harris corporation

Government Communications Systems: Conduct advanced research and produce, integrate and support highly
reliable, net-centric communications and information technology that solve the mission-critical challenges of our
civilian, defense and intelligence government customers, primarily the U.S. Government. Leverage core capabilities
such as SATCOM, ground systems, avionics, data links, mission-critical networks, ISR and space systems.
Leveraging technology, know-how and capabilities transfer across business segments: One of our strengths
is our ability to transfer technology, know-how and capabilities among business segments and focus our research
and development projects in ways that benefit Harris as a whole. An example of this is our FAME product that
utilizes COTS software and hardware developed by our Integrated Network Solutions segment and applying that
technology to government applications where there is a need to gather, store, distribute and analyze increasingly
large amounts of ISR data. The partnering of Broadcast and New Media Solutions and IT Services to provide fully
integrated solutions for the Orlando Magic and 7-Eleven is another example. Another area of focus is cross-selling
through vertical market sales channels and joint pursuits by multiple segments. Other corporate initiatives include
joint international market channel development, such as shared distributors and coordinated “go-to-market”
strategies.
Achieving operating efficiencies and cost reductions: Our principal focus areas for operating efficiencies and
cost management are: reducing procurement costs through an emphasis on coordinated supply chain management;
reducing product costs through dedicated engineering resources focused on product design; improving
manufacturing efficiencies across all segments; and optimizing facility utilization.
Making strategic acquisitions: Another key value driver is making strategic acquisitions and investments to
build or complement the strengths in our core businesses, more quickly access adjacent markets, and gain access to
new markets. On July 30, 2010, we acquired CapRock, a global provider of mission-critical, managed satellite
communications services for the government, energy and maritime industries. The acquisition of CapRock increased
the breadth of our assured communications» capabilities, while enabling us to enter new vertical markets and
increase our international presence. On April 4, 2011, we acquired Schlumberger GCS, a provider of satellite and
terrestrial communications services for the worldwide energy market. We report CapRock and Schlumberger GCS as
part of Managed Satellite and Terrestrial Communications Solutions under our Integrated Network Solutions
segment. Also on April 4, 2011, we acquired Carefx, a provider of interoperability workflow solutions for
government and commercial healthcare providers. This acquisition expanded our presence in government healthcare,
provided entry into the commercial healthcare market and is expected to leverage the healthcare interoperability
workflow products offered by Carefx and the broader scale of enterprise intelligence solutions and services that we
provide. We report Carefx as part of Healthcare Solutions under our Integrated Network Solutions segment. In the
fourth quarter of fiscal 2009, we acquired Wireless Systems, an established provider of mission-critical wireless
communications systems for law enforcement, fire and rescue, public service, utility and transportation markets. We
report Wireless Systems as Public Safety and Professional Communications under our RF Communications segment.
Maintaining a strong financial foundation: We believe our strong capital position, access to key financial
markets, ability to raise funds at a low effective cost and overall low cost of borrowing provide a strong financial
foundation from which to operate. We had $366.9 million in cash and cash equivalents as of July 1, 2011 and had
$833.1 million of cash flows provided by operating activities during fiscal 2011. Our cash is not restricted and can
be used for internal investments, capital expenditures, strategic acquisitions, repurchases of our common stock or to
pay dividends to our shareholders. On July 30, 2011, our Board of Directors approved the $1 billion New
Repurchase Program that replaced the 2009 Repurchase Program, which had a remaining, unused authorization of
approximately $200 million. The New Repurchase Program does not have a stated expiration date. We currently
expect to repurchase up to $500 million in shares under the New Repurchase Program by the end of calendar year
2011. The New Repurchase Program is expected to result in repurchases well in excess of the dilutive effect of
shares issued under our share-based incentive plans. However, the level of repurchases depends on a number of
factors, including our financial condition, capital requirements, results of operations, future business prospects and
other factors our Board of Directors may deem relevant. Share repurchases are expected to be funded with available
cash and commercial paper. Repurchases under the New Repurchase Program may be made through open market
purchases, private transactions, transactions structured through investment banking institutions, or any combination
thereof. The timing, volume and nature of share repurchases are subject to market conditions, applicable securities
laws and other factors and are at our discretion and may be suspended or discontinued at any time. Additional
information regarding share repurchases during fiscal 2011 and our Repurchase Programs is set forth above under
“Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities” of this Report.
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