1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form l0-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION l3 or l5(d)
OF THE SECURITIES EXCHANGE ACT OF l934
For the quarterly period ended October 1, 1999
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 l-3863
HARRIS CORPORATION
======================================================
(Exact name of registrant as specified in its charter)
Delaware 34-0276860
=============================== ====================================
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
l025 West NASA Boulevard
Melbourne, Florida 329l9
==================================================
(Address of principal executive offices)(Zip Code)
(321) 727-9l00
===================================================
(Registrant's telephone number, including area code)
====================
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5 (d) of the Securities Exchange Act of l934
during the preceding l2 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.
Yes X No
---- ----
The number of shares outstanding of the registrant's common stock, as of
November 1, 1999 was 79,068,788 shares.
2
PART I. FINANCIAL INFORMATION
-----------------------------
Item 1. Financial Statements.
- -----------------------------
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(unaudited)
The following information for the quarters ended October 1, 1999 and October 2,
1998 has not been audited by independent accountants, but in the opinion of
management reflects all adjustments (consisting only of normal, recurring items)
necessary for a fair presentation of the results for the indicated periods. The
results of operations for the quarter ended October 1, 1999 are not necessarily
indicative of the results for the full fiscal year.
Quarter Ended
------------------------
October 1, October 2,
1999 1998
------------ ----------
(In millions, except per
share amounts)
Revenue
Revenue from product sales and services $398.8 $412.6
Costs and Expenses
Cost of product sales and services 299.5 302.6
Engineering, selling and
administrative expenses 92.0 86.5
Special charge for litigation costs - 20.6
Other income (7.4) (5.9)
------ ------
384.1 403.8
Operating income 14.7 8.8
Interest income 1.3 5.3
Interest expense (1.7) (2.8)
------ ------
Income from continuing operations
before income taxes 14.3 11.3
Income taxes 5.0 4.1
------ ------
Income from continuing operations 9.3 7.2
Discontinued operations net of income taxes (8.0) 21.2
------ ------
Net Income $ 1.3 $ 28.4
====== ======
Net Income (Loss) Per Common Share
Basic:
Continuing operations $ .12 $ .09
Discontinued operations (.10) .27
------ ------
$ .02 $ .36
====== ======
Diluted:
Continuing operations $ .12 $ .09
Discontinued operations (.10) .27
------ ------
$ .02 $ .36
====== ======
Cash Dividends Paid Per Common Share $ .24 $ .24
====== ======
Average Shares Outstanding
Basic 79.2 79.5
====== ======
Diluted 79.4 79.9
====== ======
See Notes to Financial Statements
(2)
3
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
October 1, July 2,
1999 1999
(unaudited) (audited)
----------- ---------
ASSETS (In millions)
Current Assets
Cash and cash equivalents $ 251.7 $ 85.7
Marketable securities 31.8 15.5
Receivables - net, less allowance for collection
losses of $20,600,000 at October 1, 1999 and
$21,900,000 at July 2, 1999 406.1 411.7
Unbilled costs and accrued earnings on fixed price contracts
based on percentage-of-completion accounting, less progress
payments of $177,800,000 at October 1, 1999 and
$171,100,000 at July 2, 1999 168.7 184.4
Inventories:
Work in process and finished products 101.9 100.7
Raw materials and supplies 108.2 105.0
-------- --------
210.1 205.7
Deferred income taxes 144.8 128.4
-------- --------
Total Current Assets 1,213.2 1,031.4
Plant and equipment, less allowances for depreciation of
$538,300,000 at October 1, 1999 and $524,300,000 at
July 2, 1999 302.7 291.6
Non-current notes receivable 93.3 13.5
Intangibles resulting from acquisitions 82.2 72.8
Net assets of discontinued operations 729.2 1,293.2
Other assets 260.2 256.1
-------- --------
$2,680.8 $2,958.6
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 247.8 $ 323.7
Accounts payable 120.1 154.3
Compensation and benefits 71.6 103.2
Other accrued items 111.0 113.9
Advance payments and unearned income 93.4 84.9
Income taxes 13.0 26.8
Current portion of long-term debt - .5
-------- --------
Total Current Liabilities 656.9 807.3
Deferred income taxes 54.3 47.3
Long-term debt 415.0 514.5
Shareholders' Equity
Capital stock:
Preferred Stock, without par value:
Authorized - 1,000,000 shares; issued - none - -
Common Stock, par value $1 per share:
Authorized - 250,000,000 shares; issued 79,056,746 shares
at October 1, 1999 and 79,650,994 at July 2, 1999 79.1 79.7
Other capital 267.6 271.5
Retained earnings 1,217.4 1,246.7
Unearned compensation (6.5) (4.0)
Accumulated other comprehensive loss (3.0) (4.4)
-------- --------
Total Shareholders' Equity 1,554.6 1,589.5
-------- --------
$2,680.8 $2,958.6
======== ========
See Notes to Financial Statements
(3)
4
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
Quarter Ended
------------------------
October 1, October 2,
1999 1998
---------- ----------
(In millions)
OPERATING ACTIVITIES
Income from continuing operations $ 9.3 $ 7.2
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization 15.9 15.2
Non-current deferred income tax 7.0 4.9
Income from discontinued operations-net
of items not affecting cash 24.1 43.2
(Increase) decrease in:
Accounts and notes receivable 7.0 (6.6)
Unbilled costs and inventories 13.3 29.4
Increase (decrease) in:
Accounts payable and accrued expenses (74.8) (53.8)
Advance payments and unearned income 7.9 (2.7)
Income taxes (30.2) (59.1)
Other (27.3) (20.2)
------- ------
Net cash used in operating activities (47.8) (42.5)
INVESTING ACTIVITIES
Cash paid for acquired businesses (5.1) -
Additions of plant and equipment (24.8) (13.4)
Net assets of discontinued operations 451.9 (34.4)
------- ------
Net cash provided by (used in) investing
activities 422.0 (47.8)
FINANCING ACTIVITIES
Increase (decrease) in short-term debt (76.3) 46.2
Increase (decrease) in long-term debt (99.5) -
Proceeds from sale of Common Stock 1.0 .8
Purchase of Common Stock for treasury (14.5) -
Cash dividends (19.1) (19.2)
------- ------
Net cash (used in) provided by financing
activities (208.4) 27.8
------- -------
Effect of exchange rate changes on cash and cash
equivalents .2 1.7
------- ------
Net increase (decrease) in cash and cash
equivalents 166.0 (60.8)
Cash and cash equivalents, beginning of year 85.7 101.5
------- ------
Cash and cash equivalents, end of quarter $ 251.7 $ 40.7
======= ======
See Notes to Financial Statements
(4)
5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
October 1, 1999
Note A -- Basis of Presentation
- -------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, and changes in cash flows in conformity with generally accepted
accounting principles. For further information refer to the financial statements
and notes to financial statements included in the Corporation's Annual Report on
Form 10-K for the fiscal year ended July 2, 1999.
Note B -- Discontinued Operations
- ---------------------------------
In fiscal 1999, Harris decided to sell its semiconductor business and spin off
its Lanier Worldwide subsidiary. Accordingly, the results of operations and the
net assets of these business segments have been reclassified as discontinued
operations.
On August 13, 1999, Harris completed the sale of substantially all of its
semiconductor business to Intersil Corporation and its affiliates. Intersil
Corporation is a newly formed company owned by Sterling Holding Company, LLC, a
Citicorp Venture Capital Ltd. investment portfolio company, along with certain
management investors, and affiliates of Credit Suisse First Boston Corporation.
The Harris assets disposed of consisted primarily of land, buildings, equipment,
inventory, receivables, technology and other assets related to the operation of
the semiconductor business.
In addition to acquiring a 10 percent equity interest in Intersil for which
Harris paid $9 million, Harris received cash of $520 million, a promissory note
of $90 million and Intersil assumed certain liabilities. Harris has also
retained certain receivables and patent rights. Harris recorded an after-tax
loss of $73.5 million for the disposal of its entire semiconductor business
including the portion sold to Intersil. The promissory note received from
Intersil has been classified on the balance sheet as a non-current note
receivable and is being accounted for as a security that is available for sale.
Also, see Note F - Subsequent Events for recent developments related to the
spin-off of the Lanier Worldwide subsidiary.
Summarized financial information for the discontinued operations follows:
Quarter Ended
(in millions) October 1, 1999 October 2, 1998
- ------------------------------------------------------------------------------------
Net sales $371.2 $475.8
====== ======
Income before taxes $ 6.7 $ 31.8
Income taxes 2.5 10.6
------ ------
Income from discontinued operations 4.2 21.2
Provision for disposal of discontinued
operations after income tax benefits of
$6.1 million (12.2) -
------ ------
Discontinued operations net of income taxes $ (8.0) $ 21.2
====== ======
(5)
6
Period Ended
(in millions) October 1, 1999 July 2, 1999
- ------------------------------------------------------------------------------------
Current assets $ 545.2 $ 930.6
Total assets 1,143.0 1,994.5
Current liabilities 429.5 660.8
Total debt 146.5 149.8
Total liabilities 449.1 743.2
Accumulated comprehensive income (loss) (35.4) (41.9)
Net assets of discontinued operations $ 729.3 $1,293.2
Note C -- Comprehensive Earnings and Accumulated Other Comprehensive Income
- ---------------------------------------------------------------------------
Comprehensive earnings for the quarters ended October 1, 1999 and October 2,
1998 were $2.7 million and $9.2 million, respectively.
The components of accumulated other comprehensive loss, net of related tax, at
October 1, 1999 and July 2, 1999 are as follows:
October 1, July 2,
(in millions) 1999 1999
-----------------------------------------------------------------
Net unrealized gains on securities
available-for-sale $ 11.5 $ 7.3
Foreign currency translation adjustments (14.5) (11.7)
------ ------
$ (3.0) $ (4.4)
====== ======
Note D -- Net Income Per Share
- ------------------------------
Average outstanding shares used in the computation of net income per share are
as follows:
Quarter Ended
October 1, October 2,
(in millions) 1999 1998
----------------------------------------------------------------------------
Basic:
Weighted average shares outstanding 79.5 80.0
Contingently issuable shares (.3) (.5)
---- ----
79.2 79.5
==== ====
Diluted:
Weighted average shares outstanding 79.5 80.0
Dilutive stock options .1 .2
Contingently issuable shares (.2) (.3)
---- ----
79.4 79.9
==== ====
Note E -- Restructuring
- -----------------------
In fiscal 1999, Harris recorded a $5.1 million charge ($3.3 million after income
taxes) for severance costs associated with the restructuring of its operations.
Restructuring actions included a work force reduction of approximately 738
employees. At October 1, 1999, 478 employees have been terminated with the
remainder to be terminated before the end of fiscal 2000.
Reserve usage for the quarter ended October 1, 1999 is summarized below:
Use of Reserves
Reserve Balance ----------------- Reserve Balance
(in millions) at July 2, 1999 Cash Non-Cash at October 1, 1999
- ------------------------------------------------------------------------------------
Severance benefits $5.1 $1.9 - $3.2
(6)
7
Note F - Subsequent Events
- --------------------------
On October 22, 1999, Harris announced that its Board of Directors formally
approved the spin-off of its Lanier Worldwide subsidiary as an independent
publicly traded company. The Board declared a dividend of one share of Lanier
common stock for each share of Harris common stock to Harris shareholders of
record on November 1, 1999. The distribution of the dividend was completed on
November 5, 1999. Harris retained approximately 10 percent of the outstanding
shares of Lanier. Lanier trades on the New York Stock Exchange under the symbol
"LR".
Harris also announced that its Board of Directors authorized the repurchase of
up to 15 million shares of Harris common stock. These repurchases may be made in
the open-market, in negotiated or block transactions or pursuant to tender
offers.
(7)
8
Item 2. Management's Discussion and Analysis of Financial Condition and
-----------------------------------------------------------------------
Results of Operations.
----------------------
RESULTS OF OPERATIONS
In April 1999, Harris announced that it intended to spin off its Lanier
Worldwide, Inc. subsidiary as an independent, publicly owned company.
Additionally, in April 1999, Harris announced a plan to sell its
semiconductor power business and, in an effort to maximize the value to
the Company of the semiconductor operations, in June 1999, the board of
directors approved the sale of the entire semiconductor business. The
sale of the semiconductor business was completed on August 13, 1999. The
spin-off of Lanier was completed on November 5, 1999. As a result of
these actions, the Lanier and semiconductor businesses are presented
as discontinued operations for all periods presented. Continuing
operations are reported under two segments: the Government Communications
segment, which is comprised of the operations of the former Electronic
Systems Sector, and the Commercial Communications segment, which is
comprised of the operations of the former Communications Sector. The
following discussion is on a continuing operations basis.
NET REVENUE AND OPERATING INCOME Net revenue for the first quarter of
fiscal 2000 of $398.8 million was 3.3 percent lower than the same period
last year. Fiscal 1999 first quarter results included a $20.6 million
($13.6 million after tax) provision related to a patent litigation
settlement. Excluding the prior year's special charge for litigation,
operating income and income from continuing operations decreased by 50.0
percent and 55.3 percent respectively, from the same period last year.
Segment revenue and operating income were as follows:
Quarter Ended
--------------------------------
October 1, October 2, Percent
1999 1998 Inc./(Dec.)
-------- -------- -------------
(In Millions)
REVENUE
Government Communications $ 195.3 $ 211.2 (8)
Commercial Communications 203.5 201.4 1
-------- --------
Total $ 398.8 $ 412.6 (3)
======== ========
OPERATING INCOME
Government Communications $ 11.8 $ 14.2 (17)
Commercial Communications 2.1 (8.6)(1) ---
Headquarters Expense (6.6) (2.7) 144
Other Income 7.4 5.9 25
-------- --------
Total $ 14.7 $ 8.8 67
======== ========
<FN>
(1) Includes $20.6 million special charge for a litigation settlement.
Revenue in the Government Communications segment was $195 million or 8
percent lower than last year's first quarter, while segment operating
income decreased 17 percent to $11.8 million. Lower revenue and operating
income reflect the continuing impact of lower government spending.
Despite improved operating margins on more recent contract wins, margin
pressure in the first quarter compared to prior year continues to reflect
the completion of substantially poorer performing older contracts. Recent
wins and evidence of increased opportunities provide encouragement that
Harris' government business is showing signs of improvement.
Revenue in the Commercial Communications segment of $204 million was 1
percent higher than last year's comparable quarter while operating income
declined to $2.1 million from $12.0 million in the prior period after
excluding the $20.6 million provision described above. Sales growth
in broadcast products and tactical radio products was overshadowed by the
significant decline in microwave sales. The reduction in operating income
was primarily due to a significant decline in microwave sales and margins.
Although less severe than in the fourth quarter of fiscal 1999, pricing
pressures from industry-wide overcapacity continue to erode microwave
margins.
(8)
9
Unfavorable product mix and unit volume decline which resulted from
delayed orders, together with new product introductions, also contributed
to the decline in microwave margins. Domestic demand and some
strengthening in international markets for TV and radio equipment drove
growth in broadcast products. New product roll-outs and strengthening
international markets helped drive strong growth for tactical radio
products. Growth also continued in line test systems and other network
support products, while demand for switching products remained weak.
COST OF REVENUE. Cost of revenue as a percentage of net revenue was 75.1
percent in the first quarter compared to 73.3 percent for the
comparable prior year period. The increase in the cost ratio was due to
reduced gross margins in the RF Communications and Microwave portions of
the Commercial Communications segment. The exceptionally strong prior
year first quarter gross margin in RF Communications, which related to
favorable program close-outs, was the most significant contributor to the
decline in gross margin from the prior year first quarter.
OPERATING EXPENSES. Engineering, selling, and administrative expenses as
a percentage of net revenue increased to 23.1 percent in the first
quarter from 21.0 percent in last year's first quarter. The increase in
the operating expense ratio was due to higher research and development
and marketing spending as well as higher administrative expenses
resulting from the repositioning effort. Although implementation costs
were incurred in the first quarter of fiscal 2000, the benefits of the
recent repositioning efforts to reduce costs have not been fully
realized.
OTHER INCOME. Other income was $1.5 million higher in the first quarter
due to higher royalty income, which was partially offset by lower
equity income from joint ventures and equity investments.
INTEREST. Interest income was lower in the first quarter of fiscal 2000
when compared to the first quarter of fiscal 1999 because first
quarter fiscal 1999 included interest earned on amounts due from the
Internal Revenue Service. Interest expense decreased in the first quarter
of fiscal 2000, due to lower average borrowings. Lower borrowings
resulted primarily from the repayment of debt with the proceeds of the
sale of the semiconductor business.
INCOME TAXES. The provision for income taxes as a percentage of pretax
income was 35.0 percent in the first quarter and 36.0 percent in the
prior year's comparable period. The statutory federal income tax rate for
both periods was 35.0 percent. Both periods benefited from tax rates on
foreign source income and export sales, which offset the additional
provision needed for state income taxes.
Income from continuing operations as a percentage of revenue was 2.3
percent for the first quarter of fiscal 2000, and 1.7 percent for
last year's first quarter for the previously stated reasons.
LIQUIDITY AND FINANCIAL POSITION
Working capital increased from $224.1 million at July 2, 1999, to $556.3
million at the end of the first quarter largely due to cash received from
the sale of substantially all of the Company's semiconductor operation.
The cash received from the sale of the semiconductor business to Intersil
was $520 million. Also, approximately $546 million was received from
Lanier in connection with the spin-off of Lanier which was completed on
November 5, 1999. Harris plans to use this cash to reduce indebtedness
and for other general corporate purposes including acquisitions and
repurchases of the Company's Common Stock. Harris' Board of Directors has
approved a share repurchase program which authorizes the repurchase of up
to 15,000,000 shares through open market transactions, in negotiated or
block transactions or pursuant to tender offers. As a result of the
spin-off, the $146.5 million debt classified in net assets from
discontinued operations will also be lowered as Lanier is responsible for
such debt. Also, see Note F Subsequent Events for recent developments
related to the spin-off of the Lanier Worldwide subsidiary and stock
repurchases. Capital expenditures are up substantially from last year's
first quarter due to the purchase of a new headquarters building for the
Company's Broadcast Communications products in Mason, Ohio. Total capital
expenditures for Harris in fiscal 2000, including expenditures for
customer rental equipment, are expected to be approximately $80 million.
(9)
10
The Year 2000 statements set forth below are designated as "Year 2000
Readiness Disclosures" pursuant to the Year 2000 Information and Readiness
Disclosure Act.
Certain software and hardware systems are time sensitive. Older
time-sensitive systems often use a two-digit dating convention (e.g., "00"
rather than "2000") that could result in system failure and disruption of
operations as the year 2000 approaches. The Year 2000 problem will impact
Harris, its vendors and suppliers, customers, and other third parties that
interface with Harris.
With regard to the Year 2000 problem, 235 project initiatives of varying
magnitudes have been identified throughout Harris and its continuing
businesses. These initiatives relate to four basic aspects of Harris and
its business operations: (1) internal information technology systems,
including sales order processing, contract management, financial systems,
and service management; (2) internal non-information technology systems,
including office equipment and test equipment; (3) products and services;
and (4) material third-party relationships. Each project has been assigned
a leader and prioritized based on the size of the task and the perceived
business risk. A steering team comprised of senior management in key
functional areas including accounting, finance, legal, quality and new
processes, and information management, has been established to monitor and
oversee the progress of each project. Almost all of these projects have
been completed, including projects with the greatest complexity and
impact.
INTERNAL INFORMATION TECHNOLOGY SYSTEMS. Harris is in the process of
replacing or outsourcing many of its time-sensitive software systems and
has software programs for reprogramming other time-sensitive software and
equipment.
INTERNAL NON-INFORMATION TECHNOLOGY SYSTEMS. Harris believes that a
limited number of its non-information technology systems, such as office
equipment and machinery, and date-sensitive software and embedded
microprocessors may be affected. Harris believes that the exposure related
to non-information technology is minimal and disruption of any of these
systems will not materially inhibit Harris' ability to conduct business
operations.
PRODUCTS. Harris has implemented formal programs to advise and work with
customers to resolve Year 2000 problems. However, Harris believes it has
no material exposure to contingencies related to the Year 2000 issue for
the products it has sold. Harris has Year 2000 exposure in its operating
systems and business systems including engineering, manufacturing, order
fulfillment, program management, financial, and administrative functions.
The greatest potential risk from the Year 2000 issue could be Harris'
inability to meet commitment dates on delivery of products. Harris has
focused the majority of its efforts and dedicated resources to address
this issue. In addition, Harris believes that a limited number of
non-information technology systems, such as manufacturing machinery,
equipment, and test equipment with date-sensitive software and embedded
microprocessors, may be affected and final remediation is essentially
complete.
MATERIAL THIRD-PARTY RELATIONSHIPS. Harris also initiated communications
with significant suppliers, customers, and other relevant third parties to
identify and minimize disruptions to operations and to assist in resolving
Year 2000 issues. However, there can be no certainty that the systems and
products of companies on which Harris relies will not have an adverse
effect on Harris' operations.
Harris believes it is diligently addressing the Year 2000 issues and will
satisfactorily resolve significant Year 2000 problems. Final remediation
action is approaching closure on certain secondary projects and is
scheduled for completion prior to the end of the second quarter of fiscal
2000. Although all projects are scheduled for near-term completion,
general and specific contingency plans and carefully designed calendar
year-end cut over procedures are being finalized to mitigate risks. The
estimated cost incurred for resolving Year 2000 issues was approximately
$20 million for continuing businesses. These costs were generally not
incremental to existing information
(10)
11
technology budgets. The largest portion of this expenditure was used to
replace existing software and hardware. Estimates of Year 2000 related
costs are based on numerous assumptions, and there is no certainty that
estimates will be achieved. Actual costs could be materially greater than
anticipated due to unanticipated internal or external exposures or
uncertainties.
Harris is working to identify and analyze the most likely worst-case
scenarios, any of which could have a material adverse effect on Harris'
ability to provide products and services to its customers. These possible
scenarios include the failure of water and power supplies, the failure of
communications and financial systems, major transportation disruptions,
and lack of Year 2000 readiness of third-party vendors and customers.
Harris continues to develop contingency plans to address potential Year
2000 problems relating to the infrastructure and Harris' business
partners. These plans are nearing completion. Despite such efforts, an
infrastructure problem or combination of the above-mentioned Year 2000
problems not within Harris' control could have a material adverse impact
on Harris' business and its results of operations.
EURO CONVERSION
On January 1, 1999, certain members of the European Economic and Monetary
Union adopted a common currency, the Euro. The adoption of the Euro
affected a multitude of financial and business applications within Harris.
Programs to address changes needed to comply with all laws and regulations
are complete and Harris did not experience an adverse impact or material
expense related to the adoption of the Euro. Costs associated with these
programs were expensed as incurred and are not expected to be material to
results of operations, financial condition or liquidity.
OUTLOOK
Harris believes that revenue will be relatively flat and that income will
be significantly lower than the prior year in the second quarter of fiscal
2000. Harris also believes that the second half of the fiscal year will
show increases over comparable prior year periods.
(11)
12
FORWARD-LOOKING STATEMENTS
This report contains, and certain of Harris' other public documents and
statements contain and will contain, forward-looking statements that
reflect management's current expectations, assumptions and estimates of
future performance and economic conditions. Such statements are made in
reliance on the safe harbor provisions of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Harris
cautions investors that any forward-looking statements are subject to
risks and uncertainties that may cause actual results and future trends to
differ materially from those projected, stated, or implied by such
forward-looking statements. When used herein, the words "will",
"anticipate", "believes", "estimate", "expect", "objective", and similar
expressions are intended to identify forward-looking statements.
Harris' consolidated results and the forward-looking statements could be
affected by, among other things, general economic conditions in the
markets in which Harris operates; economic developments that have a
particularly adverse effect on one or more of the markets served by
Harris; the ability to execute management's repositioning as a pure
communications company; the ability to realize cost savings from Harris'
internal reorganization; stability of key markets for communications
products, particularly Asia and Brazil; fluctuations in foreign currency
exchange rates and the effectiveness of the Company's currency hedging
program; reductions in the U.S. and worldwide defense and space budgets;
continuing consolidation in the U.S. defense industry; Harris' ability to
receive contract awards; continued development and market acceptance of
new products, especially digital television broadcast products and
broadband wireless access products; continued success of the Company's
patent licensing programs; the ability of Harris, its customers, and
suppliers to become Year 2000 compliant; and the successful resolution of
patent infringement and general litigation. The foregoing list of factors
that could cause actual results and future trends to differ from those
projected, stated or implied by forward-looking statements should not be
construed as exhaustive. The Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result of
new information, future events, or otherwise.
(12)
13
PART II. OTHER INFORMATION
--------------------------
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits:
(12) Ratio of Earnings to Fixed Charges.
(27) Financial Data Schedule (submitted electronically to the
Securities and Exchange Commission for information only and not
filed).
(b) Reports on Form 8-K.
(i) Harris filed with the Commission a Current Report on Form 8-K
dated July 2, 1999 relating to the announced filing of a
Registration Statement in connection with the spin-off of Lanier
Worldwide, Inc.
(ii) Harris filed with the Commission a Current Report on Form 8-K
dated July 28, 1999 relating to its sales and earnings for fiscal
1999.
(iii) Harris filed with the Commission a Current Report on Form 8-K
dated July 30, 1999 providing quarterly information for the first
three quarters of fiscal year 1999 as restated to reflect
continuing operations.
(iv) Harris filed with the Commission a Current Report on Form 8-K
dated August 13, 1999 announcing the completion of the sale of
substantially all of its semiconductor business and providing
pro forma financial information giving effect to such sale.
Items 1, 2, 3, 4, and 5 of Part II are not applicable and have
been omitted.
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HARRIS CORPORATION
-----------------------------
(Registrant)
Date: November 8, 1999 By:/s/ Bryan R. Roub
--------------------------
Bryan R. Roub
Senior Vice President & Chief
Financial Officer (principal
financial officer and duly
authorized officer)
(13)
14
EXHIBIT INDEX
-------------
Exhibit No.
Under Reg.
S-K, Item 601 Description
------------- -----------
(12) Ratio of Earnings to Fixed Charges
(27) Financial Data Schedule (submitted
electronically to the Securities
and Exchange Commission for
information only and not filed).