L3harris Technologies, Inc. · NYSE:LHX
L3harris Technologies — Q1 2020 Earnings Presentation
15 slides from L3harris Technologies's earnings presentation, May 5, 2020
Slide 1: L3Harris CY2020 First Quarter Earnings Call Presentation
L3HARRIS CY2020 FIRST QUARTER EARNINGS CALL PRESENTATION May 5, 2020
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: COVID-19 risk mitigation
COVID-19 risk mitigation • Mandated work from home for those who can Ensuring the • Staggered shifts, partitioned work stations and enforced safety of our stringent cleaning protocol workforce • Implemented health screenings at most locations and provided personal protective equipment • L3Harris and
Slide 4: L3Harris strategic priorities update
L3Harris strategic priorities update • Cost synergies ahead of plan...increasing outlook to $165M net synergies in 2020, Execute seamless integration...$500M versus prior $115M 1 in gross cost synergies • Plan to achieve $300M net ($500M gross) in 2021 intact...1 year ahead of schedule • 170 bps of
Slide 5: Solid 1Q20 financials
Solid 1Q20 financials1 ($million, except per share amounts) Revenue EBIT and Margin GAAP 1,728 4,626 808 4,386 4,626 693 + 17% + 5% Pro forma Comparison EBIT2 17.5% 15.8% EBIT margin2 1Q19 1Q20 1Q19 1Q20 EPS Cash flow Operating GAAP 2.02 0.99 cash flow 405 533 2.80 2.32 L3 pre-merger + 21% adjusted
Slide 6: Integrated Mission Systems
Integrated Mission Systems 1 ($million) Revenue GAAP 14 1,370 • Revenue up 1% versus prior-year pro forma1 1,362 1,370 – Growth in Maritime offset by prior-year strength in + 1% Electro Optical Pro forma Comparison – Sustained revenue growth in ISR • Operating income up 22% versus prior-year pro 1Q1
Slide 7: Space & Airborne Systems
Space & Airborne Systems 1 ($million) Revenue GAAP 956 1,192 1,112 1,192 + 7% • Revenue up 7% versus prior-year pro forma1 – Ramp on F-35 modernization in Avionics Pro forma Comparison – Classified growth in Intel & Cyber • Operating income up 12% versus prior-year pro 1Q19 1Q20 forma Operating inco
Slide 8: Communication Systems
Communication Systems 1 ($million) Revenue GAAP 580 1,094 • Revenue up 5% versus prior-year pro forma1 1,041 1,094 + 5% – DoD Tactical modernization ramp – Partially offset by International Tactical sales timing Pro forma Comparison and prior-year strength in Public Safety 1Q19 1Q20 • Operating inco
Slide 9: Aviation Systems
Aviation Systems 1 ($million) Revenue GAAP 144 1,011 914 1,011 • Revenue up 11% versus prior-year pro forma1 11% – Growth in Defense Aviation Products and Mission Pro forma Networks Comparison – Muted growth in commercial aerospace and training 1Q19 1Q20 • Non-GAAP income up 40% versus prior-year pr
Slide 10: 2020 full-year revised guidance
2020 full-year revised guidance Total L3Harris By Segment Organic revenue1 Margin2 Organic revenue1 Margin2 IMS up 5.5 - 7.0% ~13.50% (vs. up 5.0 - 7.0%) (vs. 13.00 - 13.50%) up 3.0 - 5.0% ~17.50% (vs. up 5.0 - 7.0%) (vs. 17.00 - 17.50%) SAS up 6.0 - 7.5% ~18.75% (vs. up 5.5 - 7.5%) (vs. 18.50 - 19.
Slide 11: Non-GAAP 1Q20 EPS bridge
Non-GAAP 1Q20 EPS1 bridge $0.13 $2.80 $0.21 + Pension + Share count $0.14 - Tax $2.32 + Operational efficiencies + Volume - Mix 1Q19 Adjusted Operations Synergies Other 1Q20 pro forma2 Actual 1 Non-GAAP EPS excludes discontinued operations, as applicable, merger deal and integration costs, goodwill
Slide 12: Non-GAAP 2020 guidance EPS bridges
Non-GAAP 2020 guidance EPS1 bridges 2020 EPS guidance bridge 2020 EPS bridge $11.55 $0.19 $11.35 $0.57 $11.35 $(0.15) $0.28 $0.61 $(0.52) + Operational efficiencies + Pension + Pension $10.26 + Share count $0.58 - Mix $(0.15) $(0.52) + Volume + Operational efficiencies 2020 prior Divestitures / Pand
Slide 13: Appendix
Appendix L3Harris CALENDAR YEAR 2020 FIRST QUARTER EARNINGS PRESENTATION 13
Slide 14: Other financial information
Other financial information ($million except noted) CY20 1 1 1Q19 1Q20 CY19 Guide Cost synergies (net) $0 $55 $65 ~$165 Net interest expense $67 $63 $253 ~$255 Integration expenses $12 $31 $244 ~$158 Effective tax rate (non-GAAP) 15.7% 17.0% 16.4% ~17% Noncontrolling interests, net of income taxes2
Slide 15: Supplemental L3Harris tactical communications history
Supplemental L3Harris tactical communications history ($million) 1Q19 2Q19 3Q19 4Q19 1Q20 Orders 289 488 371 486 450 Sales 407 435 401 435 454 DoD 189 195 193 227 270 International 218 240 208 208 184 Funded Backlog1 1,034 1,079 1,049 1,100 1,096 1 Funded backlog includes the impact of foreign curre
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