harris corporation

(5) Results for fiscal 2007 included: a $6.0 million after-tax ($.04 per diluted share) charge for cost-reduction actions and a $12.3 million aftertax
($.09 per diluted share) write-down of capitalized software associated with our decision to discontinue an automation software
development effort in our Integrated Network Solutions segment; a $12.9 million after-tax ($.09 per diluted share) write-down of our
investment in Terion, Inc. (“Terion”) due to an other-than-temporary impairment; and a $12.0 million after-tax ($.09 per diluted share)
favorable impact from the settlement of a tax audit.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
The following Management’s Discussion and Analysis (“MD&A”) is intended to assist in an understanding of
Harris. MD&A is provided as a supplement to, should be read in conjunction with, and is qualified in its entirety by
reference to, our Consolidated Financial Statements and accompanying Notes appearing elsewhere in this Report.
Except for the historical information contained herein, the discussions in MD&A contain forward-looking statements
that involve risks and uncertainties. Our future results could differ materially from those discussed herein. Factors
that could cause or contribute to such differences include, but are not limited to, those discussed below in MD&A
under “Forward-Looking Statements and Factors that May Affect Future Results.”
The following is a list of the sections of MD&A, together with our perspective on the contents of these sections
of MD&A, which we hope will assist in reading these pages:
• Business Considerations — a general description of our businesses; the value drivers of our businesses and
our strategy for achieving value; fiscal 2011 results of operations and liquidity and capital resources key
indicators; and industry-wide opportunities, challenges and risks that are relevant to us in the defense,
government and commercial markets.
• Operations Review — an analysis of our consolidated results of operations and of the results in each of our
three operating segments, to the extent the segment operating results are helpful to an understanding of our
business as a whole, for the three years presented in our financial statements. In this section of MD&A,
“income from continuing operations” refers to income from continuing operations attributable to Harris
Corporation common shareholders.
• Liquidity, Capital Resources and Financial Strategies — an analysis of cash flows, common stock
repurchases, dividends, capital structure and resources, contractual obligations, off-balance sheet
arrangements, commercial commitments, financial risk management, impact of foreign exchange and impact
of inflation.
• Critical Accounting Policies and Estimates — a discussion of accounting policies and estimates that require
the most judgment and a discussion of accounting pronouncements that have been issued but not yet
implemented by us and their potential impact on our financial position, results of operations and cash flows.
• Forward-Looking Statements and Factors that May Affect Future Results — cautionary information about
forward-looking statements and a description of certain risks and uncertainties that could cause our actual
results to differ materially from our historical results or our current expectations or projections.
BUSINESS CONSIDERATIONS
General
We are an international communications and information technology company serving government and
commercial markets in more than 150 countries. We are dedicated to developing best-in-class assured
communications» products, systems and services for global markets. Our company generates revenue, income and
cash flows by developing, manufacturing and selling communications products and software as well as providing
related services. We sell directly to our customers, the largest of which are U.S. Government customers and their
prime contractors, and we utilize agents and intermediaries to sell and market some products and services, especially
in international markets.
We structure our operations primarily around the products and services we sell and the markets we serve. As
previously reported and as also discussed in Note 1: Significant Accounting Policies and Note 25: Business Segments
in the Notes, in the third quarter of fiscal 2011, we realigned our operations to provide increased market focus and
address certain high-growth commercial markets. As a result of the realignment, effective for the third quarter of
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