02010 Deutsche Bank Industrials Conference | June 23, 2010

2010 Deutsche BankIndustrials Conference

June 23, 2010

Ralph D'AmbrosioSenior Vice President and

Chief Financial Officer

12010 Deutsche Bank Industrials Conference | June 23, 2010

L-3 Overview● Aerospace & defense company

● 2009 sales of $15.6B (~70% prime)

● Fortune No. 148 (based on sales)

● Non-platform centric prime contractor plus diverse subcontractor/supplier

● 67,000 employees

● 76% of sales U.S. Department of Defense (DoD)

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2009 Sales by End Customer

Army 4,107$ 26%Air Force 3,721 24%Navy/Marines 2,544 16%Other Defense 1,560 10%

U.S. Military (DoD) 11,932$ 76%

Other U.S. Government 1,127$ 7%Foreign Governments 1,082 7%Commercial - Foreign 867 6%Commercial - Domestic 607 4%

Total 15,615$ 100%

($ in Millions)

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External Environment

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U.S. DoD Budgets and Priorities

● Modest base budget growth, plus large OCO supplementals

● Rebalancing for today's wars… Iraq and Afghanistan resource focus

● Rapid acquisition… end unneeded, poorly performing programs

● Budget constraints… few new starts… rationing and re-programming continue

● SecDef (May 8)… overhead cuts needed to fund modernization and force structure

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$411 $432$480 $513 $531 $549 $566 $582 $598 $616

$124$169

$187 $153$163 $159

$50 $50 $50 $50

FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

DoD Topline Budget FY06 - FY15

Source: Department of Defense Appropriation Acts FY2006 - FY2010, FY11 President's Budget document.http://comptroller.defense.gov/budget.html (Feb 2010)

Base FY09 to FY15 CAGR = 3% nominal (1% real) growth

$616

$693 $666$708

$632 $648

$535$601

$667 $667

DoD Base Budget OCO Supplemental

($ in Billions)

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Commercial/International Markets

● Commercial market - - currently declining, possible rebound late 2010, next year

● Homeland security market - - opportunity emerging for advanced checkpoint imaging systems (WBI and ACX)

● Foreign Military Sales (FMS) - - fiscal pressures curbing growth, stretching procurements

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L-3 Strategy, Objectives and Outlook

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Strategic Goals and Objectives

● Grow business base and increase market share

● Supply superior quality customer solutions with high satisfaction

● Achieve financial growth objectives - - double digit EPS growth with increasing FCF/share

● Maintain strong balance sheet, liquidity and credit ratings

● Exceed average investment returns in defense sector

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35%

20%

18%

27%

2009 Sales Mix

Command, ControlCommunication,

Intelligence,Surveillance andReconnaissance

(C3ISR)

ElectronicSystems

AircraftModernization &

Maintenance(AM&M)

GovernmentServices

SegmentsProducts / Services

48%52%

Products Services

2009 Sales $15.6B

102010 Deutsche Bank Industrials Conference | June 23, 2010

C3ISR Segment

● Global ISR market solutions specializing in SIGINT and COMINT systems

● Networked communications systems and secure communications products

● Logistics and field support services

● 20% of 2009 consolidated sales • Unmanned/Manned

• Small ISR aircraft

• Manpacks

• Logistics

Sales and Margin

Growth Areas

$2,278$2,537

$3,095$3,450

$0

$1,000

$2,000

$3,000

$4,000

2007 2008 2009 2010E

($ in Millions)

9.9% 9.6%

11.1%11.7%

* Based on midpoint segment guidance of April 22, 2010

*

112010 Deutsche Bank Industrials Conference | June 23, 2010

Government Services Segment● Engineering, technical and support

services for the U.S. Government and allied foreign governments Capacity BuildingOrganizational Sustainment Training & Education Linguist Services Systems Engineering & Integration Advisory & Acquisition Services Intelligence Analysis & Support Security & Incident Management

Systems

● 27% of 2009 consolidated sales

• Military/Police Training• Intelligence and SOF Support• Integrated Security Solutions

Sales and Margin

Growth Areas

($ in Millions)

$4,345 $4,317 $4,155 $4,050

$0

$1,000

$2,000

$3,000

$4,000

$5,000

2007 2008 2009 2010E

9.4%

9.9%9.5%

9.3%

* Based on midpoint segment guidance of April 22, 2010*

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$2,549 $2,673$2,827 $2,950

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

2007 2008 2009 2010E

AM&M Segment

● Modernization, upgrades service-life extensions and sustainment, maintenance, life-cycle management of military aircraft for the DoD and allied foreign governments

● Integrated logistics support services for military aircraft and other platforms

● 18% of 2009 consolidated sales

Sales and Margin

Growth Areas

($ in Millions)

9.8%9.1%

8.6% 8.7%

* Based on midpoint segment guidance of April 22, 2010

*

• Joint Cargo Aircraft (JCA)• Special mission aircraft• Helicopter maintenance and training

support• Aerostructures and subassemblies

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$4,789$5,374 $5,538

$5,850

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2007 2008 2009 2010E

Electronic Systems Segment● Broad range of systems, subsystems and

products, plus related services to military and commercial customers

• EO/IR (aircraft, aerostats, warfighter systems)

• Microwave Comms

• Simulation & Training

• Security & Detection

Sales and Margin

Growth Areas

($ in Millions)

11.8%12.0%

12.1% 12.1%Business Area

% of 2009 Segment

Sales

Power & Control Systems 17%

Electro-Optical/Infrared (EO/IR) 16

Microwave 15

Avionics & Displays 10

Simulation & Training 10

Precision Engagement 9

Security & Detection 5

Propulsion Systems 5

Telemetry & Advanced Technology 5

Undersea Warfare 5

Marine Services 3

Total Segment 100%

● 35% of 2009 consolidated sales

* Based on midpoint segment guidance of April 22, 2010

*

142010 Deutsche Bank Industrials Conference | June 23, 2010

2010 Financial Guidance (April 22, 2010)

Midpoint Growth vs. 2009

Sales $16.2B to $16.3B 4%

Operating Margin 10.8% +20 bpts

Diluted EPS $8.13 to $8.33 8%

Net Cash from Operating Activities $1.51B 7%

Capital Expenditures, Net $0.25B 37%

Notes: (1) 2010 Financial Guidance will be updated in the second quarter results report on July 27, 2010.

(2) The 2010 Financial Guidance (issued on April 22, 2010) excludes (i) an $18M ($11M after income taxes or $0.09 per diluted share) debt retirement charge related to the redemption of the 6-1/8% $800M senior subordinated notes due 2013/2014 announced on May 21, 2010, and (ii) the loss of the follow-on SOFSA contract that is expected to reduce 2010 sales by ~$150M ($0.04 per diluted share), announced on June 21, 2010.

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Cash Flow

2010Guidance 2009

(Apr 22, 2010) ActualNet income 960$ 911$

Depreciation & amortization 230 218

Deferred taxes 95 74

Stock-based compensation 228 213

Amortization of pension net losses 39 52

Non-cash interest expense 22 20

Working capital/Other (64) (81)

Net cash flow from operating activities 1,510 1,407

Captial expenditures, net (250) (182)

Free Cash Flow 1,260$ 1,225$

($ in Millions)

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Capitalization and Leverage

3/26/10 12/31/09 12/31/08Actual Actual Actual

Cash 1,135$ 1,016$ 867$

Debt 4,118$ 4,112$ 4,493$

Equity 6,796 6,660 5,941

Book Capitalization 10,914$ 10,772$ 10,434$

Debt/Book Capitalization 37.7% 38.2% 43.1%

Bank Leverage Ratio 1.9x 1.9x 2.2x

Available Revolver 968$ 968$ 940$

($ in Millions)

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L-3 Summary

● Diverse prime contractor, subcontractor and supplier

● Good positioning within slower growth DoD environment Aligned with irregular warfare priorities Quick reaction capabilities Less exposure to program cancellations/cuts Solutions to sustain/enhance existing platforms

● Growing sales, earnings and cash flow

● Disciplined capital allocation… improving leverage metrics

● Adaptability, agility and collaboration to continue growing

182010 Deutsche Bank Industrials Conference | June 23, 2010