harris corporation

Interest Income and Interest Expense
2011 2010
2011/2010
Percent
Increase/
(Decrease) 2009
2010/2009
Percent
Increase/
(Decrease)
(Dollars in millions)
Interest income. ............................ $ 2.8 $ 1.5 86.7% $ 3.2 (53.1)%
Interest expense ............................ (90.4) (72.1) 25.4% (52.8) 36.6%
Fiscal 2011 Compared With Fiscal 2010: Our interest income increased in fiscal 2011 compared with fiscal
2010 primarily due to higher average balances of cash and cash equivalents. Our interest expense increased in fiscal
2011 compared with fiscal 2010 primarily due to higher levels of borrowings related to our acquisitions of
CapRock, Schlumberger GCS and Carefx.
Fiscal 2010 Compared With Fiscal 2009: Our interest income decreased in fiscal 2010 compared with fiscal
2009 primarily due to lower interest rates applicable to our balances of cash and cash equivalents. Our interest
expense increased in fiscal 2010 compared with fiscal 2009 primarily due to increased borrowings related to our
acquisition of Wireless Systems in the fourth quarter of fiscal 2009.
Income Taxes
2011 2010
2011/2010
Percent
Increase/
(Decrease) 2009
(Dollars in millions)
2010/2009
Percent
Increase/
(Decrease)
Income from continuing operations before income
taxes. ................................. $880.7 $840.3 4.8% $485.3 73.2%
Income taxes ............................. 293.6 278.7 5.3% 172.9 61.2%
% of income from continuing operations before
income taxes .......................... 33.3% 33.2% 35.6%
Fiscal 2011 Compared With Fiscal 2010: In fiscal 2011, the major discrete item from which our effective tax
rate (income taxes as a percentage of income from continuing operations before income taxes) benefited was a
$5.9 million tax benefit associated with legislative action during the second quarter of fiscal 2011 that restored the
U.S. Federal income tax credit for research and development expenses. In fiscal 2010, the major discrete item from
which our effective tax rate benefited was a $3.5 million state income tax benefit associated with the filing of our
income tax returns. See Note 23: Income Taxes in the Notes for further information.
Fiscal 2010 Compared With Fiscal 2009: In fiscal 2010, the major discrete item from which our effective tax
rate benefited was the $3.5 million state income tax benefit noted above regarding fiscal 2011 compared with fiscal
2010. In fiscal 2009, our effective tax rate was higher than the U.S. statutory income tax rate. The major discrete
items in fiscal 2009 were the non-deductibility of a significant portion of the $255.5 million non-cash charge for
impairment of goodwill and other long-lived assets in our Integrated Network Solutions segment related to
Broadcast and New Media Solutions recorded in the fourth quarter of fiscal 2009, largely offset by: a $3.3 million
tax benefit that we recorded in the second quarter of fiscal 2009 when legislative action restored the U.S. Federal
income tax credit for research and development expenses for fiscal 2008; a $3.7 million state tax benefit in the
second quarter of fiscal 2009 related to the filing of our tax returns; and a $6.5 million favorable impact recorded in
the third quarter of fiscal 2009 from the settlement of the U.S. Federal income tax audit of fiscal year 2007. See
Note 23: Income Taxes in the Notes for further information.
Discussion of Business Segments
RF Communications Segment
2011 2010
2011/2010
Percent
Increase/
(Decrease) 2009
2010/2009
Percent
Increase/
(Decrease)
(Dollars in millions)
Revenue ............................. $2,289.2 $2,067.2 10.7% $1,760.6 17.4%
Segment operating income ............... 787.0 707.4 11.3% 571.5 23.8%
% of revenue ....................... 34.4% 34.2% 32.5%
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