Harris Corporation 10-Q/Quarter End 4-2-04

Indicate by check mark whether the registrant (1) 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.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

The number of shares outstanding of the registrant’s common stock as of April 23, 2004 was 66,544,868 shares.

The following information for the quarter and three quarters ended April 2, 2004 and March 28, 2003 and at April 2, 2004, has not been audited by independent accountants, but in the opinion of management reflects all adjustments (consisting only of normal, recurring items) necessary for a fair presentation of the results for the indicated periods. The balance sheet at June 27, 2003, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The results of operations for the quarter and three quarters ended April 2, 2004, are not necessarily indicative of the results for the full fiscal year.

HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(unaudited)


	Quarter Ended						Three Quarters Ended
	April 2,			March 28,			April 2,			March 28,
	2004			2003			2004			2003
	(In millions, except per share amounts)
Revenue from product sales and services	$	664.2		$	538.9		$	1,832.0		$	1,513.0

Cost of product sales and services		(498.7	)		(404.9	)		(1,368.1	)		(1,128.9	)
Engineering, selling and administrative expenses		(107.6	)		(97.6	)		(308.2	)		(303.3	)
Non-operating income (loss)		(1.4	)		2.8			(7.4	)		22.1
Interest income		1.6			1.5			4.4			5.0
Interest expense		(5.9	)		(6.5	)		(18.5	)		(18.8	)

Income before income taxes		52.2			34.2			134.2			89.1
Income taxes		(16.7	)		(11.6	)		(39.6	)		(30.3	)

Net income	$	35.5		$	22.6		$	94.6		$	58.8


Net income per common share
Basic	$	.54		$	.34		$	1.43		$	.89
Diluted	$	.53		$	.34		$	1.42		$	.89

Cash dividends paid per common share	$	.10		$	.08		$	.30		$	.24

Average basic shares outstanding		66.2			66.2			66.2			66.2
Average diluted shares outstanding		67.1			66.4			66.8			66.4

HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)


	April 2,			June 27,
	2004			2003
	(In millions)
Assets
Current Assets
Cash and cash equivalents	$	534.9		$	442.6
Marketable securities		18.5			23.1
Receivables		443.2			420.0
Unbilled costs and accrued earnings on fixed-price contracts		125.4			164.8
Inventories		244.4			213.9
Current deferred income taxes		103.9			88.1
Income taxes receivable		—			5.2

Total current assets		1,470.3			1,357.7

Other Assets
Plant and equipment		289.3			289.2
Goodwill		238.2			228.1
Non-current notes receivable		19.3			28.2
Non-current deferred income taxes		26.1			20.4
Other assets		152.4			156.7

		725.3			722.6

	$	2,195.6		$	2,080.3

Liabilities and Shareholders’ Equity
Current Liabilities
Short-term debt	$	7.0		$	31.2
Accounts payable		117.0			114.0
Compensation and benefits		141.2			138.5
Other accrued items		132.8			104.6
Advance payments and unearned income		133.3			106.4
Income taxes payable		8.1			—
Current portion of long-term debt		0.8			0.8

Total current liabilities		540.2			495.5

Other Liabilities
Long-term debt		401.4			401.6

Shareholders’ Equity
Preferred Stock, without par value; 1,000,000 shares authorized; none issued		—			—
Common Stock, $1.00 par value; 250,000,000 shares authorized; issued and outstanding 66,415,393 shares at April 2, 2004 and 66,391,032 shares at June 27, 2003		66.4			66.4
Other capital		252.3			229.7
Retained earnings		946.3			905.3
Unearned compensation		(4.4	)		(5.2	)
Accumulated other comprehensive income (loss)		(6.6	)		(13.0	)

Total shareholders’ equity		1,254.0			1,183.2

	$	2,195.6		$	2,080.3

HARRIS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)


	Three Quarters Ended
	April 2,			March 28,
	2004			2003
	(In millions)
Operating Activities
Net income	$	94.6		$	58.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		40.4			40.8
Non-current deferred income tax		(5.7	)		5.3
Gain on the sale of securities available-for-sale		(2.5	)		(15.7	)
Gain on the sale of LiveTV, LLC		—			(18.8	)
(Increase) decrease in:
Accounts and notes receivable		(14.3	)		(1.1	)
Unbilled costs and inventories		8.8			(18.4	)
Increase (decrease) in:
Accounts payable and accrued expenses		34.0			14.7
Advance payments and unearned income		26.8			27.3
Income taxes		(0.9	)		2.0
Other		6.1			5.9


Net cash provided by operating activities		187.3			100.8


Investing Activities
Additions of plant and equipment		(43.4	)		(47.6	)
Cash paid for selected investments		(1.3	)		(4.4	)
Proceeds from the sale of securities available-for-sale		7.4			19.3
Proceeds from the sale of LiveTV, LLC		—			19.0


Net cash used in investing activities		(37.3	)		(13.7	)


Financing Activities
Increase (decrease) in debt, net		(25.8	)		102.5
Proceeds from sale of common stock		29.7			1.7
Repurchase of common stock		(43.2	)		(2.9	)
Cash dividends		(19.9	)		(15.9	)


Net cash provided by (used in) financing activities		(59.2	)		85.4


Effect of exchange rate changes on cash and cash equivalents		1.5			(2.2	)


Net increase in cash and cash equivalents		92.3			170.3

Cash and cash equivalents at the beginning of the year		442.6			226.2


Cash and cash equivalents at the end of the quarter	$	534.9		$	396.5

The accompanying unaudited condensed consolidated financial statements of Harris Corporation and its subsidiaries have been prepared in accordance with accounting principles generally accepted for interim financial information and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations and changes in cash flows in conformity with accounting principles generally accepted in the United States. In the opinion of management, such 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 such periods. The results for the quarter and three quarters ended April 2, 2004, are not necessarily indicative of the results that may be expected for the full fiscal year. For further information refer to the Consolidated Financial Statements and related Notes to Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 27, 2003 (“Fiscal 2003 Form 10-K”). Certain reclassifications have been made to prior year amounts to conform to the current period presentation.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

In January 2003, the Financial Accounting Standards Board (“FASB”) issued Interpretation Number 46, “Consolidation of Variable Interest Entities” (“FIN 46”). This interpretation of Accounting Research Bulletin (“ARB”) No. 51, “Consolidated Financial Statements,” provides guidance for identifying a controlling interest in a variable interest entity (“VIE”) established by means other than voting interests. FIN 46 also requires consolidation of a VIE by an enterprise that holds such a controlling interest. In December 2003, the FASB completed its deliberations regarding the proposed modification to FIN 46 and issued Interpretation Number 46R, “Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51” (“FIN 46R”). The decisions reached included a deferral of the effective date and provisions for additional scope exceptions for certain types of variable interests. Application of FIN 46R is required in financial statements of public entities that have interests in VIEs or potential VIEs commonly referred to as special-purpose entities for periods ending after December 15, 2003. Application by public entities (other than small business issuers) for all other types of entities is required in financial statements for periods ending after March 15, 2004. We adopted FIN 46R beginning in the third quarter of fiscal 2004 and it did not have a material impact on our financial position, results of operations or cash flows.

In April 2003, the FASB issued Statement of Financial Accounting Standards No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities” (“Statement 149”). Statement 149 amends and clarifies the definition of a derivative, expands the nature of exemptions from Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities” (“Statement 133”), clarifies the application of hedge accounting when using certain instruments, clarifies the application of Statement 133 to embedded derivatives and modifies the cash flow presentation of derivative instruments containing financing elements. Statement 149 is effective for contracts entered into or modified after June 30, 2003. We adopted Statement 149 beginning in the first quarter of fiscal 2004 and it did not have a material impact on our financial position, results of operations or cash flows.

In July 2003, the FASB’s Emerging Issues Task Force (“EITF”) reached a consensus on Issue 03-5, “Applicability of AICPA Statement of Position 97-2 “Software Revenue Recognition” (“SOP 97-2”) to Non-Software Deliverables” (“EITF 03-5”). The consensus was reached that non-software deliverables are included within the scope of SOP 97-2 if they are included in an arrangement that contains software that is essential to the non-software deliverables’ functionality. This consensus is to be applied to fiscal periods beginning after August 13, 2003. We adopted EITF 03-5 beginning in the second quarter of fiscal 2004 and it did not have a material impact on our financial position, results of operations or cash flows.

In December 2003, the FASB revised Statement of Financial Accounting Standards No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (“Revised Statement 132”). Revised Statement 132 revises employers’ required disclosures about pension plans and other postretirement benefit plans. It does not change the measurement or recognition of those plans required by FASB Statements No. 87, “Employers’ Accounting for Pensions,” No. 88, “Employers’ Accounting for Settlements

and Curtailments of Defined Benefit Pension Plans and for Termination Benefits” and No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions” (“Statement 106”). Revised Statement 132 requires disclosures in addition to those in the original FASB Statement No. 132. Revised Statement 132 is effective for financial statements with fiscal years ending after December 15, 2003. The interim-period disclosures required by Revised Statement 132 are effective for interim periods beginning after December 15, 2003. We adopted Revised Statement 132 beginning in the third quarter of fiscal 2004 and it did not have a material impact on our financial statements or related footnotes.

In January 2004, the FASB issued Staff Position No. 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“FSP 106-1”). FSP 106-1 permits a sponsor of a postretirement health care plan that provides a prescription drug benefit to make a one-time election to defer accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“the Act”). FSP 106-1 also requires certain disclosures pending further consideration of the underlying accounting issues. The guidance in FSP 106-1 is effective for interim or annual financial statements with fiscal years ending after December 7, 2003. We do not believe the provisions of FSP 106-1 and the Act will have a material impact on our financial position, results of operations or cash flows.

In March 2004, the EITF reached a consensus on Issue 03-1, “The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments” (“EITF 03-1”). EITF 03-1 requires disclosures on investments in an unrealized loss position. The disclosures are designed to help financial statement users analyze a company’s unrealized losses and to enable them to better understand the basis for any management conclusion that the impairment is temporary. Quantitative and qualitative disclosures for investments accounted for under FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” are effective for the first annual reporting period ending after December 15, 2003. All new disclosures related to cost method investments are effective for the annual reporting periods ending after June 15, 2004. Comparative information for the periods prior to the period of initial application is not required. We will begin to make these required disclosures in our Annual Report on Form 10-K for the fiscal year ending July 2, 2004.

In April 2004, the FASB issued FASB Staff Position 129-1, “Disclosure Requirements under FASB Statement No. 129, Disclosure of Information about Capital Structure, Relating to Contingently Convertible Financial Instruments,” (“FSP 129-1”). FSP 129-1 states that FASB Statement 129 “Disclosure of Information about Capital Structure” (“Statement 129”) applies to all contingently convertible securities, including those containing contingent conversion requirements that have not been met and are not otherwise required to be included in the computation of diluted earnings per share in accordance with FASB Statement No. 128, “Earnings per Share.” Paragraph 4 of Statement 129 requires the disclosure of significant terms of the conversion features of the contingently convertible security to enable users of financial statements to understand the circumstances of the contingency and the potential impact of conversion. Disclosures are to indicate whether the shares that would be issued if the contingently convertible securities were converted are included in the calculation of diluted earnings per share, and the reasons why or why not. The guidance in FSP 129-1 is effective immediately upon posting of the final FSP 129-1 to the FASB website and applies to all existing and newly created securities. We have initiated these required disclosures in Note I “Net Income Per Share” of the Notes to Condensed Consolidated Financial Statements in this Form 10-Q.

Note C – Comprehensive Income and Accumulated Other Comprehensive Income (Loss)

Comprehensive income for the quarters ended April 2, 2004 and March 28, 2003, which includes net income, was $37.9 million and $24.5 million, respectively. Comprehensive income for the three quarters ended April 2, 2004 and March 28, 2003 was $101.0 million and $49.9 million, respectively.

The components of accumulated other comprehensive income (loss), net of related tax, at April 2, 2004 and June 27, 2003 are as follows:

Total comprehensive income for the quarter and three quarters ended April 2, 2004 and March 28, 2003 was comprised of the following:

Unbilled costs and accrued earnings on fixed-price contracts are net of progress payments of $129.1 million at April 2, 2004 and $150.9 million at June 27, 2003.


		April 2,			June 27,
		2004			2003

		(In millions)
	Land	$	13.9		$	14.0
	Buildings		295.1			288.9
	Machinery and equipment		611.6			600.9

			920.6			903.8
	Less allowances for depreciation		(631.3	)		(614.6	)

		$	289.3		$	289.2

Note G _ Selected Investments

We have equity investments in technology companies, which are accounted for using the cost method of accounting. These investments are included as a component of the _Other assets_ line item in our Condensed Consolidated Balance Sheet. Selected investments are evaluated for impairment if cost exceeds fair value. The determination of fair value requires management to obtain independent appraisals, or to estimate the value of the securities without an independent appraisal based upon available information such as projected cash flows, comparable market prices of similar companies, recent acquisitions of similar companies made in the marketplace and a review of the financial and market conditions of the underlying company. These selected investments are summarized below:

		April 2,			June 27,
		2004			2003

		(In millions)
	Investments (ownership interest)
	Terion, Inc. (19.59%)	$	21.7		$	21.7
	AuthenTec, Inc. (19.97%)		15.8			15.8
	Teltronics, Inc. (see below)		—			1.3

		$	37.5		$	38.8

The equity investment in Teltronics, Inc. (_Teltronics_) is Series C Preferred Stock, which is convertible into Teltronics common stock. In no case will this Series C Preferred Stock be exercisable for more than 19.9 percent of the total combined voting power of all classes of Teltronics capital stock that are entitled to vote. In addition to the equity investments noted above, we also have notes receivable from Terion, Inc. (_Terion_) and Teltronics with carrying values of $8.2 million and $5.0 million, respectively. During the second quarter we recognized an impairment charge of $5.0 million related to our interests in Teltronics due to Teltronics recent failure to make required payments on their debt and uncertainty as to their ability to make future payments. We will continue to assess the value of these interests, which may result in further impairment charges related to these interests.

Terion is a privately-held wireless data communication and information solution provider for mobile and remote business-to-business applications focusing on the transportation industry. It has sold units to customers such as J.B. Hunt Transport Services, Inc. and XTRA Lease, a division of XTRA Corporation. None of Terion_s revenue is generated from us or our affiliates. We have invested technology and cash in Terion since fiscal 1994 and we currently nominate one member of Terion_s six member board of directors. The maximum exposure to future losses we have with our interest in Terion is $29.9 million.

AuthenTec, Inc. (_AuthenTec_) is a privately-held provider of advanced biometric fingerprint sensors to the PC, wireless, PDA, access control and automotive markets. AuthenTec has shipped over one million of its TruePrint_ technology-based sensors to several customers in a multitude of countries worldwide. AuthenTec_s revenues generated from us or our affiliates have not been material. We have invested technology and cash in AuthenTec since 1998. None of our current employees sit on AuthenTec_s board of directors. The maximum exposure to future losses we have with our interest in AuthenTec is $15.8 million.

Teltronics is a publicly-held company that is traded on the Over-the-Counter Bulletin Board under the symbol _TELT. Teltronics is a provider of communications solutions with reported revenues of $46.9 million in calendar 2003. Teltronics revenues generated from us or our affiliates have not been material. On June 30, 2000 we sold certain equipment, inventory and intellectual property rights

related to our 20-20® switching technology and associated products from our telecom switch business to Teltronics in exchange for a promissory note, a portion of which was converted to Series C Preferred Stock of Teltronics in March 2002 under a Master Restructuring Agreement. None of our current employees sit on Teltronics’ board of directors. The maximum exposure to future losses we have with our interest in Teltronics is $5.0 million.

We adopted FIN 46R beginning in the third quarter of fiscal 2004. In implementing FIN 46R it was determined that each of these selected investments was not within the scope of FIN 46R and thus, our adoption of FIN 46R did not have a material impact on our financial position, results of operations or cash flows.

On product sales in our RF Communications, Microwave Communications, Network Support and Broadcast Communications segments we provide for future warranty costs upon product delivery. The specific terms and conditions of those warranties vary depending upon the product sold and country in which we do business. In the case of hardware manufactured by us, our warranties generally start from the delivery date and continue as follows:

Longer warranty periods are provided on a limited basis including some “lifetime” warranties on some of our small tools sold by the Network Support segment.

Software products in our Broadcast Communications and Network Support segments generally carry a 90-day warranty from the date of acceptance. Our liability under these warranties is to provide a corrected copy of any portion of the software found not to be in substantial compliance with the specifications previously agreed to. This may result in, but does not guarantee, customers receiving a free upgrade to a new release of our software.

Because our products are manufactured, in many cases, to customer specifications and their acceptance is based on meeting those specifications, we historically have experienced minimal warranty costs. Factors that affect our warranty liability include the number of installed units, historical experience and management’s judgment regarding anticipated rates of warranty claims and cost per claim. We assess the adequacy of our recorded warranty liabilities every quarter and make adjustments to the liability if necessary.

Changes in our warranty liability, which are included as a component of “Other accrued items” on the Condensed Consolidated Balance Sheet, during the first three quarters of fiscal 2004 are as follows:

On long-term contract sales with U.S. Government customers in our Government Communications Systems and RF Communications segments, the value or price of our warranty is generally included in the contract and funded by the customer. A provision is built into the estimated program costs when determining the profit rate to accrue when applying the cost-to-cost percentage of completion revenue recognition method. Warranty costs, if incurred, are charged to the specific program’s cost and both revenue and cost are recognized at that time. Factors that affect the estimated program cost for warranty include terms of the contract, number of installed units, historical experience and management’s judgment regarding anticipated rates of warranty claims and cost per claim.

Guarantees are contingent commitments issued to guarantee the performance of a customer to a third party in borrowing arrangements, such as commercial paper issuances, bond financings and similar transactions. The term of the guarantee is equal to the remaining term of the related debt, which typically ranges from one to three years. The maximum potential amount of future payments we could be required to make under our third-party guarantees at April 2, 2004, is $1.3 million. At April 2, 2004, there are no liabilities with respect to guarantees accrued for in our Condensed Consolidated Balance Sheet. We also hold insurance policies with third parties to mitigate the risk of loss on a portion of these guarantees.

Average outstanding shares used in the computation of net income per share are as follows:

In fiscal 2003 we issued $150 million of 3.5% Convertible Debentures due 2022. Holders of the debentures have the right to convert each of their debentures into shares of our common stock prior to the stated maturity under any of the following circumstances:

•		during any calendar quarter if the closing sale price of our common stock, for at least 20 trading days in the 30 consecutive trading day period ending on the last trading day of the previous calendar quarter, is more than 110 percent of the applicable conversion price per share of our common stock on such last trading day,

•		debentures called for redemption may be surrendered for conversion until the close of business on the business day immediately preceding the redemption date,

•		during any period that the long-term credit rating assigned to the debentures by either of Moody’s Investors Service Inc. or Standard & Poor’s Ratings Group is at or below Ba1 or BB+, respectively, or if the debentures no longer are rated by either of these ratings services, or if the ratings for the debentures have been suspended by either of these ratings services, or

•		upon the occurrence of specified corporate transactions, including if we make a significant distribution to holders of our common stock or if we are a party to specified consolidations, mergers or transfers of all or substantially all of our properties and assets.

For each $1,000 of debentures surrendered for conversion, a holder will receive 22.0994 shares of our common stock. This represents an initial conversion price of $45.25 per share of our common stock based on the issue price of the debentures. The conversion rate may be adjusted for certain reasons.

None of the shares that would be issued upon the conversion of our 3.5% Convertible Debentures due 2022 are included in the calculation of diluted earnings per share above because none of the circumstances noted above that could result in conversion existed during any portion of the periods presented above.

In accordance with APB Opinion No. 25, “Accounting for Stock Issued to Employees,” we use the intrinsic-value method of accounting for stock option awards to employees and, accordingly, do not recognize compensation expense for our stock option awards to employees in the Condensed Consolidated Statement of Income, as all option exercise prices are 100 percent of market value on the date the options are granted. Options may be exercised for a maximum of 10 years after the date of grant.

The following table illustrates the pro forma effect on net income and earnings per share assuming we had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” to all previously granted stock-based awards after giving consideration to potential forfeitures. The fair value of each option grant is estimated at the grant date using the Black-Scholes option-pricing model. Reference should be made to “Note 15: Stock Options and Awards” in our Fiscal 2003 Form 10-K for the assumptions used in the Black-Scholes option-pricing model. The estimated fair value of options granted is amortized to expense over their vesting period, which is generally three years.

Total compensation expense recognized from performance and restricted shares during the quarters ended April 2, 2004 and March 28, 2003 was $1.9 million and $1.1 million, respectively. Total compensation expense recognized from performance and restricted shares during the three quarters ended April 2, 2004 and March 28, 2003 was $4.3 million and $1.3 million, respectively. The value of restricted stock, equal to the intrinsic value at the time of grant, is amortized as compensation expense over the vesting period. The value of performance shares, equal to the most probable estimate of the intrinsic value at the time of distribution, is amortized as compensation expense over the vesting period.

We are structured primarily around the markets we serve and operate in five business segments – Government Communications Systems, RF Communications, Microwave Communications, Network Support and Broadcast Communications. Our Government Communications Systems segment engages in advanced research and develops, designs and produces advanced communication and information processing systems. Our RF Communications segment performs advanced research and develops, designs, manufactures and sells tactical radio products and provides services related to tactical radio products. Our Microwave Communications segment designs, manufactures and sells microwave radio products and provides services related to microwave radio products. Our Network Support segment designs, manufactures and sells telephone test equipment and systems; develops, designs, produces and sells network management systems; and provides services related to these products and systems. Our Broadcast Communications segment designs,

manufactures and sells television and radio transmission products; develops, designs, produces and sells automation and control systems and studio products; and provides services related to these products and systems.

The accounting policies of our operating segments are the same as those described in the “Significant Accounting Policies” footnote in our Fiscal 2003 Form 10-K. We evaluate each segment’s performance based on its “operating income or loss,” which we define as profit or loss from operations before income taxes excluding interest income and expense, equity income and gains or losses from securities and other investments. In fiscal 2003, intersegment sales were transferred at prices comparable to those provided to unaffiliated customers. In fiscal 2004, intersegment sales were transferred at cost to the buying division and the sourcing division recognizes a normal profit that is eliminated. This change in the intersegment policy resulted in an elimination of intercompany profit, which was $2.5 million in the third quarter of fiscal 2004 and $5.8 million in the three quarters ended April 2, 2004. The “Corporate eliminations” line item in the charts below represents the elimination of intersegment sales and their related profits.

Segment revenue, segment operating income (loss) and a reconciliation of segment operating income (loss) to total income before income taxes follows:


	Quarter Ended						Three Quarters Ended
	April 2,			March 28,			April 2,			March 28,
	2004			2003			2004(2)			2003(3)
	(In millions)
Revenue
Government Communications Systems	$	394.8		$	296.0		$	1,070.7		$	820.7
RF Communications		116.1			87.6			310.9			226.7
Microwave Communications		77.3			72.2			222.5			203.8
Network Support		14.9			11.9			48.7			37.2
Broadcast Communications		73.3			75.9			198.1			238.0
Corporate eliminations		(12.2	)		(4.7	)		(18.9	)		(13.4	)

Total Revenue	$	664.2		$	538.9		$	1,832.0		$	1,513.0


Income Before Income Taxes
Segment Operating Income (Loss):
Government Communications Systems	$	43.0		$	26.6		$	111.2		$	74.8
RF Communications		33.0			23.8			87.5			57.7
Microwave Communications		(2.5	)		(0.8	)		(6.3	)		(16.3	)
Network Support		0.7			(1.4	)		4.1			(6.6	)
Broadcast Communications		0.5			2.5			4.2			10.4
Headquarters expense		(14.3	)		(14.3	)		(39.2	)		(39.2	)
Corporate eliminations		(2.5	)		—			(5.8	)		—
Non-operating income (loss) (1)		(1.4	)		2.8			(7.4	)		22.1
Net interest		(4.3	)		(5.0	)		(14.1	)		(13.8	)

Total Income Before Income Taxes	$	52.2		$	34.2		$	134.2		$	89.1

(1)

“Non-operating income (loss)” includes equity income (loss), royalties and related intellectual property expenses, gains and losses from the sale of securities available-for-sale, write-downs of securities available-for-sale and expenses and fees associated with our

selected investments and other items. Additional information regarding non-operating income (loss) is set forth in Note K “Non-Operating Income (Loss).”

(2)		Non-operating income (loss) for the three quarters ended April 2, 2004, includes a $5.0 million pretax write-down of our interest in Teltronics, a $7.5 million pretax loss and a $6.4 million pretax gain, respectively, in two unrelated patent infringement cases.

(3)		Non-operating income (loss) for the three quarters ended March 28, 2003, includes an $18.8 million pretax gain on the sale of our minority interest in our LiveTV, LLC venture.

The provision for income taxes as a percentage of pretax income decreased from 34.0 percent in the quarter and three quarters ended March 28, 2003, to 32.0 percent and 29.5 percent in the quarter and three quarters ended April 2, 2004, respectively. The decrease in the rate for the three quarters ended April 2, 2004 is primarily due to the settlement of a foreign tax audit in the second quarter of fiscal 2004 that resulted in an income tax benefit of $3.3 million. Both fiscal 2004 and fiscal 2003 tax rates were lower than the federal and state statutory rates and benefited from the impact of export sales. The fiscal 2004 rate includes a larger benefit from the use of state, local and foreign income tax loss carryforwards.

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

The following discussion and analysis provides information that management believes is useful in understanding our operating results, cash flows and financial condition. The discussion should be read in conjunction with, and is qualified in its entirety by reference to, the Condensed Consolidated Financial Statements and related Notes to Condensed Consolidated Financial Statements appearing elsewhere in this report. In addition, reference should be made to our audited Consolidated Financial Statements and notes thereto and related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Fiscal 2003 Form 10-K.

Except for the historical information contained herein, the discussions in this report contain forward-looking statements that involve risks and uncertainties. Our future results could differ materially from those discussed in such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below under “Forward-Looking Statements and Factors that May Affect Future Results.”

Harris Corporation, along with our subsidiaries, is an international communications equipment and systems company focused on providing assured communications™ solutions for government and commercial customers. We are structured primarily around the markets we serve and operate in five business segments — Government Communications Systems, RF Communications, Microwave Communications, Network Support and Broadcast Communications. Our Government Communications Systems segment engages in advanced research and develops, designs and produces advanced communication and information processing systems. Our RF Communications segment performs advanced research and develops, designs, manufactures and sells tactical radio products and provides services related to tactical radio products. Our Microwave Communications segment designs, manufactures and sells microwave radio products and provides services related to microwave radio products. Our Network Support segment designs, manufactures and sells telephone test equipment and systems; develops, designs, produces and sells network management systems; and provides services related to these products and systems. Our Broadcast Communications segment designs, manufactures and sells television and radio transmission products; develops, designs, produces and sells automation and control systems and studio products; and provides services related to these products and systems.

•		Net income increased 57.1 percent compared to the prior-year quarter;

•		Revenue increased 23.3 percent compared to the prior-year quarter;

•		Government Communications Systems and RF Communications segments once again achieved record-setting results in both revenue and operating income;

•		Microwave Communications and Network Support segments achieved revenue growth when compared to the prior-year quarter;

•		Broadcast Communications segment experienced sequential revenue improvement when compared to the second quarter of fiscal 2004 as well as strong order growth;

•		Microwave Communications and Broadcast Communications segments continued to focus on profitability improvement and are taking additional actions in the fourth quarter to lower costs and reduce expenses going forward; and

•		Government Communications Systems and Broadcast Communications segments were awarded and began work on a $96 million contract to create a modern radio and TV broadcast and newspaper infrastructure for the people of Iraq.

Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States. Preparing consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by the application of our accounting policies. Our significant accounting policies are described in “Note 1: Significant Accounting Policies” in our Notes to Financial Statements included in our Fiscal 2003 Form 10-K. Critical accounting estimates are those that require application of management’s most difficult, subjective or complex judgments, often as a result of matters that are inherently uncertain and may change in subsequent periods. Critical accounting estimates for us include: (i) revenue recognition on long-term contracts and contract estimates, (ii) provisions for excess and obsolete inventory losses, (iii) accounts and finance receivables allowance for doubtful accounts and credit losses, (iv) valuation of marketable securities and selected investments, (v) impairment testing of goodwill, and

(vi) income taxes and tax valuation allowances. For additional discussion of our critical accounting estimates, see our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Fiscal 2003 Form 10-K.


	Quarter Ended									Three Quarters Ended
							%									%
	April 2,			March 28,			Inc./			April 2,			March 28,			Inc./
	2004			2003			(Dec.)			2004			2003			(Dec.)
	(In millions)
Revenue from product sales and services	$	664.2		$	538.9			23.3	%	$	1,832.0		$	1,513.0			21.1	%

Cost of product sales and services		(498.7	)		(404.9	)		23.2	%		(1,368.1	)		(1,128.9	)		21.2	%

Gross margin		165.5			134.0			23.5	%		463.9			384.1			20.8	%
% of revenue		24.9	%		24.9	%					25.3	%		25.4	%

Engineering, selling and administrative expenses		(107.6	)		(97.6	)		10.2	%		(308.2	)		(303.3	)		1.6	%
% of revenue		16.2	%		18.1	%					16.8	%		20.0	%


Non-operating income (loss)		(1.4	)		2.8			—			(7.4	)		22.1			—
Interest income		1.6			1.5			6.7	%		4.4			5.0			(12.0	)%
Interest expense		(5.9	)		(6.5	)		(9.2	)%		(18.5	)		(18.8	)		(1.6	)%

Income before income taxes		52.2			34.2			52.6	%		134.2			89.1			50.6	%
% of revenue		7.9	%		6.3	%					7.3	%		5.9	%

Income taxes		(16.7	)		(11.6	)		44.0	%		(39.6	)		(30.3	)		30.7	%

Net income	$	35.5		$	22.6			57.1	%	$	94.6		$	58.8			60.9	%

% of revenue		5.3	%		4.2	%					5.2	%		3.9	%

General: Net income and revenue in the third quarter of fiscal 2004 increased 57.1 percent and 23.3 percent, respectively, compared to the prior-year comparable quarter. Net income and revenue in the three quarters ended April 2, 2004, increased 60.9 percent and 21.1 percent, respectively, compared to the prior-year comparable period. The increases for the quarter and three quarters ended April 2, 2004, were primarily a result of the continuing growth in our government businesses. The third quarter of fiscal 2004 included a non-operating loss of $1.4 million, compared to $2.8 million of non-operating income in the third quarter of fiscal 2003. For the first three quarters of fiscal 2004 the non-operating loss was $7.4 million, compared to $22.1 million of non-operating income in the first three quarters of fiscal 2003.

Results in the three quarters ended March 28, 2003, were reduced by charges of $8.3 million related to cost-reduction actions in our Microwave Communications segment.

Our Government Communications Systems and RF Communications segments once again achieved record-setting results in both revenue and operating income. Our mission-critical communications systems are in high demand because of their superior performance, both on and off the battlefield. We have been successful in expanding our addressable markets and solidifying our position as a preferred supplier to U.S. Government and international customers. In addition, our performance is being rewarded with higher levels of program award fees.

We are encouraged by the continuing improvement in our commercial communications markets. Both our Microwave Communications and Network Support segments achieved year-over-year revenue growth in the third quarter, and our Broadcast Communications segment achieved sequential revenue improvement as well as strong order growth. We continue to be very focused on profitability improvement in the microwave and broadcast businesses, and are taking additional actions in the fourth quarter that will lower product costs and reduce expenses going forward.

In January, we won and began work on an important contract that we believe will significantly raise the visibility of our total communications capabilities. We were awarded a $96 million contract to rebuild and enhance the Iraqi Media Network (“IMN”). IMN will bring modern radio and TV broadcast and newspaper infrastructure and media content to the people of Iraq. Our Government Communications Systems and Broadcast Communications businesses will work together to create a fully integrated, technically

advanced media network that will provide a reliable, timely and relevant mass media capability. For this historic project, we have teamed with two media companies in the region that have invaluable experience in the broadcast and newspaper industry.

Revenue: Revenue for the third quarter of fiscal 2004 was $664.2 million, an increase of 23.3 percent compared to the third quarter of fiscal 2003. Revenue for the three quarters ended April 2, 2004, was $1,832.0 million, an increase of 21.1 percent compared to the first three quarters of fiscal 2003. The increases in revenue for both the third quarter and first three quarters resulted primarily from increased revenue in the Government Communications Systems and RF Communications segments. Increases were also recorded in the Network Support and Microwave Communications segments. These increases were partially offset by decreased revenue in the Broadcast Communications segment.

Gross Margin: Gross margin as a percent of revenue was unchanged at 24.9 percent in the third quarter of fiscal 2004 compared to the third quarter of fiscal 2003. In our RF Communications segment, gross margin improved due to manufacturing efficiencies related to increased tactical product sales and program execution especially related to our Bowman Tactical Radio Programme in the United Kingdom (“Bowman”). Our Network Support segment experienced a higher gross margin related primarily to its tools and test set products. The gross margin in our Government Communications Systems segment improved as a result of continued solid program performance and higher award fees that included a seldom-awarded incentive fee on a classified program for excellent schedule performance. Gross margin decreased in our Broadcast Communications segment when compared to the prior-year quarter due to a lower mix of digital TV transmission product sales. Productivity declines in manufacturing related to implementation of a new enterprise IT system in North America, which is nearing completion, and the transfer of European manufacturing operations from Austria to the UK also impacted the Broadcast Communications segment gross margin. Improved manufacturing efficiency in the Broadcast Communications segment, along with additional actions planned for the fourth quarter are expected to not only lower costs, but improve productivity. The gross margin in our Microwave Communications segment was negatively impacted by a higher-cost international product mix in the third quarter of fiscal 2004.

Gross margin as a percent of revenue decreased slightly from 25.4 percent in the first three quarters of fiscal 2003 to 25.3 percent in the first three quarters of fiscal 2004. For the three quarters ended April 2, 2004, improved gross margin as a percent of revenue was realized in our RF Communications, Network Support and Government Communications Systems segments, which was offset by lower gross margins in our Microwave Communications and Broadcast Communications segments.

Engineering, Selling and Administrative Expenses: Engineering, selling and administrative expenses increased $10.0 million, but decreased as a percent of revenue from 18.1 percent in the third quarter of fiscal 2003 to 16.2 percent in the third quarter of fiscal 2004. The increase in revenue outpaced the increase in engineering, selling and administrative expenses primarily due to the impact of cost reduction actions taken in fiscal 2003 at our corporate headquarters and separate cost-cutting actions taken in our Broadcast Communications segment. Since most of the gross expenses incurred at our corporate headquarters are allocated to our operating segments, a large portion of the corporate headquarters cost savings is being recognized in the operating income of our commercial segments rather than in headquarters expense.

Engineering, selling and administrative expenses increased $4.9 million to $308.2 million, but decreased as a percent of revenue from 20.0 percent in the first three quarters of fiscal 2003 to 16.8 percent in the first three quarters of fiscal 2004. The increase in revenue outpaced the increase in engineering, selling and administrative expenses primarily due to the impact of cost reduction actions taken in fiscal 2003 at our corporate headquarters and our Broadcast Communications segment as noted above and separate cost-cutting actions taken in our Microwave Communications and Network Support segments.

Non-Operating Income (Loss): Non-operating income (loss) was a $1.4 million loss in the third quarter of fiscal 2004 compared to $2.8 million of income in the third quarter of fiscal 2003. The loss in the third quarter of fiscal 2004 included a $0.4 million gain from the sale of marketable securities available-for-sale compared to a gain of $6.3 million in the third quarter of fiscal 2003.

Non-operating income (loss) was a $7.4 million loss in the first three quarters of fiscal 2004 compared to $22.1 million of income in the first three quarters of fiscal 2003. The loss in the first three quarters of fiscal 2004 included a $5.0 million pretax write-down of our interest in Teltronics, a $7.5 million pretax loss and a $6.4 million pretax gain, respectively, in two unrelated patent infringement cases. Non-operating income (loss) in the first three quarters of fiscal 2003 included an $18.8 million gain on the sale of our minority interest in our LiveTV, LLC venture. Non-operating income (loss) in the first three quarters of fiscal 2004 also included a $2.5 million gain from the sale of marketable securities available-for-sale compared to a gain of $16.4 million in the first three quarters of fiscal 2003.

Interest Income and Interest Expense: Interest income increased from $1.5 million in the third quarter of fiscal 2003 to $1.6 million in the third quarter of fiscal 2004, primarily due to the increased levels of cash. Interest income decreased from $5.0 million in the first three quarters of fiscal 2003 to $4.4 million in the first three quarters of fiscal 2004, primarily due to lower interest rates.

Interest expense decreased from $6.5 million in the third quarter of fiscal 2003 to $5.9 million in the third quarter of fiscal 2004 and decreased from $18.8 million in the first three quarters of fiscal 2003 to $18.5 million in the first three quarters of fiscal 2004, in each case primarily due to a lower level of short-term debt in our foreign subsidiaries.

Income Taxes: The provision for income taxes as a percentage of pretax income decreased from 34.0 percent in the quarter and three quarters ended March 28, 2003, to 32.0 percent and 29.5 percent in the quarter and three quarters ended April 2, 2004, respectively. The decrease in the rate for the three quarters ended April 2, 2004, is primarily due to the settlement of a foreign tax audit in the second quarter of fiscal 2004 that resulted in an income tax benefit of $3.3 million. Both fiscal 2004 and fiscal 2003 tax rates were lower than the federal and state statutory rates and benefited from the impact of export sales. The fiscal 2004 rate includes a larger benefit from the use of state, local and foreign income tax loss carryforwards. We expect that the tax rate for the fourth quarter of fiscal 2004 will be 32.0 percent.

Return on Revenue: Our net income as a percentage of revenue was 5.3 percent in the third quarter of fiscal 2004 compared to 4.2 percent in the third quarter of fiscal 2003 and 5.2 percent in the first three quarters of fiscal 2004 compared to 3.9 percent in the first three quarters of fiscal 2003. These increases were primarily due to the reasons previously discussed.

Revenue from the Government Communications Systems segment in the third quarter of fiscal 2004 of $394.8 million increased 33.4 percent from the third quarter of fiscal 2003 and operating income of $43.0 million in the third quarter of fiscal 2004 increased 61.7 percent from the third quarter of fiscal 2003. The higher operating margin in the third quarter resulted from continued solid program performance and higher award fees that included a seldom-awarded incentive fee on a classified program for excellent schedule performance. Revenue for the three quarters ended April 2, 2004, was $1,070.7 million, an increase of 30.5 percent compared to the first three quarters of fiscal 2003. Operating income of $111.2 million for the three quarters ended April 2, 2004, increased 48.7 percent from the first three quarters of fiscal 2003.

This segment’s revenue was driven by strong momentum across all key markets. Major contributors to growth during the quarter included numerous classified programs, the FAA Telecommunications Infrastructure program, the MAF/Tiger program for the U.S. Census Bureau, and numerous Department of Defense programs for avionics, satellite communications and missile defense. Total backlog for the segment, including funded and unfunded programs, was $3.9 billion at quarter-end.

During the quarter, we won a six-year, $31 million contract to design and develop the Multi-function Advanced Data Link hardware for the F-35 Joint Strike Fighter. Potential production and follow-on contracts could increase the value of the program to more than

$500 million through 2026. Also during the quarter, we began work on the one-year, $96 million, IMN contract. Broadcasts from the IMN were recently up-linked to satellite and can now be viewed throughout much of the Middle East.

Revenue from the RF Communications segment increased 32.5 percent in the third quarter of fiscal 2004 when compared to the third quarter of fiscal 2003 and operating income of $33.0 million in the third quarter of fiscal 2004 increased 38.7 percent from the third quarter of fiscal 2003. Revenue for the three quarters ended April 2, 2004, was $310.9 million, an increase of 37.1 percent compared to the first three quarters of fiscal 2003. Operating income of $87.5 million for the three quarters ended April 2, 2004, increased 51.6 percent from the first three quarters of fiscal 2003. Operating income in the quarter and three quarters ended April 2, 2004 benefited from improvements in manufacturing efficiencies and strong performance on the UK Bowman Tactical Radio Programme.

Strong demand is continuing for this segment’s Falcon® II tactical radios, which are providing seamless communications interoperability for U.S. and allied military forces in Iraq, Afghanistan and other theaters of operation. Orders in the quarter included $19 million under the previously announced $43 million Indefinite Delivery, Indefinite Quantity contract from the U.S. Navy Space and Naval Warfare Systems Command for shipboard high-frequency radio communications systems. Orders in the quarter also included radios for the U.S. Marine Corps and international customers in Kuwait, Uzbekistan, Philippines, United Kingdom, Armenia, Albania, Poland and Norway. Following the close of the quarter, we received a $15 million order, as part of the U.S. Army rapid-fielding-initiative to provide tactical radios for the deploying forces in Iraq and Afghanistan.

Revenue from the Microwave Communications segment increased 7.1 percent in the third quarter of fiscal 2004 when compared to the third quarter of fiscal 2003. This segment had an operating loss of $2.5 million in the third quarter of fiscal 2004 compared to an operating loss of $0.8 million in the third quarter of fiscal 2003. Revenue for the three quarters ended April 2, 2004, was $222.5 million, an increase of 9.2 percent compared to the first three quarters of fiscal 2003. This segment had an operating loss of $6.3 million for the three quarters ended April 2, 2004, compared to an operating loss of $16.3 million in the first three quarters of fiscal 2003. Results in the three quarters ended March 28, 2003, included $8.3 million of expenses related to cost-reduction actions, which benefited the operating income in the first three quarters of fiscal 2004. The gross margin in this segment, however, was negatively impacted by international product mix and pricing and by unfavorable foreign exchange rates in the quarter and three quarters ended April 2, 2004.

During the quarter, the Microwave Communications segment benefited from deliveries on a $24 million contract with MTN Nigeria Communications. Harris’ MegaStar® 155 radios are being used for MTN’s high-capacity backhaul GSM network. MTN Nigeria Communications is one of the largest cellular network providers in Africa. Also during the quarter, the Microwave Communications segment booked $2 million in orders for the new TRuepoint™ family of microwave products. In North America, this segment experienced a surge in orders from private network operators. New orders included $6 million for the government of Quebec, $6 million for the Imperial Irrigation District in Southern California, $3 million for the city and county of Honolulu and $3 million for an electric power utility in Eastern Canada.

Revenue from the Network Support segment increased 25.2 percent in the third quarter of fiscal 2004 when compared to the third quarter of fiscal 2003. This segment had operating income of $0.7 million in the third quarter of fiscal 2004, compared to an operating loss of $1.4 million in the third quarter of fiscal 2003. Revenue for the three quarters ended April 2, 2004, was $48.7 million, an increase of 30.9 percent compared to the first three quarters of fiscal 2003. This segment had operating income of $4.1 million for the three quarters ended April 2, 2004, compared to an operating loss of $6.6 million in the first three quarters of fiscal 2003. This segment’s operating income for the quarter and three quarters ended April 2, 2004 benefited from cost-reduction actions and sales of its EXP™ field technician test product, which was introduced in the third quarter of fiscal 2003.

Revenues in the quarter benefited from deliveries on a significant contract with MTC-Vodafone, won in the second quarter of fiscal 2004. We are the prime contractor for MTC-Vodafone’s new multimillion-dollar Integrated Network Management System project in Kuwait, which utilizes our NetBoss™ network management system.

Revenue from the Broadcast Communications segment decreased 3.4 percent in the third quarter of fiscal 2004 when compared to the third quarter of fiscal 2003. Operating income in the third quarter of fiscal 2004 was $0.5 million, compared to $2.5 million in the third quarter of fiscal 2003. Revenue for the three quarters ended April 2, 2004, was $198.1 million, a decrease of 16.8 percent compared to the first three quarters of fiscal 2003. Operating income was $4.2 million for the three quarters ended April 2, 2004, a decrease of 59.6 percent, compared to the first three quarters of fiscal 2003. Lower revenue in the quarter and three quarters ended April 2, 2004, resulted primarily from the decline in sales of digital TV transmission equipment and international radio transmission equipment. The quarter and three quarters ended March 28, 2003, were impacted by a large order in the prior year to construct radio broadcast infrastructure for S.N. Radiocomunicatii in Romania. The negative margin impact from the reduced sales volume and a lower mix of digital TV transmission product sales in the quarter and three quarters ended April 2, 2004, was partially offset by the impact of cost reduction actions taken in fiscal 2003. Also impacting gross margins were productivity declines in manufacturing related to implementation of a new enterprise IT system in North America, which is nearing completion, and the transfer of European manufacturing operations from Austria to the UK. Improved manufacturing efficiency, along with additional actions planned for the fourth quarter are expected to not only lower costs, but also improve productivity.

Orders in the third quarter for this segment increased significantly compared to the prior-year quarter and were higher across all three major product lines-transmission, studio systems and products, and automation software, and included $9 million for a Romanian TV project, $18 million for the Iraqi Media Network, and high-power AM radios for China, Saudi Arabia, and South Korea.

In the U.S., this segment won contracts during the quarter from Hearst-Argyle Television to upgrade digital transmission facilities at 26 of its television stations; from the Corporation for Public Broadcasting for

digital-ready radio transmission equipment at 13 of its member stations; and from Clear Channel radio for digital-ready transmitters for five stations.

At the National Association of Broadcasters trade exhibition last week, we introduced a number of new products, including the new Atlas™ transmitters for international analog and digital markets, the PowerCD™ UHF transmitter for the U.S. DTV market, the Mini-HD™ transmitter for the U.S. digital radio market, and audio codec products that deliver 5.1 surround sound for digital radio.

Net cash provided by operating activities: Net cash provided by operating activities was $187.3 million for the first three quarters of fiscal 2004 compared to $100.8 million for the first three quarters of fiscal 2003. Net cash provided by operating activities improved in each of our segments, which all experienced positive net cash from operating activities during the first three quarters of fiscal 2004. The improvement was led by our RF Communications and Government Communications Systems segments, and was primarily due to increased profitability and strong program execution that resulted in a decrease in unbilled costs and accrued earnings on fixed price contracts. The improved net cash provided from operating activities in our Microwave Communications segment was the result of the reduction in the segment’s operating loss as well as increased collections of accounts and notes receivable from customers. The improved cash flows in our Broadcast Communications segment were primarily due to increased collections of accounts receivable and advance payments from customers. The Network Support segment experienced higher net cash provided by operating activities as a result of improved profitability and advance payments collected from customers.

Net cash used in investing activities: Net cash used in investing activities was $37.3 million for the first three quarters of fiscal 2004 compared to $13.7 million for the first three quarters of fiscal 2003. Cash used in investing activities in the first three quarters of fiscal 2004 included $7.4 million in proceeds from the sale of securities available-for-sale. Cash used in investing activities in the first three quarters of fiscal 2003 included the receipt of $19.3 million in proceeds from the sale of securities available-for-sale and $19.0 million in proceeds from the sale of our minority interest in our LiveTV, LLC venture.

Additions of plant and equipment in the first three quarters of fiscal 2004 were $43.4 million compared to $47.6 million in the first three quarters of fiscal 2003. The expenditures are primarily due to additions made in our Government Communications Systems segment related to the FTI program’s network operating center and the expansion of facilities in 2003 to support the rapid growth in programs. Total additions of plant and equipment in fiscal 2004 are expected to be in the $70 million to $75 million range.

Net cash provided by (used in) financing activities: Net cash used in financing activities was $59.2 million for the first three quarters of fiscal 2004 compared to cash provided by financing activities of $85.4 million for the first three quarters of fiscal 2003. The decrease is attributable to the receipt of $146.3 million in net proceeds from the private placement of $150 million of our 3.5% Convertible Debentures due 2022 during the first quarter of fiscal 2003, which was offset by the repayment during the first quarter of fiscal 2003 of our $30.5 million 6.38% notes due 2002. Also, short-term debt was reduced by $24.2 million during the first three quarters of fiscal 2004.

In 1999, our Board of Directors authorized the repurchase of 15 million shares of our common stock. During the first three quarters of fiscal 2004, we repurchased 1,004,400 shares of our common stock at an average price per share of $42.97. During the first three quarters of fiscal 2003, we repurchased 117,500 shares of our common stock at an average price per share of $24.61. An authorization to repurchase an additional 520,000 shares under this repurchase program still exists. In April 2004, our Board of Directors authorized the repurchase of an additional three million shares, bringing the total number of shares authorized for future repurchases to 3,520,000. We currently expect that we will repurchase shares of our common stock to offset the dilutive effect of shares issued under our stock incentive plans. Additionally, if warranted, we will consider accelerating our purchases. Additional information regarding repurchases made during our third quarter of fiscal 2004 and our repurchase programs is set forth below under Part II, Item 2, “Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities.”

We have a committed Revolving Credit Agreement that provides for unsecured borrowings of up to $300 million. The facility expires in October 2007. Each bank’s obligation to make loans to us under this credit facility is subject to, among other things, our compliance with various representations, warranties and covenants. Interest rates on borrowings under this credit facility and related fees are determined by a pricing matrix based upon our long-term debt rating assigned by Standard and Poor’s Ratings Group and Moody’s Investors Service. The availability of borrowing under this credit facility is not contingent upon our debt rating. We are not required to

maintain compensating balances in connection with this agreement. Availability of borrowings under this revolving credit facility enables us to issue commercial paper. The financial covenants contained in this credit facility include, among others, maintenance of consolidated tangible net worth of not less than $823.5 million (which amount is subject to adjustment), maintenance of a total debt to adjusted earnings before interest, taxes, depreciation and amortization ratio of not more than 3.0 to 1 and maintenance of an adjusted earnings before interest, taxes, depreciation and amortization to interest charges ratio of not less than 3.0 to 1. This credit facility also includes negative covenants limiting (i) the creation of liens or other encumbrances, (ii) certain sale and leaseback transactions, and (iii) certain sales or other dispositions of assets other than in the ordinary course of business. In addition, this facility includes certain provisions for acceleration of maturity in the case of a (a) “cross default” with other indebtedness in an amount in excess of $50 million, (b) final uninsured judgment in excess of $50 million which remains unpaid or discharged, or (c) change of control, including if a person or group of persons acquires more than 25 percent of our voting stock.

During the first quarter of fiscal 2004, we filed a “universal shelf” registration statement with the SEC related to the potential future issuance of up to $500 million 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. This universal shelf registration statement was declared effective by the SEC during the first quarter and replaces our prior $500 million debt shelf registration.

In fiscal 2003, we issued $150 million of 3.5% Convertible Debentures due 2022. These debentures initially are convertible at a conversion price of $45.25 during any calendar quarter if the closing price of our common stock, for at least 20 trading days in the 30 consecutive trading day period ending on the last trading day of the prior calendar quarter, is more than $49.78, and in certain other circumstances as described in Note I “Net Income Per Share” of the Notes to Condensed Consolidated Financial Statements. We also have outstanding unsecured long-term debt of $250 million. The earliest scheduled maturity of any of our long-term debt is 2007.

Our debt is currently rated “BBB” by Standard and Poor’s Rating Group and “Baa2” by Moody’s Investors Service. We expect to maintain operating ratios, fixed-charge coverage ratios and balance sheet ratios sufficient for retention of these debt ratings. There are no assurances that our credit ratings will not be reduced in the future. If our credit rating is lowered below “investment grade,” then we may not be able to issue short-term commercial paper, but would instead need to borrow under our other credit facilities or pursue other alternatives. As of April 2, 2004, we had no commercial paper outstanding.

Management currently believes that existing cash, funds generated from operations, sales of marketable securities, our credit facilities and access to the public and private debt markets will be sufficient to provide for our anticipated requirements for working capital, capital expenditures and any stock repurchases under the current repurchase programs for the next 12 months and the foreseeable future.

Cash and cash equivalents: Cash increased $92.3 million in the first three quarters of fiscal 2004 primarily due to cash provided by operating activities of $187.3 million as noted above and $29.7 million of proceeds from the sale of common stock primarily related to the exercise of employee stock options. These increases were partially offset by $43.4 million in additions of plant and equipment, $43.2 million to repurchase common stock and $19.9 million in cash dividends paid.

Working capital: Working capital increased 7.9 percent from $862.2 million as of June 27, 2003 to $930.1 million as of April 2, 2004. The $67.9 million increase was primarily due to increases in cash and cash equivalents as discussed above.

Goodwill: Goodwill increased from $228.1 million as of June 27, 2003 to $238.2 million as of April 2, 2004, due to a reclassification between identifiable intangible assets and goodwill and changes in foreign exchange rates.

Non-current deferred income taxes: The asset related to non-current deferred income taxes was $20.4 million as of June 27, 2003, compared to $26.1 million as of April 2, 2004. The increase in the non-current deferred income tax asset was related to the sale of intellectual property from a Canadian subsidiary to a U.S. subsidiary.

We have contractual cash obligations to repay debt and to make payments under operating leases. We also have commitments related to contingent liabilities on outstanding letters of credit and surety bonds that are used to guarantee bids, down payments and performance and financial assurances. Guarantees are contingent commitments issued to guarantee the performance of a customer to a third party in borrowing arrangements, such as commercial paper issuances, bond financings and similar transactions. The term of the guarantee is equal to the remaining term of the related debt, which typically ranges from one to three years. The maximum potential amount of future payments we could be required to make under our third-party guarantees at April 2, 2004, is $1.3 million. At April 2, 2004, there are no guarantees accrued for as liabilities in our Condensed Consolidated Balance Sheet. We also hold insurance policies with third parties to mitigate the risk of loss on a portion of these guarantees.

The amounts disclosed in our Fiscal 2003 Form 10-K include all of our off-balance sheet arrangements and contractual obligations that we consider to have a more than remote potential future material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

During the three quarters ended April 2, 2004, no material changes occurred in our contractual cash obligations to repay debt, to purchase goods and services and to make payments under operating leases or our commitments and contingent liabilities on outstanding letters of credit, guarantees and other arrangements as disclosed in our Fiscal 2003 Form 10-K.

As described in Note B “Recent Accounting Pronouncements” of the Notes to Condensed Consolidated Financial Statements, there are accounting pronouncements that have recently been issued but not yet implemented by us. Note B describes the potential impact that these pronouncements are expected to have on our financial position, cash flows and results of operations.

For fiscal 2004, we expect earnings in the range of $1.90 to $1.95 per diluted share, and earnings for fiscal 2005 of $2.15 to $2.30 per diluted share.

The outlook for our Government Communications Systems and RF Communications segments remains very strong for the remainder of fiscal 2004. We expect both businesses to deliver solid revenue growth in fiscal 2005, with operating margins similar to those achieved in fiscal 2004. We have a broad base of strategic programs, supporting a wide range of U.S. Government agencies and international customers. Recent program wins are expected to continue to ramp up in fiscal 2005, and we are pursuing a large pool of new opportunities in both businesses.

In our commercial segments, we expect continued positive momentum in revenue growth, from improving global markets and new products. Profitability is expected to improve as a result of the higher revenue, as well as from additional actions being taken to lower product costs and reduce expenses.

This report contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they prove incorrect or never materialize, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements of our plans, strategies and objectives for future operations; any statements concerning new products, services or developments; any statements regarding future economic conditions, performance or outlook including statements relating to earnings guidance for fiscal 2004 and 2005; statements as to the outcome of contingencies; statements as to the value of our contract awards and programs; statements of expected cash flows; statements of belief or expectation; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may be identified by their use of forward-looking terminology, such as “believes,” “expects,” “may,” “should,” “would,” “will,” “intends,” “plans,” “estimates,” “anticipates” and similar words. You should not place undue reliance on these forward-looking statements, which reflect our management’s opinions only as of the date of the filing of this report. Such statements are made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our consolidated results and the forward-looking statements could be affected by many factors, including:

•		uncertain economic conditions, which make it difficult to estimate growth in our markets and, as a result, future income and expenditures;

•		the telecommunications down-turn, which has had and may continue to have a negative effect on our telecom businesses;

•		our dependence on the U.S. Government for a significant portion of our revenue, as the loss of this relationship or a shift in U.S. Government funding could have adverse consequences on our future business;

•		financial and government and regulatory risks relating to international sales and operations, including fluctuations in foreign currency exchange rates and the effectiveness of our currency hedging program, and in certain regions, such as the Middle East, risks of instability, violence and armed conflict;

•		the fair values of our portfolio of passive investments, which values are subject to significant price volatility or erosion;

•		our ability to continue to develop new products that achieve market acceptance;

•		the consequences of future geo-political events, which may affect adversely the markets in which we operate, our ability to insure against risks, our operations or our profitability;

•		strategic acquisitions and the risks and uncertainties related thereto, including our ability to manage and integrate acquired businesses;

•		potential changes in U.S. Government or customer priorities due to program reviews or revisions to strategic objectives, including termination of or potential failure to fund U.S. Government contracts;

•		risks inherent in large long-term fixed price contracts, particularly the risk that we may not be able to contain cost overruns;

•		the performance of critical subcontractors or suppliers;

•		potential claims that we are infringing the intellectual property rights of third parties;

•		the successful resolution of patent infringement claims and the ultimate outcome of other contingencies, litigation and legal matters;

•		customer demand for financing and customer credit risk;

•		cost reductions, which may not yield the benefits we expect and could have adverse effects on our future business;

•		the impact of competitive products and pricing;

•		risks inherent in developing new technologies;

•		the ability to recruit and retain qualified personnel; and

•		general economic conditions in the markets in which we operate.

Additional details and discussions concerning some of the factors that could affect our forward-looking statements or results are set forth in Exhibit 99.1 of this report, entitled “Forward-Looking Statements and Factors that May Affect Future Results,” which Exhibit is incorporated herein by reference. The foregoing list is not exhaustive. Additional risks and uncertainties not known to us or that we currently believe not to be material also may adversely impact our operations and financial position. Should any risks or uncertainties develop into actual events, these developments could have a material adverse effect on our business, financial condition and results of operations.

The forward-looking statements contained in this report are made as of the date hereof and we disclaim any intention or obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ materially from those projected in the forward-looking statements, whether as a result of new information, future events or otherwise.

In the normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates, fluctuations in the market value of our equity securities available-for-sale and changes in interest rates. We employ established policies and procedures governing the use of financial instruments to manage our exposure to such risks.

Foreign Exchange and Currency: We use foreign exchange contracts and options to hedge both balance sheet and off-balance sheet foreign currency commitments. Generally, these foreign exchange contracts offset foreign currency denominated inventory and purchase commitments from suppliers, accounts receivable from and future committed sales to customers and intercompany loans. We believe the use of foreign currency financial instruments should reduce the risks that arise from doing business in international markets. At April 2, 2004, we had open foreign exchange contracts with a notional amount of $103.0 million, of which $39.0 million were classified as cash flow hedges and $64.0 million were classified as fair value hedges. This compares to total foreign exchange contracts with a notional amount of $95.7 million as of June 27, 2003, of which $18.1 million were classified as cash flow hedges and

$77.6 million were classified as fair value hedges. At April 2, 2004, contract expiration dates range from less than one month to 21 months with a weighted average contract life of 0.3 years.

More specifically, the foreign exchange contracts classified as cash flow hedges are primarily being used to hedge currency exposures from cash flows anticipated from the United Kingdom Bowman Programme (“Bowman”) in our RF Communications segment. This contract for our tactical radio products was awarded in the third quarter of fiscal 2002. Under the contract, the customer pays in Pounds Sterling (“GBP”). We also have payments to local suppliers required to be made in GBP on this program. We have hedged the forecasted net cash flows related to sales and vendor payments denominated in GBP to maintain our anticipated profit margin on the program. As of April 2, 2004, we estimate that a pretax loss of $4.0 million would be reclassified into earnings from comprehensive income within the next 21 months related to the Bowman program transactions and an additional $0.3 million pretax loss would be reclassified into earnings from comprehensive income from the other transactions we are hedging with cash flow hedges. The net gain or loss included in our earnings for the first three quarters of fiscal 2004 and 2003 representing the amount of fair value and cash flow hedges’ ineffectiveness was not material. No amounts were recognized in our earnings for the first three quarters of fiscal 2004 and 2003 related to the component of the derivative instruments’ gain or loss excluded from the assessment of hedge effectiveness. In addition, no amounts were recognized in our earnings for the first three quarters of fiscal 2004 and 2003 related to hedged firm commitments that no longer qualify as fair value hedges. No material reclassification of gains and losses into earnings from comprehensive income is expected to result from transactions or events related to commitments to customers or suppliers within the next twelve months. All of these derivatives were recorded at their fair value on the balance sheet in accordance with Statement 133.

Factors that could impact the effectiveness of our hedging programs include accuracy of sales estimates, volatility of currency markets and the cost and availability of hedging instruments. A 10 percent adverse change in currency exchange rates for our foreign currency derivatives held at April 2, 2004, would have an impact of approximately $10.3 million on the fair value of such instruments. This quantification of exposure to the market risk associated with foreign exchange financial instruments does not take into account the offsetting impact of changes in the fair value of our foreign denominated assets, liabilities and firm commitments.

Marketable Securities: We also currently have a portfolio of marketable equity securities available-for-sale. These investments result from the retained interest in sold or spun-off businesses and the investment into start-up companies that have technology or products that are of interest to us. The fair market value of these securities at April 2, 2004, was $18.5 million, compared to $23.1 million at June 27, 2003. This decrease was primarily due to the sale of some of these investments in the first three quarters of fiscal 2004. The corresponding unrealized gain is included as a component of shareholders’ equity. These investments historically have had higher volatility than most market indices. A 10 percent adverse change in the quoted market price of marketable equity securities would have an impact of approximately $1.9 million on the fair market value of these securities.

Interest Rates: We utilize a balanced mix of debt maturities along with both fixed-rate and variable-rate debt to manage our exposure to changes in interest rates. We do not expect changes in interest rates to have a material effect on income or cash flows in fiscal 2004, although there can be no assurances that interest rates will not change significantly.

(a) Evaluation of disclosure controls and procedures: As of the end of the fiscal quarter ended April 2, 2004, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures are adequate and effective and provide reasonable assurance that such disclosure controls and procedures are effective in timely providing them with material information relating to the company and its subsidiaries required to be included in our periodic filings.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is properly recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal controls: There have been no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the quarter ended April 2, 2004 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We previously filed a patent infringement claim against Ericsson, Inc. in the United States Federal District Court for the Northern District of Texas. On October 29, 2002, a jury rendered a verdict in our favor against Ericsson, Inc. The jury awarded us approximately $61 million in compensatory damages and found that Ericsson’s conduct was “willful.” Following the rendering of such verdict, we filed a motion to enhance the damages based upon the finding of willfulness and Ericsson filed motions (i) to decrease the damage award, (ii) to order a new trial, and (iii) for non-infringement and invalidity of the patent notwithstanding the jury’s verdict. On July 17, 2003, the Court issued a ruling on these motions denying Ericsson’s motions for non-infringement and invalidity of the patent, but did rule that unless we agreed to a lowered damage award of $43 million in compensatory damages within 30 days, it was granting Ericsson’s motion for a new trial on the issue of damages. We agreed to the lowered damages and thus, a judgment was entered for us in the amount of $43 million plus $1 million for enhanced damages and $1 million for attorneys’ fees, as well as pre-judgment interest, which we currently estimate to be approximately $8 million. During the second quarter of fiscal 2004, Ericsson appealed the judgment of the District Court. We have filed a cross appeal seeking to increase the amount of enhanced damages.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities.

The following table sets forth information with respect to repurchases by us of common stock during the quarter ended April 2, 2004:

(1) As a matter of policy, we do not repurchase shares during the last two weeks of a quarter until following the release of quarterly earnings.

(2) On October 22, 1999, we announced that our Board of Directors approved a share repurchase program which authorizes us to repurchase up to 15 million shares through open-market transactions, in negotiated block transactions or pursuant to tender offers. Pursuant to the terms of this program, which does not have an expiration date, as of April 2, 2004, we still have authority to repurchase an additional 520,000 shares. All repurchases made in the quarter ended April 2, 2004, were made in open-market transactions.

(3) On April 27, 2004, we announced that our Board of Directors approved a share repurchase program which authorizes us to repurchase an additional three million shares through open-market transactions or in negotiated block transactions. This new program does not have an expiration date. The maximum number of shares that may yet be purchased under our authorized repurchase programs as of April 27, 2004 is 3,520,000.

	(3)		(a) Restated Certificate of Incorporation of Harris Corporation (1995), incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1996.

			(b) By-Laws of Harris Corporation as in effect December 3, 1999, and as amended on June 23, 2000.

	(4)		(a) Specimen stock certificate for the Company’s Common Stock, incorporated herein by reference to Exhibit 4(a) to the Company’s Annual Report on From 10-K for the fiscal year ended June 27, 1997.

			(b) Stockholder Protection Rights Agreement, between Harris Corporation and Mellon Investor Services, LLC (formerly ChaseMellon Shareholder Services, LLC) as Rights Agent, dated as of December 6, 1996, incorporated herein by reference to Exhibit 1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 6, 1996.

			(c) (i) Indenture, dated as of May 1, 1996, between Harris Corporation and The Bank of New York, as Trustee, relating to unlimited amounts of debt securities which may be issued from time to time by the Company when and as authorized by the Company’s Board of Directors or a Committee of the Board, incorporated herein by reference to Exhibit 4 to the Company’s Registration Statement on Form S-3, Registration Statement No. 333-03111, filed with the Securities and Exchange Commission on May 3, 1996.

			(c) (ii) Instrument of Resignation from Trustee and Appointment and Acceptance of Successor Trustee among Harris Corporation, JP Morgan Chase Bank, as Resigning Trustee and The Bank of New York, as Successor Trustee, dated as of November 1, 2002 (effective November 15, 2002), incorporated herein by reference to Exhibit 99.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2002.

			(d) Indenture, dated as of October 1, 1990, between Harris Corporation and National City Bank, as Trustee, relating to unlimited amounts of debt securities which may be issued from time to time by the Company when and as authorized by the Company’s Board of Directors or a Committee of the Board, incorporated herein by reference to Exhibit 4 to the Company’s Registration Statement on Form S-3, Registration Statement No. 33-35315, filed with the Securities and Exchange Commission on June 8, 1990.

			(e) Indenture, dated as of August 26, 2002, between Harris Corporation and The Bank of New York, as Trustee, relating to $150,000,000 of 3.5% Convertible Debentures due 2022, incorporated herein by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 26, 2002.

			(f) Indenture, dated as of September 3, 2003, between Harris Corporation and The Bank of

			New York, as Trustee, relating to unlimited amounts of debt securities which may be issued from time to time by the Company when and as authorized by the Company’s Board of Directors or a committee of the Board, incorporated herein by reference to Exhibit 4(b) to the Company’s Registration Statement on Form S-3, Registration Statement No. 333-108486, filed with the Securities and Exchange Commission on September 3, 2003.

			(g) Subordinated Indenture, dated as of September 3, 2003, between Harris Corporation and The Bank of New York, as Trustee, relating to unlimited amounts of debt securities which may be issued from time to time by the Company when and as authorized by the Company’s Board of Directors or a committee of the Board, incorporated herein by reference to Exhibit 4(c) to the Company’s Registration Statement on Form S-3, Registration Statement No. 333-108486, filed with the Securities and Exchange Commission on September 3, 2003.

			(h) Pursuant to Regulation S-K Item 601 (b) (4) (iii), Registrant by this filing agrees, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Company.

	(12)		Computation of Ratio of Earnings to Fixed Charges.

	(31.1)		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

	(31.2)		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

	(32.1)		Section 1350 Certification of Chief Executive Officer.

	(32.2)		Section 1350 Certification of Chief Financial Officer.

	(99.1)		Forward-Looking Statements and Factors that May Affect Future Results.

	(i)		Harris Corporation submitted to the Commission a Current Report on Form 8-K on January 20, 2004, relating to Harris Corporation’s announcement of increased earnings per share guidance for fiscal year 2004 and a preliminary earnings estimate for its second fiscal quarter of fiscal 2004, which ended January 2, 2004. This Form 8-K was furnished pursuant to Item 12 “Results of Operations and Financial Condition” of Form 8-K and was not filed.

	(ii)		Harris Corporation submitted to the Commission a Current Report on Form 8-K on January 27, 2004, relating to Harris Corporation’s announcement of earnings and financial results for its fiscal quarter ended January 2, 2004. This Form 8-K was furnished pursuant to Item 12 “Results of Operations and Financial Condition” of Form 8-K and was not filed.

	(iii)		Harris Corporation submitted to the Commission a Current Report on Form 8-K on March 10, 2004, relating to Harris Corporation’s announcement of fiscal year 2005 earnings per share guidance and its reiteration of earnings guidance for fiscal 2004. This Form 8-K was furnished pursuant to Item 9 “Regulation FD Disclosure” of Form 8-K and was not filed.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Exhibit No.
Under Reg.
S-K, Item 601		Description
(3)		(a) Restated Certificate of Incorporation of Harris Corporation (1995), incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1996.

		(b) By-Laws of Harris Corporation as in effect December 3, 1999, and as amended on June 23, 2000.

(4)		(a) Specimen stock certificate for the Company’s Common Stock, incorporated herein by reference to Exhibit 4(a) to the Company’s Annual Report on From 10-K for the fiscal year ended June 27, 1997.

		(b)Stockholder Protection Rights Agreement, between Harris Corporation and Mellon Investor Services, LLC (formerly ChaseMellon Shareholder Services, LLC) as Rights Agent, dated as of December 6, 1996, incorporated herein by reference to Exhibit 1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 6, 1996.

		(c) (i) Indenture, dated as of May 1, 1996, between Harris Corporation and The Bank of New York, as Trustee, relating to unlimited amounts of debt securities which may be issued from time to time by the Company when and as authorized by the Company’s Board of Directors or a Committee of the Board, incorporated herein by reference to Exhibit 4 to the Company’s Registration Statement on Form S-3, Registration Statement No. 333-03111, filed with the Securities and Exchange Commission on May 3, 1996.

		(c) (ii) Instrument of Resignation from Trustee and Appointment and Acceptance of Successor Trustee among Harris Corporation, JP Morgan Chase Bank, as Resigning Trustee and The Bank of New York, as Successor Trustee, dated as of November 1, 2002 (effective November 15, 2002), incorporated herein by reference to Exhibit 99.4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2002.

		(d) Indenture, dated as of October 1, 1990, between Harris Corporation and National City Bank, as Trustee, relating to unlimited amounts of debt securities which may be issued from time to time by the Company when and as authorized by the Company’s Board of Directors or a Committee of the Board, incorporated herein by reference to Exhibit 4 to the Company’s Registration Statement on Form S-3, Registration Statement No. 33-35315, filed with the Securities and Exchange Commission on June 8, 1990.

		(e) Indenture, dated as of August 26, 2002, between Harris Corporation and The Bank of New York, as Trustee, relating to $150,000,000 of 3.5% Convertible Debentures due 2022, incorporated herein by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 26, 2002.

		(f) Indenture, dated as of September 3, 2003, between Harris Corporation and The Bank of New York, as Trustee, relating to unlimited amounts of debt securities which may be issued from time to time by the Company when and as authorized by the Company’s Board of Directors or a committee of the Board, incorporated herein by reference to Exhibit 4(b) to the Company’s Registration Statement on Form S-3, Registration Statement No. 333-108486, filed with the Securities and Exchange Commission on September 3, 2003.

		(g) Subordinated Indenture, dated as of September 3, 2003, between Harris Corporation and The Bank of New York, as Trustee, relating to unlimited amounts of debt securities


		which may be issued from time to time by the Company when and as authorized by the Company’s Board of Directors or a committee of the Board, incorporated herein by reference to Exhibit 4(c) to the Company’s Registration Statement on Form S-3, Registration Statement No. 333-108486, filed with the Securities and Exchange Commission on September 3, 2003.

		(h) Pursuant to Regulation S-K Item 601 (b) (4) (iii), Registrant by this filing agrees, upon request, to furnish to the Securities and Exchange Commission a copy of other instruments defining the rights of holders of long-term debt of the Company.

(12)		Computation of Ratio of Earnings to Fixed Charges.

(31.1)		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

(31.2)		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

(32.1)		Section 1350 Certification of Chief Executive Officer.

(32.2)		Section 1350 Certification of Chief Financial Officer.

(99.1)		Forward-Looking Statements and Factors that May Affect Future Results.

33 EX-3.B 2 l07044aexv3wb.txt EX-3(B) BY-LAWS Exhibit 3(b) BY-LAWS OF HARRIS CORPORATION AS IN EFFECT DECEMBER 3, 1999 (ARTICLE II, SECTION 6 WAS AMENDED BY THE BOARD OF DIRECTORS ON JUNE 23, 2000.) BY-LAWS OF HARRIS CORPORATION ARTICLE I. OFFICES. The registered office of the Company shall be in the City of Wilmington, County of New Castle, State of Delaware. The Company may also have offices at such other places as the Board of Directors from time to time may determine or the business of the Company may require. ARTICLE II. MEETINGS OF SHAREHOLDERS. Section 1. Place of Meeting. All meetings of shareholders for the election of directors or for any other purposes whatsoever shall be held at the office of the Company in the City of Wilmington, Delaware, or elsewhere within or without the State of Delaware, as may be decided upon from time to time by the Board of Directors and indicated in the notice of the meeting. Section 2. Annual Meeting. The annual the shareholders shall be held on such date as the Board of Directors may determine and at the time as shall be decided by the Board of Directors and indicated in the notice of the meeting. Directors shall be elected thereat and such other business transacted as may be specified in the notice of the meeting, or as may be properly brought before the meeting. Section 3. Special Meetings. Special meetings of the shareholders may be held on any business day when called by the Chairman of the Board, Chief Executive Officer, the Board of Directors, or a majority of the full Board of Directors acting without a meeting. Section 4. Notice of Meetings. A written or printed notice of every annual or special meeting of the shareholders stating the time and place and the purposes thereof shall be given to each shareholder entitled to vote thereat and to each shareholder entitled to notice as provided by law, which notice shall be given not less than ten (10) nor more than sixty (60) days prior to the date of the meeting. If mailed, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to each shareholder at such shareholder's address as it appears on the records of the Company. It shall be the duty of the Secretary to give written notice of the annual meeting and of each special meeting, when requested so to do by the officer or directors calling such meeting. Any shareholder may waive in writing any notice required to be given by law or under these By-Laws and by attendance or voting at any meeting without protesting the lack of proper notice shall be deemed to have waived notice thereof. 1 Section 5. Shareholder List. A complete list of the shareholders entitled to vote at each meeting of shareholders, arranged in alphabetical order, with the address of each and the number of voting shares held by each, shall be prepared by or at the instance of the Secretary and made available at the location where the meeting is to be held, at least ten (10) days before every meeting, and shall at all times during the usual hours for business in said ten (10) day period and during the time of said meeting be open to examination by any shareholder. Section 6. Voting and Proxies. At all meetings of shareholders, only such shareholders shall be entitled to vote, in person or by proxy, who appear upon the records of the Company as the holders of shares at the time possessing voting power, or if a record date be fixed as hereinafter provided, those appearing as such on such record date. [Added June 23, 2000: "Each shareholder entitled to vote at a meeting of shareholders may authorize another person or persons to act for such shareholder by proxy, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A shareholder may authorize another person or persons to act for such shareholder as proxy by executing a writing authorizing such person or persons to act for such shareholder as proxy or by transmitting or authorizing the transmission of a telegram, cablegram, or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such telegram, cablegram, or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other means of electronic transmission was authorized by the shareholder."] Section 7. Quorum and Adjournments. Except as may otherwise be required by law or by the Certificate of Incorporation or by these By-Laws, the holders of a majority of the shares entitled to vote at a shareholders' meeting shall constitute a quorum to hold such meeting; provided, however, that any meeting, whether or not a quorum is present or otherwise, may, by vote of the holders of a majority of the voting shares represented thereat, adjourn from time to time and from place to place in the county wherein said meeting was originally called without notice other than by announcement at such meeting. Section 8. Advance Notice of Shareholder Nominees for Director and Other Shareholder Proposals. (a) The matters to be considered and brought before any annual or special meeting of shareholders of the Company shall be limited to only such matters, including the nomination and election of directors, as shall be brought properly before such meeting in compliance with the procedures set forth in this Section 8. (b) For any matter to be properly brought before any annual meeting of shareholders, the matter must be (i) specified in the notice of annual meeting given by or at the direction of the Board of Directors, (ii) otherwise brought before the annual meeting by or at the direction of the Board of Directors or (iii) brought before the annual meeting in the manner specified in this Section 8(b) by a shareholder of record entitled to vote at the annual meeting of 2 shareholders on such matter. In addition to any other requirements under applicable law and the Certificate of Incorporation and these By-Laws, persons nominated by shareholders for election as directors of the Company and any other proposals by shareholders shall be properly brought before the meeting only if notice of any such matter to be presented by a shareholder at such meeting of shareholders (the "Shareholder Notice") shall be delivered to the Secretary of the Company at the principal executive office of the Company not less than ninety (90) nor more than one hundred and twenty (120) days prior to the first anniversary date of the annual meeting for the preceding year; provided, however, if and only if the annual meeting is not scheduled to be held within a period that commences thirty (30) days before such anniversary date and ends thirty (30) days after such anniversary date (an annual meeting date outside such period being referred to herein as an "Other Meeting Date"), such Shareholder Notice shall be given in the manner provided herein by the later of the close of business on (i) the date ninety (90) days prior to such Other Meeting Date or (ii) the tenth day following the date such Other Annual Meeting Date is first publicly announced or disclosed. Any shareholder desiring to nominate any person or persons (as the case may be) for election as a director or directors of the Company shall deliver, as part of such Shareholder Notice, a statement in writing setting forth (i) the name of the person or persons to be nominated; (ii) the number and class of all shares of each class of stock of the Company owned of record and beneficially by each such person, as reported to such shareholder by such nominee(s); (iii) the information regarding each such person required by paragraphs (a), (e) and (f) of Item 401 of Regulation S-K adopted by the Securities and Exchange Commission (or the corresponding provisions of any regulation subsequently adopted by the Securities and Exchange Commission applicable to the Company); (iv) each such person's signed consent to serve as a director of the Company if elected; and (v) such shareholder's name and address and the number and class of all shares of each class of stock of the Company owned of record and beneficially by such shareholder. Any shareholder who gives a Shareholder Notice of any matter proposed to be brought before the meeting (other than a nomination of directors) shall deliver, as part of such Shareholder Notice, the text of the proposal to be presented and a brief written statement of the reasons why such shareholder favors the proposal and setting forth such shareholder's name and address, the number and class of all shares of each class of stock of the Company owned of record and beneficially by such shareholder and, if applicable, any material interest of such shareholder in the matter proposed (other than as a shareholder). As used herein, shares "beneficially owned" shall mean all shares which such person is deemed to beneficially own pursuant to Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934 (the "Exchange Act"). If a shareholder is entitled to vote only for a specific class or category of directors at a meeting (annual or special), such shareholders right to nominate one or more individuals for election as a director at the meeting shall be limited to such class or category of directors. Notwithstanding anything in this Section 8(b) to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Company at the next annual meeting is increased and either all of the nominees for director at the next annual meeting or the size of the increased Board of Directors is not publicly announced or disclosed by the Company at least one hundred (100) days prior to the first anniversary of the preceding year's annual meeting, a Shareholder Notice shall also be considered timely hereunder, but 3 only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Company at the principal executive office of the Company not later than the close of business on the tenth day following the first date all of such nominees or the size of the increased Board of Directors shall have been publicly announced or disclosed. (c) Except as provided in the immediately following sentence, only such matters shall be properly brought before a special meeting of shareholders as shall have been brought before the meeting pursuant to the Company's notice of such meeting. In the event the Company calls a special meeting of shareholders for the purpose of electing one or more directors to the Board of Directors, any shareholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Company's notice of meeting, if the Shareholder Notice required by Section 8(b) hereof shall be delivered to the Secretary of the Company at the principal executive office of the Company not later than the close of business on the tenth day following the day on which the date of the special meeting and either the names of the nominees proposed by the Board of Directors to be elected at such meeting or the number of directors to be elected is publicly announced or disclosed. (d) For purposes of this Section 8, a matter shall be deemed to have been "publicly announced or disclosed" if such matter is disclosed in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news or wire service or in a document publicly filed by the Company with the Securities and Exchange Commission. (e) In no event shall the adjournment of an annual meeting or special meeting or the postponement of any meeting that does not require a change in the record date for such meeting, or any announcement thereof, commence a new period for the giving of notice as provided in this Section 8. This Section 8 shall not (i) affect the rights of shareholders to request inclusion of proposals made pursuant to Rule 14a-8 under the Exchange Act or (ii) apply to the election of directors selected by or pursuant to the provisions of Article FOURTH, Section 3 of the Restated Certificate of Incorporation relating to the rights of the holders of any class or series of stock of the Company having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances. (f) The person presiding at any meeting of shareholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall have the power and duty to determine whether notice of nominees and other matters proposed to be brought before a meeting has been duly given in the manner provided in this Section 8 and, if not so given, shall direct and declare at the meeting that such nominees and other matters are out of order and shall not be considered. Section 9. Conduct of Meetings. The Board of Directors of the Company may adopt by resolution such rules, regulations and procedures for the conduct of meetings of shareholders as it shall deem appropriate. Except to the extent inconsistent with applicable law and such rules and regulations adopted by the Board of Directors, the Chairman of each meeting of shareholders shall have the right and authority to prescribe such rules, regulations 4 and procedures and to do all such acts, including causing an adjournment of such meeting, as, in the judgment of such Chairman, are appropriate. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the Chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting, including fixing the time for opening and closing the polls for voting on each matter; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to shareholders of record of the Company, their duly authorized and constituted proxies or such other persons as the Chairman shall permit; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless, and to the extent determined by the Board of Directors or the Chairman of the meeting, meetings of shareholders shall not be required to be held in accordance with rules of parliamentary procedure. Section 10. Organization of Meetings. Meetings of shareholders shall be presided over by the Chairman of the Board of Directors, or in his or her absence by the Chief Executive Officer, or in the absence of the foregoing persons by a Chairman designated by the Board of Directors, or, in the absence of any such designation, by a Chairman chosen at the meeting. The Secretary, or in the absence of the Secretary, an Assistant Secretary, shall act as the secretary of the meeting, but in the absence of the Secretary or Assistant Secretary, the Chairman of the meeting may appoint any person to act as secretary of the meeting. ARTICLE III. BOARD OF DIRECTORS. Section 1. Number. The Board of Directors shall consist of not less than eight nor more than thirteen members as may be determined by the Board of Directors. After any such determination, the number so determined shall continue as the authorized number of members of the Board until the same shall be changed as aforesaid. Directors need not be shareholders. Section 2. Manner of Election. Except as may otherwise be required by the Certificate of Incorporation, at each meeting of the shareholders called for the purpose of electing directors, the persons receiving the greatest number of votes shall be the directors. Such election shall be by ballot. Section 3. Tenure; Vacancies. Each director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected and qualified; subject, however, to prior resignation, death or removal as provided by law. Any director may resign at any time by oral statement to that effect made at a meeting of the Board of Directors, to be effective upon its acceptance by the Board, or in writing to that effect delivered to the Secretary, to be effective upon its acceptance or at the time specified in such writing. Any vacancy on the Board of Directors that results from an increase in the number of directors shall be filled by a 5 majority of the Board of Directors then in office, and any other vacancy occurring in the Board of Directors shall be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Section 4. Organization Meeting. Immediately after each annual meeting of the shareholders or special meeting held in lieu thereof, the newly elected Board of Directors, if a quorum is present, shall hold an organization meeting for the purpose of electing officers and transacting any other business. Notice of such meeting need not be given. If, for any reason, said organization meeting is not held at such time, a special meeting for such purpose shall be held as soon thereafter as practicable. Section 5. Regular Meetings. Regular meetings of the Board of Directors for the transaction of any business may be held at such times and places as may be determined by the Board of Directors. The Secretary shall give to each director at least five (5) days written notice of each such meeting. Section 6. Special Meetings. Special meetings of the Board of Directors may be held at any time and place upon call by the Chairman of the Board, the Chief Executive Officer, or a majority of the Directors. Notice of each such meeting shall be given to each director by letter, telegram or telephone or in person not less than two (2) days prior to such meeting; provided, however, that such notice shall be deemed to have been waived by the directors attending or voting at any such meeting, without protesting the lack of proper notice, and may be waived in writing or by telegram by any director either before or after such meeting. Unless otherwise indicated in the notice thereof, any business may be transacted at such meeting. Section 7. Quorum. At all meetings of the Board of Directors a majority of the directors in office at the time shall constitute a quorum for the transaction of business, but in no case shall such quorum be less than one-third of the total authorized number of directors. Section 8. Compensation. If so determined by the Board of Directors, all or any members of the Board of Directors or of any committee of the Board who are not Company employees shall be compensated for their services in such capacities either a fixed sum for attendance at each meeting of the Board or of such committee or such other amount as may be determined from time to time by the Board of Directors. Compensation may be paid in cash and in the Company's stock and stock equivalents. Directors may be reimbursed for expenses reasonably incurred by them in attending such meetings. ARTICLE IV. COMMITTEES. The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the directors of the Company, which to the extent provided in said resolution or resolutions shall have and may exercise the powers of the Board of Directors in the management of the 6 business and affairs of the Company and may have power to authorize the seal of the Company to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. ARTICLE V. OFFICERS. Section 1. Officers Designated. The officers of the Company shall be elected by the Board of Directors at their organization meeting or any other meeting. The Board of Directors shall elect the executive officers of the Company which may include a Chairman of the Board, President, and one or more Vice Presidents (any one or more of whom may be designated as Executive Vice Presidents, or as Senior Vice Presidents or by any other designations). In addition thereto, the officers shall include a Controller, a General Counsel, a Secretary and a Treasurer. In their discretion the Board of Directors may elect one or more Assistant Secretaries and Assistant Treasurers and any other additional officers. The Chairman of the Board shall be elected from among the directors. The other officers may but need not be elected from among the directors. Any two offices may be held by the same person, but in any case where the action of more than one officer is required no one person shall act in more than one capacity. Section 2. Tenure of Office. The officers of the Company shall hold office until the next organization meeting of the Board of Directors and until their respective successors are chosen and qualified, except in case of resignation, death or removal. The Board of Directors may remove any officer at any time with or without cause by the vote of the majority of the directors in office at the time. A vacancy in any office may be filled by election by the Board of Directors. Section 3. Powers and Duties of Officers in General. The powers and duties of the officers shall be exercised in all cases subject to such directions as the Board of Directors may see fit to give. The respective powers and duties hereinafter set forth are subject to alteration by the Board of Directors. The Board of Directors is also authorized to delegate the duties of any officer to any other officer, employee or committee and to require the performance of duties in addition to those provided for herein. Subject to such directions, if any, as the Board of Directors may give from time to time, the chief executive officers of the Company are authorized to establish and to modify from time to time an organization plan defining the respective duties and functions of the officers of the Company. Section 4. Chairman of the Board. The Chairman of the Board shall preside at meetings of the shareholders and of the Board of Directors. Section 5. Chief Executive Officer. The Chief Executive Officer shall be either the Chairman of the Board and/or the President, as the Board of Directors so designates, and he or she shall have general responsibility for the major functions of the business of the Company and shall initiate and develop broad Company policies. 7 Section 6. President; Vice Presidents. In the absence or disability of the Chief Executive Officer, the President shall perform the Chief Executive Officer's duties. In the absence or disability of the Chief Executive Officer and the President, the Vice Presidents, in the order designated by the Board of Directors, shall perform the Chief Executive Officer's duties. If so determined by the Board of Directors, one Vice President may be designated as manager of specific sectors, divisions, districts or such other unit or as being in charge of specific functions, another as Vice President in Charge of Sales, and other Vice Presidents as managers of specified divisions or sales districts of the Company or as being in charge of specified functions. Section 7. Controller, General Counsel, Secretary, and Treasurer. The Controller, General Counsel, the Secretary, and the Treasurer shall perform such duties as are indicated by their respective titles, subject to the provisions of Section 3 of this Article. The Secretary shall have the custody of the corporate seal. Section 8. Other Officers. All other officers shall have such powers and duties as may be prescribed by the Board of Directors, or, in the absence of their action, by the chief executive officers of the Company or by the respective officers having supervision over them. Section 9. Compensation. The Board of Directors is authorized to determine, or to provide the method of determining, or to empower a committee of its members to determine, the compensation of all officers. Section 10. Bond. If so requested and authorized by the Board of Directors, the Company shall furnish a fidelity bond in such sum and with such security as the Board of Directors may require. Section 11. Signing Checks and Other Instruments. The Board of Directors is authorized to determine or provide the method of determining the manner in which deeds, contracts and other obligations and instruments of the Company shall be signed. However, persons doing business with the Company shall be entitled to rely upon the action of the Chairman of the Board, the President, any Vice President, the Secretary, the Treasurer, the Controller or General Counsel in executing contracts and other obligations and instruments, of the Company as having been duly authorized. The Board of Directors of the Company is authorized to designate or provide the method of designating depositaries of the funds of the Company and to determine or provide the method of determining the manner in which checks, notes, bills of exchange and similar instruments shall be signed, countersigned or endorsed. ARTICLE VI. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company shall indemnify to the full extent permitted by law any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, 8 administrative or investigative, by reason of the fact that such person is or was a director or officer of the Company, is or was a director, officer, trustee, member, stockholder, partner, incorporator or liquidator of a Subsidiary of the Company, or serves or served at the request of the Company as a director, officer, trustee, member, stockholder, partner, incorporator or liquidator of or in any other capacity for any other enterprise. Expenses, including attorneys' fees, incurred by any such person in defending any such action, suit or proceeding shall be paid or reimbursed by the Company promptly upon demand by such person and, if any such demand is made in advance of the final disposition of any such action, suit or proceeding, promptly upon receipt by the Company of an undertaking of such person to repay such expenses if it shall ultimately be determined that such person is not entitled to be indemnified by the Company. The rights provided to any person by this by-law shall be enforceable against the Company by such person, who shall be presumed to have relied upon it in serving or continuing to serve as a director or officer or in such other capacity as provided above. In addition, the rights provided to any person by this by-law shall survive the termination of such person as any such director, officer, trustee, member, stockholder, partner, incorporator or liquidator and, insofar as such person served at the request of the Company as a director, officer, trustee, member, stockholder, partner, incorporator or liquidator of or in any other capacity for any other enterprise, shall survive the termination of such request as to service prior to termination of such request. No amendment of this by-law shall impair the rights of any person arising at any time with respect to events occurring prior to such amendment. Notwithstanding anything contained in this Article VI, except for proceedings to enforce rights provided in this Article VI, the Company shall not be obligated under this Article VI to provide any indemnification or any payment or reimbursement of expenses to any director, officer or other person in connection with a proceeding (or part thereof) initiated by such person (which shall not include counterclaims or crossclaims initiated by others) unless the Board of Directors has authorized or consented to such proceeding (or part thereof) in a resolution adopted by the Board. For purposes of this by-law, the term "Subsidiary" shall mean any corporation, partnership, limited liability company or other entity in which the Company owns, directly or indirectly, a majority of the economic or voting ownership interest; the term "other enterprise" shall include any corporation, partnership, limited liability company, joint venture, trust, association or other unincorporated organization or other entity and any employee benefit plan; the term "officer," when used with respect to the Company, shall refer to any officer elected by or appointed pursuant to authority granted by the Board of Directors of the Company pursuant to Article V of these By-Laws, when used with respect to a Subsidiary or other enterprise that is a corporation, shall refer to any person elected or appointed pursuant to the by-laws of such Subsidiary or other enterprise or chosen in such manner as is prescribed by the by-laws of such Subsidiary or other enterprise or determined by the Board of Directors of such Subsidiary or other enterprise, and when used with respect to a Subsidiary or other enterprise that is not a corporation or is organized in a foreign jurisdiction, the term "officer" shall include in addition to any officer of such entity, any person serving in a similar capacity or as the manager of such entity; service "at the request of the Company" shall include service as a director or officer of the Company which imposes 9 duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to an employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Company. To the extent authorized from time to time by the Board of Directors, the Company may provide to (i) any one or more employees and other agents of the Company, (ii) any one or more officers, employees and other agents of any Subsidiary and (iii) any one or more directors, officers, employees and other agents of any other enterprise, rights of indemnification and to receive payment or reimbursement of expenses, including attorneys' fees, that are similar to the rights conferred in this Article VI on directors and officers of the Company or any Subsidiary or other enterprise. Any such rights shall have the same force and effect as they would have if they were conferred in this Article VI. Nothing in this Article VI shall limit the power of the Company or the Board of Directors to provide rights of indemnification and to make payment and reimbursement of expenses, including attorneys' fees, to directors, officers, employees, agents and other persons otherwise than pursuant to this Article VI. ARTICLE VII. CORPORATE SEAL. The corporate seal, circular in form, shall have inscribed thereon the name of the Company and the words "Corporate Seal--Delaware." ARTICLE VIII. RECORD DATES. The Board of Directors may close the stock transfer books of the Company for a period not exceeding sixty (60) days preceding the date of any meeting of the shareholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares shall go into effect; provided, however, that in lieu of closing the stock transfer books as aforesaid, the Board of Directors may fix in advance a date, not exceeding sixty (60) days preceding the date of any meeting of shareholders, or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of shares shall go into effect, as a record date for the determination of the shareholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of shares, and in such case such shareholders, and only such shareholders as shall be shareholders of record on the date so fixed, shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of 10 such dividend or to receive such allotment of rights or to exercise such rights as the case may be, notwithstanding any transfer of any shares on the books of the Company after any such record date fixed as aforesaid. ARTICLE IX. FISCAL YEAR. The fiscal year of the Company shall end on the Friday nearest June 30 unless and until the Board of Directors shall otherwise determine. ARTICLE X. AMENDMENTS. These By-Laws may be made or altered in any respect in whole or in part by the affirmative vote of the holders of a majority of the shares entitled to vote thereon at any annual or special meeting of the shareholders, if notice of the proposed alteration or change to be made is properly brought before the meeting under these By-Laws. The By-Laws may also be made or altered in any respect in whole or in part, by the affirmative vote of the majority of the directors then comprising the Board of Directors. 11 CERTIFICATE I hereby certify that the foregoing is a true and correct copy of the By-Laws of Harris Corporation as in effect on the date hereof. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of Harris Corporation this day of _____________, 20_____. -------------------------------------------- (Assistant) Secretary of Harris Corporation EX-12 3 l07044aexv12.htm EX-12 COMPUTATION: RATIO OF EARNINGS:FIXED CHARGE EX-12 Computation: Ratio of Earnings:Fixed Charge

34 EX-31.1 4 l07044aexv31w1.htm EX-31.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER EX-31.1 Certification of Chief Executive Officer

I, Howard L. Lance, Chairman of the Board, President and Chief Executive Officer of Harris Corporation, certify that:

1.		I have reviewed this Quarterly Report on Form 10-Q of Harris Corporation;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based upon such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

EX-31.2 5 l07044aexv31w2.htm EX-31.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER EX-31.2 Certification of Chief Financial Officer

I, Bryan R. Roub, Senior Vice President and Chief Financial Officer of Harris Corporation, certify that:

1.		I have reviewed this Quarterly Report on Form 10-Q of Harris Corporation;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

EX-32.1 6 l07044aexv32w1.htm EX-32.1 SECT. 1350 CERT-CHIEF EXECUTIVE OFFICER EX-32.1 Sect. 1350 Cert-Chief Executive Officer

Certification
Pursuant to Section 1350 of Chapter 63 of Title 18 of the
United States Code as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

In connection with the filing of the Quarterly Report on Form 10-Q of Harris Corporation (“Harris”) for the fiscal quarter ended April 2, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Howard L. Lance, Chairman, President, and Chief Executive Officer of Harris, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. §1350, that:

(1)		The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Harris.

EX-32.2 7 l07044aexv32w2.htm EX-32.2 SECT. 1350 CERT-CHIEF FINANCIAL OFFICER EX-32.2 Sect. 1350 Cert-Chief Financial Officer

Certification
Pursuant to Section 1350 of Chapter 63 of Title 18 of the
United States Code as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002

In connection with the filing of the Quarterly Report on Form 10-Q of Harris Corporation (“Harris”) for the fiscal quarter ended April 2, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Bryan R. Roub, Senior Vice President and Chief Financial Officer of Harris, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. §1350, that:

(1)		The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2)		The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Harris.

EX-99.1 8 l07044aexv99w1.htm EX-99.1 FORWARD-LOOKING STATEMENTS EX-99.1 Forward-Looking Statements

The following are some of the factors we believe could cause our actual results to differ materially from expected and historical results. Other factors besides those listed here also could adversely affect us.

We currently are experiencing uncertain economic conditions, which makes it difficult to estimate growth in our markets and, as a result, future income and expenditures.

Current conditions in the domestic and global economies are extremely uncertain. As a result, it is difficult to estimate the level of growth for the economy as a whole. It is even more difficult to estimate growth in various parts of the economy, including some of the markets in which we participate. Because all components of our budgeting and forecasting are dependent upon estimates of growth in the markets we serve, the prevailing economic uncertainty renders estimates of future income and expenditures even more difficult than usual. As a result, we may make significant investments and expenditures but never realize the anticipated benefits, which could adversely affect our results of operations. The future direction of the overall domestic and global economies will have a significant impact on our overall performance.

The telecommunications down-turn has had a negative impact on our telecom businesses and continued weakness could further hurt our operations.

During the past several years there has been a down-turn and tightening of international capital markets for the telecommunication, cellular and wireless telephone industry in general. Additionally, the competitive local exchange carrier business has experienced a down-turn and many competitive local exchange carriers have ceased operations or have scaled back operations significantly. This down-turn has had an adverse impact upon our network support and microwave communications businesses.

We depend on the U.S. Government for a significant portion of our revenues, and the loss of this relationship or a shift in U.S. Government funding could have adverse consequences on our future business.

We are highly dependent on sales to the U.S. Government. Approximately 62 percent, 54 percent and 42 percent of our net revenues in fiscal 2003, 2002 and 2001, respectively, were derived from sales to the U.S. Government. Therefore, any significant disruption or deterioration of our relationship with the U.S. Government could significantly reduce our revenues. Our U.S. Government programs must compete with programs managed by other defense contractors for a limited number of programs and for uncertain levels of funding. Our competitors continuously engage in efforts to expand their business relationships with the U.S. Government and will continue these efforts in the future. The U.S. Government may choose to use other defense contractors for its limited number of defense programs. In addition, the funding of defense programs also competes with non-defense spending of the U.S. Government. Budget decisions made by the U.S. Government are outside of our control and have long-term consequences for our business. A shift in U.S. Government defense spending to other programs in which we are not involved, or a reduction in U.S. Government defense spending generally, could have adverse consequences on our business.

We derive a significant portion of our revenues from international operations and are subject to the risks of doing business in foreign countries including fluctuations in foreign currency exchange rates.

We are highly dependent on sales to customers outside the United States. In fiscal 2003, 2002 and 2001, revenues from products exported from the U.S. or manufactured abroad were 20 percent, 22 percent and 29 percent, respectively, of our total revenues. Approximately 47 percent of our international business in fiscal 2003 was transacted in local currency environments. Losses resulting from currency rate fluctuations can adversely affect our results. We expect that international revenues will continue to account for a significant portion of our total revenues. Also, a significant portion of our international revenues are in less developed countries. As a result, we are subject to risks of doing business internationally, including:

	•		currency exchange controls, fluctuations of currency and currency revaluations,

	•		the laws, regulations and policies of foreign governments relating to investments and operations, as well as U.S. laws affecting the activities of U.S. companies abroad,

	•		changes in regulatory requirements, including imposition of tariffs or embargoes, export controls and other trade restrictions,

	•		uncertainties and restrictions concerning the availability of funding, credit or guarantees,

	•		the difficulty of managing an organization doing business in many countries,

	•		import and export licensing requirements and regulations, as well as unforeseen changes in export regulations,

	•		taxes,

	•		uncertainties as to local laws and enforcement of contract and intellectual property rights and occasional requirements for onerous contract clauses, and

	•		rapid changes in government, economic and political policies, political or civil unrest or the threat of international boycotts or U.S. anti-boycott legislation.

While these factors or the impact of these factors are difficult to predict, any one or more of them could adversely affect our operations in the future.

The fair values of our portfolio of passive investments are subject to significant price volatility or erosion.

We maintain portfolio holdings of various issuers and types of securities. These securities generally are classified as available-for-sale and, consequently, are recorded on our Consolidated Balance Sheet at fair value. Part of our portfolio includes minority equity investments in several publicly-traded companies. Because the majority of these securities represent investments in technology companies, the fair market values of these securities are subject to significant price volatility and, in general, suffered a significant decline during fiscal 2002 and 2003. In addition, the realizable value of these securities is subject to market and other conditions. We also have invested in numerous privately held companies, many of which still can be considered in the start-up or developmental stages. These investments are illiquid and are inherently risky as the markets for the technologies or products they have under development are typically in the early stages and may never materialize. We could lose our entire investment in these companies.

Our future success will depend on our ability to develop new products that achieve market acceptance.

Both our commercial and defense businesses are characterized by rapidly changing technologies and evolving industry standards. Accordingly, our future performance depends on a number of factors, including our ability to:

	•		identify emerging technological trends in our target markets,

	•		develop and maintain competitive products,

	•		enhance our products by adding innovative features that differentiate our products from those of our competitors, and

	•		manufacture and bring cost-effective products to market quickly.

We believe that, in order to remain competitive in the future, we will need to continue to develop new products, which will require the investment of significant financial resources in new product development. The need to make these expenditures could divert our attention and resources from other projects, and we cannot be sure that these expenditures ultimately will lead to the timely development of new products. Due to the design complexity of some of our products, we may experience delays in completing development and introducing new products in the future. Any delays could result in increased costs of development or redirect resources from other projects. In addition, we cannot provide assurances that the markets for our products will develop as we currently anticipate. The failure of our products to gain market acceptance could reduce significantly our revenues and harm our business. Furthermore, we cannot be sure that our competitors will not develop competing products that gain market acceptance in advance of our products or that our competitors will not develop new products that cause our existing products to become obsolete. If we fail in our new product development efforts or our products fail to achieve market acceptance more rapidly than those of our competitors, our revenues will decline and our business, financial condition and results of operations will be adversely affected.

We cannot predict the consequences of future geo-political events, but they may affect adversely the markets in which we operate, our ability to insure against risks, our operations or our profitability.

The terrorist attacks in the United States on September 11, 2001, the subsequent U.S.-led military response and the potential for future terrorist activities and other recent geo-political events, have created economic and political uncertainties that could have a material adverse effect on our business and the prices of our securities. These matters have caused uncertainty in the world’s financial and insurance markets and may increase significantly the political, economic and social instability in the geographic areas in which we operate. These matters also have caused the premiums charged for our insurance coverages to increase and may cause some coverages to be unavailable altogether. While our government businesses have benefited from the War on Terrorism, military operations in the Middle East and homeland defense initiatives, these developments may affect adversely our business and profitability and the prices of our securities in ways that we cannot predict at this time.

We have made, and may continue to make, strategic acquisitions that involve significant risks and uncertainties.

We have made, and we may continue to make, strategic acquisitions that involve significant risks and uncertainties. These risks and uncertainties include:

	•		the difficulty in integrating newly-acquired businesses and operations in an efficient and cost-effective manner and the risk that we encounter significant unanticipated costs or other problems associated with integration,

	•		the challenges in achieving strategic objectives, cost savings and other benefits expected from acquisitions,

	•		the risk that our markets do not evolve as anticipated and that the technologies acquired do not prove to be those needed to be successful in those markets,

	•		the risk that we assume significant liabilities that exceed the limitations of any applicable indemnification provisions or the financial resources of any indemnifying parties,

	•		the potential loss of key employees of the acquired businesses, and

	•		the risk of diverting the attention of senior management from our existing operations.

We depend significantly on our U.S. Government contracts, which are only partially funded, subject to immediate termination, and heavily regulated and audited. The termination or failure to fund one or more of these contracts could have an adverse impact on our business.

Over its lifetime, a U.S. Government program may be implemented by the award of many different individual contracts and subcontracts. The funding of U.S. Government programs is subject to Congressional appropriations. Although multi-year contracts may be planned or authorized in connection with major procurements, Congress generally appropriates funds on a fiscal year basis even though a program may continue for several years. Consequently, programs often receive only partial funding initially, and additional funds are committed only as Congress makes further appropriations. The termination of funding for a U.S. Government program would result in a loss of anticipated future revenues attributable to that program. That could have an adverse impact on our operations. In addition, the termination of a program or the failure to commit additional funds to a program that already has been started could result in lost revenue and increase our overall costs of doing business.

Generally, U.S. Government contracts are subject to oversight audits by U.S. Government representatives. In addition, the contracts generally contain provisions permitting termination, in whole or in part, without prior notice at the U.S. Government’s convenience upon the payment of compensation only for work done and commitments made at the time of termination. We can give no assurance that one or more of our U.S. Government contracts will not be terminated under these circumstances. Also, we can give no assurance that we would be able to procure new contracts to offset the revenues lost as a result of any termination of our U.S. Government contracts. Because a significant portion of our revenues are dependent on our procurement, performance and payment under our U.S. Government contracts, the loss of one or more large contracts could have an adverse impact on our financial condition.

Our government business also is subject to specific procurement regulations and a variety of socioeconomic and other requirements. These requirements, although customary in U.S. Government contracts, increase our performance and compliance costs. These costs might increase in the future, thereby reducing our margins, which could have an adverse effect on our financial condition. Failure to

comply with these regulations and requirements could lead to suspension or debarment from U.S. Government contracting or subcontracting for a period of time. Among the causes for debarment are violations of various statutes, including those related to procurement integrity, export control, U.S. Government security regulations, employment practices, protection of the environment, accuracy of records and the recording of costs and foreign corruption. The termination of a U.S. Government contract or relationship as a result of any of these acts would have an adverse impact on our operations and could have an adverse effect on our reputation and ability to procure other U.S. Government contracts in the future. We currently are cooperating with certain U.S. Government representatives in investigations relating to potential violations of foreign corrupt practices, export controls and other laws. No assurance can be given that the outcome of these investigations will not have a material adverse effect on our financial condition or our business as a whole.

We enter into fixed-price contracts that could subject us to losses in the event that we have cost overruns.

Sometimes, we enter into contracts on a firm, fixed-price basis. During fiscal 2003 approximately 51 percent of our total Government Communications Systems and RF Communications segments’ sales were from fixed-price contracts. This allows us to benefit from cost savings, but it carries the burden of potential cost overruns since we assume all of the cost risk. If our initial estimates are incorrect, we can lose money on these contracts. U.S. Government contracts can expose us to potentially large losses because the U.S. Government can compel us to complete a project or, in certain circumstances, pay the entire cost of its replacement by another provider regardless of the size or foreseeability of any cost overruns that occur over the life of the contract. Because many of these projects involve new technologies and applications and can last for years, unforeseen events, such as technological difficulties, fluctuations in the price of raw materials, problems with other contractors and cost overruns, can result in the contractual price becoming less favorable or even unprofitable to us over time. Furthermore, if we do not meet project deadlines or specifications, we may need to renegotiate contracts on less favorable terms, be forced to pay penalties or liquidated damages or suffer major losses if the customer exercises its right to terminate. In addition, some of our contracts have provisions relating to cost controls and audit rights, and if we fail to meet the terms specified in those contracts we may not realize their full benefits. Our results of operations are dependent on our ability to maximize our earnings from our contracts. Lower earnings caused by cost overruns and cost controls would have an adverse impact on our financial results.

The inability of our subcontractors to perform, or our key suppliers to manufacture and deliver our components or products, could cause our products to be produced in an untimely or unsatisfactory manner.

On several of our U.S. Government contracts, we engage subcontractors. In addition, for all business segments, there are certain parts or components, which we source from other manufacturers. Some of our suppliers from time to time experience financial and operational difficulties, which may impact their ability to supply the materials, components and subsystems that we require. Any inability to develop alternative sources of supply on a cost-effective basis could materially impair our ability to manufacture and deliver our products to customers in a timely manner. We cannot give assurances that we will not experience material supply problems or component or subsystems problems in the future. Also, our subcontractors may not be able to maintain the quality of our products, which might result in greater product returns and could harm our business, financial condition and results of operations.

Third parties have claimed in the past and may claim in the future that we are infringing upon their intellectual property rights, and third parties may infringe upon our intellectual property rights.

Many of the markets we serve are characterized by vigorous protection and pursuit of intellectual property, which has resulted in often protracted and expensive litigation. Third parties have claimed in the past and may claim in the future that we are infringing their intellectual property rights, and we may be found to infringe those intellectual property rights. We do not believe that existing claims of infringement will have a material impact on us; however, we may be unaware of intellectual property rights of others that may cover some of our technology, products and services.

Claims of intellectual property infringement might also require us to enter into costly royalty or license agreements. Moreover, we may not be able to obtain royalty or license agreements on terms acceptable to us, or at all. We also may be subject to significant damages or injunctions against development and sale of certain of our products.

Our success depends in large part on our proprietary technology. We rely on a combination of patents, copyrights, trademarks, trade secrets, confidentiality provisions and licensing arrangements to establish and protect our proprietary rights. If we fail to successfully enforce our intellectual property rights, our competitive position could suffer. Our pending patent and trademark registration applications may not be allowed, or competitors may challenge the validity or scope of these patents or trademark registrations. In addition, our patents may not provide us a significant competitive advantage.

We may be required to spend significant resources to monitor and police our intellectual property rights. We may not be able to detect infringement and our competitive position may be harmed before we do so. In addition, competitors may design around our technology or develop competing technologies.

The competitive environment in which we operate historically has required us, and many of our principal competitors, to provide medium-term and long-term customer financing. Customer financing arrangements may include all or a portion of the purchase price for our products and services, as well as working capital. We also may assist customers in obtaining financing from banks and other sources on a recourse or non-recourse basis. Our success for some of our businesses may be dependent, in part, upon our ability to provide customer financing on competitive terms. While we generally have been able to place a portion of our customer financings with third-party lenders, or to otherwise insure a portion of this risk, a portion of these financings is provided directly by us. There can be higher risks associated with some of these financings, particularly when provided to start-up operations such as local network providers, to customers in developing countries or to customers in specific financing-intensive areas of the telecommunications industry. If customers fail to meet their obligations, losses could be incurred and such losses could have an adverse effect on us. Our losses could be much greater if it becomes more difficult to place or insure against these risks with third parties. This also may put us at a competitive disadvantage to competitors with greater financial resources. We have various programs in place to monitor and mitigate customer credit risk; however, we cannot provide assurances that such measures will be effective in reducing our exposure to our customers’ credit risk. Continued weakness in the general economy, and the telecommunications industry in particular, may result in increased defaults by customers and increased losses.

We have undertaken cost reductions, which may not yield the benefits we expect and could have adverse effects on our future business.

We are implementing cost-cutting measures throughout our Company. There are risks inherent in our efforts to reduce costs. These include the risk that we will not be able to reduce expenditures quickly enough or to sustain the reductions at a level necessary to improve profitability and that we may have to undertake additional cost-cutting measures. In addition, there is the risk that cost-cutting initiatives will impair our ability to effectively develop and market products and remain competitive. Any of these measures could have a long- term effect on our businesses by reducing our pool of technical talent, decreasing or slowing improvements in our products, making it more difficult for us to respond to customers, and limiting our ability to hire and retain key personnel.

We are exposed to liabilities that are unique to the products and services we provide. A significant portion of our business relates to designing, developing and manufacturing advanced defense and technology systems and products. New technologies associated with these systems and products may be untested or unproven. Components of certain of the defense systems and products we develop are inherently dangerous. Failures of satellites, missile systems, air-traffic control systems, homeland security applications and aircraft have the potential to cause loss of life and extensive property damage. In most circumstances we may receive indemnification from the U.S. Government. While we maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs from an accident. It also is not possible to obtain insurance to protect against all operational risks and liabilities. Substantial claims resulting from an accident in excess of U.S. Government indemnity and our insurance coverage could harm our financial condition and operating results. Moreover, any accident or incident for which we are liable, even if fully insured, could negatively affect our reputation among our customers and the public, thereby making it more difficult for us to compete effectively, and could significantly impact the cost and availability of adequate insurance in the future.

5 GRAPHIC 9 l07044al0704400.gif GRAPHIC begin 644 l07044al0704400.gif M1TE&.#EAKP`Q`/<``*:FIG1T='Q\?*2DI/6&BF=G9[6UM2@H*+&QL?`_1=75 MU:RLK-'1T?[\_/6)C7=W=^\W/CT]/1D9&6QL;/O1T_BJK/1T>8^/CWIZ>DQ, M3.T<)/SDY5)24J"@H./CXPT-#924E/."AU555>XL-)*2DO[Y^3(R,C$$!O:2 MEA45%3BIO1Q M=O>'A_W]_?K%Q^7EY=S7E\+"PNWM[?#P\/[^_M?7U^\Z0;V]OWNGIZ:.CH^'AX?[[^_WEYO[S\[*RLFAH:**BHNT8(("`@/CX^/FS MM?/S\^T@)^KJZLG)R:JJJMO;V[Z^ONXD+/7U]5=75_1X?-C8V(R,C)V=G;.S MLVEI:?[U]O+R\C4U-8B(B+JZNHN+B\O+R^\P-_WL['-S7F_[Z^OFVN;N[N_-L M<>\S.OGY^=G9V>?GY_%56_WIZH&!@?WN[_O+S=W=W8.#@_>@HV1D9%A86/WP M\:BHJ,'!P7Y^?L;&QI:6EF!@8+(1%_WFYX6%A?[T]/WQ\O)77?:5F/:6F>TB M*AX"`WEY>?WM[IH0%?-O=)9C9?BML/>?HOWHZ?WJZ_[W^._O[YB8F/J^P>\U M/.XG+M04&]\5'=;6UOSCY/FUN/S@X?FWNLW-S=_?W[>WM_)<8?S8V=O"P\/# MPVYN;OO5U_3T]/O7V/K&R.XF+?[R\OWGZ`T!`?5^@OO.S_:.DMK:VOS>W_%* M4/)A9NT7'P```/_______R'Y!`$``/\`+`````"O`#$```C^`/\)'$BPH,&# M"!,J7,BPH<.'$"-*).BOHL6+&#-JW,AQHR]:OCJ*'$FRI,F3*%.J7)E13P)^ MC5C*G$FSID@Q67+JW"D2`)>?0'\.&-D#%C]^&JR9'`/HBE.G0K1(G4I5JA!= M7."(V2A@B]>O8,'JD/K@2JSCB(;/&SQLB!@-'FA$!VD=[$;:?1J%\J!PS>PQ$FZ<27*(6P!T(HD$ M\'GG!VF61)*&3E9T0!]I=U3DWF:/^%..$O"Y,,%3$[P0`9"(1:G1$)Q]H!9' M$9`F3$8--#*C>KN,!.9F2@RBD3LE!KI46B3^RK(:'%U&0I@(< M':GQ!B9R:!0&:8QT5$B"FZ7`IT6>K*D><1T]RED&''U`6A_^4**A9@%J!`9I M/!1&@J'^_G3@ITR\<19'1P"0)D)&#FBJWA_AN,@9"1LA0%H*YOC#!VD+;/0J M9Q=4Y!]G`OA#1&D,T5$<%7-FB47II#=C`N]8L*8@&S'-&1K^G*%= MT+J4,!*F6EX0PQD1`HB24:"D/5X1.$132(,J&LG! MECNVJ4QLZ*U5Q1)ISUGA$FL%[D MQ2DNG#Z;B!@UQ]D#D#QEO5,$ MXV;E6N3#9C1$C-&2FPV<$1B1!N,6:0+G$G510I&&@:(9`R&N$`&@+>9FPQD>A&!&W(#!1?:PC55(@S+^:PK%1;(0(HR<06&*28&<+C*A3V&D$*>C MP2-C_)"1?&WF!Q@I(&=LD1(0D.8#^[H(%#@3IXY,8#-5**-Z M-`$/CMRCC:VPR),T8\'<[:YE*=(D9VC@P8N0@C18L`@;N+09A(TA`UU(A!I$ M$H9%$2P]C!)Q]S!%-@9$6VZ@@('U.% M*3QH%23^80,0?/4'8_ACGN@K%FE`4)%@D(:/&JG59EQ0$7AN!I?^X*")5@`S MC)1I,U3`PW@>XPQ["@<"%3`)*EZB*1SX@SR<091&CJB@PJP/HP&\B!V<1X5, MG+2&AO#'-YLF@D9A!`SK3(P*$@6P$WA#/:^PT4FN`0%-)0!!"NJ('3<#"#P$ M%3&`Y(AJ&&$H@AHKV0`W-#4-TCR@ M([IC9!]*V!%5E*9=G+F$/ZP@A:O.1@83,`]''&&%QCK6L3X=22N\=Q1]C$,F MD_B"9C>[674\]K-BZP@I/DO:THI'),`HK6H?&QU_C"$7B0#NP`7RPH$5M,`$ M?ED!!R1QC$/PS28,K7#;<0#BT M*`%UM\O=[IXD#YDZB@90<"GOFO>\W9T$.BH#`7N@][WPG2XJC"#>I,;WOOBU MB4N.X@8*Y/>_`$X)!8S"#VD@(\`(3O!Y'/2'D"KXP1"&00)K0`X(6SC!@M`` M/X`PCPM[^+^[*$,-8O#A$M]71LJHA8E7?-Y;-$(#S+@0BV>\79?TE\8XGNXD MG!`$%>?XQ\C=1!%L`.0B&W<#0'B=D9<\$Q8L0W!,CK)*4H$+*5L9):``Q96W &/)*````[ ` end -----END PRIVACY-ENHANCED MESSAGE-----


x		QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended April 2, 2004
		or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to


Delaware		34-0276860

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1025 West NASA Boulevard Melbourne, Florida		32919

(Address of principal executive offices)		(Zip Code)


	April 2,			June 27,
	2004			2003
	(In millions)
Accounts receivable	$	440.2		$	422.9
Notes receivable due within one year-net		15.5			10.3

		455.7			433.2
Less allowances for collection losses		(12.5	)		(13.2	)

	$	443.2		$	420.0


Segment		Warranty Periods
RF Communications		One to five years
Microwave Communications		Two to three years
Network Support		18 months to three years
Broadcast Communications		One to five years


(In millions)
Balance as of June 27, 2003	$	18.6
Warranty provision for sales made during the three quarters ended April 2, 2004		13.0
Settlements made during the three quarters ended April 2, 2004		(10.9	)
Other adjustments to the warranty liability, including those for foreign currency translation, during the three quarters ended April 2, 2004		0.4

Balance as of April 2, 2004	$	21.1

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RF Communications Segment
	Quarter Ended									Three Quarters Ended
							%									%
	April 2,			March 28,			Inc./			April 2,			March 28,			Inc./
	2004			2003			(Dec.)			2004			2003			(Dec.)
	(In millions)
Revenue from product sales and services	$	116.1		$	87.6			32.5	%	$	310.9		$	226.7			37.1	%
Segment operating income		33.0			23.8			38.7	%		87.5			57.7			51.6	%
% of revenue		28.4	%		27.2	%					28.1	%		25.5	%


Microwave Communications Segment
	Quarter Ended									Three Quarters Ended
							%									%
	April 2,			March 28,			Inc./			April 2,			March 28,			Inc./
	2004			2003			(Dec.)			2004			2003			(Dec.)
	(In millions)
Revenue from product sales and services	$	77.3		$	72.2			7.1	%	$	222.5		$	203.8			9.2	%
Segment operating income (loss)		(2.5	)		(0.8	)		—			(6.3	)		(16.3	)		—
% of revenue		(3.2	)%		(1.1	)%					(2.8	)%		(8.0	)%


Network Support Segment
	Quarter Ended									Three Quarters Ended
							%									%
	April 2,			March 28,			Inc./			April 2,			March 28,			Inc./
	2004			2003			(Dec.)			2004			2003			(Dec.)
	(In millions)
Revenue from product sales and services	$	14.9		$	11.9			25.2	%	$	48.7		$	37.2			30.9	%
Segment operating income (loss)		0.7			(1.4	)		—			4.1			(6.6	)		—
% of revenue		4.7	%		(11.8	)%					8.4	%		(17.7	)%


Broadcast Communications Segment
	Quarter Ended									Three Quarters Ended
							%									%
	April 2,			March 28,			Inc./			April 2,			March 28,			Inc./
	2004			2003			(Dec.)			2004			2003			(Dec.)
	(In millions)
Revenue from product sales and services	$	73.3		$	75.9			(3.4	)%	$	198.1		$	238.0			(16.8	)%
Segment operating income		0.5			2.5			(80.0	)%		4.2			10.4			(59.6	)%
% of revenue		0.7	%		3.3	%					2.1	%		4.4	%


							Percent
	April 2,			June 27,			Increase/
	2004			2003			(Decrease)
	(In millions, except per
	share amounts)
Cash and cash equivalents	$	534.9		$	442.6			20.9	%
Other current assets		935.4			915.1			2.2	%
Current liabilities		(540.2	)		(495.5	)		9.0	%

Working capital	$	930.1		$	862.2			7.9	%

Goodwill	$	238.2		$	228.1			4.4	%
Non-current deferred income tax asset	$	26.1		$	20.4			27.9	%

Long-term debt	$	401.4		$	401.6			—

Total shareholders’ equity	$	1,254.0		$	1,183.2			6.0	%

Book value per share	$	18.88		$	17.82			5.9	%



					Total number of		Maximum number of
					shares purchased as		shares that may yet
					part of publicly		be purchased under
	Total number of		Average price paid		announced plans or		the plans or
Period*	shares purchased		per share		programs (2)		programs (2) (3)
Month #1
(January 3, 2004 - January 30, 2004)		250,000	$	48.20		250,000		774,400
Month #2
(January 31, 2004 - February 27, 2004)		254,400	$	47.15		254,400		520,000
Month #3
(February 28, 2004 - April 2, 2004) (1)		—		—		—		520,000
Total		504,400	$	47.67		504,400		520,000	(3)


		HARRIS CORPORATION (Registrant)

Date: April 28, 2004		By: /s/ Bryan R. Roub

		Bryan R. Roub Senior Vice President and Chief Financial Officer (principal financial officer and duly authorized officer)


April 28, 2004		/s/ Howard L. Lance

		Name: Howard L. Lance
		Title: Chairman of the Board,
		President and Chief Executive Officer


April 28, 2004		/s/ Bryan R. Roub

		Name: Bryan R. Roub
		Title: Senior Vice President and
		Chief Financial Officer


Dated:
April 28, 2004		/s/ Howard L. Lance

		Name: Howard L. Lance
		Title: Chairman, President and
		Chief Executive Officer