Revenue for the quarter increased 138% versus prior-year GAAP due to the post-merger inclusion of L3 operations in results. On a pro forma basis, revenue was largely unchanged for the quarter, primarily driven by growth in the core U.S. defense-related businesses, offset by the divestiture of the airport security and automation business and COVID-19-related impacts, mainly in commercial-related businesses. On an organic⁵ basis, revenue increased 2.3% for the quarter primarily from growth in Integrated Mission Systems, Space and Airborne Systems, and Communication Systems, partially offset by a decline in Aviation Systems due to the pandemic.

GAAP EPS decreased 41% and 29% for the quarter versus prior-year GAAP and pro forma, respectively, due to divestiture-related charges, COVID-19-related impacts and amortization of merger-related intangibles, partially offset by operational excellence, cost management and integration benefits. Second quarter non-GAAP EPS⁶ increased 13% versus prior-year adjusted pro forma driven by the favorable factors noted above, partially offset by the impacts of the pandemic.

For the quarter, net income margin decreased 810 bps and 310 bps versus prior-year GAAP and pro forma, respectively. Adjusted EBIT⁶ margin increased 150 bps to 18.2%.

Segment Results

Integrated Mission Systems

	($ millions)	Second Quarter										First Half
		2020				2019				Change		2020				2019				Change
	(GAAP to GAAP comparison)
	Revenue	$	1,331			$	11			n/m		$	2,701			$	25			n/m
	Operating income	$	224			$	3			n/m		$	425			$	6			n/m
	Operating margin	16.8		%		27.3		%				15.7		%		24.0		%
	(GAAP to pro forma comparison)
	Revenue	$	1,331			$	1,240			7.3%		$	2,701			$	2,602			3.8%
	Operating income	$	224			$	162			38%		$	425			$	327			30%
	Operating margin	16.8		%		13.1		%		370bps		15.7		%		12.6		%		310bps
n/m: Not meaningful

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