L3Harris Technologies (LHX) Financial History

•Risk that we are not able to complete strategic divestitures on satisfactory terms and conditions, including non-competition arrangements applicable to certain of our business lines, or within expected timeframes;

•Risk that indemnification related to businesses divested or spun off that we may be required to provide or otherwise bear may be significant and could negatively impact our business;

•Risk that our markets do not evolve as anticipated and that the strategic mergers, acquisitions and divestitures do not prove to be those needed to be successful in those markets;

•Difficulty, delays and expense in consolidating and rationalizing IT infrastructure, which may include multiple legacy systems from transactions and integrating software code;

•Differences in business backgrounds, corporate cultures and management philosophies that may delay successful integration;

•Difficulty in identifying and evaluating potential mergers and acquisitions, including the risk that our due diligence does not identify or fully assess valuation issues, potential liabilities or other transaction ri…

Any significant increase in our future effective tax rates, or timing of deductions, credits, or payments, could adversely impact our results of operations and cash flows for future periods.

•Increases in expenses not fully deductible for tax purposes, including impairment of goodwill or other long-term assets acquired in connection with mergers or acquisitions;

•Disrupt proper functioning of these networks and systems and, therefore, our operations and/or those of certain of our customers;

From time to time, our subcontractors and suppliers experience financial and operational difficulties outside of our direct control, which may impact their ability to deliver the materials, components, subsystems and…

•Increased risk of an incident resulting in damage or destruction to our facilities or products or resulting in injury or loss of life to our employees, subcontractors or other third parties.

•Changes in government, economic and political policies, political or civil unrest, acts of terrorism, threats of international boycotts, U.S.

•Uncertainties as to local laws and enforcement of contract and intellectual property rights and occasional requirements for onerous contract terms;

•Fluctuations of currency, currency revaluations, difficulties with repatriating cash generated or held abroad in a tax-efficient manner and changes in tax laws;

•Difficulties of managing a geographically dispersed organization and culturally diverse workforces, including compliance with local laws and practices;

•Changes in regulatory requirements, including business or operating license requirements, currency exchange controls or embargoes;

•Laws, regulations and policies of foreign governments relating to investments and operations, including laws restricting our ability to transact in certain countries and/or markets;

forecasting, our estimates or guidance for future revenue, income and expenditures may be inaccurate, and we may make significant investments and expenditures but never realize the anticipated benefits.

Any or all of the foregoing could have a negative impact on our business, financial condition, results of operations, cash flows and equity.

Operations” of this Report and Note 1: Significant Accounting Policies and Note 6: Goodwill and Intangible Assets in

Accounting Estimates” in “Item 7.

information on our accounting policies related to impairment of goodwill, see our discussion under “Critical

these assets could have a material adverse effect on our results of operations and financial condition.

of determination.

or circumstances indicate there may be an impairment.

change reporting units (either as a result of a reorganization or as the result of divestiture activity) and when events

adjustment to the purchase price.

issues could arise, which could adversely affect the anticipated returns or which are otherwise not recoverable as an

judgments in determining initial acquisition price may subsequently prove to have been inaccurate and unforeseen

consist of goodwill and other intangible assets, primarily recorded as the result of acquisitions.

materially adversely affect our results of operations and financial condition.

goodwill or other intangible assets to become impaired, resulting in substantial losses and write-downs that would

Changes in future business or other market conditions could cause business investments and/or recorded

non-competition arrangements applicable to certain of our business lines, or within expected timeframes;

anticipated to result from such transactions may not be realized;

intended tax treatment for U.S.

•Risk that mergers, acquisitions, divestitures, spin offs and other strategic transactions fail to qualify for the

otherwise bear may be significant and could negatively impact our business;

indemnification provisions or the financial resources of any indemnifying parties;

retained or otherwise become subject to, significant liabilities that exceed the limitations of any applicable

•Risk that we assume or retain, or that companies we have merged with or acquired have assumed or

divestitures do not prove to be those needed to be successful in those markets;

multiple legacy systems from various mergers and acquisitions and integrating software code;

and the risk that we encounter significant unanticipated costs or other problems associated with integration;

in an efficient and cost-effective manner while maintaining adequate standards, controls and procedures,

combining product and service offerings, and in entering into new markets in which we are not experienced,

•Difficulty, delays and expense in integrating newly merged or acquired businesses and operations, including

diligence does not identify or fully assess valuation issues, potential liabilities or other merger or acquisition

operations, cash flows and equity, which include:

present significant risks and uncertainties that could adversely affect our business, financial condition, results of

equity.

uncertainties that could adversely affect our business, financial condition, results of operations, cash flows and

Strategic transactions, including mergers, acquisitions and divestitures, involve significant risks and

us to compete effectively, and could significantly impact the cost and availability of adequate insurance in the future.

insured, could negatively affect our standing with our customers and the public, thereby making it more difficult for

and fee payments we previously received.

and, in the case of certain contracts, liquidated damages, penalties and repayment to the customer of contract cost

operations, cash flows and equity.

excess of U.S.

insurance to protect against all operational risks and liabilities.

and we may be forced to bear substantial costs from an accident or incident.

cybersecurity exposures, the amount of our insurance coverage may not be adequate to cover all claims or liabilities,

indemnification from foreign governments.

circumstances, we may receive indemnification from the U.S.

assumptions or materials and components could prevent us from achieving contractual requirements.

delivery as a result of issues with respect to design, technology, licensing and patent rights, labor, learning curve

services and unplanned degradation of product performance.

replacement, problems with quality and workmanship, country of origin, delivery of subcontractor components or

profitability include loss on launch of spacecraft, premature failure of products that cannot be accessed for repair or

could result, either directly or indirectly, in the loss of life or property or otherwise negatively affect revenue and

have the potential to cause loss of life and extensive property damage.

systems, command, control, computers, communications, cyber, ISR, homeland security applications and aircraft

Failures of satellites, missile systems, air traffic control systems, electronic warfare systems, space superiority

untested or unproven.

and communications systems and products.

significant portion of our business relates to designing, developing and manufacturing advanced defense, technology

insurance or indemnity.

We face certain significant risk exposures and potential liabilities that may not be covered adequately by

position may be harmed before we do so.

attention away from other aspects of our business.

of intellectual property rights, even if ultimately successful, could be costly and could divert management’s

spend significant resources to monitor and enforce our intellectual property rights.

or competitors may challenge the validity or scope of our patents or trademark registrations.

competitive position could suffer.

foreign nations may differ from those of the U.S.

property vary among nations and the protection provided to our intellectual property by the laws and courts of

arrangements to establish and protect our intellectual property rights.

combination of patents, copyrights, trademarks, trade secrets, know-how, confidentiality provisions and licensing

products, services and solutions.

We also may be subject to significant damages or injunctions against development and sale of certain of our

license agreements on terms acceptable to us, or at all.

invalidated, misappropriated or circumvented by third parties.

enter into costly royalty or license agreements.

infringed directly or indirectly upon those intellectual property rights.

infringing directly or indirectly upon their intellectual property rights, and we may be found to be infringing or to have

property on reasonable terms.

property rights are not diluted or subject to misuse, and that we are able to license certain third-party intellectual

in the market depends in part on our ability to ensure that our intellectual property is protected, that our intellectual

intellectual property rights, which often has resulted in protracted and expensive litigation.

intellectual property rights.