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l3harris_logoxregxrgb.jpg                        Earnings Release

L3Harris Technologies Reports Strong Full Year and Fourth Quarter 2025 Results,
Initiates 2026 Guidance

MELBOURNE, Fla., January 29, 2026 — L3Harris Technologies (NYSE: LHX) reports full year and fourth quarter 2025 results.

Highlights*
Full Year
•Orders of $27.5 billion; book-to-bill of 1.3x
•Cash from operations of $3.1 billion, up 21%; Adjusted free cash flow of $2.8 billion, up 21%
•Revenue of $21.9 billion, up 3%, 5% organically
•Operating margin of 9.7%; Adjusted segment operating margin of 15.8%
•Diluted EPS of $8.53; Non-GAAP diluted EPS of $10.73
Fourth Quarter
•Revenue of $5.6 billion, up 2% versus prior year, 6% organically
•Operating margin of 7.0%; Adjusted segment operating margin of 15.7%
•Diluted EPS of $1.59; Non-GAAP diluted EPS of $2.86

“2025 was a clear inflection point for L3Harris. Our portfolio is directly aligned with the most critical national and global defense priorities, which drove record orders and strong organic growth, margins and cash flow. Throughout the year, we saw customers move with greater urgency, and our investments and agility allowed us to deliver on their missions with speed and scale,” said Christopher Kubasik, Chairman and CEO, L3Harris.

Kubasik added, "As we look to 2026, our investments in technology and capacity along with a record backlog and strong demand signals give us confidence to deliver strong results. We remain disciplined in creating value for shareholders while continuing to invest in the business via capex and R&D."







___
*Organic revenue, adjusted free cash flow, adjusted segment operating margin and non-GAAP diluted EPS are non-GAAP financial measures defined on page 19.
PAGE 1

SUMMARY FINANCIAL RESULTS
Fourth QuarterFull Year
($ millions, except per share data)2025
20241
Change2025
20241
Change
Revenue (see Table 5 for organic revenue)
Communication Systems$1,483$1,437$5,673$5,459
Integrated Mission Systems1,7161,7126,6306,618
Space & Airborne Systems1,7391,7286,9466,869
Aerojet Rocketdyne7636942,8452,580
Corporate eliminations(53)(48)(229)(201)
Revenue$5,648$5,5232%$21,865$21,3253%
Operating income
Communication Systems$369$326$1,432$1,324
Integrated Mission Systems191237812826
Space & Airborne Systems238186852812
Aerojet Rocketdyne573270307
Segment operating income8038223,3663,269
Unallocated corporate items (see Table 4)
(410)(253)(1,256)(1,351)
Operating income$393$569$2,110$1,918
Operating margin7.0%10.3%9.7%9.0%
Segment operating income$803$822$3,366$3,269
Segment impairment of goodwill and other assets2
85248524
Adjusted segment operating income2
$888$846$3,451$3,293
Adjusted segment operating margin2
15.7%15.3%40  bps15.8%15.4%40  bps
Tax rate
Effective tax rate21.5%6.4%16.9%5.3%
Effective tax rate on non-GAAP income2
16.7%8.5%14.0%8.0%
EPS
Diluted EPS$1.59$2.37$8.53$7.87
Non-GAAP diluted EPS2
$2.86$2.6010%$10.73$9.7011%
Pension adjusted non-GAAP diluted EPS2
$2.32$2.177%$9.05$8.0113%
Diluted weighted-average common shares outstanding188.2190.6188.4190.7
Cash flow
Cash from operations$1,962$1,12974%$3,106$2,55921%
Adjusted free cash flow2
$1,863$1,03380%$2,814$2,31921%
Repurchases of common stock$156$42$1,154$554
1 2024 segment financial results recast to reflect strategic realignment of the Fuzing and Ordnance Systems (FOS) business from Integrated Mission Systems to Aerojet Rocketdyne, effective in 2025. See Table 9 - 2024 Segment Recast in our EX-99.1 Earnings Release for first quarter 2025.
2 Refer to Key Terms and Non-GAAP Definitions on page 19.





PAGE 2

PRESENTATION OF FINANCIAL RESULTS*
Financial results are described on a full-year basis, with additional detail provided for notable fourth quarter activity.
Revenue: 2025 revenue increased 3%, 5% organically, reflecting organic growth across all segments, including new program ramps and increased international deliveries. The government shutdown resulted in delayed awards within the fourth quarter, impacting fourth quarter and 2025 revenue, primarily in SAS.
Operating Margin:
GAAP Operating Margin: 2025 increased 70 bps to 9.7%.
Adjusted Segment Operating Margin: 2025 increased 40 bps to 15.8%.
2025 GAAP operating margin increased driven primarily by higher monetization of legacy end-of-life assets aligned with our transformation and value creation priorities and lower unallocated corporate items, including lower LHX NeXt implementation costs, lower amortization of acquisition-related intangibles, and lower merger, acquisition, and divestiture-related expenses, partially offset by higher business divestiture-related losses in 2025.
Adjusted Segment Operating Margin for 2025 increased primarily due to higher monetization of legacy end-of-life assets aligned with our transformation and value creation priorities and LHX NeXt driven cost savings across all segments, partially offset by impacts from the higher margin Commercial Aviation Solutions (CAS) divestiture at the end of March 2025.
Diluted EPS:
GAAP Diluted EPS: 2025 increased 8% to $8.53.
Non-GAAP Diluted EPS: 2025 increased 11% to $10.73.
GAAP Diluted EPS and Non-GAAP Diluted EPS for 2025 increased from higher operating income and adjusted segment operating income, respectively, lower interest expense from decreased average outstanding short-term debt balances during 2025 and higher FAS pension income, partially offset by a higher effective tax rate.
Cash Flow:
Cash From Operations: 2025 increased 21% to $3,106 million.
Adjusted Free Cash Flow: 2025 increased 21% to $2,814 million.
Cash from Operations and Adjusted Free Cash Flow for 2025 increased primarily due to the favorable impact of tax planning strategies and tax reform, less interest paid primarily due to lower average outstanding short-term debt balances and an increase in net income. Cash from operations was additionally impacted by less cash used for merger, acquisition and severance.

*Adjusted segment operating margin and adjusted free cash flow are non-GAAP financial measures defined on page 19.
PAGE 3

SEGMENT RESULTS*

Communication Systems
Fourth QuarterFull Year
($ millions)20252024Change20252024Change
Revenue$1,483$1,4373%$5,673$5,4594%
Operating margin24.9%22.7%220 bps25.2%24.3%90 bps
Impairment of other assets—%1.7%—%0.4%
Adjusted segment operating margin24.9%24.4%50 bps25.2%24.7%50 bps
Revenue: 2025 revenue increased 4%, primarily driven by increased international deliveries for software-defined resilient communications products, as well as the Next Generation Jammer Electronic Warfare program ramp, partially offset by lower volumes related to our civil communication products.
Operating Margin:
GAAP Operating Margin: Fourth quarter increased 220 bps to 24.9% and 2025 increased 90 bps to 25.2%.
Adjusted Segment Operating Margin: Fourth quarter increased 50 bps to 24.9% and 2025 increased 50 bps to 25.2%.
Fourth quarter and 2025 operating margin increased due to LHX NeXt driven cost savings and the absence of a prior year non-cash impairment of other assets related to the Tactical Data Links acquisition, partially offset by unfavorable mix associated with a higher proportion of domestic development volume. Adjusted segment operating margin increase excludes the impact of the prior year non-cash impairment of other assets.

Integrated Mission Systems
Fourth QuarterFull Year
($ millions)20252024Change20252024Change
Revenue$1,716$1,712—%$6,630$6,618—%
Operating margin11.1%13.8%(270) bps12.2%12.5%(30) bps
Revenue: 2025 revenue remained flat. Excluding the impact of the divestiture of our CAS business, organic revenue increased 8%, primarily due to ramping activity in our ISR business on multiple classified programs and our Airborne Early Warning and Control aircrafts for the Republic of Korea Air Force.
Operating Margin: Fourth quarter operating margin decreased 270 bps to 11.1%, driven by the CAS divestiture and unfavorable Maritime program performance. 2025 operating margin decreased 30 bps to 12.2%, primarily due to the divestiture of our CAS business, unfavorable program performance in Maritime and the resolution of a legacy contract matter, partially offset by the monetization of legacy end-of-life assets aligned with our transformation and value creation priorities, favorable mix impact from higher airborne electro-optical sensors volume and LHX NeXt driven cost savings.


*Organic revenue and adjusted segment operating margin are non-GAAP financial measures defined on page 19.
PAGE 4


Space and Airborne Systems
Fourth QuarterFull Year
($ millions)20252024Change20252024Change
Revenue$1,739$1,7281%$6,946$6,8691%
Operating margin13.7%10.8%290 bps12.3%11.8%50 bps
Revenue: 2025 revenue increased 1%. Excluding the impact of the divestiture of our antenna business, organic revenue increased 2%, primarily from increased FAA volume in our Mission Networks business, partially offset by lower volume from program timing in our Space Systems business and lower classified volume in our Intel and Cyber business. The government shutdown resulted in later award timing that delayed expected fourth quarter and 2025 revenue.
Operating Margin: Fourth quarter operating margin increased 290 bps to 13.7% driven by stabilized program performance on classified space programs. 2025 operating margin increased 50 bps to 12.3%, primarily due to stabilized program performance, monetization of legacy end-of-life assets aligned with our transformation and value creation priorities and LHX NeXt driven cost savings, partially offset by unfavorable mix.


Aerojet Rocketdyne
Fourth QuarterFull Year
($ millions)20252024Change20252024Change
Revenue$763$694 10%$2,845$2,580 10%
Operating margin0.7%10.5%(980) bps9.5%11.9%(240) bps
Impairment of goodwill11.1%—%3.0%—%
Adjusted segment operating margin11.8%10.5%130 bps12.5%11.9%60 bps
Revenue: 2025 revenue increased 10%. Excluding the impact of the divestiture of our AOT business, organic revenue increased 12% from increased production volumes across key missile, munitions, and space programs, as well as development program ramps.
Operating Margin:
GAAP Operating Margin: Fourth quarter decreased 980 bps to 0.7% and 2025 decreased 240 bps to 9.5%.
Adjusted Segment Operating Margin: Fourth quarter increased 130 bps to 11.8% and 2025 increased 60 bps to 12.5%.
Fourth quarter and 2025 operating margin decreased due to a non-cash impairment of goodwill related to the Space Technology disposal group1, partially offset by favorable mix and LHX NeXt driven cost savings. Adjusted segment operating margin benefits from higher volume and LHX NeXt driven cost savings.


*Organic revenue and adjusted segment operating margin are non-GAAP financial measures defined on page 19.
1Space Technology disposal group is defined on page 19.
PAGE 5


2026 GUIDANCE1
Beginning in 1Q26 and reflected in our 2026 guidance, we reorganized our business structure to three business segments.

On January 5, 2026, we announced the sale of a majority stake in our Space Technology disposal group2; the financials of this business are included in our 2026 guidance. We expect the transaction to close in the second half of 2026 at which time our guidance will be updated.

We are also transitioning our diluted EPS presentation from a Non-GAAP basis to GAAP diluted EPS.

2026
Guidance
Revenue
Space & Mission Systems
~$11.5B
Communication & Spectrum Dominance
~$8.0B
Missiles Solutions
~$4.4B
Total3
$23B - $23.5B
Segment Operating Margin
Space & Mission Systems
mid 10%
Communication & Spectrum Dominance
~25%
Missiles Solutions
mid 12%
Total
low 16%
Diluted EPS
$11.30 - $11.50
Free cash flow4
$3.0B
1 Supplemental information is provided in accompanying Earnings Presentation.
2 Space Technology disposal group is defined on page 19.
3 Net of intersegment eliminations
4 Free cash flow is a non-GAAP financial measure defined on page 19. Net cash provided by operating activities is anticipated to be approximately $3.6 billion and capital expenditures are anticipated to be approximately $600M.





PAGE 6

Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of federal securities laws made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples include, but are not limited to: share repurchases; divestiture and realignment impacts; 2026 guidance; divestiture or investment transaction timing; an investment from the Department of War (the “Investment”); projection of other financial items; and assumptions underlying any of the foregoing. Investors should not place undue reliance on forward-looking statements, which reflect management’s current expectations, estimates, projections, assumptions and information currently available to management, and are not guarantees of future performance or actual results. Important risks that could cause our results to differ materially from those expressed in or implied by these forward-looking statements or from our historical results include, but are not limited to, risks arising from: competitive markets; U.S. Government spending priorities; changes in contract mix; inflation; tariffs and potential trade disputes; unilateral contract action by the U.S. Government or unexpected issues related to the Investment; 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 and other important risks that could impact forward-looking statements are described more fully in the "Risk Factors" in our Form 10-K for fiscal 2025. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section, and we have no duty to and disclaim any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events or developments or otherwise.

Non-GAAP Financial Measures
Management believes the adjustments to non-GAAP Financial Measures (NGFMs) in the tables beginning on page 12 are useful to investors because the excluded costs do not reflect our ongoing operating performance. Such adjustments, considered together with the unadjusted GAAP financial measures, provide information that management believes is useful to investors to understand period-over-period operating results separate from items that management believes may disproportionately impact operating results in any particular period; however there is no guarantee that items excluded from NGFMs will not reoccur in future periods. Management also believes that NGFMs enhance the ability of investors to analyze business trends, understand performance and evaluate our initiatives to drive improved financial performance. Management utilizes NGFMs to guide forecasting and long-term planning and for compensation purposes. NGFMs should be considered in addition to, and not as a substitute for, financial measures presented in accordance with GAAP.
Investor Relations Contact:
Tony Calderon, 321-727-4450
investorrelations@l3harris.com
Media Relations Contact:
Sara Banda, 321-306-8927
media@l3harris.com

PAGE 7


Table 1 - Condensed Consolidated Statement of Operations (Unaudited)

Fourth QuarterFull Year
($ millions, except per share amounts)2025202420252024
Revenue$5,648 $5,523 $21,865 $21,325 
Cost of revenue(4,202)(4,126)(16,240)(15,801)
General and administrative expenses(968)(804)(3,430)(3,568)
Impairment of goodwill and other assets(85)(24)(85)(38)
Operating income393 569 2,110 1,918 
Non-service FAS pension income and other, net1
132 79 419 354 
Interest expense, net(143)(161)(597)(675)
Income before income taxes382 487 1,932 1,597 
Income taxes(82)(31)(326)(85)
Net income300 456 1,606 1,512 
Noncontrolling interests, net of tax— (3)— (10)
Net income attributable to L3Harris$300 $453 $1,606 $1,502 
Earnings per share attributable to common shareholders
Basic$1.60 $2.38 $8.57 $7.91 
Diluted$1.59 $2.37 $8.53 $7.87 
Weighted-average common shares outstanding
Basic187.0 189.7 187.4 189.8 
Diluted188.2 190.6 188.4 190.7 
1“FAS” is defined as Financial Accounting Standards.
PAGE 8


Table 2 - Consolidated Statement of Cash Flow (Unaudited)
Fourth QuarterFull Year
($ millions)2025202420252024
Operating Activities
Net income$300 $456 $1,606 $1,512 
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization311 326 1,224 1,289 
Share-based compensation30 21 113 97 
Net periodic benefit income(114)(71)(330)(286)
Share-based matching contributions under defined contribution plans53 65 253 264 
Impairment of goodwill and other assets85 38 85 38 
Deferred income taxes55 (46)206 174 
(Increase) decrease in:
Receivables, net131 (35)(343)128 
Contract assets17 178 (437)(194)
Inventories, net64 50 117 96 
Other current assets35 3 17 (29)
Increase (decrease) in:
Accounts payable568 (45)475 (90)
Contract liabilities90 276 181 126 
Compensation and benefits3 17 70 (128)
Other current liabilities72 96 (423)155 
Income taxes221 (125)365 (383)
Other operating activities41 (75)(73)(210)
Net cash provided by operating activities1,962 1,129 3,106 2,559 
Investing Activities
Capital expenditures(158)(118)(424)(408)
Proceeds from sales of businesses, net of cash divested(11)115 820 273 
Other investing activities39 (109)11 (128)
Net cash provided by (used in) investing activities(130)(112)407 (263)
Financing Activities
Proceeds from issuances of long-term debt, net— 1 — 2,827 
Repayments of long-term debt(4)(11)(618)(2,620)
Change in commercial paper, maturities under 90 days, net(725)(660)(515)(567)
Proceeds from commercial paper, maturities over 90 days— — — 688 
Repayments of commercial paper, maturities over 90 days— — — (1,205)
Repurchases of common stock(156)(42)(1,154)(554)
Dividends paid(225)(221)(903)(886)
Other financing activities3 18 108 93 
Net cash (used in) provided by financing activities(1,107)(915)(3,082)(2,224)
Effect of exchange rate changes on cash and cash equivalents5 (26)23 (17)
Net increase (decrease) in cash and cash equivalents730 76 454 55 
Cash and cash equivalents, beginning of period339 539 615 560 
Cash and cash equivalents, end of period$1,069 $615 $1,069 $615 
PAGE 9


Table 3 - Condensed Consolidated Balance Sheet (Unaudited)
($ millions)January 2, 2026January 3, 2025
Assets
Current assets
Cash and cash equivalents$1,069 $615 
Receivables, net1,371 1,072 
Contract assets3,566 3,230 
Inventories, net1,219 1,330 
Income taxes receivable53 379 
Other current assets431 461 
Assets of business held for sale884 1,131 
Total current assets8,593 8,218 
Non-current assets
Property, plant and equipment, net2,665 2,806 
Goodwill20,010 20,325 
Intangible assets, net6,509 7,639 
Deferred income taxes76 120 
Other non-current assets3,342 2,893 
Total assets$41,195 $42,001 
Liabilities and equity
Current liabilities
Short-term debt$— $515 
Accounts payable2,461 2,005 
Contract liabilities2,262 2,142 
Compensation and benefits482 419 
Other current liabilities1,908 2,317 
Liabilities of business held for sale 113 235 
Total current liabilities7,226 7,633 
Non-current liabilities
Long-term debt, net of current portion10,443 11,081 
Deferred income taxes1,114 942 
Other non-current liabilities2,777 2,766 
Total liabilities21,560 22,422 
Total equity19,635 19,579 
Total liabilities and equity$41,195 $42,001 
PAGE 10


Table 4 - Unallocated Corporate Items (Unaudited)

Fourth QuarterFull Year
($ millions)2025202420252024
Unallocated corporate items:
Amortization of acquisition-related intangibles
$191 $211 $769 $853 
LHX NeXt implementation costs1
68 51 167 267 
Business divestiture-related losses (gains) and impairment of goodwill1,2
65 (34)82 33 
Change in fair value of deferred compensation plan liabilities9 (1)57 40 
Merger, acquisition, and divestiture-related expenses1
17 16 57 102 
Accrued corporate charge1
30 — 30 — 
Other unallocated corporate items30 10 94 56 
Total unallocated corporate items$410 $253 $1,256 $1,351 
1 Refer to Key Terms and Non-GAAP Definitions on page 19.
2 Includes business divestiture-related losses (gains) and impairment of goodwill reported at corporate.

PAGE 11


Table 5 - Organic Revenue Non-GAAP Financial Measure Reconciliation (Unaudited)

Fourth QuarterFull Year
2024
($ millions)GAAP
Adjustments1
Organic
GAAP
Adjustments1
Organic
CS$1,437 $— $1,437 $5,459 $— $5,459 
IMS1,712 (163)1,549 6,618 (459)6,159 
SAS1,728 — 1,728 6,869 (76)6,793 
AR694 (15)679 2,580 (45)2,535 
Corporate eliminations(48)— (48)(201)— (201)
Revenue$5,523 $(178)$5,345 $21,325 $(580)$20,745 
1 Adjustment to exclude amounts attributable to divested businesses.
PAGE 12


Table 6 - Reconciliation of Effective Tax Rate to Effective Tax Rate on Non-GAAP Income (Unaudited)

Fourth Quarter
20252024
($ millions)Earnings Before TaxTax Expense
(Benefit)		Effective Tax RateEarnings Before TaxTax Expense
(Benefit)		Effective Tax Rate
Income before income taxes$382 $82 21.5 %$487 $31 6.4 %
LHX NeXt implementation costs1
68 18 51 14 
Business divestiture-related losses (gains) and impairment of goodwill and other assets1
150 (7)(10)(5)
Merger, acquisition, and divestiture-related expenses1
17 7 16 6 
Accrued corporate charge1
30 8 — — 
Non-GAAP income before income taxes$647 $108 16.7 %$544 $46 8.5 %
Full Year
20252024
($ millions)Earnings Before TaxTax Expense
(Benefit) 		Effective Tax RateEarnings Before TaxTax Expense
(Benefit)		Effective Tax Rate
Income before income taxes$1,932 $326 16.9 %$1,597 $85 5.3 %
LHX NeXt implementation costs1
167 43 267 67 
Business divestiture-related losses and impairment of goodwill and other assets1
167 (62)57 (13)
Merger, acquisition, and divestiture-related expenses1
57 14 102 22 
Accrued corporate charge1
30 8 — — 
Non-GAAP income before income taxes$2,353 $329 14.0 %$2,023 $161 8.0 %
1 Refer to Key Terms and Non-GAAP Definitions on page 19.
PAGE 13


Table 7 - Reconciliation of Diluted EPS to Non-GAAP Diluted EPS and Pension Adjusted Non-GAAP Diluted EPS (Unaudited)

Fourth QuarterFull Year
2025202420252024
Diluted weighted-average common shares outstanding (in millions)
188.2 190.6 188.4 190.7 
Diluted EPS$1.59 $2.37 $8.53 $7.87 
Significant and/or non-recurring items included in diluted EPS above:
LHX NeXt implementation costs1
0.36 0.27 0.89 1.40 
Business divestiture-related losses and impairment of goodwill and other assets1
0.80 (0.05)0.89 0.30 
Merger, acquisition, and divestiture-related expenses1
0.09 0.08 0.30 0.53 
Accrued corporate charge1
0.16 — 0.16 — 
Income taxes on above adjustments and other, net2
(0.14)(0.07)(0.04)(0.40)
Non-GAAP diluted EPS2
$2.86 $2.60 $10.73 $9.70 
Less: per share impact of:
FAS/CAS operating adjustment3
— (0.04)(0.05)(0.14)
Non-service FAS pension income3
(0.54)(0.39)(1.63)(1.55)
Pension adjusted non-GAAP diluted EPS$2.32 $2.17 $9.05 $8.01 
    
1 Refer to Key Terms and Non-GAAP Definitions on page 19.
2 Fourth quarter 2024 amount updated to exclude adjustment of $1.11 per share and $0.23 per share for amortization of acquisition-related intangible assets and related income tax expense, respectively. Year to date 2024 amount updated to exclude adjustment of $4.47 per share and $1.07 per share for amortization of acquistion-related intangible assets and related income tax expense, respectively.
3 Net of tax effect.
PAGE 14


Table 8 - Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow - Non-GAAP Financial Measures Reconciliation (Unaudited)

Fourth QuarterFull Year
($ millions)2025202420252024
Net cash provided by operating activities$1,962 $1,129 $3,106 $2,559 
Capital expenditures(158)(118)(424)(408)
Proceeds from disposal of property, plant and equipment, net45 1 54 1 
Free cash flow1,849 1,012 2,736 2,152 
Cash used for merger, acquisition and severance1
14 21 78 167 
Adjusted free cash flow1
$1,863 $1,033 $2,814 $2,319 
1 Refer to Key Terms and Non-GAAP Definitions on page 19.




PAGE 15


Table 9 - Segment Recast (Unaudited)
Effective for fiscal 2026, our segments are re-aligned into three reportable segments with common capabilities and business models:
•Space & Mission Systems (SMS): will integrate satellite and payload capabilities, including missile warning and defense, with maritime, air special missions, and other global defense and civil government programs, which is comprised of the following sectors:
◦Intelligence, Surveillance and Reconnaissance (ISR): sector unchanged and previously reported in our Integrated Missions System (IMS) segment.
◦Space Systems: sector formerly reported in our Space and Airborne Systems (SAS) segment, excluding our Telemetry & Radio Frequency (T&RF) business.
◦Maritime: sector unchanged and previously reported in our IMS segment.
◦Mission Networks: sector unchanged and previously reported in our SAS segment.
◦Airborne Solutions: sector formerly named Airborne Combat Systems within our SAS segment excluding our Electronic Warfare, Agile Development Group (ADG), and Release Systems Antennas & Telemetry (RSAT) businesses.
◦Intel & Cyber: sector previously reported within our SAS segment excluding some international businesses.
•Communication & Spectrum Dominance (CSD): will combine all of the company’s capabilities in resilient communications and electronic warfare, which is comprised of the following sectors:
◦Mission Critical Communications: includes our Tactical Communications and Public Safety and Professional Communications sectors, both of which were formerly reported in our Communications Systems (CS) segment.
◦Spectrum Superiority: includes our Broadband Communications sector and the Electronic Warfare, T&RF, and related programs from our SAS segment.
◦Targeting and Sensor Systems: primarily includes our Targeting and Sensor Systems sector from our IMS segment.
◦Integrated Vision Solutions: sector unchanged and formerly reported in our CS segment.
•Missile Solutions (MSL): will unite propulsion, hypersonics and other advanced missile technologies, which is comprised of the following sectors:
◦Missile Propulsion: sector unchanged and formerly reported in our Aerojet Rocketdyne (AR) segment as Missile Solutions.
◦Advanced Effects: a newly created sector which combines our ADG air launched effects and advanced technology capabilities with the majority of our RSAT business, which includes weapons release systems. These businesses were formerly reported in our Airborne Combat Systems sector within our SAS segment. This new sector also incorporates our Space and Sensors business and other electronics capabilities, including precision navigation and timing solutions which were formerly reported in our Defense Electronics sector within our IMS segment.
◦Space Propulsion and Power Systems: sector unchanged and formerly reported in our AR segment.
The historical results through the date of divestiture of businesses divested prior to the end of fiscal 2025 will be classified within the “other non-reportable business” line item within the Company’s segment reporting.
The following business segment information reflects our results recast in our new segment structure for fiscal 2025 and and fiscal 2024 is presented as supplemental information.
PAGE 16


Supplemental Recast Information
2025
(In millions)RevenueOperating IncomeOperating Margin
First Quarter
SMS$2,411 $238 9.9 %
CSD1,809 443 24.5 %
MSL840 96 11.4 %
Other non-reportable businesses1
146 23 15.8 %
Segment operating income and margin800 15.6 %
Corporate(74)(275)
Total$5,132 $525 10.2 %
Second Quarter
SMS$2,770 $289 10.4 %
CSD1,861 458 24.6 %
MSL925 116 12.5 %
Other non-reportable businesses— — — %
Segment operating income and margin863 15.9 %
Corporate(130)(292)
Total$5,426 $571 10.5 %
Third Quarter
SMS$2,803 $299 10.7 %
CSD1,935 477 24.7 %
MSL1,008 124 12.3 %
Other non-reportable businesses— — — %
Segment operating income and margin900 15.9 %
Corporate(87)(279)
Total$5,659 $621 11.0 %
Fourth Quarter
SMS$2,727 $229 8.4 %
CSD1,961 546 27.8 %
MSL2
1,024 28 2.7 %
Other non-reportable businesses— — — %
Segment operating income and margin803 14.2 %
Segment impairment of goodwill and other assets3
85 
Adjusted segment operating income and margin888 15.7 %
Corporate(64)(410)
Total$5,648 $393 7.0 %
1 The historical results through the date of divestiture of businesses divested prior to the end of fiscal 2025 will be classified within the “other non-reportable businesses” line item within the Company’s segment reporting.
2 Fourth quarter MSL operating income includes a goodwill adjustment for the Space Technology disposal group.
3 Refer to Key Terms and Non-GAAP Definitions on page 19.



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Supplemental Recast Information
Full Year
20252024
(In millions)RevenueOperating IncomeOperating MarginRevenueOperating IncomeOperating Margin
SMS$10,711 $1,055 9.8 %$10,186 $1,046 10.3 %
CSD7,566 1,924 25.4 %7,272 1,670 23.0 %
MSL1
3,797 364 9.6 %3,525 405 11.5 %
Other non-reportable businesses2
146 23 15.8 %711 148 20.8 %
Segment operating income and margin3,366 15.4 %3,269 15.3 %
Segment impairment of goodwill and other assets3
85 24 
Adjusted segment operating income and margin3,451 15.8 %3,293 15.4 %
Corporate(355)(1,256)(369)(1,351)
Total$21,865 $2,110 9.7 %$21,325 $1,918 9.0 %
1 2025 MSL operating income includes a goodwill adjustment for the Space Technology disposal group.
2 The historical results through the date of divestiture of businesses divested prior to the end of fiscal 2025 will be classified within the “other non-reportable businesses” line item within the Company’s segment reporting.
3 Refer to Key Terms and Non-GAAP Definitions on page 19.


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Key Terms and Non-GAAP Definitions
DescriptionDefinition
Business divestiture-related losses (gains) and impairment of goodwill and other assetsIncludes gains and losses recognized in connection with divestitures and impairments of goodwill and other assets.
Merger, acquisition, and divestiture-related expensesTransaction and integration expenses associated with the Aerojet Rocketdyne acquisition; external costs related to pursuing acquisition and divestiture portfolio optimization; non-transaction costs related to divestitures; and salaries of employees in roles dedicated to planned divestiture and acquisition activity.
Accrued corporate charge
Includes a non-recurring matter unrelated to segment activities and not indicative of ongoing operations.
LHX NeXt implementation costs
Includes costs related to workforce optimization costs, incremental IT expenses for implementation of new systems, third-party consulting expenses and other related costs, including costs related to personnel dedicated to this project.
Segment impairment of goodwill and other assetsImpairment of goodwill and other assets recognized in segment results.
Space Technology disposal group
Consists of certain product lines of our Space Propulsion and Power Systems sector, reported in our Aerojet Rocketdyne segment, and the space portion of our Space & Sensors division, reported in our Integrated Mission Systems segment.
Adjusted segment operating income and margin*On a consolidated basis represents operating income and margin, excluding unallocated corporate department items and segment impairment of goodwill and other assets.
OrdersTotal value of funded and unfunded contract awards received from the U.S. Government and other customers, including incremental funding and adjustments to previous awards, excluding unexercised contract options and potential orders under ordering-type contracts, such as indefinite delivery, indefinite quantity (IDIQ) contracts.
Organic revenue*
Excludes the impact of completed divestitures and is reconciled in Table 5.
Effective tax rate on non-GAAP income*
Represents the effective tax rate (tax expense as a percentage of income before income taxes) adjusted for the tax effect of items reconciled in Table 6.
Non-GAAP income before income taxes*
Represents income before income taxes adjusted for items reconciled in Table 6.
Non-GAAP diluted EPS*
Represents EPS (earnings per share attributable to common shareholders) adjusted for items reconciled in Table 7.
Pension adjusted non-GAAP diluted EPS*
Represents Non-GAAP diluted EPS, described above, adjusted for the after tax per share impact of the FAS/CAS operating adjustment and Non-service FAS pension income reconciled in Table 7.
Free cash flow*
Net cash provided by operating activities less capital expenditures, plus proceeds from disposal of property, plant and equipment.
Adjusted free cash flow*
Net cash provided by operating activities less capital expenditures, plus proceeds from disposal of property, plant and equipment and cash used for merger, acquisition and severance reconciled in Table 8.
Cash used for merger, acquisition, and severance*Cash related to merger, acquisition and divestiture-related expenses (described above) and severance costs included in LHX NeXt implementation costs.
_____
*Refer to Non-GAAP Financial Measures on page 7 for more information.
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