L3Harris(LHX) - 2026 Q4 - Annual Report

Financial Performance - As of the end of fiscal 2025, the company's contractual backlog was $38.7 billion, with an expectation to recognize approximately 45% of this revenue by the end of fiscal 2026 and 70% by the end of fiscal 2027[32]. - In fiscal 2025, 75% of the company's revenue was derived from sales to U.S. Government customers, with no other customer accounting for more than 5% of total revenue[36]. Workforce and Employment - The company hired approximately 6,000 new employees in fiscal 2025, focusing on competitive salaries and comprehensive benefits[50]. - As of January 2, 2026, the company had approximately 45,000 employees, with 90% located in the U.S., and 6% covered by collective bargaining agreements[47]. Intellectual Property - The company has an extensive portfolio of intellectual property, routinely applying for new patents and copyrights, and licensing intellectual property to and from third parties[34]. Currency and Financial Risks - Approximately 10% of the company's business was transacted in local currency environments in fiscal 2025, resulting in a cumulative translation loss of $185 million as of January 2, 2026[285]. - The company has open foreign currency forward contracts with an aggregate notional amount of $203 million to hedge against currency risks[286]. - As of January 2, 2026, the company's long-term debt consists predominantly of fixed-rate debt with a carrying value of $10,876 million and an estimated fair value of $10,913 million[288]. - The company currently has no plans to refinance or repurchase outstanding fixed-rate debt prior to maturity[288]. - A hypothetical 10% change in interest rates on the company's long-term fixed-rate debt obligations would not have had a material impact on the fair value of these obligations[288]. - The company cannot assure that interest rates will not change significantly or have a material effect on the fair value of its debt obligations or results of operations over the next twelve months[289]. Strategic Initiatives - The company is pursuing a Trusted Disruptor strategy, emphasizing innovation, agility, and affordability in response to recent reforms in the U.S. Government's acquisition strategy[43]. - The company relies on a diverse range of suppliers for materials, facing potential supply chain disruptions due to global events and regulatory changes[44]. Safety and Risk Management - The company emphasizes a proactive safety culture and programs to eliminate workplace incidents, risks, and hazards[48].