harris corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation — Our Consolidated Financial Statements include the accounts of Harris
Corporation and its consolidated subsidiaries. As used in these Notes to Consolidated Financial Statements (these
“Notes”), the terms “Harris,” “we,” “our” and “us” refer to Harris Corporation and its consolidated subsidiaries.
Significant intercompany transactions and accounts have been eliminated. Unless otherwise specified, disclosures in
the Notes relate solely to our continuing operations.
Use of Estimates — Our Consolidated Financial Statements have been prepared in conformity with
U.S. generally accepted accounting principles (“GAAP”) and require management to make estimates and
assumptions. These assumptions affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and
expenses during the reporting period. These estimates are based on experience and other information available prior
to issuance of the Consolidated Financial Statements. Materially different results can occur as circumstances change
and additional information becomes known.
Fiscal Year — Our fiscal year ends on the Friday nearest June 30. Fiscal 2011 and 2010 included 52 weeks.
Fiscal 2009 included 53 weeks.
Cash and Cash Equivalents — Cash equivalents are temporary cash investments with a maturity of three or
fewer months when purchased. These investments include accrued interest and are carried at the lower of cost or
market.
Marketable Equity Securities — We consider all of our available-for-sale securities as available for use in our
current operations. All of our marketable equity securities are classified as available-for-sale and are stated at fair
value, with unrealized gains and losses, net of taxes, included as a separate component of shareholders’ equity.
Realized gains and losses from marketable equity securities available-for-sale are determined using the specific
identification method. In instances where a security is subject to transfer restrictions, the value of the security is
based primarily on the quoted price of the same security without restriction but may be reduced by an amount
estimated to reflect such restrictions. If an “other-than-temporary” impairment is determined to exist, the difference
between the value of the investment security recorded on the financial statements and our current estimate of fair
value is recognized as a charge to earnings in the period in which the impairment is determined. We include our
marketable equity securities in the “Other current assets” line item in our Consolidated Balance Sheet.
Fair Value of Financial Instruments — The carrying amounts reflected in our Consolidated Balance Sheet for
cash and cash equivalents, marketable equity securities available-for-sale, accounts receivable, non-current
receivables, notes receivable, accounts payable and short-term and long-term debt approximate their fair values. Fair
values for long-term debt are based primarily on quoted market prices for those or similar instruments. A discussion
of fair values for our derivative financial instruments is included under the caption “Financial Instruments and Risk
Management” in this Note 1: Significant Accounting Policies.
Accounts Receivable — We record receivables at net realizable value and they do not bear interest. This value
includes an allowance for estimated uncollectible accounts to reflect any loss anticipated on the accounts receivable
balances which is charged to the provision for doubtful accounts. We calculate this allowance based on our history
of write-offs, level of past due accounts and economic status of the customers. We consider a receivable delinquent
if it is unpaid after the term of the related invoice has expired. Write-offs are recorded at the time a customer
receivable is deemed uncollectible. See Note 5: Receivables for additional information regarding accounts
receivable.
Inventories — Inventories are valued at the lower of cost (determined by average and first-in, first-out
methods) or market. We regularly review inventory quantities on hand and record a provision for excess and
obsolete inventory based primarily on our estimated forecast of product demand and production requirements. See
Note 6: Inventories for additional information regarding inventories.
Property, Plant and Equipment — Property, plant and equipment are carried on the basis of cost and include
software capitalized for internal use. Depreciation of buildings, machinery and equipment is computed by the
straight-line and accelerated methods. The estimated useful lives of buildings generally range between 3 and
45 years. The estimated useful lives of machinery and equipment generally range between 2 and 10 years.
Amortization of internal-use software begins when the software is put into service and is based on the expected
useful life of the software. The useful lives over which we amortize internal-use software generally range between 3
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