Slide 1: Fiscal 2015 Third Quarter Earnings Call Presentation
Fiscal 2015 Third Quarter Earnings Call Presentation harris.com | Fiscal 2015 Third 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: 3Q fiscal 2015 summary
3Q fiscal 2015 summary • EPS of $1.32… solid operating results plus benefit of taxes • Revenue down 6%; orders up 9% • Operating margin 100 bp higher vs prior year…. even with R&D investment up 8% • Strong free cash flow of $150M compared to prior year of $120M • Debt financing for Exelis acquisitio
Slide 4: 3Q fiscal 2015 results
3Q fiscal 2015 results ($million, except per share amounts) 3Q 2014 3Q 2015 Orders $ 1,112 $ 1,208 % increase 9% Revenue 1,268 1,187 % increase -6% Income from continuing operations 137 126 Non-GAAP income from continuing operations 137 139 % increase 1% Operating margin 17.6% 17.9% Non-GAAP operati
Slide 5: RF Communications
RF Communications ($million) 3Q 2014 3Q 2015 Orders $ 405 $ 393 Tactical Communications 285 286 Public Safety and Professional Communications 120 107 Revenue 457 451 Tactical Communications 335 356 Public Safety and Professional Communications 122 95 Operating income 144 151 Operating margin 31.4% 3
Slide 6: Government Communications
Government Communications ($million) 3Q 2014 3Q 2015 Revenue $ 477 $ 455 % increase -5% Operating income 77 75 Operating margin 16.2% 16.4% • Lower revenue as expected – largely due to tough prior year compare from space programs and NOAA GOES-R satellite program • 16.4% operating margin – strong pr
Slide 7: Integrated Network Solutions
Integrated Network Solutions ($million) 3Q 2014 3Q 2015 Revenue $ 348 $ 299 % increase -14% Operating income 21 12 Operating margin 6.1% 3.9% • Lower segment revenue primarily from wind-down of two major IT Services programs • Lower operating income primarily due to wind-down of highly profitable NM
Slide 8: 3Q fiscal 2015 financial highlights
3Q fiscal 2015 financial highlights ($million) 3Q 2014 3Q 2015 Cash and cash equivalents $ 350 $ 488 Depreciation and amortization 48 60 Capital expenditures 55 23 Cash flow from operations 175 173 Free cash flow 120 150 Effective tax rate 31.8% 29.9% Reference non-GAAP reconciliation on the Harris
Slide 9: Fiscal 2015 guidance
Fiscal 2015 guidance EPS and op margin Guidance Revenue (non-GAAP) FY 14 Previous FY15 Revised FY15 FY 14 Previous FY15 Revised FY15 Harris Corporation $ 5.01B -1 to -3% ~ -4% $ 5.00 $ 4.95 – 5.05 $ 5.00 – 5.10 Other information RF Communications 1.83B flat to -2% -3 to -4% 30.7% 30% – 31% 30% – 31%
Slide 10: New financing and pro forma debt structure
New financing and pro forma debt structure $M Current Harris Expected end of fiscal year 2015 Face Rate Due Face Rate Due $400 5.950% Dec-17 Redeeming $350 6.375% Jun-19 $400 4.400% Dec-20 HRS $400 4.400% Dec-20 $100 7.000% Jan-26 HRS $100 7.000% Jan-26 $26 6.350% Feb-28 HRS $26 6.350% Feb-28 $300 6