Harris Corporation Reports Fiscal 2017 Third Quarter Results
|
Table 1
|
HARRIS CORPORATION
|
FY '17 Third Quarter Summary
|
CONDENSED CONSOLIDATED STATEMENT OF INCOME
|
(Unaudited)
|
|
|
|
|
|
Quarter Ended
|
|
|
Three Quarters Ended
|
|
|
|
|
March 31, 2017
|
|
|
April 1, 2016 (A)
|
|
|
March 31, 2017
|
|
|
April 1, 2016 (A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except per share amounts)
|
Revenue from product sales and services
|
|
|
|
$
|
1,489
|
|
|
|
$
|
1,550
|
|
|
|
$
|
4,358
|
|
|
|
$
|
4,459
|
|
Cost of product sales and services
|
|
|
|
(964
|
)
|
|
|
(1,009
|
)
|
|
|
(2,792
|
)
|
|
|
(2,895
|
)
|
Engineering, selling and administrative expenses
|
|
|
|
(250
|
)
|
|
|
(273
|
)
|
|
|
(768
|
)
|
|
|
(759
|
)
|
Non-operating income (loss)
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
—
|
|
Interest income
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
Interest expense
|
|
|
|
(42
|
)
|
|
|
(46
|
)
|
|
|
(130
|
)
|
|
|
(139
|
)
|
Income from continuing operations before income taxes
|
|
|
|
233
|
|
|
|
221
|
|
|
|
671
|
|
|
|
667
|
|
Income taxes
|
|
|
|
(69
|
)
|
|
|
(62
|
)
|
|
|
(199
|
)
|
|
|
(198
|
)
|
Income from continuing operations
|
|
|
|
164
|
|
|
|
159
|
|
|
|
472
|
|
|
|
469
|
|
Discontinued operations, net of income taxes
|
|
|
|
(79
|
)
|
|
|
9
|
|
|
|
(50
|
)
|
|
|
(305
|
)
|
Net income
|
|
|
|
$
|
85
|
|
|
|
$
|
168
|
|
|
|
$
|
422
|
|
|
|
$
|
164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
$
|
1.33
|
|
|
|
$
|
1.27
|
|
|
|
$
|
3.82
|
|
|
|
$
|
3.78
|
|
Discontinued operations
|
|
|
|
(0.63
|
)
|
|
|
0.08
|
|
|
|
(0.41
|
)
|
|
|
(2.46
|
)
|
|
|
|
|
$
|
0.70
|
|
|
|
$
|
1.35
|
|
|
|
$
|
3.41
|
|
|
|
$
|
1.32
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
$
|
1.31
|
|
|
|
$
|
1.26
|
|
|
|
$
|
3.77
|
|
|
|
$
|
3.74
|
|
Discontinued operations
|
|
|
|
(0.62
|
)
|
|
|
0.08
|
|
|
|
(0.40
|
)
|
|
|
(2.43
|
)
|
|
|
|
|
$
|
0.69
|
|
|
|
$
|
1.34
|
|
|
|
$
|
3.37
|
|
|
|
$
|
1.31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per common share
|
|
|
|
$
|
0.53
|
|
|
|
$
|
0.50
|
|
|
|
$
|
1.59
|
|
|
|
$
|
1.50
|
|
Basic weighted average common shares outstanding
|
|
|
|
122.6
|
|
|
|
124.0
|
|
|
|
123.3
|
|
|
|
123.7
|
|
Diluted weighted average common shares outstanding
|
|
|
|
124.5
|
|
|
|
125.1
|
|
|
|
125.0
|
|
|
|
124.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Certain amounts reclassified to conform with current period
presentation of Harris CapRock Communications and government IT
services businesses as discontinued operations
|
|
|
Table 2
|
HARRIS CORPORATION
|
FY '17 Third Quarter Summary
|
BUSINESS SEGMENT INFORMATION
|
(Unaudited)
|
|
|
|
|
|
Quarter Ended
|
|
|
Three Quarters Ended
|
|
|
|
|
March 31,
2017
|
|
|
April 1,
2016
|
|
|
March 31,
2017
|
|
|
April 1,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communication Systems
|
|
|
|
$
|
461
|
|
|
|
$
|
485
|
|
|
|
$
|
1,304
|
|
|
|
$
|
1,428
|
|
Space and Intelligence Systems
|
|
|
|
475
|
|
|
|
489
|
|
|
|
1,396
|
|
|
|
1,370
|
|
Electronic Systems
|
|
|
|
553
|
|
|
|
575
|
|
|
|
1,660
|
|
|
|
1,662
|
|
Corporate eliminations, net
|
|
|
|
—
|
|
|
|
1
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
|
|
|
|
$
|
1,489
|
|
|
|
$
|
1,550
|
|
|
|
$
|
4,358
|
|
|
|
$
|
4,459
|
|
Income From Continuing Operations Before Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Operating Income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Communication Systems
|
|
|
|
$
|
140
|
|
|
|
$
|
151
|
|
|
|
$
|
379
|
|
|
|
$
|
405
|
|
Space and Intelligence Systems
|
|
|
|
76
|
|
|
|
75
|
|
|
|
231
|
|
|
|
208
|
|
Electronic Systems
|
|
|
|
115
|
|
|
|
111
|
|
|
|
360
|
|
|
|
311
|
|
Unallocated corporate expense
|
|
|
|
(55
|
)
|
|
|
(68
|
)
|
|
|
(169
|
)
|
|
|
(116
|
)
|
Corporate eliminations
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
(3
|
)
|
Non-operating income (loss)
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
2
|
|
|
|
—
|
|
Net interest expense
|
|
|
|
(42
|
)
|
|
|
(46
|
)
|
|
|
(129
|
)
|
|
|
(138
|
)
|
|
|
|
|
$
|
233
|
|
|
|
$
|
221
|
|
|
|
$
|
671
|
|
|
|
$
|
667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Certain amounts reclassified to conform with current period
presentation of Harris CapRock Communications and government IT
services businesses as discontinued operations
|
|
|
Table 3
|
HARRIS CORPORATION
|
FY '17 Third Quarter Summary
|
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
Three Quarters Ended
|
|
|
|
|
March 31, 2017
|
|
|
April 1, 2016 (A)
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
Operating Activities
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
422
|
|
|
|
$
|
164
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
140
|
|
|
|
163
|
|
Amortization of intangible assets from Exelis Inc. acquisition
|
|
|
|
99
|
|
|
|
99
|
|
Share-based compensation
|
|
|
|
33
|
|
|
|
29
|
|
Gain on sale of CapRock commercial business
|
|
|
|
(23
|
)
|
|
|
—
|
|
Qualified pension plan contributions
|
|
|
|
(143
|
)
|
|
|
(134
|
)
|
Pension income
|
|
|
|
(73
|
)
|
|
|
(17
|
)
|
Net liability reduction for certain post-employment benefit plans
|
|
|
|
—
|
|
|
|
(101
|
)
|
Impairment of goodwill and other assets
|
|
|
|
240
|
|
|
|
367
|
|
Adjustment to loss on sales of businesses, net
|
|
|
|
—
|
|
|
|
20
|
|
(Increase) decrease in:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
14
|
|
|
|
102
|
|
Inventories
|
|
|
|
(26
|
)
|
|
|
(22
|
)
|
Increase (decrease) in:
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
(113
|
)
|
|
|
(175
|
)
|
Advance payments and unearned income
|
|
|
|
(62
|
)
|
|
|
(87
|
)
|
Other
|
|
|
|
(19
|
)
|
|
|
99
|
|
Net cash provided by operating activities
|
|
|
|
489
|
|
|
|
507
|
|
Investing Activities
|
|
|
|
|
|
|
|
Cash paid for fixed income securities
|
|
|
|
—
|
|
|
|
(19
|
)
|
Net additions of property, plant and equipment
|
|
|
|
(79
|
)
|
|
|
(84
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
|
—
|
|
|
|
2
|
|
Net proceeds from sale of CapRock commercial business
|
|
|
|
375
|
|
|
|
—
|
|
Adjustment to proceeds from sale of business
|
|
|
|
(25
|
)
|
|
|
(11
|
)
|
Net cash provided by (used in) investing activities
|
|
|
|
271
|
|
|
|
(112
|
)
|
Financing Activities
|
|
|
|
|
|
|
|
Proceeds from borrowings
|
|
|
|
235
|
|
|
|
118
|
|
Repayments of borrowings
|
|
|
|
(548
|
)
|
|
|
(510
|
)
|
Proceeds from exercises of employee stock options
|
|
|
|
50
|
|
|
|
36
|
|
Repurchases of common stock
|
|
|
|
(460
|
)
|
|
|
—
|
|
Cash dividends
|
|
|
|
(199
|
)
|
|
|
(189
|
)
|
Other financing activities
|
|
|
|
(20
|
)
|
|
|
(15
|
)
|
Net cash used in financing activities
|
|
|
|
(942
|
)
|
|
|
(560
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
(3
|
)
|
|
|
(14
|
)
|
Net decrease in cash and cash equivalents
|
|
|
|
(185
|
)
|
|
|
(179
|
)
|
Cash and cash equivalents, beginning of year
|
|
|
|
487
|
|
|
|
481
|
|
Cash and cash equivalents, end of quarter
|
|
|
|
$
|
302
|
|
|
|
$
|
302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) Certain amounts reclassified to conform with current period
presentation
|
|
|
Table 4
|
HARRIS CORPORATION
|
FY '17 Third Quarter Summary
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
(Unaudited)
|
|
|
|
|
|
March 31, 2017
|
|
|
July 1, 2016 (A)
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions)
|
Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
302
|
|
|
$
|
487
|
Receivables
|
|
|
|
714
|
|
|
674
|
Inventories
|
|
|
|
894
|
|
|
867
|
Property, plant and equipment
|
|
|
|
895
|
|
|
924
|
Goodwill
|
|
|
|
5,367
|
|
|
5,352
|
Other intangible assets
|
|
|
|
1,136
|
|
|
1,231
|
Other assets
|
|
|
|
1,799
|
|
|
2,474
|
|
|
|
|
$
|
11,107
|
|
|
$
|
12,009
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
|
$
|
233
|
|
|
$
|
15
|
Accounts payable
|
|
|
|
428
|
|
|
494
|
Compensation and benefits
|
|
|
|
179
|
|
|
165
|
Advance payments and unearned income
|
|
|
|
231
|
|
|
294
|
Current portion of long-term debt
|
|
|
|
121
|
|
|
382
|
Defined benefit plans
|
|
|
|
2,069
|
|
|
2,296
|
Long-term debt, net
|
|
|
|
3,859
|
|
|
4,120
|
Other liabilities
|
|
|
|
1,073
|
|
|
1,186
|
Equity
|
|
|
|
2,914
|
|
|
3,057
|
|
|
|
|
$
|
11,107
|
|
|
$
|
12,009
|
|
|
|
|
|
|
|
|
|
|
(A) Certain balances reclassified to conform with current period
presentation of Harris CapRock Communications and government IT
services businesses as discontinued operations, which are included
in the "Other assets" and "Other liabilities" line items above
|
|
HARRIS CORPORATION
|