10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2014

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                  to                 

Commission file numbers 001-14141 and 333-46983

L-3 COMMUNICATIONS HOLDINGS, INC.

L-3 COMMUNICATIONS CORPORATION

(Exact names of registrants as specified in their charters)

Delaware	13-3937434 and 13-3937436
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Nos.)
600 Third Avenue, New York, NY	10016
(Address of principal executive offices)	(Zip Code)

(212) 697-1111

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant, L-3 Communications Holdings, Inc., is a large accelerated filer, accelerated filer, non-accelerated filer, or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant, L-3 Communications Corporation, Inc., is a large accelerated filer, accelerated filer, non-accelerated filer, or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Act).    ¨  Yes    x  No

There were 86,232,242 shares of L-3 Communications Holdings, Inc. common stock with a par value of $0.01 outstanding as of the close of business on April 23, 2014.

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

For the quarterly period ended March 28, 2014

		Page No.
	PART I — FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of March 28, 2014 (Unaudited) and December 31, 2013		1
	Unaudited Condensed Consolidated Statements of Operations for the Quarterly periods ended March 28, 2014 and March 29, 2013		2
	Unaudited Condensed Consolidated Statements of Comprehensive Income for the Quarterly periods ended March 28, 2014 and March 29, 2013		3
	Unaudited Condensed Consolidated Statements of Equity for the Quarterly periods ended March 28, 2014 and March 29, 2013		4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Quarterly periods ended March 28, 2014 and March 29, 2013		5
	Notes to Unaudited Condensed Consolidated Financial Statements		6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk		46
ITEM 4.	Controls and Procedures		46
	PART II — OTHER INFORMATION
ITEM 1.	Legal Proceedings		47
ITEM 1A.	Risk Factors		47
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		48
ITEM 6.	Exhibits		48
Signature			49

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

	(Unaudited) March 28, 2014			December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents	$	227		$	500
Billed receivables, net of allowances of $24 in 2014 and $26 in 2013		1,093			1,015
Contracts in process		2,763			2,524
Inventories		375			359
Deferred income taxes		118			122
Other current assets		126			129
Total current assets		4,702			4,649
Property, plant and equipment, net		1,028			1,039
Goodwill		7,821			7,796
Identifiable intangible assets		283			285
Deferred debt issue costs		23			24
Other assets		208			216
Total assets	$	14,065		$	14,009
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable, trade	$	590		$	541
Accrued employment costs		538			543
Accrued expenses		403			455
Advance payments and billings in excess of costs incurred		523			570
Income taxes		22			31
Other current liabilities		380			383
Total current liabilities		2,456			2,523
Pension and postretirement benefits		729			727
Deferred income taxes		679			635
Other liabilities		382			396
Long-term debt		3,631			3,630
Total liabilities		7,877			7,911
Commitments and contingencies (see Note 17)
Equity:
L-3 shareholders’ equity:
L-3 Communications Holdings, Inc.’s common stock: $.01 par value; 300,000,000 shares authorized, 86,423,244 shares outstanding at March 28, 2014 and 85,828,485 shares outstanding at December 31, 2013 (L-3 Communications Corporation’s common stock: $.01 par value, 100 shares authorized, issued and outstanding)		5,767			5,653
L-3 Communications Holdings, Inc.’s treasury stock (at cost), 67,335,382 shares at March 28, 2014 and 66,118,406 shares at December 31, 2013		(5,421	)		(5,288	)
Retained earnings		5,895			5,768
Accumulated other comprehensive loss		(128	)		(110	)
Total L-3 shareholders’ equity		6,113			6,023
Noncontrolling interests		75			75
Total equity		6,188			6,098
Total liabilities and equity	$	14,065		$	14,009

See notes to unaudited condensed consolidated financial statements

1

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

	First Quarter Ended
	March 28, 2014			March 29, 2013
Net sales:
Products	$	1,661		$	1,813
Services		1,310			1,372
Total net sales		2,971			3,185
Cost of sales:
Products		(1,467	)		(1,620	)
Services		(1,197	)		(1,252	)
Total cost of sales		(2,664	)		(2,872	)
Operating income		307			313
Interest expense		(43	)		(43	)
Interest and other income, net		3			3
Income before income taxes		267			273
Provision for income taxes		(85	)		(79	)
Net income	$	182		$	194
Net income attributable to noncontrolling interests		(2	)		(1	)
Net income attributable to L-3	$	180		$	193
Earnings per share attributable to L-3 Holdings’ common shareholders:
Basic	$	2.09		$	2.14
Diluted	$	2.01		$	2.11
Cash dividends paid per common share	$	0.60		$	0.55
L-3 Holdings’ weighted average common shares outstanding:
Basic		86.1			90.3
Diluted		89.4			91.5

See notes to unaudited condensed consolidated financial statements

2

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

	First Quarter Ended
	March 28, 2014			March 29, 2013
Net income	$	182		$	194
Other comprehensive income:
Foreign currency translation adjustments		(16	)		(34	)
Unrealized losses on hedging instruments(1)		(5	)		(3	)
Pension and postretirement benefit plans:
Amortization of net loss and prior service cost previously recognized(2)		3			13
Total other comprehensive loss		(18	)		(24	)
Comprehensive income		164			170
Comprehensive income attributable to noncontrolling interests		(2	)		(1	)
Comprehensive income attributable to L-3	$	162		$	169

⁽¹⁾  Amounts are net of income tax benefits of $2 million for both of the quarterly periods ended March 28, 2014 and March 29, 2013.

⁽²⁾  Amounts are net of income taxes of $1 million and $9 million for the quarterly periods ended March 28, 2014 and March 29, 2013, respectively.

See notes to unaudited condensed consolidated financial statements

3

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(in millions, except per share data)

	L-3 Holdings’ Common Stock					Additional Paid-in Capital									Accumulated Other Comprehensive (Loss) Income
	Shares Outstanding			Par Value					Treasury Stock			Retained Earnings						Noncontrolling Interests			Total Equity
For the Quarter Ended March 28, 2014:
Balance at December 31, 2013		85.8		$	1	$	5,652		$	(5,288	)	$	5,768		$	(110	)	$	75		$	6,098
Net income													180						2			182
Other comprehensive income																(18	)					(18	)
Distributions to noncontrolling interests																			(2	)		(2	)
Cash dividends paid on common stock ($0.60 per share)													(52	)								(52	)
Shares issued:
Employee savings plans		0.4					44															44
Exercise of stock options		0.9					81															81
Employee stock purchase plan		0.2					—															—
Stock-based compensation expense							15															15
Treasury stock purchased		(1.2	)							(133	)											(133	)
Other		0.3					(26	)					(1	)								(27	)
Balance at March 28, 2014		86.4		$	1	$	5,766		$	(5,421	)	$	5,895		$	(128	)	$	75		$	6,188
For the Quarter Ended March 29, 2013:
Balance at December 31, 2012		90.4		$	1	$	5,313		$	(4,488	)	$	5,191		$	(550	)	$	76		$	5,543
Net income													193						1			194
Other comprehensive income																(24	)					(24	)
Distributions to noncontrolling interests																			(2	)		(2	)
Cash dividends paid on common stock ($0.55 per share)													(50	)								(50	)
Shares issued:
Employee savings plans		0.5					37															37
Exercise of stock options		0.3					16															16
Employee stock purchase plan		0.3					—															—
Stock-based compensation expense							14															14
Treasury stock purchased		(1.6	)							(122	)											(122	)
Other		0.3					(14	)														(14	)
Balance at March 29, 2013		90.2		$	1	$	5,366		$	(4,610	)	$	5,334		$	(574	)	$	75		$	5,592

See notes to unaudited condensed consolidated financial statements

4

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	First Quarter Ended
	March 28, 2014			March 29, 2013
Operating activities:
Net income	$	182		$	194
Depreciation of property, plant and equipment		42			42
Amortization of intangibles and other assets		12			12
Deferred income tax provision		22			19
Stock-based employee compensation expense		15			14
Contributions to employee savings plans in L-3 Holdings’ common stock		44			32
Amortization of pension and postretirement benefit plans net loss and prior service cost		4			22
Amortization of bond discounts and deferred debt issue costs (included in interest expense)		2			2
Other non-cash items		1			3
Changes in operating assets and liabilities, excluding amounts from acquisitions and divestitures:
Billed receivables		(74	)		(146	)
Contracts in process		(236	)		(145	)
Inventories		(16	)		8
Other assets		(4	)		49
Accounts payable, trade		49			105
Accrued employment costs		(12	)		13
Accrued expenses		(49	)		(41	)
Advance payments and billings in excess of costs incurred		(46	)		(37	)
Income taxes		38			51
Excess income tax benefits related to share-based payment arrangements		(14	)		(2	)
Other current liabilities		(8	)		4
Pension and postretirement benefits		(2	)		4
All other operating activities		(12	)		(57	)
Net cash (used in) from operating activities		(62	)		146
Investing activities:
Business acquisitions, net of cash acquired		(57	)		—
Capital expenditures		(30	)		(49	)
Dispositions of property, plant and equipment		1			1
Other investing activities		—			(6	)
Net cash used in investing activities		(86	)		(54	)
Financing activities:
Borrowings under revolving credit facility		524			477
Repayment of borrowings under revolving credit facility		(524	)		(477	)
Common stock repurchased		(133	)		(122	)
Dividends paid on L-3 Holdings’ common stock		(55	)		(52	)
Proceeds from exercises of stock options		69			18
Proceeds from employee stock purchase plan		9			9
Excess income tax benefits related to share-based payment arrangements		14			2
Other financing activities		(28	)		(13	)
Net cash used in financing activities		(124	)		(158	)
Effect of foreign currency exchange rate changes on cash and cash equivalents		(1	)		(7	)
Net decrease in cash and cash equivalents		(273	)		(73	)
Cash and cash equivalents, beginning of the period		500			349
Cash and cash equivalents, end of the period	$	227		$	276

See notes to unaudited condensed consolidated financial statements

5

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

1.  Description of Business

L-3 Communications Holdings, Inc. derives all of its operating income and cash flows from its wholly-owned subsidiary, L-3 Communications Corporation (L-3 Communications). L-3 Communications Holdings, Inc. (L-3 Holdings and, together with its subsidiaries, referred to herein as L-3 or the Company) is a prime contractor in aerospace systems and national security solutions. L-3 is also a leading provider of a broad range of communication and electronic systems and products used on military and commercial platforms. The Company’s customers include the United States (U.S.) Department of Defense (DoD) and its prime contractors, U.S. Government intelligence agencies, the U.S. Department of Homeland Security (DHS), U.S. Department of State (DoS), allied international governments, and domestic and international commercial customers.

In the first quarter of 2014, the Company reorganized its business segments to better align its organizational structure with customer priorities and increase operational efficiencies. After the realignment, L-3’s structure consists of the following four segments: Aerospace Systems, Electronic Systems, Communication Systems and National Security Solutions, as further described below.

Aerospace Systems: combines the operations of the former Platform & Logistics Solutions (P&LS) segment with Intelligence, Surveillance and Reconnaissance (ISR) Systems. ISR Systems was part of the former Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR) segment. Aerospace Systems delivers integrated solutions for the global ISR market and provides modernization, upgrade, sustainment, and maintenance and logistics support for a wide variety of aircraft and ground systems.

Electronic Systems: includes all of its previous businesses historically included in this segment except the Microwave Products businesses, which are now part of Communication Systems. Electronic Systems provides a broad range of components, products, subsystems, systems and related services for military and commercial customers.

Communication Systems: combines the operations of the Microwave Products businesses, which were previously part of the Electronic Systems reportable segment, with the operations of the Networked and Secure Communications Products businesses, previously part of the former C³ISR segment. Communication Systems delivers products and services for the global communications market, specializing in strategic and tactical airborne, space, ground and sea-based communication systems.

National Security Solutions (NSS): remains unchanged. NSS will continue to provide cybersecurity solutions, high-performance computing, enterprise information technology (IT) services, analytics and intelligence analysis.

Financial information with respect to the Company’s segments is included in Note 21 to the unaudited condensed consolidated financial statements. Financial information for the first quarter of 2013 in these unaudited condensed consolidated financial statements has been revised for the segment realignment discussed above.

2.  Basis of Presentation

These unaudited condensed consolidated financial statements for the quarterly period ended March 28, 2014 should be read in conjunction with the audited consolidated financial statements of L-3 Holdings and L-3 Communications included in their Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

6

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

Principles of Consolidation and Reporting

The accompanying financial statements comprise the consolidated financial statements of L-3 Holdings and L-3 Communications. L-3 Holdings’ only asset is its investment in the common stock of L-3 Communications, its wholly-owned subsidiary, and its only obligations are: (1) the 3% Convertible Contingent Debt Securities (CODES) due 2035, which were issued by L-3 Holdings on July 29, 2005, (2) its guarantee of borrowings under the Amended and Restated Revolving Credit Facility of L-3 Communications and (3) its guarantee of other contractual obligations of L-3 Communications and its subsidiaries. L-3 Holdings’ obligations relating to the CODES have been jointly, severally, fully and unconditionally guaranteed by L-3 Communications and certain of its wholly-owned domestic subsidiaries. Accordingly, such debt has been reflected as debt of L-3 Communications in its consolidated financial statements in accordance with the accounting standards for pushdown accounting. All issuances of and conversions into L-3 Holdings’ equity securities, including grants of stock options, restricted stock, restricted stock units and performance units by L-3 Holdings to employees and directors of L-3 Communications and its subsidiaries, have been reflected in the consolidated financial statements of L-3 Communications. As a result, the consolidated financial positions, results of operations and cash flows of L-3 Holdings and L-3 Communications are substantially the same. See Note 24 for additional information regarding the unaudited financial information of L-3 Communications and its subsidiaries.

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the disclosures required by U.S. GAAP for a complete set of annual audited financial statements. The December 31, 2013 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation of the results for the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year.

It is the Company’s established practice to close its books for the quarters ending March, June and September on the Friday nearest to the end of the calendar quarter. The interim unaudited condensed consolidated financial statements included herein have been prepared and are labeled based on that convention. The Company closes its books for annual periods on December 31 regardless of what day it falls on.

Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs of sales during the reporting period. The most significant of these estimates and assumptions for L-3 relate to contract revenue, profit and loss recognition, fair values of assets acquired and liabilities assumed in business combinations, market values for inventories reported at lower of cost or market, pension and post-retirement benefit obligations, stock-based employee compensation expense, income taxes, including the valuation of deferred tax assets, litigation reserves and environmental obligations, accrued product warranty costs, and the recoverability, useful lives and valuation of recorded amounts of long-lived assets, identifiable intangible assets and goodwill. Changes in estimates are reflected in the periods during which they become known. Actual amounts will differ from these estimates and could differ materially.

7

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

Sales and profits on contracts that are covered by accounting standards for construction-type and production-type contracts and federal government contractors are recognized using percentage-of-completion (POC) methods of accounting. Approximately 47% of the Company’s net sales in 2013 were accounted for under contract accounting standards, of which approximately 38% were fixed-price type contracts and approximately 9% were cost-plus type contracts. For contracts accounted for under contract accounting standards, sales and profits are recognized based on: (1) a POC method of accounting (fixed-price contracts), (2) allowable costs incurred plus the estimated profit on those costs (cost-plus contracts), or (3) direct labor hours expended multiplied by the contractual fixed rate per hour plus incurred costs for material (time-and-material contracts). Sales and profits on fixed-price production contracts under which units are produced and delivered in a continuous or sequential process are recorded as units are delivered based on their contractual selling prices (the “units-of-delivery” method). Sales and profits on each fixed-price production contract under which units are not produced and delivered in a continuous or sequential process, or under which a relatively few number of units are produced, are recorded based on the ratio of actual cumulative costs incurred to total estimated costs at completion of the contract multiplied by the total estimated contract revenue, less cumulative sales recognized in prior periods (the “cost-to-cost” method). Under both POC methods of accounting, a single estimated total profit margin is used to recognize profit for each contract over its entire period of performance, which can exceed one year.

Accounting for the sales and profit on these fixed-price type contracts requires the preparation of estimates of: (1) the total contract revenue, (2) the total costs at completion, which is equal to the sum of the actual incurred costs to date on the contract and the estimated costs to complete the contract’s statement of work, and (3) the measurement of progress towards completion. The estimated profit or loss at completion on a contract is equal to the difference between the total estimated contract revenue and the total estimated cost at completion. The profit recorded on a contract in any period using either the units-of-delivery method or cost-to-cost method is equal to the current estimated total profit margin multiplied by the cumulative sales recognized, less the amount of cumulative profit previously recorded for the contract.

Sales and profits on cost-plus type contracts that are covered by contract accounting standards are recognized as allowable costs are incurred on the contract, at an amount equal to the allowable costs plus the estimated profit on those costs. The estimated profit on a cost-plus type contract is fixed or variable based on the contractual fee arrangement. Incentive and award fees are the primary variable fee contractual arrangement types for the Company. Incentive and award fees on cost-plus type contracts are included as an element of total estimated contract revenues and are recorded to sales when a basis exists for the reasonable prediction of performance in relation to established contractual targets and the Company is able to make reasonably dependable estimates for them.

Sales and profits on time-and-material type contracts are recognized on the basis of direct labor hours expended multiplied by the contractual fixed rate per hour, plus the actual costs of materials and other direct non-labor costs.

Revisions or adjustments to estimates for a contract’s revenue, estimated costs at completion and estimated profit or loss are often required as work progresses under a contract, as experience is gained, as facts and circumstances change and as new information is obtained, even though the scope of work required under the contract may not change. Revisions or adjustments may also be required if contract modifications occur. The impact of revisions in profit (loss) estimates for all types of contracts subject to POC accounting are recognized on a cumulative catch-up basis in the period in which the revisions are made. The revisions in contract estimates, if significant, can materially affect the Company’s results of operations and cash flows, as well as reduce the

8

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

valuations of receivables and inventories, and in some cases result in liabilities to complete contracts in a loss position. Aggregate net changes in contract estimates increased consolidated operating income by $42 million, or 14%, for the quarterly period ended March 28, 2014 and $10 million, or 3%, for the quarterly period ended March 29, 2013.

For a more complete discussion of these estimates and assumptions, see the Annual Report of L-3 Holdings and L-3 Communications on Form 10-K for the fiscal year ended December 31, 2013.

3.  New Accounting Standards

Effective January 1, 2014, the Company adopted Financial Accounting Standards Board (FASB) issued amendments to an accounting standard that require an unrecognized tax benefit or portion of an unrecognized tax benefit to be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except when certain conditions exist. The adoption of this standard did not impact the Company’s financial position, results of operations or cash flows.

4.  Acquisitions

The business acquisitions discussed below are included in the Company’s results of operations from their respective dates of acquisition.

2014 Business Acquisition

On March 4, 2014, the Company acquired Data Tactics Corporation, renamed L-3 Data Tactics, for a purchase price of $57 million, which was financed with cash on hand. The purchase price is subject to adjustment based on closing date actual net assets. L-3 Data Tactics is a specialized provider of large-scale data analytics, cybersecurity and cloud computing solution services, primarily to the DoD. Based on the preliminary purchase price, the aggregate goodwill recognized for this business was $40 million, most of which is expected to be deductible for income tax purposes. The goodwill was assigned to the NSS reportable segment. The final purchase price allocation, which is expected to be completed by the third quarter of 2014, will be based on final purchase price, final appraisals and other analysis of fair values of acquired assets and liabilities. The Company does not expect that differences between the preliminary and final purchase price allocations will have a material impact on its results of operations or financial position.

2013 Business Acquisition

On December 19, 2013, the Company acquired Mustang Technology Group, L.P. (Mustang) business for a purchase price of $54 million, which was financed with cash on hand. The purchase price is subject to adjustment based on closing date net working capital. Mustang develops and manufactures radar-based sensors and systems used in precision-guided weapons, electronic warfare, unmanned systems and other military applications. Based on the preliminary purchase price allocations, the aggregate goodwill recognized for this business was $44 million, most of which is expected to be deductible for income tax purposes. The goodwill was assigned to the Electronic Systems reportable segment. The final purchase price allocation is expected to be completed in the second quarter of 2014 and will be based on final purchase price, final appraisals and other analysis of fair values of acquired assets and liabilities. The Company does not expect that differences between the preliminary and final purchase price allocations will have a material impact on its results of operations or financial position.

9

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

Unaudited Pro Forma Statements of Operations Data

The following unaudited pro forma Statements of Operations data presents the combined results of the Company and its business acquisitions completed during the quarter ended March 28, 2014 and the year ended December 31, 2013, in each case assuming that the business acquisitions completed during these periods had occurred on January 1, 2013.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions, except per share data)
Pro forma net sales	$	2,978	$	3,203
Pro forma net income attributable to L-3	$	179	$	193
Pro forma diluted earnings per share	$	2.00	$	2.11

The unaudited pro forma results disclosed in the table above are based on various assumptions and are not necessarily indicative of the results of operations that would have occurred had the Company completed these acquisitions on January 1, 2013.

5.  Contracts in Process

The components of contracts in process are presented in the table below.

	March 28, 2014			December 31, 2013
	(in millions)
Unbilled contract receivables, gross	$	2,685		$	2,547
Unliquidated progress payments		(990	)		(1,035	)
Unbilled contract receivables, net		1,695			1,512
Inventoried contract costs, gross		1,145			1,093
Unliquidated progress payments		(77	)		(81	)
Inventoried contract costs, net		1,068			1,012
Total contracts in process	$	2,763		$	2,524

Inventoried Contract Costs. In accordance with contract accounting standards, the Company’s U.S. Government contractor businesses account for the portion of their general and administrative (G&A), independent research and development (IRAD) and bids and proposal (B&P) costs that are allowable and reimbursable indirect contract costs under U.S. Government procurement regulations on their U.S. Government contracts (revenue arrangements) as inventoried contract costs. G&A, IRAD and B&P costs are allocated to contracts for which the U.S. Government is the end customer and are charged to costs of sales when sales on the related contracts are recognized. The Company’s U.S. Government contractor businesses record the unallowable portion of their G&A, IRAD and B&P costs to expense as incurred, and do not include them in inventoried contract costs.

10

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

The table below presents a summary of G&A, IRAD and B&P costs included in inventoried contract costs and the changes to them, including amounts charged to cost of sales by the Company’s U.S. Government contractor businesses for the periods presented.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Amounts included in inventoried contract costs at beginning of the period	$	138		$	110
IRAD and B&P costs		72			73
Other G&A costs		204			205
Total contract costs incurred		276			278
Amounts charged to cost of sales		(273	)		(275	)
Amounts included in inventoried contract costs at end of the period	$	141		$	113

The table below presents a summary of selling, general and administrative expenses and research and development expenses for the Company’s commercial businesses, which are expensed as incurred and not included in inventoried contract costs.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Selling, general and administrative expenses	$	71	$	72
Research and development expenses		17		20
Total	$	88	$	92

6.  Inventories

Inventories at Lower of Cost or Market. The table below presents the components of inventories at the lower of cost (first-in, first-out or average cost) or realizable value.

	March 28, 2014		December 31, 2013
	(in millions)
Raw materials, components and sub-assemblies	$	166	$	160
Work in process		128		125
Finished goods		81		74
Total	$	375	$	359

11

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

7.  Goodwill and Identifiable Intangible Assets

Goodwill. In accordance with the accounting standards for business combinations, the Company records the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition (commonly referred to as the purchase price allocation). The table below presents the changes in goodwill by segment for the quarter ended March 28, 2014.

	Aerospace Systems			Electronic Systems			Communication Systems		NSS		Consolidated Total
	(in millions)
Balance at December 31, 2013	$	1,751		$	4,085		$	992	$	968	$	7,796
Business acquisition(1)		—			—			—		40		40
Foreign currency translation adjustments(2)		(9	)		(6	)		—		—		(15	)
Balance at March 28, 2014	$	1,742		$	4,079		$	992	$	1,008	$	7,821

⁽¹⁾  The increase in goodwill for the NSS segment is due to the L-3 Data Tactics business acquisition.

⁽²⁾  The decrease in goodwill presented in the Aerospace Systems and Electronic Systems segments was primarily due to the strengthening of the U.S. dollar against the Canadian dollar during the quarter ended March 28, 2014.

The Company’s accumulated goodwill impairment losses were $58 million at March 28, 2014 and December 31, 2013, of which $43 million and $15 million were recorded in the Electronic Systems and Communication Systems segments, respectively.

Identifiable Intangible Assets. The table below presents information for the Company’s identifiable intangible assets that are subject to amortization.

	March 28, 2014								December 31, 2013
	Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in years)						(in millions)
Customer contractual relationships		19	$	474	$	261	$	213	$	466	$	253	$	213
Technology		11		168		110		58		168		108		60
Other		17		27		15		12		27		15		12
Total		17	$	669	$	386	$	283	$	661	$	376	$	285

The table below presents amortization expense recorded by the Company for its identifiable intangible assets.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Amortization Expense	$	10	$	9

12

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

Based on gross carrying amounts at March 28, 2014, the Company’s estimate of amortization expense for identifiable intangible assets for the years ending December 31, 2014 through 2018 is presented in the table below.

	Year Ending December 31,
	2014		2015		2016		2017		2018
	(in millions)
Estimated amortization expense	$	43	$	41	$	34	$	32	$	26

8.  Other Current Liabilities and Other Liabilities

The table below presents the components of other current liabilities.

	March 28, 2014		December 31, 2013
	(in millions)
Other Current Liabilities:
Accruals for pending and threatened litigation (see Note 17)	$	7	$	6
Accrued product warranty costs		76		75
Estimated costs in excess of estimated contract value to complete contracts in process in a loss position		73		78
Accrued interest		46		52
Deferred revenues		40		35
Other		138		137
Total other current liabilities	$	380	$	383

The table below presents the components of other liabilities.

	March 28, 2014		December 31, 2013
	(in millions)
Other Liabilities:
Non-current income taxes payable (see Note 10)	$	167	$	167
Deferred compensation		47		45
Accrued workers’ compensation		42		46
Accrued product warranty costs		21		24
Notes payable and capital lease obligations		12		15
Other		93		99
Total other liabilities	$	382	$	396

13

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

The table below presents the changes in the Company’s accrued product warranty costs.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Accrued product warranty costs:(1)
Balance at January 1	$	99		$	99
Accruals for product warranties issued during the period		17			19
Settlements made during the period		(19	)		(20	)
Foreign currency translation adjustments		—			(1	)
Balance at end of period	$	97		$	97

⁽¹⁾  Warranty obligations incurred in connection with long-term production contracts that are accounted for under the POC cost-to-cost method are included within the contract estimates at completion and are excluded from the above amounts. The balances above include both the current and non-current amounts.

9.  Debt

The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below.

	March 28, 2014			December 31, 2013
	(in millions)
L-3 Communications:
Borrowings under Amended and Restated Revolving Credit Facility(1)	$	—		$	—
3.95% Senior Notes due 2016		500			500
5.20% Senior Notes due 2019		1,000			1,000
4.75% Senior Notes due 2020		800			800
4.95% Senior Notes due 2021		650			650
Subtotal		2,950			2,950
L-3 Holdings:
3% Convertible Contingent Debt Securities due 2035 (CODES)(2)		689			689
Principal amount of long-term debt		3,639			3,639
Unamortized discounts		(8	)		(9	)
Carrying amount of long-term debt	$	3,631		$	3,630

⁽¹⁾  During the quarter ended March 28, 2014, L-3 Communications’ aggregate borrowings and repayments under the Amended and Restated Revolving Credit Facility were $524 million. At March 28, 2014, L-3 Communications had the availability of all of its $1 billion Amended and Restated Revolving Credit Facility, which expires on February 3, 2017.

⁽²⁾  The CODES have been classified as long-term debt at March 28, 2014, because the Company has the ability to draw on the Amended and Restated Revolving Credit Facility to finance the conversion of the CODES.

L-3 Holdings

Under select conditions, including if L-3 Holdings’ common stock price is more than 120% (currently $106.90) of the then current conversion price (currently $89.08) for a specified period, the conversion feature of the CODES will require L-3 Holdings, upon conversion, to pay the holders of the CODES the principal amount in cash, and if the settlement amount exceeds the principal amount, the excess will be settled in cash or stock or a

14

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

combination thereof, at the Company’s option. The current conversion rate is 11.2259 shares of common stock per $1,000 aggregate principal amount of CODES, which is equal to a conversion price of approximately $89.08 per share. At the current conversion price, the aggregate consideration to be delivered upon conversion would be determined based on 7.7 million shares of L-3 Holdings’ common stock. See Note 10 to the audited consolidated financial statements for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K, for additional information regarding the CODES, including conditions for conversion.

On March 31, 2014, the Company notified holders of the CODES that they are currently entitled to convert all or a portion of their CODES. The CODES are convertible because the closing price of L-3 Holdings common stock, for at least 20 trading days during the 30 consecutive trading-day period ended on March 28, 2014 (the last trading day of the previous fiscal quarter), was greater than $106.90 (120% of the then current conversion price of $89.08) (the “trading price condition”). Holders’ right to convert pursuant to the trading price condition began March 31, 2014 and ends on June 27, 2014. As previously announced, the Company intends to settle the entire conversion payment obligation with respect to converted CODES, if any, in cash.

Interest expense recognized was $5 million for both quarterly periods ended March 28, 2014 and March 29, 2013. The carrying amount of the equity component (conversion feature) of the CODES was $64 million at March 28, 2014 and December 31, 2013.

10.  Income Taxes

The Company and its subsidiaries file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. As of March 28, 2014, the statutes of limitations for the Company’s U.S. Federal income tax returns for the years ended December 31, 2010 through 2012 were open. The U.S. Internal Revenue Service (IRS) commenced audits of the Company’s U.S. Federal income tax returns for 2011 and 2010. The Company cannot predict the outcome of the audits at this time.

The effective tax rate for the quarter ended March 28, 2014 increased to 31.8% from 28.9% for the quarter ended March 29, 2013. The increase was primarily due to a tax benefit in the quarter ended March 29, 2013 of $12 million related to the U.S. Federal research and experimentation tax credit for 2012 and 2013, which did not recur in the quarter ended March 28, 2014. This increase was partially offset by a lower effective tax rate on foreign earnings.

As of March 28, 2014, the Company anticipates that unrecognized tax benefits will decrease by approximately $7 million over the next 12 months due to the potential resolution of unrecognized tax benefits involving several jurisdictions and tax periods. The actual amount of the decrease over the next 12 months could vary significantly depending on the ultimate timing and nature of any settlement.

Non-current income taxes payable include accrued potential interest of $12 million ($7 million after income taxes) at March 28, 2014 and $11 million ($7 million after income taxes) at December 31, 2013, and potential penalties of $7 million at March 28, 2014 and $8 million at December 31, 2013.

15

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

11.  Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income

The amounts reclassified from Accumulated Other Comprehensive (Loss) Income (AOCI) for the quarter ended March 28, 2014 are presented in the table below.

	Foreign currency translation			Unrealized gains (losses) on hedging instruments			Unrecognized (losses) and prior service cost, net			Total accumulated other comprehensive (loss) income
	(in millions)
Balance at December 31, 2012	$	163		$	3		$	(720	)	$	(554	)
Other comprehensive loss before reclassifications		(34	)		(3	)		—			(37	)
Amounts reclassified from other comprehensive income, net of tax		—			—			13			13
Net current period other comprehensive (loss) income	$	(34	)	$	(3	)	$	13		$	(24	)
Balance at March 29, 2013	$	129		$	—		$	(707	)	$	(578	)
Balance at December 31, 2013	$	142		$	1		$	(253	)	$	(110	)
Other comprehensive loss before reclassifications, net of tax		(16	)		(2	)		—			(18	)
Amounts reclassified from other comprehensive (loss) income, net of tax		—			(3	)		3			—
Net current period other comprehensive (loss) income		(16	)		(5	)		3			(18	)
Balance at March 28, 2014	$	126		$	(4	)	$	(250	)	$	(128	)

Further details regarding the amounts reclassified from AOCI for the quarter ended March 28, 2014 are presented in the table below.

	Amount Reclassified from AOCI						Affected Line Item in the Unaudited Condensed Consolidated Statements of  Operations
	First Quarter Ended
Details About Accumulated Other Comprehensive (Loss) Income Components	March 28, 2014			March 29, 2013
	(in millions)			(in millions)
Loss on hedging instruments	$	(5	)	$	—		Cost of sales-products
		(5	)		—		Income before income taxes
		2			—		Benefit for income taxes
	$	(3	)	$	—		Net income
Amortization of defined benefit pension items:
Net loss	$	4		$	22		(a)
		4			22		Income before income taxes
		(1	)		(9	)	Provision for income taxes
	$	3		$	13		Net Income
Total reclassification for the period	$	—		$	13		Net Income

^(a)  Amounts related to pension and postretirement benefit plans were reclassified from AOCI and recorded as a component of net periodic benefit cost (see Note 18 for additional information).

16

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

12.  Equity

On February 5, 2013, L-3 Holdings’ Board of Directors approved a share repurchase program that authorizes L-3 Holdings to repurchase up to $1.5 billion of its common stock through June 30, 2015. Repurchases of L-3 Holdings’ common stock under the share repurchase program are made at management’s discretion in accordance with applicable U.S. Federal securities laws in the open market or otherwise. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including, but not limited to, the Company’s financial position, earnings, legal requirements, other investment opportunities (including acquisitions), and market conditions. L-3 Holdings repurchased 1.2 million shares of its common stock at an average price of $109.43 per share for an aggregate amount of $133 million from January 1, 2014 through March 28, 2014. All share repurchases of L-3 Holdings’ common stock have been recorded as treasury shares.

At March 28, 2014, the remaining dollar value of authorization under the share repurchase program was $735 million. From March 29, 2014 through April 23, 2014, L-3 Holdings repurchased 307,692 shares of its common stock at an average price of $116.98 per share for an aggregate amount of $36 million.

On February 11, 2014, L-3 Holdings’ Board of Directors declared a cash dividend of $0.60 per share, which resulted in the Company paying total cash dividends of $52 million on March 17, 2014. In addition, during the quarter ended March 28, 2014, the Company paid $3 million of previously accrued dividends for employee held stock-awards.

17

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

13.  L-3 Holdings’ Earnings Per Common Share

A reconciliation of basic and diluted earnings per share (EPS) is presented in the table below.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions, except per share data)
Reconciliation of net income:
Net income	$	182		$	194
Net income attributable to noncontrolling interests		(2	)		(1	)
Net income attributable to L-3 Holdings’ common shareholders	$	180		$	193
Earnings per share attributable to L-3 Holdings’ common shareholders:
Basic:
Weighted average common shares outstanding		86.1			90.3
Basic earnings per share:
Net income	$	2.09		$	2.14
Diluted:
Common and potential common shares:
Weighted average common shares outstanding		86.1			90.3
Assumed exercise of stock options		3.4			3.4
Unvested restricted stock awards		1.7			1.7
Employee stock purchase plan contributions		—			0.2
Performance unit awards		0.2			0.1
Assumed purchase of common shares for treasury		(3.5	)		(4.2	)
Assumed conversion of the CODES(1)		1.5			—
Common and potential common shares		89.4			91.5
Diluted earnings per share:
Net income	$	2.01		$	2.11

⁽¹⁾  L-3 Holdings’ CODES had no impact on diluted EPS for the quarterly period ended March 29, 2013 as the average market price of L-3 Holdings common stock during this period was less than the price at which the CODES would have been convertible into L-3 Holdings common stock. As of March 28, 2014, the conversion price was $89.08.

The computation of diluted EPS excluded stock options and employee stock purchase plan contributions of 0.4 million and stock options of 1.8 million for the quarterly periods ended March 28, 2014 and March 29, 2013, respectively, as they were anti-dilutive.

18

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

14.  Fair Value Measurements

The following table presents the fair value hierarchy level for each of the Company’s assets and liabilities that are measured and recorded at fair value on a recurring basis.

	March 28, 2014						December 31, 2013
Description	Level 1(1)		Level 2(2)		Level 3(3)		Level 1(1)		Level 2(2)		Level 3(3)
	(in millions)
Assets
Cash equivalents	$	22	$	—	$	—	$	299	$	—	$	—
Derivatives (foreign currency forward contracts)		—		5		—		—		6		—
Total Assets	$	22	$	5	$	—	$	299	$	6	$	—
Liabilities
Derivatives (foreign currency forward contracts)	$	—	$	10	$	—	$	—	$	5	$	—

⁽¹⁾  Level 1 is based on quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Cash equivalents are primarily held in registered money market funds, which are valued using quoted market prices.

⁽²⁾  Level 2 is based on pricing inputs other than quoted prices in active markets, which are either directly or indirectly observable. The fair value is determined using a valuation model based on observable market inputs, including quoted foreign currency forward exchange rates and consideration of non-performance risk.

⁽³⁾  Level 3 is based on pricing inputs that are not observable and not corroborated by market data. The Company has no Level 3 assets or liabilities.

15.  Financial Instruments

At March 28, 2014 and December 31, 2013, the Company’s financial instruments consisted primarily of cash and cash equivalents, billed receivables, trade accounts payable, Senior Notes, CODES and foreign currency forward contracts. The carrying amounts of cash and cash equivalents, billed receivables and trade accounts payable are representative of their respective fair values because of their short-term maturities or the expected settlement dates of these instruments. The carrying amounts and estimated fair values of the Company’s other financial instruments are presented in the table below.

	March 28, 2014						December 31, 2013
	Carrying Amount			Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(in millions)
Senior Notes(1)	$	2,942		$	3,168		$	2,941	$	3,121
CODES(1)		689			911			689		830
Foreign currency forward contracts(2)		(5	)		(5	)		1		1

⁽¹⁾  The Company measures the fair value of its Senior Notes and CODES using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

⁽²⁾  See Note 16 for additional disclosures regarding the notional amounts and fair values of foreign currency forward contracts.

16.  Derivative Financial Instruments

The Company’s derivative financial instruments include foreign currency forward contracts, which are entered into for risk management purposes, and an embedded derivative representing the contingent interest payment provision related to the CODES.

19

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

Foreign Currency Forward Contracts. The Company’s U.S. and foreign businesses enter into contracts with customers, subcontractors or vendors that are denominated in currencies other than their functional currencies. To protect the functional currency equivalent cash flows associated with certain of these contracts, the Company enters into foreign currency forward contracts. The Company’s activities involving foreign currency forward contracts are designed to hedge the changes in the functional currency equivalent cash flows due to movements in foreign exchange rates compared to the functional currency. The foreign currencies hedged are primarily the Canadian dollar, the U.S. dollar, the Euro, and the British pound. The Company manages exposure to counterparty non-performance credit risk by entering into foreign currency forward contracts with major financial institutions that are expected to fully perform under the terms of such contracts. Foreign currency forward contracts are recorded in the Company’s condensed consolidated balance sheets at fair value and are generally designated and accounted for as cash flow hedges in accordance with the accounting standards for derivative instruments and hedging activities. Gains and losses on designated foreign currency forward contracts that are highly effective in offsetting the corresponding change in the cash flows of the hedged transactions are recorded net of income taxes in AOCI and then recognized in income when the underlying hedged transaction affects income. Gains and losses on foreign currency forward contracts that do not meet hedge accounting criteria are recognized in income immediately. Notional amounts are used to measure the volume of foreign currency forward contracts and do not represent exposure to foreign currency losses. The table below presents the notional amounts of the Company’s outstanding foreign currency forward contracts by currency at March 28, 2014.

Currency	Notional Amounts
	(in millions)
Canadian dollar	$	222
U.S. dollar		115
Euro		83
British pound		13
Other		2
Total	$	435

At March 28, 2014, the Company’s foreign currency forward contracts had maturities through 2018.

Embedded Derivative. The embedded derivative related to the issuance of the CODES is recorded at fair value, which was zero at March 28, 2014 and December 31, 2013.

20

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

The table below presents the location of the Company’s derivative instruments recorded at fair value on the condensed consolidated balance sheets.

	March 28, 2014								December 31, 2013
	Other Current Assets		Other Assets		Other Current Liabilities		Other Liabilities		Other Current Assets		Other Assets		Other Current Liabilities		Other Liabilities
	(in millions)
Derivatives designated as hedging instruments:
Foreign currency forward contracts(1)	$	4	$	1	$	7	$	3	$	5	$	1	$	3	$	2
Derivatives not designated as hedging instruments:
Foreign currency forward contracts(1)		—		—		—		—		—		—		—		—
Embedded derivative related to the CODES		—		—		—		—		—		—		—		—
Total derivative instruments	$	4	$	1	$	7	$	3	$	5	$	1	$	3	$	2

⁽¹⁾  See Note 14 for a description of the fair value hierarchy related to the Company’s foreign currency forward contracts.

The effect of gains or losses from foreign currency forward contracts was not material to the unaudited condensed consolidated statements of operations for the quarterly periods ended March 28, 2014 and March 29, 2013. At March 28, 2014, the estimated amount of existing gains that are expected to be reclassified into income within the next 12 months is $4 million.

17.  Commitments and Contingencies

Guarantees

In connection with the spin-off of Engility Holdings, Inc. (Engility), L-3 entered into a Distribution Agreement and several other agreements that govern certain aspects of L-3’s relationship with Engility, including employee matters, tax matters, transition services, and the future supplier/customer relationship between L-3 and Engility. These agreements generally provide cross-indemnities that, except as otherwise provided, are principally designed to place the financial responsibility for the obligations and liabilities of each entity with that respective entity. Engility has joint and several liability with L-3 to the U.S. Internal Revenue Service (IRS) for the consolidated U.S. Federal income taxes of L-3’s consolidated group for taxable periods in which Engility was a part of that group. However, the Tax Matters Agreement specifies the portion of this tax liability for which L-3 and Engility will each bear responsibility, and L-3 and Engility have agreed to indemnify each other against any amounts for which the other is not responsible. The Tax Matters Agreement also allocates responsibility between L-3 and Engility for other taxes, including special rules for allocating tax liabilities in the event that the spin-off is determined not to be tax-free. Though valid as between the parties, the Tax Matters Agreement is not binding on the IRS.

Procurement Regulations

A substantial majority of the Company’s revenues are generated from providing products and services under legally binding agreements or contracts with U.S. Government and international government customers. U.S. Government contracts are subject to extensive legal and regulatory requirements, and, from time to time,

21

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

agencies of the U.S. Government investigate whether such contracts were and are being conducted in accordance with these requirements. The Company is currently cooperating with the U.S. Government on several investigations from which civil, criminal or administrative proceedings have or could result and give rise to fines, penalties, compensatory and treble damages, restitution and/or forfeitures. The Company does not currently anticipate that any of these investigations will have a material adverse effect, individually or in the aggregate, on its consolidated financial position, results of operations or cash flows. However, under U.S. Government regulations, an indictment of the Company by a federal grand jury, or an administrative finding against the Company as to its present responsibility to be a U.S. Government contractor or subcontractor, could result in the Company being suspended for a period of time from eligibility for awards of new government contracts or task orders or in a loss of export privileges. A conviction, or an administrative finding against the Company that satisfies the requisite level of seriousness, could result in debarment from contracting with the federal government for a specified term. In addition, all of the Company’s U.S. Government contracts: (1) are subject to audit and various pricing and cost controls, (2) include standard provisions for termination for the convenience of the U.S. Government or for default, and (3) are subject to cancellation if funds for contracts become unavailable. International government contracts generally include comparable provisions relating to terminations for convenience or default, as well as other procurement clauses relevant to the international government.

Litigation Matters

The Company is also subject to litigation, proceedings, claims or assessments and various contingent liabilities incidental to its businesses, including those specified below. Furthermore, in connection with certain business acquisitions, the Company has assumed some or all claims against, and liabilities of, such acquired businesses, including both asserted and unasserted claims and liabilities.

In accordance with the accounting standard for contingencies, the Company records a liability when management believes that it is both probable that a liability has been incurred and the Company can reasonably estimate the amount of the loss. Generally, the loss is recorded at the amount the Company expects to resolve the liability. The estimated amounts of liabilities recorded for pending and threatened litigation are disclosed in Note 8. Amounts recoverable from insurance contracts or third parties are recorded as assets when deemed probable. At March 28, 2014, the Company did not record any amounts for recoveries from insurance contracts or third parties in connection with the amount of liabilities recorded for pending and threatened litigation. Legal defense costs are expensed as incurred. The Company believes it has recorded adequate provisions for its litigation matters. The Company reviews these provisions quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. While it is reasonably possible that an unfavorable outcome may occur in one or more of the following matters, unless otherwise stated below, the Company believes that it is not probable that a loss has been incurred in any of these matters. With respect to the litigation matters below for which it is reasonably possible that an unfavorable outcome may occur, an estimate of loss or range of loss is disclosed when such amount or amounts can be reasonably estimated. Although the Company believes that it has valid defenses with respect to legal matters and investigations pending against it, the results of litigation can be difficult to predict, particularly those involving jury trials. Accordingly, our current judgment as to the likelihood of our loss (or our current estimate as to the potential range of loss, if applicable) with respect to any particular litigation matter may turn out to be wrong. Therefore, it is possible that the financial position, results of operations or cash flows of the Company could be materially adversely affected in any particular period by the unfavorable resolution of one or more of these or other contingencies.

22

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

Kalitta Air. On January 31, 1997, a predecessor of Kalitta Air filed a lawsuit in the U.S. District Court for the Northern District of California (the trial court) asserting, among other things, negligence and negligent misrepresentation against Central Texas Airborne Systems, Inc. (CTAS), a predecessor to L-3 Integrated Systems (L-3 IS), in connection with work performed by a predecessor to CTAS to convert two Boeing 747 aircraft from passenger configuration to cargo freighters. CTAS’ insurance carrier has accepted defense of this matter and has retained counsel, subject to a reservation of rights by the insurer to dispute its obligations under the applicable insurance policies in the event a judgment is ultimately rendered against CTAS. The work at issue in the lawsuit was performed using Supplemental Type Certificates (STCs) issued in 1988 by the Federal Aviation Administration (FAA). In 1996, following completion of the work, the FAA issued an airworthiness directive with respect to the STCs that effectively grounded the aircraft. Following two jury trials (in which Kalitta Air did not prevail) and related appeals to the U.S. Court of Appeals for the Ninth Circuit (the Court of Appeals), a third jury trial for this matter began on October 31, 2011, during which Kalitta Air sought damages of approximately $235 million plus an unspecified amount of pre-judgment interest that, in other contexts, has been claimed by Kalitta Air to exceed $240 million. Following the completion of the third trial on November 30, 2011, the jury rendered a verdict in favor of CTAS, finding no negligence on the part of CTAS. The trial court entered a judgment upon the verdict on March 20, 2012. Kalitta Air filed an appeal of the judgment with the Court of Appeals on July 23, 2012, which ruled against Kalitta Air and affirmed the trial court’s judgment on November 25, 2013. The Court of Appeals subsequently denied Kalitta Air’s motion for a rehearing of its appeal. On April 3, 2014, Kalitta Air filed a petition with the U.S. Supreme Court seeking review of the Court of Appeals’ November 25, 2013 decision. L-3 IS intends to file a brief with the U.S. Supreme Court opposing Kalitta Air’s petition for review.

Bashkirian Airways. On July 1, 2004, lawsuits were filed on behalf of the estates of 31 Russian children in the state courts of Washington, Arizona, California, Florida, New York and New Jersey against Honeywell, Honeywell TCAS, Thales USA, Thales France, the Company and Aviation Communications & Surveillance Systems (ACSS), which is a joint venture of L-3 and Thales. The suits relate to the crash over southern Germany of a Bashkirian Airways Tupelov TU 154M aircraft and a DHL Boeing 757 cargo aircraft. On-board the Tupelov aircraft were 9 crew members and 60 passengers, including 45 children. The Boeing aircraft carried a crew of two. Both aircraft were equipped with Honeywell/ACSS Model 2000, Change 7 Traffic Collision and Avoidance Systems (TCAS). Sensing the other aircraft, the on-board DHL TCAS instructed the DHL pilot to descend, and the Tupelov on-board TCAS instructed the Tupelov pilot to climb. However, the Swiss air traffic controller ordered the Tupelov pilot to descend. The Tupelov pilot disregarded the on-board TCAS and put the Tupelov aircraft into a descent striking the DHL aircraft in midair at approximately 35,000 feet. All crew and passengers of both planes were lost. Investigations by the National Transportation Safety Board after the crash revealed that both TCAS units were performing as designed. The suits allege negligence and strict product liability based upon the design of the units and the training provided to resolve conflicting commands and seek approximately $315 million in damages, including $150 million in punitive damages. The Company’s insurers have accepted defense of this matter and have retained counsel. The matters were consolidated in the U.S. District Court for the District of New Jersey, which then dismissed the actions on the basis of forum non conveniens. Plaintiffs representing 30 of the estates re-filed their complaint against ACSS on April 23, 2007 with the Barcelona Court’s Registry in Spain. On March 9, 2010, the court ruled in favor of the plaintiffs and entered judgment against ACSS in the amount of approximately $6.7 million, all of which represented compensatory damages. Both ACSS and the plaintiffs appealed the judgment. In May 2012, the appellate court ruled in favor of the plaintiffs and entered judgment against ACSS in the amount of $48 million. ACSS filed an appeal of the judgment with the Supreme Court of Spain on September 28, 2012. On July 1, 2013, the Supreme Court agreed to consider the appeal, and the parties are awaiting the Supreme Court’s decision. The Company believes that the ruling and the

23

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

damages awarded are inconsistent with the law and evidence presented and, accordingly, that it is not probable that the Company has incurred a loss with respect to this matter. As of the date of this filing, 18 out of the 30 plaintiffs have released their claims against ACSS in consideration for payments made by the Company’s insurance carriers.

18. Pension and Other Postretirement Benefits

The following table summarizes the components of net periodic benefit cost for the Company’s pension and other postretirement benefit plans.

	Pension Plans						Postretirement Benefit Plans
	First Quarter Ended						First Quarter Ended
	March 28, 2014			March 29, 2013			March 28, 2014			March 29, 2013
	(in millions)
Components of net periodic benefit cost:
Service cost	$	27		$	32		$	1		$	1
Interest cost		36			33			2			2
Expected return on plan assets		(48	)		(42	)		(1	)		(1	)
Amortization of prior service costs (credits)		1			—			(1	)		1
Amortization of net loss (gain)		4			22			—			(1	)
Curtailment loss		1			—			—			—
Net periodic benefit cost	$	21		$	45		$	1		$	2

Contributions. The Company contributed cash of $14 million to its pension plans and $2 million to its other postretirement benefit plans during the quarter ended March 28, 2014. The Company expects to contribute an additional $83 million to its pension plans and $8 million to its other postretirement benefit plans during the remainder of 2014.

19.  Stock-Based Compensation

On February 19, 2014, the Company granted stock-based compensation under the Amended and Restated 2008 Long Term Performance Plan (2008 LTPP) in the form of stock options, restricted stock units and performance units further discussed below.

Stock Options. The Company granted 472,992 stock options with an exercise price of $113.67 per option, which was equal to the closing price of L-3 Holdings’ common stock on the date of grant. The options expire after 10 years from the date of grant and vest ratably over a three-year period on the annual anniversary of the date of grant. The options granted to our Chairman, President and Chief Executive Officer are also subject to performance-based vesting conditions. The weighted average grant date fair value for the options of $20.02 per option was estimated using the Black-Scholes option-pricing model. The weighted average assumptions used in the valuation model for this grant are presented in the table below.

Expected holding period (in years)	5.5
Expected volatility	24.4	%
Expected dividend yield	2.7	%
Risk-free interest rate	1.7	%

24

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

Restricted Stock Units. The Company granted 402,870 restricted stock units with a weighted average grant date fair value of $113.67 per share. Restricted stock units automatically convert into shares of L-3 Holdings’ common stock upon vesting, and are subject to forfeiture until certain restrictions have lapsed, including a three year cliff vesting period for employees and a one year cliff vesting period for non-employee directors, in each case starting on the date of grant.

Performance Units. The Company granted 47,467 performance units with a weighted average grant date fair value per unit of $113.67. The final payout for these units is based on the achievement of pre-determined EPS goals established by the compensation committee of the Company’s Board of Directors for the three-year period ending December 31, 2016. The payout can range from zero to 200% of the original number of units awarded, which are converted into shares of L-3 Holdings’ common stock based on the then existing closing price at the end of the performance period.

20.  Supplemental Cash Flow Information

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Interest paid on outstanding debt	$	48	$	48
Income tax payments		26		19
Income tax refunds		1		10

21.  Segment Information

The Company has four reportable segments, as described in Note 1. The Company evaluates the performance of its operating segments and reportable segments based on their sales and operating income. All corporate expenses are allocated to the Company’s operating segments using an allocation methodology prescribed by U.S. Government regulations for government contractors. Accordingly, all costs and expenses are included in the Company’s measure of segment profitability.

25

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

The tables below present net sales, operating income, depreciation and amortization and total assets by reportable segment.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Net Sales:
Aerospace Systems	$	1,083		$	1,187
Electronic Systems		1,103			1,139
Communication Systems		517			565
NSS		305			331
Elimination of intercompany sales		(37	)		(37	)
Consolidated total	$	2,971		$	3,185
Operating Income:
Aerospace Systems	$	114		$	140
Electronic Systems		125			117
Communication Systems		50			35
NSS		18			21
Consolidated total	$	307		$	313
Depreciation and amortization:
Aerospace Systems	$	10		$	9
Electronic Systems		29			30
Communication Systems		12			12
NSS		3			3
Consolidated total	$	54		$	54

	March 28, 2014		December 31, 2013
	(in millions)
Total Assets:
Aerospace Systems	$	3,252	$	3,175
Electronic Systems		6,993		6,895
Communication Systems		2,128		2,130
NSS		1,338		1,247
Corporate		354		562
Consolidated total	$	14,065	$	14,009

22.  Accounting Standards Issued and Not Yet Implemented

In April 2014, the FASB issued an accounting standards update that provides new guidance on the accounting and reporting of discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Additionally, the new guidance requires additional disclosures about discontinued operations. The update is effective for the Company for interim and

26

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

annual periods beginning January 1, 2015. The adoption of this standard is not expected to impact the Company’s financial position, results of operations or cash flows and will only affect the treatment of future discontinued operations.

23.  Employee Severance and Termination Costs

Consistent with the Company’s strategy to continuously improve its cost structure and right-size its businesses, especially in view of sequestration and other DoD budget reductions, L-3 is completing employment reduction actions across several of its businesses to reduce both direct and indirect costs, including overhead and general and administrative costs. As a result of these initiatives and due to the impact of sequestration at certain affected business units, the Company recorded $8 million in employee severance and other termination costs with respect to approximately 570 employees during the quarter period ended March 28, 2014. During the year ended December 31, 2013, the Company recorded a total of $29 million in employee severance and other termination costs with respect to approximately 2,000 employees. Employee severance and other termination costs are reported within cost of sales on the unaudited condensed consolidated statement of operations. The remaining balance to be paid in connection with these initiatives was $13 million at March 28, 2014 and $11 million at December 31, 2013. Employee severance and other termination costs incurred by reportable segment for the quarterly periods ended March 28, 2014 and March 29, 2013 are presented in the table below.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Reportable Segment
Aerospace Systems	$	—	$	—
Electronic Systems		4		3
Communication Systems		3		1
NSS		1		1
Consolidated	$	8	$	5

24.  Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries

L-3 Communications is a 100% owned subsidiary of L-3 Holdings. The debt of L-3 Communications, including the Senior Notes and borrowings under amounts drawn against the Amended and Restated Revolving Credit Facility is guaranteed, on a joint and several, full and unconditional basis, by certain of its domestic subsidiaries (the “Guarantor Subsidiaries”) and, in the case of the Amended and Restated Revolving Credit Facility, by L-3 Holdings. The debt of L-3 Holdings, including the CODES, is guaranteed on a joint and several, full and unconditional basis, by L-3 Communications and the Guarantor Subsidiaries. See Note 10 to the audited consolidated financial statements for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K. The foreign subsidiaries and certain domestic subsidiaries of L-3 Communications (the “Non-Guarantor Subsidiaries”) do not guarantee the debt of L-3 Communications or L-3 Holdings. None of the debt of L-3 Communications has been issued by its subsidiaries. There are no restrictions on the payment of dividends from the Guarantor Subsidiaries to L-3 Communications or from L-3 Communications to L-3 Holdings.

27

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

Under the terms of the indentures governing the Senior Notes, the guarantees of the Senior Notes will automatically and unconditionally be released and discharged: (1) upon the release of all guarantees of all other outstanding indebtedness of L-3 Communications Corporation, or (2) upon the determination that such guarantor is no longer a “domestic subsidiary”. Under the terms of the indenture governing the CODES, the guarantees of the CODES will be automatically and unconditionally released and discharged: (1) upon the release of guarantees of all other outstanding indebtedness of L-3 Holdings and its subsidiaries (other than a foreign subsidiary), or (2) upon the designation of such guarantor as an “excluded subsidiary.” In addition, the guarantees of the Senior Notes and the CODES will unconditionally be released and discharged in the event of a sale or other disposition of all of the assets of any guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the capital stock of such guarantor.

28

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

The following unaudited condensed combining financial information presents the results of operations, financial position and cash flows of: (1) L-3 Holdings, excluding L-3 Communications and its consolidated subsidiaries (the “Parent”), (2) L-3 Communications, excluding its consolidated subsidiaries, (3) the Guarantor Subsidiaries, (4) the Non-Guarantor Subsidiaries, and (5) the eliminations to arrive at the information for L-3 on a consolidated basis.

	L-3 Holdings (Parent)		L-3 Communications		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Balance Sheets:
At March 28, 2014:
Current assets:
Cash and cash equivalents	$	—	$	57	$	—	$	182	$	(12	)	$	227
Billed receivables, net		—		343		483		267		—			1,093
Contracts in process		—		1,029		1,330		404		—			2,763
Other current assets		—		296		148		175		—			619
Total current assets		—		1,725		1,961		1,028		(12	)		4,702
Goodwill		—		2,335		4,326		1,160		—			7,821
Other assets		—		784		517		241		—			1,542
Investment in and amounts due from consolidated subsidiaries		6,802		7,287		3,626		—		(17,715	)		—
Total assets	$	6,802	$	12,131	$	10,430	$	2,429	$	(17,727	)	$	14,065
Current liabilities	$	—	$	909	$	925	$	634	$	(12	)	$	2,456
Amounts due to consolidated subsidiaries		—		—		—		356		(356	)		—
Other long-term liabilities		—		1,478		191		121		—			1,790
Long-term debt		689		3,631		—		—		(689	)		3,631
Total liabilities		689		6,018		1,116		1,111		(1,057	)		7,877
L-3 shareholders’ equity		6,113		6,113		9,314		1,318		(16,745	)		6,113
Noncontrolling interests		—		—		—		—		75			75
Total equity		6,113		6,113		9,314		1,318		(16,670	)		6,188
Total liabilities and equity	$	6,802	$	12,131	$	10,430	$	2,429	$	(17,727	)	$	14,065
At December 31, 2013:
Current assets:
Cash and cash equivalents	$	—	$	258	$	—	$	261	$	(19	)	$	500
Billed receivables, net		—		364		425		226		—			1,015
Contracts in process		—		951		1,209		364		—			2,524
Other current assets		—		281		160		169		—			610
Total current assets		—		1,854		1,794		1,020		(19	)		4,649
Goodwill		—		2,335		4,325		1,136		—			7,796
Other assets		—		807		529		228		—			1,564
Investment in and amounts due from consolidated subsidiaries		6,712		7,007		3,713		—		(17,432	)		—
Total assets	$	6,712	$	12,003	$	10,361	$	2,384	$	(17,451	)	$	14,009
Current liabilities	$	—	$	909	$	1,005	$	628	$	(19	)	$	2,523
Amounts due to consolidated subsidiaries		—		—		—		246		(246	)		—
Other long-term liabilities		—		1,441		193		124		—			1,758
Long-term debt		689		3,630		—		—		(689	)		3,630
Total liabilities		689		5,980		1,198		998		(954	)		7,911
L-3 shareholders’ equity		6,023		6,023		9,163		1,386		(16,572	)		6,023
Noncontrolling interests		—		—		—		—		75			75
Total equity		6,023		6,023		9,163		1,386		(16,497	)		6,098
Total liabilities and equity	$	6,712	$	12,003	$	10,361	$	2,384	$	(17,451	)	$	14,009

29

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

	L-3 Holdings (Parent)			L-3 Communications			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Statements of Operations:
For the quarter ended March 28, 2014:
Total net sales	$	—		$	868		$	1,631		$	546		$	(74	)	$	2,971
Total cost of sales		(15	)		(774	)		(1,471	)		(493	)		89			(2,664	)
Operating (loss) income		(15	)		94			160			53			15			307
Interest expense		(5	)		(43	)		—			—			5			(43	)
Interest and other income, net		—			3			—			—			—			3
(Loss) income before income taxes		(20	)		54			160			53			20			267
Benefit (provision) for income taxes		6			(17	)		(51	)		(17	)		(6	)		(85	)
Equity in net income of consolidated subsidiaries		194			143			—			—			(337	)		—
Net income		180			180			109			36			(323	)		182
Net income attributable to noncontrolling interests		—			—			—			—			(2	)		(2	)
Net income attributable to L-3	$	180		$	180		$	109		$	36		$	(325	)	$	180
Comprehensive income attributable to L-3	$	162		$	162		$	106		$	19		$	(287	)	$	162
For the quarter ended March 29, 2013:
Total net sales	$	—		$	938		$	1,735		$	591		$	(79	)	$	3,185
Total cost of sales		(14	)		(866	)		(1,554	)		(531	)		93			(2,872	)
Operating (loss) income		(14	)		72			181			60			14			313
Interest expense		(5	)		(43	)		—			—			5			(43	)
Interest and other income, net		—			2			—			1			—			3
(Loss) income before income taxes		(19	)		31			181			61			19			273
Benefit (provision) for income taxes		5			(9	)		(52	)		(18	)		(5	)		(79	)
Equity in net income of consolidated subsidiaries		207			171			—			—			(378	)		—
Net income		193			193			129			43			(364	)		194
Net income attributable to noncontrolling interests		—			—			—			—			(1	)		(1	)
Net income attributable to L-3	$	193		$	193		$	129		$	43		$	(365	)	$	193
Comprehensive income attributable to L-3	$	169		$	169		$	129		$	6		$	(304	)	$	169

30

L-3 COMMUNICATIONS HOLDINGS, INC.

AND L-3 COMMUNICATIONS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS — (continued)

	L-3 Holdings (Parent)			L-3 Communications			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Statements of Cash Flows:
For the quarter ended March 28, 2014:
Operating activities:
Net cash from (used in) operating activities	$	188		$	80		$	(61	)	$	(34	)	$	(235	)	$	(62	)
Investing activities:
Business acquisitions, net of cash acquired		—			(57	)		—			—			—			(57	)
Investments in L-3 Communications		(51	)		—			—			—			51			—
Other investing activities		—			(13	)		(15	)		(1	)		—			(29	)
Net cash used in investing activities		(51	)		(70	)		(15	)		(1	)		51			(86	)
Financing activities:
Common stock repurchased		(133	)		—			—			—			—			(133	)
Dividends paid on L-3 Holdings common stock		(55	)		—			—			—			—			(55	)
Dividends paid to L-3 Holdings		—			(188	)		—			—			188			—
Investments from L-3 Holdings		—			51			—			—			(51	)		—
Other financing activities		51			(74	)		76			(43	)		54			64
Net cash (used in) from financing activities		(137	)		(211	)		76			(43	)		191			(124	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(1	)		—			(1	)
Net decrease in cash		—			(201	)		—			(79	)		7			(273	)
Cash and cash equivalents, beginning of the period		—			258			—			261			(19	)		500
Cash and cash equivalents, end of the period	$	—		$	57		$	—		$	182		$	(12	)	$	227
For the quarter ended March 29, 2013:
Operating activities:
Net cash from operating activities	$	174		$	92		$	73		$	24		$	(217	)	$	146
Investing activities:
Investments in L-3 Communications		(13	)		—			—			—			13			—
Other investing activities		—			(25	)		(25	)		(4	)		—			(54	)
Net cash used in investing activities		(13	)		(25	)		(25	)		(4	)		13			(54	)
Financing activities:
Common stock repurchased		(122	)		—			—			—			—			(122	)
Dividends paid on L-3 Holdings common stock		(52	)		—			—			—			—			(52	)
Dividends paid to L-3 Holdings		—			(174	)		—			—			174			—
Investments from L-3 Holdings		—			13			—			—			(13	)		—
Other financing activities		13			(86	)		(48	)		(32	)		169			16
Net cash used in financing activities		(161	)		(247	)		(48	)		(32	)		330			(158	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(7	)		—			(7	)
Net decrease in cash		—			(180	)		—			(19	)		126			(73	)
Cash and cash equivalents, beginning of the period		—			246			—			242			(139	)		349
Cash and cash equivalents, end of the period	$	—		$	66		$	—		$	223		$	(13	)	$	276

31

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Overview and Outlook

L-3’s Business

L-3 is a prime contractor in aerospace systems and national security solutions. L-3 is also a leading provider of a broad range of communication and electronic systems and products used on military and commercial platforms. Our customers include the United States (U.S.) Department of Defense (DoD) and its prime contractors, U.S. Government intelligence agencies, the U.S. Department of Homeland Security (DHS), U.S. Department of State (DoS), allied international governments, and domestic and international commercial customers.

In the quarter ended March 28, 2014 (2014 First Quarter), we reorganized our business segments to better align our organizational structure with customer priorities and increase operational efficiencies. After the realignment, L-3’s structure consists of the following four segments: Aerospace Systems, Electronic Systems, Communication Systems and National Security Solutions, as further described below.

Aerospace Systems: combines the operations of the former Platform & Logistics Solutions (P&LS) segment with Intelligence, Surveillance and Reconnaissance (ISR) Systems. ISR Systems was part of the former Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR) segment. Aerospace Systems delivers integrated solutions for the global ISR market and provides modernization, upgrade, sustainment, and maintenance and logistics support for a wide variety of aircraft and ground systems.

Electronic Systems: includes all of its previous businesses historically included in this segment except the Microwave Products businesses, which are now part of Communication Systems. Electronic Systems provides a broad range of components, products, subsystems, systems and related services for military and commercial customers.

Communication Systems: combines the operations of the Microwave Products businesses, which were previously part of the Electronic Systems reportable segment, with the operations of the Networked and Secure Communications Products businesses, previously part of the former C³ISR segment. Communication Systems delivers products and services for the global communications market, specializing in strategic and tactical airborne, space, ground and sea-based communication systems.

National Security Solutions (NSS): remains unchanged. NSS will continue to provide cybersecurity solutions, high-performance computing, enterprise IT services, analytics and intelligence analysis.

Financial information with respect to our segments is included in Results of Operations within this section and in Note 21 to our unaudited condensed consolidated financial statements. Financial information for the quarter ended March 29, 2013 (2013 First Quarter) in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” has been revised for the segment realignment discussed above.

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For the year ended December 31, 2013, we generated sales of $12,629 million. Our primary customer was the DoD. The table below presents a summary of our consolidated 2013 sales by major category of end customer and the percent contributed by each to our consolidated 2013 sales.

	2013 Sales		% of 2013 Sales
	(in millions)
DoD	$	8,584		68	%
Other U.S. Government		584		5
Total U.S. Government		9,168		73	%
International (foreign governments)		1,753		14
Commercial — international		1,061		8
Commercial — domestic		647		5
Total sales	$	12,629		100	%

We currently expect the percentage of our consolidated sales to the U.S. Government to decline from 73% of our consolidated 2013 sales to approximately 70% of our consolidated 2014 sales. U.S. Government sales include sales to the DoD, which we expect to decrease from approximately 68% of our consolidated 2013 sales to 65% of our consolidated 2014 sales. We also expect sales to commercial and international customers to increase to approximately 30% of our 2014 sales compared to 27% of our consolidated 2013 sales.

Business Environment

U.S. Government Markets. Sales to U.S. Government customers represented 73% of our consolidated 2013 sales, and were primarily to DoD customers, which comprised 68% of our consolidated sales. Therefore, our annual sales are generally highly correlated to changes in U.S. Government spending levels, especially DoD budget levels.

The DoD budget peaked in the fiscal year ended September 30, 2010 (FY 2010) at $690 billion and has declined since. The total DoD budget for FY 2013 was $578 billion, which declined 10% compared to the FY 2012 budget, with the base budget 6% lower than FY 2012 and the Overseas Contingency Operations (OCO) budget 29% lower than FY 2012. The total DoD enacted budget for FY 2014 is $581 billion.

The enacted FY 2013 and FY 2014 DoD budgets comply with the sequestration cuts required by the Budget Control Act (BCA) of 2011 (BCA), as amended by The American Taxpayer Relief Act (ATRA) and the Bipartisan Budget Act of 2013 (BBA). ATRA, enacted on January 2, 2013, delayed the effective date of the BCA sequester cuts by two months to March 1, 2013 and reduced the sequester cuts to the FY 2013 DoD budget by $9 billion. The BBA, enacted on December 26, 2013, reduced budget sequester cuts to the DoD base budget by approximately $22 billion for FY 2014 and $9 billion for FY 2015 and increased the FY 2014 OCO budget by $6 billion compared to the amount requested by the Administration.

On March 4, 2014, the Obama Administration submitted its FY 2015 DoD Proposed Budget Request (PBR). The FY 2015 base budget request of $496 billion complies with the BCA sequestration cut spending caps, as amended by the BBA. The FY 2015 budget request also includes a $79 billion estimate for OCO. The total FY 2015 DoD budget request is $575 billion, a decline of 1% compared to the enacted FY 2014 DoD budget.

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The table below presents the FY 2011 through FY 2014 enacted DoD budgets and the FY 2015 PBR. The FY 2015 PBR, submitted to Congress in March 2014, exceeds the BCA sequestration cut spending caps by $35 billion in FY 2016, $31 billion in FY 2017, $27 billion for FY 2018 and $22 billion for FY 2019. The table below excludes these amounts that exceed the BCA spending caps for FY 2016 to FY 2019.

	DoD Budget (includes Sequestration Cuts/BBA)						Annual Total Budget Change
Fiscal Year (Ending September 30)	Base		OCO		Total
	(in billions)
2011	$	528	$	159	$	687		0	%
2012	$	530	$	115	$	645		-6	%
2013	$	496	$	82	$	578		-10	%
2014	$	496	$	85	$	581		1	%
2015	$	496	$	79	$	575		-1	%
2016	$	500	$	30	$	530		-8	%
2017	$	512	$	30	$	542		+2	%
2018	$	525	$	30	$	555		+2	%
2019	$	537	$	30	$	567		+2	%

While we believe that L-3 is well positioned to benefit from several of the DoD’s focus areas, declining DoD budgets will generally pressure and possibly reduce funding for some of our contracts, which could reduce our sales and operating income and negatively impact our results of operations and cash flows. Uncertainty continues to exist, even with the recent passage of the BBA, regarding how sequestration cuts will be implemented in future fiscal year DoD budgets and what challenges this may present for the defense industry, including L-3, our customers and suppliers. Furthermore, while members of Congress and the Administration continue to discuss various options to address sequestration and the U.S. Government’s overall fiscal challenges, we cannot predict the outcome of these efforts. We do not believe the FY 2014 sequester cuts to the DoD budget will have a significant negative impact on our results of operations or cash flows for the year ending December 31, 2014. However, depending on how future sequestration cuts are implemented, sequestration could have a material, negative impact on our results of operations and cash flows in the future. In addition, declining DoD budgets due to sequestration or other reductions could also potentially trigger non-cash goodwill impairment charges depending on how these reductions impact each of our reporting units. (See the discussion regarding goodwill in “Part II — Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2013.)

International and Commercial Markets. Sales to end customers other than the U.S. Government represented 27% of our consolidated 2013 sales and we expect those sales to represent 30% of our consolidated 2014 sales. These sales are generally affected by international government security and military priorities, as well as the fiscal situations of our international government end customers, global economic conditions for our commercial end markets and our competitive success in winning new business and increasing market share.

Key Performance Measures

The primary financial performance measures that we use to manage our businesses and monitor results of operations are sales and operating income trends. Management believes that these financial performance measures are the primary growth drivers for our earnings and cash flow per common share. Generally, in evaluating our businesses and contract performance, we focus on net sales, operating income and operating margin, which we define as operating income as a percentage of sales, and not by type or amount of operating costs.

One of our primary business objectives is to increase sales organically and through select business acquisitions. We define organic sales growth as the increase or decrease in sales for the current period compared

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to the prior period, excluding sales in the: (1) current period from business acquisitions that are included in our actual results of operations for less than twelve months, and (2) prior period from business divestitures that are included in our actual results of operations for the twelve-month period prior to the divestiture date. We expect to supplement, strengthen and enhance our existing businesses by selectively acquiring businesses that: (1) add important new technologies and products, (2) provide access to select customers, programs and contracts and (3) provide attractive returns on investment. Another important financial performance measure that we use is operating margin, because sales growth combined with operating margin levels determine our operating income levels.

Sales Trend. For the 2014 First Quarter, consolidated net sales of $2,971 million decreased by $214 million, or 6.7%, compared to the 2013 First Quarter, due to a decrease in organic sales of $228 million, or 7.2%, partially offset by net sales from acquisitions of $14 million, or 0.5%. See Results of Operations, including segment results below for a discussion of sales.

For the year ended December 31, 2013, our largest contract (revenue arrangement) in terms of annual sales was the Fort Rucker Maintenance Support contract with the U.S. Army Aviation and Missile Life Cycle Management Command (AMCOM), which is included in our Aerospace Systems segment. Under this contract, which generated approximately 4% of our 2013 sales, we provide maintenance, logistics and other related sustainment support services for rotary wing aircraft assigned to Fort Rucker and satellite units in Alabama. Our period of performance, including unexercised annual options, continues through September 30, 2017.

We derived approximately 68% of our 2013 sales from DoD customers and, as a result, our sales trends are generally highly correlated to DoD budget levels. DoD budgets are a function of several factors and uncertainties beyond our control, including, but not limited to, changes in U.S. procurement policies, budget considerations, current and future economic conditions, presidential administration priorities, U.S. military engagements, changing national security and defense requirements, geo-political developments, actual fiscal year congressional appropriations for defense budgets, and sequestration and other DoD budget reductions. Any of these factors could result in a significant increase, decrease or redirection of DoD budgets and impact our future results of operations, including our sales and operating income growth rates. Additionally, our future results of operations will be affected by our ability to retain our existing business, including our revenue arrangements with DoD customers, and to successfully compete for new business, which largely depends on: (1) our successful performance on existing contracts, (2) the effectiveness and innovation of our technologies and research and development activities, (3) our ability to offer better program performance than our competitors at an affordable cost, and (4) our ability to retain our employees and hire new ones, particularly those employees who have U.S. Government security clearances. We expect our 2014 consolidated sales to decline by approximately 5% compared to 2013, primarily due to the decline in DoD budgets.

Operating Income Trend. Operating income for the 2014 First Quarter was $307 million, a decrease of 2% from $313 million for the 2013 First Quarter. Our operating margin was 10.3% for the 2014 First Quarter, an increase of 50 basis points from 9.8% for the 2013 First Quarter. See Results of Operations, including segment results below for a discussion of operating margin.

While we continue to undertake cost management actions, such as reducing our indirect costs, resizing select business units, and improving our productivity and contract performance in an effort to maintain or even increase operating margin, these efforts may not be successful. Changes in the competitive environment and DoD procurement practices, reductions to the DoD budget, lower consolidated sales, and changes in our annual pension expense and severance costs could result in lower operating margin. Furthermore, select business acquisitions and select new business, including contract renewals and new contracts, could have lower operating margins than L-3’s operating margins on existing business and contracts. We expect our 2014 annual consolidated operating margin to increase as compared to 2013, primarily due to lower expected pension expense.

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Business Acquisitions and Dispositions

Our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 summarizes the business acquisitions and dispositions that we completed during the three years ended December 31, 2013. During the 2014 First Quarter, we acquired Data Tactics Corporation (L-3 Data Tactics) with $57 million of cash on hand. Business acquisitions are included in our consolidated results of operations from their dates of acquisition. Also, see Note 4 to our unaudited condensed consolidated financial statements contained in this quarterly report for a discussion of the business acquisition completed during the 2014 First Quarter.

Results of Operations

The following information should be read in conjunction with our unaudited condensed consolidated financial statements contained in this quarterly report. Our results of operations for the periods presented are affected by our business acquisitions. See Note 4 to our audited consolidated financial statements for the year ended December 31, 2013, included in our Annual Report on Form 10-K, for a discussion of our 2013 business acquisition.

Consolidated Results of Operations

The table below provides selected financial data for L-3 for the 2014 First Quarter compared with the 2013 First Quarter.

	First Quarter Ended						Increase/ (decrease)
(in millions, except per share data)	March 28, 2014			March 29, 2013
Net sales	$	2,971		$	3,185			(7	)%
Operating income	$	307		$	313			(2	)%
Operating margin		10.3	%		9.8	%		50	bpts
Interest expense	$	43		$	43			—
Interest and other income, net	$	3		$	3			—
Effective income tax rate		31.8	%		28.9	%		290	bpts
Net income attributable to L-3	$	180		$	193			(7	)%
Diluted earnings per share	$	2.01		$	2.11			(5	)%
Diluted weighted average common shares outstanding		89.4			91.5			(2	)%

Net Sales: For the 2014 First Quarter, consolidated net sales of $3.0 billion decreased $214 million, or 7%, compared to the 2013 First Quarter. Sales to the U.S. Government, including the DoD declined 11% and impacted each segment. Acquired businesses, which are included in the Electronic Systems and NSS segments, increased net sales by $14 million in the 2014 First Quarter. Net sales to international and commercial customers increased 6%, or $46 million, to $853 million in the 2014 First Quarter, compared to $807 million in the 2013 First Quarter. Net sales to international and commercial customers, as a percentage of consolidated net sales, increased to 29% for the 2014 First Quarter as compared to 25% for the 2013 First Quarter.

Sales of products decreased by $152 million to $1,661 million, or 56% of consolidated net sales, for the 2014 First Quarter, compared to $1,813 million, or 57% of consolidated net sales, for the 2013 First Quarter. Sales of products decreased for: (1) Broadband Communication Systems primarily due to lower volume as contracts near completion and demand declines due to sequestration, other DoD budget reductions and the U.S. military drawdown from Afghanistan, (2) Sensor Systems primarily due to the completion of a force protection contract and lower volume primarily for airborne EO/IR turrets due to the U.S. military drawdown from Afghanistan, (3) ISR Systems due to sales of small ISR aircraft to the United States Air Force (USAF) in the 2013 First Quarter, (4) Precision Engagement & Training primarily due to reduced deliveries and volume for trainers and completed contracts for guidance products, and (5) Platform Systems primarily due to the USAF Joint Cargo Aircraft (JCA) program nearing completion, reduced volume for U.S. Navy maritime patrol aircraft from reduced funding, and reduced deliveries of aircraft cabin assemblies.

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Sales of services decreased by $62 million to $1,310 million, or 44% of consolidated net sales, for the 2014 First Quarter, compared to $1,372 million, or 43% of consolidated net sales, for the 2013 First Quarter. Sales of services decreased primarily due to lower volume for small ISR aircraft systems due to the drawdown from Afghanistan, reduced volume for JCA fleet management services, lower demand for aircraft maintenance services from the Canadian Department of Defence (DND), and reduced volume for technical and information technology (IT) support services due to lower demand and completed contracts. See the reportable segment results below for additional discussion of our sales trends.

Operating income and operating margin: Operating income for the 2014 First Quarter of $307 million decreased $6 million, or 2%, compared to the 2013 First Quarter. Operating Margin increased by 50 basis points to 10.3% for the 2014 First Quarter compared to 9.8% for the 2013 First Quarter. The increase in operating margin is primarily due to lower pension expense of $24 million, which increased operating margin by 80 basis points. Lower sales and mix changes, primarily for Aerospace Systems, offset improved contract performance across several business areas, reducing operating margin by approximately 20 basis points. Additionally, 2014 First Quarter severance charges increased $3 million to $8 million compared to the 2013 First Quarter. See the reportable segment results below for additional discussion of our operating margin trends.

Effective income tax rate: The effective tax rate for the 2014 First Quarter increased to 31.8% from 28.9% for the same period last year. The increase is primarily due to a $12 million tax benefit for the retroactive reinstatement in the 2013 First Quarter of the U.S. Federal research and experimentation (R&E) tax credit for 2012 and 2013, compared to no R&E tax credit in the 2014 First Quarter. This increase was partially offset by a lower effective tax rate on foreign earnings.

Net income attributable to L-3 and diluted earnings per share (EPS): Net income attributable to L-3 in the 2014 First Quarter decreased 7% to $180 million compared to the 2013 First Quarter and diluted EPS decreased 5% to $2.01 from $2.11.

Diluted weighted average common shares outstanding: Diluted weighted average common shares outstanding for the 2014 First Quarter declined by 2% compared to the same period last year. The decline was due to repurchases of L-3 common stock in connection with our share repurchase program authorized by our Board of Directors, partially offset by additional shares issued in connection with various employee stock-based compensation programs and contributions to employee savings plans made in common stock.

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Reportable Segment Results of Operations

The table below presents selected data by reportable segment reconciled to consolidated totals. See Note 21 to our unaudited condensed consolidated financial statements contained in this quarterly report for additional reportable segment data.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(dollars in millions)
Net sales:(1)
Aerospace Systems	$	1,082		$	1,186
Electronic Systems		1,082			1,111
Communication Systems		503			558
NSS		304			330
Consolidated net sales	$	2,971		$	3,185
Operating income:
Aerospace Systems	$	114		$	140
Electronic Systems		125			117
Communication Systems		50			35
NSS		18			21
Consolidated operating income	$	307		$	313
Operating margin:
Aerospace Systems		10.5	%		11.8	%
Electronic Systems		11.6	%		10.5	%
Communication Systems		9.9	%		6.3	%
NSS		5.9	%		6.4	%
Consolidated operating margin		10.3	%		9.8	%

⁽¹⁾  Net sales are after intercompany eliminations.

Aerospace Systems

	First Quarter Ended						Decrease
	March 28, 2014			March 29, 2013
	(dollars in millions)
Net sales	$	1,082		$	1,186			(8.8	)%
Operating income	$	114		$	140			(18.6	)%
Operating margin		10.5	%		11.8	%		(130	) bpts

Aerospace Systems net sales for the 2014 First Quarter decreased by $104 million, or 9%, compared to the 2013 First Quarter. Sales decreased $62 million for Platform Systems and $42 million for ISR Systems. Sales for Logistics Solutions remained substantially the same. Platform Systems sales decreased: (1) $24 million due to lower USAF JCA volume as the contract nears completion, (2) $22 million primarily due to lower volume for aircraft maintenance for the DND due to timing and reduced funding, (3) $19 million due to lower volume for U.S. Navy maritime patrol aircraft resulting from reduced funding caused by U.S. Government sequestration cuts, and (4) $16 million due to reduced deliveries of aircraft cabin assemblies. These decreases were partially offset by a sales increase of $19 million for Australia C-27J aircraft due to timing of contract deliverables. ISR Systems sales declined primarily due to lower sales and volume for small ISR aircraft and aircraft systems due to the U.S. military drawdown in Afghanistan, partially offset by higher volume for logistic support and fleet management services to the DoD and ISR platforms for foreign military customers.

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Aerospace Systems operating income for the 2014 First Quarter decreased by $26 million, or 19%, compared to the 2013 First Quarter. Operating margin declined by 130 basis points to 10.5%. Operating margin declined by 260 basis points primarily due to lower sales and mix changes. This decrease was partially offset by 70 basis points due to lower pension expense of $8 million and 60 basis points due to improved contract performance.

Electronic Systems

	First Quarter Ended						Increase/ (decrease)
	March 28, 2014			March 29, 2013
	(dollars in millions)
Net sales	$	1,082		$	1,111			(2.6	)%
Operating income	$	125		$	117			6.8	%
Operating margin		11.6	%		10.5	%		110	bpts

Electronic Systems net sales for the 2014 First Quarter decreased by $29 million, or 3%, compared to the 2013 First Quarter. Sales decreased: (1) $43 million for Precision Engagement & Training due to reduced deliveries of U.S. Army rotary wing training systems for the Flight School XXI program, lower volume for upgrades for F/A-18 flight simulator trainers and completed contracts for guidance products and (2) $38 million for Sensor Systems primarily due to the completion of a contract for force protection products for a foreign ministry of defense and lower volume for airborne EO/IR turrets due to the U.S. military drawdown from Afghanistan. These decreases were partially offset by sales increases of $26 million primarily due to the timing of deliveries of commercial shipbuilding products and $16 million for Space & Propulsion Systems due to higher volume on an engine contract to a foreign military and the Missile Defense Agency’s air-launched ballistic missile target programs. Sales from the Mustang Technology Group acquisition added $10 million.

Electronic Systems operating income for the 2014 First Quarter increased by $8 million, or 7%, compared to the 2013 First Quarter. Operating margin increased by 110 basis points to 11.6%. Lower pension expense of $8 million increased operating margin by 70 basis points and improved contract performance, primarily for Precision Engagement & Training, increased operating margin by 70 basis points. These increases were partially offset by 30 basis points due to lower sales and mix changes primarily for Sensor Systems.

Communication Systems

	First Quarter Ended						Increase/ (decrease)
	March 28, 2014			March 29, 2013
	(dollars in millions)
Net sales	$	503		$	558			(9.9	)%
Operating income	$	50		$	35			42.9	%
Operating margin		9.9	%		6.3	%		360	bpts

Communication Systems net sales for the 2014 First Quarter decreased by $55 million, or 10%, compared to the 2013 First Quarter. Sales decreased $37 million for Tactical Satellite Communications products primarily due to reduced deliveries of mobile and ground-based satellite communications systems for the U.S. military due to lower demand and $29 million for Broadband Communication Systems primarily due to: (1) lower volume for airborne and ground-based networked communication systems as contracts near completion and demand declines due to sequestration and other DoD budget reductions and (2) lower U.S. Army demand for remote video terminals and ISR support services primarily driven by the U.S. military drawdown from Afghanistan. These decreases were partially offset by an increase of $11 million for Space & Power Systems primarily due to increased deliveries of power devices for commercial satellites.

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Communication Systems operating income for the 2014 First Quarter increased by $15 million, or 43%, compared to the 2013 First Quarter. Operating margin increased 360 basis points to 9.9%. Operating margin increased 230 basis points primarily due to lower development and production costs for Broadband Communication Systems and 160 basis points due to lower pension expense of $8 million. These increases were partially offset by 30 basis points due to higher severance costs of $2 million compared to the 2013 First Quarter.

NSS

	First Quarter Ended						Decrease
	March 28, 2014			March 29, 2013
	(dollars in millions)
Net sales	$	304		$	330			(7.9	)%
Operating income	$	18		$	21			(14.3	)%
Operating margin		5.9	%		6.4	%		(50	) bpts

NSS net sales for the 2014 First Quarter decreased by $26 million, or 8%, compared to the 2013 First Quarter. Sales declined by $13 million for Intelligence Solutions primarily due to work scope reductions on a technical support contract for a U.S. Government agency due to U.S. Government sequestration cuts. Sales declined by $10 million for Federal Solutions primarily due to the completion of a contract for the National Oceanic and Atmospheric Administration. Sales also declined by $7 million for Defense Solutions primarily due to lower demand and completed contracts, partially offset by a new IT services contract for the U.S. Army reserve. These decreases were partially offset by the L-3 Data Tactics acquisition, which added $4 million of sales.

NSS operating income for the 2014 First Quarter decreased by $3 million, or 14%, compared to the 2013 First Quarter. Operating margin decreased by 50 basis points to 5.9% primarily due to lower award fees for IT and intelligence support services contracts and lower margins on new business due to competitive pricing pressure.

Liquidity and Capital Resources

Anticipated Sources and Uses of Cash Flow

At March 28, 2014, we had total cash and cash equivalents of $227 million as compared to $500 million at December 31, 2013. While no amounts of the cash and cash equivalents are considered restricted, $166 million was held by the Company’s foreign subsidiaries at March 28, 2014. The repatriation of cash held in non-U.S. jurisdictions is subject to local capital requirements, as well as income tax considerations. Our primary source of liquidity is cash flow generated from operations and our cash on hand. We used $62 million of cash from operating activities during the 2014 First Quarter. Significant cash used during the 2014 First Quarter also included $133 million to repurchase shares of our common stock, $57 million for a business acquisition, $55 million paid for dividends and $30 million for capital expenditures.

As of March 28, 2014, we had the availability of all of our $1 billion Amended and Restated Revolving Credit Facility. Our Amended and Restated Revolving Credit Facility expires on February 3, 2017. We currently believe that our cash from operating activities generated during the year, together with our cash on hand, and available borrowings under our Amended and Restated Revolving Credit Facility will be adequate for the foreseeable future to meet our anticipated requirements for working capital, capital expenditures, defined benefit plan contributions, commitments, contingencies, research and development expenditures, business acquisitions (depending on the size), program and other discretionary investments, interest payments, income tax payments, L-3 Holdings’ dividends and share repurchases.

On March 31, 2014, we notified holders of our 3% Convertible Contingent Debt Securities (CODES) that they are currently entitled to convert all or a portion of their CODES. The CODES are convertible because the

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closing prices of L-3 Holdings common stock met the trading price condition of the CODES during the 2014 First Quarter. See Note 9 to our unaudited condensed consolidated financial statements contained in this quarterly report for a description of the trading price condition. The holders’ right to convert began March 31, 2014 and ends on June 27, 2014. As previously announced, we will settle the entire conversion obligation with respect to converted CODES, if any, in cash. We anticipate funding any converted CODES with cash on hand and from borrowings under our revolving credit facility and/or through the issuance of new debt. At March 28, 2014, the conversion value of the CODES was approximately $900 million, of which $4 million relates to an income tax recapture liability. The income tax recapture liability is based on the difference between the tax basis and conversion value of the CODES. At December 31, 2013, the deferred tax liability related to the income tax recapture was $81 million.

Our business may not continue to generate cash flow at current levels and, if we are unable to generate sufficient cash flow from operations to service our debt, we may be required to reduce costs and expenses, sell assets, reduce capital expenditures, reduce dividend payments, refinance all or a portion of our existing debt or obtain additional financing. We may not be able to do this on a timely basis, on satisfactory terms, or at all. Our ability to make scheduled principal payments or to pay interest on or to refinance our indebtedness depends on our future performance and financial results, which, to a certain extent, are subject to general conditions in or affecting the U.S. defense industry and to general economic, political, financial, competitive, legislative and regulatory factors beyond our control.

Balance Sheet

Billed receivables increased by $78 million to $1,093 million at March 28, 2014, from $1,015 million at December 31, 2013 primarily due to the timing of billings and collections primarily for Marine & Power Systems, Integrated Sensor Systems, Platform Systems, Logistics Solutions and Precision Engagement & Training and $4 million from the L-3 Data Tactics business acquisition, partially offset by collections for Broadband Communication Systems.

Contracts in process increased by $239 million to $2,763 million at March 28, 2014, from $2,524 million at December 31, 2013 due to an increase of $180 million in unbilled contracts receivables, $57 million in inventoried contract costs, and $4 million from the L-3 Data Tactics business acquisition, partially offset by a $2 million decrease for foreign currency translation adjustments. The increase in unbilled contracts receivables is primarily due to sales exceeding billings for NSS, ISR Systems, Broadband Communication Systems, Platform Systems and Space & Propulsion Systems. The increase in inventoried contract costs is due to the timing of deliveries across several business areas, primarily Warrior Systems, Precision Engagement & Training, Sensor Systems and Logistics Solutions, partially offset by decreases in COMSEC & Specialty RF Products.

L-3’s receivables days sales outstanding (DSO) was 81 at March 28, 2014, compared with 73 at December 31, 2013 and 77 at March 29, 2013. We calculate our DSO by dividing: (1) our aggregate end of period billed receivables and net unbilled contract receivables, by (2) our trailing 12 month sales adjusted, on a pro forma basis, to include sales from business acquisitions and exclude sales from business divestitures that we completed as of the end of the period, multiplied by the number of calendar days in the trailing 12 month period (364 days at March 28, 2014, 365 days at December 31, 2013 and 364 days at March 29, 2013). Our trailing 12 month pro forma sales were $12,483 million at March 28, 2014, $12,664 million at December 31, 2013 and $13,220 million at March 29, 2013. The increase in DSO was primarily due to the increase in billed receivables and net unbilled contract receivables and the decline in our trailing 12 months pro forma sales.

Inventories increased primarily for Security & Detection Systems and Tactical Satellite Communications products to support customer demand.

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Goodwill increased by $25 million to $7,821 million at March 28, 2014 from $7,796 million at December 31, 2013. The table below presents the changes in goodwill by segment.

	Aerospace Systems			Electronic Systems			Communication Systems		NSS		Consolidated Total
	(in millions)
Balance at December 31, 2013	$	1,751		$	4,085		$	992	$	968	$	7,796
Business acquisition(1)		—			—			—		40		40
Foreign currency translation adjustments(2)		(9	)		(6	)		—		—		(15	)
Balance at March 28, 2014	$	1,742		$	4,079		$	992	$	1,008	$	7,821

⁽¹⁾  The increase in goodwill for the NSS segment is due to the L-3 Data Tactics business acquisition.

⁽²⁾  The decrease in goodwill presented in the Aerospace Systems and Electronic Systems segments was primarily due to the strengthening of the U.S. dollar against the Canadian dollar during the quarter ended March 28, 2014.

The decrease in identifiable intangible assets was primarily due to amortization expense, partially offset by $9 million of intangible assets recognized for the L-3 Data Tactics business acquisition.

The decrease in other assets is primarily due to lower long-term receivables for leased training systems and lower deferred charges due to timing of billings as allowable costs.

The fluctuations in accounts payable and accrued expenses were primarily due to the timing of when invoices for purchases from third party vendors and subcontractors were received and payments were made.

The decrease in advance payments and billings in excess of costs incurred was primarily due to the liquidation of balances on contracts for Platform Systems, Marine Systems International and Marine & Power Systems.

The increase in pension and postretirement benefit plan liabilities was primarily due to pension expense (excluding amortization of net losses) exceeding cash contributions during the 2014 First Quarter. We expect to contribute cash of approximately $97 million to our pension plans in 2014, of which $14 million was contributed during the 2014 First Quarter.

Non-current deferred income tax liabilities increased primarily due to amortization of certain goodwill and other identifiable intangible assets for tax purposes.

Other liabilities decreased primarily due to long-term accrued incentive compensation, warranty reserves and notes payable reclassified to current liabilities.

Statement of Cash Flows

2014 First Quarter Compared with 2013 First Quarter

The table below provides a summary of our cash flows (used in) from operating, investing, and financing activities for the periods indicated.

	First Quarter Ended
	March 28, 2014			March 29, 2013			Increase/ (decrease)
	(in millions)
Net cash (used in) from operating activities	$	(62	)	$	146		$	(208	)
Net cash used in investing activities		(86	)		(54	)		(32	)
Net cash used in financing activities		(124	)		(158	)		34

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Operating Activities

We used $62 million of cash from operating activities during the 2014 First Quarter, a decrease of $208 million compared with $146 million of cash generated from operating activities during the 2013 First Quarter. The use of cash in the 2014 First Quarter compared to cash generated in the 2013 First Quarter was due to: (1) $192 million of more cash used for changes in operating assets and liabilities due to increases in working capital primarily for contracts in process, accounts payable and inventory, (2) lower net income of $12 million and (3) lower non-cash expenses of $4 million primarily due to lower pension expense. See the discussion above under “Liquidity and Capital Resources — Balance Sheet” for additional information on changes in operating assets and liabilities.

Investing Activities

During the 2014 First Quarter, we used $86 million of cash, including $57 million for the acquisition of L-3 Data Tactics and $30 million for capital expenditures. The 2013 First Quarter includes $49 million for capital expenditures.

Financing Activities

Debt

At March 28, 2014, total outstanding debt was $3,631 million, of which $2,942 million was senior debt and $689 million was CODES, compared to $3,630 million at December 31, 2013, of which $2,941 million was senior debt and $689 million was CODES. At March 28, 2014, there were no borrowings or letters of credit outstanding under our $1 billion Amended and Restated Revolving Credit Facility and we had all of our $1 billion facility available for future borrowings. We also had $614 million of outstanding standby letters of credit with financial institutions covering performance and financial guarantees per contractual requirements with certain customers, at March 28, 2014. These standby letters of credit may be drawn upon in the event that we do not perform on certain of our contractual requirements. At March 28, 2014, our outstanding senior notes mature between November 15, 2016 and February 15, 2021. See “Liquidity and Capital Resources – Anticipated Sources and Uses of Cash Flow” within this section for information regarding the conversion of the CODES. Also, see Note 9 to our unaudited condensed consolidated financial statements contained in this quarterly report for the components of our debt at March 28, 2014.

Debt Covenants and Other Provisions. The Amended and Restated Revolving Credit Facility and Senior Notes contain financial and/or other restrictive covenants. See Note 10 to our audited consolidated financial statements for the year ended December 31, 2013, included in our Annual Report on Form 10-K, for a description of our debt, related financial covenants and cross default provisions, and for additional information regarding the CODES, including conditions for conversion. As of March 28, 2014, we were in compliance with our financial and other restrictive covenants.

Guarantees. The borrowings under the Amended and Restated Revolving Credit Facility are fully and unconditionally guaranteed by L-3 Holdings and by substantially all of the material 100% owned domestic subsidiaries of L-3 Communications on an unsecured senior basis. The payment of principal and premium, if any, and interest on the Senior Notes is fully and unconditionally guaranteed, on an unsecured senior basis, jointly and severally, by L-3 Communications’ material 100% owned domestic subsidiaries that guarantee any of its other indebtedness. The payment of principal and premium, if any, and interest on the CODES is fully and unconditionally guaranteed, on an unsecured senior subordinated basis, jointly and severally, by L-3 Communications and its 100% owned domestic subsidiaries that guarantee any of its other liabilities.

Subordination. The guarantees of the Amended and Restated Revolving Credit Facility and the Senior Notes rank senior to the guarantees of the CODES and rank pari passu with each other.

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Equity

Repurchases of L-3 Holdings’ common stock, under the share repurchase program approved by the Board of Directors, are made from time to time at management’s discretion, in accordance with applicable U.S. Federal securities laws, in the open market or otherwise. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company’s financial position, earnings, legal requirements, other investment opportunities (including acquisitions), market conditions and other factors. All share repurchases of L-3 Holdings’ common stock have been recorded as treasury shares.

The table below presents our repurchases of L-3 Holdings’ common stock during the 2014 First Quarter.

	Total Number of Shares Purchased		Average Price Paid Per Share		Treasury Stock
					(at cost in millions)
January 1 — March 28, 2014		1,216,976	$	109.43	$	133

At March 28, 2014, the remaining dollar value under the share repurchase program approved by L-3 Holdings’ Board of Directors was $735 million. From March 29, 2014 through April 23, 2014, L-3 Holdings repurchased 307,692 shares of its common stock at an average price of $116.98 per share for an aggregate amount of $36 million.

During the 2014 First Quarter, L-3 Holdings’ Board of Directors authorized the quarterly cash dividends in the table below.

Date Declared	Record Date		Cash Dividend Per Share		Date Paid		Total Dividends Paid
							(in millions)
February 11, 2014		March 3, 2014	$	0.60		March 17, 2014	$	52

In addition to the dividends in the table above, the Company paid $3 million of previously accrued dividends for employee held stock-awards during the 2014 First Quarter.

Legal Proceedings and Contingencies

For a discussion of legal proceedings and contingencies that could impact our results of operations, financial condition or cash flows, see Note 17 to our unaudited condensed consolidated financial statements contained in this quarterly report.

Forward-Looking Statements

Certain of the matters discussed in this report, including information regarding the Company’s 2014 financial outlook, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than historical facts may be forward-looking statements, such as “may,” “will,” “should,” “likely,” “projects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions are used to identify forward-looking statements. The Company cautions investors that these statements are subject to risks and uncertainties many of which are difficult to predict and generally beyond the Company’s control that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Some of the factors that could cause actual results to differ include, but are not limited to, the following: our dependence on the defense industry; backlog processing and program slips resulting from delayed awards and/or funding from the Department of Defense (DoD) and other major customers; the U.S. Government fiscal situation; changes in DoD budget levels and spending priorities; U.S. Government failure to raise the debt ceiling; our reliance on contracts with a limited number of customers and the possibility of termination of government contracts by unilateral government action or for failure to perform; the extensive legal and regulatory requirements surrounding many of our contracts; our

44

ability to retain our existing business and related contracts; our ability to successfully compete for and win new business; or, identify, acquire and integrate additional businesses; our ability to maintain and improve our operating margin; the availability of government funding and changes in customer requirements for our products and services; our significant amount of debt and the restrictions contained in our debt agreements; our ability to continue to recruit, retain and train our employees; actual future interest rates, volatility and other assumptions used in the determination of pension benefits and equity based compensation, as well as the market performance of benefit plan assets; our collective bargaining agreements, our ability to successfully negotiate contracts with labor unions and our ability to favorably resolve labor disputes should they arise; the business, economic and political conditions in the markets in which we operate; global economic uncertainty; the DoD’s Better Buying Power and other efficiency initiatives; events beyond our control such as acts of terrorism; our ability to perform contracts on schedule; our international operations; our extensive use of fixed-price type revenue arrangements; the rapid change of technology and high level of competition in which our businesses participate; our introduction of new products into commercial markets or our investments in civil and commercial products or companies; the outcome of litigation matters; results of audits by U.S. Government agencies and of on-going governmental investigations; the impact on our business of improper conduct by our employees, agents or business partners; ultimate resolution of contingent matters, claims and investigations relating to acquired businesses, and the impact on the final purchase price allocations; and the fair values of our assets.

In addition, for a discussion of other risks and uncertainties that could impair our results of operations or financial condition, see “Part I — Item 1A — Risk Factors” and “Part II — Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K for the year ended December 31, 2013 and in this quarterly report on Form 10-Q, and any material updates to these factors contained in any of our future filings.

Readers of this document are cautioned that our forward-looking statements are not guarantees of future performance and the actual results or developments may differ materially from the expectations expressed in the forward-looking statements.

As for the forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainties of estimates, forecasts and projections and may be better or worse than projected and such differences could be material. Given these uncertainties, you should not place any reliance on these forward-looking statements. These forward-looking statements also represent our estimates and assumptions only as of the date that they were made. We expressly disclaim a duty to provide updates to these forward-looking statements, and the estimates and assumptions associated with them, after the date of this filing, to reflect events or changes in circumstances or changes in expectations or the occurrence of anticipated events.

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See “Part II — Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Derivative Financial Instruments and Other Market Risk,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 for a discussion of our exposure to market risks. There were no material changes to our disclosure about market risks during the 2014 First Quarter. See Notes 14 and 16 to our unaudited condensed consolidated financial statements contained in this quarterly report for the aggregate fair values and notional amounts of our foreign currency forward contracts at March 28, 2014.

ITEM 4.

CONTROLS AND PROCEDURES

Conclusions Regarding Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934 related to L-3 Holdings and L-3 Communications is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chairman, President and Chief Executive Officer, and our Senior Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Our management, with the participation of our Chairman, President and Chief Executive Officer, and our Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 28, 2014. Based upon that evaluation, our Chairman, President and Chief Executive Officer, and our Senior Vice President and Chief Financial Officer concluded that, as of March 28, 2014, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 28, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

The information required with respect to this item can be found in Note 17 to our unaudited condensed consolidated financial statements contained in this quarterly report and is incorporated by reference into this Item 1.

ITEM 1A.

RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Part I — Item 1A — Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013, and “Part II — Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview and Outlook — Business Environment”, which could materially affect our business, financial condition or future results. Other than as described in “Business Environment”, there have been no material changes to the risk factors disclosed in “Part I — Item 1A — Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2013. The risks described in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

47

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information about share repurchases made by L-3 Holdings of its common stock during the 2014 First Quarter. Repurchases are made from time to time at management’s discretion in accordance with applicable U.S. Federal securities laws. All share repurchases of L-3 Holdings’ common stock have been recorded as treasury shares.

	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares That May Yet be Purchased Under the Plans or Programs(1)
							(in millions)
January 1 — January 31, 2014		642,503	$	106.30		642,503	$	800
February 1 — February 28, 2014		376,807	$	111.40		376,807	$	758
March 1 — March 28, 2014		197,666	$	115.87		197,666	$	735
Total		1,216,976	$	109.43		1,216,976

⁽¹⁾  The share repurchases that were completed as described in the table above were made pursuant to the $1.5 billion share repurchase program authorized by L-3 Holdings’ Board of Directors on February 5, 2013, which expires on June  30, 2015.

ITEM 6.

EXHIBITS

For a list of exhibits, see the Exhibit Index in this Form 10-Q.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized.

L-3 COMMUNICATIONS HOLDINGS, INC.
L-3 COMMUNICATIONS CORPORATION
By:	/s/    Ralph G. D’Ambrosio
Title:	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)

Date: May 1, 2014

49

EXHIBIT INDEX

Exhibits identified in parentheses below are on file with the SEC and are incorporated herein by reference to such previous filings.

Exhibit No.		Description of Exhibits
	2.1	Distribution Agreement between L-3 Communications Holdings, Inc. and Engility Holdings, Inc. dated as of July 16, 2012 (incorporated by reference to Exhibit 2.1 to the Registrants’ Quarterly Report on Form 10-Q for the period ended September 28, 2012 (File Nos. 001-14141 and 333-46983)).
	3.1	Amended and Restated Certificate of Incorporation of L-3 Communications Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Registrants’ Current Report on Form 8-K filed on May 2, 2013 (File Nos. 001-14141 and 333-46983)).
	3.2	Amended and Restated By-Laws of L-3 Communications Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Registrants’ Current Report on Form 8-K filed on May 2, 2013 (File Nos. 001-14141 and 333-46983)).
	3.3	Certificate of Incorporation of L-3 Communications Corporation (incorporated by reference to Exhibit 3.1 to L-3 Communications Corporation’s Registration Statement on Form S-4 (File No. 333-31649)).
	3.4	Amended and Restated By-Laws of L-3 Communications Corporation (incorporated by reference to Exhibit 3.2 to the Registrants’ Current Report on Form 8-K filed on December 17, 2007 (File Nos. 001-14141 and 333-46983)).
	4.1	Form of Common Stock Certificate of L-3 Communications Holdings, Inc. (incorporated by reference to Exhibit 4.1 to the Registrants’ Quarterly Report on Form 10-Q for the quarter ended June 25, 2010 (File Nos. 001-14141 and 333-46983)).
	4.2	Indenture dated as of July 29, 2005 (CODES Indenture) among L-3 Communications Holdings, Inc., the guarantors named therein and The Bank of New York Mellon (formerly known as The Bank of New York), as Trustee (incorporated by reference to Exhibit 10.70 to the Registrants’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (File Nos. 001-14141 and 333-46983)).
	4.3	Supplemental Indenture dated as of February 3, 2012 among L-3 Communications Holdings, Inc., The Bank of New York Mellon (formerly known as The Bank of New York), as Trustee, and the guarantors named therein to the CODES Indenture dated as of July 29, 2005 among L-3 Communications Holdings, Inc., the guarantors named therein and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.5 to the Registrants’ Annual Report on Form 10-K for the year ended December 31, 2011 (File Nos. 001-14141 and 333-46983)).
	4.4	Indenture dated as of October 2, 2009 among L-3 Communications Corporation, the guarantors named therein and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.15 to the Registrants’ Quarterly Report on Form 10-Q for the quarter ended September 25, 2009 (File Nos. 001-14141 and 333-46983)).
	4.5	Supplemental Indenture dated as of February 3, 2012 among L-3 Communications Corporation, The Bank of New York Mellon, as Trustee, and the guarantors named therein to the Indenture dated as of October 2, 2009 among L-3 Communications Corporation, the guarantors named therein and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.7 to the Registrants’ Annual Report on Form 10-K for the year ended December 31, 2011 (File Nos. 001-14141 and 333-46983)).
	4.6	Indenture, dated as of May 21, 2010, among L-3 Communications Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.1 to the Registrants’ Current Report on Form 8-K dated May 24, 2010 (File Nos. 001-14141 and 333-46983)).

Exhibit No.		Description of Exhibits
	4.7	First Supplemental Indenture, dated as of May 21, 2010, among L-3 Communications Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.2 to the Registrants’ Current Report on Form 8-K dated May 24, 2010 (File Nos. 001-14141 and 333-46983)).
	4.8	Second Supplemental Indenture, dated as of February 7, 2011, among L-3 Communications Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.2 to the Registrants’ Current Report on Form 8-K dated February 8, 2011 (File Nos. 001-14141 and 333-46983)).
	4.9	Third Supplemental Indenture, dated as of November 22, 2011, among L-3 Communications Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A, as Trustee (incorporated by reference to Exhibit 4.2 to the Registrants’ Current Report on Form 8-K dated November 22, 2011 (File Nos. 001-14141 and 333-46983)).
	4.10	Fourth Supplemental Indenture, dated as of February 3, 2012, among L-3 Communications Corporation, the guarantors named therein and The Bank of New York Mellon Trust Company, N.A, as Trustee (incorporated by reference to Exhibit 4.12 to the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 2011 (File Nos. 001-14141 and 333-46983)).
	10.1	Amended and Restated Credit Agreement, dated as of February 3, 2012, among L-3 Communications Corporation, L-3 Communications Holdings, Inc. and certain subsidiaries of the Registrants from time to time party thereto as guarantors, certain lenders from time to time party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Registrants’ Current Report on Form 8-K dated February 3, 2012 (File Nos. 001-14141 and 333-46983)).
	10.2	Tax Matters Agreement between L-3 Communications Holdings, Inc. and Engility Holdings, Inc. dated as of July 16, 2012 (incorporated by reference to Exhibit 10.2 to the Registrants’ Quarterly Report on Form 10-Q for the period ended September 28, 2012 (File Nos. 001-14141 and 333-46983)).
	†*10.3	Form of L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan Nonqualified Stock Option Agreement (2014 Version).
	†*10.4	Form of L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan Nonqualified Stock Option Agreement (2014 CEO Version).
	†*10.5	Form of L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan Restricted Stock Unit Agreement (2014 Version).
	†*10.6	Form of L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan Restricted Stock Unit Agreement (2014 CEO Version).
	†*10.7	Form of L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan Restricted Stock Unit Agreement (2014 CEO Direct Report Version).
	†*10.8	Form of L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan Performance Unit Agreement (2014 Version).
	†*10.9	Form of L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan Performance Unit Award Notice (2014 Version).
	†*10.10	Form of L-3 Communications Holdings, Inc. 2012 Cash Incentive Plan Performance Cash Award Agreement (2014 Version).
	†*10.11	Form of L-3 Communications Holdings, Inc. 2012 Cash Incentive Plan Performance Cash Award Notice (2014 Version).
	**11	L-3 Communications Holdings, Inc. Computation of Basic Earnings Per Share and Diluted Earnings Per Common Share.

Exhibit No.		Description of Exhibits
	*12	Ratio of Earnings to Fixed Charges.
	*31.1	Certification of Chairman, President and Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
	*31.2	Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
	*32	Section 1350 Certification.
	*101.INS	XBRL Instance Document.
	*101.SCH	XBRL Taxonomy Extension Schema Document.
	*101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
	*101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
	*101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
	*101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

** The information required in this exhibit is presented in Note 13 to the unaudited condensed consolidated financial statements as of March 28, 2014 contained in this quarterly report in accordance with the provisions of ASC 260, Earnings Per Share.

† Represents management contract, compensatory plan or arrangement in which executive officers are entitled to participate.

EX-10.3

Exhibit 10.3

L-3 COMMUNICATIONS HOLDINGS, INC.

2008 LONG TERM PERFORMANCE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

(Version 0007)

THIS AGREEMENT, effective as of the Grant Date (as defined below), is between L-3 Communications Holdings, Inc., a Delaware corporation (the “Company”), and the Optionee (as defined below).

WHEREAS, the Company has adopted the L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan (the “Plan”) in order to provide additional incentives to selected officers and employees of the Company and its subsidiaries; and

WHEREAS, the Committee responsible for administration of the Plan has determined to grant an option to the Optionee as provided herein and the Company and the Optionee hereby wish to memorialize the terms and conditions applicable to the Option (as defined below);

WHEREAS, the following terms shall have the following meanings for purposes of this Option Agreement:

“Award Letter” shall mean the letter to the Optionee attached hereto as Exhibit A;

“Common Stock” means the Company’s Common Stock, par value $0.01 per share;

“Exercise Price” shall mean the “Grant Price” listed in the Award Letter;

“Grant Date” shall mean the “Grant Date” listed in the Award Letter;

“Option Agreement” or this “Agreement” shall mean this agreement including (unless the context otherwise requires) the Award Letter.

“Optionee” shall mean the “Participant” listed in the Award Letter; and

“Shares” shall mean that number of shares of Common Stock listed in the Award Letter as “Awards Granted.”

NOW, THEREFORE, the parties hereto agree as follows:

1. Grant of Option.

1.1 Effective as of the Grant Date, for good and valuable consideration, the Company hereby irrevocably grants to the Optionee the right and option (the “Option”) to purchase all or any part of the Shares, subject to, and in accordance with, the terms and conditions set forth in this Option Agreement.

1.2 The Option is not intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code.

1.3 This Option Agreement shall be construed in accordance and consistent with, and subject to, the terms of the Plan (the provisions of which are incorporated hereby by reference); and, except as otherwise expressly set forth herein, the capitalized terms used in this Option Agreement shall have the same definitions as set forth in the Plan. In the event of any conflict between one or more of this Option Agreement, the Award Letter and the Plan, the Plan shall govern this Option Agreement and the Award Letter, and the Option Agreement (to the extent not in conflict with the Plan) shall govern the Award Letter.

2. Exercise Price.

The price at which the Optionee shall be entitled to purchase the Shares upon the exercise of the Option shall be the Exercise Price per share, subject to adjustment as provided in Section 9.

3. Duration of Option.

The Option shall be exercisable to the extent and in the manner provided herein for a period of ten (10) years from the Grant Date (the “Exercise Term”); provided, however, that the Option may be earlier terminated as provided in Section 6 hereof.

4. Exercisability of Option.

Unless otherwise provided in this Option Agreement or the Plan, the Option shall entitle the Optionee to purchase, in whole at any time or in part from time to time, one-third (1/3^rd) of the total number of shares covered by the Option on the first anniversary of the Grant Date, an additional one-third (1/3^rd) of the total number of Shares covered by the Option on the second anniversary of the Grant Date and the final one-third (1/3^rd) of the total number of Shares covered by the Option on the expiration of the third anniversary of the Grant Date. Each such right of purchase shall be cumulative and shall continue, unless sooner exercised or terminated as herein provided, during the remaining period of the Exercise Term.

5. Manner of Exercise and Payment.

5.1 Subject to the terms and conditions of this Option Agreement and the Plan, the Option may be exercised by delivery of written notice to the Secretary of the Company (or his or her designee), at its principal executive office. Such notice shall state that the Optionee or other authorized person is electing to exercise the Option and the number of Shares in respect of which the Option is being exercised and shall be signed by the person or persons exercising the Option. In the event the Company has designated an Award Administrator (as defined below), the Option may also be exercised by giving notice (including through electronic means) in accordance with the procedures established from time to time by the Award Administrator. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part, provided that partial exercise shall be for whole shares of Common Stock only. If requested by the Committee, such person or persons shall (i) deliver this Agreement (including the Award Letter) to the Secretary of the Company who shall endorse thereon a notation of such exercise and (ii) provide satisfactory proof as to the right of such person or persons to exercise the Option.

5.2 The notice of exercise described in Section 5.1 shall be accompanied by either (i) payment of the full purchase price for the Shares in respect of which the Option is being exercised and of all applicable Withholding Taxes (as defined in Section 11) pursuant to Section 11 hereof (such payment to be made in cash, by delivering Shares, by withholding a portion of the Shares otherwise issuable or by any combination thereof) or (ii) instructions from the Optionee to the Company directing the Company to deliver a specified number of Shares directly to a designated broker or dealer pursuant to a cashless exercise election, in which case the Company must receive, prior to the issuance of the Shares in respect of which the Option is being exercised, payment of the full purchase price for the Shares in respect of which the Option is being exercised and all applicable Withholding Taxes pursuant to Section 11 hereof (such payment to be made in cash, by delivering Shares, by withholding a portion of the Shares otherwise issuable or by any combination thereof). The value of any Shares withheld or delivered in satisfaction of the purchase price for the Shares in respect of which the Option is being exercised and/or Withholding Taxes shall be determined by reference to the Fair Market Value of such Shares as of the date of such withholding or delivery. In the event that Withholding Taxes are satisfied by withholding a portion of the Shares otherwise issuable in connection with an exercise of the Option, the Company shall not withhold any Shares in excess of the minimum number of Shares necessary to satisfy the applicable Withholding Taxes.

- 2 -

5.3 Upon receipt of the notice of exercise and any payment or other documentation as may be necessary pursuant to Sections 5.1 and 5.2 relating to the Shares in respect of which the Option is being exercised, the Company shall, subject to the Plan and this Option Agreement, take such action as may be necessary to effect the transfer to the Optionee of the number of Shares as to which such exercise was effective.

5.4 The Optionee shall not be deemed to be the holder of, or to have any of the rights and privileges of a stockholder of the Company in respect of, Shares purchased upon exercise of the Option until (i) the Option shall have been exercised pursuant to the terms of this Option Agreement and the Optionee shall have paid the full purchase price for the number of Shares in respect of which the Option was exercised and any applicable Withholding Taxes and (ii) the Company shall have issued the Shares in connection with such exercise.

6. Termination of Employment; Permanent Disability.

6.1 If, prior to the date of the initial vesting of the Option pursuant to Section 4 hereof (the “Initial Vesting Date”), the Optionee’s employment with the Company and its subsidiaries shall be terminated for any reason, other than death or permanent disability (as herein defined), the Optionee’s right to exercise the Option shall terminate as of the effective date of termination (the “Termination Date”) and all rights hereunder shall cease (unless otherwise provided for by the Committee in accordance with the Plan).

6.2 Upon the Optionee’s death or permanent disability, the Option shall become immediately fully exercisable as to 100% of the Shares subject to the Option, and the Optionee or the executor or administrator of the estate of the Optionee or the person or persons to whom the Option shall have been validly transferred by the executor or the administrator pursuant to will or the laws of descent or distribution shall have the right, within one year from the date of the Optionee’s death or permanent disability, to exercise the Option, subject to any other limitation contained herein on the exercise of the Option in effect at the date of exercise. For purposes hereof, “permanent disability” means the Optionee (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Optionee’s employer.

6.3 If, on or after the Initial Vesting Date, the Optionee’s employment with the Company and its subsidiaries shall be terminated for any reason other than for Cause or death or permanent disability, the Optionee shall have the right within three months after the Termination Date (or, if the Optionee’s employment with the Company and its subsidiaries is terminated by reason of a qualified retirement as herein defined, within three years after the Termination Date) to exercise the Option to the extent that installments thereof shall have been or become exercisable at the Termination Date and shall not have been exercised, subject to any other limitation contained herein on the exercise of the Option in effect at the date of exercise, and (unless otherwise provided for by the Committee in accordance with the Plan) the Optionee’s right to exercise any installments of the Option that were not exercisable at the Termination Date (if any) shall terminate as of the Termination Date. If the Optionee’s employment is terminated for Cause, the Option shall terminate as of the Termination Date, whether or not exercisable. For purposes hereof, “Cause” means the Optionee’s (i) intentional failure to perform reasonably assigned duties, (ii) dishonesty or willful misconduct in the performance of duties, (iii) engaging in a transaction in connection with the performance of duties to the Company or its subsidiaries which transaction is adverse to the interests of the Company or its subsidiaries and is engaged in for

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personal profit or (iv) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses). In addition, “qualified retirement” means the Optionee (a) terminates employment with the Company and its subsidiaries other than for Cause (and is not subject to termination for Cause at the time of such termination) more than one year after the Grant Date, (b) is available for consultation with the Company or its subsidiaries at the reasonable request of the Company or its subsidiaries and (c) terminates employment on or after attaining age 65 and completing at least five years of service in the aggregate with the Company and its subsidiaries (which service must be continuous through the date of termination except for a single break in service that does not exceed one year in length).

6.4 If the Optionee shall die within the three-month period (or the three-year period, if applicable) referred to in Section 6.3 above, the Optionee or the executor or administrator of the estate of the Optionee or the person or persons to whom the Option shall have been validly transferred by the executor or administrator pursuant to will or the laws of descent and distribution shall have the right, within one year from the date of the Optionee’s death (or, if longer and applicable under Section 6.3 above, within the original three-year period referred to therein), to exercise the Option to the extent that the Option was exercisable at the date of death, subject to any other limitation contained herein on the exercise of the Option in effect at the date of exercise.

6.5 The Optionee’s rights with respect to the Option shall not be affected by any change in the nature of the Optionee’s employment so long as the Optionee continues to be an employee of the Company or any of its subsidiaries. Whether (and the circumstances under which) employment has been terminated and the determination of the Termination Date for the purposes of this Agreement (or whether, and the date upon which, the Optionee as suffered a permanent disability) shall be determined by the Committee or (with respect to any employee other than an “Executive Officer” as defined under the Plan) its designee (who, at the date of this Agreement, shall be the Company’s Vice President of Human Resources), whose good faith determination shall be final, binding and conclusive; provided, that such designee may not make any such determination with respect to his or her own employment.

7. Nontransferability.

The Option shall not be transferable other than by will or by the laws of descent and distribution, and during the lifetime of the Optionee, the Option shall be exercisable only by the Optionee. After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 6.2 or 6.4, be exercised by the Optionee’s personal representative or by any person empowered to do so under the Optionee’s will or under the then applicable laws of descent and distribution.

8. No Right to Continued Employment.

Nothing in this Option Agreement or the Plan shall be interpreted or construed to confer upon the Optionee any right to continue employment by the Company or any of its subsidiaries, nor shall this Agreement or the Plan interfere in any way with the right of the Company or any of its subsidiaries to terminate the Optionee’s employment at any time for any reason whatsoever, whether or not with Cause.

9. Adjustments.

In the event that the outstanding shares of the Common Stock are, from time to time, changed into or exchanged for a different number or kind of shares of the capital stock of the Company or other securities of the Company by reason of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of capital stock, or other similar increase or decrease in the number of shares outstanding without receiving compensation therefor, the Committee shall, in accordance with the terms of the Plan, make an appropriate and equitable adjustment in the number and kind of Shares or other consideration as to which such Option, or portions thereof then unexercised, shall

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be exercisable and the exercise price therefor. Any such adjustment made by the Committee shall be final, binding and conclusive upon the Optionee, the Company and all other interested persons. Any such adjustment may provide for the elimination of any fractional share which might otherwise become subject to the Option. This paragraph shall also apply with respect to any extraordinary dividend or other extraordinary distribution in respect of the Common Stock (whether in the form of cash or other property).

10. Effect of a Change in Control.

10.1 Notwithstanding anything contained in the Plan or this Agreement to the contrary, in the event of a Change in Control, (a) the Option becomes immediately and fully exercisable as to 100% of the Shares subject to the Option, and (b) upon termination of an Optionee’s employment with the Company, following a Change in Control, the Option shall remain exercisable until one year after termination, but in no event beyond the Exercise Term. The Company reserves the right to change or modify in any way the definition of Change in Control set forth in this Option Agreement and any such change or modification shall be binding on the Optionee.

10.2 For the purposes of this Option Agreement, “Change in Control” shall mean the first to occur of the following:

a. The acquisition by any person or group (including a group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Company or any of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a majority of the combined voting power of the Company’s then outstanding voting securities, other than by any employee benefit plan maintained by the Company;

b. The sale of all or substantially all the assets of the Company and its subsidiaries taken as a whole;

c. The consummation of a merger, combination, consolidation, recapitalization or other reorganization of the Corporation with one or more other entities that are not subsidiaries if, as a result of the consummation of the merger, combination, consolidation, recapitalization or other reorganization, less than 50 percent of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event be beneficially owned in the aggregate by the stockholders of the Corporation immediately prior to the event; or

d. The election, including the filling of vacancies, during any period of 24 months or less, of 50% or more, of the members of the Board of Directors, without the approval of Continuing Directors, as constituted at the beginning of such period. “Continuing Directors” shall mean any director of the Company who either (i) is a member of the Board of Directors on the Grant Date, or (ii) is nominated for election to the Board of Directors by a majority of the Board which is comprised of directors who were, at the time of such nomination, Continuing Directors.

11. Withholding of Taxes.

As a condition to the issuance of Shares in respect of any exercise of the Option or any other issuance or payment to the Optionee hereunder, the Optionee shall pay to the Company (and the Company shall have the right to deduct from any distribution of cash to the Optionee) the minimum amount necessary to satisfy Federal, state, local and foreign withholding tax requirements, if any (“Withholding Taxes”) with respect to such exercise, issuance or payment.

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12. Optionee bound by the Plan.

The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

13. Modification of Agreement.

This Agreement may not be modified, amended, suspended or terminated, and any terms or conditions may not be waived, without the approval of the Committee. The Committee reserves the right to amend or modify this Agreement at any time without prior notice to the Optionee or any other interested party; provided, that except as expressly provided hereunder, any such amendment or modification may not adversely affect in any material respect the Optionee’s rights or benefits hereunder except for such amendments or modifications as are required by law.

14. Severability.

Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

15. Governing Law.

The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to the conflicts of laws principles thereof. If the Optionee has received a copy of this Agreement (or the Plan or any other document related hereto or thereto) translated into a language other than English, such translated copy is qualified in its entirety by reference to the English version thereof, and in the event of any conflict the English version will govern.

16. Successors in Interest.

This Agreement shall inure to the benefit of and be binding upon any successor to the Company. This Agreement shall inure to the benefit of the Optionee or the Optionee’s legal representatives. All obligations imposed upon the Optionee and all rights granted to the Company under this Agreement shall be final, binding and conclusive upon the Optionee’s heirs, executors, administrators and successors.

17. Administration.

The Committee shall have the power to interpret the Plan and this Option Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Optionee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action determination or interpretation made in good faith with respect to the Plan or the Options. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Option Agreement.

18. Resolution of Disputes.

Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Optionee and Company for all purposes.

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19. Data Privacy Consent.

As a condition of the grant of the Option, the Optionee hereby consents to the collection, use and transfer of personal data as described in this paragraph. The Optionee understands that the Company and its subsidiaries hold certain personal information about the Optionee, including name, home address and telephone number, date of birth, social security number, salary, nationality, job title, ownership interests or directorships held in the Company or its subsidiaries, and details of all stock options or other equity awards or other entitlements to shares of common stock awarded, cancelled, exercised, vested or unvested (“Data”). The Optionee further understands that the Company and its subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration and management of the Optionee’s participation in the Plan, and that the Company and any of its subsidiaries may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Optionee understands that these recipients may be located in the European Economic Area or elsewhere, such as the United States. The Optionee hereby authorizes them to receive, possess, use, retain and transfer such Data as may be required for the administration of the Plan or the subsequent holding of shares of common stock on the Optionee’s behalf, in electronic or other form, for the purposes of implementing, administering and managing the Optionee’s participation in the Plan, including any requisite transfer to a broker or other third party with whom the Optionee may elect to deposit any shares of common stock acquired under the Plan. The Optionee may, at any time, view such Data or require any necessary amendments to it.

20. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation.

By accepting this Agreement and the grant of the Option evidenced hereby, the Optionee expressly acknowledges that (a) the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (b) the grant of the Option is a one-time benefit that does not create any contractual or other right to receive future grants of options, or benefits in lieu of options; (c) all determinations with respect to future option grants, if any, including the grant date, the number of Shares granted, the exercise price and the exercise date or dates, will be at the sole discretion of the Company; (d) the Optionee’s participation in the Plan is voluntary; (e) the value of the Option is an extraordinary item of compensation that is outside the scope of the Optionee’s employment contract, if any, and nothing can or must automatically be inferred from such employment contract or its consequences; (f) Options are not part of normal or expected compensation for any purpose and are not to be used for calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and the Optionee waives any claim on such basis; and (g) the future value of the underlying Shares is unknown and cannot be predicted with certainty. In addition, the Optionee understands, acknowledges and agrees that the Optionee will have no rights to compensation or damages related to option proceeds in consequence of the termination of the Optionee’s employment for any reason whatsoever and whether or not in breach of contract.

21. Subsidiary.

As used herein, the term “subsidiary” shall mean, as to any person, any corporation, association, partnership, joint venture or other business entity of which 50% or more of the voting stock or other equity interests (in the case of entities other than corporations), is owned or controlled (directly or indirectly) by that entity, or by one or more of the Subsidiaries of that entity, or by a combination thereof.

22. Award Administrator.

The Company may from time to time to designate a third party (an “Award Administrator”) to assist the Company in the implementation, administration and management of the Plan and any Options granted thereunder, including by sending Award Letters on behalf of the Company to Optionees, and by facilitating through electronic means acceptance of Option Agreements by Optionees and Option exercises by Optionees.

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23. Book Entry Delivery of Shares.

Whenever reference in this Agreement is made to the issuance or delivery of certificates representing one or more Shares, the Company may elect to issue or deliver such Shares in book entry form in lieu of certificates.

24. Acceptance.

This Agreement shall not be enforceable until it has been executed by the Optionee. In the event the Company has designated an Award Administrator, the acceptance (including through electronic means) of the Option contemplated by this Option Agreement in accordance with the procedures established from time to time by the Award Administrator shall be deemed to constitute the Optionee’s acknowledgment and agreement to the terms and conditions of this Option Agreement and shall have the same legal effect in all respects of the Optionee having executed this Option Agreement by hand.

By:	L-3 COMMUNICATIONS HOLDINGS, INC.
	/s/ Michael T. Strianese
	Michael T. Strianese
	President and Chief Executive Officer
	/s/ Steven M. Post
	Steven M. Post
	Senior Vice President, General Counsel and
	Corporate Secretary

Acknowledged and Agreed

as of the date first written above:

___________________________________

Optionee Signature

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EX-10.4

Exhibit 10.4

L-3 COMMUNICATIONS HOLDINGS, INC.

2008 LONG TERM PERFORMANCE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

(Version CEO 2014)

THIS AGREEMENT, effective as of the Grant Date (as defined below), is between L-3 Communications Holdings, Inc., a Delaware corporation (the “Company”), and the Optionee (as defined below).

WHEREAS, the Company has adopted the L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan (the “Plan”) in order to provide additional incentives to selected officers and employees of the Company and its subsidiaries; and

WHEREAS, the Committee responsible for administration of the Plan has determined to grant an option to the Optionee as provided herein and the Company and the Optionee hereby wish to memorialize the terms and conditions applicable to the Option (as defined below);

WHEREAS, the following terms shall have the following meanings for purposes of this Option Agreement:

“Award Letter” shall mean the letter to the Optionee attached hereto as Exhibit A;

“Common Stock” means the Company’s Common Stock, par value $0.01 per share;

“Diluted EPS” means earnings per common share of the Company on a fully diluted basis, determined in accordance with GAAP and as derived from the Company’s audited consolidated financial statements prepared in the ordinary course of business; provided, that Diluted EPS shall be calculated so as to eliminate the effect of any: (a) impairment losses incurred on goodwill and other intangible assets or on debt or equity investments computed in accordance with Financial Accounting Standard No. 142 or other GAAP; (b) gains or losses incurred on the retirement of debt computed in accordance with Financial Accounting Standard No. 145; (c) extraordinary gains and losses in accordance with GAAP; (d) gains and losses in connection with asset dispositions whether or not constituting extraordinary gains and losses; (e) non-cash gains or losses on discontinued operations; (f) adoption by the Company of any new accounting standards required by GAAP or the Securities and Exchange Commission following the Grant Date; (g) gains or losses of $5 million or more individually, or $25 million or more in the aggregate, in respect of litigation matters; and (h) gains or losses (other than accrued interest) related to the resolution of income tax contingencies for business acquisitions, to the extent that such contingencies were established as of the dates of such acquisitions in the GAAP purchase price allocations in respect thereof;

“Exercise Price” shall mean the “Grant Price” listed in the Award Letter;

“Free Cash Flow” means (a) the Company’s net cash from operating activities, minus (b) capital expenditures, plus (c) dispositions of property, plant and equipment, in each case determined in accordance with GAAP and as derived from the Company’s audited consolidated financial statements prepared in the ordinary course of business; provided, that Free Cash Flow shall be calculated so as to eliminate the effect of: (i) discretionary contributions to pension plans that exceed the contributions forecasted in the Company’s most recent internal plan for the year as presented to the Board of Directors prior to the Grant Date; (ii) premiums and other payments in excess of principal and accrued interest associated with the retirement of debt , including without limitation payments of income taxes incurred in connection therewith; and (iii) tax payments or benefits associated with gains or losses on business divestitures in calculating net cash from operating activities;

“GAAP” shall mean generally accepted accounting principles in the United States.

“Grant Date” shall mean the “Grant Date” listed in the Award Letter;

“Option Agreement” or this “Agreement” shall mean this agreement including (unless the context otherwise requires) the Award Letter.

“Optionee” shall mean the “Participant” listed in the Award Letter; and

“Shares” shall mean that number of shares of Common Stock listed in the Award Letter as “Awards Granted,” subject to Section 4.2.

NOW, THEREFORE, the parties hereto agree as follows:

1. Grant of Option.

1.1 Effective as of the Grant Date, for good and valuable consideration, the Company hereby irrevocably grants to the Optionee the right and option (the “Option”) to purchase all or any part of the Shares, subject to, and in accordance with, the terms and conditions set forth in this Option Agreement.

1.2 The Option is not intended to qualify as an Incentive Stock Option within the meaning of Section 422 of the Code.

1.3 This Option Agreement shall be construed in accordance and consistent with, and subject to, the terms of the Plan (the provisions of which are incorporated hereby by reference); and, except as otherwise expressly set forth herein, the capitalized terms used in this Option Agreement shall have the same definitions as set forth in the Plan. In the event of any conflict between one or more of this Option Agreement, the Award Letter and the Plan, the Plan shall govern this Option Agreement and the Award Letter, and the Option Agreement (to the extent not in conflict with the Plan) shall govern the Award Letter.

2. Exercise Price.

The price at which the Optionee shall be entitled to purchase the Shares upon the exercise of the Option shall be the Exercise Price per share, subject to adjustment as provided in Section 9.

3. Duration of Option.

The Option shall be exercisable to the extent and in the manner provided herein for a period of ten (10) years from the Grant Date (the “Exercise Term”); provided, however, that the Option may be earlier terminated as provided in Section 6 hereof.

4. Exercisability of Option.

4.1 Subject to Section 4.2, and unless otherwise provided in this Option Agreement or the Plan, the Option shall entitle the Optionee to purchase, in whole at any time or in part from time to time, one-third (1/3^rd) of the total number of Shares covered by the Option on the first anniversary of the Grant Date, an additional one-third (1/3^rd) of the total number of Shares covered by the Option on the second anniversary of the Grant Date and the final one-third (1/3^rd) of the total number of Shares covered by the Option on the expiration of the third anniversary of the Grant Date. Each such right of purchase shall be cumulative and shall continue, unless sooner exercised or terminated as herein provided, during the remaining period of the Exercise Term.

4.2 No right of purchase in respect of the Option shall become exercisable by virtue of Section 4.1 prior to the Determination Date. As promptly as practicable following December 31, 2013, the Committee shall determine, subject to Section 4.3, whether the following conditions have been

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satisfied (the “Performance Conditions”): (a) the Company’s Diluted EPS for the year ended December 31, 2013 is at least $7.01; and (b) the Company’s Free Cash Flow for the year ended December 31, 2013 is at least $876 million (the date of such determinations being referred to herein as the “Determination Date”). In the event that (i) the Committee determines that only one of the two Performance Conditions shall have been satisfied as of the Determination Date and (ii) the Option shall not have become fully exercisable prior to the Determination Date under Section 6 or 10, then the number of Shares subject to the Option shall be automatically reduced by 50% (rounded to the nearest whole Share). In the event that (1) the Committee determines that none of the Performance Conditions shall have been satisfied as of the Determination Date and (2) the Option shall not have become fully exercisable prior to the Determination Date under Section 6 or 10, then Optionee’s right to exercise all or any portion of the Option shall automatically be terminated, and all of Optionee’s rights hereunder shall cease.

4.3 In the event of an equity restructuring, as defined in Financial Accounting Standards Board Accounting Standards Codification 718-10 (formerly Statement of Financial Accounting Standards 123R), the Committee shall adjust any Performance Conditions affected by such restructuring so as to preserve (without enlarging) the likelihood that such Performance Conditions shall be satisfied, with the manner of such adjustment to be determined by the Committee in its sole discretion.

5. Manner of Exercise and Payment.

5.1 Subject to the terms and conditions of this Option Agreement and the Plan, the Option may be exercised by delivery of written notice to the Secretary of the Company (or his or her designee), at its principal executive office. Such notice shall state that the Optionee or other authorized person is electing to exercise the Option and the number of Shares in respect of which the Option is being exercised and shall be signed by the person or persons exercising the Option. In the event the Company has designated an Award Administrator (as defined below), the Option may also be exercised by giving notice (including through electronic means) in accordance with the procedures established from time to time by the Award Administrator. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part, provided that partial exercise shall be for whole shares of Common Stock only. If requested by the Committee, such person or persons shall (i) deliver this Agreement (including the Award Letter) to the Secretary of the Company who shall endorse thereon a notation of such exercise and (ii) provide satisfactory proof as to the right of such person or persons to exercise the Option.

5.2 The notice of exercise described in Section 5.1 shall be accompanied by either (i) payment of the full purchase price for the Shares in respect of which the Option is being exercised and of all applicable Withholding Taxes (as defined in Section 11) pursuant to Section 11 hereof (such payment to be made in cash, by delivering Shares, by withholding a portion of the Shares otherwise issuable or by any combination thereof) or (ii) instructions from the Optionee to the Company directing the Company to deliver a specified number of Shares directly to a designated broker or dealer pursuant to a cashless exercise election, in which case the Company must receive, prior to the issuance of the Shares in respect of which the Option is being exercised, payment of the full purchase price for the Shares in respect of which the Option is being exercised and all applicable Withholding Taxes pursuant to Section 11 hereof (such payment to be made in cash, by delivering Shares, by withholding a portion of the Shares otherwise issuable or by any combination thereof). The value of any Shares withheld or delivered in satisfaction of the purchase price for the Shares in respect of which the Option is being exercised and/or Withholding Taxes shall be determined by reference to the Fair Market Value of such Shares as of the date of such withholding or delivery. In the event that Withholding Taxes are satisfied by withholding a portion of the Shares otherwise issuable in connection with an exercise of the Option, the Company shall not withhold any Shares in excess of the minimum number of Shares necessary to satisfy the applicable Withholding Taxes.

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5.3 Upon receipt of the notice of exercise and any payment or other documentation as may be necessary pursuant to Sections 5.1 and 5.2 relating to the Shares in respect of which the Option is being exercised, the Company shall, subject to the Plan and this Option Agreement, take such action as may be necessary to effect the transfer to the Optionee of the number of Shares as to which such exercise was effective.

5.4 The Optionee shall not be deemed to be the holder of, or to have any of the rights and privileges of a stockholder of the Company in respect of, Shares purchased upon exercise of the Option until (i) the Option shall have been exercised pursuant to the terms of this Option Agreement and the Optionee shall have paid the full purchase price for the number of Shares in respect of which the Option was exercised and any applicable Withholding Taxes and (ii) the Company shall have issued the Shares in connection with such exercise.

6. Termination of Employment; Permanent Disability.

6.1 If, prior to the date of the initial vesting of the Option pursuant to Section 4 hereof (the “Initial Vesting Date”), the Optionee’s employment with the Company and its subsidiaries shall be terminated for any reason, other than death or permanent disability (as herein defined), the Optionee’s right to exercise the Option shall terminate as of the effective date of termination (the “Termination Date”) and all rights hereunder shall cease (unless otherwise provided for by the Committee in accordance with the Plan).

6.2 Upon the Optionee’s death or permanent disability, the Option shall become immediately fully exercisable as to 100% of the Shares subject to the Option, and the Optionee or the executor or administrator of the estate of the Optionee or the person or persons to whom the Option shall have been validly transferred by the executor or the administrator pursuant to will or the laws of descent or distribution shall have the right, within one year from the date of the Optionee’s death or permanent disability, to exercise the Option, subject to any other limitation contained herein on the exercise of the Option in effect at the date of exercise. For purposes hereof, “permanent disability” means the Optionee (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Optionee’s employer.

6.3 If, on or after the Initial Vesting Date, the Optionee’s employment with the Company and its subsidiaries shall be terminated for any reason other than for Cause or death or permanent disability, the Optionee shall have the right within three months after the Termination Date (or, if the Optionee’s employment with the Company and its subsidiaries is terminated by reason of a qualified retirement as herein defined, within three years after the Termination Date) to exercise the Option to the extent that installments thereof shall have been or become exercisable at the Termination Date and shall not have been exercised, subject to any other limitation contained herein on the exercise of the Option in effect at the date of exercise, and (unless otherwise provided for by the Committee in accordance with the Plan) the Optionee’s right to exercise any installments of the Option that were not exercisable at the Termination Date (if any) shall terminate as of the Termination Date. If the Optionee’s employment is terminated for Cause, the Option shall terminate as of the Termination Date, whether or not exercisable. For purposes hereof, “Cause” means the Optionee’s (i) intentional failure to perform reasonably assigned duties, (ii) dishonesty or willful misconduct in the performance of duties, (iii) engaging in a transaction in connection with the performance of duties to the Company or its subsidiaries which transaction is adverse to the interests of the Company or its subsidiaries and is engaged in for personal profit or (iv) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses). In addition, “qualified retirement” means the Optionee (a) terminates employment with the Company and its subsidiaries other than for Cause (and is

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not subject to termination for Cause at the time of such termination) more than one year after the Grant Date, (b) is available for consultation with the Company or its subsidiaries at the reasonable request of the Company or its subsidiaries and (c) terminates employment on or after attaining age 65 and completing at least five years of service in the aggregate with the Company and its subsidiaries (which service must be continuous through the date of termination except for a single break in service that does not exceed one year in length).

6.4 If the Optionee shall die within the three-month period (or the three-year period, if applicable) referred to in Section 6.3 above, the Optionee or the executor or administrator of the estate of the Optionee or the person or persons to whom the Option shall have been validly transferred by the executor or administrator pursuant to will or the laws of descent and distribution shall have the right, within one year from the date of the Optionee’s death (or, if longer and applicable under Section 6.3 above, within the original three-year period referred to therein), to exercise the Option to the extent that the Option was exercisable at the date of death, subject to any other limitation contained herein on the exercise of the Option in effect at the date of exercise.

6.5 The Optionee’s rights with respect to the Option shall not be affected by any change in the nature of the Optionee’s employment so long as the Optionee continues to be an employee of the Company or any of its subsidiaries. Whether (and the circumstances under which) employment has been terminated and the determination of the Termination Date for the purposes of this Agreement (or whether, and the date upon which, the Optionee as suffered a permanent disability) shall be determined by the Committee or (with respect to any employee other than an “Executive Officer” as defined under the Plan) its designee (who, at the date of this Agreement, shall be the Company’s Vice President of Human Resources), whose good faith determination shall be final, binding and conclusive; provided, that such designee may not make any such determination with respect to his or her own employment.

7. Nontransferability.

The Option shall not be transferable other than by will or by the laws of descent and distribution, and during the lifetime of the Optionee, the Option shall be exercisable only by the Optionee. After the death of the Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 6.2 or 6.4, be exercised by the Optionee’s personal representative or by any person empowered to do so under the Optionee’s will or under the then applicable laws of descent and distribution.

8. No Right to Continued Employment.

Nothing in this Option Agreement or the Plan shall be interpreted or construed to confer upon the Optionee any right to continue employment by the Company or any of its subsidiaries, nor shall this Agreement or the Plan interfere in any way with the right of the Company or any of its subsidiaries to terminate the Optionee’s employment at any time for any reason whatsoever, whether or not with Cause.

9. Adjustments.

In the event that the outstanding shares of the Common Stock are, from time to time, changed into or exchanged for a different number or kind of shares of the capital stock of the Company or other securities of the Company by reason of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of capital stock, or other similar increase or decrease in the number of shares outstanding without receiving compensation therefor, the Committee shall, in accordance with the terms of the Plan, make an appropriate and equitable adjustment in the number and kind of Shares or other consideration as to which such Option, or portions thereof then unexercised, shall be exercisable and the exercise price therefor. Any such adjustment made by the Committee shall be final, binding and conclusive upon the Optionee, the Company and all other interested persons. Any such adjustment may provide for the elimination of any fractional share which might otherwise become subject to the Option. This paragraph shall also apply with respect to any extraordinary dividend or other extraordinary distribution in respect of the Common Stock (whether in the form of cash or other property).

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10. Effect of a Change in Control.

10.1 Notwithstanding anything contained in the Plan or this Agreement to the contrary, in the event of a Change in Control, (a) the Option becomes immediately and fully exercisable as to 100% of the Shares subject to the Option, and (b) upon termination of an Optionee’s employment with the Company, following a Change in Control, the Option shall remain exercisable until one year after termination, but in no event beyond the Exercise Term. The Company reserves the right to change or modify in any way the definition of Change in Control set forth in this Option Agreement and any such change or modification shall be binding on the Optionee.

10.2 For the purposes of this Option Agreement, “Change in Control” shall mean the first to occur of the following:

a. The acquisition by any person or group (including a group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Company or any of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a majority of the combined voting power of the Company’s then outstanding voting securities, other than by any employee benefit plan maintained by the Company;

b. The sale of all or substantially all the assets of the Company and its subsidiaries taken as a whole;

c. The consummation of a merger, combination, consolidation, recapitalization or other reorganization of the Corporation with one or more other entities that are not subsidiaries if, as a result of the consummation of the merger, combination, consolidation, recapitalization or other reorganization, less than 50 percent of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event be beneficially owned in the aggregate by the stockholders of the Corporation immediately prior to the event; or

d. The election, including the filling of vacancies, during any period of 24 months or less, of 50% or more, of the members of the Board of Directors, without the approval of Continuing Directors, as constituted at the beginning of such period. “Continuing Directors” shall mean any director of the Company who either (i) is a member of the Board of Directors on the Grant Date, or (ii) is nominated for election to the Board of Directors by a majority of the Board which is comprised of directors who were, at the time of such nomination, Continuing Directors.

11. Withholding of Taxes.

As a condition to the issuance of Shares in respect of any exercise of the Option or any other issuance or payment to the Optionee hereunder, the Optionee shall pay to the Company (and the Company shall have the right to deduct from any distribution of cash to the Optionee) the minimum amount necessary to satisfy Federal, state, local and foreign withholding tax requirements, if any (“Withholding Taxes”) with respect to such exercise, issuance or payment.

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12. Optionee bound by the Plan.

The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

13. Modification of Agreement.

This Agreement may not be modified, amended, suspended or terminated, and any terms or conditions may not be waived, without the approval of the Committee. The Committee reserves the right to amend or modify this Agreement at any time without prior notice to the Optionee or any other interested party; provided, that except as expressly provided hereunder, any such amendment or modification may not adversely affect in any material respect the Optionee’s rights or benefits hereunder except for such amendments or modifications as are required by law.

14. Severability.

Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

15. Governing Law.

The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to the conflicts of laws principles thereof. If the Optionee has received a copy of this Agreement (or the Plan or any other document related hereto or thereto) translated into a language other than English, such translated copy is qualified in its entirety by reference to the English version thereof, and in the event of any conflict the English version will govern.

16. Successors in Interest.

This Agreement shall inure to the benefit of and be binding upon any successor to the Company. This Agreement shall inure to the benefit of the Optionee or the Optionee’s legal representatives. All obligations imposed upon the Optionee and all rights granted to the Company under this Agreement shall be final, binding and conclusive upon the Optionee’s heirs, executors, administrators and successors.

17. Administration.

The Committee shall have the power to interpret the Plan and this Option Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Optionee, the Company and all other interested persons. No member of the Committee shall be personally liable for any action determination or interpretation made in good faith with respect to the Plan or the Options. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Option Agreement.

18. Resolution of Disputes.

Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Optionee and Company for all purposes.

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19. Data Privacy Consent.

As a condition of the grant of the Option, the Optionee hereby consents to the collection, use and transfer of personal data as described in this paragraph. The Optionee understands that the Company and its subsidiaries hold certain personal information about the Optionee, including name, home address and telephone number, date of birth, social security number, salary, nationality, job title, ownership interests or directorships held in the Company or its subsidiaries, and details of all stock options or other equity awards or other entitlements to shares of common stock awarded, cancelled, exercised, vested or unvested (“Data”). The Optionee further understands that the Company and its subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration and management of the Optionee’s participation in the Plan, and that the Company and any of its subsidiaries may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. The Optionee understands that these recipients may be located in the European Economic Area or elsewhere, such as the United States. The Optionee hereby authorizes them to receive, possess, use, retain and transfer such Data as may be required for the administration of the Plan or the subsequent holding of shares of common stock on the Optionee’s behalf, in electronic or other form, for the purposes of implementing, administering and managing the Optionee’s participation in the Plan, including any requisite transfer to a broker or other third party with whom the Optionee may elect to deposit any shares of common stock acquired under the Plan. The Optionee may, at any time, view such Data or require any necessary amendments to it.

20. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation.

By accepting this Agreement and the grant of the Option evidenced hereby, the Optionee expressly acknowledges that (a) the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (b) the grant of the Option is a one-time benefit that does not create any contractual or other right to receive future grants of options, or benefits in lieu of options; (c) all determinations with respect to future option grants, if any, including the grant date, the number of Shares granted, the exercise price and the exercise date or dates, will be at the sole discretion of the Company; (d) the Optionee’s participation in the Plan is voluntary; (e) the value of the Option is an extraordinary item of compensation that is outside the scope of the Optionee’s employment contract, if any, and nothing can or must automatically be inferred from such employment contract or its consequences; (f) Options are not part of normal or expected compensation for any purpose and are not to be used for calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and the Optionee waives any claim on such basis; and (g) the future value of the underlying Shares is unknown and cannot be predicted with certainty. In addition, the Optionee understands, acknowledges and agrees that the Optionee will have no rights to compensation or damages related to option proceeds in consequence of the termination of the Optionee’s employment for any reason whatsoever and whether or not in breach of contract.

21. Subsidiary.

As used herein, the term “subsidiary” shall mean, as to any person, any corporation, association, partnership, joint venture or other business entity of which 50% or more of the voting stock or other equity interests (in the case of entities other than corporations), is owned or controlled (directly or indirectly) by that entity, or by one or more of the Subsidiaries of that entity, or by a combination thereof.

22. Award Administrator.

The Company may from time to time to designate a third party (an “Award Administrator”) to assist the Company in the implementation, administration and management of the Plan and any Options granted thereunder, including by sending Award Letters on behalf of the Company to Optionees, and by facilitating through electronic means acceptance of Option Agreements by Optionees and Option exercises by Optionees.

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23. Book Entry Delivery of Shares.

Whenever reference in this Agreement is made to the issuance or delivery of certificates representing one or more Shares, the Company may elect to issue or deliver such Shares in book entry form in lieu of certificates.

24. Acceptance.

This Agreement shall not be enforceable until it has been executed by the Optionee. In the event the Company has designated an Award Administrator, the acceptance (including through electronic means) of the Option contemplated by this Option Agreement in accordance with the procedures established from time to time by the Award Administrator shall be deemed to constitute the Optionee’s acknowledgment and agreement to the terms and conditions of this Option Agreement and shall have the same legal effect in all respects of the Optionee having executed this Option Agreement by hand.

By:	L-3 COMMUNICATIONS HOLDINGS, INC.
	/s/ Michael T. Strianese
	Michael T. Strianese President and Chief Executive Officer
	/s/ Steven M. Post
	Steven M. Post Senior Vice President, General Counsel and     Corporate Secretary

Acknowledged and Agreed

as of the date first written above:

Optionee Signature

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EX-10.5

Exhibit 10.5

L-3 COMMUNICATIONS HOLDINGS, INC.

2008 LONG TERM PERFORMANCE PLAN

RESTRICTED STOCK UNIT AGREEMENT

(Version 0005)

This Restricted Stock Unit Agreement (this “Agreement”), effective as of the Grant Date (as defined below), is between L-3 Communications Holdings, Inc., a Delaware corporation (the “Corporation”), and the Participant (as defined below).

1. Definitions. The following terms shall have the following meanings for purposes of this Agreement:

(a) “Award Letter” shall mean the letter to the Participant attached hereto as Exhibit A.

(b) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(c) “Grant Date” shall mean the “Grant Date” listed in the Award Letter.

(d) “Participant” shall mean the “Participant” listed in the Award Letter.

(e) “Restricted Units” shall mean that number of restricted units listed in the Award Letter as “Awards Granted.”

(f) “Section 409A Change in Control Event” shall mean a change in ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, within the meaning of Section 409A(a)(2)(A)(v) of the Code.

(g) “Shares” shall mean a number of shares of the Corporation’s Common Stock, par value $0.01 per share, equal to the number of Restricted Units.

2. Grant of Units. The Corporation hereby grants the Restricted Units to the Participant, each of which represents the right to receive one Share upon the expiration or termination of the Restricted Period (as defined below), subject to the terms, conditions and restrictions set forth in the L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan (the “Plan”) and this Agreement.

3. Restricted Unit Account. The Corporation shall cause an account (the “Unit Account”) to be established and maintained on the books of the Corporation to record the number of Restricted Units credited to the Participant under the terms of this Agreement. The Participant’s interest in the Unit Account shall be that of a general, unsecured creditor of the Corporation.

4. Restricted Period. Except as otherwise provided in paragraphs 6 and 7 hereof, the “Restricted Period” shall mean the period beginning on the Grant Date and expiring on the third anniversary of the Grant Date. Upon the expiration or termination of the Restricted Period, the Shares shall be issued to the Participant in accordance with Section 13.

5. Nonalienation of Benefits. No Participant or beneficiary shall have the power or right to transfer, anticipate, or otherwise encumber the Participant’s interest under this Agreement. The provisions of this Agreement shall inure to the benefit of the Participant and the Participant’s beneficiaries, heirs, executors, administrators or successors in interest.

6. Change in Control During Restricted Period. Upon the occurrence of a “change in control” that constitutes a Section 409A Change in Control Event, the Restricted Period shall automatically terminate and the Shares shall thereafter be issued to the Participant in accordance with Section 13. In the event of any other “change in control,” the Restricted Period shall not be immediately affected, but shall subsequently terminate (and the Shares shall thereafter be issued to the Participant in accordance with Section 13) upon the earliest to occur of: (a) a Section 409A Change in Control Event, (b) the Participant’s death, (c) the Participant’s “disability” (as defined in Section 7(c) hereof) or (d) the third anniversary of the Grant Date. For purposes of this Agreement, a “change in control” means:

(a) The acquisition by any person or group (including a group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Corporation or any of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a majority of the combined voting power of the Corporation’s then outstanding voting securities, other than by any employee benefit plan maintained by the Corporation;

(b) The sale of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole;

(c) The consummation of a merger, combination, consolidation, recapitalization or other reorganization of the Corporation with one or more other entities that are not subsidiaries if, as a result of the consummation of the merger, combination, consolidation, recapitalization or other reorganization, less than 50 percent of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event be beneficially owned in the aggregate by the stockholders of the Corporation immediately prior to the event; or

(d) The election, including the filling of vacancies, during any period of 24 months or less, of 50% or more of the members of the Board of Directors, without the approval of Continuing Directors, as constituted at the beginning of such period. “Continuing Directors” shall mean any director of the Corporation who either (i) is a member of the Board of Directors on the Grant Date, or (ii) is nominated for election to the Board of Directors by a majority of the Board which is comprised of directors who were, at the time of such nomination, Continuing Directors.

7. Termination of Employment or Disability During Restricted Period.

(a) In the event that the Participant’s employment with the Corporation and its subsidiaries is terminated (other than by reason of death, “retirement” or “disability,” as defined below) prior to the expiration or termination of the Restricted Period and prior to the occurrence of a “change in control” (as defined in Section 6), the Participant shall forfeit the Restricted Units and all of the Participant’s rights hereunder shall cease (unless otherwise provided for by the Committee in accordance with the Plan). The Participant’s rights to the Restricted Units shall not be affected by any change in the nature of the Participant’s employment so long as the Participant continues to be an employee of the Corporation or any of its subsidiaries.

(b) In the event the Participant terminates employment with the Corporation and its subsidiaries because of “retirement” prior to the expiration or termination of the Restricted Period and prior to the occurrence of a “change in control” (as defined in Section 6), the Restricted Period shall not be affected and shall expire with the passage of time in accordance with paragraph 4, except that (i) in the

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event that the Participant dies following retirement but prior to the expiration of the Restricted Period, the Restricted Period shall automatically terminate and the Shares shall thereafter be delivered in accordance with Section 13 and (ii) the Restricted Period may earlier terminate in accordance with Section 6. For purposes of this Agreement, retirement means the Participant (A) terminates employment with the Corporation and its subsidiaries other than for Cause (and is not subject to termination for Cause at the time of such termination) more than one year after the Grant Date, (B) is available for consultation with the Corporation or its subsidiaries at the reasonable request of the Corporation or its subsidiaries and (C) terminates employment on or after attaining age 65 and completing at least five years of service in the aggregate with the Corporation and its subsidiaries (which service must be continuous through the date of termination except for a single break in service that does not exceed one year in length). For purposes of this Agreement, “Cause” means the Participant’s (1) intentional failure to perform reasonably assigned duties, (2) dishonesty or willful misconduct in the performance of duties, (3) engaging in a transaction in connection with the performance of duties to the Corporation or its subsidiaries which transaction is adverse to the interests of the Corporation and is engaged in for personal profit or (4) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses).

(c) Upon Participant’s death or “disability” (as defined below), the Restricted Period shall automatically terminate and the Shares shall thereafter be issued in accordance with Section 13. For purposes of this Agreement, disability means the Participant, (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer.

(d) Whether (and the circumstances under which) employment has been terminated and the determination of the termination date for the purposes of this Agreement (or whether, and the date upon which, the Participant has suffered a disability under Section 7(c)) shall be determined by the Committee or (with respect to any employee other than an “Executive Officer” as defined under the Plan) its designee (who, at the date of this Agreement, shall be the Corporation’s Vice President of Human Resources), whose good faith determination shall be final, binding and conclusive; provided, that such designee may not make any such determination with respect to his or her own employment.

8. Dividends. If the Corporation pays a cash dividend on its common stock, the Participant shall accrue in his or her Dividend Account (as defined below) a cash dividend equivalent with respect to the Restricted Units credited to the Participant’s Unit Account as of the record date for the dividend, with each Restricted Unit being equivalent to one share of common stock. The Corporation shall cause an account (the “Dividend Account”) to be established and maintained as part of the records of the Corporation to evidence the aggregate cash dividend equivalents accrued by the Participant from time to time under this Section. No interest shall accrue on any amounts reflected in the Dividend Account. The Participant’s interest in the amounts reflected in the Dividend Account shall be that of a general, unsecured creditor of the Corporation. Subject to, and as promptly as practicable following, the issuance of the Shares pursuant to Section 13 hereunder, the Corporation shall pay an amount in cash (without interest and subject to applicable withholding taxes) to the Participant (or his or her beneficiaries, heirs, executors, administrators or successors in interest who are issued the Shares pursuant to Section 13 hereunder) equal to the aggregate cash dividend equivalents accrued in the Participant’s Dividend Account and the Participant’s Dividend Account shall be eliminated at that time. In the event that the Participant forfeits his or her rights to the Restricted Units, the Participant also shall be deemed to have forfeited his or her rights to any cash dividend equivalents accrued in the Participant’s Dividend Account and the Participant’s Dividend Account shall be eliminated at that time.

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9. No Right to Continued Employment. Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Participant any right to continue employment by the Corporation or any of its subsidiaries, nor shall this Agreement or the Plan interfere in any way with the right of the Corporation or any of its subsidiaries to terminate the Participant’s employment at any time for any reason whatsoever, whether or not with cause.

10. No Rights as a Stockholder. The Participant’s interest in the Restricted Units shall not entitle the Participant to any rights as a stockholder of the Corporation. The Participant shall not be deemed to be the holder of, or have any of the rights and privileges of a stockholder of the Corporation in respect of, the Shares unless and until such Shares have been issued to the Participant in accordance Section 13.

11. Adjustments Upon Change in Capitalization. In the event of any reorganization, merger, consolidation, recapitalization, reclassification, stock split, stock dividend or similar capital adjustment, as a result of which shares of any class shall be issued in respect of outstanding shares of the Corporation’s Common Stock or shares of Corporation’s Common Stock shall be changed into a different number of shares or into another class or classes or into other property or cash, the Restricted Units, the Participant’s Unit Account and/or the Shares shall be adjusted to reflect such event so as to preserve (without enlarging) the value of the award hereunder, with the manner of such adjustment to be determined by the Committee in its sole discretion. This paragraph shall also apply with respect to any extraordinary dividend or other extraordinary distribution in respect of the Corporation’s Common Stock (whether in the form of cash or other property).

12.General Restrictions. Notwithstanding anything in this Agreement to the contrary, the Corporation shall have no obligation to issue or transfer the Shares as contemplated by this agreement unless and until such issuance or transfer shall comply with all relevant provisions of law and the requirements of any stock exchange on which the Corporation’s shares are listed for trading.

13. Issuance of Shares. Upon the expiration or termination of the Restricted Period and payment by the Participant of any applicable taxes pursuant to Section 14 of this Agreement, the Corporation shall, as soon as reasonably practicable (and in any event within 75 days of the termination or expiration of the Restricted Period), but subject to any delay necessary to comply with Section 12 hereof, issue the Shares to the Participant, free and clear of all restrictions; provided, that if the termination of the Restricted Period results from a Section 409A Change in Control Event, then notwithstanding the foregoing, the Shares shall be issued within 30 days of the Section 409A Change in Control Event. The Corporation shall not be required to deliver any fractional Shares, but shall pay, in lieu thereof, the fair market value (as defined in the Plan) as of the date the restrictions lapse of such fractional share to the Participant. The Corporation shall pay any costs incurred in connection with issuing the Shares. Upon the issuance of the Shares to the Participant, the Participant’s Unit Account shall be eliminated. Notwithstanding the provisions of this Section, in the event of the death of the Participant prior to the issuance of the Shares under this Section 13, the issuance of the Shares and any payment in lieu of fractional Shares shall be made to the Participant’s beneficiaries, heirs, executors, administrators or successors in interest as the case may be.

14. Tax Withholding. Upon the expiration or termination of the Restricted Period, the Participant shall remit to the Corporation the minimum amount necessary to satisfy Federal, state, local or foreign withholding tax requirements, if any (“Withholding Taxes”) as a condition to the Corporation’s

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issuance of any Shares as provided in Section 13. The payment shall be in (i) cash, (ii) the delivery of Shares, (iii) a reduction in the number of Shares otherwise issuable or deliverable or other amounts otherwise payable to the Participant pursuant to this Agreement, or (iv) a combination of (i), (ii) and/or (iii). The value of any Shares delivered or withheld as payment in respect of withholding tax requirements shall be determined by reference to the Fair Market Value of such Shares as of the date of such withholding or delivery. In the event that Withholding Taxes are satisfied by withholding a portion of the Shares otherwise issuable or deliverable to the Participant pursuant to this Agreement, the Corporation shall not withhold any Shares in excess of the minimum number of Shares necessary to satisfy the applicable Withholding Taxes.

15. Subsidiary. As used herein, the term “subsidiary” shall mean, as to any person, any corporation, association, partnership, joint venture or other business entity of which 50% or more of the voting stock or other equity interests (in the case of entities other than corporations), is owned or controlled (directly or indirectly) by that entity, or by one or more of the Subsidiaries of that entity, or by a combination thereof.

16. Plan Governs. The Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by its terms, all of which are incorporated herein by reference. The Plan shall govern in the event of any conflict between this Agreement and the Plan.

17. Modification of Agreement. This Agreement may be not be modified, amended, suspended or terminated, and any terms or conditions may not be waived, without the approval of the Committee. The Committee reserves the right to amend or modify this Agreement at any time without prior notice to any Participant or other interested party; provided, that except as expressly provided hereunder, any such amendment or modification may not adversely affect in any material respect the Participant’s rights or benefits hereunder except for such amendments or modifications as are required by law.

18. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

19. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to the conflicts of laws principles thereof. If the Participant has received a copy of this Agreement (or the Plan or any other document related hereto or thereto) translated into a language other than English, such translated copy is qualified in its entirety by reference to the English version thereof, and in the event of any conflict the English version will govern.

20. Successors in Interest. This Agreement shall inure to the benefit of and be binding upon any successor to the Corporation. This Agreement shall inure to the benefit of the Participant or the Participant’s legal representatives. All obligations imposed upon the Participant and all rights granted to the Corporation under this Agreement shall be final, binding and conclusive upon the Participant’s heirs, executors, administrators and successors.

21. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participant, the Corporation and all other interested persons. No member of the Committee shall be personally liable for

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any action determination or interpretation made in good faith with respect to the Plan or the Restricted Units. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement.

22. Resolution of Disputes. Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Participant and Corporation for all purposes.

23. Data Privacy Consent. As a condition of the grant of the Restricted Units, the Participant hereby consents to the collection, use and transfer of personal data as described in this paragraph. The Participant understands that the Corporation and its subsidiaries hold certain personal information about the Participant, including name, home address and telephone number, date of birth, social security number, salary, nationality, job title, ownership interests or directorships held in the Corporation or its subsidiaries, and details of all restricted units or other equity awards or other entitlements to shares of common stock awarded, cancelled, exercised, vested or unvested (“Data”). The Participant further understands that the Corporation and its subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration and management of the Participant’s participation in the Plan, and that the Corporation and any of its subsidiaries may each further transfer Data to any third parties assisting the Corporation in the implementation, administration and management of the Plan. The Participant understands that these recipients may be located in the European Economic Area or elsewhere, such as the United States. The Participant hereby authorizes them to receive, possess, use, retain and transfer such Data as may be required for the administration of the Plan or the subsequent holding of shares of common stock on the Participant’s behalf, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer to a broker or other third party with whom the Participant may elect to deposit any shares of common stock acquired under the Plan. The Participant may, at any time, view such Data or require any necessary amendments to it.

24. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation. By accepting this Agreement and the grant of the Restricted Units contemplated hereunder, the Participant expressly acknowledges that (a) the Plan is discretionary in nature and may be suspended or terminated by the Corporation at any time; (b) the grant of Restricted Units is a one-time benefit that does not create any contractual or other right to receive future grants of restricted units, or benefits in lieu of restricted units; (c) all determinations with respect to future grants of restricted units, if any, including the grant date, the number of Shares granted and the restricted period, will be at the sole discretion of the Corporation; (d) the Participant’s participation in the Plan is voluntary; (e) the value of the Restricted Units is an extraordinary item of compensation that is outside the scope of the Participant’s employment contract, if any, and nothing can or must automatically be inferred from such employment contract or its consequences; (f) grants of restricted units are not part of normal or expected compensation for any purpose and are not to be used for calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and the Participant waives any claim on such basis; and (g) the future value of the underlying Shares is unknown and cannot be predicted with certainty. In addition, the Participant understands, acknowledges and agrees that the Participant will have no rights to compensation or damages related to restricted unit proceeds in consequence of the termination of the Participant’s employment for any reason whatsoever and whether or not in breach of contract.

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25. Award Administrator. The Corporation may from time to time to designate a third party (an “Award Administrator”) to assist the Corporation in the implementation, administration and management of the Plan and any Restricted Units granted thereunder, including by sending Award Letters on behalf of the Corporation to Participants, and by facilitating through electronic means acceptance of Restricted Unit Agreements by Participants.

26. Section 409A. This Agreement is intended to comply with the provisions of Section 409A of the Code and the regulations promulgated thereunder. Without limiting the foregoing, the Committee shall have the right to amend the terms and conditions of this Agreement in any respect as may be necessary or appropriate to comply with Section 409A of the Code or any regulations promulgated thereunder, including without limitation by delaying the issuance of the Shares contemplated hereunder.

27. Book Entry Delivery of Shares. Whenever reference in this Agreement is made to the issuance or delivery of certificates representing one or more Shares, the Corporation may elect to issue or deliver such Shares in book entry form in lieu of certificates.

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28. Acceptance. This Agreement shall not be enforceable until it has been executed by the Participant. In the event the Corporation has designated an Award Administrator, the acceptance (including through electronic means) of the Restricted Unit award contemplated by this Agreement in accordance with the procedures established from time to time by the Award Administrator shall be deemed to constitute the Participant’s acknowledgment and agreement to the terms and conditions of this Agreement and shall have the same legal effect in all respects of the Participant having executed this Agreement by hand.

By:	L-3 COMMUNICATIONS HOLDINGS, INC.
	/s/ Michael T. Strianese
	Michael T. Strianese President and Chief Executive Officer
	/s/ Steven M. Post
	Steven M. Post Senior Vice President, General Counsel and Corporate Secretary

Acknowledged and Agreed

as of the date first written above:

Participant Signature

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EX-10.6

Exhibit 10.6

L-3 COMMUNICATIONS HOLDINGS, INC.

2008 LONG TERM PERFORMANCE PLAN

RESTRICTED STOCK UNIT AGREEMENT

(CEO Version 2014)

This Restricted Stock Unit Agreement (this “Agreement”), effective as of the Grant Date (as defined below), is between L-3 Communications Holdings, Inc., a Delaware corporation (the “Corporation”), and the Participant (as defined below).

1. Definitions. The following terms shall have the following meanings for purposes of this Agreement:

(a) “Award Letter” shall mean the letter to the Participant attached hereto as Exhibit A.

(b) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(c) “Determination Date” shall mean the date on which the Committee determines whether the Performance Condition (as defined below) has been satisfied.

(d) “Free Cash Flow” shall mean (1) the Corporation’s net cash from operating activities, minus (2) capital expenditures, plus (3) dispositions of property, plant and equipment, in each case determined in accordance with GAAP and as derived from the Corporation’s audited consolidated financial statements prepared in the ordinary course of business; provided, that Free Cash Flow shall be calculated so as to eliminate the effect of: (i) discretionary contributions to pension plans that exceed the contributions forecasted in the Corporation’s most recent internal plan for the year as presented to the Board of Directors prior to the Grant Date; (ii) premiums and other payments in excess of principal and accrued interest associated with the retirement of debt; and (iii) tax payments or benefits associated with gains or losses on business divestitures in calculating net cash from operating activities;

(e) “GAAP” shall mean generally accepted accounting principles in the United States.

(f) “Grant Date” shall mean the “Grant Date” listed in the Award Letter.

(g) “Participant” shall mean the “Participant” listed in the Award Letter.

(h) “Restricted Units” shall mean that number of restricted units listed in the Award Letter as “Awards Granted,” subjection to Section 4(b).

(i) “Section 409A Change in Control Event” shall mean a change in ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, within the meaning of Section 409A(a)(2)(A)(v) of the Code.

(j) “Shares” shall mean a number of shares of the Corporation’s Common Stock, par value $0.01 per share, equal to the number of Restricted Units outstanding under this Agreement.

2. Grant of Units. The Corporation hereby grants the Restricted Units to the Participant, each of which represents the right to receive one Share upon the expiration or termination of the Restricted Period (as defined below), subject to the terms, conditions and restrictions set forth in the L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan (the “Plan”) and this Agreement.

3. Restricted Unit Account. The Corporation shall cause an account (the “Unit Account”) to be established and maintained on the books of the Corporation to record the number of Restricted Units credited to the Participant under the terms of this Agreement, which Unit Account shall be subject to adjustment in accordance with the terms of the Plan and this Agreement, including without limitation Section 4(b). The Participant’s interest in the Unit Account shall be that of a general, unsecured creditor of the Corporation.

4. Restricted Period; Performance Condition.

(a) Except as otherwise provided in paragraphs 6 and 7 hereof, the “Restricted Period” shall mean the period beginning on the Grant Date and expiring on the third anniversary of the Grant Date. Subject to Section 4(b) below, upon the expiration or termination of the Restricted Period, the Shares shall be issued to the Participant in accordance with Section 13.

(b) As promptly as practicable following the last day of the fiscal year which includes the Grant Date, the Committee shall determine, subject to Section 4(c), whether: (x) the amount of 1.0% of the Company’s Free Cash Flow for such fiscal year, exceeds (y) the grant date fair value of the Shares underlying the Restricted Units, determined in accordance with GAAP (such condition, the “Performance Condition”). If the Performance Condition is not satisfied, then:

(1) the number of Restricted Units shall automatically be reduced to the highest whole number that would have resulted in the Performance Condition being satisfied; and

(2) any Restricted Units previously awarded in excess of the number calculated in accordance with clause (1) above (and any cash dividends accrued thereon in accordance with Section 8 hereof) shall be forfeited without any further action on behalf of the Corporation, the Committee or the Participant.

(c) In the event of an equity restructuring, as defined in Financial Accounting Standards Board Accounting Standards Codification 718-10 (formerly Statement of Financial Accounting Standards 123R), the Committee shall modify the Performance Condition to the extent it is affected by such restructuring so as to preserve (without enlarging) the likelihood that such Performance Condition shall be satisfied, with the manner of such adjustment to be determined by the Committee in its sole discretion.

5. Nonalienation of Benefits. No Participant or beneficiary shall have the power or right to transfer, anticipate, or otherwise encumber the Participant’s interest under this Agreement. The provisions of this Agreement shall inure to the benefit of the Participant and the Participant’s beneficiaries, heirs, executors, administrators or successors in interest.

6. Change in Control During Restricted Period. Upon the occurrence of a “change in control” that constitutes a Section 409A Change in Control Event, the Restricted Period shall automatically terminate and, if the Determination Date has not occurred, the Performance Condition shall automatically be waived, and the Shares shall thereafter be issued to the Participant in accordance with Section 13. In the event of any other “change in control” prior to the Determination Date the Performance Condition shall automatically be waived, but the Restricted Period shall not be immediately affected, and shall subsequently terminate (and the Shares shall thereafter be issued to the Participant in

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accordance with Section 13) upon the earliest to occur of: (a) a Section 409A Change in Control Event, (b) the Participant’s death, (c) the Participant’s “disability” (as defined in Section 7(c) hereof) or (d) the third anniversary of the Grant Date. For purposes of this Agreement, a “change in control” means:

(a) The acquisition by any person or group (including a group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Corporation or any of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a majority of the combined voting power of the Corporation’s then outstanding voting securities, other than by any employee benefit plan maintained by the Corporation;

(b) The sale of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole;

(c) The consummation of a merger, combination, consolidation, recapitalization or other reorganization of the Corporation with one or more other entities that are not subsidiaries if, as a result of the consummation of the merger, combination, consolidation, recapitalization or other reorganization, less than 50 percent of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event be beneficially owned in the aggregate by the stockholders of the Corporation immediately prior to the event; or

(d) The election, including the filling of vacancies, during any period of 24 months or less, of 50% or more of the members of the Board of Directors, without the approval of Continuing Directors, as constituted at the beginning of such period. “Continuing Directors” shall mean any director of the Corporation who either (i) is a member of the Board of Directors on the Grant Date, or (ii) is nominated for election to the Board of Directors by a majority of the Board which is comprised of directors who were, at the time of such nomination, Continuing Directors.

7. Termination of Employment or Disability During Restricted Period.

(a) In the event that the Participant’s employment with the Corporation and its subsidiaries is terminated (other than by reason of death, “retirement” or “disability,” as defined below) prior to the expiration or termination of the Restricted Period and prior to the occurrence of a “change in control” (as defined in Section 6), the Participant shall forfeit the Restricted Units and all of the Participant’s rights hereunder shall cease (unless otherwise provided for by the Committee in accordance with the Plan). The Participant’s rights to the Restricted Units shall not be affected by any change in the nature of the Participant’s employment so long as the Participant continues to be an employee of the Corporation or any of its subsidiaries.

(b) In the event the Participant terminates employment with the Corporation and its subsidiaries because of “retirement” prior to the expiration or termination of the Restricted Period and prior to the occurrence of a “change in control” (as defined in Section 6), the Restricted Period and the Performance Condition shall not be affected and shall expire with the passage of time or be satisfied or not satisfied, as applicable, in each case in accordance with paragraph 4, except that (i) in the event that the Participant dies following retirement but prior to the expiration of the Restricted Period, the Restricted Period shall automatically terminate and in the event the Determination Date has not occurred, the Performance Condition shall be waived, and the Shares shall thereafter be delivered in accordance with Section 13 and (ii) the Restricted Period may earlier terminate and the Performance Condition may be waived in accordance with Section 6. For purposes of this Agreement, retirement means the Participant (A) terminates employment with the Corporation and its subsidiaries other than for Cause (and is not subject to termination for Cause at the time of such termination) more than one year after the Grant Date,

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(B) is available for consultation with the Corporation or any of its subsidiaries at the reasonable request of the Corporation or one of its subsidiaries and (C) terminates employment on or after attaining age 65 and completing at least five years of service in the aggregate with the Corporation and its subsidiaries (which service must be continuous through the date of termination except for a single break in service that does not exceed one year in length). For purposes of this Agreement, “Cause” means the Participant’s (1) intentional failure to perform reasonably assigned duties, (2) dishonesty or willful misconduct in the performance of duties, (3) engaging in a transaction in connection with the performance of duties to the Corporation or its subsidiaries which transaction is adverse to the interests of the Corporation and is engaged in for personal profit or (4) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses).

(c) Upon Participant’s death or “disability” (as defined below), the Restricted Period shall automatically terminate and in the event the Determination Date has not occurred, the Performance Condition shall be waived, and the Shares shall thereafter be issued in accordance with Section 13. For purposes of this Agreement, disability means the Participant, (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer.

(d) Whether (and the circumstances under which) employment has been terminated and the determination of the termination date for the purposes of this Agreement (or whether, and the date upon which, the Participant has suffered a disability under Section 7(c)) shall be determined by the Committee or (with respect to any employee other than an “Executive Officer” as defined under the Plan) its designee (who, at the date of this Agreement, shall be the Corporation’s Vice President of Human Resources), whose good faith determination shall be final, binding and conclusive; provided, that such designee may not make any such determination with respect to his or her own employment.

8. Dividends. If the Corporation pays a cash dividend on its common stock, the Participant shall accrue in his or her Dividend Account (as defined below) a cash dividend equivalent with respect to the Restricted Units credited to the Participant’s Unit Account as of the record date for the dividend, with each Restricted Unit being equivalent to one share of common stock. The Corporation shall cause an account (the “Dividend Account”) to be established and maintained as part of the records of the Corporation to evidence the aggregate cash dividend equivalents accrued by the Participant from time to time under this Section. No interest shall accrue on any amounts reflected in the Dividend Account. The Participant’s interest in the amounts reflected in the Dividend Account shall be that of a general, unsecured creditor of the Corporation. Subject to, and as promptly as practicable following, the issuance of the Shares pursuant to Section 13 hereunder, the Corporation shall pay an amount in cash (without interest and subject to applicable withholding taxes) to the Participant (or his or her beneficiaries, heirs, executors, administrators or successors in interest who are issued the Shares pursuant to Section 13 hereunder) equal to the aggregate cash dividend equivalents accrued in the Participant’s Dividend Account and the Participant’s Dividend Account shall be eliminated at that time. In the event that the Participant forfeits his or her rights to any or all of the Restricted Units, including pursuant to Section 4(b) hereof, the Participant also shall be deemed to have forfeited his or her rights to any cash dividend equivalents accrued in the Participant’s Dividend Account in respect of such forfeited Restricted Units and, if no Restricted Units remain outstanding under this Agreement the Participant’s Dividend Account shall be eliminated at that time.

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9. No Right to Continued Employment. Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Participant any right to continue employment by the Corporation or any of its subsidiaries, nor shall this Agreement or the Plan interfere in any way with the right of the Corporation or any of its subsidiaries to terminate the Participant’s employment at any time for any reason whatsoever, whether or not with cause.

10. No Rights as a Stockholder. The Participant’s interest in the Restricted Units shall not entitle the Participant to any rights as a stockholder of the Corporation. The Participant shall not be deemed to be the holder of, or have any of the rights and privileges of a stockholder of the Corporation in respect of, the Shares unless and until such Shares have been issued to the Participant in accordance Section 13.

11. Adjustments Upon Change in Capitalization. In the event of any reorganization, merger, consolidation, recapitalization, reclassification, stock split, stock dividend or similar capital adjustment, as a result of which shares of any class shall be issued in respect of outstanding shares of the Corporation’s Common Stock or shares of Corporation’s Common Stock shall be changed into a different number of shares or into another class or classes or into other property or cash, the Restricted Units, the Participant’s Unit Account and/or the Shares shall be adjusted to reflect such event so as to preserve (without enlarging) the value of the award hereunder, with the manner of such adjustment to be determined by the Committee in its sole discretion. This paragraph shall also apply with respect to any extraordinary dividend or other extraordinary distribution in respect of the Corporation’s Common Stock (whether in the form of cash or other property).

12. General Restrictions. Notwithstanding anything in this Agreement to the contrary, the Corporation shall have no obligation to issue or transfer the Shares as contemplated by this agreement unless and until such issuance or transfer shall comply with all relevant provisions of law and the requirements of any stock exchange on which the Corporation’s shares are listed for trading.

13. Issuance of Shares. Upon the expiration or termination of the Restricted Period and payment by the Participant of any applicable taxes pursuant to Section 14 of this Agreement, the Corporation shall, as soon as reasonably practicable (and in any event within 75 days of the termination or expiration of the Restricted Period), but subject to any delay necessary to comply with Section 12 hereof, issue the Shares to the Participant, free and clear of all restrictions; provided, that if the termination of the Restricted Period results from a Section 409A Change in Control Event, then notwithstanding the foregoing, the Shares shall be issued within 30 days of the Section 409A Change in Control Event. The Corporation shall not be required to deliver any fractional Shares, but shall pay, in lieu thereof, the fair market value (as defined in the Plan) as of the date the restrictions lapse of such fractional share to the Participant. The Corporation shall pay any costs incurred in connection with issuing the Shares. Upon the issuance of the Shares to the Participant, the Participant’s Unit Account shall be eliminated. Notwithstanding the provisions of this Section, in the event of the death of the Participant prior to the issuance of the Shares under this Section 13, the issuance of the Shares and any payment in lieu of fractional Shares shall be made to the Participant’s beneficiaries, heirs, executors, administrators or successors in interest as the case may be.

14. Tax Withholding. Upon the expiration or termination of the Restricted Period, the Participant shall remit to the Corporation the minimum amount necessary to satisfy Federal, state, local or foreign withholding tax requirements, if any (“Withholding Taxes”) as a condition to the Corporation’s issuance of any Shares as provided in Section 13. The payment shall be in (i) cash, (ii) the delivery of Shares, (iii) a reduction in the number of Shares otherwise issuable or deliverable or other amounts otherwise payable to the Participant pursuant to this Agreement, or (iv) a combination of (i), (ii) and/or

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(iii). The value of any Shares delivered or withheld as payment in respect of withholding tax requirements shall be determined by reference to the Fair Market Value of such Shares as of the date of such withholding or delivery. In the event that Withholding Taxes are satisfied by withholding a portion of the Shares otherwise issuable or deliverable to the Participant pursuant to this Agreement, the Corporation shall not withhold any Shares in excess of the minimum number of Shares necessary to satisfy the applicable Withholding Taxes.

15. Subsidiary. As used herein, the term “subsidiary” shall mean, as to any person, any corporation, association, partnership, joint venture or other business entity of which 50% or more of the voting stock or other equity interests (in the case of entities other than corporations), is owned or controlled (directly or indirectly) by that entity, or by one or more of the Subsidiaries of that entity, or by a combination thereof.

16. Plan Governs. The Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by its terms, all of which are incorporated herein by reference. The Plan shall govern in the event of any conflict between this Agreement and the Plan.

17. Modification of Agreement. This Agreement may be not be modified, amended, suspended or terminated, and any terms or conditions may not be waived, without the approval of the Committee. The Committee reserves the right to amend or modify this Agreement at any time without prior notice to any Participant or other interested party; provided, that except as expressly provided hereunder, any such amendment or modification may not adversely affect in any material respect the Participant’s rights or benefits hereunder except for such amendments or modifications as are required by law.

18. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

19. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to the conflicts of laws principles thereof. If the Participant has received a copy of this Agreement (or the Plan or any other document related hereto or thereto) translated into a language other than English, such translated copy is qualified in its entirety by reference to the English version thereof, and in the event of any conflict the English version will govern.

20. Successors in Interest. This Agreement shall inure to the benefit of and be binding upon any successor to the Corporation. This Agreement shall inure to the benefit of the Participant or the Participant’s legal representatives. All obligations imposed upon the Participant and all rights granted to the Corporation under this Agreement shall be final, binding and conclusive upon the Participant’s heirs, executors, administrators and successors.

21. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participant, the Corporation and all other interested persons. No member of the Committee shall be personally liable for any action determination or interpretation made in good faith with respect to the Plan or the Restricted Units. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement.

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22. Resolution of Disputes. Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Participant and Corporation for all purposes.

23. Data Privacy Consent. As a condition of the grant of the Restricted Units, the Participant hereby consents to the collection, use and transfer of personal data as described in this paragraph. The Participant understands that the Corporation and its subsidiaries hold certain personal information about the Participant, including name, home address and telephone number, date of birth, social security number, salary, nationality, job title, ownership interests or directorships held in the Corporation or its subsidiaries, and details of all restricted units or other equity awards or other entitlements to shares of common stock awarded, cancelled, exercised, vested or unvested (“Data”). The Participant further understands that the Corporation and its subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration and management of the Participant’s participation in the Plan, and that the Corporation and any of its subsidiaries may each further transfer Data to any third parties assisting the Corporation in the implementation, administration and management of the Plan. The Participant understands that these recipients may be located in the European Economic Area or elsewhere, such as the United States. The Participant hereby authorizes them to receive, possess, use, retain and transfer such Data as may be required for the administration of the Plan or the subsequent holding of shares of common stock on the Participant’s behalf, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer to a broker or other third party with whom the Participant may elect to deposit any shares of common stock acquired under the Plan. The Participant may, at any time, view such Data or require any necessary amendments to it.

24. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation. By accepting this Agreement and the grant of the Restricted Units contemplated hereunder, the Participant expressly acknowledges that (a) the Plan is discretionary in nature and may be suspended or terminated by the Corporation at any time; (b) the grant of Restricted Units is a one-time benefit that does not create any contractual or other right to receive future grants of restricted units, or benefits in lieu of restricted units; (c) all determinations with respect to future grants of restricted units, if any, including the grant date, the number of Shares granted and the restricted period, will be at the sole discretion of the Corporation; (d) the Participant’s participation in the Plan is voluntary; (e) the value of the Restricted Units is an extraordinary item of compensation that is outside the scope of the Participant’s employment contract, if any, and nothing can or must automatically be inferred from such employment contract or its consequences; (f) grants of restricted units are not part of normal or expected compensation for any purpose and are not to be used for calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and the Participant waives any claim on such basis; and (g) the future value of the underlying Shares is unknown and cannot be predicted with certainty. In addition, the Participant understands, acknowledges and agrees that the Participant will have no rights to compensation or damages related to restricted unit proceeds in consequence of the termination of the Participant’s employment for any reason whatsoever and whether or not in breach of contract.

25. Award Administrator. The Corporation may from time to time to designate a third party (an “Award Administrator”) to assist the Corporation in the implementation, administration and management of the Plan and any Restricted Units granted thereunder, including by sending Award Letters on behalf of the Corporation to Participants, and by facilitating through electronic means acceptance of Restricted Unit Agreements by Participants.

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26. Section 409A. This Agreement is intended to comply with the provisions of Section 409A of the Code and the regulations promulgated thereunder. Without limiting the foregoing, the Committee shall have the right to amend the terms and conditions of this Agreement in any respect as may be necessary or appropriate to comply with Section 409A of the Code or any regulations promulgated thereunder, including without limitation by delaying the issuance of the Shares contemplated hereunder.

27. Book Entry Delivery of Shares. Whenever reference in this Agreement is made to the issuance or delivery of certificates representing one or more Shares, the Corporation may elect to issue or deliver such Shares in book entry form in lieu of certificates.

28. Acceptance. This Agreement shall not be enforceable until it has been executed by the Participant. In the event the Corporation has designated an Award Administrator, the acceptance (including through electronic means) of the Restricted Unit award contemplated by this Agreement in accordance with the procedures established from time to time by the Award Administrator shall be deemed to constitute the Participant’s acknowledgment and agreement to the terms and conditions of this Agreement and shall have the same legal effect in all respects of the Participant having executed this Agreement by hand.

By:	L-3 COMMUNICATIONS HOLDINGS, INC.
	/s/ Michael T. Strianese
	Michael T. Strianese President and Chief Executive Officer
	/s/ Steven M. Post
	Steven M. Post Senior Vice President, General Counsel and Corporate Secretary

Acknowledged and Agreed

as of the date first written above:

Participant Signature

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EX-10.7

Exhibit 10.7

L-3 COMMUNICATIONS HOLDINGS, INC.

2008 LONG TERM PERFORMANCE PLAN

RESTRICTED STOCK UNIT AGREEMENT

(Senior Executive Version 2014)

This Restricted Stock Unit Agreement (this “Agreement”), effective as of the Grant Date (as defined below), is between L-3 Communications Holdings, Inc., a Delaware corporation (the “Corporation”), and the Participant (as defined below).

1. Definitions. The following terms shall have the following meanings for purposes of this Agreement:

(a) “Award Letter” shall mean the letter to the Participant attached hereto as Exhibit A.

(b) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

(c) “Determination Date” shall mean the date on which the Committee determines whether the Performance Condition (as defined below) has been satisfied.

(d) “Free Cash Flow” shall mean (1) the Corporation’s net cash from operating activities, minus (2) capital expenditures, plus (3) dispositions of property, plant and equipment, in each case determined in accordance with GAAP and as derived from the Corporation’s audited consolidated financial statements prepared in the ordinary course of business; provided, that Free Cash Flow shall be calculated so as to eliminate the effect of: (i) discretionary contributions to pension plans that exceed the contributions forecasted in the Corporation’s most recent internal plan for the year as presented to the Board of Directors prior to the Grant Date; (ii) premiums and other payments in excess of principal and accrued interest associated with the retirement of debt; and (iii) tax payments or benefits associated with gains or losses on business divestitures in calculating net cash from operating activities;

(e) “GAAP” shall mean generally accepted accounting principles in the United States.

(f) “Grant Date” shall mean the “Grant Date” listed in the Award Letter.

(g) “Participant” shall mean the “Participant” listed in the Award Letter.

(h) “Restricted Units” shall mean that number of restricted units listed in the Award Letter as “Awards Granted,” subjection to Section 4(b).

(i) “Section 409A Change in Control Event” shall mean a change in ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, within the meaning of Section 409A(a)(2)(A)(v) of the Code.

(j) “Shares” shall mean a number of shares of the Corporation’s Common Stock, par value $0.01 per share, equal to the number of Restricted Units outstanding under this Agreement.

2. Grant of Units. The Corporation hereby grants the Restricted Units to the Participant, each of which represents the right to receive one Share upon the expiration or termination of the Restricted Period (as defined below), subject to the terms, conditions and restrictions set forth in the L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan (the “Plan”) and this Agreement.

3. Restricted Unit Account. The Corporation shall cause an account (the “Unit Account”) to be established and maintained on the books of the Corporation to record the number of Restricted Units credited to the Participant under the terms of this Agreement, which Unit Account shall be subject to adjustment in accordance with the terms of the Plan and this Agreement, including without limitation Section 4(b). The Participant’s interest in the Unit Account shall be that of a general, unsecured creditor of the Corporation.

4. Restricted Period; Performance Condition.

(a) Except as otherwise provided in paragraphs 6 and 7 hereof, the “Restricted Period” shall mean the period beginning on the Grant Date and expiring on the third anniversary of the Grant Date. Subject to Section 4(b) below, upon the expiration or termination of the Restricted Period, the Shares shall be issued to the Participant in accordance with Section 13.

(b) As promptly as practicable following the last day of the fiscal year which includes the Grant Date, the Committee shall determine, subject to Section 4(c), whether: (x) the amount of 0.5% of the Company’s Free Cash Flow for such fiscal year, exceeds (y) the grant date fair value of the Shares underlying the Restricted Units, determined in accordance with GAAP (such condition, the “Performance Condition”). If the Performance Condition is not satisfied, then:

(1) the number of Restricted Units shall automatically be reduced to the highest whole number that would have resulted in the Performance Condition being satisfied; and

(2) any Restricted Units previously awarded in excess of the number calculated in accordance with clause (1) above (and any cash dividends accrued thereon in accordance with Section 8 hereof) shall be forfeited without any further action on behalf of the Corporation, the Committee or the Participant.

(c) In the event of an equity restructuring, as defined in Financial Accounting Standards Board Accounting Standards Codification 718-10 (formerly Statement of Financial Accounting Standards 123R), the Committee shall modify the Performance Condition to the extent it is affected by such restructuring so as to preserve (without enlarging) the likelihood that such Performance Condition shall be satisfied, with the manner of such adjustment to be determined by the Committee in its sole discretion.

5. Nonalienation of Benefits. No Participant or beneficiary shall have the power or right to transfer, anticipate, or otherwise encumber the Participant’s interest under this Agreement. The provisions of this Agreement shall inure to the benefit of the Participant and the Participant’s beneficiaries, heirs, executors, administrators or successors in interest.

6. Change in Control During Restricted Period. Upon the occurrence of a “change in control” that constitutes a Section 409A Change in Control Event, the Restricted Period shall automatically terminate and, if the Determination Date has not occurred, the Performance Condition shall automatically be waived, and the Shares shall thereafter be issued to the Participant in accordance with Section 13. In the event of any other “change in control” prior to the Determination Date the Performance Condition shall automatically be waived, but the Restricted Period shall not be immediately affected, and shall subsequently terminate (and the Shares shall thereafter be issued to the Participant in

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accordance with Section 13) upon the earliest to occur of: (a) a Section 409A Change in Control Event, (b) the Participant’s death, (c) the Participant’s “disability” (as defined in Section 7(c) hereof) or (d) the third anniversary of the Grant Date. For purposes of this Agreement, a “change in control” means:

(a) The acquisition by any person or group (including a group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Corporation or any of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a majority of the combined voting power of the Corporation’s then outstanding voting securities, other than by any employee benefit plan maintained by the Corporation;

(b) The sale of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole;

(c) The consummation of a merger, combination, consolidation, recapitalization or other reorganization of the Corporation with one or more other entities that are not subsidiaries if, as a result of the consummation of the merger, combination, consolidation, recapitalization or other reorganization, less than 50 percent of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event be beneficially owned in the aggregate by the stockholders of the Corporation immediately prior to the event; or

(d) The election, including the filling of vacancies, during any period of 24 months or less, of 50% or more of the members of the Board of Directors, without the approval of Continuing Directors, as constituted at the beginning of such period. “Continuing Directors” shall mean any director of the Corporation who either (i) is a member of the Board of Directors on the Grant Date, or (ii) is nominated for election to the Board of Directors by a majority of the Board which is comprised of directors who were, at the time of such nomination, Continuing Directors.

7. Termination of Employment or Disability During Restricted Period.

(a) In the event that the Participant’s employment with the Corporation and its subsidiaries is terminated (other than by reason of death, “retirement” or “disability,” as defined below) prior to the expiration or termination of the Restricted Period and prior to the occurrence of a “change in control” (as defined in Section 6), the Participant shall forfeit the Restricted Units and all of the Participant’s rights hereunder shall cease (unless otherwise provided for by the Committee in accordance with the Plan). The Participant’s rights to the Restricted Units shall not be affected by any change in the nature of the Participant’s employment so long as the Participant continues to be an employee of the Corporation or any of its subsidiaries.

(b) In the event the Participant terminates employment with the Corporation and its subsidiaries because of “retirement” prior to the expiration or termination of the Restricted Period and prior to the occurrence of a “change in control” (as defined in Section 6), the Restricted Period and the Performance Condition shall not be affected and shall expire with the passage of time or be satisfied or not satisfied, as applicable, in each case in accordance with paragraph 4, except that (i) in the event that the Participant dies following retirement but prior to the expiration of the Restricted Period, the Restricted Period shall automatically terminate and in the event the Determination Date has not occurred, the Performance Condition shall be waived, and the Shares shall thereafter be delivered in accordance with Section 13 and (ii) the Restricted Period may earlier terminate and the Performance Condition may be waived in accordance with Section 6. For purposes of this Agreement, retirement means the Participant (A) terminates employment with the Corporation and its subsidiaries other than for Cause (and is not subject to termination for Cause at the time of such termination) more than one year after the Grant Date,

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(B) is available for consultation with the Corporation or any of its subsidiaries at the reasonable request of the Corporation or one of its subsidiaries and (C) terminates employment on or after attaining age 65 and completing at least five years of service in the aggregate with the Corporation and its subsidiaries (which service must be continuous through the date of termination except for a single break in service that does not exceed one year in length). For purposes of this Agreement, “Cause” means the Participant’s (1) intentional failure to perform reasonably assigned duties, (2) dishonesty or willful misconduct in the performance of duties, (3) engaging in a transaction in connection with the performance of duties to the Corporation or its subsidiaries which transaction is adverse to the interests of the Corporation and is engaged in for personal profit or (4) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses).

(c) Upon Participant’s death or “disability” (as defined below), the Restricted Period shall automatically terminate and in the event the Determination Date has not occurred, the Performance Condition shall be waived, and the Shares shall thereafter be issued in accordance with Section 13. For purposes of this Agreement, disability means the Participant, (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer.

(d) Whether (and the circumstances under which) employment has been terminated and the determination of the termination date for the purposes of this Agreement (or whether, and the date upon which, the Participant has suffered a disability under Section 7(c)) shall be determined by the Committee or (with respect to any employee other than an “Executive Officer” as defined under the Plan) its designee (who, at the date of this Agreement, shall be the Corporation’s Vice President of Human Resources), whose good faith determination shall be final, binding and conclusive; provided, that such designee may not make any such determination with respect to his or her own employment.

8. Dividends. If the Corporation pays a cash dividend on its common stock, the Participant shall accrue in his or her Dividend Account (as defined below) a cash dividend equivalent with respect to the Restricted Units credited to the Participant’s Unit Account as of the record date for the dividend, with each Restricted Unit being equivalent to one share of common stock. The Corporation shall cause an account (the “Dividend Account”) to be established and maintained as part of the records of the Corporation to evidence the aggregate cash dividend equivalents accrued by the Participant from time to time under this Section. No interest shall accrue on any amounts reflected in the Dividend Account. The Participant’s interest in the amounts reflected in the Dividend Account shall be that of a general, unsecured creditor of the Corporation. Subject to, and as promptly as practicable following, the issuance of the Shares pursuant to Section 13 hereunder, the Corporation shall pay an amount in cash (without interest and subject to applicable withholding taxes) to the Participant (or his or her beneficiaries, heirs, executors, administrators or successors in interest who are issued the Shares pursuant to Section 13 hereunder) equal to the aggregate cash dividend equivalents accrued in the Participant’s Dividend Account and the Participant’s Dividend Account shall be eliminated at that time. In the event that the Participant forfeits his or her rights to any or all of the Restricted Units, including pursuant to Section 4(b) hereof, the Participant also shall be deemed to have forfeited his or her rights to any cash dividend equivalents accrued in the Participant’s Dividend Account in respect of such forfeited Restricted Units and, if no Restricted Units remain outstanding under this Agreement the Participant’s Dividend Account shall be eliminated at that time.

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9. No Right to Continued Employment. Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Participant any right to continue employment by the Corporation or any of its subsidiaries, nor shall this Agreement or the Plan interfere in any way with the right of the Corporation or any of its subsidiaries to terminate the Participant’s employment at any time for any reason whatsoever, whether or not with cause.

10. No Rights as a Stockholder. The Participant’s interest in the Restricted Units shall not entitle the Participant to any rights as a stockholder of the Corporation. The Participant shall not be deemed to be the holder of, or have any of the rights and privileges of a stockholder of the Corporation in respect of, the Shares unless and until such Shares have been issued to the Participant in accordance Section 13.

11. Adjustments Upon Change in Capitalization. In the event of any reorganization, merger, consolidation, recapitalization, reclassification, stock split, stock dividend or similar capital adjustment, as a result of which shares of any class shall be issued in respect of outstanding shares of the Corporation’s Common Stock or shares of Corporation’s Common Stock shall be changed into a different number of shares or into another class or classes or into other property or cash, the Restricted Units, the Participant’s Unit Account and/or the Shares shall be adjusted to reflect such event so as to preserve (without enlarging) the value of the award hereunder, with the manner of such adjustment to be determined by the Committee in its sole discretion. This paragraph shall also apply with respect to any extraordinary dividend or other extraordinary distribution in respect of the Corporation’s Common Stock (whether in the form of cash or other property).

12. General Restrictions. Notwithstanding anything in this Agreement to the contrary, the Corporation shall have no obligation to issue or transfer the Shares as contemplated by this agreement unless and until such issuance or transfer shall comply with all relevant provisions of law and the requirements of any stock exchange on which the Corporation’s shares are listed for trading.

13. Issuance of Shares. Upon the expiration or termination of the Restricted Period and payment by the Participant of any applicable taxes pursuant to Section 14 of this Agreement, the Corporation shall, as soon as reasonably practicable (and in any event within 75 days of the termination or expiration of the Restricted Period), but subject to any delay necessary to comply with Section 12 hereof, issue the Shares to the Participant, free and clear of all restrictions; provided, that if the termination of the Restricted Period results from a Section 409A Change in Control Event, then notwithstanding the foregoing, the Shares shall be issued within 30 days of the Section 409A Change in Control Event. The Corporation shall not be required to deliver any fractional Shares, but shall pay, in lieu thereof, the fair market value (as defined in the Plan) as of the date the restrictions lapse of such fractional share to the Participant. The Corporation shall pay any costs incurred in connection with issuing the Shares. Upon the issuance of the Shares to the Participant, the Participant’s Unit Account shall be eliminated. Notwithstanding the provisions of this Section, in the event of the death of the Participant prior to the issuance of the Shares under this Section 13, the issuance of the Shares and any payment in lieu of fractional Shares shall be made to the Participant’s beneficiaries, heirs, executors, administrators or successors in interest as the case may be.

14. Tax Withholding. Upon the expiration or termination of the Restricted Period, the Participant shall remit to the Corporation the minimum amount necessary to satisfy Federal, state, local or foreign withholding tax requirements, if any (“Withholding Taxes”) as a condition to the Corporation’s issuance of any Shares as provided in Section 13. The payment shall be in (i) cash, (ii) the delivery of Shares, (iii) a reduction in the number of Shares otherwise issuable or deliverable or other amounts otherwise payable to the Participant pursuant to this Agreement, or (iv) a combination of (i), (ii) and/or

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(iii). The value of any Shares delivered or withheld as payment in respect of withholding tax requirements shall be determined by reference to the Fair Market Value of such Shares as of the date of such withholding or delivery. In the event that Withholding Taxes are satisfied by withholding a portion of the Shares otherwise issuable or deliverable to the Participant pursuant to this Agreement, the Corporation shall not withhold any Shares in excess of the minimum number of Shares necessary to satisfy the applicable Withholding Taxes.

15. Subsidiary. As used herein, the term “subsidiary” shall mean, as to any person, any corporation, association, partnership, joint venture or other business entity of which 50% or more of the voting stock or other equity interests (in the case of entities other than corporations), is owned or controlled (directly or indirectly) by that entity, or by one or more of the Subsidiaries of that entity, or by a combination thereof.

16. Plan Governs. The Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by its terms, all of which are incorporated herein by reference. The Plan shall govern in the event of any conflict between this Agreement and the Plan.

17. Modification of Agreement. This Agreement may be not be modified, amended, suspended or terminated, and any terms or conditions may not be waived, without the approval of the Committee. The Committee reserves the right to amend or modify this Agreement at any time without prior notice to any Participant or other interested party; provided, that except as expressly provided hereunder, any such amendment or modification may not adversely affect in any material respect the Participant’s rights or benefits hereunder except for such amendments or modifications as are required by law.

18. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

19. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to the conflicts of laws principles thereof. If the Participant has received a copy of this Agreement (or the Plan or any other document related hereto or thereto) translated into a language other than English, such translated copy is qualified in its entirety by reference to the English version thereof, and in the event of any conflict the English version will govern.

20. Successors in Interest. This Agreement shall inure to the benefit of and be binding upon any successor to the Corporation. This Agreement shall inure to the benefit of the Participant or the Participant’s legal representatives. All obligations imposed upon the Participant and all rights granted to the Corporation under this Agreement shall be final, binding and conclusive upon the Participant’s heirs, executors, administrators and successors.

21. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participant, the Corporation and all other interested persons. No member of the Committee shall be personally liable for any action determination or interpretation made in good faith with respect to the Plan or the Restricted Units. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement.

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22. Resolution of Disputes. Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Participant and Corporation for all purposes.

23. Data Privacy Consent. As a condition of the grant of the Restricted Units, the Participant hereby consents to the collection, use and transfer of personal data as described in this paragraph. The Participant understands that the Corporation and its subsidiaries hold certain personal information about the Participant, including name, home address and telephone number, date of birth, social security number, salary, nationality, job title, ownership interests or directorships held in the Corporation or its subsidiaries, and details of all restricted units or other equity awards or other entitlements to shares of common stock awarded, cancelled, exercised, vested or unvested (“Data”). The Participant further understands that the Corporation and its subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration and management of the Participant’s participation in the Plan, and that the Corporation and any of its subsidiaries may each further transfer Data to any third parties assisting the Corporation in the implementation, administration and management of the Plan. The Participant understands that these recipients may be located in the European Economic Area or elsewhere, such as the United States. The Participant hereby authorizes them to receive, possess, use, retain and transfer such Data as may be required for the administration of the Plan or the subsequent holding of shares of common stock on the Participant’s behalf, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer to a broker or other third party with whom the Participant may elect to deposit any shares of common stock acquired under the Plan. The Participant may, at any time, view such Data or require any necessary amendments to it.

24. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation. By accepting this Agreement and the grant of the Restricted Units contemplated hereunder, the Participant expressly acknowledges that (a) the Plan is discretionary in nature and may be suspended or terminated by the Corporation at any time; (b) the grant of Restricted Units is a one-time benefit that does not create any contractual or other right to receive future grants of restricted units, or benefits in lieu of restricted units; (c) all determinations with respect to future grants of restricted units, if any, including the grant date, the number of Shares granted and the restricted period, will be at the sole discretion of the Corporation; (d) the Participant’s participation in the Plan is voluntary; (e) the value of the Restricted Units is an extraordinary item of compensation that is outside the scope of the Participant’s employment contract, if any, and nothing can or must automatically be inferred from such employment contract or its consequences; (f) grants of restricted units are not part of normal or expected compensation for any purpose and are not to be used for calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and the Participant waives any claim on such basis; and (g) the future value of the underlying Shares is unknown and cannot be predicted with certainty. In addition, the Participant understands, acknowledges and agrees that the Participant will have no rights to compensation or damages related to restricted unit proceeds in consequence of the termination of the Participant’s employment for any reason whatsoever and whether or not in breach of contract.

25. Award Administrator. The Corporation may from time to time to designate a third party (an “Award Administrator”) to assist the Corporation in the implementation, administration and management of the Plan and any Restricted Units granted thereunder, including by sending Award Letters on behalf of the Corporation to Participants, and by facilitating through electronic means acceptance of Restricted Unit Agreements by Participants.

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26. Section 409A. This Agreement is intended to comply with the provisions of Section 409A of the Code and the regulations promulgated thereunder. Without limiting the foregoing, the Committee shall have the right to amend the terms and conditions of this Agreement in any respect as may be necessary or appropriate to comply with Section 409A of the Code or any regulations promulgated thereunder, including without limitation by delaying the issuance of the Shares contemplated hereunder.

27. Book Entry Delivery of Shares. Whenever reference in this Agreement is made to the issuance or delivery of certificates representing one or more Shares, the Corporation may elect to issue or deliver such Shares in book entry form in lieu of certificates.

28. Acceptance. This Agreement shall not be enforceable until it has been executed by the Participant. In the event the Corporation has designated an Award Administrator, the acceptance (including through electronic means) of the Restricted Unit award contemplated by this Agreement in accordance with the procedures established from time to time by the Award Administrator shall be deemed to constitute the Participant’s acknowledgment and agreement to the terms and conditions of this Agreement and shall have the same legal effect in all respects of the Participant having executed this Agreement by hand.

By: L-3 COMMUNICATIONS HOLDINGS, INC.
	/s/ Michael T. Strianese
	Michael T. Strianese President and Chief Executive Officer
	/s/ Steven M. Post
	Steven M. Post Senior Vice President, General Counsel and Corporate Secretary

Acknowledged and Agreed

as of the date first written above:

Participant Signature

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EX-10.8

Exhibit 10.8

L-3 COMMUNICATIONS HOLDINGS, INC.

2008 LONG TERM PERFORMANCE PLAN

PERFORMANCE UNIT AGREEMENT

(Version 0005)

This Performance Unit Agreement (this “Agreement”), effective as of the Grant Date (as defined below), is between L-3 Communications Holdings, Inc., a Delaware corporation (the “Corporation” or “L-3”), and the Participant (as defined below).

1. Definitions. Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in the L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan (the “Plan”). The following terms shall have the following meanings for purposes of this Agreement:

(a) “Applicable Unit Multiplier” shall mean, with respect to each Performance Measure, the “Unit Multiplier” calculated pursuant to the Award Letter based on the actual level of achievement for the Performance Period; provided, that in the event of a Change in Control, the “Applicable Unit Multiplier” shall mean 100%, subject to upward adjustment (but not above 200%) to the extent (if any) that the Committee is able, in its sole discretion, to assess that the Corporation’s progress, at or prior to the Change in Control, towards the achievement levels set forth in the Award Letter for such Performance Measure exceeds the “Target” performance level as adjusted to account for the reduced period of actual performance.

(b) “Award Letter” shall mean the award notice to the Participant attached hereto as Exhibit A.

(c) “Cause” shall mean the Participant’s (1) intentional failure to perform reasonably assigned duties, (2) dishonesty or willful misconduct in the performance of duties, (3) engaging in a transaction in connection with the performance of duties to the Corporation or its subsidiaries which transaction is adverse to the interests of the Corporation and is engaged in for personal profit or (4) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses).

(d) “Change in Control” shall mean:

(1) the acquisition by any person or group (including a group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Corporation or any of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a majority more of the combined voting power of the Corporation’s then outstanding voting securities, other than by any employee benefit plan maintained by the Corporation;

(2) the sale of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole;

(3) the consummation of a merger, combination, consolidation, recapitalization or other reorganization of the Corporation with one or more other entities that are not subsidiaries if, as a result of the consummation of the merger, combination, consolidation, recapitalization or other reorganization, less than 50 percent of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event be beneficially owned in the aggregate by the stockholders of the Corporation immediately prior to the event; or

(4) the election, including the filling of vacancies, during any period of 24 months or less, of 50% or more of the members of the Board of Directors, without the approval of Continuing Directors, as constituted at the beginning of such period. “Continuing Directors” shall mean any director of the Corporation who either (i) is a member of the Board of Directors on the Grant Date, or (ii) is nominated for election to the Board of Directors by a majority of the Board which is comprised of directors who were, at the time of such nomination, Continuing Directors.

(e) “Committee” or “Compensation Committee” shall mean the Compensation Committee of the Board of Directors of the Corporation.

(f) “Disability” shall mean that the Participant, (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer.

(g) “Fair Market Value” shall mean, with respect to any security, the closing price of the security as reported on the composite tape of New York Stock Exchange issues (or if, at the date of determination, the security is not so listed or if the principal market on which it is traded is not the New York Stock Exchange, such other reporting system as shall be selected by the Committee) on the relevant date, or, if no sale of the security is reported for that date, the next preceding day for which there is a reported sale. The Committee shall determine the Fair Market Value of any security that is not publicly traded, using criteria as it shall determine, in its sole direction, to be appropriate for the valuation.

(h) “Final Cash Performance Unit Dividends” shall mean an amount equal to the aggregate cash dividends that would have been payable on the Final Cash Performance Units if they represented shares of L-3 common stock held on all record dates between the Grant Date and the date on which the payment contemplated under Section 10(b) is made; provided, that in the event of an equity restructuring that triggers an adjustment to Performance Measures and/or the number of Performance Units as contemplated by Section 9, the amount of the Final Cash Performance Unit Dividends attributable to record dates that are prior to the date of such equity restructuring shall be calculated based on a number of Final Cash Performance Units that includes the effect of the adjustment to the Performance Measures but excludes the effect of the adjustment to the number of Performance Units.

(i) “Final Cash Performance Units” shall mean the number of Total Earned Performance Units attributable to Performance Measures the payment of which are to be made in cash as specified in the Award Letter.

(j) “Final Stock Performance Unit Dividends” shall mean an amount equal to the aggregate cash dividends that would have been payable on the Final Stock Performance Units if they represented shares of L-3 common stock held on all record dates between the Grant Date and the date on which the issuance of Award Shares and the payment of the amounts contemplated under Section 10(c) is made; provided, that in the event of an equity restructuring that triggers an adjustment to Performance Measures and/or the number of Performance Units as contemplated by Section 9, the amount of the Final Cash Performance Unit Dividends attributable to record dates that are prior to the date of such equity restructuring shall be calculated based on a number of Final Cash Performance Units that includes the effect of the adjustment to the Performance Measures but excludes the effect of the adjustment to the number of Performance Units.

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(k) “Final Stock Performance Units” shall mean the number of Total Earned Performance Units attributable to Performance Measures the payment of which are to be made in shares of L-3 stock as specified in the Award Letter.

(l) “Grant Date” shall mean the “Grant Date” listed in the Award Letter.

(m) “Participant” shall mean the “Participant” listed in the Award Letter.

(n) “Performance Measures” shall mean the performance measures set forth in the Award Letter.

(o) “Performance Period” shall mean the “Performance Period” set forth in the Award Letter, subject to adjustment in accordance with Section 5 hereof.

(p) “Performance Units” shall mean the number of performance units equal to the Total Target Performance Units or, when finally determined in accordance with this Agreement, the Total Earned Performance Units.

(q) “Retirement” shall mean that the Participant (A) terminates employment with the Corporation and its subsidiaries other than for Cause (and is not subject to termination for Cause at the time of such termination), (B) is available for consultation with the Corporation or its subsidiaries at the reasonable request of the Corporation or its subsidiaries and (C) terminates employment on or after attaining age 65 and completing at least five years of service in the aggregate with the Corporation and its subsidiaries (which service must be continuous through the date of termination except for a single break in service that does not exceed one year in length).

(r) “Segmented Target Performance Units” shall mean, with respect to each Performance Measure, the number of “Target Units” set forth in the Award Letter for the Performance Measure, subject to adjustment pursuant to the terms hereof.

(s) “Segmented Earned Performance Units” shall mean, with respect to each Performance Measure, the number of Segmented Target Performance Units multiplied by the Applicable Unit Multiplier.

(t) “Subsidiary” or “subsidiary” shall mean, as to any person, any corporation, association, partnership, joint venture or other business entity of which 50% or more of the voting stock or other equity interests (in the case of entities other than corporations), is owned or controlled (directly or indirectly) by that entity, or by one or more of the Subsidiaries of that entity, or by a combination thereof.

(u) “Total Earned Performance Units” shall mean the sum the Segmented Earned Performance Units for all Performance Measures.

(v) “Total Target Performance Units” shall mean the sum of the Segmented Target Performance Units for all Performance Measures.

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2. Target and Final Awards. Subject to the terms, conditions and restrictions set forth in the Plan and this Agreement, the Corporation hereby grants the Performance Units to the Participant. The initial amount of Performance Units granted hereunder represent a target award to the Participant in respect of the Performance Measures for the Performance Period. The final award to the Participant, and the amount of any payments to the Participant hereunder, shall be based on the actual level of achievement of the Performance Measures for the Performance Period subject to the terms of this Agreement.

3. Performance Unit Account. The Corporation shall cause an account (the “Account”) to be established and maintained on the books of the Corporation to record the number of Performance Units credited to the Participant under the terms of this Agreement. The Participant’s interest in the Account shall be that of a general, unsecured creditor of the Corporation. For the avoidance of doubt, neither this Agreement nor the grant of Performance Units hereunder shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Corporation and a Participant or any other person.

4. Nonalienation of Benefits. No Participant or beneficiary shall have the power or right to transfer, anticipate, or otherwise encumber the Participant’s interest under this Agreement. The provisions of this Agreement shall inure to the benefit of the Participant and the Participant’s beneficiaries, heirs, executors, administrators or successors in interest.

5. Change in Control During Performance Period. In the event of a Change in Control, (a) the Segmented Target Performance Units for each Performance Measure shall automatically be adjusted on a pro-rata basis to reflect the number of completed months out of the entire Performance Period as of the date of the Change in Control and (b) the Performance Period shall automatically be deemed to have terminated and the provisions of Section 10 hereof shall become applicable.

6. Termination of Employment or Disability During Performance Period.

(a) If the Participant suffers a Disability, or the Participant’s employment with the Corporation and its subsidiaries is terminated during the Performance Period: (1) by reason of death or Disability, (2) by Retirement at least one year after the first day of the Performance Period, or (3) by the Company without Cause (each, a “Qualified Separation”), the Segmented Target Performance Units for each Performance Measure shall automatically be adjusted on a pro-rata basis to reflect the number of completed months out of the entire Performance Period as of the date the Participant suffered a Disability or the date of the termination of employment, as applicable. Thereafter, the Participant (or his/her beneficiaries, heirs, executors, administrators or successors in interest) shall be entitled to any amounts payable under Section 10 following the termination of the Performance Period in accordance with the terms hereof.

(b) In the event that the Participant’s employment with the Corporation and its subsidiaries is terminated during the Performance Period and is not a Qualified Separation, then the Participant shall forfeit the Performance Units and all of the Participant’s rights hereunder shall cease.

(c) The Participant’s rights to the Performance Units shall not be affected by any change in the nature of the Participant’s employment so long as the Participant continues to be an employee of the Corporation or any of its subsidiaries. Whether (and the circumstances under which) employment has been terminated and the determination of the termination date for the purposes of this Agreement (or whether, and the date upon which, the Participant has suffered a Disability) shall be determined by the Committee or (with respect to any employee other than an “Executive Officer” as defined under the Plan) its designee (who, at the date of this Agreement, shall be the Corporation’s Vice President of Human Resources), whose good faith determination shall be final, binding and conclusive; provided, that such designee may not make any such determination with respect to his or her own employment.

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7. No Right to Continued Employment. Nothing in this Agreement shall be interpreted or construed to confer upon the Participant any right to continue employment by the Corporation or any of its subsidiaries, nor shall this Agreement interfere in any way with the right of the Corporation or any of its subsidiaries to terminate the Participant’s employment at any time for any reason whatsoever, whether or not with cause.

8. No Rights as a Stockholder. The Participant’s interest in the Performance Units shall not entitle the Participant to any rights as a stockholder of the Corporation. The Participant shall not be deemed to be the holder of, or have any of the rights and privileges of a stockholder of the Corporation in respect of, the Award Shares (as defined below) unless and until such shares have been issued to the Participant in accordance with Section 10.

9. Adjustments for Certain Changes. The Committee shall make adjustments in the calculation of any earnings-based Performance Measure to eliminate the effect of any: (a) impairment losses incurred on goodwill and other intangible assets or on debt or equity investments computed in accordance with Financial Accounting Standard No. 142 or other GAAP; (b) gains or losses incurred on the retirement of debt computed in accordance with Financial Accounting Standard No. 145; (c) extraordinary gains and losses in accordance with GAAP; (d) gains and losses in connection with asset dispositions whether or not constituting extraordinary gains and losses; (e) non-cash gains or losses on discontinued operations; (f) adoption by the Company of any new accounting standards required by GAAP or the Securities and Exchange Commission following the Grant Date; (g) gains or losses of $5 million or more individually, or $25 million or more in the aggregate, in respect of litigation matters; and (h) gains or losses (other than accrued interest) related to the resolution of income tax contingencies for business acquisitions, to the extent that such contingencies were established as of the dates of such acquisitions in the GAAP purchase price allocations in respect thereof. In the event of an equity restructuring, as defined in Statement of Financial Accounting Standards 123R, which affects the Corporation’s common stock, a Participant shall have a legal right to an adjustment to the Performance Measures (including any performance goal in respect of the Performance Measures based on market price per share) and/or the number of Performance Units which shall preserve (without enlarging) the value of the award hereunder, with the manner of such adjustment to be determined by the Committee in its sole discretion.

10. Determination and Payment of Final Awards; Negative Discretion.

(a) As promptly as practicable following the termination of the Performance Period, the Committee shall determine the Applicable Unit Multiplier for each of the Performance Measures (the date of such determination being referred to herein as the “Determination Date”).

(b) Subject to clause (f) below, promptly following the Determination Date, the Corporation shall pay the Participant an amount in cash (if any), without interest thereon and subject to applicable withholding taxes, equal to the sum of (1) number of Final Cash Performance Units multiplied by the Fair Market Value per share of L-3 common stock as of the last day of the Performance Period, and (2) the Final Cash Performance Unit Dividends. Upon the payment of the cash amount contemplated under this clause (b), the Participant’s Account in respect of the Final Cash Performance Units shall be eliminated.

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(c) Subject to clause (f) below, promptly following the Determination Date and the payment by the Participant of any applicable taxes pursuant to Section 11 of this Agreement, but subject to any delay necessary to comply with Section 12 hereof, the Corporation shall (1) issue to the Participant, free and clear of all restrictions, a number of shares of L-3 common stock (if any) equal to the number of Final Stock Performance Units (the “Award Shares”) , and (2) pay the Participant an amount in cash (if any), without interest thereon and subject to applicable withholding taxes, equal to the Final Stock Performance Unit Dividends. The Corporation shall not be required to deliver any fractional shares, but shall pay to the Participant, in lieu thereof, an amount in cash, without interest thereon and subject to applicable withholding taxes, equal to the Fair Market Value as of the last day of the Performance Period of such fractional share. The Corporation shall pay any costs incurred in connection with issuing the Award Shares. Upon the issuance of the Award Shares (and payment of any cash amounts contemplated under this clause (c)) to the Participant, the Participant’s Account in respect of the Final Stock Performance Units shall be eliminated.

(d) Subject to the provisions of Sections 11 and 12 with respect to the issuance of Award Shares, all payments of cash or issuances of Award Shares under this Section 10 shall be made no earlier than January 1, and no later than March 15, of the year after the year in which the Performance Period terminates; provided, that notwithstanding the foregoing, in the event the Performance Period terminates as a result of a Change in Control, such payments of cash and issuances of Award Shares shall be made no later than the 30^th calendar day following such Change in Control.

(e) Notwithstanding the provisions of this Section, in the event of the death of the Participant prior to the making of any payment or the issuance of the Award Shares under this Section 10, such payment or issuance shall be made to the Participant’s beneficiaries, heirs, executors, administrators or successors in interest as the case may be.

(f) Notwithstanding the provisions of this Agreement, the Committee shall have the right to reduce (or eliminate) any amount of cash payable hereunder and/or any amount of shares issuable hereunder to the extent attributable to one or more of the adjustments in the calculation of earnings-based Performance Measures provided for under Section 9, in accordance with any standards or on any other basis (including the Committee’s sole discretion) as the Committee may impose.

11. Tax Withholding. As a condition to the Corporation’s issuance of the Award Shares (if any), the Participant shall remit to the Corporation the minimum amount necessary to satisfy Federal, state, local and foreign withholding tax requirements, if any (“Withholding Taxes”). The payment shall be in the form of: (i) cash, (ii) the delivery of Shares, (iii) a reduction in the number of Shares otherwise issuable or deliverable or other amounts otherwise payable to the Participant pursuant to this Agreement, or (iv) a combination of (i), (ii) and/or (iii). The value of any Shares delivered or withheld as payment in respect of Withholding Taxes shall be determined by reference to the Fair Market Value of such Shares as of the date of such withholding or delivery. In the event that Withholding Taxes are satisfied by withholding a portion of the Shares otherwise issuable or deliverable to the Participant pursuant to this Agreement, the Corporation shall not withhold any Shares in excess of the minimum number of Shares necessary to satisfy the applicable Withholding Taxes.

12. General Restrictions. Notwithstanding anything in this Agreement to the contrary, the Corporation shall have no obligation to issue or transfer any Award Shares as contemplated by this Agreement unless and until such issuance or transfer shall comply with all relevant provisions of law and the requirements of any stock exchange on which the Corporation’s shares are listed for trading.

13. Plan Governs. The Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by its terms, all of which are incorporated herein by reference. The Plan shall govern in the event of any conflict between this Agreement and the Plan.

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14. Modification of Agreement. This Agreement may be not be modified, amended, suspended or terminated, and any terms or conditions may not be waived, without the approval of the Committee. The Committee reserves the right to amend or modify this Agreement at any time without prior notice to any Participant or other interested party; provided, that except as expressly provided hereunder, any such amendment or modification may not adversely affect in any material respect the Participant’s rights or benefits hereunder except for such amendments or modifications as are required by law.

15. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

16. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to the conflicts of laws principles thereof.

17. Successors in Interest; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon any successor to the Corporation. This Agreement shall inure to the benefit of the Participant or the Participant’s legal representatives. All obligations imposed upon the Participant and all rights granted to the Corporation under this Agreement shall be final, binding and conclusive upon the Participant’s heirs, executors, administrators and successors. Except as expressly provided herein, nothing in this Agreement shall confer any rights upon any person other than the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.

18. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participant, the Corporation and all other interested persons. No member of the Committee shall be personally liable for any action determination or interpretation made in good faith with respect to the Plan or the Performance Units. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement. The Committee shall have the power to delegate any and all of its rights and duties hereunder to any officer of the Corporation to the extent permitted under applicable law.

19. Resolution of Disputes. Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Participant and Corporation for all purposes.

20. Data Privacy Consent. As a condition of the grant of the Performance Units, the Participant hereby consents to the collection, use and transfer of personal data as described in this paragraph. The Participant understands that the Corporation and its subsidiaries hold certain personal information about the Participant, including name, home address and telephone number, date of birth, social security number, salary, nationality, job title, ownership interests or directorships held in the Corporation or its subsidiaries, and details of all performance units or other equity-based awards or other entitlements to shares of common stock awarded, cancelled, exercised, vested or unvested (“Data”). The Participant further understands that the Corporation and its subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration and management of the Participant’s participation in the Plan, and that the Corporation and any of its subsidiaries may each further transfer Data to any third parties assisting the Corporation in the implementation, administration

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and management of the Plan. The Participant understands that these recipients may be located in the European Economic Area or elsewhere, such as the United States. The Participant hereby authorizes them to receive, possess, use, retain and transfer such Data as may be required for the administration of the Plan or the subsequent holding of shares of common stock on the Participant’s behalf, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer to a broker or other third party with whom the Participant may elect to deposit any shares of common stock acquired under the Plan. The Participant may, at any time, view such Data or require any necessary amendments to it.

21. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation. By accepting this Agreement and the grant of the Performance Units contemplated hereunder, the Participant expressly acknowledges that (a) the grant of Performance Units is a one-time benefit that does not create any contractual or other right to receive future grants of performance units, or benefits in lieu of performance units; (b) all determinations with respect to future grants of Performance Units, if any, including the grant date, the number of Performance Units granted and the performance period, will be at the sole discretion of the Corporation; (c) the Participant’s acknowledgment and acceptance of this Agreement is voluntary; (d) the value of the Performance Units is an extraordinary item of compensation that is outside the scope of the Participant’s employment contract, if any, and nothing can or must automatically be inferred from such employment contract or its consequences; (e) grants of performance units are not part of normal or expected compensation for any purpose and are not to be used for calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and the Participant waives any claim on such basis; (f) the future value of the Performance Units is unknown, cannot be predicted with certainty and may be zero; and (g) the Plan is discretionary in nature and may be suspended or terminated by the Corporation at any time. In addition, the Participant understands, acknowledges and agrees that except as expressly provided hereunder, the Participant will have no rights to compensation or damages related to Performance Unit proceeds in consequence of the termination of the Participant’s employment for any reason whatsoever and whether or not in breach of contract.

22. Book Entry Delivery of Award Shares. Whenever reference in this Agreement is made to the issuance or delivery of Award Shares, the Corporation may elect to issue or deliver such shares in book entry form in lieu of certificates.

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23. Acceptance. This Agreement shall not be enforceable until it has been executed by the Participant.

By:	L-3 COMMUNICATIONS HOLDINGS, INC.
	/s/ Michael T. Strianese
	Michael T. Strianese
	Chairman, President and Chief Executive Officer
	/s/ Steven M. Post
	Steven M. Post
	Senior Vice President, General Counsel and Corporate Secretary

Acknowledged and Agreed

as of the date first written above:

Participant Signature

Name:

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EX-10.9

Exhibit 10.9

Exhibit A

Performance Unit Award Notice

A. Participant:
B. Grant Date:	February 19, 2014
C. Performance Period:	1/1/2014 through 12/31/2016
D. Aggregate Target Performance Units:

G. Performance Measure(s):

1. Diluted Earnings per Share: “Diluted EPS” means earnings per common share on a fully diluted basis, determined in accordance with generally accepted accounting principles and as derived from L-3’s audited consolidated financial statements prepared in the ordinary course of business. Diluted EPS shall be adjusted as contemplated by the terms of the Performance Unit Agreement to exclude certain items specified therein.

Portion of Aggregate Target Dollar Award for this Performance Measure: 100%

Target Units for this Performance Measure:                     

Performance Scale:

Performance Levels	Cumulative Diluted EPS Required		Unit Multiplier
Maximum	³$	28.00		200	%
	$	27.03		150	%
Target	$	26.05		100	%
	$	25.07		75	%
Threshold	$	24.10		50	%
Below Threshold	<$	24.10		0	%

In the event that the level of actual performance exceeds the Threshold and falls between two of the stated performance levels listed above, the Unit Multiplier will be calculated on a straight-line basis between the two stated Unit Multipliers for those performance levels.

Payment Method: Shares of L-3 stock. Subject to the terms of the Performance Unit Agreement, the number of shares will be determined by multiplying (1) the Target Units for this Performance Measure, by (2) the applicable Unit Multiplier.

EX-10.10

Exhibit 10.10

L-3 COMMUNICATIONS HOLDINGS, INC.

2012 CASH INCENTIVE PLAN

PERFORMANCE CASH AWARD AGREEMENT

(Version 0002)

This Performance Cash Award Agreement (this “Agreement”), effective as of the Grant Date (as defined below), is between L-3 Communications Holdings, Inc., a Delaware corporation (the “Corporation” or “L-3”), and the Participant (as defined below).

1. Definitions. Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to them in the L-3 Communications Holdings, Inc. 2012 Cash Incentive Plan (the “Plan”). The following terms shall have the following meanings for purposes of this Agreement:

(a) “Applicable Award Multiplier” shall mean, with respect to each Performance Measure, the “Award Multiplier” calculated pursuant to the Award Letter based on the actual level of achievement for the Performance Period; provided, that in the event of a Change in Control, the “Applicable Award Multiplier” shall mean 100%, subject to upward adjustment (but not above 200%) to the extent (if any) that the Committee is able, in its sole discretion, to assess that the Corporation’s progress, at or prior to the Change in Control, towards the achievement levels set forth in the Award Letter for such Performance Measure exceeds the “Target” performance level as adjusted to account for the reduced period of actual performance.

(b) “Award Letter” shall mean the award notice to the Participant attached hereto as Exhibit A.

(c) “Cause” shall mean the Participant’s (1) intentional failure to perform reasonably assigned duties, (2) dishonesty or willful misconduct in the performance of duties, (3) engaging in a transaction in connection with the performance of duties to the Corporation or its subsidiaries which transaction is adverse to the interests of the Corporation and is engaged in for personal profit or (4) willful violation of any law, rule or regulation in connection with the performance of duties (other than traffic violations or similar offenses).

(d) “Change in Control” shall mean:

(1) the acquisition by any person or group (including a group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Corporation or any of its subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a majority more of the combined voting power of the Corporation’s then outstanding voting securities, other than by any employee benefit plan maintained by the Corporation;

(2) the sale of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole;

(3) the consummation of a merger, combination, consolidation, recapitalization or other reorganization of the Corporation with one or more other entities that are not subsidiaries if, as a result of the consummation of the merger, combination, consolidation, recapitalization or other reorganization, less than 50 percent of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event be beneficially owned in the aggregate by the stockholders of the Corporation immediately prior to the event; or

(4) the election, including the filling of vacancies, during any period of 24 months or less, of 50% or more of the members of the Board of Directors, without the approval of Continuing Directors, as constituted at the beginning of such period. “Continuing Directors” shall mean any director of the Corporation who either (i) is a member of the Board of Directors on the Grant Date, or (ii) is nominated for election to the Board of Directors by a majority of the Board which is comprised of directors who were, at the time of such nomination, Continuing Directors.

(e) “Committee” or “Compensation Committee” shall mean the Compensation Committee of the Board of Directors of the Corporation.

(f) “Disability” shall mean that the Participant, (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer.

(g) “Grant Date” shall mean the “Grant Date” listed in the Award Letter.

(h) “Participant” shall mean the “Participant” listed in the Award Letter.

(i) “Performance Measures” shall mean the performance measures set forth in the Award Letter.

(j) “Performance Period” shall mean the “Performance Period” set forth in the Award Letter, subject to adjustment in accordance with Section 4 hereof.

(k) “Retirement” shall mean that the Participant (A) terminates employment with the Corporation and its subsidiaries other than for Cause (and is not subject to termination for Cause at the time of such termination), (B) is available for consultation with the Corporation or its subsidiaries at the reasonable request of the Corporation or its subsidiaries and (C) terminates employment on or after attaining age 65 and completing at least five years of service in the aggregate with the Corporation and its subsidiaries (which service must be continuous through the date of termination except for a single break in service that does not exceed one year in length).

(l) “Segmented Target Award Value” shall mean, with respect to each Performance Measure, the “Target Award Value” set forth in the Award Letter for the Performance Measure, subject to adjustment pursuant to the terms hereof.

(m) “Segmented Earned Award Value” shall mean, with respect to each Performance Measure, the Segmented Target Award Value multiplied by the Applicable Award Multiplier.

(n) “Subsidiary” or “subsidiary” shall mean, as to any person, any corporation, association, partnership, joint venture or other business entity of which 50% or more of the voting stock or other equity interests (in the case of entities other than corporations), is owned or controlled (directly or indirectly) by that entity, or by one or more of the Subsidiaries of that entity, or by a combination thereof.

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(o) “Total Earned Award Value” shall mean the sum of the Segmented Earned Award Values for all Performance Measures.

(p) “Total Target Award Value” shall mean the sum of the Segmented Target Award Values for all Performance Measures.

2. Target and Final Awards. Subject to the terms, conditions and restrictions set forth in the Plan and this Agreement, a target incentive compensation opportunity is hereby established for the Participant with respect to each Performance Measure in an amount equal to the Segmented Target Award Value in respect thereof. The final amount that shall be earned (if at all) by the Participant under the Plan and this Agreement with respect to each Performance Measure shall be based on the Segmented Target Award Value and the Applicable Award Multiplier, which shall reflect the actual level of performance achieved by the Corporation with respect to the Performance Measure over the Performance Period.

3. Nonalienation of Benefits. No Participant or beneficiary shall have the power or right to transfer, anticipate, or otherwise encumber the Participant’s interest under this Agreement. The provisions of this Agreement shall inure to the benefit of the Participant and the Participant’s beneficiaries, heirs, executors, administrators or successors in interest.

4. Change in Control During Performance Period. In the event of a Change in Control, (a) the Segmented Target Award Value for each Performance Measure shall automatically be adjusted on a pro-rata basis to reflect the number of completed months out of the entire Performance Period as of the date of the Change in Control and (b) the Performance Period shall automatically be deemed to have terminated and the provisions of Section 8 hereof shall become applicable.

5. Termination of Employment or Disability During Performance Period.

(a) If the Participant suffers a Disability or the Participant’s employment with the Corporation and its subsidiaries is terminated during the Performance Period: (1) by reason of death or Disability, (2) by Retirement at least one year after the first day of the Performance Period, or (3) by the Company without Cause (each, a “Qualified Separation”), the Segmented Target Award Value for each Performance Measure shall automatically be adjusted on a pro-rata basis to reflect the number of completed months out of the entire Performance Period as of the date the Participant suffered a Disability or the date of the termination of employment, as applicable. Thereafter, the Participant (or his/her beneficiaries, heirs, executors, administrators or successors in interest as the case may be) shall be entitled to any amounts payable under Section 8 following the termination of the Performance Period in accordance with the terms hereof.

(b) In the event that the Participant’s employment with the Corporation and its subsidiaries is terminated during the Performance Period by reason other than Qualified Separation, then the Participant shall forfeit all of his or her rights hereunder.

(c) The Participant’s rights to the Performance Units shall not be affected by any change in the nature of the Participant’s employment so long as the Participant continues to be an employee of the Corporation or any of its subsidiaries. Whether (and the circumstances under which) employment has been terminated and the determination of the termination date for the purposes of this Agreement (or whether, and the date upon which, the Participant has suffered a Disability) shall be

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determined by the Committee or (with respect to any employee other than a person who is an “executive officer” of the Corporation as defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended) its designee (who, at the date of this Agreement, shall be the Corporation’s Vice President of Human Resources), whose good faith determination shall be final, binding and conclusive; provided, that such designee may not make any such determination with respect to his or her own employment

6. No Right to Continued Employment. Nothing in this Agreement shall be interpreted or construed to confer upon the Participant any right to continue employment by the Corporation or any of its subsidiaries, nor shall this Agreement interfere in any way with the right of the Corporation or any of its subsidiaries to terminate the Participant’s employment at any time for any reason whatsoever, whether or not with cause.

7. Adjustments for Certain Changes. In the event of an equity restructuring, as defined in Financial Accounting Standards Board Accounting Standards Codification 718-10 (formerly Statement of Financial Accounting Standards 123R), that affects the Shares, the Committee shall adjust any Share-based Performance Measures affected by such restructuring so as to preserve (without enlarging) such Participant’s incentive compensation opportunity in respect thereof, with the manner of such adjustment to be determined by the Committee in its sole discretion and in a manner consistent with Section 162(m) of the Code, to the extent applicable.

8. Determination and Payment of Final Awards.

(a) As promptly as practicable following the termination of the Performance Period, the Committee shall determine the Applicable Award Multiplier for each of the Performance Measures (the date of such determination being referred to herein as the “Determination Date”).

(b) Promptly following the Determination Date, the Corporation shall pay the Participant an amount in cash (if any), without interest thereon and subject to applicable withholding taxes, equal to the Total Earned Award Value.

(c) All payments of cash under this Section 8 shall be made no earlier than January 1, and no later than March 15, of the year after the year in which the Performance Period terminates; provided, that notwithstanding the foregoing, in the event the Performance Period terminates as a result of a Change in Control, such payments of cash shall be made no later than the 30^th calendar day following such Change in Control.

(d) Notwithstanding the provisions of this Section, in the event of the death of the Participant prior to the making of any payment under this Section 8, such payment or issuance shall be made to the Participant’s beneficiaries, heirs, executors, administrators or successors in interest as the case may be.

9. Plan Governs. The Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by its terms, all of which are incorporated herein by reference. The Plan shall govern in the event of any conflict between this Agreement and the Plan.

10. Modification of Agreement. This Agreement may be not be modified, amended, suspended or terminated, and any terms or conditions may not be waived, without the approval of the Committee. The Committee reserves the right to amend or modify this Agreement at any time without prior notice to any Participant or other interested party; provided, that except as expressly provided hereunder, any such amendment or modification may not adversely affect in any material respect the Participant’s rights or benefits hereunder except for such amendments or modifications as are required by law.

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11. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

12. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to the conflicts of laws principles thereof.

13. Successors in Interest; No Third Party Beneficiaries. This Agreement shall inure to the benefit of and be binding upon any successor to the Corporation. This Agreement shall inure to the benefit of the Participant or the Participant’s legal representatives. All obligations imposed upon the Participant and all rights granted to the Corporation under this Agreement shall be final, binding and conclusive upon the Participant’s heirs, executors, administrators and successors. Except as expressly provided herein, nothing in this Agreement shall confer any rights upon any person other than the parties hereto and their respective heirs, legal representatives, successors and permitted assigns.

14. Administration. The Committee shall have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Participant, the Corporation and all other interested persons. No member of the Committee shall be personally liable for any action determination or interpretation made in good faith with respect to the Plan or the awards or award opportunities contemplated hereunder. In its absolute discretion, the Board of Directors may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan and this Agreement. The Committee shall have the power to delegate any and all of its rights and duties hereunder to any officer of the Corporation to the extent permitted under applicable law.

15. Resolution of Disputes. Any dispute or disagreement which may arise under, or as a result of, or in any way related to, the interpretation, construction or application of this Agreement shall be determined by the Committee. Any determination made hereunder shall be final, binding and conclusive on the Participant and Corporation for all purposes.

16. Data Privacy Consent. As a condition to the awards and award opportunities contemplated hereunder, the Participant hereby consents to the collection, use and transfer of personal data as described in this paragraph. The Participant understands that the Corporation and its subsidiaries hold certain personal information about the Participant, including name, home address and telephone number, date of birth, social security number, salary, nationality, job title, ownership interests or directorships held in the Corporation or its subsidiaries, and details of all performance awards and entitlements to shares of common stock awarded, cancelled, exercised, vested or unvested (“Data”). The Participant further understands that the Corporation and its subsidiaries will transfer Data among themselves as necessary for the purposes of implementation, administration and management of the Participant’s participation in the Plan, and that the Corporation and any of its subsidiaries may each further transfer Data to any third parties assisting the Corporation in the implementation, administration and management of the Plan. The Participant understands that these recipients may be located in the European Economic Area or elsewhere, such as the United States. The Participant hereby authorizes them to receive, possess, use, retain and transfer such Data as may be required for the administration of the Plan, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan. The Participant may, at any time, view such Data or require any necessary amendments to it.

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17. Limitation on Rights; No Right to Future Awards; Extraordinary Item of Compensation. By accepting this Agreement and the awards or award contemplated hereunder, the Participant expressly acknowledges that (a) the awards and award opportunities contemplated hereunder are one-time benefits that do not create any contractual or other right to receive future awards or award opportunities under the Plan, or any benefits in lieu of thereof; (b) all determinations with respect to future awards and award opportunities under the Plan, if any, will be at the sole discretion of the Committee and/or the Corporation; (c) the Participant’s acknowledgment and acceptance of this Agreement is voluntary; (d) the awards and award opportunities contemplated hereunder are extraordinary items of compensation that are outside the scope of the Participant’s employment contract, if any, and nothing can or must automatically be inferred from such employment contract or its consequences; (e) the awards and award opportunities contemplated hereunder are not part of normal or expected compensation for any purpose and are not to be used for calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments, and the Participant waives any claim on such basis; (f) the future value of the award opportunities hereunder are unknown, cannot be predicted with certainty and may be zero; and (g) the Plan is discretionary in nature and may be suspended or terminated by the Corporation at any time. In addition, the Participant understands, acknowledges and agrees that except as expressly provided hereunder, the Participant will have no rights to compensation or damages related to the awards and award opportunities contemplated hereunder in consequence of the termination of the Participant’s employment for any reason whatsoever and whether or not in breach of contract.

6

18. Acceptance. This Agreement shall not be enforceable until it has been executed by the Participant.

By:	L-3 COMMUNICATIONS HOLDINGS, INC.
	/s/ Michael T. Strianese
	Michael T. Strianese
	Chairman, President and Chief Executive Officer
	/s/ Steven M. Post
	Steven M. Post
	Senior Vice President, General Counsel and
	Corporate Secretary

Acknowledged and Agreed

as of the date first written above:

Participant Signature

Name:

7

EX-10.11

Exhibit 10.11

Exhibit A

Performance Cash Award Notice

A. Participant:
B. Grant Date:	February 19, 2014
C. Performance Period:	1/1/2014 through 12/31/2016
D. Aggregate Target Award Value:
E. Performance Measure(s):

1. Relative Total Stockholder Return: This measure will be assessed based on the percentile positioning of L-3’s TSR as compared to the TSRs of the Peer Companies, calculated using the Percentrank formula in Microsoft Excel on a basis that excludes L-3’s TSR from the Percentrank data array.

“TSR” means, with respect to any company, the value calculated by dividing (i) the average of the Company’s per share closing prices during the one-month period ending on the last day of the Performance Period, by (ii) the average of the Company’s per share closing prices during the one-month period ending on the date immediately prior to the first day of the Performance Period, and then subtracting one (1); provided, that all closing prices shall be adjusted to reflect (a) the cumulative effect of the reinvestment of dividends as of their respective ex-dividend dates, beginning with the first ex-dividend date that is on or after the first day of the one-month period referred to in clause (ii) above; and (b) any equity restructuring, as defined in Statement of Financial Accounting Standards 123R, which affects the company’s shares and which is not otherwise accounted for under clause (a) above.

“Peer Companies” means the companies listed on Appendix 1 hereto; provided, that in the event of a merger, acquisition or business combination transaction to which a Peer Company is a party, if the stockholders of the Peer Company immediately prior to the event shall, collectively as a group, have beneficial ownership of less than 50 percent of the outstanding voting securities of the surviving or resulting entity immediately after the event, then such Peer Company shall not be considered a Peer Company for any purpose (including during any time period prior to such transaction).

Portion of Aggregate Target Award Value for this Performance Measure: 100%

Performance Scale:

Performance Levels	Relative TSR		Award Multiplier
Maximum		> 74th percentile		200	%
		63rd percentile		150	%
Target		50th percentile		100	%
Threshold		40th percentile		50	%
Below Threshold		< 40th percentile		0	%

In the event that the level of actual performance exceeds the Threshold and falls between two of the stated performance levels listed above, the Award Multiplier will be calculated on a straight-line basis between the two stated Award Multipliers for those performance levels.

Appendix 1

The companies included for the Relative Total Stockholder Return assessment are those listed below.

	Company	Ticker
1.	ALLIANT TECHSYSTEMS INC	ATK
2.	BAE SYSTEMS PLC (ADR)	BAESY
3.	CACI INTERNATIONAL INC	CACI
4.	EXELIS INC	XLS
5.	GENERAL DYNAMICS CORP	GD
6.	HARRIS CORP	HRS
7.	HUNTINGTON INGALLS INDUSTRIES INC	HII
8.	LEIDOS HOLDINGS INC	LDOS
9.	LOCKHEED MARTIN CORP	LMT
10.	MANTECH INTERNATIONAL CORP	MANT
11.	NORTHROP GRUMMAN CORP	NOC
12.	RAYTHEON CO	RTN
13.	ROCKWELL COLLINS INC	COL
14.	TEXTRON INC	TXT
15.	URS CORP	URS

EX-12

Exhibit 12

L-3 Communications Holdings, Inc.

and L-3 Communications Corporation

Ratio of Earnings to Fixed Charges

	First Quarter Ended March 28, 2014
	($ in millions)
Earnings:
Income before income taxes	$	267
Net income attributable to noncontrolling interests		(2	)
Income before income taxes after noncontrolling interests	$	265
Add:
Interest expense		42
Amortization of debt expense		1
Interest component of rent expense		13
Earnings	$	321
Fixed charges:
Interest expense		42
Amortization of debt expense		1
Interest component of rent expense		13
Fixed charges	$	56
Ratio of earnings to fixed charges		5.7

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Michael T. Strianese, certify that:

1. I have reviewed this report on Form 10-Q for the quarter ended March 28, 2014 of L-3 Communications Holdings, Inc. and L-3 Communications Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;

4. The registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrants’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrants’ internal control over financial reporting that occurred during the registrants’ most recent fiscal quarter (the registrants’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants’ internal control over financial reporting; and

5. The registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants’ auditors and the audit committee of the registrants’ board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrants’ ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants’ internal control over financial reporting.

Date: May 1, 2014

/s/ Michael T. Strianese

Michael T. Strianese

Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Ralph G. D’Ambrosio, certify that:

1. I have reviewed this report on Form 10-Q for the quarter ended March 28, 2014 of L-3 Communications Holdings, Inc. and L-3 Communications Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;

4. The registrants’ other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrants and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including their consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrants’ disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrants’ internal control over financial reporting that occurred during the registrants’ most recent fiscal quarter (the registrants’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants’ internal control over financial reporting; and

5. The registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants’ auditors and the audit committee of the registrants’ board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting, which are reasonably likely to adversely affect the registrants’ ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants’ internal control over financial reporting.

Date: May 1, 2014

/s/ Ralph G. D’Ambrosio

Ralph G. D’Ambrosio

Senior Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of L-3 Communications Holdings, Inc. (“L-3 Holdings”) and L-3 Communications Corporation (“L-3 Communications”; together with L-3 Holdings referred to as “L-3”) on Form 10-Q for the quarter ended March 28, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Michael T. Strianese, Chairman, President and Chief Executive Officer and Ralph G. D’Ambrosio, Senior Vice President and Chief Financial Officer, in each case, of L-3 Holdings and L-3 Communications, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of L-3.

Date: May 1, 2014

/s/ Michael T. Strianese	/s/ Ralph G. D’Ambrosio
Michael T. Strianese	Ralph G. D’Ambrosio
Chairman, President and Chief Executive Officer	Senior Vice President and Chief Financial Officer

XML

Other Current Liabilities and Other Liabilities (Tables)

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Other Current Liabilities

The table below presents the components of other current liabilities.

	March 28, 2014		December 31, 2013
	(in millions)
Other Current Liabilities:
Accruals for pending and threatened litigation (see Note 17)	$	7	$	6
Accrued product warranty costs		76		75
Estimated costs in excess of estimated contract value to complete contracts in process in a loss position		73		78
Accrued interest		46		52
Deferred revenues		40		35
Other		138		137
Total other current liabilities	$	380	$	383

Other Liabilities

The table below presents the components of other liabilities.

	March 28, 2014		December 31, 2013
	(in millions)
Other Liabilities:
Non-current income taxes payable (see Note 10)	$	167	$	167
Deferred compensation		47		45
Accrued workers’ compensation		42		46
Accrued product warranty costs		21		24
Notes payable and capital lease obligations		12		15
Other		93		99
Total other liabilities	$	382	$	396

Changes in Company's Accrued Product Warranty Costs

The table below presents the changes in the Company’s accrued product warranty costs.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Accrued product warranty costs:(1)
Balance at January 1	$	99		$	99
Accruals for product warranties issued during the period		17			19
Settlements made during the period		(19	)		(20	)
Foreign currency translation adjustments		—			(1	)
Balance at end of period	$	97		$	97

⁽¹⁾  Warranty obligations incurred in connection with long-term production contracts that are accounted for under the POC cost-to-cost method are included within the contract estimates at completion and are excluded from the above amounts. The balances above include both the current and non-current amounts.

XML

Acquisitions - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013	Dec. 19, 2013 2013 Business Acquisition [Member]	Mar. 04, 2014 2014 Business Acquisition [Member]
Acquisitions And Discontinued Operations [Line Items]
Purchase price of acquisition			$ 54	$ 57
Amount of goodwill recognized	7,821	7,796	44	40
Goodwill deductible for income tax purposes			$ 44	$ 40

XML

Supplemental Cash Flow Information (Tables)

3 Months Ended

Mar. 28, 2014

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Interest paid on outstanding debt	$	48	$	48
Income tax payments		26		19
Income tax refunds		1		10

XML

Debt - Additional Information (Detail) (USD $) Share data in Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013	Dec. 31, 2013
Debt Instrument [Line Items]
Excess of current common stock price over common stock conversion price	120.00%
Common stock, shares	7.7
Conversion price of L-3 Holdings' CODES	$ 89.08
Number of trading days for conversion, minimum	20 days
Number of consecutive trading-day period ending on the last trading day of the previous fiscal quarter	30 days
L-3 Communications Holdings, Inc. [Member]
Debt Instrument [Line Items]
Conversion rate of CODES, shares	11.2259
Settlement amount upon conversion of the CODES	$ 1,000
Interest expense recognized	5,000,000	5,000,000
Carrying amount of the equity component (conversion feature)	$ 64,000,000		$ 64,000,000
L-3 Communications Holdings, Inc. [Member] | CODES Due 2035 [Member]
Debt Instrument [Line Items]
Current common stock price	$ 106.90
Conversion price of L-3 Holdings' CODES	$ 89.08

XML

Acquisitions - Unaudited Pro Forma Statements of Operations Data (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Business Combinations [Abstract]
Pro forma net sales	$ 2,978	$ 3,203
Pro forma net income attributable to L-3	$ 179	$ 193
Pro forma diluted earnings per share	$ 2.00	$ 2.11

XML

Financial Instruments - Carrying Amounts and Estimated Fair Values of Company's Long-Term Debt and Foreign Currency Forward Contracts (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Senior Notes, Carrying Amount	$ 2,942	$ 2,941
CODES, Carrying Amount	689	689
Senior Notes, Estimated Fair Value	3,168	3,121
CODES, Estimated Fair Value	911	830
Estimated Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts	(5)	1
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts	$ (5)	$ 1

XML

Pension and Other Postretirement Benefits (Tables)

3 Months Ended

Mar. 28, 2014

Compensation And Retirement Disclosure [Abstract]

Components of Net Periodic Benefit Cost

The following table summarizes the components of net periodic benefit cost for the Company’s pension and other postretirement benefit plans.

	Pension Plans						Postretirement Benefit Plans
	First Quarter Ended						First Quarter Ended
	March 28, 2014			March 29, 2013			March 28, 2014			March 29, 2013
	(in millions)
Components of net periodic benefit cost:
Service cost	$	27		$	32		$	1		$	1
Interest cost		36			33			2			2
Expected return on plan assets		(48	)		(42	)		(1	)		(1	)
Amortization of prior service costs (credits)		1			—			(1	)		1
Amortization of net loss (gain)		4			22			—			(1	)
Curtailment loss		1			—			—			—
Net periodic benefit cost	$	21		$	45		$	1		$	2

XML

Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries

24.  Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries

L-3 Communications is a 100% owned subsidiary of L-3 Holdings. The debt of L-3 Communications, including the Senior Notes and borrowings under amounts drawn against the Amended and Restated Revolving Credit Facility is guaranteed, on a joint and several, full and unconditional basis, by certain of its domestic subsidiaries (the “Guarantor Subsidiaries”) and, in the case of the Amended and Restated Revolving Credit Facility, by L-3 Holdings. The debt of L-3 Holdings, including the CODES, is guaranteed on a joint and several, full and unconditional basis, by L-3 Communications and the Guarantor Subsidiaries. See Note 10 to the audited consolidated financial statements for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K. The foreign subsidiaries and certain domestic subsidiaries of L-3 Communications (the “Non-Guarantor Subsidiaries”) do not guarantee the debt of L-3 Communications or L-3 Holdings. None of the debt of L-3 Communications has been issued by its subsidiaries. There are no restrictions on the payment of dividends from the Guarantor Subsidiaries to L-3 Communications or from L-3 Communications to L-3 Holdings.

Under the terms of the indentures governing the Senior Notes, the guarantees of the Senior Notes will automatically and unconditionally be released and discharged: (1) upon the release of all guarantees of all other outstanding indebtedness of L-3 Communications Corporation, or (2) upon the determination that such guarantor is no longer a “domestic subsidiary”. Under the terms of the indenture governing the CODES, the guarantees of the CODES will be automatically and unconditionally released and discharged: (1) upon the release of guarantees of all other outstanding indebtedness of L-3 Holdings and its subsidiaries (other than a foreign subsidiary), or (2) upon the designation of such guarantor as an “excluded subsidiary.” In addition, the guarantees of the Senior Notes and the CODES will unconditionally be released and discharged in the event of a sale or other disposition of all of the assets of any guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the capital stock of such guarantor.

The following unaudited condensed combining financial information presents the results of operations, financial position and cash flows of: (1) L-3 Holdings, excluding L-3 Communications and its consolidated subsidiaries (the “Parent”), (2) L-3 Communications, excluding its consolidated subsidiaries, (3) the Guarantor Subsidiaries, (4) the Non-Guarantor Subsidiaries, and (5) the eliminations to arrive at the information for L-3 on a consolidated basis.

	L-3 Holdings (Parent)		L-3 Communications		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Balance Sheets:
At March 28, 2014:
Current assets:
Cash and cash equivalents	$	—	$	57	$	—	$	182	$	(12	)	$	227
Billed receivables, net		—		343		483		267		—			1,093
Contracts in process		—		1,029		1,330		404		—			2,763
Other current assets		—		296		148		175		—			619
Total current assets		—		1,725		1,961		1,028		(12	)		4,702
Goodwill		—		2,335		4,326		1,160		—			7,821
Other assets		—		784		517		241		—			1,542
Investment in and amounts due from consolidated subsidiaries		6,802		7,287		3,626		—		(17,715	)		—
Total assets	$	6,802	$	12,131	$	10,430	$	2,429	$	(17,727	)	$	14,065
Current liabilities	$	—	$	909	$	925	$	634	$	(12	)	$	2,456
Amounts due to consolidated subsidiaries		—		—		—		356		(356	)		—
Other long-term liabilities		—		1,478		191		121		—			1,790
Long-term debt		689		3,631		—		—		(689	)		3,631
Total liabilities		689		6,018		1,116		1,111		(1,057	)		7,877
L-3 shareholders’ equity		6,113		6,113		9,314		1,318		(16,745	)		6,113
Noncontrolling interests		—		—		—		—		75			75
Total equity		6,113		6,113		9,314		1,318		(16,670	)		6,188
Total liabilities and equity	$	6,802	$	12,131	$	10,430	$	2,429	$	(17,727	)	$	14,065
At December 31, 2013:
Current assets:
Cash and cash equivalents	$	—	$	258	$	—	$	261	$	(19	)	$	500
Billed receivables, net		—		364		425		226		—			1,015
Contracts in process		—		951		1,209		364		—			2,524
Other current assets		—		281		160		169		—			610
Total current assets		—		1,854		1,794		1,020		(19	)		4,649
Goodwill		—		2,335		4,325		1,136		—			7,796
Other assets		—		807		529		228		—			1,564
Investment in and amounts due from consolidated subsidiaries		6,712		7,007		3,713		—		(17,432	)		—
Total assets	$	6,712	$	12,003	$	10,361	$	2,384	$	(17,451	)	$	14,009
Current liabilities	$	—	$	909	$	1,005	$	628	$	(19	)	$	2,523
Amounts due to consolidated subsidiaries		—		—		—		246		(246	)		—
Other long-term liabilities		—		1,441		193		124		—			1,758
Long-term debt		689		3,630		—		—		(689	)		3,630
Total liabilities		689		5,980		1,198		998		(954	)		7,911
L-3 shareholders’ equity		6,023		6,023		9,163		1,386		(16,572	)		6,023
Noncontrolling interests		—		—		—		—		75			75
Total equity		6,023		6,023		9,163		1,386		(16,497	)		6,098
Total liabilities and equity	$	6,712	$	12,003	$	10,361	$	2,384	$	(17,451	)	$	14,009

	L-3 Holdings (Parent)			L-3 Communications			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Statements of Operations:
For the quarter ended March 28, 2014:
Total net sales	$	—		$	868		$	1,631		$	546		$	(74	)	$	2,971
Total cost of sales		(15	)		(774	)		(1,471	)		(493	)		89			(2,664	)
Operating (loss) income		(15	)		94			160			53			15			307
Interest expense		(5	)		(43	)		—			—			5			(43	)
Interest and other income, net		—			3			—			—			—			3
(Loss) income before income taxes		(20	)		54			160			53			20			267
Benefit (provision) for income taxes		6			(17	)		(51	)		(17	)		(6	)		(85	)
Equity in net income of consolidated subsidiaries		194			143			—			—			(337	)		—
Net income		180			180			109			36			(323	)		182
Net income attributable to noncontrolling interests		—			—			—			—			(2	)		(2	)
Net income attributable to L-3	$	180		$	180		$	109		$	36		$	(325	)	$	180
Comprehensive income attributable to L-3	$	162		$	162		$	106		$	19		$	(287	)	$	162
For the quarter ended March 29, 2013:
Total net sales	$	—		$	938		$	1,735		$	591		$	(79	)	$	3,185
Total cost of sales		(14	)		(866	)		(1,554	)		(531	)		93			(2,872	)
Operating (loss) income		(14	)		72			181			60			14			313
Interest expense		(5	)		(43	)		—			—			5			(43	)
Interest and other income, net		—			2			—			1			—			3
(Loss) income before income taxes		(19	)		31			181			61			19			273
Benefit (provision) for income taxes		5			(9	)		(52	)		(18	)		(5	)		(79	)
Equity in net income of consolidated subsidiaries		207			171			—			—			(378	)		—
Net income		193			193			129			43			(364	)		194
Net income attributable to noncontrolling interests		—			—			—			—			(1	)		(1	)
Net income attributable to L-3	$	193		$	193		$	129		$	43		$	(365	)	$	193
Comprehensive income attributable to L-3	$	169		$	169		$	129		$	6		$	(304	)	$	169

	L-3 Holdings (Parent)			L-3 Communications			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Statements of Cash Flows:
For the quarter ended March 28, 2014:
Operating activities:
Net cash from (used in) operating activities	$	188		$	80		$	(61	)	$	(34	)	$	(235	)	$	(62	)
Investing activities:
Business acquisitions, net of cash acquired		—			(57	)		—			—			—			(57	)
Investments in L-3 Communications		(51	)		—			—			—			51			—
Other investing activities		—			(13	)		(15	)		(1	)		—			(29	)
Net cash used in investing activities		(51	)		(70	)		(15	)		(1	)		51			(86	)
Financing activities:
Common stock repurchased		(133	)		—			—			—			—			(133	)
Dividends paid on L-3 Holdings common stock		(55	)		—			—			—			—			(55	)
Dividends paid to L-3 Holdings		—			(188	)		—			—			188			—
Investments from L-3 Holdings		—			51			—			—			(51	)		—
Other financing activities		51			(74	)		76			(43	)		54			64
Net cash (used in) from financing activities		(137	)		(211	)		76			(43	)		191			(124	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(1	)		—			(1	)
Net decrease in cash		—			(201	)		—			(79	)		7			(273	)
Cash and cash equivalents, beginning of the period		—			258			—			261			(19	)		500
Cash and cash equivalents, end of the period	$	—		$	57		$	—		$	182		$	(12	)	$	227
For the quarter ended March 29, 2013:
Operating activities:
Net cash from operating activities	$	174		$	92		$	73		$	24		$	(217	)	$	146
Investing activities:
Investments in L-3 Communications		(13	)		—			—			—			13			—
Other investing activities		—			(25	)		(25	)		(4	)		—			(54	)
Net cash used in investing activities		(13	)		(25	)		(25	)		(4	)		13			(54	)
Financing activities:
Common stock repurchased		(122	)		—			—			—			—			(122	)
Dividends paid on L-3 Holdings common stock		(52	)		—			—			—			—			(52	)
Dividends paid to L-3 Holdings		—			(174	)		—			—			174			—
Investments from L-3 Holdings		—			13			—			—			(13	)		—
Other financing activities		13			(86	)		(48	)		(32	)		169			16
Net cash used in financing activities		(161	)		(247	)		(48	)		(32	)		330			(158	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(7	)		—			(7	)
Net decrease in cash		—			(180	)		—			(19	)		126			(73	)
Cash and cash equivalents, beginning of the period		—			246			—			242			(139	)		349
Cash and cash equivalents, end of the period	$	—		$	66		$	—		$	223		$	(13	)	$	276

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Derivative Financial Instruments - Notional Amounts of Company's Outstanding Foreign Currency Forward Contracts by Currency (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014
Derivative [Line Items]
Notional amounts of foreign currency forward contracts	$ 435
Canadian Dollar [Member]
Derivative [Line Items]
Notional amounts of foreign currency forward contracts	222
U.S. Dollar [Member]
Derivative [Line Items]
Notional amounts of foreign currency forward contracts	115
Euro [Member]
Derivative [Line Items]
Notional amounts of foreign currency forward contracts	83
British Pound [Member]
Derivative [Line Items]
Notional amounts of foreign currency forward contracts	13
Other [Member]
Derivative [Line Items]
Notional amounts of foreign currency forward contracts	$ 2

XML

Equity - Additional Information (Detail) (USD $)	0 Months Ended			3 Months Ended			1 Months Ended	3 Months Ended		1 Months Ended
	Mar. 17, 2014	Feb. 11, 2014	Feb. 05, 2013	Mar. 28, 2014	Mar. 29, 2013	Mar. 28, 2014 Share Repurchase Program [Member]	Apr. 23, 2014 Share Repurchase Program [Member] Subsequent Event [Member]	Mar. 28, 2014 Common Stock [Member]	Mar. 29, 2013 Common Stock [Member]	Apr. 23, 2014 Common Stock [Member] Share Repurchase Program [Member] Subsequent Event [Member]
Class of Stock [Line Items]
Amount of shares authorized to be repurchased			$ 1,500,000,000
Average price per share of repurchased shares				$ 109.43			$ 116.98
Number of common shares repurchased								1,200,000	1,600,000	307,692
Aggregate amount of repurchased shares				133,000,000	122,000,000		36,000,000
Remaining value under share repurchase program						735,000,000
Cash dividend, declared per share		$ 0.60
Total cash dividends	52,000,000			52,000,000	50,000,000
Payment of accrued dividends				$ 3,000,000

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Segment Information - Summary of Segment Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013	Dec. 31, 2013
Net Sales:
Net Sales	$ 2,971	$ 3,185
Operating Income:
Operating income	307	313
Depreciation and amortization:
Depreciation and amortization	54	54
Total Assets:
Total Assets	14,065		14,009
Operating Segments [Member] | Aerospace Systems [Member]
Net Sales:
Net Sales	1,083	1,187
Operating Income:
Operating income	114	140
Depreciation and amortization:
Depreciation and amortization	10	9
Total Assets:
Total Assets	3,252		3,175
Operating Segments [Member] | Electronic Systems [Member]
Net Sales:
Net Sales	1,103	1,139
Operating Income:
Operating income	125	117
Depreciation and amortization:
Depreciation and amortization	29	30
Total Assets:
Total Assets	6,993		6,895
Operating Segments [Member] | Communication Systems [Member]
Net Sales:
Net Sales	517	565
Operating Income:
Operating income	50	35
Depreciation and amortization:
Depreciation and amortization	12	12
Total Assets:
Total Assets	2,128		2,130
Operating Segments [Member] | NSS [Member]
Net Sales:
Net Sales	305	331
Operating Income:
Operating income	18	21
Depreciation and amortization:
Depreciation and amortization	3	3
Total Assets:
Total Assets	1,338		1,247
Elimination of Intercompany Sales [Member]
Net Sales:
Net Sales	(37)	(37)
Corporate [Member]
Total Assets:
Total Assets	$ 354		$ 562

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Contracts in Process - General and Administrative, Independent Research and Development and Bids and Proposal Costs (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Inventory Disclosure [Abstract]
Amounts included in inventoried contract costs at beginning of the period	$ 138	$ 110
IRAD and B&P costs	72	73
Other G&A costs	204	205
Total contract costs incurred	276	278
Amounts charged to cost of sales	(273)	(275)
Amounts included in inventoried contract costs at end of the period	$ 141	$ 113

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L-3 Holdings' Earnings Per Common Share - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Earnings Per Share [Abstract]
Shares excluded from computation of diluted earnings per share and employee stock purchase plan contributions	0.4	1.8

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Stock-Based Compensation - Weighted Average Assumptions in Valuation Model (Detail) (Stock Options [Member])	3 Months Ended
	Mar. 28, 2014
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected holding period (in years)	5 years 6 months
Expected volatility	24.40%
Expected dividend yield	2.70%
Risk-free interest rate	1.70%

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Derivative Financial Instruments - Location of Company's Derivative Instruments Recorded at Fair Value on Condensed Consolidated Balance Sheets (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Other Current Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	$ 7	$ 3
Other Current Liabilities [Member] | Foreign Currency Forward Contracts [Member] | Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	7	3
Other Current Liabilities [Member] | Foreign Currency Forward Contracts [Member] | Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets
Other Current Liabilities [Member] | CODES Due 2035 [Member] | Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets
Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	3	2
Other Liabilities [Member] | Foreign Currency Forward Contracts [Member] | Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets	3	2
Other Liabilities [Member] | Foreign Currency Forward Contracts [Member] | Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets
Other Liabilities [Member] | CODES Due 2035 [Member] | Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, assets
Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	4	5
Other Current Assets [Member] | Foreign Currency Forward Contracts [Member] | Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	4	5
Other Current Assets [Member] | Foreign Currency Forward Contracts [Member] | Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities
Other Current Assets [Member] | CODES Due 2035 [Member] | Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities
Other Assets [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	1	1
Other Assets [Member] | Foreign Currency Forward Contracts [Member] | Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities	1	1
Other Assets [Member] | Foreign Currency Forward Contracts [Member] | Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities
Other Assets [Member] | CODES Due 2035 [Member] | Not Designated as Hedging Instruments [Member]
Derivatives, Fair Value [Line Items]
Total derivative instruments, liabilities

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Supplemental Cash Flow Information - Supplemental Cash Flow Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Additional Cash Flow Elements And Supplemental Cash Flow Information [Abstract]
Interest paid on outstanding debt	$ 48	$ 48
Income tax payments	26	19
Income tax refunds	$ 1	$ 10

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Fair Value Measurements - Company's Assets and Liabilities at Fair Value on Recurring Basis (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Level 1 [Member]
Assets
Cash equivalents	$ 22	$ 299
Derivatives (foreign currency forward contracts)
Total Assets	22	299
Liabilities
Derivatives (foreign currency forward contracts)
Level 2 [Member]
Assets
Cash equivalents
Derivatives (foreign currency forward contracts)	5	6
Total Assets	5	6
Liabilities
Derivatives (foreign currency forward contracts)	10	5
Level 3 [Member]
Assets
Cash equivalents
Derivatives (foreign currency forward contracts)
Total Assets
Liabilities
Derivatives (foreign currency forward contracts)

XML

Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013	Dec. 31, 2013
Tax Credit Carryforward [Line Items]
Effective tax rate	31.80%	28.90%
Anticipated decrease in unrecognized tax benefits over the next 12 months	$ 7
Accrued potential interest included within non-current income taxes payable	12		11
Accrued potential interest included within non-current income taxes payable, after income taxes	7		7
Potential penalties	7		8
U.S. Federal Research and Experimentation Tax Credit [Member]
Tax Credit Carryforward [Line Items]
Tax benefit	$ 0	$ 12

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Derivative Financial Instruments

3 Months Ended

Mar. 28, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

16.  Derivative Financial Instruments

The Company’s derivative financial instruments include foreign currency forward contracts, which are entered into for risk management purposes, and an embedded derivative representing the contingent interest payment provision related to the CODES.

Foreign Currency Forward Contracts. The Company’s U.S. and foreign businesses enter into contracts with customers, subcontractors or vendors that are denominated in currencies other than their functional currencies. To protect the functional currency equivalent cash flows associated with certain of these contracts, the Company enters into foreign currency forward contracts. The Company’s activities involving foreign currency forward contracts are designed to hedge the changes in the functional currency equivalent cash flows due to movements in foreign exchange rates compared to the functional currency. The foreign currencies hedged are primarily the Canadian dollar, the U.S. dollar, the Euro, and the British pound. The Company manages exposure to counterparty non-performance credit risk by entering into foreign currency forward contracts with major financial institutions that are expected to fully perform under the terms of such contracts. Foreign currency forward contracts are recorded in the Company’s condensed consolidated balance sheets at fair value and are generally designated and accounted for as cash flow hedges in accordance with the accounting standards for derivative instruments and hedging activities. Gains and losses on designated foreign currency forward contracts that are highly effective in offsetting the corresponding change in the cash flows of the hedged transactions are recorded net of income taxes in AOCI and then recognized in income when the underlying hedged transaction affects income. Gains and losses on foreign currency forward contracts that do not meet hedge accounting criteria are recognized in income immediately. Notional amounts are used to measure the volume of foreign currency forward contracts and do not represent exposure to foreign currency losses. The table below presents the notional amounts of the Company’s outstanding foreign currency forward contracts by currency at March 28, 2014.

Currency	Notional Amounts
	(in millions)
Canadian dollar	$	222
U.S. dollar		115
Euro		83
British pound		13
Other		2
Total	$	435

At March 28, 2014, the Company’s foreign currency forward contracts had maturities through 2018.

Embedded Derivative. The embedded derivative related to the issuance of the CODES is recorded at fair value, which was zero at March 28, 2014 and December 31, 2013.

The table below presents the location of the Company’s derivative instruments recorded at fair value on the condensed consolidated balance sheets.

	March 28, 2014								December 31, 2013
	Other Current Assets		Other Assets		Other Current Liabilities		Other Liabilities		Other Current Assets		Other Assets		Other Current Liabilities		Other Liabilities
	(in millions)
Derivatives designated as hedging instruments:
Foreign currency forward contracts(1)	$	4	$	1	$	7	$	3	$	5	$	1	$	3	$	2
Derivatives not designated as hedging instruments:
Foreign currency forward contracts(1)		—		—		—		—		—		—		—		—
Embedded derivative related to the CODES		—		—		—		—		—		—		—		—
Total derivative instruments	$	4	$	1	$	7	$	3	$	5	$	1	$	3	$	2

⁽¹⁾  See Note 14 for a description of the fair value hierarchy related to the Company’s foreign currency forward contracts.

The effect of gains or losses from foreign currency forward contracts was not material to the unaudited condensed consolidated statements of operations for the quarterly periods ended March 28, 2014 and March 29, 2013. At March 28, 2014, the estimated amount of existing gains that are expected to be reclassified into income within the next 12 months is $4 million.

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Employee Severance and Termination Costs (Tables)

3 Months Ended

Mar. 28, 2014

Restructuring And Related Activities [Abstract]

Employee Severance and Other Termination Costs Incurred by Reportable Segment

Employee severance and other termination costs incurred by reportable segment for the quarterly periods ended March 28, 2014 and March 29, 2013 are presented in the table below.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Reportable Segment
Aerospace Systems	$	—	$	—
Electronic Systems		4		3
Communication Systems		3		1
NSS		1		1
Consolidated	$	8	$	5

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L-3 Holdings' Earnings Per Common Share (Tables)

3 Months Ended

Mar. 28, 2014

Earnings Per Share [Abstract]

Reconciliation of Basic and Diluted Earnings Per Share

A reconciliation of basic and diluted earnings per share (EPS) is presented in the table below.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions, except per share data)
Reconciliation of net income:
Net income	$	182		$	194
Net income attributable to noncontrolling interests		(2	)		(1	)
Net income attributable to L-3 Holdings’ common shareholders	$	180		$	193
Earnings per share attributable to L-3 Holdings’ common shareholders:
Basic:
Weighted average common shares outstanding		86.1			90.3
Basic earnings per share:
Net income	$	2.09		$	2.14
Diluted:
Common and potential common shares:
Weighted average common shares outstanding		86.1			90.3
Assumed exercise of stock options		3.4			3.4
Unvested restricted stock awards		1.7			1.7
Employee stock purchase plan contributions		—			0.2
Performance unit awards		0.2			0.1
Assumed purchase of common shares for treasury		(3.5	)		(4.2	)
Assumed conversion of the CODES(1)		1.5			—
Common and potential common shares		89.4			91.5
Diluted earnings per share:
Net income	$	2.01		$	2.11

⁽¹⁾  L-3 Holdings’ CODES had no impact on diluted EPS for the quarterly period ended March 29, 2013 as the average market price of L-3 Holdings common stock during this period was less than the price at which the CODES would have been convertible into L-3 Holdings common stock. As of March 28, 2014, the conversion price was $89.08.

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L-3 Holdings' Earnings Per Common Share - Reconciliation of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) (USD $)	Mar. 28, 2014
Earnings Per Share [Abstract]
Conversion price of L-3 Holdings' CODES	$ 89.08

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Inventories (Tables)

3 Months Ended

Mar. 28, 2014

Inventory Disclosure [Abstract]

Inventories at Lower of Cost or Market

Inventories at Lower of Cost or Market. The table below presents the components of inventories at the lower of cost (first-in, first-out or average cost) or realizable value.

	March 28, 2014		December 31, 2013
	(in millions)
Raw materials, components and sub-assemblies	$	166	$	160
Work in process		128		125
Finished goods		81		74
Total	$	375	$	359

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Description of Business - Additional Information (Detail)	3 Months Ended
	Mar. 28, 2014 Segment
Disclosure Description Of Business Additional Information [Abstract]
Number of segments	4

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Other Current Liabilities and Other Liabilities - Changes in Company's Accrued Product Warranty Costs (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Accrued product warranty costs:
Balance at January 1	$ 99	$ 99
Accruals for product warranties issued during the period	17	19
Settlements made during the period	(19)	(20)
Foreign currency translation adjustments		(1)
Balance at end of period	$ 97	$ 97

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Goodwill and Identifiable Intangible Assets - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Goodwill [Line Items]
Accumulated goodwill impairment losses	$ 58	$ 58
Electronic Systems [Member]
Goodwill [Line Items]
Accumulated goodwill impairment losses	43	43
Communication Systems [Member]
Goodwill [Line Items]
Accumulated goodwill impairment losses	$ 15	$ 15

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 28, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Weighted Average Assumptions in Valuation Model

The weighted average assumptions used in the valuation model for this grant are presented in the table below.

Expected holding period (in years)	5.5
Expected volatility	24.4	%
Expected dividend yield	2.7	%
Risk-free interest rate	1.7	%

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Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Operating activities:
Net income	$ 182	$ 194
Depreciation of property, plant and equipment	42	42
Amortization of intangibles and other assets	12	12
Deferred income tax provision	22	19
Stock-based employee compensation expense	15	14
Contributions to employee savings plans in L-3 Holdings' common stock	44	32
Amortization of pension and postretirement benefit plans net loss and prior service cost	4	22
Amortization of bond discounts and deferred debt issue costs (included in interest expense)	2	2
Other non-cash items	1	3
Changes in operating assets and liabilities, excluding amounts from acquisitions and divestitures:
Billed receivables	(74)	(146)
Contracts in process	(236)	(145)
Inventories	(16)	8
Other assets	(4)	49
Accounts payable, trade	49	105
Accrued employment costs	(12)	13
Accrued expenses	(49)	(41)
Advance payments and billings in excess of costs incurred	(46)	(37)
Income taxes	38	51
Excess income tax benefits related to share-based payment arrangements	(14)	(2)
Other current liabilities	(8)	4
Pension and postretirement benefits	(2)	4
All other operating activities	(12)	(57)
Net cash (used in) from operating activities	(62)	146
Investing activities:
Business acquisitions, net of cash acquired	(57)
Capital expenditures	(30)	(49)
Dispositions of property, plant and equipment	1	1
Other investing activities		(6)
Net cash used in investing activities	(86)	(54)
Financing activities:
Borrowings under revolving credit facility	524	477
Repayment of borrowings under revolving credit facility	(524)	(477)
Common stock repurchased	(133)	(122)
Dividends paid on L-3 Holdings' common stock	(55)	(52)
Proceeds from exercises of stock options	69	18
Proceeds from employee stock purchase plan	9	9
Excess income tax benefits related to share-based payment arrangements	14	2
Other financing activities	(28)	(13)
Net cash used in financing activities	(124)	(158)
Effect of foreign currency exchange rate changes on cash and cash equivalents	(1)	(7)
Net decrease in cash and cash equivalents	(273)	(73)
Cash and cash equivalents, beginning of the period	500	349
Cash and cash equivalents, end of the period	$ 227	$ 276

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Goodwill and Identifiable Intangible Assets - Identifiable Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in years)	17 years
Gross Carrying Amount	$ 669	$ 661
Accumulated Amortization	386	376
Net Carrying Amount	283	285
Customer Contractual Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in years)	19 years
Gross Carrying Amount	474	466
Accumulated Amortization	261	253
Net Carrying Amount	213	213
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in years)	11 years
Gross Carrying Amount	168	168
Accumulated Amortization	110	108
Net Carrying Amount	58	60
Other [Member]
Finite-Lived Intangible Assets [Line Items]
Weighted Average Amortization Period (in years)	17 years
Gross Carrying Amount	27	27
Accumulated Amortization	15	15
Net Carrying Amount	$ 12	$ 12

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 28, 2014

Fair Value Disclosures [Abstract]

Company's Assets and Liabilities at Fair Value on Recurring Basis

The following table presents the fair value hierarchy level for each of the Company’s assets and liabilities that are measured and recorded at fair value on a recurring basis.

	March 28, 2014						December 31, 2013
Description	Level 1(1)		Level 2(2)		Level 3(3)		Level 1(1)		Level 2(2)		Level 3(3)
	(in millions)
Assets
Cash equivalents	$	22	$	—	$	—	$	299	$	—	$	—
Derivatives (foreign currency forward contracts)		—		5		—		—		6		—
Total Assets	$	22	$	5	$	—	$	299	$	6	$	—
Liabilities
Derivatives (foreign currency forward contracts)	$	—	$	10	$	—	$	—	$	5	$	—

⁽¹⁾  Level 1 is based on quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Cash equivalents are primarily held in registered money market funds, which are valued using quoted market prices.

⁽²⁾  Level 2 is based on pricing inputs other than quoted prices in active markets, which are either directly or indirectly observable. The fair value is determined using a valuation model based on observable market inputs, including quoted foreign currency forward exchange rates and consideration of non-performance risk.

⁽³⁾  Level 3 is based on pricing inputs that are not observable and not corroborated by market data. The Company has no Level 3 assets or liabilities.

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Supplemental Cash Flow Information

3 Months Ended

Mar. 28, 2014

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

20.  Supplemental Cash Flow Information

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Interest paid on outstanding debt	$	48	$	48
Income tax payments		26		19
Income tax refunds		1		10

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Stock-Based Compensation

3 Months Ended

Mar. 28, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

19.  Stock-Based Compensation

On February 19, 2014, the Company granted stock-based compensation under the Amended and Restated 2008 Long Term Performance Plan (2008 LTPP) in the form of stock options, restricted stock units and performance units further discussed below.

Stock Options. The Company granted 472,992 stock options with an exercise price of $113.67 per option, which was equal to the closing price of L-3 Holdings’ common stock on the date of grant. The options expire after 10 years from the date of grant and vest ratably over a three-year period on the annual anniversary of the date of grant. The options granted to our Chairman, President and Chief Executive Officer are also subject to performance-based vesting conditions. The weighted average grant date fair value for the options of $20.02 per option was estimated using the Black-Scholes option-pricing model. The weighted average assumptions used in the valuation model for this grant are presented in the table below.

Expected holding period (in years)	5.5
Expected volatility	24.4	%
Expected dividend yield	2.7	%
Risk-free interest rate	1.7	%

Restricted Stock Units. The Company granted 402,870 restricted stock units with a weighted average grant date fair value of $113.67 per share. Restricted stock units automatically convert into shares of L-3 Holdings’ common stock upon vesting, and are subject to forfeiture until certain restrictions have lapsed, including a three year cliff vesting period for employees and a one year cliff vesting period for non-employee directors, in each case starting on the date of grant.

Performance Units. The Company granted 47,467 performance units with a weighted average grant date fair value per unit of $113.67. The final payout for these units is based on the achievement of pre-determined EPS goals established by the compensation committee of the Company’s Board of Directors for the three-year period ending December 31, 2016. The payout can range from zero to 200% of the original number of units awarded, which are converted into shares of L-3 Holdings’ common stock based on the then existing closing price at the end of the performance period.

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Contracts in Process - Components of Contracts in Process (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Components of contracts in process
Unbilled contract receivables, gross	$ 2,685	$ 2,547
Unliquidated progress payments	(990)	(1,035)
Unbilled contract receivables, net	1,695	1,512
Inventoried contract costs, gross	1,145	1,093
Unliquidated progress payments	(77)	(81)
Inventoried contract costs, net	1,068	1,012
Total contracts in process	$ 2,763	$ 2,524

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Financial Instruments (Tables)

3 Months Ended

Mar. 28, 2014

Investments All Other Investments [Abstract]

Carrying Amounts and Estimated Fair Values of Company's Long-Term Debt and Foreign Currency Forward Contracts

The carrying amounts and estimated fair values of the Company’s other financial instruments are presented in the table below.

	March 28, 2014						December 31, 2013
	Carrying Amount			Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(in millions)
Senior Notes(1)	$	2,942		$	3,168		$	2,941	$	3,121
CODES(1)		689			911			689		830
Foreign currency forward contracts(2)		(5	)		(5	)		1		1

⁽¹⁾  The Company measures the fair value of its Senior Notes and CODES using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

⁽²⁾  See Note 16 for additional disclosures regarding the notional amounts and fair values of foreign currency forward contracts.

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Segment Information

3 Months Ended

Mar. 28, 2014

Segment Reporting [Abstract]

Segment Information

21.  Segment Information

The Company has four reportable segments, as described in Note 1. The Company evaluates the performance of its operating segments and reportable segments based on their sales and operating income. All corporate expenses are allocated to the Company’s operating segments using an allocation methodology prescribed by U.S. Government regulations for government contractors. Accordingly, all costs and expenses are included in the Company’s measure of segment profitability.

The tables below present net sales, operating income, depreciation and amortization and total assets by reportable segment.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Net Sales:
Aerospace Systems	$	1,083		$	1,187
Electronic Systems		1,103			1,139
Communication Systems		517			565
NSS		305			331
Elimination of intercompany sales		(37	)		(37	)
Consolidated total	$	2,971		$	3,185
Operating Income:
Aerospace Systems	$	114		$	140
Electronic Systems		125			117
Communication Systems		50			35
NSS		18			21
Consolidated total	$	307		$	313
Depreciation and amortization:
Aerospace Systems	$	10		$	9
Electronic Systems		29			30
Communication Systems		12			12
NSS		3			3
Consolidated total	$	54		$	54

	March 28, 2014		December 31, 2013
	(in millions)
Total Assets:
Aerospace Systems	$	3,252	$	3,175
Electronic Systems		6,993		6,895
Communication Systems		2,128		2,130
NSS		1,338		1,247
Corporate		354		562
Consolidated total	$	14,065	$	14,009

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Accounting Standards Issued and Not Yet Implemented

3 Months Ended

Mar. 28, 2014

Accounting Changes And Error Corrections [Abstract]

Accounting Standards Issued and Not Yet Implemented

22.  Accounting Standards Issued and Not Yet Implemented

In April 2014, the FASB issued an accounting standards update that provides new guidance on the accounting and reporting of discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Additionally, the new guidance requires additional disclosures about discontinued operations. The update is effective for the Company for interim and annual periods beginning January 1, 2015. The adoption of this standard is not expected to impact the Company’s financial position, results of operations or cash flows and will only affect the treatment of future discontinued operations.

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Consolidated Statements of Equity (Parenthetical) (USD $)	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Class of Stock [Line Items]
Cash dividends paid on common stock, per share	$ 0.60	$ 0.55
Retained Earnings [Member]
Class of Stock [Line Items]
Cash dividends paid on common stock, per share	$ 0.60	$ 0.55

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Employee Severance and Termination Costs

3 Months Ended

Mar. 28, 2014

Restructuring And Related Activities [Abstract]

Employee Severance and Termination Costs

23.  Employee Severance and Termination Costs

Consistent with the Company’s strategy to continuously improve its cost structure and right-size its businesses, especially in view of sequestration and other DoD budget reductions, L-3 is completing employment reduction actions across several of its businesses to reduce both direct and indirect costs, including overhead and general and administrative costs. As a result of these initiatives and due to the impact of sequestration at certain affected business units, the Company recorded $8 million in employee severance and other termination costs with respect to approximately 570 employees during the quarter period ended March 28, 2014. During the year ended December 31, 2013, the Company recorded a total of $29 million in employee severance and other termination costs with respect to approximately 2,000 employees. Employee severance and other termination costs are reported within cost of sales on the unaudited condensed consolidated statement of operations. The remaining balance to be paid in connection with these initiatives was $13 million at March 28, 2014 and $11 million at December 31, 2013. Employee severance and other termination costs incurred by reportable segment for the quarterly periods ended March 28, 2014 and March 29, 2013 are presented in the table below.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Reportable Segment
Aerospace Systems	$	—	$	—
Electronic Systems		4		3
Communication Systems		3		1
NSS		1		1
Consolidated	$	8	$	5

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Pension and Other Employee Benefits - Components of Net Periodic Benefit Cost (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Pension Plans [Member]
Components of net periodic benefit cost:
Service cost	$ 27	$ 32
Interest cost	36	33
Expected return on plan assets	(48)	(42)
Amortization of prior service costs (credits)	1
Amortization of net loss (gain)	4	22
Curtailment loss	1
Net periodic benefit cost	21	45
Postretirement Benefit Plans [Member]
Components of net periodic benefit cost:
Service cost	1	1
Interest cost	2	2
Expected return on plan assets	(1)	(1)
Amortization of prior service costs (credits)	(1)	1
Amortization of net loss (gain)		(1)
Curtailment loss
Net periodic benefit cost	$ 1	$ 2

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Debt (Tables)

3 Months Ended

Mar. 28, 2014

Debt Disclosure [Abstract]

Components of Debt and Reconciliation to Carrying Amount of Long-Term Debt

The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below.

	March 28, 2014			December 31, 2013
	(in millions)
L-3 Communications:
Borrowings under Amended and Restated Revolving Credit Facility(1)	$	—		$	—
3.95% Senior Notes due 2016		500			500
5.20% Senior Notes due 2019		1,000			1,000
4.75% Senior Notes due 2020		800			800
4.95% Senior Notes due 2021		650			650
Subtotal		2,950			2,950
L-3 Holdings:
3% Convertible Contingent Debt Securities due 2035 (CODES)(2)		689			689
Principal amount of long-term debt		3,639			3,639
Unamortized discounts		(8	)		(9	)
Carrying amount of long-term debt	$	3,631		$	3,630

⁽¹⁾  During the quarter ended March 28, 2014, L-3 Communications’ aggregate borrowings and repayments under the Amended and Restated Revolving Credit Facility were $524 million. At March 28, 2014, L-3 Communications had the availability of all of its $1 billion Amended and Restated Revolving Credit Facility, which expires on February 3, 2017.

⁽²⁾  The CODES have been classified as long-term debt at March 28, 2014, because the Company has the ability to draw on the Amended and Restated Revolving Credit Facility to finance the conversion of the CODES.

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Basis of Presentation - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Summary Of Significant Accounting Policies [Line Items]
Percentage of sales accounted for under contract accounting standards	47.00%
Percentage of fixed-price type contracts	38.00%
Percentage of cost-plus type contracts	9.00%
Period of performance for contracts accounted for under the percentage-of-completion method of accounting, minimum	1 year
Increase in operating income due to changes in contract estimates	$ 42	$ 10
Percentage of increase in operating income due to changes in contract estimates	14.00%	3.00%
CODES Due 2035 [Member]
Summary Of Significant Accounting Policies [Line Items]
Interest rate on debt instruments	3.00%
Debt instruments, maturity year	2035

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Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income - Summary of Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning Balance	$ (110)	$ (554)
Other comprehensive loss before reclassifications, net of tax	(18)	(37)
Amounts reclassified from other comprehensive (loss) income, net of tax		13
Net current period other comprehensive (loss) income	(18)	(24)
Ending Balance	(128)	(578)
Cost of sales-products	1,467	1,620
Income before income taxes	267	273
(Provision) benefit for income taxes	(85)	(79)
Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net income		13
Foreign Currency Translation [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning Balance	142	163
Other comprehensive loss before reclassifications, net of tax	(16)	(34)
Amounts reclassified from other comprehensive (loss) income, net of tax
Net current period other comprehensive (loss) income	(16)	(34)
Ending Balance	126	129
Unrealized Gains (Losses) on Hedging Instruments [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning Balance	1	3
Other comprehensive loss before reclassifications, net of tax	(2)	(3)
Amounts reclassified from other comprehensive (loss) income, net of tax	(3)
Net current period other comprehensive (loss) income	(5)	(3)
Ending Balance	(4)
Unrealized Gains (Losses) on Hedging Instruments [Member] | Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Cost of sales-products	(5)
Income before income taxes	(5)
(Provision) benefit for income taxes	2
Net income	(3)
Unrecognized (Losses) Gains and Prior Service Cost, Net [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Beginning Balance	(253)	(720)
Other comprehensive loss before reclassifications, net of tax
Amounts reclassified from other comprehensive (loss) income, net of tax	3	13
Net current period other comprehensive (loss) income	3	13
Ending Balance	(250)	(707)
Accumulated Defined Benefit Plans Adjustment [Member] | Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Net loss	4	22
Income before income taxes	4	22
(Provision) benefit for income taxes	(1)	(9)
Net income	$ 3	$ 13

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Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 227	$ 500
Billed receivables, net of allowances of $24 in 2014 and $26 in 2013	1,093	1,015
Contracts in process	2,763	2,524
Inventories	375	359
Deferred income taxes	118	122
Other current assets	126	129
Total current assets	4,702	4,649
Property, plant and equipment, net	1,028	1,039
Goodwill	7,821	7,796
Identifiable intangible assets	283	285
Deferred debt issue costs	23	24
Other assets	208	216
Total assets	14,065	14,009
Current liabilities:
Accounts payable, trade	590	541
Accrued employment costs	538	543
Accrued expenses	403	455
Advance payments and billings in excess of costs incurred	523	570
Income taxes	22	31
Other current liabilities	380	383
Total current liabilities	2,456	2,523
Pension and postretirement benefits	729	727
Deferred income taxes	679	635
Other liabilities	382	396
Long-term debt	3,631	3,630
Total liabilities	7,877	7,911
Commitments and contingencies (see Note 17)
L-3 shareholders' equity:
L-3 Communications Holdings, Inc.'s common stock: $.01 par value; 300,000,000 shares authorized, 86,423,244 shares outstanding at March 28, 2014 and 85,828,485 shares outstanding at December 31, 2013 (L-3 Communications Corporation's common stock: $.01 par value, 100 shares authorized, issued and outstanding)	5,767	5,653
L-3 Communications Holdings, Inc.'s treasury stock (at cost), 67,335,382 shares at March 28, 2014 and 66,118,406 shares at December 31, 2013	(5,421)	(5,288)
Retained earnings	5,895	5,768
Accumulated other comprehensive loss	(128)	(110)
Total L-3 shareholders' equity	6,113	6,023
Noncontrolling interests	75	75
Total equity	6,188	6,098
Total liabilities and equity	$ 14,065	$ 14,009

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 28, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Notional Amounts of Company's Outstanding Foreign Currency Forward Contracts by Currency

The table below presents the notional amounts of the Company’s outstanding foreign currency forward contracts by currency at March 28, 2014.

Currency	Notional Amounts
	(in millions)
Canadian dollar	$	222
U.S. dollar		115
Euro		83
British pound		13
Other		2
Total	$	435

Location of Company's Derivative Instruments Recorded at Fair Value on Condensed Consolidated Balance Sheets

The table below presents the location of the Company’s derivative instruments recorded at fair value on the condensed consolidated balance sheets.

	March 28, 2014								December 31, 2013
	Other Current Assets		Other Assets		Other Current Liabilities		Other Liabilities		Other Current Assets		Other Assets		Other Current Liabilities		Other Liabilities
	(in millions)
Derivatives designated as hedging instruments:
Foreign currency forward contracts(1)	$	4	$	1	$	7	$	3	$	5	$	1	$	3	$	2
Derivatives not designated as hedging instruments:
Foreign currency forward contracts(1)		—		—		—		—		—		—		—		—
Embedded derivative related to the CODES		—		—		—		—		—		—		—		—
Total derivative instruments	$	4	$	1	$	7	$	3	$	5	$	1	$	3	$	2

⁽¹⁾  See Note 14 for a description of the fair value hierarchy related to the Company’s foreign currency forward contracts.

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Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Statement Of Income And Comprehensive Income [Abstract]
Income tax benefits on unrealized losses on hedging instruments	$ 2	$ 2
Income tax effect on amortization of net loss and prior service cost previously recognized	$ 1	$ 9

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Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries - Condensed Combining Statements of Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Condensed Financial Statements, Captions [Line Items]
Total net sales	$ 2,971	$ 3,185
Total cost of sales	(2,664)	(2,872)
Operating (loss) income	307	313
Interest expense	(43)	(43)
Interest and other income, net	3	3
(Loss) income before income taxes	267	273
(Provision) benefit for income taxes	(85)	(79)
Equity in net income of consolidated subsidiaries
Net income	182	194
Net income attributable to noncontrolling interests	(2)	(1)
Net income attributable to L-3	180	193
Comprehensive income attributable to L-3	162	169
L-3 Communications Holdings, Inc. [Member]
Condensed Financial Statements, Captions [Line Items]
Total net sales
Total cost of sales	(15)	(14)
Operating (loss) income	(15)	(14)
Interest expense	(5)	(5)
Interest and other income, net
(Loss) income before income taxes	(20)	(19)
(Provision) benefit for income taxes	6	5
Equity in net income of consolidated subsidiaries	194	207
Net income	180	193
Net income attributable to noncontrolling interests
Net income attributable to L-3	180	193
Comprehensive income attributable to L-3	162	169
L-3 Communications Corporation [Member]
Condensed Financial Statements, Captions [Line Items]
Total net sales	868	938
Total cost of sales	(774)	(866)
Operating (loss) income	94	72
Interest expense	(43)	(43)
Interest and other income, net	3	2
(Loss) income before income taxes	54	31
(Provision) benefit for income taxes	(17)	(9)
Equity in net income of consolidated subsidiaries	143	171
Net income	180	193
Net income attributable to noncontrolling interests
Net income attributable to L-3	180	193
Comprehensive income attributable to L-3	162	169
Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Total net sales	1,631	1,735
Total cost of sales	(1,471)	(1,554)
Operating (loss) income	160	181
Interest expense
Interest and other income, net
(Loss) income before income taxes	160	181
(Provision) benefit for income taxes	(51)	(52)
Equity in net income of consolidated subsidiaries
Net income	109	129
Net income attributable to noncontrolling interests
Net income attributable to L-3	109	129
Comprehensive income attributable to L-3	106	129
Non-Guarantor Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Total net sales	546	591
Total cost of sales	(493)	(531)
Operating (loss) income	53	60
Interest expense
Interest and other income, net		1
(Loss) income before income taxes	53	61
(Provision) benefit for income taxes	(17)	(18)
Equity in net income of consolidated subsidiaries
Net income	36	43
Net income attributable to noncontrolling interests
Net income attributable to L-3	36	43
Comprehensive income attributable to L-3	19	6
Eliminations [Member]
Condensed Financial Statements, Captions [Line Items]
Total net sales	(74)	(79)
Total cost of sales	89	93
Operating (loss) income	15	14
Interest expense	5	5
Interest and other income, net
(Loss) income before income taxes	20	19
(Provision) benefit for income taxes	(6)	(5)
Equity in net income of consolidated subsidiaries	(337)	(378)
Net income	(323)	(364)
Net income attributable to noncontrolling interests	(2)	(1)
Net income attributable to L-3	(325)	(365)
Comprehensive income attributable to L-3	$ (287)	$ (304)

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Inventories - Inventories at Lower of Cost or Market (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Raw materials, components and sub-assemblies	$ 166	$ 160
Work in process	128	125
Finished goods	81	74
Total	$ 375	$ 359

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Acquisitions (Tables)

3 Months Ended

Mar. 28, 2014

Business Combinations [Abstract]

Unaudited Pro Forma Statements of Operations Data

The following unaudited pro forma Statements of Operations data presents the combined results of the Company and its business acquisitions completed during the quarter ended March 28, 2014 and the year ended December 31, 2013, in each case assuming that the business acquisitions completed during these periods had occurred on January 1, 2013.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions, except per share data)
Pro forma net sales	$	2,978	$	3,203
Pro forma net income attributable to L-3	$	179	$	193
Pro forma diluted earnings per share	$	2.00	$	2.11

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Other Current Liabilities and Other Liabilities - Other Current Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Other Current Liabilities:
Accruals for pending and threatened litigation (see Note 17)	$ 7	$ 6
Accrued product warranty costs	76	75
Estimated costs in excess of estimated contract value to complete contracts in process in a loss position	73	78
Accrued interest	46	52
Deferred revenues	40	35
Other	138	137
Total other current liabilities	$ 380	$ 383

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L-3 Holdings' Earnings Per Common Share

3 Months Ended

Mar. 28, 2014

Earnings Per Share [Abstract]

L-3 Holdings' Earnings Per Common Share

13.  L-3 Holdings’ Earnings Per Common Share

A reconciliation of basic and diluted earnings per share (EPS) is presented in the table below.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions, except per share data)
Reconciliation of net income:
Net income	$	182		$	194
Net income attributable to noncontrolling interests		(2	)		(1	)
Net income attributable to L-3 Holdings’ common shareholders	$	180		$	193
Earnings per share attributable to L-3 Holdings’ common shareholders:
Basic:
Weighted average common shares outstanding		86.1			90.3
Basic earnings per share:
Net income	$	2.09		$	2.14
Diluted:
Common and potential common shares:
Weighted average common shares outstanding		86.1			90.3
Assumed exercise of stock options		3.4			3.4
Unvested restricted stock awards		1.7			1.7
Employee stock purchase plan contributions		—			0.2
Performance unit awards		0.2			0.1
Assumed purchase of common shares for treasury		(3.5	)		(4.2	)
Assumed conversion of the CODES(1)		1.5			—
Common and potential common shares		89.4			91.5
Diluted earnings per share:
Net income	$	2.01		$	2.11

⁽¹⁾  L-3 Holdings’ CODES had no impact on diluted EPS for the quarterly period ended March 29, 2013 as the average market price of L-3 Holdings common stock during this period was less than the price at which the CODES would have been convertible into L-3 Holdings common stock. As of March 28, 2014, the conversion price was $89.08.

The computation of diluted EPS excluded stock options and employee stock purchase plan contributions of 0.4 million and stock options of 1.8 million for the quarterly periods ended March 28, 2014 and March 29, 2013, respectively, as they were anti-dilutive.

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Contracts in Process (Tables)

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Components of Contracts in Process

The components of contracts in process are presented in the table below.

	March 28, 2014			December 31, 2013
	(in millions)
Unbilled contract receivables, gross	$	2,685		$	2,547
Unliquidated progress payments		(990	)		(1,035	)
Unbilled contract receivables, net		1,695			1,512
Inventoried contract costs, gross		1,145			1,093
Unliquidated progress payments		(77	)		(81	)
Inventoried contract costs, net		1,068			1,012
Total contracts in process	$	2,763		$	2,524

General and Administrative, Independent Research and Development and Bids and Proposal Costs

The table below presents a summary of G&A, IRAD and B&P costs included in inventoried contract costs and the changes to them, including amounts charged to cost of sales by the Company’s U.S. Government contractor businesses for the periods presented.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Amounts included in inventoried contract costs at beginning of the period	$	138		$	110
IRAD and B&P costs		72			73
Other G&A costs		204			205
Total contract costs incurred		276			278
Amounts charged to cost of sales		(273	)		(275	)
Amounts included in inventoried contract costs at end of the period	$	141		$	113

Selling, General and Administrative Expenses and Research and Development Expenses

The table below presents a summary of selling, general and administrative expenses and research and development expenses for the Company’s commercial businesses, which are expensed as incurred and not included in inventoried contract costs.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Selling, general and administrative expenses	$	71	$	72
Research and development expenses		17		20
Total	$	88	$	92

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Financial Instruments

3 Months Ended

Mar. 28, 2014

Investments All Other Investments [Abstract]

Financial Instruments

15.  Financial Instruments

At March 28, 2014 and December 31, 2013, the Company’s financial instruments consisted primarily of cash and cash equivalents, billed receivables, trade accounts payable, Senior Notes, CODES and foreign currency forward contracts. The carrying amounts of cash and cash equivalents, billed receivables and trade accounts payable are representative of their respective fair values because of their short-term maturities or the expected settlement dates of these instruments. The carrying amounts and estimated fair values of the Company’s other financial instruments are presented in the table below.

	March 28, 2014						December 31, 2013
	Carrying Amount			Estimated Fair Value			Carrying Amount		Estimated Fair Value
	(in millions)
Senior Notes(1)	$	2,942		$	3,168		$	2,941	$	3,121
CODES(1)		689			911			689		830
Foreign currency forward contracts(2)		(5	)		(5	)		1		1

⁽¹⁾  The Company measures the fair value of its Senior Notes and CODES using Level 2 inputs based primarily on current market yields for its existing debt traded in the secondary market.

⁽²⁾  See Note 16 for additional disclosures regarding the notional amounts and fair values of foreign currency forward contracts.

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Debt - Components of Debt and Reconciliation to Carrying Amount of Long-Term Debt (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
L-3 Communications Corporation [Member]
Debt Instrument [Line Items]
Borrowings under Amended and Restated Revolving Credit Facility
3.95% Senior Notes due 2016	500	500
5.20% Senior Notes due 2019	1,000	1,000
4.75% Senior Notes due 2020	800	800
4.95% Senior Notes due 2021	650	650
Subtotal	2,950	2,950
L-3 Communications Holdings, Inc. [Member]
Debt Instrument [Line Items]
3% Convertible Contingent Debt Securities due 2035 (CODES)	689	689
Principal amount of long-term debt	3,639	3,639
Unamortized discounts	(8)	(9)
Carrying amount of long-term debt	$ 3,631	$ 3,630

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Consolidated Statements of Equity (USD $) In Millions, except Share data, unless otherwise specified	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Noncontrolling Interests [Member]
Beginning Balance at Dec. 31, 2012	$ 5,543	$ 1	$ 5,313	$ (4,488)	$ 5,191	$ (550)	$ 76
Beginning Balance, Shares at Dec. 31, 2012		90,400,000
Class of Stock [Line Items]
Net income	194				193		1
Other comprehensive income	(24)					(24)
Distributions to noncontrolling interests	(2)						(2)
Cash dividends paid on common stock	(50)				(50)
Shares issued:
Employee savings plans	37		37
Employee savings plans, Shares		500,000
Exercise of stock options	16		16
Exercise of stock options, Shares		300,000
Employee stock purchase plan
Employee stock purchase plan, Shares		300,000
Stock-based compensation expense	14		14
Treasury stock purchased	(122)			(122)
Treasury stock purchased, Shares		(1,600,000)
Other	(14)		(14)
Other, Shares		300,000
Ending Balance at Mar. 29, 2013	5,592	1	5,366	(4,610)	5,334	(574)	75
Ending Balance, Shares at Mar. 29, 2013		90,200,000
Beginning Balance at Dec. 31, 2013	6,098	1	5,652	(5,288)	5,768	(110)	75
Beginning Balance, Shares at Dec. 31, 2013		85,800,000
Class of Stock [Line Items]
Net income	182				180		2
Other comprehensive income	(18)					(18)
Distributions to noncontrolling interests	(2)						(2)
Cash dividends paid on common stock	(52)				(52)
Shares issued:
Employee savings plans	44		44
Employee savings plans, Shares		400,000
Exercise of stock options	81		81
Exercise of stock options, Shares		900,000
Employee stock purchase plan
Employee stock purchase plan, Shares		200,000
Stock-based compensation expense	15		15
Treasury stock purchased	(133)			(133)
Treasury stock purchased, Shares		(1,200,000)
Other	(27)		(26)		(1)
Other, Shares		300,000
Ending Balance at Mar. 28, 2014	$ 6,188	$ 1	$ 5,766	$ (5,421)	$ 5,895	$ (128)	$ 75
Ending Balance, Shares at Mar. 28, 2014		86,400,000

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Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Class of Stock [Line Items]
Net allowances for billed receivables	$ 24	$ 26
Treasury stock (at cost), shares	67,335,382	66,118,406
L-3 Communications Holdings, Inc. [Member]
Class of Stock [Line Items]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares outstanding	86,423,244	85,828,485
L-3 Communications Corporation [Member]
Class of Stock [Line Items]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100	100
Common stock, shares issued	100	100
Common stock, shares outstanding	100	100

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Other Current Liabilities and Other Liabilities

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Other Current Liabilities and Other Liabilities

8.  Other Current Liabilities and Other Liabilities

The table below presents the components of other current liabilities.

	March 28, 2014		December 31, 2013
	(in millions)
Other Current Liabilities:
Accruals for pending and threatened litigation (see Note 17)	$	7	$	6
Accrued product warranty costs		76		75
Estimated costs in excess of estimated contract value to complete contracts in process in a loss position		73		78
Accrued interest		46		52
Deferred revenues		40		35
Other		138		137
Total other current liabilities	$	380	$	383

The table below presents the components of other liabilities.

	March 28, 2014		December 31, 2013
	(in millions)
Other Liabilities:
Non-current income taxes payable (see Note 10)	$	167	$	167
Deferred compensation		47		45
Accrued workers’ compensation		42		46
Accrued product warranty costs		21		24
Notes payable and capital lease obligations		12		15
Other		93		99
Total other liabilities	$	382	$	396

The table below presents the changes in the Company’s accrued product warranty costs.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Accrued product warranty costs:(1)
Balance at January 1	$	99		$	99
Accruals for product warranties issued during the period		17			19
Settlements made during the period		(19	)		(20	)
Foreign currency translation adjustments		—			(1	)
Balance at end of period	$	97		$	97

⁽¹⁾  Warranty obligations incurred in connection with long-term production contracts that are accounted for under the POC cost-to-cost method are included within the contract estimates at completion and are excluded from the above amounts. The balances above include both the current and non-current amounts.

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Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries - Condensed Combining Balance Sheets (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013	Mar. 29, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 227	$ 500	$ 276	$ 349
Billed receivables, net	1,093	1,015
Contracts in process	2,763	2,524
Other current assets	619	610
Total current assets	4,702	4,649
Goodwill	7,821	7,796
Other assets	1,542	1,564
Investment in and amounts due from consolidated subsidiaries
Total assets	14,065	14,009
Current liabilities	2,456	2,523
Amounts due to consolidated subsidiaries
Other long-term liabilities	1,790	1,758
Long-term debt	3,631	3,630
Total liabilities	7,877	7,911
L-3 shareholders' equity	6,113	6,023
Noncontrolling interests	75	75
Total equity	6,188	6,098	5,592	5,543
Total liabilities and equity	14,065	14,009
L-3 Communications Holdings, Inc. [Member]
Current assets:
Cash and cash equivalents
Billed receivables, net
Contracts in process
Other current assets
Total current assets
Goodwill
Other assets
Investment in and amounts due from consolidated subsidiaries	6,802	6,712
Total assets	6,802	6,712
Current liabilities
Amounts due to consolidated subsidiaries
Other long-term liabilities
Long-term debt	689	689
Total liabilities	689	689
L-3 shareholders' equity	6,113	6,023
Noncontrolling interests
Total equity	6,113	6,023
Total liabilities and equity	6,802	6,712
L-3 Communications Corporation [Member]
Current assets:
Cash and cash equivalents	57	258	66	246
Billed receivables, net	343	364
Contracts in process	1,029	951
Other current assets	296	281
Total current assets	1,725	1,854
Goodwill	2,335	2,335
Other assets	784	807
Investment in and amounts due from consolidated subsidiaries	7,287	7,007
Total assets	12,131	12,003
Current liabilities	909	909
Amounts due to consolidated subsidiaries
Other long-term liabilities	1,478	1,441
Long-term debt	3,631	3,630
Total liabilities	6,018	5,980
L-3 shareholders' equity	6,113	6,023
Noncontrolling interests
Total equity	6,113	6,023
Total liabilities and equity	12,131	12,003
Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents
Billed receivables, net	483	425
Contracts in process	1,330	1,209
Other current assets	148	160
Total current assets	1,961	1,794
Goodwill	4,326	4,325
Other assets	517	529
Investment in and amounts due from consolidated subsidiaries	3,626	3,713
Total assets	10,430	10,361
Current liabilities	925	1,005
Amounts due to consolidated subsidiaries
Other long-term liabilities	191	193
Long-term debt
Total liabilities	1,116	1,198
L-3 shareholders' equity	9,314	9,163
Noncontrolling interests
Total equity	9,314	9,163
Total liabilities and equity	10,430	10,361
Non-Guarantor Subsidiaries [Member]
Current assets:
Cash and cash equivalents	182	261	223	242
Billed receivables, net	267	226
Contracts in process	404	364
Other current assets	175	169
Total current assets	1,028	1,020
Goodwill	1,160	1,136
Other assets	241	228
Investment in and amounts due from consolidated subsidiaries
Total assets	2,429	2,384
Current liabilities	634	628
Amounts due to consolidated subsidiaries	356	246
Other long-term liabilities	121	124
Long-term debt
Total liabilities	1,111	998
L-3 shareholders' equity	1,318	1,386
Noncontrolling interests
Total equity	1,318	1,386
Total liabilities and equity	2,429	2,384
Eliminations [Member]
Current assets:
Cash and cash equivalents	(12)	(19)	(13)	(139)
Billed receivables, net
Contracts in process
Other current assets
Total current assets	(12)	(19)
Goodwill
Other assets
Investment in and amounts due from consolidated subsidiaries	(17,715)	(17,432)
Total assets	(17,727)	(17,451)
Current liabilities	(12)	(19)
Amounts due to consolidated subsidiaries	(356)	(246)
Other long-term liabilities
Long-term debt	(689)	(689)
Total liabilities	(1,057)	(954)
L-3 shareholders' equity	(16,745)	(16,572)
Noncontrolling interests	75	75
Total equity	(16,670)	(16,497)
Total liabilities and equity	$ (17,727)	$ (17,451)

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Employee Severance and Termination Costs - Employee Severance and Other Termination Costs Incurred by Reportable Segment (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 28, 2014	Mar. 29, 2013	Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
Employee severance and other related termination costs	$ 8	$ 5	$ 29
Aerospace Systems [Member]
Restructuring Cost and Reserve [Line Items]
Employee severance and other related termination costs
Electronic Systems [Member]
Restructuring Cost and Reserve [Line Items]
Employee severance and other related termination costs	4	3
Communication Systems [Member]
Restructuring Cost and Reserve [Line Items]
Employee severance and other related termination costs	3	1
NSS [Member]
Restructuring Cost and Reserve [Line Items]
Employee severance and other related termination costs	$ 1	$ 1

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Document and Entity Information	3 Months Ended
	Mar. 28, 2014	Apr. 23, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 28, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	LLL
Entity Registrant Name	L 3 COMMUNICATIONS HOLDINGS INC
Entity Central Index Key	0001056239
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		86,232,242

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Debt

3 Months Ended

Mar. 28, 2014

Debt Disclosure [Abstract]

Debt

9.  Debt

The components of debt and a reconciliation to the carrying amount of long-term debt is presented in the table below.

	March 28, 2014			December 31, 2013
	(in millions)
L-3 Communications:
Borrowings under Amended and Restated Revolving Credit Facility(1)	$	—		$	—
3.95% Senior Notes due 2016		500			500
5.20% Senior Notes due 2019		1,000			1,000
4.75% Senior Notes due 2020		800			800
4.95% Senior Notes due 2021		650			650
Subtotal		2,950			2,950
L-3 Holdings:
3% Convertible Contingent Debt Securities due 2035 (CODES)(2)		689			689
Principal amount of long-term debt		3,639			3,639
Unamortized discounts		(8	)		(9	)
Carrying amount of long-term debt	$	3,631		$	3,630

⁽¹⁾  During the quarter ended March 28, 2014, L-3 Communications’ aggregate borrowings and repayments under the Amended and Restated Revolving Credit Facility were $524 million. At March 28, 2014, L-3 Communications had the availability of all of its $1 billion Amended and Restated Revolving Credit Facility, which expires on February 3, 2017.

⁽²⁾  The CODES have been classified as long-term debt at March 28, 2014, because the Company has the ability to draw on the Amended and Restated Revolving Credit Facility to finance the conversion of the CODES.

L-3 Holdings

Under select conditions, including if L-3 Holdings’ common stock price is more than 120% (currently $106.90) of the then current conversion price (currently $89.08) for a specified period, the conversion feature of the CODES will require L-3 Holdings, upon conversion, to pay the holders of the CODES the principal amount in cash, and if the settlement amount exceeds the principal amount, the excess will be settled in cash or stock or a combination thereof, at the Company’s option. The current conversion rate is 11.2259 shares of common stock per $1,000 aggregate principal amount of CODES, which is equal to a conversion price of approximately $89.08 per share. At the current conversion price, the aggregate consideration to be delivered upon conversion would be determined based on 7.7 million shares of L-3 Holdings’ common stock. See Note 10 to the audited consolidated financial statements for the year ended December 31, 2013, included in the Company’s Annual Report on Form 10-K, for additional information regarding the CODES, including conditions for conversion.

On March 31, 2014, the Company notified holders of the CODES that they are currently entitled to convert all or a portion of their CODES. The CODES are convertible because the closing price of L-3 Holdings common stock, for at least 20 trading days during the 30 consecutive trading-day period ended on March 28, 2014 (the last trading day of the previous fiscal quarter), was greater than $106.90 (120% of the then current conversion price of $89.08) (the “trading price condition”). Holders’ right to convert pursuant to the trading price condition began March 31, 2014 and ends on June 27, 2014. As previously announced, the Company intends to settle the entire conversion payment obligation with respect to converted CODES, if any, in cash.

Interest expense recognized was $5 million for both quarterly periods ended March 28, 2014 and March 29, 2013. The carrying amount of the equity component (conversion feature) of the CODES was $64 million at March 28, 2014 and December 31, 2013.

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Derivative Financial Instruments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Derivative [Line Items]
Estimated amount of existing gains expected to be reclassified into income within the next 12 months	$ 4
CODES Due 2035 [Member]
Derivative [Line Items]
Fair value of embedded derivative related to the issuance of the CODES	$ 0	$ 0

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Employee Severance and Termination Costs - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 28, 2014 Employees	Mar. 29, 2013	Dec. 31, 2013 Employees
Restructuring And Related Activities [Abstract]
Employee severance and other related termination costs	$ 8	$ 5	$ 29
Number of employees terminated	570		2,000
Remaining balance of employee termination costs	$ 13		$ 11

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Consolidated Statements of Operations (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Net sales:
Products	$ 1,661	$ 1,813
Services	1,310	1,372
Total net sales	2,971	3,185
Cost of sales:
Products	(1,467)	(1,620)
Services	(1,197)	(1,252)
Total cost of sales	(2,664)	(2,872)
Operating income	307	313
Interest expense	(43)	(43)
Interest and other income, net	3	3
Income before income taxes	267	273
Provision for income taxes	(85)	(79)
Net income	182	194
Net income attributable to noncontrolling interests	(2)	(1)
Net income attributable to L-3	$ 180	$ 193
Earnings per share attributable to L-3 Holdings' common shareholders:
Basic	$ 2.09	$ 2.14
Diluted	$ 2.01	$ 2.11
Cash dividends paid per common share	$ 0.60	$ 0.55
L-3 Holdings' weighted average common shares outstanding:
Basic	86.1	90.3
Diluted	89.4	91.5

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New Accounting Standards

3 Months Ended

Mar. 28, 2014

Accounting Changes And Error Corrections [Abstract]

New Accounting Standards

3.  New Accounting Standards

Effective January 1, 2014, the Company adopted Financial Accounting Standards Board (FASB) issued amendments to an accounting standard that require an unrecognized tax benefit or portion of an unrecognized tax benefit to be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except when certain conditions exist. The adoption of this standard did not impact the Company’s financial position, results of operations or cash flows.

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Basis of Presentation

3 Months Ended

Mar. 28, 2014

Accounting Policies [Abstract]

Basis of Presentation

2.  Basis of Presentation

These unaudited condensed consolidated financial statements for the quarterly period ended March 28, 2014 should be read in conjunction with the audited consolidated financial statements of L-3 Holdings and L-3 Communications included in their Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Principles of Consolidation and Reporting

The accompanying financial statements comprise the consolidated financial statements of L-3 Holdings and L-3 Communications. L-3 Holdings’ only asset is its investment in the common stock of L-3 Communications, its wholly-owned subsidiary, and its only obligations are: (1) the 3% Convertible Contingent Debt Securities (CODES) due 2035, which were issued by L-3 Holdings on July 29, 2005, (2) its guarantee of borrowings under the Amended and Restated Revolving Credit Facility of L-3 Communications and (3) its guarantee of other contractual obligations of L-3 Communications and its subsidiaries. L-3 Holdings’ obligations relating to the CODES have been jointly, severally, fully and unconditionally guaranteed by L-3 Communications and certain of its wholly-owned domestic subsidiaries. Accordingly, such debt has been reflected as debt of L-3 Communications in its consolidated financial statements in accordance with the accounting standards for pushdown accounting. All issuances of and conversions into L-3 Holdings’ equity securities, including grants of stock options, restricted stock, restricted stock units and performance units by L-3 Holdings to employees and directors of L-3 Communications and its subsidiaries, have been reflected in the consolidated financial statements of L-3 Communications. As a result, the consolidated financial positions, results of operations and cash flows of L-3 Holdings and L-3 Communications are substantially the same. See Note 24 for additional information regarding the unaudited financial information of L-3 Communications and its subsidiaries.

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the disclosures required by U.S. GAAP for a complete set of annual audited financial statements. The December 31, 2013 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation of the results for the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year.

It is the Company’s established practice to close its books for the quarters ending March, June and September on the Friday nearest to the end of the calendar quarter. The interim unaudited condensed consolidated financial statements included herein have been prepared and are labeled based on that convention. The Company closes its books for annual periods on December 31 regardless of what day it falls on.

Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs of sales during the reporting period. The most significant of these estimates and assumptions for L-3 relate to contract revenue, profit and loss recognition, fair values of assets acquired and liabilities assumed in business combinations, market values for inventories reported at lower of cost or market, pension and post-retirement benefit obligations, stock-based employee compensation expense, income taxes, including the valuation of deferred tax assets, litigation reserves and environmental obligations, accrued product warranty costs, and the recoverability, useful lives and valuation of recorded amounts of long-lived assets, identifiable intangible assets and goodwill. Changes in estimates are reflected in the periods during which they become known. Actual amounts will differ from these estimates and could differ materially.

Sales and profits on contracts that are covered by accounting standards for construction-type and production-type contracts and federal government contractors are recognized using percentage-of-completion (POC) methods of accounting. Approximately 47% of the Company’s net sales in 2013 were accounted for under contract accounting standards, of which approximately 38% were fixed-price type contracts and approximately 9% were cost-plus type contracts. For contracts accounted for under contract accounting standards, sales and profits are recognized based on: (1) a POC method of accounting (fixed-price contracts), (2) allowable costs incurred plus the estimated profit on those costs (cost-plus contracts), or (3) direct labor hours expended multiplied by the contractual fixed rate per hour plus incurred costs for material (time-and-material contracts). Sales and profits on fixed-price production contracts under which units are produced and delivered in a continuous or sequential process are recorded as units are delivered based on their contractual selling prices (the “units-of-delivery” method). Sales and profits on each fixed-price production contract under which units are not produced and delivered in a continuous or sequential process, or under which a relatively few number of units are produced, are recorded based on the ratio of actual cumulative costs incurred to total estimated costs at completion of the contract multiplied by the total estimated contract revenue, less cumulative sales recognized in prior periods (the “cost-to-cost” method). Under both POC methods of accounting, a single estimated total profit margin is used to recognize profit for each contract over its entire period of performance, which can exceed one year.

Accounting for the sales and profit on these fixed-price type contracts requires the preparation of estimates of: (1) the total contract revenue, (2) the total costs at completion, which is equal to the sum of the actual incurred costs to date on the contract and the estimated costs to complete the contract’s statement of work, and (3) the measurement of progress towards completion. The estimated profit or loss at completion on a contract is equal to the difference between the total estimated contract revenue and the total estimated cost at completion. The profit recorded on a contract in any period using either the units-of-delivery method or cost-to-cost method is equal to the current estimated total profit margin multiplied by the cumulative sales recognized, less the amount of cumulative profit previously recorded for the contract.

Sales and profits on cost-plus type contracts that are covered by contract accounting standards are recognized as allowable costs are incurred on the contract, at an amount equal to the allowable costs plus the estimated profit on those costs. The estimated profit on a cost-plus type contract is fixed or variable based on the contractual fee arrangement. Incentive and award fees are the primary variable fee contractual arrangement types for the Company. Incentive and award fees on cost-plus type contracts are included as an element of total estimated contract revenues and are recorded to sales when a basis exists for the reasonable prediction of performance in relation to established contractual targets and the Company is able to make reasonably dependable estimates for them.

Sales and profits on time-and-material type contracts are recognized on the basis of direct labor hours expended multiplied by the contractual fixed rate per hour, plus the actual costs of materials and other direct non-labor costs.

Revisions or adjustments to estimates for a contract’s revenue, estimated costs at completion and estimated profit or loss are often required as work progresses under a contract, as experience is gained, as facts and circumstances change and as new information is obtained, even though the scope of work required under the contract may not change. Revisions or adjustments may also be required if contract modifications occur. The impact of revisions in profit (loss) estimates for all types of contracts subject to POC accounting are recognized on a cumulative catch-up basis in the period in which the revisions are made. The revisions in contract estimates, if significant, can materially affect the Company’s results of operations and cash flows, as well as reduce the valuations of receivables and inventories, and in some cases result in liabilities to complete contracts in a loss position. Aggregate net changes in contract estimates increased consolidated operating income by $42 million, or 14%, for the quarterly period ended March 28, 2014 and $10 million, or 3%, for the quarterly period ended March 29, 2013.

For a more complete discussion of these estimates and assumptions, see the Annual Report of L-3 Holdings and L-3 Communications on Form 10-K for the fiscal year ended December 31, 2013.

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Fair Value Measurements

3 Months Ended

Mar. 28, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

14.  Fair Value Measurements

The following table presents the fair value hierarchy level for each of the Company’s assets and liabilities that are measured and recorded at fair value on a recurring basis.

	March 28, 2014						December 31, 2013
Description	Level 1(1)		Level 2(2)		Level 3(3)		Level 1(1)		Level 2(2)		Level 3(3)
	(in millions)
Assets
Cash equivalents	$	22	$	—	$	—	$	299	$	—	$	—
Derivatives (foreign currency forward contracts)		—		5		—		—		6		—
Total Assets	$	22	$	5	$	—	$	299	$	6	$	—
Liabilities
Derivatives (foreign currency forward contracts)	$	—	$	10	$	—	$	—	$	5	$	—

⁽¹⁾  Level 1 is based on quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Cash equivalents are primarily held in registered money market funds, which are valued using quoted market prices.

⁽²⁾  Level 2 is based on pricing inputs other than quoted prices in active markets, which are either directly or indirectly observable. The fair value is determined using a valuation model based on observable market inputs, including quoted foreign currency forward exchange rates and consideration of non-performance risk.

⁽³⁾  Level 3 is based on pricing inputs that are not observable and not corroborated by market data. The Company has no Level 3 assets or liabilities.

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Income Taxes

3 Months Ended

Mar. 28, 2014

Income Tax Disclosure [Abstract]

Income Taxes

10.  Income Taxes

The Company and its subsidiaries file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. As of March 28, 2014, the statutes of limitations for the Company’s U.S. Federal income tax returns for the years ended December 31, 2010 through 2012 were open. The U.S. Internal Revenue Service (IRS) commenced audits of the Company’s U.S. Federal income tax returns for 2011 and 2010. The Company cannot predict the outcome of the audits at this time.

The effective tax rate for the quarter ended March 28, 2014 increased to 31.8% from 28.9% for the quarter ended March 29, 2013. The increase was primarily due to a tax benefit in the quarter ended March 29, 2013 of $12 million related to the U.S. Federal research and experimentation tax credit for 2012 and 2013, which did not recur in the quarter ended March 28, 2014. This increase was partially offset by a lower effective tax rate on foreign earnings.

As of March 28, 2014, the Company anticipates that unrecognized tax benefits will decrease by approximately $7 million over the next 12 months due to the potential resolution of unrecognized tax benefits involving several jurisdictions and tax periods. The actual amount of the decrease over the next 12 months could vary significantly depending on the ultimate timing and nature of any settlement.

Non-current income taxes payable include accrued potential interest of $12 million ($7 million after income taxes) at March 28, 2014 and $11 million ($7 million after income taxes) at December 31, 2013, and potential penalties of $7 million at March 28, 2014 and $8 million at December 31, 2013.

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Pension and Other Employee Benefits - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014
Pension Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Contribution to pension plans	$ 14
Expected contributions to plans	83
Postretirement Benefit Plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Contribution to other postretirement benefit plans	2
Expected contributions to plans	$ 8

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Inventories

3 Months Ended

Mar. 28, 2014

Inventory Disclosure [Abstract]

Inventories

6.  Inventories

Inventories at Lower of Cost or Market. The table below presents the components of inventories at the lower of cost (first-in, first-out or average cost) or realizable value.

	March 28, 2014		December 31, 2013
	(in millions)
Raw materials, components and sub-assemblies	$	166	$	160
Work in process		128		125
Finished goods		81		74
Total	$	375	$	359

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Goodwill and Identifiable Intangible Assets - Changes in Goodwill by Segment (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014
Goodwill [Line Items]
Balance, Beginning	$ 7,796
Business acquisition	40
Foreign currency translation adjustments	(15)
Balance, Ending	7,821
Aerospace Systems [Member]
Goodwill [Line Items]
Balance, Beginning	1,751
Business acquisition
Foreign currency translation adjustments	(9)
Balance, Ending	1,742
Electronic Systems [Member]
Goodwill [Line Items]
Balance, Beginning	4,085
Business acquisition
Foreign currency translation adjustments	(6)
Balance, Ending	4,079
Communication Systems [Member]
Goodwill [Line Items]
Balance, Beginning	992
Business acquisition
Foreign currency translation adjustments
Balance, Ending	992
NSS [Member]
Goodwill [Line Items]
Balance, Beginning	968
Business acquisition	40
Foreign currency translation adjustments
Balance, Ending	$ 1,008

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Acquisitions

3 Months Ended

Mar. 28, 2014

Business Combinations [Abstract]

Acquisitions

4.  Acquisitions

The business acquisitions discussed below are included in the Company’s results of operations from their respective dates of acquisition.

2014 Business Acquisition

On March 4, 2014, the Company acquired Data Tactics Corporation, renamed L-3 Data Tactics, for a purchase price of $57 million, which was financed with cash on hand. The purchase price is subject to adjustment based on closing date actual net assets. L-3 Data Tactics is a specialized provider of large-scale data analytics, cybersecurity and cloud computing solution services, primarily to the DoD. Based on the preliminary purchase price, the aggregate goodwill recognized for this business was $40 million, most of which is expected to be deductible for income tax purposes. The goodwill was assigned to the NSS reportable segment. The final purchase price allocation, which is expected to be completed by the third quarter of 2014, will be based on final purchase price, final appraisals and other analysis of fair values of acquired assets and liabilities. The Company does not expect that differences between the preliminary and final purchase price allocations will have a material impact on its results of operations or financial position.

2013 Business Acquisition

On December 19, 2013, the Company acquired Mustang Technology Group, L.P. (Mustang) business for a purchase price of $54 million, which was financed with cash on hand. The purchase price is subject to adjustment based on closing date net working capital. Mustang develops and manufactures radar-based sensors and systems used in precision-guided weapons, electronic warfare, unmanned systems and other military applications. Based on the preliminary purchase price allocations, the aggregate goodwill recognized for this business was $44 million, most of which is expected to be deductible for income tax purposes. The goodwill was assigned to the Electronic Systems reportable segment. The final purchase price allocation is expected to be completed in the second quarter of 2014 and will be based on final purchase price, final appraisals and other analysis of fair values of acquired assets and liabilities. The Company does not expect that differences between the preliminary and final purchase price allocations will have a material impact on its results of operations or financial position.

Unaudited Pro Forma Statements of Operations Data

The following unaudited pro forma Statements of Operations data presents the combined results of the Company and its business acquisitions completed during the quarter ended March 28, 2014 and the year ended December 31, 2013, in each case assuming that the business acquisitions completed during these periods had occurred on January 1, 2013.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions, except per share data)
Pro forma net sales	$	2,978	$	3,203
Pro forma net income attributable to L-3	$	179	$	193
Pro forma diluted earnings per share	$	2.00	$	2.11

The unaudited pro forma results disclosed in the table above are based on various assumptions and are not necessarily indicative of the results of operations that would have occurred had the Company completed these acquisitions on January 1, 2013.

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Contracts in Process

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Contracts in Process

5.  Contracts in Process

The components of contracts in process are presented in the table below.

	March 28, 2014			December 31, 2013
	(in millions)
Unbilled contract receivables, gross	$	2,685		$	2,547
Unliquidated progress payments		(990	)		(1,035	)
Unbilled contract receivables, net		1,695			1,512
Inventoried contract costs, gross		1,145			1,093
Unliquidated progress payments		(77	)		(81	)
Inventoried contract costs, net		1,068			1,012
Total contracts in process	$	2,763		$	2,524

Inventoried Contract Costs. In accordance with contract accounting standards, the Company’s U.S. Government contractor businesses account for the portion of their general and administrative (G&A), independent research and development (IRAD) and bids and proposal (B&P) costs that are allowable and reimbursable indirect contract costs under U.S. Government procurement regulations on their U.S. Government contracts (revenue arrangements) as inventoried contract costs. G&A, IRAD and B&P costs are allocated to contracts for which the U.S. Government is the end customer and are charged to costs of sales when sales on the related contracts are recognized. The Company’s U.S. Government contractor businesses record the unallowable portion of their G&A, IRAD and B&P costs to expense as incurred, and do not include them in inventoried contract costs.

The table below presents a summary of G&A, IRAD and B&P costs included in inventoried contract costs and the changes to them, including amounts charged to cost of sales by the Company’s U.S. Government contractor businesses for the periods presented.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Amounts included in inventoried contract costs at beginning of the period	$	138		$	110
IRAD and B&P costs		72			73
Other G&A costs		204			205
Total contract costs incurred		276			278
Amounts charged to cost of sales		(273	)		(275	)
Amounts included in inventoried contract costs at end of the period	$	141		$	113

The table below presents a summary of selling, general and administrative expenses and research and development expenses for the Company’s commercial businesses, which are expensed as incurred and not included in inventoried contract costs.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Selling, general and administrative expenses	$	71	$	72
Research and development expenses		17		20
Total	$	88	$	92

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Goodwill and Identifiable Intangible Assets

3 Months Ended

Mar. 28, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Identifiable Intangible Assets

7.  Goodwill and Identifiable Intangible Assets

Goodwill. In accordance with the accounting standards for business combinations, the Company records the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition (commonly referred to as the purchase price allocation). The table below presents the changes in goodwill by segment for the quarter ended March 28, 2014.

	Aerospace Systems			Electronic Systems			Communication Systems		NSS		Consolidated Total
	(in millions)
Balance at December 31, 2013	$	1,751		$	4,085		$	992	$	968	$	7,796
Business acquisition(1)		—			—			—		40		40
Foreign currency translation adjustments(2)		(9	)		(6	)		—		—		(15	)
Balance at March 28, 2014	$	1,742		$	4,079		$	992	$	1,008	$	7,821

⁽¹⁾  The increase in goodwill for the NSS segment is due to the L-3 Data Tactics business acquisition.

⁽²⁾  The decrease in goodwill presented in the Aerospace Systems and Electronic Systems segments was primarily due to the strengthening of the U.S. dollar against the Canadian dollar during the quarter ended March 28, 2014.

The Company’s accumulated goodwill impairment losses were $58 million at March 28, 2014 and December 31, 2013, of which $43 million and $15 million were recorded in the Electronic Systems and Communication Systems segments, respectively.

Identifiable Intangible Assets. The table below presents information for the Company’s identifiable intangible assets that are subject to amortization.

	March 28, 2014								December 31, 2013
	Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in years)						(in millions)
Customer contractual relationships		19	$	474	$	261	$	213	$	466	$	253	$	213
Technology		11		168		110		58		168		108		60
Other		17		27		15		12		27		15		12
Total		17	$	669	$	386	$	283	$	661	$	376	$	285

The table below presents amortization expense recorded by the Company for its identifiable intangible assets.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Amortization Expense	$	10	$	9

Based on gross carrying amounts at March 28, 2014, the Company’s estimate of amortization expense for identifiable intangible assets for the years ending December 31, 2014 through 2018 is presented in the table below.

	Year Ending December 31,
	2014		2015		2016		2017		2018
	(in millions)
Estimated amortization expense	$	43	$	41	$	34	$	32	$	26

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Goodwill and Identifiable Intangible Assets - Estimated Amortization Expense (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
Estimated amortization expense, 2014	$ 43
Estimated amortization expense, 2015	41
Estimated amortization expense, 2016	34
Estimated amortization expense, 2017	32
Estimated amortization expense, 2018	$ 26

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Stock-Based Compensation - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 28, 2014
Employee Restricted Equity Awards And Performance Stock Awards Vesting Activity [Line Items]
Exercise price	$ 113.67
Stock options granted	472,992
Expiration period of stock options granted from date of grant	10 years
Vesting period	3 years
Weighted average grant date fair value of stock options	$ 20.02
Restricted Stock Units [Member]
Employee Restricted Equity Awards And Performance Stock Awards Vesting Activity [Line Items]
Vesting period	3 years
Units granted	402,870
Weighted average grant date fair value	$ 113.67
Vesting period of units granted for non-employee directors	1 year
Performance Units [Member]
Employee Restricted Equity Awards And Performance Stock Awards Vesting Activity [Line Items]
Units granted	47,467
Weighted average grant date fair value	$ 113.67
Length of service after grant date	3 years
Minimum payout range	0.00%
Maximum payout range	200.00%

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Other Current Liabilities and Other Liabilities - Other Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	Dec. 31, 2013
Other Liabilities:
Non-current income taxes payable (see Note 10)	$ 167	$ 167
Deferred compensation	47	45
Accrued workers' compensation	42	46
Accrued product warranty costs	21	24
Notes payable and capital lease obligations	12	15
Other	93	99
Total other liabilities	$ 382	$ 396

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Goodwill and Identifiable Intangible Assets - Amortization Expense (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization Expense	$ 10	$ 9

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Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries - Additional Information (Detail)	Mar. 28, 2014
Condensed Financial Information Of Parent Company Only Disclosure [Abstract]
Ownership percentage held in subsidiary	100.00%

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Basis of Presentation (Policies)

3 Months Ended

Mar. 28, 2014

Accounting Policies [Abstract]

Principles of Consolidation and Reporting

Principles of Consolidation and Reporting

The accompanying financial statements comprise the consolidated financial statements of L-3 Holdings and L-3 Communications. L-3 Holdings’ only asset is its investment in the common stock of L-3 Communications, its wholly-owned subsidiary, and its only obligations are: (1) the 3% Convertible Contingent Debt Securities (CODES) due 2035, which were issued by L-3 Holdings on July 29, 2005, (2) its guarantee of borrowings under the Amended and Restated Revolving Credit Facility of L-3 Communications and (3) its guarantee of other contractual obligations of L-3 Communications and its subsidiaries. L-3 Holdings’ obligations relating to the CODES have been jointly, severally, fully and unconditionally guaranteed by L-3 Communications and certain of its wholly-owned domestic subsidiaries. Accordingly, such debt has been reflected as debt of L-3 Communications in its consolidated financial statements in accordance with the accounting standards for pushdown accounting. All issuances of and conversions into L-3 Holdings’ equity securities, including grants of stock options, restricted stock, restricted stock units and performance units by L-3 Holdings to employees and directors of L-3 Communications and its subsidiaries, have been reflected in the consolidated financial statements of L-3 Communications. As a result, the consolidated financial positions, results of operations and cash flows of L-3 Holdings and L-3 Communications are substantially the same. See Note 24 for additional information regarding the unaudited financial information of L-3 Communications and its subsidiaries.

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, they do not include all of the disclosures required by U.S. GAAP for a complete set of annual audited financial statements. The December 31, 2013 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation of the results for the interim periods presented have been included. The results of operations for the interim periods are not necessarily indicative of results for the full year.

It is the Company’s established practice to close its books for the quarters ending March, June and September on the Friday nearest to the end of the calendar quarter. The interim unaudited condensed consolidated financial statements included herein have been prepared and are labeled based on that convention. The Company closes its books for annual periods on December 31 regardless of what day it falls on.

Accounting Estimates

Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and costs of sales during the reporting period. The most significant of these estimates and assumptions for L-3 relate to contract revenue, profit and loss recognition, fair values of assets acquired and liabilities assumed in business combinations, market values for inventories reported at lower of cost or market, pension and post-retirement benefit obligations, stock-based employee compensation expense, income taxes, including the valuation of deferred tax assets, litigation reserves and environmental obligations, accrued product warranty costs, and the recoverability, useful lives and valuation of recorded amounts of long-lived assets, identifiable intangible assets and goodwill. Changes in estimates are reflected in the periods during which they become known. Actual amounts will differ from these estimates and could differ materially.

Sales and profits on contracts that are covered by accounting standards for construction-type and production-type contracts and federal government contractors are recognized using percentage-of-completion (POC) methods of accounting. Approximately 47% of the Company’s net sales in 2013 were accounted for under contract accounting standards, of which approximately 38% were fixed-price type contracts and approximately 9% were cost-plus type contracts. For contracts accounted for under contract accounting standards, sales and profits are recognized based on: (1) a POC method of accounting (fixed-price contracts), (2) allowable costs incurred plus the estimated profit on those costs (cost-plus contracts), or (3) direct labor hours expended multiplied by the contractual fixed rate per hour plus incurred costs for material (time-and-material contracts). Sales and profits on fixed-price production contracts under which units are produced and delivered in a continuous or sequential process are recorded as units are delivered based on their contractual selling prices (the “units-of-delivery” method). Sales and profits on each fixed-price production contract under which units are not produced and delivered in a continuous or sequential process, or under which a relatively few number of units are produced, are recorded based on the ratio of actual cumulative costs incurred to total estimated costs at completion of the contract multiplied by the total estimated contract revenue, less cumulative sales recognized in prior periods (the “cost-to-cost” method). Under both POC methods of accounting, a single estimated total profit margin is used to recognize profit for each contract over its entire period of performance, which can exceed one year.

Accounting for the sales and profit on these fixed-price type contracts requires the preparation of estimates of: (1) the total contract revenue, (2) the total costs at completion, which is equal to the sum of the actual incurred costs to date on the contract and the estimated costs to complete the contract’s statement of work, and (3) the measurement of progress towards completion. The estimated profit or loss at completion on a contract is equal to the difference between the total estimated contract revenue and the total estimated cost at completion. The profit recorded on a contract in any period using either the units-of-delivery method or cost-to-cost method is equal to the current estimated total profit margin multiplied by the cumulative sales recognized, less the amount of cumulative profit previously recorded for the contract.

Sales and profits on cost-plus type contracts that are covered by contract accounting standards are recognized as allowable costs are incurred on the contract, at an amount equal to the allowable costs plus the estimated profit on those costs. The estimated profit on a cost-plus type contract is fixed or variable based on the contractual fee arrangement. Incentive and award fees are the primary variable fee contractual arrangement types for the Company. Incentive and award fees on cost-plus type contracts are included as an element of total estimated contract revenues and are recorded to sales when a basis exists for the reasonable prediction of performance in relation to established contractual targets and the Company is able to make reasonably dependable estimates for them.

Sales and profits on time-and-material type contracts are recognized on the basis of direct labor hours expended multiplied by the contractual fixed rate per hour, plus the actual costs of materials and other direct non-labor costs.

Revisions or adjustments to estimates for a contract’s revenue, estimated costs at completion and estimated profit or loss are often required as work progresses under a contract, as experience is gained, as facts and circumstances change and as new information is obtained, even though the scope of work required under the contract may not change. Revisions or adjustments may also be required if contract modifications occur. The impact of revisions in profit (loss) estimates for all types of contracts subject to POC accounting are recognized on a cumulative catch-up basis in the period in which the revisions are made. The revisions in contract estimates, if significant, can materially affect the Company’s results of operations and cash flows, as well as reduce the valuations of receivables and inventories, and in some cases result in liabilities to complete contracts in a loss position. Aggregate net changes in contract estimates increased consolidated operating income by $42 million, or 14%, for the quarterly period ended March 28, 2014 and $10 million, or 3%, for the quarterly period ended March 29, 2013.

For a more complete discussion of these estimates and assumptions, see the Annual Report of L-3 Holdings and L-3 Communications on Form 10-K for the fiscal year ended December 31, 2013.

Adoption of New Accounting Standards

Effective January 1, 2014, the Company adopted Financial Accounting Standards Board (FASB) issued amendments to an accounting standard that require an unrecognized tax benefit or portion of an unrecognized tax benefit to be presented as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except when certain conditions exist. The adoption of this standard did not impact the Company’s financial position, results of operations or cash flows.

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Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries (Tables)

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Condensed Combining Balance Sheets

The following unaudited condensed combining financial information presents the results of operations, financial position and cash flows of: (1) L-3 Holdings, excluding L-3 Communications and its consolidated subsidiaries (the “Parent”), (2) L-3 Communications, excluding its consolidated subsidiaries, (3) the Guarantor Subsidiaries, (4) the Non-Guarantor Subsidiaries, and (5) the eliminations to arrive at the information for L-3 on a consolidated basis.

	L-3 Holdings (Parent)		L-3 Communications		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Balance Sheets:
At March 28, 2014:
Current assets:
Cash and cash equivalents	$	—	$	57	$	—	$	182	$	(12	)	$	227
Billed receivables, net		—		343		483		267		—			1,093
Contracts in process		—		1,029		1,330		404		—			2,763
Other current assets		—		296		148		175		—			619
Total current assets		—		1,725		1,961		1,028		(12	)		4,702
Goodwill		—		2,335		4,326		1,160		—			7,821
Other assets		—		784		517		241		—			1,542
Investment in and amounts due from consolidated subsidiaries		6,802		7,287		3,626		—		(17,715	)		—
Total assets	$	6,802	$	12,131	$	10,430	$	2,429	$	(17,727	)	$	14,065
Current liabilities	$	—	$	909	$	925	$	634	$	(12	)	$	2,456
Amounts due to consolidated subsidiaries		—		—		—		356		(356	)		—
Other long-term liabilities		—		1,478		191		121		—			1,790
Long-term debt		689		3,631		—		—		(689	)		3,631
Total liabilities		689		6,018		1,116		1,111		(1,057	)		7,877
L-3 shareholders’ equity		6,113		6,113		9,314		1,318		(16,745	)		6,113
Noncontrolling interests		—		—		—		—		75			75
Total equity		6,113		6,113		9,314		1,318		(16,670	)		6,188
Total liabilities and equity	$	6,802	$	12,131	$	10,430	$	2,429	$	(17,727	)	$	14,065
At December 31, 2013:
Current assets:
Cash and cash equivalents	$	—	$	258	$	—	$	261	$	(19	)	$	500
Billed receivables, net		—		364		425		226		—			1,015
Contracts in process		—		951		1,209		364		—			2,524
Other current assets		—		281		160		169		—			610
Total current assets		—		1,854		1,794		1,020		(19	)		4,649
Goodwill		—		2,335		4,325		1,136		—			7,796
Other assets		—		807		529		228		—			1,564
Investment in and amounts due from consolidated subsidiaries		6,712		7,007		3,713		—		(17,432	)		—
Total assets	$	6,712	$	12,003	$	10,361	$	2,384	$	(17,451	)	$	14,009
Current liabilities	$	—	$	909	$	1,005	$	628	$	(19	)	$	2,523
Amounts due to consolidated subsidiaries		—		—		—		246		(246	)		—
Other long-term liabilities		—		1,441		193		124		—			1,758
Long-term debt		689		3,630		—		—		(689	)		3,630
Total liabilities		689		5,980		1,198		998		(954	)		7,911
L-3 shareholders’ equity		6,023		6,023		9,163		1,386		(16,572	)		6,023
Noncontrolling interests		—		—		—		—		75			75
Total equity		6,023		6,023		9,163		1,386		(16,497	)		6,098
Total liabilities and equity	$	6,712	$	12,003	$	10,361	$	2,384	$	(17,451	)	$	14,009

Condensed Combining Statements of Operations

	L-3 Holdings (Parent)			L-3 Communications			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Statements of Operations:
For the quarter ended March 28, 2014:
Total net sales	$	—		$	868		$	1,631		$	546		$	(74	)	$	2,971
Total cost of sales		(15	)		(774	)		(1,471	)		(493	)		89			(2,664	)
Operating (loss) income		(15	)		94			160			53			15			307
Interest expense		(5	)		(43	)		—			—			5			(43	)
Interest and other income, net		—			3			—			—			—			3
(Loss) income before income taxes		(20	)		54			160			53			20			267
Benefit (provision) for income taxes		6			(17	)		(51	)		(17	)		(6	)		(85	)
Equity in net income of consolidated subsidiaries		194			143			—			—			(337	)		—
Net income		180			180			109			36			(323	)		182
Net income attributable to noncontrolling interests		—			—			—			—			(2	)		(2	)
Net income attributable to L-3	$	180		$	180		$	109		$	36		$	(325	)	$	180
Comprehensive income attributable to L-3	$	162		$	162		$	106		$	19		$	(287	)	$	162
For the quarter ended March 29, 2013:
Total net sales	$	—		$	938		$	1,735		$	591		$	(79	)	$	3,185
Total cost of sales		(14	)		(866	)		(1,554	)		(531	)		93			(2,872	)
Operating (loss) income		(14	)		72			181			60			14			313
Interest expense		(5	)		(43	)		—			—			5			(43	)
Interest and other income, net		—			2			—			1			—			3
(Loss) income before income taxes		(19	)		31			181			61			19			273
Benefit (provision) for income taxes		5			(9	)		(52	)		(18	)		(5	)		(79	)
Equity in net income of consolidated subsidiaries		207			171			—			—			(378	)		—
Net income		193			193			129			43			(364	)		194
Net income attributable to noncontrolling interests		—			—			—			—			(1	)		(1	)
Net income attributable to L-3	$	193		$	193		$	129		$	43		$	(365	)	$	193
Comprehensive income attributable to L-3	$	169		$	169		$	129		$	6		$	(304	)	$	169

Condensed Combining Statements of Cash Flows

	L-3 Holdings (Parent)			L-3 Communications			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated L-3
	(in millions)
Condensed Combining Statements of Cash Flows:
For the quarter ended March 28, 2014:
Operating activities:
Net cash from (used in) operating activities	$	188		$	80		$	(61	)	$	(34	)	$	(235	)	$	(62	)
Investing activities:
Business acquisitions, net of cash acquired		—			(57	)		—			—			—			(57	)
Investments in L-3 Communications		(51	)		—			—			—			51			—
Other investing activities		—			(13	)		(15	)		(1	)		—			(29	)
Net cash used in investing activities		(51	)		(70	)		(15	)		(1	)		51			(86	)
Financing activities:
Common stock repurchased		(133	)		—			—			—			—			(133	)
Dividends paid on L-3 Holdings common stock		(55	)		—			—			—			—			(55	)
Dividends paid to L-3 Holdings		—			(188	)		—			—			188			—
Investments from L-3 Holdings		—			51			—			—			(51	)		—
Other financing activities		51			(74	)		76			(43	)		54			64
Net cash (used in) from financing activities		(137	)		(211	)		76			(43	)		191			(124	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(1	)		—			(1	)
Net decrease in cash		—			(201	)		—			(79	)		7			(273	)
Cash and cash equivalents, beginning of the period		—			258			—			261			(19	)		500
Cash and cash equivalents, end of the period	$	—		$	57		$	—		$	182		$	(12	)	$	227
For the quarter ended March 29, 2013:
Operating activities:
Net cash from operating activities	$	174		$	92		$	73		$	24		$	(217	)	$	146
Investing activities:
Investments in L-3 Communications		(13	)		—			—			—			13			—
Other investing activities		—			(25	)		(25	)		(4	)		—			(54	)
Net cash used in investing activities		(13	)		(25	)		(25	)		(4	)		13			(54	)
Financing activities:
Common stock repurchased		(122	)		—			—			—			—			(122	)
Dividends paid on L-3 Holdings common stock		(52	)		—			—			—			—			(52	)
Dividends paid to L-3 Holdings		—			(174	)		—			—			174			—
Investments from L-3 Holdings		—			13			—			—			(13	)		—
Other financing activities		13			(86	)		(48	)		(32	)		169			16
Net cash used in financing activities		(161	)		(247	)		(48	)		(32	)		330			(158	)
Effect of foreign currency exchange rate changes on cash		—			—			—			(7	)		—			(7	)
Net decrease in cash		—			(180	)		—			(19	)		126			(73	)
Cash and cash equivalents, beginning of the period		—			246			—			242			(139	)		349
Cash and cash equivalents, end of the period	$	—		$	66		$	—		$	223		$	(13	)	$	276

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Equity

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Equity

12.  Equity

On February 5, 2013, L-3 Holdings’ Board of Directors approved a share repurchase program that authorizes L-3 Holdings to repurchase up to $1.5 billion of its common stock through June 30, 2015. Repurchases of L-3 Holdings’ common stock under the share repurchase program are made at management’s discretion in accordance with applicable U.S. Federal securities laws in the open market or otherwise. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including, but not limited to, the Company’s financial position, earnings, legal requirements, other investment opportunities (including acquisitions), and market conditions. L-3 Holdings repurchased 1.2 million shares of its common stock at an average price of $109.43 per share for an aggregate amount of $133 million from January 1, 2014 through March 28, 2014. All share repurchases of L-3 Holdings’ common stock have been recorded as treasury shares.

At March 28, 2014, the remaining dollar value of authorization under the share repurchase program was $735 million. From March 29, 2014 through April 23, 2014, L-3 Holdings repurchased 307,692 shares of its common stock at an average price of $116.98 per share for an aggregate amount of $36 million.

On February 11, 2014, L-3 Holdings’ Board of Directors declared a cash dividend of $0.60 per share, which resulted in the Company paying total cash dividends of $52 million on March 17, 2014. In addition, during the quarter ended March 28, 2014, the Company paid $3 million of previously accrued dividends for employee held stock-awards.

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Commitments and Contingencies

3 Months Ended

Mar. 28, 2014

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

17.  Commitments and Contingencies

Guarantees

In connection with the spin-off of Engility Holdings, Inc. (Engility), L-3 entered into a Distribution Agreement and several other agreements that govern certain aspects of L-3’s relationship with Engility, including employee matters, tax matters, transition services, and the future supplier/customer relationship between L-3 and Engility. These agreements generally provide cross-indemnities that, except as otherwise provided, are principally designed to place the financial responsibility for the obligations and liabilities of each entity with that respective entity. Engility has joint and several liability with L-3 to the U.S. Internal Revenue Service (IRS) for the consolidated U.S. Federal income taxes of L-3’s consolidated group for taxable periods in which Engility was a part of that group. However, the Tax Matters Agreement specifies the portion of this tax liability for which L-3 and Engility will each bear responsibility, and L-3 and Engility have agreed to indemnify each other against any amounts for which the other is not responsible. The Tax Matters Agreement also allocates responsibility between L-3 and Engility for other taxes, including special rules for allocating tax liabilities in the event that the spin-off is determined not to be tax-free. Though valid as between the parties, the Tax Matters Agreement is not binding on the IRS.

Procurement Regulations

A substantial majority of the Company’s revenues are generated from providing products and services under legally binding agreements or contracts with U.S. Government and international government customers. U.S. Government contracts are subject to extensive legal and regulatory requirements, and, from time to time, agencies of the U.S. Government investigate whether such contracts were and are being conducted in accordance with these requirements. The Company is currently cooperating with the U.S. Government on several investigations from which civil, criminal or administrative proceedings have or could result and give rise to fines, penalties, compensatory and treble damages, restitution and/or forfeitures. The Company does not currently anticipate that any of these investigations will have a material adverse effect, individually or in the aggregate, on its consolidated financial position, results of operations or cash flows. However, under U.S. Government regulations, an indictment of the Company by a federal grand jury, or an administrative finding against the Company as to its present responsibility to be a U.S. Government contractor or subcontractor, could result in the Company being suspended for a period of time from eligibility for awards of new government contracts or task orders or in a loss of export privileges. A conviction, or an administrative finding against the Company that satisfies the requisite level of seriousness, could result in debarment from contracting with the federal government for a specified term. In addition, all of the Company’s U.S. Government contracts: (1) are subject to audit and various pricing and cost controls, (2) include standard provisions for termination for the convenience of the U.S. Government or for default, and (3) are subject to cancellation if funds for contracts become unavailable. International government contracts generally include comparable provisions relating to terminations for convenience or default, as well as other procurement clauses relevant to the international government.

Litigation Matters

The Company is also subject to litigation, proceedings, claims or assessments and various contingent liabilities incidental to its businesses, including those specified below. Furthermore, in connection with certain business acquisitions, the Company has assumed some or all claims against, and liabilities of, such acquired businesses, including both asserted and unasserted claims and liabilities.

In accordance with the accounting standard for contingencies, the Company records a liability when management believes that it is both probable that a liability has been incurred and the Company can reasonably estimate the amount of the loss. Generally, the loss is recorded at the amount the Company expects to resolve the liability. The estimated amounts of liabilities recorded for pending and threatened litigation are disclosed in Note 8. Amounts recoverable from insurance contracts or third parties are recorded as assets when deemed probable. At March 28, 2014, the Company did not record any amounts for recoveries from insurance contracts or third parties in connection with the amount of liabilities recorded for pending and threatened litigation. Legal defense costs are expensed as incurred. The Company believes it has recorded adequate provisions for its litigation matters. The Company reviews these provisions quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. While it is reasonably possible that an unfavorable outcome may occur in one or more of the following matters, unless otherwise stated below, the Company believes that it is not probable that a loss has been incurred in any of these matters. With respect to the litigation matters below for which it is reasonably possible that an unfavorable outcome may occur, an estimate of loss or range of loss is disclosed when such amount or amounts can be reasonably estimated. Although the Company believes that it has valid defenses with respect to legal matters and investigations pending against it, the results of litigation can be difficult to predict, particularly those involving jury trials. Accordingly, our current judgment as to the likelihood of our loss (or our current estimate as to the potential range of loss, if applicable) with respect to any particular litigation matter may turn out to be wrong. Therefore, it is possible that the financial position, results of operations or cash flows of the Company could be materially adversely affected in any particular period by the unfavorable resolution of one or more of these or other contingencies.

Kalitta Air. On January 31, 1997, a predecessor of Kalitta Air filed a lawsuit in the U.S. District Court for the Northern District of California (the trial court) asserting, among other things, negligence and negligent misrepresentation against Central Texas Airborne Systems, Inc. (CTAS), a predecessor to L-3 Integrated Systems (L-3 IS), in connection with work performed by a predecessor to CTAS to convert two Boeing 747 aircraft from passenger configuration to cargo freighters. CTAS’ insurance carrier has accepted defense of this matter and has retained counsel, subject to a reservation of rights by the insurer to dispute its obligations under the applicable insurance policies in the event a judgment is ultimately rendered against CTAS. The work at issue in the lawsuit was performed using Supplemental Type Certificates (STCs) issued in 1988 by the Federal Aviation Administration (FAA). In 1996, following completion of the work, the FAA issued an airworthiness directive with respect to the STCs that effectively grounded the aircraft. Following two jury trials (in which Kalitta Air did not prevail) and related appeals to the U.S. Court of Appeals for the Ninth Circuit (the Court of Appeals), a third jury trial for this matter began on October 31, 2011, during which Kalitta Air sought damages of approximately $235 million plus an unspecified amount of pre-judgment interest that, in other contexts, has been claimed by Kalitta Air to exceed $240 million. Following the completion of the third trial on November 30, 2011, the jury rendered a verdict in favor of CTAS, finding no negligence on the part of CTAS. The trial court entered a judgment upon the verdict on March 20, 2012. Kalitta Air filed an appeal of the judgment with the Court of Appeals on July 23, 2012, which ruled against Kalitta Air and affirmed the trial court’s judgment on November 25, 2013. The Court of Appeals subsequently denied Kalitta Air’s motion for a rehearing of its appeal. On April 3, 2014, Kalitta Air filed a petition with the U.S. Supreme Court seeking review of the Court of Appeals’ November 25, 2013 decision. L-3 IS intends to file a brief with the U.S. Supreme Court opposing Kalitta Air’s petition for review.

Bashkirian Airways. On July 1, 2004, lawsuits were filed on behalf of the estates of 31 Russian children in the state courts of Washington, Arizona, California, Florida, New York and New Jersey against Honeywell, Honeywell TCAS, Thales USA, Thales France, the Company and Aviation Communications & Surveillance Systems (ACSS), which is a joint venture of L-3 and Thales. The suits relate to the crash over southern Germany of a Bashkirian Airways Tupelov TU 154M aircraft and a DHL Boeing 757 cargo aircraft. On-board the Tupelov aircraft were 9 crew members and 60 passengers, including 45 children. The Boeing aircraft carried a crew of two. Both aircraft were equipped with Honeywell/ACSS Model 2000, Change 7 Traffic Collision and Avoidance Systems (TCAS). Sensing the other aircraft, the on-board DHL TCAS instructed the DHL pilot to descend, and the Tupelov on-board TCAS instructed the Tupelov pilot to climb. However, the Swiss air traffic controller ordered the Tupelov pilot to descend. The Tupelov pilot disregarded the on-board TCAS and put the Tupelov aircraft into a descent striking the DHL aircraft in midair at approximately 35,000 feet. All crew and passengers of both planes were lost. Investigations by the National Transportation Safety Board after the crash revealed that both TCAS units were performing as designed. The suits allege negligence and strict product liability based upon the design of the units and the training provided to resolve conflicting commands and seek approximately $315 million in damages, including $150 million in punitive damages. The Company’s insurers have accepted defense of this matter and have retained counsel. The matters were consolidated in the U.S. District Court for the District of New Jersey, which then dismissed the actions on the basis of forum non conveniens. Plaintiffs representing 30 of the estates re-filed their complaint against ACSS on April 23, 2007 with the Barcelona Court’s Registry in Spain. On March 9, 2010, the court ruled in favor of the plaintiffs and entered judgment against ACSS in the amount of approximately $6.7 million, all of which represented compensatory damages. Both ACSS and the plaintiffs appealed the judgment. In May 2012, the appellate court ruled in favor of the plaintiffs and entered judgment against ACSS in the amount of $48 million. ACSS filed an appeal of the judgment with the Supreme Court of Spain on September 28, 2012. On July 1, 2013, the Supreme Court agreed to consider the appeal, and the parties are awaiting the Supreme Court’s decision. The Company believes that the ruling and the damages awarded are inconsistent with the law and evidence presented and, accordingly, that it is not probable that the Company has incurred a loss with respect to this matter. As of the date of this filing, 18 out of the 30 plaintiffs have released their claims against ACSS in consideration for payments made by the Company’s insurance carriers.

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Condensed Combining Financial Information of L-3 Communications and Its Subsidiaries - Condensed Combining Statements of Cash Flows (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Operating activities:
Net cash from (used in) operating activities	$ (62)	$ 146
Investing activities:
Business acquisitions, net of cash acquired	(57)
Investments in L-3 Communications
Other investing activities	(29)	(54)
Net cash used in investing activities	(86)	(54)
Financing activities:
Common stock repurchased	(133)	(122)
Dividends paid on L-3 Holdings common stock	(55)	(52)
Dividends paid to L-3 Holdings
Investments from L-3 Holdings
Other financing activities	64	16
Net cash used in financing activities	(124)	(158)
Effect of foreign currency exchange rate changes on cash	(1)	(7)
Net decrease in cash and cash equivalents	(273)	(73)
Cash and cash equivalents, beginning of the period	500	349
Cash and cash equivalents, end of the period	227	276
L-3 Communications Holdings, Inc. [Member]
Operating activities:
Net cash from (used in) operating activities	188	174
Investing activities:
Business acquisitions, net of cash acquired
Investments in L-3 Communications	(51)	(13)
Other investing activities
Net cash used in investing activities	(51)	(13)
Financing activities:
Common stock repurchased	(133)	(122)
Dividends paid on L-3 Holdings common stock	(55)	(52)
Dividends paid to L-3 Holdings
Investments from L-3 Holdings
Other financing activities	51	13
Net cash used in financing activities	(137)	(161)
Effect of foreign currency exchange rate changes on cash
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of the period
Cash and cash equivalents, end of the period
L-3 Communications Corporation [Member]
Operating activities:
Net cash from (used in) operating activities	80	92
Investing activities:
Business acquisitions, net of cash acquired	(57)
Investments in L-3 Communications
Other investing activities	(13)	(25)
Net cash used in investing activities	(70)	(25)
Financing activities:
Common stock repurchased
Dividends paid on L-3 Holdings common stock
Dividends paid to L-3 Holdings	(188)	(174)
Investments from L-3 Holdings	51	13
Other financing activities	(74)	(86)
Net cash used in financing activities	(211)	(247)
Effect of foreign currency exchange rate changes on cash
Net decrease in cash and cash equivalents	(201)	(180)
Cash and cash equivalents, beginning of the period	258	246
Cash and cash equivalents, end of the period	57	66
Guarantor Subsidiaries [Member]
Operating activities:
Net cash from (used in) operating activities	(61)	73
Investing activities:
Business acquisitions, net of cash acquired
Investments in L-3 Communications
Other investing activities	(15)	(25)
Net cash used in investing activities	(15)	(25)
Financing activities:
Common stock repurchased
Dividends paid on L-3 Holdings common stock
Dividends paid to L-3 Holdings
Investments from L-3 Holdings
Other financing activities	76	(48)
Net cash used in financing activities	76	(48)
Effect of foreign currency exchange rate changes on cash
Net decrease in cash and cash equivalents
Cash and cash equivalents, beginning of the period
Cash and cash equivalents, end of the period
Non-Guarantor Subsidiaries [Member]
Operating activities:
Net cash from (used in) operating activities	(34)	24
Investing activities:
Business acquisitions, net of cash acquired
Investments in L-3 Communications
Other investing activities	(1)	(4)
Net cash used in investing activities	(1)	(4)
Financing activities:
Common stock repurchased
Dividends paid on L-3 Holdings common stock
Dividends paid to L-3 Holdings
Investments from L-3 Holdings
Other financing activities	(43)	(32)
Net cash used in financing activities	(43)	(32)
Effect of foreign currency exchange rate changes on cash	(1)	(7)
Net decrease in cash and cash equivalents	(79)	(19)
Cash and cash equivalents, beginning of the period	261	242
Cash and cash equivalents, end of the period	182	223
Eliminations [Member]
Operating activities:
Net cash from (used in) operating activities	(235)	(217)
Investing activities:
Business acquisitions, net of cash acquired
Investments in L-3 Communications	51	13
Other investing activities
Net cash used in investing activities	51	13
Financing activities:
Common stock repurchased
Dividends paid on L-3 Holdings common stock
Dividends paid to L-3 Holdings	188	174
Investments from L-3 Holdings	(51)	(13)
Other financing activities	54	169
Net cash used in financing activities	191	330
Effect of foreign currency exchange rate changes on cash
Net decrease in cash and cash equivalents	7	126
Cash and cash equivalents, beginning of the period	(19)	(139)
Cash and cash equivalents, end of the period	$ (12)	$ (13)

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Segment Information (Tables)

3 Months Ended

Mar. 28, 2014

Segment Reporting [Abstract]

Summary of Segment Information

The tables below present net sales, operating income, depreciation and amortization and total assets by reportable segment.

	First Quarter Ended
	March 28, 2014			March 29, 2013
	(in millions)
Net Sales:
Aerospace Systems	$	1,083		$	1,187
Electronic Systems		1,103			1,139
Communication Systems		517			565
NSS		305			331
Elimination of intercompany sales		(37	)		(37	)
Consolidated total	$	2,971		$	3,185
Operating Income:
Aerospace Systems	$	114		$	140
Electronic Systems		125			117
Communication Systems		50			35
NSS		18			21
Consolidated total	$	307		$	313
Depreciation and amortization:
Aerospace Systems	$	10		$	9
Electronic Systems		29			30
Communication Systems		12			12
NSS		3			3
Consolidated total	$	54		$	54

	March 28, 2014		December 31, 2013
	(in millions)
Total Assets:
Aerospace Systems	$	3,252	$	3,175
Electronic Systems		6,993		6,895
Communication Systems		2,128		2,130
NSS		1,338		1,247
Corporate		354		562
Consolidated total	$	14,065	$	14,009

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Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income (Tables)

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Summary of Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income

The amounts reclassified from Accumulated Other Comprehensive (Loss) Income (AOCI) for the quarter ended March 28, 2014 are presented in the table below.

	Foreign currency translation			Unrealized gains (losses) on hedging instruments			Unrecognized (losses) and prior service cost, net			Total accumulated other comprehensive (loss) income
	(in millions)
Balance at December 31, 2012	$	163		$	3		$	(720	)	$	(554	)
Other comprehensive loss before reclassifications		(34	)		(3	)		—			(37	)
Amounts reclassified from other comprehensive income, net of tax		—			—			13			13
Net current period other comprehensive (loss) income	$	(34	)	$	(3	)	$	13		$	(24	)
Balance at March 29, 2013	$	129		$	—		$	(707	)	$	(578	)
Balance at December 31, 2013	$	142		$	1		$	(253	)	$	(110	)
Other comprehensive loss before reclassifications, net of tax		(16	)		(2	)		—			(18	)
Amounts reclassified from other comprehensive (loss) income, net of tax		—			(3	)		3			—
Net current period other comprehensive (loss) income		(16	)		(5	)		3			(18	)
Balance at March 28, 2014	$	126		$	(4	)	$	(250	)	$	(128	)

Further details regarding the amounts reclassified from AOCI for the quarter ended March 28, 2014 are presented in the table below.

	Amount Reclassified from AOCI						Affected Line Item in the Unaudited Condensed Consolidated Statements of  Operations
	First Quarter Ended
Details About Accumulated Other Comprehensive (Loss) Income Components	March 28, 2014			March 29, 2013
	(in millions)			(in millions)
Loss on hedging instruments	$	(5	)	$	—		Cost of sales-products
		(5	)		—		Income before income taxes
		2			—		Benefit for income taxes
	$	(3	)	$	—		Net income
Amortization of defined benefit pension items:
Net loss	$	4		$	22		(a)
		4			22		Income before income taxes
		(1	)		(9	)	Provision for income taxes
	$	3		$	13		Net Income
Total reclassification for the period	$	—		$	13		Net Income

^(a)  Amounts related to pension and postretirement benefit plans were reclassified from AOCI and recorded as a component of net periodic benefit cost (see Note 18 for additional information).

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Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014		Mar. 29, 2013
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 182		$ 194
Other comprehensive income:
Foreign currency translation adjustments	(16)		(34)
Unrealized losses on hedging instruments	(5)	[1]	(3)	[1]
Pension and postretirement benefit plans:
Amortization of net loss and prior service cost previously recognized	3	[2]	13	[2]
Total other comprehensive loss	(18)		(24)
Comprehensive income	164		170
Comprehensive income attributable to noncontrolling interests	(2)		(1)
Comprehensive income attributable to L-3	$ 162		$ 169

[1] Amounts are net of income tax benefits of $2 million for both of the quarterly periods ended March 28, 2014 and March 29, 2013.

[2] Amounts are net of income taxes of $1 million and $9 million for the quarterly periods ended March 28, 2014 and March 29, 2013, respectively.

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Segment Information - Additional Information (Detail)	3 Months Ended
	Mar. 28, 2014 Segment
Segment Reporting [Abstract]
Number of segments	4

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Description of Business

3 Months Ended

Mar. 28, 2014

Accounting Policies [Abstract]

Description of Business

1.  Description of Business

L-3 Communications Holdings, Inc. derives all of its operating income and cash flows from its wholly-owned subsidiary, L-3 Communications Corporation (L-3 Communications). L-3 Communications Holdings, Inc. (L-3 Holdings and, together with its subsidiaries, referred to herein as L-3 or the Company) is a prime contractor in aerospace systems and national security solutions. L-3 is also a leading provider of a broad range of communication and electronic systems and products used on military and commercial platforms. The Company’s customers include the United States (U.S.) Department of Defense (DoD) and its prime contractors, U.S. Government intelligence agencies, the U.S. Department of Homeland Security (DHS), U.S. Department of State (DoS), allied international governments, and domestic and international commercial customers.

In the first quarter of 2014, the Company reorganized its business segments to better align its organizational structure with customer priorities and increase operational efficiencies. After the realignment, L-3’s structure consists of the following four segments: Aerospace Systems, Electronic Systems, Communication Systems and National Security Solutions, as further described below.

Aerospace Systems: combines the operations of the former Platform & Logistics Solutions (P&LS) segment with Intelligence, Surveillance and Reconnaissance (ISR) Systems. ISR Systems was part of the former Command, Control, Communications, Intelligence, Surveillance and Reconnaissance (C³ISR) segment. Aerospace Systems delivers integrated solutions for the global ISR market and provides modernization, upgrade, sustainment, and maintenance and logistics support for a wide variety of aircraft and ground systems.

Electronic Systems: includes all of its previous businesses historically included in this segment except the Microwave Products businesses, which are now part of Communication Systems. Electronic Systems provides a broad range of components, products, subsystems, systems and related services for military and commercial customers.

Communication Systems: combines the operations of the Microwave Products businesses, which were previously part of the Electronic Systems reportable segment, with the operations of the Networked and Secure Communications Products businesses, previously part of the former C³ISR segment. Communication Systems delivers products and services for the global communications market, specializing in strategic and tactical airborne, space, ground and sea-based communication systems.

National Security Solutions (NSS): remains unchanged. NSS will continue to provide cybersecurity solutions, high-performance computing, enterprise information technology (IT) services, analytics and intelligence analysis.

Financial information with respect to the Company’s segments is included in Note 21 to the unaudited condensed consolidated financial statements. Financial information for the first quarter of 2013 in these unaudited condensed consolidated financial statements has been revised for the segment realignment discussed above.

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Contracts in Process - Selling, General and Administrative Expenses and Research and Development Expenses (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Inventory Disclosure [Abstract]
Selling, general and administrative expenses	$ 71	$ 72
Research and development expenses	17	20
Total	$ 88	$ 92

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 28, 2014	May 31, 2012	Mar. 09, 2010	Jul. 01, 2004
Commitments And Contingencies Disclosure [Abstract]
Kalitta Air damages, minimum	$ 235
Pre-judgment interest in Kalitta Air damages, minimum	240
Total damages sought				315
Punitive damages sought				150
Compensatory damages		$ 48.0	$ 6.7

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Debt - Components of Debt and Reconciliation to Carrying Amount of Long-Term Debt (Parenthetical) (Detail) (USD $)	Mar. 28, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Aggregate borrowings and repayments under the Amended and Restated Revolving Credit Facility	$ 524,000,000
Borrowings under Amended and Restated Revolving Credit Facility	$ 1,000,000,000
CODES Due 2035 [Member]
Debt Instrument [Line Items]
Interest rate on Senior Notes	3.00%
L-3 Communications Corporation [Member] | 3.95% Senior Notes due 2016 [Member]
Debt Instrument [Line Items]
Interest rate on Senior Notes	3.95%	3.95%
L-3 Communications Corporation [Member] | 5.20% Senior Notes due 2019 [Member]
Debt Instrument [Line Items]
Interest rate on Senior Notes	5.20%	5.20%
L-3 Communications Corporation [Member] | 4.75% Senior Notes due 2020 [Member]
Debt Instrument [Line Items]
Interest rate on Senior Notes	4.75%	4.75%
L-3 Communications Corporation [Member] | 4.95% Senior Notes due 2021 [Member]
Debt Instrument [Line Items]
Interest rate on Senior Notes	4.95%	4.95%
L-3 Communications Holdings, Inc. [Member] | CODES Due 2035 [Member]
Debt Instrument [Line Items]
Interest rate on Senior Notes	3.00%	3.00%

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Pension and Other Postretirement Benefits

3 Months Ended

Mar. 28, 2014

Compensation And Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits

18. Pension and Other Postretirement Benefits

The following table summarizes the components of net periodic benefit cost for the Company’s pension and other postretirement benefit plans.

	Pension Plans						Postretirement Benefit Plans
	First Quarter Ended						First Quarter Ended
	March 28, 2014			March 29, 2013			March 28, 2014			March 29, 2013
	(in millions)
Components of net periodic benefit cost:
Service cost	$	27		$	32		$	1		$	1
Interest cost		36			33			2			2
Expected return on plan assets		(48	)		(42	)		(1	)		(1	)
Amortization of prior service costs (credits)		1			—			(1	)		1
Amortization of net loss (gain)		4			22			—			(1	)
Curtailment loss		1			—			—			—
Net periodic benefit cost	$	21		$	45		$	1		$	2

Contributions. The Company contributed cash of $14 million to its pension plans and $2 million to its other postretirement benefit plans during the quarter ended March 28, 2014. The Company expects to contribute an additional $83 million to its pension plans and $8 million to its other postretirement benefit plans during the remainder of 2014.

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L-3 Holdings' Earnings Per Common Share - Reconciliation of Basic and Diluted Earnings Per Share (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 28, 2014	Mar. 29, 2013
Reconciliation of net income:
Net income	$ 182	$ 194
Net income attributable to noncontrolling interests	(2)	(1)
Net income attributable to L-3 Holdings' common shareholders	$ 180	$ 193
Basic:
Weighted average common shares outstanding	86.1	90.3
Basic earnings per share:
Net income	$ 2.09	$ 2.14
Common and potential common shares:
Weighted average common shares outstanding	86.1	90.3
Assumed purchase of common shares for treasury	(3.5)	(4.2)
Assumed conversion of the CODES	1.5
Common and potential common shares	89.4	91.5
Diluted earnings per share:
Net income	$ 2.01	$ 2.11
Stock Options [Member]
Common and potential common shares:
Common and potential common shares	3.4	3.4
Unvested Restricted Stock Awards [Member]
Common and potential common shares:
Common and potential common shares	1.7	1.7
Employee Stock Purchase Plan Contributions [Member]
Common and potential common shares:
Common and potential common shares		0.2
Performance Unit Awards [Member]
Common and potential common shares:
Common and potential common shares	0.2	0.1

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Goodwill and Identifiable Intangible Assets (Tables)

3 Months Ended

Mar. 28, 2014

Goodwill And Intangible Assets Disclosure [Abstract]

Changes in Goodwill by Segment

The table below presents the changes in goodwill by segment for the quarter ended March 28, 2014.

	Aerospace Systems			Electronic Systems			Communication Systems		NSS		Consolidated Total
	(in millions)
Balance at December 31, 2013	$	1,751		$	4,085		$	992	$	968	$	7,796
Business acquisition(1)		—			—			—		40		40
Foreign currency translation adjustments(2)		(9	)		(6	)		—		—		(15	)
Balance at March 28, 2014	$	1,742		$	4,079		$	992	$	1,008	$	7,821

⁽¹⁾  The increase in goodwill for the NSS segment is due to the L-3 Data Tactics business acquisition.

⁽²⁾  The decrease in goodwill presented in the Aerospace Systems and Electronic Systems segments was primarily due to the strengthening of the U.S. dollar against the Canadian dollar during the quarter ended March 28, 2014.

Identifiable Intangible Assets

The table below presents information for the Company’s identifiable intangible assets that are subject to amortization.

	March 28, 2014								December 31, 2013
	Weighted Average Amortization Period		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(in years)						(in millions)
Customer contractual relationships		19	$	474	$	261	$	213	$	466	$	253	$	213
Technology		11		168		110		58		168		108		60
Other		17		27		15		12		27		15		12
Total		17	$	669	$	386	$	283	$	661	$	376	$	285

Amortization Expense

The table below presents amortization expense recorded by the Company for its identifiable intangible assets.

	First Quarter Ended
	March 28, 2014		March 29, 2013
	(in millions)
Amortization Expense	$	10	$	9

Estimated Amortization Expense

Based on gross carrying amounts at March 28, 2014, the Company’s estimate of amortization expense for identifiable intangible assets for the years ending December 31, 2014 through 2018 is presented in the table below.

	Year Ending December 31,
	2014		2015		2016		2017		2018
	(in millions)
Estimated amortization expense	$	43	$	41	$	34	$	32	$	26

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Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income

3 Months Ended

Mar. 28, 2014

Text Block [Abstract]

Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income

11.  Amounts Reclassified Out of Accumulated Other Comprehensive (Loss) Income

The amounts reclassified from Accumulated Other Comprehensive (Loss) Income (AOCI) for the quarter ended March 28, 2014 are presented in the table below.

	Foreign currency translation			Unrealized gains (losses) on hedging instruments			Unrecognized (losses) and prior service cost, net			Total accumulated other comprehensive (loss) income
	(in millions)
Balance at December 31, 2012	$	163		$	3		$	(720	)	$	(554	)
Other comprehensive loss before reclassifications		(34	)		(3	)		—			(37	)
Amounts reclassified from other comprehensive income, net of tax		—			—			13			13
Net current period other comprehensive (loss) income	$	(34	)	$	(3	)	$	13		$	(24	)
Balance at March 29, 2013	$	129		$	—		$	(707	)	$	(578	)
Balance at December 31, 2013	$	142		$	1		$	(253	)	$	(110	)
Other comprehensive loss before reclassifications, net of tax		(16	)		(2	)		—			(18	)
Amounts reclassified from other comprehensive (loss) income, net of tax		—			(3	)		3			—
Net current period other comprehensive (loss) income		(16	)		(5	)		3			(18	)
Balance at March 28, 2014	$	126		$	(4	)	$	(250	)	$	(128	)

Further details regarding the amounts reclassified from AOCI for the quarter ended March 28, 2014 are presented in the table below.

	Amount Reclassified from AOCI						Affected Line Item in the Unaudited Condensed Consolidated Statements of  Operations
	First Quarter Ended
Details About Accumulated Other Comprehensive (Loss) Income Components	March 28, 2014			March 29, 2013
	(in millions)			(in millions)
Loss on hedging instruments	$	(5	)	$	—		Cost of sales-products
		(5	)		—		Income before income taxes
		2			—		Benefit for income taxes
	$	(3	)	$	—		Net income
Amortization of defined benefit pension items:
Net loss	$	4		$	22		(a)
		4			22		Income before income taxes
		(1	)		(9	)	Provision for income taxes
	$	3		$	13		Net Income
Total reclassification for the period	$	—		$	13		Net Income

^(a)  Amounts related to pension and postretirement benefit plans were reclassified from AOCI and recorded as a component of net periodic benefit cost (see Note 18 for additional information).