%
|
Obligation assumptions as of:
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
|
||||
Discount rate
|
2.97
|
%
|
|
3.21
|
%
|
|
3.99
|
%
|
|
|
|
Rate of future compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost assumptions for fiscal periods ended:
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||
Discount rate to determine service cost
|
3.47
|
%
|
|
4.14
|
%
|
|
3.62
|
%
|
|
3.52
|
%
|
Discount rate to determine interest cost
|
2.74
|
%
|
|
3.62
|
%
|
|
3.04
|
%
|
|
2.60
|
%
|
Rate of future compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Target Asset
Allocation
|
|||
Equity investments
|
40
|
%
|
—
|
60%
|
Fixed income investments
|
20
|
%
|
—
|
40%
|
Hedge funds
|
0
|
%
|
—
|
30%
|
Cash and cash equivalents
|
0
|
%
|
—
|
10%
|
•
|
Domestic and international equities, which include common and preferred shares, domestic listed and foreign listed equity securities, open-ended and closed-ended mutual funds, real estate investment trusts and exchange traded funds, are generally valued at the closing price reported on the major market exchanges on which the individual securities are traded at the measurement date. Because these assets are traded predominantly on liquid, widely traded public exchanges, equity securities are categorized as Level 1 assets.
|
•
|
Private equity funds, which include buy-out, mezzanine, venture capital, distressed asset and secondary funds, are typically limited partnership investment structures. Private equity funds are valued using a market approach based on NAV calculated by the funds and are not publicly available. Private equity funds generally have liquidity restrictions that extend for ten or more years. At January 3, 2020, June 28, 2019 and June 29, 2018, our defined benefit plans had future unfunded commitments totaling $325 million, $355 million and $246 million, respectively, related to private equity fund investments.
|
•
|
Hedge funds, which include equity long/short, event-driven, fixed-income arbitrage and global macro strategies, are typically limited partnership investment structures. Limited partnership interests in hedge funds are valued using a market approach based on NAV calculated by the funds and are not publicly available. Hedge funds generally permit redemption on a quarterly or more frequent basis with 90 or fewer days-notice. At each of January 3, 2020, June 28, 2019 and June 29, 2018, our defined benefit plans had no future unfunded commitments related to hedge fund investments.
|
•
|
Fixed income investments, which include U.S. Government securities, investment and non-investment grade corporate bonds and securitized bonds are generally valued using pricing models that use verifiable, observable market data such as interest rates, benchmark yield curves and credit spreads, bids provided by brokers or dealers, or quoted prices of securities with similar characteristics. Fixed income investments are generally categorized as Level 2 assets. Fixed income funds valued at the closing price reported on the major market exchanges on which the individual fund is traded are categorized as Level 1 assets.
|
•
|
Other is comprised of guaranteed insurance contracts valued at book value, which approximates fair value, calculated using the prior-year balance adjusted for investment returns and changes in cash flows and corporate owned life insurance policies valued at the accumulated benefit.
|
•
|
Cash and cash equivalents are primarily comprised of short-term money market funds valued at cost, which approximates fair value, or valued at quoted market prices of identical instruments. Cash and currency are categorized as Level 1 assets; cash equivalents, such as money market funds or short-term commingled funds, are categorized as Level 2 assets.
|
•
|
Certain investments that are valued using the NAV per share (or its equivalent) as a practical expedient are not categorized in the fair value hierarchy and are included in the table to permit reconciliation of the fair value hierarchy to the aggregate postretirement benefit plan assets.
|
|
January 3, 2020
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Asset Category
|
|
|
|
|
|
|
|
||||||||
Equities:
|
|
|
|
|
|
|
|
||||||||
Domestic equities
|
$
|
2,968
|
|
|
$
|
2,968
|
|
|
$
|
—
|
|
|
$
|
—
|
|
International equities
|
1,217
|
|
|
1,217
|
|
|
—
|
|
|
—
|
|
||||
Real Estate Investment Trusts
|
211
|
|
|
211
|
|
|
—
|
|
|
—
|
|
||||
Fixed income:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
1,176
|
|
|
—
|
|
|
1,159
|
|
|
17
|
|
||||
Government securities
|
489
|
|
|
—
|
|
|
489
|
|
|
—
|
|
||||
Securitized Assets
|
131
|
|
|
—
|
|
|
131
|
|
|
—
|
|
||||
Fixed Income Funds
|
101
|
|
|
101
|
|
|
—
|
|
|
—
|
|
||||
Other
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Cash and cash equivalents
|
691
|
|
|
17
|
|
|
674
|
|
|
—
|
|
||||
Total
|
6,986
|
|
|
$
|
4,514
|
|
|
$
|
2,453
|
|
|
$
|
19
|
|
|
Investments Measured at NAV
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
933
|
|
|
|
|
|
|
|
|||||||
Fixed income funds
|
323
|
|
|
|
|
|
|
|
|||||||
Hedge funds
|
342
|
|
|
|
|
|
|
|
|||||||
Private equity funds
|
302
|
|
|
|
|
|
|
|
|||||||
Other
|
1
|
|
|
|
|
|
|
|
|||||||
Total Investments Measured at NAV
|
1,901
|
|
|
|
|
|
|
|
|||||||
Receivables, net
|
5
|
|
|
|
|
|
|
|
|||||||
Total fair value of plan assets
|
$
|
8,892
|
|
|
|
|
|
|
|
|
June 28, 2019
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Asset Category
|
|
|
|
|
|
|
|
||||||||
Equities:
|
|
|
|
|
|
|
|
||||||||
Domestic equities
|
$
|
1,173
|
|
|
$
|
1,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
International equities
|
896
|
|
|
896
|
|
|
—
|
|
|
—
|
|
||||
Fixed income:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
923
|
|
|
—
|
|
|
906
|
|
|
17
|
|
||||
Government securities
|
332
|
|
|
—
|
|
|
332
|
|
|
—
|
|
||||
Other
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Cash and cash equivalents
|
59
|
|
|
12
|
|
|
47
|
|
|
—
|
|
||||
Total
|
3,385
|
|
|
$
|
2,081
|
|
|
$
|
1,285
|
|
|
$
|
19
|
|
|
Investments Measured at NAV
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
703
|
|
|
|
|
|
|
|
|||||||
Fixed income funds
|
362
|
|
|
|
|
|
|
|
|||||||
Hedge funds
|
331
|
|
|
|
|
|
|
|
|||||||
Private equity funds
|
294
|
|
|
|
|
|
|
|
|||||||
Total Investments Measured at NAV
|
1,690
|
|
|
|
|
|
|
|
|||||||
Receivables, net
|
84
|
|
|
|
|
|
|
|
|||||||
Total fair value of plan assets
|
$
|
5,159
|
|
|
|
|
|
|
|
|
June 29, 2018
|
||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Asset Category
|
|
|
|
|
|
|
|
||||||||
Equities:
|
|
|
|
|
|
|
|
||||||||
Domestic equities
|
$
|
1,221
|
|
|
$
|
1,189
|
|
|
$
|
32
|
|
|
$
|
—
|
|
International equities
|
903
|
|
|
899
|
|
|
4
|
|
|
—
|
|
||||
Fixed income:
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
811
|
|
|
—
|
|
|
800
|
|
|
11
|
|
||||
Government securities
|
335
|
|
|
—
|
|
|
335
|
|
|
—
|
|
||||
Other
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Cash and cash equivalents
|
209
|
|
|
6
|
|
|
203
|
|
|
—
|
|
||||
Total
|
3,481
|
|
|
$
|
2,094
|
|
|
$
|
1,374
|
|
|
$
|
13
|
|
|
Investments Measured at NAV
|
|
|
|
|
|
|
|
||||||||
Equity funds
|
714
|
|
|
|
|
|
|
|
|||||||
Fixed income funds
|
318
|
|
|
|
|
|
|
|
|||||||
Hedge funds
|
395
|
|
|
|
|
|
|
|
|||||||
Private equity funds
|
401
|
|
|
|
|
|
|
|
|||||||
Total Investments Measured at NAV
|
1,828
|
|
|
|
|
|
|
|
|||||||
Payables, net
|
(4
|
)
|
|
|
|
|
|
|
|||||||
Total fair value of plan assets
|
$
|
5,305
|
|
|
|
|
|
|
|
|
Pension
|
|
Other
Benefits(1)
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Fiscal Years:
|
|
|
|
|
|
||||||
2020
|
$
|
572
|
|
|
$
|
32
|
|
|
$
|
604
|
|
2021
|
576
|
|
|
31
|
|
|
607
|
|
|||
2022
|
583
|
|
|
30
|
|
|
613
|
|
|||
2023
|
584
|
|
|
29
|
|
|
613
|
|
|||
2024
|
581
|
|
|
27
|
|
|
608
|
|
|||
2025 — 2028
|
2,896
|
|
|
117
|
|
|
3,013
|
|
(1)
|
Projected payments for Other Benefits reflect net payments from the Company, which include subsidies that reduce the gross payments by less than 10 percent.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Total expense
|
$
|
125
|
|
|
$
|
58
|
|
|
$
|
51
|
|
|
$
|
42
|
|
Included in:
|
|
|
|
|
|
|
|
||||||||
Cost of product sales and services
|
$
|
5
|
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
3
|
|
Engineering, selling and administrative expenses
|
120
|
|
|
46
|
|
|
43
|
|
|
39
|
|
||||
Income from continuing operations
|
125
|
|
|
58
|
|
|
51
|
|
|
42
|
|
||||
Tax effect on share-based compensation expense
|
(31
|
)
|
|
(14
|
)
|
|
(16
|
)
|
|
(16
|
)
|
||||
Total share-based compensation expense after-tax
|
$
|
94
|
|
|
$
|
44
|
|
|
$
|
35
|
|
|
$
|
26
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||
|
|
|
|
|
|
|
|
||||
Expected dividends
|
1.70
|
%
|
|
1.61
|
%
|
|
1.80
|
%
|
|
2.36
|
%
|
Expected volatility
|
22.18
|
%
|
|
19.87
|
%
|
|
19.30
|
%
|
|
21.78
|
%
|
Risk-free interest rates
|
1.68
|
%
|
|
2.72
|
%
|
|
1.80
|
%
|
|
1.23
|
%
|
Expected term (years)
|
5.65
|
|
|
5.03
|
|
|
5.00
|
|
|
5.03
|
|
|
Shares
|
|
Weighted
Average
Exercise
Price
Per Share
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic Value
|
|||||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
(In years)
|
|
(In millions)
|
|||||
Stock options outstanding June 28, 2019
|
4,195,201
|
|
|
$
|
80.86
|
|
|
|
|
|
||
Granted
|
738,956
|
|
|
$
|
204.85
|
|
|
|
|
|
||
Exercised
|
(1,654,558
|
)
|
|
$
|
79.35
|
|
|
|
|
|
||
Other — L3Harris Merger(1)
|
1,266,379
|
|
|
$
|
112.83
|
|
|
|
|
|
||
Stock options outstanding January 3, 2020
|
4,545,978
|
|
|
$
|
110.48
|
|
|
6.26
|
|
$
|
454.57
|
|
Stock options exercisable January 3, 2020
|
3,807,022
|
|
|
$
|
92.16
|
|
|
5.61
|
|
$
|
450.42
|
|
(1)
|
Represents L3 stock options converted to L3Harris stock options in accordance with the Merger Agreement.
|
|
Shares
|
|
Weighted-Average
Grant-Date Fair Value
Per Share
|
|||
|
|
|
|
|||
Nonvested stock options June 28, 2019
|
856,753
|
|
|
$
|
20.28
|
|
Granted
|
738,956
|
|
|
$
|
38.61
|
|
Vested
|
(856,753
|
)
|
|
$
|
20.28
|
|
Nonvested stock options January 3, 2020
|
738,956
|
|
|
$
|
38.61
|
|
|
Shares or Units
|
|
Weighted-Average
Grant Price Per Share or Unit
|
|||
|
|
|
|
|||
Restricted stock and restricted stock units outstanding at June 28, 2019
|
365,998
|
|
|
$
|
134.06
|
|
Granted
|
260,167
|
|
|
$
|
204.62
|
|
Vested
|
(503,069
|
)
|
|
$
|
149.39
|
|
Forfeited
|
(16,916
|
)
|
|
$
|
193.20
|
|
Other — L3Harris Merger(1)
|
429,587
|
|
|
$
|
189.13
|
|
Restricted stock and restricted stock units outstanding at January 3, 2020
|
535,767
|
|
|
$
|
196.22
|
|
(1)
|
Represents L3 share-based awards converted to L3Harris restricted stock units in accordance with the Merger Agreement.
|
|
Shares or Units
|
|
Weighted-Average
Grant Price
Per Share or Unit
|
|||
|
|
|
|
|||
Performance share units outstanding at June 28, 2019
|
509,749
|
|
|
$
|
126.73
|
|
Granted
|
55,020
|
|
|
$
|
204.85
|
|
Performance based adjustment(1)
|
326,656
|
|
|
$
|
129.84
|
|
Vested
|
(836,405
|
)
|
|
$
|
127.94
|
|
Performance share units outstanding at January 3, 2020
|
55,020
|
|
|
$
|
204.85
|
|
(1)
|
Represents adjustments for performance conditions that impact the number of shares that vest. All awards with such criteria automatically vested upon the closing of the L3Harris Merger.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Income from continuing operations
|
$
|
823
|
|
|
$
|
953
|
|
|
$
|
702
|
|
|
$
|
628
|
|
Adjustments for participating securities outstanding
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||
Income from continuing operations used in per basic and diluted common share calculations (A)
|
$
|
823
|
|
|
$
|
951
|
|
|
$
|
700
|
|
|
$
|
627
|
|
Basic weighted average common shares outstanding (B)
|
221.2
|
|
|
118.0
|
|
|
118.6
|
|
|
122.6
|
|
||||
Impact of dilutive share-based awards
|
2.5
|
|
|
2.5
|
|
|
2.5
|
|
|
1.7
|
|
||||
Diluted weighted average common shares outstanding (C)
|
223.7
|
|
|
120.5
|
|
|
121.1
|
|
|
124.3
|
|
||||
Income from continuing operations per basic common share (A)/(B)
|
$
|
3.72
|
|
|
$
|
8.06
|
|
|
$
|
5.90
|
|
|
$
|
5.11
|
|
Income from continuing operations per diluted common share (A)/(C)
|
$
|
3.68
|
|
|
$
|
7.89
|
|
|
$
|
5.78
|
|
|
$
|
5.04
|
|
|
(In millions)
|
||
Operating lease right-of-use assets
|
$
|
837
|
|
|
|
||
Other accrued items
|
129
|
|
|
Operating lease liabilities
|
781
|
|
|
Total operating lease liabilities
|
$
|
910
|
|
|
(In millions, except lease term and discount rate)
|
||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
91
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
17
|
|
|
Weighted average remaining lease term — operating leases (in years)
|
9.4
|
|
|
Weighted average discount rate — operating leases
|
3.1
|
%
|
|
(In millions)
|
||
Fiscal Years
|
|
||
2020
|
$
|
162
|
|
2021
|
134
|
|
|
2022
|
123
|
|
|
2023
|
103
|
|
|
2024
|
86
|
|
|
Thereafter
|
450
|
|
|
Total future lease payments required
|
1,058
|
|
|
Less: imputed interest
|
148
|
|
|
Total
|
$
|
910
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Pension adjustment(1)
|
$
|
172
|
|
|
$
|
186
|
|
|
$
|
184
|
|
|
$
|
164
|
|
Gain on pension plan curtailment
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Loss on extinguishment of debt(2)
|
(2
|
)
|
|
—
|
|
|
(24
|
)
|
|
—
|
|
||||
Adjustment to gain on sale of business
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Other
|
(1
|
)
|
|
2
|
|
|
(4
|
)
|
|
—
|
|
||||
|
$
|
192
|
|
|
$
|
188
|
|
|
$
|
156
|
|
|
$
|
166
|
|
(1)
|
The non-service components of net periodic pension and postretirement benefit costs include interest cost, expected return on plan assets, amortization of net actuarial gain or loss and effect of curtailments or settlements.
|
(2)
|
Losses associated with our optional redemption of the entire outstanding $400 million principal amount of our 2.7% 2020 Notes in the two quarters ended January 3, 2020 and our optional redemption of the entire outstanding $800 million aggregate principal amount of our 2018 Redeemed Notes, the repayment in full of $253 million in remaining outstanding indebtedness under the 5-year tranche of our $1.3 billion senior unsecured term loan facility and the termination of our 2015 Credit Agreement in fiscal 2018. See. Note 14: Debt for additional information.
|
|
Foreign currency translation
|
|
Net unrealized (losses) gains on hedging derivatives
|
|
Unrecognized postretirement obligations
|
|
Total AOCI
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Balance at June 30, 2017
|
$
|
(113
|
)
|
|
$
|
(17
|
)
|
|
$
|
(146
|
)
|
|
$
|
(276
|
)
|
Other comprehensive income
|
13
|
|
|
1
|
|
|
122
|
|
|
136
|
|
||||
Income taxes
|
2
|
|
|
—
|
|
|
(29
|
)
|
|
(27
|
)
|
||||
Other comprehensive income, net of tax
|
15
|
|
|
1
|
|
|
93
|
|
|
109
|
|
||||
Reclassifications to retained earnings due to adoption of accounting standards update
|
(1
|
)
|
|
(4
|
)
|
|
(30
|
)
|
|
(35
|
)
|
||||
Balance at June 29, 2018
|
(99
|
)
|
|
(20
|
)
|
|
(83
|
)
|
|
(202
|
)
|
||||
Other comprehensive loss
|
(7
|
)
|
|
(24
|
)
|
|
(638
|
)
|
|
(669
|
)
|
||||
Income taxes
|
—
|
|
|
6
|
|
|
158
|
|
|
164
|
|
||||
Other comprehensive loss, net of tax
|
(7
|
)
|
|
(18
|
)
|
|
(480
|
)
|
|
(505
|
)
|
||||
Balance at June 28, 2019
|
(106
|
)
|
|
(38
|
)
|
|
(563
|
)
|
|
(707
|
)
|
||||
Other comprehensive income (loss)
|
25
|
|
|
(23
|
)
|
|
231
|
|
|
233
|
|
||||
Income taxes
|
—
|
|
|
6
|
|
|
(53
|
)
|
|
(47
|
)
|
||||
Other comprehensive income (loss), net of tax
|
25
|
|
|
(17
|
)
|
|
178
|
|
|
186
|
|
||||
Amounts reclassified to earnings from AOCI(1)
|
—
|
|
|
—
|
|
|
18
|
|
|
18
|
|
||||
Income taxes
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
||||
Amounts reclassified to earnings from AOCI, net of tax
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
||||
Balance at January 3, 2020
|
$
|
(81
|
)
|
|
$
|
(55
|
)
|
|
$
|
(372
|
)
|
|
$
|
(508
|
)
|
(1)
|
Amounts reclassified to earnings from AOCI are included in the gain on sale of business and non-operating income line items in our Consolidated Statement of Income.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Current:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
11
|
|
|
$
|
105
|
|
|
$
|
(141
|
)
|
|
$
|
117
|
|
International
|
37
|
|
|
9
|
|
|
12
|
|
|
9
|
|
||||
State and local
|
16
|
|
|
8
|
|
|
(11
|
)
|
|
6
|
|
||||
|
64
|
|
|
122
|
|
|
(140
|
)
|
|
132
|
|
||||
Deferred:
|
|
|
|
|
|
|
|
||||||||
United States
|
33
|
|
|
15
|
|
|
324
|
|
|
121
|
|
||||
International
|
(15
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
1
|
|
||||
State and local
|
(9
|
)
|
|
26
|
|
|
25
|
|
|
7
|
|
||||
|
9
|
|
|
38
|
|
|
346
|
|
|
129
|
|
||||
|
$
|
73
|
|
|
$
|
160
|
|
|
$
|
206
|
|
|
$
|
261
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Continuing operations
|
$
|
73
|
|
|
$
|
160
|
|
|
$
|
206
|
|
|
$
|
261
|
|
Discontinued operations
|
—
|
|
|
(1
|
)
|
|
(5
|
)
|
|
(110
|
)
|
||||
Total income tax provision
|
$
|
73
|
|
|
$
|
159
|
|
|
$
|
201
|
|
|
$
|
151
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||
U.S. statutory income tax rate
|
21.0
|
%
|
|
21.0
|
%
|
|
28.1
|
%
|
|
35.0
|
%
|
State taxes
|
1.4
|
|
|
2.4
|
|
|
1.9
|
|
|
1.0
|
|
International income
|
0.9
|
|
|
(0.5
|
)
|
|
(0.5
|
)
|
|
(1.3
|
)
|
Research and development tax credit
|
(4.7
|
)
|
|
(4.5
|
)
|
|
(2.9
|
)
|
|
(2.0
|
)
|
Foreign derived intangibles income deduction
|
(0.8
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
Change in valuation allowance
|
(4.8
|
)
|
|
(1.8
|
)
|
|
0.2
|
|
|
(0.2
|
)
|
U.S. production activity benefit
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.5
|
)
|
Equity-based compensation(1)
|
(5.4
|
)
|
|
(2.1
|
)
|
|
(1.8
|
)
|
|
(2.6
|
)
|
Settlement of tax audits
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
U.S. tax reform
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
Other items
|
0.4
|
|
|
1.2
|
|
|
0.4
|
|
|
(0.1
|
)
|
Effective income tax rate
|
8.0
|
%
|
|
14.4
|
%
|
|
22.7
|
%
|
|
29.3
|
%
|
(1)
|
Includes non-deductible equity-based compensation and excess tax benefits from equity-based compensation
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Deferred tax assets:
|
|
|
|
|
|
||||||
Accruals
|
$
|
240
|
|
|
$
|
152
|
|
|
$
|
178
|
|
Tax loss and credit carryforwards
|
177
|
|
|
92
|
|
|
119
|
|
|||
Share-based compensation
|
27
|
|
|
28
|
|
|
26
|
|
|||
Capital loss carryforwards
|
44
|
|
|
95
|
|
|
101
|
|
|||
Pension and other post-employment benefits
|
431
|
|
|
305
|
|
|
188
|
|
|||
Operating lease obligation
|
213
|
|
|
—
|
|
|
—
|
|
|||
Other
|
238
|
|
|
75
|
|
|
64
|
|
|||
Valuation allowance(1)
|
(185
|
)
|
|
(159
|
)
|
|
(181
|
)
|
|||
Deferred tax assets, net
|
1,185
|
|
|
588
|
|
|
495
|
|
|||
|
|
|
|
|
|
||||||
Deferred tax liabilities:
|
|
|
|
|
|
||||||
Property, plant and equipment
|
(159
|
)
|
|
(71
|
)
|
|
(65
|
)
|
|||
Unbilled receivables
|
(51
|
)
|
|
(65
|
)
|
|
(86
|
)
|
|||
Acquired intangibles
|
(2,037
|
)
|
|
(260
|
)
|
|
(268
|
)
|
|||
Operating lease right-of-use asset
|
(196
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(121
|
)
|
|
(31
|
)
|
|
(36
|
)
|
|||
Deferred tax liabilities
|
(2,564
|
)
|
|
(427
|
)
|
|
(455
|
)
|
|||
Net deferred tax assets (liabilities)
|
$
|
(1,379
|
)
|
|
$
|
161
|
|
|
$
|
40
|
|
(1)
|
The valuation allowance has been established to offset certain domestic and foreign deferred tax assets due to uncertainty regarding our ability to realize them in the future.
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Non-current deferred income tax assets
|
$
|
102
|
|
|
$
|
173
|
|
|
$
|
119
|
|
Non-current deferred income tax liabilities
|
(1,481
|
)
|
|
(12
|
)
|
|
(79
|
)
|
|||
|
$
|
(1,379
|
)
|
|
$
|
161
|
|
|
$
|
40
|
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Balance at beginning of period
|
$
|
204
|
|
|
$
|
102
|
|
|
$
|
90
|
|
|
$
|
63
|
|
Additions based on tax positions taken during current period
|
35
|
|
|
31
|
|
|
17
|
|
|
52
|
|
||||
Additions based on tax positions taken during prior periods
|
—
|
|
|
80
|
|
|
23
|
|
|
—
|
|
||||
Additions for tax positions related to acquired entities
|
226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Decreases based on tax positions taken during prior periods
|
(7
|
)
|
|
(9
|
)
|
|
(28
|
)
|
|
(25
|
)
|
||||
Decreases from lapse in statutes of limitations
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
$
|
438
|
|
|
$
|
204
|
|
|
$
|
102
|
|
|
$
|
90
|
|
•
|
Integrated Mission Systems, including multi-mission ISR and communication systems; integrated electrical and electronic systems for maritime platforms; and advanced electro-optical and infrared solutions;
|
•
|
Space and Airborne Systems, including space payloads, sensors and full-mission solutions; classified intelligence and cyber defense; avionics; and electronic warfare;
|
•
|
Communication Systems, including tactical communications; broadband communications; integrated vision solutions; and public safety; and
|
•
|
Aviation Systems, including defense aviation products; security, detection and other commercial aviation products; commercial and military pilot training; and mission networks for air traffic management.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
Integrated Mission Systems
|
$
|
2,774
|
|
|
$
|
48
|
|
|
$
|
45
|
|
|
$
|
38
|
|
Space and Airborne Systems
|
2,360
|
|
|
3,715
|
|
|
3,304
|
|
|
3,156
|
|
||||
Communication Systems
|
2,151
|
|
|
2,208
|
|
|
2,015
|
|
|
1,891
|
|
||||
Aviation Systems
|
2,038
|
|
|
672
|
|
|
668
|
|
|
697
|
|
||||
Other non-reportable business segments(1)
|
23
|
|
|
165
|
|
|
148
|
|
|
121
|
|
||||
Corporate eliminations
|
(83
|
)
|
|
(7
|
)
|
|
(12
|
)
|
|
(6
|
)
|
||||
|
$
|
9,263
|
|
|
$
|
6,801
|
|
|
$
|
6,168
|
|
|
$
|
5,897
|
|
Income from Continuing Operations before Income Taxes
|
|||||||||||||||
Segment Operating Income:
|
|
|
|
|
|
|
|
||||||||
Integrated Mission Systems
|
$
|
377
|
|
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Space and Airborne Systems
|
442
|
|
|
697
|
|
|
628
|
|
|
559
|
|
||||
Communication Systems
|
493
|
|
|
637
|
|
|
561
|
|
|
522
|
|
||||
Aviation Systems
|
289
|
|
|
76
|
|
|
54
|
|
|
131
|
|
||||
Other business activities and non-reportable business segments(1)
|
—
|
|
|
27
|
|
|
20
|
|
|
9
|
|
||||
Unallocated corporate expenses and corporate eliminations(2)
|
(140
|
)
|
|
(2
|
)
|
|
(65
|
)
|
|
(62
|
)
|
||||
L3Harris Merger-related transaction and integration expenses and losses
|
(390
|
)
|
|
(65
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of acquisition-related intangibles(3)
|
(289
|
)
|
|
(101
|
)
|
|
(101
|
)
|
|
(109
|
)
|
||||
Gain on sale of business
|
229
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Pension adjustment
|
(172
|
)
|
|
(186
|
)
|
|
(184
|
)
|
|
(164
|
)
|
||||
Non-operating income
|
192
|
|
|
188
|
|
|
156
|
|
|
166
|
|
||||
Net interest expense
|
(123
|
)
|
|
(167
|
)
|
|
(168
|
)
|
|
(170
|
)
|
||||
Total
|
$
|
908
|
|
|
$
|
1,113
|
|
|
$
|
908
|
|
|
$
|
889
|
|
(1)
|
Includes the operating results of the Harris Night Vision business prior to the date of divestiture on September 13, 2019. See Note 3: Divestitures, Asset Sales and Discontinued Operations in these Notes for more information.
|
(2)
|
Includes: (i) $142 million of additional cost of sales related to the fair value step-up in inventory sold (see Note 5: Business Combination in these Notes for more information), a $12 million gain on the sale of an asset group and a $10 million non-cash cumulative adjustment to lease expense for the two quarters ended January 3, 2020; (ii) $47 million of charges related to our decision to transition and exit a commercial air-to-ground LTE radio communications line of business and other items, a $12 million non-cash adjustment for deferred compensation and $5 million of Exelis acquisition-related and other charges in fiscal 2018; and (iii) $58 million of Exelis acquisition-related and other charges in fiscal 2017.
|
(3)
|
Includes $239 million of amortization of identifiable intangible assets acquired as a result of the L3Harris Merger for the two quarters ended January 3, 2020 and $50 million, $101 million, $101 million and $109 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis for the two quarters ended January 3, 2020 and fiscal 2019, 2018 and 2017, respectively. Because the L3Harris Merger and the acquisition of Exelis benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired was not allocated to any segment.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenue By Customer Relationship
|
|
|
|
|
|
|
|
||||||||
Prime contractor
|
$
|
1,904
|
|
|
$
|
25
|
|
|
$
|
20
|
|
|
$
|
24
|
|
Subcontractor
|
870
|
|
|
23
|
|
|
25
|
|
|
14
|
|
||||
|
$
|
2,774
|
|
|
$
|
48
|
|
|
$
|
45
|
|
|
$
|
38
|
|
Revenue By Contract Type
|
|
|
|
|
|
|
|
||||||||
Fixed-price(1)
|
$
|
2,138
|
|
|
$
|
48
|
|
|
$
|
45
|
|
|
$
|
37
|
|
Cost-reimbursable
|
636
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
|
$
|
2,774
|
|
|
$
|
48
|
|
|
$
|
45
|
|
|
$
|
38
|
|
Revenue By Geographical Region
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
2,300
|
|
|
$
|
30
|
|
|
$
|
39
|
|
|
$
|
27
|
|
International
|
474
|
|
|
18
|
|
|
6
|
|
|
11
|
|
||||
|
$
|
2,774
|
|
|
$
|
48
|
|
|
$
|
45
|
|
|
$
|
38
|
|
(1)
|
Includes revenue derived from time-and-materials contracts.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenue By Customer Relationship
|
|
|
|
|
|
|
|
||||||||
Prime contractor
|
$
|
1,337
|
|
|
$
|
2,246
|
|
|
$
|
2,159
|
|
|
$
|
2,067
|
|
Subcontractor
|
1,023
|
|
|
1,469
|
|
|
1,145
|
|
|
1,089
|
|
||||
|
$
|
2,360
|
|
|
$
|
3,715
|
|
|
$
|
3,304
|
|
|
$
|
3,156
|
|
Revenue By Contract Type
|
|
|
|
|
|
|
|
||||||||
Fixed-price(1)
|
$
|
1,367
|
|
|
$
|
2,097
|
|
|
$
|
1,634
|
|
|
$
|
1,390
|
|
Cost-reimbursable
|
993
|
|
|
1,618
|
|
|
1,670
|
|
|
1,766
|
|
||||
|
$
|
2,360
|
|
|
$
|
3,715
|
|
|
$
|
3,304
|
|
|
$
|
3,156
|
|
Revenue By Geographical Region
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
2,037
|
|
|
$
|
3,255
|
|
|
$
|
2,937
|
|
|
$
|
2,782
|
|
International
|
323
|
|
|
460
|
|
|
367
|
|
|
374
|
|
||||
|
$
|
2,360
|
|
|
$
|
3,715
|
|
|
$
|
3,304
|
|
|
$
|
3,156
|
|
(1)
|
Includes revenue derived from time-and-materials contracts.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenue By Customer Relationship(1)
|
|
|
|
|
|
|
|
||||||||
Prime contractor
|
$
|
1,406
|
|
|
|
|
|
|
|
||||||
Subcontractor
|
745
|
|
|
|
|
|
|
|
|||||||
|
$
|
2,151
|
|
|
|
|
|
|
|
||||||
Revenue By Contract Type(1)
|
|
|
|
|
|
|
|
||||||||
Fixed-price(2)
|
$
|
1,849
|
|
|
|
|
|
|
|
||||||
Cost-reimbursable
|
302
|
|
|
|
|
|
|
|
|||||||
|
$
|
2,151
|
|
|
|
|
|
|
|
||||||
Revenue By Geographical Region
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
1,518
|
|
|
$
|
1,281
|
|
|
$
|
1,031
|
|
|
$
|
880
|
|
International
|
633
|
|
|
927
|
|
|
984
|
|
|
1,011
|
|
||||
|
$
|
2,151
|
|
|
$
|
2,208
|
|
|
$
|
2,015
|
|
|
$
|
1,891
|
|
(1)
|
Prior to the L3Harris Merger, Communication Systems did not recognize significant revenue for customer-specific products and systems, and currently, such customer arrangements primarily exist at operating businesses acquired in connection with the L3Harris Merger. The “Revenue by Customer Relationship” and “Revenue by Contract Type” disaggregation categories were added beginning in the Fiscal Transition Period to best depict how the nature, amount, timing and uncertainty of revenue and cash flows from these types of customer arrangements are affected by economic factors.
|
(2)
|
Includes revenue derived from time-and-materials contracts.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Revenue By Customer Relationship
|
|
|
|
|
|
|
|
||||||||
Prime contractor
|
$
|
1,246
|
|
|
$
|
654
|
|
|
$
|
656
|
|
|
$
|
697
|
|
Subcontractor
|
792
|
|
|
18
|
|
|
12
|
|
|
—
|
|
||||
|
$
|
2,038
|
|
|
$
|
672
|
|
|
$
|
668
|
|
|
$
|
697
|
|
Revenue By Contract Type
|
|
|
|
|
|
|
|
||||||||
Fixed-price(1)
|
$
|
1,688
|
|
|
$
|
587
|
|
|
$
|
582
|
|
|
$
|
636
|
|
Cost-reimbursable
|
350
|
|
|
85
|
|
|
86
|
|
|
61
|
|
||||
|
$
|
2,038
|
|
|
$
|
672
|
|
|
$
|
668
|
|
|
$
|
697
|
|
Revenue By Geographical Region
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
1,514
|
|
|
$
|
644
|
|
|
$
|
627
|
|
|
$
|
647
|
|
International
|
524
|
|
|
28
|
|
|
41
|
|
|
50
|
|
||||
|
$
|
2,038
|
|
|
$
|
672
|
|
|
$
|
668
|
|
|
$
|
697
|
|
(1)
|
Includes revenue derived from time-and-materials contracts.
|
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
||||||
|
|
|
|
|
|
||||||
|
(In millions)
|
||||||||||
Total Assets
|
|
|
|
|
|
||||||
Integrated Mission Systems
|
$
|
7,896
|
|
|
$
|
87
|
|
|
$
|
90
|
|
Space and Airborne Systems
|
6,829
|
|
|
5,027
|
|
|
4,953
|
|
|||
Communication Systems
|
5,930
|
|
|
1,683
|
|
|
1,724
|
|
|||
Aviation Systems
|
7,569
|
|
|
1,036
|
|
|
1,046
|
|
|||
Corporate(1)
|
10,112
|
|
|
2,284
|
|
|
2,038
|
|
|||
|
$
|
38,336
|
|
|
$
|
10,117
|
|
|
$
|
9,851
|
|
(1)
|
Identifiable intangible assets acquired in connection with the L3Harris Merger in the two quarters ended January 3, 2020 and our acquisition of Exelis in fiscal 2015 were recorded as Corporate assets because they benefited the entire Company as opposed to any individual segment. Identifiable intangible asset balances recorded as Corporate assets were approximately $8.5 billion, $869 million and $974 million at January 3, 2020, June 28, 2019 and June 29, 2018, respectively. Corporate assets also consisted of cash, income taxes receivable, deferred income taxes, deferred compensation plan investments, buildings and equipment, as well as any assets of discontinued operations and divestitures. See Note 3: Divestitures, Asset Sales and Discontinued Operations for additional information.
|
|
Two Quarters Ended
|
|
Fiscal Years Ended
|
||||||||||||
|
January 3, 2020
|
|
June 28, 2019
|
|
June 29, 2018
|
|
June 30, 2017
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
(In millions)
|
||||||||||||||
Capital Expenditures
|
|
|
|
|
|
|
|
||||||||
Integrated Mission Systems
|
$
|
29
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Space and Airborne Systems
|
36
|
|
|
48
|
|
|
49
|
|
|
49
|
|
||||
Communication Systems
|
22
|
|
|
29
|
|
|
25
|
|
|
16
|
|
||||
Aviation Systems
|
64
|
|
|
54
|
|
|
37
|
|
|
22
|
|
||||
Other non-reportable business segments(1)
|
—
|
|
|
6
|
|
|
4
|
|
|
1
|
|
||||
Corporate
|
22
|
|
|
23
|
|
|
20
|
|
|
27
|
|
||||
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
|
$
|
173
|
|
|
$
|
161
|
|
|
$
|
136
|
|
|
$
|
119
|
|
Depreciation and Amortization
|
|
|
|
|
|
|
|
||||||||
Integrated Mission Systems
|
$
|
37
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Space and Airborne Systems
|
31
|
|
|
50
|
|
|
54
|
|
|
55
|
|
||||
Communication Systems
|
32
|
|
|
49
|
|
|
54
|
|
|
60
|
|
||||
Aviation Systems
|
53
|
|
|
29
|
|
|
22
|
|
|
5
|
|
||||
Other non-reportable business segments(1)
|
—
|
|
|
3
|
|
|
5
|
|
|
8
|
|
||||
Corporate
|
289
|
|
|
125
|
|
|
122
|
|
|
142
|
|
||||
Discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
||||
|
$
|
442
|
|
|
$
|
258
|
|
|
$
|
259
|
|
|
$
|
311
|
|
Geographical Information for Continuing Operations
|
|
|
|
|
|
|
|
||||||||
U.S. operations:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
8,485
|
|
|
$
|
6,530
|
|
|
$
|
5,854
|
|
|
$
|
5,637
|
|
Long-lived assets
|
$
|
1865
|
|
|
$
|
866
|
|
|
$
|
892
|
|
|
$
|
896
|
|
International operations:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
778
|
|
|
$
|
271
|
|
|
$
|
314
|
|
|
$
|
260
|
|
Long-lived assets
|
$
|
252
|
|
|
$
|
28
|
|
|
$
|
8
|
|
|
$
|
8
|
|
(1)
|
Includes capital expenditures and depreciation and amortization of the Harris Night Vision business prior to the date of divestiture on September 13, 2019. See Note 3: Divestitures, Asset Sales and Discontinued Operations in these Notes for more information.
|
|
Two Quarters Ended
|
||||||
|
January 3,
2020
|
|
December 28, 2018
|
||||
|
|
|
|
||||
|
(In millions, except per share amounts)
|
||||||
Revenue from product sales and services
|
$
|
9,263
|
|
|
$
|
3,208
|
|
Cost of product sales and services
|
(6,726
|
)
|
|
(2,105
|
)
|
||
Engineering, selling and administrative expenses
|
(1,927
|
)
|
|
(583
|
)
|
||
Gain on sale of business
|
229
|
|
|
—
|
|
||
Non-operating income
|
192
|
|
|
94
|
|
||
Interest income
|
12
|
|
|
1
|
|
||
Interest expense
|
(135
|
)
|
|
(87
|
)
|
||
Income from continuing operations before income taxes
|
908
|
|
|
528
|
|
||
Income taxes
|
(73
|
)
|
|
(87
|
)
|
||
Income from continuing operations
|
835
|
|
|
441
|
|
||
Discontinued operations, net of income taxes
|
(1
|
)
|
|
(3
|
)
|
||
Net income
|
834
|
|
|
438
|
|
||
Noncontrolling interests, net of income taxes
|
(12
|
)
|
|
—
|
|
||
Net income attributable to L3Harris Technologies, Inc.
|
$
|
822
|
|
|
$
|
438
|
|
|
|
|
|
||||
Net income per common share attributable to L3Harris Technologies, Inc. common shareholders
|
|
|
|
||||
Basic
|
|
|
|
||||
Continuing operations
|
$
|
3.72
|
|
|
$
|
3.74
|
|
Discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
|
$
|
3.72
|
|
|
$
|
3.71
|
|
Diluted
|
|
|
|
||||
Continuing operations
|
$
|
3.68
|
|
|
$
|
3.66
|
|
Discontinued operations
|
(0.01
|
)
|
|
(0.02
|
)
|
||
|
$
|
3.67
|
|
|
$
|
3.64
|
|
|
|
|
|
||||
Basic weighted average common shares outstanding
|
221.2
|
|
|
117.8
|
|
||
Diluted weighted average common shares outstanding
|
223.7
|
|
|
120.3
|
|
|
Quarter Ended
|
|
Total
Fiscal Transition Period
|
||||||||
|
9/27/2019
|
|
1/3/2020
|
|
|||||||
|
|
|
|
|
|
||||||
Two Quarters Ended January 3, 2020(1)(2)
|
(In millions, except per share amounts)
|
||||||||||
Revenue
|
$
|
4,431
|
|
|
$
|
4,832
|
|
|
$
|
9,263
|
|
Gross profit
|
1,189
|
|
|
1,348
|
|
|
2,537
|
|
|||
Income from continuing operations before income taxes
|
440
|
|
|
468
|
|
|
908
|
|
|||
Income from continuing operations
|
435
|
|
|
400
|
|
|
835
|
|
|||
Discontinued operations, net of income taxes
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Net income
|
435
|
|
|
399
|
|
|
834
|
|
|||
Per common share data:
|
|
|
|
|
|
||||||
Basic
|
|
|
|
|
|
||||||
Income from continuing operations
|
1.93
|
|
|
1.79
|
|
|
3.72
|
|
|||
Net income
|
1.93
|
|
|
1.79
|
|
|
3.72
|
|
|||
Diluted
|
|
|
|
|
|
||||||
Income from continuing operations
|
1.90
|
|
|
1.77
|
|
|
3.68
|
|
|||
Net income
|
1.90
|
|
|
1.77
|
|
|
3.67
|
|
|||
Cash dividends
|
0.75
|
|
|
0.75
|
|
|
1.50
|
|
|||
Stock prices — High
|
217.31
|
|
|
212.43
|
|
|
|
||||
Low
|
176.16
|
|
|
190.55
|
|
|
|
|
Quarter Ended
|
|
Total
Year
|
||||||||||||||||
|
9/28/2018
|
|
12/28/2018
|
|
3/29/2019
|
|
6/28/2019
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Fiscal Year Ended June 28, 2019(3)
|
(In millions, except per share amounts)
|
||||||||||||||||||
Revenue
|
$
|
1,542
|
|
|
$
|
1,666
|
|
|
$
|
1,728
|
|
|
$
|
1,865
|
|
|
$
|
6,801
|
|
Gross profit
|
532
|
|
|
571
|
|
|
589
|
|
|
642
|
|
|
2,334
|
|
|||||
Income from continuing operations before income taxes
|
257
|
|
|
271
|
|
|
283
|
|
|
302
|
|
|
1,113
|
|
|||||
Income from continuing operations
|
216
|
|
|
225
|
|
|
243
|
|
|
269
|
|
|
953
|
|
|||||
Discontinued operations, net of income taxes
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(4
|
)
|
|||||
Net income
|
213
|
|
|
225
|
|
|
243
|
|
|
268
|
|
|
949
|
|
|||||
Per common share data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
1.82
|
|
|
1.91
|
|
|
2.06
|
|
|
2.26
|
|
|
8.06
|
|
|||||
Net income
|
1.81
|
|
|
1.91
|
|
|
2.06
|
|
|
2.26
|
|
|
8.03
|
|
|||||
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations
|
1.78
|
|
|
1.88
|
|
|
2.02
|
|
|
2.21
|
|
|
7.89
|
|
|||||
Net income
|
1.77
|
|
|
1.87
|
|
|
2.02
|
|
|
2.20
|
|
|
7.86
|
|
|||||
Cash dividends
|
0.685
|
|
|
0.685
|
|
|
0.685
|
|
|
0.685
|
|
|
2.740
|
|
|||||
Stock prices — High
|
169.98
|
|
|
175.50
|
|
|
167.09
|
|
|
200.77
|
|
|
|
||||||
Low
|
142.95
|
|
|
123.24
|
|
|
129.46
|
|
|
159.29
|
|
|
|
(1)
|
Includes the operating results of L3 businesses after the L3Harris Merger on June 29, 2019. See Note 5: Business Combination in the Notes for more information.
|
(2)
|
Results for the two quarters ended January 3, 2020 included: (i) $390 million of L3Harris Merger-related transaction and integration costs; (ii) $289 million of acquisition-related intangibles, including $239 million of amortization of identifiable intangible assets acquired as a result of the L3Harris Merger (see Note 5: Business Combination in the Notes for more information) and $50 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis; (iii) a $229 million gain on the sale of the Harris Night Vision business; (iv) $142 million of additional cost of sales related to the fair value step-up in inventory sold; (v) a $23 million gain on pension plain curtailment; (vi) a $12 million gain on the sale of an asset group (see Note 3: Divestitures, Asset Sales and Discontinued Operations in the Notes for more information); (vii) a $10 million non-cash cumulative adjustment to lease expense; and (viii) $3 million of losses and other costs related to debt refinancing. The net after-tax impact from these two quarters ended January 3, 2020 items was $392 million or $1.75 per diluted common share.
|
(3)
|
Results for fiscal 2019 included: (i) $101 million of amortization of identifiable intangible assets acquired as a result of our acquisition of Exelis and (ii) $65 million of L3Harris Merger-related transaction and integration costs. The net after-tax impact from these fiscal 2019 items was $128 million or $1.06 per diluted common share.
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
|
ITEM 9A.
|
CONTROLS AND PROCEDURES.
|
ITEM 9B.
|
OTHER INFORMATION.
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
ITEM 11.
|
EXECUTIVE COMPENSATION.
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Plan Category
|
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
(a)(2)
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)(2)
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
||||
Equity compensation plans approved by shareholders(1)
|
5,101,896
|
|
|
$110.48
|
|
22,071,494
|
|
Equity compensation plans not approved by shareholders
|
—
|
|
—
|
|
—
|
|
|
Total
|
5,101,896
|
|
|
$110.48
|
|
22,071,494
|
|
(1)
|
Consists of the Harris Corporation 2005 Equity Incentive Plan (As Amended and Restated Effective August 27, 2010) (the “2005 EIP”) and the Harris Corporation 2015 Equity Incentive Plan (the “2015 EIP”), as well as employee stock incentive plans of L3 assumed by L3Harris (collectively with the 2005 EIP and the 2015 EIP, the “L3Harris SIPs”). No additional awards may be granted under the 2005 EIP.
|
(2)
|
Under the L3Harris SIPs, in addition to options, we have granted share-based compensation awards in the form of performance shares, shares of restricted stock, performance share units, restricted stock units, shares of immediately vested common stock and other similar types of share-based awards. As of January 3, 2020, there were awards outstanding under those plans with respect to 590,787 shares, consisting of (i) awards of 34,869 shares of restricted stock, for which all 34,869 shares were issued and outstanding; and (ii) awards of 555,918 performance share units and restricted stock units, for which all 555,918 were payable in shares but for which no shares were yet issued and outstanding. The 5,101,896 shares to be issued upon exercise of outstanding options, warrants and rights as listed in column (a) consisted of shares to be issued in respect of the exercise of 4,545,978 outstanding options and in respect of awards of 555,918 performance share units and restricted stock units payable in shares. Because there is no exercise price associated with awards of shares of restricted stock, performance share units or restricted stock units, all of which are granted to employees at no cost, such awards are not included in the weighted-average exercise price calculation in column (b).
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES.
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
|
*
|
Management contract or compensatory plan or arrangement.
|
**
|
Paper filing.
|
***
|
Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. L3Harris Technologies, Inc. hereby undertakes to furnish supplementally copies of any of the omitted schedules upon request by the SEC.
|
ITEM 16.
|
FORM 10-KT SUMMARY.
|
|
|
L3HARRIS TECHNOLOGIES, INC.
|
||
|
|
(Registrant)
|
||
Date: March 3, 2020
|
|
By:
|
|
/S/ WILLIAM M. BROWN
|
|
|
|
|
William M. Brown
|
|
|
|
|
Chairman and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
||
|
|
|
||||
/s/ WILLIAM M. BROWN
|
|
Chairman and Chief Executive Officer (Principal Executive Officer)
|
|
March 3, 2020
|
||
William M. Brown
|
|
|
||||
|
|
|
||||
/s/ CHRISTOPHER E. KUBASIK
|
|
Vice Chairman, President and Chief Operating Officer
|
|
March 3, 2020
|
||
Christopher E. Kubasik
|
|
|
||||
|
|
|
|
|
||
/s/ JESUS MALAVE JR.
|
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
March 3, 2020
|
||
Jesus Malave Jr.
|
|
|
||||
|
|
|
||||
/s/ TODD A. TAYLOR
|
|
Vice President, Principal Accounting Officer (Principal Accounting Officer)
|
|
March 3, 2020
|
||
Todd A. Taylor
|
|
|
||||
|
|
|
|
|
||
/s/ SALLIE B. BAILEY*
|
|
Director
|
|
March 3, 2020
|
||
Sallie B. Bailey
|
|
|
||||
|
|
|
|
|
||
/s/ PETER W. CHIARELLI*
|
|
Director
|
|
March 3, 2020
|
||
Peter W. Chiarelli
|
|
|
||||
|
|
|
|
|
||
/s/ THOMAS A. CORCORAN*
|
|
Director
|
|
March 3, 2020
|
||
Thomas A. Corcoran
|
|
|
||||
|
|
|
||||
/s/ THOMAS A. DATTILO*
|
|
Director
|
|
March 3, 2020
|
||
Thomas A. Dattilo
|
|
|
||||
|
|
|
||||
/s/ ROGER B. FRADIN*
|
|
Director
|
|
March 3, 2020
|
||
Roger B. Fradin
|
|
|
||||
|
|
|
||||
/s/ LEWIS HAY III*
|
|
Director
|
|
March 3, 2020
|
||
Lewis Hay III
|
|
|
||||
|
|
|
||||
/s/ LEWIS KRAMER*
|
|
Director
|
|
March 3, 2020
|
||
Lewis Kramer
|
|
|
||||
|
|
|
||||
/s/ RITA S. LANE*
|
|
Director
|
|
March 3, 2020
|
||
Rita S. Lane
|
|
|
||||
|
|
|
||||
/s/ ROBERT B. MILLARD*
|
|
Director
|
|
March 3, 2020
|
||
Robert B. Millard
|
|
|
||||
|
|
|
||||
/s/ LLOYD W. NEWTON*
|
|
Director
|
|
March 3, 2020
|
||
Lloyd W. Newton
|
|
|
||||
|
|
|
||||
*By:
|
|
/s/ SCOTT T. MIKUEN
|
|
|
|
|
|
|
Scott T. Mikuen
|
|
|
|
|
|
|
Attorney-in-Fact
|
|
|
|
|
|
|
pursuant to a power of attorney
|
|
|
|
|
ARTICLE 1
|
TITLE 1
|
ARTICLE 2
|
DEFINITIONS 2
|
ARTICLE 3
|
PARTICIPATION 19
|
Section 3.1.
|
Eligibility for Participation 19
|
Section 3.2.
|
Election of Pre-Tax Contributions, Designated Roth Contributions and After-Tax Contributions 19
|
Section 3.3.
|
Transfers to Affiliates 21
|
ARTICLE 4
|
PRE-TAX, DESIGNATED ROTH, MATCHING, PROFIT SHARING, FRINGE AND OTHER EMPLOYER CONTRIBUTIONS 21
|
Section 4.1.
|
Pre-Tax Contributions and Designated Roth Contributions 21
|
Section 4.2.
|
Matching Contributions 24
|
Section 4.3.
|
Profit Sharing Contributions 24
|
Section 4.4.
|
Fringe Contributions 25
|
Section 4.5.
|
Other Employer Contributions 25
|
Section 4.6.
|
Deposit of Contributions 25
|
Section 4.7.
|
Form of Contributions 26
|
Section 4.8.
|
In-Plan Roth Conversions 26
|
ARTICLE 5
|
AFTER-TAX AND ROLLOVER CONTRIBUTIONS 27
|
Section 5.1.
|
After-Tax Contributions 27
|
Section 5.2.
|
Rollover Contributions 28
|
ARTICLE 6
|
LIMITATIONS ON CONTRIBUTIONS 28
|
Section 6.1.
|
Annual Limit on Pre-Tax Contributions and Designated Roth Contributions 28
|
Section 6.2.
|
Limits on Contributions for Highly Compensated Employees 31
|
Section 6.3.
|
Maximum Annual Additions under Section 415 of the Code 42
|
Section 6.4.
|
Other Limitations on Employer Contributions 43
|
ARTICLE 7
|
TRUST AND INVESTMENT FUNDS 44
|
Section 7.1.
|
Trust 44
|
Section 7.2.
|
Investments 45
|
ARTICLE 8
|
PARTICIPANT ACCOUNTS AND INVESTMENT ELECTIONS 46
|
Section 8.1.
|
Participant Accounts 46
|
Section 8.2.
|
Investment Elections 47
|
Section 8.3.
|
Valuation of Funds and Plan Accounts 50
|
Section 8.4.
|
Valuation of Units within the L3Harris Stock Fund 50
|
Section 8.5.
|
Allocation of Contributions Other than Profit Sharing Contributions 51
|
Section 8.6.
|
Allocation of Profit Sharing Contributions 51
|
Section 8.7.
|
Correction of Error 52
|
ARTICLE 9
|
WITHDRAWALS AND DISTRIBUTIONS 52
|
Section 9.1.
|
Withdrawals Prior to Termination of Employment 52
|
Section 9.2.
|
Distribution of Account upon Termination of Employment 58
|
Section 9.3.
|
Time and Form of Distribution upon Termination of Employment 61
|
Section 9.4.
|
Payment of Small Account Balances 64
|
Section 9.5.
|
Medium and Order of Withdrawal or Distribution 65
|
Section 9.6.
|
Direct Rollover Option 66
|
Section 9.7.
|
Designation of Beneficiary 66
|
Section 9.8.
|
Missing Persons 68
|
Section 9.9.
|
Distributions to Minor and Disabled Distributees 69
|
Section 9.10.
|
Payment of Group Welfare Program Premiums 70
|
Section 9.11.
|
Dividends in Respect of the L3Harris Stock Fund 70
|
ARTICLE 10
|
LOANS 71
|
Section 10.1.
|
Making of Loans 71
|
Section 10.2.
|
Restrictions 72
|
Section 10.3.
|
Default 72
|
Section 10.4.
|
Applicability 72
|
ARTICLE 11
|
SPECIAL PARTICIPATION AND DISTRIBUTION RULES 73
|
Section 11.1.
|
Change of Employment Status 73
|
Section 11.2.
|
Reemployment of a Terminated Participant 73
|
Section 11.3.
|
Employment by Affiliates 74
|
Section 11.4.
|
Leased Employees 74
|
Section 11.5.
|
Reemployment of Veterans 75
|
ARTICLE 12
|
SHAREHOLDER RIGHTS WITH RESPECT TO L3HARRIS STOCK 78
|
Section 12.1.
|
Voting Shares of L3Harris Stock 78
|
Section 12.2.
|
Tender Offers 79
|
ARTICLE 13
|
ADMINISTRATION 81
|
Section 13.1.
|
The Administrative Committee 81
|
Section 13.2.
|
Named Fiduciaries 84
|
Section 13.3.
|
Allocation and Delegation of Responsibilities 84
|
Section 13.4.
|
Professional and Other Services 85
|
Section 13.5.
|
Indemnification and Expense Reimbursement 85
|
Section 13.6.
|
Claims Procedure 85
|
Section 13.7.
|
Notices to Participants 87
|
Section 13.8.
|
Notices to Administrative Committee or Employers 88
|
Section 13.9.
|
Electronic Media 88
|
Section 13.10.
|
Records 88
|
Section 13.11.
|
Reports of Trustee and Accounting to Participants 88
|
Section 13.12.
|
Limitations on Investments and Transactions/Conversions 89
|
ARTICLE 14
|
PARTICIPATION BY EMPLOYERS 90
|
Section 14.1.
|
Adoption of Plan 90
|
Section 14.2.
|
Withdrawal from Participation 90
|
Section 14.3.
|
Company, Administrative Committee and Investment Committee as Agents for Employers 91
|
Section 14.4.
|
Continuance by a Successor 91
|
ARTICLE 15
|
MISCELLANEOUS 92
|
Section 15.1.
|
Expenses 92
|
Section 15.2.
|
Non-Assignability 92
|
Section 15.3.
|
Employment Non-Contractual 94
|
Section 15.4.
|
Merger or Consolidation with Another Plan; Transfer Contributions; Transferred Employees; Divestitures 94
|
Section 15.5.
|
Gender and Plurals 95
|
Section 15.6.
|
Statute of Limitations for Actions under the Plan 95
|
Section 15.7.
|
Applicable Law 96
|
Section 15.8.
|
Severability 96
|
Section 15.9.
|
No Guarantee 96
|
Section 15.10.
|
Plan Voluntary 96
|
Section 15.11.
|
Legal Fees 97
|
ARTICLE 16
|
TOP-HEAVY PLAN REQUIREMENTS 97
|
Section 16.1.
|
Top-Heavy Plan Determination 97
|
Section 16.2.
|
Definitions and Special Rules 98
|
Section 16.3.
|
Minimum Contribution for Top-Heavy Years 99
|
ARTICLE 17
|
AMENDMENT, ESTABLISHMENT OF SEPARATE PLAN, PLAN TERMINATION AND CHANGE IN CONTROL 100
|
Section 17.1.
|
Amendment 100
|
Section 17.2.
|
Establishment of Separate Plan 100
|
Section 17.3.
|
Termination 101
|
Section 17.4.
|
Change in Control 101
|
Section 17.5.
|
Trust Fund to Be Applied Exclusively for Participants and Their Beneficiaries 102
|
(i)
|
$57,000 (as adjusted pursuant to section 415(d) of the Code); and
|
(ii)
|
100% of the Participant’s compensation for such limitation year (or such other percentage of compensation set forth in section 415(c) of the Code).
|
(i)
|
expenses for (or necessary to obtain) medical care that would be deductible under section 213(d) of the Code determined without regard to the limitations in section 213(a) (relating to the applicable percentage of adjusted gross income and the recipients of the medical care) provided that, if the recipient of the medical care is not listed in section 213(a), the recipient is a primary Beneficiary;
|
(ii)
|
costs directly related to the purchase of a principal residence for the Participant (excluding mortgage payments);
|
(iii)
|
payment of tuition, room and board and related educational fees for up to the next 12 months of post-secondary education for the Participant, or the Participant’s Spouse, children, dependents (as defined in section 152 of the Code, and without regard to sections 152(b)(1), (b)(2) and (d)(1)(B)) or primary Beneficiary;
|
(iv)
|
payments necessary to prevent the eviction of the Participant from the Participant’s principal residence or foreclosure of the mortgage on that residence;
|
(v)
|
payments for burial or funeral expenses for the Participant’s deceased parent, Spouse, children, dependents (as defined in section 152 of the Code, and without regard to section 152(d)(1)(B)) or primary Beneficiary; and
|
(vi)
|
expenses for the repair of damage to the Participant’s principal residence that would qualify for the casualty deduction under section 165 of the Code (determined without regard to whether the loss exceeds 10% of adjusted gross income, and effective January 1, 2019, determined without regard to section 165(h)(5)).
|
Years of Service
|
Percentage
|
Less than 1
|
0%
|
At least 1 but less than 2
|
25%
|
At least 2 but less than 3
|
50%
|
3 or more
|
100%
|
Years of Service
|
Percentage
|
Less than 1
|
0%
|
At least 1 but less than 2
|
25%
|
At least 2 but less than 3
|
50%
|
At least 3 but less than 4
|
75%
|
4 or more
|
100%
|
Years of Service
|
Percentage
|
|
Less than 1
|
0
|
%
|
At least 1 but less than 2
|
50
|
%
|
2 or more
|
100%
|
|
A.
|
Form of Distribution. Except as otherwise set forth in this Appendix 1, the Account of a Money Purchase Participant shall be distributed in the form of a single life annuity or, in the case of a Money Purchase Participant who is legally married on his or her annuity commencement date, in the form of a Joint and Survivor Annuity or, if the Money Purchase Participant has died prior to the annuity commencement date, a Pre-Retirement Survivor Annuity. Any annuity payable under this Appendix 1 shall be satisfied by purchase of a nonforfeitable annuity contract for the Money Purchase Participant or Spouse, as applicable.
|
B.
|
Joint and Survivor Annuity. The term “Joint and Survivor Annuity” means an annuity for the life of the Money Purchase Participant with a survivor annuity for the life of his or her surviving Spouse which is equal to 50, 75 or 100 percent of the amount of the annuity payable during the joint lives of the Money Purchase Participant and his or her Spouse and which is the actuarial equivalent of a single life annuity for the life of the Money Purchase Participant.
|
(2)
|
a written description of the Joint and Survivor Annuity and the relative financial effect of payment of his or her Account in that form; and
|
(3)
|
a notification of the right to waive payment in that form, the rights of his or her Spouse with respect to such waiver and the right to revoke such waiver.
|
C.
|
Pre-Retirement Survivor Annuity. The term “Pre-Retirement Survivor Annuity” means an annuity for the life of the Money Purchase Participant’s surviving Spouse, the payments under which must be equal to the amount of benefit that can be purchased with the balance in the Money Purchase Participant’s Account as of the date of his or her death. Payment of such benefits will commence as soon as practicable after the date of the Money Purchase Participant’s death, unless the surviving Spouse elects a later date. Any election to waive the Pre-Retirement Survivor Annuity must be made by the Money Purchase Participant in writing during the election period described herein and shall require the Spouse’s consent in the same manner provided for in paragraph B. The election period to waive the Pre-Retirement Survivor Annuity shall begin on the first day of the Plan Year in which the Money Purchase Participant attains age 35 and end on the date of the Money Purchase Participant’s death. In the event a Money Purchase Participant separates from service prior to the beginning of the election period, the election period shall begin on the date of such separation from service. In connection with the election, the Administrative Committee shall provide each Money Purchase Participant, within the period beginning with the first day of the Plan Year in which the Money Purchase Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Money Purchase Participant attains age 35, a written explanation of the Pre-Retirement Survivor Annuity containing comparable information to that required pursuant to the provisions of paragraphs B(1) and B(2). If the Money Purchase Participant enters the Plan after such election period has terminated, the Administrative Committee shall provide such explanation no later than one year following the entry of the Money Purchase Participant into the Plan. If the Money Purchase Participant is not married as of the date of his or her death, the Money Purchase Participant’s Account shall be distributed to his or her Beneficiary in the form elected by the Beneficiary pursuant to Section 9.3(c) of the Plan. Notwithstanding the foregoing, if the Participant’s distributable Account balance does not exceed $5,000, the Account will be distributed in a lump sum.
|
Contract Name
|
Effective Date
|
Business and Financial Management Support (BFMS)
|
July 15, 2004
|
Electromagnetic Spectrum Engineering Services (ESES)
|
August 5, 2005
|
Engineering, Technical and Programmatic Support Services Electronic Warfare (EW) – Surface and Airborne (“Crane”)
|
March 24, 2007
|
Advisory and Assistance Services (A&AS) for United States Strategic Command (USSTRATCOM) Systems and Mission Support (“USAMS II”)
|
March 9, 2009
|
Commander, Navy Installations Command (CNIC)
|
August 24, 2009
|
JTF-GN Cyber Defense, Analysis, Operations and Strategic Planning Support (JTF-GN)
|
October 2, 2009
|
JIEDDO Omnibus (Omnibus)
|
April 1, 2010
|
Solutions for Intelligence Analysis, US Forces to Afghanistan
|
September 15, 2010
|
Space Communications Network Services (SCNS)
|
April 11, 2011
|
Enterprise Communications Support Systems (ECSS)
|
September 30, 2011
|
US INSCOM OMNIB III Program
|
November 12, 2011
|
Wideband Satellite Operations and Technical Support (WSOTS)
|
February 1, 2012
|
JIEDDO Operations Support Services
|
March 26, 2012
|
FAA Command and Control Communications Program Support
|
April 2, 2012
|
Global Combat Support System – Marine Corps Sustainment Training (GCSS MC Sustainment Training)
|
October 15, 2013
|
Deep Space Network (DSN)
|
January 1, 2014
|
Service
|
Nonforfeitable Percentage
|
|
less than 1 year
|
0
|
%
|
1 but less than 2 years
|
20
|
%
|
2 but less than 3 years
|
40
|
%
|
3 but less than 4 years
|
60
|
%
|
4 but less than 5 years
|
80
|
%
|
5 or more years
|
100
|
%
|
Service
|
Nonforfeitable Percentage
|
|
less than 1 year
|
0
|
%
|
1 but less than 2 years
|
20
|
%
|
2 but less than 3 years
|
40
|
%
|
3 but less than 4 years
|
60
|
%
|
4 but less than 5 years
|
80
|
%
|
5 or more years
|
100
|
%
|
Service
|
Nonforfeitable Percentage
|
|
less than 1 year
|
0
|
%
|
1 but less than 2 years
|
20
|
%
|
2 but less than 3 years
|
40
|
%
|
3 but less than 4 years
|
60
|
%
|
4 but less than 5 years
|
80
|
%
|
5 or more years
|
100
|
%
|
Service
|
Nonforfeitable Percentage
|
|
less than 1 year
|
0
|
%
|
1 but less than 2 years
|
20
|
%
|
2 but less than 3 years
|
40
|
%
|
3 but less than 4 years
|
60
|
%
|
4 but less than 5 years
|
80
|
%
|
5 or more years
|
100
|
%
|
Benefit Group
|
Description
|
Matching Contributions
|
Company Base Contributions
|
Deep Space Network Contract
|
|
|
|
1. DSNUNION
|
1. Union EEs
|
1. 50% to 10%
|
1. $220 per month
|
Space Communications Network Services (SCNS)
|
|
|
|
1. SCNS UN
|
1. Union EEs
|
1. No Match
|
1. No Base
|
Bargaining Unit/Specified Group
|
Maximum Deferral Percentage
|
Match Eligibility
|
MATCH FORMULA
|
Match on Catch-Up
|
Other Employer Contributions
|
Plan Expenses
|
Cincinnati Electronics Business Unit (PA2107)
Cincinnati Electronics & International Brotherhood of Electrical Workers (IBEW 648) – Local Union 648 (205)
|
Base Plan
|
Base Plan
|
100% of 6%
|
No
|
No
|
Base Plan
|
Combat Propulsion Systems Business Unit (2084)
Combat Propulsion Systems & International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) and its Local 113 (232)
Aerospace and Agricultural Implement Workers of America (UAW) and its Local 1279 (CBU) and (TBU) (233)
|
25% (pre-tax, after-tax and designated Roth combined)
|
Immediate
(No Year of Service requirement)
|
100% of 5%
|
Yes, to be made on a Plan Year basis, provided that the Participant defers an amount during the Plan Year equal to the section 402(g) limit
|
No
|
Employer pays record-keeping and in-service withdrawal expenses
|
Communication Systems East Business Unit (PA2005)
Communication Systems East & International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers – Communications Workers of America, (AFL-CIO), Local 103 (173)
Communication Systems East & International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers – Communications Workers of America, (AFL-CIO), Local 110 (265)
Communication Systems East & International Federation of Professional & Technical Engineers, AFL-CIO, Local 241 (172)
|
Base Plan
|
Base Plan
|
100% of 6%
|
No
|
No
|
Base Plan
|
Communication Systems East Business Unit (PA2005)
Communication Systems East & Association of Scientists and Professional Engineering Personnel (ASPEP)
|
Base Plan
|
Base Plan
|
Base Plan
|
No
|
No
|
Base Plan
|
Doss Business Unit (PA2668)
International Association of Machinists and Aerospace Workers, AFL-CIO, and its Local Lodge No. 47 (IAM 47) (432)
Service Contract Act employees
|
Base Plan
|
No Match
|
No Match
|
No
|
No
|
Base Plan
|
Electron Devices Business Unit (PA2169)
Electron Devices & United Brotherhood of Carpenters and Joiners of America, Local 721 (105)
Electron Devices & International Brotherhood of Electrical Workers, Local 2295 (IBEW 2295) (160)
|
Base Plan
|
Base Plan
|
100% of 6%
|
No
|
No
|
Base Plan
|
KEO Business Unit (2399)
KEO & Hassett Lodge No. 1420 of District 15 of the International Association of Machinists and Aerospace Workers (IAMAW) (244)
|
25% (pre-tax, after-tax and designated Roth combined)
|
Immediate
(No Year of Service requirement)
|
50% of 6%
|
Yes, to be made on a Plan Year basis, provided that the Participant defers an amount during the Plan Year equal to the section 402(g) limit
|
No
|
Employer pays record-keeping and in-service withdrawal expenses
|
Link Simulation & Training Business Unit (2144)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Union 2949, Tuscon ANG, AZ (IAMHW 2949), F-16 Program (134)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Lodge 519, Luke AFB, AZ (IAMHW 519), F-16 TS Program (143)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Lodge 2003, District Lodge 75, Ft. Rucker, AL (IAMHW 2003), FSXXI Program (144)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Lodge 771, Creech AFB, NV (IAMHW 771), PMATS Program (149)
|
25% (pre-tax, after-tax and designated Roth combined)
|
Immediate
(No Year of Service requirement)
|
100% of 4%
|
No
|
No
|
Base Plan
|
Link Simulation & Training Business Unit (2144)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Lodge 850, District Lodge 171, Tinker AFB, OK (IAMAW 850), E-6 ELDES Program (122)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, District Lodge 171, Local Lodge 850, Tinker AFB, OK (IAMAW 850), E-3 Program (145)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, District Lodge 131, Local Lodge 1034, Warner Robins AFB, GA (IAMHW 1034), J-STARS Program (148)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Lodge 711, Nellis AFB NV (IAMHW 711), F-16 MTC (159)
Link Simulation & Training & International Association of Machinists and Aerospace Workers Local, Lodge 778, Whiteman AFB, MO (IAMHW 778), B-2 Program (140)
|
25% (pre-tax, after-tax and designated Roth combined)
|
Immediate
(No Year of Service requirement)
|
100% of 5%
|
No
|
No
|
Base Plan
|
Link Simulation & Training Business Unit (2144)
Service Contract Act employees
|
Base Plan
|
No Match
|
No Match
|
No
|
No
|
Base Plan
|
Link Simulation & Training Business Unit (2144)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Lodge 568, Hill AFB, UT (IAMHW 568), F-16 TS Program (147)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Lodge 2003, District Lodge 75, Ft Rucker, AL (IAMHW 2003), ATMP Program (454)
Link Simulation & Training & International Association of Machinists and Aerospace Workers, Local Lodge 2003, District Lodge 75, Ft Rucker, AL (IAMHW 2003), ATMP AVCATT Program (451)
|
Base Plan
|
Base Plan
|
100% of 5%
|
No
|
No
|
Base Plan
|
L3 Unidyne Inc. Business Unit (PA2221)
Unidyne & International Association of Machinists and Aerospace Workers, District Lodge 947 and its Affiliated Local Lodge 389 (IAM 389) (273 & 275)
Unidyne & International Brotherhood of Electrical Workers, Local Union 569 (IBEW 569) (274)
|
Base Plan
|
No Match
|
No Match
|
No
|
No
|
Base Plan
|
Mission Integration Division Business Unit (2012)
Mission Integration Division—Greenville, International Union, United Automobile Aerospace and Agricultural Implement Workers of America (UAW) and its Local 967) (200)
|
Base Plan
|
Base Plan
|
100% of 5% if participant in Company pension plan; otherwise, 100% of 6%
|
No
|
No
|
Base Plan
|
Ocean Systems Business Unit (PA2132)
Ocean Systems & International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) and its Local 179 (272)
|
Base Plan
|
Base Plan
|
100% of 6%
|
No
|
No
|
Base Plan
|
Space & Navigation Business Unit (PA 2129)
Space & Navigation & International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) (204)
|
Base Plan
|
Base Plan
|
100% of 6%
|
No
|
No
|
Base Plan
|
SPD Electrical Systems Business Unit (2181)
SPD Electrical Systems & United Automobile Aerospace and Agricultural Implement Workers of America (UAW) and its Local 1612, Amalgamated (203)
|
Base Plan
|
Base Plan
|
100% of 6%
|
No
|
Defined Contribution Retirement Plan (DCRP) contribution of 2% of Compensation each payroll period if hired prior to June 1, 2015 and have remained continuously employed by SPD since June 1, 2015. The DCRP contribution (as adjusted for earnings and losses) is fully vested.
|
Base Plan
|
Telemetry & RF Products Business Unit (PA2063)
Telemetry RF Products Bristol & IUE/CWA the International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers, Local 123 AFL-CIO (285)
|
Base Plan
|
Base Plan
|
100% of 6%
|
No
|
No
|
Base Plan
|
ARTICLE I
|
– TITLE, PURPOSE AND EFFECTIVE DATE
|
ARTICLE II
|
– DEFINITIONS
|
ARTICLE III
|
– ELIGIBILITY AND PARTICIPATION
|
ARTICLE IV
|
– ALLOCATIONS
|
ARTICLE V
|
– ACCOUNTS AND INVESTMENT
|
ARTICLE VI
|
– VESTING AND DISTRIBUTION
|
(1)
|
a single sum;
|
(2)
|
installments over a three-year period;
|
(3)
|
installments over a five-year period;
|
(4)
|
installments over a seven-year period;
|
(5)
|
installments over a ten-year period; or
|
(6)
|
installments over a fifteen-year period.
|
ARTICLE VII
|
– ADMINISTRATION
|
ARTICLE VIII
|
– GENERAL PROVISIONS
|
|
|
L3HARRIS TECHNOLOGIES, INC.
|
|
EMPLOYEE BENEFITS COMMITTEE
|
|
|
|
By:
|
|
Title:
|
|
1.
|
Vesting. All Grandfathered Balances are fully vested and nonforfeitable.
|
2.
|
Time of Distribution. Subject to paragraph 4 of this Appendix A, a Participant shall commence distribution of his or her Grandfathered Balance in January of the calendar year immediately following the later of (i) the calendar year during which the Participant attains age 55 and (ii) the calendar year during which the Participant terminates employment with the Corporation and its Affiliates. The special rule for Specified Employees set forth in Section 6.2(b) of the Plan shall not apply to the Grandfathered Balance.
|
3.
|
Form of Distribution
|
A.
|
Timing of Election. A Participant may elect the form of distribution of his or her Grandfathered Balance by filing an election form with the Committee before October 1st of the calendar year in which such Participant terminates employment with the Corporation and its Affiliates, except that if a Participant terminates employment with the Corporation and its Affiliates on or after October 1st of a calendar year in connection with a Reduction in Force, then the Participant must elect the form of distribution before the end of such calendar year. A Participant may change a prior election regarding the form of distribution of his or her Grandfathered Balance by filing a new election form with the Committee at the time and in the manner permitted by the Committee, provided that such form is received by the Committee no later than a date determined by the Committee within the calendar year prior to the year in which such distribution was to be paid or commence pursuant to the Participant's prior election.
|
B.
|
Installment Period. A Participant may elect to receive distribution of his or her Grandfathered Balance in any of the forms set forth in Section 6.3; provided, however, that the Participant may not elect such distribution in the form of installments over a three year period.
|
4.
|
De Minimis Amounts. Notwithstanding any provision of the Plan to the contrary, if a Participant's Grandfathered Balance is less than $25,000 at the time of the Participant’s termination of employment, then the Participant’s Grandfathered Balance shall be distributed in a single sum as soon as reasonably practicable thereafter. If the Participant’s Grandfathered Balance is greater than or equal to $25,000 at the time of the Participant’s termination of employment, but is less than $25,000 at the time that the Participant later becomes entitled to a distribution, then the Participant’s Grandfathered Balance shall be distributed in a single sum as soon as reasonably practicable after the Participant becomes entitled to a distribution.
|
5.
|
Reemployment. Installment payments of a Participant’s Grandfathered Balance shall cease upon such Participant's reemployment by the Corporation or an Affiliate. The remaining Grandfathered Balance shall be distributed to the Participant upon his or her subsequent termination of employment with the Corporation and its Affiliates in accordance with the Participant's most recent distribution election applicable to the Grandfathered Balance.
|
a.
|
Death. If a Participant shall die before his or her entire Grandfathered Balance is distributed, then such remaining balance shall be paid at the time and in the manner such balance would have been paid to the Participant, to the Beneficiary or Beneficiaries designated by the Participant in the manner prescribed by the Committee. Any Beneficiary designation made by a Participant under the Prior Harris SERP shall remain in full force and effect and govern distribution of the Participant’s entire Plan account unless revoked or changed by the Participant by filing a new Beneficiary designation with the Committee during his or her lifetime.
|
6.
|
Change in Control. Notwithstanding any provision to the contrary in the Plan, in the event of a Change in Control (irrespective of whether the Change in Control qualifies as a “change in control event” within the meaning of Treasury Regulation §1.409A-3(i)(5)), a Participant's Grandfathered Balance either (i) shall be distributed to such Participant in a single sum as soon as practicable or (ii) shall be transferred to (or retained in) a grantor trust established by the Corporation and distributed at the same time and in the same form as the Participant’s Grandfathered Balance would have been distributed if a Change in Control had not occurred, as determined by the Change in Control election made by the Participant. In the case of a Change in Control that occurs on or after January 1, 2020, the grantor trust described in this paragraph 7 must be irrevocable as of the date of the Change in Control.
|
1.
|
Vesting. The portion of a Participant’s L3 SSP II Balance attributable to his or her Deferral Account (as defined under the L3 SSP II immediately prior to its merger into this Plan), including any related earnings, shall be 100% vested and nonforfeitable at all times. The portion of a Participant’s L3 SSP II Balance attributable to his or her Matching Account or Supplemental Account (in each case as defined under the L3 SSP II immediately prior to its merger into this Plan), including any related earnings, shall become vested at the same time and to the same extent as the Participant’s matching contributions under the Retirement Plan become vested.
|
2.
|
Time of Distribution. A Participant shall commence distribution of his or her L3 SSP II Balance as soon as practicable during the month of January or the month of July (whichever is earlier) next following the six month anniversary of the date on which the Participant Separates from Service. In the case distribution is to be made in installments, each subsequent installment shall be paid on the next succeeding anniversary date of the first installment payment until all installment payments have been made.
|
3.
|
Form of Distribution. Subject to paragraph 4 of this Appendix B, a Participant may elect to receive distribution of his or her vested L3 SSP II Balance in any one of the following forms:
|
(1)
|
a single sum;
|
(2)
|
installments over a five-year period;
|
(3)
|
installments over a ten-year period;
|
(4)
|
installments over a fifteen-year period; or
|
(5)
|
installments over a twenty year period.
|
4.
|
De Minimis Amounts. Notwithstanding any provision of the Plan to the contrary, if a Participant's vested L3 SSP II Balance does not exceed $50,000 at the time the Participant Separates from Service, then the Participant’s L3 SSP II Balance shall be distributed in a single sum as soon as practicable during the month of January or the month of July (whichever is earlier) next following the six month anniversary of the date on which the Participant Separates from Service.
|
a.
|
Beneficiary. Any Beneficiary designation made by a Participant under the L3 SSP II shall remain in full force and effect and govern distribution of the Participant’s entire Plan account unless revoked or changed by the Participant by filing a new Beneficiary designation with the Committee during his or her lifetime.
|
5.
|
L3 Change in Control. Notwithstanding any provision to the contrary in the Plan, in the event of an L3 Change in Control that occurs on or after January 1, 2020, a Participant's L3 SSP II Balance shall be fully vested and shall be distributed in one lump-sum payment within 60 days following the date of the L3 Change in Control. For purposes of this Appendix B, an “L3 Change in Control” shall mean a “Change in Control” as defined under the L3 SSP II immediately prior to its merger into this Plan. Section 6.7 of the Plan shall not apply to the L3 SSP II Balance, except as related to the full vesting of the L3 SSP II Balance in the event of a Change of Control that occurs on or after January 1, 2020.
|
|
|
|
Name of Subsidiary
|
|
State or Other
Jurisdiction of Incorporation
|
1231670 Ontario Inc.
|
|
Canada
|
AeroElite Limited
|
|
United Kingdom
|
Aerosim Academy, Inc.
|
|
Florida
|
Aerosim Bangkok Company Limited
|
|
Thailand
|
Aerosim Technologies, Inc.
|
|
Minnesota
|
Aerosim Thai Company Limited
|
|
Thailand
|
Airline Placement Limited
|
|
United Kingdom
|
Airline Recruitment Limited
|
|
United Kingdom
|
Applied Defense Solutions, Inc.
|
|
Delaware
|
Applied Kilovolts Limited
|
|
United Kingdom
|
Asian Aviation Training Centre Ltd.
|
|
Thailand
|
ASV Global, L.L.C.
|
|
Louisiana
|
Autonomous Surface Vehicles Limited
|
|
United Kingdom
|
Autonomous Surface Vehicles, LLC
|
|
Louisiana
|
Aviation Communication & Surveillance Systems, LLC
|
|
Delaware
|
Aydin Yazilim ve Elektronik Sanayi A.S.
|
|
Turkey
|
Azimuth Security Pty Ltd
|
|
Australia
|
Azimuth Security Trust
|
|
Australia
|
Azimuth Security, LLC
|
|
Florida
|
Beijing MAPPS-SERI Technology Company Ltd.
|
|
China
|
C.K. Industrial Engineers Limited
|
|
United Kingdom
|
Calzoni S.r.l.
|
|
Italy
|
Combat Advanced Propulsion, LLC
|
|
Delaware
|
CR MSA LLC
|
|
Delaware
|
CTC Aviation Group Limited
|
|
United Kingdom
|
CTC Aviation Holdings Limited
|
|
United Kingdom
|
CTC Aviation International Limited
|
|
United Kingdom
|
CTC Aviation Services Limited
|
|
United Kingdom
|
CTC Aviation Training (UK) Limited.
|
|
United Kingdom
|
Defence Investments Limited
|
|
United Kingdom
|
DMRAC-Aviation Corporation - SGPS, Unipessoal LDA
|
|
Portugal
|
EAA – Escola de Aviação Aerocondor, S.A.
|
|
Portugal
|
Eagle Technology, LLC
|
|
Delaware
|
EDO (UK) Ltd.
|
|
United Kingdom
|
EDO MBM Technology Ltd.
|
|
United Kingdom
|
EDO Western Corporation
|
|
Utah
|
Electrodynamics, Inc.
|
|
Arizona
|
EMC S.r.l.
|
|
Italy
|
ESSCO Collins Limited
|
|
Ireland
|
Exelis Arctic Services
|
|
Delaware
|
Exelis Australia Holdings Pty Ltd
|
|
Australia
|
Exelis Australia Pty Ltd
|
|
Australia
|
Exelis Holdings, Inc.
|
|
Delaware
|
Exmac Automation Limited
|
|
United Kingdom
|
FAST Holdings Limited
|
|
United Kingdom
|
Name of Subsidiary
|
|
State or Other
Jurisdiction of Incorporation
|
FAST Training Services Limited
|
|
United Kingdom
|
Felec Services, Inc.
|
|
Delaware
|
Flight Data Services Limited
|
|
United Kingdom
|
Flight Training Acquisitions LLC
|
|
Delaware
|
ForceX, Inc
|
|
Tennessee
|
G Air Advanced Training, Lda
|
|
Portugal
|
G Air II Maintenance, Lda
|
|
Portugal
|
G4U – Gestão de Activos Aeronáuticos, Sociedade, Lda
|
|
Portugal
|
Hamilton BioVentures, L.P.
|
|
Delaware
|
Harris Asia Pacific Sdn. Bhd.
|
|
Malaysia
|
Harris Atlas Systems LLC*
|
|
UAE
|
Harris C4i Pty Ltd
|
|
Australia
|
Harris Canada Systems, Inc.
|
|
Canada
|
Harris Cayman Ltd.
|
|
Cayman Islands
|
Harris Communications (Australia) Pty. Ltd.
|
|
Australia
|
Harris Communications (Spain), S. L.
|
|
Spain
|
Harris Communications FZCO
|
|
UAE
|
Harris Communications GmbH
|
|
Germany
|
Harris Communications Limited
|
|
Hong Kong
|
Harris Communications Malaysia Sdn. Bhd.
|
|
Malaysia
|
Harris Communications MH Spain, S. L.
|
|
Spain
|
Harris Communications Pakistan (Private) Limited
|
|
Pakistan
|
Harris Communications Systems India Private Limited
|
|
India
|
Harris Comunicações e Participações do Brasil Ltda.
|
|
Brazil
|
Harris Defence Ltd.
|
|
United Kingdom
|
Harris Denmark ApS
|
|
Denmark
|
Harris Denmark Holding ApS
|
|
Denmark
|
Harris Geospatial Solutions B.V.
|
|
Netherlands
|
Harris Geospatial Solutions France SARL
|
|
France
|
Harris Geospatial Solutions GmbH
|
|
Germany
|
Harris Geospatial Solutions Italia SRL
|
|
Italy
|
Harris Geospatial Solutions KK
|
|
Japan
|
Harris Geospatial Solutions UK Limited
|
|
United Kingdom
|
Harris Geospatial Solutions, Inc.*
|
|
Colorado
|
Harris Global Communications, Inc.
|
|
New York
|
Harris Holdco LLC
|
|
Delaware
|
Harris International Chile Limitada
|
|
Chile
|
Harris International Holdings, LLC
|
|
Delaware
|
Harris International Saudi Communications
|
|
Saudi Arabia
|
Harris International Venezuela, C.A.
|
|
Venezuela
|
Harris International, Inc.
|
|
Delaware
|
Harris Luxembourg Sarl
|
|
Luxembourg
|
Harris NV
|
|
Belgium
|
Harris Orthogon GmbH
|
|
Germany
|
Harris Pension Management Limited
|
|
United Kingdom
|
Harris Solid-State (Malaysia) Sdn. Bhd.
|
|
Malaysia
|
Harris Systems Limited
|
|
United Kingdom
|
Honeywell TCAS Inc.
|
|
Delaware
|
Interstate Electronics Corporation
|
|
California
|
Jariet Technologies, Inc.
|
|
Delaware
|
L-3 Afghanistan, LLC
|
|
Delaware
|
Name of Subsidiary
|
|
State or Other
Jurisdiction of Incorporation
|
L3 Applied Technologies, Inc.
|
|
Delaware
|
L3 Australia Group Pty Ltd
|
|
Australia
|
L3 Aviation Products, Inc.
|
|
Delaware
|
L-3 Brasil Importação, Exportação e Comércio Ltda.
|
|
Brazil
|
L-3 Centaur, LLC
|
|
Delaware
|
L3 Cincinnati Electronics Corporation
|
|
Ohio
|
L3 Commercial Training Solutions Limited
|
|
United Kingdom
|
L-3 Communications AIS GP Corporation
|
|
Delaware
|
L-3 Communications ASA Limited
|
|
United Kingdom
|
L-3 Communications Australia Pty Ltd
|
|
Australia
|
L-3 Communications Flight Capital LLC
|
|
Delaware
|
L-3 Communications Holding GmbH
|
|
Germany
|
L-3 Communications Hong Kong Limited
|
|
Hong Kong
|
L-3 Communications India Private Limited
|
|
India
|
L-3 Communications Integrated Systems L.P.
|
|
Delaware
|
L-3 Communications Investments Inc.
|
|
Delaware
|
L-3 Communications Korea Co., Ltd.
|
|
Korea
|
L-3 Communications Limited
|
|
United Kingdom
|
L-3 Communications Link Simulation and Training UK (Overseas) Limited
|
|
United Kingdom
|
L-3 Communications Singapore Pte. Ltd.
|
|
Singapore
|
L-3 Communications U.K. Ltd.
|
|
United Kingdom
|
L3 CTS Airline Academy (NZ) Limited
|
|
New Zealand
|
L3 CTS Airline and Academy Training Limited
|
|
United Kingdom
|
L-3 Domestic Holdings, Inc.
|
|
Delaware
|
L3 Doss Aviation, Inc.
|
|
Texas
|
L3 Electron Devices, Inc.
|
|
Delaware
|
L3 ESSCO, Inc.
|
|
Delaware
|
L3 Foreign Holdings, Inc.
|
|
Delaware
|
L3 Fuzing and Ordnance Systems, Inc.
|
|
Delaware
|
L-3 Global Holding UK Ltd.
|
|
United Kingdom
|
L3 International Australia Pty Ltd
|
|
Australia
|
L-3 International UK Ltd
|
|
United Kingdom
|
L3 Investments UK Holdings Ltd
|
|
United Kingdom
|
L3 Investments, LLC
|
|
Delaware
|
L3 Kenya LTD
|
|
Kenya
|
L3 Kigre, Inc.
|
|
Ohio
|
L3 Latitude, LLC
|
|
Arizona
|
L3 Magnet-Motor GmbH
|
|
Germany
|
L3 MAPPS INC.
|
|
Canada
|
L3 MAPPS Limited
|
|
United Kingdom
|
L3 MAPPS Sdn. Bhd.
|
|
Malaysia
|
L3 Micreo Pty Limited
|
|
Australia
|
L3 Oceania Pty Limited
|
|
Australia
|
L3 Open Water Power, Inc.
|
|
Delaware
|
L-3 Saudi Arabia LLC
|
|
Saudi Arabia
|
L3 Security and Detection Systems, Inc.
|
|
Delaware
|
L-3 Security Equipment Trading (Beijing) Co., Ltd.
|
|
China
|
L-3 Societá Srl.
|
|
Italy
|
L3 Technologies Australia Group Pty Ltd
|
|
Australia
|
L3 Technologies Canada Group Inc.
|
|
Canada
|
L3 Technologies Canada Inc.
|
|
Canada
|
L3 Technologies Investments Limited
|
|
Cyprus
|
Name of Subsidiary
|
|
State or Other
Jurisdiction of Incorporation
|
L3 Technologies MAS Inc.
|
|
Canada
|
L3 Technologies UK Group Ltd
|
|
United Kingdom
|
L3 Technologies, Inc.
|
|
Delaware
|
L-3 Technology & Services UK Ltd
|
|
United Kingdom
|
L3 Unidyne, Inc.
|
|
Delaware
|
L3 Unmanned Systems, Inc.
|
|
Texas
|
L3 Westwood Corporation
|
|
Nevada
|
Linchpin Labs Inc.
|
|
Canada
|
Linchpin Labs Inc.
|
|
Delaware
|
Linchpin Labs Limited
|
|
United Kingdom
|
Linchpin Labs Limited
|
|
New Zealand
|
Linchpin Labs Pty Limited
|
|
Australia
|
L-Tres Comunicaciones Costa Rica, S.A.
|
|
Costa Rica
|
MacDonald Humfrey (Automation) India Private Limited*
|
|
India
|
MacDonald Humfrey (Automation) Limited
|
|
United Kingdom
|
MacDonald Humfrey (Automation) SEA PTE. Ltd.
|
|
Singapore
|
MacDonald Humfrey Automation Middle East Control Systems LLC*
|
|
UAE
|
Manatee Investment, LLC
|
|
Delaware
|
Manu Kai, LLC*
|
|
Hawaii
|
Melbourne Leasing, LLC
|
|
Florida
|
Mustang Technology Group, L.P.
|
|
Texas
|
Narda Safety Test Solutions GmbH
|
|
Germany
|
Narda Safety Test Solutions S.r.l.
|
|
Italy
|
NexGen Communications, LLC
|
|
Virginia
|
Peak Nano Optics, LLC
|
|
Delaware
|
Power Paragon, Inc.
|
|
Delaware
|
Riptide Autonomous Solutions LLC
|
|
Delaware
|
S.C. Harris Assured Communications SRL
|
|
Romania
|
SARL Assured Communications
|
|
Algeria
|
Sovcan Star Satellite Communications Inc.
|
|
Canada
|
SPD Electrical Systems, Inc.
|
|
Delaware
|
Sunshine General Services, LLC
|
|
Iraq
|
TRL Electronics Limited
|
|
United Kingdom
|
TRL Technology Limited
|
|
United Kingdom
|
Wescam Inc.
|
|
Canada
|
Wescam USA, Inc.
|
|
Florida
|
Form S-3
|
|
No. 333-233827
|
|
L3Harris Technologies, Inc. Debt and Equity Securities
|
Form S-4/A
|
|
No. 333-228829
|
|
Harris Corporation Shares of Common Stock
|
Form S-8
|
|
No. 333-232482
|
|
L3 Technologies, Inc. Amended and Restated 2008 Long Term Performance Plan; L3 Technologies, Inc. Master Savings Plan; and Aviation Communications & Surveillance Systems 401(k) Plan
|
Form S-8
|
|
No. 333-222821
|
|
Harris Corporation Retirement Plan
|
Form S-8
|
|
No. 333-192735
|
|
Harris Corporation Retirement Plan
|
Form S-8
|
|
No. 333-163647
|
|
Harris Corporation Retirement Plan
|
Form S-8
|
|
No. 333-75114
|
|
Harris Corporation Retirement Plan
|
Form S-8
|
|
No. 333-130124
|
|
Harris Corporation 2005 Equity Incentive Plan
|
Form S-8
|
|
No. 333-207774
|
|
Harris Corporation 2015 Equity Incentive Plan
|
/s/ WILLIAM M. BROWN
|
|
/s/ THOMAS A. DATTILO
|
William M. Brown
|
|
Thomas A. Dattilo
|
Chairman and Chief Executive Officer
|
|
Director
|
|
|
|
/s/ CHRISTOPHER E. KUBASIK
|
|
/s/ ROGER B. FRADIN
|
Christopher E. Kubasik
|
|
Roger B. Fradin
|
Vice Chairman, President and Chief Operating Officer
|
|
Director
|
|
|
|
/s/ JESUS MALAVE JR.
|
|
/s/ LEWIS HAY III
|
Jesus Malave Jr.
|
|
Lewis Hay III
|
Senior Vice President and Chief Financial Officer
|
|
Director
|
|
|
|
/s/ TODD A. TAYLOR
|
|
/s/ LEWIS KRAMER
|
Todd A. Taylor
|
|
Lewis Kramer
|
Vice President, Principal Accounting Officer
|
|
Director
|
|
|
|
/s/ SALLIE B. BAILEY
|
|
/s/ RITA S. LANE
|
Sallie B. Bailey
|
|
Rita S. Lane
|
Director
|
|
Director
|
|
|
|
/s/ PETER W. CHIARELLI
|
|
/s/ ROBERT B. MILLARD
|
Peter W. Chiarelli
|
|
Robert B. Millard
|
Director
|
|
Director
|
|
|
|
/s/ THOMAS A. CORCORAN
|
|
/s/ LLOYD W. NEWTON
|
Thomas A. Corcoran
|
|
Lloyd W. Newton
|
Director
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this Transition Report on Form 10-KT for the fiscal transition period ended January 3, 2020 of L3Harris Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 3, 2020
|
|
|
|
/s/ William M. Brown
|
||
|
|
|
|
Name:
|
|
William M. Brown
|
|
|
|
|
Title:
|
|
Chairman and Chief Executive Officer
|
1.
|
I have reviewed this Transition Report on Form 10-KT for the fiscal transition period ended January 3, 2020 of L3Harris Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 3, 2020
|
|
|
|
/s/ Jesus Malave Jr.
|
||
|
|
|
|
Name:
|
|
Jesus Malave Jr.
|
|
|
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of L3Harris as of the dates and for the periods expressed in the Report.
|
Date: March 3, 2020
|
|
|
|
/s/ William M. Brown
|
||
|
|
|
|
Name:
|
|
William M. Brown
|
|
|
|
|
Title:
|
|
Chairman and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of L3Harris as of the dates and for the periods expressed in the Report.
|
Date: March 3, 2020
|
|
|
|
/s/ Jesus Malave Jr.
|
||
|
|
|
|
Name:
|
|
Jesus Malave Jr.
|
|
|
|
|
Title:
|
|
Senior Vice President and Chief Financial Officer
|