OVERVIEW

The following Management's Discussion and Analysis ("MD&A") is intended to assist in an understanding of our financial condition and results of operations. This MD&A is provided as a supplement to, should be read in conjunction with, and is qualified in its entirety by reference to, our Condensed Consolidated Financial Statements (Unaudited) and accompanying Notes appearing elsewhere in this Report (the "Notes"). In addition, reference should be made to our audited Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Form 10-KT for the Fiscal Transition Period from June 29, 2019 to January 3, 2020 (our "Fiscal Transition Period Form 10-KT"). Except for the historical information contained herein, the discussions in this MD&A contain forward-looking statements that involve risks and uncertainties. Our future results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below in this MD&A under "Forward-Looking Statements and Factors that May Affect Future Results." COVID-19 In March 2020, the widespread outbreak of the novel COVID-19 strain of coronavirus ("COVID-19") was recognized as a pandemic by the World Health Organization ("WHO") and declared a national emergency by the U.S. Government. The COVID-19 pandemic and attempts to contain it, such as mandatory closures, "shelter-in-place" orders and travel restrictions, have caused significant disruptions and adverse effects on U.S. and global economies, including impacts to supply chains, customer demand, international trade and capital markets. In response, we have increased our focus on keeping our employees safe while continuing to strive to meet customer commitments and support suppliers. For example, we have instituted work-from-home (for employees who are able to work remotely) and social distancing arrangements; canceled travel and external events; worked to procure personal protective equipment ("PPE"); initiated health screening procedures at higher-risk facilities; staggered work shifts, redesigned work stations and implemented stringent cleaning protocols, particularly for production facilities; maintained an active dialog with key suppliers and developed plans to mitigate supply chain risks; and shifted the timing of share repurchases, which bolsters liquidity in support of employees, suppliers and customers during the pandemic. The U.S. Government response has included identifying the Defense Industrial Base as a Critical Infrastructure Sector and enhancing cash flow and liquidity for the Defense Industrial Base, such as by increasing progress payments and accelerating contract awards. As a part of the Defense Industrial Base, these actions have enabled us to keep our U.S. production facilities largely operational in support of national security commitments to U.S. Government customers and to announce that we will accelerate more than $100 million in payments to small business suppliers in 45 states. Although we believe that the large percentage of our revenue, earnings and cash flows that is derived from sales to the U.S. government, whether directly or through prime contractors, will be relatively predictable, in part due to the responsive actions taken by the U.S. Government described above, our commercial, international and public safety businesses are at a higher risk of adverse impacts related to the COVID-19 pandemic. For example, the severe decline in global air traffic from travel restrictions and the resulting downturn in the commercial aviation market and its impact on customer operations has significantly reduced demand for flight training, flight simulators and commercial avionics products in our Commercial Aviation Solutions sector within our Aviation Systems segment. As a result, we have temporarily closed some of our flight training facilities in Europe and several other locations and also have recognized $330 million of charges for impairment of goodwill and other assets and other COVID-19-related impacts in the first quarter of 2020. The extent of these disruptions and impacts, including on our ability to perform under U.S. Government contracts and other contracts within agreed timeframes and ultimately on our results of operations and cash flows, will depend on future developments, including the severity and duration of the pandemic and associated containment actions taken by the U.S. Government, state and local government officials and international governments, and consequences thereof, and global air traffic demand, all of which are uncertain and unpredictable. The impact of COVID-19 may also exacerbate other risks discussed in Item 1A. "Risk Factors" of our Fiscal Transition Period Form 10-KT, any of which could have a material effect on us. We continue to work with our customers, employees, suppliers, subcontractors, distributors, resellers and communities to address the impact of the pandemic. We continue to assess possible implications to our business, supply chain and customers, and to take actions in an effort to mitigate adverse consequences. For further information regarding the impact, and the risks of the impact, of COVID-19 on the Company, see Part II, Item 1A. "Risk Factors" in this Report.





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The following is a list of the remaining sections of this MD&A, together with
our perspective on their contents, which we hope will assist in reading these
pages:
•          Results of Operations - an analysis of our consolidated results of
           operations and the results in each of our business segments, to the
           extent the segment results are helpful to an understanding of our
           business as a whole, for the periods presented in our Condensed
           Consolidated Financial Statements (Unaudited).


•          Liquidity, Capital Resources and Financial Strategies - an analysis of
           cash flows, funding of pension plans, common stock repurchases,
           dividends, capital structure and resources, off-balance sheet
           arrangements and commercial commitments and contractual obligations.


•          Critical Accounting Policies and Estimates - information about
           accounting policies that require critical judgments and estimates and
           about accounting standards that have been issued, but are not yet
           effective for us, and their potential impact on our financial
           condition, results of operations and cash flows.


•          Forward-Looking Statements and Factors that May Affect Future
           Results - cautionary information about forward-looking statements and
           a description of certain risks and uncertainties that could cause our
           actual results to differ materially from our historical results or our
           current expectations or projections.


As discussed in Note V - Business Segment Information in the Notes, we
implemented a new organizational structure effective on June 29, 2019, which
resulted in changes to our operating segments, which are also reportable
segments and referred to as our business segments. The historical results,
discussion and presentation of our business segments as set forth in this MD&A
reflect the impact of these changes for all periods presented in order to
present segment information on a comparable basis. There is no impact on our
previously reported consolidated statements of income, balance sheets,
statements of cash flows or statements of equity resulting from these changes.
We report the financial results of our continuing operations in the following
four segments, which are also referred to as
our business segments:
•       Integrated Mission Systems, including multi-mission intelligence,
        surveillance and reconnaissance and communication systems; integrated
        electrical and electronic systems for maritime platforms; and advanced
        electro-optical and infrared solutions;


•       Space and Airborne Systems, including space payloads, sensors and
        full-mission solutions; classified intelligence and cyber defense;
        avionics; and electronic warfare;


•       Communication Systems, including tactical communications; broadband
        communications; integrated vision solutions; and public safety; and


•       Aviation Systems, including defense aviation products; security,
        detection and other commercial aviation products; commercial and military
        pilot training; and mission networks for air traffic management.


On February 4, 2020, we entered into a definitive agreement to sell Security &
Detection Systems and MacDonald Humfrey Automation solutions ("airport security
and automation business") to Leidos, Inc. for $1 billion in cash, subject to
customary purchase price adjustments as set forth in the definitive agreement.
The sale transaction is conditioned on customary closing conditions, including
satisfaction of regulatory requirements. The airport security and automation
business, which is reported as part of our Aviation Systems segment, provides
solutions used by the aviation and transportation industries, regulatory and
customs authorities, government and law enforcement agencies and commercial and
other high-security facilities. We completed the sale of the airport security
and automation business on May 4, 2020 and expect to use the proceeds from the
sale for general corporate expenses and for potential repurchases of shares of
our common stock.
On March 20, 2020, we entered into a definitive agreement to sell our EOTech
business for $42 million, subject to customary purchase price adjustments and
customary closing conditions as set forth in the definitive agreement. The
EOTech business, which is reported as part of our Communications Systems
segment, manufactures holographic sighting systems, magnified field optics and
accessories for military, law enforcement and commercial markets around the
world. We expect to complete the sale of the EOTech business in mid-2020.
On February 19, 2020, we entered into a definitive agreement to sell our Applied
Kilovolts and Analytical Instrumentation business, which is reported as part of
our Space and Airborne Systems segment, subject to customary closing conditions
as set forth in the definitive agreement. We expect to complete the sale of the
Applied Kilovolts and Analytical Instrumentation business in mid-2020.
As described in more detail in Note C - Business Divestitures and Assets Sales
in the Notes, the assets and liabilities of the airport security and automation,
EOTech and the Applied Kilovolts and Analytical Instrumentation businesses were
classified as held for sale in our Condensed Consolidated Balance Sheet
(Unaudited) as of April 3, 2020.
Amounts contained in this Report may not always add to totals due to rounding.

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RESULTS OF OPERATIONS
As discussed further in Note A - Significant Accounting Policies and Recent
Accounting Standards in the Notes, we completed the L3Harris Merger on June 29,
2019. Because of the L3Harris Merger, the quarter ended April 3, 2020 reflects
the results of the combined company, while the quarter ended March 29, 2019
reflects the results of only Harris operating businesses. Due to the
significance of the L3 operating businesses included in the combined company
results following the L3Harris Merger, the reported results for the quarter
ended April 3, 2020 and quarter ended March 29, 2019 generally are not
comparable. Therefore, to assist with a discussion of the April 3, 2020 and
March 29, 2019 consolidated results of operations on a more comparable basis,
certain supplemental unaudited pro forma combined income statement information
prepared in accordance with the requirements of Article 11 of Regulation S-X
(referred to in this MD&A as "pro forma") also is provided (see "Supplemental
Unaudited Pro Forma Condensed Combined Income Statement Information" below in
this MD&A).
Highlights
Consolidated operating results for the quarter ended April 3, 2020, in each case
compared with the quarter ended March 29, 2019 on both an "as reported" basis
(reflecting the results of only Harris operating businesses for the prior
period) and a "pro forma" basis (also reflecting the results of L3 operating
businesses for the prior period), included:
Consolidated - as reported
• Revenue increased 168 percent to $4.6 billion from $1.7 billion;

• Gross margin increased 125 percent to $1,328 million from $589 million;




•          Income from continuing operations decreased 20 percent to $195 million
           from $243 million; and


•          Income from continuing operations per diluted common share
           attributable to L3Harris Technologies, Inc. common shareholders
           decreased 51 percent to $0.99 from $2.02.


Consolidated - pro forma
• Revenue increased 5 percent to $4.6 billion from $4.4 billion;

• Gross margin increased 5 percent to $1,328 million from $1,267 million;




•          Income from continuing operations decreased 51 percent to $195 million
           from $400 million; and


•          Income from continuing operations per diluted common share
           attributable to L3Harris Technologies, Inc. common shareholders
           decreased 43 percent to $0.99 from $1.75.



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