J.P.

Morgan Aviation, Transportation & Defense Conference

March 4, 2013

Ralph D'Ambrosio
SVP and CFO
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 1

Forward Looking Statements

Certain of the matters discussed in these slides, including information regarding the companys 2013 financial outlook that are predictive in nature, that depend upon or refer to events or conditions or that include words such as expects, anticipates, intends, plans, believes, estimates, and similar expressi ons constitute forward-looking statements. Although we believe that these statements are based upon reasonable assumptions, including projections of total sales growth, sales growth from business acquisitions, organic sales growth, consolidated operating margins, total segment operating margins, interest expense, earnings, cash flow, research and development costs, working capital, capital expenditures and other projections, they are subject to several risks and uncertainties, and therefore, we can give no assurance that these statements will be achieved. Such statements will also be influenced by factors which include, among other things: our dependence on the defense industry and the business risks peculiar to that industry, including changing priorities or reductions in the U.S. Government defense budget; backlog processing and program slips resulting from delayed funding of the Department of Defense (DoD) budget; our reliance on contracts with a limited number of agencies of, or contractors to, the U.S. Government and the possibility of termination of government contracts by unilateral government action or for failure to perform; the extensive legal and regulatory requirements surrounding our contracts with the U.S. or foreign governments and the results of any investigation of our contracts undertaken by the U.S. or foreign governments; our ability to retain our existing business and related contracts (revenue arrangements); our ability to successfully compete for and win new business and related contracts (revenue arrangements) and to win re-competitions of our existing contracts; our ability to identify and acquire additional businesses in the future with terms that are attractive to L-3 and to integrate acquired business operations; the impact of any strategic initiatives undertaken by us, and our ability to achieve anticipated benefits; our ability to maintain and improve our consolidated operating margin and total segment operating margin in future periods; our ability to obtain future government contracts (revenue arrangements) on a timely basis; the availability of government funding or cost-cutting initiatives and changes in customer requirements for our products and services; our significant amount of debt and the restrictions contained in our debt agreements; our ability to continue to retain and train our existing employees and to recruit and hire new qualified and skilled employees as well as our ability to retain and hire employees with U.S. Government security clearances; actual future interest rates, volatility and other assumptions used in the determination of pension benefits and equity based compensation, as well as the market performance of benefit plan assets; our collective bargaining agreements, our ability to successfully negotiate contracts with labor unions and our ability to favorably resolve labor disputes should they arise; the business, economic and political conditions in the markets in which we operate, including those for the commercial aviation, shipbuilding and communications markets; global economic uncertainty; the DoDs contractor support services in-sourcing and efficiency initiatives; events beyond our control such as acts of terrorism; our ability to perform contracts (revenue arrangements) on schedule; our international operations; our extensive use of fixed-price type contracts as compared to cost-plus type and time-and-material type contracts; the rapid change of technology and high level of competition in the defense industry and the commercial industries in which our businesses participate; our introduction of new products into commercial markets or our investments in civil and commercial products or companies; the outcome of litigation matters, including in connection with jury trials; results of audits by U.S. Government agencies; results of on-going governmental investigations, including potential suspensions or debarments; the impact on our business of improper conduct by our employees, agents or business partners; anticipated cost savings from business acquisitions not fully realized or realized within the expected time frame; the outcome of matters relating to the Foreign Corrupt Practices Act (FCPA) and similar non-U.S. regulations; ultimate resolution of contingent matters, claims and investigations relating to acquired businesses, and the impact on the final purchase price allocations; competitive pressure among companies in our industry; and the fair values of our assets, which can be impaired or reduced by other factors, some of which are discussed above. For a discussion of these and other risks and uncertainties that could impair our results of operations or financial condition, see Part I Item 1A Risk Factors and Note 19 to our audited consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2011, as modified by the Form 8-K filed on November 20, 2012, Part I Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations Overview and Outlook Industry Considerations, included in our Quarterly Reports on Form 10-Q for the quarters ended September 28, 2012, June 29, 2012 and March 30, 2012, and any material updates to these factors contained in any of our future filings. Our forward-looking statements are not guarantees of future performance and the actual results or developments may differ materially from the expectations expressed in the forward-looking statements. As for the forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainties of estimates, forecasts and projections and may be better or worse than projected and such differences could be material. Given these uncertainties, you should not place any reliance on these forward-looking statements. These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of these slides to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events.

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

L-3 Overview
Aerospace & defense contractor$12,650M sales* Prime contractor for ISR systems, C3 systems and Sustainment solutionssupplier of electronic systems Key characteristics: broad & diverse technologies/contracts non-platform OEM 67% sales direct to end customers flexible cost structurelow capital intensity robust cash flow
* 2013 midpoint guidance
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 3

L-3 Strategy and Priorities

Strengthen our market positionsgrow market share customers relationships innovative and affordable solutionsprogram performance and collaboration pursue adjacenciesexpand platform content acquire niche businesses Proactively manage business/cost structures Allocate capital to grow/preserve stakeholder value Grow EPS and cash flow per share
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 4

2012 Accomplishments
Solid program performanceachieved financial plan
Strengthened portfolioEngility spin-offacquisitions Ft. Rucker CLS re-compete win and market share gains Grew Orders 7% vs. 2011Book-to-Bill 1.05x Increased Commercial/International sales 15% Robust cash flow

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

Cash Returned to Shareholders

($ in Millions) 100% 90%
80% 70% 60% 50% 40% 30% 20% 10% 0%

88% 79% 65%

$834

97% 79%
$872

74%
$958

$184

14%

14%
$188
2011 Actual Share Repurchases

18%
$195
2012 Actual

2010 Actual Cash Dividends

Free Cash Flow Returned to Shareholders

Notes: (1) Free Cash Flow for this purpose includes cash flow from discontinued operations. (2) See Reconciliation of GAAP to Non-GAAP Measurements.
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 6

2013 Outlook

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

End Customer Sales Mix Estimates

DoD Iraq/Afghanistan U.S. Department of Defense (DoD) All Other

7% 61%

5%

Other U.S. Government

14% 13%

Commercial

Foreign Government

2013 Midpoint Net Sales Guidance $12,650M

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 8

US Government Markets
Geopolitical threats vs. fiscal constraints
2013 Sales Estimates
Commercial / International DoD Defense down-cycle began in 2011 68% OCO declining rapidly with drawdowns OSD Better Buying Power initiatives BCAcut $487B FY12-21 DoD base budget growth FY13CR expires March 27th Expect Sequester resolution

27% 5% Other
USG

Non-DoD agencies - - smaller bill payers than DoD

Market share opportunities

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 9

DoD Budget Top-Line Trends

($ in Billions)

FY13R Base FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 $528 $528 $531 $525 $534 $546 $556 $567

vs. PFY 3% 0% 1% -1% 2% 2% 2% 2%

Base w/Sequester $528 $528 $531 $479 $475 $491 $501 $512

vs. PFY 3% 0% 1% -10% -1% 3% 2% 2%

OCO $162 $159 $115 $89 $57 $43 $34 $33

vs. PFY 11% -2% -28% -23% -36% -25% -21% -3%

Note: FY13-17 data based on DoD FY13 Plan (February 2012) and L-3 estimates.
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 10

Commercial/International Markets
2013

Foreign Military - - market share gainsISR systems, simulators and aircraft modifications

International USG

13%
Commercial

73%

14%

Commercial - - modest growth in aviation and security & detectionshipbuilding and SATCOM softening

Link UK acquisition adds commercial simulation market and full-motion simulator capability
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 11

Electronic Systems Segment

Net Sales

($ in Millions)

Operating Margin

Diverse products supplier, mostly shortcyclehighest segment Commercial & International mix Leveraging technologies to capture higherlevel assemblies and systems DoD funding cuts impactsEO/IR turrets Afghanistan surge ended in 2012Non-DoD growing Highest segment marginsmix changes
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 12

C3ISR Segment
($ in Millions)

Strong, long-term program positions with solid demand Pull-through for Electronic Systems and AM&M International, select DoD growingsmall ISR aircraft and Rover declining with Afghanistan drawdown Solid marginshigher pension expense
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

Net Sales
Operating Margin

13

AM&M Segment
($ in Millions)

Aging fleets and DoD affordability initiatives creating opportunities

Net Sales Operating Margin

Platform Systems gaining market shareseveral international wins Expanding into adjacent ground equipment CLS market Stable margins
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 14

NSS Segment
($ in Millions)

Market pressures reducing salesOSD initiatives, tighter budgets, drawdowns

Net Sales

Operating Margin

Technology enablers from C3ISR Intense competitionmaintaining market share Margins improving
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 15

2013 Consolidated Financial Guidance

(in Millions, except per share amounts)

Current Guidance (Jan. 30, 2013) Net Sales Operating margin Interest expense Interest and other income Debt retirement charges Tax rate Diluted Shares Diluted EPS Free cash flow $12,550 to $12,750 10.0% $176 $12 32.0% 90.1 $8.15 to $8.35 $1,030

Midpoint vs. 2012 -4% -30 bps -4% n.m. -$13 -20 bps -8% 3% -2%

Notes: (1) Assumes no Sequestration cuts to FY13 DoD Budget and FY13 Continuing Resolution Authority will not be extended. (2) 2013 estimated pension expense (FAS net CAS) $14M >2012, reducing operating margin ~10 bps. (3) Current Guidance includes $18M tax benefit, or $0.20 per share for the American Taxpayer Relief Act of 2012, which reinstated the U.S. federal research and experimentation tax credit (R&E Credit) for 2012 and 2013. (4) See Reconciliation of GAAP to Non-GAAP Measurements. n.m. = not meaningful
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 16

Free Cash Flow

($ in Millions)

Income from continuing operations Impairment charges Depreciation & amortization Deferred income taxes 401K common stock match Stock-based employee compensation Working capital/other items Capital expenditures, net Income tax payments attribituable to discontinued operations Free cash flow

2013 Guidance $ 750 225 60 110 55 25 (195) $ 1,030

2012 Actual $ 788 228 112 125 59 (81) (205) 24 $ 1,050

Robust Cash Flow

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 17

L-3 Summary
Manageable DoD environment Technology/solutions for customersstrong market positions International, commercial, select DoD areas growing

Flexible cost structureproactive business unit resizing

Defense down-cycle will eventually turn Robust cash flowFCF per share growing
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 18

Q&A
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 19

Supplemental Financial Data

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

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2013 Segment Guidance Midpoints

($ in Millions)

Elect. Sys.
$6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500
11.8% 10.8% 10.1%

C3ISR

AM&M
Net Sales

NSS
70.

$5,677

-4%
$5,475

60. 50.

Operating Margin
-1%
$3,601 $3,550

40.

-4%
$2,483 $2,375

30. 20.

-10%
10.5% 9.5% 9.2%

$1,000
$500 $0

$1,385
5.7%

$1,250
6.5%

10.

0.0

2012

2013

2012

2013

2012

2013

2012

2013

Note: Higher pension expense for 2013 vs. 2012 is estimated to reduce 2013 operating income by $14M, consolidated margin by 10 bps, C3ISR $17M or -50 bps and Electronic Systems $(3)M or +10 bps.
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013 21

Cash Sources and Uses

($ in Millions)

2013 Guidance Beginning cash Free cash flow from continuing operations Free cash flow from discontinued operations Engility spin dividend, gross Acquisitions, net Dividends Share repurchases Debt repayments Other, net Ending cash
Note: See Reconciliation of GAAP to Non-GAAP Measurements.
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

2012 Actual $ 764 1,050 50 335 (343) (195) (872) (500) 60 $ 349

2011 Actual $ 607 1,113 185 (19) (188) (958) (11) 35 $ 764

349 1,030 (10) (198) (500) (250) 29

450

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Capitalization and Leverage

($ in Millions)

12/31/13 Estimate Cash Debt Equity Invested Capital Available Revolver $450 $3,381 5,880 $9,261 $1,000

12/31/12 Actual $349 $3,629 5,539 $9,168 $1,000

12/31/11 Actual $764 $4,125 6,724 $10,849 $997

Note: Equity includes non-controlling interests (minority interests) of $76M as of Dec 31, 2012 and $89M as of Dec 31, 2011.

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

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Reconciliation of GAAP to Non-GAAP Measurements

($ in Millions)

2013 Guidance $ 1,225 (200) 5 $ 1,030

2012 Actual $ 1,231 (210) 5 24 $ 1,050

2011 Actual $ 1,231 (187) 6 63 $ 1,113

2010 Actual $ 1,270 (178) 10 21 $ 1,123

Net cash from operating activities from continuing operations Less: Capital expenditures from continuing operations Add: Dispositions of property, plant and equipment from continuing operations Income tax payments attributable to discontinued operations Free cash flow from continuing operations

Net cash from operating activities from discontinued operations Less: Capital expenditures from discontinued operations Income tax payments attributable to discontinued operations Free cash flow from discontinued operations Combined free cash flow from all operations
J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

75 (24)

253 (5) (63)

191 (3) (21)

51

185

167

$ 1,101

$ 1,298

$ 1,290
24

J.P Morgan Aviation, Transportation & Defense Conference | March 4, 2013

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