8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 1, 2019

HARRIS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	1-3863	34-0276860
(State or other jurisdiction  of incorporation)	(Commission  File Number)	(I.R.S. Employer  Identification No.)

1025 West NASA Blvd., Melbourne, Florida	32919
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (321) 727-9100

No change

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00 per share	HRS	New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02 Results of Operations and Financial Condition.

Item 7.01 Regulation FD Disclosure.

The information contained in this Current Report on Form 8-K that is furnished under this Item 2.02 and 7.01, including the accompanying Exhibit 99.1, is being furnished pursuant to Item 2.02 and 7.01 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. The information contained in this Current Report on Form 8-K that is furnished under this Item 2.02 and 7.01, including the accompanying Exhibit 99.1, shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.

     On May 1, 2019, Harris Corporation (“Harris”) issued a press release announcing, among other things, its results of operations and financial condition as of and for its third quarter of fiscal 2019 and its updated guidance for fiscal 2019, including for expected revenue, earnings per diluted share from continuing operations and free cash flow. The full text of the press release and related financial tables is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

Non-GAAP Financial Measures

     The press release includes a discussion of non-GAAP financial measures (as defined below), including earnings per diluted share from continuing operations for the third quarter and first three quarters of fiscal 2019 and expected earnings per diluted share from continuing operations for fiscal 2019, in each case excluding L3 deal and integration costs; earnings per diluted share from continuing operations for the third quarter and first three quarters of fiscal 2018, in each case excluding the impact of non-cash adjustments related to tax reform and charges related to a decision to transition and exit a commercial line of business and other items, and in the case of the first three quarters of fiscal 2018, also excluding a one-time non-cash charge from an adjustment for deferred compensation; adjusted earnings before interest and taxes (“EBIT”) and adjusted EBIT margin for the third quarter and first three quarters of fiscal 2019, in each case excluding net interest expense, income taxes, discontinued operations net of income taxes and L3 deal and integration costs; adjusted EBIT and adjusted EBIT margin for the third quarter and first three quarters of fiscal 2018, in each case excluding, as applicable, net interest expense, income taxes, discontinued operations net of income taxes, charges related to a decision to transition and exit a commercial line of business and other items and a one-time non-cash charge from an adjustment for deferred compensation; free cash flow for the third quarter and first three quarters of fiscal 2019 and third quarter and first three quarters of fiscal 2018, in each case excluding cash flow for capital expenditures; adjusted free cash flow for the third quarter and first three quarters of fiscal 2019 and expected adjusted free cash flow for fiscal 2019, in each case excluding cash flow for capital expenditures and L3 deal and integration costs; and adjusted free cash flow for the third quarter and first three quarters of fiscal 2018, in each case excluding cash flow for capital expenditures and adjusted for the voluntary contribution to qualified pension plans in the third quarter of fiscal 2018; and effective tax rate for fiscal 2019, excluding the impact of L3 deal and integration costs. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). The non-GAAP financial measures identified in the first sentence of this paragraph are financial measures that are not defined by GAAP and should be viewed in addition to, and not in lieu of, earnings per diluted share from continuing operations, net income, net income margin, net cash provided by operating activities, effective tax rate and other financial measures on a GAAP basis. Harris has included in its press release a reconciliation of non-GAAP financial measures disclosed in the press release to the most directly comparable GAAP financial measure.

Harris management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionate positive or negative impact on results in any particular period. Harris management also believes that these non-GAAP financial measures enhance the ability of investors to analyze trends in Harris’ business and to understand Harris’ performance. In addition, Harris may utilize non-GAAP financial measures as guides in forecasting, budgeting and long-term planning processes and to measure operating performance for some management compensation purposes. Please refer to Harris’ financial statements and accompanying footnotes for additional information and for a presentation of results in accordance with GAAP. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

EXHIBIT INDEX

     The following exhibit is furnished herewith:

99.1 Press Release, issued by Harris Corporation on May 1, 2019 (furnished pursuant to Item 2.02 and Item 7.01).

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HARRIS CORPORATION
By:	/s/ Rahul Ghai
	Name:	Rahul Ghai
	Title:	Senior Vice President and Chief Financial Officer

Date: May 1, 2019

EX-99.1

Exhibit 99.1

Investor Relations Contact:

Anurag Maheshwari, 321-727-9383

anurag.maheshwari@harris.com

Media Relations Contact:

Jim Burke, 321-727-9131

jim.burke@harris.com

Harris Corporation Reports Strong Fiscal 2019 Third Quarter Results

With Double-Digit Revenue Growth and Record EPS

• 3Q19 revenue up11% to $1.7 billion

• 3Q19 GAAP EPS from continuing operations up24% to $2.02; non-GAAP¹up30% to $2.11

• 3Q19 operating cash flow of $405 million; adjusted free cash flow² of $379 million

• YTD19 revenue up10% to $4.9 billion; GAAP EPS from continuing operations up39% to $5.67; non-GAAP¹ up 26% to $5.85

• YTD19 operating cash flow of $874 million; adjusted free cash flow²up75% to $788 million

• Increased revenue, EPS and adjusted free cash flow² guidance for fiscal 2019

___________________________________________________________________________________________

MELBOURNE, Fla., May 01, 2019— Harris Corporation (NYSE:HRS) reported fiscal 2019third quarter revenue of $1.7 billion, up11% compared with the prior year with a book-to-bill of 1.03. GAAP earnings per diluted share (EPS) from continuing operations increased 24% to $2.02, and non-GAAP EPS¹increased30% to $2.11. Net income increased24% to $243 million, and adjusted earnings before interest and taxes (EBIT¹) increased15% to $341 million with margin expansion of 80 basis points (bps) to 19.7%.

"We achieved double-digit EPS growth for the sixth consecutive quarter driven by our highest organic revenue growth and margin in the past eight years," said William M. Brown, chairman, president and chief executive officer. "These results, combined with another quarter of strong free cash flow, continue our exceptional year-to-date performance and position us well to deliver on increased revenue, EPS and free cash flow guidance for the year."

"Alongside strong operating results, integration planning continues to progress well with the teams developing detailed plans to deliver cost and revenue synergies. The shareholder approvals for the L3 Harris transaction and Harris signing a definitive agreement to divest the Night Vision business, reaffirm our confidence in closing the merger in mid-calendar 2019. This transformational merger, combined with a strong addressable budget, will drive continued growth and create long-term value for our shareholders."

__________________________________________________________________________________________________________________________

¹Excludes discontinued operations and L3 deal and integration costs; reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

²Excludes L3 deal and integration costs; reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

Summary Financial Results

($ millions, except per share data)	Third Quarter							Year to Date
	FY 2019			FY 2018			Change	FY 2019			FY 2018			Change
Revenue	$	1,728		$	1,562		11%	$	4,936		$	4,507		10%
(GAAP comparison)
Net income	$	243		$	196		24%	$	681		$	486		40%
Net income margin	14.1		%	12.5		%	160bps	13.8		%	10.8		%	300bps
Earnings per share	$	2.02		$	1.63		24%	$	5.67		$	4.07		39%
(Non-GAAP comparison)3
Adjusted EBIT	$	341		$	296		15%	$	968		$	843		15%
Adjusted EBIT margin	19.7		%	18.9		%	80bps	19.6		%	18.7		%	90bps
Earnings per share	$	2.11		$	1.62		30%	$	5.85		$	4.64		26%

Revenue increased11% for the quarter and 10% year-to-date, with continued strong growth across all three segments. GAAP and non-GAAP EPS³ grew more than 20% for the quarter and for the first three quarters from higher volume, strong operational performance and a lower tax rate, partially offset by product and program mix. In addition, third quarter GAAP EPS growth was partially offset by L3 deal and integration costs. Year-to-date adjusted EBIT³ margin expanded 90 bps to 19.6% and book-to-bill was 1.12.

Communication Systems

($ millions)	Third Quarter							Year to Date
	FY 2019			FY 2018			Change	FY 2019			FY 2018			Change
Revenue	$	568		$	479		19%	$	1,577		$	1,377		15%
Operating income	$	172		$	144		19%	$	474		$	404		17%
Operating margin	30.3		%	30.1		%	20bps	30.1		%	29.3		%	80bps

Revenue increased double digits for the fourth consecutive quarter, up19%, from growth in Tactical Communications and Public Safety. Tactical Communications revenue grew 19%, driven by 55% growth in DoD Tactical, from a ramp in U.S. DoD modernization programs. Public Safety grew double digits on increased demand from state and federal agencies. Operating income increased 19% to $172 million.

________________________________________________________________________________________________

³ Excludes discontinued operations and L3 deal and integration costs; reconciliations of GAAP to non-GAAP financial measures are provided in the

attached tables.

U.S. DoD tactical radio modernization momentum continued in the third quarter, with an initial production order from SOCOM for next generation multi-channel handheld radios under the sole-source $390 million IDIQ contract and an order from the Marine Corps for multi-channel manpack radios. These orders follow the Army HMS Manpack and 2-Channel Leader Radio LRIP awards received in prior quarters and expand multi-year modernization efforts across the services.

International adoption of multi-channel radios continued to expand with an order from the Canadian Army as part of their modernization program. In addition, Harris received an order from New Zealand to integrate, modernize and upgrade their command and control network, advancing the company's strategy of expanding into integrated network systems.

Segment revenue in the first three quarters increased 15% from strong growth in all three businesses with a book-to-bill of 1.1 and operating margin expanding 80 bps to 30.1%.

Electronic Systems

($ millions)	Third Quarter							Year to Date
	FY 2019			FY 2018			Change	FY 2019			FY 2018			Change
Revenue	$	649		$	606		7%	$	1,855		$	1,729		7%
Operating income	$	123		$	108		14%	$	355		$	314		13%
Operating margin	19.0		%	17.8		%	120bps	19.1		%	18.2		%	90bps

Third quarter revenue increased7% from sustained strong growth on long-term platforms – F-35, F/A-18 and F-16 and from increased volume in release systems, partially offset by the United Arab Emirates (UAE) program transition timing. Operating income grew14% to $123 million, and margin expanded120 bps to 19.0%, driven by higher volume and strong operational performance.

Strong bookings on long-term platforms continued in the quarter with a $212 million contract to upgrade electronic countermeasure capabilities on U.S. Navy and Kuwaiti F/A-18 aircraft, increasing the inception-to-date IDECM production awards to $2 billion. The company also received a $129 million development contract for the open systems mission processor on the F-35, a key milestone supporting platform modernization under the Technology Refresh 3 program.

In addition, Harris strengthened its position in the UAE with the award of a $46 million contract to provide technical support and training to the UAE Armed Forces, as the Emirates Land Tactical System (ELTS) transitions to full operations. This award follows the company's successful completion of the $192 million UAE ELTS Initial Operational Capability program.

Segment revenue in the first three quarters increased 7% with a book-to-bill of 1.2 and operating margin expanding 90 bps to 19.1%.

Space and Intelligence Systems

($ millions)	Third Quarter							Year to Date
	FY 2019			FY 2018			Change	FY 2019			FY 2018			Change
Revenue	$	514		$	482		7%	$	1,515		$	1,410		7%
Operating income	$	87		$	83		5%	$	265		$	250		6%
Operating margin	16.9		%	17.2		%	(30)bps	17.5		%	17.7		%	(20)bps

Third quarter revenue increased7%, as double-digit growth from classified programs, driven by small satellites, exquisite systems and next-generation technology programs, was partially offset by lower revenue from environmental programs. Operating income increased5% to $87 million from higher volume and strong program execution, partially offset by higher investments.

Order momentum remained strong on classified programs, as the company leveraged its investments in innovation and strong customer relationships to secure a $185 million follow-on sustainment and modernization award from the U.S. Air Force for counter-communication, $154 million of increased scope from an existing classified customer to enhance and deploy mission-critical capabilities and $84 million of additional funding for exquisite space systems from a long-standing customer.

Investments in technology have strengthened the company's position as the partner-of-choice on long-standing Civil programs. Harris received a $243 million award as part of the GPS IIIF SV11-32 contract to provide fully-digital navigation payloads for the first two GPS IIIF satellites. This award follows the company's success on the current GPS III SV1-10 contract. Harris also received a 3-year, $293 million award to expand capabilities on the GOES-R ground system, increasing the total contract value to $1.7 billion.

Segment revenue in the first three quartersincreased7% with a book-to-bill of 1.1. Operating income increased6% and operating margin remained strong at 17.5%.

Cash and Capital Deployment

($ millions)	Third Quarter							Year to Date
	FY 2019		FY 2018			Change		FY 2019		FY 2018		Change
Operating cash flow	$	405	$	(143	)	$	548	$	874	$	230	$	644
Free cash flow4	$	368	$	(179	)	$	547	$	770	$	151	$	619
Adjusted free cash flow5	$	379	$	121		$	258	$	788	$	451	$	337

In the first three quarters of fiscal 2019, the company generated $788 million in adjusted free cash flow⁵, up 75%, and returned $444 million to shareholders through dividends and share repurchases and, in the third quarter, paid down $300 million of debt.

Guidance

As a result of strong year-to-date performance, Harris updated its guidance for fiscal 2019 to the following:

• Revenue ~$6.72 billion, up ~9.0% from fiscal 2018 (increased from previous guidance of up 8.0 - 8.5%)

• GAAP EPS from continuing operations ~$7.80 and non-GAAP⁶ EPS ~$8.15 (increased from previous guidance of $7.50 - $7.60 GAAP and $7.90 - $8.00 non-GAAP⁶)

• Operating cash flow ~$1,160 billion; adjusted free cash flow⁵ ~$1.025 billion (increased from previous guidance of $1.000 - $1.025 billion)

• Tax rate of approximately 15.0% GAAP; 15.5% non-GAAP (a decrease from ~16.3% GAAP and ~16.5% non-GAAP previously)

_____________________________________________________________________________________________________

⁴Reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

⁵Excludes L3 deal and integration costs; reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

⁶Excludes discontinued operations and L3 deal and integration costs; reconciliations of GAAP to non-GAAP financial measures are provided in the attached tables.

Conference Call and Webcast

Harris will host a conference call today, May 1, at 8:30 a.m. Eastern Time (ET) to discuss its fiscal 2019 third quarter financial results. The dial-in numbers for the teleconference are (U.S.) (877) 407-6184 and (International) (201) 389-0877, and participants will be directed to an operator. Please allow at least 10 minutes before the scheduled start time to connect to the teleconference. Participants are encouraged to listen via live webcast and view management’s supporting slide presentation at https://www.harris.com/investors/financial-reports. A recording of the call will be available on the Harris website beginning at approximately 12 p.m. ET on May 1.

About Harris Corporation

Harris Corporation is a leading technology innovator, solving customers’ toughest mission-critical challenges by providing solutions that connect, inform and protect. Harris supports government and commercial customers in more than 100 countries and has approximately $6 billion in annual revenue. The company is organized into three business segments: Communication Systems, Electronic Systems and Space and Intelligence Systems. Learn more at harris.com.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission (“SEC”), including earnings per diluted share from continuing operations for the third quarter and first three quarters of fiscal 2019 and expected earnings per diluted share from continuing operations for fiscal 2019, in each case excluding L3 deal and integration costs; earnings per diluted share from continuing operations for the third quarter and first three quarters of fiscal 2018, in each case excluding the impact of non-cash adjustments related to tax reform and charges related to a decision to transition and exit a commercial line of business and other items, and in the case of the first three quarters of fiscal 2018, also excluding a one-time non-cash charge from an adjustment for deferred compensation; adjusted earnings before interest and taxes (“EBIT”) and adjusted EBIT margin for the third quarter and first three quarters of fiscal 2019, in each case excluding net interest expense, income taxes, discontinued operations net of income taxes and L3 deal and integration costs; and adjusted EBIT and adjusted EBIT margin for the third quarter and first three quarters of fiscal 2018, in each case excluding, as applicable, net interest expense, income taxes, discontinued operations net of income taxes, charges related to a decision to transition and exit a commercial line of business and other items and a one-time non-cash charge from an adjustment for deferred compensation; free cash flow for the third quarter and first three quarters of fiscal 2019 and third quarter and first three quarters of fiscal 2018, in each case excluding cash flow for capital expenditures; adjusted free cash flow for the third quarter and first three quarters of fiscal 2019 and expected adjusted free cash flow for fiscal 2019, in each case excluding cash flow for capital expenditures and L3 deal and integration costs; adjusted free cash flow for the third quarter and first three quarters of fiscal 2018, in each case excluding cash flow for capital expenditures and adjusted for the voluntary contribution to qualified pension plans in the third quarter of fiscal 2018; and expected effective tax rate for fiscal 2019, excluding the impact of L3 deal and integration costs. A “non-GAAP financial measure” is generally defined as a numerical measure of a company’s historical or future performance that excludes or includes amounts, or is subject to adjustments, so as to be different from the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”). Harris management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. Harris management also believes that these non-GAAP financial measures enhance the ability of investors to analyze Harris business trends and to understand Harris performance. In addition, Harris may utilize non-GAAP financial measures as guides in forecasting, budgeting and long-term planning processes and to measure operating performance for some management compensation purposes. Non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures presented in accordance with GAAP.

Attachments: Financial statements (8 tables)

Forward-Looking Statements

Statements in this press release 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 of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this press release include but are not limited to: earnings, revenue, adjusted free cash flow and tax rate guidance for fiscal 2019; potential contract opportunities and awards; the potential value and timing of contract awards; statements regarding being well positioned to deliver on increased guidance; statements about the proposed transformational L3 Harris merger and the anticipated timing of the closing thereof and anticipated benefits therefrom; statements regarding a strong addressable budget, continued growth and creation of long-term shareholder value; and other statements regarding outlook or that are not historical facts. The company cautions investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. The company's consolidated results, future trends and forward-looking statements could be affected by many factors, risks and uncertainties, including but not limited to: the loss of the company’s relationship with the U.S. Government or a change or reduction in U.S. Government funding; potential changes in U.S. Government or customer priorities and requirements (including potential deferrals of awards, terminations, reductions of expenditures, changes to respond to the priorities of Congress and the Administration, budgetary constraints, debt ceiling implications, sequestration, and cost-cutting initiatives); a security breach, through cyber attack or otherwise, or other significant disruptions of the company’s IT networks and systems or those the company operates for customers; the level of returns on defined benefit plan assets and changes in interest rates; risks inherent with large long-term fixed-price contracts, particularly the ability to contain cost overruns; changes in estimates used in accounting for the company’s programs; financial and government and regulatory risks relating to international sales and operations; effects of any non-compliance with laws; the company’s ability to continue to develop new products that achieve market acceptance; the consequences of uncertain economic conditions and future geo-political events; strategic acquisitions and divestitures and the risks and uncertainties related thereto, including the company’s ability to manage and integrate acquired businesses and realize expected benefits and the potential disruption to relationships with employees, suppliers and customers, including the U.S. Government, and to the company’s business generally; performance of the company’s subcontractors and suppliers; potential claims related to infringement of intellectual property rights or environmental remediation or other contingencies, litigation and legal matters and the ultimate outcome thereof; risks inherent in developing new and complex technologies and/or that may not be covered adequately by insurance or indemnity; changes in the company’s effective tax rate; significant indebtedness and unfunded pension liability and potential downgrades in the company’s credit ratings; unforeseen environmental matters; natural disasters or other disruptions affecting the company’s operations; changes in future business or other market conditions that could cause business investments and/or recorded goodwill or other long-term assets to become impaired; the company’s ability to attract and retain key employees, maintain reasonable relationships with unionized employees and manage escalating costs of providing employee health care; or potential tax, indemnification and other liabilities and exposures related to Exelis’ spin-off of Vectrus, Inc. and Exelis’ spin-off from ITT Corporation; the occurrence of any event, change or other circumstances that could give rise to the termination of the L3 Harris merger agreement; the risk that the parties may not be able to obtain (or may be required to make divestitures in order to obtain) the necessary regulatory approvals or to satisfy any of the other conditions to the proposed combination in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the proposed combination; risks related to the inability to realize benefits or to implement integration plans and other consequences associated with the proposed combination; the risk that any announcements relating to the proposed combination could have adverse effects on the market price of the common stock of either or both parties to the combination; and the risk that the proposed combination and its announcement could have an adverse effect on either or both parties’ ability to retain customers and retain and hire key personnel and maintain relationships with suppliers and customers, including the U.S. Government and other governments, and on their operating results and businesses generally. Further information relating to these and other factors that may impact the company's results, future trends and forward-looking statements are disclosed in the company's filings with the SEC. The forward-looking statements contained in this press release are made as of the date of this press release, and the company disclaims any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Table 1

HARRIS CORPORATION

FY '19Third Quarter Summary

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

	Quarter Ended						Three Quarters Ended
	March 29, 2019			March 30, 2018			March 29, 2019			March 30, 2018
	(In millions, except per share amounts)
Revenue from product sales and services	$	1,728		$	1,562		$	4,936		$	4,507
Cost of product sales and services	(1,139		)	(1,028		)	(3,244		)	(2,969		)
Engineering, selling and administrative expenses	(310		)	(331		)	(893		)	(890		)
Non-operating income	46			46			140			136
Interest income	1			—			2			1
Interest expense	(43		)	(41		)	(130		)	(124		)
Income from continuing operations before income taxes	283			208			811			661
Income taxes	(40		)	(10		)	(127		)	(167		)
Income from continuing operations	243			198			684			494
Discontinued operations, net of income taxes	—			(2		)	(3		)	(8		)
Net income	$	243		$	196		$	681		$	486
Net income per common share
Basic
Continuing operations	$	2.06		$	1.66		$	5.79		$	4.15
Discontinued operations	—			(0.01		)	(0.02		)	(0.07		)
	$	2.06		$	1.65		$	5.77		$	4.08
Diluted
Continuing operations	$	2.02		$	1.63		$	5.67		$	4.07
Discontinued operations	—			(0.01		)	(0.02		)	(0.07		)
	$	2.02		$	1.62		$	5.65		$	4.00
Basic weighted average common shares outstanding	117.9			118.4			117.9			118.7
Diluted weighted average common shares outstanding	120.3			121.0			120.3			121.1

Table 2

HARRIS CORPORATION

FY '19Third Quarter Summary

BUSINESS SEGMENT INFORMATION

(Unaudited)

	Quarter Ended						Three Quarters Ended
	March 29, 2019			March 30, 2018			March 29, 2019			March 30, 2018
	(In millions)
Revenue
Communication Systems	$	568		$	479		$	1,577		$	1,377
Electronic Systems	649			606			1,855			1,729
Space and Intelligence Systems	514			482			1,515			1,410
Corporate eliminations	(3		)	(5		)	(11		)	(9		)
	$	1,728		$	1,562		$	4,936		$	4,507
Income From Continuing Operations Before Income Taxes
Segment Operating Income:
Communication Systems	$	172		$	144		$	474		$	404
Electronic Systems	123			108			355			314
Space and Intelligence Systems	87			83			265			250
Unallocated corporate expense and corporate eliminations	(56		)	(86		)	(155		)	(182		)
Pension adjustment	(47		)	(46		)	(140		)	(138		)
Non-operating income	46			46			140			136
Net interest expense	(42		)	(41		)	(128		)	(123		)
	$	283		$	208		$	811		$	661

Table 3

HARRIS CORPORATION

FY '19Third Quarter Summary

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Three Quarters Ended
	March 29, 2019			March 30, 2018
	(In millions)
Operating Activities
Net income	$	681		$	486
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of acquisition-related intangibles	87			87
Other depreciation and amortization	106			105
Qualified pension plan contributions	—			(301		)
Pension income and share-based compensation	5			(51		)
(Increase) decrease in:
Accounts receivable	13			(94		)
Contract assets	(99		)	(110		)
Inventories	(22		)	(36		)
Increase (decrease) in:
Accounts payable	(99		)	(46		)
Contract liabilities	94			58
Other	108			132
Net cash provided by operating activities	874			230
Investing Activities
Additions of property, plant and equipment	(104		)	(79		)
Adjustment to proceeds from sale of business	—			(2		)
Net cash used in investing activities	(104		)	(81		)
Financing Activities
Proceeds from borrowings	25			552
Repayments of borrowings	(303		)	(367		)
Proceeds from exercises of employee stock options	24			31
Repurchases of common stock	(200		)	(197		)
Cash dividends	(244		)	(205		)
Other financing activities	(24		)	(10		)
Net cash used in financing activities	(722		)	(196		)
Effect of exchange rate changes on cash and cash equivalents	(2		)	6
Net increase (decrease) in cash and cash equivalents	46			(41		)
Cash and cash equivalents, beginning of year	288			484
Cash and cash equivalents, end of quarter	$	334		$	443

Table 4

HARRIS CORPORATION

FY '19Third Quarter Summary

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

	March 29, 2019		June 29, 2018
	(In millions)
Assets
Cash and cash equivalents	$	334	$	288
Receivables	453		466
Contract assets	881		782
Inventories	433		411
Property, plant and equipment	904		900
Goodwill	5,371		5,372
Other intangible assets	902		989
Other assets	514		643
	$	9,792	$	9,851
Liabilities
Short-term debt	$	103	$	78
Accounts payable	523		622
Contract liabilities	466		372
Compensation and benefits	176		142
Current portion of long-term debt, net	6		304
Defined benefit plans	601		714
Long-term debt, net	3,412		3,408
Other liabilities	898		933
Equity	3,607		3,278
	$	9,792	$	9,851

HARRIS CORPORATION

FY '19Third Quarter Summary

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G DISCLOSURE

To supplement our condensed consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), we provide additional measures of income from continuing operations per diluted common share, net income, net income margin, effective tax rate and net cash provided by operating activities, adjusted to exclude certain costs, charges, expenses and losses or other amounts. Harris management believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. Harris management also believes that these non-GAAP financial measures enhance the ability of investors to analyze Harris’ business trends and to understand Harris’ performance. In addition, Harris may utilize non-GAAP financial measures as guides in its forecasting, budgeting, and long-term planning processes and to measure operating performance for some management compensation purposes. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP. A reconciliation of these non-GAAP financial measures with the most directly comparable financial measures calculated in accordance with GAAP follows:

Table 5

HARRIS CORPORATION

FY '19Third Quarter Summary

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Adjusted EBIT and Adjusted EBIT Margin

(Unaudited)

	Quarter Ended						Three Quarters Ended
	March 29, 2019			March 30, 2018			March 29, 2019			March 30, 2018
	(In millions)
Revenue from product sales and services (B)	$	1,728		$	1,562		$	4,936		$	4,507
Net income	$	243		$	196		$	681		$	486
Adjustments:
Net interest expense	42			41			128			123
Income taxes	40			10			127			167
Discontinued operations, net of income taxes	—			2			3			8
L3 deal and integration costs	16			—			29			—
Charges related to decision to transition and exit a commercial line of business and other items	—			47			—			47
One-time non-cash charge from an adjustment for deferred compensation	—			—			—			12
Total adjustments	98			100			287			357
Adjusted EBIT (A)	$	341		$	296		$	968		$	843
Adjusted EBIT margin percentage (A) / (B)	19.7		%	18.9		%	19.6		%	18.7		%

Table 6

HARRIS CORPORATION

FY '19Third Quarter Summary

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Reconciliation of GAAP Income from Continuing Operations per Diluted Common Share to

Non-GAAP Income from Continuing Operations per Diluted Common Share

(Unaudited)

	Quarter Ended					Three Quarters Ended
	March 29, 2019		March 30, 2018			March 29, 2019		March 30, 2018		Fiscal Year 2019 (Guidance)
GAAP income from continuing operations per diluted common share	$	2.02	$	1.63		$	5.67	$	4.07	~ $7.80
Impact of non-cash adjustments related to tax reform	—		(0.28		)	—		0.20		—
Charges related to decision to transition and exit a commercial line of business and other items	—		0.27			—		0.27		—
One-time non-cash charge from an adjustment for deferred compensation	—		—			—		0.10		—
L3 deal and integration costs	0.09		—			0.18		—		~ 0.35
Non-GAAP income from continuing operations per diluted common share	$	2.11	$	1.62		$	5.85	$	4.64	~ $8.15

Table 7

HARRIS CORPORATION

FY '19Third Quarter Summary

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Free Cash Flow and Adjusted Free Cash Flow

(Unaudited)

	Quarter Ended						Three Quarters Ended
	March 29, 2019			March 30, 2018			March 29, 2019			March 30, 2018			Fiscal Year 2019 (Guidance)
	(In millions)
Net cash provided by (used in) operating activities	$	405		$	(143	)	$	874		$	230		~ $1,160
Less capital expenditures	(37		)	(36		)	(104		)	(79		)	(170	)
Free cash flow	368			(179		)	770			151			~ 990
Adjustment for voluntary contribution to qualified pension plans	—			300			—			300			—
Cash used for L3 deal and integration costs	11			—			18			—			~ 35
Adjusted free cash flow	$	379		$	121		$	788		$	451		~ $1,025

Table 8

HARRIS CORPORATION

FY '19Third Quarter Summary

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Effective Tax Rate

(Unaudited)

	Fiscal Year 2019 (Guidance)
	GAAP			Adjustments (1)			Non-GAAP
	(In millions)
Income from continuing operations before income taxes (B)	$	1,104		$	57		$	1,161
Income taxes (A)	(166		)	(14		)	(180		)
Effective tax rate (A) / (B)	15.0		%				15.5		%
(1) Adjustments reflect L3 deal and integration costs.