2020 Annual Report FINANCIAL * 2019 2020 HIGHLIGHTS $ in millions NON-GAAP EARNINGS PER SHARE Organic Revenue* $17,677 $18,194 $11.60 $10.26 Non-GAAP EBIT* $3,039 $3,280 Non-GAAP EBIT Margin* 16.8% 18.0% 2019 2020 Capital Returns ADJUSTED FREE CASH FLOW (IN MILLIONS) Dividends $499 $725 Share Repurchases $1,500 $2,290 $2,686 $2,095 FIVE-YEAR CUMULATIVE TOTAL RETURN $295 $263 $270 LHX 2019 $198 2020 S&P 500 $147 NET DEBT/EBITDA LHX UP $109 170% $100 SINCE FY15 1.8 S&P UP 102% SINCE FY15 1.6 FY15 FY16 FY17 FY18 FY19 1/3/2020 FY20 ABOUT L3HARRIS TECHNOLOGIES 2019 2020 L3Harris Technologies is an agile global aerospace and defense technology innovator, delivering end-to-end TOTAL BACKLOG (IN MILLIONS) solutions that meet customers’ mission-critical needs. The company provides advanced defense and commercial $21,670 technologies across air, land, sea, space and cyber $20,146 domains. L3Harris has approximately $18 billion in annual revenue and 48,000 employees, with customers in more than 100 countries. *Includes or reflects non–GAAP financial measures (NGFMs) and/or pro forma financial 2019 2020 measures; refer to disclosures and NGFM reconciliations in “Non-GAAP and Pro Forma Financial Measures” section on pages 5-6. L3HARRIS TECHNOLOGIES 2020 ANNUAL REPORT LETTER TO SHAREHOLDERS Integrating a merger of equals while meeting stakeholder commitments is challenging even under ideal circumstances. 2020 was anything but ideal. Global health, economic and social crises tested the very fabric of our merger vision – to create a company with the scale, resources and capabilities to provide affordable, innovative and rapidly fielded solutions that address our customers’ mission critical needs. But, it was the strength of that vision – combined with the heroic efforts of our employees, suppliers and customers – that enabled L3Harris to not only succeed, but emerge stronger than we imagined when we set out on this journey over two years ago. OUR HEROES After the calendar-year close, we raised our quarterly Our 48,000 employees succeeded amid some of dividend by 20% – representing a nearly 50% increase the most challenging circumstances imaginable. since the merger – and established a new $6 billion With an equal number working remotely and onsite, share repurchase authorization. The actions reflect employees adhered to strict health and safety the strength of our company and confidence in our protocols while continuing to design and deliver financial outlook and ability to generate strong free innovative new technologies to meet our customer cash flow while continuing to invest for future growth. commitments. They accomplished this while donating time to support first responders, healthcare workers, STRATEGIC PRIORITIES educators and community organizations’ COVID-19 We continued to make significant strides executing and economic relief efforts. against our strategic priorities during the year. Our focus on excellence helped deliver $205 million in L3Harris’ 7,000-plus suppliers – many small net synergy savings in 2020 – $270 million since businesses – were forced to overcome their own the merger. We increased our net savings target to staffing, resource and material constraints. We $320-$350 million in 2021, still a year ahead of schedule. supported them by accelerating payments and sharing best practices, and they responded by We maintained our innovation strategy, focusing delivering the products and services we required our leadership team and industry leading ~4% R&D to operate without interruption. investment on open architecture, multi-function and software-defined solutions across our broad C5ISR Through shared adversity we also tightened portfolio of capabilities. Our investments included the bonds with our customers and changed the funding revenue synergy opportunities involving way we do business. Together we created more new solutions that combine capabilities from across efficient problem-solving approaches that will legacy companies. pay benefits well into the future, such as using remote communication tools to increase dialogue, Our emphasis on working capital reduction led to collaboration and even virtual inspections. an eight-day improvement in 2020, which helped generate $2.7 billion in adjusted free cash flow. FINANCIAL RESULTS* This enabled us to return $3 billion to shareholders Despite 2020’s challenges, L3Harris delivered solid through $725 million in dividends and $2.3 billion results in its first full year of operation as a combined in share repurchases. company – exceeding initial pre-pandemic guidance on margins, EPS and free cash flow. Non-GAAP We continued to position the business for long-term earnings per share grew 13% to $11.60, with value creation by exiting non-core businesses – with revenue up 3% organically and margin increasing a goal to divest a cumulative 8-10% of revenue – and 120 bps to 18%. Adjusted free cash flow rose 28%, focusing our management time and R&D investments and we reported solid orders and a book-to-bill on more strategic, technology-based business areas. above 1. PAGE 1 MERGER INTEGRATION OUTLOOK In a short period, we’ve made tremendous progress We have laid the important building blocks for our integrating two large organizations into a single high- new company. Entering 2021, we are well positioned performance, technology-focused operating company with a strong organization and technologies that align – and positioning L3Harris as a full, end-to-end with our customers’ budgets and national defense mission solutions prime. priorities to counter near-peer threats. Since the merger close, we’ve established a culture We will continue to execute on our strategic priorities of integrity, excellence and respect and issued our – focusing on growing the top-line, completing the first Diversity & Inclusion report and Sustainability integration, expanding margins through flawless report. We made great strides maturing our culture execution and continuous improvement, reshaping of continuous improvement by institutionalizing our portfolio and maximizing cash flow to support the company’s e3 (excellence, everywhere, every capital returns. day) operating model – embedding metrics into our business processes and providing employees with As established by the merger agreement, we will tools and training. complete a leadership transition on June 29, 2021, with Bill serving as Executive Chair of the Board and We also leveraged functional efficiencies and shared Chris becoming CEO. We developed the L3Harris services, empowering the company to harmonize vision together, have partnered throughout the benefits, rationalize our geographic footprint and integration and are committed to continuing to consolidate our supply chain, among other cost- execute the strategy established at the merger close. saving improvements. We are proud of the progress we have made so These actions helped foster collaboration throughout far, which has garnered third-party recognition the company, leading to both cost and revenue including being named to FORTUNE’s Most Admired synergies that exceeded initial expectations. The Companies’ list, Bloomberg’s Gender Equality Index combined capabilities of our company are allowing and the Human Rights Campaign’s Best Places to us to offer new solutions, as well as enter new Work for LGBTQ Equality Index. markets and gain share in existing markets, which would not have been possible independently. Our Integrating the two companies and overcoming this revenue synergy pipeline matured faster than past year’s challenges would not have been possible originally anticipated – nearing $7 billion, with an without the support of our Board of Directors, approximately two-thirds win rate on proposals leadership team and company’s 48,000 employees. awarded to date, which have over $2 billion in Our company’s success is a testament to their potential lifetime value. resilience and dedication. William M. Brown Christopher E. Kubasik Chair and CEO Vice Chair, President and COO COMPANY HIGHLIGHTS ~4% EMPLOYEES $18B INDUSTRY-LEADING ANNUAL REVENUE INTERNAL R&D INVESTMENT 48K CUSTOMERS IN ~19K MORE THAN ENGINEERS & SCIENTISTS 100 COUNTRIES L3HARRIS TECHNOLOGIES 2020 ANNUAL REPORT INTEGRATED SPACE AND MISSION SYSTEMS AIRBORNE SYSTEMS $5.5B $4.9B Leading technology integrator to U.S. and Mission solutions for space and airborne international militaries for complex ISR, domains with defense, intelligence and airborne, maritime and space platforms commercial applications ISR | Maritime | Electro-Optical Space | Intel and Cyber | Avionics | Electronic Warfare COMMUNICATION AVIATION SYSTEMS SYSTEMS $4.4B $3.4B Secure ground and airborne communications Commercial and military aviation solutions, and network systems for U.S. military, international systems, networks and pilot training forces and commercial customers Defense Aviation | Commercial Aviation | Tactical Communications | Broadband Commercial & Military Training | Communications | Integrated Vision Solutions | Mission Networks Public Safety L3HARRIS LEADERSHIP BOARD OF DIRECTORS > William M. Brown > Peter W. Chiarelli > Roger B. Fradin > Rita S. Lane Chair and CEO General, U.S. Army(Retired) Former Vice Chairman, Former Vice President, Honeywell Operations, Apple > Christopher E. Kubasik > Thomas A. Corcoran Vice Chair, President Former President and CEO, > Lewis Hay III > Robert B. Millard and COO Allegheny Teledyne Former Chairman Chair Emeritus, and CEO, NextEra Energy MIT Corporation > Sallie B. Bailey > Thomas A. Dattilo Former EVP and