L-3 Announces Plan to Spin off a New Publicly Traded Government Services Company

L-3 Communications Holdings, Inc. LLL today announced that the company's Board of Directors has unanimously approved a plan to spin off to L-3 shareholders 100% of a new, independent, publicly traded government services company. The transaction, which is intended to be tax-free to L-3 and its shareholders, is expected to be completed in the first half of 2012. The new public company, named Engility, will be a leader in Systems Engineering and Technical Assistance, Training and Operational Support services for the Department of Defense (DoD) and other U.S. Government agencies, as well as civil and international customers. These businesses are currently part of L-3's Government Services segment. Tony Smeraglinolo, currently executive vice president of L-3 Services Group, will be appointed Engility's chief executive officer upon completion of the spin-off. As an independent entity, Engility will be able to more effectively address its customers' priorities with cost effective and innovative solutions and enhance its operational efficiency. It will also expand its stand-alone growth opportunities beyond L-3's areas of strategic focus, unencumbered by L-3's potential Organizational Conflicts of Interest. In 2011, Engility is expected to have pro forma sales of approximately $2.0 billion, operating income of approximately $179 million and depreciation and amortization expense of approximately $14 million. The company will have approximately 10,000 employees. L-3 will retain its Cyber, Intelligence and Security Solutions businesses, currently part of L-3's Government Services segment. The new segment will be named National Security Solutions upon completion of the transaction, and will continue to leverage synergies across the company to develop unique solutions to address growing challenges for its DoD, intelligence and global security customers. Steve Kantor, currently a senior vice president of L-3 and president of L-3 Services Group, will serve as president of National Security Solutions. In 2011, National Security Solutions is expected to have pro forma sales of approximately $1.65 billion, operating income of approximately $108 million, depreciation and amortization expense of approximately $19 million and approximately 6,000 employees.