Slide 1: Fiscal 2015 Fourth Quarter Earnings Call Presentation
Fiscal 2015 Fourth Quarter Earnings Call Presentation harris.com | Fiscal 2015 Fourth Quarter Earnings Call Presentation |1
Slide 2: Forward-looking statements
Forward-looking statements Statements in this presentation that are not historical facts are forward-looking statements that reflect management's current expectations, assumptions and estimates of future performance and economic conditions. Such statements are made in reliance on the safe harbor pro
Slide 3: 4Q15 summary
4Q15 summary • Solid Harris stand-alone results … ─ Revenue and EPS met expectations ─ FCF of $634M beat expectations at 119% of non-GAAP net income ─ Orders up 17% – RF Communications and Gov’t Communications • Integration team moving aggressively to capture cost synergies ─ May 29th consolidated h
Slide 4: 4Q15 and fiscal 15 results
4Q15 and fiscal 15 results Pro forma excluding Exelis ($million, except per share amounts) 4Q14 4Q15 Fiscal 14 Fiscal 15 4Q15 Fiscal 15 Orders $ 1,087 $ 1,526 $ 4,875 $ 4,959 $ 1,276 $ 4,709 % increase 40% 2% 17% -3% Revenue 1,329 1,535 5,012 5,083 1,255 4,804 % increase 15% 1% -6% -4% GAAP net inco
Slide 5: 4Q15 and fiscal 15 bridge to non-GAAP and pro forma results
4Q15 and fiscal 15 bridge to non-GAAP and pro forma results 4Q15 Fiscal 15 ($million, except per share amounts) $ EPS $ EPS GAAP net income $ (56) $ (0.51) $ 334 $ 3.11 Deal, financing and other acquisition costs 158 169 281 Acquisition integration costs, gross 104 112 Restructuring and other items
Slide 6: Other 4Q15 and fiscal 15 highlights
Other 4Q15 and fiscal 15 highlights ($million) 4Q14 4Q15 Fiscal 14 Fiscal 15 Cash and cash equivalents $ 561 $ 481 $ 561 $ 481 Amortization of acquisition intangibles - 11 - 11 Depreciation and amortization, all other 56 69 204 233 Capital expenditures 70 46 209 148 Effective tax rate (GAAP) 32.3% 1
Slide 7: RF Communications
RF Communications ($million) 4Q14 4Q15 Orders $ 361 $ 530 Tactical Communications 232 402 Public Safety and Professional Communications 129 128 Revenue 493 505 Tactical Communications 348 366 Public Safety and Professional Communications 145 139 Operating income 141 157 Non-GAAP operating income 141
Slide 8: Government Communications
Government Communications ($million) 4Q14 4Q15 Revenue $ 480 $ 485 % increase 1% Operating income 69 66 Operating margin 14.4% 13.7% • 4Q15 revenue up 1% and op margin 13.7%; full year revenue up 3% and 15.8% op margin • Growth drivers for year: F-35 ramping; Foundation GEOINT program; satcom termin
Slide 9: Integrated Network Solutions
Integrated Network Solutions ($million) 4Q14 4Q15 Revenue $ 373 $ 289 % increase -23% Operating income 33 (21) Non-GAAP operating income 33 16 Non-GAAP operating margin 8.7% 5.5% Reference non-GAAP reconciliation on the Harris investor relations website. • Segment revenue down 23% as anticipated – w
Slide 10: Fiscal 16 guidance
Fiscal 16 guidance ($ millions, except revenue and per share amounts) Guidance Fiscal 15 Fiscal 16 $ EPS $ EPS Revenue $ 5.08B $ 7.67 - 7.83B GAAP EPS $ 3.11 $ 5.25 – 5.45 Deal, financing and other acquisition costs 169 ~10 ~$ 0.05 Acquisition integration costs 112 60 - 65 ~$ 0.30 Restructuring and
Slide 11: Pension information
Pension information Legacy Exelis Fiscal 16 ($million) (pro forma Fiscal 15) Estimate FAS expense (income) 65 ~(25) Legacy Exelis Fiscal 16 Fiscal 17 (pro forma Fiscal 15) Estimate Estimate Minimum ERISA contributions* 134 173 ~170 * Includes Exelis OPEB of $1M in proforma FY15 and ~$1-2M thereafter
Slide 12: New fiscal 16 organization
New fiscal 16 organization Four market-focused segments Communication Critical Electronic Space and Systems Networks Systems Intelligence Systems Chris Young Carl D’Alessandro Ed Zoiss Bill Gattle President, President, President, President, Communication Critical Electronic Space & Intelligence Syst
Slide 13: Integration progressing ahead of schedule
Integration progressing ahead of schedule Critical success factors High end of previous ranges ~$150M • CEO ownership ~$120M Weekly program reviews Rigorous tracking of milestones Net cost Net run-rate • Board oversight savings Reviewed at every board meeting • Full-time, dedicated resources A