L3harris Technologies, Inc 10-Q for FY2026 Q3
L3harris Technologies, Inc. (LHX)
10-Q
2026-10-29
For: 2026-10-02
View Original
Added on
October 29, 2026
About this 10-Q
L3harris Technologies, Inc filed this 10-Q on October 29, 2026, covering the quarter ended October 2, 2026 (FY2026 Q3).
Headline figures
Quarter ended October 2, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $6.06B
- up 7.1% from $5.66B a year earlier
- Net income
- $632M
- up 36.8% from net income of $462M a year earlier
- Diluted EPS
- $3.28
- up 33.3% from $2.46 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| For the transition period from _______________ to ______________ | |||||
Commission File Number 1-3863
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| Attn: Corporate Secretary | (Zip Code) | |||||||||||||
| (Address of principal executive offices) | ||||||||||||||
Registrant’s telephone number, including area code: (321 ) 727-9100
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| þ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ¨ | Smaller reporting company | ||||||||||||||||||
| 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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes þ No
The number of shares outstanding of the registrant’s common stock as of October 23, 2026 was 186,200,733 .
L3HARRIS TECHNOLOGIES, INC.
FORM 10-Q
For Third Quarter 2026
TABLE OF CONTENTS
| Page No. | |||||
| Part I. Financial Information: | |||||
ITEM 1. Financial Statements (Unaudited): | |||||
Condensed Consolidated Statement of Operations for Third Quarter and Year to Date 2026 and 2025 | |||||
Condensed Consolidated Statement of Comprehensive Income for Third Quarter and Year to Date 2026 and 2025 | |||||
Notes to Condensed Consolidated Financial Statements | |||||
| Part II. Other Information: | |||||
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds | |||||
ITEM 6. Exhibits | |||||
This Quarterly Report on Form 10-Q (this “Report”) contains trademarks, service marks and registered marks of L3Harris Technologies, Inc. and its subsidiaries. All other trademarks are the property of their respective owners.
_____________________________________________________________________
1
Cautionary Statement Regarding Forward-Looking Statements
This Report contains forward-looking statements within the meaning of federal securities laws that involve risks, uncertainties and assumptions that could cause our results to differ materially from such forward-looking statements. Examples include, but are not limited to, statements concerning: our plans, strategies and objectives for future operations; new products, systems, technologies, services or developments; future economic conditions, performance or outlook, including expectations regarding trade policies; future political or budget conditions; the outcome of contingencies or litigation; expected contractual backlog recognition; effective tax rate forecast; the potential level of share repurchases, dividends or pension contributions; capital expenditures and capital structure; other financial items; and assumptions underlying any of the foregoing. Terminology, such as “believes,” “expects,” “may,” “could,” “should,” “would,” “will,” “intends,” “plans,” “estimates,” “anticipates,” “projects” and similar words or expressions may also identify forward-looking statements.
You should not place undue reliance on forward-looking statements, which reflect our management’s current expectations, estimates, projections and assumptions and information currently available to our management as of the date of filing of this Report 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 and our investments in capacity; unexpected developments with multi-year procurement contracts; changes in contract mix; unilateral contract action by the U.S. Government or unexpected issues related to the Department of War (“DoW”) investment in our subsidiary; uncertain economic conditions; future geo-political events; supply chain disruptions; indebtedness; interest rates and other market factors; and changes in effective tax rate or additional tax exposures. These important risks and other disclosures are described more fully in Part I. Item 1A. Risk Factors in our Fiscal 2025 Form 10-K and in Part II. Item 1A. Risk Factors of this Report.
Forward-looking statements are made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 and disclaim any intention or obligation, other than as imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events or developments or otherwise, after the date of filing of this Report or, in the case of any document incorporated by reference, the date of that document.
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2
PART I. FINANCIAL INFORMATION
ITEM 1. | FINANCIAL STATEMENTS. | ||||
L3HARRIS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue | ( | ( | ( | ( | |||||||||||||||||||
| General and administrative expenses | ( | ( | ( | ( | |||||||||||||||||||
| Operating income | |||||||||||||||||||||||
Non-service FAS pension income(1) | |||||||||||||||||||||||
| Other non-operating (expense) income, net | ( | ||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | ( | ( | ( | ( | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Subsidiary preferred stock deemed dividends | ( | ( | |||||||||||||||||||||
| Net income available to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per share available to common shareholders | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
_______________
(1)“FAS” is defined as Financial Accounting Standards.
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
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3
L3HARRIS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive loss, net of tax: | |||||||||||||||||||||||
| Foreign currency translation and other, net | ( | ||||||||||||||||||||||
| Pension and other postretirement benefits | ( | ( | ( | ( | |||||||||||||||||||
| Other comprehensive loss, net of tax | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
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4
L3HARRIS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In millions, except par value) | October 2, 2026 | January 2, 2026 | |||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Receivables, net | |||||||||||
| Contract assets | |||||||||||
| Inventories, net | |||||||||||
| Short-term investments | |||||||||||
| Other current assets | |||||||||||
| Assets of business held for sale | |||||||||||
| Total current assets | |||||||||||
| Non-current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Deferred income taxes | |||||||||||
| Other non-current assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities, mezzanine equity, and equity | |||||||||||
| Current liabilities | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Contract liabilities | |||||||||||
| Compensation and benefits | |||||||||||
| Other current liabilities | |||||||||||
| Liabilities of business held for sale | |||||||||||
| Total current liabilities | |||||||||||
| Non-current liabilities | |||||||||||
Long-term debt, net | |||||||||||
| Deferred income taxes | |||||||||||
| Subsidiary Series A preferred stock conversion feature | |||||||||||
| Subsidiary warrants | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
| Mezzanine equity | |||||||||||
Redeemable subsidiary Series A convertible preferred stock, $ | |||||||||||
| Equity | |||||||||||
Common stock, $ | |||||||||||
| Paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive income | |||||||||||
| Total equity | |||||||||||
| Total liabilities, mezzanine equity, and equity | $ | $ | |||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
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5
L3HARRIS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
| Year to Date | |||||||||||
| (In millions) | 2026 | 2025 | |||||||||
| Operating Activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Share-based compensation | |||||||||||
| Net periodic benefit income | ( | ( | |||||||||
| Share-based matching contributions under defined contribution plans | |||||||||||
| Net investment gains | ( | ( | |||||||||
| Change in fair value of subsidiary preferred stock conversion feature and warrants | |||||||||||
| Deferred income taxes | |||||||||||
| (Increase) decrease in: | |||||||||||
| Receivables, net | ( | ( | |||||||||
| Contract assets | ( | ( | |||||||||
| Inventories, net | ( | ||||||||||
| Other current assets | ( | ( | |||||||||
| Increase (decrease) in: | |||||||||||
| Accounts payable | ( | ( | |||||||||
| Contract liabilities | |||||||||||
| Compensation and benefits | |||||||||||
| Other current liabilities | ( | ( | |||||||||
| Income taxes | |||||||||||
| Other operating activities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Investing Activities | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Proceeds from disposal of property, plant and equipment, net | |||||||||||
| Proceeds from sales of businesses, net of cash divested | |||||||||||
| Cash used for short-term investments | ( | ||||||||||
| Other investing activities | ( | ( | |||||||||
| Net cash (used in) provided by investing activities | ( | ||||||||||
| Financing Activities | |||||||||||
| Proceeds from issuance of subsidiary Series A preferred stock, net | |||||||||||
| Repayments of long-term debt | ( | ( | |||||||||
| Change in commercial paper, net | |||||||||||
| Repurchases of common stock | ( | ( | |||||||||
| Dividends paid | ( | ( | |||||||||
| Other financing activities | |||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
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6
L3HARRIS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
(Unaudited)
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Common Stock | |||||||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
| Share-based compensation | — | ||||||||||||||||||||||
| Repurchases and retirement of common stock | — | ( | ( | ( | |||||||||||||||||||
| Ending balance | |||||||||||||||||||||||
| Paid-in Capital | |||||||||||||||||||||||
| Beginning balance | |||||||||||||||||||||||
| Share-based compensation and other, net | |||||||||||||||||||||||
| Repurchases and retirement of common stock | ( | ( | ( | ( | |||||||||||||||||||
| Ending balance | |||||||||||||||||||||||
| Retained Earnings | |||||||||||||||||||||||
| Beginning balance | |||||||||||||||||||||||
| Net income and other | |||||||||||||||||||||||
| Subsidiary preferred stock deemed dividend | ( | — | ( | — | |||||||||||||||||||
| Repurchases and retirement of common stock | ( | ( | ( | ( | |||||||||||||||||||
| Cash dividends | ( | ( | ( | ( | |||||||||||||||||||
| Ending balance | |||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||
| Beginning balance | |||||||||||||||||||||||
| Other comprehensive loss, net of tax | ( | ( | ( | ( | |||||||||||||||||||
| Ending balance | |||||||||||||||||||||||
| Noncontrolling Interests | |||||||||||||||||||||||
| Beginning balance | |||||||||||||||||||||||
| Derecognized with divestiture | — | — | — | ( | |||||||||||||||||||
| Other | — | — | — | ( | |||||||||||||||||||
| Ending balance | |||||||||||||||||||||||
| Total Equity | $ | $ | $ | $ | |||||||||||||||||||
| Cash dividends per share | $ | $ | $ | $ | |||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).
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7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A: BASIS OF PRESENTATION
Principles of Consolidation
The accompanying Condensed Consolidated Financial Statements include the accounts of L3Harris Technologies, Inc. and its consolidated subsidiaries. As used in these notes to the Condensed Consolidated Financial Statements (these “Notes”), the terms “L3Harris,” “Company,” “we,” “our” and “us” refer to L3Harris Technologies, Inc. and its consolidated subsidiaries. Intercompany transactions and accounts have been eliminated.
The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, such interim financial statements do not include all information and footnotes necessary for a complete presentation of financial condition, results of operations, cash flows and equity in conformity with GAAP for annual financial statements and are not necessarily indicative of the results that may be expected for the full fiscal year or any subsequent period.
Segment Reorganization
Effective in fiscal 2026, we streamlined our operating segments, which are also our reportable segments or business segments, from four segments to three segments, more closely aligning common capabilities and business models. We report our financial results in the following three reportable segments, consistent with the manner in which our Chief Operating Decision Maker (“CODM”) manages the business, evaluates performance, and allocates resources:
Space & Mission Systems (“SMS”): Integrates satellite and payload capabilities, including missile warning and defense, with maritime, air special missions, and other global defense and civil government programs;
Communications & Spectrum Dominance (“CSD”): Combines all of our capabilities in resilient communications and electronic warfare; and
Missile Solutions (“MSL”): Unites propulsion, sensing, guidance, and other advanced missile and munition technologies for delivery of end-to-end missile solutions.
Information on the reallocation of goodwill in connection with the segment reorganization can be found under the “Reallocation of Goodwill in Segment Reorganization” heading in Note E: Goodwill and Intangible Assets in our Form 10-Q for first quarter 2026, which information is incorporated herein by reference.
The historical results, discussion and presentation of our business segments as set forth in the accompanying Condensed Consolidated Financial Statements and these Notes reflect the impact of these changes for all periods presented in order to present segment information on a comparable basis. There is no impact on our previously reported consolidated statements of operations, balance sheets, statements of cash flows or statements of equity resulting from these changes.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the accompanying Condensed Consolidated Financial Statements and these Notes and related disclosures. These estimates and assumptions are based on experience and other information available prior to issuance of the accompanying Condensed Consolidated Financial Statements and these Notes. Materially different results can occur as circumstances change and additional information becomes known.
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8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Reclassifications
Recently Issued Accounting Pronouncements
In May 2026, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2026-02, Environmental Credits and Environmental Credit Obligations, which provides guidance on how companies should recognize, measure, and present environmental credits and environmental credit obligations in their financial statements. ASU 2026-02 is effective for annual and interim reporting periods beginning after December 15, 2027, and should be applied retrospectively. We are currently evaluating the potential impact of adopting ASU 2026-02 on our operating results, financial position and cash flows.
For information on accounting pronouncements issued prior to fiscal 2026, see Note 1: Significant Accounting Policies in our Fiscal 2025 Form 10-K.
NOTE B: STRATEGIC INVESTMENT IN SUBSIDIARY
Overview
On April 17, 2026, with respect to our wholly owned subsidiary, Aerojet Rocketdyne Holdings, Inc. (“AR”), which operates as our Missile Solutions segment, we entered into a definitive agreement (the “DoW Investment Agreement”) with the United States Department of War (“DoW” or the “Investor”). The DoW Investment Agreement provided for the issuance and sale of 10,000 shares of Redeemable AR Series A Convertible Preferred Stock (the “Subsidiary Series A Preferred Stock”) par value of $0.0001 per share and stated value of $100,000 per share, and pre-initial public offering (“IPO”) and, upon a Qualified IPO (as defined in the DoW Investment Agreement), post-IPO warrants (collectively the “Subsidiary Warrants”), for an aggregate purchase price of $1 billion, which is the initial face value of the Subsidiary Series A Preferred Stock.
The Subsidiary Series A Preferred Stock payout options include one of the following: (i) a liquidation preference equal to face value of the preferred shares plus 7 % cumulative annual dividends, compounded quarterly (the “Liquidation Preference”); (ii) an automatic conversion into common stock of our wholly owned subsidiary AXYV Inc. (“AXYV”), at a 20 % discount to the IPO stock price upon a Qualified IPO on or before December 31, 2027; or (iii) either Investor conversion on demand or redemption on or after April 17, 2031, at fair value, if a Qualified IPO does not occur by December 31, 2027. Under the DoW Investment Agreement, we are expected to use commercially reasonable efforts to consummate a Qualified IPO. The options are mutually exclusive and are dependent on achieving specified milestones.
The purpose of the investment is to strengthen the U.S. defense industrial base by providing funding for the Missile Solutions segment to expand and modernize its facilities, accelerate research and development, and increase production capacity for critical technologies. The fair value of the investment exceeds the proceeds as it simultaneously provides financing, the opportunity to substantially expand an existing commercial relationship, and the benefit of an anchor investor whose participation tangibly demonstrates the Missile Solutions segment’s strong long-term business prospects.
The DoW Investment Agreement contains customary representations, warranties, and covenants by us and the Investor. Under the terms of the DoW Investment Agreement, AR may redeem, or the Investor may require the redemption of, the Subsidiary Series A Preferred Stock and Subsidiary Warrants held by the Investor under certain conditions.
Use of Proceeds
Under terms of the DoW Investment Agreement, net proceeds of $973 million are to be used to fund development and construction activities for expanding our missile manufacturing capacity and capabilities within our Missile Solutions segment. We intend to use the remaining net proceeds, if any, for general corporate purposes. The net proceeds are included in the “Proceeds from issuance of subsidiary Series A preferred stock, net” line item in our Condensed Consolidated Statement of Cash Flows as Net cash used in financing activities.
Preferred Stock
Because redemption of the Subsidiary Series A Preferred Stock is not solely within our control due to the redemption features described above, the Subsidiary Series A Preferred Stock is classified as mezzanine equity and
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9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
included in the “Redeemable subsidiary Series A convertible preferred stock” line item in our Condensed Consolidated Balance Sheet.
Conversion Upon Qualified IPO On or Before December 31, 2027. Upon completion of a Qualified IPO, the Subsidiary Series A Preferred Stock will convert into common stock of AXYV (“AXYV Common Stock”) at a 20 % discount to the public offering price in the Qualified IPO. The conversion terms are designed to provide the holder with a fixed return settled in a variable number of shares of AXYV Common Stock. The Investor’s ownership percentage would be determined based on the valuation of AXYV at the time of a Qualified IPO.
Fair Value Conversion or Redemption After December 31, 2027. If a Qualified IPO does not occur on or before December 31, 2027, the redemption price calculation methodology varies depending on whether specified milestones have been achieved by such date. If such milestones are not achieved by December 31, 2027, the redemption price would be calculated by applying a contractual premium of 110 % to the Liquidation Preference.
If the milestones are achieved by December 31, 2027, the Investor can convert the Subsidiary Series A Preferred Stock at any time (including in the case of an IPO after December 31, 2027), or a redemption on or after April 17, 2031 could occur. The Investor’s conversion rate will be determined based on the face value of the Subsidiary Series A Preferred Stock ($1 billion) divided by 15 times 2026 AXYV earnings before interest, taxes, depreciation, and amortization (“EBITDA”). The redemption price would be calculated on or after April 17, 2031, and would equal the greater of (i) the Liquidation Preference or (ii) the fair market value, calculated in the same manner as noted above.
Redemption Upon Sale of AXYV. If there is a sale of AXYV before a Qualified IPO, or after December 31, 2027 but prior to a Qualified IPO and specified milestones have not been achieved, the redemption price would be calculated by applying a contractual premium of 110 % to the Liquidation Preference. If specified milestones have been achieved, the Investor is entitled to receive cash equal to the greater of the Liquidation Preference or a pro forma ownership percentage which is calculated as the face value of the Subsidiary Series A Preferred Stock divided by 15 times 2026 AXYV EBITDA.
Conversion and Redemption Feature Embedded Derivatives. Certain of the conversion and redemption features represent embedded derivatives. These features of the Subsidiary Series A Preferred Stock were bifurcated from the host instrument and recorded as a derivative liability, which is included in the “Subsidiary Series A preferred stock conversion feature” line item in the Condensed Consolidated Balance Sheet at its fair value. The derivative liability is measured at fair value each reporting period, with changes recognized in earnings as a component of the “Other non-operating (expense) income, net” line item in our Condensed Consolidated Statement of Operations.
Warrants
The Subsidiary Warrants entitle the Investor to purchase shares representing 3 % of the AXYV Common Stock, on a fully diluted basis, and consist of pre-IPO warrants exercisable at 100 %, 110 %, and 120 % of the non-IPO common stock price, and post-IPO warrants exercisable at 100 %, 110 %, and 120 % of the Qualified IPO price, which take effect upon a Qualified IPO. The pre-IPO warrants become exercisable only upon (i) the occurrence of certain events outlined in the DoW Investment Agreement and (ii) the passage of time (i.e., on or after December 31, 2027), but only if certain operational conditions are met that are outside the control of the Company and the Investor.
The pre-IPO warrants are accounted for as derivative liabilities, included in the “Subsidiary warrants” line item in the Condensed Consolidated Balance Sheet, initially measured at fair value with subsequent changes recognized in earnings as a component of the “Other non-operating (expense) income, net” line item in our Condensed Consolidated Statement of Operations.
Immediately prior to the Qualified IPO, the pre-IPO warrants will automatically convert into post-IPO warrants of AXYV. The number of shares underlying the post-IPO warrants will be calculated as a specified percentage of the fully diluted AXYV Common Stock immediately prior to the Qualified IPO, after giving effect to the conversion of the Subsidiary Series A Preferred Stock.
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10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Fair Value Measurements
The conversion and redemption feature embedded derivatives and warrants are measured at fair value with probabilities associated with expected Qualified IPO timing and probability, projected valuation of AXYV, equity volatility, and probability-weighted scenario outcomes. The significant unobservable quantitative inputs used for the fair value measurement of the warrants are the projected valuation of AXYV and the equity volatility, which is 30 % as of October 2, 2026. These liabilities are classified within Level 3 of the fair value hierarchy. See Note H: Fair Value Measurements for further information on fair value methodology.
Measurement and Recognition
The fair value of the Subsidiary Series A Preferred Stock was initially assigned first to the conversion feature embedded derivative based on the fair value at issuance and the residual amount was recorded as the initial fair value of the Subsidiary Series A Preferred Stock. The Subsidiary Warrants were separately recognized at their fair value. Our fair value estimates as of October 2, 2026 are substantially weighted to reflect a Qualified IPO prior to December 31, 2027, in line with our expectation to use commercially reasonable efforts to consummate a Qualified IPO by such date.
Fair values recognized upon initial issuance, fair value adjustments related to updates in assumptions recognized during third quarter and the fair values of the instruments as of October 2, 2026 recognized in our Condensed Consolidated Balance Sheet are summarized below:
| (In millions) | April 17, 2026 | Fair Value Adjustment Loss/(Gain)(1) | October 2, 2026 | ||||||||||||||
| Subsidiary Series A preferred stock conversion feature | $ | $ | $ | ||||||||||||||
| Subsidiary warrants | ( | ||||||||||||||||
______________
(1)Included as a component of the “Other non-operating (expense) income, net” line item in our Condensed Consolidated Statement of Operations.
Program Investment Asset. We also recognized a program investment intangible asset of $386 million, representing the fair value in excess of cash proceeds from our issuance of preferred stock, embedded derivative instruments, and warrants related to the DoW strategic investment. Amortization of the program investment asset commenced in third quarter 2026 and is being recognized as a reduction to revenue on a straight-line basis over its estimated useful life of 20 years. The asset is included in the “Intangible assets, net” line item in the Condensed Consolidated Balance Sheet and the initial recognition of this asset is a non-cash financing activity, excluded from our Condensed Consolidated Statement of Cash Flows.
Upon recognition of the program investment asset, we recorded a deferred tax liability of $89 million, which is netted against the Subsidiary Series A Preferred Stock, and is included in the “Deferred income taxes” line item in the Condensed Consolidated Balance Sheet.
Transaction Costs. We incurred transaction costs of $27 million in connection with the issuance of the Subsidiary Series A Preferred Stock and related derivative instruments. These costs were recognized as a reduction to the initial carrying value of the Subsidiary Series A Preferred Stock, reflected in the “Redeemable subsidiary Series A convertible preferred stock” line item in the Condensed Consolidated Balance Sheet.
Subsidiary Preferred Stock Deemed Dividends. The Subsidiary Series A Preferred Stock has multiple redemption and conversion factors, as described above. As of October 2, 2026, we evaluated if the Subsidiary Series A Preferred Stock was currently redeemable or probable of becoming redeemable. While the Subsidiary Series A Preferred Stock is not currently redeemable, it is probable of becoming redeemable based on passage of time and certain milestones that are not currently achieved. The highest redemption value should not consider the Subsidiary Series A preferred stock conversion feature as it represents value incremental to Liquidation Preference. Therefore, we will recognize accretion to the highest redemption value of $1,422 million, representing the expected Liquidation Preference amount at April 17, 2031, through a subsidiary preferred stock deemed dividend which will be recognized ratably over time through April 17, 2031.
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11
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Redeemable subsidiary Series A convertible preferred stock recognized in Mezzanine equity in our Condensed Consolidated Balance Sheet is summarized below:
| (In millions) | |||||
Balance as of April 17, 2026 | $ | ||||
| Deferred tax liability | ( | ||||
| Transaction costs | ( | ||||
| Subsidiary preferred stock deemed dividends | |||||
Balance as of October 2, 2026 | $ | ||||
NOTE C: EARNINGS PER SHARE AVAILABLE TO COMMON SHAREHOLDERS (“EPS”)
EPS is calculated as net income available to common shareholders divided by our weighted-average number of basic or diluted common shares outstanding. Net income available to common shareholders is calculated by reducing net income by the amount of the subsidiary preferred stock deemed dividends associated with the Subsidiary Series A Preferred Stock, as it is not a participating security.
Potential dilutive common shares primarily consist of employee stock options, restricted stock units (“RSUs”), performance share units (“PSUs”), Subsidiary Series A Preferred Stock and Subsidiary Warrants. As of October 2, 2026, the Subsidiary Series A Preferred Stock is anti-dilutive and the Subsidiary Warrants are not currently exercisable, therefore, both instruments are excluded from the diluted EPS calculation.
See Note B: Strategic Investment in Subsidiary for further information on the subsidiary preferred stock deemed dividends, Subsidiary Series A Preferred Stock and Subsidiary Warrants.
Basic and diluted EPS are calculated as follows:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions, except per share amount) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Subsidiary preferred stock deemed dividends | ( | ( | |||||||||||||||||||||
| Net income available to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
| Basic weighted-average common shares outstanding | |||||||||||||||||||||||
| Impact of dilutive share-based awards | |||||||||||||||||||||||
| Diluted weighted-average common shares outstanding | |||||||||||||||||||||||
| Earnings per share available to common shareholders | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
Anti-dilutive share-based awards excluded from diluted EPS were 0.4 million and 0.9 million for third quarter and year to date 2026, respectively, and 2.0 million for year to date 2025. There were no anti-dilutive share-based awards excluded from diluted EPS for third quarter 2025.
NOTE D: CONTRACT ASSETS AND CONTRACT LIABILITIES
Contract assets represent unbilled receivables for revenue recognized in advance of billings, primarily under the percentage-of-completion (“POC”) cost-to-cost method. Contract liabilities consist of advance payments and billings in excess of revenue recognized. Contract assets and liabilities are reported net on a contract-by-contract basis.
Contract assets and contract liabilities are summarized below:
| (In millions) | October 2, 2026 | January 2, 2026 | |||||||||
Contract assets | $ | $ | |||||||||
Contract liabilities | ( | ( | |||||||||
Contract liabilities, non-current(1) | ( | ( | |||||||||
| Net contract assets | $ | $ | |||||||||
_______________
(1)Included as a component of the “Other non-current liabilities” line item in our Condensed Consolidated Balance Sheet.
During third quarter and year to date 2026, we recognized revenue of $274 million and $1,616 million, respectively, related to contract liabilities that were outstanding as of January 2, 2026. During third quarter and year to date 2025, we recognized revenue of $270 million and $1,485 million, respectively, related to contract liabilities that were outstanding as of January 3, 2025.
NOTE E: INVENTORIES, NET
Inventories, net are summarized below:
| (In millions) | October 2, 2026 | January 2, 2026 | |||||||||
| Materials and supplies | $ | $ | |||||||||
| Work in process | |||||||||||
Finished products | |||||||||||
Inventories, net | $ | $ | |||||||||
NOTE F: GOODWILL AND INTANGIBLE ASSETS
Goodwill
Changes in the carrying amount of goodwill, by business segment, were as follows:
| (In millions) | SMS | CSD | MSL | Total | |||||||||||||||||||
Balance as of January 2, 2026(1) | $ | $ | $ | $ | |||||||||||||||||||
| Currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
Balance as of October 2, 2026 | $ | $ | $ | $ | |||||||||||||||||||
(1)Balances reflect impact of segment reorganization, as discussed in Note A: Basis of Presentation. Information on the reallocation of goodwill in connection with the reorganization can be found under the “Reallocation of Goodwill in Segment Reorganization” heading in Note E: Goodwill and Intangible Assets in our Form 10-Q for first quarter 2026, which information is incorporated herein by reference.
As of both October 2, 2026 and January 2, 2026, accumulated goodwill impairment losses were $120 431 238 million and $337 million, respectively. The decrease reflects the removal upon sale of $99 million of accumulated impairment losses in connection with the August 3, 2026 divestiture of certain businesses previously reported in our Missile Solutions segment (“Space Technology disposal group”). See Note O: Divestitures for further information.
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12
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Intangible Assets
Intangible assets, net are summarized below:
| October 2, 2026 | January 2, 2026 | ||||||||||||||||||||||||||||||||||
| (In millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||
Customer relationships(1) | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Developed technologies(1) | ( | ( | |||||||||||||||||||||||||||||||||
Trade names(1) | ( | ( | |||||||||||||||||||||||||||||||||
Program investment(2) | ( | ||||||||||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||||||||
| Total finite-lived intangible assets | ( | ( | |||||||||||||||||||||||||||||||||
Corporate trade name | — | — | |||||||||||||||||||||||||||||||||
| Intangible assets, net | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
_______________
(1)Acquisition-related intangibles recorded at Corporate, as they benefit the entire Company. Amortization is included in “Unallocated corporate items and other, net” in Note Q: Business Segment Information.
(2)Asset is recorded at Corporate, as it benefits the entire Company. Amortization is included in the “Revenue” line item of our Condensed Consolidated Statement of Operations. See Note B: Strategic Investment in Subsidiary for further information.
Amortization for intangible assets was $152 million and $503 million for third quarter and year to date 2026, respectively, and $192 million and $579 million for third quarter and year to date 2025, respectively. Future estimated amortization for intangible assets is as follows:
| (In millions) | Remaining Fiscal 2026 | Fiscal 2027 | Fiscal 2028 | Fiscal 2029 | Fiscal 2030 | Thereafter | Total | ||||||||||||||||||||||||||||||||||
| Amortization | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
NOTE G: INCOME TAXES
Tax Legislation Update
The Organisation for Economic Cooperation and Development (“OECD”) established a 15% global minimum tax applicable to multinational companies, which has been adopted by a majority of countries in which we operate and may subject us to this tax. In January 2026, the OECD issued additional guidance that is expected to reduce the global minimum tax burden on U.S. based multinationals. We are actively monitoring the legislative adoption of this guidance in relevant jurisdictions and will continue to evaluate its applicability to our operations and refine our estimates of the effective tax rate and cash tax impacts as new legislation is enacted. There was no impact on our effective tax rate in third quarter 2026.
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13
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Effective Tax Rate
Our effective tax rate was as follows:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Income tax expense | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Effective tax rate | % | % | % | % | |||||||||||||||||||
Both third quarter 2026 and 2025 effective tax rate benefited from favorable impacts of research and development (“R&D”) credits and tax deductions for foreign derived deduction-eligible intangible income (“FDDEI”). Third quarter 2026 effective tax rate reflects an incremental benefit of 10 % associated with the favorable resolution of audit uncertainties, partially offset by an unfavorable impact from pre-divestiture activities of the Space Technology disposal group. Third quarter 2025 effective tax rate was unfavorably impacted by the reduction in R&D credits from the enactment of the One Big Beautiful Bill Act (“OBBBA”) and the Commercial Aviation Solutions (“CAS disposal group”) divestiture, partially offset by a favorable return-to-provision adjustment.
NOTE H: FAIR VALUE MEASUREMENTS
We measure certain assets and liabilities at fair value on a recurring basis utilizing a three-level fair value hierarchy that prioritizes inputs based on market observability:
•Level 1 — Quoted prices in active markets for identical assets or liabilities.
•Level 2 — Observable inputs other than quoted prices included within Level 1, including: quoted prices for similar assets or liabilities in active or inactive markets; quoted prices for identical assets or liabilities in inactive markets; and inputs derived from or corroborated by observable market data.
•Level 3 — Unobservable inputs with little or no market activity that are significant to the fair value of the assets or liabilities and reflect our assumptions about market participants’ pricing, using the best available information.
We utilize observable inputs whenever available. In certain instances, fair value is estimated using quoted market prices from external pricing services. We assess the methodologies of these services to ensure valuations reflect fair value, including net asset value (“NAV”). The NAV reported by an asset manager may be adjusted when sufficient evidence indicates NAV is not representative of fair value.
For further information on assets and liabilities measured at fair value on a recurring basis, see Note B: Strategic Investment in Subsidiary, Note J: Retirement Benefits and Note P: Investments. For further information on fair value of long-term debt, see Note I: Debt and Credit Arrangements.
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14
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE I: DEBT AND CREDIT ARRANGEMENTS
Long-Term Debt
Long-term debt is summarized below:
| (In millions) | October 2, 2026 | January 2, 2026 | |||||||||||||||||||||
Fixed-rate debt(1) | $ | $ | |||||||||||||||||||||
| Finance lease obligations and other | |||||||||||||||||||||||
| Unamortized discounts and issuance costs, net of bond premium | ( | ( | |||||||||||||||||||||
| Total long-term debt | |||||||||||||||||||||||
Less: Current portion of long-term debt(2) | |||||||||||||||||||||||
| Long-term debt, net | $ | $ | |||||||||||||||||||||
_______________
(1)See Note 8: Debt and Credit Arrangements in our Fiscal 2025 Form 10-K for information on our fixed-rate debt.
(2)As of October 2, 2026, includes the $550 million 3.85 % notes, due December 2026 (“3.85 % 2026 Notes”) and $1,250 million 5.40 % notes, due January 2027 (“5.40 % 2027 Notes”). As of January 2, 2026, includes the $100 million 7.00 % debentures, due January 2026 (“7.00 % 2026 Debentures”) and $550 million 3.85 % 2026 Notes.
Repayments. On January 14, 2026, we repaid the entire outstanding $100 million 7.00 % 2026 Debentures with cash on hand.
Fair Value. As of October 2, 2026 and January 2, 2026, the estimated fair value of long-term debt was $10.6 billion and $11.2 billion, respectively. These values were estimated using a market approach based on quoted market prices for our debt in the secondary market and would be classified as Level 2 in the fair value hierarchy. See Note H: Fair Value Measurements for further information on fair value.
Credit Agreements
Five-Year Credit Facility. On February 18, 2025, we established a $2.5 billion, five-year senior unsecured revolving credit facility (the “2025 Five-Year Credit Facility”) under a Revolving Credit Agreement (“2025 Five-Year Credit Agreement”) maturing on February 18, 2030 with a syndicate of lenders. For a description of the 2025 Five-Year Credit Agreement and related covenants, see Note 8: Debt and Credit Arrangements in our Fiscal 2025 Form 10-K.
As of October 2, 2026, we had no 2.5 billion, net of outstanding borrowings under our commercial paper program, as discussed below, and were in compliance with all covenants under the 2025 Five-Year Credit Agreement.
364-Day Credit Facility. On February 18, 2025, we established a $500 million 364 -day senior unsecured revolving credit facility (“2025 364-Day Credit Facility”) by entering into a 364 -day Credit Agreement with a syndicate of lenders. The 2025 364-Day Credit Facility matured on February 17, 2026.
Commercial Paper Program (“CP Program”)
Under our CP Program, we may issue unsecured commercial paper notes up to a maximum aggregate amount, supported by the availability under our credit agreements. As of October 2, 2026, our CP Program had maximum aggregate capacity of $2.5 billion, supported by our 2025 Five-Year Credit Facility. As of January 2, 2026, our CP Program had maximum aggregate capacity of $3.0 billion, supported by our 2025 Five-Year Credit Facility and 2025 364-Day Credit Facility, which matured on February 17, 2026.
The commercial paper notes are sold at par less a discount representing an interest factor or, if interest bearing, at par, and the maturities vary but may not exceed 397 days from the date of issue. The commercial paper notes rank at least pari passu with all other unsecured and unsubordinated indebtedness.
As of both October 2, 2026 and January 2, 2026, we had no
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15
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE J: RETIREMENT BENEFITS
Deferred Compensation Plans
We sponsor certain non-qualified deferred compensation plans which are measured at fair value on a recurring basis in our Condensed Consolidated Balance Sheet. Deferred compensation plan assets represent diversified assets held in rabbi trusts, which include marketable equity and fixed income securities and corporate-owned life insurance (“COLI”) contracts. Liabilities represent participant balances in marketable equity securities and common/collective trusts (“CCTs”) and guaranteed investment contracts (“GICs”) based on participant designated investment options.
The following table summarizes our deferred compensation plan assets and liabilities and classifications within the fair value hierarchy:
| October 2, 2026 | January 2, 2026 | ||||||||||||||||||||||
| (In millions) | Total | Level 1 | Total | Level 1 | |||||||||||||||||||
Assets | |||||||||||||||||||||||
| Equity and fixed income securities | $ | $ | $ | $ | |||||||||||||||||||
| COLI, measured at NAV | |||||||||||||||||||||||
Deferred compensation plan assets(1) | $ | $ | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
| Equity securities | $ | $ | $ | $ | |||||||||||||||||||
CCTs and GICs, measured at NAV | |||||||||||||||||||||||
Deferred compensation plan liabilities(2) | $ | $ | |||||||||||||||||||||
_______________
(1)Included in the “Other current assets” and “Other non-current assets” line items in our Condensed Consolidated Balance Sheet.
(2)Included in the “Compensation and benefits” and “Other non-current liabilities” line items in our Condensed Consolidated Balance Sheet.
See Note H: Fair Value Measurements for further information on fair value.
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16
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Defined Benefit Plans
The components of net periodic benefit income for our defined benefit pension plans and other postretirement benefit plans (“other benefits”) (collectively, “defined benefit plans”) were as follows:
| Third Quarter | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
(In millions) | Pension | Other Benefits | Total | Pension | Other Benefits | Total | |||||||||||||||||||||||||||||
| Operating | |||||||||||||||||||||||||||||||||||
Service cost(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Non-operating | |||||||||||||||||||||||||||||||||||
| Interest cost | |||||||||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of net actuarial gains | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||
| Amortization of prior service credits | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Non-service cost net periodic benefit income(2) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Net periodic benefit income | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
| Year to Date | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
(In millions) | Pension | Other Benefits | Total | Pension | Other Benefits | Total | |||||||||||||||||||||||||||||
| Operating | |||||||||||||||||||||||||||||||||||
Service cost(1) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Non-operating | |||||||||||||||||||||||||||||||||||
| Interest cost | |||||||||||||||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of net actuarial gains | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Amortization of prior service (credits) costs | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
| Effect of settlements | ( | ( | |||||||||||||||||||||||||||||||||
Non-service cost net periodic benefit income(2) | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Net periodic benefit income | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
______________
(1)Included in the “Cost of revenue” and “General and administrative expenses” line items in our Condensed Consolidated Statement of Operations.
(2)Included in the “Non-service FAS pension income” line item in our Condensed Consolidated Statement of Operations.
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17
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE K: SHARE-BASED COMPENSATION
As of October 2, 2026, we had stock options and other share-based compensation awards outstanding under our 2024 Equity Incentive Plan and predecessor plans (collectively, the “L3Harris SIPs”).
Awards granted to participants under the L3Harris SIPs and the weighted-average grant-date fair value per share or unit were as follows:
| Year to Date | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| (In thousands, except per share/unit amounts) | Shares or Units | Weighted-Average Grant-Date Fair Value Per Share or Unit | Shares or Units | Weighted-Average Grant-Date Fair Value Per Share or Unit | |||||||||||||||||||
Stock options(1) | $ | $ | |||||||||||||||||||||
RSUs(2) | $ | $ | |||||||||||||||||||||
PSUs(3) | $ | $ | |||||||||||||||||||||
_______________
(1)Other than certain stock options granted in connection with new hires, our stock options generally vest ratably in equal amounts over a three-year period.
(2)The majority of our RSUs, including those granted annually to executives under our long-term incentive plan, cliff vest after three years .
(3)Our PSUs are subject to performance criteria and generally vest after the three-year performance period.
The aggregate number of shares of our common stock issued under the L3Harris SIPs, net of shares withheld for tax purposes, was 0.1 million and 0.6 million for third quarter and year to date 2026, respectively, and 0.7 million and 1.1 million for third quarter and year to date 2025, respectively.
Share-based compensation expense was $1 million of income and $48 million of expense for third quarter and year to date 2026, respectively, and $35 million and $83 million of expense for third quarter and year to date 2025, respectively. Both third quarter and year to date 2026 include $20 0.1 million shares granted year to date 2026.
NOTE L: SHAREHOLDERS' EQUITY
Common Stock
Authorized common stock consists of 500,000,000 1 186,144,686 186,844,093
Share Repurchase Program. On October 21, 2022, we announced that our Board of Directors (“Board”) approved a $3.0 billion share repurchase authorization under our repurchase program. Our previous $6.0 billion share repurchase authorization was fully utilized during first quarter 2025. Our repurchase program does not have an expiration date and authorizes us to repurchase shares of our common stock through open market purchases, private transactions, transactions structured through investment banking institutions or any combination thereof.
During year to date 2026, we repurchased 1.8 million shares of our common stock under our share repurchase program for $598 million and had remaining unused authorizations of $1.6 billion as of October 2, 2026. During year to date 2025, we repurchased 4.5 million shares of our common stock under our share repurchase program for $998 million and had remaining unused authorizations of $2.4 billion as of October 3, 2025.
Preferred Stock
Authorized preferred stock consists of 1,000,000 no
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18
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Accumulated Other Comprehensive Income (Loss) (“AOCI”)
Changes in the components of AOCI, net of tax were as follows:
| (In millions) | Foreign Currency Translation and Other, Net(1) | Pension and Other Postretirement Benefits(2) | Total AOCI | ||||||||||||||
Balance as of January 2, 2026 | $ | ( | $ | $ | |||||||||||||
| Other comprehensive loss before reclassifications | ( | ( | |||||||||||||||
Losses (gains) reclassified to earnings | ( | ( | |||||||||||||||
| Other comprehensive loss | ( | ( | ( | ||||||||||||||
| Balance as of October 2, 2026 | $ | ( | $ | $ | |||||||||||||
| Balance as of January 3, 2025 | $ | ( | $ | $ | |||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||
Losses (gains) reclassified to earnings | ( | ( | |||||||||||||||
| Other comprehensive income (loss) | ( | ( | |||||||||||||||
Balance as of October 3, 2025 | $ | ( | $ | $ | |||||||||||||
_______________
(1)Other, net consists of hedging derivatives.
(2)See Note J: Retirement Benefits for additional information.
NOTE M: CHANGES IN ESTIMATES
Many of our contracts utilize the POC cost-to-cost method of revenue recognition. A single estimated profit margin is used to recognize profit for each performance obligation over its period of performance. At the outset of each contract, we gauge its complexity and perceived risks and establish an estimated total cost at completion in line with those expectations. Due to the long-term nature of many of these contracts, developing the estimated total cost at completion and total transaction price often requires judgment. After establishing the estimated total cost at completion, we follow a standard estimate at completion (“EAC”) process in which we review the progress and performance on our ongoing contracts. If we successfully retire risks associated with the technical, schedule and cost aspects of a contract, we may lower our estimated total cost at completion commensurate with the retirement of these risks. Conversely, there are many reasons estimated contract costs can increase, including: (i) supply chain disruptions, inflation and labor issues; (ii) design or other development challenges; and (iii) program execution challenges (including technical schedule or quality issues and other performance concerns). Additionally, as the contract progresses, our estimates of total transaction price may increase or decrease if, for example, we receive incentive or award fees that are higher or lower than expected.
The following table presents the effect of aggregate net EAC adjustments:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Operating income | ( | ||||||||||||||||||||||
Net income(1) | ( | ||||||||||||||||||||||
| Diluted EPS | ( | ||||||||||||||||||||||
_______________
(1)Based on a 25
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19
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE N: CONTRACTUAL BACKLOG
Contractual backlog, which is the equivalent of our remaining performance obligations, represents the future revenue we expect to recognize as we perform on our current contracts. Contractual backlog comprises both funded backlog (i.e., firm orders for which funding is authorized and appropriated) and unfunded backlog (i.e., orders for which funds have not been appropriated and/or incrementally funded). Contractual backlog excludes unexercised contract options and potential orders under ordering-type contracts, such as indefinite-delivery, indefinite-quantity (“IDIQ”) contracts.
As of October 2, 2026, our contractual backlog and funded contractual backlog was $53.2 billion and $31.2 billion, respectively. We expect to recognize approximately 35 % of our contractual backlog as revenue over the next twelve months and 55 % as revenue over the next twenty-four months , with the remainder to be recognized thereafter.
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20
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE O: DIVESTITURES
Space Technology Disposal Group
On August 3, 2026, we completed the sale of a 60 % controlling interest in our Space Technology disposal group for cash proceeds, net of cash divested, of $539 million, subject to final purchase price adjustments, including the final working capital settlement, as set forth in the agreement. In connection with the transaction, we recognized a $248 million equity method investment, reflecting the fair value of our retained 40 % noncontrolling interest in the newly formed company, RocketForce Technologies LLC (“Rocketdyne”). See Note P: Investments for further information on our Rocketdyne equity method investment.
In connection with the transaction, we recognized pre-tax losses of $17 million and $27 million for third quarter and year to date 2026, respectively, which are included in the “General and administrative expenses” line item in our Condensed Consolidated Statement of Operations. The fiscal 2026 losses are incremental to the $54 million loss recognized in fiscal 2025.
The Space Technology disposal group consists of certain contributed assets and liabilities of the Space Propulsion and Power Systems business and the Space Avionics & Communications division, both previously reported in our Missile Solutions segment. The Space Technology disposal group excludes our RS-25 rocket engine and hypersonics businesses.
The carrying values of the Space Technology disposal group assets and liabilities divested on August 3, 2026 and carrying values of the Space Technology disposal group assets and liabilities classified as held for sale as of January 2, 2026 in our Condensed Consolidated Balance Sheet were as follows:
| (In millions) | August 3, 2026 | January 2, 2026 | |||||||||
| Receivables, net | $ | $ | |||||||||
| Contract assets | |||||||||||
| Inventories, net | |||||||||||
| Other current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Other non-current assets | |||||||||||
| Valuation allowance | ( | ||||||||||
| Total assets | $ | $ | |||||||||
| Accounts payable | $ | $ | |||||||||
| Contract liabilities | |||||||||||
| Compensation and benefits | |||||||||||
| Other current liabilities | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | $ | $ | |||||||||
| Net assets divested | $ | ||||||||||
Income before income taxes attributable to the Space Technology disposal group was $5 million and $64 million for third quarter and year to date 2026, respectively, and $23 million and $61 million for third quarter and year to date 2025, respectively.
CAS Disposal Group
_____________________________________________________________________
21
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE P: INVESTMENTS
Short-Term Investments
During third quarter 2026, we entered into time deposits with contractual maturities of more than three months but less than one year. Time deposits are held with high credit quality financial institutions and are intended to be held to maturity. As of October 2, 2026, the aggregate carrying value of our time deposits was $550 million, which is included in the “Short-term investments” line item in our Condensed Consolidated Balance Sheet.
Fair Value. The fair value of our time deposits approximates the carrying value due to its short-term nature and would be classified as Level 2 in the fair value hierarchy. See Note H: Fair Value Measurements for further information on fair value.
Non-Current Investments
We hold investments in certain companies that align with our strategic business objectives, including advancing capabilities, market access and technology development. The majority of our investments are reported at Corporate, as they benefit the entire Company, while certain investments strategically aligned with our segments, are reported within the respective segment. See “Segment aligned investment” discussion below for further information.
Rocketdyne Equity Method Investment. On August 3, 2026, in connection with the divestiture of the Space Technology disposal group, further discussed in Note O: Divestitures, we recorded an initial equity method investment of $248 million, reflecting fair value of our 40 % retained noncontrolling interest in Rocketdyne. The recognition of this investment is a non-cash investing activity, excluded from our Condensed Consolidated Statement of Cash Flows.
Segment Aligned Investments. Investments in companies with dual-use technologies that accelerate our capabilities, improve go-to-market efforts and are operationally aligned with our business segments are reported within segment assets. Investment gains, losses and impairments associated with segment aligned investments are included in segment operating income, the profit measure reviewed and used by the CODM for evaluating segment performance and allocating resources. See Note Q: Business Segment Information for further information.
As of October 2, 2026, segment aligned investments, consisting of both equity method and equity interest investments, were $54 million and $43 million in our Space and Mission Systems and Communications and Spectrum Dominance segments, respectively. Net investment gains included in segment operating income were $39 million for year to date 2026. There were no
Non-current investments, included as a component of the “Other non-current assets” line item in our Condensed Consolidated Balance Sheet, are summarized below:
| (In millions) | October 2, 2026 | January 2, 2026 | |||||||||
Equity method investments | $ | $ | |||||||||
Equity interest investments | |||||||||||
Total non-current investments | $ | $ | |||||||||
Investment gains (losses) associated with our non-current investments, included as a component of the “Other non-operating (expense) income, net” line item in our Condensed Consolidated Statement of Operations, are summarized below:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Adjustments for equity method share of income | $ | ( | $ | ( | $ | $ | |||||||||||||||||
| Fair value adjustments | |||||||||||||||||||||||
| Impairments | ( | ||||||||||||||||||||||
Net investment gains | $ | $ | $ | $ | |||||||||||||||||||
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22
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE Q: BUSINESS SEGMENT INFORMATION
Description of Business Segments
We structure our operations primarily around the capabilities we provide, with each segment consisting of similar end products and technologies, and report our financial results in the following three operating segments, which are also our reportable segments or business segments, consistent with the manner in which our CODM manages the business, evaluates performance and allocates resources. In second quarter 2026, we enhanced our business segment disclosure to clarify the manner in which our CODM evaluates segment performance and allocates resources. Investment gains and losses, net of impairments, associated with investments in companies with dual-use technologies that accelerate our capabilities, improve go-to-market efforts and are operationally aligned with our business segments are included in the respective segments’ operating income. There were no material changes to the historical results, discussion and presentation of our business segments in the accompanying Condensed Consolidated Financial Statements and these Notes. Our three business segments are:
Space & Mission Systems: Supplies full mission solutions as a prime and subsystem integrator in the space, airborne, maritime, and cyber domains. We provide top-tier capabilities in the design, development, integration, production and sustainment of weapons systems for national security, civil government and international customers in the following business sectors:
Intelligence, Surveillance and Reconnaissance (“ISR”): Airborne passive sensing and targeting, mission systems development, integration and life-cycle management for strategic reconnaissance and air superiority platforms, national command and control, tactical surveillance, electronic attack, agile strike, mobility, and classified platforms.
Space Systems: End-to-end mission solutions to support intelligence, surveillance and reconnaissance; missile defense; positioning, navigation and timing; weather and climate monitoring; and ground-based space surveillance networks.
Maritime: Power, electrical, imaging, communication and sensor systems for naval platforms; autonomous solutions for surface and undersea operations; high-assurance encryption; in-service support; missionization prototyping; and naval integration.
Mission Networks: Integrator of large-scale, highly secure, and resilient mission critical infrastructure and enterprise systems for communications, air traffic surveillance, and enterprise information management.
Airborne Solutions: Integrated and multi-function processors, memory, communication, displays, and other hardened electronics, for airborne and ground platforms.
Intel & Cyber: Situational awareness, optical networks and advanced wireless solutions for classified intelligence and defense customers.
Communications & Spectrum Dominance: Enables warfighters across all domains with solutions critical to mission success even in the most contested environments. We are a leading provider of resilient communication solutions for the DoW and international, federal, and state agency customers in the following business sectors:
Mission Critical Communications: Design, manufacture and sustainment of resilient and interoperable secure communication solutions that includes software defined radios, waveforms, satellite terminals and end-to-end battlefield systems for the warfighter and government agencies.
Spectrum Superiority: Design, manufacture and sustainment of resilient and secure communication solutions that include ISR and tactical data links, software and integrated broadband networks and electronic warfare.
Targeting & Sensor Systems: Multi-domain, multi-spectral electro-optical and infrared sensor systems supporting ISR and target acquisition missions; manufacturing of specialty laser transmitters and filter glass materials; manufacturing of counter unmanned aircraft integrated systems; and specialized mission management software solutions.
Integrated Vision Solutions: Design, manufacture and sustainment of a full suite of helmet-mounted integrated night vision goggles with leading-edge image intensifier tubes, as well as weapon-mounted sights, aiming lasers, and range finders.
Missile Solutions: Provides a comprehensive portfolio of missile technologies spanning the full mission lifecycle, as well as critical space propulsion capabilities to the U.S. Government and its allies, including the DoW, NASA and major aerospace and defense prime contractors in the following business sectors:
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23
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Propulsion Systems: Provides propulsion, maneuvering, and control technologies as well as fuzing systems that support missile defense interceptors, strategic deterrence systems, and precision strike weapons; and space propulsion for national security and space exploration missions.
Advanced Effects: Provides advanced systems that improve missile performance, accuracy, and mission effectiveness across four capability areas including advanced sensing and targeting systems, guidance systems, weapons release systems, and complete weapons systems.
Business Segment Financial Results
The following table presents results by business segment:
______________
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Space & Mission Systems | $ | $ | $ | $ | |||||||||||||||||||
| Communications & Spectrum Dominance | |||||||||||||||||||||||
| Missile Solutions | |||||||||||||||||||||||
| Intersegment | ( | ( | ( | ( | |||||||||||||||||||
| Segment revenue | |||||||||||||||||||||||
Other(1) | ( | ( | |||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Space & Mission Systems | ( | ( | ( | ( | |||||||||||||||||||
| Communications & Spectrum Dominance | ( | ( | ( | ( | |||||||||||||||||||
| Missile Solutions | ( | ( | ( | ( | |||||||||||||||||||
| Intersegment | |||||||||||||||||||||||
| Segment cost of revenue | ( | ( | ( | ( | |||||||||||||||||||
Company-funded R&D costs(2) | |||||||||||||||||||||||
| Space & Mission Systems | ( | ( | ( | ( | |||||||||||||||||||
| Communications & Spectrum Dominance | ( | ( | ( | ( | |||||||||||||||||||
| Missile Solutions | ( | ( | ( | ( | |||||||||||||||||||
| Segment company-funded R&D costs | ( | ( | ( | ( | |||||||||||||||||||
Other segment items(3) | |||||||||||||||||||||||
| Space & Mission Systems | ( | ( | ( | ( | |||||||||||||||||||
| Communications & Spectrum Dominance | ( | ( | ( | ( | |||||||||||||||||||
| Missile Solutions | ( | ( | ( | ( | |||||||||||||||||||
| Total other segment items | ( | ( | ( | ( | |||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Space & Mission Systems | |||||||||||||||||||||||
| Communications & Spectrum Dominance | |||||||||||||||||||||||
| Missile Solutions | |||||||||||||||||||||||
| Segment operating income | $ | $ | $ | $ | |||||||||||||||||||
(1)Includes corporate headquarters. Additionally, year to date 2025 includes other non-reportable businesses, which consists of the CAS disposal group.
(2)Included as a component of the “General and administrative expenses” line item in our Condensed Consolidated Statement of Operations.
(3)Includes selling and marketing costs and other General and Administrative (“G&A”) expenses, which includes depreciation and amortization costs that are disaggregated by segment under the “Disaggregation of Revenue” heading below in this Note, and investment gains recognized on segment aligned investments. See Note P: Investments for further information.
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24
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents a reconciliation of segment operating income to consolidated Income before income taxes:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Segment operating income | $ | $ | $ | $ | |||||||||||||||||||
| Unallocated corporate items and other, net | ( | ( | ( | ( | |||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Non-service FAS pension income | |||||||||||||||||||||||
| Other non-operating (expense) income, net | ( | ||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
Unallocated Corporate Items and Other, Net. Unallocated corporate items include expenses not included in management’s evaluation of segment operating performance, such as: amortization of acquisition-related intangibles; acquisition, divestiture and transaction-related expenses; business divestiture-related losses; LHX NeXt implementation costs; a portion of management and administration, legal, environmental, compensation and retiree benefits, and the FAS/Cost Accounting Standards (“CAS”) operating adjustment.
Other, net includes the operating results of other non-reportable businesses, which consists of the CAS disposal group, eliminations and other. Other, net also includes a segment investment offset to eliminate the effect of net investment gains on segment aligned investments included in segment operating income, when applicable. There were no segment investment gains or losses recognized in third quarter and $39 million of segment investment gains recognized in year to date 2026. There were no
Assets
Total assets by business segment were as follows:
| (In millions) | October 2, 2026 | January 2, 2026 | |||||||||
| Space & Mission Systems | $ | $ | |||||||||
| Communications & Spectrum Dominance | |||||||||||
| Missile Solutions | |||||||||||
Corporate | |||||||||||
| Total assets | $ | $ | |||||||||
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25
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Other Financial Information
Other financial information by business segment is summarized below:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Capital expenditures | |||||||||||||||||||||||
| Space & Mission Systems | $ | $ | $ | $ | |||||||||||||||||||
| Communications & Spectrum Dominance | |||||||||||||||||||||||
| Missile Solutions | |||||||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Total capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Space & Mission Systems | $ | $ | $ | $ | |||||||||||||||||||
| Communications & Spectrum Dominance | |||||||||||||||||||||||
| Missile Solutions | |||||||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
Disaggregation of Revenue
We disaggregate revenue by customer relationship, contract type and geographical region. We believe these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
| Third Quarter | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | SMS | CSD | MSL | SMS | CSD | MSL | |||||||||||||||||||||||||||||||||||||||||
| Revenue by customer relationship | |||||||||||||||||||||||||||||||||||||||||||||||
| Prime contractor | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Subcontractor | |||||||||||||||||||||||||||||||||||||||||||||||
| Intersegment | |||||||||||||||||||||||||||||||||||||||||||||||
| Total segment | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Revenue by contract type | |||||||||||||||||||||||||||||||||||||||||||||||
Fixed-price | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Cost-type | |||||||||||||||||||||||||||||||||||||||||||||||
| Intersegment | |||||||||||||||||||||||||||||||||||||||||||||||
| Total segment | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Revenue by geographical region | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| International | |||||||||||||||||||||||||||||||||||||||||||||||
| Intersegment | |||||||||||||||||||||||||||||||||||||||||||||||
| Total segment | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
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26
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| Year to Date | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| (In millions) | SMS | CSD | MSL | SMS | CSD | MSL | Other(1) | ||||||||||||||||||||||||||||||||||||||||
| Revenue by customer relationship | |||||||||||||||||||||||||||||||||||||||||||||||
| Prime contractor | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Subcontractor | |||||||||||||||||||||||||||||||||||||||||||||||
| Intersegment | |||||||||||||||||||||||||||||||||||||||||||||||
| Total segment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Revenue by contract type | |||||||||||||||||||||||||||||||||||||||||||||||
Fixed-price | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Cost-type | |||||||||||||||||||||||||||||||||||||||||||||||
| Intersegment | |||||||||||||||||||||||||||||||||||||||||||||||
| Total segment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Revenue by geographical region | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| International | |||||||||||||||||||||||||||||||||||||||||||||||
| Intersegment | |||||||||||||||||||||||||||||||||||||||||||||||
| Total segment | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
_______________
(1)Includes revenue associated with other non-reportable businesses, which consists of the CAS disposal group. These amounts are included to reconcile total revenue.
NOTE R: LEGAL PROCEEDINGS AND CONTINGENCIES
In the ordinary course of business, we are routinely defendants in, parties to or otherwise subject to many pending and threatened legal actions, claims, disputes, arbitrations and other legal proceedings incident to our business, arising from or related to matters, including but not limited to: product liability; personal injury; patents, trademarks, trade secrets or other intellectual property; labor and employment disputes; commercial or contractual disputes; strategic acquisitions or divestitures; the prior sale or use of former products allegedly containing asbestos or other restricted materials; breach of warranty; or environmental matters. Claimed amounts against us may be substantial, but may not bear any reasonable relationship to the merits of the claim or the extent of any real risk of court or arbitral awards. We record accruals for losses related to those matters against us that we consider to be probable and that can be reasonably estimated. Gain contingencies, if any, are recognized when they are realized and legal costs generally are expensed when incurred. As of October 2, 2026, our accrual for the potential resolution of lawsuits, claims or proceedings that we consider probable of being decided unfavorably to us was not material. We cannot at this time estimate the reasonably possible loss or range of loss in excess of our accrual due to the inherent uncertainties and speculative nature of contested proceedings. Although it is not feasible to predict the outcome of these matters with certainty, based on available information, in the opinion of management, settlements, arbitration awards and final judgments, if any, that are considered probable of being rendered against us in litigation or arbitration in existence as of October 2, 2026 were reserved against or would not have a material adverse effect on our financial condition, results of operations, cash flows or equity.
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27
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Environmental Matters
We are subject to numerous U.S. federal, state, local and international environmental laws and regulatory requirements and are involved from time to time in investigations or litigation of various potential environmental issues. We or companies we have acquired are responsible, or alleged to be responsible, for environmental investigation and/or remediation of multiple sites, including sites owned by us and third-party sites. These sites are in various stages of investigation and/or remediation, and in some cases our liability is considered de minimis. Notices from the U.S. Environmental Protection Agency or equivalent state or international environmental agencies allege that several sites formerly or currently owned and/or operated by us or companies we have acquired, and other properties or water supplies that may be or have been impacted from those operations, contain disposed or recycled materials or wastes and require environmental investigation and/or remediation. These sites include instances of us or companies we acquired being identified as a potentially responsible party (“PRP”) under the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as the “Superfund Act”), the Resource Conservation Recovery Act and/or equivalent state and international laws, and in some instances, our liability and proportionate share of costs that may be shared among other PRPs have not been determined largely due to uncertainties as to the nature and extent of site conditions and our involvement.
Based on an assessment of relevant factors, we estimated that our liability under applicable environmental statutes and regulations for identified sites was $700 million and $659 million as of October 2, 2026 and January 2, 2026, respectively. The current and non-current portions of our estimated environmental liability are included in the “Other current liabilities” and “Other non-current liabilities” line items, respectively, in our Condensed Consolidated Balance Sheet.
Certain environmental costs are eligible for future recovery in the pricing of our products and services to the U.S. Government and based on U.S. Government contracting regulations, we consider the recovery probable. We had recoverable assets of $521 million and $483 million, as of October 2, 2026 and January 2, 2026, respectively. The current and non-current portions of the recoverable costs are included in the “Other current assets” and “Other non-current assets” line items, respectively, in our Condensed Consolidated Balance Sheet.
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28
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of L3Harris Technologies, Inc.
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of L3Harris Technologies, Inc. and subsidiaries (the Company) as of October 2, 2026, the related condensed consolidated statements of operations, comprehensive income and equity for the quarter and three quarters ended October 2, 2026 and October 3, 2025, the condensed consolidated statements of cash flows for the three quarters ended October 2, 2026 and October 3, 2025, and the related notes (collectively referred to as the “condensed consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated interim financial statements for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of January 2, 2026, the related consolidated statements of operations, comprehensive income, cash flows and equity for the year then ended, and the related notes (not presented herein); and in our report dated February 12, 2026, we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 2, 2026, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These financial statements are the responsibility of the Company's management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
/s/ Ernst & Young LLP
Orlando, Florida
October 29, 2026
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29
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. | ||||
The following Management’s Discussion and Analysis (“MD&A”) is intended to assist in an understanding of our financial condition and results of operations. This MD&A is provided as a supplement to, should be read in conjunction with, and is qualified in its entirety by reference to, our Condensed Consolidated Financial Statements and accompanying Notes in this Report (the “Notes”). In addition, reference should be made to our audited Consolidated Financial Statements and accompanying Notes to our Consolidated Financial Statements and Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2025 Form 10-K. The discussions in this MD&A contain forward-looking statements.
OVERVIEW
We deliver mission-critical end-to-end technology solutions connecting the space, air, land, sea and cyber domains in the interest of national security. We support government customers in more than 100 countries, with our largest customers being various departments and agencies of the U.S. Government, their prime contractors and international allies. Our products, systems and services have defense and civil government applications, as well as commercial applications. The percentage of our revenue that was derived from sales to U.S. Government customers, including foreign military sales funded through the U.S. Government, whether directly or through prime contractors, was 75% for year to date 2026.
U.S. and International Budget Environment
The U.S. and international budget environments are evolving rapidly within a dynamic geopolitical context, influenced by the Administration and Congress, heightened geopolitical tensions, global security concerns, inflationary pressures and overall macroeconomic conditions.
On April 3, 2026, the President submitted the U.S. Government fiscal year (“GFY”) 2027 President’s Budget Request (“PBR”) to Congress. It called for an approximately $1.5 trillion topline for national defense programs, comprised of $1.1 trillion for the DoW base budget and $350 billion in reconciliation funding. This total request represents a $441 billion increase, or 44%, over the GFY 2026 enacted level. Further, the PBR requested $18.8 billion for NASA, a $5.6 billion or 23% decrease from the GFY 2026 enacted level; $4.5 billion for National Oceanic and Atmospheric Administration, a decrease from $6.1 billion enacted in GFY 2026; and $22.4 billion for Federal Aviation Administration (“FAA”), a moderate increase above the $22.1 billion enacted in GFY 2026. Additionally, on June 24, 2026, the White House submitted an $88 billion supplemental funding request for GFY 2026, of which $67 billion is intended for defense spending.
Both the House and Senate have released GFY 2027 National Defense Authorization Act markups that authorize $1.1 trillion for the DoW base budget. Given the election cycle, the GFY 2027 appropriations cycle is delayed and the U.S. Government began operating on a continuing resolution on October 1, 2026 through December 11, 2026, which is limited to the GFY 2026 base budget request of $860 billion. Congress will address final appropriations and any treatment of a supplemental or reconciliation after the midterm elections.
Internationally, almost all NATO allies have committed to spend 5% of GDP annually over the next decade on defense and security-related expenditures, with 3.5% on core defense articles and another 1.5% on critical infrastructure, cyber and other key areas.
The overall defense spending environment, both in the U.S. and internationally, reflects the continued impacts of global conflicts and geopolitical tensions, and changes to U.S. Government or international spending priorities have and could in the future impact our business.
See our U.S. Government funding risks and the discussion of our international business risks within Part I. Item 1A. Risk Factors in our Fiscal 2025 Form 10-K.
Economic Environment
The ongoing uncertainty related to the impacts of inflation, supply chain disruptions, constraints in the availability of critical materials, including rare earth minerals and metals, as well as the interest rate environment and ongoing federal deficits could in the future impact U.S. Government spending priorities for our products and services. For a discussion of risks related to inflation, supply chain, materials and U.S. Government spending priorities, see Part I. Item 1A. Risk Factors in our Fiscal 2025 Form 10-K.
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30
We continue to monitor and evaluate the potential impact of current and proposed changes in trade policies and in particular, tariffs. In response to enacted tariffs, we are seeking exemptions, evaluating alternative sources of materials and subcontracted components, as well as engaging in supplier negotiations to help manage cost impacts and are considering price adjustments and other strategies to support profitability. Based on current conditions, we do not expect a material impact on our 2026 results, but will continue to monitor developments and assess potential implications as trade policies evolve.
Key Development
Divestiture. On August 3, 2026, we completed the sale of our Space Technology disposal group, which was reported in our Missile Solutions segment through the date of divestiture. See Note O: Divestitures in the Notes for further information.
RESULTS OF OPERATIONS
Third quarter 2026 and 2025 include thirteen weeks and fourteen weeks, respectively, while year to date 2026 and 2025 both include thirty-nine weeks. Outcomes for specific periods, or year-over-year comparisons of results of operations and segment performance should be considered in this context.
Consolidated Results of Operations
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (Dollars in millions, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenue | $ | 6,060 | $ | 5,659 | $ | 17,685 | $ | 16,217 | |||||||||||||||
| Cost of revenue | (4,448) | (4,165) | (13,169) | (12,038) | |||||||||||||||||||
| Gross margin | 1,612 | 1,494 | 4,516 | 4,179 | |||||||||||||||||||
| General and administrative expenses | (826) | (873) | (2,424) | (2,462) | |||||||||||||||||||
| Operating income | 786 | 621 | 2,092 | 1,717 | |||||||||||||||||||
| Non-service FAS pension income | 74 | 73 | 224 | 236 | |||||||||||||||||||
| Other non-operating (expense) income, net | (1) | 25 | 107 | 51 | |||||||||||||||||||
| Interest expense, net | (116) | (152) | (381) | (454) | |||||||||||||||||||
| Income before income taxes | 743 | 567 | 2,042 | 1,550 | |||||||||||||||||||
| Income tax expense | (111) | (105) | (298) | (244) | |||||||||||||||||||
| Effective tax rate | 14.9 | % | 18.5 | % | 14.6 | % | 15.7 | % | |||||||||||||||
| Net income | $ | 632 | $ | 462 | $ | 1,744 | $ | 1,306 | |||||||||||||||
| Subsidiary preferred stock deemed dividends | (19) | — | (33) | — | |||||||||||||||||||
| Net income available to common shareholders | $ | 613 | $ | 462 | $ | 1,711 | $ | 1,306 | |||||||||||||||
| Diluted EPS | $ | 3.28 | $ | 2.46 | $ | 9.13 | $ | 6.92 | |||||||||||||||
Revenue
Third Quarter Comparison. Revenue increased $401 million, or 7%, reflecting higher revenues across all segments, primarily from higher volumes and a milestone related to material procurement in support of classified contracts, partially offset by lower revenue of $103 million from the Space Technology disposal group divestiture.
Year to Date Comparison. Revenue increased $1,468 million, or 9%, reflecting higher revenues across all segments, primarily from higher volumes, driven by new program ramps, including milestones related to material procurement in support of classified contracts, and increased international deliveries.
See the “Business Segment Results of Operations” discussion below in this MD&A for further information.
Gross Margin
Third Quarter Comparison. Gross margin increased $118 million, primarily due to higher volumes across all segments and a $62 million favorable change in net EAC adjustments.
Year to Date Comparison. Gross margin increased $337 million, primarily due to higher volumes across all segments and a $144 million favorable change in net EAC adjustments, partially offset by the absence of the CAS disposal group as a result of the March 2025 divestiture.
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Included in gross margin are the following net EAC adjustments, by segment, for the periods presented:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Space & Mission Systems | $ | 23 | $ | (15) | $ | 24 | $ | (115) | |||||||||||||||
| Communications & Spectrum Dominance | 39 | 12 | 85 | 51 | |||||||||||||||||||
| Missile Solutions | 27 | 20 | 36 | 50 | |||||||||||||||||||
| Corporate | — | 10 | (15) | — | |||||||||||||||||||
| Net EAC adjustments | $ | 89 | $ | 27 | $ | 130 | $ | (14) | |||||||||||||||
See the “Business Segment Results of Operations” discussion below in this MD&A for further information.
G&A Expenses
The following table presents the components of G&A expenses:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Corporate: | |||||||||||||||||||||||
| Amortization of acquisition-related intangibles | $ | (142) | $ | (177) | $ | (464) | $ | (531) | |||||||||||||||
LHX NeXt implementation costs(1) | — | (25) | — | (99) | |||||||||||||||||||
Acquisition, divestiture and transaction-related expenses(2) | (9) | (10) | (49) | (40) | |||||||||||||||||||
Business divestiture-related losses(3) | (17) | — | (27) | (17) | |||||||||||||||||||
| Changes in fair value of deferred compensation plan liabilities | 3 | (25) | (35) | (48) | |||||||||||||||||||
Other items(4) | (15) | (42) | (65) | (112) | |||||||||||||||||||
| Segment: | |||||||||||||||||||||||
| Company-funded R&D costs | (143) | (138) | (449) | (380) | |||||||||||||||||||
| Selling and marketing | (136) | (144) | (414) | (398) | |||||||||||||||||||
| Product line sale gains | 8 | 26 | 58 | 123 | |||||||||||||||||||
Other(5) | (375) | (338) | (979) | (960) | |||||||||||||||||||
G&A expenses | $ | (826) | $ | (873) | $ | (2,424) | $ | (2,462) | |||||||||||||||
_______________
(1)Includes costs associated with transforming multiple functions, systems and processes to increase agility and competitiveness. See the “Operating Environment, Strategic Priorities and Key Performance Measures” section in the MD&A in our Fiscal 2025 Form 10-K for more detail on our LHX NeXt initiative and implementation costs.
(2)Includes costs related to pursuing acquisition and divestiture portfolio optimization; non-transaction costs related to divestitures; costs related to the carve-out and planned AXYV public offering; salaries of employees in roles dedicated to planned strategic transaction activity; and resolution of a procurement contract matter.
(3)Includes losses associated with the Space Technology disposal group and the CAS disposal group in 2026 and 2025, respectively. See Note O: Divestitures in the Notes for further information.
(4)Includes a portion of management and administration, legal, environmental, compensation, retiree benefits, the FAS/CAS operating adjustment, eliminations and other. Year to date 2025 also includes the CAS disposal group. See Note O: Divestitures in the Notes for further information.
(5)Includes other segment G&A expenses, primarily payroll and benefits, outside services, facilities and insurance.
Third Quarter Comparison. G&A expenses decreased $47 million, or 5%, primarily due to a decrease in amortization of acquisition-related intangibles, the absence of LHX NeXt implementation costs, changes in fair value of deferred compensation, partially offset by the absence of a $19 million gain recognized in connection with the sale of assets from a product line in third quarter 2025 in our Space and Mission Systems segment and increase in business divestiture-related losses.
Year to Date Comparison. G&A expenses decreased $38 million, or 2%, primarily due to the absence of LHX NeXt implementation costs, and a decrease in amortization of acquisition-related intangibles. Such decreases were partially offset by an increase in company-funded R&D costs and a decrease in gains recognized in connection with the sale of assets from product line sales, including recognition of a $39 million gain in our Missile Solutions segment in first quarter 2026 compared to recognition of gains of $94 million and $17 million in year to date 2025 in our Space and Mission Systems and Communications and Spectrum Dominance segments, respectively.
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Non-service FAS Pension Income
Non-service FAS pension income increased $1 million for third quarter and decreased $12 million for year to date, reflecting activity associated with non-service cost components of net periodic benefit income under our defined benefit plans. See Note J: Retirement Benefits in the Notes for further information.
Other Non-Operating (Expense) Income, Net
The following table presents the components of other non-operating (expense) income, net:
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
Net investment gains(1) | 37 | 7 | 114 | 11 | |||||||||||||||||||
Change in fair value of subsidiary preferred stock conversion feature and warrants(2) | (50) | — | (50) | — | |||||||||||||||||||
Other, net(3) | 12 | 18 | 43 | 40 | |||||||||||||||||||
| Other non-operating (expense) income, net | $ | (1) | $ | 25 | $ | 107 | $ | 51 | |||||||||||||||
_______________
(1)Includes gains and losses, net of impairments, from equity interests and higher equity in net earnings of investees related to dual-use technology investments that accelerate our capabilities and improve go-to-market efforts. See Note P: Investments in the Notes for further information.
(2)See Note B: Strategic Investment in Subsidiary in the Notes for further information.
(3)Primarily includes changes in the market value of our rabbi trust assets and royalty income.
Interest Expense, Net
Interest expense, net decreased $36 million and $73 million for third quarter and year to date, respectively, primarily due to lower total outstanding debt, which reflects reductions in both long-term debt and average outstanding notes under our CP Program during 2026. See Note I: Debt and Credit Arrangements in the Notes and the “Liquidity and Capital Resources” section below in this MD&A for further information.
Income Taxes
During interim periods, we estimate our global annual effective tax rate and apply that rate to ordinary income in order to compute the income tax provision. Although most items will be considered part of the annual effective tax rate, there are a number of items that are instead required to be recorded in the interim period in which they occur; such as certain changes in uncertain tax positions, the accrual of interest and penalties, changes in tax laws or rates, and other items as prescribed by GAAP. As a result, there may be quarterly fluctuations in our effective tax rate and the results for the interim periods are not necessarily indicative of the results to be expected for the full year or future periods.
Third Quarter Comparison. Our effective tax rate was 14.9% and 18.5% for third quarter 2026 and 2025, respectively. Both third quarter 2026 and 2025 effective tax rate benefited from the favorable impacts of R&D credits and FDDEI. Third quarter 2026 reflects an incremental benefit of 10% associated with the favorable resolution of audit uncertainties, partially offset by an unfavorable impact from pre-divestiture activities of the Space Technology disposal group. Third quarter 2025 effective tax rate was unfavorably impacted by the reduction in R&D credits from the enactment of the OBBBA and the CAS disposal group divestiture, partially offset by a favorable return-to-provision adjustment.
Year to Date Comparison. Our effective tax rate was 14.6% and 15.7% for year to date 2026 and 2025, respectively. Both year to date 2026 and 2025 effective tax rate benefited from the favorable resolution of audit uncertainties, favorable impacts of R&D credits and FDDEI. Year to date 2026 effective tax rate is lower than year to date 2025 effective tax rate primarily due to the establishment of a valuation allowance on R&D credit carryforwards in year to date 2025 resulting from a state legislative change.
Diluted EPS
Diluted EPS increased 33% and 32% for third quarter and year to date, respectively, primarily due to higher net income from the combined effects of reasons noted in the sections above, partially offset by the subsidiary preferred stock deemed dividends for the accretion on the Subsidiary Series A Preferred Stock.
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Business Segment Results of Operations
We report our financial results in our Space & Mission Systems, Communications & Spectrum Dominance and Missile Solutions business segments, consistent with the manner in which our CODM manages the business, evaluates performance and allocates resources. See Note Q: Business Segment Information in the Notes for a description of the sectors in each segment.
Space & Mission Systems Segment
| Third Quarter | Year to Date | ||||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | % Inc/(Dec) | 2026 | 2025 | % Inc/(Dec) | |||||||||||||||||||||||||||||
| Revenue | $ | 3,093 | $ | 2,803 | 10 | % | $ | 9,049 | $ | 7,984 | 13 | % | |||||||||||||||||||||||
| Operating income | 338 | 299 | 13 | % | 941 | 826 | 14 | % | |||||||||||||||||||||||||||
Operating margin | 10.9 | % | 10.7 | % | 10.4 | % | 10.3 | % | |||||||||||||||||||||||||||
Third Quarter Comparison. Space and Mission Systems revenue increased primarily due to higher revenues of $127 million in Space Systems from growth driven by higher volumes in missile warning and tracking programs and classified programs, $107 million in ISR associated with milestones related to material procurement in support of classified contracts, $36 million in Mission Networks from higher FAA volume and $25 million in Airborne Solutions from higher F-35 volumes.
Space and Mission Systems operating income increased primarily due to a $38 million favorable change in net EAC adjustments, reflecting improved program performance, and higher volume across the segment, partially offset by the absence of a $19 million gain recognized in connection with the sale of assets from a product line in third quarter 2025.
Year to Date Comparison. Space and Mission Systems revenue increased primarily due to higher revenues of $608 million in ISR associated with milestones related to material procurement in support of classified contracts and higher volumes on missionized aircraft programs, $268 million in Space Systems from growth driven by higher volume in missile warning and tracking programs and classified programs, $135 million in Mission Networks from higher FAA volume, $76 million in Airborne Solutions from higher F-35 volumes and $54 million in Maritime from higher volume associated with program timing. Such increases were partially offset by lower revenue of $33 million in Intel and Cyber from lower classified program volume.
Space and Mission Systems operating income increased primarily due to a $139 million favorable change in net EAC adjustments, reflecting improved program performance, and higher volume, partially offset by the absence of $94 million gains recognized in connection with the sales of assets from product lines in second quarter 2025.
Communications & Spectrum Dominance Segment
| Third Quarter | Year to Date | ||||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | % Inc/(Dec) | 2026 | 2025 | % Inc/(Dec) | |||||||||||||||||||||||||||||
| Revenue | $ | 1,995 | $ | 1,935 | 3 | % | $ | 5,793 | $ | 5,605 | 3 | % | |||||||||||||||||||||||
| Operating income | 502 | 477 | 5 | % | 1,489 | 1,378 | 8 | % | |||||||||||||||||||||||||||
| Operating margin | 25.2 | % | 24.7 | % | 25.7 | % | 24.6 | % | |||||||||||||||||||||||||||
Third Quarter Comparison. Communications and Spectrum Dominance revenue increased primarily due to higher revenues of $54 million in Targeting and Sensor Systems from ramp on VAMPIRE™ counter-unmanned systems programs and $48 million in Mission Critical Communications from increased international deliveries for our software-defined resilient communications equipment, partially offset by lower revenue of $29 million in Spectrum Superiority from lower program volumes impacted by one fewer week in the quarter.
Communications and Spectrum Dominance operating income increased primarily due to higher volume and more favorable margin mix, including international and software mix within Mission Critical Communications, and a $27 million favorable change in net EAC adjustments, partially offset by $20 million increase in R&D and selling and marketing expenses.
Year to Date Comparison. Communications and Spectrum Dominance revenue increased primarily due to higher revenues of $136 million in Mission Critical Communications reflecting a $280 million increase in international deliveries for our software-defined resilient communications equipment, partially offset by lower DoW volume and lower volume in our PSPC business, $35 million in Targeting and Sensor Systems from ramp on VAMPIRE™ counter-unmanned systems programs and $18 million in Integrated Vision Solutions from higher volumes.
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Communications and Spectrum Dominance operating income increased primarily due to higher volume and more favorable margin mix, including significantly higher international mix within Mission Critical Communications, and a $34 million favorable change in net EAC adjustments, reflecting favorable program performance, partially offset by a $79 million increase in R&D and selling and marketing expenses and the absence of a $17 million gain recognized in connection with the sale of assets from a product line sale in year to date 2025.
Missile Solutions Segment
| Third Quarter | Year to Date | ||||||||||||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | % Inc/(Dec) | 2026 | 2025 | % Inc/(Dec) | |||||||||||||||||||||||||||||
| Revenue | $ | 1,057 | $ | 1,008 | 5 | % | $ | 3,101 | $ | 2,773 | 12 | % | |||||||||||||||||||||||
| Operating income | 127 | 124 | 2 | % | 381 | 336 | 13 | % | |||||||||||||||||||||||||||
Operating margin | 12.0 | % | 12.3 | % | 12.3 | % | 12.1 | % | |||||||||||||||||||||||||||
Third Quarter Comparison. Missile Solutions revenue increased primarily due to higher revenues of $43 million in Propulsion Systems, reflecting $152 million from production and development volumes on key missile and munitions programs, partially offset by lower revenues of $80 million from the Space Technology disposal group divestiture and $25 million from lower space propulsion systems volume, and $6 million in Advanced Effects, reflecting $27 million from higher volumes, partially offset by lower revenue of $23 million from the Space Technology disposal group divestiture.
Missile Solutions operating income increased primarily due to higher volume, partially offset by a $10 million decrease from the Space Technology disposal group divestiture in third quarter 2026.
Year to Date Comparison. Missile Solutions revenue increased primarily reflecting higher revenues of $253 million in Propulsion Systems, reflecting $335 million from production and development volumes on key missile and munitions programs, partially offset by lower revenue of $80 million from the Space Technology disposal group divestiture, and $71 million in Advanced Effects, reflecting $93 million from higher volumes and program ramps, partially offset by lower revenue of $23 million from the Space Technology disposal group divestiture.
Missile Solutions operating income increased primarily due to higher volume and a gain of $39 million recognized in connection with the sale of assets from a product line sale in first quarter 2026, partially offset by $10 million decrease from the Space Technology disposal group divestiture in third quarter 2026 and a $31 million unfavorable EAC adjustment on a legacy domestic naval sensor program in first quarter 2026.
Contractual Backlog
We monitor contractual backlog as an operational indicator of future business activity. Although backlog is not necessarily indicative of revenue to be recognized in any particular period, it provides insight into demand trends and expected future utilization of production and service capacity. Our contractual backlog by segment, including funded and unfunded components, were as follows:
| October 2, 2026 | |||||||||||||||||||||||||||||||||||
| (In billions) | Funded | Unfunded | Total Contractual Backlog | ||||||||||||||||||||||||||||||||
| Space & Mission Systems | $ | 15.1 | $ | 7.2 | $ | 22.3 | |||||||||||||||||||||||||||||
| Communications & Spectrum Dominance | 8.4 | 2.5 | 10.9 | ||||||||||||||||||||||||||||||||
| Missile Solutions | 7.7 | 12.3 | 20.0 | ||||||||||||||||||||||||||||||||
| Total contractual backlog | $ | 31.2 | $ | 22.0 | $ | 53.2 | |||||||||||||||||||||||||||||
Our total contractual backlog increased during third quarter 2026, driven by new awards across all three segments and contract modifications during the period, including firm amounts associated with undefinitized contract action (“UCA”), partially offset by a reduction of approximately $2.0 billion in contractual backlog associated with the completed Space Technology disposal group divestiture.
In our Missile Solutions segment, third quarter 2026 awards included UCA awards of $6.3 billion and $4.7 billion on our Terminal High Altitude Area Defense (“THAAD”) and PAC-3 Missile Segment Enhancement programs, respectively. These awards represent two seven-year contracts consistent with the long-term framework agreements established with the DoW. The first year of each contract is included in funded contractual backlog and the remaining contract years are included in unfunded contractual backlog.
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In our Communications & Spectrum Dominance segment, third quarter 2026 awards included UCA awards of $723 million associated with our Next Generation Jammer Electronic Warfare and $540 million in new VAMPIRE™ program awards.
Unallocated Corporate Items and Other, Net
| Third Quarter | Year to Date | ||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Unallocated corporate items: | |||||||||||||||||||||||
Amortization of acquisition-related intangibles(1) | $ | (147) | $ | (192) | $ | (497) | $ | (579) | |||||||||||||||
LHX NeXt implementation costs(2) | — | (25) | — | (99) | |||||||||||||||||||
Business divestiture-related losses(3) | (17) | — | (27) | (17) | |||||||||||||||||||
Acquisition, divestiture and transaction-related expenses(4) | (9) | (10) | (49) | (40) | |||||||||||||||||||
| Change in fair value of deferred compensation plan liabilities | 3 | (25) | (35) | (48) | |||||||||||||||||||
Segment investment offset(5) | — | — | (39) | — | |||||||||||||||||||
Other items(6) | (11) | (27) | (72) | (40) | |||||||||||||||||||
| Unallocated corporate items and other, net | $ | (181) | $ | (279) | $ | (719) | $ | (823) | |||||||||||||||
______________
(1)Includes amortization of intangible assets acquired in connection with business combinations. Because our acquisitions benefit the entire Company, the amortization was not allocated to any segment.
(2)Includes costs associated with transforming multiple functions, systems and processes to increase agility and competitiveness. The implementation phase of LHX NeXt was completed in fiscal 2025.
(3)Includes losses associated with the Space Technology disposal group and the CAS disposal group in 2026 and 2025, respectively. See Note O: Divestitures in the Notes for further information.
(4)Includes costs related to pursuing acquisition and divestiture portfolio optimization; non-transaction costs related to divestitures; costs related to the carve-out and planned AXYV public offering; salaries of employees in roles dedicated to planned strategic transaction activity; and resolution of a procurement contract matter.
(5)Adjustment to eliminate the effect of net investment gains on segment aligned investments included in segment operating income. Net investment gains are included in the “Other non-operating (expense) income, net” line item in our Condensed Consolidated Statement of Operations. See Note P: Investments in the Notes for further information.
(6)Includes a portion of management and administration, legal, environmental, compensation, retiree benefits, the FAS/CAS operating adjustment, corporate eliminations and other. Year to date 2025 also includes the divested CAS disposal group. See Note O: Divestitures in the Notes for further information.
LIQUIDITY AND CAPITAL RESOURCES
Capital Resources
As of October 2, 2026, we had cash and cash equivalents of $2,471 million, of which $446 million was held by our foreign subsidiaries, a significant portion of which we believe can be repatriated to the U.S. with minimal tax cost.
CP Program. As of October 2, 2026, we had no outstanding notes under our CP Program. Our CP Program serves as a source of short-term financing under which we may issue unsecured commercial paper notes supported by amounts available under our $2.5 billion 2025 Five-Year Credit Facility, discussed below. From time to time, we use borrowings under the CP Program for general corporate purposes, including funding acquisitions, repaying debt, paying dividends, and repurchasing our common stock. See the “Financing Activities” discussion below in this MD&A for further information about our CP Program.
Credit Facilities. As of October 2, 2026, we had no outstanding borrowings under our 2025 Five-Year Credit Facility, had available borrowing capacity of $2.5 billion, net of outstanding notes under our CP Program, and were in compliance with all covenants. Our previous $500 million 2025 364-Day Credit Facility matured on February 17, 2026 and our CP Program capacity was reduced accordingly.
See Note I: Debt and Credit Arrangements in the Notes for further information regarding our credit facilities.
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Cash Flows
The following table provides a summary of our cash flow information:
Year to Date | |||||||||||
| (In millions) | 2026 | 2025 | |||||||||
| Cash and cash equivalents, beginning of period | $ | 1,069 | $ | 615 | |||||||
| Operating Activities: | |||||||||||
| Net income | 1,744 | 1,306 | |||||||||
| Non-cash adjustments | 1,015 | 1,120 | |||||||||
| Changes in working capital | (242) | (877) | |||||||||
| Other, net | (294) | (405) | |||||||||
| Net cash provided by operating activities | 2,223 | 1,144 | |||||||||
| Net cash (used in) provided by investing activities | (392) | 537 | |||||||||
| Net cash used in financing activities | (426) | (1,975) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (3) | 18 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 1,402 | (276) | |||||||||
| Cash and cash equivalents, end of period | $ | 2,471 | $ | 339 | |||||||
Operating Activities. The $1,079 million increase in net cash provided by operating activities for year to date 2026 compared to year to date 2025 was primarily due to an increase in net income and $635 million less cash used to fund working capital, largely driven by higher net customer advance payments on new awards and timing of billing and collection activity.
Investing Activities. The $929 million change in net cash used in investing activities for year to date 2026 compared to net cash provided by investing activities for year to date 2025 was primarily due to $550 million of cash used for short-term investments, a $292 million decrease in net proceeds from sale of businesses (see “Divestitures” section below) and a $120 million increase in capital expenditures.
Divestitures. In 2026, we completed the divestiture of our Space Technology disposal group for net cash proceeds of $539 million, subject to final purchase price adjustments, as set forth in the purchase agreement. In 2025, we completed the divestiture of our CAS disposal group for net cash proceeds of $831 million.
Financing Activities. The $1,549 million decrease in net cash used in financing activities for year to date 2026 compared to year to date 2025 was primarily due to $973 million of net proceeds from issuance of Subsidiary Series A Preferred Stock in connection with the DoW strategic investment transaction, $499 million decrease in repayments of long-term debt, and a $400 million decrease in cash used to repurchase common stock, partially offset by a $210 million decrease in net issuances of commercial paper. Our primary financing activities are further discussed below.
Common Stock Repurchases. On October 21, 2022, we announced that our Board approved a $3.0 billion share repurchase authorization under our repurchase program. Our previous $6.0 billion share repurchase authorization was fully utilized in first quarter 2025.
During year to date 2026, we used $598 million of cash to repurchase 1.8 million shares of our common stock under our share repurchase program. As of October 2, 2026, we had $1.6 billion of remaining unused authorizations under our repurchase program. During year to date 2025, we used $998 million of cash to repurchase 4.5 million shares of our common stock under our share repurchase program.
See “Liquidity and Capital Resources” in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2025 Form 10-K and Part II. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of this Report for further information regarding common stock repurchases.
Long-term debt. During year to date 2026, we repaid the entire outstanding $100 million 7.00% 2026 Debentures with cash on hand. During year to date 2025, we repaid the entire outstanding $600 million aggregate principal amount of our 3.832% notes, due April 27, 2025.
As of October 2, 2026, we had $11.0 billion of outstanding total long-term debt, which includes the current portion of long-term debt of $1,815 million. The current portion primarily consists of the $550 million 3.85% 2026 Notes and the $1,250 million 5.40% 2027 Notes. We expect to repay the entire $550 million 3.85% 2026 Notes and a portion of the $1,250 million 5.40% 2027 Notes in the fourth quarter of 2026.
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CP Program. During year to date 2026, our CP Program had a maximum outstanding balance of $880 million and a daily average outstanding balance of $274 million. During year to date 2025, our CP Program had a maximum outstanding balance of $1.8 billion and daily average outstanding balance of $1.3 billion.
Dividends. On January 23, 2026, we announced that our Board increased the quarterly per share cash dividend rate on our common stock to $1.25 from $1.20, the 25th consecutive annual dividend increase. During year to date 2026 and 2025, we paid $704 million and $678 million in dividends, respectively. See Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in our Fiscal 2025 Form 10-K for further information regarding our dividends.
Cash Requirements
Except for the level of indebtedness under our CP Program, there were no material changes to our cash requirements or commercial commitments as disclosed in our Fiscal 2025 Form 10-K. Further information about our credit facilities and CP Program can be found in “Capital Resources” in this MD&A and Note I: Debt and Credit Arrangements in the Notes.
Defined Benefit Plan Contributions. As of October 2, 2026, we had net defined benefit plan assets of $1.4 billion, the majority of which pertain to our U.S. qualified defined benefit pension plans. We intend to contribute annually no less than the required minimum funding thresholds to these pension plans and do not expect to make material contributions in fiscal 2026. Future required contributions will depend primarily on the actual return on plan assets and the discount rate used to measure the benefit obligation at the end of each year.
We expect to continue evaluating opportunities to strategically manage our pension obligations, including the potential for additional pension de-risking transactions in the future, subject to market conditions and plan funding levels. These actions align with our long-term strategy to reduce exposure to pension volatility while maintaining financial flexibility.
See Note 9: Retirement Benefits in our Fiscal 2025 Form 10-K and Note J: Retirement Benefits in the Notes for further information regarding our defined benefit plans.
Liquidity Assessment
Given our current cash position, outlook for funds generated from operations, credit ratings, available credit facilities, cash needs and debt structure, we have not experienced to date, and do not expect to experience, any material issues with liquidity for the next 12 months and in the longer term, although we can give no assurances concerning our future liquidity, particularly in light of our overall level of debt, U.S. Government budget uncertainties, and the state of global commerce and general political and global financial uncertainty. See the “U.S. and International Budget Environment” discussion above in this MD&A and Part I. Item 1A. Risk Factors in our Fiscal 2025 Form 10-K for more information on budget uncertainties.
Based on our current business plan and revenue prospects, we believe that our existing cash, funds generated from operations, short-term investments, availability under our senior unsecured credit facility and our CP Program, and access to the public and private debt and equity markets will be sufficient to provide for our anticipated working capital requirements, capital expenditures, dividend payments, repurchases under our share repurchase program, and repayments of our debt securities at maturity for the next 12 months and the reasonably foreseeable future thereafter. Our capital expenditures for fiscal 2026 are expected to be approximately $600 million. See “Cash Requirements” in this MD&A and “Capital Resources”, “Cash Requirements” and “Commercial Commitments” in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2025 Form 10-K, for further information regarding our cash requirements.
CRITICAL ACCOUNTING ESTIMATES
Except as set forth below, there have been no material changes to the critical accounting estimates disclosed in “Critical Accounting Estimates” in Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Fiscal 2025 Form 10-K.
Goodwill
We test our goodwill for impairment annually as of the first day of our fourth fiscal quarter, or under certain circumstances, more frequently, such as when events or circumstances indicate there may be impairment or when we reorganize our reporting structure such that the composition of one or more of our reporting units is affected.
Fiscal 2026 Impairment Tests. Information on interim impairment tests can be found in “Critical Accounting Estimates - Fiscal 2026 Impairment Tests” in Part I. Item 2. Management's Discussion and Analysis of Financial
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Condition and Results of Operations in our Form 10-Q for first quarter 2026, which information is incorporated herein by reference. These assessments indicated no impairment existed either before or after the realignments.
Impact of Recently Issued Accounting Pronouncements
There have been no new accounting pronouncements that became effective during third quarter 2026 that have had a material impact on our Condensed Consolidated Financial Statements.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. | ||||
Other than the repayment of long-term debt discussed in the Liquidity and Capital Resources section of Part I. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations above, there were no material changes during third quarter 2026, with respect to our exposure to market risk as discussed in Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Fiscal 2025 Form 10-K.
ITEM 4. | CONTROLS AND PROCEDURES. | ||||
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), management, with the participation of our principal executive officer, our Chief Executive Officer (“CEO”), and our principal financial officer, our Chief Financial Officer (“CFO”), carried out an evaluation of the Company’s disclosure controls and procedures as of October 2, 2026. Based on this evaluation, the CEO and CFO concluded that as of October 2, 2026, our disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosures.
Changes in Internal Control
There have been no changes in our internal control over financial reporting during third quarter 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. | LEGAL PROCEEDINGS. | ||||
See Note R: Legal Proceedings and Contingencies in the Notes for discussion regarding material legal proceedings and contingencies. Except as set forth in such discussion, there have been no material developments in legal proceedings as reported in Part I. Item 3. Legal Proceedings in our Fiscal 2025 Form 10-K.
ITEM 1A. | RISK FACTORS. | ||||
Investors should carefully review and consider the information regarding certain factors that could materially affect our business, results of operations, financial condition, cash flows and equity as set forth in Part I. Item 1A. Risk Factors in our Fiscal 2025 Form 10-K. Except as set forth below, there have been no material changes to the risk factors disclosed in our Fiscal 2025 Form 10-K. We may disclose changes to our risk factors or disclose additional risk factors from time to time in our future filings with the SEC. Additional risks and uncertainties not presently known to us or that we currently believe not to be material also may adversely impact our business, financial condition, results of operations, cash flows and equity.
Our multi-year capacity expansion in our Missile Solutions segment involves substantial capital commitments and is reliant on our multi-year procurement contracts. In response to the Munitions Acceleration Council (“MAC”) framework initiatives and increased demand, we are executing a multi-year capacity expansion and modernization plan involving more than $3 billion of capital investments through 2030 across our Missile Solutions segment to materially increase annual production capacity for solid rocket motors, divert and attitude control systems, and precision fuzes across priority MAC programs.
These large-scale facility build-outs and advanced manufacturing expansions are subject to complex execution and commissioning risks, including: delays in permitting, site preparation, engineering, and construction; extended lead times, delivery delays, or integration challenges for specialized tooling, large-scale propellant mixers, robotics, and automated production systems; technical difficulties in scaling manufacturing processes; and delays in completing rigorous customer and government validation, testing, and qualification milestones required before expanded facilities can achieve full-rate production authorization. The expansions also increase our existing risk of supply chain disruption because of increased production volumes.
While we have agreed to multi-year contracts for minimum production volumes for priority MAC missile programs, these contracts require sustained government appropriations across the multi-year performance periods. Although cancellation fees under these multi-year contracts are designed to cover facilitization charges and are higher than our standard terms, cancellation fees may not cover all of our incurred capital expenditures, site preparation costs, long-lead supply commitments, and ongoing facility operating expenses. Furthermore, if orders are canceled, we may be unable to fully utilize this specialized manufacturing footprint or redirect these custom facilities to alternative programs, resulting in unabsorbed overhead, facility underutilization, and unrecovered capital investments.
Additionally, achieving target production rates requires rapidly scaling our specialized workforce at these expansion sites, including engineering, assembly, quality assurance, and Environmental, Health and Safety personnel with active security clearances. Bottlenecks in recruitment, training, or government security clearance processing, as well as operational constraints associated with increased energetic mixing volumes and hazardous waste disposal limits, could impede facility ramp milestones.
Our long-term funding and production volumes could also be adversely affected by proposed legislative initiatives, including second-source mandates for certain of our missile products and subsystems for which we are the sole supplier. If enacted into law or implemented into DoW procurement strategy, mandatory second sourcing could redirect government funding or future contract awards to competitors or new entrants, reduce our share of program quantities, and undermine the economic assumptions underlying our capital investments, leaving our expanded production lines with excess capacity.
Any failure to successfully execute our facility expansion and modernization plans on schedule and within budget, or any cancellation, reduction in appropriations, or legislative reallocation of procurement funding to second sources that leaves capital investments unrecovered, could impair our ability to meet customer delivery commitments on priority missile programs, undermine our competitive position, and adversely affect our business, financial condition, results of operations, cash flows and equity.
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We depend on our subcontractors and suppliers, and failures in or disruptions to our supply chain could cause our products and or services to be produced or delivered in an untimely or unsatisfactory manner. Our ability to manufacture and deliver products and services to our customers requires our U.S. and non-U.S. subcontractors and suppliers to provide a variety of materials, components, subsystems and services. In some instances, we depend upon a single supplier for certain components, which adds risk because that supplier may at times be unable to meet our needs and because we may have limited negotiating leverage with sole-source suppliers. Identifying and qualifying dual and second-source suppliers can be difficult, time-consuming and may result in increased costs. Any inability to timely develop cost-effective alternative sources of supply could materially impact our ability to manufacture and deliver products and services to our customers.
In particular, we rely on subcontractors and suppliers for our multi-year contracts in our Missile Solutions segment to materially increase production capacity for solid rocket motors, divert and attitude control systems, and precision fuzes across priority MAC programs. Some of these suppliers are currently sole-source, and we cannot guarantee that all of our suppliers will be able to increase their capacity to the levels required under our multi-year contracts.
In addition, we are required to procure certain materials and components, including rare earth minerals, such as tungsten, and microelectronic components, from U.S. Government-approved supply sources. Heightened regulatory requirements that may apply to these sources can further limit the subcontractors and suppliers we may utilize. Legislation, regulatory changes or other governmental actions, including product certification or stewardship requirements, sourcing restrictions, tariffs, export controls, embargoes, product authenticity, cybersecurity regulation, and environmental standards may all impact our subcontractors and suppliers. These impacts may be worsened by increased demand.
From time to time, our subcontractors and suppliers experience financial and operational difficulties outside of our direct control, which may impact their ability to deliver the materials, components, subsystems and services we need.
In recent years, global supply chains, including ours, have experienced significant disruption from material availability and supplier performance, as well as extended lead times, pricing volatility, inflationary pressures and labor issues. We and our subcontractors and suppliers have also experienced difficulties in the timely procurement of necessary materials and components, including rare earth minerals and microelectronics. Current geopolitical conditions, including sanctions and other trade restrictive activities and strained inter-country relations, have contributed to issues procuring necessary materials and components. For example, some materials and components in our supply chain have previously been sourced from areas now under sanctions or other trade restrictions, such as specialty metals from Russia and certain raw materials and equipment from China, or are currently sourced from areas which are at risk of sanctions or other trade restrictive actions, not just by the United States but by other nations or groups, such as the European Union.
While we continuously work to implement supply chain resiliency initiatives, including investment in our supply chain for priority MAC programs, we cannot guarantee the success of any of these efforts. Material supply disruptions may still occur in the future. Any supply chain disruption could result in delayed deliveries, increased costs, loss of customers, contractual penalties or damages, claims or litigation, regulatory investigations or actions, loss of future business opportunities, or reputational harm, any of which could materially and adversely affect our business, results of operations, financial condition and cash flows.
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ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. | ||||
Issuer Purchases of Equity Securities
The following table sets forth information with respect to repurchases by us of our common stock during third quarter 2026:
| Period* | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs(1) | Maximum approximate dollar value of shares that may yet be purchased under the plans or programs(1) ($ in millions) | |||||||||||||||||||
| Month No. 1 | |||||||||||||||||||||||
(July 4, 2026 - July 31, 2026) | |||||||||||||||||||||||
Repurchase program(1) | — | $ | — | — | $ | 1,702 | |||||||||||||||||
Employee transactions(2) | 715 | $ | 291.86 | ||||||||||||||||||||
| Month No. 2 | |||||||||||||||||||||||
(August 1, 2026 - August 28, 2026) | |||||||||||||||||||||||
Repurchase program(1) | 259,000 | $ | 282.50 | 259,000 | $ | 1,629 | |||||||||||||||||
Employee transactions(2) | 10,807 | $ | 279.03 | ||||||||||||||||||||
| Month No. 3 | |||||||||||||||||||||||
(August 29, 2026 - October 2, 2026) | |||||||||||||||||||||||
Repurchase program(1) | — | $ | — | — | $ | 1,629 | |||||||||||||||||
Employee transactions(2) | 239 | $ | 260.56 | ||||||||||||||||||||
| Total | 270,761 | 259,000 | $ | 1,629 | |||||||||||||||||||
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* Periods represent our fiscal months.
(1) On October 21, 2022, we announced that our Board approved share repurchase authorizations under our repurchase program of $3.0 billion. Our repurchase program does not have an expiration date and authorizes us to repurchase shares of our common stock through open market purchases, private transactions, transactions structured through investment banking institutions or any combination thereof.
(2) Represents shares of our common stock delivered to us in satisfaction of the tax withholding obligation of holders of PSUs or RSUs that vested during the quarter. Our stock incentive plans provide that the value of shares delivered to us to cover tax withholding obligations shall be the closing price of our common stock on the date the relevant transaction occurs.
Sales of Unregistered Equity Securities
During third quarter 2026, we did not issue or sell any unregistered equity securities.
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. | ||||
None.
ITEM 4. | MINE SAFETY DISCLOSURES. | ||||
Not applicable.
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ITEM 5. | OTHER INFORMATION. | ||||
Securities Trading Plans of Directors and Executive Officers
We require all executive officers and directors to effect purchase and sale transactions in L3Harris securities pursuant to a trading plan (each, a “10b5-1 Plan”) intended to satisfy the requirements of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”). We limit executive officers to a single 10b5-1 Plan in effect at any time, subject to limited exceptions in accordance with Rule 10b5-1.
On August 16, 2026 , Christopher Kubasik , the Company’s former Chairman and CEO, terminated his February 4, 2026 10b5-1 Plan, which provided for the sale of 189,501 shares.
Other than as disclosed above, during third quarter 2026, none of the Company’s directors or officers adopted terminated any 10b5-1 Plan.
Compensation Plans
On October 23, 2026, upon the recommendation of the compensation committee (the “Committee”) of the Board, the Board amended each of the Company’s Annual Incentive Plan (the “AIP”) and the Company’s Severance Pay Plan (the “Severance Plan”).
The amendment to the AIP removes the individual payout cap, such that the Committee retains discretion to determine the payout for each award, subject to a maximum payout not to exceed 200% of the applicable target award.
The amendment to the Severance Plan adds a CEO severance benefit, providing for a lump sum cash payment equal to two times the sum of the CEO’s annual base pay and annual bonus at target, and 24 months of COBRA coverage.
The foregoing descriptions of the amendment to the AIP and the amendment to the Severance Plan are summaries, do not purport to be complete and are qualified in their entirety by reference to the full text of the AIP and the Severance Plan, each effective October 23, 2026, which are filed as Exhibits 10.3 and 10.4, respectively, to this Report and incorporated herein by reference.
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ITEM 6. | EXHIBITS. | ||||
(10.1) | |||||
(10.2) | |||||
(10.3) | |||||
(10.4) | |||||
(13) | |||||
(15) | |||||
(31.1) | |||||
(31.2) | |||||
(32)* | |||||
(101) | The financial information from L3Harris Technologies, Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 2, 2026 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Statement of Operations, (ii) the Condensed Consolidated Statement of Comprehensive Income , (iii) the Condensed Consolidated Balance Sheet, (iv) the Condensed Consolidated Statement of Cash Flows, (v) the Condensed Consolidated Statement of Equity, and (vi) the Notes to Condensed Consolidated Financial Statements. | ||||
(104) | Cover Page Interactive Data File formatted in Inline XBRL and contained in Exhibit 101. | ||||
* Furnished herewith.
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SIGNATURES
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, thereunto duly authorized.
L3HARRIS TECHNOLOGIES, INC. | ||||||||||||||
(Registrant) | ||||||||||||||
Date: October 29, 2026 | By: | /s/ KEN SHARP | ||||||||||||
| Ken Sharp | ||||||||||||||
| Senior Vice President and Chief Financial Officer | ||||||||||||||
| (Principal Financial Officer) | ||||||||||||||
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Exhibit 10.2
SUMMARY OF ANNUAL COMPENSATION OF L3HARRIS TECHNOLOGIES, INC. NON-EMPLOYEE DIRECTORS
(Effective as of August 17, 2026)
The following summarizes the annual compensation of directors of L3Harris Technologies, Inc. (“L3Harris”) who are not employees of L3Harris (“Non-Employee Directors”), effective as of August 17, 2026. Employee directors are not separately compensated for service as a director.
Annual Retainer
Cash Retainer
Non-Employee Directors receive annual cash retainers for service as follows:
• Independent Chairman – $200,000
• Member of the Board – $150,000
•Lead Independent Director – $50,000
•Chair of Audit Committee – $30,000
•Chair of Compensation Committee - $25,000
•Chairman of Committee other than Audit Committee or Compensation Committee – $20,000
Cash retainers are payable on a quarterly basis in arrears. If a Non-Employee Director does not serve for the entire quarter as a member of the Board of Directors of L3Harris (the “Board”), Lead Independent Director, Independent Chairman or as Chairman of a committee, as applicable, the cash retainers payable for such calendar quarter shall be pro-rated based on the period of the Non-Employee Director’s service during the calendar quarter. The applicable cash retainers shall be paid in a lump sum within 60 days following the calendar quarter of the Board service. The amounts set forth above for the cash retainers may be changed from time to time by a resolution duly adopted by the Board. Any such duly adopted resolution shall be deemed to have amended this summary.
Equity Retainer
Non-Employee Directors receive an annual equity retainer in the form of Director Share Units granted under and subject to the provisions of the L3Harris Technologies, Inc. 2024 Equity Incentive Plan or any successor plan (the “Equity Plan”). The Director Share Units are denominated in shares of common stock of L3Harris (each, a “Share”) and granted on the date of L3Harris’ annual meeting of shareholders (“Annual Meeting”) each year. The number of Director Share Units delivered to each Non-Employee Director will be determined by dividing $200,000 by the Fair Market Value (as defined under the Equity Plan) of a Share on the grant date, rounded down to the nearest whole Share. The Director Share Units will generally be subject to cliff vesting on the one-year anniversary of the grant date, subject to the Non-Employee Director’s continued service and the terms of the applicable award agreement.
BOD-26-115.8
Exhibit 10.2
If a Non-Employee Director commences service on the Board following the annual grant date of the Director Share Units, the Non-Employee Director will receive a prorated annual equity retainer, with such proration determined based on the period of the Non-Employee Director’s Board service during the year.
The amounts set forth above for the equity retainer may be changed from time to time by a resolution duly adopted by the Board. Any such duly adopted resolution shall be deemed to have amended this summary.
Directors’ Deferred Compensation Plan
Non-Employee Directors may defer receipt of annual cash retainers and equity retainers for service on the Board under the L3Harris Technologies, Inc. 2019 Non-Employee Director Deferred Compensation Plan.
Stock Ownership Guidelines
Non-Employee Directors are expected to own, within five years after election or appointment to the Board, Shares or L3Harris stock equivalents having a minimum value equal to five (5) times the annual cash retainer for service as a member of the Board.
Shares owned outright or jointly by the Non-Employee Director and deferred units (on an after-tax basis) credited with respect to the Non-Employee Director under any deferred compensation plan maintained by L3Harris will count toward the ownership guidelines.
Travel and Other Expenses
Reimbursement of actual costs and expenses incurred in the performance of service as a Non-Employee Director, including director education institutes and activities.
Insurance
Liability insurance and up to $200,000 in accidental death and dismemberment insurance and an additional $200,000 if involved in an accident while traveling on business relating to L3Harris’ affairs.
Charitable Gift Matching Program
Matching of a Non-Employee Director’s contributions to eligible educational institutions and charitable organizations up to an annual maximum of $10,000 per Non-Employee Director.
Indemnification Agreement
Each Non-Employee Director is entitled to the benefits of an indemnification agreement in the form approved by the L3Harris Board of Directors.
BOD-26-115.8
Exhibit 10.3
L3HARRIS TECHNOLOGIES, INC.
ANNUAL INCENTIVE PLAN
(Amended and Restated Effective as of October 23, 2026)
1. Purpose of the Plan. The purpose of the L3Harris Technologies, Inc. Annual Incentive Plan is to promote the growth and performance of the Company and thereby advance the interest of shareholders by: (i) linking a portion of the total annual compensation for certain key employees to achievement of such corporate or other objectives as shall be approved for each Plan Year; and (ii) assisting in attracting, retaining and motivating certain key employees.
2. Definitions. Wherever the following capitalized terms are used in the Plan, they shall have the meanings specified below:
“Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with, the Company, as determined by the Committee.
“Award” means a right to receive an annual cash incentive payment pursuant to the terms and conditions of the Plan.
“Board” means the Board of Directors of the Company.
“Cause” means, with respect to any Participant, either: (i) if such Participant is a party to an employment agreement with any member of the Company Group (other than an executive change in control severance agreement) and such agreement defines “cause,” the definition contained therein; or (ii) if no such agreement exists, or if such agreement does not define “cause”: (A) a substantial and continuing failure or refusal by such Participant to perform the material duties of his or her position, or to perform specific directives from such Participant’s supervisor that are consistent with such Participant’s position (other than a failure resulting from such Participant’s disability); (B) any conduct that results in or is reasonably likely to result in harm to the reputation or business of any member of the Company Group; (C) deliberate, willful or gross negligence or misconduct with respect to any member of the Company Group; (D) any act of fraud, dishonesty, embezzlement, theft or unethical business conduct by such Participant in connection with his or her duties or such Participant’s admission or conviction of, or plea of nolo contendere with respect to, a felony or any crime involving moral turpitude, fraud, dishonesty, embezzlement, theft or misrepresentation; or (E) willful violation by such Participant of a material policy of any member of the Company Group that is applicable to the Participant, including the Company’s Code of Conduct. Determination of whether Cause exists shall be made by the Committee or by the Company’s management in its sole discretion.
“Change in Control” shall have the meaning set forth in Section 13(d).
“Code” means the Internal Revenue Code of 1986, as amended.
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“Committee” means a committee of the Board designated by the Board to administer the Plan which shall be comprised solely of three or more Independent Directors, and which initially shall be the Compensation Committee of the Board.
“Company” means L3Harris Technologies, Inc., a Delaware corporation, or any successor thereto.
“Company Group” means the Company and each of its Subsidiaries and Affiliates.
“Director” means a member of the Board.
“Employee” means any individual who is treated as a salaried employee of any member of the Company Group in the personnel records of any member of the Company Group for the relevant period (including any officers or Executive Officers), but shall exclude individuals who are classified by any member of the Company Group as (i) leased or otherwise employed by a third party; (ii) independent contractors; or (iii) intermittent or temporary, in each case even if any such classification is changed retroactively as a result of an audit, litigation, or otherwise.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Executive Officer” means a Participant the Board has designated as an executive officer of the Company for purposes of reporting under Section 16 of the Exchange Act.
“Independent Director” means a Director who is not an Employee and who is intended to qualify as (i) a “non-employee director” under Rule 16b-3(b)(3) under the Exchange Act and (ii) an “independent director” under the rules and listing standards adopted by the New York Stock Exchange or any other exchange upon which the Company’s common stock is listed for trading.
“Participant” means any Employee designated by the Board, the Committee or the Chief Executive Officer or another officer of the Company (pursuant to a delegation under Section 3(c)) to participate in the Plan for a Plan Year or a portion of a Plan Year.
“Payment Requirements” shall have the meaning set forth in Section 7(b).
“Performance Objectives” means the performance objectives established pursuant to the Plan for Participants. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or the Subsidiary, Affiliate, segment, division, business unit, department, geography or function within the Company in which the Participant is employed by or performs services for or any combination of the foregoing. Performance Objectives may be measured on an absolute basis or a relative basis (for example, relative to a group of peer
2
companies or a financial market index). Performance Objectives may be based on one or more, or a combination, of any performance criteria, including without limitation, any of the following: return on equity; diluted earnings per share; earnings per share growth; total earnings; earnings growth; return on capital; return on invested capital; return on assets; return on sales; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; revenue; revenue growth; expenses; gross margin; return on investment; increase in the fair market value of shares; share price (including, but not limited to, growth measures and total shareholder return); operating profit; net earnings; profit margin; new product introduction; business efficiency measures; sustainability, including energy or materials utilization; cash flow (including, but not limited to, operating cash flow and free cash flow); inventory turns; financial return ratios; market share; earnings measures/ratios; economic value added; working capital metrics or other balance sheet measurements (such as receivable turnover); internal rate of return; customer satisfaction surveys; synergies and run-rate synergies; operating ratios; borrowing levels, leverage ratios or credit ratings; acquisitions or divestitures; recapitalizations; overhead or expense containment or reduction; productivity; or any other types or categories of Performance Objective as the Committee shall determine, including categories involving individual performance and subjective targets. Performance Objectives may be applied on a pre- or post-tax basis.
“Plan” means this L3Harris Technologies, Inc. Annual Incentive Plan, as amended from time to time.
“Plan Year” means a fiscal year of the Company.
“Retirement” means retirement after age sixty (60) with five (5) or more years of full-time service with the Company Group; provided, that the Employee (A) has given written notice, in form reasonably satisfactory to the Company, to the Employee’s supervisor, with a copy to the Vice President, Chief Human Resources Officer of the Company (or, if the Employee is the Vice President, Chief Human Resources Officer of the Company, to the Chief Executive Officer of the Company) that (1) specifies the Employee’s intent to retire from the Company and the particular intended date of retirement, which must be at least six (6) months after the date such written notice is given, and (2) has not been preceded by notice from the Company Group to the Employee of the actual or impending termination of employment of the Employee by the Company Group; and (B) has remained employed by the Company Group until the earlier of (1) the particular intended date of retirement specified in such notice (or such other date as has been mutually agreed in writing between the Company Group and the Employee) or (2) the date on which the Employee ceases to be an employee of the Company Group due to death or disability or involuntary termination of employment of the Employee by the Company Group other than for Cause.
“Section 409A” means Section 409A of the Code and the regulations promulgated thereunder, as amended.
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“Subsidiary” means any entity of which the Company owns or controls, either directly or indirectly, 50% or more of the outstanding shares of stock normally entitled to vote for the election of directors or of comparable equity participation and voting power.
“Third Party” shall have the meaning set forth in Section 13(c).
3. Administration of Plan.
(a) Powers of Committee; Discretion. The Plan shall be administered by the Committee. With respect to participation in the Plan by the Chief Executive Officer or any other Executive Officer that is also a Director, the Plan shall be administered by the Committee with the other Independent Directors of the Board. Subject to the terms of the Plan, the Committee shall have such powers and authority as may be necessary or appropriate for the Committee to carry out its functions as described in the Plan, including the authority in its discretion to determine: (i) which Employees shall receive Awards; (ii) the amount of such Awards; (iii) the objectives and the other terms and conditions of such Awards, including the Performance Objectives, targets and weightings applicable to an Award; and (iv) whether the Performance Objectives have been achieved. Determinations by the Committee under the Plan, including, without limitation, determinations of the Participants, the amount and timing of Awards and the terms and provisions of Awards, need not be uniform and may be made selectively among Participants and Employees who receive or are eligible to receive Awards. The Committee shall have the full power, discretion and authority, consistent with the terms of the Plan, to interpret the Plan, to establish, amend, suspend and rescind any rules and regulations relating to the Plan and to make all other determinations that it deems necessary or advisable for the administration of the Plan. The Committee may impose conditions with respect to an Award, such as limiting solicitation of employees or former employees or limiting competitive employment or other activities. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry it into effect. All such interpretations, rules, regulations, determinations and corrections shall be final, conclusive and binding on all persons (including the Company, Subsidiaries, Affiliates, Participants and Employees) and for all purposes.
(b) Board Authority. If the Committee does not exist, or for any other reason determined by the Board, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee, subject to applicable law or the listing requirements of the New York Stock Exchange or any other exchange upon which the Company’s securities are listed for trading (or, if applicable with respect to an Award to a Participant, any exchange upon which the securities of a Subsidiary or Affiliate are traded).
(c) Delegation. Except to the extent prohibited by applicable law or the listing requirements of the New York Stock Exchange or any other exchange upon which the Company’s securities are listed for trading (or, if applicable with respect to an Award to a Participant, any exchange upon which the securities of a Subsidiary or Affiliate are traded), the Committee shall have the right, from time to time, to delegate to one or more officers of any member of the Company Group the authority of the Committee to grant and determine
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the terms and conditions of Awards granted under the Plan, subject to such limitations as the Committee shall determine. Notwithstanding the foregoing, in no event shall any such delegation of authority be permitted (i) with respect to Awards to any Executive Officer or (ii) with respect to any Award granted to the person to whom such authority is delegated. The Committee shall also be permitted to delegate, to any appropriate officer or employee of any member of the Company Group, responsibility for performing ministerial functions under the Plan. In the event that the Committee’s authority is delegated to officers or employees in accordance with the foregoing, all references in the Plan relating to the Committee shall be interpreted in a manner consistent with the foregoing by treating any such reference as a reference to such officer or employee for such purpose. Any action undertaken in accordance with the Committee’s delegation of authority hereunder shall have the same force and effect as if such action was undertaken directly by the Committee and shall be deemed for all purposes of the Plan to have been taken by the Committee.
(d) Limitation on Liability. To the maximum extent permitted by applicable law, no member of the Board or Committee, nor any officer or employee delegated authority by the Committee, shall be liable for any action or determination made in good faith by the Board, the Committee or such officer or employee with respect to the Plan or any Award.
4. Eligibility; Designation of Participants. All Employees are eligible to be designated by the Committee to receive Awards and become Participants under the Plan, including, if and to the extent the Committee, in its sole discretion, shall determine, during any periods during which a Participant is on a leave of absence. In selecting Employees to be Participants and in determining the amount of an Award to be granted under the Plan and the terms and conditions of the Award, the Committee shall consider any and all factors that it deems relevant or appropriate. Awards need not be uniform and may be made selectively among Participants and Employees who receive or are eligible to receive Awards.
5. Annual Incentive Awards.
(a) In General. Each Participant in the Plan shall be eligible to receive such Award, if any, for each Plan Year as may be payable pursuant to the Performance Objectives and criteria applicable for such Participant. The Committee shall, on an annual basis, establish a “target” Award for a Participant for a Plan Year, and the maximum payout with respect to such Award, which maximum payout shall not exceed 200% of such target Award.
(b) Performance Objectives. Participants shall have the payout of their Awards, if any, determined on the basis of the degree of achievement of Performance Objectives which shall be established by the Committee in writing and which Performance Objectives shall be stated in terms of the attainment of specified levels of or percentage changes as compared to a prior measurement period in any one or more of the Performance Objectives. The Committee shall, for each Plan Year, establish the Performance Objectives to apply to each Participant and a formula or matrix prescribing the extent to which such
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Participant’s Award shall be earned based upon the degree of achievement of such Performance Objectives. The Committee shall strive to determine the target Award, Performance Objectives and any related formula or matrix for each Participant not later than 90 calendar days after the beginning of the Plan Year.
(c) Transfer of Employment. A Participant’s target Award or Performance Objectives may be changed by the Committee during the Plan Year to reflect a change in such Participant’s responsibilities, which may increase or decrease the Award’s value or have the effect of making the Performance Objectives more or less difficult to attain.
(d) Committee Adjustment. The Committee may, in its sole discretion, increase the amount of an Award payable to a Participant even though not earned in accordance with the Performance Objectives established pursuant to this Section 5. The Committee may, in its sole discretion, reduce or eliminate the amount of any payment with respect to any Award that would otherwise be made to any Participant pursuant to the Performance Objectives established in accordance with this Section 5. The Committee may exercise its discretion pursuant to this Section 5(d) considering the extent to which any other performance goals are achieved, regardless of whether such performance goals are set forth in the Plan or are assessed on an objective or subjective basis.
6. Reserved.
7. Payment of Annual Incentive Award.
(a) Payments. Payment of any amount to be paid to a Participant based upon the degree of achievement of the applicable Performance Objectives shall be made in a lump sum cash payment at such time as the Committee may in its discretion determine. Notwithstanding the foregoing but subject to Sections 16 and 18(c), in no event will the payment of such amount be made earlier than the day immediately following the end of the Plan Year or later than the 15th day of the third month following the end of the Plan Year; provided, however, that with respect to any Participant who is not subject to United States federal income tax with respect to such payment, such payment may be made at a later time in order to accommodate applicable international payroll schedules, but in no event later than December 31 of the calendar year following the end of the Plan Year.
(b) Termination of Employment. Except to the extent otherwise provided by the Committee or as provided in Section 13, and except in the case of termination by reason of death, disability, Retirement or involuntary termination without Cause by a member of the Company Group, if a Participant’s employment with the Company Group is terminated prior to the last day of a Plan Year, then the Participant shall forfeit the Award and shall not be entitled to a payment of the Award. If a Participant’s employment is terminated prior to the last day of the Plan Year due to death, disability, Retirement or involuntary termination without Cause, then (i) if the Participant has been employed by any member of the Company Group a minimum of 180 days during the Plan Year and any other requirements for a pro-rated payment of the Award, as set forth in the applicable terms and conditions for such
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Award (collectively, the “Payment Requirements”), have been satisfied, the Participant shall be entitled to a pro-rated payment of the Award that would have been payable if the Participant had been a Participant on the last day of the Plan Year; and (ii) if the Payment Requirements have not been satisfied, except to the extent otherwise provided by the Committee or as provided in Section 13, the Participant shall forfeit the Award and shall not be entitled to a payment of the Award. If a Participant is entitled to a payment of the Award pursuant to the immediately preceding sentence, such amount shall be prorated based on the number of days the individual was a Participant in the Plan for such Plan Year and shall be paid at the same time and in the same manner as such payment would have been made if the Participant had been a Participant on the last day of the Plan Year (for avoidance of doubt, including being subject to adjustment for Performance Objectives involving financial performance, individual performance and subjective targets).
8. Unfunded Plan. A Participant’s interest in any Awards hereunder shall at all times be reflected on the Company’s books as a general unsecured and unfunded obligation of the Company subject to the terms and conditions of the Plan. The Plan shall not give any person any right or security interest in any asset of the Company Group or any fund in which any deferred payment is deemed invested. Neither the Company Group, the Board, the Committee, nor any officer or employee of the Company Group shall be responsible for the adequacy of the general assets of the Company to discharge the payment of its obligations hereunder nor shall any member of the Company Group be required to reserve or set aside funds therefor.
9. Non-Alienation of Benefits; Beneficiary Designation. All rights and benefits under the Plan are personal to the Participant and neither the Plan nor any right or interest of a Participant or any other person arising under the Plan is subject to voluntary or involuntary alienation, sale, transfer, or assignment without the Company’s consent. Subject to the foregoing, the Company may establish such procedures as it deems necessary for a Participant to designate one or more beneficiaries to whom any payment the Committee determines to make would be payable in the event of the Participant’s death. In the event no beneficiary has been properly designated, the payment, if any, shall be made to the Participant’s estate or by the laws of descent and distribution.
10. Withholding for Taxes; Offset. Notwithstanding any other provisions of the Plan, the Company shall have the authority to withhold from any payment made by it under the Plan such amount or amounts as may be required for purposes of complying with any Federal, state, local or foreign tax or withholding requirements. The Company may, to the extent permitted by applicable law (including Section 409A), offset against any payments to be made to a Participant under the Plan any amounts owing to any member of the Company Group from the Participant for any reason.
11. No Right to Continued Employment or to Participate. Nothing in the Plan or in the grant of any Award shall interfere with or limit in any way the right of any member of the Company Group to terminate a Participant’s employment at any time, nor confer upon any Participant any right to continued employment with any member of the Company Group
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or to any particular terms of employment. Neither the adoption of the Plan nor any action by any member of the Company Group, the Board, the Committee or any Director or officer of any member of the Company Group shall be deemed to give any Employee any right to be designated as a Participant under the Plan.
12. Non-Exclusivity of Plan. The Plan is not intended to and shall not preclude the Board or any committee of the Board or any board of directors of any Subsidiary or Affiliate (or any committee thereof) from adopting, continuing, amending or terminating such additional compensation arrangements as it deems desirable for Employees.
13. Change in Control.
(a) Amount of Award. Notwithstanding anything to the contrary provided elsewhere herein, in the event of a Change in Control of the Company, then an Award for the Plan Year during which the Change in Control is effective shall equal the target Award as originally approved for the Plan Year or at such greater level of performance as the Committee may authorize, notwithstanding actual results or any changes or modifications occurring after any such Change in Control.
(b) Timing of Payment. Notwithstanding anything to the contrary provided elsewhere herein, in the event of a Change in Control of the Company that qualifies as a “change in control event” within the meaning of Treasury Regulation §1.409A-3(i)(5), the Company shall pay any Awards for the Plan Year during which the Change in Control is effective in a lump sum as promptly as practicable following such effective date, but in no event later than the earlier of(i) the 90th day following the effective date of the Change in Control and (ii) the 15th day of the third month following the end of the Plan Year during which the Change in Control is effective. In the event of a Change in Control of the Company that does not qualify as a “change in control event” within the meaning of Treasury Regulation §1.409A-3(i)(5) and to the extent the Awards are subject to Section 409A, the Company shall pay any Awards for the Plan Year during which the Change in Control is effective in a lump sum at the time set forth in Section 7(a) if required to comply with Section 409A.
(c) Termination of Employment. A Participant who remains employed by the Company Group as of the time the Change in Control is effective shall be entitled to receive the payment provided for in this Section 13, notwithstanding any subsequent termination of employment for any reason. In addition, if a Participant’s employment is terminated within 90 days prior to a Change in Control and the Participant reasonably demonstrates that such termination was at the request or suggestion of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control (a “Third Party”), and the Change in Control involving such Third Party actually occurs, then for purposes of this Section 13, the Participant’s employment shall be deemed to have been terminated after the Change in Control is effective and the Participant shall be entitled to receive the payment provided for in this Section 13.
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(d) Definition of Change in Control. For purposes of the Plan and any Award, unless otherwise expressly set forth in writing with respect to the applicable Award, a “Change in Control” shall be deemed to have occurred if:
(i) any “person” (as such term is defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board (the “Company Voting Securities”); provided, however, that the event described in this paragraph (i) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (a) by the Company or any Subsidiary, (b) by any employee benefit plan sponsored or maintained by the Company or any Subsidiary, (c) by any underwriter temporarily holding securities pursuant to an offering of such securities, or (d) pursuant to a Non-Control Transaction (as defined in paragraph (iii));
(ii) individuals who, on October 23 , 2026, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director subsequent to October 23, 2026, whose appointment, election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors who remain on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director, without objection to such nomination) shall also be deemed to be an Incumbent Director; provided, however, that no individual initially appointed, elected or nominated as a Director of the Company as a result of an actual or threatened election contest with respect to Directors or any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director;
(iii) there is consummated a merger, consolidation, share exchange or similar form of corporate reorganization of the Company or any such type of transaction involving the Company or any of its Subsidiaries that requires the approval of the Company’s shareholders (whether for such transaction or the issuance of securities in the transaction or otherwise) (a “Business Combination”), unless immediately following such Business Combination: (a) more than 60% of the total voting power of the company resulting from such Business Combination (including, without limitation, any company which directly or indirectly has beneficial ownership of 100% of the Company Voting Securities) eligible to elect directors of such company is represented by shares that were Company Voting Securities immediately prior to such Business Combination (either by remaining outstanding or being converted), and such voting power is in substantially the same proportion as the voting power of such Company Voting Securities immediately prior to the Business Combination, (b) no person (other than any publicly traded holding company resulting from such Business Combination, or any employee benefit plan sponsored or maintained by the Company (or the company resulting from such Business Combination)) becomes the beneficial owner, directly or indirectly, of 20% or more of the total voting power of the outstanding voting securities eligible to elect directors of the company resulting from such
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Business Combination, and (c) at least a majority of the members of the board of directors of the company resulting from such Business Combination were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies the foregoing conditions specified in (a), (b) and (c) shall be deemed to be a “Non-Control Transaction”);
(iv) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company; or
(v) the Company consummates a direct or indirect sale or other disposition of all or substantially all of the assets of the Company and its Subsidiaries.
Notwithstanding the foregoing, a Change in Control of the Company shall not be deemed to occur solely because any person acquires beneficial ownership of more than 20% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding; provided, that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in Control of the Company shall then occur.
14. Adjustment of Awards. The Committee shall be authorized to make adjustments in the method of calculating achievement of Performance Objectives in recognition of unusual or nonrecurring events affecting the Company or its financial statements or changes in applicable laws, regulations or accounting principles. In the event the Company shall assume outstanding employee benefit awards or the right or obligation to make future such awards in connection with the acquisition of another corporation or business entity, the Committee may, in its discretion, but subject to the requirements of Section 409A, make such adjustments in the terms of Awards under the Plan as it shall deem appropriate.
15. Impact of Restatement of Financial Statements upon Previous Awards. If any member of the Company Group’s financial statements are restated as a result of errors, omissions, or fraud, the Committee may direct that the Company recover all or a portion of any such Award or payment made to any, all or any class of Participants with respect to any Plan Year the financial results of which are negatively affected by such restatement. The amount to be recovered from any Participant shall be the amount by which the affected Award or payment exceeded the amount that would have been payable to such Participant had the financial statements been initially filed as restated, or any greater or lesser amount (including, but not limited to, the entire Award) that the Committee shall determine. The Committee may determine to recover different amounts from different Participants or different classes of Participants on such basis as it shall deem appropriate. In no event shall the amount to be recovered by the Company from a Participant be less than the amount required to be repaid or recovered as a matter of law. The Committee shall determine whether the Company shall effect any such recovery (i) by seeking repayment from the
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Participant, (ii) by reducing the amount that would otherwise be payable to the Participant under any compensatory plan, program or arrangement maintained by the Company, a Subsidiary or any of its Affiliates, (iii) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Company’s otherwise applicable compensation practices, or (iv) by any combination of the foregoing or otherwise (subject, in each of subclause (ii), (iii) and (iv), to applicable law, including without limitation Section 409A, and the terms and conditions of the applicable plan, program or arrangement). This Section 15 shall be a non-exclusive remedy and nothing contained in this Section 15 shall preclude the Company from pursuing any other applicable remedies available to it, whether in addition to, or in lieu of, application of this Section 15. In addition, Awards under the Plan are subject to recoupment pursuant to policies adopted by any member of the Company Group, as such policies are in effect from time to time and applicable the Participant, including, without limitation, any policy adopted to comply with the Dodd-Frank Act.
16. Deferral. The Committee may, in its discretion, permit a Participant to defer receipt of all or a portion of the payment of cash that would otherwise be due to the Participant under the Plan. If any such deferral is to be permitted by the Committee, the Committee shall establish written rules and procedures relating to such deferral in a manner intended to comply with the requirements of Section 409A, including, without limitation, the time when an election to defer may be made, the time period of the deferral and the events that would result in payment of the deferred amount, the interest or other earnings attributable to the deferral and the method of funding, if any, attributable to the deferred amount.
17. Amendment or Termination. The Board or the Committee may, in its sole discretion, amend, suspend or terminate the Plan at any time (including during or following the applicable Plan Year) and for any reason, with or without written notification and without regard to the effect that any such action may have on any Participant’s incentive or potential incentive under the Award, subject to any requirement for shareholder approval imposed by applicable law or regulation or the listing requirements of the New York Stock Exchange or any other exchange upon which the Company’s securities are listed (or, if applicable with respect to an Award to a Participant, any exchange upon which the securities of a Subsidiary or Affiliate are traded); provided, however, that upon the occurrence of a Change in Control, the Plan may not be amended, suspended or terminated as it relates to Awards for the Plan Year during which the Change in Control is effective.
18. Application of Section 409A.
(a) General. All payments made under the Plan are intended to be exempt from (or comply with) the requirements of Section 409A to the maximum extent permitted. To the extent applicable, the Plan is intended to be administered and interpreted in a manner that is consistent with the requirements of Section 409A. Notwithstanding anything herein, the Committee may, without a Participant’s prior consent, amend the Plan and/or Awards, adopt
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policies and procedures, or take any other actions (including amendments, policies, procedures and actions with retroactive effect) as are necessary or appropriate to preserve the intended tax treatment of Awards under the Plan, including without limitation, any such actions intended to(A) exempt the Plan and/or any Award from the application of Section 409A, and/or (B) comply with the requirements of Section 409A, including without limitation any such regulations, guidance, compliance programs and other interpretative authority that may be issued after the date of grant of any Award. Notwithstanding the foregoing, no particular tax result with respect to any income recognized by a Participant in connection with the Plan is guaranteed and each Participant shall be responsible for any taxes, penalties or interest imposed on such Participant in connection with the Plan. The Company Group shall have no obligation under this Section 18 or otherwise to take any action (whether or not described herein) to avoid the imposition of taxes, penalties or interest under Section 409A with respect to any Award and shall have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute non-compliant, “nonqualified deferred compensation” subject to the imposition of taxes, penalties and/or interest under Section 409A.
(b) Separation from Service. With respect to any Award that constitutes “nonqualified deferred compensation” under Section 409A, any payment or settlement of such Award that is to be made upon a termination of a Participant’s relationship with the Company Group shall, to the extent necessary to avoid the imposition of taxes under Section 409A, be made only upon the Participant’s “separation from service” (within the meaning of Section 409A), whether such “separation from service” occurs before, upon or subsequent to the termination of the Participant’s relationship with the Company Group. For purposes of any such provision of the Plan or any Award relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”
(c) Payments to Specified Employees. Notwithstanding any contrary provision in the Plan or any Award, any payment of “nonqualified deferred compensation” that is otherwise required to be made under an Award to a “specified employee” (as determined by the Committee in accordance with Section 409A and the Company’s Specified Employee Policy for 409A Arrangements) as a result of his or her “separation from service” shall, to the extent necessary to avoid the imposition of taxes under Section 409A(a)(2)(B)(i), be delayed until the expiration of the six-month period immediately following such “separation from service” (or, if earlier, until the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Plan or Award, as applicable) on the day that immediately follows the end of such six-month period (without interest). Any payments of “nonqualified deferred compensation” under such Award that are, by their terms, payable more than six months following the Participant’s “separation from service” shall be paid at the time or times such payments are otherwise scheduled to be made.
19. Tax Advice. The provisions of the Plan are not intended, and should not be construed, to be legal, business or tax advice.
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20. Governing Law and Interpretation. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware, without regard to the conflict of law principles thereof. Unless otherwise indicated, all “Section” references are to sections of the Plan. References to any law, rule or regulation shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing, or interpreting such law, rule or regulation.
21. Severability. Notwithstanding any other provision or Section of the Plan, if any provision of the Plan is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Board or the Committee, such provision shall be construed or deemed amended to conform to the applicable laws (but only to such extent necessary to comply with such laws), or if it cannot be construed or deemed amended without, in the determination of the Board or the Committee, materially altering the intent of the Plan or Award, such provision shall be stricken as to such jurisdiction, person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
22. Waiver of Claims. Each Participant recognizes and agrees that prior to being selected by the Committee to receive an Award he or she has no right to any benefits hereunder. Accordingly, in consideration of the Participant’s receipt of any Award hereunder, he or she expressly waives any right to contest the amount of any Award, any determination or action hereunder by the Committee, the Company or the Board, or any amendment to the Plan or with respect to any Award.
23. Employees Outside of the United States. Without amending this Plan, the Committee may grant Awards to eligible persons who are foreign nationals and/or reside outside the U.S. on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes, the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company Group operates or has employees.
24. Effective Date. The Plan, as amended and restated as set forth herein, shall become effective as of October 23, 2026, shall replace the L3Harris Technologies, Inc. Annual Incentive Plan (Effective as of August 28, 2020) as amended, and shall remain effective until terminated by the Board or the Committee pursuant to Section 17, subject to any shareholder approvals (or reapprovals) which are or may become mandated by applicable law, rules or regulations.
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Exhibit 10.4 Severance Pay Plan Summary Plan Description SECTION IX Severance benefits following certain involuntary terminations from L3Harris Plan features include: • Service-based formula • Lump-sum payments • Minimum and maximum benefits • Waiver and release required October 2026
Severance Pay Plan 1 | P a g e THINGS FOR YOU TO KNOW… There are eligibility requirements to receive severance benefits ► Status: You must be a full-time regular (non-temporary) employee who has been employed by L3Harris for at least 90 days prior to the date of a termination considered eligible by this Plan. Types of terminations: Involuntary, as specifically defined by this Plan; otherwise, no severance is payable. You must timely sign and submit a waiver and release to receive severance benefits ► You must properly sign and submit a waiver and release within a specified time frame for severance to be paid. You will not receive severance if you revoke the waiver and release. Payments are based on a formula ► Severance pay is based on your years of credited L3Harris service (including partial years) as of your date of termination. There are minimums and maximums applied. Severance is a one-time payment ► If eligible for severance, you can expect a lump-sum payment, usually within 60 days of your termination. ► Together, this description of the Severance Pay Plan, and the separate “Benefit Basics & Administration” section, comprise a complete Summary Plan Description (SPD) of your severance benefits as is required by the Employee Retirement Income Security Act of 1974, as amended (ERISA). NOTE! You can find all L3Harris SPDs in Document Library of the enrollment site, which can be accessed via the SSO link on LHXcare.com or outside the L3Harris network at benefits.l3harris.com. IMPORTANT NOTE FOR COLLECTIVELY BARGAINED EMPLOYEES Not all benefit plans and programs described in this SPD are offered to L3Harris employees subject to a collective bargaining agreement. If a collective bargaining agreement governs your benefits, a copy of the agreement is available for examination and can be obtained by written request to the plan administrator.
Severance Pay Plan 2 | P a g e WHERE YOU CAN FIND… Quick Look — Plan Terminology ................................................. 3 How the Severance Pay Plan Works ............................................ 4 Eligibility ..................................................................................... 4 Ineligible Terminations ............................................................... 4 Plan Benefits .............................................................................. 5 Death Benefits ............................................................................ 7 Claims and Appeals ...................................................................... 7 Other Key Information ................................................................... 8
Severance Pay Plan 3 | P a g e QUICK LOOK — PLAN TERMINOLOGY Base pay — Your regular base pay excluding all other compensation (including, but not limited to, bonus incentives, equity compensation, benefits and perquisites, overtime and premium pay). COBRA Subsidy Period — Period of time during which you will pay active rates for COBRA coverage, if eligible and elected. The COBRA Subsidy Period is set forth under “Plan Benefits.” Credited service — Your period of employment with L3Harris (including employment with certain legacy companies) and certain periods of absence from employment as determined by L3Harris. In general, you will be credited with one year of service on each anniversary of your hire date, provided you remain an employee of L3Harris. Executive — Eligible employee designated by L3Harris as holding a job classification at level XL3, XL2, XL1, XL0, or XCEO or the equivalent job classification in any new classification system subsequently adopted by the Company. Full time employee — An L3Harris employee who (A) is regularly scheduled to work at least 30 hours a week or (B) has a rotation schedule and works at least 1,560 hours during a calendar year. Involuntary termination — When you are terminated by L3Harris involuntarily, either individually or as a member of a group of individuals, regardless of whether your position is being eliminated. An involuntary termination for purposes of this Severance Pay Plan shall exclude any ineligible termination as described later in this document. Outplacement services — Assistance with transition to new jobs and reorientation in the job market. Termination/terminated — Termination of employment (or, in the case of any amount payable hereunder subject to Section 409A of the Internal Revenue Code, a “separation from service,” as defined in Treasury Regulation §1.409A-1(h) (without regard to any permissible alternative definition thereunder)). Waiver and release — Agreement you must sign and submit (and not revoke) for Severance Pay Plan benefits to be paid. (See “Plan Benefits” later in this section of the SPD for additional information.)
Severance Pay Plan 4 | P a g e HOW THE SEVERANCE PAY PLAN WORKS L3Harris will determine, in its sole discretion, which employees are eligible for Severance Pay Plan benefits as well as whether a particular termination meets the requirements for an offer of severance benefits under this Plan. Eligibility Except as otherwise described below (or under “Eligibility” in the separate “Benefit Basics & Administration” section of the SPD), full-time regular (non-temporary) employees of L3Harris whose employment is involuntarily terminated are eligible to be offered severance benefits. Employees Not Considered Eligible The following employees are not eligible for severance benefits under this Severance Pay Plan: • Employees entitled to severance benefits under an individual agreement or a plan, policy or other arrangement that provides for severance benefits outside the scope of this Plan (including severance benefits in connection with a change in control of L3Harris) • Employees who terminate from employment within their first 90 days of employment • Part-time employees • Temporary employees • Employees of foreign subsidiaries • Employees covered by a collective bargaining agreement that does not provide for participation in this Plan • Employees who are working on a Service Contract Act wage determination contract (unless this Plan is specifically made applicable to their contract by L3Harris) • Employees on a general leave of absence at the time of their termination • Employees who terminate employment in connection with an early retirement offering or other voluntary retirement program offered by L3Harris (unless this Plan is specifically made applicable to such employees by L3Harris) • Additional employees or classes or groups of employees as determined by L3Harris in its sole discretion Ineligible Terminations If you terminate from L3Harris for a reason that is not an involuntary termination by L3Harris, you will not be offered Severance Pay Plan benefits. Additional circumstances considered ineligible for severance benefits include the following: • Your employment is involuntarily terminated by L3Harris for cause (as determined by L3Harris, and which shall include, but not be limited to, termination due to misconduct, violation of company policy or performance reasons) • You voluntarily leave your employment with L3Harris for any reason • You lose your job with L3Harris as the result of the sale by L3Harris of the stock or assets of a subsidiary, business unit or division of L3Harris • You lose your job with L3Harris as the result of L3Harris’ loss of a particular contract to which you were assigned, but you are offered comparable employment by the company acquiring the contract
Severance Pay Plan 5 | P a g e • You lose your job with L3Harris as the result of a decision by L3Harris to outsource a portion of its business, but you are offered comparable employment by the outsourcing company • You lose your job with L3Harris because you no longer qualify for your position due to your loss of a requisite security clearance, certification or other similar job requirement • Your position is eliminated but L3Harris offers you a comparable alternative position • You voluntarily leave employment with L3Harris prior to the date L3Harris specifies as your termination date L3Harris, in its sole discretion, will determine whether certain employment or a certain position is “comparable” for purposes of this Severance Pay Plan. Plan Benefits The Severance Pay Plan offers a lump-sum severance payment, as outlined below, in addition to providing COBRA continuation coverage at subsidized active employee rates, provided you elect COBRA coverage on a timely basis and pay premiums under the L3Harris Medical and Dental Plans as further discussed in the separate “Benefit Basics & Administration” section of the SPD. Partial years of credited service will be calculated as a fraction of one week’s base pay. For example, if you have worked five full months in the calendar year of your termination, your benefit will take into account five-twelfths of a year of service in addition to any full years of service. If you are rehired by L3Harris following receipt of severance benefits and once again become eligible for an offer of severance under the Severance Pay Plan at a later date resulting from a subsequent termination, your offer of severance benefits will be based only on your credited service following rehire. Non-Executive Levels Benefits for employees below the Executive levels are equal to one week of base pay (at the rate of base pay in effect as of the date of your termination) for each full year of your credited service with L3Harris, as outlined below. This Plan’s minimum severance offer for employees below the Executive levels is two weeks of base pay, and the maximum offer is 52 weeks of base pay. The COBRA Subsidy Period equals the number of weeks of base pay to which you are entitled (i.e., one week for each full year of credited service, subject to the minimums and maximums described above). Non-Executive Level Example This example shows the severance offer for four different eligible employees below the Executive levels, based on their credited service: Credited Service Severance Pay Plan Offer 11 months (11/12 of a year) 2 weeks of base pay; 2-week COBRA Subsidy Period (minimum) 5 years, 0 months 5 weeks of base pay; 5-week COBRA Subsidy Period 18 years, 5 months 18 5/12 weeks of base pay; 18 5/12-week COBRA Subsidy Period 55 years 52 weeks of base pay; 52-week COBRA Subsidy Period (maximum)
Severance Pay Plan 6 | P a g e Executive Levels Benefits for employees at the Executive levels are as outlined below. Base pay is the rate of such pay in effect as of the date of termination and annual bonus target is such target under the company’s Annual Incentive Plan in effect for the year of termination. Executive Level Severance Benefit COBRA Subsidy Period Chief Executive Officer (CEO) Two times base pay plus two times annual bonus target 24 months Officer other than CEO One times base pay plus one times annual bonus target 12 months XL0 and XL1 (non-officer) One times base pay 12 months XL2 (non-officer) The higher of: • One week of base pay per full year of credited service1; or • Nine months of base pay The longer of: • One week per full year of credited service1; or • Nine months XL3 (non-officer) The higher of: • One week of base pay per full year of credited service1; or • Six months of base pay The longer of: • One week per full year of credited service1; or • Six months 1 Up to a maximum of 52 weeks Executive Level Example This example shows the severance offer for four different eligible employees at Executive levels: Executive Level Credited Service COBRA Subsidy Period Officer other than CEO 9 months (9/12 of a year) One times base pay plus one times annual bonus target; 12-month COBRA Subsidy Period XL1 (non-officer) 10 years, 5 months One times base pay; 12-month COBRA Subsidy Period XL2 (non-officer) 25 years Nine months of base pay; nine-month COBRA Subsidy Period XL3 (non-officer) 40 years 40 weeks of base pay; 40-week COBRA Subsidy Period How Severance is Paid Severance will be paid in a lump sum within 60 days following termination (subject to any delay required by Section 409A of the Internal Revenue Code, as noted below). • The payment will in no event be made earlier than the end of any applicable revocation period following your execution of a waiver and release. • If you are subject to another severance arrangement that provides for “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code, then if such 60- day payment period begins in one calendar year and ends in a second calendar year, the lump sum payment will be made in the second calendar year.
Severance Pay Plan 7 | P a g e Impact on L3Harris Benefits Upon your termination, you will no longer be eligible to participate in the L3Harris benefit plans in accordance with their terms. If you are participating in the Medical, Dental or Vision Care Plans, or Health Care Flexible Spending Account (FSA), at the time of your termination, you will receive information about COBRA continuation rights that apply to you. You will be offered COBRA coverage at active employee rates during your COBRA Subsidy Period, upon signing your waiver and release and following the revocation period. If you elected COBRA continuation coverage under any applicable L3Harris plans and continue to be covered while receiving severance benefits from this Plan, after the COBRA Subsidy Period ends, you will be responsible for the full monthly cost of COBRA continuation coverage plus a 2% administrative fee. You also will remain eligible for Employee Assistance Program (EAP) benefits for a period following your termination, as required by COBRA. There is no cost to you for continued EAP coverage. For more information on COBRA, including considerations regarding having both Medicare and COBRA coverage, see “COBRA Continuation Coverage Notice” in the separate “Benefit Basics & Administration” section of the SPD. Outplacement Services You will be offered services in accordance with HR guidelines to assist you in finding new employment. You will be provided details about outplacement services with your waiver and release. Waiver and Release You will be required to execute a “waiver and release” in order to receive severance pay and COBRA coverage at active employee rates for the designated period and outplacement services. All severance offers are expressly conditioned on the execution of a waiver and release. The waiver and release must be signed and returned to L3Harris within 45 days following your termination (or such shorter period as determined by L3Harris and set forth in the waiver and release). Severance will not be paid, and the COBRA Subsidy Period and outplacement services will not be provided, if you revoke the waiver and release during any applicable revocation period. Death Benefits If you die before receiving any severance pay to which you are entitled, the unpaid amount will be paid in a lump sum to your beneficiary under the L3Harris Retirement Savings Plan. If you do not have a Retirement Savings Plan account, the unpaid amount will be paid to your Basic Life Insurance beneficiary, or in the absence of a Basic Life Insurance beneficiary, as outlined in the separate “Survivor and Accident Plans” section of the SPD. The payment will occur at a time determined by L3Harris, within 90 days following your death. CLAIMS AND APPEALS Contact your local Human Resources department in writing within 60 days of your termination if you believe you were eligible for but did not receive a severance offer, or if you received a severance offer but believe it was calculated incorrectly.
Severance Pay Plan 8 | P a g e The claim administrator will determine if your severance claim will be paid or denied. If the claim for benefits is denied, either in full or in part, the claim administrator will send you or your representative a notice within 90 days following the date the claim was received unless special circumstances apply that contains the specific reason(s) for denial, references to the pertinent plan provisions on which the decision was based, a description of any additional information or material needed to support the claim and an explanation of the claim administrator’s review procedure and the time limits applicable to this procedure (including legal rights if a claim is denied). See “Plan-by-Plan Appeal Process” in the separate “Benefit Basics & Administration” section of the SPD for more information on appeals. OTHER KEY INFORMATION Here is some additional information about the Severance Pay Plan: • L3Harris will automatically deduct from your severance payment all applicable withholdings for taxes and benefits and may also deduct any other amount that you owe L3Harris to the extent permitted by law. • Severance pay won’t be considered compensation for purposes of L3Harris retirement plans and, as a result, you will not be able to defer any portion of your severance pay into the L3Harris Retirement Savings Plan. • Severance pay received will not affect any other benefits to which you are entitled from any other plan, fund or program sponsored by L3Harris, except as specified in the terms of that plan, fund or program. • Except as otherwise communicated in writing in another plan or agreement approved by the L3Harris Board of Directors or designated body, this Severance Pay Plan is the only such plan sponsored by L3Harris. • L3Harris reserves the right at any time to amend, modify or terminate this Severance Pay Plan at its absolute discretion. If your employment is terminated due to an involuntary termination, you will receive only those benefits available under this plan at the time your employment actually is terminated. This Severance Pay Plan is not intended to provide “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code and shall be interpreted consistent with such intent. Nevertheless, in the event that any payment or benefit hereunder is determined to constitute “nonqualified deferred compensation,” subject to Section 409A, and the recipient is a “specified employee” (as defined in the L3Harris Specified Employee Policy for 409A Arrangements) on the date of the employee’s termination (the “termination date”), then no such payment or benefit shall be provided during the period beginning on the termination date and ending on the date that is 6 months following the termination date or, if earlier, on the date of the employee’s death, if the earlier providing of such payment or benefit would result in tax penalties being imposed on the employee under Section 409A of the Internal Revenue Code. The amount of any payment or benefit that otherwise would be paid to the employee under this Severance Pay Plan during this period instead shall be paid to the employee on the first business day coincident with or next following the date that is 6 months and 1 day following the termination date or, if earlier, within 90 days following the employee’s death. Each payment and benefit under this Severance Pay Plan shall constitute a “separately identified” amount within the meaning of Treasury Regulation §1.409A-2(b)(2).
Severance Pay Plan 9 | P a g e L3Harris Enrollment Center TO REACH BY TELEPHONE 1.844.892.6495 Hours: 8:30 a.m. to 5:30 p.m. (ET), business days TO REACH BY FAX 1.844.678.6679 TO REACH THE ENROLLMENT SITE Use the enrollment site SSO link on LHXcare.com or visit benefits.L3Harris.com.
Exhibit 15
Acknowledgment of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of L3Harris Technologies, Inc.:
We are aware of the incorporation by reference of our report dated October 29, 2026, relating to the unaudited condensed consolidated interim financial statements of L3Harris Technologies, Inc. that is included in its Form 10-Q for the quarter ended October 2, 2026, in the following Registration Statements of L3Harris Technologies, Inc.:
| Form S-3 | No. 333-293429 | L3Harris Technologies, Inc. Debt Securities, Preferred Stock, Common Stock, Depositary Shares and Warrants | ||||||||||||
| Form S-8 | No. 333-279040 | L3Harris Technologies, Inc. 2024 Equity Incentive Plan | ||||||||||||
| Form S-8 | No. 333-268794 | L3Harris Technologies, Inc. Retirement Savings Plan | ||||||||||||
| Form S-8 | No. 333-222821 | Harris Corporation Retirement Plan | ||||||||||||
| Form S-8 | No. 333-192735 | Harris Corporation Retirement Plan | ||||||||||||
| Form S-8 | No. 333-163647 | Harris Corporation Retirement Plan | ||||||||||||
| Form S-8 | No. 333-75114 | Harris Corporation Retirement Plan | ||||||||||||
| Form S-8 | No. 333-207774 | L3Harris Technologies, Inc. 2015 Equity Incentive Plan | ||||||||||||
/s/ Ernst & Young LLP
Orlando, Florida
October 29, 2026
Exhibit 31.1
CERTIFICATION
I, Sam Mehta, President and Chief Executive Officer of L3Harris Technologies, Inc., certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of L3Harris Technologies, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: October 29, 2026 | /s/ Sam Mehta | ||||||||||
| Name: | Sam Mehta | ||||||||||
| Title: | President and Chief Executive Officer | ||||||||||
Exhibit 31.2
CERTIFICATION
I, Ken Sharp, Senior Vice President and Chief Financial Officer of L3Harris Technologies, Inc., certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of L3Harris Technologies, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: October 29, 2026 | /s/ Ken Sharp | ||||||||||
| Name: | Ken Sharp | ||||||||||
| Title: | Senior Vice President and Chief Financial Officer | ||||||||||
Exhibit 32
Certification of Sam Mehta and Ken Sharp
Pursuant to Section 1350 of Chapter 63 of Title 18 of the
United States Code as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
In connection with the filing of the Quarterly Report on Form 10-Q of L3Harris Technologies, Inc. (“L3Harris”) for the three quarters ended October 2, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, Sam Mehta, President and Chief Executive Officer, and Ken Sharp, Senior Vice President and Chief Financial Officer, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of L3Harris as of the dates and for the periods expressed in the Report.
| Date: October 29, 2026 | /s/ Sam Mehta | ||||||||||
| Name: | Sam Mehta | ||||||||||
| Title: | President and Chief Executive Officer | ||||||||||
| /s/ Ken Sharp | |||||||||||
| Name: | Ken Sharp | ||||||||||
| Title: | Senior Vice President and Chief Financial Officer | ||||||||||