Slide 1: Fiscal 2018 Second Quarter Earnings Call Presentation
Place image here (13.33” x 3.5”) FISCAL 2018 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: 2Q18: Solid progress against strategic priorities
2Q18: Solid progress against strategic priorities • Strong 6% revenue growth driven by tactical 1 Grow revenue across • Orders up 13%; up double-digits in CS and ES all 3 segments • Year-over-year backlog growth of 15% Drive flawless execution • Excluding tax reform EPS grew by 6%* 2 while maintaini
Slide 4: Key highlights
Key highlights Communication Systems Electronic Systems Space and Intelligence Systems • Revenue up 18%...Tactical up 26% • Revenue up 2%, despite ADS-B • Continued strength in Classified ̶ DoD up 56%...delivering readiness ̶ Double-digit growth in Avionics ̶ Leveraging investments in ground now whi
Slide 5: Solid 2Q18 and 1H18 financial results
Solid 2Q18 and 1H18 financial results ($million, except per share amounts) Revenue EPS Growth across all 3 segments in 1H Operational efficiencies & tax reform driving growth 2.52 GAAP 1.30 1.15 2,869 2,948 2.45 3.05 1,535 +3% 1.67 1,449 Non- 2.66 1.38 +21% +15% +6% GAAP* 2Q17 2Q18 1H17 1H18 2Q17 2Q
Slide 6: Communication Systems
Communication Systems ($million) Revenue • 2Q revenue up 18%; 1H revenue up 7% 899 843 +7% − Tactical Comms grew 10% in 1H 489 413 +18% − Night Vision up high-single digits in 1H • 2Q operating income up 19%; 1H operating income up 10% 2Q17 2Q18 1H17 1H18 − Higher Tactical Comms volume, operational
Slide 7: Electronic Systems
Electronic Systems ($million) Revenue • 2Q and 1H revenue up 2% despite $43M YTD 1,107 1,124 ADS-B impact ($22M in Q2) 570 584 +2% − Strong growth in Avionics across multiple platforms − UAE battle management system and UK robotics ramp +2% − EW growth on legacy platforms • 2Q operating income down
Slide 8: Space & Intelligence Systems
Space & Intelligence Systems ($million) Revenue 921 931 • 2Q revenue down 1%; 1H revenue up 1% +1% 468 465 − Continued demand in Classified programs & commercial -1% reflectors − Environmental programs down high teens • 2Q operating income up 7%; 1H operating 2Q17 2Q18 1H17 1H18 income up 8% Operati
Slide 9: EPS guidance bridge
EPS* guidance bridge $6.30 - $6.50 $0.44 $5.85 - $6.05 $0.13 $0.12 Tactical volume − IRAD into innovative Operational tax & affordable solutions efficiencies Avionics volume − Bid & proposal Half year tax SIS program reform benefit execution/margins − One-time employee − ES mix stock grant
Slide 10: FY18 guidance summary
FY18 guidance summary Total Harris By Segment Revenue Operating margin Revenue Operating Margin $1.84 - 1.88B CS 29.5 - 30.5% $6.08 - 6.14B up 5 - 7% up 3 - 4% 19.0 - 19.5% (versus up 3 - 5%) (versus up 2 - 4%) $2.34 - 2.36B 18.0 - 19.0% ES EPS FCF** up 4 - 5% − (versus 19.0 – 20.0%) (versus up
Slide 11: Other information (with FY17, 2Q18 and 1H18 results comparison)
Other information (with FY17, 2Q18 and 1H18 results comparison) ($million except noted) FY17 2Q18 1H18 FY18 Amortization of Exelis acquisition intangibles $110 $25 $50 ~$103 CHQ costs $56 $18 $34 $55 – 60 non-GAAP non-GAAP non-GAAP non-GAAP FAS Pension expense/(income)* ($90) ($30) ($60) ~($120) Net
Slide 12: Supplemental information - tactical communications history
Supplemental information - tactical communications history ($million) YTD 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 FY15 FY16 FY17 FY18 Orders 404 238 290 237 369 301 279 293 681 353 1,169 1,242 1,034 Sales 340 346 335 276 311 276 328 306 296 348 1,297 1,221 644 DoD 117 91 99 98 113 102