L3harris Technologies, Inc. · NYSE:LHX
L3harris Technologies — Investor Day (December 2023)
92 slides from L3harris Technologies's investor day presentation, Dec 12, 2023
Slide 1: L3Harris Investor Day 2023
L3HARRIS Investor Day 2023 1
Slide 2: Opening Remarks
OPENING REMARKS Vice President, Investor Relations L3HARRIS Investor Day 2023 2
Slide 3: Forward-looking statements
Statements in this 2023 Investor Day 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 provisions o
Slide 4: Non-GAAP financial measures
This 2023 Investor Day presentation contains non-GAAP financial measures (“NGFMs”) within the meaning of Regulation G promulgated by the SEC, including segment operating margin, adjusted free cash flow, organic revenue and debt leverage and each of which is defined in the most recent earnings materi
Slide 5: Agenda and presenters
9:00 am Welcome Mark Kratz Vice President, Investor Relations Executive Overview Chris Kubasik Chair and Chief Executive Officer Aerojet Rocketdyne Ross Niebergall President Space & Airborne Systems Ed Zoiss President ~ 10:30 am Break (~15 min) Integrated Mission Systems Jon Rambeau President Commun
Slide 6: Click to play overview video
CLICK TO PLAY OVERVIEW VIDEO (LINK TO YOUTUBE)
Slide 7: Executive Overview
EXECUTIVE OVERVIEW Chair and Chief Executive Officer L3HARRIS Investor Day 2023 7
Slide 8: Our Mission
SHAREHOLDERS OUR MISSION Rapidly deliver resilient, innovative and disruptive solutions by listening to our EMPLOYEES CUSTOMERS customers, knowing the threats and partnering for speed. L3HARRIS Investor Day 2023 11
Slide 9: Capital deployment, margin expansion, growth, portfolio, talent
CAPITAL DEPLOYMENT DELIVER AND RETURN FREE CASH FLOW TO SHAREHOLDERS MARGIN EXPANSION RELENTLESS FOCUS ON OPERATIONAL EXCELLENCE AND ENTERPRISE EFFICIENCY GROWTH TRUSTED DISRUPTOR STRATEGY IN ACTION PORTFOLIO PORTFOLIO FOCUSED ON NATIONAL SECURITY AND TECHNOLOGY TALENT EXPERIENCED LEADERSHIP TEAM L3
Slide 10: National security company at a glance
National Security SPACE 50K+ 60% 75% 80% 80% TOTAL PRIME PROGRAMS DOMESTIC CUSTOMER EMPLOYEES R&D AIR CYBER LAND 25K+ 40% 25% 20% 20% CLEARED MERCHANT PRODUCTS INTERNATIONAL INTERNAL SEA PERSONNEL SUPPLIER / R&D SUBCONTRACT Other L3HARRIS Investor Day 2023 10
Slide 11: Differentiated, trusted, disruptive portfolio
DIFFERENTIATED. TRUSTED. DISRUPTIVE. AGILE. INNOVATIVE. Space & Airborne Communication Systems (SAS) Systems (CS) $7B 11%+ LONG- $5B 24%+ SHORT- Revenue Margin CYCLE Revenue Margin CYCLE DOMAINS: DOMAINS: PORTFOLIO CONNECTING ALL Integrated Mission DOMAINS Aerojet Systems (IMS) Rocketdyne (AR) $7B 1
Slide 12: Defense budget and Future Year Defense Plan
842 816 Geopolitical environment increasingly 742 complex, driving increased defense 704 303 315 spending +12% +4% 270 +9% Investment 248 Accounts Continued focus on developing advanced capabilities, while balancing affordability Future Year Defense Plan (FYDP) is growing in key areas aligned with L
Slide 13: Demand for L3Harris capabilities
DEMAND FOR L3HARRIS CAPABILITIES… Aircraft Missionization Soldier Modernization & Resilient Communications Fighter Upgrades & Platform Expansion Maritime Platform Expansion L3HARRIS Investor Day 2023 13
Slide 14: Captured value and focused businesses on the core
Core Non- Core Core Non- Core 2024+ Core Focusing the Portfolio for Value Creation 2020-23 Captured Value and Focused ❯ Execute strategic alternatives for non-core assets Businesses on the Core 2019 ❯ Capture Aerojet Rocketdyne Introduced L3Harris Achieved $660M in cost savings synergies Combined mi
Slide 15: Portfolio core and non-core revenue
~$21B 10% + Assessing Portfolio To ~$18B ~$2.4B Determine Non-Core… Evaluating Multiple ~$2.4B ~$2.8B Organic Growth Disposition Strategies Non-Core Revenue ~25% Executed or Expanded Critical Announced Non-Core National Security Divestitures Capabilities Through Acquisitions $2.9B of proceeds Core t
Slide 16: Tactical Data Links acquisition integration
Improves Combined Joint Gained immediate access Provides path to Expanded defense- Strong revenue growth All-Domain Command & to Link 16 waveform, Advanced Tactical Data oriented commercial and margin profile Control (CJADC2) platforms and prime Links for future, models across domains capability con
Slide 17: Aerojet Rocketdyne acquisition progress
Established L3Harris Expanded capabilities in Enhanced revenue Gained access to >50% Accretive in near-term as a go-to rocket motor weapons and space, two visibility with long-term of possible content on merchant supplier high-growth markets backlog U.S. Missile programs RECENT MARKET DYNAMICS: IN 4
Slide 18: Perform, Grow, Innovate
PERFORM Execute on time and on plan GROW Focus on profitable growth INNOVATE Leverage technology & agility as a competitive advantage L3HARRIS Investor Day 2023 18
Slide 19: Imperative: Perform
IMPERATIVE: PERF ORM Core to L3Harris’ culture Next phase of L3Harris integration Enduring approach to delivering value Targeted 3-year program to achieve cost savings for customers and partners Empowering teams to be efficient, Delivering operational efficiencies by leveraging innovative and entrep
Slide 20: ~$1B gross savings target
IMPERATIVE: PERF ORM ~$1B GROSS SAVINGS TARGET Gross Savings Direct ~$450M ~$400M Spend Margin ~$400M Improvement Indirect ~$200M Implementation Cost Annual Run-Rate Savings Spend Implementation Margin Improvement Cost Exiting Year 2023 ~$100M ~$20M Workforce 2024 ~$220M ~$175M & Labor ~$350M 2025 ~
Slide 21: Targeted savings by category
IMPERATIVE: PERF ORM ~$17B ~$1B Targeted Savings Infrastructure • Rationalize facilities from 275 to 200 Indirect 4 • Standardize ERP - reduce entities 50% • Consolidate IT data centers 98% from 85 to 2 • Reduce IT application portfolio and spend by 25% ~6% Indirect Procurement Reduction • Outsource
Slide 22: Imperative: Grow
IMPERATIVE: GROW PROCESSES U.S. DOD MAJOR GROWTH AREAS SPACE Growth in space as a warfighting domain, especially in missile warning / missile defense; growth in civil due to weather re-cap Deliver solutions across the value chain MISSILES & MUNITIONS Increase share of platform mission content Acquis
Slide 23: Imperative: Innovate
IMPERATIVE: INNOVATE MAJOR FOCUS AREAS $500M $2B Resilient Networking Multi-Domain ANNUAL ANNUAL & Communications Autonomy & AI INTERNAL R&D CUSTOMER R&D 25 Kinetic & Non- Kinetic Effects Spectrum & Information Dominance INNOVATION COLLABORATIONS Note: Figures based on anticipated 2023 amounts L3HAR
Slide 24: Unique, diverse experience
CHRIS KUBASIK K E N B E D I N G F I E LD BYRON GREEN TANIA HANNA Chair and Chief Senior Vice President Vice President, Vice President, Executive Officer and Chief Financial Global Operations Government Relations Officer and Communications ❯ Joined in 2015* ❯ Joined in 2023 ❯ Joined in 2019 ❯ Joined
Slide 25: Ad hoc Business Review Committee
AD HOC BUSINESS REVIEW COMMITTEE CHRISTOPHER E. SALLIE B. PETER W. THOMAS A. Established ad hoc Business KUBASIK BAILEY CHIARELLI DATTILO Review Committee Chair Independent Director Independent Director Independent Director ROGER B. WILLIAM H. FRADIN SWANSON Review L3Harris’ operational Co-Chair Co-
Slide 26: Invest, pay down debt, return excess cash
INVEST IN THE BUSINESS • Consistent R&D and Capital Expenditures DEBT PAYDOWN • Achieve Leverage of < 3.0x RETURN EXCESS CASH • Annual Dividend Increases • Share Repurchases L3HARRIS Investor Day 2023 26
Slide 27: Differentiated from peers as the Trusted Disruptor
Differentiated from peers as the Trusted Disruptor Relentless focus on operational excellence and enterprise efficiency Clear financial objectives and capital deployment strategy to drive shareholder value L3HARRIS Investor Day 2023 27
Slide 28: Aerojet Rocketdyne
AEROJET ROCKETDYNE President, Aerojet Rocketdyne L3HARRIS Investor Day 2023 28
Slide 29: Growing Aerojet Rocketdyne as trusted merchant supplier
L3Harris will grow Aerojet Rocketdyne as a trusted merchant supplier Aerojet Rocketdyne drives pull through of L3Harris capabilities Secured positions on next generation franchises Improved execution on core franchises will drive top-line growth and margins Demand continues to grow with Ukraine and
Slide 30: Fast facts
FAST. FACTS. $1B+ 25% 60% Designing and producing a full range 2023 REVENUE PRIME FIXED PRICE of propulsion and power solutions across space and missile systems. Trusted merchant supplier to the primes for franchise programs. 11%+ 75% 40% 2023 SEGMENT MARGIN SUB COST PLUS $6B+ 50% 80% ROBUST OF PROP
Slide 31: Space and missiles
SPACE MISSILES LAUNCH IN-SPACE TACTICAL AIR & MISSILE STRATEGIC PROPULSION PROPULSION MISSILES DEFENSE DETERRENCE & POWER First stage RS-25 and Chemical, electrical and Propulsion for tactical Propulsion for Patriot Propulsion for Trident upper stage RL10 nuclear thrusters and weapons, like Javelin,
Slide 32: Next generation heavy lift space launch
Next generation of heavy lift space launch provides multi-year pipeline for rocket engines and propulsion system Trusted and reliable franchises Supports Artemis moon landing NASA and deep space exploration SPACE On contract for 9 launches LAUNCH SYSTEM 40+ propulsion systems per launch RL10 RS-25 F
Slide 33: Share of missile cost and market size
❯ Aerojet Rocketdyne captures ~20% of total cost of every missile it is on ❯ Aerojet Rocketdyne + L3Harris can address 50%+ of the content on every missile program ❯ Positioned as trusted merchant supplier across the value chain Controls and Datalinks and Structure Propulsion Kinetic Effect Subsyste
Slide 34: Presence on domestic missiles fielded
❯ Aerojet Rocketdyne + L3Harris is on 75%+ of all domestic missiles currently fielded ❯ Complementary capabilities better position L3Harris to pursue new missile programs ❯ New missile programs are infrequent, but last decades when they enter production 80% 100% 100% 50% 50% SURFACE-TO-AIR SURFACE-T
Slide 35: Balanced portfolio and new franchise wins
BALANCED PORTFOLIO ACROSS PRODUCTION BACKLOG AND NEXT GENERATION ON-RAMPS Re-entering large motor market with Sentinel and Next Generation Interceptor Developing advanced air- launched missile propulsion WINNING NEW FRANCHISE PROGRAMS WITH Competing for Long Range INNOVATIVE DESIGNS Maneuverable Fir
Slide 36: Efforts to deliver >100 bps margin expansion
PROGRAM EXECUTION Reallocate segment R&D – 4x Additive manufacturing to Injected missile prime experience for manufacturing reduce costs by up to 75% in into leadership modernization certain areas Establishing Centers of Excellence Reallocate segment capital – 10x investment in suppliers to 2x for f
Slide 37: Standard Missile-6 case study
S TANDARD MISSILE -6 (SM -6) C ASE S TUDY: SM-6 IS A SHIP LAUNCHED, MULTI-MISSION MISSILE 4 1 PARTNERING WITH SUPPLIERS ❯ Anti-air warfare TO ADDRESS CRITICAL COMPONENTS ❯ Ballistic missile defense Surging on-site resources 2 ❯ Anti-surface warfare Investing to increase capacity 3 AEROJET ROCKETDYNE
Slide 38: L3Harris operating system and DPA Title III
APPLY L3HARRIS OPERATING SYSTEM AND DPA TITLE III TO MODERNIZE AEROJET ROCKETDYNE ENTERPRISE Purpose-Built Facilities Digital Factory for efficient operations and with centers of excellence expanded production capacity for inerts and energetics DEFENSE PRODUCTION ACT TITLE III Strengthen Supply Chai
Slide 39: Click to play modernized manufacturing video
CLICK TO PLAY MODERNIZED MANUFACTURING FACILITIES VIDEO (LINK TO YOUTUBE)
Slide 40: What L3Harris brings to Aerojet Rocketdyne
WHAT L3HARRIS BRINGS TO IN 4+ MONTHS SINCE CLOSE WE HAVE… AEROJET ROCKETDYNE Opportunity to scale ❯ Created a world-class ❯ Re-directed investments to leadership team, steeped in focus on operational Enhanced operating system and missiles and munitions excellence operational excellence programs ❯ Su
Slide 41: Growing Aerojet Rocketdyne as trusted merchant supplier
L3Harris will grow Aerojet Rocketdyne as a trusted merchant supplier Aerojet Rocketdyne drives pull through of L3Harris capabilities Secured positions on next generation franchises Improved execution on core franchises will drive top-line growth and margins Demand continues to grow with Ukraine and
Slide 42: Space and Airborne Systems
SPACE AND AIRBORNE SYSTEMS President, Space and Airborne Systems L3HARRIS Investor Day 2023 42
Slide 43: Build on Trusted Disruptor strategy
Build on success of Trusted Disruptor strategy Continue growing as a prime mission provider in next-generation architectures Expand on new prime wins in missile defense, weather, Position Navigation and Timing, and trusted microelectronics Drive margin expansion following period of space prime marke
Slide 44: Fast facts
FAST. FACTS. $7B 60% 60% 90% 2023 REVENUE* PRIME FIXED PRICE DOMESTIC Provider of full-mission solutions and top-tier major weapons systems capabilities in the space, 11%+ 40% 40% 10% airborne and cyber domains. 2023 SEGMENT MARGIN* SUB COST PLUS INTERNATIONAL 2023 Revenue 2023 Revenue by Customer S
Slide 45: Air, space and cyber
Surveillance Classified AIR ❯ Mission Processors SPACE ❯ CYBER ❯ ❯ Electronic Warfare ❯ Global Positioning ❯ Information Assurance ❯ Suspension & Release ❯ Civil Weather ❯ Advanced RF Solutions for Equipment Special Applications ❯ Missile Warning / ❯ Multi-Function Apertures Missile Defense ❯ Truste
Slide 46: Air: modernizing platforms and next-generation
AIR Modernizing Key In-Service Platforms Participating in Next-Generation Platforms ❯ Maintaining relevance for the future fight ❯ High-performance mission systems ❯ Technology refreshes moving into production ❯ Longer term time horizon ❯ $12B of future production opportunity ❯ Multi-billion dollar
Slide 47: Space provides
SPAC E Space Provides ❯ Access to denied areas ❯ 24 x 7 Persistence ❯ Faster capability insertion ❯ Lower support cost ❯ Opening opportunities for L3Harris to prime PERMISSIVE AIR DOMAIN CONTESTED AIR DOMAIN L3HARRIS Investor Day 2023 47
Slide 48: Next-gen missile defense and surveillance
SPAC E NEXT-GEN MISSILE DEFENSE NEXT-GEN SURVEILLANCE SYSTEMS ❯ New market entry for L3Harris into the fast-growing Space sector PAYLOADS ❯ 20 satellites on order, $1B+ captured over last 2 years Optical Telescope ❯ Constellation refresh cycle 3-5 years driving continuous production Assembly Comms /
Slide 49: Next-gen PNT and civil weather
SPAC E NEXT-GEN POSITION, NAVIGATION & TIMING NEXT-GEN CIVIL WEATHER PAYLOADS Mission Transmitter PAYLOADS Advanced Baseline Cross-Track Data Unit Electronics Imager (ABI) Infrared Sounder (CrIS) ❯ Evolved from payload provider to full system ❯ Provider of 2/3 of the world’s weather products, prime,
Slide 50: Satellite production increasing
SPAC E 25+ SATELLITE PRODUCTION INCREASING 50+ satellites under contract since merger 6 New satellite architecture 2023 2024 2025 2026 2027 driving stable marketplace for STATE-OF-THE-ART SPACE FACILITY EXPANSIONS continuous production Indiana Florida New competitive prime awards valued at >$4B over
Slide 51: Secure microelectronics moving into production
C YBER New Secure $52B CHIPS & Science Act Need for Trusted Foundry Driving Microelectronics $6B in DoD Microelectronics Investments Significant Growth Moving Into ❯ Unique secure fabrication facility Applied technologies and facilities to execute Production wide range of secure missions ❯ 100k sq.
Slide 52: Efforts to deliver >100 bps margin expansion
PROGRAM EXECUTION Optimizing functional Advanced program tools & No bidding Fixed Price contracts with high- organization support automated workflows risk exposure Driving structural efficiencies Implemented real-time Incorporating increased bid rigor performance dashboards and inflation adjustments
Slide 53: Build on Trusted Disruptor strategy
Build on success of Trusted Disruptor strategy Continue growing as a prime mission provider in next-generation architectures Expand on new prime wins in missile defense, weather, Position Navigation and Timing, and trusted microelectronics Drive margin expansion following period of space prime marke
Slide 54: L3Harris Investor Day 2023
L3HARRIS Investor Day 2023 54
Slide 55: Integrated Mission Systems
INTEGRATED MISSION SYSTEMS President, Integrated Mission Systems L3HARRIS Investor Day 2023 55
Slide 56: Accelerate Trusted Disruptor momentum
Accelerate Trusted Disruptor momentum Scale and extend specialized mission capabilities across domains Deliver differentiated prime integration capability through technology depth Focused on profitable growth to expand margins L3HARRIS Investor Day 2023 56
Slide 57: Fast facts
FAST. FACTS. $7B 60% 75% 75% 2023 REVENUE* PRIME FIXED PRICE DOMESTIC Industry-leading mission capabilities provider and prime mission systems 11%+ 40% 25% 25% integrator for air and sea domains. 2023 SEGMENT SUB COST PLUS INTERNATIONAL MARGIN* 2023 Revenue 2023 Revenue by Customer Commercial Sea 25
Slide 58: Air and sea
AIR ❯ Air Platform Integration SEA ❯ Passive Sensing & Targeting ❯ Passive Sensing & Targeting ❯ Autonomy & Manned/Unmanned ❯ Electronic Attack ❯ Power & Communications ❯ Classified ❯ Undersea Networks ❯ Classified L3HARRIS Investor Day 2023 58
Slide 59: Business journey since merger
MERGER TODAY Integration Covid-19 Impact Stabilization Optimization Profitable Growth ❯ Synergy ❯ Virtual Work ❯ Residual ❯ Infrastructure ❯ Focused Realization Impact Efficiencies Portfolio ❯ Supply Chain Challenges ❯ Operational ❯ Performance ❯ Portfolio Shaping ❯ Streamlined ❯ Attrition and Knowl
Slide 60: Efforts to deliver >100 bps margin expansion
PROGRAM EXECUTION Simplifying Harmonizing functional Revised delegations business systems processes Strengthened program controls Reducing footprint Improving supply chain resiliency Expanding independent Shaping portfolio bid reviews Streamlining procedures COMBINED EFFORTS ANTICIPATED TO DELIVER >
Slide 61: Business optimization and accretive growth
BUSINESS OPTIMIZATION ACCRETIVE GROW TH 4 REPORTING UNITS Category Trusted Disruptor in Action Timing TODAY FROM TO 1 ERP VENDORS AIR Airborne ISR Large Business Jets NEAR-TERM Platforms HORIZON ~70 SITES Sensing & Targeting Radar Hybrid MID-TERM HORIZON SEA ~10 Manned/ Maritime Fully-Manned Unmanne
Slide 62: 50%+ steady revenue
Foundational Air Force and Naval Ship Systems and Growing Army Partnership Partnership with US Allies USSOCOM Partnerships Acoustics Foundation Opens Expands Airborne Increases Profitable Deliver Consistent Annual Door for Disruptive Growth Sensing Opportunities International Revenue Volume Revenue
Slide 63: Click to play IMS video
CLICK TO PLAY IMS VIDEO (LINK TO YOUTUBE)
Slide 64: Leading special mission capabilities today
LEADING SPECIAL ❯ Industry-leading MISSION CAPABILITIES DoD signals TODAY intelligence ❯ The mission- critical link for all air combat 60 Years of Sensing and Targeting Experience L3HARRIS Investor Day 2023 64
Slide 65: Leading special mission capabilities
57 LEADING SPECIAL ❯ Industry-leading DoD signals intelligence MISSION CAPABILITIES TODAY ❯ The mission-critical link L3HARRIS for all air combat Business Jets 48 Across Next 8 Competitors ADVANCING 18 ❯ Extending to smaller, agile, more affordable platforms CAPABILITIES FOR THE (agnostic) MISSIONS
Slide 66: Unmanned and passive sensing budget growth
UNMANNED Budget: Small/Medium Unmanned Surface & Underwater Vessels 2x We are growing use of unmanned platforms that can greatly enhance our collective maritime domain awareness. ❯ Admiral Lisa Franchetti Chief of Naval Operations (Sep 2023) UNMANNED 2023 2026 2028 The Navy has successfully demonstr
Slide 67: Extending leadership position today
360◦ PASSIVE 150 USVs EXTENDING OUR LEADERSHIP POSITION TODAY Operational DETECTION ❯ 60 years of sensing and targeting experience ❯ Leading operational autonomy for US, UAE, UK, AUS Navies ❯ The ONLY successful UUV submarine launch and recovery 1000+ Kilometers of INNOVATING FOR THE SOLUTIONS OF TO
Slide 68: Industry partner and LHX capabilities
LHX Industry-Leading Industry Partner Capabilities Capabilities 7,000+ Fielded Passive Sensing & Targeting Systems L3HARRIS Investor Day 2023 68
Slide 69: Differentiators in air and sea
18 Months to Field 150 Capabilities on 48 57 Business Jet Operational Across Next 8 Unmanned Surface Competitors Vessels L3HARRIS Business Jets 7000+ Fielded Passive Sensing & Targeting 50%+ 1000+ Systems Steady Kilometers of Revenue Undersea Network Deployed 300 Deployed Unmanned 60 Underwater Vehi
Slide 70: Accelerate Trusted Disruptor momentum
Accelerate Trusted Disruptor momentum Scale and extend specialized mission capabilities across domains Deliver differentiated prime integration capability through technology depth Focused on profitable growth to expand margins L3HARRIS Investor Day 2023 70
Slide 71: Communication Systems
COMMUNICATION SYSTEMS President, Communication Systems L3HARRIS Investor Day 2023 71
Slide 72: Extend leadership in secure resilient communications
Extend leadership in delivering secure and resilient communications across all domains Drive value from Tactical Data Links (TDL) acquisition Leverage differentiated business model, technology, and strengthened supply chain Enable the U.S. and its allies to operate seamlessly across all domains — Co
Slide 73: Fast facts
FAST. FACTS. $5B 70% 85% 70% Leading provider of best-in-class, 2023 REVENUE* PRIME FIXED PRICE DOMESTIC resilient networks for seamless sensor-to-shooter and CJADC2 connectivity. 24%+ 30% 15% 30% 2023 SEGMENT MARGIN* SUB COST PLUS INTERNATIONAL 2023 Revenue 2023 Revenue by Customer International 30
Slide 74: TDL acquisition expands capabilities
SEAMLESSLY INTEGRATING COMPLEX TDL acquisition expands resilient CARVE-OUT ACQUISITION communication and networking ❯ Integration ahead of schedule and on budget capabilities with: ❯ Completed transition of all 5 product lines to Salt Lake City ❯ Broader end-to-end connectivity across multiple domai
Slide 75: Supply chain evolution
Survive Covid-19 Launch Recovery Stabilize Optimize for Impact Effort Output Performance & Profit ❯ Scarcity of product ❯ Alternate part design ❯ Initiate strategic ❯ Value engineer for cost relationships reduction ❯ Supply chain crisis ❯ Increased inventory safety stock ❯ Proactively design for ❯ P
Slide 76: Efforts to deliver >100 bps margin expansion
PROGRAM EXECUTION Leverage supplier long- Continue realizing streamlined Price to execute not just win term agreements internal business processes Deploy enhanced program Design alternate supply Gaining labor efficiencies execution tools and training chain parts Reduce product manufacturing costs CO
Slide 77: Traditional model versus our model
Traditional Model Our Model Field R&D solutions Warfighter feedback BATTLE TESTED Complex, Time-Intensive, Disjointed Rapid, Agile, Scalable L3HARRIS Investor Day 2023 77
Slide 78: Breadth of radios, links, platforms and sensors
BREADTH OF RADIOS, LINKS, PLATFORMS AND SENSORS IN 140 COUNTRIES WORLDWIDE 1M+ Tactical radios 20K+ Link-16 capable platforms 50K+ Data link devices 1M+ Aiming & Night Vision devices L3HARRIS Investor Day 2023 78
Slide 79: Software defined, hardware enabled
SOFTWARE DEFINED… …HARDWARE ENABLED MIDS-JTRS (Multi-Functional RASOR 65+ Waveforms AN / PRC-167 Most feature rich Information Distribution System- Joint Tactical Radio System) Rapidly Adaptable Software defined Open Radio software defined tactical Premier Link-16 terminal for U.S. and radio in the
Slide 80: Combined Joint All Domain Command & Control
COMBINED Interoperability with allied forces NGJ ICP MX-10 JOINT BANDIT Multiple U.S. services MIDS ALL DOMAIN Linking assets across RASOR all 5 domains COMMAND 167 167 & CONTROL Assured information 163 ENVG-B transmit and receive Geolocation Jamming Detection Quantum & AI NEAR PEER THREATS & Spoofi
Slide 81: Extend leadership in secure resilient communications
Extend leadership in delivering secure and resilient communications across all domains Drive value from Tactical Data Links (TDL) acquisition Leverage differentiated business model, technology, and strengthened supply chain Enable the U.S. and its allies to operate seamlessly across all domains — Co
Slide 82: Financials
FINANCIALS Chair and Chief Executive Officer L3HARRIS Investor Day 2023 82
Slide 83: 2023 Guidance, 2024 Outlook, 2026 Framework
2023 Guidance 2024 Outlook 2026 Framework Revenue $19.2B - $19.4B ~$21B $23B Segment Operating Margin ~14.8% ~15.0% 16.0% Free Cash Flow $2B+ ~$2.2B $2.8B L3HARRIS Investor Day 2023 83
Slide 84: Segments and other information
Segments Other Information Revenue Organic Margin Pension Income ~$300M ~$0.45 non-operational Guidance Revenue EPS headwind ~$0.45 non-operational SAS Low $7B Interest Expense ~$640M EPS headwind IMS Mid $6B1 Tax Rate Low 13% CS Low-Mid $5B Share Count Flat – up slightly Potential opportunistic sha
Slide 85: Growth drivers by segment
AR SAS IMS CS MISSILES SPACE SEA LAND / ALL ❯ Improved execution on core ❯ Grow prime positions in next- ❯ Sensing & Targeting ❯ Resilient communications franchises generation architectures ❯ Manned / Unmanned ❯ Waveform software strategy ❯ Demand from growing conflicts, ❯ Expand on new prime wins i
Slide 86: Organic growth and margin expansion versus peers
~350+bps above defense peers National Security focused portfolio to drive organic revenue growth 16% ~14.8% All segments anticipated to deliver >100 bps margin expansion by 2026 11.1% LHX NeXt delivering operational efficiencies and cost savings 2022 Peer Median Focus on profitable growth through 20
Slide 87: Free cash flow drivers
SOLID ORGANIC REVENUE GROWTH MARGIN EXPANSION BALANCE SHEET EFFICIENCY ~$7.5B Missiles Revenue Growth Working Capital Space Operational Improvement Cash Taxes Cyber LHX NeXt Cash Interest Resilient Communications Revenue Growth Mix L3HARRIS Investor Day 2023 87
Slide 88: Balance sheet snapshot and debt leverage target
BALANCE SHEET SNAPSHOT DEBT LEVERAGE TARGET 1 ~$500M ~100% 3.7x Cash Balance Funded Pension Original < 3.0x target $11.5B $2.0B Long-Term Debt Short-Term Debt Proceeds from non-core assets provide opportunity to accelerate target MAINTAINING INVESTMENT GRADE RATINGS leverage achievement BBB Baa2 BBB
Slide 89: 2024–2026 capital plan and deployment framework
2024 – 2026 CAPITAL PLAN CAPITAL DEPLOYMENT FRAMEWORK ~$8B+ ❯ Invest in the business Divestiture Proceeds $0.6B+ $3.7B+ • Capex: ~2.0% of revenue Available Cash for Repurchases ❯ Pay down debt to < 3.0x ❯ Pay cash dividend • Increased 22 consecutive years Free Cash Flow ~$7.5B Debt Payments $1.7B •
Slide 90: 2026 revenue, margin and FCF framework
Revenue Margin1 FCF $23B 16% $2.8B L3HARRIS Investor Day 2023 (1) Segment Operating Margin 90
Slide 91: L3Harris Investor Day 2023
L3HARRIS Investor Day 2023 91
Slide 92: L3Harris Investor Day 2023
L3HARRIS Investor Day 2023 92