2016 investor conference - l3 technologies2016 investor conference | company overview december 6,...

12016 Investor Conference | Company Overview December 6, 2016

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2016 Investor ConferenceCompany OverviewDecember 6, 2016

Michael T. Strianese

Chairman and

Chief Executive Officer


L-3 at a Glance

• Leading positions in select aerospace and defense markets

• Prime contractor: ISR systems, aircraft sustainment,

training & simulation, night vision

• Supplier: electronic and communication systems

• Strategic objectives:

– Provide innovative solutions for our customers

– Expand our market positions and unique capabilities

– Disciplined growth

– Perform with excellence, integrity and accountability

– Increase value for all stakeholders


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Oct-98 Oct-00 Oct-02 Oct-04 Oct-06 Oct-08 Oct-10 Oct-12 Oct-14 Oct-16

Historical Stock Performance1998-2016 YTD

New Defense Upcycle

Aggressive Growth Portfolio Shaping Disciplined Growth

Key Stock Drivers:• Organic Sales Growth• More EBIT• More M&A

Iraq/Afghanistan

Surge

Iraq/Afghanistan Drawdown

Defense Budget down (20%)

FY10 to FY15

Defense Upcycle,

Op Tempo Rising,

Global InsecurityIPO


2016 Highlights

• Increased margins, operating income and EPS vs. 2015

• Delivered first VIP Head-of-State aircraft

• Divested NSS

• Acquired ATM, Micreo, Aerosim and MacDonald Humfrey

• Won several strategic new business awards


U.S. Government Markets

• Geopolitical conditions support increased military spending

• DoD budget upcycle beginning FY16

– anticipate upcycle 2 to 3% growth, more

sequester trimming and OCO relief

– classified budgets expanding and growing

• Higher defense spending expected under Trump Administration

• Select L-3 capabilities: secure communications, ISR systems, sensors,

night vision, naval systems, readiness support, SOF

69%

28%

3%

DoD

International

& Commercial

2017

Sales

Estimates

Other

USG


International & Commercial

• Affected by global economic and security

conditions

• International - - large addressable market

– ISR, simulators, comm systems, night vision,

aviation security, sensors

– near-term softness in ISR systems

– increasing BD efforts

• Commercial - - favorable long-term fundamentals

– avionics, aviation training & simulation, aviation security, RF

microwave & power

72%

15%13%

U.S. Government

International

2017

Sales

Estimates

Commercial


Growth Area and Opportunities


DoD Technology Acquisition Trends

OSD

Strategic Capabilities Office

Defense Innovation Advisory Board

DASD Rapid Reaction Technology Office

Air Force

Rapid

Capabilities

Office

Maritime

Accelerated

Capabilities

Office

Navy

Rapid

Capabilities

Office

Army

SOCOM

SOFWERX

DARPA

Agencies


Cash Deployment - - 2016

• IRAD - - ~2.5% of sales

• Capital Expenditures, net - - $205 million

• Debt Repayments - - $298 million

• Dividends $220 million… 12th annual increase

• Share repurchases - - $373 million

• Acquisitions - - $387 million


L3 Technologies, Inc.

• L-3 Communications Corporation will change its name to L3Technologies, Inc. effective Dec. 31, 2016.

– Capitalizes on our brand equity and better reflects who we are today and how we are positioned for the future.

• Ticker symbol will remain the same (NYSE:LLL)

• Website and emails will change to L3T.com on Jan. 3, 2017


Summary: Solid 2016, 2017 Looking Good

• DoD budget upcycle beginning

• Affordable solutions & technologies

aligned with customer priorities

• Focused on satisfying customers… growing sales, margin

and EPS

• Generating robust cash flow… deploying cash for

disciplined growth

2016 investor conference - l3 technologies2016 investor conference | company overview december 6,...

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