SEC Comment Letter for L3HARRIS TECHNOLOGIES, (LHX) — Jan 17, 2008
L3HARRIS TECHNOLOGIES, INC. /DE/
Date: Jan. 17, 2008 · CIK: 0000202058 · Accession: 0000000000-08-003076
AI Filing Summary & Sentiment
File numbers found in text: 001-03863
Letter
Mail Stop 3561 January 17, 2008 Via Fax & U.S. Mail Mr. Gary L. McArthur Vice President and Chief Financial Officer 1025 West NASA Boulevard Melbourne, Florida 32919
Re: Harris Corporation Form 10-K for the year ended June 29, 2007 Filed August 27, 2007 File No. 001-03863
Dear Mr. McArthur:
We have reviewed your filing solely for th e issues identified below and have the following comments. Unless otherwise indi cated, we think you should revise your document in future filings in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as deta iled as necessary in your expl anation. In some of our comments, we may ask you to provide us w ith information so we may better understand your disclosure. After reviewing this info rmation, we may raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Please respond to confirm that such comments will be complied with, or, if certain of the comments are deemed inappropr iate, advise the staff of your reason. Your response should be submitted in electronic form, under the label “corresp” with a copy to the staff. Please respond w ithin ten (10) business days. Form 10-K for the year ended June 29, 2007
Consolidated Financial Statements
Mr. Gary L. McArthur Harris Corporation January 17, 2008 Page 2
Statements of Cash Flows, page 62
1. We note your presentation of “Other” as a component of the net cash provided by operating activities. In light of the signi ficance of this amo unt to cash provided by operating activities in fiscal 2007 a nd the first quarter of fiscal 2008, please revise future filings to separately identif y the nature and amount of the significant components included in the “other” amount. Also, to the extent the amount is material, please separately present stoc k compensation expense as an adjustment to reconcile net income to net cash provi ded by (used in) operating activities.
Note 3. Business Combinations, page 72
2. We note from your disclosure that in the Multimax acquisition you allocated $255.7 million of the purchase price to goodwill and $115 million to customer related intangible assets. Please explain how you have considered the guidance contained in paragraph A14 of SFAS No. 141 and EITF 02-17 in connection with your purchase price allocation of Multima x. For instance, explain how you have considered the need to allo cate fair value to order or production backlog, contract- based intangibles, and technology-based in tangibles. If you ha ve ascribed fair value to these contracts, describe the significant assumptions that were used in your valuation and provide the related valuation.
3. We note from your disclosure that the Stratex combination was accounted for as a purchase business combination and resulted in a gain of approximately $163.4 million which relates to the deemed sale of 43% of the assets and liabilities of your Microwave Communications Division to the minority shareholders of Harris Stratex Networks. In future filings, pleas e include disclosure of how this gain was calculated or determined. As part of your revised disclosure, please include how the value of the Micr owave Communications Divi sion assets that were contributed to Strate x was calculated.
4. With respect to your acquisition of ma jority ownership of Harris Stratex Networks, please confirm to us that the va lue of the assets acquired and liabilities assumed are based on fair value to the ex tent of your ownership acquired. Also, tell us whether the remaining portion of the values assigned to the asset and liabilities of the acquired enterprise repres ents the minority inte rests’ ownership in the acquired enterprise and therefore, is based the historical financial statement carrying amounts of the acqui red enterprise. We may have further comment upon receipt of your response.
Mr. Gary L. McArthur Harris Corporation January 17, 2008 Page 3
Furthermore, please explain to us and revise your disclosures in future filings to clarify how you determined or calculated the value assigned to the Harris Stratex shares issued to Stratex shareholders of $464.9 million included as part of your purchase price consideration of Harris Stra tex. As part of your response to us, please provide the guidance you relied upon in determining your accounting treatment and why you believe it was appropriate.
******** We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing. You may contact Claire Er langer at (202) 551-3301 or Jean Yu at (202) 551-3305 if you have questions regarding comments on the financial statements and related matters. Please contact me at ( 202) 551-3813 with any other questions.
Sincerely,
Linda Cvrkel Branch Chief
Show Raw Text
Mail Stop 3561 January 17, 2008 Via Fax & U.S. Mail Mr. Gary L. McArthur Vice President and Chief Financial Officer 1025 West NASA Boulevard Melbourne, Florida 32919 Re: Harris Corporation Form 10-K for the year ended June 29, 2007 Filed August 27, 2007 File No. 001-03863 Dear Mr. McArthur: We have reviewed your filing solely for th e issues identified below and have the following comments. Unless otherwise indi cated, we think you should revise your document in future filings in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as deta iled as necessary in your expl anation. In some of our comments, we may ask you to provide us w ith information so we may better understand your disclosure. After reviewing this info rmation, we may raise additional comments. Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter. Please respond to confirm that such comments will be complied with, or, if certain of the comments are deemed inappropr iate, advise the staff of your reason. Your response should be submitted in electronic form, under the label “corresp” with a copy to the staff. Please respond w ithin ten (10) business days. Form 10-K for the year ended June 29, 2007 Consolidated Financial Statements Mr. Gary L. McArthur Harris Corporation January 17, 2008 Page 2 Statements of Cash Flows, page 62 1. We note your presentation of “Other” as a component of the net cash provided by operating activities. In light of the signi ficance of this amo unt to cash provided by operating activities in fiscal 2007 a nd the first quarter of fiscal 2008, please revise future filings to separately identif y the nature and amount of the significant components included in the “other” amount. Also, to the extent the amount is material, please separately present stoc k compensation expense as an adjustment to reconcile net income to net cash provi ded by (used in) operating activities. Note 3. Business Combinations, page 72 2. We note from your disclosure that in the Multimax acquisition you allocated $255.7 million of the purchase price to goodwill and $115 million to customer related intangible assets. Please explain how you have considered the guidance contained in paragraph A14 of SFAS No. 141 and EITF 02-17 in connection with your purchase price allocation of Multima x. For instance, explain how you have considered the need to allo cate fair value to order or production backlog, contract- based intangibles, and technology-based in tangibles. If you ha ve ascribed fair value to these contracts, describe the significant assumptions that were used in your valuation and provide the related valuation. 3. We note from your disclosure that the Stratex combination was accounted for as a purchase business combination and resulted in a gain of approximately $163.4 million which relates to the deemed sale of 43% of the assets and liabilities of your Microwave Communications Division to the minority shareholders of Harris Stratex Networks. In future filings, pleas e include disclosure of how this gain was calculated or determined. As part of your revised disclosure, please include how the value of the Micr owave Communications Divi sion assets that were contributed to Strate x was calculated. 4. With respect to your acquisition of ma jority ownership of Harris Stratex Networks, please confirm to us that the va lue of the assets acquired and liabilities assumed are based on fair value to the ex tent of your ownership acquired. Also, tell us whether the remaining portion of the values assigned to the asset and liabilities of the acquired enterprise repres ents the minority inte rests’ ownership in the acquired enterprise and therefore, is based the historical financial statement carrying amounts of the acqui red enterprise. We may have further comment upon receipt of your response. Mr. Gary L. McArthur Harris Corporation January 17, 2008 Page 3 Furthermore, please explain to us and revise your disclosures in future filings to clarify how you determined or calculated the value assigned to the Harris Stratex shares issued to Stratex shareholders of $464.9 million included as part of your purchase price consideration of Harris Stra tex. As part of your response to us, please provide the guidance you relied upon in determining your accounting treatment and why you believe it was appropriate. ******** We urge all persons who are responsi ble for the accuracy an d adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing. You may contact Claire Er langer at (202) 551-3301 or Jean Yu at (202) 551-3305 if you have questions regarding comments on the financial statements and related matters. Please contact me at ( 202) 551-3813 with any other questions. Sincerely, Linda Cvrkel Branch Chief