8-K
L3harris Technologies, Inc. /De/ (LHX)
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): July 24, 2025
L3HARRIS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-3863 | 34-0276860 | ||||
|---|---|---|---|---|---|---|
| (State or other jurisdiction<br> of incorporation) | (Commission<br> File Number) | (I.R.S. Employer<br> Identification No.) | 1025 West NASA Boulevard | |||
| --- | --- | --- | ||||
| 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) | 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: | ||||
| --- | --- | ||||
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | 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 | LHX | New York Stock Exchange | Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | ||
| --- | --- | ||||
| Emerging growth company | ☐ | ||||
| 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. | ☐ |
Item 2.02 Results of Operations and Financial Condition.
On July 24, 2025, L3Harris Technologies, Inc. released its second quarter financial results in an earnings release.
The earnings release announcing the release of the second quarter financial results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. The information contained in this Current Report on Form 8-K that is furnished under Item 2.02, including Exhibit 99.1, 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 liabilities of that section and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such a filing, except as shall be expressly set forth by specific reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
EXHIBIT INDEX
The following exhibits are provided herewith:
| 99.1 | Earnings Release, issued by L3Harris Technologies, Inc. on July 24, 2025 (furnished pursuant to Item 2.02). |
|---|---|
| 104 | Cover Page Interactive Data File formatted in Inline XBRL |
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.
| L3HARRIS TECHNOLOGIES, INC. | ||
|---|---|---|
| By: | /s/ Kenneth L. Bedingfield | |
| Name: | Kenneth L. Bedingfield | |
| Title: | Senior Vice President, Chief Financial Officer and President, Aerojet Rocketdyne |
Date: July 24, 2025
Document
Exhibit 99.1
Earnings Release
L3Harris Technologies Reports Strong Second Quarter 2025 Results,
Increases 2025 Guidance
Highlights*
•Orders of $8.3 billion; book-to-bill of 1.5x
•Revenue of $5.4 billion, up 2%, and 6% organically
•Operating margin of 10.5%; Adjusted segment operating margin of 15.9%
•Diluted EPS of $2.44; Non-GAAP diluted EPS of $2.78, up 16%
•2025 guidance and 2026 outlook increased on strong performance and improved expectations
MELBOURNE, Fla., July 24, 2025 — L3Harris Technologies (NYSE: LHX) reported second quarter 2025 diluted EPS of $2.44 on second quarter 2025 revenue of $5.4 billion. Second quarter 2025 non-GAAP diluted EPS was $2.78. Reconciliations of non-GAAP results are detailed in tables beginning on page 11.
“We delivered impressive second-quarter results, led by a record book-to-bill of 1.5x, solid organic growth, and year-over-year adjusted segment operating margin expansion for the seventh consecutive quarter. This marks a clear inflection point, with our strongest top-line growth in six quarters and meaningful progress towards our 2026 Financial Framework. Our Trusted Disruptor strategy continues to drive differentiated, mission-critical solutions that meet our customers’ evolving needs while creating value for shareholders,” said Christopher E. Kubasik, Chair and CEO.
Kubasik added, “Defense is entering a generational investment cycle, as U.S. and allied budgets grow rapidly. Demand is accelerating, and our portfolio is aligned with key growth areas – Golden Dome, space, missiles, shipbuilding, autonomy, and resilient communications. With the flexibility of our business-model agnostic approach – able to win as a prime, sub, or merchant supplier – a focused national security portfolio, and competitive momentum from LHX NeXt, we’re confident in our path to sustained profitable growth and long-term value creation.”
___
*Organic revenue, adjusted segment operating margin and non-GAAP diluted EPS are non-GAAP financial measures defined on page 16.
PAGE 1
SUMMARY FINANCIAL RESULTS*
| Second Quarter | Year to Date | 2025 Guidance | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ millions, except per share data) | 2025 | 20241 | Change | 2025 | 20241 | Change | |||||||||||
| Revenue (see Table 4 for organic revenue) | |||||||||||||||||
| Communication Systems | $ | 1,376 | $ | 1,346 | $ | 2,728 | $ | 2,640 | |||||||||
| Integrated Mission Systems | 1,622 | 1,671 | 3,214 | 3,298 | |||||||||||||
| Space & Airborne Systems | 1,787 | 1,707 | 3,398 | 3,458 | |||||||||||||
| Aerojet Rocketdyne | 698 | 633 | 1,327 | 1,217 | |||||||||||||
| Corporate eliminations | (57) | (58) | (109) | (103) | |||||||||||||
| Revenue | $ | 5,426 | $ | 5,299 | 2 | % | $ | 10,558 | $ | 10,510 | — | % | ~$21.75B<br><br>(Prior: $21.4B - 21.7B) | ||||
| Operating income | |||||||||||||||||
| Communication Systems | 336 | 329 | 681 | 639 | |||||||||||||
| Integrated Mission Systems | 214 | 200 | 417 | 385 | |||||||||||||
| Space & Airborne Systems | 220 | 215 | 396 | 431 | |||||||||||||
| Aerojet Rocketdyne | 93 | 81 | 169 | 158 | |||||||||||||
| Unallocated corporate expenses | (292) | (349) | (567) | (759) | |||||||||||||
| Operating income | $ | 571 | $ | 476 | $ | 1,096 | $ | 854 | |||||||||
| Adjusted segment operating income | $ | 863 | $ | 825 | 5 | % | $ | 1,663 | $ | 1,613 | 3 | % | |||||
| Margin | |||||||||||||||||
| Operating margin | 10.5 | % | 9.0 | % | 10.4 | % | 8.1 | % | |||||||||
| Adjusted segment operating margin | 15.9 | % | 15.6 | % | 30 | bps | 15.8 | % | 15.3 | % | 50 | bps | mid - high 15% | ||||
| Tax rate | |||||||||||||||||
| Effective tax rate (GAAP) | 12.6 | % | 5.9 | % | 14.1 | % | 4.1 | % | |||||||||
| Effective tax rate (non-GAAP) | 9.5 | % | 7.8 | % | 11.5 | % | 6.7 | % | |||||||||
| EPS | |||||||||||||||||
| Diluted EPS | $ | 2.44 | $ | 1.92 | $ | 4.48 | $ | 3.40 | |||||||||
| Non-GAAP diluted EPS | $ | 2.78 | $ | 2.40 | 16 | % | $ | 5.18 | $ | 4.64 | 12 | % | $10.40 - $10.60<br><br>(Prior: $10.30 - $10.50) | ||||
| Pension adjusted non-GAAP diluted EPS | $ | 2.42 | $ | 1.98 | 22 | % | $ | 4.38 | $ | 3.79 | 16 | % | |||||
| Diluted weighted-average common shares outstanding | 187.8 | 190.6 | 188.5 | 190.8 | |||||||||||||
| Cash flow | |||||||||||||||||
| Cash from operations | $ | 640 | $ | 754 | (15 | %) | $ | 598 | $ | 650 | (8 | %) | |||||
| Adjusted free cash flow | $ | 574 | $ | 714 | (20 | %) | $ | 502 | $ | 558 | (10 | %) | ~$2.65B<br><br>(Prior: $2.4B - $2.5B) |
*A reconciliation of adjusted segment operating income and margin, non-GAAP effective tax rate, diluted EPS and pension adjusted diluted EPS, and adjusted free cash flow on a forward-looking basis to GAAP is not available without unreasonable effort due to the unavailability of items for exclusion from the GAAP measure. We are unable to address the probable significance of this information, the variability of which may have a significant impact on future GAAP results. See Non-GAAP Financial Measures on page 7 for more information.
1 2024 segment financial results recast to reflect strategic realignment of the Fuzing and Ordnance Systems (FOS) business from Integrated Mission Systems to Aerojet Rocketdyne, effective in 2025. See Table 9 - 2024 Segment Recast in our EX-99.1EarningsReleasefor first quarter 2025.
PAGE 2
Revenue: Second quarter revenue increased 2%, 6% organically, reflecting growth across all segments, primarily from higher volumes, new program ramps and increased international demand.
Operating Margin:
GAAP Operating Margin: Second quarter increased 150 bps to 10.5% primarily driven by lower unallocated corporate expenses, including lower LHX NeXt implementation costs, amortization of acquisition-related intangibles and the absence of business divestiture-related losses and impairment of goodwill that impacted 2024.
Adjusted Segment Operating Margin: Second quarter expanded 30 bps to 15.9% primarily driven by monetization of legacy end-of-life assets, aligned with our transformation and value creation priorities, and LHX NeXt driven cost saving across all segments, partially offset by impacts from higher margin Commercial Aviation Solutions (CAS) divestiture.
Diluted EPS:
GAAP Diluted EPS: Second quarter increased 27% to $2.44 driven by higher operating income and lower interest expense from decreased average outstanding short-term debt balances during second quarter 2025, partially offset by a higher effective tax rate.
Non-GAAP Diluted EPS and Pension Adjusted Non-GAAP Diluted EPS: Second quarter increased 16% to $2.78 and 22% to $2.42, respectively, from higher adjusted segment operating income and lower interest expense from decreased average outstanding short-term debt balances during second quarter 2025, partially offset by a higher effective tax rate.
Cash Flow:
Cash From Operations: Second quarter decreased 15% to $640 million driven by working capital timing and cash used for settlement of a longstanding legal matter, partially offset by growth in operating income.
Adjusted Free Cash Flow: Second quarter decreased 20% to $574 million, driven by working capital timing, cash used for settlement of a longstanding legal matter, partially offset by growth in operating income and lower capital expenditures.
PAGE 3
SEGMENT RESULTS*
Communication Systems
| Second Quarter | Year to Date | 2025 Guidance | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||
| Revenue | $ | 1,376 | $ | 1,346 | 2% | $ | 2,728 | $ | 2,640 | 3% | $5,600 - $5,700 | ||||
| Operating margin | 24.4 | % | 24.4 | % | — bps | 25.0 | % | 24.2 | % | 80 bps | ~25% |
Revenue: Second quarter revenue increased 2% primarily driven by increased international demand for resilient communication equipment and related waveforms.
Operating Margin: Second quarter operating margin was flat, reflecting higher volume and LHX NeXt driven cost savings, partially offset by the absence of the favorable impact of legal settlements that impacted 2024.
Integrated Mission Systems
| Second Quarter | Year to Date | 2025 Guidance | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||
| Revenue | $ | 1,622 | $ | 1,671 | (3)% | $ | 3,214 | $ | 3,298 | (3)% | ~$6,400<br><br>(Prior: ~$6,300) | ||||
| Operating margin | 13.2 | % | 12.0 | % | 120 bps | 13.0 | % | 11.7 | % | 130 bps | ~12%<br><br>(Prior: high 11%) |
Revenue: Second quarter revenue decreased 3%, reflecting the divestiture of our CAS business in the first quarter of 2025. Excluding the divestiture impact, organic revenue increased 6% primarily due to ISR classified program ramp.
Operating Margin: Second quarter operating margin increased 120 bps to 13.2% primarily due to monetization of legacy end-of-life assets, aligned with our transformation and value creation priorities, partially offset by an unfavorable EAC adjustment from the resolution of a contract matter related to lower utilization on the Canadian Maritime Helicopter Program as it nears completion and impact from divestiture of our CAS business.
*Organic revenue is a non-GAAP financial measure defined on page 16.
PAGE 4
Space and Airborne Systems
| Second Quarter | Year to Date | 2025 Guidance | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||
| Revenue | $ | 1,787 | $ | 1,707 | 5% | $ | 3,398 | $ | 3,458 | (2)% | ~$7,100<br><br>(Prior: $6,900 - $7,100) | ||||
| Operating margin | 12.3 | % | 12.6 | % | (30) bps | 11.7 | % | 12.5 | % | (80) bps | low 12% |
Revenue: Second quarter revenue increased 5%, including the impact from the divestiture of our antenna business in the second quarter of 2024. Excluding the divestiture impact, organic revenue increased 7%, primarily from increased FAA volume in our Mission Networks business and higher volume and improved program performance in our Airborne Combat Systems business, partially offset by lower volumes in our Space Systems and Intel and Cyber businesses associated with program timing.
Operating Margin: Second quarter operating margin decreased 30 bps to 12.3% primarily from unfavorable mix, partially offset by monetization of legacy end-of-life assets aligned with our transformation and value creation priorities, improved program performance and LHX NeXt driven cost savings.
Aerojet Rocketdyne
| Second Quarter | Year to Date | 2025 Guidance | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ millions) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||
| Revenue | $ | 698 | $ | 633 | 10% | $ | 1,327 | $ | 1,217 | 9% | ~$2,800 | ||||
| Operating margin | 13.3 | % | 12.8 | % | 50 bps | 12.7 | % | 13.0 | % | (30) bps | mid 12% |
Revenue: Second quarter revenue increased 10%, including the impact from the divestiture of our AOT business in the fourth quarter of 2024. Excluding the divestiture impact, organic revenue increased 12% from increased production volume across key missile and munitions programs and new program ramp.
Operating Margin: Second quarter operating margin increased 50 bps to 13.3%, primarily due to improved performance driven by LHX NeXt driven cost savings and a favorable contract resolution.
*Organic revenue is a non-GAAP financial measure defined on page 16.
PAGE 5
2025 NON-GAAP EPS GUIDANCE BRIDGE
Our updated 2025 non-GAAP diluted EPS guidance reflects an increase of 200 to 300 basis points to the effective tax rate, resulting in a headwind of ~$0.30 at the midpoint. This impact is more than offset by strong first-half performance and increased guidance, driving a net increase of $0.10 to our full-year non-GAAP diluted EPS guidance.
| 2025 Guidance | |
|---|---|
| Non-GAAP diluted EPS (Prior) | $10.30 - $10.50 |
| H1 2025 performance and guidance update | ~0.40 |
| Non-GAAP EPS (Before tax reform impact) | $10.70 - $10.90 |
| Impact of tax reform | ~(0.30) |
| Non-GAAP diluted EPS (New)1 | $10.40 - $10.60 |
SUPPLEMENTAL INFORMATION
| 2025 | ||
|---|---|---|
| Other Information | Current | Prior |
| FAS/CAS operating adjustment | ~$15 million | ~$15 million |
| Non-service FAS pension income | ~$285 million | ~$270 million |
| Net interest expense | ~$600 million | ~$600 million |
| Effective tax rate on non-GAAP income1 | 13.5% - 14.5% | 11.0% - 12.0% |
| Weighted-average diluted shares | ~188 | 188 - 189 |
| Capital expenditures | ~2% revenue | ~2% revenue |
1Non-GAAP diluted EPS and effective tax rate on non-GAAP income are non-GAAP financial measures defined on page 16. A reconciliation of non-GAAP diluted EPS and effective tax rate on non-GAAP income guidance is not available. See Non-GAAP Financial Measures on page 7 for more information.
PAGE 6
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of federal securities laws made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples include, but are not limited to: share repurchases; divestiture and realignment impacts; 2025 guidance; budget increases; anticipated LHX NeXt initiative costs and savings; supplemental information for 2025; projection of other financial items; and assumptions underlying any of the foregoing. Investors should not place undue reliance on forward-looking statements, which reflect management’s current expectations, estimates, projections, assumptions and information currently available to management, and are not guarantees of future performance or actual results. Important risks that could cause our results to differ materially from those expressed in or implied by these forward-looking statements or from our historical results include, but are not limited to, risks arising from: competitive markets; U.S. Government spending priorities; changes in contract mix; inflation; tariffs and potential trade disputes; unilateral contract action by the U.S. Government; uncertain economic conditions; future geo-political events; supply chain disruptions; impacts of LHX NeXt; indebtedness; defined benefit plan liabilities and returns; interest rates and other market factors; changes in effective tax rate or additional tax exposures; pending and contemplated divestitures. These and other important risks that could impact forward-looking statements are described more fully in the "Risk Factors" in our Form 10-K for fiscal 2024 and our Form 10-Q for Q1 2025 filed with the SEC. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section, and we have no duty to and disclaim 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 developments or otherwise.
Non-GAAP Financial Measures
Management believes the adjustments to non-GAAP Financial Measures ("NGFMs") in the tables beginning on page 11 are useful to investors because the excluded costs do not reflect our ongoing operating performance. Such adjustments, considered together with the unadjusted GAAP financial measures, provide information that management believes is useful to investors to understand period-over-period operating results separate from items that management believes may disproportionately impact operating results in any particular period; however there is no guarantee that items excluded from NGFMs will not reoccur in future periods. Management also believes that NGFMs enhance the ability of investors to analyze business trends, understand performance and evaluate our initiatives to drive improved financial performance. Management utilizes NGFMs to guide forecasting and long-term planning and for compensation purposes. NGFMs should be considered in addition to, and not as a substitute for, financial measures presented in accordance with GAAP. A reconciliation of forward-looking NGFMs to GAAP is not available without unreasonable effort because of inherent difficulty in forecasting and quantifying comparable GAAP measures and applicable adjustments and other amounts necessary for a reconciliation because of potentially high variability, complexity and low visibility of applicable adjustments and other unusual amounts that could disproportionately impact future GAAP results, such as the impact of defined benefit plan performance, LHX NeXt, portfolio shaping activities, and the extent of tax deductibility.
| Investor Relations Contact:<br><br>Daniel Gittsovich, 321-724-3170<br><br>investorrelations@l3harris.com | Media Relations Contact:<br><br>Sara Banda, 321-306-8927<br><br>media@l3harris.com |
|---|
PAGE 7
Table 1 - Condensed Consolidated Statement of Operations (Unaudited)
| Second Quarter | Year to Date | |||||||
|---|---|---|---|---|---|---|---|---|
| ($ millions, except per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||
| Revenue | $ | 5,426 | $ | 5,299 | $ | 10,558 | $ | 10,510 |
| Cost of revenue | (4,091) | (3,939) | (7,873) | (7,802) | ||||
| General and administrative expenses | (764) | (884) | (1,589) | (1,854) | ||||
| Operating income | 571 | 476 | 1,096 | 854 | ||||
| Non-service FAS pension income and other, net1 | 105 | 86 | 189 | 174 | ||||
| Interest expense, net | (152) | (172) | (302) | (348) | ||||
| Income before income taxes | 524 | 390 | 983 | 680 | ||||
| Income taxes | (66) | (23) | (139) | (28) | ||||
| Net income | 458 | 367 | 844 | 652 | ||||
| Noncontrolling interests, net of income taxes | — | (1) | — | (3) | ||||
| Net income attributable to L3Harris | $ | 458 | $ | 366 | $ | 844 | $ | 649 |
| Earnings per share attributable to common shareholders | ||||||||
| Basic | $ | 2.45 | $ | 1.93 | $ | 4.50 | $ | 3.42 |
| Diluted | $ | 2.44 | $ | 1.92 | $ | 4.48 | $ | 3.40 |
| Weighted-average common shares outstanding | ||||||||
| Basic | 187.0 | 189.7 | 187.7 | 189.8 | ||||
| Diluted | 187.8 | 190.6 | 188.5 | 190.8 |
1“FAS” is defined as Financial Accounting Standards.
PAGE 8
Table 2 - Consolidated Statement of Cash Flow (Unaudited)
| Second Quarter | Year to Date | |||||||
|---|---|---|---|---|---|---|---|---|
| ($ millions) | 2025 | 2024 | 2025 | 2024 | ||||
| Operating Activities | ||||||||
| Net income | $ | 458 | $ | 367 | $ | 844 | $ | 652 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 303 | 319 | 604 | 639 | ||||
| Share-based compensation | 29 | 27 | 48 | 53 | ||||
| Net periodic benefit income | (66) | (71) | (150) | (143) | ||||
| Share-based matching contributions under defined contribution plans | 68 | 72 | 136 | 142 | ||||
| Deferred income taxes | (5) | (136) | (94) | (247) | ||||
| (Increase) decrease in: | ||||||||
| Receivables, net | 64 | (32) | (383) | (25) | ||||
| Contract assets | (214) | 175 | (634) | (165) | ||||
| Inventories, net | (6) | 27 | 86 | 6 | ||||
| Other current assets | (3) | (36) | (22) | (26) | ||||
| Increase (decrease) in: | ||||||||
| Accounts payable | (14) | (209) | 38 | (200) | ||||
| Contract liabilities | 193 | 14 | 177 | (138) | ||||
| Compensation and benefits | 130 | 69 | 25 | (101) | ||||
| Other current liabilities | (279) | 103 | (268) | 85 | ||||
| Income taxes | 48 | 108 | 321 | 211 | ||||
| Other operating activities | (66) | (43) | (130) | (93) | ||||
| Net cash provided by operating activities | 640 | 754 | 598 | 650 | ||||
| Investing Activities | ||||||||
| Capital expenditures | (88) | (97) | (147) | (212) | ||||
| Proceeds from sales of businesses, net of cash divested | — | 158 | 831 | 158 | ||||
| Other investing activities | 10 | (3) | (18) | (4) | ||||
| Net cash (used in) provided by investing activities | (78) | 58 | 666 | (58) | ||||
| Financing Activities | ||||||||
| Proceeds from issuances of long-term debt, net | — | 4 | — | 2,241 | ||||
| Repayments of long-term debt | (606) | (357) | (611) | (2,607) | ||||
| Change in commercial paper, maturities under 90 days, net | 450 | 171 | 470 | 497 | ||||
| Proceeds from commercial paper, maturities over 90 days | — | 208 | — | 688 | ||||
| Repayments of commercial paper, maturities over 90 days | — | (480) | — | (685) | ||||
| Repurchases of common stock | (253) | (89) | (822) | (322) | ||||
| Dividends paid | (225) | (221) | (453) | (445) | ||||
| Other financing activities | 24 | 20 | 1 | 33 | ||||
| Net cash (used in) provided by financing activities | (610) | (744) | (1,415) | (600) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 13 | 2 | 18 | (5) | ||||
| Net decrease in cash and cash equivalents | (35) | 70 | (133) | (13) | ||||
| Cash and cash equivalents, beginning of period | 517 | 477 | 615 | 560 | ||||
| Cash and cash equivalents, end of period | $ | 482 | $ | 547 | $ | 482 | $ | 547 |
PAGE 9
Table 3 - Condensed Consolidated Balance Sheet (Unaudited)
| ($ millions) | June 27, 2025 | January 3, 2025 | ||
|---|---|---|---|---|
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 482 | $ | 615 |
| Receivables, net | 1,437 | 1,072 | ||
| Contract assets | 3,857 | 3,230 | ||
| Inventories, net | 1,258 | 1,330 | ||
| Income taxes receivable | 93 | 379 | ||
| Other current assets | 481 | 461 | ||
| Assets of business held for sale | — | 1,131 | ||
| Total current assets | 7,608 | 8,218 | ||
| Non-current assets | ||||
| Property, plant and equipment, net | 2,742 | 2,806 | ||
| Goodwill | 20,372 | 20,325 | ||
| Intangible assets, net | 7,261 | 7,639 | ||
| Deferred income taxes | 89 | 120 | ||
| Other non-current assets | 3,168 | 2,893 | ||
| Total assets | $ | 41,240 | $ | 42,001 |
| Liabilities and equity | ||||
| Current liabilities | ||||
| Short-term debt | $ | 985 | $ | 515 |
| Current portion of long-term debt, net | 141 | 640 | ||
| Accounts payable | 2,033 | 2,005 | ||
| Contract liabilities | 2,317 | 2,142 | ||
| Compensation and benefits | 444 | 419 | ||
| Other current liabilities | 1,402 | 1,677 | ||
| Liabilities of business held for sale | — | 235 | ||
| Total current liabilities | 7,322 | 7,633 | ||
| Non-current liabilities | ||||
| Long-term debt, net | 10,976 | 11,081 | ||
| Deferred income taxes | 800 | 942 | ||
| Other non-current liabilities | 2,864 | 2,766 | ||
| Total liabilities | 21,962 | 22,422 | ||
| Total equity | 19,278 | 19,579 | ||
| Total liabilities and equity | $ | 41,240 | $ | 42,001 |
PAGE 10
Reconciliation of Non-GAAP Financial Measures
Table 4 - Organic Revenue Reconciliation (Unaudited)
| Second Quarter | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||||||
| ($ millions) | GAAP | Adjustments | Organic | GAAP | Adjustments1 | Organic | ||||||
| CS | $ | 1,376 | — | $ | 1,376 | $ | 1,346 | — | $ | 1,346 | ||
| IMS | 1,622 | — | 1,622 | 1,671 | (138) | 1,533 | ||||||
| SAS | 1,787 | — | 1,787 | 1,707 | (32) | 1,675 | ||||||
| AR | 698 | — | 698 | 633 | (12) | 621 | ||||||
| Corporate eliminations | (57) | — | (57) | (58) | — | (58) | ||||||
| Revenue | $ | 5,426 | $ | — | $ | 5,426 | $ | 5,299 | $ | (182) | $ | 5,117 |
| Year to Date | ||||||||||||
| 2025 | 2024 | |||||||||||
| ($ millions) | GAAP | Adjustments | Organic | GAAP | Adjustments1 | Organic | ||||||
| CS | $ | 2,728 | $ | — | $ | 2,728 | $ | 2,640 | $ | — | $ | 2,640 |
| IMS | 3,214 | — | 3,214 | 3,298 | (138) | 3,160 | ||||||
| SAS | 3,398 | — | 3,398 | 3,458 | (76) | 3,382 | ||||||
| AR | 1,327 | — | 1,327 | 1,217 | (20) | 1,197 | ||||||
| Corporate eliminations | (109) | — | (109) | (103) | — | (103) | ||||||
| Revenue | $ | 10,558 | $ | — | $ | 10,558 | $ | 10,510 | $ | (234) | $ | 10,276 |
1Adjustment to exclude amounts attributable to divested businesses.
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Table 5 - Reconciliation of Operating Income to Adjusted Segment Operating Income (Unaudited)
| Second Quarter | Year to Date | |||||||
|---|---|---|---|---|---|---|---|---|
| ($ millions) | 2025 | 2024 | 2025 | 2024 | ||||
| Operating income | $ | 571 | $ | 476 | $ | 1,096 | $ | 854 |
| Unallocated corporate department items | ||||||||
| Amortization of acquisition-related intangibles | 193 | 215 | 387 | 432 | ||||
| Unallocated corporate department expense, net | 50 | 33 | 65 | 66 | ||||
| FAS/CAS operating adjustment | (3) | (6) | (6) | (13) | ||||
| Total unallocated corporate department items | 240 | 242 | 446 | 485 | ||||
| Significant and/or non-recurring items: | ||||||||
| Merger, acquisition, and divestiture-related expenses1 | 13 | 21 | 30 | 61 | ||||
| Business divestiture-related losses and impairment of goodwill1 | — | 38 | 17 | 38 | ||||
| LHX NeXt implementation costs1 | 39 | 48 | 74 | 175 | ||||
| Total significant and/or non-recurring items | 52 | 107 | 121 | 274 | ||||
| Unallocated corporate expenses | 292 | 349 | 567 | 759 | ||||
| Adjusted segment operating income | $ | 863 | $ | 825 | $ | 1,663 | $ | 1,613 |
1Refer to Key Terms and Non-GAAP Definitions on page 16.
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Table 6 - Reconciliation of Effective Tax Rate to Effective Tax Rate on Non-GAAP Income (Unaudited)
| Second Quarter | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||||||
| ($ millions) | Earnings Before Tax | Tax Expense<br>(Benefit) | Effective Tax Rate | Earnings Before Tax | Tax Expense | Effective Tax Rate | ||||||
| Income before income taxes | $ | 524 | $ | 66 | 12.6 | % | $ | 390 | $ | 23 | 5.9 | % |
| Merger, acquisition, and divestiture-related expenses1 | 13 | 3 | 21 | 7 | ||||||||
| Business divestiture-related losses and impairment of goodwill1 | — | (18) | 38 | (2) | ||||||||
| LHX NeXt implementation costs1 | 39 | 4 | 48 | 11 | ||||||||
| Non-GAAP income before income taxes | $ | 576 | $ | 55 | 9.5 | % | $ | 497 | $ | 39 | 7.8 | % |
| Year to Date | ||||||||||||
| 2025 | 2024 | |||||||||||
| ($ millions) | Earnings Before Tax | Tax Expense<br>(Benefit) | Effective Tax Rate | Earnings Before Tax | Tax Expense | Effective Tax Rate | ||||||
| Income before income taxes | $ | 983 | $ | 139 | 14.1 | % | $ | 680 | $ | 28 | 4.1 | % |
| Merger, acquisition, and divestiture-related expenses1 | 30 | 4 | 61 | 16 | ||||||||
| Business divestiture-related losses and impairment of goodwill1 | 17 | (23) | 38 | (2) | ||||||||
| LHX NeXt implementation costs1 | 74 | 7 | 175 | 22 | ||||||||
| Non-GAAP income before income taxes | $ | 1,104 | $ | 127 | 11.5 | % | $ | 954 | $ | 64 | 6.7 | % |
1Refer to Key Terms and Non-GAAP Definitions on page 16.
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Table 7 - Reconciliation of Diluted EPS to Non-GAAP Diluted EPS and Pension Adjusted Non-GAAP Diluted EPS (Unaudited)
| Second Quarter | Year to Date | |||||||
|---|---|---|---|---|---|---|---|---|
| ($ millions, except per share data) | 2025 | 2024 | 2025 | 2024 | ||||
| Diluted weighted-average common shares outstanding | 187.8 | 190.6 | 188.5 | 190.8 | ||||
| Diluted EPS | $ | 2.44 | $ | 1.92 | $ | 4.48 | $ | 3.40 |
| Significant and/or non-recurring items included in diluted EPS above: | ||||||||
| Merger, acquisition, and divestiture-related expenses1 | 0.07 | 0.11 | 0.16 | 0.32 | ||||
| Business divestiture-related losses and impairment of goodwill1 | — | 0.20 | 0.09 | 0.20 | ||||
| LHX NeXt implementation costs1 | 0.21 | 0.25 | 0.39 | 0.92 | ||||
| Income taxes on above adjustments and other, net2 | 0.06 | (0.08) | 0.06 | (0.20) | ||||
| Non-GAAP diluted EPS2 | $ | 2.78 | $ | 2.40 | $ | 5.18 | $ | 4.64 |
| Less: per share impact of: | ||||||||
| FAS/CAS operating adjustment3 | (0.01) | (0.03) | (0.03) | (0.06) | ||||
| Non-service FAS pension income3 | (0.35) | (0.39) | (0.77) | (0.79) | ||||
| Pension adjusted non-GAAP diluted EPS | $ | 2.42 | $ | 1.98 | $ | 4.38 | $ | 3.79 |
1Refer to Key Terms and Non-GAAP Definitions on page 16.
2Second quarter 2024 amount updated to exclude adjustment of $1.13 per share and $0.29 per share for amortization of acquisition-related intangible assets and related income tax expense, respectively. Year to date 2024 amount updated to exclude adjustment of $2.26 per share and $0.60 per share for amortization of acquistion-related intangible assets and related income tax expense, respectively.
3Net of tax effect.
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Table 8 - Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow (Unaudited)
| Second Quarter | Year to Date | |||||||
|---|---|---|---|---|---|---|---|---|
| ($ millions) | 2025 | 2024 | 2025 | 2024 | ||||
| Net cash provided by operating activities | $ | 640 | $ | 754 | $ | 598 | $ | 650 |
| Capital expenditures | (88) | (97) | (147) | (212) | ||||
| Proceeds from disposal of property, plant and equipment, net | 9 | — | 9 | — | ||||
| Free cash flow | 561 | 657 | 460 | 438 | ||||
| Cash used for merger, acquisition and severance1 | 13 | 57 | 42 | 120 | ||||
| Adjusted free cash flow | $ | 574 | $ | 714 | $ | 502 | $ | 558 |
1Refer to Key Terms and Non-GAAP Definitions on page 16.
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Key Terms and Non-GAAP Definitions
| Description | Definition |
|---|---|
| Merger, acquisition, and divestiture-related expenses | Transaction and integration expenses associated with the AJRD acquisition; external costs related to pursuing acquisition and divestiture portfolio optimization; non-transaction costs related to divestitures; and salaries of employees in roles dedicated to planned divestiture and acquisition activity. |
| Business divestiture-related losses and impairment of goodwill | In 2024, includes loss on sale and impairment of goodwill recognized in connection with the sale of our antenna and related businesses and a loss associated with the then pending divestiture of our Commercial Aviation Solutions business. In 2025, includes loss recognized in connection with the sale of our Commercial Aviation Solutions business. |
| LHX NeXt implementation costs | Costs related to the LHX NeXt initiative are expected to continue into 2026 and are expected to include workforce optimization costs and incremental IT expenses for implementation of new systems, third-party consulting expenses and other related costs, including costs related to personnel dedicated to this project. |
| Organic revenue* | Excludes the impact of completed divestitures and is reconciled in Table 4. |
| Orders | Total value of funded and unfunded contract awards received from the U.S. Government and other customers, including incremental funding and adjustments to previous awards, excluding unexercised contract options and potential orders under ordering-type contracts, such as indefinite delivery, indefinite quantity (IDIQ) contracts. |
| Non-GAAP income before income taxes* | Represents income before income taxes adjusted for items reconciled in Table 6. |
| Effective tax rate on non-GAAP income* | Represents the effective tax rate (tax expense as a percentage of income before income taxes) adjusted for the tax effect of items reconciled in Table 6. |
| Adjusted segment operating income and margin* | On a consolidated basis represents operating income and margin, excluding unallocated corporate department items and items reconciled in Table 5. |
| Non-GAAP diluted EPS* | Represents EPS (earnings per share attributable to common shareholders) adjusted for items reconciled in Table 7. |
| Pension adjusted non-GAAP diluted EPS* | Represents Non-GAAP diluted EPS, described above, adjusted for the after tax per share impact of the FAS/CAS operating adjustment and Non-service FAS pension income reconciled in Table 7. |
| Adjusted free cash flow* | Net cash provided by operating activities less capital expenditures, plus proceeds from disposal of property, plant and equipment and cash used for merger, acquisition and severance reconciled in Table 8. |
| Cash used for merger, acquisition, and severance* | Cash related to merger, acquisition and divestiture-related expenses (described above) and severance costs included in LHX NeXt implementation costs. |
_____
*Refer to Non-GAAP Financial Measures on page 7 for more information.
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