CL King 8th Annual Best Ideas Conference

CL King 8 th Annual Best Ideas Conference 

September 15, 2010 

Gary L. McArthur 

Sr. Vice President and Chief Financial Officer 

RF COMMUNICATIONS • GOVERNMENT COMMUNICATIONS SYSTEMS • BROADCAST COMMUNICATIONS 

Corporate Strategy & Outlook, 1 

Investor Briefing, September 2010

Corporate strategic vision 



Executive summary 

• We have established a culture focused on delivering continuous 

growth in revenue, earnings and cash flow 

• Our core businesses are well-positioned with a track record of 

solid execution and market share gains 

• Growth initiatives in adjacent markets are contributing 

• Strategic acquisitions further enhance revenue and earnings 

growth and business diversification 

• Operating margins are sustainable 

• Strong operating cash flow and conservative balance sheet 

management provides flexibility 

Corporate Strategy & Outlook, 3 Investor Briefing, September 2010

Solid track record of growth 

Revenue ($ in billions) 

Earnings per share 

14% CAGR 17% CAGR 

$3.1 

$3.7 

FY06 FY07 FY08 FY09 FY10 FY11E 


$4.6 

$5.0 

$5.2 

$5.9 – 6.0 $4.60 – 4.70 

$4.43 

$2.15 

$2.71 

$3.33 

$3.85 

FY06 FY07 FY08 FY09 FY10 FY11E 

Based on fiscal 2011 guidance provided on August 3, 2010. Reference non-GAAP reconciliation on the Harris investor relations website. 


Fiscal 2011 seasonality 

Earnings per share 

$1.89 

H1'10 H2'10 H1'11 F H2'11 F 

Based on midpoint of fiscal 2011 guidance provided August 3, 2010. Reference non-GAAP reconciliation on the Harris investor relations website. 


$2.53 

$2.20 

$2.45 

• RF Communications first quarter 

revenue expected to be 30% 

higher than the prior year with 

segment margins of about 39%, 

driving atypical seasonality in 

fiscal 2011 

• Second quarter revenue is 

expected to be sequentially 

lower, with sequential increases 

in the third and fourth quarter 

• Fiscal 2011 Q1 EPS expected to 

be in a range of $1.20 to $1.25 

per share 

• Fiscal 2011 Q2 EPS expected to 

be in a range of $0.95 to $1.00 

per share 


Revenue by segment 

RF Communications 

segment 


International 

Public 

Safety 

Broadcast 

Communications 

segment 

Based on company estimates for fiscal 2011. 

DoD 

Broadcast 

Managed 

Satellite 

Services 

Defense 

Programs 

National 

Programs 

IT Services 

Civil 

Programs 

Government 


Systems segment 


Revenue by business model 

Commercially developed 

Based on company estimates for fiscal 2011. 


Government programs 


Engineering R&D investments 

Fiscal 2010 – $1.0 billion 

Government 

funded 

$721 


Internally 

funded 

$326 

$90 $118 

$169 $196 

$248 

($ in millions) 

$244 

$326 

FY04 FY05 FY06 FY07 FY08 FY09 FY10 


$900 

$800 

$700 

$600 

$500 

$400 

$300 

$200 

$100 

$- 

Strong cash flow 


$334 


Operating cash flow Free cash flow 

$439 

$556 

$667 

FY06 FY07 FY08 FY09 FY10 FY11 Guidance 

120% 

100% 

80% 

60% 

40% 

20% 

0% 

62% 

$803 

$775 

$900 

$800 

$700 

$600 

$500 

$400 

$300 

$200 

$100 

$- 

$188 

Free cash flow/net income 

82% 

90% 

106% 

$310 

$410 


$545 

$605 


Based on midpoint of fiscal 2011 guidance provided August 3, 2010. Reference non-GAAP reconciliation on the Harris investor relations website. 

104% 

86% 

$513 


Solid financial position 

• Excellent liquidity 

– $455 million in cash and cash equivalents at year end 

– No long-term debt maturities before October 2015 

– $750 million credit facility in place through 2013 – subsequent to 

year end borrowed $320 million to fund acquisition of CapRock 

– Cash flow from operations expected to be in a range of 

$750 - $800 million in fiscal 2011 

• Strong balance sheet 

– Total-debt-to-total-capital ratio of 36% 

– Debt ratings at BBB+/Baa1 

• $450 million remaining under stock repurchase program 

authorized February 2009 

• Quarterly dividend of $.25 per share 

Corporate Strategy & Outlook, 10 Investor Briefing, September 2010

RF Communications 

RF Communications, 11 Investor Briefing, September 2010

RF Communications business units 

• Advanced JTRS approved 

tactical radio products 

and systems 

• NSA certified 


Security products 

• Intelligence 

Surveillance 

Reconnaissance (ISR) 

products and applications 

• Full range of tactical 

radio products 

and systems 

• Exportable 

communications 

security products 

• Integrated 


systems 

• Full range of Land 

mobile radio (LMR) 

products 

• Integrated LMR 


systems with end 

to end IP capability 

• Professional 


over cellular 


RF Communications snapshot 


$2,500 

$2,250 

$2,000 

$1,750 

$1,500 

$1,250 

$1,000 

40.0% 

30.0% 

20.0% 

10.0% 

0.0% 

Revenue guidance 

$2.1B 

7% to 

8% 

growth 

Fiscal 2010 Fiscal 2011F 

Operating margin guidance 

35.2% 

Based on fiscal 2011 guidance provided August 3, 2010. 

~33% 


Highlights 

• Segment backlog of $1.76B 

providing foundation for continued 

growth in fiscal 2011 

• Tactical radios orders opportunity 

pipeline of $2B for international and 

$1.5B in the U.S. market 

• Stronger international orders reflect 

a strengthening global market and a 

significant uptake in customer 

adoption of Falcon III radio family 

• Continue to invest Harris funds for 

development of new products 

• Public Safety and Professional 

Communications opportunity 

pipeline exceeding $3 billion in 

North America 


FY06 – FY10 Tactical radio orders 


$800 

$700 

$600 

$500 

$400 

$300 

$200 

$100 

$0 

Q1 

'06 

Q2 

'06 

Q3 

'06 

Q4 

'06 

Q1 

'07 

Q2 

'07 

Q3 

'07 

Q4 

'07 

Q1 

'08 

Q2 

'08 

RF Communications, 14 Investor Briefing, September 2010 

Q3 

'08 

Q4 

'08 

Q1 

'09 

Q2 

'09 

Q3 

'09 

Q4 

'09 

Q1 

'10 

Q2 

'10 

Q3 

'10 

Q4 

'10

Worldwide tactical radio market leadership 

Selex 

3% 

Ultra 

Electronics 

3% 

All 

Others 

18% 

Raytheon 

4% 

Harris 

38% 

Tadiran 

5% 

Thales 

13% 

ITT 

16% 

Harris market share was 38% in CY2009, 

one point lower than in CY2008, in a 

market that declined 8% 

Harris market share has doubled over 

the past 5 years 

Note: Definition of “core tactical radio market” expanded in CY2009 include High-Capacity Data Radio, Secure Personal Radios and High-Capacity LOS 

Harris market share estimates based on calendar year 2009 ground-based, global tactical radio market of $3.9B compared to $4.2B in the prior year. 


19% 

23% 

28% 

32% 

39% 

38% 

2004 2005 2006 2007 2008 2009

U.S. Armed Forces ground tactical 

radios in service 2010 

MB MP 

Raytheon PSC- 5 

Raytheon EPLRS 

Harris AN/PRC- 117F 

Legacy radios 

Harris estimate of radios in units. 

MB HH 

Thales MBITR 

1.1 million radios 

Acquisition cost ~ $14 Billion 

SPR 

Motorola, ICOM, EFJ 

HF 

Harris AN/PRC- 150 

JTRS HH and MP 

Thales AN/PRC- 148 



Harris AN/PRC- 117G 

VHF- SINCGARS 

ITT 

Large long-term replacement 

market for non-JTRS radios 


Addressable tactical communications 

market expansion 

Core tactical radio market 

Expanded tactical radio market 

Expanding into other adjacent markets 

$1.6B 

CY05 

$2.7B 

CY06 

$8,000 

$0 

$6.4B 

International 


Systems 

Narrowband 

SATCOM 

COMSEC 

Falcon Watch Sensors 

International 


Systems 

International 


Systems 

COTS Tactical Intercoms 

Narrowband SATCOM 

COMSEC COMSEC 

Falcon Falcon Watch Watch Sensors Sensors 

Falcon Watch 


High-Capacity Sensors 

LOS LOS Falcon Watch Sensors 



Falc 

High-Capacity Secure Secure Personal LOS Personal Radio Radio High-Capacity High-Capacity Falcon LOS Watch LOS Sensors High-Capacity LOS Falcon W 

High-Capacity LOS 

Secure Personal Radio 

Secure Secure Personal Personal Radio Radio 

Secure Personal Falcon Radio Watch SensorsH 

High-C 


Secure Personal Radio 

MB Handheld 

MB Manpack 

VHF International 

MB Handheld 

MB Handheld 

MB MB Manpack 

MB Manpack 

VHF VHF International VHF International 

High-Capacity Secure LOS Personal Wideband Radio 

Sec 


Secure Personal Radio Networking Secure P 

Radio Secure Personal Radio 

MB Handheld 

MB Handheld MB Handheld MB Handheld 

MB Handheld 

MB Manpack MB Handheld 

M 

MB Manpack MB Manpack MB Manpack MB H 

MB Manpack 

MB Manpack 

M 


MB M 

VHF SINCGARS 

VHF International VHF International VHF International 

VHF SINCGARS 



VH 

VHF SINCGARS 

VHF SINCGARS 

VHF Int 

VHF SINCGARS 

HF 


$8,000 

$7.0B 

Narrowband 


SATCOM 

HF 

HF HF 

$7.8B 

International International 

InterI 

Communications Communications Systems International Communic Comm 

Systems 


Systems 

COTS Tactical Intercoms 


COMSEC 

COMSEC 

COMSEC 

$0 

CY07 CY08 

CY09 CY08 

CY08 

CY10CY09 

CY09 

Narrowband SATCOM Tactical ISR Narrowband SATCOM SATCOM Narrowba Narro 


HF 

VHF SINCGARS 

VHF SINCGARS VHF SINCGARS 

VHF SINCGARS 

V 

VHF S 

HF 

HF 

COTS Tactical Intercom 

Narrowband SATCO 

COMSEC COMSEC 

CO 

COMSEC 

HF 

HF 

CY11CY10 

HF 

CY10 

C

Macro market trends 

• Ongoing conflicts will likely drive Defense and Homeland Security 

Communications requirements 

• DoD supplemental budgets have migrated to base budget 

• Increased ISR spending and convergence with 

Networked Communications 

• Emergence of new regional/country markets – Libya, India, Africa 

• Transition from narrowband to wideband networking 

• Continued focus on reduction in size, weight and power 

• Increased use of 4G cellular/broadband in defense and public safety 

• Greater fielding of integrated Soldier Systems 

Market trends should drive additional demand and funding for more 

capable mission critical communications capabilities 


Key differentiators 

• “Commercial” business model 

– Anticipate market needs; invest 

internal R&D resources; and provide 

ready-to-ship, off-the-shelf products 

• Faster-to-market with new technology 

• Broadest product portfolio 

• World-class international 

distribution channels 

• Outstanding field service and support 

• Global player – strong across 

U.S. and international markets 


Expanded tactical communications 

product portfolio 

• Greatly expanded 

product portfolio 

provides strong 

entry position in 

multiple segments 

of expanded market 

HF, VHF, MB 

BFT 

Encryptor 

Situational 

Awareness 

PRC-152 

Sensors 

PRC-117G 

RF-7800M 

Intercoms 

SecNet 

2005 2010 


BGAN 

SPR 

VRC-110 

System 

Products 

HCLOS 

ISR 

RF-7800V HF, VHF, MB 

310M-HH

Falcon III is changing the game with 

battlefield proven, multi-mission JTRS radios 

• Multiband, multi-mission interoperability 

• Advanced features 

– Secure wideband networking 

• Streaming video, soldier-to-soldier data 

transmission, ISR applications; SIPRNET 

IP connection with Pentagon 

– Extended frequency range 

– Significantly reduced size and weight 

– Programmable HAIPE encryption 

– Waveform portability / upgradability to 

address future mission needs 

• Mission critical waveforms – 

ROVER, HPW, IW, COBRA 

• JTRS ready – SRW, WNW, MUOS 

Video 

Dissemination 

Network-wide 

Email & Chat 

Ground-to-Air 

Situational 

Awareness 

TACSAT 

Biometrics 

Data 

Legacy 

Interoperability 

First 

Responders 

APCO P-25 


ISR 

Falcon III addresses the full range of mission requirements 

today and enables the mission critical applications of the future

Accelerating adoption of Falcon III radios 

• Embraced by all branches of U.S. Armed Forces 

for a wide variety applications 

• 125,000+ JTRS-approved Falcon III radios fielded 

• AN/PRC-152 handheld and AN/VRC-110 vehicular 

systems in service with all branches 

of U.S. Armed forced and 15 allied countries 

• AN/PRC-117G manpack radio with ANW2 

wideband networking now in service with all 

branches of the U.S. armed forces 

• Major AN/PRC-117G contract vehicles in place 

– U.S. Army 

– USMC 

– USSOCOM 

First JTRS-approved tactical radio to be used in a 

wideband networking battlefield application 


AN/PRG-117G feedback from the 

82 nd Airborne Division 

“Leveraging the capabilities of the PRC-117G … 

directly translates to warfighters having SIPRNet 

voice and data at anytime and from any location.” 

“PRC-117Gs … cost far less than … Joint Tactical 

Radio System (JTRS) … These radios are available 

today and can be fully integrated into the … 

architecture.” 

“Expand the use of ANW2…This is tremendous 

capability…to save precious SATCOM bandwidth” 

“Include the ANW2 waveform and AN/PRC-117G as 

a solution & component of the JTRS family/program 

of record; this will allow immediate fielding of JTRS 

– capable platforms …” 

Reference: A tactical commander's vision of ideal communications 

Feb 17, 2010 

By Maj. Paul Sparks and Maj. Graham Fox, 

G6, 82 nd Airborne Division 


AN/PRC-117G Army capability set (CS) 

2009 — 2010 fielding 

Army capability sets – interoperable 

communications systems and applications 

fielded together to strengthen Brigade Combat 

Team (BCT) Battle Command Network 

• Will provide secure wideband 

networking for all Army Brigade 

Combat Teams in Afghanistan 

• Operational Need Statements for 

1,700 AN/PRC-117G systems 

• Wideband networks from Platoon 

through Battalion 

• Enables full range of wideband 

networking applications 

• Establishes the standards and 

procedures for future battlefield 

networking 

Will extend JTRS-approved wideband networking radio fielding to 

all Army BCTs deployed to Afghanistan 


Marine Corps AN/PRC-117G 

standardization 

Light Anti-Air Defense (LAAD) program 

• Early USMC AN/PRC-117G adoption 

• Total requirement 400+ systems 

Tactical Networking Trials (TNT) 

• Joint USA/USMC Operational Evaluation 

• AN/PRC-117G/ANW2 determined to be a 

“game-changing capability” 

Multiband Radio (MBR) program 

• Amended contract to incorporate 

AN/PRC-117G line items 

• Initial $75M deliver order 

• $148 of remaining contract headroom 

USMC’s next generation multimission networking 

radio standard 


Continuing innovation — family 

of mission module appliqués 

Expands PRC-117G 

capability to address future 

customer-specific 

requirements 

• 30 to 512 MHz 

• ANW2, SINCGARS, 

HAVEQUICK, DAMA, HPW 

• Type 1 encryption 

• 1.6 to 30 MHz 

• Type 1 encryption 

• Interoperable w/PRC-150 

• Common data link (CDL) 

• ROVER 

• SUAS DDL 

• ISR video dissemination 

• RF scanning 

• Signal intercept 

• Direction finding 


PRC-152 

PRC-150 

RF-7800T 

SIGINT 

Not in current JTRS ORD

ISR product line expansion 

Tactical 

Operations 

Center (TOC) 

Airborne 

Embedded Video 

Communications Module 

Target 

Dismount 

Ground Mobile 

Market Segment Size Product Form Factor Funded Service Programs 

Airborne $100M 

Ground Mobile $200M 

Dismount $300M 

Falcon III 

Common Data Link (CDL) 

Mission Module 

Remote Video Terminal 

(RVT) 

• RAVEN Small UAS (SUAS) Program 

• Shadow 200 Ground Maneuver UAS 

• Fire Scout 

• USMC - CDL program 

• Video (Cubic partnership with Harris Corp.) 

• SOCOM-Next Gen Tactical C4I program 

• U.S. Army -One System Remote Video 

Terminal (OSRVT) 

• Joint Tactical C4I Transceiver system 

• USAF -Tactical Air Control Party (TACP) 


Communications security programs 

VACM 

TKL 

KGV-72 

• USAF VINSON Advanced Narrowband Voice 

Terminal Cryptographic Modernization (VACM) 

– Next generation stand alone COMSSEC terminal 

replacement program 

– Contract award August 2010 

– Potential value $400M 

• Tactical Key Loader (TKL) 

– Development complete – 2010 

– Production contract – 2011 

– Market opportunity $50 – $100M 

• KGV-72 Blue Force Tracking (BFT) Encryptor 

– Production contract – May 2010 

– Market opportunity $150 – $200M 

• Multiple new NSA strategic initiatives for next 

generation communications security devices 

Addressing over $700M in communications security program opportunities 


Global footprint 

Harris presence 

Harris dealers 

Harris Falcon ® customers 

Falcon tactical radio family users are in 100+ countries on five continents 


Major international standardization 

programs and opportunities 

Standardization Program Wins 

Standardization Program Opportunities 

Multi-year standardization programs create long-term stability in the international market 


Pakistan Frontier Corps C4ISR program 

• Secure, high-speed 


infrastructure backbone 

• Fixed, mobile and man 

portable tactical 

radio extension 

• Implementing phases 1 – 3 

of potential $250M 

multi-phase project 

• Complete turnkey system 

using full range of Falcon II 

and Falcon III radio families 


Australia Land 200 program 

• Next generation secure, voice and data 

communications infrastructure in support of 

vehicular and dismounted combat systems 

• AN/PRC-152 Falcon III Multiband and AN/PRC-150C 

HF radio systems deployed in initial phase 

• Future phases will use AN/PRC-117G Falcon III 

for wideband networking 

• $500M multi-year program 


Iraq 

Ministry of Interior 

• Tactical radios and integrated 

C3 system for Border Security 

Forces and anti-terrorism units 

Ministry of Defense 

• Standardized on HF and 

multiband tactical radios 

• $500M market potential 


Mexico Navy C4ISR system 

Video relay via VHF 

and SPR radios and 

then over BGAN to 

HQ, using Inmarset 

network. 

• Integrated tactical C4ISR system 

• Enables land, air and sea operations 

• Leverages full range of Falcon II/III 

radios and BGAN SATCOM 

• Phase 1 implementation – $10M 

• Future phases – $30M – $50M 


Public Safety and Professional 

Communications — key markets 

Public Safety / Public Service 

Transit and Transportation 

Utility 

U.S. DoD and Federal 

International 


North American land mobile radio market 

Motorola 

62% 


EADS 

1% 

Kenwood 

6% iCOM 

2% 

Others 

4% 

Tait 

1% 

EFJ 

2% 

Applications 

13% 

HARRIS 

PSPC 

9% 

Harris market share was 9% of a total $4.7B market in CY2009

Broad product portfolio 

Vertical integration 

Network Switching 

Products 

Network Administration 

Products 

Network Management 

Systems 

Infrastructure Site 

Products 

Mobile and Portable 

Radios(Terminals) 

Dispatch Consoles 

Interworking Gateways 

Product Portfolio Description / Comments 

• Voice and data switching 

• End to end IP 

• High availability 

• Soft-switch technology 

• COTS hardware 

• WEB-based administration server 

• System database 

• Key management facility 

• Configuration management 

• Fault management 

• Real-time monitoring 

• Advanced Information Assurance 

• Multimode Master V 

• P25 Phase II 

• Multimode 

• Multiband 

• Market / user tiers 

• Multimode 

• Customizable 

• Analog to IP 

• Legacy protocols 

• Priority / pre-emption 


End-to-end internet protocol

Powerful network backbone 

delivers competitive advantage 

• Standards based 

solutions and products 

• Internet Protocol (IP) 

VIDA networks 

• LMR and 

Broadband solutions 

• Multiband, 

Multimode radios 

• IP Gateway 

for inter-system 

interoperability 

VIDA – voice, interoperability, data and access network supports multiple 

platforms on a secure and scalable IP backbone 


Delivering interoperability 

Unity™ XG-100 

Full Spectrum 

Land Mobile Radio 

• In production 

• FCC certified 

• Early customers 

– NY State Police 

– LA County Sheriff 


Key wins as Harris in first year 

Federal program $134M potential 

Miami Dade County, FL $100M 

State of Maine $34M 

Monroe County, NY $30M 

Center Point Energy $23M 

Lower Colorado River Authority $16M 

Monterey County, CA $15M 

State of Vermont $14M 


U.S. Department of Justice 

Integrated Wireless Network (IWN) 

• Nationwide digital P25 trunked system for 

federal first responders 

• U.S. Department of Justice – 30,000 users 

– FBI, U.S. Marshalls, Bureau of Alcohol 

Tobacco and Firearms and Treasury agents 

• Contract award for regions 1 and 3 

infrastructure with a potential value 

of $130M 

• Initial delivery order for Mid-Atlantic 

region 

• Uses Harris’ VIDA end-to-end IP 

infrastructure network, advanced 

Information Assurance (IA) capability and 

nationwide network management system 

• Significant follow on potential for multiband 

subscriber radios 


Miami Dade County, Florida 

• $100M integrated communications systems 

• Countywide P25 700/800 MHz network 

• Provides interoperable digital LMR 

communications for over 100 state, 

local, county and federal agencies 

• 14,100 – Dual-band portable radios 

• 10,000 – Dual-band mobile radios 

Miami-Dade County 

Aventura 

Coconut Grove 

Coral Gables 

Homestead 

Kendall 

Miami 

Miami Beach 

Miami Lakes 

Naranja Lakes 

North Bay Village 

North Miami Beach 

North Miami 

South Miami 

Sunny Isles 

Surfside 


$3B plus major opportunity pipeline 

in North America 

AK 

OR 

CA NV 

CA 

Major opportunities 

Local systems 

Harris 

Motorola 

WA 

British 

Columbia 

ID 

UT 

AZ 

Alberta 

MT 

WY 

CO 

NM 

Saskatchewan Manitoba 

ND 

SD 

NE 

TX 

KS 

OK 


MN 

TN 

IA 

WI 

IA IL 

MO 

AR 

LA 

Ontario 

MI 

MS 

IN 

TN 

AL 

OH 

KY KY 

Quebec 

GA 

WV 

PA 

NC 

SC 

FL 

NY 

MD 

VA 

Newfoundland 

MRCI 

VT 

DE 

NH 

ME 

MA 

CT RI 

NJ 

Newfoundland

Government Communications Systems

Diversified customer base 

National Intelligence 

Programs 

• NSA 

• NRO 

• NGA 

• Other classified 

Managed Satellite Services 

• Government 

• Energy 

• Maritime 

Based on company forecast for fiscal 2011. 

Defense Programs 

• U.S. Army 

• U.S. Air Force 

• U.S. Navy 

• U.S. Marine Corps 

IT Services 

• NRO 

• U.S. Air Force 

• U.S. Navy 

• U.S. Army 

• Dept. of State 

Civil Programs 

• FAA 

• Census Bureau 

• Military & VA Healthcare 

• NOAA 

Over 300 programs, with no single program representing more than 10% of revenue 

Government Communications Systems, 45 Investor Briefing, September 2010

Government Communications 

Systems snapshot 


$3,500 

$3,000 

$2,500 

$2,000 

$1,500 

$1,000 

15.0% 

10.0% 

5.0% 

0.0% 


$2.7B 

20% to 

22% 

growth 


Operating margin guidance 

12.8% 

~11% 



CapRock 

Highlights 

• CapRock Communications 

acquisition expected to add $380M 

to $390M of revenue in fiscal 2011 

• Pipeline of opportunities for 

Government Communications 

remains very large, including 

a strong pipeline in healthcare 

solutions 

• Fiscal 2011 will benefit from the 

recent wins on GOES-R, healthcare, 

NASA and classified cyber 

• Expect continued growth in FAA 

programs and IT services 

• Confident that backlog along with 

opportunities to be awarded in fiscal 

2011 support projected growth 


CapRock Communications 

acquisition strategic rationale 

• Expands Harris position as a leading provider of mission-critical 

communications “solutions-as-a-service” in high-growth market segments 

that demands high-availability, security and reliability 

• Addresses $2.7B market with double digit growth rate 

• Harris / CapRock is the market leader with 13 percent market share 

• Serves the energy, government and maritime markets – providing Harris entry 

into energy market and expands offering in the government and maritime 

markets to include managed satellite communications solutions 

• Considerably expands Harris international footprint 

• Opportunity to provide CapRock solution to existing Harris customers and 

markets – public safety, international communications systems and cyber 

• Brings scalable, installed-base, commercial business model providing high 

customer retention (>95% renewal rate) with revenue and profit visibility from 

3-5 year duration contracts 


CapRock Communications 

global operations footprint 

Extensive global infrastructure 


CapRock summary financials 

and outlook 

• Expect growth and cost synergies to drive margin expansion 


1 Based on fiscal 2011 guidance provided August 3, 2010 (includes 11 months of CapRock based on July 30 close). Reference non-GAAP reconciliation on the 

Harris investor relations website. 

Calendar year Fiscal 2011 

2008 2009 guidance¹ 

Revenue $ 291 $ 359 $380 – $390 

EBITDA 47.3 53.5 61 – 65 

margin 16.3% 14.9% 16 – 17% 

Depreciation and amortization 24.6 25.2 37 – 39 

Operating income 22.7 28.3 24 – 26 

margin 7.8% 7.9% 6 – 7% 


Geostationary Operational Environmental 

Satellite R-Series (GOES-R) 

teammates – 

Harris is the prime contractor and responsible 

for developing, deploying and operating the 

GOES-R Ground Segment 

• Performs satellite operations, manages ground 

elements, produces operational weather products 

and distributes these products to users 

• These weather data products are used by National 

Weather Service forecasters, climate scientists 

and academia 

Potential program value 

• $800M, 10 years (~$400M planned over 

three years) 

• Awarded May 2009 


Geostationary Operational Environmental 

Satellite R-Series (GOES-R) antenna 

Prime contractor responsibilities for 

developing, deploying and sustaining the 

GOES-R antenna system 

• Installing or refurbishing a total of 10 antennas 

at three locations, includes site preparation 

and sustainment 

• Antenna system receives raw weather data from 

the GOES-R satellites and distributes this data 

to the ground segment for processing 


• $130M, 10 years (~$100M planned over 

three years) 

• Awarded July 2010 


Modernization of Enterprise 

Terminals (MET) 

• U.S. Army CECOM 

• Design and replace the AN/GSC-52 strategic 

terminals over the next 10 years 

• Transportable 7.2-meter antenna to fixed terminal 

12-meter antenna 

• Supports legacy and Wideband Global 

Satellites (WGS) 

• Strategic terminals with X/Ka operation 


• $650M, 10 years 

• Awarded April 2009 


Situational awareness in the cockpit 

F/A-18 

• Avionics processing and 

mass storage products 

• Digital map products 

Potential program value: $675M 

F-22 

• Fiber-optic network products 

• Fiber network interface unit 

• High speed data bus products 

Potential program value: $450M 

F-35 

• Fiber-optic network products 

• Avionics infrastructure solutions 

• Multifunction Advanced Data Link 

(MADL) antennae 

Potential program value: $4.2B 

F/A-18 

New opportunities 

• Image georegistration 

• DTP upgrades 

Network processor 

F-22 and F-35 

New opportunities 

• IP networking and SATCOM 

• Harris extremely 

sensitive receiver 

• Image georegistration 

• Wideband network rack 

• Retrofit opportunities 


Warfighter Information Network-Tactical (WIN-T) 

Highband Networking Radio 

HCLOS P- 

MP 

FOB 

CP 3 

FOB 

Brigade 

FOB 

Deployed 

LCN_ LRIP _v04 

SecNet 

HNR 

Deployed 


Compan 

y 

HNR 

C2 

OT 

M 

Battalion 

HN 

R 

HNR 

Highband Network Radio demonstration 

Deployed 


HCLOS P-P 

FOB 

Deployed 


SR 

W 

CP 2 

HNR 

Company 

HNR 

Company 


Pt-Pt 

CP-1 


Pt-Pt 

FOB 

Highband Networking Radio creates a 

tactical backbone network 

• Ad Hoc mobile, self-forming, self-healing 

• High throughput: up to 54 Mbps shared 

(burst rate) 

• TDMA time division duplex – dynamically 

assigned bandwidth 

• Directive beam antenna technology 

• C and Ku bands ATH and OTM 

• Long range 


• $750M, 16 years 

• Awarded August 2002 

Providing battlefield situational awareness 


TDRSS Ground Systems Modernization — Space 

Network Ground Systems Sustainment (SGSS) 

Obsolete 70s, 80s, 90s technology 

• Modernize ground systems at White Sands 

Complex and Guam 

– Lead development of space-to-ground link 

and user services as sub to General Dynamics C4S 

– Budgeted program is critical to NASA and its 

customers for continued operations 

• Expands on Harris legacy ground systems 

credentials as well as recent wins on GOES-R 

and MET 

– Harris developed the TDRSS ground station in the 

late 70’s 

• $140M, 5 years 

• Awarded June 2010 (under protest) 


Global Geospatial Intelligence (GGI) 

moving from frames to video 

Feature Extraction 

Capture, aggregate, analyze and distribute 

images, from frames to video 

Global 

Vector 

Maritime 

LIDAR/DSM 


• $800M, 10 years 

• Awarded January 2003 


FAA Telecommunications 

Infrastructure (FTI) program 

• FTI Operations Network 

• FTI Mission Support Network 

• FTI Satellite/Microwave Network 

• FTI Network and Security Operations 

Control Centers 

• Over 4,500 locations nationwide; 21,000 services 

• $600 million life-cycle savings 

• On going network evolution – national optical 

backbone build-out underway 


• $2.6B, 15 years, awarded July 2002 

• $3.5B contract ceiling – FAA communications franchise 

• Entering years 8 thru 15 

• Harris prime 


NextGen vision for the FAA 

NextGen’s five transformational programs – NVS, DataComm, 

SWIM, ADS-B, NNEW 


NextGen pursuit — NAS (National 

Air Space) Voice Switch (NVS) 

• Next Generation Program to Voice 

Switching and Control System 

(VSCS) – Harris incumbent 

• Provide a scalable, net-centric 

switch meeting NextGen 

requirements for en route and 

terminal domains consisting of: 

– Dynamic resectorization 

– Business continuity 

– Full interoperability 


• $700M, 10 years 

• Award expected fall 2012 


NextGen pursuit — DataComm 

• Deployment and 

management of a data link 

network in support of the 

FAA NextGen initiative 

• Provides equivalent of text 

messaging to airplanes for 

air traffic control 

• Provides data to augment 

voice system 


• $700M, 17 years 

• Award expected winter 2011 


NextGen pursuit — System-Wide Information 

Management Services (SWIM) 

SWIM 2025 Vision 

• IT infrastructure based on a 

Service-Oriented Architecture (SOA) 

• Provide seamless information to users who 

have a valid need for the data – a trusted 

data exchange service 

• Implementation of a network-centric 

architecture for the National Air Space 

(NAS) Manager of FAA information in 

publisher/subscriber manner as advocated 

by the Federal Enterprise Architecture (FEA) 


• $400M, 10 years 

• FAA finalizing acquisition strategy 

• Multiple segment awards expected 

• Initial segment award of $30M expected fall 

2011; additional segments by 2013 


National Reconnaissance Office (NRO) 

Operations, maintenance and support 

Patriot program 

• 24/7 365 days/year, 100% reliable 

and available 

• Operations, maintenance and 

support services for the NRO’s 

information systems network 

in space and on the ground, 

which support their global 

analyst community 

• New processes, efficiency tools 

and a centralized enterprise 

management system 


• $1B+, 10 years 

• Harris prime 

• Awarded August 2004 


Navy Marine Corps Intranet (NMCI) program 

Providing U.S. Navy with 

comprehensive, end-to-end 

support for data, video and 

voice communications 

• NMCI is largest government 

managed services contract 

– 700,000 users 

– 100 million email messages 

per month 

– 5.2 million unauthorized intrusion 

attempts prevented each month 

• Largest subcontractor to HP 


• Original award October 2000 

• Negotiated 5-year, $500M 

extension through 2015 


Expanding in Healthcare Solutions 

• CONNECT Solution 

– Foundational standards-based integration solution enabling health information 

exchange between federal agencies – and with the private sector 

– Customer is Federal Health Architecture (FHA) within Health and Human Services, 

Office of National Coordinator 

– Phase 1 award $15M, 2+ years – phase 2 potential $80M, 4 years 

• Military Health System’s Global Healthcare Artifact and Image 

Management Solution (HAIMS) 

– Providing all 65 military hospitals, medical centers and clinics with enterprise-wide 

access and viewing of healthcare artifacts and images 

– Award $18M, 2 years 

• Revenue Improvement System Enhancement – Consolidated 

Patient Account Center (RISE CPAC) 

– Management consulting, workflow tool implementation, training, reporting and 

sustainment for the VAs RISE CPAC nationwide deployment 

– Award $73M, 3 years 

• Health First – $96M, 10 years 

– Multi-hospital IT Infrastructure Services 

Harris is trusted at the intersection of life and data™ 


Expanding in cyber market — strategy 

for Cyber Integrated Solutions 

• Leveraging Harris reputation as trusted provider and technology leader for 

mission-critical government networks 

– Federal Aviation Administration (FAA) Telecommunications Infrastructure – trusted 

to protect network communications at more than 4,000 FAA and Department of Defense 

(DoD) facilities nationwide 

– Navy Marine Corps Intranet (NMCI) – trusted to deploy and implement the services 

required to provide and maintain a secure computing environment 

– National Reconnaissance Office (NRO) – trusted to operate, maintain and support services 

for the agency's global communications and information systems 

• Establishing Cyber Integration Center as the foundation for a trusted 

hosting platform 

– Leveraging recently acquired SignaCert “white listing” expertise – the only National 

Institute of Standards and Technology (NIST), Security Content Automation Protocol 

(SCAP)-validated solution on the market today 

– High security cloud computing environment 

• Applying acquired Crucial Security, Inc. – proven IT forensics technology 

for Federal Law Enforcement 

Providing trusted tailored solutions for today’s changing marketplace 


Increasing Customer Value 

Trust — integrated into every 

cyber solution 

Healthcare 

Content Mgt & Delivery 

Image Mgt & Analytics 

Forensics (Crucial) 

White Listing (SignaCert) 

Trusted Platform 

Disaster Recovery 

Government 

Assured Operations 

Assured Information 

Application Hosting 

Managed Security Services 

Communication, Networks, 

Storage, Servers 

Assured Communications 

Enterprise 

& Media 

Leveraging Proven 

Capabilities Trusted 

To Meet Mission 

Critical Government 

Requirements 

Application Services 

Security Services 

Infrastructure Services 

Government Communications Systems, 66 Investor Briefing, September 2010 

Cyber Service Layers

Expanding into international market 

Harris Atlas Systems joint venture 

• Abu Dhabi, UAE based Joint 

Venture between Atlas Telecom 

and Harris formed in April 2010 

• Focus on Middle East and North 

Africa markets 

• Systems integration and regional 

tailoring of solutions in: 

- Situational awareness 

- Command and Control 

- Emergency management 

- Healthcare Solutions 

Saudi 

Arabia 

Government Communications Systems, 67 Investor Briefing, September 2010 

Kuwait Bahrain 

UAE

Broadcast Communications 

Broadcast Communications, 68 Investor Briefing, September 2010

Broadcast Communications 

snapshot 


$600 

$500 

$400 

$300 

$200 

$100 

$0 

5.0 

(5.0) 

(15.0) 

(25.0) 

(35.0) 


$486M 

$490M 

to 

$510M 


Operating income guidance 

$ (31M) 

Break 

Even 



Highlights 

• New leadership team put in place in 

fourth quarter 

• Significant cost reductions were 

implemented in 2010 in response to 

the lower revenue trends; further 

actions will be completed in early 

fiscal 2011 

• Continuing to invest in growth 

markets of the future at a time 

when the legacy market has 

continued to decline in order 

to drive long-term success 

• Highlighted growth areas: 

– International markets 

– U.S. government market for full-motion 

video systems (FAME™) 

– Digital-out-of-home advertising 


Diverse and global customer base, 

serving every type of media entity 


End-to-end solutions 


Key elements of strategy 

• Invest in international and new media markets for growth versus 

traditional U.S. over-the-air broadcast 

• Focus core into a few attractive market segments with higher growth 

and more sustainable margins 

– Production – especially Sports/News/Live 

– Content management and channel launch 

– Key international growth markets such as Brazil, China, and SE Asia 

– New-media initiatives such as digital out-of-home networks and government ISR 

• Deliver differentiated solutions for these segments 

• Increase gross margin through significant, continuous improvement 

in supply chain efficiency, quality, and process sourcing 


Global digital market opportunities 

Transmitter market value ($ in millions) 

Americas 

APAC 

EMEA 

Committed 

Pending 

Complete 

53 of 203 countries committed – only 10 countries have reached analog switch-off 


3-D emerging — creating more 

―rich content‖ to manage 

Broadcast Communications, 74 Investor Briefing, August 2010

Emerging new-media market opportunities 

Digital Out-Of-Home networks 

• Opportunities for customers to 

expand revenue through out-of-home 

content and targeted advertising 

• Harris win strategy 

– Best-of-class digital signage player 

(Infocaster) 

– Ad sales and scheduling software 

(Punctuate) 

– Network management software 

(Connectus) 

– Field deployment 

– Managed IT services for the network 

• $4B market with 28% CAGR ($1.5B 

addressable) 

Harris end-to-end video networking skills are key 


Emerging new-media market opportunities 

Sports, live-event venues 

• Worldwide opportunity for Harris 

– Router, infrastructure, multiviewer, fiber, T&M, 

server, graphics 

– Instant replay 

– Highlights editing and playout 

– Digital signage – OOHA and IPTV solutions 

• $2B+ worldwide solutions market 

opportunity over 5 years 

– $1M – $10M per Tier 1 stadium x 300+ worldwide 

– $200K – $2M per Tier 2 stadium x 3,000+ worldwide 

• Harris win strategy 

– Leverage Broadcast brand and association 

– Digital signage solution (Infocaster) 

– Ad sales and scheduling software (Punctuate) 

– Field deployment (Harris IT Services) 

– Managed IT services for the stadium network 

Video/imagery is a critical factor in fan experience 


Full-Motion Video Asset 

Management Engine (FAME™) 

• Enables users to change the way they 

ingest, catalog, analyze, archive, retrieve 

and distribute ISR information 

– Multiple intel sources of data, audio, and video 

– One UI, one digital asset management 

platform 

– Simultaneous motion video feeds 

– Multiple sensor types, all in real time 

– A highly collaborative platform 

– Replaces silos that slow knowledge transfer 

– Shortens decision cycle from weeks to 

seconds 

FAME applies advanced commercial video technology to the ISR 

market dramatically reducing the analysis-to-action time using 

multimedia situational awareness information 


CL King 8 th Annual Best Ideas Conference 

September 15, 2010 

Gary L. McArthur 

Sr. Vice President and Chief Financial Officer 

RF COMMUNICATIONS • GOVERNMENT COMMUNICATIONS SYSTEMS • BROADCAST COMMUNICATIONS

CL King 8th Annual Best Ideas Conference

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