L3Harris Technologies, Inc. is a defense industry leader known as the "Trusted Disruptor," providing comprehensive technology solutions across space, air, land, sea, and cyber domains **[0000202058-24-000029_hrs-20231229.htm:4]**. The company primarily serves government customers in over 100 countries, with the U.S. Government being its largest customer **[0000202058-24-000029_hrs-20231229.htm:55]**. L3Harris operates through four main segments: Space & Airborne Systems, Integrated Mission Systems, Communication Systems, and Aerojet Rocketdyne, offering a range of products from space payloads to missile solutions **[0000202058-24-000029_hrs-20231229.htm:4]** **[0000202058-24-000029_hrs-20231229.htm:55]**.

1. **Integrated Mission Systems (IMS)** - Focuses on intelligence, surveillance, reconnaissance systems, passive sensing, targeting, and electronic attack, with a significant portion of revenue from international markets **[LHX_3369370_22]** **[0000202058-24-000140_hrs-20240628.htm:23]**.
   - **International Revenue Growth** - Expected to increase from 25% to 30% over the next three years **[LHX_3369370_22]**.
2. **Space & Airborne Systems (SAS)** - Includes space payloads, sensors, avionics, electronic warfare, and mission networks, contributing significantly to the company's operations **[0000202058-24-000140_hrs-20240628.htm:23]** **[0000202058-24-000103_hrs-20240329.htm:22]**.
3. **Communication Systems (CS)** - Provides tactical communications, broadband solutions, and public safety radios **[0000202058-24-000140_hrs-20240628.htm:23]** **[0000202058-24-000103_hrs-20240329.htm:22]**.
4. **Aerojet Rocketdyne (AR)** - Offers missile solutions and space propulsion systems **[0000202058-24-000140_hrs-20240628.htm:23]** **[0000202058-24-000103_hrs-20240329.htm:22]**.

9965c65dab6fb584ae0cfba9433bd3f36904509494011111a7d5a7b900df0939

Adjustments for Non-Cash Items (USD, millions)

Stock-Based Compensation (USD, millions)

Changes in Working Capital (USD, millions)

Capital Expenditures (CapEx) (USD, millions)

Proceeds from / Repayments of Debt (USD, millions)

Share Repurchases (USD, millions)

Dividend Payments (USD, millions)

Net Change in Cash (USD, millions)

555660106637a6254e899d5eeec505399d5b5da831402fd5e8fa5defc975380f

| Segment/Quarter | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-----------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Integrated Mission Systems (IMS) [USD Million]** | **1,812**  **[0000202058-23-000005_l3harrisq42022investorle.htm:20]**  | **1,700**  **[0000202058-23-000026_l3harrisq12023investorle.htm:12]**  | **1,735**  **[0000202058-23-000045_l3harrisq22023investorle.htm:11]**  | **1,568**  **[0000202058-23-000054_l3harrisq32023investorle.htm:11]**  | N/A | **1,669**  **[0000202058-24-000102_exhibit991q1cy24earnings.htm:1]**  | **1,735**  **[0000202058-23-000047_hrs-20230630.htm:23]**  | **1,568**  **[0000202058-23-000057_hrs-20230929.htm:29]**  |
| **Space & Airborne Systems (SAS) [USD Million]** | **1,610**  **[0000202058-23-000005_l3harrisq42022investorle.htm:20]**  | **1,655**  **[0000202058-23-000026_l3harrisq12023investorle.htm:12]**  | **1,715**  **[0000202058-23-000045_l3harrisq22023investorle.htm:11]**  | **1,686**  **[0000202058-23-000054_l3harrisq32023investorle.htm:11]**  | N/A | **1,751**  **[0000202058-24-000102_exhibit991q1cy24earnings.htm:1]**  | **1,715**  **[0000202058-23-000047_hrs-20230630.htm:23]**  | **1,686**  **[0000202058-23-000057_hrs-20230929.htm:29]**  |
| **Communication Systems (CS) [USD Million]** | **1,193**  **[0000202058-23-000005_l3harrisq42022investorle.htm:20]**  | **1,163**  **[0000202058-23-000026_l3harrisq12023investorle.htm:12]**  | **1,289**  **[0000202058-23-000045_l3harrisq22023investorle.htm:11]**  | **1,255**  **[0000202058-23-000054_l3harrisq32023investorle.htm:11]**  | N/A | **1,294**  **[0000202058-24-000102_exhibit991q1cy24earnings.htm:1]**  | **1,289**  **[0000202058-23-000047_hrs-20230630.htm:23]**  | **1,255**  **[0000202058-23-000057_hrs-20230929.htm:29]**  |
| **Aerojet Rocketdyne (AR) [USD Million]** | N/A | N/A | N/A | **455**  **[0000202058-23-000054_l3harrisq32023investorle.htm:11]**  | N/A | **542**  **[0000202058-24-000102_exhibit991q1cy24earnings.htm:1]**  | N/A | **455**  **[0000202058-23-000057_hrs-20230929.htm:29]**  |
| **Corporate Eliminations [USD Million]** | **(37)**  **[0000202058-23-000005_l3harrisq42022investorle.htm:20]**  | N/A | **(46)**  **[0000202058-23-000045_l3harrisq22023investorle.htm:11]**  | **(49)**  **[0000202058-23-000054_l3harrisq32023investorle.htm:11]**  | N/A | **(45)**  **[0000202058-24-000102_exhibit991q1cy24earnings.htm:1]**  | **(46)**  **[0000202058-23-000047_hrs-20230630.htm:23]**  | N/A |
| **Total Revenue [USD Million]** | **4,578**  **[0000202058-23-000005_l3harrisq42022investorle.htm:20]**  | **4,471**  **[0000202058-23-000026_l3harrisq12023investorle.htm:12]**  | **4,693**  **[0000202058-23-000045_l3harrisq22023investorle.htm:11]**  | **4,915**  **[0000202058-23-000054_l3harrisq32023investorle.htm:11]**  | N/A | **5,211**  **[0000202058-24-000102_exhibit991q1cy24earnings.htm:1]**  | **4,693**  **[0000202058-23-000047_hrs-20230630.htm:23]**  | **4,915**  **[0000202058-23-000057_hrs-20230929.htm:29]**  |

8a031c70181b8f37dabddd8e16385aa6239b989a73f43a3ca8d8e2733fda0ae0

| Metric [Unit: USD Million] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| United States              | **3,333**  **[0000202058-23-000005_l3harrisq42022investorle.htm:20]**  | **3,502**  **[0000202058-23-000028_hrs-20230331.htm:21]**  | **3,590**  **[0000202058-23-000047_hrs-20230630.htm:25]**  | **3,936**  **[0000202058-23-000057_hrs-20230929.htm:31]**  | N/A     | **3,502**  **[0000202058-23-000028_hrs-20230331.htm:21]**  | **3,456**  **[0000202058-23-000057_hrs-20230929.htm:31]**  | **1,484**  **[0000202058-24-000168_hrs-20240927.htm:24]**  |
| International              | **1,245**  **[0000202058-23-000005_l3harrisq42022investorle.htm:20]**  | **969**  **[0000202058-23-000028_hrs-20230331.htm:21]**    | **1,103**  **[0000202058-23-000047_hrs-20230630.htm:25]**  | **980**  **[0000202058-23-000057_hrs-20230929.htm:31]**    | N/A     | **969**  **[0000202058-23-000028_hrs-20230331.htm:21]**    | **1,237**  **[0000202058-23-000057_hrs-20230929.htm:31]**  | **187**  **[0000202058-24-000168_hrs-20240927.htm:24]**    |
| Intersegment               | N/A     | N/A     | N/A     | **49**  **[0000202058-23-000057_hrs-20230929.htm:31]**      | N/A     | **47**  **[0000202058-23-000028_hrs-20230331.htm:21]**    | N/A     | **12**  **[0000202058-24-000168_hrs-20240927.htm:24]**    |
| Total Revenue              | **4,578**  **[0000202058-23-000005_l3harrisq42022investorle.htm:20]**  | **4,471**  **[0000202058-23-000028_hrs-20230331.htm:21]**  | **4,693**  **[0000202058-23-000047_hrs-20230630.htm:25]**  | **4,915**  **[0000202058-23-000057_hrs-20230929.htm:31]**  | N/A     | **4,471**  **[0000202058-23-000028_hrs-20230331.htm:21]**  | **4,693**  **[0000202058-23-000057_hrs-20230929.htm:31]**  | **1,683**  **[0000202058-24-000168_hrs-20240927.htm:24]**  |

469d35a9dca5aabbcfcac16c87b0afb45a2cf0b7d0017f0f4ddb794e29f01e1a

- BAE Systems, Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, RTX; Thales; and non-traditional defense contractors  **[0000202058-24-000029_hrs-20231229.htm:7]** .

c9c499a5b8a68693e84a68cda406f2f170ceeee3583e368f7bab8beb36bd6433

1. With increasing competition in the solid rocket motor market, especially for GMLRS, how do you plan to maintain or grow your market share, and what specific steps are you taking to address capacity constraints and competitive pressures?  **[LHX_3404003_15]** 

2. You aim to achieve at least a 16% segment operating margin by 2026; what are the primary risks that could prevent you from reaching this target, especially in the lower-margin sectors, and how do you plan to mitigate them?  **[LHX_3404003_13]** 

3. Given past supply chain challenges in your software-defined radio business, what measures have you implemented to ensure supply chain resilience, and how confident are you that similar issues won't resurface?  **[LHX_3404003_17]** **[LHX_3404003_10]** **[LHX_3404003_12]** 

4. With approximately 300,000 radios remaining in the DoD modernization cycle and competition from other providers, how do you plan to maintain your current market share, and what risks do you see in achieving your targets both domestically and with NATO countries?  **[LHX_3404003_10]** 

5. Regarding the ENVG night vision goggle program, considering past funding inconsistencies and potential shifts towards augmented reality systems, how confident are you in the sustainability of this business, and what strategies do you have to address potential risks?  **[LHX_3404003_11]** 

ef1bfa92fdad568b786422adbeccf6356944f8f95a8dd79528058ad906833884

358b9bee66f9ccfb1b3a6e5d9ca9acf075ba1ea7bea196cb48cc12cdcdca9f78

United States

International

Intersegment

SAS Segment

- United States

- International

IMS Segment

CS Segment

AR Segment

Total Revenue

f654e30862100b4c9ed96c457572f30bd58bde189a43b2f28a1585c88d3ff923

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Forward Loss Provision **[0000202058-23-000028_hrs-20230331.htm:9]**

Forward Loss Provision **[0000202058-23-000047_hrs-20230630.htm:9]**

Forward Loss Provision **[0000202058-23-000057_hrs-20230929.htm:9]**

Off-market Customer Contracts **[0000202058-23-000028_hrs-20230331.htm:9]**

Off-market Customer Contracts **[0000202058-23-000047_hrs-20230630.htm:9]**

Off-market Customer Contracts **[0000202058-23-000057_hrs-20230929.htm:9]**

b7b30a9266088e73fd54a8ae011a36e11386a83111f943605b33faa5b1b0aafb

30ce4676b977d6e85cada1d9e51e3f4805a13b143267706b0764eaf8abc0973f

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** FY 2024
- **Guidance:**
  - **Total Company Revenue:** $21.1 billion to $21.3 billion  **[LHX_3404003_5]** .
  - **Segment Operating Margin:** Approximately 15.5%  **[LHX_3404003_5]** .
  - **Earnings Per Share (EPS):** $12.95 to $13.15 per share  **[LHX_3404003_5]** .
  - **Free Cash Flow:** $2.2 billion  **[LHX_3404003_5]** .
  - **Long-term Targets for 2026:**
    - **Revenue:** $23 billion  **[LHX_3404003_4]** .
    - **Segment Operating Margin:** At least 16%  **[LHX_3404003_4]** .
    - **Free Cash Flow:** $2.8 billion  **[LHX_3404003_4]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** FY 2024
- **Guidance:**
  - **Earnings Per Share (EPS):** $12.85 to $13.15 per share  **[LHX_3394787_4]** .
  - **Free Cash Flow:** $2.2 billion  **[LHX_3394787_4]** .
  - **Revenue, Margin Rate, and EPS:** Increased due to strong first-half performance and additional revenue from commercial aviation business  **[LHX_3394787_4]** .
  - **Book-to-Bill Ratio:** 1.03  **[LHX_3394787_4]** .
  - **Organic Revenue Growth:** 3%  **[LHX_3394787_4]** .
  - **Segment Operating Margin:** Sequentially increasing  **[LHX_3394787_4]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** FY 2024
- **Guidance:**
  - **Earnings Per Share (EPS):** $12.70 to $13.05 per share  **[LHX_3381259_5]** .
  - **Revenue:** $20.7 billion to $21.3 billion  **[LHX_3371030_4]** .
  - **Operating Margin:** Approximately 15%  **[LHX_3371030_4]** .
  - **Free Cash Flow:** $2.2 billion  **[LHX_3371030_4]** .
  - **Segment Revenue and Operating Margin:**
    - **SAS:** $6.9 billion to $7.1 billion, mid- to high 11% margin  **[LHX_3371030_4]** .
    - **IMS:** $6.4 billion to $6.6 billion, low to mid 11% margin  **[LHX_3371030_4]** .
    - **CS:** $5.3 billion to $5.4 billion, low to mid 24% margin  **[LHX_3371030_4]** .
    - **Aerojet Rocketdyne:** $2.4 billion to $2.5 billion, high 11% margin  **[LHX_3371030_4]** .
  - **Interest Expense:** $650 million  **[LHX_3371030_4]** .
  - **Pension Income:** $300 million  **[LHX_3371030_4]** .
  - **Capital Allocation:**
    - Leverage ratio less than 3.0  **[LHX_3371030_4]** .
    - Dividend payout ratio 35% to 40% of free cash flow  **[LHX_3371030_4]** .
    - Share repurchases over $0.5 billion in 2024  **[LHX_3371030_4]** .

### Q4 2023 Earnings Call
- **Issued Period:** Q4 2023
- **Guided Period:** FY 2024
- **Guidance:**
  - **Revenue:** $20.7 billion to $21.3 billion  **[LHX_3371030_4]** .
  - **Consolidated Segment Operating Margin:** Approximately 15%  **[LHX_3371030_4]** .
  - **Non-GAAP EPS:** $12.40 to $12.80  **[LHX_3371030_4]** .
  - **Free Cash Flow:** $2.2 billion  **[LHX_3371030_4]** .
  - **Segment-Level Guidance:**
    - **SAS:** $6.9 billion to $7.1 billion, mid- to high 11% margin  **[LHX_3371030_4]** .
    - **IMS:** $6.4 billion to $6.6 billion, low to mid 11% margin  **[LHX_3371030_4]** .
    - **CS:** $5.3 billion to $5.4 billion, low to mid 24% margin  **[LHX_3371030_4]** .
    - **Aerojet Rocketdyne:** $2.4 billion to $2.5 billion, high 11% margin  **[LHX_3371030_4]** .
  - **Capital Allocation:** Focus on debt reduction and returning excess cash to shareholders  **[LHX_3371030_4]** .
  - **Dividend Payout Ratio:** 35% to 40% of free cash flow  **[LHX_3371030_4]** .
  - **Share Repurchases:** Over $0.5 billion in 2024  **[LHX_3371030_4]** .

9b4f0dab5a60364d93e5cf9de5a10f0156a8456fe7a489774856b6074601f1e4

| Name                  | Position                                               | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------|--------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Christopher E. Kubasik| Chair and Chief Executive Officer                      | June 29, 2022    | Christopher E. Kubasik has been serving as the Chair and Chief Executive Officer of L3Harris Technologies, Inc. since June 29, 2022. He previously held various executive roles at L3 Technologies, Inc.  **[0001104659-24-028248_tm2330987d3_pre14a.htm:18]** **[0001104659-24-032435_tm2330987d5_def14a.htm:17]** **[0000202058-24-000029_hrs-20231229.htm:45]** .                             |
| Kenneth L. Bedingfield| Senior Vice President and Chief Financial Officer      | December 11, 2023| Kenneth L. Bedingfield began his role as Senior Vice President and Chief Financial Officer at L3Harris Technologies on December 11, 2023. He has held executive roles at Epirus, Inc. and Northrop Grumman Corporation  **[0000202058-24-000029_offer_letterxkenxbedingf.htm:0]** **[0000202058-24-000029_hrs-20231229.htm:45]** .                  |
| Samir B. Mehta        | President, Communication Systems                       | January 3, 2023  | Samir B. Mehta is the President of the Communication Systems segment at L3Harris Technologies. He previously worked at Collins Aerospace and Sikorsky Aircraft in various leadership roles  **[0000202058-24-000029_hrs-20231229.htm:45]** **[0000202058-23-000014_hrs-20221230.htm:51]** .                                              |
| Scott T. Mikuen       | Senior Vice President, General Counsel and Secretary   | February 2013    | Scott T. Mikuen has been serving as Senior Vice President, General Counsel, and Secretary at L3Harris Technologies, Inc. since February 2013. He has been with the company in various roles since 2004  **[0000202058-24-000029_hrs-20231229.htm:45]** **[0000202058-23-000014_hrs-20221230.htm:51]** .                                   |
| Corliss J. Montesi    | Vice President and Principal Accounting Officer        | August 2021      | Corliss J. Montesi has been serving as the Vice President and Principal Accounting Officer at L3Harris Technologies since August 2021. She previously worked at Stanley Black and Decker in various executive roles  **[0000202058-24-000029_hrs-20231229.htm:45]** .                        |
| Ross S. Niebergall    | President, Aerojet Rocketdyne (AR)                     | July 2023        | Ross S. Niebergall is the President of Aerojet Rocketdyne at L3Harris Technologies. He has held various roles within the company and previously worked at RTX  **[0000202058-24-000029_hrs-20231229.htm:45]** .                                                                                |
| Melanie Rakita        | Vice President and Chief Human Resources Officer       | April 2023       | Melanie Rakita is the Vice President and Chief Human Resources Officer at L3Harris Technologies. She has held various HR leadership roles within the company and previously worked for United Technologies Corporation  **[0000202058-24-000029_hrs-20231229.htm:45]** .                     |
| Jonathan P. Rambeau   | President, Integrated Mission Systems (IMS)            | October 17, 2022 | Jonathan P. Rambeau is the President of Integrated Mission Systems at L3Harris. He joined L3Harris after a 26-year career at Lockheed Martin  **[0000202058-23-000014_hrs-20221230.htm:51]** **[0001104659-24-028248_tm2330987d3_pre14a.htm:74]** .                                                                                            |
| Sean J. Stackley      | Senior Vice President, Strategy & Growth               | October 2022     | Sean J. Stackley is the Senior Vice President, Strategy & Growth at L3Harris Technologies. He has a distinguished career in public service, including a 27-year tenure with the U.S. Navy  **[0000202058-24-000029_hrs-20231229.htm:45]** **[0000202058-23-000014_hrs-20221230.htm:51]** .                                               |
| Edward J. Zoiss       | President, Space & Airborne Systems                    | June 29, 2019    | Edward J. Zoiss has been serving as the President of Space & Airborne Systems at L3Harris Technologies since June 29, 2019. He previously held leadership roles in Electronic Systems and Government Communications Systems  **[0000202058-24-000029_hrs-20231229.htm:45]** **[0000202058-23-000014_hrs-20221230.htm:51]** .              |
| John P. Cantillon     | Vice President and Principal Accounting Officer        | May 1, 2024      | John P. Cantillon serves as the Vice President and Principal Accounting Officer at L3Harris Technologies, Inc. He signed the company's registration statement on May 1, 2024, in his capacity as the Principal Accounting Officer  **[0000202058-24-000105_forms-8registrationstateme.htm:6]** .          |

57fb1891d04ba4dcd5af7f579e402f35edab275b2b946fb13bb28e74ae42e391

| Program Details          | Program 1        |
|--------------------------|------------------|
| Approval Date            | **October 21, 2022**  **[0000202058-24-000168_hrs-20240927.htm:49]**  |
| End Date/Duration        | **N/A**          |
| Total Additional Amount  | **$3.0 billion**  **[0000202058-24-000168_hrs-20240927.htm:49]**  |
| Remaining Authorization  | **$3.4 billion**  **[0000202058-24-000168_hrs-20240927.htm:42]**  |
| Details                  | The program is part of the company's strategy to return cash to shareholders. It is flexible and can be adjusted based on market conditions and other considerations. The program does not have a stated expiration date and authorizes repurchases through various methods, including open market purchases and private transactions.  **[0000202058-23-000057_hrs-20230929.htm:49]** **[0000202058-24-000029_hrs-20231229.htm:51]** **[0000202058-23-000014_hrs-20221230.htm:77]**  |

dc06df96370ab69d21c0aa2bb7a86fb8d9e3a0dd7cff0039164e729d1a6adbac

f5238da7f423be33341e7c6faf3096835abaa6d5f13150e722ea096b54c666eb

1. **Revenue Growth Drivers**  
   **Q:** What are the biggest drivers to reach the $23B revenue target?  **[LHX_3404003_7]**   
   **A:** CEO Christopher Kubasik highlighted a record backlog and a **book-to-bill ratio of 1.14** after nine months.  **[LHX_3404003_7]**  He emphasized alignment with key areas of the U.S. budget.  **[LHX_3404003_7]**  Growth drivers include Communication Systems (CS) with a **$10 billion international pipeline**, especially NATO software-defined radios  **[LHX_3404003_7]** ; in Space, despite near-term budget pressures, growth is expected by **2026** as missions move from air to space  **[LHX_3404003_7]** ; Aerojet Rocketdyne's operations are improving, with investments in supply chain and capacity expansion that should accelerate growth in **2026**, including opportunities with the Glide Phase Interceptor and next-gen interceptor.  **[LHX_3404003_7]** 

2. **Margin Expansion Goals**  
   **Q:** Are you on track for 16% margins by 2025-2026?  **[LHX_3404003_8]** **[LHX_3404003_13]**   
   **A:** The company is tracking towards its **$1 billion cost reduction** target a year ahead of schedule.  **[LHX_3404003_8]**  CEO Kubasik emphasized efforts to eliminate non-value activities, expecting to achieve the $1 billion savings next year and more thereafter.  **[LHX_3404003_8]**  CFO Bedingfield stated they are "absolutely tracking" to the margin targets set, moving the **2026 margin target from approximately 16% to at least 16%**.  **[LHX_3404003_8]** **[LHX_3404003_13]**  Margin improvements are expected across all segments.  **[LHX_3404003_13]** 

3. **Aerojet Rocketdyne Growth**  
   **Q:** How do you view growth prospects and competition in solid rocket motors?  **[LHX_3404003_15]**   
   **A:** The company recognizes increased demand, with the Army indicating a need for **32,000 solid rocket motors a year**.  **[LHX_3404003_15]**  Currently producing **8,000**, L3Harris is investing to ramp up to **10,000–14,000**.  **[LHX_3404003_15]**  CEO Kubasik welcomes competition but believes they have the best technology and infrastructure.  **[LHX_3404003_15]**  He is "more pleased with the acquisition of Aerojet today than...a couple of years ago" due to strong demand.  **[LHX_3404003_15]** 

4. **Free Cash Flow and Share Repurchases**  
   **Q:** Will you increase share repurchases as you approach target leverage?  **[LHX_3404003_14]**   
   **A:** CFO Bedingfield confirmed plans to return to more value-creating share repurchase levels in **2025 and 2026** as leverage reaches the **3.0** target.  **[LHX_3404003_14]**  The company has already met its **$500 million** share repurchase target for **2024**.  **[LHX_3404003_14]**  Growing free cash flow per share is a priority.  **[LHX_3404003_14]** 

5. **Palantir Partnership**  
   **Q:** What's the strategic rationale for partnering with Palantir?  **[LHX_3404003_9]**   
   **A:** The partnership involves no upfront investment.  **[LHX_3404003_9]**  CEO Kubasik emphasized that combining capabilities provides a competitive edge, especially in AI.  **[LHX_3404003_9]**  They are collaborating on programs like TITAN, where Palantir is the prime and L3Harris provides resilient communications.  **[LHX_3404003_9]**  Internally, L3Harris is using Palantir products as part of LHX NeXt to make real-time, data-driven decisions, driving cost reductions and operational efficiencies.  **[LHX_3404003_9]** 

6. **Supply Chain Improvements**  
   **Q:** How is the supply chain impacting CS segment growth in 2025?  **[LHX_3404003_17]**   
   **A:** CEO Kubasik stated that the supply chain is in better shape today than before the pandemic.  **[LHX_3404003_17]**  This resilience provides confidence in the CS sector, especially in the software-defined radio business.  **[LHX_3404003_17]**  They anticipate both domestic and international demand growth in **2025**, with a more stable mix compared to **2024**.  **[LHX_3404003_17]** 

7. **F-35 Tech Refresh 3**  
   **Q:** What's the status of F-35 TR-3 and its impact?  **[LHX_3404003_16]**   
   **A:** L3Harris is under contract with Lockheed Martin through **Lot 19** and is not experiencing financial headwinds from their negotiations.  **[LHX_3404003_16]**  The company is meeting commitments on TR-3 components like the core processor, memory system, and cockpit display.  **[LHX_3404003_16]**  CEO Kubasik mentioned that the customers and prime are satisfied with their performance.  **[LHX_3404003_16]** 

8. **Night Vision Goggles Outlook**  
   **Q:** What's the outlook for night vision goggles given funding uncertainties?  **[LHX_3404003_11]**   
   **A:** CEO Kubasik is optimistic, noting that funding is actually included in the budget this time.  **[LHX_3404003_11]**  He believes both ENVG and IVAS systems will be used, with ENVG being a superior product for warfighters.  **[LHX_3404003_11]**  The company feels better about the night vision goggle business now than a year or two ago.  **[LHX_3404003_11]** 

9. **Tactical Data Links and Link 16**  
   **Q:** Can you update on TDL and Link 16 developments?  **[LHX_3404003_22]**   
   **A:** The company is ahead of its TDL business case, successfully moving production to the Salt Lake City facility.  **[LHX_3404003_22]**  They've streamlined operations, reduced hours, and improved supply chain leverage.  **[LHX_3404003_22]**  Significant orders have been received, including for the BATS-D handheld Link 16.  **[LHX_3404003_22]**  Link 16 demonstrations in space are progressing well.  **[LHX_3404003_22]** 

10. **Working Capital Management**  
    **Q:** How are you approaching working capital and free cash flow growth?  **[LHX_3404003_21]**   
    **A:** CFO Bedingfield stated they aim to be effective managers of capital while willing to invest in the business to drive growth.  **[LHX_3404003_21]**  The growth and increase in profit are the biggest contributors to growing free cash flow.  **[LHX_3404003_21]**  They are not short-termists and make decisions to invest for long-term benefits, enabled by LHX NeXt.  **[LHX_3404003_21]** 

778620ca28848be04f369bfc5209fbe8ec5edcd4822b4bab9609790f7b102648

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | At least 1932  **[0000202058-24-000029_hrs-20231229.htm:93]**  | Present  | Current auditor   |

4ab49fdda52449fa936e37c507291cd553bb28097e02d33fb632ea11a8f51e1e

- Total Revenue: $5.292B (+8% YoY)  **[0000202058-24-000168_hrs-20240927.htm:23]** **[0000202058-24-000168_hrs-20240927.htm:32]** **[0000202058-23-000057_hrs-20230929.htm:29]**   
- IMS: $1.671B (+7% YoY)  **[0000202058-24-000168_hrs-20240927.htm:23]** **[0000202058-24-000168_hrs-20240927.htm:32]** **[0000202058-23-000057_hrs-20230929.htm:31]**   
- CS: $1.382B (+10% YoY)  **[0000202058-24-000168_hrs-20240927.htm:23]** **[0000202058-24-000168_hrs-20240927.htm:32]** **[0000202058-23-000057_hrs-20230929.htm:31]**   
- AR: $596M (+31% YoY)  **[0000202058-24-000168_hrs-20240927.htm:23]** **[0000202058-24-000168_hrs-20240927.htm:32]** **[0000202058-23-000057_hrs-20230929.htm:31]**   
- Operating Income: $495M (+**105%** YoY)  **[0000202058-24-000168_hrs-20240927.htm:3]** **[0000202058-23-000057_hrs-20230929.htm:2]** **[0000202058-23-000057_hrs-20230929.htm:29]**   
- Net Income: $4M (**-99%** YoY)  **[0000202058-24-000168_hrs-20240927.htm:3]** **[0000202058-23-000057_hrs-20230929.htm:2]** **[0000202058-23-000057_hrs-20230929.htm:29]**   

adeeb6a08088090cbfa1d6be34abbef7161cd1967c521d98f69c291f7dbdadb2

833b6b603025f49fdd38d9ab3cad21580c070125f2dec424c571ffce379a4f16

38758b3d99d298b76702d2d1672797074abb00f57fa6adf738d7484b68f01d69

| Year  | Amount Due (in millions) | Debt Type            | Interest Rate (%) | % of Total Debt                                                                 |
|-------|---------------------------|----------------------|-------------------|---------------------------------------------------------------------------------|
| 2025  | 600 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 3.832% notes        | 3.832 **[0000202058-24-000168_hrs-20240927.htm:10]**     | 5.1% = (600 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2026  | 100 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 7.00% debentures    | 7.00 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 0.9% = (100 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2026  | 550 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 3.85% notes         | 3.85 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 4.7% = (550 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2027  | 1,250 **[0000202058-24-000168_hrs-20240927.htm:10]**            | 5.40% notes         | 5.40 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 10.7% = (1,250 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                  |
| 2028  | 26 **[0000202058-24-000168_hrs-20240927.htm:10]**               | 6.35% debentures    | 6.35 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 0.2% = (26 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                      |
| 2028  | 1,850 **[0000202058-24-000168_hrs-20240927.htm:10]**            | 4.40% notes         | 4.40 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 15.8% = (1,850 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                  |
| 2029  | 750 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 5.05% notes         | 5.05 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 6.4% = (750 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2029  | 400 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 2.90% notes         | 2.90 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 3.4% = (400 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2031  | 650 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 1.80% notes         | 1.80 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 5.6% = (650 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2031  | 750 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 5.25% notes         | 5.25 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 6.4% = (750 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2033  | 1,500 **[0000202058-24-000168_hrs-20240927.htm:10]**            | 5.40% notes         | 5.40 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 12.8% = (1,500 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                  |
| 2034  | 750 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 5.35% notes         | 5.35 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 6.4% = (750 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2035  | 400 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 4.854% notes        | 4.854 **[0000202058-24-000168_hrs-20240927.htm:10]**     | 3.4% = (400 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2040  | 300 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 6.15% notes         | 6.15 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 2.6% = (300 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2045  | 500 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 5.054% notes        | 5.054 **[0000202058-24-000168_hrs-20240927.htm:10]**     | 4.3% = (500 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2053  | 500 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 5.60% notes         | 5.60 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 4.3% = (500 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |
| 2054  | 600 **[0000202058-24-000168_hrs-20240927.htm:10]**              | 5.50% notes         | 5.50 **[0000202058-24-000168_hrs-20240927.htm:10]**      | 5.1% = (600 / 11,700) * 100 **[0000202058-24-000168_hrs-20240927.htm:10]** **[0000202058-24-000168_hrs-20240927.htm:11]**                                     |

275b30425e79113b68d00d2550209306411562d3ea2d3d4d15322e3f25651632

1. **Margin Outlook**  
   **Q:** Are you still on track for 16% margins?  
   **A:** Management expressed increased confidence in reaching the **16% margin** target by 2026, noting solid progress with first-half margins at **15.3%**, up from **14.8%** last year. They highlighted improvements across segments and successful cost-saving initiatives like LHX NeXt.  **[LHX_3394787_6]** 

2. **Aerojet Performance and Growth**  
   **Q:** What drives Aerojet's strong performance and future growth?  
   **A:** Aerojet Rocketdyne is performing well, with strong margins in the first half. Management expects growth in the second half driven by increased supplier deliveries and operational improvements. They have reduced overdue deliveries by **40%** in 12 months and are investing in capacity expansion. They see Aerojet as a fast-growing opportunity with demand exceeding supply.  **[LHX_3394787_5]** **[LHX_3394787_13]** 

3. **Communication Systems Growth**  
   **Q:** What's the outlook for Communication Systems orders and backlog?  
   **A:** The Communication Systems segment has a **$32 billion** backlog and a **$16 billion** pipeline over three years. Growth is driven by DoD modernization, NATO's focus on interoperability (a potential **100,000 radio** opportunity), and demand for resilient communications. The international pipeline amounts to **$10 billion**. Management sees no supply chain issues affecting this growth.  **[LHX_3394787_10]** **[LHX_3394787_18]** 

4. **Impact of European Defense Spending**  
   **Q:** How does increased European defense spending benefit L3Harris?  
   **A:** European defense spending is rising, creating significant opportunities for L3Harris, especially in software-defined radios due to NATO's emphasis on interoperability. Management estimates a potential **100,000 radio** market in Europe, viewing it as a major growth area for 2024 and beyond.  **[LHX_3394787_8]** 

5. **LHX NeXt Cost Savings**  
   **Q:** Will cost savings from LHX NeXt boost margins?  
   **A:** The LHX NeXt program is expected to deliver **$1 billion** in savings over three years, with **40%** accruing to company margins. Management is ahead of schedule on these savings, which are contributing to margin improvements and competitiveness.  **[LHX_3394787_15]** 

6. **Free Cash Flow Guidance**  
   **Q:** Are you maintaining the $2.2B free cash flow guidance?  
   **A:** Management is confident in achieving the **$2.2 billion** free cash flow guidance for 2024, having generated **25%** of this target in the first half. They anticipate stronger cash flow in the second half without significant working capital headwinds, progressing toward their 2026 goal of **$2.8 billion**.  **[LHX_3394787_16]** 

7. **SAS Segment Growth**  
   **Q:** What are the trends in the SAS segment?  
   **A:** The Space and Airborne Systems segment is seeing growth in Space, Intelligence, and Cyber areas, driven by successful bids like the SDA Tranche awards. Airborne is facing headwinds as missions move from air to space, but SAS margins are improving due to cost savings and moving from development to production phases.  **[LHX_3394787_12]** 

8. **Competition and Pricing in Tactical Communications**  
   **Q:** Are you facing price pressure in tactical communications internationally?  
   **A:** International tactical communications markets are winner-take-all, but L3Harris has had great success without significant price pressure. Management feels confident in maintaining their margins due to the value of their technology and the importance of interoperability for customers.  **[LHX_3394787_18]** 

9. **IMS Margins Outlook**  
   **Q:** What's affecting IMS margins in the second half?  
   **A:** Integrated Mission Systems showed strong first-half margins at **11.7%**, but margins may soften in the second half due to less favorable commercial mix and growth in less profitable areas like ISR. However, cost savings from LHX NeXt should continue to benefit margins.  **[LHX_3394787_11]** 

10. **Supplemental Funding Impact**  
    **Q:** How will supplemental funding affect your revenue?  
    **A:** Supplemental funding is built into their guidance, with expectations of benefiting from additional radio revenues and supporting munitions through Aerojet Rocketdyne. While quantities and timing are uncertain, this funding provides confidence and stability in their outlook.  **[LHX_3394787_19]** 

62d82c59a403e93ab801290c26645c590ca8ce8499336b793d2a051a4f18485a

- **Strong and growing demand for L3Harris's tactical radios globally**, with significant contracts from NATO allies totaling over **$400 million** and a **$1.4 billion** program with the Netherlands, as well as high market share in U.S. DoD modernization programs, positioning the company for continued revenue growth.  **[LHX_3404003_10]**
- **Improved operational efficiency and high margins in the Communication Systems segment**, with margins reaching **26%**, a **350-basis-point** improvement year-over-year, driven by favorable international mix, proprietary waveform sales, and supply chain improvements, leading to strong profitability.  **[LHX_3404003_17]**
- **Strategic initiatives and partnerships**, such as the partnership with Palantir to enhance capabilities in AI and data analytics, align with customer priorities and position the company for future growth opportunities in areas like AI, which is becoming increasingly important in defense.  **[LHX_3404003_9]**

20bc78c9b0f260fe30e05b56c6a62a079803044074eed8377a5048e986c27031

- L3Harris is experiencing margin pressure and operational challenges in its Integrated Mission Systems (IMS) segment, with margins expected to decline relative to the second half of 2023. Attrition and program performance issues have impacted results, and the segment faces **lower-than-historical international mix**, which is affecting profitability.  **[LHX_3371030_5]**
- The Aerojet Rocketdyne acquisition is facing supply chain bottlenecks at sub-tier suppliers, which could hinder the company's ability to meet increasing demand for rocket motors. Additionally, projected revenue growth for Aerojet Rocketdyne in 2024 is limited, with only around **5% growth expected**, indicating potential integration challenges and slower-than-anticipated benefits from the acquisition.  **[LHX_3371030_8]** **[LHX_3371030_12]**
- The Space and Airborne Systems (SAS) segment is projecting a slowdown in organic revenue growth, with guidance for 2024 at only **2%**, down from **8%** in 2023. This deceleration is due to flat performance in key sectors such as the air domain and Mission Networks, limiting the segment's contribution to overall company growth.  **[LHX_3371030_8]**

270818e86cbd4327e59cafe4199cf756c195f75365814d8fd02a2dbd414554c0

- The **Aerojet Rocketdyne segment continues to face bottlenecks** due to low yields, performance issues, and supply chain challenges, requiring significant investment in capacity before improvements are realized.  **[LHX_3381259_18]**
- The **Integrated Mission Systems (IMS) segment may still face challenges** as it is the company's longest-cycle business, and turning programs and operations takes time despite recent improvements.  **[LHX_3381259_13]**
- The **establishment of a new Business Review Committee** suggests potential internal concerns requiring attention at the Board level, indicating possible challenges in operations or strategic direction.  **[LHX_3381259_8]**

851366e77b8d92ba842b671350bf62b6f1bfd04683c1b5d77f912da73deda82f

- **L3Harris is taking market share in key growth areas**, being awarded over **60 satellites as a prime since the merger**, including **38 for SDA tracking**, and winning contracts by displacing long-term incumbents, such as the **$150 million secure networking program in Taiwan**.  **[LHX_3381259_17]** **[LHX_3381259_16]**
- **The acquisition of Aerojet Rocketdyne is expected to drive double-digit top-line growth over the next 5-7 years**, fueled by increasing demand for tactical missiles and solid rocket motors, with significant opportunities like the Next Generation Interceptor (NGI) program.  **[LHX_3381259_7]** **[LHX_3381259_18]**
- **Margin expansion and cost savings initiatives are boosting profitability**, with **nearly 100 basis points of year-over-year margin expansion** achieved through operational improvements, disciplined bidding, and the **LHX NeXt** program contributing to savings, already achieving about **1/3 of the $1 billion gross savings target**.  **[LHX_3381259_10]** **[LHX_3381259_9]**

b60ea6cade11c60f57534b59c3178fe44ec30133e74f328d670efc275c12f235

1. **Margin Improvement and LHX NeXt**  
   **Q:** Which segments offer more margin improvement opportunities?  
   **A:** Chris stated they aim for at least **100 basis points** margin improvement across segments by **2026**, driven by the **LHX NeXt** program targeting **$1 billion** in cost savings.  **[LHX_3371030_6]**  He prioritized segments: **Communications Systems** has the most potential due to its commercial model and international growth; **Aerojet Rocketdyne** is seeing improvements with increased volume and capacity investments; **IMS** has upside with international expansion and improved program performance; **Space & Airborne Systems** may see less impact due to cost-plus contracts.  **[LHX_3371030_6]** 

2. **Aerojet Rocketdyne Integration**  
   **Q:** Are there more synergies to achieve from Aerojet's integration?  
   **A:** Chris confirmed they've achieved the initial **$50 million** in cost synergies, primarily from eliminating public company costs.  **[LHX_3371030_9]**  They expect an additional **$20 to $30 million** from further integration efforts like IT systems, which will contribute to the **LHX NeXt** program.  **[LHX_3371030_9]**  Ken added that focus is shifting to operational efficiencies to drive throughput and deliver critical capabilities.  **[LHX_3371030_9]** 

3. **IMS Performance and Margins**  
   **Q:** Can you update on IMS attrition and margins?  
   **A:** Chris reported improved margins in the second half of **2023**.  **[LHX_3371030_5]**  Attrition is **slowing down**, and they've successfully hired and trained new employees.  **[LHX_3371030_5]**  Supplier performance is improving, and bidding rigor has increased with more bids reviewed at higher levels.  **[LHX_3371030_5]**  They've no-bid certain contracts to focus on earnings and cash over revenue.  **[LHX_3371030_5]**  There's margin upside as they aim to increase international revenue from **25% to 30%**, driven by **WESCAM** and international business jets.  **[LHX_3371030_5]** 

4. **Space Business Growth**  
   **Q:** How is the Space business progressing?  
   **A:** Chris highlighted they've won three tracking contracts for the **Space Development Agency (SDA)**, increasing from **4 to 18 satellites**.  **[LHX_3371030_7]**  Margins have improved with each contract.  **[LHX_3371030_7]**  Satellites have short lifespans, creating an annuity as they'll need replacement over time.  **[LHX_3371030_7]**  They're investing in a new satellite factory in Florida to enhance production.  **[LHX_3371030_7]** 

5. **SAS Growth Outlook**  
   **Q:** Why is SAS growth slowing in 2024?  
   **A:** Chris explained that while **Space** and **Intel & Cyber** sectors are growing, two large sectors are flat: the **Air Domain** (e.g., F-35, F-16) and **Mission Networks** due to FAA budget pressures.  **[LHX_3371030_8]**  Reducing costs in cost-plus contracts slightly reduces revenue.  **[LHX_3371030_8]**  They prioritize margins and cash over revenue.  **[LHX_3371030_8]** 

6. **Communications Systems Outlook**  
   **Q:** What's the outlook for tactical radio sales?  
   **A:** Chris reported a **record year** for tactical radios in **2023**.  **[LHX_3371030_11]**  Margins are influenced by the mix of domestic and international sales.  **[LHX_3371030_11]**  Supply chain challenges have been overcome, reducing key suppliers significantly.  **[LHX_3371030_11]**  They've secured new market wins to be announced soon.  **[LHX_3371030_11]** 

7. **Cash Flow and Tax Impact**  
   **Q:** What's the impact of Section 174 on cash flow?  
   **A:** Ken noted they managed the cash impact of Section **174** by catching up on tax payments in **2023**.  **[LHX_3371030_13]**  Pending legislation could positively affect cash if passed, potentially offering retroactive relief for **2022 and 2023**.  **[LHX_3371030_13]**  Free cash flow guidance adjustments mainly include **LHX NeXt** implementation costs.  **[LHX_3371030_13]** 

8. **International Opportunities and Margins**  
   **Q:** How does international mix affect growth and margins?  
   **A:** Chris stated international sales have **higher margins** and are expected to increase slightly from around **22–23%** of revenue.  **[LHX_3371030_14]**  Pending supplemental defense budgets, like the **$58 billion** DoD portion for **Ukraine, Taiwan, and Israel**, could bolster growth.  **[LHX_3371030_14]** 

9. **Aerojet Supply Chain Challenges**  
   **Q:** Any updates on Aerojet's supply chain issues?  
   **A:** Chris acknowledged challenges with sub-tier suppliers but doesn't see bringing them in-house as viable.  **[LHX_3371030_12]**  They've invested in these suppliers, aiding with tooling and capital.  **[LHX_3371030_12]**  He expects improvements as new facilities become operational.  **[LHX_3371030_12]**  Despite new competitors, demand exceeds supply, affirming the acquisition's value.  **[LHX_3371030_12]** 

10. **Defense Contracting Dynamics**  
    **Q:** Do you see structural contracting issues in defense?  
    **A:** Chris noted cyclical shifts between fixed-price and cost-plus contracts.  **[LHX_3371030_15]**  They're focusing on areas like software, requiring different business models.  **[LHX_3371030_15]**  Sometimes they choose to no-bid contracts where risk is misaligned.  **[LHX_3371030_15]**  He emphasized balancing risk and maintaining open dialogue with customers.  **[LHX_3371030_15]** 

2a47698c8668ec620385fe48eaf6a8ecfd3469bec3e21947176f3cf000c76f81

1. **Aerojet Rocketdyne & NGI Impact**  
   **Q:** How does the NGI win affect Aerojet and growth targets?  
   **A:** The NGI win is a significant boost for Aerojet Rocketdyne, providing a tailwind that was not factored into the acquisition plans. It's expected to be accretive and contribute to achieving the **$23 billion** target, with revenue impact starting in **2025-2026**. The demand environment is improving, pointing to potential **double-digit top-line growth over the next 5-7 years**. Investments are being made to expand capacity and address bottlenecks, aiming for strong growth by **2026-2027**.  **[LHX_3381259_7]** **[LHX_3381259_18]** 

2. **Communications Outlook & Margins**  
   **Q:** What is the outlook for the Communications business and margins?  
   **A:** The Communications segment is seeing positive developments, including a **$150 million** networking win in Taiwan and increasing radio modernization efforts globally. The backlog is at a record level, with significant international opportunities pending. Margins were **24%** in Q1, reflecting a higher domestic mix, and are expected to reach low to mid-**24%** for the full year, aided by higher-margin international sales.  **[LHX_3381259_11]** **[LHX_3381259_12]** 

3. **LHX NeXt Cost Savings**  
   **Q:** How are LHX NeXt cost-saving initiatives progressing?  
   **A:** LHX NeXt is on track, with about **one-third** of the gross savings achieved through workforce reductions. Plans include reducing facilities from **275 to 200**, consolidating ERP systems, and cutting data centers from **85 to 2**. Indirect procurement and supply chain efficiencies are also targeted to realize additional savings, contributing to margin improvement.  **[LHX_3381259_10]** **[LHX_3381259_9]** 

4. **Bidding Strategy & Risk Management**  
   **Q:** What's your approach to bidding and managing program risks?  
   **A:** The company maintains strict bidding discipline, avoiding programs with unfavorable contract terms, such as fixed-price development contracts with options for undeveloped products. This approach led to the decision not to bid on the Stand-in Attack Weapon program. Future opportunities include being selective in priming roles, focusing on areas like Armed Overwatch and classified space programs.  **[LHX_3381259_14]** 

5. **International Growth & Margins**  
   **Q:** How does international business impact growth and margins?  
   **A:** International revenue accounts for low **20%** of total sales, with a strategy to grow this segment due to its higher margins. About half of international sales are direct commercial sales, which typically yield better margins than foreign military sales. Recent wins, like an ISR program for a NATO country, are expected to contribute significantly.  **[LHX_3381259_12]** **[LHX_3381259_16]** 

6. **IMS Performance & EACs**  
   **Q:** How is the IMS segment performing regarding EACs?  
   **A:** The IMS segment showed significant improvement in the quarter, with margins at **11.4%**, working towards the full-year guidance. Programs are stabilizing, operations are improving, and benefits from LHX NeXt initiatives are materializing, leading to better EAC performance.  **[LHX_3381259_13]** 

7. **F-35 Production Ramp**  
   **Q:** What's the status of F-35 production deliveries?  
   **A:** Production deliveries for the F-35 are on track, with a ramp-up starting next month. Investments have been made to support the increased production, focusing on the core processor. The company maintains good relations with Lockheed and is prepared to meet the growing demand.  **[LHX_3381259_15]** 

8. **Market Share Gains**  
   **Q:** How are you achieving revenue growth and market share gains?  
   **A:** The company is selectively investing and bidding in areas where it can take market share. In space, they've been awarded **60 satellites as a prime** since the merger, including **38 for SDA tracking**. In other domains like undersea systems and radios (e.g., the Next Gen Survival Radio for the Air Force), they are displacing incumbents and innovating to stay ahead.  **[LHX_3381259_17]** 

9. **Business Review Committee Progress**  
   **Q:** What's the progress of the Business Review Committee?  
   **A:** The committee, formed in December, has been meeting twice a month, covering operations, program reviews, the bidding process, LHX NeXt strategy, portfolio, and capital deployment. They are more than halfway through, aiming to present observations and recommendations to the Board by mid-year.  **[LHX_3381259_8]** 

10. **Margin Expansion Drivers**  
    **Q:** What are the main drivers of margin expansion?  
    **A:** Margin expansion is attributed to improved mix as programs move out of development phases, disciplined bidding practices, operational performance, and contributions from LHX NeXt initiatives. Each of these areas is contributing to the year-over-year margin increase of nearly **100 basis points**.  **[LHX_3381259_9]** 

16e022d6ac8b656d8546ebbb77a861c2be82d61e2ab3e22cbfd091b173261b72

- **Strong Growth in Space Business with Successive SDA Contracts:** L3Harris has secured significant contracts in its Space business, including successive awards from the Space Development Agency (SDA) for tracking satellites. They have progressed from **4 satellites in Tranche 0 to 18 satellites in Tranche 2**, with each contract yielding higher expected margins, indicating robust growth potential in the Space sector.  **[LHX_3371030_7]**
- **Positive Integration and Growth of Aerojet Rocketdyne:** The integration of Aerojet Rocketdyne is advancing well, with **200 proposals submitted for over $13 billion** and an expected **5% top-line growth in 2024** compared to pro forma 2023. This highlights strong demand exceeding supply in the missile and space propulsion business, contributing to LHX's growth trajectory.  **[LHX_3371030_8]** ,  **[LHX_3371030_12]**
- **Margin Expansion through Operational Efficiencies and Cost-Saving Initiatives:** L3Harris is actively improving margins across its segments, particularly in Communications Systems (CS) and Integrated Mission Systems (IMS), through operational efficiencies, international growth, and cost-saving initiatives such as the **LHX NeXt program targeting $1 billion in gross cost savings over the next three years**. This is expected to enhance profitability and shareholder value.  **[LHX_3371030_6]** ,  **[LHX_3371030_5]** ,  **[LHX_3371030_10]**

a19412d4db2fc286172fed7e777d0d5351bebe461cf9ec49f858ee2a68ce4a94

- **Margin decline in the SAS segment:** Margins in SAS declined to **11.6%**, largely due to challenges on classified development programs in the space business, indicating potential ongoing issues in this area.  **[LHX_3404003_5]**
- **Near-term budget pressures in space segment:** The company acknowledges **well-documented budget pressures** in the space side in the near term, which may impact growth expectations.  **[LHX_3404003_7]**
- **Dependence on lumpy international opportunities:** International opportunities in IMS are described as "**a little lumpy**," potentially leading to revenue volatility and unpredictability.  **[LHX_3404003_7]**

22c5a0d4207be8a085ad168870140e868fbfa36c4b1b5d2017763f8c5fc05c68

L3Harris Technologies Inc (LHX)

Financials