UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 1, 2011

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

HARRIS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		34-0276860
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
1025 West NASA Boulevard Melbourne, Florida		329l9
(Address of principal executive offices)		(Zip Code)

(321) 727-9l00
(Registrant’s telephone number, including area code)

No changes
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                                                                                                       

Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).                                                                                              

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Non-accelerated filer   o	(Do not check if a smaller reporting company)			Accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

The number of shares outstanding of the registrant’s common stock as of April 29, 2011 was 127,199,175 shares.

 

 

HARRIS CORPORATION

FORM 10-Q

For the Quarter Ended April 1, 2011

INDEX

		Page
Part I. Financial Information:
Item 1. Financial Statements (Unaudited):
Condensed Consolidated Statement of Income for the Quarter and Three Quarters ended April 1, 2011 and April 2, 2010			1
Condensed Consolidated Balance Sheet at April 1, 2011 and July 2, 2010			2
Condensed Consolidated Statement of Cash Flows for the Three Quarters ended April 1, 2011 and April 2, 2010			3
Notes to Condensed Consolidated Financial Statements			4
Report of Independent Registered Public Accounting Firm			17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			31
Part II. Other Information:
Item 1. Legal Proceedings			32
Item 1A. Risk Factors			32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			32
Item 3. Defaults Upon Senior Securities			33
Item 4. (Removed and Reserved)			33
Item 5. Other Information			34
Item 6. Exhibits			34
Signature			35
Exhibit Index
EX-12
EX-15
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

     This Quarterly Report on Form 10-Q contains trademarks, service marks and registered marks of Harris Corporation and its subsidiaries.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)

		Quarter Ended								Three Quarters Ended
		April 1,				April 2,				April 1,				April 2,
		2011				2010				2011				2010
		(In millions, except per share amounts)
Revenue from product sales and services		$	1,413.3			$	1,329.5			$	4,257.2			$	3,750.2
Cost of product sales and services			(896.3	)			(820.0	)			(2,717.9	)			(2,410.7	)
Engineering, selling and administrative expenses			(285.6	)			(245.0	)			(796.0	)			(672.8	)
Non-operating loss			(0.3	)			(0.5	)			(1.6	)			(1.0	)
Interest income			1.3				0.4				2.3				1.1
Interest expense			(26.0	)			(18.1	)			(64.2	)			(54.5	)
Income before income taxes			206.4				246.3				679.8				612.3
Income taxes			(67.2	)			(80.1	)			(225.6	)			(202.1	)
Net income			139.2				166.2				454.2				410.2
Noncontrolling interests, net of income taxes			0.3				—				0.3				—
Net income attributable to Harris Corporation		$	139.5			$	166.2			$	454.5			$	410.2
Net income per common share attributable to Harris Corporation common shareholders
Basic		$	1.10			$	1.27			$	3.57			$	3.13
Diluted		$	1.09			$	1.26			$	3.54			$	3.11
Cash dividends paid per common share		$	0.25			$	0.22			$	0.75			$	0.66
Basic weighted average shares outstanding			125.0				128.8				125.9				129.8
Diluted weighted average shares outstanding			126.0				130.0				126.9				130.7

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)

		April 1,				July 2,
		2011				2010
		(In millions, except shares)
Assets
Current Assets
Cash and cash equivalents		$	885.1			$	455.2
Receivables			796.9				736.0
Inventories			693.9				615.3
Income taxes receivable			29.9				15.3
Current deferred income taxes			156.5				145.3
Other current assets			70.7				37.5
Total current assets			2,633.0				2,004.6
Non-current Assets
Property, plant and equipment			758.8				609.7
Goodwill			1,963.4				1,576.2
Intangible assets			416.0				297.8
Non-current deferred income taxes			43.5				107.7
Other non-current assets			214.6				147.6
Total non-current assets			3,396.3				2,739.0
		$	6,029.3			$	4,743.6
Liabilities and Equity
Current Liabilities
Short-term debt		$	180.0			$	30.0
Accounts payable			382.6				329.4
Compensation and benefits			221.9				239.7
Other accrued items			295.5				267.5
Advance payments and unearned income			223.5				175.6
Income taxes payable			—				8.9
Current portion of long-term debt			6.6				0.7
Total current liabilities			1,310.1				1,051.8
Non-current Liabilities
Long-term debt			1,886.8				1,176.6
Long-term contract liability			123.7				132.4
Other long-term liabilities			212.6				192.7
Total non-current liabilities			2,223.1				1,501.7
Equity
Shareholders’ Equity:
Preferred stock, without par value; 1,000,000 shares authorized; none issued			—				—
Common stock, $1.00 par value; 500,000,000 shares authorized; issued and outstanding 125,005,756 shares at April 1, 2011 and 127,460,307 shares at July 2, 2010			125.0				127.5
Other capital			477.1				461.1
Retained earnings			1,864.8				1,621.4
Accumulated other comprehensive income (loss)			17.6				(20.4	)
Total shareholders’ equity			2,484.5				2,189.6
Noncontrolling interests			11.6				0.5
Total equity			2,496.1				2,190.1
		$	6,029.3			$	4,743.6

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

		Three Quarters Ended
		April 1,				April 2,
		2011				2010
		(In millions)
Operating Activities
Net income		$	454.2			$	410.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			148.5				121.0
Share-based compensation			36.5				28.8
Non-current deferred income taxes			17.5				(0.6	)
(Increase) decrease in:
Accounts and notes receivable			(19.6	)			119.7
Inventories			(44.6	)			(46.9	)
Increase (decrease) in:
Accounts payable and accrued expenses			(22.8	)			(65.2	)
Advance payments and unearned income			45.6				38.9
Income taxes			(32.2	)			24.5
Other			(26.3	)			4.9
Net cash provided by operating activities			556.8				635.3
Investing Activities
Net cash paid for acquired businesses			(548.4	)			(40.2	)
Cash paid for cost-method investment			(10.0	)			—
Additions of property, plant and equipment			(186.1	)			(129.9	)
Additions of capitalized software			(10.1	)			(6.3	)
Net cash used in investing activities			(754.6	)			(176.4	)
Financing Activities
Proceeds from borrowings			855.7				—
Repayments of borrowings			(0.6	)			(106.6	)
Proceeds from exercise of employee stock options			19.2				12.1
Repurchases of common stock			(156.0	)			(155.7	)
Cash dividends			(95.7	)			(86.4	)
Net cash provided by (used in) financing activities			622.6				(336.6	)
Effect of exchange rate changes on cash and cash equivalents			5.1				2.2
Net increase in cash and cash equivalents			429.9				124.5
Cash and cash equivalents, beginning of year			455.2				281.2
Cash and cash equivalents, end of quarter		$	885.1			$	405.7

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

April 1, 2011

Note A — Significant Accounting Policies and Recent Accounting Standards

Basis of Presentation

     The accompanying condensed consolidated financial statements include the accounts of Harris Corporation and its subsidiaries. As used in these Notes to Condensed Consolidated Financial Statements (Unaudited) (these “Notes”), the terms “Harris,” “Company,” “we,” “our,” and “us” refer to Harris Corporation and its consolidated subsidiaries. Significant intercompany transactions and accounts have been eliminated. The accompanying condensed consolidated financial statements have been prepared by Harris, without an audit, in accordance with U.S. generally accepted accounting principles for interim financial information and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, such interim financial statements do not include all information and footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with U.S. generally accepted accounting principles. In the opinion of management, such interim financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented therein. The results for the quarter and three quarters ended April 1, 2011 are not necessarily indicative of the results that may be expected for the full fiscal year or any subsequent period. The balance sheet at July 2, 2010 has been derived from the audited financial statements but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for annual financial statements. We provide complete financial statements in our Annual Report on Form 10-K, which includes information and footnotes required by the rules and regulations of the SEC. The information included in this Quarterly Report on Form 10-Q (this “Report”) should be read in conjunction with the Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended July 2, 2010 (the “Fiscal 2010 Form 10-K”).

     As previously reported and as discussed further in Note P — Business Segments in these Notes and in the “Highlights” discussion in Part I. Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report, our operating segment reporting structure changed, effective for the third quarter of fiscal 2011. Our new operating segment reporting structure continues to consist of three business segments. As a result of a realignment of our operations, we formed our new Integrated Network Solutions segment by realigning Harris IT Services, Harris CapRock Communications, Healthcare Solutions and Cyber Integrated Solutions (all of which were formerly under our Government Communications Systems segment) with Broadcast Communications (formerly a separate reporting segment). Our Government Communications Systems segment now is comprised of Civil Programs, Defense Programs and National Intelligence Programs. Our RF Communications segment did not change. The historical results, discussion and presentation of our business segments as set forth in this Report have been adjusted to reflect the impact of these changes to our operating segment reporting structure for all periods presented in this Report.

     The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the amounts reported in the accompanying condensed consolidated financial statements and these Notes. Actual results could differ from those estimates and assumptions.

Adoption of New Accounting Standards

     In the first quarter of fiscal 2011, we adopted the following accounting standards, neither of which had a material impact on our financial position, results of operations or cash flows:

	•		The accounting standard that revises accounting and reporting requirements for arrangements with multiple deliverables. This standard allows the use of an estimated selling price to determine the selling price of a deliverable in cases where neither vendor-specific objective evidence nor third-party evidence is available. Additionally, this standard requires the total selling price of a multiple-deliverable arrangement to be allocated at the inception of the arrangement to all deliverables based on relative selling prices.
	•		The accounting standard that clarifies which revenue allocation and measurement guidance should be used for arrangements that contain both tangible products and software, in cases where the software is more than incidental to the tangible product as a whole. More specifically, if the software sold with or embedded within the tangible product is essential to the functionality of the tangible product, then this software as well as undelivered software elements that relate to this software are excluded from the scope of existing software revenue guidance.

Reclassifications

     Certain prior-year amounts have been reclassified in the accompanying condensed consolidated financial statements to conform to current-year classifications.

Note B — Stock Options and Other Share-Based Compensation

     As of April 1, 2011, we had two shareholder-approved employee stock incentive plans (“SIPs”) under which options or other share-based compensation was outstanding, and we had the following types of share-based awards outstanding under our SIPs: stock options, performance share awards, performance share unit awards, restricted stock awards and restricted stock unit awards. We believe that such awards more closely align the interests of employees with those of shareholders. Certain share-based awards provide for accelerated vesting if there is a change in control (as defined under our SIPs). The compensation cost related to our share-based awards that was charged against income for the quarter and three quarters ended April 1, 2011 was $10.4 million and $36.5 million, respectively. The compensation cost related to our share-based awards that was charged against income for the quarter and three quarters ended April 2, 2010 was $7.6 million and $28.8 million, respectively.

     Grants to employees under our SIPs during the quarter ended April 1, 2011 consisted of 29,000 stock options and 21,600 restricted stock awards. Grants to employees under our SIPs during the three quarters ended April 1, 2011 consisted of 1,395,450 stock options, 163,151 performance share awards and 408,100 restricted stock awards. The fair value of each option grant was estimated on the date of grant using the Black-Scholes-Merton option-pricing model which used the following assumptions: expected volatility of 35.58 percent; expected dividend yield of 2.0 percent; and expected life in years of 4.94.

Note C — Business Combinations

     On July 30, 2010, we acquired privately held CapRock Holdings, Inc. and its subsidiaries, including CapRock Communications, Inc. (collectively, “CapRock”), a global provider of mission-critical, managed satellite communications services for the government, energy and maritime industries. CapRock’s solutions include broadband Internet access, voice over Internet Protocol (“VOIP”) telephony, wideband networking and real-time video, delivered to nearly 2,000 customer sites around the world. The acquisition of CapRock increased the breadth of our assured communications^® capabilities, while enabling us to enter new vertical markets and increase our international presence. The total net purchase price for CapRock was $517.4 million. Our fiscal 2011 results of operations include revenue of $255.9 million and a pre-tax loss of $8.2 million (including $11.6 million of acquisition-related charges) associated with CapRock for the eight-month period following the date of acquisition. We report CapRock (now part of Harris CapRock Communications) under our newly formed Integrated Network Solutions segment.

The following tables provide further detail of the acquisition of CapRock in fiscal 2011:

		CapRock
		(In millions)
Date of acquisition			7/30/2010
Reporting business segment		Integrated Network Solutions
Cash consideration paid to former owners		$	539.6
Less cash acquired			(22.2	)
Total net purchase price paid		$	517.4
Allocation of purchase price:
Accounts and notes receivable		$	42.7
Inventories			34.1
Other current assets			4.3
Current deferred income taxes			3.0
Identifiable intangible assets			131.5
Goodwill			350.2
Property, plant and equipment			59.8
Other assets			23.0
Total assets acquired			648.6
Accounts payable and accrued expenses			82.4
Advance payments and unearned income			2.3
Non-current deferred tax liabilities			37.0
Other liabilities			9.5
Total liabilities acquired			131.2
Net assets acquired		$	517.4

		CapRock
		Weighted
		Average
		Amortization
		Period				Total
		(In years)				(In millions)
Identifiable intangible assets:
Customer relationships			16.0			$	70.0
Contract backlog			5.0				47.0
Tradenames			5.0				14.0
Other			15.0				0.5
Weighted average amortization period and total			10.9			$	131.5

     The goodwill resulting from this business combination was associated primarily with CapRock’s market presence and leading position, growth opportunities in the markets in which it operates, experienced work force and established operating infrastructure. The goodwill resulting from this business combination is nondeductible for tax purposes.

Pro Forma Results (Unaudited)

     The following summary, prepared on a pro forma basis, presents our unaudited consolidated results of operations as if the acquisition of CapRock had been completed as of the beginning of fiscal 2010, after including the impact of adjustments such as amortization of intangible assets, interest expense on related borrowings, and the related income tax effects. This pro forma presentation does not include any impact of transaction synergies. In the following table, “net income” refers to net income attributable to Harris Corporation.

		Quarter Ended								Three Quarters Ended
		April 1,				April 2,				April 1,				April 2,
		2011				2010				2011				2010
		(In millions, except per share amounts)
Revenue from product sales and services — as reported		$	1,413.3			$	1,329.5			$	4,257.2			$	3,750.2
Revenue from product sales and services — pro forma		$	1,413.3			$	1,421.6			$	4,289.5			$	4,032.0
Net income — as reported		$	139.5			$	166.2			$	454.5			$	410.2
Net income — pro forma		$	139.5			$	167.5			$	454.2			$	416.4
Net income per diluted common share — as reported		$	1.09			$	1.26			$	3.54			$	3.11
Net income per diluted common share — pro forma		$	1.09			$	1.27			$	3.54			$	3.15

     The pro forma results are not necessarily indicative of our results of operations had we owned CapRock for the entire periods presented.

     As discussed further in Note Q — Subsequent Events in these Notes, on April 4, 2011, subsequent to the end of the third quarter of fiscal 2011, we completed our previously announced acquisition from Schlumberger B.V. and its affiliates (“Schlumberger”) of substantially all of the assets of the Global Connectivity Services business of the Schlumberger group (“Schlumberger GCS”), as well as our previously announced acquisition of Carefx Corporation (“Carefx”).

     We combined Schlumberger GCS and the recently acquired infrastructure assets of the government business of Core180, Inc. (“Core180 Infrastructure”) (acquired in the third quarter of fiscal 2011) with previously acquired CapRock and Harris’ Maritime Communications Services to form Harris CapRock Communications — a provider of managed satellite and terrestrial communications services for the energy, government and maritime markets. We purchased Schlumberger GCS for $397.5 million in cash, subject to post-closing adjustments. The purchase price was paid from cash on hand, which was largely generated by our net proceeds from issuances of long-term debt in December 2010. The goodwill arising from the acquisition will be an allowable tax expense. We will report Schlumberger GCS (now part of Harris CapRock Communications, as noted above) under our newly formed Integrated Network Solutions segment.

     Carefx is a provider of interoperability workflow solutions for government and commercial healthcare providers. We purchased privately held Carefx for $155 million in cash, subject to post-closing adjustments. The purchase price was paid from cash on hand, which was largely generated by our net proceeds from issuances of commercial paper during the third quarter of fiscal 2011. We will report Carefx (now part of Healthcare Solutions) under our newly formed Integrated Network Solutions segment.

Note D — Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

     Comprehensive income for the quarter and three quarters ended April 1, 2011 and April 2, 2010 was comprised of the following:

		Quarter Ended								Three Quarters Ended
		April 1,				April 2,				April 1,				April 2,
		2011				2010				2011				2010
						(In millions)
Net income		$	139.2			$	166.2			$	454.2			$	410.2
Other comprehensive income (loss):
Foreign currency translation			19.7				0.5				35.2				34.8
Net unrealized gain (loss) on securities available-for-sale, net of income taxes			0.6				(0.1	)			0.7				0.4
Net unrealized gain (loss) on hedging derivatives, net of income taxes			(0.2	)			0.3				(0.3	)			(0.3	)
Amortization of loss on treasury lock, net of income taxes			0.2				0.1				0.5				0.4
Recognition of pension actuarial losses in net income, net of income taxes			0.4				1.9				1.9				4.1
Total comprehensive income			159.9				168.9				492.2				449.6
Comprehensive loss attributable to noncontrolling interests			0.3				—				0.3				—
Total comprehensive income attributable to Harris Corporation		$	160.2			$	168.9			$	492.5			$	449.6

     The components of accumulated other comprehensive income (loss) at April 1, 2011 and July 2, 2010 were as follows:

		April 1,				July 2,
		2011				2010
		(In millions)
Foreign currency translation		$	49.5			$	14.3
Net unrealized gain on securities available-for-sale, net of income taxes			1.3				0.6
Net unrealized gain on hedging derivatives, net of income taxes			0.2				0.5
Unamortized loss on treasury lock, net of income taxes			(3.6	)			(4.1	)
Unrecognized pension obligations, net of income taxes			(29.8	)			(31.7	)
		$	17.6			$	(20.4	)

Note E — Receivables

     Receivables are summarized below:

		April 1,				July 2,
		2011				2010
		(In millions)
Accounts receivable		$	667.7			$	613.0
Unbilled costs on cost-plus contracts			134.9				125.1
Notes receivable due within one year, net			6.7				7.9
			809.3				746.0
Less allowances for collection losses			(12.4	)			(10.0	)
		$	796.9			$	736.0

Note F — Inventories

     Inventories are summarized below:

		April 1,				July 2,
		2011				2010
		(In millions)
Unbilled costs and accrued earnings on fixed-price contracts		$	311.8			$	295.3
Finished products			176.4				134.6
Work in process			68.2				59.7
Raw materials and supplies			137.5				125.7
		$	693.9			$	615.3

     Unbilled costs and accrued earnings on fixed-price contracts were net of progress payments of $67.1 million at April 1, 2011 and $35.8 million at July 2, 2010.

Note G — Property, Plant and Equipment

     Property, plant and equipment are summarized below:

		April 1,				July 2,
		2011				2010
		(In millions)
Land		$	12.8			$	13.1
Software capitalized for internal use			100.7				85.7
Buildings			465.3				396.6
Machinery and equipment			995.3				860.2
			1,574.1				1,355.6
Less allowances for depreciation and amortization			(815.3	)			(745.9	)
		$	758.8			$	609.7

     Depreciation and amortization expense related to property, plant and equipment for the quarter and three quarters ended April 1, 2011 was $34.4 million and $95.0 million, respectively. Depreciation and amortization expense related to property, plant and equipment for the quarter and three quarters ended April 2, 2010 was $26.8 million and $78.9 million, respectively.

Note H — Goodwill and Intangible Assets

     As discussed further in Note P — Business Segments in these Notes and in the “Highlights” discussion in Part I. Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report, effective for the third quarter of fiscal 2011, we changed our operating segment reporting structure, which also changed certain identified reporting units. As a result of these changes, we reallocated goodwill to the affected reporting units using the relative fair value approach, which resulted in changes in the goodwill balances by business segment at July 2, 2010 as presented below from amounts previously reported.

     Changes in the carrying amount of goodwill for the three quarters ended April 1, 2011 by business segment are as follows:

						Government				Integrated
		RF				Communications				Network
		Communications				Systems				Solutions				Total
						(In millions)
Balance at July 2, 2010 — net of impairment losses		$	422.6			$	292.1			$	861.5			$	1,576.2
Goodwill acquired during the period			—				—				366.9				366.9
Currency translation adjustments			2.1				1.0				17.2				20.3
Balance at April 1, 2011 — net of impairment losses		$	424.7			$	293.1			$	1,245.6			$	1,963.4
Balance at April 1, 2011 — before impairment losses		$	424.7			$	293.1			$	1,406.5			$	2,124.3
Accumulated impairment losses			—				—				(160.9	)			(160.9	)
Balance at April 1, 2011 — net of impairment losses		$	424.7			$	293.1			$	1,245.6			$	1,963.4

     The goodwill resulting from the acquisition of CapRock was associated primarily with CapRock’s market presence and leading position, growth opportunities in the market in which it operates, experienced work force and established operating infrastructure.

     In the table above, the accumulated impairment losses in our Integrated Network Solutions segment related to Broadcast Communications and were recorded in the fourth quarter of fiscal 2009.

     We have identifiable intangible assets related primarily to customer relationships and technology acquired through acquisitions. The unamortized balance of identifiable intangible assets on our accompanying Condensed Consolidated Balance Sheet was $416.0 million and $297.8 million at April 1, 2011 and July 2, 2010, respectively. Amortization expense related to identifiable intangible assets for the quarter and three quarters ended April 1, 2011 was $15.7 million and $47.8 million, respectively. Amortization expense related to identifiable intangible assets for the quarter and three quarters ended April 2, 2010 was $12.0 million and $37.7 million, respectively. The estimated amortization expense related to identifiable intangible assets for the remaining quarter of fiscal 2011 is $17.8 million and for the five fiscal years following fiscal 2011 and, in total, thereafter is: $67.3 million in fiscal 2012, $64.1 million in fiscal 2013, $54.1 million in fiscal 2014, $52.4 million in fiscal 2015, $39.4 million in fiscal 2016 and $120.9 million thereafter.

Note I — Credit Arrangements

     On September 29, 2010, we entered into a $300 million senior unsecured 364-day revolving credit agreement (the “364-Day Revolving Credit Agreement”) with a syndicate of lenders. The 364-Day Revolving Credit Agreement provides for the extension of credit to us in the form of revolving loans at any time and from time to time during the term of the 364-Day Revolving Credit Agreement, in an aggregate principal amount at any time outstanding not to exceed $300 million. Borrowings under the 364-Day Revolving Credit Agreement will be denominated in U.S. Dollars. The 364-Day Revolving Credit Agreement may be used for working capital and other general corporate purposes (excluding hostile acquisitions) and may also be used to support any commercial paper that we may issue.

     At our election, borrowings under the 364-Day Revolving Credit Agreement will bear interest either at LIBOR plus an applicable margin or at the base rate plus an applicable margin. The interest rate margin over LIBOR, initially set at 1.75 percent, may increase (to a maximum amount of 2.25 percent) or decrease (to a minimum amount of 1.25 percent) based on changes in the ratings of our senior unsecured long-term debt securities (“Senior Debt Ratings”). The base rate is a fluctuating rate equal to the highest of (i) the federal funds rate plus 0.50 percent, (ii) SunTrust Bank’s publicly announced prime lending rate for U.S. Dollars or (iii) LIBOR for an interest period of one month plus 1.00 percent. The interest rate margin over the base rate, initially set at 0.75 percent, may increase (to a maximum amount of 1.25 percent) or decrease (to a minimum amount of 0.25 percent) based on our Senior Debt Ratings.

     The 364-Day Revolving Credit Agreement contains certain customary covenants, including covenants limiting: certain liens on our assets; certain mergers, consolidations or sales of assets; certain sale and leaseback transactions; certain vendor financing investments; and certain investments in unrestricted subsidiaries. The 364-Day Revolving Credit Agreement also requires that we not permit our ratio of consolidated total indebtedness to total capital, each as defined, to be greater than 0.60 to 1.00 and not permit our ratio of consolidated EBITDA to consolidated net interest expense, each as defined, to be less than 3.00 to 1.00 (measured on the last day of each fiscal quarter for the rolling four-quarter period then ending). We were in compliance with the covenants in the 364-Day Revolving Credit Agreement in the third quarter of fiscal 2011. The 364-Day Revolving Credit Agreement contains certain events of default, including: failure to make payments; failure to perform or observe terms, covenants and agreements; material inaccuracy of any representation or warranty; payment default under other indebtedness with a principal amount in excess of $75 million, other default under such other indebtedness that permits acceleration of such indebtedness, or acceleration of such other indebtedness; occurrence of one or more final judgments or orders for the payment of money in excess of $75 million that remain unsatisfied; incurrence of certain ERISA liability in excess of $75 million; any bankruptcy or insolvency; or a change of control, including if a person or group becomes the beneficial owner of 25 percent or more of our voting stock. If an event of default occurs the lenders may, among other things, terminate their commitments and declare all outstanding borrowings to be immediately due and payable together with accrued interest and fees. All amounts borrowed or outstanding under the 364-Day Revolving Credit Agreement are due and mature on September 28, 2011, unless the commitments are terminated earlier either at our request or if certain events of default occur. At April 1, 2011, we had no borrowings outstanding under the 364-Day Revolving Credit Agreement.

     For a description of our other credit arrangements, see the “Capital Structure and Resources” discussion in Part I. Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report.

Note J — Debt

     Long-term debt is summarized below:

		April 1,				July 2,
		2011				2010
		(In millions)
5.0% notes, due October 1, 2015		$	300.0			$	300.0
5.95% notes, due December 1, 2017			400.0				400.0
6.375% notes, due June 15, 2019			350.0				350.0
4.4% notes, due December 15, 2020			400.0				—
7.0% debentures, due January 15, 2026			100.0				100.0
6.35% debentures, due February 1, 2028			25.8				25.8
6.15% notes, due December 15, 2040			300.0				—
Other			17.6				1.5
Total debt			1,893.4				1,177.3
Less: current portion of debt			(6.6	)			(0.7	)
Total long-term debt		$	1,886.8			$	1,176.6

     The potential maturities of long-term debt, including the current portion, for the remainder of fiscal 2011 and the five years following fiscal 2011 and, in total, thereafter are: $0.5 million for the remainder of fiscal 2011; $6.5 million in fiscal 2012; $7.3 million in fiscal 2013; $3.3 million in fiscal 2014; none in fiscal 2015; $300.0 million in fiscal 2016; and $1,575.8 million thereafter. All of our outstanding long-term debt is unsubordinated and unsecured with equal ranking.

     On December 3, 2010, we completed the issuance of $400 million in aggregate principal amount of 4.4% Notes due December 15, 2020 (the “2020 Notes”) and $300 million in aggregate principal amount of 6.15% Notes due December 15, 2040 (the “2040 Notes”). Interest on each of the 2020 Notes and the 2040 Notes is payable semi-annually in arrears on June 15 and December 15 of each year. We may redeem the 2020 Notes and/or the 2040 Notes at any time in whole or, from time to time, in part at the applicable “make-whole” redemption price. The applicable “make-whole” redemption price is equal to the greater of 100 percent of the principal amount of the notes being redeemed or the sum of the present values of the remaining scheduled payments of the principal and interest (other than interest accruing to the date of redemption) on the notes being redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, as defined, plus 25 basis points in the case of the 2020 Notes and 35 basis points in the case of the 2040 Notes. In each case, we will pay accrued interest on the principal amount of the notes being redeemed to the redemption date. In addition, upon a change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase the notes at a price equal to 101 percent of the aggregate principal amount of the notes repurchased, plus accrued interest on the notes repurchased to the date of repurchase. We incurred $5.5 million and $4.8 million in debt issuance costs and discounts related to the issuance of the 2020 Notes and 2040 Notes, respectively, which are being amortized on a straight-line basis over the respective lives of the notes, which approximates the effective interest rate method, and are reflected as a portion of interest expense in the accompanying Condensed Consolidated Statement of Income (Unaudited).

     For a description of other notes and debentures in our outstanding long-term debt, see the “Capital Structure and Resources” discussion in Part I. Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report or see Note 13: “Long-Term Debt” in the Notes to Consolidated Financial Statements included in our Fiscal 2010 Form 10-K.

     Our short-term debt at April 1, 2011, December 31, 2010, October 1, 2010 and July 2, 2010 was $180.0 million, $30.0 million, $275.0 million and $30.0 million, respectively, and consisted primarily of commercial paper outstanding under our commercial paper program, which was supported by our senior unsecured revolving credit facility under the 2008 Credit Agreement (as defined in the “Capital Structure and Resources” discussion in Part I. Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report). During the first quarter of fiscal 2011, we issued approximately $320 million of commercial paper to fund a portion of the purchase price for our acquisition of CapRock. During the second quarter of fiscal 2011, we used approximately $285 million of the net proceeds from the sale of the 2020 Notes and 2040 Notes described above for repayment of a substantial portion of our outstanding commercial paper. During the third quarter of fiscal 2011, we issued $150 million of commercial paper to fund a portion of the purchase price for our pending acquisitions of Schlumberger GCS and Carefx, both of which we completed on April 4, 2011, subsequent to the end of the third quarter of fiscal 2011.

Note K — Accrued Warranties

     Changes in our warranty liability, which is included as a component of the “Other accrued items” and “Other long-term liabilities” line items in the accompanying Condensed Consolidated Balance Sheet (Unaudited), during the three quarters ended April 1, 2011 were as follows:

		(In millions)
Balance at July 2, 2010		$	73.1
Warranty provision for sales made during the three quarters ended April 1, 2011			15.4
Settlements made during the three quarters ended April 1, 2011			(34.7	)
Other adjustments to warranty liability, including those for acquisitions and foreign currency translation, during the three quarters ended April 1, 2011			0.2
Balance at April 1, 2011		$	54.0

Note L — Net Income Per Share

     The calculations of net income per share are as follows (in this Note L, “net income” refers to net income attributable to Harris Corporation and “net income per share” refers to net income per share attributable to Harris Corporation common shareholders):

		Quarter Ended								Three Quarters Ended
		April 1,				April 2,				April 1,				April 2,
		2011				2010				2011				2010
		(In millions, except per share amounts)
Net income		$	139.5			$	166.2			$	454.5			$	410.2
Adjustments for participating securities outstanding			(1.7	)			(2.0	)			(5.6	)			(4.1	)
Net income used in basic and diluted common share calculations (A)		$	137.8			$	164.2			$	448.9			$	406.1
Basic weighted average common shares outstanding (B)			125.0				128.8				125.9				129.8
Impact of dilutive stock options			1.0				1.2				1.0				0.9
Diluted weighted average common shares outstanding (C)			126.0				130.0				126.9				130.7
Net income per basic share (A)/(B)		$	1.10			$	1.27			$	3.57			$	3.13
Net income per diluted share (A)/(C)		$	1.09			$	1.26			$	3.54			$	3.11

     Employee stock options to purchase approximately 3,244,200 and 3,654,385 shares of our common stock were outstanding at April 1, 2011 and April 2, 2010, respectively, but were not included as dilutive stock options in the calculations of net income per diluted share because the effect would have been antidilutive as the options’ exercise prices exceeded the average market price of our common stock.

Note M — Income Taxes

     Our effective tax rate (income taxes as a percentage of income before income taxes) was 32.6 percent in the third quarter of fiscal 2011 compared with 32.5 percent in the third quarter of fiscal 2010. In the third quarter of fiscal 2011, our effective tax rate benefited from the expiration of state income tax statutes of limitations and several other minor discrete items. In the third quarter of fiscal 2010, our effective tax rate benefited from several minor discrete items.

     Our effective tax rate was 33.2 percent in the first three quarters of fiscal 2011 compared with 33.0 percent in the first three quarters of fiscal 2010. In the first three quarters of fiscal 2011, the major discrete item was a $5.9 million tax benefit associated with legislative action during the second quarter of fiscal 2011 that restored the U.S. Federal income tax credit for research and development expenses, which was recorded in the second quarter of fiscal 2011. In the first three quarters of fiscal 2010, the major discrete item was a $3.5 million state income tax benefit associated with the filing of our fiscal 2008 income tax returns, which we recorded in the second quarter of fiscal 2010.

Note N — Fair Value Measurements

     Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Further, entities are required to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value, and to utilize a three-level fair value hierarchy that prioritizes the inputs used to measure

fair value. The three levels of inputs used to measure fair value are as follows:

	•		Level 1 — Quoted prices in active markets for identical assets or liabilities.
	•		Level 2 — Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means.
	•		Level 3 — Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities, and reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

     The following table represents the fair value hierarchy of our assets and liabilities measured at fair value on a recurring basis (at least annually) as of April 1, 2011:

		Level 1				Level 2				Level 3				Total
						(In millions)
Assets
Marketable equity securities (1)		$	5.9			$	—			$	—			$	5.9
Deferred compensation plan investments: (2)
Money market fund			27.8				—				—				27.8
Stock fund			40.3				—				—				40.3
Equity security			16.7				—				—				16.7
Foreign currency forward contracts (3)			—				2.3				—				2.3
Liabilities
Deferred compensation plans (4)			80.9				—				—				80.9
Foreign currency forward contracts (5)			—				2.4				—				2.4

     Assets and liabilities that were measured at fair value on a nonrecurring basis were not material during the quarter and three quarters ended April 1, 2011.

     The following table represents the carrying amounts and estimated fair values of our significant financial instruments that are not measured at fair value (carrying amounts of other financial instruments not listed in the table below approximate fair value due to the short-term nature of those items):

April 1, 2011

July 2, 2010

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

(In millions)

Financial Liabilities

Long-term debt (including current portion) (1)

$

1,893.4

$

2,043.9

$

1,177.3

$

1,301.8

Note O — Derivative Instruments and Hedging Activities

     In the normal course of doing business, we are exposed to global market risks, including the effect of changes in foreign currency exchange rates. We use derivative instruments to manage our exposure to such risks and formally document all relationships between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking hedge transactions. We recognize all derivatives in the accompanying Condensed Consolidated Balance Sheet (Unaudited) at fair value. We do not hold or issue derivatives for trading purposes.

     At April 1, 2011, we had open foreign currency forward contracts with a notional amount of $83.6 million, of which $42.7 million were classified as cash flow hedges and $40.9 million were classified as fair value hedges. This compares with open foreign currency forward contracts with a notional amount of $46.5 million at July 2, 2010, of which $16.2 million were classified as cash flow hedges and $30.3 million were classified as fair value hedges. At April 1, 2011, contract expiration dates ranged from less than 1 month to 14 months with a weighted average contract life of 2 months.

Balance Sheet Hedges

     To manage the exposure in our balance sheet to risks from changes in foreign currency exchange rates, we implement fair value hedges. More specifically, we use foreign currency forward contracts and options to hedge certain balance sheet items, including foreign currency denominated accounts receivable and inventory. Changes in the value of the derivatives and the related hedged items are reflected in earnings, in the “Cost of product sales and services” line item in the accompanying Condensed Consolidated Statement of Income (Unaudited). As of April 1, 2011, we had outstanding foreign currency forward contracts denominated in the Euro, British Pound, Canadian Dollar and Australian Dollar to hedge certain balance sheet items. The net gains or losses on foreign currency forward contracts designated as fair value hedges for the quarter and three quarters ended April 1, 2011 were not material. In addition, no amounts were recognized in earnings in the quarter and three quarters ended April 1, 2011 related to hedged firm commitments that no longer qualify as fair value hedges.

Cash Flow Hedges

     To manage our exposure to currency risk and market fluctuation risk associated with anticipated cash flows that are probable of occurring in the future, we implement cash flow hedges. More specifically, we use foreign currency forward contracts and options to hedge off-balance sheet future foreign currency commitments, including purchase commitments from suppliers, future committed sales to customers and intercompany transactions. These derivatives are primarily being used to hedge currency exposures from cash flows anticipated in our RF Communications segment related to programs in the United Kingdom. We also have hedged U.S. dollar payments to suppliers to maintain our anticipated profit margins in our international operations. As of April 1, 2011, we had outstanding foreign currency forward contracts denominated in the Euro, British Pound and Canadian Dollar to hedge certain forecasted transactions.

     These derivatives have only nominal intrinsic value at the time of purchase and have a high degree of correlation to the anticipated cash flows they are designated to hedge. Hedge effectiveness is determined by the correlation of the anticipated cash flows and the maturity dates of the derivatives used to hedge these cash flows. These financial instruments are marked-to-market using forward prices and fair value quotes with the offset to other comprehensive income, net of hedge ineffectiveness. Gains and losses from other comprehensive income are reclassified to earnings when the related hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value is immediately recognized in earnings. The cash flow impact of our derivatives is included in the same category in the accompanying Condensed Consolidated Statement of Cash Flows (Unaudited) as the cash flows of the item being hedged.

     The amount of gains or losses from cash flow hedges recognized in earnings or recorded in other comprehensive income, including gains or losses related to hedge ineffectiveness, was not material in the quarter and three quarters ended April 1, 2011 or in the quarter and three quarters ended April 2, 2010. We do not expect the amount of gains or losses recognized in the “Accumulated other comprehensive income (loss)” line item in the accompanying Condensed Consolidated Balance Sheet (Unaudited) as of April 1, 2011 that will be reclassified to earnings from other comprehensive income within the next 12 months to be material.

Credit Risk

     We are exposed to credit losses in the event of non-performance by counterparties to these financial instruments, but we do not expect any of the counterparties to fail to meet their obligations. To manage credit risks, we select counterparties based on credit ratings, limit our exposure to any single counterparty under defined guidelines and monitor the market position with each counterparty.

     See Note N — Fair Value Measurements in these Notes for the amount of the assets and liabilities related to these foreign currency forward contracts in the accompanying Condensed Consolidated Balance Sheet (Unaudited) as of April 1, 2011, and see Note D — Comprehensive Income and Accumulated Other Comprehensive Income (Loss) in these Notes for additional information on changes in accumulated other comprehensive income (loss) for the quarter and three quarters ended April 1, 2011.

Note P — Business Segments

     We structure our operations primarily around the products and services we sell and the markets we serve, and we report the financial results of our operations in the following three business segments — RF Communications, Government Communications Systems and Integrated Network Solutions. Our RF Communications segment is a global supplier of secure tactical radio communications and embedded high-grade encryption solutions for military and government organizations and also of secure communications systems and equipment for public safety, utility and transportation markets. Our Government Communications Systems segment conducts advanced research studies and produces, integrates and supports highly reliable, net-centric communications and information technology that solve the mission-critical challenges of our defense, intelligence and civilian government customers, primarily the U.S. Government. Our Integrated Network Solutions segment provides mission-critical end-to-end information technology (“IT”) services; managed satellite and terrestrial communications services; standards-based healthcare interoperability and image management solutions; cyber integrated solutions; and digital media management solutions to support government, energy, healthcare, enterprise and broadcast customers. Within each business segment, there are multiple program areas and product and service lines that aggregate into such business segment.

     As discussed further in the “Highlights” discussion in Part I. Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report, our operating segment reporting structure reflects that, effective for the third quarter of fiscal 2011, as a result of a realignment of our operations and as previously reported, we formed our Integrated Network Solutions segment as a new segment. The new segment realigns Harris IT Services, Harris CapRock Communications, Healthcare Solutions and Cyber Integrated Solutions (all of which were formerly under our Government Communications Systems segment) with Broadcast Communications (formerly a separate reporting segment). Our Government Communications Systems segment now is comprised of Civil Programs, Defense Programs and National Intelligence Programs. Our RF Communications segment did not change and continues to be comprised of U.S. Department of Defense and International Tactical Communications and Public Safety and Professional Communications. The historical results, discussion and presentation of our business segments as set forth in this Report have been adjusted to reflect the impact of these changes to our operating segment reporting structure for all periods presented in this Report.

     The accounting policies of our business segments are the same as those described in Note 1: “Significant Accounting Policies” in our Fiscal 2010 Form 10-K. We evaluate each segment’s performance based on its “operating income (loss),” which we define as profit or loss from operations before income taxes excluding interest income and expense, royalties and related intellectual property expenses, equity income and gains or losses from securities and other investments. Intersegment sales among our segments are transferred at cost to the buying segment and the sourcing segment recognizes a normal profit that is eliminated. The “Corporate eliminations” line item in the tables below represents the elimination of intersegment sales and their related profits. The “Unallocated corporate expense” line item in the tables below represents the portion of corporate expenses not allocated to our business segments.

     Total assets by business segment are summarized below:

		April 1,				July 2,
		2011				2010
		(In millions)
Total Assets
RF Communications		$	1,474.3			$	1,468.5
Government Communications Systems			973.6				919.8
Integrated Network Solutions			2,388.0				1,672.9
Corporate			1,193.4				682.4
		$	6,029.3			$	4,743.6

     Segment revenue, segment operating income and a reconciliation of segment operating income to total income before income taxes follow:

		Quarter Ended								Three Quarters Ended
		April 1,				April 2,				April 1,				April 2,
		2011				2010				2011				2010
						(In millions)
Revenue
RF Communications		$	550.0			$	550.7			$	1,661.2			$	1,437.3
Government Communications Systems			431.2				426.9				1,277.0				1,297.6
Integrated Network Solutions			462.9				375.8				1,400.4				1,080.5
Corporate eliminations			(30.8	)			(23.9	)			(81.4	)			(65.2	)
		$	1,413.3			$	1,329.5			$	4,257.2			$	3,750.2
Income Before Income Taxes
Segment Operating Income
RF Communications (1)		$	178.5			$	204.7			$	596.3			$	487.3
Government Communications Systems			59.8				58.4				163.8				167.1
Integrated Network Solutions (2)			20.7				28.3				67.8				90.6
Unallocated corporate expense			(19.8	)			(23.0	)			(67.5	)			(67.0	)
Corporate eliminations			(7.8	)			(3.9	)			(17.1	)			(11.3	)
Non-operating loss (3)			(0.3	)			(0.5	)			(1.6	)			(1.0	)
Net interest expense			(24.7	)			(17.7	)			(61.9	)			(53.4	)
		$	206.4			$	246.3			$	679.8			$	612.3

Note Q — Subsequent Events

     Subsequent to the end of the third quarter of fiscal 2011, on April 4, 2011, we completed our previously announced acquisition of Schlumberger GCS, a provider of satellite and terrestrial communications services for the worldwide energy market. We combined Schlumberger GCS and recently acquired Core180 Infrastructure (acquired in the third quarter of fiscal 2011) with previously acquired CapRock (acquired in the first quarter of fiscal 2011) and Harris’ Maritime Communications Services to form Harris CapRock Communications — a provider of managed satellite and terrestrial communications services for the energy, government and maritime markets. We purchased Schlumberger GCS for $397.5 million in cash, subject to post-closing adjustments. The purchase price was paid from cash on hand, which was largely generated by our net proceeds from issuances of long-term debt in December 2010. The goodwill arising from the acquisition will be an allowable tax expense. We will report Schlumberger GCS (now part of Harris CapRock Communications, as noted above) under our newly formed Integrated Network Solutions segment.

     Also on April 4, 2011, we completed our previously announced acquisition of Carefx, a provider of interoperability workflow solutions for government and commercial healthcare providers. Carefx’s solution suite is used by more than 800 hospitals, healthcare systems and health information exchanges across North America, Europe and Asia. The acquisition expands our presence in government healthcare, provides entry into the commercial healthcare market, and is expected to leverage the healthcare interoperability workflow products offered by Carefx and the broader scale of enterprise intelligence solutions and services that we provide. We purchased privately held Carefx for $155 million in cash, subject to post-closing adjustments. The purchase price was paid from cash on hand, which was largely generated by our net proceeds from issuances of commercial paper during the third quarter of fiscal 2011. We will report Carefx (now part of Healthcare Solutions) under our newly formed Integrated Network Solutions segment.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Harris Corporation

     We have reviewed the condensed consolidated balance sheet of Harris Corporation as of April 1, 2011, and the related condensed consolidated statements of income for the quarter and three quarters ended April 1, 2011 and April 2, 2010, and the condensed consolidated statements of cash flows for the three quarters ended April 1, 2011 and April 2, 2010. These financial statements are the responsibility of the Company’s management.

     We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

     Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

     We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Harris Corporation as of July 2, 2010, and the related consolidated statements of income, cash flows, and comprehensive income and equity for the year then ended, not presented herein, and in our report dated August 30, 2010, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of July 2, 2010, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Boca Raton, Florida
May 4, 2011

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 Condensed Consolidated Financial Statements (Unaudited) and accompanying Notes appearing elsewhere in this Report. In addition, reference should be made to our audited Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Fiscal 2010 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 assist in reading these pages:

	•		Results of Operations — an analysis of our consolidated results of operations and of the results in each of our three business segments, to the extent the business segment operating results are helpful to an understanding of our business as a whole, for the periods presented in our Condensed Consolidated Financial Statements (Unaudited). In this section of MD&A, “net income” refers to net income attributable to Harris Corporation and “net income per share” refers to net income per share attributable to Harris Corporation common shareholders.
	•		Liquidity and Capital Resources — an analysis of cash flows, common stock repurchases, dividends, capital structure and resources, off-balance sheet arrangements and commercial commitments and contractual obligations.
	•		Critical Accounting Policies and Estimates — information about accounting policies that require critical judgments and estimates and about accounting standards that have been issued but are not yet effective for us and their potential impact.
	•		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.

RESULTS OF OPERATIONS

Highlights

     Operations results for the third quarter of fiscal 2011 include:

	•		Revenue increased 6.3 percent to $1,413.3 million in the third quarter of fiscal 2011 from $1,329.5 million in the third quarter of fiscal 2010;
	•		Net income decreased to $139.5 million, or $1.09 per diluted share, in the third quarter of fiscal 2011 from $166.2 million, or $1.26 per diluted share, in the third quarter of fiscal 2010;
	•		Our RF Communications segment revenue was essentially flat at $550.0 million and operating income decreased 12.8 percent to $178.5 million in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010. Both revenue and operating income in the third quarter of fiscal 2010 benefited significantly from large shipments of tactical radios to equip mine resistant ambush protected (“MRAP”) vehicles for Afghanistan;
	•		Our Government Communications Systems segment revenue increased 1.0 percent to $431.2 million and operating income increased 2.4 percent to $59.8 million in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010;
	•		Our Integrated Network Solutions segment revenue increased 23.2 percent to $462.9 million and operating income decreased 26.9 percent to $20.7 million in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010. Integrated Network Solutions segment revenue in the third quarter of fiscal 2011 benefited from our acquisition of CapRock in the first quarter of fiscal 2011, and operating income in the third quarter of fiscal 2011 included $10.8 million of acquisition-related charges; and
	•		Net cash provided by operating activities was $556.8 million in the first three quarters of fiscal 2011 compared with $635.3 million in the first three quarters of fiscal 2010, a decrease of 12.4 percent.

     As previously reported and as also discussed in Note A — Significant Accounting Policies and Recent Accounting Standards and Note P — Business Segments in the Notes, in the third quarter of fiscal 2011, we realigned our operations to provide increased market focus and address the fast-growing global market for integrated communications and information technology and services. As a result of the realignment, effective for the third quarter of fiscal 2011, our operating segment reporting structure changed, and we now report our financial results in the following three operating segments:

	•		Our RF Communications segment, which is unchanged by the realignment and continues to be comprised of (i) U.S. Department of Defense and International Tactical Communications (“Tactical Communications”) and (ii) Public Safety and Professional Communications;
	•		Our Government Communications Systems segment, which now is comprised of (i) Civil Programs, (ii) Defense Programs and (iii) National Intelligence Programs; and
	•		Our newly formed Integrated Network Solutions segment, which is comprised of (i) Harris IT Services, (ii) Harris CapRock Communications, (iii) Healthcare Solutions, (iv) Cyber Integrated Solutions and (v) Broadcast Communications.

     Our new operating segment reporting structure reflects that Harris IT Services, Harris CapRock Communications, Healthcare Solutions and Cyber Integrated Solutions are no longer under our Government Communications Systems segment, but instead have been realigned with Broadcast Communications (formerly a separate reporting segment) to form our new Integrated Network Solutions segment. Our RF Communications segment did not change. The historical results, discussion and presentation of our business segments as set forth in this Report have been adjusted to reflect the impact of these changes to our operating segment reporting structure for all periods presented in this Report.

Consolidated Results of Operations

Revenue and Net Income

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
						(Dollars in millions, except per share amounts)
Revenue		$	1,413.3			$	1,329.5				6.3%			$	4,257.2			$	3,750.2				13.5%
Net income		$	139.5			$	166.2				(16.1)%			$	454.5			$	410.2				10.8%
% of revenue			9.9	%			12.5	%							10.7	%			10.9	%
Net income per diluted common share		$	1.09			$	1.26				(13.5)%			$	3.54			$	3.11				13.8%

     Third Quarter 2011 Compared With Third Quarter 2010: The increase in revenue in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 was primarily due to revenue from CapRock, which we acquired in the first quarter of fiscal 2011.

     The decrease in net income and net income as a percentage of revenue in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 was primarily due to net income in the third quarter of fiscal 2010 benefiting significantly from large shipments of tactical radios to equip MRAP vehicles for Afghanistan and the resulting favorable product mix. In addition, interest expense in the third quarter of fiscal 2011 was $26.0 million compared with $18.1 million in the third quarter of fiscal 2010.

     First Three Quarters 2011 Compared With First Three Quarters 2010: The increase in revenue in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 was primarily due to revenue from CapRock, which we acquired in the first quarter of fiscal 2011 and strength in international sales in Tactical Communications in our RF Communications segment.

     The increase in net income in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 was primarily due to strength in the first quarter of fiscal 2011 from sales to equip the U.S. Department of Defense’s (“DoD’s”) MRAP vehicles and mine resistant ambush protected all-terrain vehicles (“M-ATVs”). This was partially offset by an increase in interest expense, to $64.2 million in the first three quarters of fiscal 2011 from $54.5 million in the first three quarters of fiscal 2010.

     See the “Discussion of Business Segment Results of Operations” and “Interest Income and Expense” discussions below in this MD&A for further information.

Gross Margin

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
										(Dollars in millions)
Revenue		$	1,413.3			$	1,329.5			6.3%				$	4,257.2			$	3,750.2			13.5%
Cost of product sales and services			(896.3	)			(820.0	)		9.3%					(2,717.9	)			(2,410.7	)		12.7%
Gross margin		$	517.0			$	509.5			1.5%				$	1,539.3			$	1,339.5			14.9%
% of revenue			36.6	%			38.3	%							36.2	%			35.7	%

     Third Quarter 2011 Compared With Third Quarter 2010: The decrease in gross margin as a percentage of revenue (“gross margin percentage”) in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 was primarily due to a less favorable product mix in our RF Communications segment and the impact of our acquisition of CapRock, which has a lower gross margin percentage than our overall gross margin percentage.

     First Three Quarters 2011 Compared With First Three Quarters 2010: The increase in gross margin percentage in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 was primarily due to a more favorable product mix from our RF Communications segment in the first quarter of fiscal 2011, partially offset by the impact of our acquisition of CapRock, which has a lower gross margin percentage than our overall gross margin percentage.

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

Engineering, Selling and Administrative Expenses

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
										(Dollars in millions)
Engineering, selling and administrative expenses		$	285.6			$	245.0			16.6%				$	796.0			$	672.8			18.3%
% of revenue			20.2	%			18.4	%							18.7	%			17.9	%

     Third Quarter 2011 Compared With Third Quarter 2010: The increase in engineering, selling and administrative (“ESA”) expenses in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 was primarily due to our acquisition of CapRock, including integration and other costs associated with the acquisition, and the pursuit of new growth opportunities.

     The increase in ESA expenses as a percentage of revenue in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 was primarily due to integration and other costs associated with our acquisition of CapRock.

     First Three Quarters 2011 Compared With First Three Quarters 2010: The reasons for the increase in ESA expenses and the increase in ESA expenses as a percentage of revenue in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 are primarily the same as those noted above regarding the third quarters of fiscal 2011 and 2010.

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

Interest Income and Expense

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
										(Dollars in millions)
Interest income		$	1.3			$	0.4			225.0%				$	2.3			$	1.1				109.1%
Interest expense			(26.0	)			(18.1	)		43.6%					(64.2	)			(54.5	)			17.8%

     Third Quarter 2011 Compared With Third Quarter 2010: Our interest income increased in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 due to higher balances of cash and cash equivalents. Our interest expense increased in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 primarily due to higher levels of borrowings related to our acquisition of CapRock and pending acquisitions of Schlumberger GCS and Carefx, both of which, as discussed further in Note Q — Subsequent Events in the Notes, we completed on April 4, 2011, subsequent to the end of the third quarter of fiscal 2011.

     First Three Quarters 2011 Compared With First Three Quarters 2010: Our interest income and interest expense increased in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 for the same reasons as noted above regarding the third quarters of fiscal 2011 and 2010.

Income Taxes

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
										(Dollars in millions)
Income taxes		$	67.2			$	80.1			(16.1)%				$	225.6			$	202.1			11.6%
Effective tax rate			32.6	%			32.5	%							33.2	%			33.0	%

     Third Quarter 2011 Compared With Third Quarter 2010: Our effective tax rate (income taxes as a percentage of income before income taxes) in the third quarter of fiscal 2011 benefited from the expiration of state income tax statutes of limitations and several other minor discrete items. Our effective tax rate in the third quarter of fiscal 2010 benefited from several minor discrete items.

     First Three Quarters 2011 Compared With First Three Quarters 2010: In the first three quarters of fiscal 2011, the major discrete item from which our effective tax rate benefited was a $5.9 million tax benefit associated with legislative action during the second quarter of fiscal 2011 that restored the U.S. Federal income tax credit for research and development expenses, which we recorded in the second quarter of fiscal 2011. In the first three quarters of fiscal 2010, the major discrete item from which our effective tax rate benefited was a $3.5 million state income tax benefit associated with the filing of our fiscal 2008 income tax returns, which we recorded in the second quarter of fiscal 2010.

Discussion of Business Segment Results of Operations

     As discussed further in the “Highlights” discussion above of this MD&A, our operating segment reporting structure changed, effective for the third quarter of fiscal 2011. Our new operating segment reporting structure reflects that, as a result of a realignment of our operations, we formed our Integrated Network Solutions segment as a new segment. The new segment realigns Harris IT Services, Harris CapRock Communications, Healthcare Solutions and Cyber Integrated Solutions (all of which were formerly under our Government Communications Systems segment) with Broadcast Communications (formerly a separate reporting segment). Our Government Communications Systems segment now is comprised of Civil Programs, Defense Programs and National Intelligence Programs. Our RF Communications segment did not change. The historical results, discussion and presentation of our business segments as set forth in this Report have been adjusted to reflect the impact of these changes to our operating segment reporting structure for all periods presented in this Report.

RF Communications Segment

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
										(Dollars in millions)
Revenue		$	550.0			$	550.7			(0.1)%				$	1,661.2			$	1,437.3			15.6%
Segment operating income			178.5				204.7			(12.8)%					596.3				487.3			22.4%
% of revenue			32.5	%			37.2	%							35.9	%			33.9	%

     Third Quarter 2011 Compared With Third Quarter 2010: RF Communications segment revenue in the third quarter of fiscal 2011 of $550.0 million included $431.4 million in Tactical Communications and $118.6 million in Public Safety and Professional Communications. Revenue in the third quarter of fiscal 2011 was flat for both Tactical Communications and Public Safety and Professional Communications compared with the third quarter of fiscal 2010. Revenue in Tactical Communications was primarily driven by strengthening international sales, which comprised half of Tactical Communications revenue in the third quarter of fiscal 2011. Sales to the DoD of radios to equip MRAP vehicles declined by $206 million in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010. Excluding MRAP vehicle-related radio sales, however, sales to the DoD increased significantly in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 as a result of adoption in the Falcon III^® product line.

     The decrease in RF Communications segment operating income and operating income as a percentage of revenue in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 was primarily due to operating income in the third quarter of fiscal 2010 benefiting significantly from large shipments of tactical radios to equip MRAP vehicles.

     RF Communications segment orders in the third quarter of fiscal 2011 totaled $722 million, including $351 million in Tactical Communications and $371 million in Public Safety and Professional Communications. At the end of the third quarter of fiscal 2011, total backlog for our RF Communications segment was $1.70 billion, including $981 million in Tactical Communications and $715 million in Public Safety and Professional Communications.

     During the third quarter of fiscal 2011, orders in Tactical Communications reflected strong demand from the DoD for a variety of communications systems, including a $70 million order to deliver encryption devices and support services for use in the Force XXI Battle Command Brigade and Below-Blue Force Tracking system; two orders totaling $40 million from the U.S. Army for Falcon II^® high frequency vehicular radio systems; and a $23 million order from the U.S. Air Force to supply Falcon III RF-310M multiband handheld radios in a repeater configuration to extend the network.

     In the third quarter of fiscal 2011, Tactical Communications orders in the international market included a $29 million order from a country in Asia to provide in-country battle management software, networking modules, wide-area high-capacity line-of-sight radios, and engineering training and maintenance to support the next phase of an integrated command, control, communications, computers, intelligence, surveillance and reconnaissance (“C4ISR”) system; a $22 million order from a country in Asia for Falcon III RF-7800S Secure Personal Radios in support of a multi-year infantry soldier modernization program; a $19 million order from a country in Southeast Asia for Falcon III and Falcon II tactical radios and related equipment to provide command and control; and other significant orders from Australia, Afghanistan and another international government customer.

     New orders in Public Safety and Professional Communications in the third quarter of fiscal 2011 included a $291 million order to design and build Alberta, Canada’s First Responders Radio Communications System (“AFRRCS”) that will provide public safety communications for the 256,000 square-mile province and a $15 million order from Dane County, Wisconsin to upgrade the county’s public safety communication system.

     First Three Quarters 2011 Compared With First Three Quarters 2010: The increase in RF Communications segment revenue, operating income and operating income as a percentage of revenue in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 was primarily driven by sales for the DoD’s MRAP vehicle and M-ATV programs, most of which occurred in the first quarter of fiscal 2011, and strong international sales.

Government Communications Systems Segment

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
										(Dollars in millions)
Revenue		$	431.2			$	426.9				1.0%			$	1,277.0			$	1,297.6				(1.6)%
Segment operating income			59.8				58.4				2.4%				163.8				167.1				(2.0)%
% of revenue			13.9	%			13.7	%							12.8	%			12.9	%

     Third Quarter 2011 Compared With Third Quarter 2010: Government Communications Systems segment revenue in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 increased on the Geostationary Operational Environmental Satellite — Series R (“GOES-R”) Ground and Antenna Segment weather programs for National Oceanic and Atmospheric Administration (“NOAA”) and the F-35 Lightning II fighter aircraft program for the DoD, but declined on several classified programs as a result of slower U.S. Government spending. Government Communications Systems segment revenue also declined, as expected, on the Field Data Collection Automation (“FDCA”) program for the 2010 U.S. Census due to its wind-down.

     Government Communications Systems segment operating income and operating income as a percentage of revenue were higher in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010, primarily due to improved performance on our space communications systems programs, partially offset by the impact of our FDCA program for the 2010 U.S. Census winding down.

     Major contract awards in the third quarter of fiscal 2011 in our Government Communications Systems segment included a three-year contract from Boeing Space and Intelligence Systems to build Ka-band antennas for three Inmarsat-5 satellites, a three-year contract from Boeing Space and Intelligence Systems for a 22-meter deployable L-band reflector to support military and civil communications in Mexico, and a follow-on delivery order, potentially worth $15 million, from the U.S. Air Force for telemetry modules that provide missile data and command destruct capability for the AIM-120 Advanced Medium-Range Air-to-Air Missile (“AMRAAM”). After the close of the third quarter of fiscal 2011, we were awarded a contract, potentially worth $11 million, from the National Geospatial-Intelligence Agency for Adjusted Metric Support Data/Digital Point Positioning Data Base (“AMSD/DPPDB”) used for targeting purposes and Controlled Image Base (“CIB”) used for mission planning systems.

     First Three Quarters 2011 Compared With First Three Quarters 2010: Government Communications Systems segment revenue and operating income decreased in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010. The major drivers of revenue and operating income increases and decreases in our Government Communication Systems segment were the programs noted above regarding the third quarters of fiscal 2011 and 2010. In addition, operating income in the first quarter of fiscal 2010 benefited from favorable award fees for the completion of the equipment build-out phase on the FAA Telecommunications Infrastructure (“FTI”) program for the Federal Aviation Administration (“FAA”).

Integrated Network Solutions Segment

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
										(Dollars in millions)
Revenue		$	462.9			$	375.8			23.2%				$	1,400.4			$	1,080.5			29.6%
Segment operating income			20.7				28.3			(26.9)%					67.8				90.6			(25.2)%
% of revenue			4.5	%			7.5	%							4.8	%			8.4	%

     Third Quarter 2011 Compared With Third Quarter 2010: The increase in Integrated Network Solutions segment revenue in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 was primarily due to revenue from CapRock, which we acquired in the first quarter of fiscal 2011, and continued improvement in Broadcast Communications, while Harris IT Services revenue was negatively impacted by slower U.S. Government spending. Integrated Network Solutions operating income and operating income as a percentage of revenue were lower in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010, primarily due to the impact of charges for integration and other costs associated with our acquisition of CapRock, accelerated investments in Cyber Integrated Solutions and lower pricing on the Harris IT Services contract extension for the Navy Marine Corps Intranet (“NMCI”) program, partially offset by improved performance in Broadcast Communications.

     Integrated Network Solutions segment awards in the third quarter of fiscal 2011 included 14 task orders on the DISN Satellite Transmission Services — Global (“DSTS-G”) and Future Commercial SATCOM Acquisition (“FCSA”) contracts, with a potential value of $150 million, to provide C, Ku, and X-band space segment capacity, monitoring and control, teleport services, and operations and maintenance to customers operating in Asia, Europe, the U.S. and all major ocean regions; and a $15 million option year extension from the U.S. Department of Veterans Affairs for healthcare imaging software and systems engineering services for the VistA imaging application. We also received a $10 million order in the third quarter of fiscal 2011 from the Virtual Computing Environment Company (“VCE”) for trusted enterprise cloud services. This followed the announcement of a strategic alliance between Harris, EMC Corporation and VCE to develop and market trusted cloud solutions.

     In the second quarter of fiscal 2011, we announced a definitive agreement to acquire Schlumberger GCS for $397.5 million in cash, subject to post-closing adjustments. In the third quarter of fiscal 2011, we announced a definitive agreement to acquire Carefx for $155 million in cash, subject to post-closing adjustments. As discussed further in Note Q — Subsequent Events in the Notes, we completed both of these acquisitions on April 4, 2011, subsequent to the end of the third quarter of fiscal 2011. The acquisition of Schlumberger GCS adds scale to our global managed satellite communications services capabilities, increases our international footprint and further diversifies us into faster-growing markets. The acquisition of Carefx expands our presence in government healthcare, provides entry into the commercial healthcare market, and is expected to leverage the healthcare interoperability workflow products offered by Carefx and the broader global scale of enterprise intelligence solutions and services that we provide.

     First Three Quarters 2011 Compared With First Three Quarters 2010: The reasons Integrated Network Solutions segment revenue increased and operating income and operating income as a percentage of revenue decreased in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 are primarily the same as those noted above regarding the third quarters of fiscal 2011 and 2010.

Unallocated Corporate Expense and Corporate Eliminations

		Quarter Ended												Three Quarters Ended
		April 1,				April 2,				%				April 1,				April 2,				%
		2011				2010				Inc/(Dec)				2011				2010				Inc/(Dec)
										(Dollars in millions)
Unallocated corporate expense		$	19.8			$	23.0			(13.9)%				$	67.5			$	67.0			0.7%
Corporate eliminations			7.8				3.9			100.0%					17.1				11.3			51.3%

     Third Quarter 2011 Compared With Third Quarter 2010: The decrease in unallocated corporate expense in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 was primarily due to lower benefit plan expenses. Corporate eliminations increased in the third quarter of fiscal 2011 compared with the third quarter of fiscal 2010 due to higher intersegment activity.

     First Three Quarters 2011 Compared With First Three Quarters 2010: Corporate eliminations increased in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 due to higher intersegment activity.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

		Three Quarters Ended
		April 1,				April 2,
		2011				2010
		(In millions)
Net cash provided by operating activities		$	556.8			$	635.3
Net cash used in investing activities			(754.6	)			(176.4	)
Net cash provided by (used in) financing activities			622.6				(336.6	)
Effect of exchange rate changes on cash and cash equivalents			5.1				2.2
Net increase in cash and cash equivalents			429.9				124.5
Cash and cash equivalents, beginning of year			455.2				281.2
Cash and cash equivalents, end of quarter		$	885.1			$	405.7

     Cash and Cash Equivalents: Our cash and cash equivalents increased $429.9 million to $885.1 million at the end of the third quarter of fiscal 2011 from $455.2 million at the end of fiscal 2010. The increase was primarily due to $556.8 million of net cash provided by operating activities and $855.7 million of proceeds from borrowings, partially offset by $548.4 million of net cash paid for our acquisitions of CapRock and Core180 Infrastructure, $156.0 million used to repurchase shares of our common stock, $186.1 million of property, plant and equipment additions and $95.7 million used to pay cash dividends.

     Our financial position remained strong at April 1, 2011. We ended the third quarter of fiscal 2011 with cash and cash equivalents of $885.1 million; we have no long-term debt maturing until fiscal 2016; we have a senior unsecured $750 million revolving credit facility that expires in September 2013 ($570.0 million of which was available to us as of April 1, 2011 as a result of $180.0 million of short-term debt outstanding under our commercial paper program, which was supported by such senior unsecured revolving credit facility); we have a senior unsecured $300 million 364-day revolving credit facility that expires on September 28, 2011 (all of which was available to us as of April 1, 2011); and we do not have any material defined benefit pension plan obligations.

     Subsequent to the end of the third quarter of fiscal 2011, we used $552.5 million of our cash and cash equivalents to complete our acquisitions of Schlumberger GCS and Carefx. Given our current cash position, outlook for funds generated from operations, credit ratings, available credit facilities, cash needs and debt structure, we have not experienced to date, and do not expect to experience, any material issues with liquidity, although we can give no assurances concerning our future liquidity.

     We also currently believe that existing cash, funds generated from operations, our credit facilities and access to the public and private debt and equity markets will be sufficient to provide for our anticipated working capital requirements, capital expenditures and repurchases under our share repurchase program for the next 12 months. We anticipate tax payments over the next three years to be approximately equal to our tax expense during the same period. Other than those cash outlays noted in the “Commercial Commitments and Contractual Obligations” discussion below in this MD&A, capital expenditures and repurchases under our share repurchase program, no other significant cash outlays are anticipated during the remainder of fiscal 2011.

     There can be no assurance, however, that our business will continue to generate cash flow at current levels, that ongoing operational improvements will be achieved, or that the cost or availability of future borrowings, if any, under our commercial paper program or our credit facilities or in the debt markets will not be impacted by any potential future credit and capital markets disruptions. If we are unable to maintain cash balances or generate sufficient cash flow from operations to service our obligations, we may be required to sell assets, reduce capital expenditures, reduce or eliminate strategic acquisitions, reduce or terminate our share repurchase program, reduce or eliminate dividends, refinance all or a portion of our existing debt or obtain additional financing. Our ability to make principal payments or pay interest on or refinance our indebtedness depends on our future performance and financial results, which, to a certain extent, are subject to general conditions in or affecting the defense, government, satellite and broadcast communications markets and to general economic, political, financial, competitive, legislative and regulatory factors beyond our control.

     Net cash provided by operating activities: Our net cash provided by operating activities was $556.8 million in the first three quarters of fiscal 2011 compared with $635.3 million in the first three quarters of fiscal 2010. The decrease was primarily due to higher tax payments and lower cash flow from operations in our Government Communications Systems segment in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010. Cash flow from operations was positive in all of our business segments in the first three quarters of fiscal 2011, primarily reflecting strong operating income.

     Net cash used in investing activities: Our net cash used in investing activities was $754.6 million in the first three quarters of fiscal 2011 compared with $176.4 million in the first three quarters of fiscal 2010. Net cash used in investing activities in the first three quarters of fiscal 2011 consisted of $548.4 million of net cash paid for our acquisitions of CapRock and Core180 Infrastructure, $186.1 million of property, plant and equipment additions, $10.1 million of capitalized software additions and $10.0 million of cash paid for a cost-method investment. Net cash used in investing activities in the first three quarters of fiscal 2010 consisted of $129.9 million of property, plant and equipment additions, $6.3 million of capitalized software additions and $40.2 million of net cash paid for acquired businesses. The increase in our capital expenditures in the first three quarters of fiscal 2011 compared with the first three quarters of fiscal 2010 was primarily due to the build-out of our newly acquired Harris Cyber Integration Center and our recently acquired RF Communications manufacturing facility. Our total capital expenditures, including capitalized software, in fiscal 2011 are expected to be between $325 million and $345 million, primarily reflecting accelerated investment in our Harris Cyber Integration Center and other growth initiatives.

     Net cash provided by (used in) financing activities: Our net cash provided by financing activities was $622.6 million in the first three quarters of fiscal 2011 compared with net cash used in financing activities of $336.6 million in the first three quarters of fiscal 2010. Net cash provided by financing activities in the first three quarters of fiscal 2011 primarily consisted of $855.7 million of proceeds from borrowings to partially fund our acquisition of CapRock and to fund our pending acquisitions of Schlumberger GCS and Carefx, both of which we completed on April 4, 2011, subsequent to the end of the third quarter of fiscal 2011, partially offset by $156.0 million used to repurchase shares of our common stock and $95.7 million used to pay cash dividends. Net cash used in financing activities in the first three quarters of fiscal 2010 primarily consisted of $106.6 million used for repayments of borrowings, $155.7 million used to repurchase shares of our common stock and $86.4 million used to pay cash dividends.

Common Stock Repurchases

     During the third quarter of fiscal 2011, we used $50.0 million to repurchase 1,020,018 shares of our common stock under our repurchase program at an average price per share of $49.02, including commissions. During the third quarter of fiscal 2010, we used $49.9 million to repurchase 1,118,900 shares of our common stock under our repurchase program at an average price per share of $44.63, including commissions. During the first three quarters of fiscal 2011, we used $150.0 million to repurchase 3,277,780 shares of our common stock under our repurchase program at an average price per share of $45.76, including commissions. During the first three quarters of fiscal 2010, we used $149.9 million to repurchase 3,703,772 shares of our common stock under our repurchase program at an average price per share of $40.48, including commissions. In each of the third quarter of fiscal 2011 and third quarter of fiscal 2010, $0.3 million in shares of our common stock was delivered to us or withheld by us to satisfy withholding taxes on employee share-based awards. In the first three quarters of fiscal 2011 and first three quarters of fiscal 2010, $6.0 million and $5.8 million, respectively, in shares of our common stock were delivered to us or withheld by us to satisfy withholding taxes on employee share-based awards. Shares repurchased by us are cancelled and retired.

     As of April 1, 2011, we have a remaining authorization to repurchase approximately $300 million in shares of our common stock under our repurchase program, which does not have a stated expiration date. Repurchases under our repurchase program may be made through open market purchases, private transactions, transactions structured through investment banking institutions or any combination thereof. Share repurchases are expected to be funded with available cash. The level of our repurchases depends on a number of factors, including our financial condition, capital requirements, results of operations, future business prospects and other factors that our Board of Directors may deem relevant. The timing, volume and nature of share repurchases are subject to market conditions, applicable securities laws and other factors and are at our discretion and may be suspended or discontinued at any time.

     Additional information regarding share repurchases during the third quarter of fiscal 2011 and our repurchase program is set forth in this Report under Part II. Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds.”

Dividends

     On August 28, 2010, our Board of Directors increased the quarterly cash dividend rate on our common stock from $.22 per share to $.25 per share, for an annualized cash dividend rate of $1.00 per share, which was our ninth consecutive annual increase in our quarterly cash dividend rate. Our annualized cash dividend rate was $.88 per share in fiscal 2010. There can be no assurances that our annualized cash dividend rate will continue to increase. Quarterly cash dividends are typically paid in March, June, September and December. We currently expect that cash dividends will continue to be paid in the near future, but we can give no assurances concerning payment of future dividends. The declaration of dividends and the amount thereof will depend on a number of factors, including our financial condition, capital requirements, results of operations, future business prospects and other factors that our Board of Directors may deem relevant.

Capital Structure and Resources

     364-Day Revolving Credit Agreement: As discussed in Note I — Credit Arrangements in the Notes, on September 29, 2010, we entered into the $300 million senior unsecured 364-Day Revolving Credit Agreement with a syndicate of lenders. The 364-Day Revolving Credit Agreement provides for the extension of credit to us in the form of revolving loans at any time and from time to time during the term of the 364-Day Revolving Credit Agreement, in an aggregate principal amount at any time outstanding not to exceed $300 million. Borrowings under the 364-Day Revolving Credit Agreement will be denominated in U.S. Dollars. The 364-Day Revolving Credit Agreement may be used for working capital and other general corporate purposes (excluding hostile acquisitions) and may also be used to support any commercial paper that we may issue.

     At our election, borrowings under the 364-Day Revolving Credit Agreement will bear interest either at LIBOR plus an applicable margin or at the base rate plus an applicable margin. The interest rate margin over LIBOR, initially set at 1.75 percent, may increase (to a maximum amount of 2.25 percent) or decrease (to a minimum amount of 1.25 percent) based on changes in our Senior Debt Ratings. The base rate is a fluctuating rate equal to the highest of (i) the federal funds rate plus 0.50 percent, (ii) SunTrust Bank’s publicly announced prime lending rate for U.S. Dollars or (iii) LIBOR for an interest period of one month plus 1.00 percent. The interest rate margin over the base rate, initially set at 0.75 percent, may increase (to a maximum amount of 1.25 percent) or decrease (to a minimum amount of 0.25 percent) based on our Senior Debt Ratings.

     The 364-Day Revolving Credit Agreement contains certain customary covenants similar to the 2008 Credit Agreement discussed below. We were in compliance with the covenants in the 364-Day Revolving Credit Agreement in the third quarter of fiscal 2011. The 364-Day Revolving Credit Agreement contains certain events of default similar to the 2008 Credit Agreement discussed below. If an event of default occurs the lenders may, among other things, terminate their commitments and declare all outstanding borrowings to be immediately due and payable together with accrued interest and fees. All amounts borrowed or outstanding under the 364-Day Revolving Credit Agreement are due and mature on September 28, 2011, unless the commitments are terminated earlier either at our request or if certain events of default occur. At April 1, 2011, we had no borrowings outstanding under the 364-Day Revolving Credit Agreement.

     2008 Credit Agreement: On September 10, 2008, we entered into a five-year, senior unsecured revolving credit agreement (the “2008 Credit Agreement”) with a syndicate of lenders. The 2008 Credit Agreement provides for the extension of credit to us in the form of revolving loans, including swingline loans, and letters of credit at any time and from time to time during the term of the 2008 Credit Agreement, in an aggregate principal amount at any time outstanding not to exceed $750 million for both revolving loans and letters of credit, with a sub-limit of $50 million for swingline loans and $125 million for letters of credit. The 2008 Credit Agreement includes a provision pursuant to which, from time to time, we may request that the lenders in their discretion increase the maximum amount of commitments under the 2008 Credit Agreement by an amount not to exceed $500 million. Only consenting lenders (including new lenders reasonably acceptable to the administrative agent) will participate in any such increase. In no event will the maximum amount of credit extensions available under the 2008 Credit Agreement exceed $1.25 billion. The 2008 Credit Agreement may be used for working capital and other general corporate purposes (excluding hostile acquisitions) and to support any commercial paper that we may issue. Borrowings under the 2008 Credit Agreement may be denominated in U.S. Dollars, Euros, Sterling and any other currency acceptable to the administrative agent and the lenders, with a non-U.S. currency sub-limit of $150 million. We may designate certain wholly owned subsidiaries as borrowers under the 2008 Credit Agreement, and the obligations of any such subsidiary borrower must be guaranteed by Harris Corporation. We also may designate certain subsidiaries as unrestricted subsidiaries, which means certain of the covenants and representations in the 2008 Credit Agreement do not apply to such subsidiaries.

     At our election, borrowings under the 2008 Credit Agreement denominated in U.S. Dollars will bear interest either at LIBOR plus an applicable margin or at the base rate plus an applicable margin. The interest rate margin over LIBOR, initially set at 0.50 percent, may increase (to a maximum amount of 1.725 percent) or decrease (to a minimum of 0.385 percent) based on our Senior Debt Ratings and on the degree of utilization under the 2008 Credit Agreement (“Utilization”). The base rate is a fluctuating rate equal to the higher of the federal funds rate plus 0.50 percent or SunTrust Bank’s publicly announced prime lending rate for U.S. Dollars. The interest rate margin over the base rate is 0.00 percent, but if our Senior Debt Ratings fall to “BB+/Ba1” or below, then the interest rate margin over the base rate will increase to either 0.225 percent or 0.725 percent based on Utilization. Borrowings under the 2008 Credit Agreement denominated in a currency other than U.S. Dollars will bear interest at LIBOR plus the applicable interest rate margin over LIBOR described above. Letter of credit fees are also determined based on our Senior Debt Ratings and Utilization.

     The 2008 Credit Agreement contains certain customary covenants, including covenants limiting: certain liens on our assets; certain mergers, consolidations or sales of assets; certain sale and leaseback transactions; certain vendor financing investments; and certain investments in unrestricted subsidiaries. The 2008 Credit Agreement also requires that we not permit our ratio of consolidated total indebtedness to total capital, each as defined, to be greater than 0.60 to 1.00 and not permit our ratio of consolidated EBITDA to consolidated net interest expense, each as defined, to be less than 3.00 to 1.00 (measured on the last day of each fiscal quarter for the

rolling four-quarter period then ending). We were in compliance with the covenants in the 2008 Credit Agreement in the third quarter of fiscal 2011. The 2008 Credit Agreement contains certain events of default, including: failure to make payments; failure to perform or observe terms, covenants and agreements; material inaccuracy of any representation or warranty; payment default under other indebtedness with a principal amount in excess of $75 million, other default under such other indebtedness that permits acceleration of such indebtedness, or acceleration of such other indebtedness; occurrence of one or more final judgments or orders for the payment of money in excess of $75 million that remain unsatisfied; incurrence of certain ERISA liability in excess of $75 million; any bankruptcy or insolvency; or a change of control, including if a person or group becomes the beneficial owner of 25 percent or more of our voting stock. If an event of default occurs the lenders may, among other things, terminate their commitments and declare all outstanding borrowings to be immediately due and payable together with accrued interest and fees. All amounts borrowed or outstanding under the 2008 Credit Agreement are due and mature on September 10, 2013, unless the commitments are terminated earlier either at our request or if certain events of default occur. At April 1, 2011, we had no borrowings outstanding under the 2008 Credit Agreement, but we had $180.0 million of short-term debt outstanding under our commercial paper program, which was supported by our senior unsecured revolving credit facility under the 2008 Credit Agreement.

     Long-Term Debt: As discussed in Note J — Debt in the Notes, on December 3, 2010, we completed the issuance of $400 million in aggregate principal amount of the 4.4% 2020 Notes due December 15, 2020 and $300 million in aggregate principal amount of the 6.15% 2040 Notes due December 15, 2040. Interest on each of the 2020 Notes and the 2040 Notes is payable semi-annually in arrears on June 15 and December 15 of each year. We may redeem the 2020 Notes and/or the 2040 Notes at any time in whole or, from time to time, in part at the applicable “make-whole” redemption price. The applicable “make-whole” redemption price is equal to the greater of 100 percent of the principal amount of the notes being redeemed or the sum of the present values of the remaining scheduled payments of the principal and interest (other than interest accruing to the date of redemption) on the notes being redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, as defined, plus 25 basis points in the case of the 2020 Notes and 35 basis points in the case of the 2040 Notes. In each case, we will pay accrued interest on the principal amount of the notes being redeemed to the redemption date. In addition, upon a change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase the notes at a price equal to 101 percent of the aggregate principal amount of the notes repurchased, plus accrued interest on the notes repurchased to the date of repurchase. We incurred $5.5 million and $4.8 million in debt issuance costs and discounts related to the issuance of the 2020 Notes and 2040 Notes, respectively, which are being amortized on a straight-line basis over the respective lives of the notes, which approximates the effective interest rate method, and are reflected as a portion of interest expense in the accompanying Condensed Consolidated Statement of Income (Unaudited).

     On June 9, 2009, we completed the issuance of $350 million in aggregate principal amount of 6.375% Notes due June 15, 2019. Interest on the notes is payable on June 15 and December 15 of each year. We may redeem the notes at any time in whole or, from time to time, in part at the “make-whole” redemption price. The “make-whole” redemption price is equal to the greater of 100 percent of the principal amount of the notes being redeemed or the sum of the present values of the remaining scheduled payments of the principal and interest (other than interest accruing to the date of redemption) on the notes being redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, as defined, plus 37.5 basis points. In each case, we will pay accrued interest on the principal amount of the notes being redeemed to the redemption date. In addition, upon a change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase the notes at a price equal to 101 percent of the aggregate principal amount of the notes repurchased, plus accrued interest on the notes repurchased to the date of repurchase. We incurred $4.1 million in debt issuance costs and discounts related to the issuance of the notes, which are being amortized on a straight-line basis over the life of the notes, which approximates the effective interest rate method, and are reflected as a portion of interest expense in the accompanying Condensed Consolidated Statement of Income (Unaudited).

     On December 5, 2007, we completed the issuance of $400 million in aggregate principal amount of 5.95% Notes due December 1, 2017. Interest on the notes is payable on June 1 and December 1 of each year. We may redeem the notes at any time in whole or, from time to time, in part at the “make-whole” redemption price. The “make-whole” redemption price is equal to the greater of 100 percent of the principal amount of the notes being redeemed or the sum of the present values of the remaining scheduled payments of the principal and interest (other than interest accruing to the date of redemption) on the notes being redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, as defined, plus 30 basis points. In each case, we will pay accrued interest on the principal amount of the notes being redeemed to the redemption date. In addition, upon a change of control combined with a below-investment-grade rating event, we may be required to make an offer to repurchase the notes at a price equal to 101 percent of the aggregate principal amount of the notes repurchased, plus accrued interest on the notes repurchased to the date of repurchase. In conjunction with the issuance of the notes, we entered into treasury lock agreements to protect against fluctuations in forecasted interest payments resulting from the issuance of ten-year, fixed-rate debt due to changes in the benchmark U.S. Treasury rate. These agreements were determined to be highly effective in offsetting changes in forecasted interest payments as a result of changes in the benchmark U.S. Treasury rate. Upon termination of these agreements on December 6, 2007, we recorded a loss of $5.5 million, net of income tax, in shareholders’ equity as a component of

accumulated other comprehensive income. This loss, along with $5.0 million in debt issuance costs, is being amortized on a straight-line basis over the life of the notes, which approximates the effective interest rate method, and is reflected as a portion of interest expense in the accompanying Condensed Consolidated Statement of Income (Unaudited).

     On September 20, 2005, we completed the issuance of $300 million in aggregate principal amount of 5.0% Notes due October 1, 2015. Interest on the notes is payable on April 1 and October 1 of each year. We may redeem the notes in whole, or in part, at any time at the “make-whole” redemption price. The “make-whole” redemption price is equal to the greater of 100 percent of the principal amount of the notes being redeemed or the sum of the present values of the remaining scheduled payments of the principal and interest (other than interest accruing to the date of redemption) on the notes being redeemed, discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate, as defined, plus 15 basis points. In each case, we will pay accrued interest on the principal amount of the notes being redeemed to the redemption date. We incurred $4.1 million in debt issuance costs and discounts related to the issuance of the notes, which are being amortized on a straight-line basis over a ten-year period and reflected as a portion of interest expense in the accompanying Condensed Consolidated Statement of Income (Unaudited).

     In February 1998, we completed the issuance of $150 million in aggregate principal amount of 6.35% Debentures due February 1, 2028. On December 5, 2007, we repurchased and retired $25.0 million in aggregate principal amount of the debentures. On February 1, 2008, we redeemed $99.2 million in aggregate principal amount of the debentures pursuant to the procedures for redemption at the option of the holders of the debentures. We may redeem the remaining $25.8 million in aggregate principal amount of the debentures in whole, or in part, at any time at a pre-determined redemption price.

     In January 1996, we completed the issuance of $100 million in aggregate principal amount of 7.0% Debentures due January 15, 2026. The debentures are not redeemable prior to maturity.

     Short-Term Debt: Our short-term debt at April 1, 2011, December 31, 2010, October 1, 2010 and July 2, 2010 was $180.0 million, $30.0 million, $275.0 million and $30.0 million, respectively, and consisted primarily of commercial paper outstanding under our commercial paper program, which was supported by our senior unsecured revolving credit facility under the 2008 Credit Agreement. During the first quarter of fiscal 2011, we issued approximately $320 million of commercial paper to fund a portion of the purchase price for our acquisition of CapRock. During the second quarter of fiscal 2011, we used approximately $285 million of the net proceeds from the sale of the 2020 Notes and 2040 Notes described above for repayment of a substantial portion of our outstanding commercial paper. During the third quarter of fiscal 2011, we issued $150 million of commercial paper to fund a portion of the purchase price for our pending acquisitions of Schlumberger GCS and Carefx, both of which we completed on April 4, 2011, subsequent to the end of the third quarter of fiscal 2011.

     Other: We have an automatically effective, universal shelf registration statement, filed with the SEC on June 3, 2009, related to the potential future issuance of an indeterminate amount of securities, including debt securities, preferred stock, common stock, fractional interests in preferred stock represented by depositary shares and warrants to purchase debt securities, preferred stock or common stock.

     We expect to maintain operating ratios, fixed-charge coverage ratios and balance sheet ratios sufficient for retention of, or improvement to, our current debt ratings. There are no assurances that our debt ratings will not be reduced in the future. If our debt ratings are lowered below “investment grade,” then we may not be able to issue short-term commercial paper, but may instead need to borrow under our credit facilities or pursue other options. In addition, if our debt ratings are lowered below “investment grade,” then we may also be required to provide cash collateral to support outstanding performance bonds. For a discussion of such performance bonds, see the “Commercial Commitments” discussion in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Fiscal 2010 Form 10-K. We do not currently foresee losing our investment-grade debt ratings, but no assurances can be given. If our debt ratings were downgraded, however, it could adversely impact, among other things, our future borrowing costs and access to capital markets and our ability to receive certain types of contract awards.

Off-Balance Sheet Arrangements

     In accordance with the definition under SEC rules, any of the following qualify as off-balance sheet arrangements:

	•		Any obligation under certain guarantee contracts;
	•		A retained or contingent interest in assets transferred to an unconsolidated entity or similar entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets;
	•		Any obligation, including a contingent obligation, under certain derivative instruments; and
	•		Any obligation, including a contingent obligation, under a material variable interest held by the registrant in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or research and development services with the registrant.

     Currently we are not participating in any material transactions that generate relationships with unconsolidated entities or financial partnerships, including variable interest entities, and we do not have any material retained or contingent interest in assets as defined above. As of April 1, 2011, we did not have material financial guarantees or other contractual commitments that are reasonably likely to adversely affect our results of operations, financial condition or cash flows. In addition, we are not currently a party to any related party transactions that materially affect our results of operations, financial condition or cash flows.

     We have, from time to time, divested certain of our businesses and assets. In connection with these divestitures, we often provide representations, warranties and/or indemnities to cover various risks and unknown liabilities, such as environmental liabilities and tax liabilities. We cannot estimate the potential liability from such representations, warranties and indemnities because they relate to unknown conditions. We do not believe, however, that the liabilities relating to these representations, warranties and indemnities will have a material adverse effect on our results of operations, financial condition or cash flows.

     Due to our downsizing of certain operations pursuant to acquisitions, restructuring plans or otherwise, certain properties leased by us have been sublet to third parties. In the event any of these third parties vacates any of these premises, we would be legally obligated under master lease arrangements. We believe that the financial risk of default by such sublessees is individually and in the aggregate not material to our results of operations, financial condition or cash flows.

Commercial Commitments and Contractual Obligations

     The amounts disclosed in our Fiscal 2010 Form 10-K include our commercial commitments and contractual obligations. During the three quarters ended April 1, 2011: