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Article by DailyStocks_admin    (09-22-08 03:27 AM)

The Daily Magic Formula Stock for 09/20/2008 is Harris Corp. According to the Magic Formula Investing Web Site, the ebit yield is 11% and the EBIT ROIC is 50-75 %.

Dailystocks.com only deals with facts, not biased journalism. What is a better way than to go to the SEC Filings? It's not exciting reading, but it makes you money. We cut and paste the important information from SEC filings for you to get started on your research on a specific company.


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BUSINESS OVERVIEW

General
We report our financial results for fiscal 2008 in the following four business segments:


• Our Defense Communications and Electronics segment, which was comprised of our (i) RF Communications and (ii) Defense Programs businesses;
• Our Government Communications Systems segment, which was comprised of our (i) Civil Programs, (ii) National Intelligence Programs and (iii) IT Services businesses;
• Our Broadcast Communications segment, which was comprised of our (i) Infrastructure and Networking Solutions, (ii) Media and Workflow and (iii) Television and Radio Transmission Systems businesses; and
• Our Harris Stratex Networks, Inc. (“Harris Stratex Networks”) segment (formerly Microwave Communications), which was comprised of our (i) North America Microwave, (ii) International Microwave and (iii) Network Operations businesses.

As discussed further in Note 23: Business Segments in the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K (the “Notes”), effective for fiscal 2008 (which began June 30, 2007), our Defense Programs business (part of our Government Communications Systems segment for fiscal 2007) was combined with our RF Communications business, and the combined business is reported as our Defense Communications and Electronics segment for fiscal 2008. Our Broadcast Communications and Harris Stratex Networks segments did not change as a result of these adjustments to our organizational structure. The historical results, discussion and presentation of our business segments as set forth in this Annual Report on Form 10-K reflect the impact of these adjustments to our organizational structure for all periods presented in this Annual Report on Form 10-K. As described in greater detail below under “Item 1. Business — Description of Business by Segment for Fiscal 2008 — Harris Stratex Networks,” in the third quarter of fiscal 2007, we combined our former Microwave Communications Division with Stratex Networks, Inc. (“Stratex”), a publicly-traded provider of high-speed wireless transmission systems, to form a new company named Harris Stratex Networks, Inc. As of June 27, 2008, we owned approximately 56 percent of Harris Stratex Networks’ outstanding stock. Following the combination, our business segment formerly referred to as Microwave Communications is referred to as Harris Stratex Networks and includes the results of the combined businesses for periods following the combination. Financial information with respect to all of our other activities, including corporate costs not allocated to the operating segments or discontinued operations, is reported as part of Headquarters Expense or Non-Operating Income (Loss).

Each of our business segments has been organized on the basis of specific communications markets. Each business segment has its own marketing, engineering and product service and maintenance organizations. Broadcast Communications and Harris Stratex Networks have their own separate manufacturing operations. Defense Communications and Electronics and Government Communications Systems have both separate and shared manufacturing operations. We manufacture most of the finished products we sell.

On August 5, 2008, we announced that we would report our financial results for fiscal 2009 (which began June 28, 2008) in the following four business segments:


• Our RF Communications segment;
• Our Government Communications Systems segment, which will be comprised of our (i) Defense Programs, (ii) National Intelligence Programs, (iii) Civil Programs and (iv) IT Services businesses;
• Our Broadcast Communications segment, which will be comprised of our (i) Infrastructure and Networking Solutions, (ii) Media and Workflow and (iii) Television and Radio Transmission Systems businesses; and
• Our Harris Stratex Networks segment, which will be comprised of our (i) North America Microwave, (ii) International Microwave and (iii) Network Operations businesses.

Our segment reporting structure for fiscal 2009 reflects that our RF Communications business (part of our Defense Communications and Electronics segment for fiscal 2008) will be reported as its own separate segment for fiscal 2009, and that our Defense Programs business (the other part of our Defense Communications and Electronics segment for fiscal 2008) will be reported as part of our Government Communications Systems segment for fiscal 2009, together with that segment’s existing businesses (National Intelligence Programs, Civil Programs and IT Services). Our Broadcast Communications and Harris Stratex Networks segments will not change as a result of the adjustments to our segment reporting structure. These adjustments to our segment reporting take effect in fiscal 2009 and therefore do not affect the historical results, discussion or presentation of our business segments as set forth in this Annual Report on Form 10-K. We will begin to report our financial results consistent with this new segment reporting structure beginning with the first quarter of fiscal 2009 and we will conform our historical segment reporting accordingly.

Our total revenue was approximately $5.3 billion in fiscal 2008 compared with approximately $4.2 billion in fiscal 2007. Total revenue in the United States increased 23 percent from fiscal 2007 while international revenue, amounting to 24 percent of our total revenue in fiscal 2008, increased 33 percent from fiscal 2007. Our net income was $444.2 million in fiscal 2008 compared with $480.4 million in fiscal 2007.

Financial Information About Our Business Segments
Financial information with respect to our business segments, including revenue, operating income or loss and total assets, and with respect to our operations outside the United States, is contained in Note 23: Business Segments in the Notes and is incorporated herein by reference.

Description of Business by Segment for Fiscal 2008

Defense Communications and Electronics
For fiscal 2008, Defense Communications and Electronics was comprised of our RF Communications and Defense Programs businesses. These two businesses have developed significant technology-based capabilities that are directly targeted to a diverse base of U.S. and international defense customers and their continuing needs for more complex, secure communications and information technology networks.

RF Communications: We offer to the global tactical radio market a comprehensive line of highly secure software-defined radio products and systems for manpack, handheld, vehicular, strategic fixed-site and shipboard applications, supporting our customers’ critical missions. These radio systems are highly flexible, interoperable and capable of supporting diverse mission requirements. Our Falcon ® family of tactical radios includes the Falcon II ® secure high-frequency, very high-frequency, ultra high-frequency and multiband handheld, manpack and vehicular radio systems; the Falcon III ® multiband, multimode, multimission handheld, manpack, vehicular and high-capacity data radios; and the Secure Personal Radio. These radios are built on a platform that is reprogrammable to add features or software upgrades, addressing the increasing need for an integrated high-frequency, very high-frequency and ultra high-frequency communications system. The platform also provides interconnectivity among land-based and wireless communications media. These radios also have military-strength embedded encryption and can be linked to computers, providing network capabilities on the battlefield. Our Falcon II and Falcon III radios are being installed on new Mine Resistant Ambush Protected (“MRAP”) vehicles for the U.S. Army, Navy, Marine Corps and Air Force. In fiscal 2008, we received an order from the U.S. Army to supply Falcon II high-frequency vehicular radio systems for High Mobility Multipurpose Wheeled Vehicles (“HMMWVs”) and other vehicles. We also announced in fiscal 2008 that the U.S. Army is installing Joint Tactical Radio System (“JTRS”)-approved Falcon III handheld radios in Shadow 200 Unmanned Aerial Vehicles (“UAVs”) to serve as critical links in a relay system to extend significantly the communications capabilities of ground forces operating in obstructed line-of-sight environments.

The Falcon III is the next-generation family of software-defined tactical radios which have been developed to address the JTRS requirements. Falcon III radios provide multimode capability, including secure, ultra high-frequency ground-to-ground line-of-sight communications, close-air support, and long-range tactical satellite communications, as well as programmable encryption. Falcon III radios offer operational flexibility by addressing a full range of evolving mission requirements, including backwards compatibility and interoperability with legacy systems, such as Single Channel Ground and Airborne Systems (“SINCGARS”), and are software upgradeable to incorporate new waveforms as they are developed. The AN/PRC-152 Falcon III multiband handheld is the first widely fielded tactical radio to be certified without waivers by the Joint Program Executive Office (“JPEO”) as fully compliant with the JTRS Software Communications Architecture (“SCA”). The Falcon III handheld radio also has been certified by the National Security Agency (“NSA”) for the protection of voice and data traffic up through the TOP SECRET/SCI level. In fiscal 2007, we introduced the Falcon III multiband, multimission, manpack tactical radio, which combines traditional multiband radio features with new capabilities such as extended frequency range to 2 gigahertz, commercial L-Band satellite communications (“SATCOM”) and wideband mobile ad hoc networking, and we received certification from the NSA for the Falcon III manpack in fiscal 2008. The Falcon III manpack is the first wideband networking radio to utilize the JTRS SCA and receive NSA Type 1 certification for the protection of voice and data traffic up through the TOP SECRET level. In July 2008, the Falcon III manpack became the first manpack radio with wideband networking capability to be certified as SCA-compliant by the JTRS JPEO. In fiscal 2007, we also introduced the very small Secure Personal Radio that delivers secure, tactical digital communications to individual soldiers, and a high-capacity, line-of-site (“HCLOS”) data radio. The HCLOS data radio is a lightweight broadband Ethernet system that can securely transmit encrypted Internet Protocol (“IP”) traffic over distances greater than 50 kilometers under clear line-of-sight conditions in fixed point-to-point and 20 kilometers in point-to-multipoint configurations, and can support throughput in excess of 80 megabits per second in a military application of 802.16 WiMax technology for high-speed IP data communications, providing ground troops the ability to send secure, high-bandwidth data between command posts and forward-operating bases.

We are a leader in multiband frequency radios, which allow operators to perform multiple functions on different frequency bands, eliminating the need and inconvenience of carrying multiple radios. This capability has become increasingly important to global military and peacekeeping forces as they upgrade communications for joint missions. This capability is also important for different Federal, state and local authorities confronting difficulty in communicating directly with one another during emergency operations, due to the large number of frequency bands and technologies used in today’s two-way land mobile radio communications systems, without relying on additional infrastructure or radio gateway equipment. Introduced in fiscal 2008, our new RF-1033M Multiband Multimode Land Mobile Radio delivers true real-time interoperable communications to address this difficulty by providing direct, secure multi-agency communications across multiple frequency bands (very high-frequency and ultra high-frequency bands) in a single portable radio for the growing public safety, homeland security and first responder markets. The RF-1033M Multiband Multimode Land Mobile Radio is a rugged, mission-critical communications platform for joint operations, built to the same standards as our proven military tactical radio products, and features true software-defined radio architecture, which provides flexibility and capacity for future growth while protecting our customers’ investments with software-enabled technology migrations. In July 2008, we introduced the Unity tm XG-100 land mobile radio, the newest product in a family of multiband software-defined radios that will give Federal, state and local public safety responders the ability to communicate using a single radio across multiple frequencies with virtually any agency responding to an emergency. The Unity XG-100 expands on the capabilities of the RF-1033M and extends the covered frequency range to include the 700/800 megahertz bands.

We also develop cryptographic solutions for markets with demanding communications security requirements, utilizing security algorithms that meet a wide range of applications and/or country needs to address unique privacy requirements of customers (whether a government agency or supplier or a commercial manufacturer) and providing NSA-certified products and systems that range from single integrated circuits to major communications systems. Our Sierra tm II cryptographic subsystem is a miniaturized programmable module that can be integrated into radios and other voice and data communications devices to encrypt classified information prior to transmission and storage. Our encryption modules currently meet or exceed the highest security standards established by the U.S. Government. Sierra II can be used for tactical radios, wireless local area networks (“WLANs”), remote sensors, guided munitions and UAVs. We also offer the Citadel ® cryptographic engine, which provides military-grade, Type IV encryption, enabling low-cost, exportable encryption for our family of Falcon II radios. Our secure WLAN (“SWLAN”) solution, SecNet 11 ® Plus, is certified by the NSA’s Commercial COMSEC Endorsement Program (“CCEP”) and enables military and government users to communicate multimedia information, including data, voice and video, through a secure wireless network at 11 megabits per second. Our SecNet 54 tm family of IP communications encryption products, designed to keep data, voice and video communications secure, is comprised of a modular architecture that includes a cryptographic module that provides all security-critical functions and companion modules that provide both wired and wireless communications of encrypted data over specific protocols. In fiscal 2007, we received Type 1 certification from the NSA for the SecNet 54 SWLAN product line, which enables very high data rate transmission of sensitive defense communications over wireless infrastructures in applications such as tactical operations centers. In fiscal 2008, we received certification of the SecNet 54 Ethernet module (“EMOD”) which enables secure transmission of sensitive communications over wired Ethernet connections.

We also provide unmanned ground sensor systems, which are a force-multiplier solution with a network of easily deployable, remotely located products that detect movement of personnel and vehicles. Our Falcon Watch tm remote intrusion detection and surveillance systems are fully integrated with our Falcon radios and are designed for surveillance and monitoring of high-value assets such as troop encampments, airfields, base installations, supply routes and depots. In larger networks these systems also can be used to monitor and protect national borders, regional boundaries and assets in homeland defense and peacekeeping operations. These sensor systems can be comprised of remote, battery-operated, wireless sensors using seismic, magnetic and/or passive infra-red detectors; relays; Falcon tactical radios; and sensor management application software.

Global market demand for our advanced tactical radio solutions continued to increase at strong growth rates in fiscal 2008, driving positive results for this segment. Deployment of advanced communications capabilities continues to be a top priority in the U.S. and globally, driven by modernization programs, force expansion, force restructuring and modularity, interoperability required in the growing number of NATO-led peacekeeping and disaster-relief missions, and the increasing desire for network-centric communications that will significantly improve situational awareness and force effectiveness through communications superiority. In fiscal 2008, we responded to requirements for our Falcon family of radios from a broad base of U.S. Government customers, including the U.S. Army, Marine Corps, Navy and Air Force. Internationally, our radios are the standard of NATO and Partnership for Peace countries. In fiscal 2008, we received orders from, and/or made deliveries to, a wide range of international customers in countries including Albania, Algeria, Armenia, Brunei, Bulgaria, Chad, Denmark, Estonia, Ethiopia, Georgia, Iraq, Jamaica, Kazakhstan, Kenya, Malaysia, Norway, Pakistan, the Philippines, the Republic of Niger, Romania, Saudi Arabia, Singapore, Spain, Tajikistan, Thailand, the United Arab Emirates and the United Kingdom.

In May 2007, we were awarded an Indefinite Delivery, Indefinite Quantity (“IDIQ”) contract with a maximum value of $422 million from the U.S. Army for Falcon II high-frequency manpack tactical radios and related vehicular and base station systems. We received an initial $104 million order against the contract in the fourth quarter of fiscal 2007. In June 2007, we were awarded the Consolidated Interim Single Channel Handheld Radio (“CISCHR”) IDIQ contract by the JTRS JPEO to supply the U.S. Department of Defense (“DoD”) with JTRS-approved Falcon III multiband handheld tactical radios and vehicular systems. The CISCHR contract has a one-year maximum value of $2.7 billion and a five-year maximum value of approximately $7 billion (including additional options that may be exercised over a five-year period). Under the CISCHR contract, orders are awarded based on competitive bidding between us and another supplier, and we received orders under the CISCHR contract in fiscal 2008 for the U.S. Marine Corps and Air Force. In fiscal 2008, we also received orders under the $212 million Tactical Handheld Radio (“THHR”) IDIQ contract awarded in July 2007 by the U.S. Marine Corps to support MRAP and other tactical vehicles. In June 2008, we were awarded $118 million in orders to supply the U.S. Marine Corps with Falcon II multiband manpack radios under a new $350 million IDIQ contract that is part of the Marine Corps’ Strategic Radio Plan, which will transition the Marine Corps from legacy single-band radios to multiband, multimission software-defined radios.

Defense Programs: We develop, supply and integrate communications and information processing products, systems and networks for diverse aerospace, terrestrial and maritime applications, in support of the ongoing transformation of communications for U.S. and international customers to network-centric architectures that support real-time situational awareness in combat conditions. Our technologies are providing advanced battlespace networking capabilities to assure timely and secure network-centric capabilities across strategic, operational and tactical boundaries in support of the DoD’s full spectrum of war fighting, intelligence and business missions. Our major technology areas include satellite communications terminals for mobile ground, fixed-site and shipboard applications; large, deployable satellite antenna reflectors; flat-panel, phased-array and single-mission antennas; aviation electronics for military jets and helicopters, including radios, digital maps, modems, sensors, data buses, fiber optics and microelectronics; and high-speed data links and data networks for wireless communications and smart weapons. For example, our high-speed digital Common Data Link (“CDL”) system called Hawklink, which is designed for the U.S. Navy’s Light Airborne Multi-Purpose System (“LAMPS”) helicopters, transmits tactical video, radar, acoustic and other sensor data from the helicopters to their host surface ships at distances greater than 100 nautical miles and at data rates exceeding 21 megabits per second.

We also provide high-speed secure wireless network solutions and phased-array capabilities for wireless transmission systems and are developing network-centric communications system architectures and technologies that will link sensors, platforms, weapons and soldiers using open architectures and mobile ad hoc networking capabilities. Our mobile ad hoc networking capability allows the military to take its communications infrastructure with it, creating mobile, self-forming and self-healing communications links across the battlefield. For example, our Highband Networking Radio (“HNR”), released in fiscal 2007, provides the military with fully mobile, wireless, long-range, high-bandwidth communications on-the-move by establishing line-of-sight connectivity between users of widely dispersed local area networks (“LANs”) using a Harris-developed waveform that automatically selects the best communications path available.

Major ongoing previously awarded programs include the F-35 Joint Strike Fighter, F-22 Raptor and F/A-18E/F Super Hornet aircraft platform programs, for which we provide high-performance, advanced avionics such as high-speed fiber optic networking and switching, intra-flight data links, image processing, digital map software and other electronic components; the Warfighter Information Network-Tactical (“WIN-T”) program for the U.S. Army, for which we are designing and testing the wireless transmission system architecture, applying our proven enabling technologies for wireless on-the-move communications, including phased arrays and high-speed secure wireless network solutions; the JTRS Ground Mobile Radio (“GMR”) program, for which we design, test and integrate the crypto subsystem, ground vehicle adaptor, ground vehicle adaptor mount, high-frequency power amplifier and high-frequency coupler; the Multifunctional Information Distribution System (“MIDS”) terminals program for DoD aircraft, which provides U.S. military forces with secure, jam-resistant, digital tactical communications; the Multiple Launch Rocket System (“MLRS”) Improved Fire Control System (“IFCS”) program for the U.S. Army, for which we provide the launcher interface unit, power switching unit and weapon interface unit; the Large Aperture Multiband Deployable Antenna (“LAMDA”) program, for which we provide rugged, highly-mobile, user-friendly, large-aperture tactical antennas supporting tri-band operations by utilizing interchangeable antenna feeds that can be rapidly installed by operators in the field; the CDL Hawklink program for U.S. Navy LAMPS helicopters, for which we are performing pre-production and testing of the Ku-band tactical CDL; the Multiband Shipboard Satellite Communications Terminal (“MSSCT”) program for the U.S. Navy, for which we are providing wideband satellite communications terminal systems; the Global Positioning System Next Generation Ground Control Segment (“OCX”) program, for which we provide design and engineering services for hardware, software and network infrastructure, including advanced ground antennas, advanced monitoring stations and interfaces to existing ground antennas; and the Lightweight Multiband Satellite Terminal (“LMST”) program for the U.S. Marine Corps, for which we provide mobile satellite communications terminals.

Significant new contract awards during fiscal 2008 included a five-year IDIQ contract, potentially worth $85 million, for the U.S. Navy’s Commercial Broadband Satellite Program (“CBSP”) Force Level Variant, for which we supply, for aircraft carriers and amphibious assault ships, broadband multiband satellite communications terminals that support essential mission requirements and provide high-speed Internet access for as many as 5,000 military personnel onboard each aircraft carrier; and a five-year IDIQ contract, potentially worth $77 million, for the U.S. Navy’s CBSP Unit Level Variant, for which we supply, for frigates, cruisers and destroyers, broadband multiband satellite communications terminals that provide enhanced morale-related communications services such as high-speed Internet access and video communications.

Revenue and Backlog: Revenue for the Defense Communications and Electronics segment increased 19 percent to $1,975 million in fiscal 2008 compared with $1,661 million in fiscal 2007, and was $1,293 million in fiscal 2006. Segment operating income increased 23 percent to $599.8 million in fiscal 2008 compared with $487.1 million in fiscal 2007, and was $354.1 million in fiscal 2006. The Defense Communications and Electronics segment contributed 37 percent of our total revenue in fiscal 2008 compared with 39 percent in fiscal 2007 and 37 percent in fiscal 2006. The percentage of this segment’s revenue that was derived outside of the United States was approximately 21 percent in fiscal 2008 compared with 21 percent in fiscal 2007 and 24 percent in fiscal 2006. U.S. Government customers, whether directly or through prime contractors, accounted for approximately 86 percent of this segment’s total revenue in fiscal 2008 compared with approximately 83 percent in fiscal 2007 and in fiscal 2006. For a general description of our U.S. Government contracts and subcontracts, including a discussion of revenue generated from cost-reimbursement versus fixed-price contracts, see “Item 1. Business — Principal Customers; Government Contracts” of this Annual Report on Form 10-K.

In general, this segment’s domestic products are sold and serviced directly to customers through its sales organization and through established distribution channels. Internationally, this segment markets and sells its products and services through regional sales offices and established distribution channels. See “Item 1. Business — International Business” of this Annual Report on Form 10-K.

The funded backlog of unfilled orders for this segment was $1,160 million at July 25, 2008 compared with $1,016 million at July 27, 2007 and $933 million at July 28, 2006. We expect to fill approximately 90 percent of this funded backlog during fiscal 2009, but we can give no assurance of such fulfillment. Unfunded backlog for this segment was $223 million at July 25, 2008 compared with $148 million at July 27, 2007 and $278 million at July 28, 2006. Additional information regarding this segment’s funded and unfunded backlog is provided under “Item 1. Business — Funded and Unfunded Backlog” of this Annual Report on Form 10-K. For a discussion of certain risks affecting this segment, including risks relating to our U.S. Government contracts and subcontracts, see “Item 1. Business — Principal Customers; Government Contracts,” “Item 1A. Risk Factors” and “Item 3. Legal Proceedings” of this Annual Report on Form 10-K.

Government Communications Systems
In fiscal 2008, Government Communications Systems was comprised of our Civil Programs, National Intelligence Programs and IT Services businesses.

Civil Programs: Serving primarily U.S. Government civilian agencies, including the Federal Aviation Administration (“FAA”), Census Bureau, National Oceanic and Atmospheric Administration (“NOAA”), Department of Homeland Security (“DHS”) and Government Printing Office (“GPO”), we use our ability to implement and manage large, complex programs that integrate secure, advanced communications and information processing technologies in order to provide precise, highly reliable, secure high-speed communications and information networks that improve productivity and information processing for our customers. Our networks and information systems for large-scale, geographically-dispersed enterprises offer advanced capabilities for collecting, processing, analyzing, interpreting, displaying, distributing, storing and retrieving data. Our custom networks, systems and solutions include meteorological data processing systems; electronic archival systems; graphic information systems; telecommunications services systems; maritime communications systems, including worldwide turnkey broadband satellite and terrestrial network systems and managed services for the maritime community, remote land-based installations and autonomous (buoy) systems; and healthcare IT enterprise intelligence solutions and services, including systems integration and collaboration, intelligent infrastructure, advanced visualization and display, and enterprise digital content management.

For example, we are the prime contractor on the 15-year, $2.2 billion contract for the FAA Telecommunications Infrastructure (“FTI”) program to integrate and modernize the U.S. air traffic control system and infrastructure. FTI is a modern, secure and efficient network that is providing voice, data and radar communications to 50,000 FAA employees at more than 4,000 FAA sites across the U.S., while reducing operating costs, enhancing network efficiency, reliability and security and improving service. We designed and deployed the new FTI network, have successfully transitioned more than 90 percent of the FAA’s legacy networks to the new FTI network, and are providing on-going mission operations and support services. We are also working with the FAA on other programs, including the Voice Switching and Control System (“VSCS”) program that allows air traffic controllers to establish critical ground-to-air and ground-to-ground communications links with pilots and other air traffic controllers, respectively; the Weather and Radar Processor (“WARP”) program that provides air traffic controllers with high-resolution graphical displays of integrated real-time next generation weather radar data; and the Operational and Supportability Implementation System (“OASIS”) program that provides integrated real-time weather and flight planning data for preflight weather briefings and in-flight updates. We are also the prime contractor to the U.S. Census Bureau on two of its major programs. Under the Master Address File/Topologically Integrated Geographic Encoding and Referencing Accuracy Improvement Project (“MTAIP”), we have modernized two key census databases containing 175 million addresses for all U.S. residences and businesses and a database linking U.S. streets, rivers, railroads and other geographic features to Global Positioning System (“GPS”) coordinates. For the Field Data Collection Automation (“FDCA”) program awarded to us during fiscal 2006, we are integrating multiple automated systems and have developed a new wireless handheld device with integrated GPS and secure communication capabilities that together are designed to enable census takers to input data in real time and securely transmit the information back to the Census Bureau in support of the 2010 census.

We are also working with the GPO on its digital catalog database conversion project to develop its Federal Digital System, an IT system in which content — text, graphics, video, audio and other formats — will be entered, authenticated, and catalogued according to GPO-selected metadata and standards, in order to digitally preserve and make publicly accessible in a one-stop online site a vast quantity of Federal documents and information from all three branches of the U.S. Government.

In a new market for us — healthcare IT solutions — the Department of Health and Human Services (“HHS”) awarded us a $6 million contract in the third quarter of fiscal 2008 to develop and integrate an open-source National Health Information Exchange Gateway solution that will enable Federal healthcare agencies and healthcare providers to share patient information more quickly and easily, improving the quality of care and reducing costs. In the fourth quarter of fiscal 2008, we were selected for award of a seven-year contract, potentially worth $58 million, to provide the communications/navigation system for the next-generation space suit supporting the National Aeronautics and Space Administration (“NASA”) Constellation program.

National Intelligence Programs: A significant portion of this business involves classified programs. While classified programs generally are not discussed in this Annual Report on Form 10-K, the operating results relating to classified programs are included in our consolidated financial statements. We believe that the business risks associated with such programs do not differ materially from those of other U.S. Government programs.

Serving primarily national intelligence and security agency customers, including NSA, the National Reconnaissance Office (“NRO”) and the National Geospatial-Intelligence Agency (“NGA”), we provide integrated intelligence, surveillance and reconnaissance (“ISR”) solutions that improve situational awareness, data collection accuracy and product analysis by correlating near real-time mission data and intelligence reference data for display and analysis by strategic and tactical planners and decision makers. Our ISR systems help to integrate information across the analyst workflow, accelerating the movement of information that has been collected and processed. We strive to produce innovative and cost-effective ISR solutions that provide our customers with information dominance for battle-space superiority.

For example, our image processing capabilities extend from algorithm development through delivery of operations systems, and we are providing advanced image exploitation and dissemination solutions for ISR applications by advancing image processing, image data fusion, display technologies and digital product generation techniques. These technologies range from new techniques for merging and displaying imagery to automated techniques for image screening, cueing and remote visualization. Also, our mapping and visualization capabilities provide complete, accurate and timely knowledge about the threat, the terrain, the status and the location of single or multiple foe and friendly forces and their support by utilizing data, pictures, voice and video drawn from vast storage banks or from real-time input which can be transmitted around the world in fractions of a second. In addition, we have industry-leading capabilities in the architecture, design and development of highly-specialized satellite antennas, structures, phased arrays and on-board processors, which are used to enable next-generation satellite systems to provide the U.S. military and intelligence communities with strategic and tactical advantage. We are also a leader in the design and development of antenna and reflector technologies for commercial space telecommunications applications. Further, our wireless products capabilities include developing and supplying state-of-the-art wireless surveillance and tracking equipment to the U.S. Government and law enforcement communities for vehicular, man-portable, airborne, remote/unattended and system-level solutions for both passive and active missions.

CEO BACKGROUND

Lewis Hay III , 52, is Chairman and Chief Executive Officer of FPL Group, Inc., a public utility holding company, and is Chairman of both Florida Power and Light Company and FPL Energy, LLC. He joined FPL Group in 1999 as Vice President, Finance and Chief Financial Officer. From March 2000 until December 2001, he served as President of FPL Group’s competitive energy subsidiary, FPL Energy, LLC. He was named President and Chief Executive Officer of FPL Group in June 2001 and relinquished the title of President in December 2006. He was named Chairman in January 2002.
Mr. Hay has been a member of our Board since February 2002 and is Chairperson of the Corporate Governance Committee and a member of the Audit Committee.
In addition to being a director of FPL Group, Mr. Hay is also a director of Capital One Financial Corporation, Chairman of the Board of the Institute of Nuclear Power Operations, a director of the Florida Council of 100, a member of the Business Roundtable and a member of the Business Board of Advisors of the Tepper School of Business at Carnegie Mellon University.

Karen Katen , 59, is a senior advisor to Essex Woodlands Health Ventures, a healthcare-based venture capital firm. She joined Essex Woodlands in October 2007. Ms. Katen is currently also Chairman of the Pfizer Foundation, a charitable foundation affiliated with Pfizer Inc. devoted to supporting healthcare access, education and community outreach initiatives around the world. Ms. Katen retired in March 2007 as Vice Chairman of Pfizer Inc., a research-based, global pharmaceutical company. Ms. Katen joined Pfizer in 1974 and held a series of management positions including serving as President of Pfizer Human Health, the company’s principal operating group.
Ms. Katen has been a member of our Board since December 1994 and is a member of the Business Conduct and Corporate Responsibility Committee and the Management Development and Compensation Committee.
Ms. Katen is also a director of General Motors Corporation, The Home Depot, Inc. and Air Liquide. In addition, she serves on the Catalyst Board, the RAND Corporation’s Health Board of Advisors, ARMGO Pharmaceuticals and the Economic Club of New York Trustees. Ms. Katen is a trustee for the University of Chicago and is a council member of the Graduate School of Business at the University of Chicago.

Stephen P. Kaufman , 66, has been a Senior Lecturer of Business Administration at the Harvard Business School since January 2001. He is retired Chairman and Chief Executive Officer of Arrow Electronics, Inc., a distributor of semiconductors, peripherals and components. He became President and Chief Operating Officer of Arrow in 1985, Chief Executive Officer in 1986, and Chairman in 1994. He retired as Chief Executive Officer in June 2000 and reassumed that position in June 2002 on an interim basis until September 2002.
Mr. Kaufman has been a member of our Board since December 1999 and is Chairperson of the Management Development and Compensation Committee and a member of the Finance Committee.
Mr. Kaufman is also a director of KLA-Tencor Corporation and Thermo Fischer Scientific Inc.

Hansel E. Tookes II , 60, retired from Raytheon Company, a company engaged in defense and government electronics, space, information technology, technical services and business and special mission aircraft, in December 2002. He joined Raytheon in September 1999 as President and Chief Operating Officer of its Raytheon Aircraft Company subsidiary, a commercial, military and regional aircraft manufacturing company. He was appointed Chief Executive Officer of Raytheon Aircraft Company in January 2000 and Chairman in August 2000. He became President of Raytheon International in May 2001. Prior to joining Raytheon in 1999, he served United Technologies Corporation as President of its Pratt & Whitney Large Military Engines Group since 1996. He joined United Technologies Corporation in 1980 and held a variety of senior leadership positions. Mr. Tookes was a Lieutenant Commander and pilot in the U.S. Navy and later served as a commercial pilot with United Airlines.
Mr. Tookes has been a member of our Board since April 2005 and is a member of the Audit Committee and the Business Conduct and Corporate Responsibility Committee.
Mr. Tookes is also a director of BBA Aviation plc, Corning Incorporated, FPL Group, Inc. and Ryder System, Inc.

Terry D. Growcock , 62, is retired Chief Executive Officer of The Manitowoc Company, Inc., a diversified industrial manufacturer of cranes and foodservice equipment and a provider of ship building and ship repair services. He joined Manitowoc in 1994 as Executive Vice President and General Manager of Manitowoc Ice. He became President of Manitowoc Foodservice Group in 1995 and served in that capacity until his promotion to President, Chief Executive Officer and a member of the Board of Directors of The Manitowoc Company, Inc. in 1998. Mr. Growcock retired as Chief Executive Officer of Manitowoc in May 2007, but still serves as Chairman of its Board.
Mr. Growcock has been a member of our Board since August 2005 and is a member of the Corporate Governance Committee and the Management Development and Compensation Committee.
In addition to being a director for Manitowoc, Mr. Growcock is also a director of Bemis Manufacturing Company and Harsco, Inc., and an advisory member of the Kelley School of Business at Indiana University.

Leslie F. Kenne , Lieutenant General USAF (Ret.), 60, retired in September 2003 from the U.S. Air Force, where she had most recently been Deputy Chief of Staff for Warfighting Integration at Air Force headquarters in Washington, D.C. Previously, she commanded the Electronic Systems Center at Hanscom Air Force Base in Massachusetts. She also directed a number of major procurement programs, including the F-16 and Joint Strike Fighter programs. Following her retirement from the U.S. Air Force, Ms. Kenne became President of The Kenne Group, a private independent consulting firm for various defense companies and/or agencies.
Ms. Kenne has been a member of our Board since April 2004 and is Chairperson of the Business Conduct and Corporate Responsibility Committee and a member of the Corporate Governance Committee.
Ms. Kenne is also a director of Unisys Corporation.

David B. Rickard , 61, is Executive Vice President, Chief Financial Officer and Chief Administrative Officer of CVS Caremark Corporation, a retail pharmacy chain and provider of healthcare services and pharmacy benefits management. He has held this position since joining CVS in September 1999. Prior to joining CVS, he was Senior Vice President and Chief Financial Officer of RJR Nabisco Holdings Corporation from March 1997 to August 1999. Previously, he was Executive Vice President of International Distillers and Vintners Americas.
Mr. Rickard has been a member of our Board since October 2001 and is Chairperson of the Audit Committee and a member of the Finance Committee.
Mr. Rickard is also a director of Jones Lang LaSalle Incorporated.

Gregory T. Swienton , 58, is Chairman and Chief Executive Officer of Ryder System, Inc., a logistics and transportation services company. He joined Ryder in June 1999 as President and Chief Operating Officer, and was named Chief Executive Officer in November 2000 and Chairman in May 2002. Prior to joining Ryder, he was Senior Vice President-Growth Initiatives of Burlington Northern Santa Fe Corporation (“BNSF”). He held senior positions with BNSF and the former Burlington Northern Railroad from 1994 to 1999, and various executive and management positions with DHL Worldwide Express from 1982 to 1994.
Mr. Swienton has been a member of our Board since February 2000 and is Chairperson of the Finance Committee and a member of the Business Conduct and Corporate Responsibility Committee.
In addition to being a director for Ryder System, he is also on the Board of Trustees of St. Thomas University in Miami, Florida.

Howard L. Lance , 52, is our Chairman, President and Chief Executive Officer. Mr. Lance joined Harris in January 2003 as President and Chief Executive Officer and was appointed Chairman in June 2003. Prior to joining Harris, Mr. Lance was President of NCR Corporation, an information technology services provider, and Chief Operating Officer of its Retail and Financial Group from July 2001 until October 2002. Prior to joining NCR, he spent 17 years with Emerson Electric Company, an electronic products and systems company, where he held increasingly senior management positions with different divisions of the company. In 1999, Mr. Lance was named Executive Vice President with operating responsibility for its Electronics and Telecommunications businesses. Earlier, Mr. Lance held sales and marketing positions with the Scott-Fetzer Company and Caterpillar, Inc.
Mr. Lance has been a member of our Board since January 2003.
Mr. Lance is also a director of Harris Stratex Networks, Inc. and Eastman Chemical Company and serves on the Board of Trustees of the Aerospace Industries Association, the Manufacturers Alliance/MAPI, Inc., the Florida Council of 100, the United Way of Brevard County and the Florida Institute of Technology.

Thomas A. Dattilo , 57, is Senior Advisor for Cerberus Operations and Advisory Company, LLC, a unit of Cerberus Capital Management, a private investment firm. Prior to joining Cerberus in June 2007, Mr. Dattilo was most recently Chairman, President and Chief Executive Officer of Cooper Tire & Rubber Company, a company that specializes in the design, manufacture and sale of passenger and truck tires.

He joined Cooper in January 1999 as President and Chief Operating Officer and was Chairman, President and Chief Executive Officer from April 2000 until August 2006. Prior to joining Cooper, he held senior positions with Dana Corporation. His last position with Dana was President of its sealing products group.
Mr. Dattilo has been a member of our Board since August 2001 and is a member of the Audit Committee and the Corporate Governance Committee.
Mr. Dattilo is also a director of Alberto-Culver Company. He is past Chairman of the Rubber Manufacturers Association and past Chairman of the Board of Trustees of the Manufacturers Alliance.

Dr. James C. Stoffel , 62, is a retired Senior Vice President, Chief Technical Officer, and Director of Research and Development of Eastman Kodak Company, a film and digital imaging company. He held this position from 2000 to April 2005. He joined Kodak in 1997 as Vice President, Director Electronic Imaging Products Research and Development and became Director of Research and Engineering in 1998. Prior to joining Kodak, he was with Xerox Corporation where he began his career in 1972. His most recent position with Xerox was Vice President, Corporate Research and Technology.
Dr. Stoffel has been a member of our Board since August 2003 and is a member of the Finance Committee and the Management Development and Compensation Committee.
Dr. Stoffel is also a director of Harris Stratex Networks, Inc. and a trustee of the George Eastman House museum. He serves on the Advisory Board for Research and Graduate Studies at the University of Notre Dame and is a member of the advisory board of ASTRI, Hong Kong.

MANAGEMENT DISCUSSION FROM LATEST 10K

OVERVIEW

The following Management’s Discussion and Analysis (“MD&A”) is intended to assist in an understanding of Harris. MD&A is provided as a supplement to, should be read in conjunction with, and is qualified in its entirety by reference to, our Consolidated Financial Statements and related Notes appearing elsewhere in this Annual Report on Form 10-K. Except for the historical information contained herein, the discussions in 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 MD&A under “Forward-Looking Statements and Factors that May Affect Future Results.”

The following is a list of the sections of MD&A, together with our perspective on the contents of these sections of MD&A, which we hope will make reading these pages more productive:


• Business Considerations — a general description of our businesses; the value drivers of our businesses and our strategy for achieving value; fiscal 2008 key indicators; and industry-wide opportunities, challenges and risks that are relevant to us in the defense, government, broadcast communications and microwave communications markets.

• Operations Review — an analysis of our consolidated results of operations and of the results in each of our four operating segments, to the extent the operating segment results are helpful to an understanding of our business as a whole, for the three years presented in our financial statements.

• Liquidity, Capital Resources and Financial Strategies — an analysis of cash flows, common stock repurchases, dividend policy, capital structure and resources, contractual obligations, off-balance sheet arrangements, commercial commitments, financial risk management, impact of foreign exchange and impact of inflation.

• Critical Accounting Policies and Estimates — a discussion of accounting policies and estimates that require the most judgment and a discussion of accounting pronouncements that have been issued but not yet implemented by us and their potential impact.

• 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.

BUSINESS CONSIDERATIONS

General
We are an international communications and information technology company that applies a solutions approach to serving government and commercial markets in more than 150 countries. Our mission is to be the best-in-class global provider of mission critical assured communications ® products, systems and services for global markets. Our company generates revenue, income and cash flows by developing, manufacturing and selling communications products and software as well as providing related services. We generally sell directly to our customers, the largest of which is the U.S. Government and its prime contractors. We also utilize agents and intermediaries to sell and market some products and services, especially in international markets.

As discussed further in Note 23: Business Segments in the Notes, effective for fiscal 2008 (which began June 30, 2007), our Defense Programs business (part of our Government Communications Systems segment for fiscal 2007) was combined with our RF Communications business, and the combined business is reported as our Defense Communications and Electronics segment for fiscal 2008. Our Broadcast Communications and Harris Stratex Networks segments did not change as a result of these adjustments to our organizational structure. The historical results, discussion and presentation of our business segments as set forth in this Annual Report on Form 10-K reflect the impact of these adjustments to our organizational structure for all periods presented in this Annual Report on Form 10-K.

We report our financial results for fiscal 2008 in the following four business segments:


• Our Defense Communications and Electronics segment, which was comprised of our (i) RF Communications and (ii) Defense Programs businesses;
• Our Government Communications Systems segment, which was comprised of our (i) Civil Programs, (ii) National Intelligence Programs and (iii) IT Services businesses;
• Our Broadcast Communications segment, which was comprised of our (i) Infrastructure and Networking Solutions, (ii) Media and Workflow and (iii) Television and Radio Transmission Systems businesses; and
• Our Harris Stratex Networks segment (formerly Microwave Communications), which was comprised of our (i) North America Microwave, (ii) International Microwave and (iii) Network Operations businesses.

As described in greater detail in “Item 1. Business — Description of Business by Segment for Fiscal 2008 — Harris Stratex Networks,” in the third quarter of fiscal 2007, we combined our former Microwave Communications Division with Stratex, a publicly-traded provider of high-speed wireless transmission systems, to form a new company named Harris Stratex Networks, Inc. As of June 27, 2008, we owned approximately 56 percent of Harris Stratex Networks’ outstanding stock. Following the combination, our business segment formerly referred to as Microwave Communications is referred to as Harris Stratex Networks and reflects the results of the combined businesses for periods following the combination. Financial information with respect to all of our other activities, including corporate costs not allocated to the business segments, is reported as part of Headquarters Expense or Non-Operating Income (Loss).

On August 5, 2008, we announced that we would report our financial results for fiscal 2009 (which began June 28, 2008) in the following four business segments:


• Our RF Communications segment;
• Our Government Communications Systems segment, which will be comprised of our (i) Defense Programs, (ii) National Intelligence Programs, (iii) Civil Programs and (iv) IT Services businesses;
• Our Broadcast Communications segment, which will be comprised of our (i) Infrastructure and Networking Solutions, (ii) Media and Workflow and (iii) Television and Radio Transmission Systems businesses; and
• Our Harris Stratex Networks segment, which will be comprised of our (i) North America Microwave, (ii) International Microwave and (iii) Network Operations businesses.

Our segment reporting structure for fiscal 2009 reflects that our RF Communications business (part of our Defense Communications and Electronics segment for fiscal 2008) will be reported as its own separate segment for fiscal 2009, and that our Defense Programs business (the other part of our Defense Communications and Electronics segment for fiscal 2008) will be reported as part of our Government Communications Systems segment for fiscal 2009, together with that segment’s existing businesses (National Intelligence Programs, Civil Programs and IT Services). Our Broadcast Communications and Harris Stratex Networks segments will not change as a result of the adjustments to our segment reporting structure. These adjustments to our segment reporting take effect in fiscal 2009 and therefore do not affect the historical results, discussion or presentation of our business segments as set forth in this Annual Report on Form 10-K. We will begin to report our financial results consistent with this new segment reporting structure beginning with the first quarter of fiscal 2009 and we will conform our historical segment reporting accordingly.

Value Drivers of Our Businesses and Our Strategy for Achieving Value
We are committed to our mission statement, and we believe that executing our mission statement creates value. Consistent with this commitment to effective execution, we currently focus on these key value drivers:


• Continuing profitable revenue growth in all segments by introducing new technology-based products, expanding addressable markets, developing new capabilities to attract new customers and new programs, and investing in international markets and channels;
• Focusing on operating efficiencies and cost reductions by focusing on supply chain and operational excellence;
• Leveraging various corporate initiatives across business segments;
• Making strategic acquisitions to enhance and supplement our products and services portfolio and to gain access to new markets; and
• Maintaining an efficient capital structure.

Continuing profitable revenue growth in all segments: We plan to focus on continued profitable revenue growth by implementing the following strategies in each segment:

Defense Communications and Electronics: Continue to leverage reputation and position as a leading provider of tactical radios offered by our RF Communications business in the areas of high-frequency (“HF”), multiband and cryptographic sub-systems; and expand market reach with new products such as the Falcon III JTRS-compliant multiband handheld, manpack and vehicular and secure personal radios as well as high-capacity line-of-site radios, COMSEC terminals, unmanned ground sensor products and international systems. Expand addressable markets such as avionics, electronics and data links; space and ground SATCOM systems, including antennas and space-hardened electronics; and defense communications and information networks. Leverage synergies across RF Communications and Defense Programs business units. Develop, promote and sell Defense Programs products and systems into certain global markets.

Government Communications Systems: Expand capabilities based on strong national intelligence credentials core to national security and the Global War on Terror. Leverage core capabilities for expanded opportunities in civil markets. Utilize IT Services business scale to address the growing government and commercial service markets. Identify and implement growth initiatives in new markets.

Broadcast Communications: Grow core business through aggressive new product introductions aimed at high-definition and digital-infrastructure build-outs, new channel additions, and expansion into new markets such as digital signage, government, news and sports. Focus on expanding profit and return on capital. Leverage interoperability initiative based on open industry standards by delivering high-value, highly reliable solutions. Drive a customer-centric culture, with strong strategic account management. Focus on geographic expansion in international growth markets. Leverage the Harris brand.

Harris Stratex Networks: Continue to win opportunities with public telecommunications providers as well as Federal, state and other private network operators to meet increasing demand for capacity requirements and the demand for high-reliability, high-bandwidth networks that are more secure and better protected against natural and man-made disasters. Offer innovative new products and expand regional sales channels to capture greenfield network opportunities and penetrate major regional mobile telecom operators to participate in network opportunities. Offer a broad range of engineering and other professional services for network planning, systems architecture design and project management as a global competitive advantage. Expand our network operations offerings in microwave and non-microwave opportunities to create items that differentiate our total solutions offerings.

Focusing on operating efficiencies and cost reductions: Our principal focus areas for operating efficiencies and cost management are: reducing procurement costs through an emphasis on coordinated supply chain management; reducing product costs through dedicated engineering resources focused on product design; improving manufacturing efficiencies across all segments; and optimizing facility utilization.

Leveraging various corporate initiatives across business segments: One of our strengths is our ability to transfer technology among segments and focus our research and development projects in ways that benefit Harris as a whole. Another area of focus is cross-selling through segment sales channels and joint pursuits by multiple segments. Other corporate initiatives include joint international market channel development, such as shared distributors and coordinated “go-to-market” strategies.

Making strategic acquisitions: Another key value driver is effective capital allocation by making effective acquisitions and investments to build or complement the strengths in our base businesses. We believe acquisitions may also serve to balance and enhance our portfolio of businesses. No material acquisitions were completed in fiscal 2008. In the third quarter of fiscal 2007, we combined our Microwave Communications Division with Stratex to form Harris Stratex Networks, the largest independent provider of wireless transmission network solutions, of which we own 56 percent. In the fourth quarter of fiscal 2007, we acquired Multimax, a leading provider of information technology and network services for the U.S. Government, which is being operated as part of our Government Communications Systems segment. The acquisition of Multimax provided us greater scale, a broader customer base and new growth opportunities through key positions on GWACs. In recent years, we have also made several acquisitions in our Broadcast Communications segment including Encoda, Leitch, OSi, Aastra Digital Video and Zandar. These acquisitions helped us expand our product and service portfolio so we can offer end-to-end content delivery, transport and asset management solutions to our customers.

Maintaining an efficient capital structure: Our capital structure is intended to optimize our cost of capital. We believe our strong capital position, access to key financial markets, ability to raise funds at a low effective cost and overall low cost of borrowing provide a competitive advantage. We had $373.1 million in cash, cash equivalents and short-term investments as of June 27, 2008 and had $550.3 million of cash flows provided by operating

activities during fiscal 2008. Our cash is not restricted and can be used to invest in capital expenditures, make strategic acquisitions, repurchase our common stock or pay dividends to our shareholders. During fiscal 2008, we repurchased $225 million in shares of our common stock under a $600 million share repurchase program approved by our Board of Directors during fiscal 2007, for a total of $425 million in shares of our common stock repurchased under this program since it was approved. While this program does not have a stated expiration date, we expect to repurchase during fiscal 2009 the remaining $175 million in shares of our common stock authorized to be repurchased under this program. We currently expect that these repurchases will more than offset the dilutive effect of shares to be issued under our share-based incentive plans.

Key Indicators

We believe our value drivers, when implemented, will improve our key indicators of value such as: (1) net income and net income per diluted share, (2) revenue, (3) gross margin, (4) net income as a percentage of revenue, (5) operating cash flows, (6) return on average assets and (7) return on average equity. The measure of our success is reflected in our results of operations and liquidity and capital resources key indicators:

Fiscal 2008 Results of Operations Key Indicators: Net income, net income per diluted share, revenue, gross margin, and net income as a percentage of revenue represent key measurements of our value drivers:

• Net income decreased 7.5 percent from $480.4 million in fiscal 2007 (which included a $143.1 million after-tax gain on the combination with Stratex) to $444.2 million in fiscal 2008;
• Net income per diluted share decreased 5.0 percent from $3.43 in fiscal 2007 (which included a $1.01 per diluted share after-tax gain on the combination with Stratex) to $3.26 in fiscal 2008;
• Revenue increased 25.2 percent from $4.2 billion in fiscal 2007 to $5.3 billion in fiscal 2008;
• Gross margin (revenue from product sales and services less cost of product sales and services) decreased from 32.3 percent of revenue in fiscal 2007 to 30.7 percent of revenue in fiscal 2008; and
• Net income as a percentage of revenue decreased from 11.3 percent in fiscal 2007 to 8.4 percent in fiscal 2008.

Refer to MD&A heading “Operations Review” below in this Annual Report on Form 10-K for more information.

Liquidity and Capital Resources Key Indicators: Net cash provided by operating activities, return on average assets and return on average equity also represent key measurements of our value drivers:

• Net cash provided by operating activities increased from $438.6 million in fiscal 2007 to $550.3 million in fiscal 2008;
• We expect to generate between $650 million and $700 million of net cash from operating activities in fiscal 2009;
• Return on average assets (defined as net income divided by the two-point average of total assets at the beginning and ending of the fiscal year) decreased from 12.7 percent in fiscal 2007 to 9.9 percent in fiscal 2008. Return on average assets would have increased in fiscal 2008 when compared with fiscal 2007 absent the impact of the fiscal 2007 $143.1 million after-tax gain on the combination with Stratex; and
• Return on average equity (defined as net income divided by the two-point average of shareholders’ equity at the beginning and ending of the fiscal year) decreased from 26.9 percent in fiscal 2007 to 21.3 percent in fiscal 2008. Return on average equity would have increased in fiscal 2008 when compared with fiscal 2007 absent the impact of the fiscal 2007 $143.1 million after-tax gain on the combination with Stratex.

Refer to MD&A heading “Liquidity, Capital Resources and Financial Strategies” below in this Annual Report on Form 10-K for more information.

Fiscal 2008 Compared With Fiscal 2007: Our revenue for fiscal 2008 was $5,311.0 million, an increase of 25.2 percent compared with fiscal 2007. Net income for fiscal 2008 was $444.2 million, a decrease of 7.5 percent compared with fiscal 2007 net income of $480.4 million. Fiscal 2008 revenue increased as compared with fiscal 2007 in all four of our business segments. Fiscal 2008 revenue increased by 41.4 percent in our Harris Stratex Networks segment, 32.2 percent in our Government Communications Systems segment, primarily as a result of the June 2007 acquisition of Multimax, 18.9 percent in our Defense Communications and Electronics segment and 7.3 percent in our Broadcast Communications segment. While fiscal 2008 revenue increases benefited from the acquisitions of Multimax and Zandar and the combination with Stratex, we also had strong organic revenue growth in fiscal 2008 compared with fiscal 2007.

Fiscal 2008 net income decreased from fiscal 2007, primarily due to a $163.4 million gain ($143.1 million after-tax) recorded in fiscal 2007 in our Harris Stratex Networks segment as a result of the combination with Stratex. Integration and transaction-related costs associated with the Stratex combination were $46.0 million in fiscal 2007 and $38.7 million in fiscal 2008. Additionally, Harris Stratex Networks fiscal 2008 operating income was negatively impacted by non-cash accounting adjustments and higher operating costs including orders-based sales compensation expense, an increase in the allowance for doubtful accounts and outside consultant fees. Our Defense Communications and Electronics segment continued its strong operating income trends in fiscal 2008 with a 23.1 percent increase over fiscal 2007 operating income. Operating income in our Government Communications Systems segment increased 7.0 percent over fiscal 2007 operating income, primarily due to the acquisition of Multimax partially offset by $75.9 million of charges recorded in fiscal 2008 for schedule and cost overruns on several fixed-price commercial satellite reflector programs. Operating income in our Broadcast Communications segment improved significantly, from $11.9 million in fiscal 2007 to $33.8 million in fiscal 2008. Fiscal 2007 operating income in this segment was adversely impacted by $7.5 million of charges associated with cost-reduction actions and an $18.9 million write-down of capitalized software associated with management’s decision to discontinue an automation software development effort.

Net interest expense increased from $27.6 million in fiscal 2007 to $48.4 million in fiscal 2008, mainly due to increased borrowings related to the acquisition of Multimax in June 2007, as well as lower average cash balances and lower interest rates on invested cash. Fiscal 2008 non-operating income was $11.4 million, which included $9.8 million in gains related to the sale of marketable equity securities. Fiscal 2007 non-operating loss was $16.2 million, which included a $19.8 million write-down of our investment in Terion due to an other-than-temporary impairment.

In fiscal 2008 our effective tax rate (income taxes as a percentage of income before income taxes and minority interest) was 31.6 percent compared with an effective tax rate of 28.9 percent in fiscal 2007. In fiscal 2008, our effective tax rate was lower than the U.S. statutory rate because of an $11 million favorable impact from the settlement of U.S. Federal income tax audits for fiscal years 2004 through 2006. Additionally, in the third quarter of fiscal 2008, we began recording state income taxes in our Consolidated Statement of Income as engineering, selling and administrative expenses to the extent these taxes are reimbursed under government contracts, which totaled $9.9 million for fiscal 2008. Under U.S. Government regulations, these state income taxes are allowable in establishing prices for the products and services we sell to the U.S. Government. Prior to the third quarter of fiscal 2008, these state income taxes were recorded in our Consolidated Statement of Income as income taxes. The reimbursement of these state income taxes is recorded in our Consolidated Statement of Income as revenue for all periods presented. As a result of this change, we reduced total income tax expense by approximately $6.4 million in fiscal 2008. This change will also lower our effective tax rate in future quarters.

In fiscal 2007, our effective tax rate was lower than the U.S. statutory tax rate because of the tax-free nature of the combination with Stratex, and a $12 million favorable impact from the settlement concerning the tax audit for fiscal years 2001, 2002 and 2003. These favorable impacts to our effective tax rate were partially offset by transaction-related costs incurred in our Harris Stratex Networks segment and cost-reduction initiatives in our Broadcast Communications segment in foreign jurisdictions where we have significant net operating losses and where we were unable to realize a tax benefit associated with these charges.

See the “Discussion of Business Segments” discussion below in this MD&A for further information.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

RESULTS OF OPERATIONS
Highlights
Operations results for the third quarter of fiscal 2008 include:
• Net income decreased from $214.9 million, or $1.52 per diluted share, in the third quarter of fiscal 2007 to $108.0 million, or $.78 per diluted share, in the third quarter of fiscal 2008. The prior-year quarter benefited from a $143.1 million after-tax gain on the combination with Stratex partially offset by $13.1 million of after-tax costs associated with the combination with Stratex and $15.6 million of after-tax charges associated with cost-reduction actions and a write-down of capitalized software in our Broadcast Communications segment. The third quarter of fiscal 2008 was impacted by the charges for schedule and cost overruns on commercial satellite reflector programs in our Government Communications Systems segment and the impact of favorable income tax settlements of $11 million;

• Revenue increased 24.0 percent from $1,072.4 million in the third quarter of fiscal 2007 to $1,329.6 million in the third quarter of fiscal 2008;

• Our Defense Communications and Electronics segment achieved revenue growth of 21.7 percent to $506.8 million and operating income increased 23.8 percent to $156.4 million in the third quarter of fiscal 2008 compared to the third quarter of fiscal 2007;

• Our Government Communications Systems segment revenue increased by 26.6 percent to $490.6 million while operating income decreased by 87.2 percent to $5.7 million in the third quarter of fiscal 2008 compared to the third quarter of fiscal 2007. The third quarter of fiscal 2008 includes the results of Multimax, which was acquired in the fourth quarter of fiscal 2007, and $46.8 million in charges for schedule and cost overruns on commercial satellite reflector programs;

• Our Broadcast Communications segment revenue increased 14.4 percent to $158.6 million while operating income was $7.1 million in the third quarter of fiscal 2008 compared to an operating loss of $18.1 million in the third quarter of fiscal 2007. The third quarter of fiscal 2008 includes the results of Zandar, which was acquired in the second quarter of fiscal 2008. Operating income in the third quarter of fiscal 2007 was adversely impacted by $23.1 million of costs associated with a write-down of capitalized software and cost-reduction actions;

• Our Harris Stratex Networks segment revenue increased 28.2 percent to $178.2 million in the third quarter of fiscal 2008 compared to the third quarter of fiscal 2007 and had operating income of $9.2 million in the third quarter of fiscal 2008 compared to operating income of $141.0 million in the third quarter of fiscal 2007. The third quarter of fiscal 2008 reflects the results of the combination with Stratex in the third quarter of fiscal 2007 including $1.5 million of costs associated with the combination. The third quarter of fiscal 2007 includes a $163.4 million gain on the combination with Stratex offset by $26.5 million of costs associated with the combination; and

• Net cash provided by operating activities was $353.2 million in the first three quarters of fiscal 2008 compared to $323.3 million in the first three quarters of fiscal 2007.

CONF CALL

Pamela Padgett - Vice President of Investor Relations and Corporate Communications

Thank you, operator. Good afternoon everyone and welcome to Harris Corporation's fourth quarter fiscal 2008 conference call.

I'm Pamela Padgett, Vice President, Investor Relations and Corporate Communications and on the call today is Howard Lance, Chairman, President and CEO; and Gary McArthur, Vice President and Chief Financial Officer.

Before we get started, a few words about forward-looking statements. In the course of this teleconference, management may make forward-looking statements. Forward-looking statements involve assumptions, risks and uncertainties that could cause actual results to differ materially from those statements. For more information and discussions on such assumptions, risks and uncertainties, please see the press release and filings made by Harris to the SEC.

In addition, in our press release and on this teleconference we will discuss certain financial measures and information that are non-GAAP financial measures. A reconciliation to the comparable GAAP measures is included in table through our press release on the Investor Relations section of the website which is www.harris.com. A replay of this call will also be available on the Investor Relations section of our website.

And with that Howard I'll turn call over to you.

Howard L. Lance - Chairman, President and Chief Exec Officer

Thank you, Pam and welcome to all of you joining us today for our fourth quarter fiscal 2008 earnings call.

I am pleased to report that Harris had another quarter of very good financial results. Revenue in our fiscal fourth quarter was $1.4 billion 19% above last year. Organic revenue growth was a strong 12% in the quarter.

Revenue increased in all four business segments. Orders in the fourth quarter were significantly higher than revenue, providing strong momentum as we enter fiscal year 2009.

Earnings were also strong even with absorbing the unexpected cost reported last week, by Harris Stratex Networks. Non-GAAP net income was a $128 million, $0.95 per diluted share, a 34% increase compared to the prior year.

Our full year results also reflected strong financial performance. Revenue was $5.3 billion, a 25% increase over fiscal 2007 and non-GAAP net income for the year increased 18% to $462 million, $3.39 per diluted share.

Let's move on to the segment results. The Defense Communications Electronics segment which includes RF Communications and Defense Programs reported another excellent quarter. Revenue increased 22% to $567 million, operating income increased 29% and operating margin was 30% of revenue. RF Communications revenue was very strong in the quarter at $441 million, a 36% increase compared to the prior year quarter and a sequential increase of about 13% compared to the third quarter.

Our success continued across both U.S. and international markets. Operating margins at RF Communications continued strong in the quarter at 33.8% of revenue. We believe that operating margins in fiscal year '09 will be sustained in 33% to 34% range. RF orders for fiscal year 2008 totaled $1.7 billion and significantly exceeded revenue. Backlog at year-end was about $1 billion significantly, higher than at the end of fiscal year 2007. This should clear up any misconceptions that the RF backlog has been declining, during the past several quarters.

During the fourth quarter we had a number of important orders. We received a $118 million order from U.S. Marine Corps for Falcon II multiband manpack radios, part of a $350 million IDIQ contracts. The Marine Corps strategic radio plan provides for a transition from legacy single-band radios to multiband, multimission software defined radios.

Harris is playing the central role in this transition plan, delivering Falcon II multiband and HF manpack radios as well as Falcon III multiband handheld radios. Harris also received a $42 million order from the Army in the quarter, to enable installation of our Falcon II manpack radios in their Mine Resistant Ambush Protected vehicles.

We've been reporting to you that the number and strength size of our international market opportunities has been steadily increasing over the last two years. These opportunities resulted in accelerating international revenue growth in the second half of fiscal 2008. During the fourth quarter, Harris received a $43 million follow on order from a major customer in Latin America for Falcon II HF radios. We also received an $18 million order for the Falcon II HF from the Iraq Ministry of Defense.

A $16 million follow on order for Bowman HF radios from the United Kingdom and a $15 million order from the Ministry of National Defense in Poland for Falcon II manpack radios.

And during the quarter we received our first order from South Africa. Demand for Harris tactical radios continues to be driven by multiple factors both at home and abroad. Communications monetization programs, force expansion, force restructuring, interoperability requirements, and requirements for a increased network centric communications.

We recently reached another very important milestone in the development of our Falcon III JTRS radio product line. In July, the Falcon III AN/PRC-117G multiband, manpack became the first wideband networking radio to be certified by the JTRS Joint Program Executive Office.

The Harris 117G significantly improves situational awareness like creating a wideband communications environment that supports network data intensive application such as real time video transmission. The 117G had previously received Type-1 encryption certification from the National Security Agency. This latest certification completely validates the design of the Harris Falcon III manpack, ensuring customers that the 117G is both interoperable with legacy radios and able to accommodate new JTRS platforms as there are created.

With the latest certification of 117G manpack and the certification last year of the 152 handheld Harris is the only company that have two certified JTRS radios in production now. At least two years in advance of the JTRS programs of record for scheduled low rate initial production.

Last quarter, we reported that we were showcasing the capabilities of the new Falcon III manpack with over 100 demonstrations scheduled at U.S. military installations. At this point, we are about half way through the demos. They have been met with widespread excitement from our customer base. The 117G is being used by a number of customers in current field exercises.

We have already received 117G orders from a number of DoD and other U.S. government customers and it is being operationally deployed around the world. We also recently announced another important new product from the RF Division. The Unity XG-100 land mobile radio, the XG-100 is the first products in a new family of mutiband software to find radios directed at the growing federal public safety and home land security markets.

These radios provide direct interoperability between federal agency officials and state and local first responders, using a single radio operating across multiple frequencies.

The radios also provide interoperability with National Guard users who are already equipped with the Harris Falcon III mutiband radio.

The XG-100 extends the covered frequency range to include the 700 MHz bands and 800 MHz bands. It will begin field trials later this calendar year with product shipments beginning in early 2009.

Moving on, revenue in defense programs declined 7% in the quarter compared to the prior year, in large part due to lower levels of production on the F/A-18 and F22A aircraft programs. Revenue was also impacted by the JDAM weapon program nearing its completion. Revenue increased in the quarter on several ongoing programs, including the Lightweight Multiband Satellite Terminal program for the U.S.Marine Corps, the F-35 Joint Strike Fighter program and the next-generation U.S. Air Force Global Positioning System Program.

We achieved two significant new wins during the quarter for multiband SATCOM terminals with a combined potential value of $162 million over five years. These new terminals will augment the navy's existing military and commercial satellite communications capabilities, as well as provide high speed Internet access.

Moving on to Government Communications Systems, revenue in the Government Communications System segment, and again that's comprised of Civil Programs, National Intelligence Programs, and IT Services increased by 24% to $512 million in the quarter. Organic revenue growth was about 6% in the quarter. Operating income increased 57% to $52 million and operating margin was 10.2% of revenue.

The strong rebound in operating performance in the quarter resulted primarily from progress made on the 10 commercial satellite reflectors that are in various stages of assembly, test and delivery.

In April we reached a significant milestone, when the first reflector successfully deployed in space on board the ICO G1 global communication satellite. We have since shipped three more reflectors to customers for spacecraft integration.

A fifth reflector was nearing completion when it sustained accidental damage in our factory. Harris and its prime contractor have agreed to a revised shipping date that meets the customers launch with no parameters. Harris maintains property insurance policies, covering accidental damage and related costs. So we do not expect any material financial impact as a result of this accident.

Now withstanding the accident a good progress was made in the quarter on all of the radial rip styled reflectors that we have in production, retiring much of our financial risk. The remaining four reflectors to this type are expected to ship by the end of our fiscal third quarter.

That leaves the two hoop styled reflectors which are still in the very early stages of manufacturing. As we previously indicated, the hoop design is more complex and carries our remaining risk in a commercial reflector enterprise.

Programs with higher revenue in the quarter included that field data collection automation program for the U.S. Census Bureau, the Global Geospace Intelligence program for the National Geospatial Intelligence Agency. The U.S. Air Force net sense IT integration and services program, the Navy/Marine Corps Intranet Program and the network space operations and maintenance program for the U.S. Air Force 50th, space wing.

Continued government outsourcing of IT and communications operations and port requirements is providing excellent growth opportunities for Harris. With our IT services workforce distributed at over 300 locations across the U.S., Harris delivers an unmatched level of service commitment and responsiveness to our military, government and commercial customers.

Important new wins, during the quarter included several new classified programs with a combined value of $113 million. Also during the quarter, Harris was awarded a potential seven year $58 million dollar communications contract for the next generation space suite supporting NASA's Constellation program, which will establish an outpost in the moon and lay a foundation to explore Mars and beyond in the first half of the next century.

We were also awarded a new three year $20 million IT services contract for tactical video capture systems to support pre-deployment training at Marine Corps basis across the U.S. and abroad. The system combines real time audio and video fleets from multiple cameras across multiple training events to create an integrated view of the exercise including the light movement of personnel.

And during the quarter, Harris won its second contract in the healthcare IT market. This one is a $12 million contract for the U.S. Army Dental Command Information Management and Technology Division. Harris will provide operations and support for the Army Dental Command headquartered at Ft. Sam Houston, Texas and at other army clinics and locations around the world.

Turning to the broadcast business, fourth quarter revenue and broadcast communications was $174 million, an increase set of 5% compared to the prior year quarter. Higher revenue in video infrastructure and transmission systems was partially offset by lower revenue from our legacy software products, new orders were higher than revenue in the quarter.

Non-GAAP income in the fourth quarter was $8 million, slightly higher sequentially than the third quarter but below the prior year quarter. Operating expenses increased compared, to the prior year as a result of investments in R&D, incremental investments in international sales and marketing and new IT systems.

In July, we announced a workforce reduction of about 140 personnel at the broadcast division, primarily in North America aimed at improving our profitability in this business going forward. We expect to incur severance and vacant facility costs of about $5 million in our first quarter of fiscal '09, as a result of these actions.

We expect to generate annual savings of about $14 million. So it nets up to about a $9 million expected fiscal '09 improvement in income on a GAAP basis as a result of these actions.

Highlighting some of our significant achievements during the quarter, was the continued traction at the Harris ONE solution is gaining in both domestic and international broadcast markets. Harris is in a unique position in the markets provide a full range of work flow solutions across the entire broadcast delivery chain. This has been especially important to many customers as they transition to digital high definition broadcasting operations.

During the quarter the Harris ONE solution resulted in an equipment and services contract from a new customer called Seznec [ph], a widely publicized new entertainment services company combining traditional T.V. content, video-on-demand movies and Internet video into a single easy use consumer service. We're providing Seznec [ph] with traffic and scheduling software systems, videos servers and a full line of video infrastructure equipment.

Harris will also distribute content for Seznec [ph] and will provide network and IT managed services, provide network operation center located in Melbourne. On the international broadcast front our ONE solution led to several new orders during the quarter including Australia's SBS Network where we will provide end-to-end systems to rebuild their play up facility located in Sydney. Other important international orders in the quarter included Show Time, Arabia, Advanced Broadcast Corporation in Thailand and India's Kalaignar T.V.

Broadcast Communications is continuing to build an impressive list, customers and contracts. We're very pleased with our competitive position and the opportunities we see in the global markets. Continuing attention towards improving gross margins and reducing operating costs should result in improved operating performance in fiscal 2009.

I'll keep my comments on Harris Stratex Networks brief today since the company just held the conference call last week to provide comments on their preliminary expected fourth quarter results. As you know they ended the year with strong revenue growth. And orders that were significantly higher than revenue. Fourth quarter revenue is expected to be $187 million, an increase of 7% compared to the prior year and sequentially up 5% in the third quarter. Record orders for the quarter resulted in 1.6 book-to-build ratio.

This excellent revenue and orders performance highlights the progress that has been made over the last year in reorganizing and integrating the sales and marketing organizations and setting them on the right course for success. It also highlights that our product strategy is working. And customers have seen the value of the Harris Stratex partnership.

Global wireless transmission markets continue to be quite robust. The transition to IP based networks, the evolution to 4G technologies and bandwidth expansion in emerging regions continue to drive solid market growth. The challenge in hand for the management team is to focus on further integration of the two businesses, to expand gross margins and reduce costs. New CEO, Harold Brown [ph] and his team are working through detailed action plans to improve profitability for fiscal '09. And he will be sharing these plans during their fourth quarter earnings call.

With that I'd now like to turn the call over to our Chief Financial Officer, Gary McArthur.

Gary L. McArthur - Vice President and Chief Financial Officer

Thank you, Howard, good evening. Fiscal year 2008 was another very solid balance sheet year for Harris. We ended the year with $373 million of cash, cash equivalents and short-term investments. During the year we repurchased $225 million of our outstanding stock, paid off or converted $275 million of debt and received a ratings upgrade at Moody's bringing our current debt ratings to BBB plus BAA 1.

Return on invested capital as of the end of the year was 16.1%, nearly twice our weighted average cost of capital. Further we are entering fiscal year 2009 with nearly $1 billion of borrowing capacity and excess cash available for acquisitions, further share repurchases or higher dividends. As to the forward quarter, cash flow generated from operating activities was $197 million as compared to $150 million, $15 million in the fourth quarter of fiscal 2007. All four operating segments generated higher operating cash flow during the quarter as compared to the same quarter a year ago.

Operating cash flow for full year fiscal 2008 was $550 million as compared to $439 million in the prior year. Depreciation and amortization was $46 million for the fourth quarter of the current as well as the prior year. Depreciation and amortization for total fiscal year 2008 was $172 million.

Capital expenditures were $37 million for the fourth quarter as compared to $30 million in the fourth quarter of fiscal 2007. Our cap expense for the full year was $146 million. During the quarter we repurchased an additional approximately 438,000 shares of common stock bringing the total number of shares repurchased during fiscal 2008 to 3.95 million.

As of year-end we have $175 million of remaining availability under our $600 million share repurchase program. All of which is expected to be used to repurchase shares during fiscal 2009. Our full year tax rate for fiscal 2008 was 32% with an outlook for fiscal year 2009 of 33%, noting however that the tax rate for any given quarter could vary up or down.

Other areas of guidance for fiscal 2009 are depreciation and amortization of $170 million to $180 million capital expenditures including capitalized software are also $170 million to $180 million. And operating cash flow of $650 million to $700 million. This is $25 million lower on both ends of the range than provided during our third quarter earnings call.

In summary, fiscal 2008 was another very strong year for Harris with expectations for continued improvement in fiscal 2009.

Back to you Howard.

Howard L. Lance - Chairman, President and Chief Exec Officer

Thanks, Gary. Let, me wrap up by summarizing our outlook for fiscal year 2009. And, then discuss some recently announced organizational changes with you.

Revenue in fiscal 2009 is expected to increase by 8% to 10% compared to fiscal year 2008 with revenue growth expected in every segment. We're expecting 9% to 11% growth for Defense Communications, including within that 11% to 13%.growth at RF Communications.

We are expecting 6% to 8% growth in Government Communication Systems and 6% to 8% growth in Broadcast Communications. Earnings in the fiscal 2009 are expected in a range from $4.05 to $4.15 per diluted share representing a year-over-year increase of 19% to 22% above 2008.

We expect the second half fiscal year earnings to be stronger than the first half because that's where we will see the benefit of the first half cost reductions we are taking in Broadcast, Harris Stratex and Government Systems.

Segment operating margins in fiscal 2009 are expected to be as follows; about 29% in Defense Communications including within that margins of 33% to 34% at RF Communications. We are expecting margins at Government Communication Systems in a range of 10.5%to 11.5% and we're expecting 7% to 9% operating margins in Broadcast Communications.

On the organization front Bob Henry, Executive Vice President and Chief Operating Officer at Harris has announced his plans to retire following the end of fiscal year 2009. I have asked Bob to spent most of his time during this next year in Washington DC, where he will serve as a mentor to our many business teams located there; as well as he will provide executive leadership on the important feed cut program for the Census Bureau. He'll continue to oversee some of our corporate functions which include information systems, supply chain management and operations and security.

Dan Peterson has been named Group President for the Government Communication Systems Division and he'll report directly to me. Dan is a 31 year Harris veteran and most recently was Group President for Defence Communications and Electronics segment. As part of this change with Dan we've moved the Defense Programs business back together with national programs, civil programs and IT services businesses.

So, beginning with first quarter fiscal 2009, we'll report our two government segments going forward exactly as we did prior to fiscal year 2008. That is, we'll report Government Communication systems and [indiscernible] Communications as our two separate segments.

So the Defense Communications and Electronics segment now reduced in fiscal 2008 will no longer exist. Of course, Dan may not continue as President of the RF Communications Division but he'll now report directly to me.

Jeremy Wensinger, who was previously Group President for Government Communication Systems will be leaving the company later this month to pursue outside opportunities. I want to take this opportunity to personally acknowledge Jeremy's many contributions to Harris during his 20 year career.

Following the filing of our 10-K, we'll file an 8-K that will provide you with both the Government Communications Systems and RF Communications quarterly financial segment results for our fiscal year 2008 for comparability purposes going forward.

With that I'd like to ask the operator to open the line and we'll take your questions.

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