Item 1. BUSINESS.

General

L3Harris Technologies, Inc. is the Trusted Disruptor for the defense industry. With customers’ mission-critical

needs in mind, we deliver end-to-end technology solutions connecting the space, air, land, sea and cyber domains in

the interest of global 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 and services have defense and civil government applications, as well as

commercial applications.

Our fiscal year ends on the Friday nearest December 31. The fiscal year ended January 3, 2025 (“fiscal 2024”)

included 53 weeks and fiscal years ended December 29, 2023 (“fiscal 2023”) and December 30, 2022 (“fiscal

2022”) included 52 weeks. Unless the context otherwise requires, the terms “we,” “our,” “us,” “Company” and

“L3Harris” as used in this Report mean L3Harris Technologies, Inc. and its subsidiaries.

Description of Business Segments

We structure our operations primarily around the products, systems and services we sell and the markets we

serve, and we report our financial results in four operating segments, which are also our reportable segments or

business segments. From time to time, we acquire or divest businesses and strategically realign businesses within

and across our business segments to optimize existing capabilities and enhance the efficiency with which we

develop and deliver our products and services. Our business segments provide a wide-range of products, systems

and services to various customers and are described below. For financial information with respect to our business

segments, see Note 14: Business Segments in the Notes.

Space & Airborne Systems (“SAS”). Supplies full mission solutions as a prime and subsystem integrator in the

space, airborne 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:

Space Systems: Intelligence, surveillance and reconnaissance (“ISR”); position, navigation and timing; weather

and climate monitoring; missile defense and ground-based space surveillance networks.

Intel & Cyber: Situational awareness, optical networks and advanced wireless solutions for classified intelligence

and defense customers.

Mission Networks: Communications and networking solutions for air traffic management.

Airborne Combat Systems*:* Sensors, processors, hardened electronics, unmanned aircraft systems, precision

weapons, infrared search and tracking, distributed aperture systems and precision pointing, weapons release

systems; antennas for aircraft platforms; and threat warning and countermeasures for airborne, ground and

maritime platforms.

Integrated Mission Systems (“IMS”). Delivers differentiated mission capabilities and prime systems integration

to support intelligence, reconnaissance and surveillance (ISR), passive sensing and targeting, electronic attack,

autonomy, power and communications, networks and sensors. IMS specializes in system design, development,

integration, production, modernization and sustainment for national security and international customers in the

following business sectors:

ISR: Airborne passive sensing and targeting, mission systems development, integration and life-cycle

management for strategic reconnaissance, national command and control, tactical surveillance, electronic attack,

agile strike, mobility, and classified platforms.

Maritime: Power, electrical, imaging, communication and sensor systems for naval platforms; integrated

autonomous vessels for surface and undersea operations; fleet management; in-service support; missionization

prototyping; and naval integration.

Global Optical Systems: Multi-domain, multi-spectral electro-optical and infrared (EO/IR) sensor systems

supporting ISR and target acquisition missions; manufacturing of specialty laser and filter glass materials, laser

range finders, target designators and transmitters; and highly scalable autonomous solutions. On January 4, 2025,

we realigned our software solutions business from the ISR sector into Global Optical Solutions and renamed the

sector Targeting & Sensor Systems.

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Defense Electronics*:* Space communications and space flight avionics; 360-degree visible/midwave IR passive

surveillance; fuzing, navigation and range-testing solutions; and precision electronic components.

Commercial Aviation Solutions*:* Integrated aircraft avionics, pilot training and data analytics services for the

commercial aviation industry. At January 3, 2025, Commercial Aviation Solutions (“CAS disposal group”) was

classified as held for sale in our Consolidated Balance Sheet. See Note 13: Acquisitions and Divestitures in the Notes

for further information.

Communication Systems (“CS”). 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 U.S. Department of Defense (“DoD”), international, federal, and state agency customers in the following

business sectors:

Tactical Communications: Design, manufacture and sustainment of resilient and interoperable secure

communication solutions that include tactical radios, software, waveforms, satellite terminals and end-to-end

battlefield systems.

Broadband Communications: Design, manufacture and sustainment of resilient and secure communication

solutions that include ISR and tactical data links, software and integrated broadband networks.

Integrated Vision Solutions: Design, manufacture and sustainment of a full suite of helmet-mounted integrated

night vision goggles with leading-edge image intensifier tubes and weapon-mounted sights, aiming lasers, and range

finders.

Public Safety and Professional Communications: State-of-the-art communication equipment, systems and

applications for federal agencies, state and local government first responders, utilities and transit agencies.

Aerojet Rocketdyne (“AR”)**. Provides propulsion, power and armament products and systems to U.S.

Government, including the DoD, National Aeronautics and Space Administration ("NASA") and major aerospace and

defense prime contractors in the following business sectors:

Missile Solutions: Propulsion technologies and armament systems for strategic defense, missile defense,

hypersonic and tactical systems.

Space Propulsion and Power Systems: Premier propulsion and power systems for national security, space and

exploration missions.

International Business

In fiscal 2024, revenue from products and services where the end consumer is located outside the U.S.,

including foreign military sales funded through the U.S. Government, whether directly or through prime contractors,

was $4.4 billion (21% of our revenue) and came from a large number of countries with no single foreign country

accounting for more than 5% of our total revenue. For financial information regarding our domestic and international

operations, including long-lived assets, see Note 14: Business Segments in the Notes.

The majority of our international marketing activities are conducted through subsidiaries that operate in the

Europe, Middle East and Africa (“EMEA”) and Asia-Pacific (“APAC”) regions and Canada. We also have established

international marketing organizations and several regional sales offices.

Competitive Conditions and Trends in Market Demand

We operate in highly-competitive markets that are sensitive to technological advances. Some of our competitors

in each of our markets are larger than we are and can maintain higher levels of expenditures for research and

development (“R&D”). We concentrate on the opportunities that we believe are compatible with our resources,

overall technological capabilities and objectives. We also collaborate with innovative partners, such as our strategic

partnerships with Palantir Technologies and Shield Capital to develop new capabilities to meet the demands of our

customers. Such collaboration is required by modern market dynamics where competing in our markets requires the

ability to fuse hardware, software and artificial intelligence (“AI”). Principal competitive factors are product and

system quality and reliability; technological capabilities; service; past performance; ability to develop and

implement complex, integrated solutions; ability to meet delivery schedules; and cost-effectiveness. We frequently

“partner” or are involved in subcontracting and teaming relationships with companies that are, from time to time,

competitors on other programs. We compete domestically and internationally against large defense companies;

principally BAE Systems, Boeing, General Dynamics, Lockheed Martin, Northrop Grumman, RTX, Thales and non-

traditional defense contractors. For further discussion of trends in market demand, see “Item 7. Management’s

Discussion and Analysis of Financial Condition and Results of Operations” of this Report.

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Backlog

Company-wide total backlog was $34.2 billion and $32.7 billion at January 3, 2025 and December 29, 2023,

respectively. We expect to recognize approximately 45% of the revenue associated with Company-wide total

backlog by the end of fiscal 2025 and approximately 75% of the revenue associated with Company-wide total

backlog by the end of fiscal 2026, with the remainder to be recognized thereafter. See Note 1: Significant Accounting

Policies in the Notes for additional information regarding Company-wide total backlog.

R&D

We conduct R&D activities using our own funds (company-funded R&D) and under contractual arrangements

(customer-funded R&D). See Note 1: Significant Accounting Policies in the Notes for further information on company-

funded R&D.

Intellectual Property

We own a large portfolio of patents, trade secrets, know-how, confidential information, trademarks, copyrights

and other intellectual property and we routinely apply for new patents, trademarks and copyrights. We also license

intellectual property to and from third parties. With regard to certain patents, the U.S. Government has an

irrevocable, non-exclusive, royalty-free license, pursuant to which the U.S. Government may use or authorize others

to use the inventions covered by such patents. Pursuant to similar arrangements, the U.S. Government may consent

to our use of inventions covered by patents owned by other persons. Numerous trademarks used on or in connection

with our products are also considered to be valuable assets.

Government Regulations

Our company is subject to various federal, state, local and international laws and regulations relating to the

development, manufacture, sale and distribution of our products and services, and it is our policy to comply with the

applicable laws in each jurisdiction in which we conduct business. Regulations include, but are not limited to, those

related to import and export controls, corruption, bribery, the protection of the environment, government

procurement, competition, product safety, workplace health and safety, employment, labor and data privacy. The

following describes significant regulations that may impact our businesses. For further discussion of risks relating to

government regulations, see “Item 1A. Risk Factors” of this Report.

Government Contracts. In fiscal 2024, 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 76% and no other customer accounted for more than 5% of our revenue.

Additional information regarding customers for each of our segments is provided under “Item 1. Business —

Description of Business Segments” of this Report.

Cost-type contracts. Our U.S. Government cost-reimbursable contracts provide for the reimbursement of

allowable costs plus payment of a fee and fall into three basic types: (i) cost-plus fixed-fee contracts, which provide

for payment of a fixed fee irrespective of the final cost of performance; (ii) cost-plus incentive-fee contracts, which

provide for payment of a fee that may increase or decrease, within specified limits, based on actual results

compared with contractual targets relating to factors such as cost, performance and delivery schedule; and (iii) cost-

plus award-fee contracts, which provide for payment of an award fee determined at the customer’s discretion based

on our performance against pre-established performance criteria. Under our U.S. Government cost-reimbursable

contracts, we are reimbursed periodically for allowable costs and are paid a portion of the fee based on contract

progress. Some costs are partially or wholly unallowable for reimbursement by statute or regulation. Examples

include certain merger and acquisition costs, lobbying costs, charitable contributions, interest expense, financing

costs and certain litigation defense costs.

Fixed-price contracts. Our U.S. Government fixed-price contracts are either firm fixed-price contracts or fixed-

price incentive contracts. Under our U.S. Government firm fixed-price contracts, we agree to perform a specific

scope of work or sell a specific product for a fixed price and, as a result, benefit from cost savings or carry the

burden of cost overruns. Under our U.S. Government fixed-price incentive contracts, we share with the

U.S. Government both savings accrued for performance at less than target cost as well as costs incurred in excess of

target cost up to a negotiated ceiling price, which is higher than the target cost, but carry the entire burden of costs

exceeding the negotiated ceiling price. Under such incentive contracts, profit may also be adjusted up or down

depending on whether specified performance objectives are met. Under our U.S. Government firm fixed-price and

fixed-price incentive contracts, we generally receive either milestone payments totaling 100% of the contract price

or monthly progress payments in amounts equaling 80% of costs incurred under the contract. The remaining

amounts, including profits or incentive fees, are billed upon delivery and final acceptance of end items and

deliverables under the contract.

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Our production contracts are mainly fixed-price contracts and development contracts are generally cost-

reimbursable contracts, although we have some fixed-price development contracts. Time-and-material contracts

are considered fixed-price contracts as they specify a fixed hourly rate for each labor hour charged.

For further discussion of risks relating to U.S. Government contracts, see “Item 1A. Risk Factors,” “Item 3.

Legal Proceedings” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations” of this Report.

Environmental. Our operations are subject to and affected by U.S. federal, state, local and foreign laws and

regulations relating to the protection of the environment. We have incurred and, based on currently available

information, we expect to continue to incur capital and operating costs to comply with existing and pending

environmental laws and regulations. See “Item 1A. Risk Factors” and “Item 3. Legal Proceedings” of this Report and

Note 1: Significant Accounting Policies and Note 15: Legal Proceedings, Commitments and Contingencies in the Notes.

Materials, Suppliers and Seasonality

Because of the diversity of our products and services, as well as the wide geographic dispersion of our facilities,

we use numerous sources for the wide array of materials, such as electronic components, printed circuit boards,

metals and plastics needed for our operations and products. We depend on suppliers and subcontractors for a large

number of components and subsystems. We also rely on a limited number of certified microelectronics component

suppliers for our products. We have experienced component shortages from vendors as a result of the global

pandemic, natural disasters, or the shifting regulatory landscape. These events or regulations may cause a spike in

demand for certain electronic components resulting in industry-wide supply chain disruptions. For further

discussion of risks relating to subcontractors and suppliers, see “Item 1A. Risk Factors” of this Report.

We do not consider any material portion of our business to be seasonal. Various factors can affect the

distribution of our revenue between accounting periods, including the timing of contract awards and the timing and

availability of U.S. Government funding, as well as the timing of product deliveries and customer acceptance.

Human Capital and Sustainability

Our success depends on our skilled workforce. Attracting, developing, motivating and retaining highly-skilled

people, particularly those with technical, engineering and science backgrounds, and in many cases, security

clearances, is critical to our ability to execute our strategic priorities. We use human capital measures to set goals

and monitor performance in several areas, including health and safety and talent.

Additional information regarding our human capital strategy and sustainability goals are available in our 2024

Sustainability Report which we expect to be published in fiscal 2025 on our company website. Information on our

website, including our 2024 Sustainability Report, is not incorporated by reference into this Report.

Workforce Demographics. We had approximately 47,000 employees at January 3, 2025, including

approximately 18,000 engineers and scientists. Of our total employees, 89% were located in the U.S. As of

January 3, 2025, approximately 2,600, or 6%, of our U.S. employees were covered by various collective bargaining

agreements, which we expect will be renegotiated as they expire, as we historically have done without significant

disruption to operating activities.

Health and Safety. We prioritize the safety of our employees through maintaining a proactive safety culture and

implementing programs designed to eliminate workplace incidents, risks and hazards. Throughout the year, we

review and monitor our performance closely to reduce Occupational Safety and Health Administration reportable

incidents.

Talent Strategy. We are focused on ensuring we maintain a balanced talent portfolio. Attracting new

perspectives, ideas and capabilities, recognizing and rewarding performance, offering professional development and

career growth opportunities, and providing an engaging employee experience that retains talent are strategic

priorities. We strive to attract employees in all stages of their careers.

We hired approximately 4,500 new employees in fiscal 2024. We offer competitive salaries and comprehensive

benefit packages, including health care, retirement planning and employer retirement contributions, educational

assistance, child and elder back-up care, paid parental leave, and a discretionary paid time off program.

Sustainability*.* During fiscal 2024, we updated our environmental sustainability goals: by 2030 we plan to

reduce our Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions by 60%, water usage by 20%, solid waste by

10% from 2021 levels and source 40% of our electricity from renewable sources.

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Available Information

Our principal executive offices are located at 1025 West NASA Boulevard, Melbourne, Florida 32919. Our

website address is https://www.l3harris.com.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, proxy statements, current reports on Form 8-

K and amendments to such reports are available free of charge on our website https://www.l3harris.com/investors,

as soon as reasonably practicable after these reports are electronically filed with or furnished to the U.S. Securities

and Exchange Commission (“SEC”). We also will provide the reports in electronic or paper form, free of charge, upon

written request. Our website and the information posted thereon are not incorporated into this Report or any current

or other periodic report that we file with or furnish to the SEC.

Cautionary Statement Regarding Forward-Looking Statements

This Report, including “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations,” contains forward-looking statements that involve risks and uncertainties, as well as assumptions that

may not materialize or prove correct, which could cause our results to differ materially from those expressed in or

implied by such forward-looking statements. All statements other than statements of historical fact are statements

that could be deemed forward-looking statements, including, but 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; future political conditions; the outcome of contingencies or

litigation; environmental remediation cost estimates; the potential level of share repurchases, dividends or pension

contributions; potential acquisitions or divestitures; the integration of our acquisitions; the value of contract awards

and programs; expected revenue; expected cash flows or capital expenditures; our beliefs or expectations;

activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the

future; and assumptions underlying any of the foregoing. Forward-looking statements may be identified by their use

of forward-looking terminology, such as “believes,” “expects,” “may,” “could,” “should,” “would,” “will,” “intends,”

“plans,” “estimates,” “anticipates,” “projects” and similar words or expressions. You should not place undue

reliance on these forward-looking statements, which reflect our management’s opinions only as of the date of filing

of this Report and are not guarantees of future performance or actual results. Factors that might cause our results to

differ materially from those expressed in or implied by these forward-looking statements, from our current

expectations or projections or from our historical results include, but are not limited to, those discussed in “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations,” most notably those listed

in the following section of this Report. All forward-looking statements are qualified by, and should be read in

conjunction with, those risk factors. Forward-looking statements are made in reliance on the safe harbor provisions

of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities

Exchange Act of 1934, as amended (the “Exchange Act”), and are made as of the date of filing of this Report, and we

disclaim any intention or obligation, other than imposed by law, to update or revise any forward-looking statements,

whether as a result of new information, future events or developments or otherwise, after the date of filing of this

Report or, in the case of any document incorporated by reference, the date of that document.