harris corporation

Fiscal 2011 Compared With Fiscal 2010: Revenue in fiscal 2011 included $1,775.4 million in Tactical
Communications and $513.8 million in Public Safety and Professional Communications. Revenue growth and higher
operating income in fiscal 2011 compared with fiscal 2010 were primarily due to strong international sales in
Tactical Communications and continuing Falcon III» adoption to support the DoD’s vision for wideband networking
throughout the battlefield, partially offset by lower revenue from shipments of radios to equip MRAP vehicles.
The increase in operating income as a percentage of revenue in fiscal 2011 compared with fiscal 2010 was
primarily due to higher operating margins on international sales in Tactical Communications and a $19.3 million
charge incurred in fiscal 2010 associated with our acquisition of Wireless Systems in the fourth quarter of fiscal
2009, partially offset by the decrease in high-margin sales of radios to equip MRAP vehicles.
Our new manufacturing facility in Rochester, New York is up and running. The new facility consolidates
multiple facilities into one location, reducing production cycle times and creating operational efficiencies. We now
have a single facility of sufficient size, layout and capabilities to fully implement the lean production processes we
need to further reduce product costs. The new facility is expected to provide cost savings and create a state-of-theart
high-volume manufacturing capability for products across RF Communications.
Orders for this segment were $2.03 billion for fiscal 2011 compared with $2.88 billion for fiscal 2010. Fiscal
2011 orders included $1.30 billion in Tactical Communications and $730 million in Public Safety and Professional
Communications. At the end of the fourth quarter of fiscal 2011, total backlog in our RF Communications segment
was $1.50 billion, including $766 million in Tactical Communications and $737 million in Public Safety and
Professional Communications.
In both fiscal 2011 and fiscal 2010, this segment derived 63 percent of its revenue from U.S. Government
customers, including the DoD and intelligence and civilian agencies, as well as foreign military sales through the
U.S. Government, whether directly or through prime contractors.
Fiscal 2010 Compared With Fiscal 2009: Revenue in fiscal 2010 included $1,573.2 million in Tactical
Communications and $494.0 million in Public Safety and Professional Communications. Revenue growth in fiscal
2010 compared with fiscal 2009 was driven by our acquisition of Wireless Systems in the fourth quarter of fiscal
2009, partially offset by a decline in total tactical radio sales.
In spite of the decline in the total tactical radio market, our tactical radio sales increased in the U.S. market due
to customer adoption of our next-generation Falcon III radios, as well as equipping a significant number of the
U.S. military’s MRAP vehicles and M-ATVs with Falcon II» and Falcon III radios. In the international market, our
tactical radio sales declined in fiscal 2010 compared with fiscal 2009 primarily due to a delay in shipments as a
result of the high priority of the U.S. military’s MRAP vehicle and M-ATV programs. However, international orders
in fiscal 2010 were strong, signaling growing international demand.
The increase in operating income was primarily due to higher operating margins in Tactical Communications
and our acquisition of Wireless Systems. Additionally, we incurred a $19.3 million charge associated with our
acquisition of Wireless Systems in fiscal 2010 compared with $9.5 million in fiscal 2009. The increase in operating
income as a percentage of revenue was primarily driven by favorable product mix as a result of the U.S. military’s
MRAP vehicle and M-ATV programs, cost-reduction actions implemented in the second half of fiscal 2009 and
operational efficiencies.
Orders for this segment were $2.88 billion for fiscal 2010 compared with $1.25 billion for fiscal 2009. Fiscal
2010 orders included $2.34 billion in Tactical Communications and $541 million in Public Safety and Professional
Communications. At the end of the fourth quarter, total backlog in our RF Communications segment was
$1.76 billion, including $1.24 billion in Tactical Communications and $527 million in Public Safety and
Professional Communications.
In both fiscal 2010 and fiscal 2009, this segment derived 63 percent of its revenue from U.S. Government
customers, including the DoD and intelligence and civilian agencies, as well as foreign military sales through the
U.S. Government, whether directly or through prime contractors.
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