L3harris Technologies, Inc. · NYSE:LHX
L3harris Technologies — Q2 2024 Earnings Presentation
15 slides from L3harris Technologies's earnings presentation, Jul 26, 2024
Slide 1: Second Quarter 2024 Earnings Presentation
SECOND QUARTER 2024 EARNINGS PRESENTATION JULY 25, 2024
Slide 2: Forward-Looking Statements; Non-GAAP Measures
Forward-Looking Statements; Non-GAAP Measures 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
Slide 3: Reaffirming Commitment to Drive Shareholder Value
REAFFIRMING COMMITMENT TO DRIVE SHAREHOLDER VALUE STRONG FOUNDATION FOR GROWTH 2026 FINANCIAL FRAMEWORK Portfolio focused on national security and technology Driving profitable growth through program excellence and LHX NeXt 1 Capital deployment priorities: fund the business, pay down debt and return
Slide 4: Key Highlights
KEY HIGHLIGHTS NEXT GENERATION INTERCEPTOR ELECTRONIC-TIME FUZES IDIQ > Aerojet Rocketdyne will provide propulsion for > Awarded ~$900 million IDIQ from the U.S. Army the Missile Defense Agency's Next Generation contract to deliver Electronic-Time Fuzes, crucial Interceptor (NGI), enhancing the Grou
Slide 5: Second Quarter Results & 2024 Guidance
SECOND QUARTER RESULTS & 2024 GUIDANCE STRONG SECOND QUARTER PERFORMANCE... ...DRIVING INCREASE TO GUIDANCE Awarded $5.2B in orders, resulting in a book- Revenue: $21.0B to $21.3B to-bill of 1.0x • Up from prior guidance of $20.8B - $21.3B Revenue up 13% year-over-year, 1% 1 1 organically , primaril
Slide 6: Second Quarter 2024 Financial Results
SECOND QUARTER 2024 FINANCIAL RESULTS $5.2B 1.0x $32B Orders Book-to-Bill Total Backlog $5.3B $825M 15.6% Revenue Adjusted Segment Adjusted Segment Operating Income1 Operating Margin1 $3.24 1 $714M $221M $89M Non-GAAP EPS Adjusted Free Dividends Share Repurchase Cash Flow1 1) NGFM - reference the 2Q
Slide 7: Space & Airborne Systems
SPACE & AIRBORNE SYSTEMS ($ millions) Revenue Operating Income and Margin $1,715 $1,707 $215 $168 12.6% 9.8% 2Q23 2Q24 2Q23 2Q24 2Q24 DRIVERS Revenue: flat Margin: increased 280 basis + Space Systems points + Operational performance + Intelligence & Cyber + LHX NeXt - Airborne + Prior year non-cash
Slide 8: Integrated Mission Systems
INTEGRATED MISSION SYSTEMS ($ millions) Revenue Operating Income and Margin $1,735 $1,729 $206 $162 11.9% 9.3% 2Q23 2Q24 2Q23 2Q24 2Q24 DRIVERS Revenue: flat Margin: increased 260 basis + Maritime points + Program performance - Commercial Aviation + LHX NeXt L3HARRIS 2024 Second Quarter Earnings Pre
Slide 9: Communication Systems
COMMUNICATION SYSTEMS ($ millions) Revenue Operating Income and Margin $1,289 $1,346 $325 $329 25.2% 24.4% 2Q23 2Q24 2Q23 2Q24 2Q24 DRIVERS Revenue: increased 4% Margin: decreased 80 basis + Tactical Communications points + LHX NeXt + Broadband Communications + Favorable adjustment related to legal
Slide 10: Aerojet Rocketdyne
AEROJET ROCKETDYNE ($ millions) Revenue Operating Income and Margin $581 $75 12.9% 2Q24 2Q24 2Q24 DRIVERS + Results are attributed to program execution across Missile Solutions and Space Propulsion and Power Systems L3HARRIS 2024 Second Quarter Earnings Presentation 10
Slide 11: 2024 Guidance
2024 GUIDANCE Consolidated Segment Adjusted segment Revenue Operating Margin1 Revenue 1 operating margin SAS ~$7.0B low 12% (Prior: ~12%) $21.0B - $21.3B 15.2% - 15.4% (Prior: $20.8B - $21.3B) (Prior: >15%) $6.5B - $6.7B mid 11% IMS (Prior: $6.4B - $6.6B) (Prior: low-mid 11%) $5.3B - $5.4B mid 24% N
Slide 12: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES NEAR-TERM <3.0x LEVERAGE TARGET 3.7x Invest in the business 3.5x 3.4x • Capex: ~2.0% of revenue 3.2x < 3.0x Pay down debt to <3.0x leverage Pay competitive dividend • Increased 23 consecutive years • Target payout: 35% - 40% of FCF Return 100% of excess cash after de-le
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 ~$650 million 1 Effective tax rate on non-GAAP earnings 1
Slide 14: Pension Adjusted EPS
PENSION ADJUSTED EPS 1Q 2Q 3Q 4Q Full Year 1Q 2Q Full Year 2023 2023 2023 2023 2023 2024 2024 2024 1 Non-GAAP EPS $2.86 $2.97 $3.19 $3.35 $12.36 $3.06 $3.24 $12.85 - $13.15 YoY Growth % 7.0% 9.1% 5.2%* FAS/CAS operating adjustment 0.10 0.10 0.12 0.17 0.50 0.03 0.03 ~0.14* Non-service FAS pension inc
Slide 15: Leverage Reconciliation
LEVERAGE RECONCILIATION Quarter Ended Four (In millions) 2Q24 1Q24 4Q23 3Q23 Quarters Short-term debt $ 2,102 Current portion of long-term debt, net 617 Long-term debt, net 10,533 Total debt 13,252 Less cash and cash equivalents 547 Net debt (A) $ 12,705 Net income $ 367 $ 285 $ 126 $ 382 $ 1,160 Ad
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