<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM l0-Q/A
------
[X] QUARTERLY REPORT PURSUANT TO SECTION l3 or l5(d)
OF THE SECURITIES EXCHANGE ACT OF l934
For the quarterly period ended January 1, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period _________ from to _________
Commission File Number l-3863
HARRIS CORPORATION
======================================================
(Exact name of registrant as specified in its charter)
Delaware 34-0276860
================================ =====================================
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
l025 West NASA Boulevard
Melbourne, Florida 32919
================================================
(Address of principal executive offices) (Zip Code)
(407) 727-9l00
=======================================
(Registrant's telephone number, including area code)
==================================================
Indicate by check mark whether the registrant (l) has filed all reports required
to be filed by Section l3 or l5 (d) of the Securities Exchange Act of l934
during the preceding l2 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The number of shares outstanding of the registrant's common stock, par value
$1.00 per share, as of February 12, 1999 was 79,875,164 shares.
<PAGE> 2
PART I. FINANCIAL INFORMATION
-----------------------------
Item 1. Financial Statements.
- ------------------------------
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
The following information for the quarter and two quarters ended January 1, 1999
and January 2, 1998, has not been audited by independent accountants, but in the
opinion of management reflects all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results for the
indicated periods. The results of operations for the quarter and two quarters
ended January 1, 1999 are not necessarily indicative of the results for the full
fiscal year.
<TABLE>
<CAPTION>
Quarter Ended Two Quarters Ended
--------------------- ---------------------
January 1, January 2, January 1, January 2,
1999 1998 1999 1998
---- ---- ---- ----
(In millions, except per share amounts)
Revenue
Revenue from sales, rentals
<S> <C> <C> <C> <C>
and services $919.4 $970.0 $1,807.8 $1,949.6
Interest 9.8 9.7 24.5 19.5
----- ----- ------- -------
929.2 979.7 1,832.3 1,969.1
Costs and Expenses
Cost of sales, rentals and
services 610.0 641.0 1,218.0 1,296.8
Engineering, selling and
administrative expenses 237.3 245.6 458.7 496.5
Interest 21.2 16.4 42.3 33.3
Restructuring expense (11.0) - (11.0) -
Special charge for litigation costs - - 20.6 -
Other - net (8.1) (3.1) (19.2) (3.4)
----- ----- ------ -------
Income before income taxes 79.8 79.8 122.9 145.9
Income taxes 27.0 27.1 41.7 49.6
----- ----- ------ -------
Net Income $ 52.8 $ 52.7 $ 81.2 $ 96.3
====== ====== ======= ========
Net Income Per Common Share
Basic $.66 $.67 $1.02 $1.22
==== ==== ===== =====
Diluted $.66 $.66 $1.02 $1.21
==== ==== ===== =====
Cash Dividends Paid Per Common Share $.24 $.22 $ .48 $ .44
==== ==== ===== =====
Average Shares Outstanding
Basic 79.5 79.2 79.5 79.2
==== ==== ==== ====
Diluted 79.8 80.2 79.8 80.1
==== ==== ==== ====
</TABLE>
See Notes to Financial Statements
(2)
<PAGE> 3
<TABLE>
<CAPTION>
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
July 3,
January 1, 1998
1999 (audited)
---- ---------
ASSETS (In millions)
Current Assets
<S> <C> <C>
Cash and cash equivalents $ 127.8 $ 184.3
Marketable securities 24.9 44.5
Accounts and notes receivable - net, less allowance for collection
losses of $46,900,000 at January 1, 1999
and $30,600,000 at July 3, 1998 879.0 805.1
Unbilled costs and accrued earnings on fixed price contracts
based on percentage-of-completion accounting, less progress
payments of $170,900,000 at January 1, 1999 and
$179,000,000 at July 3, 1998 214.6 247.0
Inventories:
Work in process and finished products 477.0 481.2
Raw materials and supplies 109.0 122.4
------- -------
586.0 603.6
Deferred income taxes 192.4 215.2
------- -------
Total Current Assets 2,024.7 2,099.7
Plant and equipment, less allowances for depreciation of
$1,433,900,000 at January 1, 1999 and $1,360,900,000 at
July 3, 1998 981.2 947.0
Notes receivable - net 220.5 232.5
Intangibles resulting from acquisitions 283.1 214.4
Other assets 386.8 290.4
-------- --------
$3,896.3 $3,784.0
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt $ 367.1 $ 231.0
Accounts payable 192.7 190.3
Compensation and benefits 211.1 230.0
Other accrued items 281.6 241.9
Advance payments and unearned income 201.4 228.2
Income taxes 38.5 83.9
Current portion of long-term debt 58.2 56.5
-------- --------
Total Current Liabilities 1,350.6 1,261.8
Deferred income taxes 134.1 144.3
Long-term debt 770.5 768.6
Shareholders' Equity
Capital stock:
Preferred Stock, without par value:
Authorized - 1,000,000 shares; issued - none - -
Common Stock, par value $1 per share:
Authorized - 250,000,000 shares; issued 79,842,964 shares
at January 1, 1999 and 80,012,625 at July 3, 1998 79.8 80.0
Other capital 271.2 271.3
Retained earnings 1,321.3 1,282.8
Unearned compensation (6.8) (3.2)
Accumulated other comprehensive loss (24.4) (21.6)
-------- --------
Total Shareholders' Equity 1,641.1 1,609.3
-------- --------
$3,896.3 $3,784.0
======== ========
</TABLE>
See Notes to Financial Statements
(3)
<PAGE> 4
<TABLE>
<CAPTION>
HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Two Quarters Ended
January 1, January 2,
1999 1998
------------ --------
(In millions)
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 81.2 $ 96.3
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 139.2 97.3
Non-current deferred income tax (10.2) (3.4)
(Increase) decrease in:
Accounts and notes receivable .3 40.9
Unbilled costs and inventories 77.7 (3.0)
Other assets (73.7) (43.6)
Increase (decrease) in:
Trade payables and accrued expenses (59.5) (47.7)
Advance payments and unearned income (31.2) (32.7)
Income taxes (5.3) 11.3
Other 21.2 4.9
------ ------
Net cash provided by operating activities 139.7 120.3
------ ------
INVESTING ACTIVITIES
Cash paid for acquisitions (186.4) (9.9)
Additions of plant and equipment (116.6) (140.7)
------ ------
Net cash used in investing activities (303.0) (150.6)
------ ------
FINANCING ACTIVITIES
Increase in short-term debt 137.8 18.8
Increase (decrease) in long-term debt 1.9 (.2)
Proceeds from sale of Common Stock 1.6 6.3
Purchase of Common Stock for Treasury (5.5) -
Cash dividends (38.3) (35.0)
------ ------
Net cash provided by (used in) financing activities 97.5 (10.1)
------ ------
Effect of exchange rate changes on cash and cash
equivalents 9.3 .5
------ ------
Net decrease in cash and cash equivalents (56.5) (39.9)
Cash and cash equivalents, beginning of year 184.3 70.7
------ ------
Cash and cash equivalents, end of period $127.8 $ 30.8
====== ======
</TABLE>
See Notes to Financial Statements
(4)
<PAGE> 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 1, 1999
Note A -- Basis of Presentation
- -------------------------------
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, and changes in cash flows in conformity with generally accepted
accounting principles. For further information refer to the financial statements
and notes to financial statements included in the Corporation's Annual Report on
Form 10-K/A for the fiscal year ended July 3, 1998.
Note B -- Accounting Changes
- ----------------------------
For the first quarter ended October 2, 1998, the Corporation adopted Statement
of Financial Accounting Standards (FAS) No. 130, "Reporting Comprehensive
Income". This Statement requires reporting of changes in shareholders' equity
that do not result directly from transactions with shareholders. These changes
include the fair value adjustment to certain cost-based investments and foreign
currency translation adjustments. Comprehensive earnings for the quarter and the
first two quarters ended January 1, 1999 were $59.1 million and $78.3 million,
respectively. Prior fiscal year comprehensive earnings for the quarter and the
first two quarters ended January 2, 1998 were $19.0 million and $74.8 million,
respectively. Prior year financial statements have been reclassified to conform
to the requirements of FAS No. 130.
The components of accumulated other comprehensive loss, net of related tax, at
January 1, 1999 and July 3, 1998 are as follows:
January 1, July 3,
(in millions) 1999 1998
---------------------------------------------------------------------
Net unrealized gains on securities
available-for-sale $ 13.0 $ 25.3
Foreign currency translation adjustments (37.4) (46.9)
----- -----
$(24.4) $(21.6)
====== ======
The Corporation also adopted Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information", as
of the first quarter ended October 2, 1998. This statement establishes new rules
for reporting information about operating segments in annual financial
statements and requires selected information about operating segments in interim
financial statements. The Corporation was in compliance with the provisions of
the new statement and, therefore, will not be required to restate prior year
business segment data.
Net sales, operating profit and net income by segment are on page 7. That
information is an integral part of these financial statements. Intersegment
revenues are not material.
Total assets by segment are as follows:
January 1, July 3,
(in millions) 1999 1998
---------------------------------------------------
Electronic Systems $ 405.3 $ 545.7
Semiconductor 764.4 1,022.0
Communications 734.0 716.7
Lanier Worldwide 1,678.5 1,166.5
Corporate 314.1 333.1
-------- --------
$3,896.3 $3,784.0
======== ========
(5)
<PAGE> 6
Note C -- Net Income Per Share
- ------------------------------
Average outstanding shares used in the computation of net income per share are
as follows:
<TABLE>
<CAPTION>
Quarter Ended Two Quarters Ended
January 1, January 2, January 1, January 2,
--------------------------------------------------------------------------------------------
(in millions) 1999 1998 1999 1998
Basic:
Weighted average shares
<S> <C> <C> <C> <C>
outstanding 80.0 79.9 80.0 79.8
Contingently issuable shares (.5) (.7) (.5) (.6)
---- ---- ---- ----
79.5 79.2 79.5 79.2
==== ==== ==== ====
Diluted:
Weighted average shares
outstanding 80.0 79.9 80.0 79.8
Dilutive stock options .2 .3 .1 .3
Contingently issuable shares (.4) - (.3) -
---- ---- ---- ----
79.8 80.2 79.8 80.1
==== ==== ==== ====
</TABLE>
Note D -- Restructuring
- -----------------------
In fiscal 1998, the Corporation recorded a $83.8 million charge ($55.7 million
after income taxes) for the restructuring of its operations. Restructuring
actions included a work force reduction of approximately 2,300 employees and the
exit of six product lines, the most significant being the semiconductor
commercial logic product line. At January 1, 1999 1,450 employees have been
terminated with the remainder to be terminated before the end of fiscal 1999.
During the second quarter ended January 1, 1999, the Corporation completed the
sale of its Semiconductor commercial logic product line. This sale resulted in a
gain before income taxes of $11.0 million. Other smaller product lines are in
the process of being discontinued through the fulfillment of sales backlog and
commitments, collection of receivables and the liquidation of inventory.
Reserve usage for the two quarters ended January 1, 1999 is summarized below:
<TABLE>
<CAPTION>
Reserve Balance USE OF RESERVES Reserve Balance
(in millions) at July 3, 1998 Cash Non-Cash at January 1, 1999
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Severance benefits $48.1 $16.5 - $31.6
Facility write-offs 1.2 .5 - .7
Other exit costs 6.7 1.4 - 5.3
----- ----- ---- -----
$56.0 $18.4 - $37.6
===== ===== ==== =====
</TABLE>
Note E -- Financial Instruments
- -------------------------------
The Company uses foreign exchange contracts to hedge off-balance sheet foreign
currency commitments and anticipated transactions. The Company has significant
manufacturing operations in Malaysia and has a hedging program in place to set
the exchange rates on the Company's foreign currency operating commitments in
Malaysia. Under this hedging program, increases or decreases in the Company's
local currency manufacturing costs and operating expenses are partially offset
by realized gains and losses, respectively, on the hedging instruments.
At January 1, 1999, the Company had foreign currency exchange contracts to buy
192.1 million Malaysian Ringgits for $50.5 million. The maturity period for
these contracts is 1 to 8 months. Deferred losses resulting from ringgit
contracts are $33.3 million.
(6)
<PAGE> 7
Item 2. Management's Discussion & Analysis of Financial Condition & Results of
- ------------------------------------------------------------------------------
Operations.
-----------
RESULTS OF OPERATIONS
Net sales for the second quarter and first two quarters were lower than the
comparable periods a year ago while earnings were flat for the current quarter
and down for the first two quarters. Fiscal 1999 second quarter results include
a restructuring gain of $11.0 million ($6.7 million after tax) from the sale of
a product line and results for the first two quarters include a $20.6 million
($13.6 million after tax) provision related to a patent litigation judgment. The
provision relates to the potential settlement of a lawsuit in which the Federal
Circuit Court of Appeals on September 9, 1998 upheld a lower court ruling that
the Company had infringed a competitor's patent for an analog television
transmitter circuit. The award totaled $15.4 million plus attorneys fees and
interest and relates to an older product no longer manufactured by the Company.
Segment net sales, operating profit and net income were as follows:
<TABLE>
<CAPTION>
Quarter Ended Two Quarters Ended
------------- ------------------
Jan. 1, Jan. 2, Percent Jan. 1, Jan. 2, Percent
1999 1998 Inc./(Dec.) 1999 1998 Inc./(Dec.)
---- ---- ----------- ---- ---- -----------
(Dollars in millions)
NET SALES
<S> <C> <C> <C> <C> <C> <C>
Electronic Systems $187.6 $237.6 (21) $ 398.6 $ 499.0 (20)
Semiconductor 136.2 174.7 (22) 279.5 355.5 (21)
Communications 233.0 238.8 (2) 435.8 479.0 (9)
Lanier Worldwide 362.6 318.9 14 693.9 616.1 13
----- ----- ------- -------
Total $919.4 $970.0 (5) $1,807.8 $1,949.6 (7)
===== ===== ======= =======
OPERATING PROFIT
Electronic Systems $ 19.4 $ 18.7 4 $ 42.3 $ 39.3 8
Semiconductor 25.9 23.0 13 44.1 45.0 (2)
Communications 15.0 29.3 (49) 8.7 53.5 (84)
Lanier Worldwide 46.0 35.8 28 75.0 64.0 17
Corporate Expense (5.3) (10.6) (50) (4.9) (22.6) (78)
Interest Expense (21.2) (16.4) 29 (42.3) (33.3) 27
----- ----- ----- -----
Total $ 79.8 $ 79.8 - $ 122.9 $ 145.9 (16)
===== ===== ===== =====
NET INCOME
Electronic Systems $ 9.3 $ 7.7 21 $ 21.2 $ 16.2 31
Semiconductor 11.2 12.1 (7) 20.3 22.7 (11)
Communications 7.8 15.7 (50) 1.4 28.0 (95)
Lanier Worldwide 24.5 17.2 42 38.3 29.4 30
---- ---- ----- -----
Total $ 52.8 $ 52.7 - $ 81.2 $ 96.3 (16)
==== ==== ===== =====
</TABLE>
The Electronic Systems segment reported lower sales for both the second quarter
and the first two quarters because new program starts have not kept pace with
the wind-down of ongoing defense and other government programs. Notwithstanding
lower sales, segment earnings were higher for both the second quarter and the
first two quarters compared to prior year periods due to higher margins and
higher award fees in ongoing government and commercial projects, and higher
first quarter interest income.
Semiconductor segment sales were lower for the quarter and the first two
quarters due to industry-wide pricing pressure for commodity products and weak
demand. Continuing pricing pressure, weak demand, and lower royalty income
negatively impacted operating profit and net income while lower operating
expenses resulting from prior year restructuring actions and ongoing cost
controls helped to preserve margins. Operating profit in this year's second
quarter also includes an $11.0 million gain from the sale of technology
associated with the segment's exit of its commercial logic product line.
Sales in the Communications segment were 2 percent lower in the second quarter
and 9 percent lower for the first two quarters compared to the prior year
periods. Continuing weakness in its international markets, reduced demand, and
dampened pricing for some of the segment's products, particularly its microwave
systems product line, contributed to lower sales. Segment earnings were
significantly lower for both the quarter and year-to-date compared to the prior
year periods because of lower sales and lower gains from the sale of investment
securities. Earnings for the first two quarters also were adversely impacted by
a $20.6 million ($13.6 million after tax) provision for a patent litigation
judgment.
(7)
<PAGE> 8
Lanier Worldwide segment sales increased in both the second quarter and the
first two quarters over prior year periods and were driven by the successful
first quarter acquisition and integration of the Agfa-Gevaert Group's copying
systems business. The acquisition doubles Lanier's market share in the European
office equipment market. Both domestic and international net income increased
due to improved operating profit margin as a result of ongoing cost reductions
in its domestic business and higher international sales.
Corporate expense decreased significantly for the most recent quarter and the
first two quarters of fiscal 1999 due primarily to lower expenses associated
with employee benefit and retirement plans.
Cost of sales as a percentage of net sales increased to 66.3 percent in the
second quarter and 67.4 percent in the first two quarters of this year, compared
to 66.1 percent and 66.5 percent for the respective periods last year. The
increase in the cost ratio was primarily due to declining unit volumes,
continuing price pressures, and a continuing decline in royalty income in the
Semiconductor segment.
Engineering, selling, and administrative expenses as a percentage of net sales
were 25.8 percent for the second quarter and 25.4 percent for the first two
quarters compared to 25.3 percent and 25.5 percent for the respective prior year
periods. The increase in the second quarter ratio was due to a higher proportion
of administrative and general expenses.
Interest income was higher in the first two quarters because of interest earned
on amounts due from the Internal Revenue Service. Interest expense also
increased in both the second quarter and the first two quarters of fiscal 1999,
due to higher average borrowings and a lower amount of capitalized interest
compared to the prior year's periods. Capitalized interest is included as a
component of plant and equipment on the balance sheet. "Other-net" expense was
lower due primarily to gains on foreign currency and gains from the sale of
assets.
The provision for income taxes as a percentage of pretax income was 34.0 percent
in all periods. The statutory federal tax rate for all periods was 35.0 percent.
All periods benefited from lower tax rates on foreign source income and export
sales.
Net income as a percentage of sales was 5.7 percent for the second quarter and
4.5 percent for the year-to-date, compared to 5.4 percent and 4.9 percent in the
same periods last year for the previously stated reasons.
LIQUIDITY AND FINANCIAL POSITION
Working capital decreased from $837.9 million at July 3, 1998, to $674.1 million
at the end of the second quarter largely due to cash and short-term debt used to
fund Lanier Worldwide's acquisition of the Agfa-Gevaert copying systems
business. Capital expenditures are down substantially from last year's first two
quarters due to completion of several semiconductor related projects. Total
capital expenditures for the Corporation in fiscal 1999, including expenditures
for customer rental equipment, are expected to be approximately $239 million
compared to $285 million for fiscal 1998. Cash expenditures during the first two
quarters for restructuring actions were $18 million with an additional $32
million expected in the second half of fiscal 1999. On October 28, 1998, the
Corporation filed a $500 million "shelf" debt registration statement with the
Securities and Exchange Commission. After this statement becomes effective, debt
securities may be issued from time to time under a prospectus supplement that
will contain specific information about the terms of an offering. Proceeds from
the sale of debt securities will be used for general corporate purposes,
including the repayment of existing indebtedness and additions to working
capital. In November 1998, the Company's 364-day $300 million credit facility
expired and it is the Company's intention not to replace this facility due to
sufficient other borrowing capacity. The requirement for funds to finance
capital expenditures, acquisitions of new businesses and other operational
requirements during fiscal 1999 will be met by cash flow from operations,
potential sales of debt securities and other available borrowing capacity.
(8)
<PAGE> 9
YEAR 2000 ISSUE
For the fiscal year-end July 3, 1998, the Company discussed in its Annual Report
on Form 10-K programs underway to address the Year 2000 issue. At January 1,
1999, the Company had completed over 117 of its remediation programs and was
actively working on more than an additional 269 programs. The focus of these
in-process programs is to replace or modify time-sensitive software systems and
equipment. The Company has provided Year 2000 internet web pages to communicate
general and product specific issues and has initiated formal programs with
customers to resolve certain Year 2000 problems. However, the Company believes
it has no material exposure to contingencies related to the Year 2000 issue for
the products it has sold.
The Company has Year 2000 exposure in its operating systems and business
systems; including engineering, manufacturing, order fulfillment, program
management, financial and administrative functions. It is the Company's belief
that the greatest potential risk from the Year 2000 issue could be its inability
to meet commitment dates on delivery of product and has focused the majority of
the Company's effort and dedicated resources to address this issue. In addition,
the Company believes that a limited number of the non-information technology
systems, such as manufacturing machinery, equipment and test equipment with date
sensitive software and embedded microprocessors may be affected, and evaluation
and remediation are continuing.
The Company believes it is diligently addressing the Year 2000 issues and that
it will satisfactorily resolve significant Year 2000 problems. The Company
anticipates completing most of its Year 2000 projects during fiscal 1999, with
major completion milestones being targeted for the fourth quarter of fiscal
1999. In the event the Company falls short of these milestones, additional
internal resources will be focused on completing these projects or developing
contingency plans. The estimated cost for resolving Year 2000 issues is
approximately $46 million with approximately $26 million planned for fiscal
1999. These costs are generally not incremental to existing information
technology budgets. Rather, internal resources were re-deployed and timetables
for implementation of replacement systems were accelerated. The largest portion
of this expenditure is being used to replace existing software and hardware.
Estimates of Year 2000 related costs are based on numerous assumptions and there
is no certainty that estimates will be achieved and actual costs could be
materially greater than anticipated. Specific factors that might cause such
difference include, but are not limited to, the continuing availability of
personnel trained in this area, the ability to timely identify and correct all
relevant computer programs, and similar uncertainties.
EURO CONVERSON
On January 1, 1999, certain members of the European Economic and Monetary Union
adopted a common currency, the Euro. The adoption of the Euro affects a
multitude of financial and business applications within the Company. Programs to
address changes needed to comply with all laws and regulations have been
implemented with no adverse effect on the Company's operations. Costs associated
with these programs were expensed as incurred and were not material to results
of operations, financial condition or liquidity.
OUTLOOK
The Company believes that revenue will be relatively flat for the fiscal year.
Earnings for the third quarter and the fiscal year are expected to be lower than
fiscal 1998 results before restructuring provisions. Lower royalty income and an
ongoing industry downturn in the Company's semiconductor business and general
market weakness for communications products continue to adversely impact
earnings from operations.
The fiscal 1998 restructuring program is being vigorously implemented to reduce
cost and maintain profit margins. Restructuring actions and other ongoing cost
controls will help balance near-term results and long-term positioning to retain
and grow market share in all business segments.
(9)
<PAGE> 10
FORWARD-LOOKING STATEMENTS
This report contains, and certain of the Company's other public documents and
statements and oral statements contain and will contain, forward-looking
statements that reflect management's current assumptions and estimates of future
performance and economic conditions. Such statements are made in reliance upon
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. The Company cautions investors that any forward-looking statements are
subject to risks and uncertainties that may cause actual results and future
trends to differ materially from those projected, stated, or implied by the
forward-looking statements.
The Company's consolidated results and the forward-looking statements could be
affected by, among other things, general economic conditions in the markets in
which the Company operates; economic developments that have a particularly
adverse effect on one or more of the markets served by the Company; the ability
to execute management's internal operating plans (specifically management's
announced restructuring plan, which includes employee reductions, cost reduction
in its commodity semiconductor product lines, consolidation of administrative,
technical, sales and marketing functions, and manufacturing facilities, and the
successful exit of several product lines and a program); stability of key
markets for communications products, particularly Asia, Brazil and Russia;
fluctuation in foreign currency exchange rates and the effectiveness of the
Company's currency hedging program; worldwide demand for integrated
semiconductor circuits, particularly power products; reductions in the U.S. and
worldwide defense and space budgets; effect of continuing consolidation in the
U.S. defense industry on the Company's direct and indirect business with the
U.S. government; the Company's ability to recover costs incurred on fixed price
contracts; continued development and market acceptance of new products,
especially digital television broadcast products and semiconductor wireless
products; continued success of the Company's patent licensing programs,
particularly as it relates to the Semiconductor and Communications segments; the
ability of Harris, its customers and suppliers to become Year 2000 compliant;
and the successful resolution of patent infringement and other general
litigation. Harris disclaims any intention or obligation to update or revise
forward-looking statements, whether as a result of new information, future
events, or otherwise.
(10)
<PAGE> 11
PART II. OTHER INFORMATION
- --------------------------
Item 4. Submission of Matters to a Vote of Security Holders.
- -------------------------------------------------------------
At the Annual Meeting of Shareholders held on October 23, 1998,
the following proposals were adopted by the margins indicated.
1. To elect three nominees to the Board of Directors:
Nominee Number of Shares
------- ----------------
For Withheld
--- --------
Phillip W. Farmer 63,718,958 427,550
Lester E. Coleman 63,741,866 404,642
Alfred C. DeCrane, Jr. 63,707,364 439,144
2. To ratify the selection of Ernst & Young LLP as the
independent public auditors of the Company for fiscal 1999:
For 63,878,526
Against 157,984
Abstain 109,998
Item 6. Exhibits and Reports on Form 8-K.
- ------------------------------------------
(a) Exhibits:
*(12) Ratio of Earnings to Fixed Charges.
*(27) Financial Data Schedule.
* Previously filed with the Company's Form 10-Q Quarterly Report for
the fiscal quarter ended January 1, 1999.
(b) Reports on Form 8-K.
No Current Reports on form 8-K were filed during the fiscal quarter
ended January 1, 1999.
Items 1, 2, 3 and 5 of Part II are not applicable and have been omitted.
(11)
<PAGE> 12
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HARRIS CORPORATION
-----------------------------------
(Registrant)
Date: April 9, 1999 By: /s/ Bryan R. Roub
------------- --------------------------------
Bryan R. Roub
Senior Vice President & Chief
Financial Officer (principal
financial officer and duly
authorized officer)
(12)
