HARRIS CORPORATION

FIN 3403 ACTUAL STUDENT

SLIDE PRESENTATION Use this for ideas on

your presentation

HARRIS CORPORATION

NOTES ON PRESENTATION Provide a handout from the

spreadsheet to everyone in class and instructor

Provide instructor the following:• Hard copy of slides• Copy of spreadsheet• Copy of disk• Latest annual or 10K

HARRIS CORPORATION

LIST ALL TEAM MEMBERS HERE

BE SURE AND INTRODUCE YOUR TEAM MEMBERS TO THE

CLASS

DRESS APPROPRIATELY IN BUSINESS ATTIRE

Group Members

HARRIS CORPORATION

Agenda

History Goals Industry Overview Growth Analysis

HARRIS CORPORATION

Agenda Contd. Du Pont Model Competitors Forecasted Income

Statement Stock Performance Q & A

HARRIS CORPORATION

HISTORY

HARRIS CORPORATION

Harris Evolution

Harris Automatic Press Company

Harris-Intertype Radiation Incorporated 1974 Harris Corp was born

HARRIS CORPORATION

GOALS

HARRIS CORPORATION

Harris Goals Short Term Goals

• “Near-term” Profits• Increase Market Share

Long Term Goals• International Growth• Federal Contracts• Increase Shareholder’s Wealth

HARRIS CORPORATION

Industry Trends

World Markets in Turmoil- Russia Falls

- German banks caught in Russia

- Brazil in trouble

- Asia Falls

HARRIS CORPORATION

Harris Reacts July 20, 1998 - Harris implements a restructuring

program– reduction of 2,300 workers (8% of workforce)

• 1,900 of these from the semiconductor sector August 31, 1998 - Harris authorizes the

repurchase of 1 million shares of common stock

“We are continuing to experience difficult market conditions in the semiconductor industry. As a result…it is necessary to reduce our cost structure.”

Phil Farmer, chairman, president and CEO of Harris

HARRIS CORPORATION

Revenue

3200

3400

3600

3800

4000

1998 1997 1996 1995

Revenue ($M)

Source: Thomson Investors Report

HARRIS CORPORATION

Earnings Per Share

0

0.5

1

1.5

2

2.5

3

1998 1997 1996 1995

Earnings PerShare ($)

Source: Thomson Investors Report

HARRIS CORPORATION

Cash Flow

0

100

200

300

400

1998 1997 1996 1995

Cash Flow ($)

Source: Thomson Investors Report

HARRIS CORPORATION

Analysis

R.D.

Liquidity Profitability Leverage

HARRIS CORPORATION

LiquidityCurrent Ratio = Current Assets

Current Liabilities

1997: 2,064/1289 = 1.6

NOTE: I RECOMMEND YOU DO A BAR CHART ON RATIOS

Prof Diggle

Quick Ratio = Current Assets - Inventories Current Liabilities

1997: 2064-611/1289 = 1.1

HARRIS CORPORATIONProfitability--do bar chart

Operating Profit Margin = Operating Income Sales

1997: 1278/3797 = 34%

Total Asset Turnover = Sales Total Assets

1997: 3797/2064 = 1.84

Operating Income Return on Investment (OIROI) =

1997: .34 X 1.84 = .63

HARRIS CORPORATION

Leverage

Times Interest Earned = EBITInterest Expense

1997: 1278/105 = 12X

HARRIS CORPORATION

Du Pont Model

HARRIS CORPORATION

Competitors

HARRIS CORPORATION

Harris Happenings

BLOCK TRADE - Harris Corp 143,700 Lehman Brothers

BLOCK TRADE - Harris Corp 100,000

Harris Corporation Line Test System Selected by Major

U.S. Carrier for National Deployment

Harris Semiconductor Introduces the World's First QML Class T Product Flow

HARRIS CORPORATION

Motorola Happenings Motorola changes accounting for Starfish MOTOROLA SAYS CHARGES RELATED TO STARFISH AC

QUISITION BROWN BROTHERS CUTS MOTOROLA TO SHORT-TERM

NEUTRAL AirTouch contract loss based on price - Motorola AirTouch

signs equipment deal with Nortel Ericsson unconcerned by Microsoft mobile move MOTOROLA SAYS ADOPTS SHAREHOLDER RIGHTS PLAN INTERVIEW-Iridium sees end-November start in India Harris forms Space & Defense unit

HARRIS CORPORATION

Nortel Happenings Nortel

Networks' Symposium Integrated Call Center Solution Wins Best-of-Show Award Cellcom Israel Showcases Broadband Wireless Access Technology from Nortel Networks

S&P 11/10/1998 ***** Star Recommendation for Northern Telecm NT on 03/02/98 Benefits from wireless, Internet growth PRN 11/10/1998

Nortel Networks Brings Industry's Richest Centrex Feature Set into IP World

Nortel Networks' New CallPilot Provides Enterprise Customers With the Next Generation of Multimedia Messaging

Nortel Networks Executive Presents Vision for Public Network Transition

HARRIS CORPORATIONForecasted Income Statement

optional fin 3403 reqd fin 3404

HARRIS CORPORATION

Stock Analysis

HARRIS CORPORATION

Harris Vs. S&P 500

HARRIS CORPORATION

Harris Vs. Motorola

HARRIS CORPORATIONHRS Vs. S&P, Motorola, Northern

Telecom

HARRIS CORPORATION

Summary Harris is focusing on short-term stability

and long-term growth. Harris makes internal adjustments to off-

set world markets. Exponential growth of Lanier Worldwide

has supported lagging sectors. Harris has followed sector trends but is

still behind its competitors on shareholder value, therefore;• RECOMMENDATION: DUE DILIGENCE

HARRIS CORPORATION

Questionsand

Answers