L3harris Technologies, Inc. · NYSE:LHX
L3harris Technologies — Q3 2024 Earnings Presentation
15 slides from L3harris Technologies's earnings presentation, Oct 25, 2024
Slide 1: Third Quarter 2024 Earnings Presentation
THIRD QUARTER 2024 EARNINGS PRESENTATION OCTOBER 24, 2024
Slide 2: Forward-Looking Statements; Non-GAAP Measures
Forward-Looking Statements; Non-GAAP Measures This presentation contains forward-looking statements within the meaning of federal securities laws made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples include, but are not limited to, statemen
Slide 3: Reaffirming Commitment to Drive Shareholder Value
REAFFIRMING COMMITMENT TO DRIVE SHAREHOLDER VALUE STRONG FOUNDATION FOR GROWTH 2026 FINANCIAL FRAMEWORK Strong and experienced leadership team and Board of Directors Portfolio focused on national security and technology 1 Driving profitable growth through program excellence and LHX NeXt Capital depl
Slide 4: Key Highlights
KEY HIGHLIGHTS NEXT GENERATION JAMMER P-8A POSEIDON IDIQ > Awarded ~$600 million contract to deliver > Awarded ~$1.2 billion IDIQ contract from the U.S. custom tactical jamming pods for the U.S. Navy, for maintenance and support services of the Navy's Aerial Electronic Attack capability. The P-8A Po
Slide 5: Third Quarter 2024 Financial Results
THIRD QUARTER 2024 FINANCIAL RESULTS $7.2B 1.4x $34B Orders Book-to-Bill Total Backlog $5.3B $833M 15.7% Revenue Adjusted Segment Adjusted Segment Operating Income2 Operating Margin2 $3.34 $728M $220M $190M Non-GAAP Adjusted Free Dividends Share Repurchases Diluted EPS2 Cash Flow2 2) NGFM - referenc
Slide 6: Third Quarter Results & 2024 Guidance
THIRD QUARTER RESULTS & 2024 GUIDANCE STRONG THIRD QUARTER PERFORMANCE... ...DRIVING INCREASE TO GUIDANCE $7.2B in orders, resulting in a book-to-bill Revenue: $21.1B to $21.3B of 1.4x • Updated from prior guidance of $21.0B - $21.3B Revenue up 8% year-over-year, 5% 2 1 organically , primarily from
Slide 7: Space & Airborne Systems
SPACE & AIRBORNE SYSTEMS ($ millions) Revenue Operating Income and Margin $1,686 $1,683 $210 $195 12.5% 11.6% 3Q23 3Q24 3Q23 3Q24 3Q24 DRIVERS Revenue: flat Margin: decreased 90 basis + Intel & Cyber classified programs points + Intel & Cyber + FAA mission critical networks + FAA mission critical ne
Slide 8: Integrated Mission Systems
INTEGRATED MISSION SYSTEMS ($ millions) Revenue Operating Income and Margin $1,671 $1,568 $204 $187 11.9% 12.2% 3Q23 3Q24 3Q23 3Q24 3Q24 DRIVERS Revenue: increased 7% Margin: increased 30 basis + Aircraft missionization volumes points + Program performance + Advanced electronics for space and + LHX
Slide 9: Communication Systems
COMMUNICATION SYSTEMS ($ millions) Revenue Operating Income and Margin $1,382 $1,255 $359 $282 26.0% 22.5% 3Q23 3Q24 3Q23 3Q24 3Q24 DRIVERS Revenue: increased 10% Margin: increased 350 basis + Demand for resilient points + Higher volumes communications and waveforms + International mix + Night visio
Slide 10: Aerojet Rocketdyne
AEROJET ROCKETDYNE ($ millions) Revenue Operating Income and Margin $596 $75 12.6% 3Q24 3Q24 3Q24 DRIVERS + Results are attributed to program execution across Missile Solutions and Space Propulsion and Power Systems L3HARRIS 2024 Third Quarter Earnings Presentation 10
Slide 11: 2024 Guidance
2024 GUIDANCE CONSOLIDATED SEGMENT Adjusted segment Revenue Operating Margin 2 Revenue 2 operating margin SAS ~$7.0B low 12% $21.1B - $21.3B ~15.5% (Prior: $21.0B - $21.3B) (Prior: 15.2% - 15.4%) IMS $6.6B - $6.7B mid - high 11% (Prior: $6.5B - $6.7B) (Prior: mid 11%) CS ~$5.4B mid - high 24% Non-GA
Slide 12: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES NEAR-TERM <3.0x NET LEVERAGE TARGET 3.7x Invest in the business 3.5x 3.4x • Capex: ~2.0% of revenue 3.2x 3.1x < 3.0x Pay down debt to <3.0x net leverage Pay competitive dividend • Increased 23 consecutive years • Target payout: 35% - 40% of FCF Return 100% of excess cas
Slide 13: 2024 Supplemental Information
2024 SUPPLEMENTAL INFORMATION Current Prior FAS/CAS operating adjustment ~$30 million ~$30 million Non-service FAS pension income ~$310 million ~$310 million Net FAS/CAS pension* ~$340 million ~$340 million Net interest expense* ~$660 million ~$660 million 2 Effective tax rate on non-GAAP earnings 1
Slide 14: Pension Adjusted EPS
PENSION ADJUSTED EPS 2 1Q 2Q 3Q 4Q Full Year 1Q 2Q 3Q Full Year 2023 2023 2023 2023 2023 2024 2024 2024 2024 1 Non-GAAP EPS $2.86 $2.97 $3.19 $3.35 $12.36 $3.06 $3.24 $3.34 $12.95 - $13.15 YoY Growth % 7.0% 9.1% 4.7% 5.6%* FAS/CAS operating adjustment 0.10 0.10 0.12 0.17 0.50 0.03 0.03 0.03 ~0.14* N
Slide 15: Leverage Reconciliation
LEVERAGE RECONCILIATION Four (In millions) 4Q23 1Q24 2Q24 3Q24 Quarters Short-term debt $ 1,177 Current portion of long-term debt, net 640 Long-term debt, net 11,093 Total debt 12,910 Less cash and cash equivalents 539 Net debt (A) $ 12,371 Net income $ 126 $ 285 $ 367 $ 404 $ 1,182 Adjustments: Inc
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