. Unaudited Quarterly Financial Data

Unaudited summarized financial data by quarter for the years ended December 31, 2018 and 2017 is presented in the tables below. The Company’s unaudited quarterly results of operations are affected, significantly in some periods, by the Company’s business acquisitions and divestitures. See Note 3 for additional information.



	First Quarter		Second Quarter⁽¹⁾		Third Quarter⁽²⁾		Fourth Quarter⁽³⁾
	(in millions, except per share data)
2018
Sales	$	2,371	$	2,583	$	2,519	$	2,771
Operating income	251		321		272		276
Income from continuing operations	192		189		208		232
Net income	208		379		208		231
Net income attributable to L3	203		375		202		225
Basic EPS from continuing operations⁽⁴⁾	2.40		2.36		2.57		2.87
Basic EPS⁽⁴⁾	2.60		4.78		2.57		2.86
Diluted EPS from continuing operations⁽⁴⁾	2.34		2.33		2.54		2.83
Diluted EPS⁽⁴⁾	2.54		4.72		2.54		2.82

__________________

⁽¹⁾

Income from continuing operations includes debt retirement charges of $48 million ($36 million after income taxes), or $0.45 per diluted share and a pre-tax gain of $48 million ($25 million after income taxes), or $0.31 per diluted share, related to the divestiture of the Crestview Aerospace and TCS businesses. The Company recorded a pre-tax gain of $237 million ($180 million after income taxes, or $2.27 per diluted share) related to the divestiture of the Vertex Aerospace business, which is reported in discontinued operations.

⁽²⁾

Income from continuing operations includes debt retirement charges of $21 million ($16 million after income taxes), or $0.21 per diluted share, merger and acquisition related expenses of $5 million ($4 million after income taxes), or $0.06 per diluted share and adjustments to divestiture gains of $4 million ($4 million after income taxes), or $0.04 per diluted share, related to the sale of the Crestview Aerospace and TCS businesses.


⁽³⁾	Income from continuing operations includes merger and acquisition related expenses of $23 million ($19 million after income taxes), or $0.24 per diluted share and adjustments to divestiture gains of $2 million ($2 million after income taxes), or $0.03 per diluted share, related to the sale of the Crestview Aerospace and TCS businesses.


⁽⁴⁾	EPS in each quarter is computed using the weighted-average number of shares outstanding during that quarter, while EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ EPS may not equal the full year computed EPS.



	First Quarter		Second Quarter		Third Quarter⁽¹⁾		Fourth Quarter⁽²⁾
	(in millions, except per share data)
2017
Sales	$	2,321	$	2,385	$	2,293	$	2,574
Operating income	237		294		232		268
Income from continuing operations	157		195		146		271
Net income	168		207		25		293
Net income attributable to L3	164		202		22		289
Basic EPS from continuing operations⁽³⁾	1.97		2.44		1.83		3.42
Basic EPS⁽³⁾	2.11		2.59		0.28		3.70
Diluted EPS from continuing operations⁽³⁾	1.93		2.39		1.79		3.34
Diluted EPS⁽³⁾	2.07		2.54		0.28		3.62

__________________


⁽¹⁾	The Company recorded a goodwill impairment charge of $187 million or $1.67 per diluted share for the Vertex Aerospace reporting unit in 2017, which is reported in discontinued operations.


⁽²⁾	Provision for income taxes for the fourth quarter of 2017, includes estimated tax benefits of $79 million or $0.99 per diluted share, related to the enactment of the U.S. Tax Reform in December 2017.


⁽³⁾	EPS in each quarter is computed using the weighted-average number of shares outstanding during that quarter, while EPS for the full year is computed using the weighted-average number of shares outstanding during the year. Therefore, the sum of the four quarters’ EPS may not equal the full year computed EPS.