L3harris Technologies, Inc. · NYSE:LHX
L3harris Technologies — Q1 2024 Earnings Presentation
14 slides from L3harris Technologies's earnings presentation, Apr 26, 2024
Slide 1: First Quarter 2024 Earnings Presentation
FIRST QUARTER 2024 EARNINGS PRESENTATION April 26, 2024
Slide 2: Forward-Looking Statements; Non-GAAP Measures
Forward-Looking Statements; Non-GAAP Measures 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
Slide 3: Reaffirming Commitment to Drive Shareholder Value
REAFFIRMING COMMITMENT TO DRIVE SHAREHOLDER VALUE STRONG FOUNDATION FOR GROWTH 2026 FINANCIAL FRAMEWORK Strong leadership team and Board of Directors Portfolio focused on national security and technology 1 Driving profitable growth through program excellence and LHX NeXt Capital deployment prioritie
Slide 4: First Quarter Results & 2024 Guidance
FIRST QUARTER RESULTS & 2024 GUIDANCE STRONG FIRST QUARTER PERFORMANCE... ...DRIVING INCREASE TO MARGIN & EPS GUIDANCE Awarded $5.5B in orders, resulting in a book- Revenue: $20.8B to $21.3B to-bill of 1.06x 1 Adjusted segment operating margin : >15% Revenue up 17% year-over-year, 5% 1 • Up from pri
Slide 5: First Quarter 2024 Financial Results
FIRST QUARTER 2024 FINANCIAL RESULTS $5.5B 1.06x $32B Orders Book-to-Bill Total Backlog $5.2B $788M 15.1% Revenue Adjusted Segment Adjusted Segment Operating Income1 Operating Margin1 $3.06 1 ($156)M $224M $233M Non-GAAP EPS Adjusted Free Dividends Share Repurchase Cash Flow1 1) NGFM - reference the
Slide 6: Space & Airborne Systems
SPACE & AIRBORNE SYSTEMS ($ millions) Revenue Operating Income and Margin $1,751 $1,655 6% $216 $187 12.3% 16% 11.3% 1Q23 1Q24 1Q23 1Q24 1Q24 DRIVERS Revenue: increased 6% Margin: increased 100 bps + Space Systems + Operational performance + Intelligence & Cyber + Program matters in space + Volume b
Slide 7: Integrated Mission Systems
INTEGRATED MISSION SYSTEMS ($ millions) Revenue Operating Income and Margin $1,700 $1,669 (2)% $185 $190 11.4% 3% 10.9% 1Q23 1Q24 1Q23 1Q24 1Q24 DRIVERS Revenue: down 2% Margin: increased 50 bps - Intelligence, Surveillance & + Program performance Reconnaissance (ISR) aircraft + Fewer negative EAC p
Slide 8: Communication Systems
COMMUNICATION SYSTEMS ($ millions) Revenue Operating Income and Margin $1,294 $1,163 11% $310 $266 24.0% 17% 22.9% 1Q23 1Q24 1Q23 1Q24 1Q24 DRIVERS Revenue: increased 11% Margin: increased 110 bps + Tactical Communications + Volume benefit + Integrated Vision Systems + Operational performance + Broa
Slide 9: Aerojet Rocketdyne
AEROJET ROCKETDYNE ($ millions) Revenue Operating Income and Margin $542 $72 13.3% 1Q24 1Q24 1Q24 DRIVERS Results are attributed to program execution across Missile Solutions and Space Propulsion and Power Systems L3HARRIS 2024 First Quarter Earnings Presentation 9
Slide 10: 2024 Guidance
2024 GUIDANCE Consolidated Segment Adjusted segment Revenue Operating Margin1 Revenue 1 operating margin SAS ~$7.0B ~12% (Prior: $6.9B - $7.1B) (Prior: mid-high 11%) $20.8B - $21.3B >15% (Prior: $20.7B - $21.3B) (Prior: ~15%) IMS $6.4B - $6.6B low-mid 11% Non-GAAP EPS 1 FCF 1 CS $5.3B - $5.4B low-mi
Slide 11: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES NEAR-TERM <3.0x LEVERAGE TARGET 3.7x 3.5x Invest in the business 3.4x • Capex: ~2.0% of revenue < 3.0x Debt pay down to <3.0x Pay cash dividend • Increased 23 consecutive years • Target payout: 35% - 40% of FCF Return 100% excess cash after de-levering • $3.7B repurchas
Slide 12: 2024 Supplemental Information
2024 SUPPLEMENTAL INFORMATION Current Prior FAS/CAS operating adjustment ~$30 million ~$40 million Non-service FAS pension income ~$310 million ~$260 million Net FAS/CAS pension* ~$340 million ~$300 million Net interest expense* ~$650 million ~$650 million 1 Effective tax rate on non-GAAP earnings 1
Slide 13: Pension Adjusted EPS
PENSION ADJUSTED EPS 1Q 2Q 3Q 4Q Full Year 1Q Full Year 2023 2023 2023 2023 2023 2024 2024 1 Non-GAAP EPS $2.86 $2.97 $3.19 $3.35 $12.36 $3.06 $12.70 - $13.05 YoY Growth % 7.0% 3% - 6% FAS/CAS operating adjustment 0.10 0.10 0.12 0.17 0.50 0.03 ~0.14 Non-service FAS pension income 0.35 0.35 0.36 0.36
Slide 14: Leverage Reconciliation
LEVERAGE RECONCILIATION Quarter Ended Four (In millions) 1Q24 4Q23 3Q23 2Q23 Quarters Short-term debt $ 2,203 Current portion of long-term debt, net 365 Long-term debt, net 11,140 Total debt 13,708 Less cash and cash equivalents 477 Net debt (A) $ 13,231 Net income $ 283 $ 158 $ 383 $ 349 $ 1,173 Ad
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