Exhibit 99.1
2012 Raymond James
Government Services & Technology Summit
John Shephard
SVP, Chief Strategy & Corporate Development Officer
January 5, 2012
FORWARD LOOKING STATEMENT
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward looking statements include, but are not limited to, statements about the separation of Exelis Inc. (the “Company”) from ITT Corporation, the terms and the effect of the separation, the nature and impact of such a separation, capitalization of the Company, future strategic plans and other statements that describe the Company’s business strategy, outlook, objectives, plans, intentions or goals, and any discussion of future operating or financial performance. Whenever used, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target” and other terms of similar meaning are intended to identify such forward looking statements. Forward looking statements are uncertain and to some extent unpredictable, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such forward looking statements. Factors that could cause results to differ materially from those anticipated include, but are not limited to:
Economic, political and social conditions in the countries in which we conduct our businesses; Changes in U.S. or International government defense budgets;
Decline in consumer spending;
Sales and revenues mix and pricing levels;
Availability of adequate
labor, commodities, supplies and raw materials;
Interest and foreign currency exchange rate fluctuations and changes in local government regulations;
Competition, industry capacity & production rates;
Ability of third parties, including our commercial partners, counterparties, financial institutions and insurers, to comply with their commitments to us;
Our ability to borrow or to refinance our existing indebtedness and availability of liquidity sufficient to meet our needs; Changes in the value of goodwill or intangible assets;
Our ability to achieve stated synergies or cost savings from acquisitions or divestitures;
The number of personal injury claims filed against or the Company or degree of liability;
Our ability to effect restructuring and cost reduction programs and realize savings from such actions;
Government regulations and compliance therewith, including Dodd-Frank legislation; Changes in technology;
Intellectual property matters;
Governmental investigations; Potential future employee benefit plan contributions and other employment and pension matters; Contingencies related to actual or alleged environmental contamination, claims and concerns;
Changes in generally accepted accounting principles; and
Other factors set forth in our Registration Statement on Form 10 and our other filings with the Securities and Exchange Commission.
In addition, there are risks and uncertainties relating to the separation including whether those transactions will result in any tax liability, the operational and financial profile of the Company or any of its businesses after giving effect to the separation, and the ability of the Company to operate as an independent entity.
The Company undertakes no obligation to update any forward looking statements, whether as a result of new information, future events or otherwise.
THE STATE OF SECURITY
Unstable Highly Unstable War State Concern Nuclear Proliferation Terrorism Border Tension Civil Unrest
Cyber Attack-Emphasis shifting from major ground deployments to Piracy ensuring access by air and sea assets in strategic theaters Drug War Persistent cyber priorities in counter-terror and
Natural Disaster
Threats are numerous, asymmetric and unlikely to abate
A DIVERSIFIED BUSINESS RESPONDING TO GLOBAL SECURITY NEEDS…
C4ISR Electronics & Systems
Electronic Systems Geospatial Systems
Electronic Warfare
Airborne Situational Awareness
Force Protection
Information
Networked Exploitation Communications
Space-Based Satellite
Radar Imaging
Composite Structures
Weather & Climate
Reconnaissance & Monitoring Surveillance
GPS
Undersea Acoustics
Night Vision
Integrated Power Solutions
Information & Technical Services (I&TS)
Information Systems Mission Systems
High-end Information
Global Base Operations and Engineering Services Support
Information-enabled
Range Operations, Mission Solutions Sustainment, Upgrade
& Modernization
Enterprise Air Traffic
Management Solutions
Battlefield Network Communications
Aviation Information Support Systems
Worldwide Logistics &
Enterprise Deployment Support Communication System and Network Services
Ground Vehicle & Equipment
Satellite Ground Systems Maintenance
…WITH A DIVERSIFIED PORTFOLIO
2010 Revenue by Customer/Contract Type 2010 Revenue: $5.9B
2011(E) Revenue: $5.7B(1)
CUSTOMERS
International, Other Non
DoD, NASA, Commercial, FAA
Army 28% 35%
Intel, Special Ops, Other DOD
7% Navy Air Force 14% 16%
CONTRACT TYPE
Cost Fixed Plus Price 48% 52%
CONTRACT POSITION
I&TS C4ISR Prime Prime 32% 48% Sub contractor 20%
Customer and contract diversity provides sustainability and mitigates against downside risk
(1) | | Top end of guidance range previously provided on July 29, 2011 |
LARGE FIELDED BASE & PLATFORM AGNOSTIC SOLUTIONS
Space Fixed Wing & UAVs Rotary Wing Naval Vehicle s Systems (G) Aircraft 53
8 64 47 60 22 60 MH- MH-ISR 1B 130 15 16 18 22 35 AH- UH-
GPS F F F F P Subs
B C UAVs Com’l CV Surface round oldier
E/F CH/MH
Capabilities G S Examples
Electronic 25,000 counter IED
systems; 2,500
Warfare
airborne jammers Communications 600,000 radio systems Radar & 1,200 radars; Acoustics 1,000 ESM systems
Night Vision &
860,000+ goggles
Imaging
Navigation 43 GPS payloads
Integrated 18,000 weapon
Structures release racks
Broadly positioned on enduring platforms Exelis Position
Platform diversification, modernization and aftermarket drive revenue sustainability
EVOLVING REVENUE MIX—BALANCE OF PRODUCTS AND SERVICES
$B
$1.7B CAGR 28 -.2% $0.6B
$5.1B
CAGR 5.0%
$4.4B
$-
US SINCGARS, IED Jammers and Night Vision All Other
$B
Products (2)
Services (2)
60 / 40 50 / 50
“All other” represents 90% of 2011 revenue and is well positioned for continued market-share growth
(1) | | 2011E Guidance as previously provided on July 29, 2011 |
Service mix anticipated to remain in the ratio seen in 2011
(2) | | Product and service revenues serve as a close proxy for fixed price (product) and cost plus (service) revenues |
EXELIS DIVISIONS ARE FOCUSED ON WINNING
Classified ISR
International Night Vision (Sweden, Afghanistan, Norway) Recent Wins Next Generation Jammer - Technical Maturity Phase
Department of State
EGON Jammer
WSOTS
CBRNE and Biometrics Applications and Technologies
KBOSSS
Option Year Exercises
APS 5
US Navy F/A-18E/F IDECM
SCNS
ADSB Multilateration Expansion phase II
International Radar
DATACOMM
Next Generation Jammer Major Pursuits in 2011-12 Common Infra-Red Counter Measures (CIRCM)
UAE Falcon Eye
International ADS B
NIE Communications Initiatives
Southwest Asia Communications O&M
European Communications O&M
Launch Integrated Support
GeoEye3
GNOMAD
STRONG TEAM AND CULTURE DRIVE ABILITY TO WIN AND EXECUTE
ADS-B
Cornerstone of FAA Next Generation Air Transportation System
(NextGen)
GPS-based real-time surveillance
Improved safety, capacity and efficiency
On track and under budget
IDECM
Next generation integrated countermeasures for F/A-18
10 years of on-time supply to US Navy F/A-18 E/F models
Retrofitting to legacy C/D models to meet future threats
Counter-IED
Vehicle-mounted Counter IED
Swiftly ramped up in support of urgent war fighter needs
Organization-wide effort to ensure quality and delivery
20,000+ units delivered to date
CH-53 Aerostructures
Major sub assemblies for CH-53K, the first all-composite heavy-lift helicopter
Full design, development and manufacturing responsibility
Significant investment in capacity and automation
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DELIVER AFFORDABLE, READY-NOW SOLUTIONS
Intelligence, Surveillance and Reconnaissance
Space-based and airborne capabilities
Solutions leveraging commercially available technologies
Simultaneous multi-user analysis of live video and imagery
Networked
Communications
Simple-to-install software-defined radio modules
Augments widely fielded existing solutions
Compatible with commercial radios and smart phones
Electronic Warfare
Modular, scalable electronic protection and jamming systems
Adaptable, next-gen counter-IED solution
Leveraging combat-proven technologies
Information & Technical Services
Air traffic and airport solutions
Agile cyber and science support to classified customers
Global, scalable base operations and logistics services
Our offerings are aligned with customer mission and funding priorities
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INVESTMENTS ALIGNED WITH DOD PRIORITIES
Priorities1 Needs Exelis Solutions
EchoStorm
Faster and more efficient analysis
Data to Decisions
Gorgon Stare
and use of large data sets
Large-Data-WAN
Next Gen EW Jammer Electronic Warfare / Protection of systems and Networked IED Protection
Electronic Protection extension of capabilities across Electroma
gnetic pulse the electromagnetic spectrum protection
Multi-level Secure Cloud
Cyber Science & Efficient and effective cyber
Cyber Mission Assurance capabilities across the joint Communications and
Technology
operations spectrum network solutions
Autonomous completion of
Sense & Avoid Radar Autonomy complex tasks in a reliable
Tagging, Tracking & Locating and safe manner
We enable smarter, faster decisions and efficient, targeted responses
(1) As stated by Secretary of Defense; 4/19/2011 memorandum; Science and Technology Priorities for Fiscal Years 2013-17 Planning
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CONTINUE TO EXPAND IN INTERNATIONAL MARKETS
International Revenue by Region (2010)
Traditional High-Growth Markets Markets 41% 59%
Middle East
Europe 28% 20% CAGR 41% international growth 2008-2010
Asia-Pacific 25% Americas 6%
Growth driven by expanding product sales and solutions in high-growth markets
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EXPAND AIR TRAFFIC SOLUTIONS & AEROSTRUCTURES
Air Traffic 2010 – 2030
Trillions of Revenue Passenger KMs 2010-2030
Traffic: 4.8 5 - .1% CAGR Fleets: 3.6 - 3.8% CAGR
Air traffic and world-wide fleets expected to double over next 20 years
ATM and aerostructures are in strong up-cycle
Sources: The Boeing Company and Airbus
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PORTFOLIO MANAGEMENT TO ALIGN WITH ENDURING NEEDS
Core Positions: Extend Leadership
Electronic Warfare ISR Networked Communications
Focused Growth: Invest in Capabilities && Scale Scale
Air Traffic Solutions Information & Cyber Aerostructures
Create value through complementary C4ISR capabilities and positions
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Presentation title Calibri January Regular 5, 2012 915 pt
Appendix
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APPENDIX
Presenting Management Biographies
John Shephard, Senior Vice President – Chief Strategy and Corporate Development Officer
John’s areas of responsibility for Exelis, Inc., include corporate strategy, planning, and mergers & acquisitions. Prior to the Oct, 2011, spin-off of Exelis from ITT Corporation, he led these functions for ITT’s Defense and Information Solutions Group. He also led ITT Corporation government relations from April 2009 to September 2010, and global business development from April 2009 to April 2011.
Prior to joining ITT, John was CEO of Pallas-Athena Group based in Williamsburg, Va., where he provided strategic, financial, and operations consultation to clients including start-ups and emerging technology-based ventures, private equity funds and Fortune Global 500 corporations.
Previously, he was President, Newport News Industrial Co., and Sector Senior Vice President, Operations, Northrop Grumman-Newport News, where he led operations for a $3 billion business sector that designs, builds and maintains nuclear-powered aircraft carriers and submarines. Ships produced during his tenure include the nuclear-powered carriers U.S.S. Harry S. Truman, U.S.S.
Ronald Reagan, and U.S.S. George H. W. Bush, and several U.S.S. Virginia class submarines.
Prior to that he served in a variety of leadership roles at Newport News Shipbuilding, Inc., to include Vice President, Manufacturing and Materials; Vice President, Strategy and Process Innovation; and Director, Strategic Planning.
John began his work in industry at Tenneco, Inc., following a distinguished military career, which included command and staff assignments from platoon to division level, combat duty in Operation Desert Storm with the 101st Airborne Division, a NASA leadership post, and a teaching assignment at the United States Military Academy.
John holds degrees from the U.S. Military Academy at West Point and the Massachusetts Institute of Technology, and was a White House Fellow. In 1999, the American Society of Engineering Management honored him as Engineering Manager of the Year.
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