L3Harris Delivers Record Backlog and Strong Third-Quarter Results
Broad-based growth with robust earnings and cash flow; increases full-year guidance
Orders of $19.3 billion drove record backlog of $53.2 billion; book-to-bill of 3.2x
Operating income margin of 13.0%, up 200 bps vs. prior year; segment operating margin
• Guidance Update: Increases bottom end of the revenue guidance range to $23.5 billion to $23.7 billion (prev. $23.2 billion to $23.7 billion), increases GAAP EPS range to $12.25 to $12.35 (prev. $11.80 to $12.00)
“ Our team’s exceptional execution delivered solid financial performance in the third quarter. We grew backlog to record levels, underscoring the consistently strong demand for our mission-critical capabilities. Our priority now is to convert that demand into results. We will continue to invest in production capacity and differentiated capabilities across missiles and missile solutions, space, resilient communications and multi-domain sensing, which will enable us to deliver for the warfighter, our customers and our shareholders,” said Sam Mehta, President and CEO, L3Harris.
Revenue of $6.1 billion increased $401 million compared to prior year, up 7%, and up 9% on an organic 1 basis, driven by double-digit growth in the Space & Mission Systems and Missile Solutions segments. Operating income margin was 13.0%, up 200 bps compared to prior year, driven by higher revenues and continued management of corporate expenses. Segment operating margin 2 was 15.9%, flat to prior year. Third quarter GAAP EPS increased 33% to $3.28 driven by higher volumes, a lower level of corporate expense, lower interest expense and a lower effective tax rate.
Net cash provided by operating activities in the quarter totaled $1.4 billion. Capital expenditures were $179 million. Free cash flow 3 was $1.3 billion, up 195% over prior year. The Company ended the quarter with $11.0 billion in total debt, $2.5 billion in cash and equivalents and $550 million in short-term investments. PAGE 1
Orders received in the quarter totaled $19.3 billion, resulting in backlog of $53.2 billion. Book-to-bill ratio was 3.2x for the quarter. By segment, Space & Mission Systems book-to-bill was 1.0x, Communications & Spectrum Dominance was 1.9x and Missile Solutions was 11.8x.
Management increases the bottom end of the revenue guidance range to $23.5 billion to $23.7 billion (prev. $23.2 billion to $23.7 billion), increases GAAP EPS range to $12.25 to $12.35 (prev. $11.80 to $12.00) and maintains FY26 Free Cash Flow guidance of $3 billion 3 .
• Captured a $6.3 billion (excluding escalations), seven-year undefinitized contract to scale propulsion production for the Terminal High Altitude Area Defense (THAAD) system
• Captured a $4.7 billion (excluding escalations), seven-year undefinitized contract to scale propulsion production for the PAC-3 Missile Segment Enhancement (MSE) interceptor
• Announced a $250 million follow-on contract to manufacture standard-range Guided Multiple Launch Rocket System (GMLRS) propulsion units
• Secured more than $500 million in VAMPIRE C-UAS orders from the United States and allies. Delivered the first VAMPIRE units to the U.S. Army for hostile drone defense just two months after receiving their order
• Awarded an $876 million contract modification to advance the development and production preparation of the U.S. Navy Next Generation Jammer Low Band (NGJ-LB) tactical electronic warfare system
• Opened the ‘Arsenal of Freedom’ solid rocket motor production facility in Camden, Arkansas in October – one of approximately 60 new facilities being built to address rising demand for munitions
• Completed the launch of NASA's Nancy Grace Roman Space Telescope with L3Harris' 2.4-meter Optical Telescope Assembly (OTA), which serves as Roman’s eye, as well as L3Harris’ radiation-hardened electronics, which keep the telescope in operation approximately 1 million miles from Earth
1 Organic revenue is a non-GAAP Financial Measure as defined by Regulation G and reconciled to GAAP in Table5.
2 Segment operating margin is a non-GAAP Financial Measure as defined by Regulation G and reconciled to GAAP in Table4.
3 Free cash flow is a non-GAAP Financial Measure as defined by Regulation G and reconciled to GAAP in Table6. PAGE 2
1 Segment revenue, segment operating income and segment operating margin are non-GAAP Financial Measures as defined by Regulation G and reconciled to GAAP in Table 4. A reconciliation of segment operating margin on a forward-looking basis to GAAP is not available without unreasonable effort due to the unavailability of items for exclusion from the GAAP measure. We are unable to address the probable significance of this information, the variability of which may have a significant impact on future GAAP results.
2 Revenue attributable to our corporate headquarters, which includes amortization of program investment asset recognized in connection with DoW strategic investment in 2026. Year to date 2025 includes our divested Commercial Aviation Solutions business CAS disposal group.
3 Free cash flow is a non-GAAP Financial Measure defined and reconciled to GAAP in Table 6. Net cash provided by operating activities is anticipated to be approximately $3.6 billion and capital expenditures are anticipated to be approximately $600 million. As of third quarter 2026, we no longer include proceeds from disposal of property, plant and equipment, net. Prior periods have been recast for comparability. PAGE 3
This earnings release contains forward-looking statements within the meaning of federal securities laws made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples include, but are not limited to: planned investments and capacity expansion; our pipeline and backlog expansion; 2026 guidance; the impact of recent and expected contract awards; the 2028 financial framework; the impact of the global security environment; projections of other financial items; and assumptions underlying any of the foregoing. Investors should not place undue reliance on forward-looking statements, which reflect management’s current expectations, estimates, projections, assumptions and information currently available to management, and are not guarantees of future performance or actual results. Important risks that could cause our results to differ materially from those expressed in or implied by these forward-looking statements or from our historical results include, but are not limited to, risks arising from: competitive markets; U.S. Government spending priorities; changes in contract mix; unilateral contract action by the U.S. Government or unexpected issues related to the DoW's investment in our subsidiary; uncertain economic conditions; future geo-political events; supply chain disruptions; indebtedness; interest rates and other market factors; and changes in effective tax rate or additional tax exposures. These and other important risks that could impact forward-looking statements are described more fully in the " Risk Factors" in our Form 10-K for fiscal 2025 and subsequent Form 10-Q filings. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are qualified by the cautionary statements in this section, and we have no duty to and disclaim any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events or developments or otherwise.
Investor Relations Contact: Media Relations Contact: John Sweeney, CFA, 321-724-3676 Sara Banda, 321-306-8927 investorrelations@l3harris.com media@l3harris.com
1 “FAS” is defined as Financial Accounting Standards. PAGE 5 Table 2 - Condensed Consolidated Balance Sheet (Unaudited)
($ millions) October 2, 2026 January 2, 2026 ────────────────────────────────────────────────────────────────────────────── Assets Current assets Cash and cash $ 2,471 $ 1,069 equivalents Receivables, net 1,640 1,371 Contract assets 3,999 3,566 Inventories, net 1,278 1,219 Short-term 550 — investments Other current assets 635 484 Assets of business — 884 held for sale Total current assets 10,573 8,593 Non-current assets Property, plant and 2,833 2,665 equipment, net Goodwill 19,999 20,010 Intangible assets, 6,389 6,509 net Deferred income 72 76 taxes Other non-current 3,940 3,342 assets Total assets $ 43,806 $ 41,195 Liabilities, mezzanine equity, and equity Current liabilities Current portion of $ 1,815 $ 673 long-term debt Accounts payable 2,182 2,461 Contract liabilities 3,107 2,262 Compensation and 500 482 benefits Other current 1,237 1,235 liabilities Liabilities of business held for — 113 sale Total current 8,841 7,226 liabilities Non-current liabilities Long-term debt, net 9,181 10,443 Deferred income 1,436 1,114 taxes Subsidiary Series A preferred stock 203 — conversion feature Subsidiary warrants 163 — Other non-current 2,755 2,777 liabilities Total liabilities 22,579 21,560 Mezzanine equity Redeemable subsidiary Series A 987 — convertible preferred stock Total equity 20,240 19,635 Total liabilities, mezzanine equity, $ 43,806 $ 41,195 and equity
PAGE 7 Table 4 - Reconciliation of Revenue, Operating Income and Margin to Segment Revenue, Operating Income and Margin - Non-GAAP Financial Measures Reconciliation (Unaudited)
1 Revenue attributable to our corporate headquarters, which includes amortization of program investment asset recognized in connection with DoW strategic investment in 2026. Year to date 2025 includes our divested CAS disposal group.
2 Segment revenue is a non-GAAP Financial Measure as defined by Regulation G. We use segment revenue because it reflects the aggregate results of our segments without the impact of corporate headquarters or divestitures. We believe this metric provide investors a more complete understanding of factors and trends affecting our business.
4 Includes a portion of management and administration, legal, environmental, compensation, retiree benefits, corporate eliminations and other. Year to date 2025 also includes the divested CAS disposal group.
5 Segment operating income and margin are non-GAAP Financial Measures as defined by Regulation G. We use segment operating income and margin to evaluate our core operating performance because it reflects the aggregate performance results of our segments without the impact of unallocated corporate items and it includes income from investments that are operationally aligned with our business segments. We believe these metrics provide investors a more complete understanding of factors and trends affecting our business. PAGE 8 Table 5 - Organic Revenue - Non-GAAP Financial Measures Reconciliation (Unaudited)
2 Includes corporate headquarters and our divested CAS disposal group in prior periods.
Table 6 - Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow - Non-GAAP Financial Measures Reconciliation (Unaudited)
1 Free cash flow is a non-GAAP Financial Measure as defined by Regulation G. As of third quarter 2026, we no longer include proceeds from disposal of property, plant and equipment, net. Prior periods have been recast for comparability. We use free cash flow to evaluate business performance and overall liquidity, and it is a performance metric in our annual incentive plan. We believe free cash flow is useful because it represents the cash generated from operations after reinvesting in our business that may be available to return to stockholders and creditors through dividends, share repurchases, and debt repayments, or to fund acquisitions or other investments. However, the entire amount of the free cash flow is not available for discretionary expenditures because of certain mandatory expenditures, such as debt repayments. PAGE 9 Key Terms
Description Definition Transaction and integration expenses associated with the Aerojet Rocketdyne acquisition in 2025; external costs related to pursuing acquisition and divestiture portfolio Acquisition, divestiture and optimization; non-transaction costs transaction-related expenses related to divestitures; costs related to the carve-out and planned MSL public offering; salaries of employees in roles dedicated to planned strategic transaction activity; and resolution of a procurement contract matter. In 2026, includes a loss recognized in connection with the Space Technology disposal group divestiture, which consists of certain product lines of our Space Propulsion and Power Systems business Business divestiture-related losses and the space portion of our Space & Sensors division reported in our Mission Solutions segment through the date of divestiture. In 2025, includes a loss recognized in connection with the CAS disposal group divestiture. Includes costs related to workforce optimization costs, incremental IT expenses for implementation of new systems, third-party consulting LHX NeXt implementation costs expenses and other related costs, including costs related to personnel dedicated to this project. The implementation phase of LHX NeXt was completed in fiscal 2025. Total value of funded and unfunded contract awards received from the U.S. Government and other customers Orders excluding unexercised contract options and potential orders under ordering-type contracts, such as indefinite delivery, indefinite quantity (IDIQ) contracts. Adjustment to eliminate the effect of Segment investment offset net investment gains or losses on segment aligned investments included in segment operating income.
Full text with the tables
Exhibit 99.1
L3Harris Delivers Record Backlog and Strong Third-Quarter Results
Broad-based growth with robust earnings and cash flow; increases full-year
guidance
•
Orders of $19.3 billion drove record backlog of $53.2 billion; book-to-bill of
3.2x
•
Revenue of $6.1 billion, up 7%, and up 9% on an organic 1
basis
•
Operating income margin of 13.0%, up 200 bps vs. prior year; segment operating
margin
2
of 15.9%
•
Diluted EPS of $3.28, up 33% year-over-year
•
Operating cash flow of $1.4 billion; free cash flow
3
of $1.3 billion, up 195% compared to prior year
• Guidance Update: Increases bottom end of the revenue guidance range to $23.5
billion to $23.7 billion (prev. $23.2 billion to $23.7 billion), increases GAAP
EPS range to $12.25 to $12.35 (prev. $11.80 to $12.00)
MELBOURNE, Fla., October 29, 2026
—
L3Harris Technologies (NYSE: LHX) reported its third quarter 2026 results.
“ Our team’s exceptional execution delivered solid financial performance in the
third quarter. We grew backlog to record levels, underscoring the consistently
strong demand for our mission-critical capabilities. Our priority now is to
convert that demand into results. We will continue to invest in production
capacity and differentiated capabilities across missiles and missile solutions,
space, resilient communications and multi-domain sensing, which will enable us
to deliver for the warfighter, our customers and our shareholders,” said Sam
Mehta, President and CEO, L3Harris.
Third-Quarter Summary
Revenue of $6.1 billion increased $401 million compared to prior year, up 7%,
and up 9% on an organic 1 basis, driven by double-digit growth in the Space &
Mission Systems and Missile Solutions segments. Operating income margin was
13.0%, up 200 bps compared to prior year, driven by higher revenues and
continued management of corporate expenses. Segment operating margin 2 was
15.9%, flat to prior year. Third quarter GAAP EPS increased 33% to $3.28 driven
by higher volumes, a lower level of corporate expense, lower interest expense
and a lower effective tax rate.
Third-Quarter Cash Generation
Net cash provided by operating activities in the quarter totaled $1.4 billion.
Capital expenditures were $179 million. Free cash flow 3 was $1.3 billion, up
195% over prior year. The Company ended the quarter with $11.0 billion in total
debt, $2.5 billion in cash and equivalents and $550 million in short-term
investments.
PAGE 1
Backlog and Orders
Orders received in the quarter totaled $19.3 billion, resulting in backlog of
$53.2 billion. Book-to-bill ratio was 3.2x for the quarter. By segment, Space &
Mission Systems book-to-bill was 1.0x, Communications & Spectrum Dominance was
1.9x and Missile Solutions was 11.8x.
FY26 Guidance
Management increases the bottom end of the revenue guidance range to $23.5
billion to $23.7 billion (prev. $23.2 billion to $23.7 billion), increases GAAP
EPS range to $12.25 to $12.35 (prev. $11.80 to $12.00) and maintains FY26 Free
Cash Flow guidance of $3 billion 3 .
Third Quarter & Recent Business Highlights
• Captured a $6.3 billion (excluding escalations), seven-year undefinitized
contract to scale propulsion production for the Terminal High Altitude Area
Defense (THAAD) system
• Captured a $4.7 billion (excluding escalations), seven-year undefinitized
contract to scale propulsion production for the PAC-3 Missile Segment
Enhancement (MSE) interceptor
• Announced a $250 million follow-on contract to manufacture standard-range
Guided Multiple Launch Rocket System (GMLRS) propulsion units
• Secured more than $500 million in VAMPIRE C-UAS orders from the United States
and allies. Delivered the first VAMPIRE units to the U.S. Army for hostile drone
defense just two months after receiving their order
• Awarded an $876 million contract modification to advance the development and
production preparation of the U.S. Navy Next Generation Jammer Low Band (NGJ-LB)
tactical electronic warfare system
• Opened the ‘Arsenal of Freedom’ solid rocket motor production facility in
Camden, Arkansas in October – one of approximately 60 new facilities being built
to address rising demand for munitions
• Completed the launch of NASA's Nancy Grace Roman Space Telescope with
L3Harris' 2.4-meter Optical Telescope Assembly (OTA), which serves as Roman’s
eye, as well as L3Harris’ radiation-hardened electronics, which keep the
telescope in operation approximately 1 million miles from Earth
1 Organic revenue is a non-GAAP Financial Measure as defined by Regulation G and
reconciled to GAAP in Table5.
2 Segment operating margin is a non-GAAP Financial Measure as defined by
Regulation G and reconciled to GAAP in Table4.
3 Free cash flow is a non-GAAP Financial Measure as defined by Regulation G and
reconciled to GAAP in Table6.
PAGE 2
SUMMARY FINANCIAL RESULTS
…
…
…
…
… T… Y… 2…
… Q… to G…
… 2… 20… D… 20… 2…
──────────────────────────────────────────────────────────────────────────────
… ~$…
& $ 3… $ 2,… $ 9,… $ 7… (P…
… ~$…
…
… ~$…
& 1… 1,… 5,… 5… (P…
… ~$…
…
… 1… 1,… 3,… 2… ~$…
… (u…
… -… -88 -2… -…
… 6… 5,… 17… 1…
…
… -5 1 -5 1…
$2…
-
$2…
… $ 6… $ 5,… $ 17… $ 1… (P…
$2…
-
$2…
…
…
… mid
& $ 3… $ 299 $ 941 $ 8… 10%
… (u…
…
… mid
& 5… 477 1,… 1… 25%
… (u…
…
… low
… 1… 124 381 3… 12%
(u…
…
… 9… 900 2,… 2…
…
…
…
…
…
… -… -2… -7… -…
…
…
…
…
… $ 7… $ 621 $ 2,… $ 1…
…
… 13… % 1… % 1… % 10… %
…
… Low
… 15… % 1… % 1… % 15… % 16%
… (u…
…
…
…
… 14… % 1… % 1… % 15… %
…
…
…
$1…
-
… $1…
… $ 3… $ 2.… $ 9.… $ 6… (P…
$1…
-
$1…
…
…
… 1… 18… 18… 1…
…
…
…
…
… $3…
… $ 1… $ 546 $ 2,… $ 1… (u…
…
… $3…
… $ 1… $ 427 $ 1,… $ 8… (u…
…
…
… $ 73 $ 176 $ 598 $ 9…
…
…
… $ 2… $ 225 $ 704 $ 6…
…
1 Segment revenue, segment operating income and segment operating margin are
non-GAAP Financial Measures as defined by Regulation G and reconciled to GAAP in
Table 4. A reconciliation of segment operating margin on a forward-looking basis
to GAAP is not available without unreasonable effort due to the unavailability
of items for exclusion from the GAAP measure. We are unable to address the
probable significance of this information, the variability of which may have a
significant impact on future GAAP results.
2 Revenue attributable to our corporate headquarters, which includes
amortization of program investment asset recognized in connection with DoW
strategic investment in 2026. Year to date 2025 includes our divested Commercial
Aviation Solutions business CAS disposal group.
3 Free cash flow is a non-GAAP Financial Measure defined and reconciled to GAAP
in Table 6. Net cash provided by operating activities is anticipated to be
approximately $3.6 billion and capital expenditures are anticipated to be
approximately $600 million. As of third quarter 2026, we no longer include
proceeds from disposal of property, plant and equipment, net. Prior periods have
been recast for comparability.
PAGE 3
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of
federal securities laws made in reliance on the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Examples include, but are not
limited to: planned investments and capacity expansion; our pipeline and backlog
expansion; 2026 guidance; the impact of recent and expected contract awards; the
2028 financial framework; the impact of the global security environment;
projections of other financial items; and assumptions underlying any of the
foregoing. Investors should not place undue reliance on forward-looking
statements, which reflect management’s current expectations, estimates,
projections, assumptions and information currently available to management, and
are not guarantees of future performance or actual results. Important risks that
could cause our results to differ materially from those expressed in or implied
by these forward-looking statements or from our historical results include, but
are not limited to, risks arising from: competitive markets; U.S. Government
spending priorities; changes in contract mix; unilateral contract action by the
U.S. Government or unexpected issues related to the DoW's investment in our
subsidiary; uncertain economic conditions; future geo-political events; supply
chain disruptions; indebtedness; interest rates and other market factors; and
changes in effective tax rate or additional tax exposures. These and other
important risks that could impact forward-looking statements are described more
fully in the " Risk Factors" in our Form 10-K for fiscal 2025 and subsequent
Form 10-Q filings. All subsequent written and oral forward-looking statements
attributable to us or any person acting on our behalf are qualified by the
cautionary statements in this section, and we have no duty to and disclaim any
intention or obligation, other than imposed by law, to update or revise any
forward-looking statements, whether as a result of new information, future
events or developments or otherwise.
Investor Relations Contact: Media Relations Contact:
John Sweeney, CFA, 321-724-3676 Sara Banda, 321-306-8927
investorrelations@l3harris.com media@l3harris.com
PAGE 4
Table 1 - Condensed Consolidated Statement of Operations (Unaudited)
($
milli…
except
per Year
share Third to
amoun… Quarter 2026 2025 Date 2026 2025
──────────────────────────────────────────────────────────────────────────────
Reven… $ 6,060 $ 5,659 $ 17,685 $ 16,217
Cost
of -4,448 -4,165 -13,169 -12,0…
reven…
Gener…
and -826 -873 -2,424 -2,462
admin…
expen…
Opera… 786 621 2,092 1,717
income
Non-s…
FAS 74 73 224 236
pensi…
incom…
Other
non-o…
(expe… -1 25 107 51
incom…
net
Inter…
expen… -116 -152 -381 -454
net
Income
before 743 567 2,042 1,550
income
taxes
Income
tax -111 -105 -298 -244
expen…
Net $ 632 $ 462 $ 1,744 $ 1,306
income
Subsi…
prefe…
stock -19 — -33 —
deemed
divid…
Net
income
avail… $ 613 $ 462 $ 1,711 $ 1,306
to
common
share…
Earni…
per
share
avail…
to
common
share…
Basic $ 3.29 $ 2.47 $ 9.18 $ 6.96
Dilut… $ 3.28 $ 2.46 $ 9.13 $ 6.92
Weigh…
common
shares
outst…
Basic 186.1 187.1 186.4 187.6
Dilut… 186.9 188.1 187.5 188.6
1 “FAS” is defined as Financial Accounting Standards.
PAGE 5
Table 2 - Condensed Consolidated Balance Sheet (Unaudited)
($ millions) October 2, 2026 January 2, 2026
──────────────────────────────────────────────────────────────────────────────
Assets
Current assets
Cash and cash $ 2,471 $ 1,069
equivalents
Receivables, net 1,640 1,371
Contract assets 3,999 3,566
Inventories, net 1,278 1,219
Short-term 550 —
investments
Other current assets 635 484
Assets of business — 884
held for sale
Total current assets 10,573 8,593
Non-current assets
Property, plant and 2,833 2,665
equipment, net
Goodwill 19,999 20,010
Intangible assets, 6,389 6,509
net
Deferred income 72 76
taxes
Other non-current 3,940 3,342
assets
Total assets $ 43,806 $ 41,195
Liabilities,
mezzanine equity,
and
equity
Current liabilities
Current portion of $ 1,815 $ 673
long-term debt
Accounts payable 2,182 2,461
Contract liabilities 3,107 2,262
Compensation and 500 482
benefits
Other current 1,237 1,235
liabilities
Liabilities of
business held for — 113
sale
Total current 8,841 7,226
liabilities
Non-current
liabilities
Long-term debt, net 9,181 10,443
Deferred income 1,436 1,114
taxes
Subsidiary Series A
preferred stock 203 —
conversion feature
Subsidiary warrants 163 —
Other non-current 2,755 2,777
liabilities
Total liabilities 22,579 21,560
Mezzanine equity
Redeemable
subsidiary Series A 987 —
convertible
preferred stock
Total equity 20,240 19,635
Total liabilities,
mezzanine equity, $ 43,806 $ 41,195
and
equity
PAGE 6
Table 3 - Condensed Consolidated Statement of Cash Flows (Unaudited)
($
millio… Third Year to
Operat… Quarter Date
Activi… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net $ 632 $ 462 $ 1,744 $ 1,306
income
Adjust…
to
reconc…
to net
cash
provid…
by
operat…
activi…
Deprec…
and 267 309 837 913
amorti…
Share-… -1 35 48 83
compen…
Net
period… -70 -66 -209 -216
benefit
income
Share-…
matchi…
contri…
under 51 64 158 200
defined
contri…
plans
Net
invest… -37 -7 -114 -11
gains
Change
in fair
value
of
subsid…
prefer… 50 — 50 —
stock
conver…
feature
and
warran…
Deferr…
income 63 245 245 151
taxes
(Incre…
decrea…
in:
Receiv… 369 -91 -306 -474
net
Contra… -299 180 -437 -454
assets
Invent… -6 -33 -61 53
net
Other
current 26 4 -153 -18
assets
Increa…
(decre…
in:
Accoun… 106 -131 -263 -93
payable
Contra… 169 -86 825 91
liabil…
Compen…
and 121 42 16 67
benefi…
Other
current 14 -227 -74 -495
liabil…
Income 23 -177 18 144
taxes
Other
operat… -39 23 -101 -103
activi…
Net
cash
provid… 1,439 546 2,223 1,144
by
operat…
activi…
Invest…
Activi…
Capital -179 -119 -386 -266
expend…
Procee…
from
dispos…
of
proper… 13 — 20 9
plant
and
equipm…
net
Procee…
from
sales
of 539 — 539 831
busine…
net
of cash
divest…
Cash
used
for -550 — -550 —
short-…
invest…
Other
invest… -4 -10 -15 -37
activi…
Net
cash
(used
in) -181 -129 -392 537
provid…
by
invest…
activi…
Financ…
Activi…
Procee…
from
issuan…
of
subsid… — — 973 —
Series
A
prefer…
stock,
net
Repaym…
of -3 -3 -115 -614
long-t…
debt
Change
in
commer… — -260 — 210
paper,
net
Repurc…
of -73 -176 -598 -998
common
stock
Divide… -234 -225 -704 -678
paid
Other
financ… 1 104 18 105
activi…
Net
cash
used in -309 -560 -426 -1,975
financ…
activi…
Effect
of
exchan…
rate
changes 1 — -3 18
on cash
and
cash
equiva…
Net
increa…
(decre…
in cash 950 -143 1,402 -276
and
cash
equiva…
Cash
and
cash
equiva… 1,521 482 1,069 615
beginn…
of
period
Cash
and
cash $ 2,471 $ 339 $ 2,471 $ 339
equiva…
end of
period
PAGE 7
Table 4 - Reconciliation of Revenue, Operating Income and Margin to Segment
Revenue, Operating Income and Margin - Non-GAAP Financial Measures
Reconciliation (Unaudited)
Year
Thi… to
($ Qua… Date
m… 2026 20… 2026 20…
──────────────────────────────────────────────────────────────────────────────
R… $ 6,0… $ 5,… $ 17,… $ 16…
(…
O… 5 -1 5 -1…
S… $ 6,0… $ 5,… $ 17,… $ 16…
r…
O…
i… $ 786 $ 621 $ 2,0… $ 1,…
(…
U…
c…
i…
A…
of 147 192 497 579
a…
i…
L…
N… — 25 — 99
i…
c…
B…
d… 17 — 27 17
l…
A…
d…
a… 9 10 49 40
t…
e…
C…
in
f…
v…
of -3 25 35 48
d…
c…
p…
l…
S…
i… — — 39 —
o…
O… 11 27 72 40
i…
U…
c…
i… 181 279 719 823
a…
o…
n…
S…
o… $ 967 $ 900 $ 2,8… $ 2,…
i…
O…
m…
(… 13… % 11.0 % 11… % 10.6 %
/
(…
S…
o…
m… 15… % 15.9 % 15… % 15.8 %
/
(…
1 Revenue attributable to our corporate headquarters, which includes
amortization of program investment asset recognized in connection with DoW
strategic investment in 2026. Year to date 2025 includes our divested CAS
disposal group.
2 Segment revenue is a non-GAAP Financial Measure as defined by Regulation G. We
use segment revenue because it reflects the aggregate results of our segments
without the impact of corporate headquarters or divestitures. We believe this
metric provide investors a more complete understanding of factors and trends
affecting our business.
3 Refer to Key Terms on page 10.
4 Includes a portion of management and administration, legal, environmental,
compensation, retiree benefits, corporate eliminations and other. Year to date
2025 also includes the divested CAS disposal group.
5 Segment operating income and margin are non-GAAP Financial Measures as defined
by Regulation G. We use segment operating income and margin to evaluate our core
operating performance because it reflects the aggregate performance results of
our segments without the impact of unallocated corporate items and it includes
income from investments that are operationally aligned with our business
segments. We believe these metrics provide investors a more complete
understanding of factors and trends affecting our business.
PAGE 8
Table 5 - Organic Revenue - Non-GAAP Financial Measures Reconciliation
(Unaudited)
20… Ye…
Th… to
($ Qu… Da…
m… GA… Ad… Or… GA… Adj… Org…
──────────────────────────────────────────────────────────────────────────────
S…
& $ 2,… $ — $ 2,… $ 7,… $ — $ 7,…
M…
S…
C…
& 1,… — 1,… 5,… — 5,…
S…
D…
M… 1,… -1… 905 2,… -1… 2,…
S…
I… -88 — -88 -2… — -2…
S… 5,… -1… 5,… 16… -1… 15…
r…
O… 1 — 1 147 -1… 1
T… $ 5,… $ -1… $ 5,… $ 16… $ -2… $ 15…
r…
1 Includes our divested Space Technology disposal group in prior periods.
2 Includes corporate headquarters and our divested CAS disposal group in prior
periods.
Table 6 - Reconciliation of Net Cash Provided by Operating Activities to Free
Cash Flow - Non-GAAP Financial Measures Reconciliation (Unaudited)
($ Third Year to
million… Quarter 2026 2025 Date 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net
cash
provid… $ 1,439 $ 546 $ 2,223 $ 1,144
by
operat…
activi…
Capital -179 -119 -386 -266
expend…
Free
cash $ 1,260 $ 427 $ 1,837 $ 878
flow1
1 Free cash flow is a non-GAAP Financial Measure as defined by Regulation G. As
of third quarter 2026, we no longer include proceeds from disposal of property,
plant and equipment, net. Prior periods have been recast for comparability. We
use free cash flow to evaluate business performance and overall liquidity, and
it is a performance metric in our annual incentive plan. We believe free cash
flow is useful because it represents the cash generated from operations after
reinvesting in our business that may be available to return to stockholders and
creditors through dividends, share repurchases, and debt repayments, or to fund
acquisitions or other investments. However, the entire amount of the free cash
flow is not available for discretionary expenditures because of certain
mandatory expenditures, such as debt repayments.
PAGE 9
Key Terms
Description Definition
Transaction and integration expenses
associated with the Aerojet
Rocketdyne acquisition in 2025;
external costs related to pursuing
acquisition and divestiture portfolio
Acquisition, divestiture and optimization; non-transaction costs
transaction-related expenses related to divestitures; costs
related to the carve-out and planned
MSL public offering; salaries of
employees in roles dedicated to
planned strategic transaction
activity; and resolution of a
procurement contract matter.
In 2026, includes a loss recognized
in connection with the Space
Technology disposal group
divestiture, which consists of
certain product lines of our Space
Propulsion and Power Systems business
Business divestiture-related losses and the space portion of our Space &
Sensors division reported in our
Mission Solutions segment through the
date of divestiture. In 2025,
includes a loss recognized in
connection with the CAS disposal
group divestiture.
Includes costs related to workforce
optimization costs, incremental IT
expenses for implementation of new
systems, third-party consulting
LHX NeXt implementation costs expenses and other related costs,
including costs related to personnel
dedicated to this project. The
implementation phase of LHX NeXt was
completed in fiscal 2025.
Total value of funded and unfunded
contract awards received from the
U.S. Government and other customers
Orders excluding unexercised contract
options and potential orders under
ordering-type contracts, such as
indefinite delivery, indefinite
quantity (IDIQ) contracts.
Adjustment to eliminate the effect of
Segment investment offset net investment gains or losses on
segment aligned investments included
in segment operating income.
PAGE 10