Slide 1: Fiscal 2016 Second Quarter Earnings Call Presentation
Place image here (10” x 3.5”) FISCAL 2016 SECOND QUARTER EARNINGS CALL PRESENTATION HARRIS.COM | #HARRISCORP
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: 2Q16 summary
2Q16 summary ($million, except per share amounts) Reported 2Q16 Revenue EPS FCF • 2Q EPS solid; FCF particularly strong 1,843 $1.49 • Fiscal 16 unfolding about as anticipated 1,843 $1.49 298 298 $1.32 $1.32 1,206 1,206 104 104 w/ acquisition effects driving accretion 2Q15 2Q16 2Q15 2Q15 2Q16 2Q16 2Q
Slide 4: Integration savings exceeding expectations
Integration savings exceeding expectations ($million) Increased run-rate savings – from $120M to $140-150M exiting fiscal 17 100% of Footprint projects completed or in process rationalization 250 • Multiple locations Net run-rate ~75 200 savings • Reducing footprint ~50 140 - 150 175 150 20 - 30 120
Slide 5: 2Q16 GAAP to non-GAAP
2Q16 GAAP to non-GAAP ($million, except per share amounts) 2Q16 $ after-tax EPS GAAP loss from continuing operations (135) (1.09) Non-cash write-down of goodwilll and other assets ($367M pre-tax) 328 2.63 Acquisition-related Net liability reduction for certain post-employment benefit plans ($101M pr
Slide 6: Communications Systems
Communications Systems ($million) Revenue 539 • Segment revenue down 9% 469 489 454 116 − Tactical Comms(1) down 10% Public 109 Safety 111 92 − HRS legacy tactical about flat − International up 10% Tactical 423 380 Comms(1) 358 362 − International 1H B:B of .99 − Weak revenue in Exelis legacy night
Slide 7: Space and Intelligence Systems
Space and Intelligence Systems ($million) Revenue 488 455 435 446 • Segment revenue down 9% − Lower revenue from completion of classified programs and GPS III − Higher revenue from 2 classified programs, including FGCM 1Q15 2Q15 1Q16 2Q16 • Healthy classified orders of $172M on pro forma pro forma p
Slide 8: Electronic Systems
Electronic Systems ($million) Revenue 451 378 374 382 • Segment revenue down 15% − Lower electronic warfare − Higher revenue from F-35 ramp • 2Q wins 1Q15 2Q15 1Q16 2Q16 pro forma pro forma pro forma − $19M order U.S. Air Force B-1B for Operating income and margin electronic warfare 78 − 5-year, $28
Slide 9: Critical Networks
Critical Networks ($million) Revenue 672 644 566 • Segment revenue down 19% 541 − Lower revenue in government IT services and CapRock energy − Higher FAA revenue driven by NextGen modernization 1Q15 pro 2Q15 forma pro forma pro forma 1Q16 2Q16 • IT services B:B >1 in 2Q and 1H Operating income and m
Slide 10: Fiscal 2016 outlook
Fiscal 2016 outlook ($million, except revenue and per share amounts) Guidance Previous Fiscal 16 Revised Fiscal 16 $ pre-tax EPS $ pre-tax EPS Revenue $ 7,670 - 7,830 $ 7,600 - 7,680 GAAP EPS from continuing operations $ 5.25 – 5.45* $ 2.80 – 2.90* Non-cash write-down of goodwill and other assets 36
Slide 11: Fiscal 2016 segment outlook
Fiscal 2016 segment outlook ($million) Non-GAAP segment Other information Revenue operating margin FY15 FY15 Previous FY16 Revised FY16 Previous FY16 Revised FY16 pro forma pro forma Harris Corporation $ 8,085 down 3 to 5% down 5 to 6% Communication Systems $ 2,125 down 2 to 3% down 2 to 3% 29.0% 29